CONTRIBUTION AGREEMENT
This is a Contribution Agreement, dated as of April 14, 1999 (as in effect
from time to time, this "Agreement"), between UroMed Corporation, a
Massachusetts corporation ("Parent"), and Assurance Medical, Inc., a Delaware
corporation ("Assurance").
WHEREAS, the Parent has engaged for several years in the development of its
BreastView(R), BreastCheck(R) and Breast Exam electronic palpation technology
(the "Products");
WHEREAS, the Parent has caused the formation of Assurance in order to own
the Products and continue the development and commercialization of the Products;
WHEREAS, the Parent and Assurance desire to enter into this Agreement in
order to effect the transfer by the Parent to Assurance of certain assets and
liabilities relating to the Products in exchange for the issuance by Assurance
to the Parent of shares of Assurance's Series A Preferred Stock, par value $.001
per share ("Series A Preferred Stock"), and shares of Series B Preferred Stock,
par value $.001 per share ("Series B Preferred Stock" and collectively the
"Preferred Stock").
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
set forth below, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:
Article 1
Definitions
1.1. Certain Defined Terms. As used in this Agreement, the following
capitalized terms have the following meanings:
"Agreement" means this Contribution Agreement, including all exhibits and
schedules hereto, as amended, restated or supplemented from time to time.
"Assurance" has the meaning set forth in the preamble.
"Co-Sale Agreement" means that certain Co-Sale Agreement, dated as of April
14, 1999, by and among Assurance, ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
and the holders of Series A Preferred Stock and Series B Preferred Stock.
"Encumbrance" means all liens, security interests, pledges, charges,
mortgages, conditional sales agreements, title retention agreements and other
encumbrances.
"Material Adverse Effect" means a material adverse effect on the
operations, assets or financial condition of the Transferred Business taken as a
whole.
"Parent" has the meaning set forth in the preamble.
"Permitted Encumbrances" means Encumbrances that in connection with any
agreement or instrument, relate to restrictions on transfer embodied in the
terms of such agreement or instrument.
"Person" means any individual, partnership, corporation, association,
trust, limited liability company, joint venture, unincorporated organization and
any government, governmental department or agency or political subdivision
thereof.
"Products" has the meaning set forth in the preamble.
"Transferred Business" means the development and commercialization of the
Company's breast cancer palpation screening technology, including, without
limitation, the Products.
1.2. Cross References to Certain Terms Defined Elsewhere in this Agreement.
Term Section
401(k) Plan 8.2(c)
Acquired Assets 2.1
Assumed Obligations 3.1
Claim 9.3(a)
Closing 4.1
Closing Date 4.1
Employees 6.10
Equipment 2.1(a)
Excluded Assets 2.2
Hopkinton Lease 2.1(c)
Indemnified Party 9.3(a)
Indemnifying Party 9.3(a)
Intangibles 2.1(d)
Losses 9.1 and 9.2
Miscellaneous Contracts 2.1(e)
Parent Benefit Plan 8.2(b)
Preferred Stock preamble
Proprietary Software 2.2(f)
Purchase Agreement 7.3
Retained Liabilities 3.1
Retained Third Party Software 2.2(f)
Securities Act 5.5(c)
Series A Preferred Stock preamble
Series B Preferred Stock preamble
Shares 3.2 and 5.5(a)
Subject Losses 9.6
Third Party Claim 9.3(a)
Third Party Software 2.1(f)
Third Party Software Licenses 2.1(f)
Transferred Employees 8.2(a)
Transferred Software 2.2(f)
WARN Act 8.2(a)
Article 2
Contribution of Assets
2.1. Acquired Assets. Subject to the terms and conditions set forth in this
Agreement, the Parent hereby assigns, transfers and delivers to Assurance, and
Assurance hereby acquires and takes assignment and delivery of, the assets of
the Parent owned, used or held for use in the Transferred Business as of the
date hereof and described below:
(a) any and all fixtures, machinery, installations, equipment, furniture,
supplies and other personal property, used solely in conjunction with the
operations of the Transferred Business, including without limitation those items
described on Schedule 2.1(a) hereto (the "Equipment");
(b) all the Parent's title to, interest in and rights under the lease of
the real property located at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ (the
"Hopkinton Lease");
(c) (i) all the Parent's right, title and interest in and to all trade
secrets and confidential information relating to the Transferred Business;
(ii) all the Parent's right, title and interest in and to any works of
authorship relating to the Transferred Business, including all copyright rights
throughout the world, and including the right to ▇▇▇ for and to recover for past
infringement thereof; (iii) all the Parent's right, title and interest in and to
all technical information, know-how and show-how whether or not protectable by
patent, copyright or trade secret law, relating to the Transferred Business;
(iv) all the Parent's right, title and interest in and to the trademarks, trade
names and service marks, whether registered or unregistered, arising under the
common law, state law, Federal law and laws of foreign countries and all
registrations thereof and interests therein throughout the world, used solely in
or with respect to the Transferred Business, including the right to ▇▇▇ for and
to recover for past infringement thereof; (v) all of the Parent's right, title
and interest in and to advertising and marketing know-how and materials, sales
tools and advertising, customer lists and other customer and potential customer
data relating to the Transferred Business, supplier and vendor lists and other
intangible assets, to the extent relating to the conduct of the Transferred
Business; and (vi) all the Parent's right, title and interest in any internally
developed software used in the Transferred Business (the "Internally Developed
Software," and, collectively, the "Intangibles"), including those more
particularly described on Schedule 2.1(c) hereto;
(d) all the Parent's right, title and interest in the miscellaneous
contracts of the Parent listed on Schedule 2.l(d) hereto (the "Miscellaneous
Contracts");
(e) copies of the Parent's accounting books, records and ledgers relating
to the Transferred Business, and copies of all documents and records relating to
the Acquired Assets and the Transferred Business and originals of the Hopkinton
Lease and Miscellaneous Contracts; and
(f) all the Parent's right, title and interest in the computer software
licensed to Parent and used in the Transferred Business and listed on Schedule
2.1(f) hereto (the "Transferred Software").
All of the foregoing assets are referred to collectively in this Agreement
as the "Acquired Assets".
2.2 Excluded Assets. Notwithstanding the foregoing, the Parent is not
transferring and Assurance is not acquiring, pursuant to this Agreement, and the
term "Acquired Assets" shall not include, any of the following (the "Excluded
Assets"):
(a) Any cash;
(b) Any accounts receivable, notes receivable or miscellaneous receivables;
(c) Any of the Parent's tradenames, service marks or tradenames, or any
stationery, office supplies, business forms, manuals or similar property bearing
the Parent's trademarks, trade names, service marks, logos or similar corporate
identification, unless such trademarks, trade names, service marks, logos or
similar corporate identification have been redacted therefrom;
(d) Any assets related solely to Retained Liabilities;
(e) Any income tax refunds or claims therefor which the Parent may be
entitled to receive from any federal, state, or local authorities;
(f) all computer software owned by the Parent and used in the Transferred
Business (the "Proprietary Software") and all computer software licensed to
Parent and used in the Transferred Business (the "Retained Third Party
Software") other than the Transferred Software and Internally Developed
Software; and
(g) Any assets of the Parent not used in the Transferred Business;
(h) Any of the Parent's rights under any insurance policies;
(i) the consideration received by the Parent pursuant to this Agreement;
(j) the rights of the Parent under this Agreement; and
(k) any rights of the Parent under any Parent Benefit Plan, and any pension
funds or other assets held pursuant to the terms of any Parent Benefit Plan.
Article 3
Assumption of Obligations; Issuance of Shares
3.1. Assumption of Obligations. Assurance assumes, and agrees to pay,
perform, fulfill and discharge (i) all obligations of the Parent arising on or
after the date hereof and relating to events transpiring on or after the date
hereof under the Hopkinton Lease, the Miscellaneous Contracts and the license
agreements relating to the Transferred Software, (ii) all other liabilities and
obligations relating to the Acquired Assets and arising after the Closing or
otherwise relating to or arising out of the operation of the Transferred
Business from and after the Closing Date, and (iii) the expenses to be paid by
Assurance pursuant to Section 3.3 (collectively, the "Assumed Obligations").
Anything in this Agreement to the contrary notwithstanding, Assurance shall not
assume, and shall not be deemed to have assumed, any liability or obligation of
the Parent whatsoever other than as specifically set forth in this Section 3.1
(with all such non-assumed liabilities and obligations referred to herein as the
"Retained Liabilities").
3.2. Issuance of Shares. As consideration for the transfer to Assurance of
the Acquired Assets, Assurance hereby agrees to issue to the Parent 4,740,000
shares of Series A Preferred and 500,000 shares of Series B Preferred
(collectively, the "Shares").
3.3. Issuance of Letter of Credit; Payment of Certain Fees and Expenses.
(a) Assurance agrees to cause its lender to issue a Letter of Credit in
favor of ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, sublessor under the Hopkinton Lease, complying with
the terms of the Hopkinton Lease, which shall replace the Letter of Credit
issued by Fleet National Bank pursuant to Section 10.15(b) of the Hopkinton
Lease, within thirty (30) days after Closing.
(b) Assurance agrees that it will pay or reimburse Parent for (i) accrued
expenses attributable to the Transferred Business listed on Schedule 3.3(b)
hereto, within one week after the Closing; (ii) any expenses attributable to the
Transferred Business incurred by Parent on or after April 1, 1999, a reasonable
estimate of which is set forth on Schedule 3.3(b), within one week after request
for such payment or reimbursement by Parent, (iii) an amount equal to the
security deposit, and any interest accrued thereon, deposited by Parent pursuant
to Section 10.15(a) of the Hopkinton Lease, within one week after the Closing,
and (iv) employee bonuses in the amounts set forth on Schedule 3.3(b) (the
"Employee Bonuses"), prior to May 1, 1999.
Article 4
Closing
4.1. Time and Place. The closing of the transfer and delivery of all
documents and instruments necessary to consummate the transactions contemplated
by this Agreement (the "Closing") shall be held at the offices of ▇▇▇▇ & ▇▇▇▇
LLP, Boston, Massachusetts, on the date of this Agreement or at such other time
or such other place as the Parent and Assurance may agree. The date on which the
Closing is actually held hereunder is sometimes referred to herein as the
"Closing Date". The Closing will be deemed to be effective for purposes of this
Agreement as of 11:59 p.m. in Boston, Massachusetts on the Closing Date.
4.2. Transactions at Closing. At the Closing:
(a) The Parent shall duly execute and deliver to Assurance or its nominee
or nominees such bills of sale, certificates of title and other instruments of
assignment or transfer with respect to the Acquired Assets as Assurance may
reasonably request and as may be necessary to vest in Assurance all of the
Parent's title to the Acquired Assets.
(b) Assurance shall deliver to the Parent duly executed certificates
representing the Shares.
(c) Assurance shall duly execute and deliver to the Parent such instruments
of assumption with respect to the Assumed Obligations as the Parent may
reasonably request.
(d) The Parent shall deliver to Assurance consents to the transactions
contemplated by this Agreement from ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, the Sublessor under the
Hopkinton Lease, and Tekscan, Inc.
(e) Fish & ▇▇▇▇▇▇▇▇▇▇ P.C. shall deliver to Assurance a written opinion,
addressed to Assurance and dated the Closing Date in form and substance
acceptable to Assurance and at Assurance's expense.
(f) Each of ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ and ▇▇▇▇ ▇▇▇▇▇ shall deliver to the
Parent an acknowledgement in the form of Exhibit A hereto.
Article 5
Representations and Warranties of the Parent
The Parent represents and warrants to Assurance as follows:
5.1 Incorporation; Authority. The Parent is a corporation duly organized,
validly existing and in good standing under the laws of the Commonwealth of
Massachusetts and has all requisite corporate power and authority to carry on
the Transferred Business as now conducted.
5.2 Rights to Sell Acquired Assets; Approvals; Binding Effect. The Parent
has all requisite corporate power and authority to enter into this Agreement, to
perform all of its agreements and obligations hereunder in accordance with its
terms, and to transfer to Assurance all of the Acquired Assets. The execution,
delivery and performance of this Agreement and the consummation of the
transactions contemplated hereby has been duly authorized by all necessary
corporate action on the part of the Parent. This Agreement has been duly
executed and delivered by the Parent and constitutes the legal, valid and
binding obligation of the Parent, enforceable against the Parent in accordance
with its terms, except as such validity, binding effect or enforcement may be
limited by bankruptcy, insolvency or similar laws affecting creditors' rights
generally or by equitable principles relating to the availability of remedies.
5.3 No Defaults. Except for consents to transfer with respect to any
agreement or license that is part of the Acquired Assets, the entering into this
Agreement, the performance and compliance by the Parent with the terms hereof,
and the consummation of all the transactions contemplated hereby, will not
either currently, or after notice or lapse of time or both:
(a) result in a violation of any provision of the charter, by-laws or other
organizational documents of the Parent;
(b) result in a violation by the Parent of any statute, regulation, order,
law, ordinance or restriction applicable to the Parent or by which the Parent or
any of the Acquired Assets is bound or subject;
(c) result in a violation by the Parent of any judgment, order or decree of
any court or judicial or quasi-judicial tribunal applicable to the Parent;
(d) conflict with, violate, result in the breach or termination of, or
constitute a default under any contract, order, or permit to which the Parent is
a party or by which it or any of the Acquired Assets are bound or subject; or
(e) result in the creation of any Encumbrance upon any of the Acquired
Assets, except, in each case, for Permitted Encumbrances.
5.4. Title to Assets. The Parent owns or has the right to transfer all of
the Acquired Assets, subject to the receipt of consents to transfer, which will
be obtained prior to the Closing. The Parent has, and at and as of the Closing
the Parent will convey to Assurance, good and marketable title to the Acquired
Assets, free and clear of all Encumbrances except for Permitted Encumbrances;
provided that this Section 5.4 shall not be considered a representation or
warranty as to the non-infringement of any of the Intangibles or other
intellectual property included in the Acquired Assets.
5.5. Investment Representations
(a) Purchase Entirely for Own Account. This Agreement is made with the
Parent in reliance upon the Parent's representation to Assurance, which by the
Parent's execution of this Agreement the Parent hereby confirms, that the shares
of Preferred Stock (the "Shares") to be acquired by the Parent will be acquired
for investment for the Parent's own account, not as a nominee or agent, and not
with a view to the resale or distribution of any part thereof and that the
Parent has no present intention of selling, granting any participation in, or
otherwise distributing the same.
(b) Disclosure of Information. The Parent represents that it has had an
opportunity to ask questions and receive answers from Assurance regarding the
terms and conditions of the transactions contemplated by this Agreement. The
foregoing, however, does not limit or modify the representations and warranties
of Assurance in Article 6 of this Agreement or the right of the Parent to rely
thereon.
(c) Investment Experience. The Parent understands that the Shares have not
been, and prior to an appropriate registration statement's becoming effective
will not be, registered under the Securities Act of 1933, as amended (the
"Securities Act"), by reason of a specific exemption from the registration
provisions of the Securities Act which depends upon, among other things, the
bona fide nature of the investment intent and the accuracy of the Parent's
representations as expressed herein. The Parent acknowledges that it is able to
fend for itself, can bear the economic risk of its investment and has such
knowledge and experience in financial and business matters that it is capable of
evaluating the merits and risks of the investment in the Shares.
(d) Legends. The Parent understands that the Shares may bear one or all of
the following legends:
(i) "these securities have not been registered under the securities act of
1933. they may not be sold, offered for sale, pledged or hypothecated in the
absence of a registration statement in effect with respect to the securities
under such act or an opinion of counsel REASONABLY satisfactory to the company
that such registration is not required."
(ii). Any legend required by the Blue Sky laws of any state to the extent
such laws are applicable to the shares represented by the certificate so
legended.
A certificate shall not bear such legends if in the opinion of counsel
reasonably satisfactory to Assurance the securities represented thereby may be
publicly sold without registration under the Securities Act and any applicable
state securities laws.
(e) Restricted Securities. The Parent understands that the Shares are
characterized as "restricted securities" under the federal securities laws
inasmuch as they are being acquired from Assurance in a transaction not
involving a public offering and that under such laws and applicable regulations
such Shares may be resold without registration under the Securities Act only in
certain limited circumstances. The Parent acknowledges that the Shares must be
held indefinitely unless subsequently registered under the Securities Act or an
exemption from such registration is available.
(f) Accredited Investor. The Parent is an accredited investor as defined in
Rule 501(a) of Regulation D promulgated under the Securities Act.
Article 6
Representations and Warranties of Assurance
Assurance hereby represents and warrants to the Parent as follows:
6.1. Organization and Standing of Assurance. Assurance is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware. Assurance has all required corporate power and authority to
enter into this Agreement, to perform all of its agreements and obligations
hereunder in accordance with its terms and to acquire the Acquired Assets from
the Parent.
6.2. Corporate Approval; Binding Effect. Assurance has obtained all
necessary authorizations and approvals from its Board of Directors and
shareholders required for the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby. This Agreement has been
duly executed and delivered by Assurance and constitutes the legal, valid and
binding obligation of Assurance enforceable against Assurance in accordance with
its terms, except as such validity, binding effect or enforcement may be limited
by bankruptcy, insolvency or similar laws affecting creditors' rights generally
or by equitable principles relating to the availability of remedies.
6.3. Non-Contravention. The execution, delivery and performance by
Assurance of this Agreement will not result in any violation of or be in
conflict with its Certificate of Incorporation or By-Laws, or any agreement,
instrument, judgment, decree, order, statute, rule or governmental regulation
applicable to it, or be in conflict with or constitute a default under any of
the foregoing.
6.4. Government Consents, Etc. Except for filings with the United States
Patent and Trademark Office and similar filings to register the transfer of
personal property, no consent, approval or authorization of or registration,
designation, declaration or filing with any Governmental Entity, Federal or
other, on the part of Assurance is required in connection with the purchase of
the Acquired Assets pursuant to this Agreement or the consummation of any other
transaction contemplated hereby.
6.5. Brokers. No finder, broker, agent or other intermediary has worked for
or on behalf of Assurance in connection with the negotiation or consummation of
the transactions contemplated hereby.
6.6. Capital Stock. The authorized capital stock of Assurance consists of
(a) 4,780,000 shares of Series A Preferred Stock, $.01 par value, (b) 8,500,000
shares of Series B Preferred Stock, par value $.01 per share and (c) 25,000,000
shares of Common Stock, $.01 par value. All of the outstanding shares of capital
stock of Assurance are duly authorized, validly issued, fully paid and
non-assessable. No class of capital stock of the Buyer is entitled to preemptive
rights. Except for rights of first refusal set forth in the Co-Sale Agreement,
no options, warrants or other rights to acquire capital stock from the Buyer are
outstanding.
6.7. Authorization for Shares. Assurance has taken all necessary action to
permit it to issue the number of Shares required to be issued pursuant to
Article 3. The Shares to be issued pursuant to Article 3 will, when issued, be
duly authorized, validly issued, fully paid, nonassessable and free of any
Encumbrance and no stockholder of Assurance will have any preemptive right of
subscription or purchase in respect thereof. Assuming the accuracy of the
Parent's representations and warranties in Section 5.5 hereof, the Shares will,
when issued, be exempt from registration under the Securities Act and any
applicable state securities laws.
6.8. Due Diligence Review. Assurance acknowledges that it has completed to
its satisfaction its own due diligence investigation with respect to the
Acquired Assets. Assurance acknowledges and agrees that, except for the
representations and warranties of the Parent contained in Article 5 hereof,
Assurance is acquiring the Acquired Assets on an AS IS/WHERE IS basis. Assurance
further acknowledges and agrees that upon consummation of the transactions
contemplated hereby, Assurance will not have any further recourse against the
Seller with respect to the Acquired Assets except for claims for indemnification
made pursuant to Article 9 hereof, claims for equitable remedies and claims
based upon fraud.
6.9. Conversion Shares. Assurance has reserved 5,280,000 shares of Common
Stock for issuance upon conversion of the Shares. All shares of Common Stock to
be issued upon conversion of the Shares have been duly authorized and, upon
issuance upon conversion of the Shares in accordance with the terms of
Assurance's Certificate of Incorporation, as amended from time to time, will be
validly issued and fully paid and non-assessable and issued free of any
preemptive rights.
6.10. Accrued Expenses. To the best knowledge of Assurance, except as set
forth on Schedule 6.10(a) hereto, Parent's employees listed on Schedule 6.10(b)
hereto (the "Employees") have not incurred any expenses relating to the
Transferred Business since January 1, 1999.
Article 7
Post Closing Covenants of Assurance and Parent
7.1. Securities Laws Compliance. Assurance shall, within 15 days after the
Closing, file a notice of the sale of the Shares to the Parent pursuant to
Section 25102(f) of the California Corporations Code, and shall make any filings
necessary under the securities or Blue Sky laws of any other applicable
jurisdiction.
7.2. Private Offering. Assurance agrees that neither Assurance nor anyone
acting on its behalf will offer any of the Shares or any similar securities for
issuance or sale to, or solicit any offer to acquire any of the same from,
anyone or take any other action so as to make the issuance and sale of the
Shares subject to the registration requirements of Section 5 of the Securities
Act.
7.3. Confidentiality Agreements. In the event that after the Closing a
current or former employee or vendor of Parent violates the terms of any
confidentiality or non-disclosure agreement between the Parent and such employee
or vendor with respect to information relating to the Transferred Business, then
at the request and direction of Assurance the Parent agrees to use reasonable
efforts to enforce the provisions of such agreement. Assurance shall reimburse
Parent for all reasonable expenses incurred by Parent in connection with such
enforcement.
Article 8
Certain Transitional Matters
8.1. (a) Employment. Assurance will offer employment, commencing on the
Closing Date, to the Employees who are at work at the Closing Date, including
those Employees on vacation, absent due to a sick or personal day, family leave
or workers' compensation claim (collectively, the "Transferred Employees").
Assurance will not be required to employ Employees who at the Closing Date are
on long-term disability. Each Transferred Employee's salary shall be at least as
great as his/her salary immediately prior to the Closing Date, and the location
of the offered employment shall be within a twenty-five mile radius of the
location where the Employee is employed immediately prior to the Closing Date.
Assurance shall have no obligation to employ any Employee for any specific term
after the Closing Date, provided that Assurance agrees that for a period of 60
days after the Closing Date, it will not cause any of the Transferred Employees
to suffer "employment loss" for purposes of the Worker Adjustment and Retraining
Notification Act and related regulations (the "WARN Act") if such employment
loss could create any liability for the Parent, unless Assurance delivers
notices under the WARN Act in such a manner and at such time that the Parent
bears no liability with respect thereto.
(b) Benefit Plans - Generally. Except as otherwise set forth on Schedule
8.4 hereto, the Transferred Employees (and their eligible dependents and
beneficiaries) shall cease to participate in any of the Parent's employee
benefit plans and programs ("Parent Benefit Plans") effective as of the Closing.
The Parent shall retain exclusive liability and responsibility for providing any
and all benefits due and payable to or in respect of Transferred Employees and
related dependents and beneficiaries under any Parent Benefit Plans in
accordance with the terms of such Parent Benefit Plans and applicable law.
(c) Savings Plan. The Parent will retain all liability and responsibility
for the disposition of interests under the Parent's 401(k) Plan (the "401(k)
Plan"), with respect to those Transferred Employees (or their beneficiaries) of
Parent who, as of the Closing Date, are participants in the 401(k) Plan. The
Parent agrees that it will cause the accounts in the 401(k) Plan of all such
participants to be fully vested as of the Closing Date. The active participation
of the Transferred Employees in the 401(k) Plan shall cease as of the Closing
Date.
8.3. Business Records. Assurance acknowledges that business records of the
Parent relating to the Parent's operations prior to the Closing will be conveyed
to Assurance as part of the Acquired Assets, and that the Parent may from time
to time require access to such records, and Assurance agrees that upon
reasonable prior written notice from the Parent, it will at any time prior to
the third anniversary of this Agreement, during normal business hours, either
provide the Parent with access to or, at Assurance's option and Parent's
expense, copies of such records for such purposes. Assurance agrees that it will
not destroy any such business records during the three year period after the
Closing Date and it will not within the two year period after that destroy any
business records prepared prior to the Closing without first notifying the
Parent and affording it the opportunity to remove or copy them. Assurance
further acknowledges that certain records relating to the Transferred Employees
are not being delivered to Assurance as part of the Acquired Assets. The Parent
acknowledges that Assurance may from time to time require access to or copies of
such records in connection with employee matters, and the Parent agrees that
upon reasonable prior written notice from Assurance, it will at any time prior
to the third anniversary of this Agreement, during normal business hours, either
provide Assurance with access to or, at the Parent's option and Assurance's
expense, copies of such records for such purposes. The Parent further agrees
that it will not destroy any such records during the three year period after the
Closing Date and it will not within the two year period after that destroy any
records relating to the Transferred Employees without first notifying Assurance
and affording it the opportunity to remove or copy them.
8.4. General Transitional Assistance. Parent agrees to provide general
transitional assistance to Assurance after the Closing, including assistance
with the matters set forth on Schedule 8.4 hereto. Any such transitional
assistance will be at the request of Assurance. Assurance will reimburse Parent
for any out-of-pocket costs and an allocable portion of wages or salaries and
related costs of any Parent employees providing this assistance. Unless it
otherwise agrees, Parent will not be required to provide this assistance after
180 days after Closing.
8.5. Computer Transition. Immediately after the Closing, Assurance agrees
to do all acts reasonably requested by Parent to transition Assurance off of
Parent's computer network. Parent agrees to provide the computer transition
assistance to Assurance set forth on Schedule 8.5 hereto.
Article 9
Indemnification
9.1. Indemnity by the Parent. The Parent agrees to indemnify and hold
Assurance harmless from and with respect to any and all claims, liabilities,
losses, damages, costs and expenses, including without limitation the reasonable
fees and disbursements of counsel, net of insurance proceeds (collectively, the
"Losses"), related to or arising directly or indirectly out of (a) any breach of
any representation or warranty made by the Parent in this Agreement, (b) any
breach by the Parent of any covenant, obligation, or undertaking made by the
Parent in this Agreement or (c) the Retained Liabilities, including the
liabilities of the Parent relating to Parent Benefit Plans and retained pursuant
to Section 8.2(b).
9.2. Indemnity by Assurance. Assurance agrees to indemnify and hold the
Parent harmless from and with respect to any and all claims, liabilities,
losses, damages, costs and expenses, including without limitation the fees and
disbursements of counsel, net of insurance proceeds (also referred to as
"Losses"), related to or arising directly or indirectly out of (a) any breach of
any representation or warranty made by Assurance in this Agreement, or (b) any
breach by Assurance of any covenant, obligation or undertaking made by Assurance
in this Agreement (including without limitation any failure by Assurance to pay
or perform any of the Assumed Obligations).
9.3. Claims.
(a) Any party seeking indemnification hereunder (the "Indemnified Party")
shall promptly notify the party hereto obligated to provide indemnification
hereunder (the "Indemnifying Party") or any action, suit, proceeding, demand or
breach (a "Claim") with respect to which the Indemnified Party claims
indemnification hereunder, provided that failure of the Indemnified Party to
give such notice shall not relieve the Indemnifying Party of its obligations
under this Article 9 except to the extent, it at all, that such Indemnifying
Party shall have been prejudiced thereby. If such Claim relates to any action,
suit, proceeding or demand instituted against the Indemnified Party by a third
party (a "Third Party Claim"), upon receipt of such notice from the Indemnified
Party the Indemnifying Party shall be entitled to participate in the defense of
such Third Party Claim, and if and only if each of the following conditions is
satisfied, the Indemnifying Party may assume the defense of such Third Party
Claim, and in the case of such an assumption the Indemnifying Party shall have
the authority to negotiate, compromise and settle such Third Party Claim:
(i) the Indemnifying Party confirms in writing that it is obligated
hereunder to indemnify the Indemnified Party with respect to such Third Party
Claim; and
(ii) the Indemnified Party does not give the Indemnifying Party written
notice that it has determined, in the exercise of its reasonable discretion,
that matters of corporate or management policy or a conflict of interest make
separate representation by the Indemnified Party's own counsel advisable.
The Indemnified Party shall retain the right to employ its own counsel and
to participate in the defense of any Third Party Claim, the defense of which has
been assumed by the Indemnifying Party pursuant hereto, but the Indemnified
Party shall bear and shall be solely responsible for its own costs and expenses
in connection with such participation.
(b) In the event of any Claim under Section 9.1 or 9.2, the Indemnified
Party shall advise the Indemnifying Party in writing of the amount and
circumstances surrounding such Claim. With respect to liquidated Claims, if
within thirty (30) days the Indemnifying Party has not contested such Claim in
writing, the Indemnifying Party will pay the full amount thereof within ten (10)
days after the expiration of such period.
9.4. Limits. No claim for indemnification under this Article 9 may be
asserted for the first time for any breach of any representation or warranty
made by Assurance or Parent in this Agreement after the second anniversary of
the Closing Date. The aggregate amount payable by the Parent or Assurance
pursuant to this Article 9 for breaches of representations or warranties is
$5,240,000.
9.5. Exclusive Remedy. The Parent and Assurance acknowledge and agree that
the indemnification rights and remedies available to each party under this
Article 9 shall be the sole and exclusive rights and remedies of Assurance and
the Parent with respect to any Losses arising out of or relating in any way to
(i) any breach of this Agreement, (ii) the acquisition of the Transferred
Business by Assurance, or (iii) the consummation of the transactions
contemplated hereby (collectively, the "Subject Losses"); provided, however,
that this Article 9 does not in any way limit any equitable remedies or claims
based upon fraud. Without limiting the generality of the foregoing, except as
specifically authorized by this Article 9, Assurance and the Parent hereby
waive, release and disclaim any claims, rights or remedies arising in tort, by
statute, or otherwise, with respect to the Subject Losses. As provided in
Section 10.7, in no event shall Assurance or the Parent be entitled to recover
from the other party hereto for punitive damages, and for all purposes of this
Agreement, the term "Losses" shall be deemed not to include any such damages.
Article 10
General
10.1. Expenses. Except as expressly set forth in this Agreement, all
expenses of the preparation, execution and consummation of this Agreement and of
the transactions contemplated hereby, including, without limitation, attorneys',
accountants and outside advisers' fees and disbursements, shall be borne by the
party incurring such expenses.
10.2. Notices. All notices, demands and other communications hereunder
shall be in writing or by written telecommunication, and shall be deemed to have
been duly given if delivered personally or if mailed by certified mail, return
receipt requested, postage prepaid or if sent by overnight courier or sent by
written telecommunication, as follows:
If to the Parent:
UroMed Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇
with a copy sent contemporaneously to:
▇▇▇▇▇▇▇ ▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇, Esq.
If to Assurance:
Assurance Medical, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇
with a copy sent contemporaneously to:
▇▇▇▇ and ▇▇▇▇ LLP
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
10.3. Entire Agreement. This Agreement (including the Exhibits and
Schedules hereto) contains the entire understanding of the parties hereto and
thereto, supersedes all prior agreements and understandings relating to the
subject matter hereof and thereof and shall not be amended except by a written
instrument hereafter signed by all of the parties hereto. No waiver of any
provision of this Agreement shall be effective unless evidenced by a written
instrument signed by the waiving party. Each of the parties hereto further
acknowledge and agree that, in entering into this Agreement, they have not in
any way relied upon any oral or written agreements, statements, promises,
information, arrangements, understandings, representations or warranties,
express or implied, not specifically set forth in this Agreement. EXCEPT AS SET
FORTH IN ARTICLE 5, PARENT MAKES NO REPRESENTATIONS OR WARRANTIES, EXPRESS OR
IMPLIED, INCLUDING WITHOUT LIMITATION ANY REPRESENTATION OR WARRANTY WITH
RESPECT TO MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, WITH RESPECT TO
THE TRANSFER OF THE ACQUIRED ASSETS HEREUNDER OR THE TRANSFERRED BUSINESS.
10.4. Governing Law. This Agreement shall be governed by, and construed and
enforced in accordance with, the laws of the Commonwealth of Massachusetts
without regard to its conflict of laws rules.
10.5. Consent to Jurisdiction. Each of the parties hereto agrees that any
suit, action or proceeding instituted against such party under or in connection
with this Agreement shall be brought exclusively in a court of competent
jurisdiction of the Commonwealth of Massachusetts. By execution hereof, each
party hereto irrevocably waives any objection to, and any right of immunity on
the grounds of, improper venue, the convenience of the forum, the personal
jurisdiction of such courts or the execution of judgments resulting therefrom.
Each party hereto hereby irrevocably accepts and submits to the exclusive
jurisdiction of such courts in any such action, suit or proceeding.
10.6. Waiver of Jury Trial. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY
WAIVES ANY RIGHTS THAT THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
LITIGATION BASED UPON, OR ARISING OUT OF, THIS AGREEMENT OR ANY OF THE RELATED
AGREEMENTS OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS OR ACTIONS OF
ANY OF THEM RELATING THERETO.
10.7. Waiver of Certain Damages. EACH OF THE PARTIES HERETO TO THE FULLEST
EXTENT PERMITTED BY LAW IRREVOCABLY WAIVES ANY RIGHTS THAT THEY MAY HAVE TO
PUNITIVE DAMAGES IN RESPECT OF ANY LITIGATION BASED UPON, OR ARISING OUT OF,
THIS AGREEMENT OR ANY RELATED AGREEMENT OR ANY COURSE OF CONDUCT, COURSE OF
DEALING, STATEMENTS OR ACTIONS OF ANY OF THEM RELATING THERETO.
10.8. Sections and Section Headings. The headings of sections and
subsections are for reference only and shall not limit or control the meaning
thereof.
10.9. Assigns. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective heirs, successors and
permitted assigns. Neither this Agreement nor the obligations of any party
hereunder shall be assignable or transferable by such party without the prior
written consent of the other party hereto; provided, however, that the Acquired
Assets may be transferred after the Closing Date without the consent of any
other party hereto. In addition, either party may assign such party's rights and
obligations hereunder by way of collateral assignment to any bank or financing
institution or in connection with a sale of all or substantially all of such
party's assets.
10.10. No Implied Rights or Remedies. Except as otherwise expressly
provided herein, nothing herein expressed or implied is intended or shall be
construed to confer upon or to give any Person, except the parties hereto, any
rights or remedies under or by reason of this Agreement.
10.11. Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
10.12. Construction. The language used in this Agreement will be deemed to
be the language chosen by the parties to express their mutual intent, and no
rule of strict construction will be applied against any party.
10.13. Severability. The invalidity or unenforceability of any particular
provision of this Agreement shall not affect the other provisions hereof or
thereof, and this Agreement shall be construed in all respects as if such
invalid or unenforceable provision was omitted.
10.14. No Other Obligations. The parties hereto hereby acknowledge and
agree that except as otherwise expressly provided in this Agreement, the
Schedules hereto and the documents and instruments delivered in connection
herewith, neither party has any obligation or liability to the other arising out
of the transactions contemplated by this Agreement or otherwise.
IN WITNESS WHEREOF, and intending to be legally bound hereby, the parties
hereto have caused this Agreement to be duly executed and delivered as a sealed
instrument as of the date and year first above written.
UROMED CORPORATION
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
______________________________
Name: ▇▇▇▇ ▇. ▇▇▇▇▇
Title: President and Chief Executive Officer
ASSURANCE MEDICAL, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇
_______________________________
Name:
Title: President