SEPARATION AGREEMENT
between
Epitope, Inc.
and
Agritope, Inc.
Dated ________________, 1997
TABLE OF CONTENTS
PAGE
ARTICLE 1
DEFINITIONS................................................ 1
ARTICLE 2
PRE-DISTRIBUTION TRANSACTIONS....................................... 4
2.1 Private Placement of Agritope Equity. ..................................................... 4
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2.2 Agritope Corporate Actions.................................................................. 5
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2.3 Epitope Approval............................................................................ 5
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2.4 Related Agreements.......................................................................... 5
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2.5 Securities Law Actions...................................................................... 5
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ARTICLE 3
THE DISTRIBUTION.............................................. 6
3.1 Discretion of Epitope Board; No Obligation.................................................. 6
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3.2 Conditions to the Distribution.............................................................. 6
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3.3 The Distribution............................................................................ 6
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3.4 Fractional Shares........................................................................... 7
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ARTICLE 4
INDEMNIFICATION, CLAIMS AND OTHER MATTERS................................. 7
4.1 Indemnification by Epitope.................................................................. 7
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4.2 Indemnification by Agritope................................................................. 8
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4.3 Insurance Proceeds.......................................................................... 8
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4.4 Procedure for Indemnification............................................................... 8
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4.5 Other Claims................................................................................ 10
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4.6 Contribution in Respect of Certain Indemnifiable Losses..................................... 11
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4.7 No Beneficiaries............................................................................ 11
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ARTICLE 5
CERTAIN ADDITIONAL MATTERS......................................... 11
5.1 Construction of Agreements.................................................................. 11
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5.2 Consents and Assignments.................................................................... 11
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5.3 No Representations or Warranties............................................................ 11
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5.4 Officers and Directors...................................................................... 12
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5.5 Existing Intercompany Arrangements.......................................................... 12
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5.6 Termination of Intercompany Accounts........................................................ 12
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ARTICLE 6
ACCESS TO INFORMATION AND SERVICES; TECHNOLOGY............................... 12
6.1 Provision of Corporate Records.............................................................. 12
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6.2 Access to Information....................................................................... 12
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6.3 Production of Witnesses and Individuals..................................................... 13
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6.4 Retention of Records........................................................................ 13
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6.5 Confidentiality............................................................................. 13
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6.6 Privileged Matters.......................................................................... 14
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6.7 Technology.................................................................................. 15
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ARTICLE 7
INSURANCE................................................. 16
7.1 Transition.................................................................................. 16
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7.2 Post-Distribution Date Claims............................................................... 16
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7.3 Allocation of Insurance Proceeds............................................................ 16
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ARTICLE 8
DISPUTE RESOLUTION............................................. 17
8.1 Negotiation and Binding Arbitration......................................................... 17
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8.2 Initiation.................................................................................. 17
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8.3 Submission to Arbitration................................................................... 17
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8.4 Equitable Relief............................................................................ 17
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ARTICLE 9
MISCELLANEOUS............................................... 18
9.1 Entire Agreement............................................................................ 18
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9.2 Expenses.................................................................................... 18
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9.3 Governing Law............................................................................... 18
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9.4 Jurisdiction and Venue...................................................................... 18
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9.5 Notices..................................................................................... 18
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9.6 Modification of Agreement................................................................... 19
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9.7 Termination................................................................................. 19
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9.8 Successors and Assigns...................................................................... 19
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9.9 No Third Party Beneficiaries................................................................ 19
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9.10 Titles and Headings; Interpretation......................................................... 19
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9.11 Exhibits.................................................................................... 19
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9.12 Severability................................................................................ 20
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9.13 No Waiver................................................................................... 20
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9.14 Survival.................................................................................... 20
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9.15 Counterparts................................................................................ 20
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SEPARATION AGREEMENT
THIS SEPARATION AGREEMENT (this "Agreement") is entered into
by and between Epitope, Inc., an Oregon corporation ("Epitope"), and Agritope,
Inc., an Oregon corporation ("Agritope"), as of _________, 1997.
RECITALS
A. Agritope is a wholly owned subsidiary of Epitope, principally
engaged in research and development of agricultural products using plant genetic
engineering.
B. The board of directors of Epitope has determined that it is in the
best interests of the shareholders of Epitope to separate Agritope from Epitope
by distributing as a dividend to holders of Epitope common stock, no par value
("Epitope Stock"), all of the issued and outstanding shares of Agritope common
stock, no par value, including certain preferred stock purchase rights attached
thereto (the "Agritope Stock"), held by Epitope (the "Distribution"), as
provided herein; and
C. Epitope and Agritope have determined that it is necessary and
desirable to establish the principal corporate transactions required to effect
the separation of Agritope from Epitope, and to enter into certain other
agreements governing matters relating to the Distribution and the relationship
between Epitope and Agritope after the Distribution.
NOW, THEREFORE, in consideration of the foregoing and the
mutual covenants and agreements contained herein, Epitope and Agritope agree as
follows:
ARTICLE 1
DEFINITIONS
Capitalized terms shall have the meanings given below or
elsewhere in this Agreement.
Action: any action, claim, suit, arbitration, inquiry,
subpoena, discovery request, proceeding or investigation by or before any court
or grand jury, any governmental or other regulatory or administrative agency or
commission or any arbitration tribunal.
Affiliate: with respect to any specified person, a person
that, directly or indirectly, through one or more intermediaries, controls, or
is controlled by, or is under common control with such specified person;
provided, however, that unless otherwise expressly provided, the Agritope Units
and Epitope shall not be deemed to be Affiliates of one another for purposes of
this Agreement.
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Agent: ChaseMellon Shareholder Services, L.L.C., the
distribution agent appointed by Epitope and Agritope to distribute the Agritope
Stock in connection with the Distribution.
Agritope Business: (i) the business of research and
development, marketing and sales of novel agricultural products using both plant
genetic engineering and other modern methods; (ii) the businesses of Vinifera
involving grapevine plant propagation and disease screening and elimination
programs; and (iii) any other business or operation conducted by an Agritope
Unit at any time. The Agritope Business does not include the business conducted
by Xxxxxx and Xxxxxxxxxx Sales, Co., a California corporation formerly owned by
Epitope.
Agritope Employee: any employee of a Core Company, and any
employee of Epitope who is assigned to a Core Company on or prior to the
Distribution Date.
Agritope Unit: each Core Company and Related Company.
Core Company: each of Agritope, Vinifera, and Agrimax Floral
Products, Inc., a Minnesota corporation.
Books and Records: books and records (or true and complete
copies thereof), including computerized records, of Epitope that relate
principally to any Agritope Unit or the Agritope Business, including, without
limitation, all books and records relating to Agritope Employees, the purchase
of materials, supplies and services by any Agritope Unit, and the technologies,
customers, and business partners of any Agritope Unit; and all files relating to
any Action involving any Agritope Unit.
Code: the Internal Revenue Code of 1986, as amended.
Commission: the Securities and Exchange Commission.
Distribution Date: the effective date of the Distribution, as
determined by the Epitope Board.
Distribution Prospectus: the prospectus to be distributed to
holders of Epitope Stock in connection with the Distribution.
Employee Benefits Agreement: the agreement, substantially in
the form of Exhibit A hereto, pursuant to which Epitope and Agritope will
provide for certain employee benefit matters.
Epitope Board: the board of directors of Epitope.
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Form S-1: the Registration Statement on Form S-1 filed by
Agritope with the Commission to register the Agritope Stock to be distributed to
holders of Epitope Stock in the Distribution.
Indemnifiable Losses: with respect to any claim by an
Indemnitee for indemnification authorized pursuant to Article 4 hereof, any and
all losses, liabilities, claims, damages, obligations, payments, costs and
expenses (including, without limitation, the costs and expenses of any and all
Actions, demands, assessments, judgments, settlements and compromises relating
thereto and reasonable attorney fees and expenses in connection therewith,
including attorney fees before and at trial and in connection with any appeal or
petition for review) suffered by such Indemnitee with respect to such claim.
Indemnifying Party: any party who is required to pay any other
person pursuant to Article 4 hereof.
Indemnitee: any party who is entitled to receive payment from
an Indemnifying Party pursuant to Article 4 hereof.
Indemnity Payment: the amount an Indemnifying Party is
required to pay an Indemnitee pursuant to Article 4 hereof.
Insurance Proceeds: those monies (i) received by an insured
from an insurance carrier or (ii) paid by an insurance carrier on behalf of the
insured, in either case net of any applicable premium adjustment,
retrospectively rated premium, deductible, retention, cost or reserve paid or
held by or for the benefit of such insured.
Insured Claims: those Liabilities that, individually or in the
aggregate, are covered within the terms and conditions of any of the Policies,
whether or not subject to deductibles, co-insurance, uncollectibility or
retrospectively-rated premium adjustments, but only to the extent that such
Liabilities are within applicable Policy limits, including aggregates.
Liabilities: any and all debts, liabilities and obligations,
whether accrued, contingent or reflected on a balance sheet, known or unknown,
including, without limitation, those arising under any law, rule, regulation,
Action, order or consent decree of any governmental entity or any judgment of
any court of any kind or award of any arbitrator of any kind, and those arising
under any contract, commitment or undertaking.
Policies: insurance policies and insurance contracts of any
kind, including, without limitation, primary and excess policies, comprehensive
general liability policies, automobile and workers' compensation insurance
policies, and self-insurance arrangements, together with the rights and benefits
thereunder.
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Private Placement: the sale of Agritope Stock to certain
private investors in transactions intended to be exempt from registration under
the Securities Act pursuant to Regulation D or Regulation S under the Securities
Act.
Record Date: the date determined by the Epitope Board as the
record date for the Distribution.
Related Agreements: the Employee Benefits Agreement,
Transition Services and Facilities Agreement, Tax Allocation Agreement, and all
other agreements entered into by Epitope and Agritope pursuant to this Agreement
or otherwise in connection with the Distribution.
Related Company: each of UAF, Limited Partnership, a Delaware
limited partnership, Petals USA, Inc., a Minnesota corporation, and Superior
Tomato Associates, L.L.C., a Delaware limited liability company.
Securities Act: the Securities Act of 1933, as amended.
Shared Policies: all Policies owned or maintained by or on
behalf of Epitope prior to the Distribution Date, relating to both Epitope's
business and the Agritope Business.
Tax Allocation Agreement: the agreement, substantially in the
form of Exhibit B hereto, pursuant to which Epitope and Agritope will provide
for certain tax matters.
Transition Services and Facilities Agreement: the agreement,
substantially in the form of Exhibit C hereto, pursuant to which Epitope will
provide certain transitional services and facilities to Agritope following the
Distribution Date.
Vinifera: Vinifera, Inc., an Oregon corporation.
Vinifera Share Exchange: the exchange of shares of Vinifera
common stock or Vinifera preferred stock held by shareholders of Vinifera other
than Agritope, for shares of Agritope Stock.
Warrant Transaction: any sale of Epitope Stock upon the
exercise of outstanding warrants to purchase Epitope Stock.
ARTICLE 2
PRE-DISTRIBUTION TRANSACTIONS
2.1 Private Placement of Agritope Equity. Agritope shall use its best
efforts to obtain commitments in the form of executed share purchase agreements
from investors interested in investing in Agritope in a Private Placement to
occur immediately following the
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Distribution. Agritope shall use its best efforts to determine the aggregate
amount of committed investment capital as soon as practicable.
2.2 Agritope Corporate Actions. Prior to the Distribution Date,
Agritope will take all corporate action necessary to effect the Distribution and
comply with this Agreement and any Related Agreements, including but not limited
to authorizing a recapitalization such that a sufficient number of shares of
Agritope Stock are available to effect the Distribution, and approving
appropriate stock-based compensation or other plans, agreements and
arrangements, as provided for in the Employee Benefits Agreement.
2.3 Epitope Approval. Subject to the business judgment of the Epitope
Board, Epitope shall cooperate with Agritope in effecting any actions that are
reasonably necessary or desirable to be taken by Agritope in connection with the
transactions contemplated by this Agreement or any Related Agreements including,
without limitation, approving or ratifying as sole shareholder of Agritope, the
election or appointment of directors of Agritope to serve following the
Distribution, appropriate stock-based compensation or other plans for Agritope
Employees, board members and consultants, and any recapitalization necessary to
effect the Distribution.
2.4 Related Agreements. Epitope and Agritope will use their best
efforts to cause, on or before the Distribution Date, the execution and delivery
by each party of the Related Agreements and any other agreements deemed
necessary or desirable by the parties to establish and govern the
post-Distribution relationship of the parties.
2.5 Securities Law Actions.
(a) Epitope and Agritope will prepare, and file with the
Commission, the Form S-1, including the Distribution Prospectus.
Epitope and Agritope shall use reasonable efforts to cause the Form S-1
to become effective under the Securities Act, and, as soon as
practicable after the Distribution Date, Epitope shall mail the
Distribution Prospectus to holders of Epitope Stock as of the Record
Date. The joint obligations of Epitope and Agritope under this Section
2.4(a) shall not affect their respective obligations of indemnity under
Article 4 hereof.
(b) Epitope and Agritope shall take all such actions as may be
necessary or appropriate under the securities or blue sky laws of the
various states or other political subdivisions of the United States and
other countries in connection with the Distribution and the Private
Placement.
(c) Agritope will prepare and file, and will use its best
efforts to have approved, an application for inclusion of Agritope
Stock on The Nasdaq SmallCap Market.
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ARTICLE 3
THE DISTRIBUTION
3.1 Discretion of Epitope Board; No Obligation. The Epitope Board will
have the sole discretion to determine, by resolution, the Record Date, the
Distribution Date and all appropriate procedures in connection with the
Distribution. Nothing contained in this section shall be interpreted to create
any obligation on the part of Epitope or Agritope to effect or to seek to effect
the Distribution or in any way limit Epitope's right to terminate this
Agreement.
3.2 Conditions to the Distribution. The Distribution will not occur
prior to such time as each of the following conditions have been satisfied or
have been waived by the Epitope Board, in its sole discretion:
(a) Agritope shall have received binding commitments for
financing in an amount the Epitope Board deems sufficient to support
the operations of the Core Companies as businesses separate from
Epitope for a period of not less than two years;
(b) any waivers, consents, or amendments with respect to
agreements or other obligations entered into by or binding upon Epitope
or any Core Company shall have been executed and received to the extent
necessary to prevent Epitope or the Core Company from being in default
with respect to such agreements or obligations following the
Distribution;
(c) an opinion shall have been received from Miller, Nash,
Wiener, Hager & Xxxxxxx LLP in form and substance satisfactory to the
Epitope Board, with respect to the federal income tax status of the
Distribution under Section 355 of the Code;
(d) the Form S-1 shall have been declared effective by the
Commission;
(e) any material approvals and consents necessary to
consummate the Distribution shall have been obtained and shall be in
full force and effect, and no Action shall be pending or threatened
with respect to the Distribution; and
(f) no other event or development shall have occurred that, in
the judgment of the Epitope Board, would have a material adverse effect
on Epitope or its Shareholders.
3.3 The Distribution. On or prior to the Distribution Date,
Epitope will deliver its certificate or certificates for Agritope Stock to the
Agent. Epitope will deliver to the Agent a stock certificate or certificates
representing, in the aggregate (and rounded down to the nearest whole share),
the number of shares necessary so that one share of Agritope Stock may be
distributed to Epitope shareholders of record for every ______ shares of
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Epitope Stock outstanding on the Record Date. Thereafter, Epitope shall instruct
the Agent to distribute to holders of record of Epitope Stock on the Record
Date, one share of Agritope Stock for every ______ shares of Epitope Stock. All
of the shares of Agritope Stock issued in the Distribution will be fully paid,
nonassessable and free of preemptive rights. If the aggregate number of shares
held by Epitope or delivered to the Agent as of the Distribution Date exceeds
the number to be distributed to Epitope shareholders, Epitope shall return or
instruct the Agent to return the excess shares to Agritope for cancellation, as
an additional contribution to capital.
3.4 Fractional Shares. No certificates or scrip representing
fractional shares of Agritope Stock will be issued as a part of the
Distribution, and in lieu of receiving fractional shares, each holder of Epitope
Stock who would otherwise be entitled to receive a fractional share of Agritope
Stock pursuant to the Distribution will receive cash from Epitope for such
fractional share.
ARTICLE 4
INDEMNIFICATION, CLAIMS AND OTHER MATTERS
4.1 Indemnification by Epitope. Epitope will indemnify, defend
and hold harmless the Agritope Units and each of their directors, officers,
employees, and agents from and against any and all Indemnifiable Losses after
the Distribution Date arising out of or due to, directly or indirectly: (i)
Liabilities incurred in the course of the business or operations of Epitope
exclusive of the Agritope Business; (ii) any claim that any information provided
in connection with the Warrant Transaction, other than information listed in
Section 4.2(iii), is false or misleading with respect to any material fact or
omits to state any material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading, or that the Warrant Transaction otherwise
violated the applicable law of any country; (iii) any claim that the information
included in the Distribution Prospectus or the Form S-1 under (A) the captions
"Summary -- Distributing Corporation and Business," "-- Conditions to the
Distribution," "-- Distribution Ratio," "-- Record Date," "-- Distribution
Date," "--Shares to be Distributed," "-- Fractional Share Interests," "--
Primary Purposes of the Distribution," "--Tax Consequences," or "--Relationship
with Epitope after the Distribution," and the corresponding information
appearing elsewhere in the Prospectus, (B) the captions "The Distribution --
Reasons for the Distribution," "-- Manner of Effecting the Distribution" and "--
Certain Federal Income Tax Consequences," or (C) the information concerning
Vector Securities International, Inc. is false or misleading with respect to any
material fact or omits to state any material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading; (iv) any third party
claim of failure by Epitope to perform under, or of any violation by Epitope of,
any provision of this Agreement or any Related Agreement, which is to be
performed or complied with by Epitope; and (v) breaches of this Agreement or any
Related Agreement by Epitope.
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4.2 Indemnification by Agritope. Agritope will indemnify,
defend and hold harmless Epitope and each of its directors, officers, employees,
and agents from and against any and all Indemnifiable Losses after the
Distribution Date arising out of or due to, directly or indirectly: (i)
Liabilities incurred in the course of the Agritope Business, including
obligations under any existing guaranty by Epitope of obligations of any
Agritope Unit; (ii) any claim that any information provided in connection with
the Private Placement or Vinifera Share Exchange, other than the information
listed in Section 4.1(iii), is false or misleading with respect to any material
fact or omits to state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading, or that the Private Placement or
Vinifera Share Exchange otherwise violated the applicable law of any country;
(iii) any claim that the information included in the Distribution Prospectus or
Form S-1, other than the information listed in Section 4.1(iii) hereof, is false
or misleading with respect to any material fact or omits to state any material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading; (iv) any third party claims of failure by an Agritope Unit to
perform under, or any violation by an Agritope Unit of, any provision of this
Agreement or any Related Agreement which is to be performed or complied with by
an Agritope Unit; and (v) breaches of this Agreement or any Related Agreement by
an Agritope Unit.
4.3 Insurance Proceeds. The amount that any Indemnifying Party
is or may be required to pay to any Indemnitee pursuant to Section 4.1 or
Section 4.2 hereof will be reduced (including, without limitation,
retroactively) by any Insurance Proceeds and other amounts actually recovered by
or on behalf of such Indemnitee in reduction of the related Indemnifiable Loss.
If an Indemnitee shall have received an Indemnity Payment in respect of an
Indemnifiable Loss and shall subsequently actually receive Insurance Proceeds or
other amounts in respect of such Indemnifiable Loss as specified above, then
such Indemnitee will pay to such Indemnifying Party a sum equal to the amount of
such Insurance Proceeds or other amounts actually received. Notwithstanding the
foregoing, nothing in this section grants to an Indemnitee any direct or
indirect rights or benefits to insurance coverage, nor requires an Indemnifying
Party to make any claim for insurance coverage.
4.4 Procedure for Indemnification.
(a) If either party shall receive notice of any claim or
Action brought, asserted, commenced or pursued by any person or entity
not a party to this Agreement (hereinafter a "Third Party Claim"), with
respect to which the other party is or may be obligated to make an
Indemnity Payment, it shall give such other party prompt notice thereof
(including any pleadings relating thereto), specifying in such
reasonable detail as is known to it the nature of such Third Party
Claim and the amount or estimated amount thereof; provided, however,
that the failure of a party to give notice as provided in this Section
4.4 shall not relieve the other party of its indemnification
obligations under this Article 4, except to the extent that such other
party is actually prejudiced by such failure to give notice.
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(b) For any Third Party Claim concerning which notice is
required to be given, and, in fact, is given under subparagraph (a) of
this Section 4.4, the Indemnifying Party shall defend in a timely
manner, to the extent permitted by law, such Third Party Claim through
counsel appointed by the Indemnifying Party and reasonably acceptable
to the Indemnitee. Once an Indemnifying Party has commenced its defense
of an Indemnitee, it cannot withdraw from such defense until conclusion
of the matter, unless the Indemnified Party agrees to the withdrawal or
the Indemnitee is also defending the claim. The Indemnitee shall have
the right to participate in the defense of the Third Party Claim by
employing separate counsel at its own expense.
(c) If a party responds to a notice of a Third Party Claim by
denying its obligation to indemnify the other party, or if the
Indemnifying Party fails to defend in a timely or reasonably
satisfactory manner, the Indemnitee shall be entitled to defend such
Third Party Claim through counsel appointed by it. In addition, if it
is later determined that such party wrongfully denied such claim, or
the Indemnifying Party failed to defend timely or in a reasonably
satisfactory manner, then the Indemnifying Party shall (i) reimburse
the Indemnitee for all reasonable costs and expenses (including
attorney fees before and at trial and in connection with any appeal or
petition for review, but excluding salaries of officers and employees)
incurred by the Indemnitee in connection with its defense of such Third
Party Claim; and (ii) be estopped from challenging a judgment, order,
settlement, compromise, or consent judgment resolving the Third Party
Claim entered into in good faith by the Indemnitee (if such claim has
been resolved prior to the conclusion of the proceeding between the
Indemnitee and Indemnifying Party). An Indemnifying Party, after
initially rejecting a claim for defense or indemnification, may defend
and indemnify the Indemnitee, at any time prior to the resolution of
said Third Party Claim, for such claim, provided that (x) the
Indemnifying Party reimburses the Indemnitee for all reasonable costs
and expenses (including attorney fees before and at trial and in
connection with any appeal or petition for review, but excluding
salaries of officers and employees) incurred by the Indemnitee in
connection with its defense of such Third Party Claim up to the time
the Indemnifying Party assumes control of the defense of such claim
(including costs incurred in the transition of the defense from the
Indemnitee to the Indemnifying Party); and (y) the assumption of the
defense of the Third Party Claim is not expected to prejudice or cause
harm to the Indemnitee.
(d) With respect to any Third Party Claim for which
indemnification has been claimed hereunder, no party shall enter into
any compromise or settlement, or consent to the entry of any judgment
which (i) does not include as a term thereof the giving by the third
party of a release to the Indemnitee from all further liability
concerning such Third Party Claim on terms no less favorable than those
obtained by the party entering into such compromise, settlement or
consent; or (ii) imposes any obligation on the Indemnitee without such
Indemnitee's written consent (such consent not to be withheld
unreasonably), except an obligation to pay money which the Indemnifying
Party has agreed to pay and has the ability to pay on behalf of the
Indemnitee. In the event that an Indemnitee enters into any such
compromise,
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settlement or consent without the written consent of the Indemnifying
Party (other than as contemplated by Section 4.4(c) hereof), the entry
of such compromise, settlement or consent shall relieve the
Indemnifying Party of its indemnification obligation related to the
claims underlying such compromise, settlement or consent.
(e) Upon final judgment, determination, settlement or
compromise of any Third Party Claim, and unless otherwise agreed by the
parties in writing, the Indemnifying Party shall pay promptly on behalf
of the Indemnitee, or to the Indemnitee in reimbursement of any amount
theretofore required to be paid by the Indemnitee, the amount so
determined by final judgment, determination, settlement or compromise.
Upon the payment in full by the Indemnifying Party of such amount, the
Indemnifying Party shall succeed to the rights of such Indemnitee to
the extent not waived in settlement, against the third party who made
such Third Party Claim and any other person who may have been liable to
the Indemnitee with respect to the indemnified matter.
(f) In connection with defending against Third Party Claims,
the parties shall cooperate with and assist each other by making
available all employees, books, records, communications, documents,
items and matters within their knowledge, possession or control that
are necessary, appropriate or reasonably deemed relevant with respect
to defense of such claims; provided, however, that nothing in this
subparagraph (f) shall be deemed to require the waiver of any
privilege, including the attorney-client privilege, or protection
afforded by the attorney work product doctrine. In addition, regardless
of the party actually defending a Third Party Claim for which there is
an indemnity obligation under Section 4.1 or 4.2 hereof, the parties
shall give each other regular status reports relating to such action
with detail sufficient to permit the other party to assert and protect
its rights and obligations under this Agreement.
4.5 Other Claims. Any claim for an Indemnifiable Loss which
does not result from a Third Party Claim shall be asserted by written notice
from the Indemnitee to the Indemnifying Party within 120 days of first learning
thereof. All such claims that are not timely asserted pursuant to this section
shall be deemed to be forever waived. The Indemnitee's written notice shall
contain such information as the Indemnitee has regarding the alleged breach.
Such Indemnifying Party shall have a period of 120 days (or such shorter time
period as may be required by law as indicated by the Indemnitee in the written
notice) within which to respond thereto. If such Indemnifying Party does not
respond within such 120-day period (or lesser period), such Indemnifying Party
shall be deemed to have accepted responsibility to make payment for the amount
of Indemnifiable Loss and shall have no further right to contest the validity of
such claim. If such Indemnifying Party does respond within such 120-day (or
lesser) period and rejects such claim in whole or in part, such Indemnitee shall
be free to pursue such remedies as may be available under applicable law or
under this Agreement.
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4.6 Contribution in Respect of Certain Indemnifiable Losses.
If the indemnification provided for in this Article 4 is unavailable to an
Indemnitee in respect of any Indemnifiable Loss arising out of, or related to,
information contained in the Prospectus or the related Form S-1 or used in
connection with the Warrant Transaction, Private Placement, or Vinifera Stock
Exchange, the Indemnifying Party, in lieu of indemnifying such Indemnitee, shall
contribute to the amount paid or payable by such Indemnitee as a result of such
Indemnifiable Loss, in such proportion as is appropriate to reflect the relative
fault of Agritope, its directors, officers, employees or agents, on the one
hand, and Epitope, its directors, officers, employees or agents, on the other
hand, in connection with the statements or omissions which resulted in such
Indemnifiable Loss. The relative fault of such respective groups shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by either such group.
4.7 No Beneficiaries. Except to the extent expressly provided
otherwise in this Article 4, the indemnification provided for by this Article 4
shall not inure to the benefit of any third party or parties and shall not
relieve any insurer who would otherwise be obligated to pay any claim of the
responsibility with respect thereto or, solely by virtue of the indemnification
provisions hereof, provide any such subrogation rights with respect thereto and
each party agrees to waive such rights against the other to the fullest extent
permitted.
ARTICLE 5
CERTAIN ADDITIONAL MATTERS
5.1 Construction of Agreements. Notwithstanding any other
provisions in this Agreement to the contrary, in the event and to the extent
that there is a conflict between the provisions of this Agreement and the
provisions of any Related Agreement, the provisions of such Related Agreement
shall control.
5.2 Consents and Assignments. Epitope and Agritope shall use
reasonable efforts to obtain, either before or after the Distribution Date, any
consent, approval or amendment required to novate and/or assign to an Agritope
Unit or to Epitope, as appropriate, all agreements, leases, licenses and other
rights of any nature whatsoever relating solely to that party's business.
5.3 No Representations or Warranties. Agritope understands and
agrees that Epitope is not, in this Agreement, or in any Related Agreement or
any other agreement or document contemplated by this Agreement, representing or
warranting in any way as to the businesses and Liabilities retained, transferred
or assumed in connection with the Distribution, or that the obtaining of the
consents or approvals, the execution and delivery of any ancillary or amendatory
agreements or the making of the filings and applications contemplated by this
Agreement will satisfy the provisions of all applicable agreements or the
requirements of all applicable laws or judgments, it being understood and agreed
that, subject to Section 5.2 hereof, Agritope shall bear the economic and legal
risk of the business and
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Liabilities retained or assumed hereunder by Agritope, and the legal and
economic risk that any necessary consents or approvals are not obtained or that
any requirements of law or judgments are not complied with or satisfied.
5.4 Officers and Directors. Agritope and Epitope shall take
all necessary actions to elect or otherwise appoint, as of the Distribution
Date, individuals to be directors or officers (or both) of Agritope, as set
forth in the Form S-1, and to cause the resignation of individuals as officers
and directors of each so that there are only two common directors of Agritope
and Epitope as of the Distribution Date and only one common officer.
5.5 Existing Intercompany Arrangements. Except as otherwise
provided in this Agreement, any and all agreements, arrangements, commitments or
understandings, whether or not in writing, between Epitope and Agritope will be
terminated and of no further force and effect as of the Distribution Date.
Following the Distribution Date, the parties shall discuss in good faith the
provision of any services and products to be provided by the other, but which
inadvertently were not the subject of this Agreement or any other Related
Agreement.
5.6 Termination of Intercompany Accounts. Any intercompany
receivable, payable or loan between Epitope and Agritope outstanding on the
Distribution Date will be deemed terminated as a result of the consummation of
the transactions contemplated in this Agreement and will be treated as a capital
contribution.
ARTICLE 6
ACCESS TO INFORMATION AND SERVICES; TECHNOLOGY
6.1 Provision of Corporate Records. Following the Distribution
Date, all Books and Records will remain the property of Epitope but will be made
available upon reasonable notice and during normal business hours to Agritope
for review and duplication until the earlier of (i) notice from Agritope that
such Books and Records are no longer needed by Agritope, or (ii) the seventh
anniversary of the Distribution Date.
6.2 Access to Information. From and after the Distribution
Date, Epitope and Agritope will afford to each other and to each other's
authorized accountants, legal counsel and other designated representatives
reasonable access and duplicating rights (with copying costs to be borne by the
requesting party) during normal business hours to all Books and Records and
documents, communications, items and matters, including computer data
(collectively, "Information") within each other's knowledge, possession or
control, relating to the Agritope Units or Agritope Employees, insofar as such
access is reasonably required by Epitope or Agritope (and shall use reasonable
efforts to cause persons or firms possessing Information to give similar
access). Information may be requested under this Article 6 for any legitimate
business purpose including, without limitation, audit, accounting, claims,
Actions, litigation and tax purposes, as well as for purposes of fulfilling
disclosure and reporting obligations, but not for competitive purposes.
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6.3 Production of Witnesses and Individuals. From and after
the Distribution Date, Epitope and Agritope will use reasonable efforts to make
available to each other, upon written request, their respective officers,
directors, employees and agents for fact finding, consultation and interviews
and as witnesses to the extent that any such person may reasonably be required
in connection with any Actions in which the requesting party may from time to
time be involved. Epitope and Agritope agree to reimburse each other for
reasonable out-of-pocket expenses (but not labor charges or salary payments)
incurred by the other in connection with providing individuals and witnesses
pursuant to this Section 6.3.
6.4 Retention of Records. Except when a longer retention
period is otherwise required by law or agreed to in writing, Epitope and
Agritope will retain, for seven years following the Distribution Date, all
material Information relating to Agritope. Notwithstanding the foregoing, in
lieu of retaining any specific Information, Epitope or Agritope may offer in
writing to deliver such Information to the other and, if such offer is not
accepted within 90 days, the offered Information may be destroyed or otherwise
disposed of at any time. If a recipient of such offer requests in writing that
any of the Information proposed to be destroyed or disposed of be delivered to
such requesting party, the party proposing the destruction or disposal will
promptly arrange for the delivery of the requested Information (at the cost of
the requesting party).
6.5 Confidentiality. During the period that Agritope has been
a wholly owned subsidiary of Epitope, employees of both Epitope and Agritope
have become aware of a wide variety of otherwise confidential business and
technical information of the other party. Such information of Epitope or the
Agritope Units (the "Disclosing Party") shall be protected by the other party
(the "Recipient") as follows:
(a) "Confidential Information" means nonpublic information
concerning the Disclosing Party's business, business plans,
products, or technology, whether disclosed before or after the
Distribution Date, including but not limited to strategic and
long-range plans, financial and operating results, identities of
principal customers and suppliers, plans for capital expenditures,
plans for expansion into new markets, research projects and results,
and trade secrets.
(b) "Confidential Information" for purposes of this agreement
excludes:
(i) information which is or becomes publicly
available through no act of the Recipient, from and after the
date of public availability;
(ii) information disclosed to the Recipient by a
third party, provided: (A) under the circumstances of
disclosure the Recipient does not have a duty of
non-disclosure owed to such third party; (B) the third party's
disclosure does not violate a duty of non-disclosure owed to
another, including the Disclosing Party; and (C) the
disclosure by the third party is not otherwise unlawful; and
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(iii) information developed by the Recipient
independent of any confidential information of the Disclosing
Party which is known by the Recipient on the Distribution Date
and/or disclosed by the Disclosing Party thereafter.
(c) The Recipient will hold, and will cause its officers,
employees, agents, consultants, advisors and Affiliates to hold, in
strict confidence, and not to disclose, unless compelled to disclose by
judicial or administrative process or, in the opinion of its
independent legal counsel, by other requirements of law, all
Confidential Information of the Disclosing Party.
(d) The Recipient shall protect Confidential Information of
the Disclosing Party by using the same degree of care, but no less than
a reasonable degree of care, to prevent unauthorized disclosure as the
Recipient uses to protect its own confidential information of a like
nature.
(e) The Recipient may disclose Confidential Information of the
Disclosing Party to its employees, Affiliates, sublicensees, agents and
advisors (such as attorneys, accountants and other consultants) who
need to know the information and are obligated by policy, agreement or
otherwise to avoid unauthorized use and disclosure of Confidential
Information.
(f) The foregoing restrictions shall expire five years after
the later of the Distribution Date or the date of disclosure, unless
and to the extent Epitope and Agritope agree to a longer period for the
foregoing restrictions with respect to specific categories of
Confidential Information.
6.6 Privileged Matters.
(a) Epitope and Agritope will each maintain, preserve and
assert all privileges, including, without limitation, any privilege or
protection arising under or relating to any attorney-client
relationship (including, without limitation, the attorney-client and
work product privileges), that existed prior to the Distribution Date
in favor of the other party ("Privilege" or "Privileges"). Neither
party will waive any Privilege that could be asserted under applicable
law by the other party (the "Privileged Party") without the prior
written consent of the Privileged Party. The rights and obligations
created by this paragraph apply to all information as to which, but for
the Distribution, a party would have been entitled to assert or did
assert the protection of a Privilege ("Privileged Information").
(b) Upon receipt by either party or any of its Affiliates of
any subpoena, discovery or other request that arguably calls for the
production or disclosure of Privileged Information of the other party,
or if a party obtains knowledge that any of its current or former
employees has received any subpoena, discovery or other request which
arguably calls for the production or disclosure of Privileged
Information of the
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other party, the party will promptly notify the Privileged Party of the
existence of the request and will provide the Privileged Party a
reasonable opportunity to review the information and to assert any
rights it may have under this Section 6.6 or otherwise to prevent the
production or disclosure of Privileged Information. Neither party will
produce or disclose any information it should reasonably expect to be
covered by a Privilege under this Section 6.6 unless (i) the Privileged
Party has provided its express written consent to such production or
disclosure; or (ii) a court of competent jurisdiction has entered a
final, non-appealable order finding that the information is not
entitled to protection under any applicable privilege.
(c) Either party's provision of information to the other
party, and either party's agreement to permit the other party to
possess copies of Privileged Information occurring or generated prior
to the Distribution Date, are made in reliance on the agreement, as set
forth in this Section 6.6, to maintain the confidentiality of
Privileged Information and to assert and maintain all applicable
Privileges. Any actions taken by either party in connection with the
Distribution and this Separation Agreement shall not be deemed a waiver
of any Privilege that has been or may be asserted by either party nor
shall they operate to reduce, minimize or condition the rights granted
to either party in, or the obligations imposed upon either party by,
this Section 6.6.
(d) Agritope shall cause the Core Companies to comply with the
restrictions imposed on it under this Section 6.6.
6.7 Technology.
(a) On or before the Distribution Date, Epitope shall assign
to Agritope, or as applicable Agritope shall assign to Epitope, those
patents, patent applications, trademarks or service marks and related
applications, copyrights, trade secrets, licenses, or agreements listed
on Schedule 1, which specifies the current owner or named party and the
party to which they are to be assigned. Epitope and Agritope shall
cooperate fully with each other to effect the assignments and cause
them to be made of record. The assignee shall pay any recording costs,
counsel fees, or similar charges incurred to cause the assignment to be
made of record.
(b) After the Distribution Date, Epitope, on the one hand, and
the Agritope Units, on the other, may use the patented inventions,
trademarks, service marks, copyrighted works, trade secrets, or
internally developed or licensed technology of the Agritope Units and
of Epitope, respectively, only to the extent permitted by this or
another written agreement.
(c) For a period not to exceed two years after the
Distribution Date, Agritope may continue to use the E design registered
trademark, Reg. Nos. 1,770,765 and 1,805,488, in connection with goods
and services of a quality comparable to those it provides as of the
Distribution Date. Agritope shall use reasonable efforts to
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adopt a substitute corporate logo within six months after the
Distribution Date, and shall phase out use of the E design trademark as
soon as practicable.
(d) Epitope and Agritope will each make their employees (and
employees of the Core Companies) reasonably available to cooperate with
the other party in connection with any patent application filed after
the Distribution Date if such employees have knowledge relevant to the
application. If an employee of Epitope, on the one hand, or the
Agritope Units, on the other, is an inventor of an invention assigned
to an Agritope Unit or to Epitope, respectively, the employer will make
the employee reasonably available to sign patent applications or
related documents, testify in connection with patent interference or
similar proceedings, and take other actions reasonably requested by the
assignee to obtain or maintain patent or other rights in the invention.
Nothing in this paragraph requires the assignment of any invention to
Epitope or the Agritope Units.
ARTICLE 7
INSURANCE
7.1 Transition. Agritope shall use reasonable efforts to
obtain by and after the Distribution Date such insurance policies for the
Agritope Business as the Agritope board of directors deems advisable, and shall
keep Epitope informed of all new insurance policies obtained by Agritope that
replace Shared Policies. Epitope may have the Agritope Units removed as named
insureds from each Shared Policy covering losses of a type for which Agritope
obtains its own insurance policy, regardless of differences in the limits under
the Shared Policy and the policy obtained by Agritope. Epitope may have the
Agritope Units removed as named insureds on each Shared Policy at the time the
Shared Policy next comes due for renewal. For any period after the Distribution
Date during which an Agritope Unit remains a named insured under a Shared
Policy, Agritope shall pay Epitope a pro rata portion of the premiums
attributable to the period.
7.2 Post-Distribution Date Claims. If, subsequent to the
Distribution Date, any person, corporation, firm or entity shall assert a claim
against an Agritope Unit with respect to any injury, loss, liability, damage or
expense incurred or claimed to have been incurred in, or in connection with, the
conduct of the Agritope Business or, to the extent any claim is made against
Agritope, Epitope's business, and which injury, loss, liability, damage or
expense may arise out of insured or insurable occurrences or events under one or
more of the Shared Policies, Epitope shall at the time such claim is asserted be
deemed to assign, without need of further documentation, to Agritope any and all
rights of an insured party under the applicable Shared Policy(ies) with respect
to such asserted claim, specifically including rights of indemnity and the
right(s) to be defended by or at the expense of the insurer(s); provided,
however, that nothing in this sentence is intended to effectuate or shall be
deemed to constitute or reflect the assignment of the Shared Policies, or any of
them, to Agritope.
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7.3 Allocation of Insurance Proceeds. Insurance Proceeds
received with respect to claims, costs and expenses under the Shared Policies
shall be paid to Agritope with respect to Agritope's Liabilities and to
Epitope with respect to Epitope's Liabilities. Payment of the allocable portions
of indemnity costs of Insurance Proceeds resulting from the liability policies
will be made to the appropriate party upon receipt from the insurance carrier.
In the event that the aggregate limits on any of the Shared Policies are
exceeded, the parties agree to provide an equitable allocation of Insurance
Proceeds received after the Distribution Date based upon their respective bona
fide claims. The parties shall use their best efforts to cooperate with respect
to insurance matters.
ARTICLE 8
DISPUTE RESOLUTION
8.1 Negotiation and Binding Arbitration. Except with respect
to matters involving Section 6.6 hereof (Privileged Matters) and except as may
expressly be provided in any other agreement between the parties entered into
pursuant hereto, if a dispute, controversy or claim (collectively, a "Dispute")
between Epitope and Agritope arises out of or relates to this Agreement, a
Related Agreement or any other agreement entered into pursuant hereto or
thereto, including, without limitation, the breach, interpretation or validity
of any such agreement or any matter involving an Indemnifiable Loss, Epitope and
Agritope agree to use the following procedures, in lieu of either party pursuing
other available remedies and as the sole remedy (except as provided in Section
8.4 below), to resolve the Dispute.
8.2 Initiation. A party seeking to initiate the procedures
will give written notice to the other party, briefly describing the nature of
the Dispute. A meeting will be held between the parties within 30 days of the
receipt of such notice, attended by individuals with decision-making authority
regarding the Dispute, to attempt in good faith to negotiate a resolution of the
Dispute.
8.3 Submission to Arbitration. If, not later than 30 days
after such meeting, the parties have not succeeded in negotiating a resolution
of the Dispute, they will agree to submit the Dispute to binding arbitration in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association, by a sole arbitrator selected by the parties. The arbitration will
be held in Portland, Oregon, and governed by the Federal Arbitration Act, 9
U.S.C. Sections 1-16, and judgment upon the award rendered by the arbitrator may
be entered by any court having jurisdiction thereof. The costs of arbitration
will be apportioned between Epitope and Agritope as determined by the arbitrator
in such manner as the arbitrator deems reasonable, taking into account the
circumstances of the Dispute, the conduct of the parties during the proceeding,
and the result of the arbitration.
8.4 Equitable Relief. Nothing herein will preclude either
party from seeking equitable relief to prevent any immediate, irreparable harm
to its interests, including multiple breaches of this Agreement or the relevant
Related Agreement by the other party. Otherwise, these procedures are exclusive
and will be fully exhausted prior to the initiation
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of any litigation. Either party may seek specific enforcement of any
arbitrator's decision under this Article. The arbitrator may consolidate an
arbitration under this Agreement with any arbitration arising under or relating
to the Related Agreements or any other agreement between the parties entered
into pursuant hereto, as the case may be, if the subjects of the Disputes
thereunder arise out of or relate essentially to the same set of facts or
transactions. The determination of issues relating to consolidation and the
determination of any such consolidated arbitration will be determined by the
arbitrator appointed for the arbitration proceeding that was commenced first in
time.
ARTICLE 9
MISCELLANEOUS
9.1 Entire Agreement. This Agreement, including the Exhibits
and the agreements and other documents referred to herein, shall constitute the
entire agreement between Epitope and Agritope with respect to the subject matter
hereof and shall supersede all previous negotiations, commitments and writings
with respect to such subject matter.
9.2 Expenses. Except as otherwise expressly provided in this
Agreement, any Related Agreement or any other agreement being entered into
between Epitope and Agritope in connection with this Agreement, Epitope and
Agritope shall each pay their own costs and expenses incurred in connection with
the Distribution and the consummation of the transactions contemplated by this
Agreement.
9.3 Governing Law. This Agreement, the Related Agreements and
any other agreement entered into in connection with the Distribution, shall be
governed by, and construed and enforced in accordance with, the laws of the
state of Oregon (regardless of the laws that might otherwise govern under
applicable principles of conflict of laws).
9.4 Jurisdiction and Venue. Subject to the arbitration
provisions of this Agreement, each party consents to the personal jurisdiction
of the state and federal courts located in the state of Oregon and hereby waives
any argument that venue in any such forum is not convenient or proper.
9.5 Notices. All notices, requests, demands and other
communications under this Agreement shall be in writing and shall be deemed to
have been duly given (i) on the date of service if served personally on the
party to whom notice is given; (ii) on the day of transmission if sent via
facsimile transmission to the facsimile number given below, provided telephonic
confirmation of receipt is obtained promptly after completion of transmission;
(iii) on the business day after delivery to an overnight courier service or the
express mail service maintained by the United States Postal Service, provided
receipt of delivery has been confirmed; or (iv) on the fifth day after mailing,
provided receipt of delivery is confirmed, if mailed to the party to whom notice
is to be given, by registered or certified mail, postage prepaid, properly
addressed and return-receipt requested, to the party as follows:
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If to Epitope: Epitope, Inc.
0000 X.X. Xxxxxxxxx Xxxxx
Xxxxxxxxx, Xxxxxx 00000
Attn: President
Facsimile No. (000) 000-0000
If to Agritope: Agritope, Inc.
0000 X.X. Xxxxxxxxx Xxxxx
Xxxxxxxxx, Xxxxxx 00000
Attn: President
Facsimile No. (000) 000-0000
Any party may change its address and facsimile number by giving the other party
written notice of its new address and facsimile number in the manner set forth
above.
9.6 Modification of Agreement. No modification, amendment or
waiver of any provision of this Agreement shall be effective unless the same
shall be in writing and signed by each of the parties hereto and then such
modification, amendment or waiver shall be effective only in the specific
instance and for the purpose for which given.
9.7 Termination. This Agreement may be terminated and the
Distribution abandoned at any time prior to the Distribution Date by, and in the
sole discretion of, Epitope without the approval of Agritope. In the event of
such termination, neither party (or any of its directors of officers) shall have
any liability of any kind to the other party.
9.8 Successors and Assigns. This Agreement and all of the
provisions hereof shall be binding upon and inure to the benefit of the parties
and their respective successors and permitted assigns, but neither this
Agreement nor any of the rights, interests or obligations hereunder shall be
assigned by either party without the prior written consent of the other party,
and such consent shall not be unreasonably withheld.
9.9 No Third Party Beneficiaries. Except for certain parties
entitled to indemnification under Sections 4.1 and 4.2 hereof and listed
therein, this Agreement is solely for the benefit of the parties hereto and is
not intended to confer upon any other person except the parties hereto any
rights or remedies hereunder.
9.10 Titles and Headings; Interpretation. The titles and
headings to articles and sections herein are inserted for convenience of
reference only and are not intended to constitute a part of or to affect the
meaning or interpretation of this Agreement.
9.11 Exhibits. The exhibits and schedules to this Agreement
shall be construed with and as an integral part of this Agreement to the same
extent as if the same had been set forth verbatim herein.
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9.12 Severability. In case any one or more of the provisions
contained in this Agreement should be invalid, illegal or unenforceable, the
enforceability of the remaining provisions hereof shall not in any way be
affected or impaired thereby.
9.13 No Waiver. Neither the failure nor any delay on the part
of any party hereto to exercise any right under this Agreement shall operate as
a waiver thereof, nor shall any single or partial exercise of any right preclude
any other or further exercise of the same or any other right, nor shall any
waiver of any right with respect to any occurrence be construed as a waiver of
such right with respect to any other occurrence.
9.14 Survival. All covenants and agreements of the parties
contained in this Agreement will survive for ten years following the
Distribution Date.
9.15 Counterparts. This Agreement may be executed in two or
more counterparts, all of which shall be considered one and the same agreement,
and shall become a binding agreement when a counterpart has been signed by each
party and delivered to the other party.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed delivered on their behalf as of the date first written
above.
EPITOPE, INC.
By ---------------------------------------
Title ------------------------------------
AGRITOPE, INC.
By ---------------------------------------
Title ------------------------------------
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The undersigned consent to and agree to be bound by the terms
of this agreement.
VINIFERA, INC.
By
Title
AGRIMAX FLORAL PRODUCTS, INC.
By
Title
[Exhibits omitted.]
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