Exhibit 10.1
TECHNOLOGY ACQUISITION AGREEMENT
This Technology Acquisition Agreement (this "Agreement") is made effective
as of February 19, 2007 (the "Effective Date"), by and among SGPF, LLC, a
Kentucky limited liability company ("SGPF"), ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ("▇▇▇▇▇▇▇"), a
resident of the State of California, and Visual Connections, a California
corporation ("Visual Connections').
RECITALS
A. Visual Connections owns the entire right, title and interest in the
following Patents and Patent Applications and in the inventions described and
claimed therein:
i. U.S. Patent Number 7,198,617 B2, issued on April 3, 2007,
entitled "Passively Guarded, Fillable Injection Syringe".
ii. U.S. Patent Application No. 11055415, filed February 10, 2005,
entitled "Syringe Guard with Selected Needle Configurations";
iii. U.S. Patent Application No. 11140583, filed May 27, 2005,
entitled "Passively Guarded, Pre-filled Injection Syringe"
(ClP);
iv. Syringe Guard tor Pre-filled medicament vial, US application
number 11/211,336 filed on August 25, 2005;
v. Hypodermic Needle Tip Protector, Application number 11/422,851
filed on June 7, 2006;
vi. PCT Application No. US2005/018178, entitled "Passively
Guarded, Fillable Injection Syringe";
vii. PCT Application No. US2006/004286, entitled "Syringe Guard
with Selected Needle Configurations";
viii. PCT Application No. US2006/004068, entitled "Passively
Guarded, Prefilled Injection Syringe"; and
ix. To be filed: PCT for "Hypodermic Needle tip Protector"
B. SGPF desires to obtain exclusive ownership of the Patents and Patent
Applications, and certain related technology rights, upon the payment of certain
consideration set forth in this Agreement. Visual Connections is willing to
transfer outright ownership of the Patents and Patent Applications, and certain
related technology rights, to SGPF upon receipt of certain payments and in
consideration of the terms set forth in this Agreement. SGPF desires that Visual
Connections grant it a worldwide exclusive license in order to profit in the
interim from the inventions described in the Patents and Patent Applications,
and to exploit such related technology rights, all as described more fully in
this Agreement. SGPF agrees to assume all expenses related to patent prosecution
fees and any related fees immediately upon execution of
this Agreement, except for the payments to be made, actions to be taken and
expenses to be incurred by Visual Connections as set forth in this Agreement.
Visual Connections guarantees that all related actions have been executed in a
timely manner in order to maintain all Patent Applications and Patents in good
standing.
AGREEMENT
Incorporating the above recitals herein, and in consideration of the
covenants and obligations contained herein and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, SGPF
and Visual Connections hereby agree as follows:
1. Definitions
For purposes of this Agreement capitalized terms have the meanings set
forth in this Section or elsewhere in this Agreement.
1.1 "Adjusted Gross Sales" as used in this Agreement means the amount of
revenue actually received by SGPF, including any Affiliates, from the sale,
license, sublicense, lease, franchising, rental or other exploitation of the
Products, less: (a) cash, trade, quantity or other discounts, credits or
rebates; (b) sales, use, tariff, import/export duties or other excise or similar
taxes imposed upon particular sales; (c) transportation and related insurance
charges; (d) allowances or credits to customers because of rejections, returns,
refunds, billing errors or retroactive price reductions; and (e) product
liability insurances; all as calculated in accordance with consistently applied
and generally accepted accounting principles as used by SGPF in its normal
financial reporting.
1.2 "Affiliate" as used in this Agreement with respect to a person or
entity means any corporation, company, partnership, joint venture, entity and/or
firm which controls, is controlled by or is under common control with such
person or entity.
1.3 "Commercialize the Product" means to develop pre-production samples
and establish a formal marketing plan with respect to the Product.
1.4 "Encumbrances" is defined in Section 5.1.
1.5 "Patents" means (a) any patents described in Recital A above or
patents arising out of the Patent Applications described in Recital A above; (b)
any and all reissues, extensions, substitutions, confirmation, registrations,
re-validations, re-examinations, additions, continuations, continuation-in-part
or divisionals of or to such patents, together with all foreign corresponding
patents thereof; and (c) any other patents or such other rights owned,
controlled, acquired or otherwise licensable by Visual Connections or Asbaghi
during the term of this Agreement which would be infringed by SGPF in exercising
its rights under the license granted, or exercise of the Technology Rights
transferred, by this Agreement;
1.6 "Patent Applications" means (a) the patent applications described in
Recital A above and (b) any other U.S. or foreign patent applications that may
be filed with respect to the
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Technology or the Product, and any continuations, continuations-in-part and
divisions of these applications.
1.7 "Permits" is defined in Section 5.1(b).
1.8 "Product" means the Safety Syringe System, with and without a Distal
Protective Needle, in a Fillable and Pre-filled Configuration, as described on
Exhibit A to this Agreement and covered by the Patents and the Patent
Applications.
1.9 "Royalty Payment" is defined in Section 2.3.
1.10 "Technology" means (a) the technology described on the Description of
the Safety Syringe Device and the Product, in multiple configurations as noted
in this Agreement, and as attached to this Agreement as Exhibit A, and (b) all
knowledge, information, know-how, discoveries, procedures, devices, techniques,
programs, inventions, creations, methods, protocols, formulas, software,
designs, drawings, works of authorship and other valuable technical and
proprietary information related to such technology, the Safety Syringe Device
and the Product that have been developed by or on behalf of Visual Connections
as of the date of this Agreement. Such know-how described in the previous
sentence includes, but is not limited to, proof of concept and all efforts
necessary to ensure manufacturability of all of the above mentioned. This does
NOT mean additional refinements may not be necessary.
1.11 "Technology Documents" is defined in Section 5.2.
1.12 "Technology Rights" means all present and future right, title and
interest in and to any and all intellectual property rights throughout the world
in and relating to the Technology, including, without limitation, any and all
patents (including the Patents), patent applications (including the Patent
Applications), copyrights, copyright applications, trademarks (including the
Trademarks), trade secret rights, rights to know-how, inventions and algorithms,
and any and all similar or equivalent rights throughout the world.
1.13 "Technology Transfer Time" is defined in Section 5.l.
1.14 "Trademarks" means all trademarks, trademark applications and
tradenames related to the Product.
1.15 "Verified the Patents" means that SGPF has reviewed the Patent
Applications and the Patents for issues affecting SGPF's ability to
Commercialize the Product, including ability to market and profitably sell the
Product and SGPF has reviewed the Patent Applications and the Patents for
infringement issues, and has determined, in its reasonable discretion, that
there are no issues which would materially hinder SGPF's ability to
Commercialize the Product, profitably market and sell the Product and utilize
the Technology Rights.
2. Payments and Royalties for License and Technology Transfer
2.1 Payment for Transfer of Technology Rights. In consideration of the
transfer to SGPF by Visual Connections of the Technology Rights pursuant to
Section 5 of this Agreement, SGPF will pay to Visual Connections the following
contingent technology transfer payments if
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such payments are triggered pursuant to the requirements in this Section (the
payments set forth below, to the extent they are triggered, shall be referred to
herein collectively as the "Technology Transfer Payment"). If only the Initial
Technology Transfer Payment is triggered, it shall constitute the sole, and be
sufficient, consideration for the transfer of the Technology Rights. Payment of
the Initial Technology Transfer Payment does not eliminate any obligation for
SGPF to pay the remainder of the Technology Transfer Payment and provided for
below.
(a) Up to Three Million Dollars ($3,000,000.00) will be paid to
Visual Connections as follows:
(i) Two Hundred Fifty Thousand Dollars ($250,000.00) will be
paid to Visual Connections by SGPF ten (10) days after the execution of
this Agreement (the "Initial Technology Transfer Payment");
(ii) Two Hundred Fifty Thousand Dollars ($250,000.00) will be
paid to Visual Connections by SGPF one hundred eighty (180) days from the
previous payment if, and only if, SGPF has successfully verified the
Patents within 150 days of the date of this Agreement;
(ii) Five Hundred Thousand Dollars ($500,000.00) Dollars will
be paid to Visual Connections one hundred eighty (180) days from the
previous payment if, and only if, SGPF has successfully verified the
Patents within 150 days of the date of this Agreement; and
(iii) Thereafter, SGPF will pay to Visual Connections eight
(8) consecutive quarterly payments of Two Hundred Fifty Thousand Dollars
($250,000.00), each commencing ninety (90) days from the previous payment
if, and only if, SGPF has successfully verified the Patents within 150
days of the date of this Agreement.
2.2 Other Payments. In addition to the Technology Transfer Payment
required from SGPF to acquire the Technology Rights, SGPF agrees to make the
royalty payments as provided in Section 2.3 below to Visual Connections pursuant
to the terms of this Agreement. So long as SGPF pays the Technology Transfer
Payment to Visual Connections pursuant to Section 2.1 of this Agreement,
however, Visual Connections' remedy for any claimed breach by SGPF in connection
with the payments set forth in this Section 2.2 and Section 2.3 does not include
a restoration of ownership of the Technology Rights, Product or Technology to
Visual Connections.
2.3 Royalty Payments. SGPF agrees to pay the following to Visual
Connections:
(a) SGPF agrees to pay to Visual Connections or its designee a
royalty payment based upon a percentage of Adjusted Gross Sales for any
Product sold by SGPF or any of its Affiliates (a "`Royalty Payment"). For
each calendar year in which Royalty Payments are applicable per this
section, the Royalty Payment shall be equal to five percent (5.0%) of
Adjusted Gross Sales for any Product sold by SGPF or any of its Affiliates
until the total of all Royalty Payments for such calendar year equals Two
Hundred and Fifty Thousand Dollars ($250,000.00). At such time, and for
the remainder of each calendar year, the Royalty Payment shall be reduced
to four percent (4%) of
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Adjusted Gross Sales of any Product sold by SGPF or any of its Affiliates.
SGPF covenants and agrees that all Royalty Payments under this Agreement
shall survive any sale, license, sublicense or other transfer of the
Patents or Patent Applications to an Affiliate or a third party, but that
SGPF will be relieved of the duty to pay the Royalty Payments if such
transferee; licensee or sublicensee agrees to directly pay such Royalty
Payments to Visual Connections. The obligation to pay the Royalty Payment
shall commence on the later of the date that is thirty-six (36) months
from the signing of this Agreement, or six (6) months after the sale of
the first Product, but such obligation shall only be due and payable in
accord with Section 6.1 hereof. The obligation to pay the five (5%)
percent royalty shall not be applicable in the initial calendar year in
which the Royalty Payments are triggered.
(b) Subject to Section 12.2 below, and continuing until the
termination of the first Patent:
(i) SGPF will use its commercially reasonable efforts to commence
production and sales of the Product(s) ("Production") within two years
from the date of this Agreement.
(ii) SGPF shall have the right to terminate Visual Connections'
royalty rights under this Section 2.3, if Visual Connections so agrees, by
tendering to Visual Connections, at any time, an amount equal to the
anticipated Royalty Payment for the life of the Patents discounted by an
appropriate discount rate, which such rate takes into consideration the
time value of money and the risk related to the likelihood of receiving
the anticipated Adjusted Gross Sales giving rise to the anticipated
Royalty Payment (the "Royalty Payoff Amount"). If the parties hereto can
not agree on the Royalty Payoff Amount, SGPF and Visual Connections shall
each appoint a certified public accounting firm and the two certified
public accounting firms so chosen shall appoint a third certified public
accounting firm (collectively, the "Appraisers"). The Appraisers shall
determine the Royalty Payoff Amount and such amount shall irrefutably be
the Royalty Payoff Amount. If Visual Connections does not agree to such
Royalty Payoff Amount and its termination of the Royalty Payments, SGPF
can offer a 10% premium (the "Premium") in addition to the Royalty Payoff
Amount and Visual Connections shall be required to accept such Premium and
Royalty Payoff Amount and such payment shall terminate any future
obligation to pay any Royalty Payment.
(iii) SGPF shall not accrue any obligation in the event that SGPF is
unable to commercialize the Product due to manufacturability issues
(including limitations caused by direct manufacturing cost), failure to
receive patent acceptances, technological obsolescence or patent
infringement opinions.
(iv) SGPF will initiate pre-production efforts to Commercialize the
Product in a timely manner, and will develop a schedule for these efforts
as soon as practical. SGPF will make reasonable efforts to engage ▇▇▇
▇▇▇▇▇▇▇ of MUE Corporation ("MUE") as the technical project manager for
the development of the Product. SGPF and ▇▇▇▇▇▇▇ have reviewed the Product
and the Technology in an attempt to determine the efforts required to
complete all engineering efforts necessary to develop proof of concept
tooling. All parties, including Visual Connections, SGPF and MUE, have
agreed that the entire effort to produce engineering drawings to build
tools and tooling for the manufacture of the
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Product (the "Engineering Drawings") will not exceed One Hundred and
Twenty Five Thousand Dollars ($125,000.00) (the "Engineering Drawings
Cost"). SGPF will be responsible for the payment of the Engineering
Drawings Cost, but such cost will be deducted from the first Royalty
Payments to become due hereunder until the Engineering Drawings Cost is
fully recouped by elimination of the first One Hundred and Twenty Five
Thousand Dollars ($125,000.00) of Royalty Payments that would otherwise be
due and owing to Visual Connections, in the event that modifications are
required after the construction of the initial tools, SGPF and Visual
Connections will mutually determine the responsibility for such
modifications, and determine what portion of the payments will be deemed
product enhancements as opposed to costs for Engineering Drawings. If SGPF
determines that it wishes to request modifications to the Product that
were not originally contemplated in the design, and these modifications
are not required for functionality or patent office action response, then
SGPF shall be responsible for such payments without deduction of these
amounts from Royalty Payments. If charges as defined in this section
exceed the Engineering Drawings Cost, Visual Connections shall be
responsible for providing MUE with a satisfactory payment, or develop a
mutually acceptable plan for payment, with SGPF, whichever SGPF chooses.
3. Grant of License to SGPF
3.l Grant. Visual Connections and Asbaghi hereby grant to SGPF an
exclusive, worldwide, right and license, with the right to grant sublicenses as
hereinafter set forth, to use the Technology Rights and the Technology, which
such license permits SGPF to construct, hire others to construct, use, promote,
market, offer for sale and sell the Product and the Technology.
3.2 Sublicenses. SGPF may grant sublicenses of the Technology Rights
without the approval of Visual Connections. If SGPF grants any sublicenses of
the Technology Rights, it shall promptly notify Visual Connections of such
sublicense and provide Visual Connections with a copy of such sublicense
agreement. All payment provisions as described in this agreement shall apply to
any such sub-license unless otherwise agreed by both SGPF and Visual Connections
except that in no instance shall Visual Connections be entitled to greater than
100% of the Technology Transfer Payment or Royalty Payment as calculated
hereunder; provided, however, that the Royalty Payment shall be based upon the
Adjusted Gross sales for SGPF and any sublicensee.
4. SGPF Right of First Refusal
4.1 Right of first Refusal. Visual Connections and Asbaghi hereby grant
SGPF the right of first refusal to enter into an acquisition, licensing or other
agreement to commercialize any additional Visual Connections' products
including, without limitation, rights related to research, development,
manufacturing, marketing and sales. Prior to entering into a commercialization
agreement with any third party with respect to such additional products, Visual
Connections will first negotiate in good faith with SGPF for such rights. If
SGPF and Visual Connections are unable to enter into a commercialization
agreement within ninety (90) days of beginning negotiations, then Visual
Connections will be free to enter into negotiations with another third party
concerning such an agreement; provided, however, that Visual Connections will
not enter into a commercialization agreement with any other third party on terms
in the aggregate less attractive to Visual Connections than the terms last
offered by SGPF
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without first giving SGPF the opportunity to enter into a commercialization
agreement on such terms.
5. Transfer of Technology Rights and Certain Payments and Actions
5.1 Technology Rights. Effective upon the payment by SGPF of the Initial
Technology Transfer Payment to Visual Connections pursuant to Section 2.1 above
(the "Technology Transfer Time"), Visual Connections hereby grants, sells,
assigns, transfers, conveys and delivers to SGPF, its successors and assigns,
forever, free and clear of all title detects, objections, liens, claims,
pledges, rights of first refusal, options, charges, security interests,
mortgages or other encumbrances of any nature whatsoever (collectively, the
"Encumbrances"):
(a) (i) all right, title and interest in and to the Technology, the
Product and the Technology Rights; (ii) all rights of priority and all
rights and claims for past infringement of the Patents or the Trademarks;
and (iii) the fun and unrestricted right to use, develop, enhance, modify,
improve and assign, license or otherwise transfer the Technology, the
Patents, the Patent Applications and the Trademarks, and to make, use,
sell and lease the Product and any other products incorporating the
Technology;
(b) to the extent transferable, all licenses, permits, applications,
registrations, authorizations, orders, or approvals of governmental or
quasi-governmental agencies and authorities (whether federal, state,
local, municipal or foreign), including, without limitation, any clearance
certificates or marketing approvals issued by the Food and Drug
Administration (the "FDA"), relating to the manufacture, marketing,
distribution or use of the Product (collectively, "Permits"); and
(c) originals or copies of all books, records, files and papers,
whether in hard copy or computer format, used in connection with the
Technology including, without limitation, manuals and data, notes,
drawings, sales and advertising materials, sales and purchase
correspondence, design history files, lists of present and former
suppliers and any and all documentation or materials that have any
relevance or bearing on the Technology, the Product and the Technology
Rights.
Visual Connections covenants that it shall not permit any Encumbrances to attach
to the Patents, Patent Applications, Technology, Technology Rights or the
Product.
5.2 Certain Payments and Actions.
(a) Visual Connections recognizes that additional Product
documentation and other similar supporting materials may be required by
SGPF to properly commercialize the Product as described in this Agreement.
Visual Connections shall comply with any requests by SGPF for such
materials as are beneficial to the success of the project, and, as such,
will in good faith agree to take all such necessary action, without
hesitation, to create the additional Product documentation and other
similar supporting materials requested by SGPF from time to time. Visual
Connections further agrees, notwithstanding any other provision of this
Agreement, to pay all initial patent application filing fees related to
such supporting documentation to help protect any novel
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features that may need protection as determined by counsel for SGPF or
Visual Connections. Such patent applications will automatically become
part of the Patents and the Patent Applications described in the recitals.
SGPF agrees and acknowledges that this provision refers specifically to
documentation that will be required to support FDA clearance filings,
current parent application filings and similar regulatory or support
requirements, including, but not limited to, the following:
(i) Completion of all US Patent Applications thru issuance;
(ii) Documentation deficiencies regarding all future 510(k)
FDA filings by SGPF; and
(iii) Additional engineering costs associated with initial
manufacturability to be completed by Visual Connections and MUE
Corporation; provided, however, that payment of these expenses shall
be governed by Section 2.3(b)(iv).
(b) Visual Connections agrees to pay 50% of all costs arising from
any infringement action filed in connection with the Product, whenever
such action is filed.
(c) SGPF agrees that Visual Connections' obligations under this
Section 5.2(a)(i) and (a)(ii) are exclusive of Patent prosecution costs in
their general context, and this section only requires Visual Connections
to provide materials related to pending application documentation and
supporting material requirements, except as required by Section
5.2(a)(ii), (a)(iii) and (b). Further, any infringement defense
requirements pertain to unaltered product designs. In the event that SGPF
requires material Product modifications, it will accept the infringement
burden related to such modifications.
(d) Visual Connections will take no action, directly or indirectly,
to seek: or cause or facilitate another to seek or cause (i) a receiver,
liquidator or trustee to be appointed with respect to Visual Connections
or of any of the properties or to take possession of any of their
respective properties, (ii) Visual Connections to generally fail to pay
its debts as they become due or admit in writing its inability to pay its
debts as they mature, (iii) Visual Connections to be adjudicated bankrupt
or insolvent or to have any of its material properties sequestered by
court order, or (iv) a petition to be filed by or against Visual
Connections under any bankruptcy, reorganization. arrangement, insolvency,
readjustment of debt, dissolution or liquidation law of any jurisdiction,
whether now or subsequently in effect.
5.3 Instruments of Conveyance. Upon the execution of this Agreement,
Visual Connections will execute and deliver to SGPF, to hold until the
Technology Transfer Time, all such documents or instruments of assignment,
transfer, notice or conveyance as SGPF reasonably deems necessary or appropriate
to vest in, confirm title to and prove SGPF's rights to the Technology Rights.
Technology and Product in accordance with the terms of this Agreement (the
"Technology Documents"). SGPF will hold these documents until the Technology
Transfer Time. Visual Connections shall be entitled to retain a copy of all such
Technology Documents and hereby is granted a security interest in the Technology
Rights to secure the payment of the Technology Transfer Payment. SGPF will take
all acts necessary, but only as requested by
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Visual Connections from time to time, to perfect such security interest in favor
of Visual Connections, and such security interest shall terminate upon payment
of the Technology Transfer Payment (to the extent the payments composing the
Technology Transfer Payment are triggered) or termination or waiver of the
obligation by SGPF to make such Technology Transfer Payment. In the event that
SGPF fails to make any Technology Transfer Payment due and owing to Visual
Connections, and any cure period has lapsed, SGPF will transfer the Technology
Rights back to Visual Connections at its sole cost and expense.
5.4 Verification of the Patents. SGPF has one hundred and fifty (150) days
within which to verify the Patents. If SGPF is not able to verify the Patents
within such time, SGPF shall provide notice to Visual Connections of such
failure and the issues or facts giving rise to such failure. Upon receipt of
such notice, Visual Connections shall have the right to offer a cure to the
issues or facts giving rise to the failure to verify the Patents. SGPF, in it's
reasonably discretion, taking into account profitability, has the right to
accept or reject such cure. If such cure is accepted, the payments composing the
Technology Transfer Payment shall become due and payable, with the first payment
due one hundred eighty (180) days after the date any such accepted cure becomes
effective.
5.5 Further Assurances. Each party hereto will, before, at and after the
Effective Date, execute and deliver such other instruments and take such other
actions as the other party or parties, as the case may be, may reasonably
require in order to carry out the intent of this Agreement. Without limiting the
generality of the foregoing, at any time after the Technology Transfer Time, at
the request of SGPF and without further consideration, Visual Connections will
execute and deliver such further instruments of sale, transfer, conveyance,
assignment and confirmation and take such action as SGPF may reasonably deem
necessary or desirable in order to more effectively transfer, convey and assign
to SGPF, and to confirm SGPF's title to, all of the Technology Rights, the
Technology and the Product and to assist SGPF in exercising all rights with
respect thereto.
6. Payments; Books and Records
6.1 Payments. All royalties payable to Visual Connections, or Visual
Connections' designee, under this Agreement will be paid twice yearly, on the
last business day of January with respect to Adjusted Gross Sales for the first
six months of the prior calendar year and on the last business day of July with
respect to Adjusted Gross Sales for the last six months of the prior calendar
year, without interest. Each royalty payment win be accompanied by a written
statement showing the aggregate Adjusted Gross Sales received by SGPF for the
period to which such royalty payment relates and the amount of the royalty
payable to Visual Connections in respect thereof, together with such other
information as Visual Connections may reasonably request. SGPF agrees to submit
such statements beginning with the first Royalty Payment made pursuant to
Section 2.3.
6.2 Books and Records. SGPF agrees to keep complete and accurate books of
account and records covering all transactions relating to this Agreement,
including technical records, which will enable Visual Connections to determine
which products of SGPF are Products under this Agreement. Visual Connections and
Visual Connections' duly authorized representatives and auditors will have the
right, up to two (2) times in each calendar year, on reasonable notice of at
least two weeks, to audit SGPF's books of account and records that relate to the
subject
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matter and terms of this Agreement. All such books of account and records must
be kept available for at least two (2) years after the termination of this
Agreement Visual Connections will not have any right to audit any other books of
account or records of SGPF. Upon three (3) days' written notice, Visual
Connections shall conduct any inspections of the records of SGPF at its own
expense; provided, however, that if any audit reveals a material negative
discrepancy in the cumulative Royalty Payments made through the date of such
audit in an amount of more than five (5%), SGPF shall immediately pay the cost
of such audit
7. Representations and Warranties of Visual Connections
Visual Connections and Asbaghi represent and warrant to SGPF as of the
date hereof, which representations and warranties are material, are being relied
upon by SGPF (not withstanding any independent investigation) and will survive
the date hereof, as follows:
7.1 Organization, Power. Visual Connections is a corporation duly
organized, validly existing and in good standing under the laws of the state of
California and has all requisite corporate power and authority to carry on its
business as it is now being conducted, to own, lease and operate its properties
and assets, to enter into this Agreement and to carry out the transactions
contemplated hereby.
7.2 Authorization, Execution. The execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby will be duly
authorized by the Board of Directors and shareholders of Visual Connections.
This Agreement has been duly executed and delivered by Visual Connections, and
constitutes a valid and legally binding obligation enforceable against Visual
Connections in accordance with its terms.
7.3 Conflicts. Neither the execution and delivery of this Agreement nor
the performance of the provisions hereof or the transactions contemplated hereby
by Visual Connections (a) violates or conflict with any organizational, charter
or governing documents; (b) violates or conflicts with any applicable law, rule,
regulation, writ, judgment, injunction, decree, determination, award or other
order of any court, government or governmental agency or instrumentality,
domestic or foreign, or (c) results in any breach of any of the terms of or
constitutes a default under or results in the creation or imposition of any
mortgage, deed of trust, pledge, lien, security interest or other charge or
Encumbrance of any nature pursuant to the terms of any contract, agreement or
instrument to which Visual Connections is a party or by which it or its
properties or any of the Technology, Technology Rights or Product is bound.
7.4 Technology Rights.
(a) Visual Connections is the exclusive record and beneficial owner
of the Technology Rights (including without limitation the Product, the
Patents, the Patent Applications and the Trademarks), free and clear of
all Encumbrances. Visual Connections has full rights and powers to, and at
the Technology Transfer Time will deliver to SGPF, good and marketable
title to all of the Technology Rights, free and clear of any Encumbrance.
(b) The use of Patents, Trademarks and Technology necessary or
required for the conduct of the business of Visual Connections as
presently conducted and as
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proposed to be conducted by SGPF does not and will not infringe or violate
any trade secrets, plans and specifications, patents, copyrights, trade
names, registered and common law trademarks, trademark applications,
service marks, service ▇▇▇▇ applications, computer programs and other
computer software, inventions, know-how, technology, proprietary processes
and formulae or other intellectual property rights of any other person or
entity (the "Third Party Intellectual Property Rights"). Visual
Connections is not using any confidential information or trade secrets of
others.
(c) The Patents and Patent Applications are in compliance with
formal legal requirements (including the payment of filing, examination
and maintenance fees and proofs of working or use), are valid and
enforceable and are not subject to any fees or taxes or actions falling
due within ninety (90) days after the date of this Agreement. The Patents
and, as applicable, the Patent Applications, are valid and enforceable and
have not been, and are not now, involved in any interference, reissue,
reexamination, opposition, declaratory judgment or other invalidating
proceeding, nor is any such action threatened with respect to the Patents
or the Patent Applications. No applications for potentially infringing
patents have been filed and no potentially infringing patents have been
issued. No Trademarks have been or are involved in any opposition,
invalidation or cancellation proceeding, and there is no basis for the
commencement of any such proceeding. The Trademarks are valid and
enforceable and no person holds any infringing or potentially infringing
trademark and no application for any infringing or potentially infringing
trademark has been made.
(d) A copy of all documentation related to the Technology,
Technology Rights and the Product has been furnished to SGPF. Such
documentation is current, accurate, complete and in sufficient detail and
content to explain all aspects of the Technology and to allow it's full
and proper use without reliance on the memory of others. Visual
Connections has not suffered or allowed any of the Patents, Patent
Applications, Trademarks or other Technology Rights to enter into the
public domain, nor has the Technology been used, divulged or appropriated
for the benefit of any person or entity other than Visual Connections or
to the detriment of Visual Connections. Visual Connections has taken all
measures and precautions necessary to protect the secrecy, confidentiality
and value of the Technology.
(e) Visual Connections is not obligated or under any liability
whatsoever to make any payments by way of royalties, fees or otherwise to
any person claiming to be an owner of, licensor of, or other claimant to,
any of the Patents, Patent Applications, Trademarks, Technology Rights or
Technology or any Third Party Intellectual Property Rights.
(f) All employees, contractors and consultants of Visual Connections
involved in the technical or scientific aspects of the business of Visual
Connections, both past and present, have executed written agreements with
Visual Connections which assign to Visual Connections all rights to any
inventions, improvements, discoveries or information which relate to
Visual Connections' business. No employee, contractor or consultant of
Visual Connections has entered into any agreement which restricts or
limits in any way the scope or type of work in which such employee,
contractor or consultant may be engaged or requires such employee,
contractor or consultant to transfer, assign or
11
disclose information concerning such employee's, contractor's or
consultant's work to anyone other than Visual Connections.
7.5 Permits. Visual Connections (a) has provided SGPF with all consents,
approvals, governmental filings, authorizations, and permits in its possession
for (i) the consummation of the transactions contemplated by this Agreement and
(ii) the continued manufacture, distribution and use of the Product and
Technology, including, without limitation, any clearance certificates or
marketing approvals issued by the FDA, relating to the manufacture, marketing,
distribution or use of the Product; and (b) has maintained in full force and
effect and renewed, when required, all Permits.
7.6 Instruments of Conveyance. The Technology Documents are sufficient to
transfer all right, title and interest in the Patents, the Patent Applications,
the Technology, the Technology Rights and the Product to SGPF.
7.7 Statements. Neither this Agreement nor any exhibit, certificate, list
or other document furnished or to be furnished by or on behalf of Visual
Connections pursuant to this Agreement contains or will contain any untrue
statement of material fact or omits or will omit to state a material fact
necessary to make the statements contained herein and therein, in light of the
circumstances under which they are made, not misleading. There is no material
fact as of the date hereof which has not been disclosed in writing to SGPF to
which Visual Connections has knowledge related to the Product, the Technology or
the Technology Rights which could have a material adverse effect on SGPF's
ability to fully use the Product, the Technology or the Technology Rights.
7.8 Litigation. There is no legal, administrative, arbitration, or other
proceeding, suit, claim or action of any nature or investigation review or audit
of any kind, judgment, decree, decision, injunction, writ or order pending,
noticed, scheduled or threatened or contemplated by or against or involving the
Product, the Technology or the Technology Rights, whether at law or in equity,
before or by any person or entity or Authority, or which questions or challenges
the validity of this Agreement or any action taken or to be taken by the parties
hereto pursuant to this Agreement or in connection with the transactions
contemplated herein. For purposes of this Agreement, "Authority" means any
foreign, federal, state or local government, government agency or
instrumentality, administrative, regulatory or judicial court, department,
commission, agency, bureau, instrumentality or other authority.
7.9 Compliance with Law; Permits; Consents. Visual Connections has
complied with all laws applicable to the Product, the Technology and the
Technology Rights. No Consent, approval order, notice to or other authorization
of any Authority, or of any other third parties, are required in connection with
the execution, delivery or performance of this Agreement by Visual Connections
or the consummation by Visual Connections of the transactions contemplated
herein or therein, except for the Instruments of Conveyance. For purposes of
this Agreement, "Consent" means any consent, approval, order or authorization of
or from, or registration, notification, declaration or filing with any
individual or Authority, including without limitation any Authority.
7.10 Books and Records. The books and records of Visual Connections
relating to the Technology are complete and correct in all material respects and
have been maintained in
12
accordance with Visual Connections' past business practices and copies have been
provided to SGPF.
7.11 Product Liability. Visual Connections has no liability (and there is
no basis for any present action, suit, proceeding, hearing, investigation,
charge, complaint, claim or demand against any of them giving rise to any
liability) arising out of any injury to individuals or property as a result of
the ownership, possession, or use of the Product, the Technology or the
Technology Rights.
7.12 Taxes. Visual Connections has filed or caused to be filed all
federal, state, municipal and other tax returns, reports and declarations
required to be filed by it on or before the date hereof so as to prevent any
Encumbrance of any nature on the Product, the Technology and the Technology
Rights, and, except as otherwise provided herein, has paid or will pay all taxes
which have been or will become due with respect to the periods covered by said
returns and any period prior to the date hereof, or pursuant to any assessment
received by it in connection therewith. All assessments and charges (including
penalties and interest, if any) have been paid by Visual Connections, including
any necessary adjustments with state and local tax authorities, and no
deficiency in payment of any taxes for any period has been asserted by any
taxing authority which remains unsettled at the date hereof.
7.13 All Necessary Assignments. The assignments by Visual Connections
pursuant to this Agreement will constitute an assignment of all the Technology
Rights and all rights, whether defined as Technology Rights or otherwise, to the
Product and the Technology.
7.14 Additional Representations and Warranties. Visual Connections and
Asbaghi represent and warrant, and covenant, as applicable, to SGPF that:
(a) Visual Connections and Asbaghi have entered into this Agreement
in good faith and for bona fide business purposes, and the sale and
purchase of the Technology Rights is an arm's length transaction which is
fair, reasonable and in the best interest of both Visual Connections and
SGPF.
(b) The consideration received by Visual Connections for the
Technology Rights pursuant to this Agreement, regardless of which payments
are actually triggered going forward, is as of the date hereof sufficient,
substantial, valuable, fair and adequate consideration for the purchase of
the Technology Rights, and Visual Connections has received the reasonably
equivalent value for the Technology Rights being sold to SGPF such that
there is reasonable equivalence between the consideration and the current
fair market value of the Technology Rights.
(c) In connection with the examination by SGPF of Visual
Connections' books and records relating to the Technology Rights, Visual
Connections has provided SGPF with all necessary documentation and
information to perform such audits, that all such information and
documentation furnished to SGPF was true and correct and that Visual
Connections has provided SGPF with all the necessary documentation and
information in order for SGPF to fairly assess the value of the Technology
Rights and to determine that the consideration is fair and adequate
consideration for the Technology Rights.
13
(d) Visual Connections is not entering into this Agreement or any of
the agreements related to this transaction with the intent to hinder,
delay, defeat or defraud any of Visual Connections' existing creditors, or
any other person, any rights such creditors may have against SGPF or to
place the Technology Rights beyond the reach of the creditors or to hinder
creditors in the collection of their claims against SGPF. Visual
Connections agrees that the transfer of the Technology Rights to SGPF is
not being made with the intent to evade or escape any liability for
existing debts, or to avoid any duty or debt due by, or incumbent on,
Visual Connections.
8. Representations and Warranties of SGPF
SGPF represents and warrants to Visual Connections as of the date hereof,
which representations and warranties are material, are being relied upon by
Visual Connections (not withstanding any independent investigation) and will
survive the date hereof, as follows:
8.1 . Organization, Power. SGPF is a limited liability company duly
organized, validly existing and in good standing under the laws of the slate of
Kentucky and has all requisite power and authority to carry on its business as
it is now being conducted, to own, lease and operate its properties and assets,
to enter into this Agreement and to carry out the transactions contemplated
hereby.
8.2 Authorization, Execution. The execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby will be duly
authorized by the Board of Directors of SGPF. Subject to the receipt of such
authorization, this Agreement has been duly executed and delivered by SGPF, and
constitutes a valid and legally binding obligation enforceable against them in
accordance with its terms.
8.3 Conflicts. Neither the execution and delivery of this Agreement nor
the performance of the provisions hereof or the transactions contemplated hereby
by SGPF violate or conflict with (a) any organizational, charter or governing
documents; or (b) any applicable law, role, regulation, writ, judgment,
injunction, decree, determination, award or other order of any court, government
or governmental agency or instrumentality, domestic or foreign.
8.4 Statements. Neither this Agreement nor any exhibit, certificate, list
or other document furnished or to be furnished by or on behalf of SGPF pursuant
to this Agreement contains or will contain any untrue statement of material fact
or omits or will omit to state a material fact necessary to make the statements
contained herein and therein, in light of the circumstances under which they are
made, not misleading.
8.5 Litigation. There is no legal, administrative, arbitration, or other
proceeding, suit, claim or action of any nature or investigation, review or
audit of any kind, judgment, decree, decision, injunction, writ or order
pending, noticed, scheduled or threatened or contemplated, whether at law or in
equity, before or by any person or entity or Authority, which questions or
challenges the validity of this Agreement or any action taken or to be taken by
the parties hereto pursuant to this Agreement or in connection with the
transactions contemplated herein.
14
8.6 Compliance with Law; Permits; Consents. No Consent, approval order,
notice to or other authorization of any Authority, or of any other third
parties, are required in connection with the execution, delivery or performance
of this Agreement by SGPF or the consummation by SGPF of the transactions
contemplated herein or therein.
9. Term and Termination
9.1 Generally. The term of this Agreement will commence on the date first
set forth above. Except for the royalty payment obligations of SGPF pursuant to
Sections 2.3, which shall remain in effect for the period set forth in Section
2.3, this Agreement shall expire upon the termination of the latest expiration
date of the Patents. Notwithstanding the foregoing, this Agreement and the
obligations of the parties hereunder may be terminated in accordance with the
following provisions:
(a) Prior to the payment by SGPF of the Technology Transfer Payment,
this Agreement shall terminate in the event SGPF fails to comply with the
payment schedule set forth in Section 2.1 above, to the extent such
payments are triggered; provided, however, that there shall be a fifteen
(15) day cure period after receipt of notice of any non-compliance by
SGPF. There is no cure period with respect to the Initial Technology
Transfer Payment.
(b) SGPF may terminate any further obligations it may have under
this Agreement by giving notice in writing to Visual Connections in the
event Visual Connections is in material breach of this Agreement and has
failed to cure such breach within sixty (60) days of receipt of written
notice thereof from SGPF.
(c) SGPF may terminate any further obligations it may have under
this Agreement (including any obligation to pay to Visual Connections any
royalty payments withheld pursuant to Section 12.1(b) below) immediately
in the event that a court of competent jurisdiction (i) holds that a
patent owned by a third party is infringed by reason of SGPF's use of the
Technology Rights in the manufacture, sale or use of the Products or the
Technology or (ii) holds that any of the Patents are invalid.
9.2 Payment Offset. If any of the representations and warranties by Visual
Connections set forth in Section 7 are or become inaccurate or breached in any
material respect, SGPF, in addition to SGPF's other rights under this Agreement
and at law or in equity, will be entitled to a reduction in such amounts payable
or paid by SGPF under this Agreement, such refund and reduction to be in such an
amount or amounts as will compensate SGPF for its damages incurred by reason of
the inaccuracy or breach and compensate SGPF for the loss of value in rights
granted to SGPF under this Agreement as compared with the value of such rights
in the absence of such inaccuracy or breach.
9.3 Rights and Obligation on Termination. In the event of termination of
this Agreement for any reason, the parties will have the following rights and
obligations:
(a) If SGPF has paid Visual Connections the initial Technology
Transfer Payment pursuant to Section 2.1, then SGPF will retain ownership
of the Technology Rights. If SGPF has not paid Visual Connections the
Technology Transfer Payment, then
15
SGPF shall lose any and all right, title and interest in and to the
Patents, Patent Applications, Trademarks, Technology, and Technology
Rights.
(b) SGPF will remain responsible for payment of any amounts due to
Visual Connections that has accrued prior to the effective date of
termination of this Agreement by SGPF subject to the set off described in
Section 9.2; provided, however, that if upon termination of this Agreement
SGPF has not acquired the Technology Rights then SGPF shall have no
further obligation to pay any additional portion of the Technology
Transfer Payment.
(c) Sections 10 and 11 will survive termination of this Agreement.
(d) SGPF, SGPF's Affiliates and sublicensees will be permitted to
sell any inventory of Product on hand at the effective date of termination
for a period of one hundred and twenty (120) days from the effective date
of termination of this Agreement, provided that no provision of this
Agreement will prevent SGPF, SGPF's Affiliates or sublicensees from
selling Products after termination of this Agreement if the relevant
Technology Rights have expired or SGPF is the owner of the Technology
Rights. Visual Connection shall have the right to buy all inventory of
Product on hand at SGPF's cost at the end of the one hundred and twenty
(120) day period after the effective date of termination.
10. Confidentiality; Non-Competition
10.1 Confidentiality. Visual Connections and Asbaghi agree to keep
strictly confidential and not to disclose to any third party any knowledge,
know-how, practice, process or other information relating to the Technology, the
Technology Rights or the Product, or any information provided by SGPF to Visual
Connections pursuant to Section 6; provided, however, that such information (a)
was not in the public domain at the time of disclosure to the third party, or
(b) is required to be disclosed to a government entity, in which case SGPF will
be provided with adequate written notice and given every reasonable opportunity
to protect or contest such governmental disclosure. Visual Connections will use
all reasonable efforts to ensure that none of its agents, employees or
representatives violate the provisions of this Section 10.1. Visual Connections
understands that if it fails to fulfill its obligation under this Section 10.1,
the damages to SGPF would be very difficult to determine. In addition to any
rights or remedies available to SGPF at law, in equity or by statute, therefore,
Visual Connections hereby consents to the specific enforcement of this Section
10.1 by SGPF through an injunction or restraining order issued by an appropriate
court prohibiting the continuance of any violation by the breaching party.
10.2 Non-Competition Agreement. The parties agree that, as a condition
precedent to this Agreement, Asbaghi will execute and deliver to SGPF the
Non-Competition Agreement attached hereto as Exhibit B. The Non-Competition
Agreement will immediately terminate if Visual Connections terminates this
Agreement because of SGPF's failure to make the Technology Transfer Payment as
set forth in Section 2.1 above.
11. Indemnification
16
11.1 Indemnification by Visual Connections. Visual Connections and
Asbaghi, jointly and severally, agree to defend, indemnify and hold harmless
SGPF and its respective directors, representatives, officers, managers,
employees, agents, shareholders or consultants, from and against any claim,
demand, loss, damage (including consequential and incidental damages), cost or
expense (including, without limitation, reasonable attorneys' fees and expenses
including costs of investigation), or diminution of value, whether or not
involving a third party claim, suffered or incurred by SGPF in connection with:
(a) the failure of any of the representations and warranties of Visual
Connections contained in this Agreement to have been true and correct in all
respects, including without limitation those representations and warranties set
forth in Section 7.4 above; and (b) the failure of Visual Connections to comply
with any of the covenants or provisions contained in this Agreement which are
required to be performed by Visual Connections.
11.2 Indemnification by SGPF. SGPF agrees to defend, indemnify and hold
harmless Visual Connections and its respective directors, representatives,
officers, managers, employees, agents, shareholders or consultants, from and
against any claim, demand, loss, damage (including consequential and incidental
damages), cost or expense (including, without limitation, reasonable attorneys'
fees and expenses including costs of investigation), suffered or incurred by
Visual Connections in connection with personal injury, product liability or
warranty claims of third parties related to any of the Products manufactured by
or for SGPF.
11.3 Notice and Procedure. In the event any claim or demand is asserted or
any legal proceeding is threatened or instituted by any person in respect of
which indemnification may be sought by an indemnified party pursuant to Sections
11.1 or 11.2, the indemnified party will notify the indemnifying party thereof
within a reasonable period of time. The indemnifying party will thereafter, at
its expense, defend against, negotiate, settle or otherwise deal with any
proceeding, claim or demand, provided, however that the indemnified party may
participate in any proceeding with counsel of its choice at its expense. The
parties will cooperate fully with each other in connection with the defense,
negotiation or settlement of any such legal proceeding, claim or demand;
provided, however, that the indemnifying party will not settle any claim, demand
or proceeding without the consent of the indemnified party(ies) with respect
thereto, which consent will not be unreasonably withheld.
12. Miscellaneous Provisions
12.1 Infringement or Invalidity Actions or Proceedings.
(a) Cooperation. In any suit, proceeding or dispute involving (i)
the infringement of any Patent within the Technology Rights (or alleging
infringement of a patent or other intellectual property owned by a third
party by reason of SGPF's use of the Technology Rights in the manufacture,
sale or use of the Products or the Technology) or (ii) claims that any
such Patent or Patent Application is invalid, then Visual Connections will
provide SGPF with reasonable cooperation including, but not limited to,
becoming party to such suit, proceeding or dispute, and, upon the request
and at the expense of SGPF, Visual Connections will make available to
SGPF, at reasonable times and under appropriate conditions, all relevant
personnel, records, papers, information, samples, specimens, and the like
in its possession.
17
(b) Payment of Royalties.
(i) If any suit, action or proceeding is brought (i) against SGPF
alleging the infringement of a patent or other intellectual
property owned by a third party by reason of SGPF's use of the
Technology Rights in the manufacture, sale or use of the
Products or (ii) alleging the invalidity of any of the
Patents, then during the pendency of such suit, action or
proceeding, and provided that SGPF is unable to sell the
Product or in its discretion decides not to sell the Product
as a result of such suit or proceeding, SGPF will not be
required to make any payments to Visual Connections pursuant
to Section 2.3. Promptly after the dismissal of such matter
(or settlement on terms reasonably acceptable to SGPF), SGPF
shall resume making such payments to Visual Connections
pursuant to Section 2.3 and shall pay the amount of the
withheld royalty payments to Visual Connections.
(ii) SGPF, at its sole discretion, may develop a written plan that
will provide Visual Connections with the opportunity to
convert portions, or all, of its royalty payments into equity
interests in SGPF or a successor to SGPF ("the Royalty Stock
Option Plan "). SGPF will use its best efforts to make the
Royalty Stock Option Plan transferable to any SGPF successor.
Such Royalty Stock Option Plan shall not be adopted if it
would result in an expense under generally accepted accounting
principals or under tax law or would interfere with any
initial public offering by SGPF or its successor.
12.2 SGPF Decision. Notwithstanding anything to the contrary in this
Agreement, SGPF may, at its sole discretion, determine whether or not to proceed
with development, production and/or distribution of the Product. SGPF shall
notify Visual Connections of any such decision not to proceed, and its reasons,
in writing. In the event that SGPF's decision to discontinue such development,
production and/or distribution of the Product is based upon unfavorable economic
conditions, technological obsolescence, patent infringement claims, or
prohibitive governmental regulations, the Technology Transfer Payment as set
forth in Section 2.1 above will constitute its entire financial obligation to
Visual Connections.
12.3 Patent Prosecution. From and after the date of this Agreement, SGPF
shall be solely responsible for the prosecution of the Patent Applications and
the Patents before the applicable governing examining authorities, excluding
Visual Connections responsibilities as stated in Section 5 and Section
2.3(b)(iv) hereof. SGPF shall timely pay, when due, all filing and/or
maintenance fees for any of such Patent Applications and Patents in accordance
with applicable law and regulations. SGPF shall also be solely responsible for
all of the expenses incurred by it in connection with prosecuting and
maintaining such patent rights. SGPF and Visual Connections shall cooperate
fully with each other to execute all necessary documentation to enable each
party to perform its duties and exercise its rights under the terms of this
section.
12.4 Permits. From and after the date of this Agreement, SGPF shall be
solely responsible, except for Visual Connections responsibilities as stated in
Section 5 and Section 2.3(b)(iv) hereof for obtaining (a) all consents,
approvals, governmental filings, authorizations,
18
and permits for (i) the consummation of the transactions contemplated by this
Agreement and (ii) the continued manufacture, distribution and use of the
Product, including, without limitation, any clearance certificates or marketing
approvals issued by the FDA, relating to the manufacture, marketing,
distribution or use of the Product; and (b) SGPF shall maintain in full force
and effect and renew in a timely manner, when required, all Permits.
12.5 Amendment and Modification. This Agreement may be amended, modified
or supplemented only by written agreement of all the parties hereto.
12.6 Amendment and Modification. Except as otherwise provided hereunder,
neither this Agreement nor any right or obligation arising hereunder may be
assigned by either party hereto, in whole or in part, without the prior written
consent of the other party hereto, which may be withheld in the absolute
discretion of such other party, and any attempted assignment in violation of the
terms hereof will be null and void and of no force or effect; provided, however,
that either party may assign this Agreement to a purchaser of substantially all
of the business of such party without the prior written consent of the other
party hereto, so long as such purchaser agrees in writing to be bound by the
terms and conditions of this Agreement as though such purchaser were Visual
Connections or SGPF, as the case may be. Subject to the foregoing sentence, this
Agreement will be binding upon and inure to the benefit of the parties and their
respective successors and assigns. Notwithstanding anything in this Agreement to
the contrary, SGPF may sell, transfer or assign all or substantially all of the
Technology Rights and all of its rights and obligations under this Agreement so
long as the purchaser agrees in writing to be bound by the terms and conditions
of this Agreement as though such purchaser were SGPF, including any obligation
to make Royalty Payments under this Agreement.
12.7 Entire Agreement; Severability. This Agreement, including the
Exhibits attached hereto which are incorporated herein by reference, contains
the entire agreement between the parties relating to the matters addressed
herein, and consequently, all prior and contemporaneous oral and written
discussions and understandings are superseded. If one or more of the provisions
of this Agreement or any application thereof are invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions and any other application thereof will in no way be
affected or impaired and any such provision will be enforced to the maximum
extent possible by law.
12.8 Counterparts. This Agreement may be executed in counterparts, all of
which taken together will constitute a single Agreement, or by the execution of
a separate agreement under the terms of which the person executing such separate
agreement specifically undertakes to be bound by the terms, provisions and
agreements of this Agreement.
12.9 Governing Law, Consent to Jurisdiction. Unless otherwise agreed upon
in writing between the parties, this Agreement and the legal relations created
by it will in all respects, including, without limitation, with respect to
construction, interpretation, performance, effect and remedies, be governed by
and construed in accordance with the internal laws of the State of Delaware
(without regard to the laws of conflict of any jurisdiction), except that the
laws of the United States will apply to questions regarding the validity,
infringement or enforceability of U.S. patents rights relating to the subject
matter of this Agreement. Each party hereto irrevocably consents that any legal
action or proceeding against it occurring under, relating to or in connection
with this Agreement or any other agreement, document or instrument arising out
of
19
or executed in connection with this Agreement may be brought only in a court of
the state of Delaware or in the United States District Court for the District of
Delaware, but that each party consents and agrees that any litigation should
occur in the Delaware Chancery Courts, if jurisdiction exists. Each party by the
execution and delivery of this Agreement expressly and irrevocably assents and
submits to the personal jurisdiction of any of such courts in any such action or
proceeding. Each party further irrevocably consents to the service of any
complaint, summons, notice or other process relating to any such action or
proceeding by delivery thereof to it by hand or by mail in the manner provided
for in Section 12.11 hereof. Each party hereby expressly and irrevocably waives
any claim or defense in any action or proceeding based on any alleged lack of
personal jurisdiction, improper venue or forum non conveniens or any similar
basis.
12.10 Certain Agreements; Additional Documents and Acts. Each party agrees
to cooperate and to execute and deliver in a timely fashion such additional
documents and instruments and to perform such additional acts as may be
necessary or appropriate to effect, carry out and perform all of the terms,
provisions, and conditions of this Agreement and the transactions contemplated
hereby.
12.11 Notices. Any notice, request, instruction or other document to be
given hereunder by any party hereto to any other party must be in writing and
delivered personally or sent by registered or certified mail, postage prepaid
(and if by mail with a copy sent by telephonic facsimile transmission),
If to Visual Connections:
Visual Connections, Inc.
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Phone: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
If to Asbaghi:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Phone: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
If to SGPF:
SGPF, LLC
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Phone: ▇▇▇-▇▇▇-▇▇▇▇
20
Fax: ▇▇▇-▇▇▇-▇▇▇▇
or at such other address for a party as is specified by like notice. Any
notice which is addressed and mailed in the manner herein provided will be
deemed to have been duly given to the party to which it is addressed on
the date deposited in the mail (or, if later, the date of facsimile
transmission).
12.12 Force Majeure. If either party is delayed in or prevented from
performing any obligation hereunder due to any act of God, fire, riot, embargo,
or strike or other labor problem, availability of Product materials, unforeseen
and dramatic increases in Product production costs that eliminate the ability to
allow commercialization the Product, then such delay or nonperformance shall be
excused and the time for performance shall be extended during the pendency of
such condition. Time is of the essence in performance of the terms of this
Agreement.
12.13 Exhibits. Exhibits attached hereto are incorporated herein in full
by this reference as if each of such exhibits were set forth in the body of this
Agreement and duly executed by the parties hereto.
12.14 Waivers. Neither the waiver by a party of a breach of or a default
under any of the provisions of this Agreement, nor the failure of a party, on
one or more occasions, to enforce any of the provisions of this Agreement or to
exercise any right, remedy or privilege hereunder will thereafter be construed
as a waiver of any such provisions, rights, remedies or privileges hereunder.
12.15 Exercise of Rights. No failure or delay on the part of a party in
exercising any right, power or privilege hereunder and no course of dealing
between the parties will operate as a waiver thereof, nor will any single or
partial exercise of any right, power or privilege hereunder preclude any other
or further exercise thereof or the exercise of any other right, power or
privilege. The rights and remedies herein expressly provided are cumulative and
not exclusive of any other rights or remedies which a party hereto would
otherwise have at law in equity or otherwise.
12.16 Pronouns. All pronouns and any variations thereof will be deemed to
refer to the masculine, feminine, neuter, singular or plural, as the identity of
the person or entity may require.
12.17 Headings. Section headings contained in this Agreement are inserted
for convenience of reference only, will not be deemed to be a part of this
Agreement for any purpose, and will not in any way define or affect the meaning,
construction or scope of any of the provisions hereof.
12.18 Survival. It is the express intention and agreement of the parties
that all covenants, agreements, statements, representations, warranties and
indemnities made in this Agreement will survive the execution and delivery of
this Agreement and, where appropriate to facilitate the intent of this
Agreement.
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The parties hereto have duly executed this Agreement as of the day and
year first above written.
SGPF, LLC VISUAL CONNECTIONS, INC.
a Kentucky limited liability company a California corporation
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, President
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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Exhibit A
Description of Safety Syringe System, with and without a Distal Protective
Needle, in a Fillable and Pre-filled Configuration
The patents as described in Recital A of this Agreement provide for the
following device configurations, as described generally below:
PRODUCT DESCRIPTIONS:
1. Passively guarded 1ml syringe with and without "blunt" needle.
2. Passively guarded 3ml syringe with and without "blunt" needle.
3. Passively guarded 1ml syringe without a needle. (All product sizes
about 5ml are the same design).
4. Passively guarded 1ml pre-filled syringe with a detached cartridge.
(The cartridge can be either glass or plastic).
5. Hypodermic needle with "blunt" needle attached to it.
Exhibit B
NON-COMPETITION AGREEMENT
This Agreement, effective as of February 19th, 2007 (the "Effective
Date"), by and between SGPF, LLC a Kentucky limited liability company (the
"Marketing Company"), and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, an individual resident of the State
of California ("Hooman") as of the date of this Agreement.
A. Hooman is a principal shareholder of Visual Connections ("Visual
Connections").
B. Visual Connections desires to enter into that certain Agreement (the
"Technology Acquisition Agreement") with SGPF and Hooman, dated as of February
19th, 2007, from which Hooman will directly receive substantial consideration as
a stockholder of Visual Connections.
C. SGPF requires, as a condition to its entry into the Agreement, that
Hooman enter into this Agreement.
In consideration of the premises and mutual covenants contained herein,
and intending to be legally bound, the parties agree as follows:
1. Non-Compete. During the Non-Compete Period (as defined below) Hooman
will not, alone, or in any capacity with another firm, within any geographical
area in which SGPF, at the time of the execution of this Agreement, is engaged
in more than an insignificant volume of business:
(a) directly or indirectly participate in or support in any capacity
(e.g., as an advisor, principal, agent, partner, officer, director, shareholder,
employee or otherwise) the manufacture, invention, development, sale,
solicitation of sale, marketing, testing, research or other business aspect of
any actual or projected product, product line or service designed, developed,
manufactured, marketed or sold by anyone other than SGPF that performs similar
functions or is used for the same general purposes as a Product, as defined in
the Technology Acquisition Agreement, or otherwise competes with exploitation of
the technology described on the Description of the Safety Syringe System, with
and without a Distal Protective Needle, in a Fillable and Pre-filled
Configuration attached to the Technology Acquisition Agreement as Exhibit A.
(b) call upon, solicit, contact or serve any of the then-existing clients,
customers, vendors or suppliers of SGPF or its marketing representative(s), any
clients, customers, vendors or suppliers that have had a relationship with SGPF
or its marketing representative(s) during the preceding twelve (12) months, or
any potential clients, customers, vendors or suppliers that were solicited by
SGPF or its marketing representative(s) during the preceding twelve (12) months;
(c) disrupt, damage, impair or interfere with the business of SGPF,
whether by way of interfering with or disrupting SGPF's relationship with
employees, customers, agents, representatives or vendors; or
(d) employ or attempt to employ (by soliciting or assisting anyone else in
the solicitation of) any of SGPF's employees on behalf of any other entity,
whether or not such entity competes with SGPF.
2. Non-Compete Period. For purposes of this Agreement, "Non-Compete
Period" means the term of this Agreement, which shall continue for the term of
the Technology Acquisition Agreement and a further period of 12 months
thereafter.
3. Exceptions to Non-Compete. The restrictions contained in this Agreement
will not prevent Hooman from accepting employment with a large diversified
organization with one or more separate and distinct divisions that do not
compete, directly or indirectly, with SGPF, as long as prior to accepting such
employment SGPF receives separate written assurances from the prospective
employer and from Hooman, satisfactory to SGPF, to the effect that Hooman will
not render any services, directly or indirectly, to any division or business
unit that competes, directly or indirectly, with SGPF. During the Non-Compete
Period, Hooman will inform any new employer, prior to accepting employment, of
the existence of this Agreement and provide such employer with a copy of this
Agreement. Notwithstanding anything to the contrary in this Agreement, this
Agreement will immediately terminate if Visual Connections terminates the
Technology Transfer Agreement because of SGPF's failure to make the Technology
Transfer Payment as set forth in Section 2.1 of the Technology Transfer
Agreement. The parties understand and acknowledge that Hooman has previously, is
currently involved in and anticipates continuing to be involved in the design,
development and sale and/or licensing of various other types of safety needles
for the healthcare industry unrelated to a passive safety blood collection
holder. SGPF acknowledges that Hooman's activities and involvement as described
in the preceding sentence shall not constitute any breach or violation of this
Agreement.
4. Remedies. Hooman acknowledges that if he breaches this Agreement, SGPF
will be irreparably and immeasurably injured. Therefore, Hooman agrees that in
addition to any other remedies available to SGPF, SGPF may apply to a court of
competent jurisdiction for a temporary and/or permanent injunction and that such
court may grant such injunction to restrain and prohibit such breach by Hooman.
5. Assignments. This Agreement is personal to Hooman and may not be
assigned or delegated by Hooman or transferred in any manner whatsoever, nor are
such obligations subject to involuntary alienation, assignment or transfer. This
Agreement will inure to the benefit of and be enforceable by Hooman's legal
representatives. This Agreement is binding on and inures to the benefit of the
Company's successors and assigns.
6. Nonwaivers of Rights. No failure or delay on the part of a party in
exercising any right hereunder will operate as a waiver of, or impair, any such
right. No single or partial exercise of any such right will preclude any other
or further exercise thereof or the exercise of any other right. No waiver of any
such right will be effective unless given in a signed writing. No waiver of any
such right will be deemed a waiver of any other right hereunder.
7. Validity of Provisions; Severability. If any provision of this
Agreement is or becomes or is deemed invalid, illegal, or unenforceable in any
jurisdiction, (a) such provision
S-4
will be deemed amended to conform to applicable laws of such jurisdiction so as
to be valid and enforceable, (b) the validity, legality and enforceability of
such provision will not in any way be affected or impaired thereby in any other
jurisdiction and (c) the remainder of this Agreement will remain in full force
and effect.
8. Governing Law, Consent to Jurisdiction. This Agreement has been
negotiated and entered into in the state of Delaware, will be deemed to be a
Delaware contract and will be governed by the laws of Delaware as to
interpretation and performance without reference to principles of conflicts of
laws. Each party irrevocably consents that any legal action or proceeding
against it occurring under, relating to or in connection with this Agreement or
any other agreement, document or instrument arising out of or executed in
connection with this Agreement may be brought in a court of the state of
Delaware or in the United States District Court for the District of Delaware.
Each party by the execution and delivery of this Agreement expressly and
irrevocably assents and submits to the personal jurisdiction of any of such
courts in any such action or proceeding. Each party hereby expressly and
irrevocably waives any claim or defense in any action or proceeding based on any
alleged lack of personal jurisdiction, improper venue or forum non convenes or
any similar basis.
The parties have executed this Agreement effective the date first above
written.
SGPF, LLC ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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