Exhibit 10.1
================================================================================
ASSET PURCHASE OPTION AGREEMENT
BY AND BETWEEN
PROTEIN POLYMER TECHNOLOGIES, INC.
and
SURGICA CORPORATION
November 23, 2005
================================================================================
ASSET PURCHASE OPTION AGREEMENT
THIS ASSET PURCHASE OPTION AGREEMENT (this "Agreement") is made and
entered into as of November 23, 2005 by and between Surgica Corporation, a
Delaware corporation (the "Company") and Protein Polymer Technologies, Inc., a
Delaware corporation (the "Optionee"). Unless otherwise defined herein, all
capitalized terms used herein shall have the respective meanings ascribed
thereto in the Purchase Agreement (defined below).
R E C I T A L S
WHEREAS, the Company and the Optionee propose to enter into that
certain License Agreement and that certain Supply and Services Agreement,
attached hereto as Exhibit A and Exhibit B, respectively (collectively, the
"License Agreement"), pursuant to which the Company, among other things, would
license to Optionee certain intellectual property (including patent and patent
applications), as well as marketing and distribution rights;
WHEREAS, in order to induce the Optionee to enter into the License
Agreement and to advance funds to the Company, pursuant to this Agreement and
subject to the terms herein, the Optionee shall have the right to purchase from
the Company substantially all of the assets of the Company now existing or
hereafter acquired through the date of the exercise of the Option (defined
below) (the "Assets") for the purchase price described in Section 1.4 of this
Agreement.
NOW, THEREFORE, in consideration of the premises and mutual covenants
and agreements herein set forth and for other good and valuable consideration,
the receipt and adequacy of which are hereby acknowledged, each of the parties
hereto (individually, a "Party", collectively, the "Parties") hereby agree as
follows:
ARTICLE I
OPTION TO PURCHASE
Section 1.1. Option to Purchase Assets.
---------------------------------------
Subject to the satisfaction or waiver of the conditions set forth in
Article V hereof, the Company hereby grants to Optionee the option to purchase
substantially all of the Assets (the "Option") during the Option Period (as
defined in Section 1.2 of this Agreement), as the same may be extended pursuant
to the terms hereof, or such later date as the Parties shall mutually agree
upon. The date on which the Option becomes effective is referred to herein as
the "Option Effective Date."
-1-
Section 1.2. The Option Period.
-------------------------------
The "Option Period" shall commence on the date hereof and extend until
One (1) year from the Effective Date, provided that, upon written notice from
Optionee to the Company not more than 60 days and not less than 30 days prior to
such date, the Option Period may be extended until Two (2) years from the
Effective Date, in the sole and absolute discretion of Optionee.
Section 1.3. Exercise of Option.
--------------------------------
(a) During the Option Period, Optionee may exercise the Option only
upon written notice (the "Option Notice") to the Company, in accordance with
Section 7.7 herein.
(b) Within 10 days after the Optionee delivers the Option Notice, the
Optionee, Optionee's wholly-owned subsidiary and the Company, must enter into a
definitive asset purchase agreement in substantially the form attached hereto as
Exhibit C (the "Purchase Agreement").
Section 1.4. Option Payment.
----------------------------
The consideration which shall be paid by Optionee to the Company for
the Assets shall be equal to that set forth in Section 2.6 of the Purchase
Agreement.
Section 1.5. Option Closing.
----------------------------
The Option shall become effective (the "Option Closing") on the Option
Effective Date, which shall be one Business Day after satisfaction or waiver of
all the conditions set forth in Article V hereof, but in no event later than
December 17, 2005. At the Option Closing, the parties shall enter into the
License Agreement and Supply and Services Agreement and shall execute and
deliver such other instruments and documents contemplated by Article V hereof.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to the Optionee for its benefit
that the statements contained in this Article II are true and correct, subject
to such exceptions as are specifically disclosed in writing in the Disclosure
Schedule provided by the Company to the Optionee (the "Disclosure Schedule").
Section 2.1. Organization, Qualification and Corporate Power.
-------------------------------------------------------------
The Company is a corporation duly organized, validly existing and in
corporate good standing under the laws of the State of Delaware. The Company is
duly qualified to conduct business and is in corporate good standing under the
-2-
laws of each jurisdiction in which the nature of its businesses or the ownership
or leasing of its properties requires such qualification, except where the
failure to be so qualified or in good standing would not have a Material Adverse
Effect on the Company. The Company has the corporate power and authority to
carry on the businesses in which it is engaged and to own and use the properties
owned and used by it. The Company has furnished or made available to the
Optionee true and complete copies of its Certificate of Incorporation and
Bylaws, each as amended and/or restated and as in effect on the date hereof
(hereinafter the "Charter" and "Bylaws," respectively). The Company is not in
default under or in violation of any provision of its Charter or Bylaws, each as
amended to date.
Section 2.2. Representations and Warranties in Purchase Agreement.
------------------------------------------------------------------
The representations and warranties regarding the Company set forth in
Article III of the Purchase Agreement are true and correct as of the date
hereof.
Section 2.3. Authorization of Transaction.
------------------------------------------
Subject to the Requisite Stockholder Approval (as defined below) of
this Agreement, the Company has the corporate power and authority to execute and
deliver this Agreement and to perform its obligations hereunder. The execution
and delivery of this Agreement and, subject to the adoption of this Agreement,
the proper notice or waiver thereof to the Company's preferred stockholders as
provided in the Charter and Bylaws of the Company and the approval of the
transaction by a majority of the votes represented by the outstanding shares of
stock entitled to vote on this Agreement, which is a majority of the Company's
common stock and preferred stock voting as a single class, with the preferred
voting on an "as converted" basis, voting in accordance with the corporate laws
of the State of Delaware and the Charter and Bylaws of the Company (the
"Requisite Stockholder Approval"), the performance by the Company of this
Agreement and the consummation by the Company of the transactions contemplated
hereby have been duly and validly authorized by all necessary corporate action
on the part of the Company. This Agreement has been duly and validly executed
and delivered by the Company and, assuming the due authorization, execution and
delivery by the Optionee, constitutes a valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms, except as
enforcement may be limited by bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws affecting the enforcement of
creditors' rights generally, and except that the availability of equitable
remedies, including specific performance, is subject to the discretion of the
court before which any proceeding therefor may be brought.
Section 2.4. Noncontravention.
------------------------------
Subject to receipt of the Requisite Stockholder Approval and the
consent of AngioDynamics, Inc., substantially in the form as set forth on
Exhibit D, attached hereto, except as set forth on Schedule 2.4, attached
hereto, neither the execution and delivery of this Agreement by the Company, nor
the consummation by the Company of the transactions contemplated hereby, will:
(a) conflict with or violate any provision of the Charter or Bylaws of the
Company; (b) require on the part of the Company any filing with, or any permit,
authorization, consent or approval of, any Governmental Body; (c) conflict with,
-3-
result in a breach of, constitute (with or without due notice or lapse of time
or both) a default under, result in the acceleration of, create in any party the
right to accelerate, terminate, modify or cancel, or require any notice, consent
or waiver under, any contract, lease, sublease, license, sublicense, franchise,
permit, indenture, agreement or mortgage for borrowed money, instrument of
indebtedness, Lien or other arrangement to which the Company is a party or by
which the Company is bound or to which any of its Assets is subject; (d) result
in the imposition of any Lien upon any Assets of the Company; or (e) violate any
order, writ, injunction, decree, statute, rule or regulation applicable to the
Company, any of its properties or Assets.
Section 2.5. Subsidiaries.
--------------------------
The Company does not have any direct or indirect subsidiaries or any
other equity interest in any other firm, corporation, partnership, joint
venture, association or other business organization.
Section 2.6. Absence of Certain Changes.
----------------------------------------
Since June 30, 2005, the Company has conducted its business in the
Ordinary Course of Business and there has not occurred any change, event or
condition (whether or not covered by insurance) that has resulted in, or might
reasonably be expected to result in any material adverse change in the Assets,
business, financial condition or results of operations of the Company.
Section 2.7. Powers of Attorney.
--------------------------------
There are no outstanding powers of attorney executed on behalf of the
Company.
Section 2.8. Fees.
------------------
Except as disclosed in Schedule 2.8, the Company has no liability or
obligation to pay any fees or commissions to any broker, investment banking
firm, finder or agent with respect to the transactions contemplated by this
Agreement.
Section 2.9. Books and Records.
-------------------------------
The minute books and other similar records of the Company contain true
and complete records of all material actions taken at any meetings of the
stockholders of the Company, Board of Directors or any committee thereof and of
all written consents executed in lieu of the holding of any such meeting.
Section 2.10. Company Action.
-----------------------------
The Board of Directors of the Company, at a meeting duly called and
held, has by the unanimous vote of all directors (i) determined that the
transaction contemplated herein is fair and in the best interests of the Company
and its stockholders, (ii) adopted this Agreement in accordance with the
provisions of the corporate laws of the State of Delaware, and (iii) directed
that this Agreement be submitted to the stockholders of the Company for their
-4-
adoption and approval and resolved to recommend that the stockholders of the
Company vote in favor of the adoption of this Agreement.
Section 2.11. Disclosure.
-------------------------
No representation or warranty by the Company contained in this
Agreement, and no statement contained in the Disclosure Schedule or any other
document, certificate or other instrument delivered to or to be delivered by or
on behalf of the Company pursuant to this Agreement, contains any untrue
statement of a material fact or omits to state any material fact necessary, in
light of the circumstances under which it was made, in order to make the
statements herein not misleading.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE OPTIONEE
The Optionee represents and warrants to the Company as follows:
Section 3.1. Organization.
--------------------------
The Optionee is a corporation duly organized, validly existing and in
good standing under the laws of the state of Delaware. The Optionee is duly
qualified to conduct business and is in corporate good standing under the laws
of each jurisdiction in which the nature of its businesses or the ownership or
leasing of its properties requires such qualification, except where the failure
to be so qualified or in good standing would not have a Material Adverse Effect
on it.
Section 3.2. Authorization of Transaction.
------------------------------------------
The Optionee has all corporate requisite power and authority to execute
and deliver this Agreement and to perform its obligations hereunder and
thereunder. The execution and delivery of this Agreement and the performance of
this Agreement and the consummation of the transactions contemplated hereby and
thereby by the Optionee have been duly and validly authorized by all necessary
corporate action on the part of the Optionee. This Agreement has been duly and
validly executed and delivered by the Optionee and, assuming the due
authorization, execution and delivery by the Company, constitutes a valid and
binding obligation of the Optionee, enforceable against it in accordance with
its terms, except as enforcement may be limited by bankruptcy, insolvency or
other similar laws affecting the enforcement of creditors' rights generally, and
except that the availability of equitable remedies, including specific
performance, is subject to the discretion of the court before which any
proceeding therefor may be brought.
Section 3.3. Noncontravention.
------------------------------
Neither the execution and delivery of this Agreement, nor the
consummation by the Optionee of the transactions contemplated hereby, will (a)
conflict or violate any provision of the Certificate of Incorporation or Bylaws
-5-
of the Optionee, (b) conflict with, result in breach of, constitute (with or
without due notice or lapse of time or both) a default under, result in the
acceleration of, create in any party any right to accelerate, terminate, modify
or cancel, or require any notice, consent or waiver under, any contract, lease,
sublease, license, sublicense, franchise, permit, indenture, agreement or
mortgage for borrowed money, instrument of indebtedness, security interest or
other arrangement to which the Optionee is a party or by which either is bound
or to which any of their assets are subject, or (c) violate any order, writ,
injunction, decree, statute, rule or regulation applicable to the Optionee or
any of its properties or assets.
Section 3.4. Company Action.
----------------------------
The Board of Directors of the Optionee, at a meeting duly called and
held, have (i) determined that the transaction contemplated herein is fair and
in the best interests of the Optionee and each of its stockholders, and (ii)
adopted this Agreement in accordance with the provisions of the Delaware General
Corporation Law.
Section 3.5. Brokers' Fees.
---------------------------
The Optionee has no liability or obligation to pay any fees or
commissions to any broker, finder or agent with respect to the transactions
contemplated by this Agreement.
Section 3.6. Financial Reports and SEC Documents.
-------------------------------------------------
The Optionee's Annual Report on Form 10-KSB for the fiscal year ended
December 31, 2004, as amended by Form 10-KSB/A filed on May 18, 2005, and all
other reports, definitive proxy statements or information statements filed or to
be filed by it subsequent to December 31, 2004 under Section 13(a), 13(c), 14 or
15(d) of the Exchange Act in the form filed or to be filed (collectively, "SEC
Documents") with the SEC, as of the date filed or to be filed, (A) complied or
will comply in all material respects as to form with the applicable requirements
under the Exchange Act and (B) as of the time filed, or to be filed, did not and
will not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; and each of the balance sheets contained in or incorporated by
reference into any such SEC Document (including the related notes and schedules
thereto) fairly presents, or will fairly present, the financial position of
Optionee and its subsidiaries, if any, as of its date, and each of the
statements of income and changes in shareholders' equity and cash flows or
equivalent statements in such SEC Documents (including any related notes and
schedules thereto) fairly presents, or will fairly present, the results of
operations, changes in shareholders' equity and changes in cash flows, as the
case may be, of Optionee and its subsidiaries, if any, for the periods to which
they relate, in each case in accordance with U.S. GAAP consistently applied
during the periods involved, except in each case as may be noted therein,
subject to the absence of footnotes and to normal year-end adjustments in the
case of unaudited statements.
-6-
ARTICLE IV
COVENANTS BY THE OPTIONEE AND THE COMPANY
The Optionee and the Company covenant as follows:
Section 4.1. Satisfaction of Conditions.
----------------------------------------
Each of the Parties shall use its commercially reasonable efforts to
take all actions and to do all things necessary, proper or advisable to satisfy
the conditions set forth in Article V of this Agreement.
Section 4.2. Notices and Consents.
----------------------------------
Each of the Optionee and the Company shall use their commercially
reasonable efforts to obtain, at its expense, all such waivers, permits,
consents, approvals or other authorizations from third parties and Governmental
Bodies, and to effect all such registrations, filings and notices with or to
third parties and Governmental Bodies, as may be required by or with respect to
the Optionee or the Company, respectively, in connection with the transactions
contemplated by this Agreement.
Section 4.3. Operation of Business.
-----------------------------------
Except as contemplated by this Agreement, during the period from the
date of this Agreement up until the Closing Date (as defined in the Purchase
Agreement), the Company shall conduct its operations in the Ordinary Course of
Business and in compliance with all applicable laws and regulations and, to the
extent consistent therewith, use all reasonable efforts to preserve intact its
current business organization, keep its physical Assets in good working
condition, keep available the services of its current officers and employees and
preserve its relationships with customers, suppliers and others having business
dealings with it to the end that its goodwill and ongoing business shall not be
impaired in any material respect. Without limiting the generality of the
foregoing, prior to the Closing Date, the Company shall not, without the written
consent of the Optionee:
(a) issue, sell, deliver or agree or commit to issue, sell or deliver
(whether through the issuance or granting of options, warrants, commitments,
subscriptions, rights to purchase or otherwise) or authorize the issuance, sale
or delivery of, or redeem or repurchase, any stock of any class or any other
securities or any rights, warrants or options to acquire any such stock or other
securities (except pursuant to the conversion or exercise of convertible
securities, options or warrants outstanding on the date hereof), or amend any of
the terms of any such convertible securities, options or warrants;
(b) split, combine or reclassify any shares of its capital stock;
declare, set aside or pay any dividend, special bonus or other distribution
(whether in cash, stock or property or any combination thereof) in respect of
its capital stock;
-7-
(c) create, incur or assume any debt not currently outstanding
(including obligations in respect of capital leases); assume, guarantee, endorse
or otherwise become liable or responsible (whether directly, contingently or
otherwise) for the obligations of any other person or entity; or make any loans,
advances or capital contributions to, or investments in, or increase the amount
of any existing loan to any other person or entity;
(d) enter into, adopt or amend any Plans or any employment or severance
agreement or arrangement or increase in any manner the compensation or fringe
benefits of, or modify the employment terms of, its directors, officers or
employees, generally or individually, or pay any benefit not required by the
terms in effect on the date hereof of any existing Plan;
(e) acquire, sell, transfer, lease, sublease, license, abandon,
encumber, transfer or otherwise dispose of any properties or assets, real,
personal or mixed (including leasehold interests and intangible property)
related to the Operations, except in the Ordinary Course of Business
(f) amend and/or restate its Charter or Bylaws;
(g) change in any material respect its accounting methods, principles
or practices, or make any change in depreciation or amortization policies or
lives adopted by it except insofar as may be required by a generally applicable
change in GAAP or as required by Optionee;
(h) discharge or satisfy any Lien or pay any obligation or liability
other than in the Ordinary Course of Business;
(i) settle, compromise, materially modify or amend, waive, terminate,
cancel, release or assign any rights or Claims concerning, affecting or relating
to any Contract relating to the Operations (including, without limitation, any
Assigned Agreement), or otherwise relating to the Operations;
(j) mortgage or pledge any of its property or Assets or subject any
such Assets to any Lien;
(k) sell, assign, license, grant or transfer any rights under, or enter
into any settlement regarding the breach or infringement of, any Intellectual
Property, or modify any existing rights with respect thereto;
(l) enter into, amend, terminate, take or omit to take any action that
would constitute a violation of or default under, or waive, release or assign
any rights under, any contract or agreement;
(m) enter into, amend, modify or consent to the termination of any
Assigned Agreement;
-8-
(n) make or commit to make any capital expenditure in excess of Five
Thousand Dollars ($5,000) per item;
(o) take any action or fail to take any action permitted by this
Agreement with the knowledge that such action or failure to take action would
result in (i) any of the representations and warranties of the Company set forth
in this Agreement or the Purchase Agreement becoming untrue or (ii) any of the
conditions to the transaction set forth in Article V, not being satisfied;
(p) make any material charitable contribution;
(q) engage or terminate any consultant;
(r) enter into, materially amend or (except in conjunction with the
completion of the term thereof) terminate any Contract or transaction with any
director or officer, stockholder or Affiliate of Seller (or with any relative,
beneficiary, spouse or Affiliate of such Person) relating to the Operations;
(s) terminate, discontinue, close or dispose of any facility or other
business operation, or lay off any employees or implement any early retirement,
separation or program providing early retirement window benefits or announce or
plan any such action or program for the future;
(t) allow any Permit that was issued or relates to the Operations to
lapse or terminate or fail to renew any insurance policy or Permit that is
scheduled to terminate or expire within forty five (45) calendar days of the
Effective Date, except to the extent that such failure would not be reasonably
expected to cause a Material Adverse Effect on the ability of the Company to own
and operate the Operations as now conducted;
(u) enter into any contract, other than in the Ordinary Course of
Business and as provided to the Optionee, or any amendment or termination of, or
default under, any contract that is or was material to the Operations or
Seller's rights thereunder;
(v) commence any litigation other than (i) for the routine collection
of bills or (ii) in such cases where the Company in good faith determines that
failure to commence suit would result in the material impairment of a valuable
aspect of the Company's business, provided that Company consults with the
Optionee prior to the filing of such a suit;
(w) make or change any material election in respect of Taxes, adopt or
change any accounting method in respect of Taxes, file any material return or
any amendment to a material return, enter into any closing agreement, settle any
claim or assessment in respect of Taxes (except settlements effected solely
through payment of immaterial sums of money), or consent to any extension or
waiver of the limitation period applicable to any claim or assessment in respect
of Taxes;
-9-
(x) write down or write up (or fail to write down or write up in
accordance with U.S. GAAP consistent with past practice) the value of any
receivables or revalue any of the Company's assets other than in the Ordinary
Course of Business and in accordance with U.S. GAAP;
(y) issue any purchase orders or otherwise agreed to make any purchases
involving exchanges in value in excess of Two Thousand Five Hundred Dollars and
Zero Cents ($2,500.00) individually or Five Thousand Dollars and Zero Cents
($5,000.00) in the aggregate, except in the Ordinary Course of Business;
(z) merge with, enter into a consolidation with or acquire an interest
of 5% or more in any Person or acquire a substantial portion of the assets or
business of any Person or any division or line of business thereof engaged in a
business relating to the Operations, or otherwise acquire any material assets
relating to the Operations except in the Ordinary Course of Business;
(aa) (i) grant, announce, or make any change in the rate of
compensation, wages, salaries, commission, bonuses, incentives, pensions or
other direct or indirect remuneration or benefits payable, or pay or agree or
orally promised to pay, conditionally or otherwise, any bonus, incentive,
retention or other compensation, retirement, welfare, fringe or severance
benefit or vacation pay, to or in respect of any director, officer, employee,
distributor, contractor, or agent of the Company relating to or involved in the
Operations, including any increase or change pursuant to any Plan or (ii) enter
into, establish, increase or promise to increase, amend or terminate any
benefits under any Plan or any employment or severance agreement or commitment
or collective bargaining agreement with any employee or contractor of the
Company relating to or involved in the Operations, in either case except as
required by Law or any collective bargaining agreement, such exceptions being
disclosed in the Disclosure Schedules;
(bb) fail to pay any creditor any material amount owed to such creditor
when due;
(cc) change in any manner the character or scope of the Operations;
or
(dd) agree, whether in writing or otherwise, to take any action
described in this Section 4.3 or grant any options to purchase, rights of first
refusal, rights of first offer or any other similar rights or commitments with
respect to any of the actions specified in this Section 4.3, except as expressly
contemplated by this Agreement.
Section 4.4. Full Access.
-------------------------
The Company shall permit representatives of the Optionee to have full
access (upon reasonable notice and at all reasonable times, and in a manner so
as not to interfere with the normal business operations of the Company) to all
-10-
premises, properties, financial and accounting records, contracts, other records
and documents, and personnel, of or pertaining to the Company, subject to
compliance with applicable confidentiality obligations of the Company.
Section 4.5. Notice of Breaches.
--------------------------------
The Company shall promptly deliver to the Optionee written notice of
any event or development of which the Company is aware and that would (a) render
any statement, representation or warranty of the Company in this Agreement
(including the Disclosure Schedule) inaccurate or incomplete in any material
respect, or (b) constitute or result in a breach by the Company of, or a failure
by the Company to comply with, any agreement or covenant in this Agreement
applicable to such Party. The Optionee shall promptly deliver to the Company
written notice of any event or development of which the Optionee is aware that
would (i) render any statement, representation or warranty of the Optionee in
this Agreement inaccurate or incomplete in any material respect, or (ii)
constitute or result in a breach by the Optionee of, or a failure by the
Optionee to comply with, any agreement or covenant in this Agreement applicable
to such Party. No such disclosure shall be deemed to avoid or cure any such
misrepresentation or breach.
Section 4.6. Exclusivity.
-------------------------
The Company agrees that from the date of execution of this Agreement
until the earlier of (a) the Closing Date or (b) termination of this Agreement
in accordance with Article VI hereof, the Company shall not, and the Company
shall use its best efforts to cause each of its officers, directors, employees,
representatives and agents not to, directly or indirectly, (a) solicit,
initiate, engage or participate in or knowingly encourage discussions or
negotiations with any person or entity (other than the Optionee) concerning any
merger, consolidation, sale of assets, tender offer, recapitalization,
accumulation of stock, proxy solicitation or other business combination
involving the Company or any division of the Company, (b) solicit, initiate,
entertain or encourage any proposal or offer related to such an acquisition, (c)
provide any non-public information concerning the business, properties or Assets
of the Company to any person or entity (other than the Optionee) or (d) enter
into any understanding, letter of intent or agreement, whether binding or
non-binding, in connection with the foregoing. The Company shall immediately
notify the Optionee of, and shall disclose to the Optionee all details of, any
inquiries, discussions or negotiations of the nature described in the first
sentence of this Section 4.6. The term "indirectly" shall include, but not be
limited to, through Company representatives.
Section 4.7. Reasonable Commercial Efforts and Further Assurances.
------------------------------------------------------------------
Each of the Parties shall use reasonable commercial efforts to
effectuate the transactions contemplated hereby and to fill and cause to be
fulfilled the conditions to closing under this Agreement. Each Party, at the
reasonable request of another Party, shall execute and deliver such other
instruments and do and perform such other acts and things as may be necessary or
desirable for effecting completely the consummation of this Agreement and the
transactions contemplated hereby.
-11-
Section 4.8. Funding of Business Plan.
--------------------------------------
If the Closing occurs prior to June 30, 2007, absent a Material Adverse
Effect, as determined by and in the sole discretion of Optionee, Optionee shall
provide support, as more fully described in Schedule 4.8, to the Operations to
be transferred from Seller to Optionee as provided herein in order to, in the
reasonable judgment of Optionee, enable the Minimum Revenue Trigger to be met.
It is currently anticipated that such support, if any, will be reflected in the
approval budgets for the Operations to be transferred from Seller to Optionee as
further described in the Supply and Services Agreement.
ARTICLE V
CONDITIONS TO CONSUMMATION OF TRANSACTION
Section 5.1. Conditions to Each Party's Obligations.
----------------------------------------------------
The respective obligations of each Party to the Option Closing
hereunder are subject to the following conditions:
(a) The Company shall have received the Requisite Stockholder Approval
from the stockholders of the Company.
(b) Any required notice to the Company's preferred stockholders shall
have been given or waived; and
(c) Subject to the Requisite Stockholder Approval, Company and the
Optionee shall have entered into the License Agreement.
Section 5.2. Conditions to Obligations of the Optionee.
-------------------------------------------------------
The obligation of the Optionee to the Option Closing hereunder is
subject to the satisfaction of the following additional conditions:
(a) the Company shall have performed or complied with in all material
respects its agreements and covenants required to be performed or complied with
under this Agreement as of or prior to the Option Closing;
(b) the representations and warranties of the Company set forth in
Article II shall be true and correct as of the date hereof, and shall be true
and correct as of the Option Closing, except for representations and warranties
made as of a specific date, which shall be true and correct as of such date;
(c) the Company shall have delivered to the Optionee a certificate
(without qualification as to knowledge or materiality or otherwise) to the
effect that each of the conditions specified in clauses (a) and (b) of this
Section 5.2 is satisfied in all respects;
-12-
(d) The Company shall have received the consent of AngioDynamics, Inc.,
substantially in the form of Exhibit D, attached hereto, to assign the Company's
rights and obligations under that certain Distributor Agreement, dated as of
June 28, 2002, between the Company and AngioDynamics, Inc.
(e) Xxxxx X. Xxxxxx shall have entered into a Voting Agreement,
substantially in the form attached hereto as Exhibit E; and
(f) Xxxxx X. Xxxxxx and the Company shall have entered into an
Employment Agreement substantially in the form set forth on Exhibit F hereto;
and
(g) Xxxxx X. Xxxxxx and the Optionee shall have entered into a Side
Letter Agreement substantially in the form set forth on Exhibit G hereto.
Section 5.3. Conditions to Obligations of the Company.
------------------------------------------------------
The obligation of the Company to consummate the Option Closing
hereunder is subject to the satisfaction of the following additional conditions:
(a) The Optionee shall have performed or complied with in all material
respects its agreements and covenants required to be performed or complied with
under this Agreement as of or prior to the Option Closing;
(b) the representations and warranties of the Optionee set forth in
Article III shall be true and correct as of the date hereof, and shall be true
and correct as of the Option Closing, except for representations and warranties
made as of a specific date, which shall be true and correct as of such date; and
(c) the Optionee shall have delivered to the Company a certificate
(without qualification as to knowledge or materiality or otherwise) to the
effect that each of the conditions specified in clause (a) and (b) of this
Section 5.3 is satisfied in all respects.
ARTICLE VI
TERMINATION
Section 6.1. Termination of Agreement.
--------------------------------------
The Parties may terminate this Agreement prior to the Closing Date as
provided below:
(a) the Parties may terminate this Agreement by mutual written consent;
(b) any Party may terminate this Agreement by giving written notice to
the other Parties upon the entry of any permanent injunction or other order of a
court or other competent authority preventing the consummation of the
transaction that has become final and nonappealable;
-13-
(c) The Optionee may terminate this Agreement if any of the conditions
set forth in Section 5.1 or 5.2 is not satisfied on or prior to December 17,
2005 and the Optionee is not then in breach of this Agreement;
(d) the Company may terminate this Agreement if any of the conditions
set forth in Section 5.1 or 5.3 are not satisfied on or prior to December 17,
2005 and the Company is not then in breach of this Agreement; and
(e) the Optionee may terminate this Agreement for any reason prior to
the Closing Date.
Section 6.2. Effect of Termination.
-----------------------------------
If any Party terminates this Agreement pursuant to Section 6.1, all
obligations of the Parties shall terminate without any liability of any Party to
any other Party. Notwithstanding the foregoing, the following obligations shall
survive termination of this Agreement: (i) liability of any Party for breaches
of this Agreement; (ii) confidentiality, as provided in Section 7.1; and (iii)
each Party's obligation to bear its own fees and expenses incurred in connection
with the preparation and negotiation of this Agreement and the transactions
contemplated herein as provided in Section 7.11.
Section 6.3. Amendment.
-----------------------
The Parties may cause this Agreement to be amended at any time by
execution of an instrument in writing signed on behalf of each of the Parties.
Section 6.4. Extension; Waiver.
-------------------------------
At any time prior to the Closing Date, any Party may, to the extent
legally allowed (i) extend the time for the performance of any of the
obligations or other acts of the other Parties; (ii) waive any inaccuracies in
the representations and warranties made to such Party contained herein or in any
document delivered pursuant hereto and (iii) waive compliance with any of the
agreements or conditions for the benefit of such Party contained herein. Any
agreement on the part of a Party to any such extension or waiver shall be valid
only if set forth in an instrument in writing signed on behalf of such Party.
ARTICLE VII
MISCELLANEOUS
Section 7.1. Press Releases and Announcements.
----------------------------------------------
No Party shall issue any press release or make any public disclosure
relating to the subject matter of this Agreement without the prior approval of
the other Parties; provided, however, that any Party may make any public
disclosure it believes in good faith is required by law or regulation (in which
case the disclosing Party shall advise the other Parties and provide them with
-14-
a copy of the proposed disclosure prior to making the disclosure).
Notwithstanding the foregoing, the Parties acknowledge that Optionee is a
reporting company under the Securities Exchange Act of 1934, as amended, and
will be required to publicly disclose this Agreement and the transactions
contemplated hereby in the form of press releases, Current Reports on Form 8-K
and such other means as Optionee determines.
Section 7.2. No Third Party Beneficiaries.
------------------------------------------
This Agreement shall not confer any rights or remedies upon any person
other than the Parties and their respective successors and permitted assigns.
Section 7.3. Entire Agreement.
------------------------------
This Agreement, the Disclosure Schedule, the Schedules, the documents
and instruments and other agreements among the Parties referred to herein
constitute the entire agreement among the Parties and supersedes any prior
understandings, agreements or representations by or among the Parties, written
or oral, with respect to the subject matter hereof.
Section 7.4. Succession and Assignment.
---------------------------------------
This Agreement shall be binding upon and inure to the benefit of the
Parties and their respective successors and permitted assigns. No Party may
assign either this Agreement or any of its rights, interests, or obligations
hereunder without the prior written approval of the other Parties, provided
however, that Optionee may assign some or all of its rights hereunder to a
wholly owned subsidiary.
Section 7.5. Counterparts.
--------------------------
This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original but all of which together shall constitute one
and the same instrument.
Section 7.6. Headings.
----------------------
The section headings contained in this Agreement are inserted for
convenience only and shall not affect in any way the meaning or interpretation
of this Agreement.
Section 7.7. Notices.
---------------------
All notices, requests, demands, claims, and other communications
hereunder shall be in writing. Any notice, request, demand, claim, or other
communication hereunder shall be deemed duly delivered two business days after
it is sent by registered or certified mail, return receipt requested, postage
prepaid, or one business day after it is sent via a reputable nationwide
overnight courier service or sent via facsimile (with acknowledgment of complete
transmission) with a confirmation copy by registered or certified mail, in each
case to the intended recipient as set forth in the Purchase Agreement.
-15-
Any Party may give any notice, request, demand, claim, or other
communication hereunder using any other means (including personal delivery,
expedited courier, messenger service, telecopy, telex, ordinary mail, or
electronic mail), but no such notice, request, demand, claim, or other
communication shall be deemed to have been duly given unless and until it
actually is received by the Party for whom it is intended. Any Party may change
the address to which notices, requests, demands, claims, and other
communications hereunder are to be delivered by giving the other Parties notice
in the manner herein set forth.
Section 7.8. Governing Law.
---------------------------
This Agreement shall be governed by and construed in accordance with
the internal laws (and not the law of conflicts) of the State of California.
Section 7.9. Amendments and Waivers.
------------------------------------
The Parties may mutually amend any provision of this Agreement at any
time prior to Closing Date. No amendment of any provision of this Agreement
shall be valid unless the same shall be in writing and signed by all of the
Parties. No waiver by any Party of any default, misrepresentation or breach of
warranty or covenant hereunder, whether intentional or not, shall be deemed to
extend to any prior or subsequent default, misrepresentation or breach of
warranty or covenant hereunder or affect in any way any rights arising by virtue
of any prior or subsequent default, misrepresentation, breach of such warranty
or covenant.
Section 7.10. Severability.
---------------------------
Any term or provision of this Agreement that is invalid or
unenforceable in any situation in any jurisdiction shall not affect the validity
or enforceability of the remaining terms and provisions hereof or the validity
or enforceability of the offending term or provision in any other situation or
in any other jurisdiction. If the final judgment of a court of competent
jurisdiction declares that any term or provision hereof is invalid or
unenforceable, the Parties agree that the court making the determination of
invalidity or unenforceability shall have the power to reduce the scope,
duration, or area of the term or provision, to delete specific words or phrases,
or to replace any invalid or unenforceable term or provision with a term or
provision that is valid and enforceable and that comes closest to expressing the
intention of the invalid or unenforceable term or provision, and this Agreement
shall be enforceable as so modified after the expiration of the time within
which the judgment may be appealed, provided that this Agreement shall not then
substantially deprive either Party of the bargained-for performance of the other
Party.
Section 7.11. Expenses.
-----------------------
All fees and expenses (including all legal and accounting fees and
expenses and all other expenses) incurred by Optionee in connection with this
Agreement and the transactions contemplated hereby shall be paid by Optionee
whether or not the transaction is consummated. All transaction costs incurred by
the Company in connection with this Agreement and the transactions contemplated
hereby shall be paid by the Company whether or not the transaction is
consummated.
-16-
Section 7.12. Other Remedies.
-----------------------------
Except as otherwise provided herein, any and all remedies herein
expressly conferred upon a Party will be deemed cumulative with, and not
exclusive of, any other remedy conferred hereby or by law or equity upon such
Party, and the exercise by a Party of any one remedy will not preclude the
exercise of any other remedy.
Section 7.13. Construction.
---------------------------
The Parties agree that they have been represented by counsel during the
negotiation, preparation and execution of this Agreement and, therefore, waive
the application of any law, regulation, holding or rule of construction
providing that ambiguities in an agreement or other document will be construed
against the Party drafting such agreement or document. Any reference to any
federal, state, local, or foreign statute or law shall be deemed also to refer
to all rules and regulations promulgated thereunder, unless the context requires
otherwise.
Section 7.14. Incorporation of Schedules and Disclosure Schedule.
-----------------------------------------------------------------
The Exhibits, Schedules and Disclosure Schedule identified in this
Agreement are incorporated herein by reference and made a part hereof.
[Signature page to follow]
-17-
EXECUTION COPY
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
SURGICA CORPORATION
By: /s/ Xxxxx X. Xxxxxx
---------------------------------
Name: Xxxxx X. Xxxxxx
Title: President and Chief Executive
Officer
PROTEIN POLYMER TECHNOLOGIES, INC.
By: /s/ Xxxxxxx X. Xxxxxxxxx, III
---------------------------------
Name: Xxxxxxx X. Xxxxxxxxx, III
Title: Chief Executive Officer
[Signature Page to the Asset Purchase Option Agreement]
