SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) January 31, 1996
COMPETITIVE TECHNOLOGIES, INC.
(Exact name of registrant as specified in its charter)
Delaware 1-8696 36-2664428
(State or other (Commission file (IRS employer
jurisdiction number) identification No.
of incorporation)
1465 Post Road East, P.O. Box 901, Westport, Connecticut 06881
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (203) 255-6044
N/A
(Former name or former address, if changed since last report)
Item 2. Acquisition or disposition of assets
On January 31, 1996, in an agreement resulting from arms'
length bargaining, UPAT Services, Inc., a wholly-owned subsidiary
of the Registrant, purchased the limited partnership interests of
Texas Research and Technology Foundation and United Services
Automobile Association in USET Acquisition Partners, L.P (the
"Partnership"). The total purchase price was $1,835,000 with
$500,000 paid in cash from the Registrant's working capital at the
closing and the balance to be paid without interest on each
succeeding January 31 in installments equal to 60% of University
Science, Engineering and Technology, Inc.'s ("USET") earned
revenues for the preceding calendar year or the remaining unpaid
balance of the purchase price, whichever is less. However, if any
annual 60% installment would be less than $400,000, that
installment shall be equal to the lesser of $400,000 or 80% of
USET's earned revenues. The Registrant has guaranteed the payment
of these installments when due.
After the purchase, UPAT Services, Inc. owns 100% of all
partnership interests in USET Acquisition Partners, L.P. and as a
result, the Partnership will be dissolved. The Partnership's
principal asset is its investment in 100% of the equity of USET
Holding Co. USET Holding Co.'s only asset is its investment in
100% of the equity of USET. The primary effect of the purchase
will be that the balance sheet and operations of USET will be
included in the Registrant's consolidated balance sheet and results
of operations from January 31, 1996. Through January 31, 1996, the
registrant accounted for its investment in USET on the equity
method and recorded 20% of USET's net income.
USET provides technical evaluation, patent and market
assessment, patent application and prosecution, licensing, license
management and royalty distribution services under agreements with
former university clients of the Registrant and other research
institutions. For further information about the technology
management services of USET, see Part I, Item 1 - Business and Note
4 to Consolidated Financial Statements in the Registrant's Annual
Report on Form 10-K for the year ended July 31, 1995.
As permitted by Item 7 (a) (4) and 7 (b) (2), the Registrant
undertakes to provide the audited financial statements and pro
forma financial information required by Items 7 (a) and 7 (b) as
soon as they are available on or before April 15, 1996.
Item 7. Financial Statements and Exhibits
A. Financial Statements of Businesses Acquired
It is impractical for the Registrant to file the required
audited financial statements of USET Acquisition
Partners, L.P. and its consolidated operating entities,
USET Holding Co. and University Science, Engineering and
Technology, Inc., at this time. As permitted by Item
7(a)(4), those financial statements will be filed under
cover of Form 8-K/A as soon as they are available on or
before April 15, 1996.
B. Pro Forma Financial Information
It is impractical for the Registrant to file the required
pro forma financial information at this time. As
permitted by Item 7(b)(2), it will be filed under cover
of Form 8-K/A as soon as it is available on or before
April 15, 1996.
C. Exhibits Page
2.1 Agreement for Purchase and Sale of 6-10
Partnership Interests in USET
Acquisition Partners, L.P. effective
January 31, 1996 by and between UPAT
Services, Inc., Texas Research and
Technology Foundation and United
Services Automobile Association.
2.2 Promissory Note of UPAT Services, Inc. 11-13
dated January 31, 1996 in the
principal amount of $983,684.21
payable to United Services
Automobile Association ("USAA").
2.3 Promissory Note of UPAT Services, Inc. 14-16
dated January 31, 1996 in the
principal amount of $351,315.79
payable to Texas Research and
Technology Foundation.
2.4 Security Agreement of UPAT Services, 17-23
Inc. dated January 31, 1996 to USAA
and Texas Research and Technology
Foundation as collateral for the
related Promissory notes dated
January 31, 1996.
2.5 USET Acquisition Partners, L.P. 24
Assignment of Partnership Interests
to UPAT Services, Inc. by Texas
Research and Technology Foundation.
2.6 USET Acquisition Partners, L.P. 25
Assignment of Partnership Interests
to UPAT Services, Inc. by USAA.
Signatures
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned hereunto duly authorized.
COMPETITIVE TECHNOLOGIES, INC.
Registrant
Date: February 12, 1996 Frank R. McPike, Jr.
By: Frank R. McPike, Jr.
Vice President, Finance
Principal Financial Officer
and Authorized Signer
Exhibit 2.1
AGREEMENT FOR
PURCHASE AND SALE OF
PARTNERSHIP INTERESTS
IN
USET ACQUISITION PARTNERS, L.P.
THIS AGREEMENT is made and entered into this 31st day of
January, 1996, by and between UPAT SERVICES, INC., a Delaware
corporation ("UPAT"), TEXAS RESEARCH AND TECHNOLOGY FOUNDATION., a
Texas non-profit corporation ("TRTF") and UNITED SERVICES
AUTOMOBILE ASSOCIATION, a reciprocal interinsurance exchange
("USAA").
BACKGROUND
UPAT, TRTF and USAA are all of the partners of USET
ACQUISITION PARTNERS, L.P., a Texas limited partnership (the
"Partnership") formed pursuant to an Agreement of Limited
Partnership dated as of June 28, 1990, as amended as of July 30,
1990, April 19, 1991 and March 24, 1993 (the "Partnership
Agreement"). TRTF and USAA are each a limited partner in the
Partnership with a Percentage Interest (as defined in the
Partnership Agreement) of 5/24 of 80% and 7/12 of 80%,
respectively, and UPAT is both a general partner and a limited
partner in the Partnership with Percentage Interests in those
capacities of 20% and 5/24 of 80%, respectively.
TRTF and USAA each desire to sell their entire interest in the
Partnership (the "Partnership Interests"), and UPAT desires to
purchase the Partnership Interests, all upon the terms and
conditions set forth below.
AGREEMENT
The parties hereby agree as follows:
(1) Purchase and Sale of Partnership Interests. On the
Closing Date (as defined below), TRTF and USAA shall each sell to
UPAT, and UPAT shall purchase from TRTF and USAA, the Partnership
Interests.
(2) Purchase Price. The purchase price to be paid by UPAT to
TRTF and USAA for the Partnership Interests shall be (i) $500,000,
payable 5/19 to TRTF and 14/19 to USAA (the Base Price"), plus (ii)
up to an additional $1,335,000 in the aggregate, without interest,
payable to TRTF and USAA in the same ratios as the Base Price (the
"Additional Price").
(a) The Base Price shall be paid to TRTF and USAA on the
Closing Date.
(b)(i) The Additional Price shall be paid to each TRTF
and USAA as their interests may arise, as described in the
Partnership Agreement, on January 31 of each year (the "Annual
Payment"), beginning on January 31, 1997, and shall equal at
least 60% of USET Annual Revenues (as defined below)for the
preceding calendar year, until the total of such Annual
Payments equals $1,335,000. Should any such Annual Payment to
USAA and TRTF be less than a combined total of $400,000, USET
will pay USAA and TRTF in such proportion as described in
Section 2 of this Agreement an additional 20% of USET Annual
Revenues up to a total of $400,000 or the remaining unpaid
balance of the Additional Price, whichever is lesser.
(ii) As used in the agreement, "Annual Revenue" of USET
shall mean, for any year, the revenues earned during such year
by University Science, Engineering and Technology, Inc., a
Delaware corporation ("USET"), determined in accordance with
generally accepted accounting principles applied on a basis
consistent with USET's past audited financial statement,
excluding payments to USET as agent for other persons sharing
in rights to royalties or other payments in respect of
options, licenses or assignments of technology rights. If at
any time UPAT and its Affiliates pursuant to a transaction
that resulted in the reduction of equity ownership shall be
included in the Net Revenues of USET, and thereafter, Net
Revenues of USET shall mean the amount determined in
accordance with the preceding sentence multiplied by the new
percentage of equity ownership of USET owned by UPAT and its
Affiliates. Legal fees and expenses attributable to
activities of the partnership for which USAA or TRTF receive
no benefit shall not be deducted in the computation of Annual
Revenues. Furthermore, the parties agree that the annual
$400,000 partnership management fee ordinarily due to USET
will be discontinued until the $1,335,000 amount referred to
above has been distributed to USAA and TRTF.
(3) Termination of Partnership. The parties recognize that
upon the purchase of the Partnership Interests of TRTF and USAA by
UPAT, UPAT will be the only partner of the Partnership and, as a
result, the Partnership will be dissolved and UPAT will become the
owner of all of the assets of the Partnership, including 100% of
the outstanding shares of USET, subject to all of the liabilities
of the Partnership. Thereafter, UPAT shall cause a certificate of
cancellation to be filed with the Secretary of State of the State
of Texas as provided by Section 2.03 of the Texas Revised Limited
Partnership Act.
(4) Representations and Warranties of TRTF and USAA. TRTF
and USAA each represent and warrant to UPAT that:
(a) It has the right, power and authority to enter into
and perform this agreement, and this agreement constitutes a
valid and legally binding obligation, enforceable against it
in accordance with its terms;
(b) It owns its Partnership Interest, free and clear of
all liens, claims, encumbrances or security interests; and
(C) It has obtained sufficient information and has such
knowledge and experience in matters of this sort that is
capable of evaluating the business and prospects of the
Partnership and USET and the fairness of the purchase price
being paid to it for its Partnership Interest and the terms of
such payment.
(5) Representations and Warranties of UPAT. UPAT represents
and warrants to TRTF and USAA that it has the right, power and
authority to enter into this agreement, and this agreement
constitutes a valid and legally binding obligation, enforceable
against it in accordance with its terms.
(6) Continuation and Survival of Representations and
Warranties. All of the representations and warranties by the
parties shall continue to be true and correct up to and as of the
Closing Date and shall survive the consummation of the purchase and
sale of the Partnership Interests provided for herein.
(7) Closing. The closing of the purchase and sale of the
Partnership Interest shall take place at such time and place as
agreed to by the parties hereto. At the closing:
(a) TRTF and USAA shall each deliver to UPAT an
assignment in form and substance reasonably satisfactory to
UPAT, assigning its Partnership Interest to UPAT free and
clear of all liens.
(b) UPAT shall deliver certified checks (or wire
transfer) to TRTF and USAA in the amount of the Base Price.
(8) Notices. Any notice or other communication to any party
shall be in writing and shall be deemed to have been given or
delivered when hand-delivered or mailed by registered or certified
mail, postage prepaid, and addressed to the party for whom intended
as follows:
If to TRTF, at: c/o Texas Research and Technology
Foundation
14815 Omicron Drive
San Antonio, Texas 78288
If to USAA, at: c/o USAA Investment Management
Company
USAA Building
San Antonio, Texas 78288
Attn: David Peebles
If to UPAT, at: 1465 Post Road East
P.O. Box 901
Westport, CT 06881
or to such other address as any party may designate for itself by
written notice to the other parties in the above manner, except
that any notice of a change of address shall not be effective until
received.
(9) Entire Agreement. This agreement supersedes all prior
negotiations and agreements, if any, between the parties with
respect to the purchase and sale of the Partnership Interests, and
there are no representations, warranties or agreements with respect
to such transaction other than as expressly set forth herein.
(10) Successors and Assigns. This agreement shall be binding
upon and shall inure to the benefit of the parties hereto and their
respective heirs, personal representatives, successors and assigns.
(11) Miscellaneous. The invalidity of any part of this
agreement shall not impair or affect in any manner the
enforceability of the remainder of this agreement. If any
provision of this agreement is so broad as to be unenforceable,
such provision shall be interpreted to be only so broad as is
enforceable. Headings are used in this agreement for convenience
only and shall not affect the meaning of any provision hereof.
This agreement shall be construed and enforced in accordance with
the internal laws of the State of Connecticut.
IN WITNESS WHEREOF, the parties hereto have caused this
agreement to be duly executed, all on this day and year first above
written.
UPAT SERVICES, INC.
By: Frank R. McPike, Jr.
Vice President
TEXAS RESEARCH AND
TECHNOLOGY FOUNDATION
By: George H. Ensley
George H. Ensley,
President
UNITED SERVICES AUTOMOBILE
ASSOCIATION
By: David Peebles
Vice President
GUARANTY
COMPETITIVE TECHNOLOGIES, INC., the owner of all of the
outstanding stock of UPAT SERVICES, INC., ("UPAT"), in order to
induce TEXAS RESEARCH AND TECHNOLOGY FOUNDATION and UNITED SERVICES
AUTOMOBILE ASSOCIATION to enter into the foregoing agreement,
hereby guarantees the payment when due of all amounts owed to each
of them by UPAT.
February 1 , 1996.
COMPETITIVE TECHNOLOGIES, INC.
By: Frank R. McPike, Jr.
Vice President
Exhibit 2.2
PROMISSORY NOTE
$983,684.21 January 31, 1996 FRM
Note Amount Date To Be Initialed by
Authorized Officer
FOR VALUE RECEIVED, the undersigned ("the Maker") hereby
unconditionally promises to pay to the order of United Services
Automobile Association a reciprocal interinsurance exchange, with
its offices located in San Antonio, Texas (USAA) (together with
its successors and assigns, the "Payee"), as their interests may
appear the amount of $983,684.21 (the "Note Amount"), at the
offices of the Payee, or at such other place as the Payee may
designate in writing to the Maker.
This amount shall be payable in installments as follows:
Annual payments of 14/19 of 60% of USET annual revenues until
a total of $983,684.21 is received by USAA (should such annual
payments to USAA be less than a total of $294,736.84, USET will
pay USAA an additional 14/19 of 20% of USET annual revenues up to
a total of $294,736.84). Such annual payments shall commence on
January 31, 1997 and shall continue to be paid on January 31st of
each year thereafter based upon the preceding calendar year's
annual revenues, until the entire balance of this Note is paid.
This Note is secured by the Maker and may be negotiated,
endorsed, assigned, transferred, pledged, or hypothecated by the
Payee to secure any indebtedness of the Payee and shall constitute
a negotiable instrument. In the event that this Note is
negotiated, endorsed, assigned, transferred, hypothecated and/or
pledged, all references to the Payee shall apply to the holder,
pledgee or transferee as if named as original Payee under this
Note.
If any installment hereunder is not paid when due, of if any
installment due under any other note held by the holder hereof and
given by Maker to the Payee (whether now existing or hereinafter
entered into) is not paid when due, and such default continues for
a period of fifteen (15) days, of if any "Event of Default," as
defined in the Security Agreement, occurs, then at the election of
the holder hereof without further notice, all principal and
interest hereunder and under any such other note held by the holder
of this Note shall be due and payable forthwith.
No delay or omission of the Payee to exercise its rights
hereunder shall impair any such right or power or shall be
construed to be a waiver of any such default or any acquiescence
therein. Any acceptance by the holder hereof of a partial or late
payment made hereunder shall not establish a custom, waiver, or
acquiescence. No waiver of any default shall be construed, taken,
or held to be a waiver of any other default. Maker waives demand,
presentment for payment, notice of dishonor, and protest and any
defense by reason of extension of time for payment or other
indulgence granted by the holder hereof.
Interest shall accrue on any overdue installment of principal,
and on the unpaid balance of the principal sum, from the date such
amount is due and payable until the date paid, at the lesser of
eighteen percent (18%) per annum or the maximum rate permitted by
law.
The obligation to make payments to the Payee hereunder is
absolute and unconditional and the rights of said Payee shall not
be subject to any defense, set-off, counterclaim or recoupment
which the Maker may have against the Payee or by reason of any
indebtedness or liability at any time owing by the Payee to the
Maker. If this Note is held by a commercial bank, or a lending or
financing institution, such holder, its successors, assigns and
endorsees, shall in all respects be deemed a holder in due course,
and the Maker expressly waives any rights it may have to assert
that such holder or subsequent holder is not a holder in due
course.
If any installment of this Note becomes due and payable on a
Saturday, a Sunday, or a banking holiday the maturity thereof shall
be extended to the next business day.
Should this Note, or any part of the indebtedness evidenced
hereby, be collected by law or through an attorney-at-law, the
Payee shall be entitled to collect all costs of collection,
including, but not limited to, reasonable attorneys' fees.
Any notice to Maker may be made by certified or registered
mail addressed to Maker at the address shown below or such other
address as Maker may designate by written notice to the holder of
this Note.
This Note shall be governed and controlled as to
interpretation, validity, enforcement and in all other material
respects in accordance with the internal laws of the State of
Texas.
WITNESS the execution hereof under seal this 1st day of
February, 1996.
Maker:
UPAT SERVICES, INC.
By: Frank R. McPike, Jr.
Signature of Authorized Party
Frank R. McPike, Jr., Vice President
Name and Title of Authorized Party
ADDRESS: 1465 Post Road East
P.O. Box 901
Westport, CT 06881
Exhibit 2.3
PROMISSORY NOTE
$351,315.79 January 31, 1996 FRM
Note Amount Date To Be Initialed by
Authorized Officer
FOR VALUE RECEIVED, the undersigned ("the Maker") hereby
unconditionally promises to pay to the order of TEXAS RESEARCH AND
TECHNOLOGY FOUNDATION, with its offices located in San Antonio,
Texas (TRTF) (together with its successors and assigns, the
"Payee"), as their interests may appear the amount of $351,315.79
(the "Note Amount"), at the offices of the Payee, or at such other
place as the Payee may designate in writing to the Maker.
This amount shall be payable in installments as follows:
Annual payments of 5/19 of 60% of USET annual revenues until
a total of $351,315.79 is received by TRTF (should such annual
payments to TRTF be less than a total of $105,263.16, USET will
pay TRTF an additional 5/19 of 20% of USET annual revenues up to a
total of $105,263.16). Such annual payments shall commence on
January 31, 1997 and shall continue to be paid on January 31st of
each year thereafter based upon the preceding calendar year's
annual revenues, until the entire balance of this Note is paid.
This Note is secured by the Maker and may be negotiated,
endorsed, assigned, transferred, pledged, or hypothecated by the
Payee to secure any indebtedness of the Payee and shall constitute
a negotiable instrument. In the event that this Note is
negotiated, endorsed, assigned, transferred, hypothecated and/or
pledged, all references to the Payee shall apply to the holder,
pledgee or transferee as if named as original Payee under this
Note.
If any installment hereunder is not paid when due, of if any
installment due under any other note held by the holder hereof and
given by Maker to the Payee (whether now existing or hereinafter
entered into) is not paid when due, and such default continues for
a period of fifteen (15) days, of if any "Event of Default," as
defined in the Security Agreement, occurs, then at the election of
the holder hereof without further notice, all principal and
interest hereunder and under any such other note held by the holder
of this Note shall be due and payable forthwith.
No delay or omission of the Payee to exercise its rights
hereunder shall impair any such right or power or shall be
construed to be a waiver of any such default or any acquiescence
therein. Any acceptance by the holder hereof of a partial or late
payment made hereunder shall not establish a custom, waiver, or
acquiescence. No waiver of any default shall be construed, taken,
or held to be a waiver of any other default. Maker waives demand,
presentment for payment, notice of dishonor, and protest and any
defense by reason of extension of time for payment or other
indulgence granted by the holder hereof.
Interest shall accrue on any overdue installment of principal,
and on the unpaid balance of the principal sum, from the date such
amount is due and payable until the date paid, at the lesser of
eighteen percent (18%) per annum or the maximum rate permitted by
law.
The obligation to make payments to the Payee hereunder is
absolute and unconditional and the rights of said Payee shall not
be subject to any defense, set-off, counterclaim or recoupment
which the Maker may have against the Payee or by reason of any
indebtedness or liability at any time owing by the Payee to the
Maker. If this Note is held by a commercial bank, or a lending or
financing institution, such holder, its successors, assigns and
endorsees, shall in all respects be deemed a holder in due course,
and the Maker expressly waives any rights it may have to assert
that such holder or subsequent holder is not a holder in due
course.
If any installment of this Note becomes due and payable on a
Saturday, a Sunday, or a banking holiday the maturity thereof shall
be extended to the next business day.
Should this Note, or any part of the indebtedness evidenced
hereby, be collected by law or through an attorney-at-law, the
Payee shall be entitled to collect all costs of collection,
including, but not limited to, reasonable attorneys' fees.
Any notice to Maker may be made by certified or registered
mail addressed to Maker at the address shown below or such other
address as Maker may designate by written notice to the holder of
this Note.
This Note shall be governed and controlled as to
interpretation, validity, enforcement and in all other material
respects in accordance with the internal laws of the State of
Texas.
WITNESS the execution hereof under seal this 1st day of
February, 1996.
Maker:
UPAT SERVICES, INC.
By: Frank R. McPike, Jr.
Signature of Authorized Party
Frank R. McPike, Jr., Vice President
Name and Title of Authorized Party
ADDRESS: 1465 Post Road East
P.O. Box 901
Westport, CT 06881
Exhibit 2.4
SECURITY AGREEMENT
UPAT Services, Inc. is the maker of a Promissory Note
("Maker") in the principal amount of $983,684.21, dated January 31,
1996, (the "Note") payable to USAA (together with its successors
and assignees, and a Promissory Note in the principal amount of
$351,315.79, dated January 31, 1996 (hereinafter collectively
referred to as the "Notes"), payable to TEXAS RESEARCH AND
TECHNOLOGY FOUNDATION (hereinafter cumulatively referred to as the
"Sellers").
As partial consideration and collateral for the loan evidenced
by the Notes, the Maker has agreed to grant, assign and set over to
the Sellers a security interest in certain property of the Maker
and its successors and assigns and hereby agrees as follows:
1. Grant of Security Interest. All indebtedness evidenced
by and any obligations arising under the Notes (or under such other
promissory notes as may be issued by the Maker to the Sellers or an
assignee thereof as replacement or substitute notes) or this
Agreement, including any extensions, renewals, refinancing or
changes in form thereof, now existing or hereafter arising, are
hereinafter referred to as the "Obligations."
As security for the Obligations, the Maker hereby assigns,
grants, and sets over to the Sellers, and agrees that the Sellers
shall have a security interest in the following collateral (the
"Collateral"): All of the shares of stock of University Science
Engineering and Technology, Inc. ("USET"), which has been
authorized by the Board of Directors of USET.
2. Execution of Financing and Other Statements. At any time
and from time to time, upon request of the Sellers, or any
successor, assignee, transferee or subsequent holder of the Notes
(collectively the "Successor"), the Maker will give and execute,
any notice, financing statement, continuation statement,
instrument, document or agreement that the Sellers or their
Successors may consider necessary or desirable to create, preserve,
continue, perfect or validate the security interest granted
hereunder or which the Sellers or their Successors may consider
necessary or desirable to exercise or enforce their rights
hereunder with respect to such security interest. Without limiting
the generality of the foregoing, the Sellers or their Successors
are authorized to file with respect to the Collateral one or more
financing statements, continuation statements or other documents
without the signature of the Maker and to name therein the Maker as
debtor and the Sellers or their Successors as secured parties or to
correct or complete, or cause to be corrected or completed, any
financing statements, continuation statements or other such
documents as have been signed by the Maker, provided, however, that
upon final discharge of the Obligations by the Maker, the Sellers
or their Successors shall promptly file such termination statements
and other documents as are necessary to evidence the termination of
the security interest granted hereunder.
In addition to the foregoing, the Maker hereby constitutes and
appoints the Sellers and their officers, acting singly, with full
power of substitution, its true and lawful attorney-in-fact in its
name, place and stead to carry out fully the provisions of this
Security Agreement and take any action which such parties may deem
necessary or appropriate in that connection after an Event of
Default has occurred and so long as such Event of Default remains
uncured. The power of attorney hereby granted shall be deemed to
be coupled with an interest, shall be irrevocable and shall survive
and shall not be affected by the subsequent disability, incapacity,
bankruptcy, dissolution or termination of the Maker or any delivery
by the Maker of an assignment of the whole or any portion of the
Collateral.
3. Default. Each of the following shall constitute an event
of default ("Event of Default") hereunder, (i) if the Maker shall
fail to make payment of any of the Obligations within ten (10) days
of the date when such payment is due; (ii) if the Maker has made
any material misrepresentation in or with respect to, or has
breached or does breach any provision of, this Security Agreement,
or any other agreement entered into between the Maker and the
Sellers; (iii) if an event of default occurs under the Note; (iv)
if the Maker shall become insolvent or if any proceeding shall be
instituted by the Maker seeking relief on its behalf as debtor, or
to adjudicate it a bankrupt, or insolvent, or seeking
reorganization, arrangement, adjustment or composition of it or its
debts under any law relating to bankruptcy, insolvency or
reorganization or relief of debtors, or seeking appointment of a
receiver, trustee, custodian or other similar official for it or
for any substantial part of its property or the Maker shall consent
by answer or otherwise to the institution of any such proceeding
against it; (v) if any proceeding shall be instituted against the
Maker seeking to have an order for relief entered against it as
debtor or to adjudicate it a bankrupt or insolvent, or seeking
reorganization, arrangement, adjustment or composition of it or its
debts under any law relating to bankruptcy, insolvency, or
reorganization or relief to debtors, or seeking appointment of a
receiver, trustee, custodian or other similar official for it or
for any substantial part of its property which either (a) results
in any such entry of an order for relief, adjudication or
bankruptcy or insolvency or issuance or entry of any other order
having a similar effect or (b) remains undismissed for a period of
60 days; (vi) if a receiver, trustee or other custodian is
appointed for any substantial part of the Maker's assets; (vii) if
any assignment for the benefit of the Maker's creditors shall be
made; or (viii) if any of the Collateral shall be attached or
distrained at any time pursuant to any court order or other legal
process.
If an Event of Default shall occur and if such default shall
remain uncured for a period of ten days after notice by Sellers to
the Maker then, at the option of the Sellers or their Successors,
all Obligations shall become immediately due and payable and the
Sellers may avail themselves of all rights and remedies granted
hereunder or pursuant to the Partnership Agreement of the
Partnership or available to a secured party under the Uniform
Commercial Code as in force in the State of Texas or available to
a secured party under the Uniform Commercial Code as in force in
the state in which secured party is incorporated or maintains its
principal place of business in the United States. Such rights
shall include without limiting the generality of the foregoing, the
right to vote the Collateral in any manner it may see fit, or to
sell, assign and deliver the Collateral or any part thereof, at
public or private sale wherever the Sellers or their Successors may
determine in good faith and at such prices as the Sellers or their
Successors may deem best. At any such sale the Sellers or their
Successors shall have the right to purchase the Collateral, or any
part thereof. The Maker consents to private sales so made even
though such sales may be at prices and upon other terms less
favorable than if the Collateral were sold at public sale. The
Maker agrees that the Sellers or their Successors shall have no
obligation to delay sale of the Collateral for the period of time
necessary to permit the offering and sale of the Collateral to be
registered for public sale under the Securities Act of 1933, as
amended (the "Act") and applicable state or local securities or
blue sky laws. The Maker consents that private sales made under
the foregoing circumstances will be deemed to have been made in a
commercially reasonable manner. The parties agree that written
notice mailed to the Maker ten (10) business days prior to the date
after which private sale or any other disposition of the Collateral
will be made shall constitute reasonable notice (all other notices,
demands, or advertisement of any kind being hereby expressly
waived), but notice given in any other reasonable manner or at any
other reasonable time shall be sufficient. The Maker shall be
liable for reasonable attorney's fees and legal expenses incurred
by the Seller or their Successors in enforcing any of its rights or
remedies hereunder, and without limiting the rights of the Sellers
or their Successors, the proceeds of disposition of the Collateral
may be applied in the Sellers' or their Successors' discretion to
payment of such reasonable attorney's fees and legal expenses. To
the extent permissible by law, the Maker waives the right to trial
by jury in any action or proceeding instituted against the Maker in
respect of the Note and other Obligations or the enforcement of any
rights granted to the Sellers or their Successors hereunder. In
addition, the Maker hereby acknowledges that the remedies provided
herein in favor of the Sellers or their Successors shall not be
deemed exclusive, but shall be cumulative and shall be in addition
to all other remedies in favor of the Sellers or their Successors
now or hereafter existing by statute, at law or in equity
including, without limitation, all rights reserved to the Sellers.
The Maker recognizes that for the reasons as set forth herein,
a sale, public or private, of the Collateral, may not be able to be
effected and the Sellers or their Successors is herewith expressly
authorized at its sole election, without any obligation to do so,
to retain the Collateral until a purchase can be effected. Until
such sale, Sellers, or their Assignees, may elect to hold said
Collateral and be treated as the owner thereof. Upon the happening
of the sale, the Sellers, upon receipt of its pro rata portion of
any proceeds realized as a result of such dissolution, termination
or sale, after deducting all costs, loss, damage and expense
attributable to the default, shall apply the residue of the
proceeds so realized to pay in whole or in part, as the case may
be, the principal and interest then due upon the Note or the
Obligations and shall return the surplus, if any, to the Maker and
the Maker shall remain liable to the Sellers for any deficiency
arising as a result thereof.
The Sellers shall have no obligation to resort to the
Collateral or any other security which is or may become available
to it.
4. Consent to Jurisdiction. The Maker consents that all
actions or proceedings arising directly, indirectly or otherwise in
connection with, out of, related to or from the Note or this
Security Agreement shall, at the Sellers' discretion, be litigated
only in courts located in the State of Texas or in the state where
the Sellers or their successors maintain their principal place of
business, and the Maker (i) consents and submits to the personal
jurisdiction of any state or federal court located within said
state(s), and (ii) waives any right to transfer or change the venue
of litigation brought against the Maker.
5. Assignability. The Maker acknowledges that the security
interest granted hereby, as well as its Note, may be pledged,
transferred or assigned by the Sellers, and hereby consents to any
such pledge, transfer or assignment. The Maker acknowledges and
agrees that, even if the Sellers sell, assign or otherwise transfer
the Obligations to a third party, the security interest in the
Collateral will be conveyed to such third party and will survive
until the Obligations are paid in full. The Maker also
acknowledges that the recipient of such pledge, transfer or
assignment may rely on the representations made in this Security
Agreement. In addition, the Maker understands that such Successor
may be a "holder in due course" under applicable commercial law and
hence certain defenses to non-payment may be unavailable against
such Successor, and the Maker shall have no rights of set off,
counterclaims or defenses to non-payment against the Sellers or
such Successor based upon the conduct of the Sellers.
6. Certain Additional Warranties and Representations. The
Maker also makes each of the following warranties and
representations:
(a) The Maker has the corporate power and authority to carry
on the business in which it is engaged and to purchase the
Partnership interest and execute the Note.
(b) The execution and delivery of this Security Agreement and
the Note has been duly authorized by all necessary action and
constitutes the legal, valid and binding obligations of the Maker
enforceable in accordance with their terms.
(C) The execution and delivery of this Security Agreement and
the Note do not, and the performance of the terms thereof will not,
contravene any provision of existing law or regulations, or of the
Partnership Agreement, and will not conflict with or result in any
breach of the terms, conditions or provisions of, or constitute a
default under, or result in or permit the creation or imposition of
any lien, charge or encumbrance upon any of the properties of the
Maker pursuant to, any indenture, mortgage, or other agreement or
instrument or any judgment, decree, order or decision to which the
Maker is a party or by which it is bound.
(d) Under existing law, no approval, authorization, license,
permit or other action by or filing with, any Federal, state,
municipal or other governmental commission, board or agency is
required in connection with the execution and delivery by the Maker
of this Security Agreement or the Note.
(e) The officer executing and delivering this Security
Agreement on behalf of the Maker is duly authorized by the Maker
and has full power and authority to execute these agreements and
instruments and to make the warranties and representations
contained therein.
(f) The Maker represents that it owns all of the Collateral
free and clear of any lien or encumbrance (other than the security
interest granted hereby) and agrees that it will not encumber or
grant any security interest in or file a financing statement other
than in favor of the Sellers or their Successors as Secured Party
with respect to the Collateral, or permit any of the foregoing,
without the prior written consent of the Sellers or their
Successors; and hereby represents that (except as aforesaid) it has
not heretofore done so.
(g) The Maker represents that its present principal place of
business is as set forth on the signature page of this Security
Agreement. If the Maker should relocate its principal place of
business at any time prior to the satisfaction in full of the debt
as represented by the Note for which this Security Agreement is
executed as collateral, the Maker shall, within thirty (30) days of
the date of said relocation, inform the Sellers of the new
location.
(h) The Maker agrees that it will make available to the
Sellers such financial statements as the Maker may prepare in the
normal course of its business, which the Sellers may reasonably
request.
(i) The Maker hereby specifically warrants and represents
that should the Board of Directors of USET authorize additional
amounts or shares of stock of USET, such additional shares of stock
shall become subject to the terms of this Security Agreement as
Additional Collateral.
7. Notices. Any notice, demand or other communication which
any party hereto may elect or be required to give to anyone
interested hereunder shall be sufficiently given if (I) deposited,
postage prepaid, in a United States mail box, stamped, registered
or certified mail, return receipt requested, addressed to the
address for that person in the Seller's books and records or (ii)
delivered personally at such address.
8. Severability. Each provision of this Security Agreement
is intended to be severable from each other provision, and the
validity or illegality of any portion hereof shall not affect the
validity or legality of the remainder hereof.
9. Applicable Law. This Security Agreement shall be
governed by and construed in accordance with the laws of the State
of Texas applicable to contracts to be performed wholly therein,
without giving effect to any conflicts of law principles or cases.
IN WITNESS WHEREOF, the Maker executes, accepts, adopts and
agrees to be bound by all of the terms hereof by executing this
Security Agreement on the date indicated below.
IN WITNESS WHEREOF, the undersigned has executed this Security
Agreement under seal on this 31st day of January, 1996.
UPAT SERVICES, INC.
By: Frank R. McPike, Jr.
Name: Frank R. McPike, Jr.
Title: Vice President
CORPORATE ACKNOWLEDGMENT:
STATE OF CONNECTICUT )
)
COUNTY OF FAIRFIELD )
On the 1st day of February, 1996, before me came Frank R.
McPike, Jr., to me known, who being by me duly sworn, did depose
and say that he is the Vice President of UPAT Services, Inc., the
corporation described in and which executed the foregoing
instrument; that he knows the seal of said corporation; that the
seal affixed to said instrument is such corporate seal; that it was
so affixed by authority of the Board of Directors of said
corporation; that he signed his name thereto by like order.
WITNESS my hand and official seal.
Donna Szybist
Notary Public
Donna Szybist
NOTARY PUBLIC
My Commission Expires July 31, 1998
Exhibit 2.5
STATE OF TEXAS
COUNTY OF BEXAR
USET ACQUISITION PARTNERS, L.P.
ASSIGNMENT OF PARTNERSHIP INTERESTS
For value received, as more specifically described in the
AGREEMENT FOR PURCHASE AND SALE OF PARTNERSHIP INTERESTS IN USET
ACQUISITION PARTNERS, L.P., all of even date herewith, TEXAS
RESEARCH AND TECHNOLOGY FOUNDATION of San Antonio, Bexar County,
Texas, a limited partner in the Texas limited partnership of USET
Acquisition Partners, L.P., does hereby assign, sell, transfer and
convey all its right, title and interest IN USET ACQUISITION
PARTNERS, L.P. to UPAT SERVICES, INC., a Delaware corporation, free
and clear of all liens, claims, encumbrances or security interests.
Date: TEXAS RESEARCH AND
TECHNOLOGY FOUNDATION
By: George H. Ensley
George H. Ensley
President
Exhibit 2.6
STATE OF TEXAS
COUNTY OF BEXAR
USET ACQUISITION PARTNERS, L.P.
ASSIGNMENT OF PARTNERSHIP INTERESTS
For value received, as more specifically described in the
AGREEMENT FOR PURCHASE AND SALE OF PARTNERSHIP INTERESTS IN USET
ACQUISITION PARTNERS, L.P., all of even date herewith, UNITED
SERVICES AUTOMOBILE ASSOCIATION, a reciprocal interinsurance
exchange of San Antonio, Bexar County, Texas, a limited partner in
the Texas limited partnership of USET Acquisition Partners, L.P.,
does hereby assign, sell, transfer and convey all its right, title
and interest IN USET ACQUISITION PARTNERS, L.P. to UPAT SERVICES,
INC., a Delaware corporation, free and clear of all liens, claims,
encumbrances or security interests.
Date: UNITED SERVICES AUTOMOBILE
ASSOCIATION, a reciprocal
interinsurance exchange
By: David G. Peebles
David G. Peebles
Vice President
