SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. ___)*
AN-CON GENETICS, INC.
(Name of Issuer)
COMMON STOCK, PAR VALUE $0.001 PER SHARE
(Title of Class of Securities)
032347106
(CUSIP Number)
Keith A. Blakely, President
Advanced Refractory Technologies, Inc.
699 Hertel Avenue
Buffalo, New York 14207
Tel: (716) 875-4091
With a Copy to:
George F. Gabel, Jr., Esq.
Damon & Morey LLP
1000 Cathedral Place
298 Main Street
Buffalo, New York 14202
(716) 858-3753
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
February 9, 1998
(Date of Event Which Requires Filing of this
Statement)
If the filing person has previously filed a
statement on Schedule 13G to report the
acquisition which is the subject of this
Schedule 13D, and is filing this schedule
because of Rule 13d-1(b)(3) or (4), check the
following box [ ].
Note: Six copies of this statement,
including all exhibits, should be filed with
the Commission. See Rule 13d-1(a) for other
parties to whom copies are to be sent.
* The remainder of this cover page shall be
filled out for a reporting person s initial
filing on this form with respect to the
subject class of securities, and for any
subsequent amendment containing information
which would alter disclosures provided in a
prior cover page.
The information required on the remainder of
this cover page shall not be deemed to be
filed for the purpose of Section 18 of the
Securities Exchange Act of 1934 ( Act ) or
otherwise subject to the liabilities of that
section of the Act but shall be subject to
all other provisions of the Act (however, see
the Notes).
<PAGE>
SCHEDULE 13D
CUSIP NO.: 032347106
1)NAME OF REPORTING PERSON:
ADVANCED REFRACTORY TECHNOLOGIES, INC. ( ART )
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON:
16-1155508
2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A
GROUP: (a) [ ]
Not Applicable. (b) [ ]
3) SEC USE ONLY:
4) SOURCE OF FUNDS: 00
5) CHECK BOX IF DISCLOSURE OF LEGAL
PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e):
[ ]
Not Applicable.
6) PLACE OF ORGANIZATION:
STATE OF NEW YORK
NUMBER OF
SHARES
BENEFICIALLY
OWNED BY
EACH
REPORTING
PERSON
WITH:<PAGE>
7) SOLE VOTING POWER: 2,000,000
8) SHARED VOTING POWER: -0-
9) SOLE DISPOSITIVE POWER:
2,000,000
10 SHARED DISPOSITIVE POWER: -0-<PAGE>
<PAGE>
11) AGGREGATE AMOUNT BENEFICIALLY OWNED
BY EACH REPORTING PERSON: 2,000,000
12) CHECK BOX IF THE AGGREGATE
AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES: [ ]
13) PERCENT OF CLASS REPRESENTED BY
AMOUNT IN ROW (11): 15.0%
14) TYPE OF REPORTING PERSON: CO<PAGE>
ITEM 1. SECURITY AND ISSUER.
This Schedule 13D relates to 2,000,000 shares
of the common stock, par value $0.001 per
share (the Common Stock ), of An-Con
Genetics, Inc., a Delaware corporation (the
Issuer or An-Con ). The principal
executive offices of the Issuer are located
at 734 Walt Whitman Road, Melville, New York
11747.
ITEM 2. IDENTITY AND BACKGROUND.
This Schedule 13D is filed on behalf of
Advanced Refractory Technologies, Inc.
( ART ).
ART s State of organization is New York.
ART s principal business is the
development, manufacturing and marketing
of advanced ceramic materials and
related products.
ART s principal office and business address
is 699 Hertel Avenue, Buffalo, New York
14207.
The following are ART s executive officers,
directors and controlling person:
Keith A. Blakely, President, Chairman of the
Board of Directors and controlling person
Business Address:
699 Hertel Avenue
Buffalo, New York 14207
Principal Occupation: President of ART
Citizenship: United States
Jeffrey A. Harris, Director
Business Address:
E.M. Warburg, Pincus & Co., Inc.
466 Lexington Avenue, 11th Floor
New York, New York 10017
Principal Occupation:Managing Director
Name and Address
and Principal Business of Employer:
E.M. Warburg, Pincus & Co., Inc.
466 Lexington Avenue, 11th Floor
New York, New York 10017
Investment banking
Citizenship: United States
Robert H. Hood, Jr., Director
Business Address: SFI, Inc.
112 Regents Place
Ponte Vedra Beach, Florida 32082
Principal Occupation: Investments
Name and Address
and Principal Business of Employer:
SFI, Inc.
112 Regents Place
Ponte Vedra Beach, Florida 32082
Investments
Citizenship: United States<PAGE>
George Pashel, Director
Business Address:
The Pressley Ridge Schools
Administrative Offices
530 Marshall Avenue
Pittsburgh, Pennsylvania 15214
Principal Occupation: Director of Finance
Name and Address
and Principal Business of Employer: The
Pressley Ridge Schools
Administrative Offices
530 Marshall Avenue
Pittsburgh, Pennsylvania 15214
Behavioral Health Services for Children
Citizenship: United States
W. Dale Compton, Ph.D., Director
Residence Address: 372 Pawnee Drive
West Lafayette, Indiana 47906
Principal Occupation:
Educator
Name and Address
and Principal Business of Employer:
Purdue University
Lafayette, Indiana 47907
Citizenship: United States
E. John Finn, Director
Residence Address: 114 Middle Beach Road
Madison, Connecticut 06443
Principal Occupation: Retired
Name and Address
and Principal Business of Employer:
Not Applicable
Citizenship: United States
During the last Five (5) years, none of the
above-named persons: (a) has been convicted
in a criminal proceeding (excluding traffic
violations or similar misdemeanors) or (b)
was a party to a civil proceeding of a
judicial or administrative body of competent
jurisdiction and as a result of such
proceeding was or is subject to a judgment,
decree or final order enjoining future
violations of, or prohibiting or mandating
activities subject to, federal or state
securities laws or finding any violation with
respect to such laws.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER
CONSIDERATION.
The shares of Common Stock were acquired by
ART in exchange for 1,000 shares of Class A
Preferred Stock of BSD Development Beta
Corporation ("BSD"). BSD had previously
acquired certain items of manufacturing
equipment ( Equipment ) owned by ART. No
cash consideration was paid by ART for such
shares.
ITEM 4. PURPOSE OF THE TRANSACTION.
On February 9, 1998, ART acquired 2,000,000
shares of Common Stock of the Issuer (the
Shares ) in exchange for 1,000 shares of
Class A Preferred Stock of BSD. BSD had
previously acquired the Equipment from ART.
Pursuant to the terms of the Stock Exchange
Agreement relating to the acquisition of the
Shares, ART is to exchange the Shares for
2,000,000 shares of An-Con Series A Preferred
Stock ( Preferred Stock ) on or before
September 6, 1998, subject to the approval of
An-Con shareholders of a Certificate of
Amendment of An-Con s Certificate of
Incorporation authorizing the issuance of
such shares of Preferred Stock. The
Preferred Stock is to be convertible into
2,000,000 shares of An-Con Common Stock
( Conversion Shares ). In the event An-Con
is unable, for any reason, to deliver the
Preferred Stock to ART on or before September
6, 1998, then, prior to September 15, 1998,
An-Con is to issue and deliver, without
payment of any additional consideration by
ART, an additional number of shares of An-
Con s Common Stock having an aggregate fair
market value of $500,000 ( Additional An-Con
Shares ). Furthermore, in the event An-Con
should issue any shares of any series or
class of its preferred stock having
substantially the same rights and preferences
as the Preferred Stock, then An-Con is to
issue and deliver to ART, without payment of
any additional consideration by ART, an
additional number of shares of An-Con s
Common Stock having an aggregate fair market
value equal to $500,000 ( Compensatory An-Con
Shares ).
In addition, in connection with the
acquisition of the Shares, ART entered into a
Profit-Sharing Agreement with the Eric Rainer
Bashford Charitable Remainder Unitrust
( Bashford ) and the Norman P. Fuchs
Individual Retirement Account ( Fuchs )
pursuant to which ART has agreed to share
with Bashford and Fuchs certain gains
realized by ART on the sale or other
disposition (other than a pledge or grant of
a lien or security interest) of all or a
portion of the Shares, the Preferred Stock or
the Conversion Shares to a third person
(other than an affiliate of ART) up to an
aggregate maximum amount of $1,000,000. Any
such profit is to be shared equally between
Bashford and Fuchs.
In addition, ART has granted to
Bashford and Fuchs a right of first refusal
with respect to any proposed sale or other
disposition (other than a pledge or a grant
of a lien or security interest) of any of
such Shares, Preferred Stock or Conversion
Shares to a third person (other than an
affiliate of ART) at a price below the then
current fair market value of such shares.
ART has acquired the shares of
Common Stock and, in the event it acquires
any shares of Additional An-Con Shares,
Compensatory An-Con Shares, Preferred Stock
and/or Conversion Shares, shall acquire such
shares, for investment purposes only. ART
may acquire additional shares of Common
Stock, dispose of all or some of such shares
from time to time, in each case in open
market transactions, block sales or purchases
or otherwise, or may continue to hold such
shares.
Other than the foregoing, and the
right to nominate a single member of An-Con s
board of directors, ART does not currently
have any plan or proposal that relates to or
would result in any action enumerated in Item
4 of Schedule 13D.
ITEM 5. INTEREST IN SECURITIES OF THE
ISSUER.
ART beneficially owns 2,000,000
shares of Common Stock, or approximately
15.0% of the 13,342,097 shares of An-Con s
Common Stock outstanding. ART has sole power
to vote or to direct the vote, and sole power
to dispose or to direct the disposition of,
2,000,000 shares of Common Stock.
The transactions in the shares of
Common Stock that were effected during the
past 60 days by ART involved the acquisition
of the shares of Common Stock directly from
An-Con in exchange for the 1,000 shares of
Class A Preferred Stock of BSD:<PAGE>
Date of Purchase: February 9, 1998
Amount of Shares: 2,000,000
Price Per Share1: $1.00
Purchase Price1: $2,000,000
ART became the beneficial owner of more than
five percent of the outstanding Common Stock
on February 9, 1998.
ART and BSD have agreed that the
fair market value of the Equipment is
$2,000,000.00. Also, see response to Item 4,
above.
ITEM 6. CONTRACTS, ARRANGEMENTS,
UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO SECURITIES OF THE ISSUER.
There are no contracts,
arrangements, understandings or relations
(legal or otherwise) with any person with
respect to the Common Stock or any other
securities of An-Con, other than those
described in Items 4 and 5 above.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
A. Stock Exchange Agreement by
and among ART, An-Con, and BSD Development
Beta Corporation, dated February 9, 1998; and
B. Profit-Sharing Agreement by
and among ART, the Eric Rainer Bashford
Charitable Remainder Unitrust and the Norman
P. Fuchs Individual Retirement Account, dated
February 9, 1998.
[The remainder of this page has been
intentionally left blank.]
The next page is the signature page<PAGE>
SIGNATURE
After reasonable inquiry and to the best of
my knowledge and belief, I certify that the
information set forth in this statement is
true, complete and correct.
Dated: February 16, 1998
ADVANCED REFRACTORY TECHNOLOGIES, INC.
By: s/KEITH A. BLAKELY
Keith A. Blakely, President
#280350
<PAGE>
EXHIBIT A
STOCK EXCHANGE AGREEMENT
<PAGE>
STOCK EXCHANGE AGREEMENT
THIS STOCK EXCHANGE AGREEMENT
( Agreement ) is made this 9th day of
February, 1998 by and among AN-CON GENETICS,
INC., a corporation duly organized and
existing under the laws of the State of
Delaware, having its principal office at 7100
30th Avenue North, St. Petersburg, Florida
( An-Con ), ADVANCED REFRACTORY TECHNOLOGIES,
INC., a corporation duly organized and
existing under the laws of the State of New
York, having its principal office at 699
Hertel Avenue, Buffalo, New York ( ART ) and
BSD DEVELOPMENT BETA CORPORATION, a
corporation duly organized and existing under
the laws of the State of Delaware, having an
address at 1313 N. Market Street, Wilmington,
Delaware ( BSD ).
WHEREAS, subject to the terms
hereof, ART desires to exchange with An-Con,
One Thousand (1,000) shares of Class A
Preferred Stock of BSD, par value $.01 per
share (collectively, the BSD Shares ) for
Two Million (2,000,000) shares of common
stock of An-Con, par value $.001 per share
(collectively, the An-Con Shares ).
WHEREAS, subject to the terms
hereof, An-Con desires to exchange with ART,
the An-Con Shares for the BSD Shares.
NOW, THEREFORE, for good and
valuable consideration, the receipt and
sufficiency of which are hereby acknowledged,
the parties hereto (each individually, a
Party ; collectively, the Parties ) hereby
agree as follows:
ARTICLE 1
DEFINITIONS
1.1 Definitions. For purposes of
this Agreement, the following terms shall
have the respective meanings set forth below:
a. Affiliate of a Party
means any Person (as hereinafter defined)
which Controls (as hereinafter defined), is
Controlled by, or is under common Control
with, such Party.
b. Applicable Law means
any and all applicable laws, rules,
regulations, statutes, orders and ordinances
of any Government Authority (as hereinafter
defined).
c. Consent means any
consent, certificate, approval,
authorization, waiver, permit, grant,
franchise, concession, agreement, license,
exemption or order of, registration,
declaration or filing with, or report,
filing, registration or notice to, any
Person, including, without limitation, any
Government Authority.
d. Control means the
possession, directly or indirectly, of the
power to direct or cause the direction of
management or policies of a Person, whether
through the ownership of voting securities,
by contract or otherwise.
e. Fair Market Value for
shares of common stock of An-Con, par value
$.001 ( An-Con Common Stock ) as of a
particular date means the closing sale price
for One (1) share of An-Con Common Stock as
reported on the primary securities exchange
on which such shares are listed or, in the
event shares of An-Con Common Stock are not
listed on any securities exchange, the last
reported sale price on the NASDAQ National
Market System ( NASDAQ/NMS ) or, in the event
no such reported sale takes place on the day
subject to determination of the Fair Market
Value, the average of the reported closing
bid and asked prices on such securities
exchange or NASDAQ/NMS, or, in the event such
shares of An-Con Common Stock are not listed
on any securities exchange or quoted on the
NASDAQ/NMS, the average of the bid and asked
prices for the immediately preceding Forty-
Five (45) days as quoted on the NASDAQ Small
Cap Market, or in the event shares of An-Con
Common Stock are not quoted on the NASDAQ
Small Cap Market, the average of the bona
fide independent bid prices for the
immediately preceding Forty-Five (45) days as
reported in the NASDAQ Bulletin Board, or in
the event shares of An-Con Common Stock are
not reported in the NASDAQ Bulletin Board,
the average of the bona fide independent bid
prices for the immediately preceding Forty-
Five (45) days reported in the over-the-
counter market in the pink sheets
published by the National Quotation Bureau,
Inc., or in the event such shares of An-Con
Common Stock are not so listed, quoted or
included, the fair market value as
established by the good faith determination
of any nationally recognized firm of
certified public accountants selected by ART.
f. Force Majeure means any
event or circumstance beyond the reasonable
control of the Party affected which prevents
or delays the performance of the Party s
obligations hereunder, including, without
limitation, natural disasters, wars, riots,
sabotage, government action, lockouts,
strikes, labor disputes, acts of God or fire.
g. Government Authority
means any foreign, federal, state, local or
other government, government agency or
authority or quasi-governmental body, or any
entity exercising any executive, legislative,
judicial, regulatory or administrative
functions of or pertaining to government,
including, without limitation, any arbitrator
and any government department, board,
commission, court or tribunal.
h. Person means any
individual, proprietorship, joint venture,
corporation, partnership, limited liability
company, limited liability partnership,
trust, unincorporated organization or
Government Authority.
ARTICLE 2
EXCHANGE OF SHARES
2.1 Exchange of Shares.
a. BSD Shares - Subject to
the terms hereof, at the Closing (as
hereinafter defined), ART shall transfer and
assign to An-Con, and An-Con shall acquire
from ART, the BSD Shares, including all legal
and beneficial interest thereto, free and
clear of all liens or encumbrances of any
kind created by ART.
b. An-Con Shares - Subject
to the terms hereof, at the Closing, An-Con
shall transfer and assign to ART, and ART
shall acquire from An-Con, the An-Con Shares,
including all legal and beneficial interest
thereto, free and clear of all liens or
encumbrances of any kind.
2.2 Closing. The closing of the
exchange of the BSD Shares and the An-Con
Shares contemplated in this Agreement and the
transactions contemplated in all other
Covered Agreements ( Closing ) shall occur at
10:00 o clock a.m. on February 9, 1998
( Closing Date ), at Alfred V. Greco, P.C.,
666 Fifth Avenue, 14th Floor, New York, New
York, or such other place, date and/or time
as the Parties shall mutually agree upon. At
the Closing: (a) ART shall deliver to An-Con
the stock certificate representing the BSD
Shares, duly endorsed in blank and in proper
form for transfer to An-Con; and (b) An-Con
shall deliver to ART the stock certificate
representing the An-Con Shares.
2.3 Registration Rights Agreement.
An-Con and ART each agrees to execute and
deliver at the Closing, a registration rights
agreement in the form attached hereto and
made a part hereof as Exhibit A
( Registration Rights Agreement ).
2.4 Covered Agreements. Covered
Agreements means each of the following:
(a) this Agreement; (b) the Registration
Rights Agreement; and (c) any other
agreement, instrument or document delivered
or required to be delivered by any Party
pursuant to this Agreement or any agreement
referenced above in this Section 2.4.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF ART
ART hereby represents and warrants
to BSD and An-Con, at the Closing, as
follows:
3.1 Standing. ART is a corporation
duly organized and validly existing under the
laws of the State of New York. ART has all
requisite corporate power and authority to
conduct its business as it is now being
conducted and as presently contemplated to be
conducted and to carry out the transactions
contemplated in this Agreement and the other
Covered Agreements to which it is a party.
3.2 Authority. The execution and
delivery of this Agreement and any other
Covered Agreement to which it is a party, and
the consummation of the transactions
contemplated herein and therein have been
duly authorized by all necessary corporate
action of ART, and ART has all requisite
corporate power and authority to execute,
deliver and perform this Agreement and any
other Covered Agreement to which it is a
party. This Agreement and any other Covered
Agreement to which it is a party have been
duly executed and delivered by ART and
constitute legal, valid and binding
agreements of ART enforceable in accordance
with their respective terms (except as their
enforceability may be limited by applicable
bankruptcy, insolvency, reorganization,
moratorium or other laws of general
application relating to or affecting
enforcement of creditors rights or the
application of equitable principles in any
action, legal or equitable). ART has full
power and authority to perform its
obligations under this Agreement and any
other Covered Agreement to which it is a
party and the transactions contemplated
herein and therein.
3.3 No Conflicts. Neither the
execution, delivery or performance of this
Agreement or any other Covered Agreement to
which it is a party, nor the consummation of
the transactions contemplated herein or
therein, will conflict with or constitute a
breach of or a default under, or an event
which, with or without notice or lapse of
time, or both, would be a breach of, default
under or violation of: (a) ART s Certificate
of Incorporation or By-Laws; or (b) any
agreement, document, indenture, mortgage or
other instrument or undertaking to which ART
is a party or to which any of its properties
is subject, which breach, default or
violation would have a material adverse
effect, financial or otherwise, on ART or
would be a material violation of any
Applicable Law relating to ART.
3.4 Litigation. There is not now
pending and, to the best of ART s knowledge,
there is not threatened nor is there any
basis for, any claim, demand, litigation,
arbitration, action, suit, inquiry,
investigation or proceeding by or before any
Government Authority to which ART is or may
be a party, and which: (a) may result in a
material adverse effect, financial or
otherwise, on the condition or prospects of
ART; (b) may threaten the validity of this
Agreement or any other Covered Agreement to
which it is a party; or (c) seeks to prevent,
or if successful would prevent, ART from
consummating the transactions contemplated in
this Agreement or any other Covered Agreement
to which it is a party. ART is not subject
to any judgment, decree, injunction, rule,
decision or order of any Government Authority
having, or which, insofar as can be foreseen
in the future, may have, any material adverse
effect, financial or otherwise, on the
condition or prospects of ART.
3.5 Consents. There is no Consent
necessary or required in connection with the
valid execution, delivery and performance by
ART of this Agreement or any other Covered
Agreement to which it is a party and the
consummation of the transactions contemplated
herein or therein.
3.6 Compliance with Law. ART has
complied in all material respects with all
Applicable Law relating to ART, and no claims
have been made to or against ART by any
Person to the contrary. ART has received no
notice of any violation of or noncompliance
with any Applicable Law which has not been
cured, which violation or noncompliance would
have a material adverse effect, financial or
otherwise, on the condition or prospects of
ART.
3.7 Brokers. No agent, finder,
broker, investment banker or other Person
acting under the authority of ART is or will
be entitled to any broker s fee or finder s
fee or any other commission or similar fee,
directly or indirectly, from ART or any
Affiliate of ART as a result of the
transaction contemplated in this Agreement or
any other Covered Agreement to which it is a
party.
3.8 BSD Shares. ART acquired the
BSD Shares from BSD pursuant to that certain
Purchase Agreement by and between ART and
BSD, dated of even date herewith ( Purchase
Agreement ), and: (a) ART has the same right,
title and interest in and to the BSD Shares
that it had when it acquired the BSD Shares
from BSD pursuant to the Purchase Agreement;
and (b) the BSD Shares are free and clear of
any lien or encumbrance of any kind created
by ART.
3.9 No Registration. ART
acknowledges that the An-Con Shares have not
been registered under the Securities Act of
1933, as amended ( Securities Act ) or under
state securities acts and are offered in
reliance on exemptions provided by such acts.
ART acknowledges that the An-Con Shares are
being acquired for investment only and may
not be sold or transferred in the absence of
an effective registration statement under
such acts or an opinion of counsel acceptable
to An-Con that such registration statement is
not required.
3.10 Restrictive Legend. ART
acknowledges that each certificate evidencing
the An-Con Shares shall be imprinted with a
restrictive legend to the following effect:
A. THE SHARES EVIDENCED BY THIS
CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE
SECURITIES ACT OF 1933 AND MAY
NOT BE TRANSFERRED OR SOLD
UNLESS: (A) A REGISTRATION
STATEMENT UNDER SUCH ACT AND
STATE SECURITIES LAWS IS THEN
IN EFFECT WITH RESPECT
THERETO; OR (B) A WRITTEN
OPINION OF COUNSEL ACCEPTABLE
TO AN-CON GENETICS, INC. HAS
BEEN OBTAINED TO THE EFFECT
THAT THE PROPOSED TRANSFER OR
SALE IS TO BE MADE PURSUANT TO
A TRANSACTION EXEMPT FROM
REGISTRATION UNDER SUCH ACT.
B. THE SHARES EVIDENCED BY THIS
CERTIFICATE ARE SUBJECT TO THE
TERMS, CONDITIONS AND
RESTRICTIONS IMPOSED BY THAT
CERTAIN PROFIT-SHARING
AGREEMENT BY AND AMONG
ADVANCED REFRACTORY
TECHNOLOGIES, INC., THE ERIC
RAINER BASHFORD CHARITABLE
REMAINDER UNITRUST AND THE
NORMAN P. FUCHS INDIVIDUAL
RETIREMENT ACCOUNT, DATED
FEBRUARY 9, 1998, A COPY OF
WHICH IS ON FILE WITH THE
SECRETARY OF ADVANCED
REFRACTORY TECHNOLOGIES, INC.
AND AN-CON GENETICS, INC.
3.11 Restrictions on Transfer. The
An-Con Shares are being purchased for the
account of ART for investment, and not for
distribution, transfer or resale to others,
except pursuant to a registration statement
under the Securities Act and applicable state
securities laws or except pursuant to a
transaction exempt from registration under
the Securities Act and applicable state
securities laws.
3.12 General Warranty. No
representation or warranty by ART in this
Agreement or any other Covered Agreement to
which ART is a party, and no statement
contained in any document, statement or
certificate furnished to BSD or An-Con by ART
in connection with the transactions
contemplated in this Agreement or any other
Covered Agreement to which ART is a party,
contains any untrue statement of a material
fact or omits to state a material fact
necessary to make the statements contained or
incorporated herein or therein not
misleading. All documents, instruments and
certificates delivered by or on behalf of ART
in connection with this Agreement or any
other Covered Agreement to which ART is a
party, and the transactions contemplated
herein and therein are true, correct and
complete in all material respects.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF AN-CON
An-Con hereby represents and
warrants to ART and BSD, at the Closing, as
follows:
4.1 Standing. An-Con is a
corporation duly organized and validly
existing under the laws of the State of
Delaware, and each An-Con subsidiary is a
corporation duly organized and validly
existing under the laws of its state of
incorporation. An-Con has all requisite
corporate power and authority to conduct its
business as it is now being conducted and as
presently contemplated to be conducted and to
carry out the transactions contemplated in
this Agreement and the other Covered
Agreements to which it is a party. The
subsidiaries of An-Con are set forth on
Schedule 4.1 attached hereto and made a part
hereof. (For purposes of this Agreement, An-
Con means An-Con and its subsidiaries,
unless the context requires otherwise.)
4.2 Authority. The execution and
delivery of this Agreement and any other
Covered Agreement to which it is a party, and
the consummation of the transactions
contemplated herein and therein have been
duly authorized by all necessary corporate
action of An-Con, and An-Con has all
requisite corporate power and authority to
execute, deliver and perform this Agreement
and any other Covered Agreement to which it
is a party. This Agreement and any other
Covered Agreement to which it is a party have
been duly executed and delivered by An-Con
and constitute legal, valid and binding
agreements of An-Con enforceable in
accordance with their respective terms
(except as their enforceability may be
limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other laws of
general application relating to or affecting
enforcement of creditors rights or the
application of equitable principles in any
action, legal or equitable). An-Con has full
power and authority to perform its
obligations under this Agreement and any
other Covered Agreement to which it is a
party and the transactions contemplated
herein and therein.
4.3 An-Con Capitalization.
a. Capital Stock - The total
number of shares of capital stock of all
classifications which An-Con has authority to
issue is Fifteen Million (15,000,000), which
shares are apportioned into One (1) class of
common stock. All issued and outstanding
shares of An-Con Common Stock are duly and
validly issued, fully paid and nonassessable
and free and clear of all liens or
encumbrances of any kind, and have been
issued in compliance with all Applicable Law.
When issued, sold and delivered to ART in
accordance with the terms set forth in this
Agreement, the An-Con Shares will: (x) be
duly and validly issued, fully paid and
nonassessable; (y) be free and clear of any
liens or encumbrances of any kind; and (z)
issued in compliance with all Applicable Law.
If and when issued, sold and delivered to ART
in accordance with Section 6.7, the An-Con
Preferred Stock (as hereinafter defined)
will: (i) be duly and validly issued, fully
paid and nonassessable; (ii) be free and
clear of any liens or encumbrances of any
kind; (iii)have the designations, rights,
limitations, restrictions and preferences set
forth in the Certificate of Amendment of the
Certificate of Incorporation of An-Con, as
set forth on Exhibit B attached hereto and
made a part hereof ( An-Con Certificate of
Amendment ); and (iv) be issued in compliance
with all Applicable Law. The shares of An-
Con Common Stock to be issued and delivered
upon the conversion of the An-Con Preferred
Stock (collectively, the An-Con Conversion
Shares ) will, upon the approval of the
Certificate of Amendment by the An-Con
stockholders and the filing of the An-Con
Certificate of Amendment with the Delaware
Secretary of State in accordance with the
provisions of the Delaware General
Corporation Law: (i) be duly and validly
issued, fully paid and nonassessable; (ii) be
free and clear of any liens or encumbrances
of any kind; and (iii) shall be issued in
compliance with all Applicable Law.
b. Warrants/Options - Except
as set forth on Schedule 4.3 attached hereto
and made a part hereof: (1) there are no
outstanding options, warrants, purchase
rights, subscription rights, conversion
rights, exchange rights or other rights,
commitments or arrangements, written or oral,
to which An-Con is a party or by which it is
bound, to purchase or otherwise acquire any
authorized but unissued shares of capital
stock of An-Con or any security directly or
indirectly convertible into or exercisable or
exchangeable for any capital stock of An-Con;
(2) no holder of any equity security of An-
Con is entitled to any preemptive rights or
has any right of first refusal to purchase
any of the An-Con Shares; and (3) there are
no voting trusts, proxies or other agreements
or understandings, written or oral, to which
An-Con is a party or by which it is bound,
relating to the issuance, sale or voting of
any securities of An-Con.
c. Registration Rights -
Except as set forth on Schedule 4.3, no
holder of any securities of An-Con or of any
option, warrant or other right to acquire any
securities of An-Con, has the right to
include any securities issued by An-Con in
any registration statement to be filed by An-
Con or to require An-Con to file a
registration statement, under the Securities
Act.
d. Schedule of Holders - A
true, correct and complete list of the record
and beneficial holders of Five Percent (5%)
or more of any class of the issued and
outstanding equity securities of An-Con is
set forth on Schedule 4.3.
4.4 No Conflicts. Neither the
execution, delivery or performance of this
Agreement or any other Covered Agreement to
which it is a party, nor the consummation of
the transactions contemplated herein or
therein, will conflict with or constitute a
breach of or a default under, or an event
which, with or without notice or lapse of
time, or both, would be a breach of, default
under or violation of: (a) An-Con s
Certificate of Incorporation or By-Laws; or
(b) any agreement, document, indenture,
mortgage or other instrument or undertaking
to which An-Con is a party or to which any of
its properties is subject, which breach,
default or violation would have a material
adverse effect, financial or otherwise, on
An-Con or would be a material violation of
any Applicable Law relating to An-Con.
4.5 Title. Except as set forth on
Schedule 4.5 attached hereto and made a part
hereof, An-Con owns its property and assets,
as shown on its most recent Balance Sheet
included in its Financial Statements (as
hereinafter defined), free and clear of all
mortgages, liens and encumbrances of any
kind. An-Con owns or possesses the valid
right or license to use, all tangible
personal property and other tangible assets
necessary to permit An-Con to conduct its
business in all material respects in the same
manner as presently conducted and as proposed
to be conducted.
4.6 An-Con Reports. An-Con has
made all filings with the Securities and
Exchange Commission ( SEC ) that it has been
required to make under the Securities
Exchange Act of 1934, as amended ( Exchange
Act ). An-Con has made available to ART a
true, correct and complete copy of each
registration statement, report, proxy
statement and information statement prepared
by it since January 1, 1995, including,
without limitation: (a) its Annual Reports on
Form 10-K for its fiscal years ended December
31, 1996 and December 31, 1995; (b) its
Quarterly Reports on Form 10-Q for each of
the quarterly periods ended within its fiscal
year 1997; (c) its Current Reports on Form 8-
K filed during the period beginning January
1, 1995 through the date hereof and all Proxy
Statements and Information Statements (as
defined in Regulation 14 under the Exchange
Act) during the period beginning January 1,
1995 through the date hereof; and (d) its
Registration Statement on Form SB-2, as
amended; including, in every case, all
schedules, exhibits, amendments and
supplements thereto, whether filed therewith
or incorporated therein by reference
(collectively, the An-Con Reports ). As of
their respective dates, all An-Con Reports
filed within the Twelve (12) month period
prior to the date hereof:(i) complied with
all applicable requirements of the Securities
Act, the Exchange Act, and all rules and
regulations thereunder ( Rules and
Regulations ); and (ii) did 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 made therein, in the light of the
circumstances under which they were made, not
misleading. Each financial statement of An-
Con, including, without limitation, all
related notes and schedules ( Financial
Statements ), included in the An-Con Reports
have been prepared in accordance with
generally accepted accounting principles
consistently applied, or if unaudited, in
accordance with the applicable accounting
requirements of the SEC, and fairly present
the financial position of An-Con as of its
date and the results of operations, changes
in stockholders equity or cash flows, as the
case may be, of An-Con for the periods set
forth therein (subject, in the case of
unaudited statements, to normal year-end
audit adjustments which will not cause
material adverse effect). An-Con has no
liabilities or obligations of any kind,
whether accrued, absolute, contingent or
otherwise, that would be required to be
reflected on, or reserved against in, the
Financial Statements, except liabilities
arising in the ordinary course of business
since September 30, 1997. Since January 1,
1997, An-Con has timely filed all reports,
registration statements and other filings
required to be filed with the SEC under the
Rules and Regulations. The Financial
Statements are based on the books and records
of An-Con. The assets and liabilities
reflected on the Financial Statements have
arisen in the ordinary course of business,
except as otherwise disclosed therein.
Within the past Five (5) years, none of An-
Con s independent public accountants has
brought to the attention of An-Con s
management any material weakness , as defined
in the Statement of Auditing Standard No. 60,
in any of An-Con s internal controls.
4.7 No Undisclosed Liabilities.
An-Con has no material liabilities except for
liabilities disclosed in the Financial
Statements or disclosed on Schedule 4.7
attached hereto and made a part hereof or
incurred in the ordinary course of business
after September 30, 1997.
4.8 Absence of Certain Changes.
Except as set forth on Schedule 4.8 attached
hereto and made a part hereof, since
September 30, 1997, An-Con has not:
a. incurred any material
debt, obligation
or liability of any kind,
except in the ordinary
course of business;
b. entered into any
transaction which is
material to its
financial condition or
to the operation of its
business, except in the
ordinary course of
business; or
c. suffered any material
adverse change in its
condition or prospects,
financial or otherwise.
4.9 Tax Returns. An-Con has duly
and timely filed any and all tax returns,
filings and reports (collectively, the An-Con
Tax Returns ) required to be filed by it
pursuant to any Applicable Law with any
Government Authority ( Tax Authority ) and all
An-Con Tax Returns are true, complete and
correct in all material respects and properly
reflect any and all material tax liabilities
of An-Con for the periods covered thereby.
An-Con has duly and timely paid any and all:
(a) taxes; (b) assessments, interest,
penalties and deficiencies; (c) fees and
charges of any Government Authority; and
(d) duties or impositions of any Government
Authority; which are reflected as payable on
any An-Con Tax Returns or claimed to be due
by any Tax Authority. To the best knowledge
of An-Con, there is no pending claim by any
Tax Authority in any jurisdiction in which
An-Con does not file An-Con Tax Returns, that
An-Con is or may be subject to taxation by
that jurisdiction. An-Con has withheld and
paid all taxes required to have been withheld
and paid by it under Applicable Law in
connection with any amounts paid to any
employee or shareholder.
4.10 Litigation. Except as set
forth on Schedule 4.10 attached hereto and
made a part hereof, there is not now pending
and, to the best of An-Con s knowledge, there
is not threatened nor is there any basis for,
any claim, demand, litigation, arbitration,
action, suit, inquiry, investigation or
proceeding by or before any Government
Authority to which An-Con is or may be a
party, and which: (a) may result in a
material adverse effect, financial or
otherwise, on the condition or prospects of
An-Con; (b) may threaten the validity of this
Agreement or any other Covered Agreement to
which it is a party; or (c) seeks to prevent,
or if successful would prevent, ART from
consummating the transactions contemplated in
this Agreement or any other Covered Agreement
to which it is a party. An-Con is not
subject to any judgment, decree, injunction,
rule, decision or order of any Government
Authority having, or which, insofar as can be
foreseen in the future, may have, any
material adverse effect, financial or
otherwise, on the condition or prospects of
ART.
4.11 Consents. There is no Consent
necessary or required in connection with the
valid execution, delivery and performance by
An-Con of this Agreement or any other Covered
Agreement to which it is a party and the
consummation of the transactions contemplated
herein or therein.
4.12 Compliance with Law. An-Con
has complied in all material respects with
all Applicable Law relating to An-Con, and no
claims have been made to or against An-Con by
any Person to the contrary. An-Con has
received no notice of any violation of or
noncompliance with any Applicable Law which
has not been cured, which violation or
noncompliance would have a material adverse
effect, financial or otherwise, on the
condition or prospects of An-Con. Neither
An-Con nor, to the best knowledge of An-Con,
any of its officers, directors, employees,
agents or Affiliates has, directly or
indirectly, made or agreed to make, any
kickback, bribe, gift or other illegal
payment to any Person for referring,
recommending or arranging business with, to
or for An-Con.
4.13 Brokers. No agent, finder,
broker, investment banker or other Person
acting under the authority of An-Con is or
will be entitled to any broker s fee or
finder s fee or any other commission or
similar fee, directly or indirectly, from An-
Con or any Affiliate of An-Con as a result of
the transaction contemplated in this
Agreement or any other Covered Agreement to
which it is a party.
4.14 Insurance. An-Con has
obtained, and there is currently in effect,
any and all insurance polices and other
insurance coverages necessary or appropriate
for the conduct of An-Con s business as now
conducted and as proposed to be conducted
(collectively, the Insurance Policies ). To
the best knowledge of An-Con, the Insurance
Policies and related coverages are in amounts
which are adequate in kind and amount to
cover insurable risks relating to the
operation of An-Con s business as now
conducted and as proposed to be conducted,
and all premiums and other payments to date
have been paid in full, and there is no fact,
act or omission to act that has caused or may
cause any Insurance Policy to be canceled or
terminated. Each Insurance Policy is in full
force and effect and is legal, valid and
binding and enforceable in accordance with
its respective terms. An-Con is not in
default with respect to any material
provision contained in any Insurance Policy
and has not failed to give any notice or
present any claim under any Insurance Policy
in due and timely fashion. An-Con has
received no notice of any cancellation,
modification, change in premiums or denial of
renewal in connection with any Insurance
Policy or any renewal of any Insurance
Policy.
4.15 Contracts.
a. SEC Contracts - An-Con is not
a party to or bound by, and no An-Con asset
is subject to, any contract, agreement or
arrangement required to be disclosed in, or
included as an exhibit to, any An-Con Report
(collectively, the SEC Contracts ), which
contract, agreement or arrangement is not
disclosed in, or included as an exhibit to,
such An-Con Report. Schedule 4.15 attached
hereto and made a part hereof sets forth a
list and a brief description of all SEC
Contracts which would be required to be filed
as exhibits to An-Con s Annual Report on Form
10-K for the fiscal year ending December 31,
1997 (collectively, the Last Quarter
Contracts ).
b. Other Contracts - Schedule 4.15
sets forth a list and a brief description of
all material contracts, agreements and
arrangements to which An-Con is a party to or
by which it is bound, or to which any of its
assets are subject, other than those
described in Section 4.15a above
(collectively, the Other Contracts ). (The
SEC Contracts, the Last Quarter Contracts and
the Other Contracts are collectively referred
to as the Contracts .)
c. Status -
(1) Each Contract is in full force
and effect and is a legal, valid and binding
agreement of An-Con enforceable as to An-Con
in accordance with its respective terms and,
to the best knowledge of An-Con, binding upon
the other parties thereto in accordance with
their terms.
(2) Neither An-Con nor any other
party to any Contract is in breach of or
default under (nor has any default been
asserted by any party under) any Contract,
which breach or default may have a material
adverse effect, financial or otherwise, on
An-Con.
(3) There has not occurred any
event with respect to An-Con nor, to An-Con s
best knowledge, with respect to any other
party to any Contract, which, after the
giving of notice or the lapse of time, or
both, would constitute a default under or
result in a breach of any Contract, which
breach or default would have a material
adverse effect, financial or otherwise, on
An-Con.
(4) No Contract will be subject to
amendment or termination as a result of the
consummation of transactions contemplated in
this Agreement or in any other Covered
Agreement.
(5) No Contract
contains any change-in-control term or other
term or condition that will become applicable
upon consummation of the transactions
contemplated in this Agreement or in any
other Covered Agreement.
4.16 Permits and Licenses.
a. Scope - An-Con has all
permits and licenses required or necessary
under Applicable Law for the operation of An-
Con s business as presently conducted
(collectively, the Permits and Licenses ).
An-Con has not received any notice from any
Government Authority or any other Person to
the effect (and has no reason to believe)
that any additional permits or licenses of
any kind are required or necessary under any
Applicable Law for the operation of the An-
Con business as presently conducted.
b. Status -
(1) Each Permit and License is in
full force and effect and is a legal, valid
and binding agreement of An-Con enforceable
as to An-Con in accordance with its
respective terms.
(2) An-Con is not in violation or
breach of or default under (nor has any
default been asserted against An-Con under)
any Permit and License, which violation,
breach or default may have a material adverse
effect, financial or otherwise, on An-Con.
(3) No Permit and License will be
subject to amendment or termination as a
result of the consummation of the
transactions contemplated in this Agreement
or in any other Covered Agreement.
4.17 Intellectual Property.
a. Ownership - Schedule 4.17
contains a true, correct and complete list
and description of all material patents,
patent applications, licenses, trademarks,
service marks, trade names, copyrights,
software, technologies, inventions, trade
secrets, know-how, mask works, ideas,
improvements, concepts, information, methods,
studies, data, confidential information,
proprietary information, other intellectual
property rights of any kind and other
intangible assets owned by An-Con
(collectively, the Intellectual Property ).
As to the Intellectual Property: (1) An-Con
is the sole and exclusive owner of all right,
title and interest of any kind in and to the
Intellectual Property, free and clear of all
liens, encumbrances, claims, challenges,
conditions and restrictions of any kind; and
(2) An-Con has not granted any right, title
or interest of any kind therein to any
Person.
b. Scope - The Intellectual
Property constitutes all of the material
intellectual property rights and licenses
which are required or necessary in the
operation of An-Con s business as currently
conducted.
c. Protection -
(1) An-Con Confidential Information - Other
than Intellectual Property subject to a
validly existing registration of an
intellectual property right, no Intellectual
Property, including, without limitation,
trade secrets, know-how, confidential
information and proprietary information
(collectively, An-Con Confidential
Information ), has been disclosed to any
Person under circumstances that may result in
the loss of its confidential or proprietary
status and which if disclosed would have a
material adverse effect on the An-Con
business as presently conducted. An-Con has
taken any and all precautions reasonably
necessary to ensure that An-Con Confidential
Information remains confidential and
proprietary.
(2) Confidential Information of Other Persons
- - Neither An-Con nor, to An-Con s best
knowledge, any of An-Con s stockholders,
officers, directors, agents, employees or
Affiliates has made any unauthorized use of
any intellectual property right of any Person
required or necessary for the operation of
the An-Con business as presently conducted,
(other than intellectual property subject to
a validly existing registration of an
intellectual property right), including,
without limitation, trade secrets, know-how,
confidential information or proprietary
information of any Person (collectively, the
Third Party Confidential Information ),
including, without limitation, any Third
Party Confidential Information of any former
employers.
(3) No Other Rights - None of An-Con s
employees, officers, directors, stockholders,
joint venturers, consultants, agents,
independent contractors or Affiliates has any
right, title or interest of any kind in any
of the Intellectual Property. To the extent
any of such parties had any right, title or
interest in or to any of the Intellectual
Property, said right, title and interest has
been duly and properly assigned in writing to
An-Con.
d. No Infringement - Except as
set forth on Schedule 4.17:
(1) Of Third Party Rights - To
the best knowledge of An-Con, neither the
Intellectual Property nor any of the products
manufactured or services provided by An-Con
using any of the Intellectual Property:
(a) infringes in any way upon any patent,
patent application, license, know-how,
copyright, trademark, service mark, trade
name, trade secret or other intellectual
property right of any kind of any Person; or
(b) constitutes any kind of wrongful use of
any confidential information or proprietary
information of any Person.
(2) By Third Parties - None of
the Intellectual Property is being infringed,
or otherwise used or available for use, by
any Person in any way.
e. Intellectual Property
Litigation - Except as set forth on Schedule
4.17, there is not now pending and there is
not threatened nor is there any basis for,
any claim, demand, litigation, arbitration,
action, suit, inquiry, investigation or
proceeding by or before any Government
Authority to which An-Con is or will be a
party, and which: (1) challenges or asserts
any conflicting right or claim as to the
validity, ownership or any other right, title
or interest of An-Con in or to the
Intellectual Property; (2) asserts or claims
that the Intellectual Property or any of the
products manufactured or services provided by
An-Con using any of the Intellectual
Property: (x) infringes in any way upon any
patent, patent application, know-how,
license, copyright, trademark, service mark,
trade name, trade secret or any other
intellectual property right of any kind of
any Person; (y) constitutes any kind of
wrongful use of any confidential information
or proprietary information of any Person; or
(z) constitutes a proceeding relating to the
Intellectual Property, either inter parte or
ex parte, including, without limitation, any
re-examination, interference, opposition or
cancellation proceeding, which is pending in
or before any Government Authority.
4.18 Environmental Protection.
Except as set forth on Schedule 4.18 attached
hereto and made a part hereof, An-Con is in
compliance, in all material respects, with
any and all applicable environmental laws,
rules and regulations and with all
limitations, restrictions, conditions,
standards, prohibitions, requirements,
obligations, schedules and timetables
contained in any applicable environmental
laws, rules or regulations, or in any plan,
order, decree, judgment, notice or demand
letter issued, entered, promulgated or
approved thereunder, including, without
limitation, laws, rules and regulations
relating to the disposal of hazardous to
toxic materials or wastes. An-Con has not
received written notice of any event,
condition, circumstance, activity, practice,
incident, action or plan which may interfere
with or prevent continued compliance with any
applicable environmental laws, rules or
regulations, or which may give rise to any
common law or legal liability, or otherwise
form the basis of any claim, action, suit,
proceeding, hearing or investigation, based
on or related to the manufacture, processing,
distribution, use, treatment, storage,
disposal, transport, or handling, or the
emission, discharge, release or threatened
release into the environment, of any
pollutant, contaminant, or hazardous or toxic
material or waste.
4.19 Market Price. Neither An-Con
nor, to the best of An-Con s knowledge, any
of its stockholders, officers, directors,
agents, employees or Affiliates, has taken,
directly or indirectly, any action designed
to cause or result in or which has
constituted, under the Exchange Act or
otherwise, stabilization or manipulation of
the price of any An-Con security.
4.20 No Registration. An-Con
acknowledges that the BSD Shares have not
been registered under the Securities Act or
under state securities acts and are offered
in reliance on exemptions provided by such
acts. An-Con acknowledges that the BSD
Shares are being acquired for investment only
and may not be sold or transferred in the
absence of an effective registration
statement under such acts or an opinion of
counsel acceptable to BSD that such
registration statement is not required.
4.21 Restrictive Legend. An-Con
acknowledges that each certificate evidencing
the BSD Shares shall be imprinted with a
restrictive legend as follows:
TO THE FULLEST EXTENT PERMITTED BY
THE DELAWARE GENERAL CORPORATION
LAW, THE HOLDER OF THE SHARES
REPRESENTED BY THIS CERTIFICATE
SHALL NOT IN ANY EVENT BE ENTITLED
TO VOTE ON ANY MATTER, PROCEEDING OR
ACTION OF THE CORPORATION AT ANY
REGULAR OR SPECIAL MEETING OF THE
STOCKHOLDERS, OR IN ANY WRITTEN
CONSENT OF THE STOCKHOLDERS IN LIEU
OF ANY SUCH MEETING OR OTHERWISE.
THE SHARES REPRESENTED BY THIS
CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS
AMENDED. THE SHARES MAY NOT BE
TRANSFERRED EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT
UNDER SUCH ACT COVERING THE SHARES,
OR PURSUANT TO AN EXEMPTION
THEREFROM.
4.22 Restrictions on Transfer. The
BSD Shares are being purchased for the
account of An-Con for investment, and not for
distribution, transfer or resale to others,
except pursuant to a registration statement
under the Securities Act and applicable state
securities laws or except pursuant to a
transaction exempt from registration under
the Securities Act and applicable state
securities laws.
4.23 General Warranty. No
representation or warranty by An-Con in this
Agreement or any other Covered Agreement to
which An-Con is a party, and no statement
contained in any document, statement or
certificate furnished to ART or BSD by An-Con
in connection with the transactions
contemplated in this Agreement or any other
Covered Agreement to which ART is a party,
contains any untrue statement of a material
fact or omits to state a material fact
necessary to make the statements contained or
incorporated herein or therein not
misleading. There is no fact known to An-Con
which An-Con has not disclosed to ART and BSD
which might reasonably be expected to have or
result in a material adverse effect,
financial or otherwise, on the ability of An-
Con to perform its obligations under this
Agreement or any other Covered Agreement to
which An-Con is a party. All documents,
instruments and certificates delivered by or
on behalf of An-Con in connection with this
Agreement or any other Covered Agreement to
which An-Con is a party, and the transactions
contemplated herein and therein are true,
correct and complete in all material
respects.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF BSD
BSD hereby represents or warrants to, and
covenants with, ART and An-Con, at the
Closing, as follows:
5.1 Standing. BSD is a corporation
duly organized, validly existing and in good
standing under the laws of the State of
Delaware. BSD has all requisite corporate
power and authority to conduct its business
as it is now being conducted and as presently
contemplated to be conducted and to carry out
the transactions contemplated in this
Agreement and the other Covered Agreements to
which it is a party. BSD has no
subsidiaries.
5.2 Authority. The execution and
delivery of this Agreement and the other
Covered Agreements to which it is a party and
the consummation of the transactions
contemplated herein and therein have been
duly authorized by all necessary corporate
action of BSD, and BSD has all requisite
corporate power and authority to execute,
deliver and perform this Agreement and the
other Covered Agreements to which it is a
party. This Agreement and the other Covered
Agreements to which it is a party have been
duly executed and delivered by BSD and
constitute legal, valid and binding
agreements of BSD enforceable in accordance
with their respective terms (except as their
enforceability may be limited by applicable
bankruptcy, insolvency, reorganization,
moratorium or other laws of general
application relating to or affecting
enforcement of creditors rights or the
application of equitable principles in any
action, legal or equitable). BSD has full
power and authority to perform its
obligations under this Agreement and the
other Covered Agreements to which it is a
party and the transactions contemplated
herein and therein.
5.3 BSD Capitalization.
a. Capital Stock - The total number of
shares of capital stock of all
classifications which BSD has authority to
issue is Ten Thousand (10,000), which shares
are apportioned into two classes of capital
stock as follows: (1) One Thousand (1,000)
shares are designated as Common Stock ,
having a par value of $.01 per share ( BSD
Common Stock ), of which Two Hundred Twenty-
Five (225) shares of BSD Common Stock are
issued and outstanding and an additional
Seventy-Five (75) of which are reserved for
issuance upon conversion of that certain BSD
convertible debenture in the original
principal amount of Seven Hundred Fifty
Thousand Dollars ($750,000.00), dated
February 9, 1998, issued to Gregory Konesky
( Convertible Debenture ); and (2) Nine
Thousand (9,000) shares are designated as
Preferred Stock , having a par value of $.01
per share, of which: (x) One Thousand (1,000)
shares have been designated as Class A
Preferred Stock , all of which are issued and
outstanding and comprise the BSD Shares; (y)
One Thousand (1,000) shares have been
designated as Class B Preferred Stock , of
which no shares are issued and outstanding;
and (z) One Thousand (1,000) shares have been
designated as Class C Preferred Stock , of
which no shares are issued and outstanding.
All of BSD s issued and outstanding shares of
Common Stock are duly and validly issued,
fully paid and nonassessable and have been
issued in compliance with all Applicable Law.
The BSD Shares: (w) are duly and validly
issued, fully paid and nonassessable; (x) are
free and clear of any liens or encumbrances
of any kind imposed or created by BSD;
(y) have been issued in compliance with all
Applicable Law; and (z) have the
designations, rights, limitations,
restrictions and preferences set forth in the
Certificate of Amendment of the Certificate
of Incorporation of BSD, as set forth on
Exhibit C attached hereto and made a part
hereof ( BSD Certificate of Amendment ).
b. Warrants/Options - Except for the
Convertible Debenture and except as set forth
in the BSD Certificate of Amendment: (1)
there are no outstanding options, warrants,
purchase rights, subscription rights,
conversion rights, exchange rights or other
rights, commitments or arrangements, written
or oral, to which BSD is a party or by which
it is bound, to purchase or otherwise acquire
any authorized but unissued shares of capital
stock of BSD or any security directly or
indirectly convertible into or exercisable or
exchangeable for any capital stock of BSD;
(2) no holder of any equity security of BSD
is entitled to any preemptive rights or has
any right of first refusal to purchase any of
the BSD Shares; and (3) there are no voting
trusts, proxies or other agreements or
understandings, written or oral, to which BSD
is a party or by which it is bound, relating
to the issuance, sale or voting of any
securities of BSD.
c. Schedule of Holders - A true,
correct and complete list of the record and
beneficial holders of all issued and
outstanding equity securities of BSD is set
forth on Schedule 5.3 attached hereto and
made a part hereof.
d. Registration Rights - No holder of
any securities of BSD or of any option,
warrant or other right to acquire any
securities of BSD, has the right to include
any securities issued by BSD in any
registration statement to be filed by BSD or
to require BSD to file a registration
statement, under the Securities Act.
5.4 No Conflicts. Neither the
execution, delivery or performance of this
Agreement or any other Covered Agreement to
which it is a party, nor the consummation of
the transactions contemplated herein or
therein, will conflict with or constitute a
breach of or a default under, or an event
which, with or without notice or lapse of
time, or both, would be a breach of, default
under or violation of: (a) BSD s Certificate
of Incorporation or By-Laws; or (b) any
agreement, document, indenture, mortgage or
other instrument or undertaking to which BSD
is a party or to which any of its properties
is subject, which breach, default or
violation would have a material adverse
effect, financial or otherwise, on BSD, or
would be a material violation of any
Applicable Law relating to BSD.
5.5 Assets. Except: (a) as
contemplated pursuant to the terms of this
Agreement, any other Covered Agreement to
which BSD is a party, the Purchase Agreement,
that certain License Agreement by and between
ART and BSD, dated of even date herewith
( License Agreement ), that certain
Manufacturing Agreement by and between ART
and BSD, dated of even date herewith
( Manufacturing Agreement ), that certain
assignment and assumption agreement by and
between BSD and An-Con, dated of even date
herewith ( Assignment ) (or any agreement,
instrument or document delivered by BSD
pursuant to the Purchase Agreement, the
License Agreement, the Manufacturing
Agreement or the Assignment (collectively the
Earlier BSD Covered Agreements )) (the
Purchase Agreement, the License Agreement,
the Manufacturing Agreement, the Assignment
and the Earlier BSD Covered Agreements are
collectively referred to as the Earlier BSD
Agreements ); (b) for that certain promissory
note made by Gregory Konesky in the original
principal amount of Seven Hundred Fifty
Thousand Dollars ($750,000.00), dated
February 9, 1998; and (c) for approximately
Two Hundred Fifty Thousand Dollars
($250,000.00) in cash, BSD has no right,
title or interest in any property or assets
of any kind.
5.6 No Liabilities. Except as
contemplated pursuant to the terms of this
Agreement, any other Covered Agreement to
which BSD is a party, any other Earlier BSD
Agreement or the Convertible Debenture, BSD
has no liabilities or obligations of any
nature, whether known or unknown, absolute,
accrued, contingent or otherwise and whether
due or to become due.
5.7 No Business Operations. BSD was
incorporated on December 20, 1996 and through
the Closing, except for matters relating to
the internal organization of BSD, including,
without limitation, the issuance of the
Convertible Debenture and the issuance of
BSD s issued and outstanding capital stock as
set forth on Schedule 5.3, BSD has not
engaged in any business operations, other
than the negotiation, execution and delivery
of this Agreement, any other Covered
Agreement to which it is a party, the Earlier
BSD Agreements, the Convertible Debenture and
matters related to each of the foregoing.
5.8 Tax Returns. BSD has duly and
timely filed any and all tax returns, filings
and reports (collectively, the BSD Tax
Returns ) required to be filed by it pursuant
to any Applicable Law with any Tax Authority
and all BSD Tax Returns are true, complete
and correct in all material respects and
properly reflect any and all material tax
liabilities of BSD for the periods covered
thereby. BSD has duly and timely paid any
and all: (a) taxes; (b) assessments,
interest, penalties and deficiencies;
(c) fees and charges of any Government
Authority; and (d) duties or impositions of
any Government Authority; which are reflected
as payable on any BSD Tax Returns or claimed
to be due by any Tax Authority. To the best
knowledge of BSD, there is no pending claim
by any Tax Authority in any jurisdiction in
which BSD does not file BSD Tax Returns, that
BSD is or may be subject to taxation by that
jurisdiction. BSD has withheld and paid all
taxes required to have been withheld and paid
by it under Applicable Law in connection with
any amounts paid to any employee or
shareholder.
5.9 Litigation. There is not now
pending and, to the best of BSD s knowledge,
there is not threatened nor is there any
basis for, any claim, demand, litigation,
arbitration, action, suit, inquiry,
investigation or proceeding by or before any
Government Authority to which BSD is or may
be a party, and which: (a) may result in a
material adverse effect, financial or
otherwise, on the condition or prospects of
BSD; (b) may threaten the validity of this
Agreement or any other Covered Agreement to
which it is a party; or (c) seeks to prevent,
or if successful would prevent, BSD from
consummating the transactions contemplated in
this Agreement or any other Covered Agreement
to which it is a party. BSD is not subject
to any judgment, decree, injunction, rule,
decision or order of any Government Authority
having, or which, insofar as can be foreseen
in the future, may have, any material adverse
effect, financial or otherwise, on the
condition or prospects of BSD.
5.10 Consents. There is no Consent
necessary or required in connection with the
valid execution, delivery and performance by
BSD of this Agreement or any other Covered
Agreement to which it is a party, and the
consummation of the transactions contemplated
herein or therein.
5.11 Status of Agreements. Except:
(a) as contemplated pursuant to terms and
conditions of this Agreement, any other
Covered Agreement to which it is a party or
any Earlier BSD Agreements; and (b) any
agreement relating to the internal
organization of BSD, including, without
limitation, the issuance of the Convertible
Debenture and the issuance of BSD s issued
and outstanding capital stock set forth on
Schedule 5.3, as of the Closing, BSD is not a
party to any contract, agreement, commitment,
obligation, plan, lease, policy or license.
5.12 Compliance with Law. BSD has
complied in all material respects with all
Applicable Law relating to BSD, and no claims
have been made to or against BSD by any
Person to the contrary. BSD has received no
notice of any violation of or noncompliance
with any Applicable Law which has not been
cured, which violation or noncompliance would
have a material adverse effect, financial or
otherwise, on the condition or prospects of
BSD.
5.13 Market Price. Neither BSD nor,
to BSD s best knowledge, any of its
stockholders, officers, directors, agents,
employees or Affiliates, has taken or will
take, directly or indirectly, any action
designed to cause or result in or which has
constituted, under the Exchange Act or
otherwise, stabilization or manipulation of
the price of any An-Con security.
5.14 Brokers. No agent, finder,
broker, investment banker or other Person
acting under the authority of BSD is or will
be entitled to any broker s fee or finder s
fee or any other commission or similar fee,
directly or indirectly, from BSD or any
Affiliate of BSD as a result of the
transactions contemplated in this Agreement
or any other Covered Agreement to which it is
a party.
5.15 General Warranty. No
representation or warranty by BSD in this
Agreement or any other Covered Agreement to
which it is a party and no statement
contained in any document, instrument or
certificate furnished to ART or An-Con by BSD
in connection with the transactions
contemplated in this Agreement or any other
Covered Agreement to which it is a party,
contains any untrue statement of a material
fact or omits to state a material fact
necessary to make the statements contained or
incorporated herein or therein not
misleading. There is no fact known to BSD
which BSD has not disclosed to ART and An-Con
which might reasonably be expected to have or
result in a material adverse effect,
financial or otherwise, on the condition or
prospects of BSD or on the ability of BSD to
perform its obligations under this Agreement
or any other Covered Agreement to which it is
a party. All documents, instruments and
certificates delivered by or on behalf of BSD
in connection with this Agreement or any
other Covered Agreement to which it is a
party, and the transactions contemplated
herein and therein, are true, correct and
complete in all material respects.
ARTICLE 6
COVENANTS OF AN-CON
6.1 Deliverables. So long as ART
beneficially owns any An-Con securities, An-
Con shall, at its sole cost and expense,
furnish to ART upon its request, all of the
following:
a. copies of all reports (financial or
other) furnished to An-Con stockholders;
b. copies of all reports and financial
statements furnished to or filed with, the
SEC, the NASDAQ or any securities
exchange; or, in the event that reports
and statements are no longer required to
be so furnished or filed, reports and
statements containing substantially the
same information;
c. copies of every press release and
material news item or article of interest
made available to the financial community
with respect to An-Con or its business or
affairs, which was released or prepared by
or on behalf of An-Con; and
d. such other information concerning An-
Con or its business or affairs which ART,
as a stockholder, licensor or contract
manufacturer, shall reasonably request.
6.2 Transfer Agent/Registrar. So
long as ART beneficially owns any An-Con
securities, An-Con shall, at its sole cost
and or expense, maintain a transfer agent and
a registrar (which may be the same entity as
the transfer agent) for the An-Con Common
Stock.
6.3 Listing. An-Con shall use its
best efforts to have the An-Con Common Stock
approved for inclusion on The NASDAQ Stock
Market and, so long as ART beneficially owns
any An-Con securities, An-Con shall use its
best efforts to maintain such inclusion;
provided, however, that An-Con shall not be
required to undertake a reverse split of the
An-Con Common Stock or any other similar
recapitalization. So long as ART
beneficially owns any An-Con securities, An-
Con shall not de-register any class of its
equity securities registered under Section 12
of the Exchange Act or otherwise attempt to
terminate or suspend its reporting
obligations to the SEC under Sections 13, 14
or 15(d) of the Exchange Act.
6.4 Rule 144 Reporting. So long as
ART beneficially owns any An-Con securities,
An-Con shall, with respect to Rule 144 under
the Securities Act:
a. cause public information with respect
to An-Con to be available, as set forth in
Rule 144 or any comparable rule or
regulation under the Securities Act, at
all times;
b. file with the SEC in a timely manner
all reports and other documents required
of An-Con under the Securities Act, the
Exchange Act or the Rules and Regulations;
and
c. promptly furnish to ART upon request,
a written statement by An-Con as to An-
Con s compliance with the reporting
requirements of Rule 144, the Securities
Act, the Exchange Act and the Rules and
Regulations.
6.5 Proxy Statement. Each document
required to be filed by An-Con with the SEC
in connection with the transactions
contemplated in this Agreement or in any
other Covered Agreement, including, without
limitation, the authorization of the An-Con
Series A Preferred Stock and other matters,
including, without limitation, An-Con s Proxy
Statement to be distributed to its
stockholders in connection with the
stockholders meeting at which the proposal to
issue the An-Con Preferred Stock is to be
considered, and any amendments or supplements
(collectively, the An-Con Disclosure
Documents ) thereto, will comply in all
material respects with the applicable
requirements of the Exchange Act and the
Rules and Regulations and will not contain
any untrue statement of a material fact or
omit to state any material fact required to
be stated therein or necessary in order to
make the statements made therein, in the
light of the circumstances under which they
were made, not misleading.
6.6 Market Price. Neither An-Con
nor any of its employees, directors,
stockholders or Affiliates, will take,
directly or indirectly, any action designed
to cause or result in or which constitutes,
under the Exchange Act or the Rules and
Regulations or otherwise, stabilization or
manipulation of the market price of any An-
Con security.
6.7 Delivery of An-Con Preferred
Stock. On or before September 6, 1998
( Delivery Date ), An-Con shall issue and
deliver to ART Two Million (2,000,000) shares
of An-Con Series A preferred stock, par value
$.001 per share (collectively, the An-Con
Preferred Stock ). When issued and delivered
to ART in accordance with the terms set forth
in this Section 6.7, the An-Con Preferred
Stock will: (a) be duly and validly issued,
fully paid and nonassessable; (b) be free and
clear of any liens or encumbrances of any
kind; (c) have the designations, rights,
limitations, restrictions and preferences set
forth in the An-Con Certificate of Amendment;
and (d) be issued in compliance with all
Applicable Law. Upon receipt of the An-Con
Preferred Stock from An-Con, ART shall
deliver to An-Con, the An-Con Shares, free
and clear of any liens or encumbrances of any
kind created by ART.
6.8 Delivery of Additional Shares
of An-Con Common Stock.
a. Additional An-Con Shares -
In the event An-Con fails for any reason to
deliver the An-Con Preferred Stock to ART as
set forth in Section 6.7, on or before the
Delivery Date, then An-Con shall issue and
deliver to ART, without payment of any
additional consideration by ART, on or before
September 15, 1998 such additional number of
shares of An-Con Common Stock (collectively,
the Additional An-Con Shares ) as shall equal
Five Hundred Thousand Dollars ($500,000.00)
divided by the Fair Market Value (determined
as of a date selected by ART, which date is
no more than Ten (10) business days prior to
the Delivery Date) of a single share of An-
Con Common Stock, and the delivery of the
Additional An-Con Shares by An-Con pursuant
to this Section 6.8a shall release An-Con
from its duty under Section 6.7 to deliver
the An-Con Preferred Stock to ART.
b. Compensatory An-Con Shares
- - In addition to the requirement that An-Con
deliver the Additional An-Con Shares to ART
as set forth in Section 6.8a, in the event
An-Con has issued and delivered the An-Con
Preferred Stock to ART as provided in
Section 6.7 and in the further event An-Con
issues any shares of any series or class of
its preferred stock having substantially the
same rights and preferences as the An-Con
Preferred Stock ( Equal Preferred Shares )
without obtaining ART s prior written consent
to such issuance, which consent may be
withheld for any reason or no reason, then
An-Con shall deliver to ART, without payment
of any additional consideration by ART, no
later than contemporaneously with the
issuance of such Equal Preferred Shares
( Compensatory An-Con Shares Delivery Date ),
such additional number of shares of An-Con
Common Stock (collectively, the Compensatory
An-Con Shares ) as shall equal Five Hundred
Thousand Dollars ($500,000.00) divided by the
Fair Market Value (determined as of a date
selected by ART, which date is no more than
Ten (10) business days prior to the
Compensatory An-Con Shares Delivery Date of a
single share of An-Con Common Stock;
provided, however, An-Con s obligation to
deliver the Compensatory An-Con Shares shall
apply only with respect to the first issuance
of any Equal Preferred Shares.
c. Valid Issuance - When
issued and delivered to ART in accordance
with the terms set forth in this Section 6.8,
the Additional An-Con Shares and the
Compensatory An-Con Shares, as the case may
be, will: (a) be duly and validly issued,
fully paid and nonassessable; (b) be free and
clear of any liens or encumbrances of any
kind; and (c) be issued in compliance with
all Applicable Law.
6.9 Equitable Remedies. An-Con
acknowledges and agrees that in the event of
a breach or threatened breach by An-Con of
any covenant contained in this Article 6,
irreparable harm will result to ART for which
there is no adequate remedy at law, and An-
Con agrees that in the event of any such
breach or threatened breach, ART shall have
the right, in addition to all other
applicable remedies, to specific performance
of the terms of Article 6 and immediate
injunctive relief restraining An-Con from
activity constituting such breach or
threatened breach. ART shall also be
reimbursed by An-Con for any and all costs
incurred by ART in enforcing any provisions
of this Article 6, including, without
limitation, reasonable attorneys fees and
costs. Nothing herein shall be construed as
prohibiting ART from pursuing any other
remedies available to it for breach or
threatened breach of this Agreement,
including, without limitation, the recovery
of damages from An-Con.
6.10 Board of Director Designee.
Commencing on the Closing Date and continuing
for so long as ART shall retain the
beneficial ownership (as defined in Rule 13d-
3 under the Exchange Act) of at least Five
Percent (5%) of any class of An-Con s equity
securities, ART shall be entitled to
designate, and An-Con shall use its best
efforts to cause the election of, One (1)
member of An-Con s Board of Directors ( ART
Designee ), which ART Designee shall be Keith
A. Blakely. In the event that Mr. Blakely,
in his sole determination, is either unable
or unwilling to serve as a member of An-Con s
Board of Directors, ART shall be entitled,
and An-Con shall use its best efforts to
enable ART, to designate a single individual
( ART Observer ) who will be entitled to
attend and observe, but who shall not be
entitled to vote, at all meetings of An-Con s
Board of Directors. An-Con shall provide ART
copies of: (a) minutes of all meetings of
the Board of Directors; (b) notices of all
meetings of the Board of Directors; and (c)
all other consents, reports, correspondence
and similar documents relating to the
activities of An-Con s Board of Directors,
which shall be sent to ART at the same time
and in the same manner as such documents are
generally made available to the other members
of An-Con s Board of Directors.
6.11 Legend. An-Con agrees that it
shall not remove or authorize the removal of
the restrictive legend set forth in Section
3.10B from the certificate representing the
An-Con Shares without: (a) evidence
reasonably satisfactory to An-Con that ART s
obligations pursuant to that certain Profit-
Sharing Agreement by and among ART, the Eric
Rainer Bashford Charitable Remainder Unitrust
( Bashford ) and the Norman P. Fuchs
Individual Retirement Account ( Fuchs ), dated
February 9, 1998, have been satisfied; or
(b) the prior consent of Bashford and Fuchs,
which consent shall not be unreasonably
withheld or delayed.
ARTICLE 7
INDEMNIFICATION
7.1 By ART. ART agrees to
indemnify, defend and hold harmless, BSD and
its Affiliates, and their respective
directors, officers, employees, stockholders
and agents (collectively, the BSD
Indemnitees ) and An-Con and its Affiliates,
directors, officers, employees, stockholders
and agents (collectively, the An-Con
Indemnitees ), both jointly and severally,
with respect to the aggregate of any and all
Section 7.1 Indemnifiable Damages . For
purposes of this Agreement, Section 7.1
Indemnifiable Damages shall mean the
aggregate of all claims, losses, costs,
judgments, deficiencies, penalties,
obligations, liabilities, damages, fines and
expenses, including, without limitation,
reasonable attorneys fees and disbursements
(collectively, the Claims ), whether or not
any of the Claims result from third party
claims or result from the assertion of any of
BSD s rights hereunder or any of An-Con s
rights hereunder, as the case may be,
incurred or suffered by any BSD Indemnitees
or any An-Con Indemnitees, as the case may
be, directly or indirectly, arising out of or
relating to:
a. any breach of or default in the
observance or performance of any agreement
made by ART in this Agreement or any other
Covered Agreement to which it is a party,
or the failure of ART to fulfill any other
obligation which it is required to perform
or observe in this Agreement or any other
Covered Agreement to which it is a party;
b. any inaccuracy in any, breach of any,
or false or fraudulent, representation or
warranty made by ART in this Agreement or
any other Covered Agreement to which it is
a party; or
c. the investigation or defense of any
Claim which is made or brought against any
BSD Indemnitee or An-Con Indemnitee, as
the case may be, relating to any of the
Section 7.1 Indemnifiable Damages.
7.2 By An-Con. An-Con agrees to indemnify,
defend and hold harmless, ART and its
Affiliates, and their respective directors,
officers, employees, shareholders and agents
(collectively, the ART Indemnitees ) and the
BSD Indemnitees, both jointly and severally,
with respect to the aggregate of all Section
7.2 Indemnifiable Damages . For purposes of
this Agreement, Section 7.2 Indemnifiable
Damages shall mean the aggregate of all
Claims, whether or not any of the Claims
result from third party claims or result from
the assertion of any of ART s rights
hereunder or any of BSD s rights hereunder,
as the case may be, incurred or suffered by
any ART Indemnitees or any BSD Indemnitees,
as the case may be, directly or indirectly,
arising out of or relating to:
a. any breach of or default in the
observance or performance of any agreement
made by An-Con in this Agreement or any
other Covered Agreement to which it is a
party, or the failure of An-Con to fulfill
any other obligation which it is required
to perform or observe in this Agreement or
any other Covered Agreement to which it is
a party;
b. any inaccuracy in any, breach of any,
or false or fraudulent, representation or
warranty made by An-Con in this Agreement
or any other Covered Agreement to which it
is a party; or
c. the investigation or defense of any
Claim which is made or brought against any
ART Indemnitee or any BSD Indemnitee, as
the case may be, relating to any of the
Section 7.2 Indemnifiable Damages.
7.3 By BSD. BSD agrees to indemnify,
defend and hold harmless, the ART Indemnitees
and the An-Con Indemnitees, both jointly and
severally, with respect to the aggregate of
all Section 7.3 Indemnifiable Damages . For
purposes of this Agreement, Section 7.3
Indemnifiable Damages shall mean the
aggregate of all Claims, whether or not any
of the Claims result from third party claims
or result from the assertion of any of ART s
rights hereunder or any of An-Con s rights
hereunder, as the case may be, incurred or
suffered by any ART Indemnitees or any An-Con
Indemnitees, as the case may be, directly or
indirectly, arising out of or relating to:
a. any breach of or default in the
observance or performance of any agreement
made by BSD in this Agreement or any other
Covered Agreement to which it is a party,
or the failure of BSD to fulfill any other
obligation which it is required to perform
or observe in this Agreement or any other
Covered Agreement to which it is a party;
b. any inaccuracy in any, breach of any,
or false or fraudulent, representation or
warranty made by BSD in this Agreement or
any other Covered Agreement to which it is
a party; or
c. the investigation or defense of any
Claim which is made or brought against any
ART Indemnitee or any An-Con Indemnitee,
as the case may be, relating to any of the
Section 7.3 Indemnifiable Damages.
7.4 Rules Regarding
Indemnification. The obligations and
liabilities of each Party which may be
subject to indemnification liability under
Section 7.1, Section 7.2 or Section 7.3
( Indemnifying Party ) to the BSD Indemnitees,
the An-Con Indemnitees and/or the ART
Indemnitees, as the case may be ( Indemnified
Party ), shall be subject to the following
terms and conditions:
a. Claims by Non-Parties -
After receipt by an Indemnified Party of
notice of the commencement of any proceeding
against it by a third party which is likely
to give rise to Section 7.1 Indemnifiable
Damages, Section 7.2 Indemnifiable Damages or
Section 7.3 Indemnifiable Damages, as the
case may be, the Indemnified Party shall give
prompt written notice ( Notice of Third Party
Claim ) to the Indemnifying Party stating the
nature of such Claim, the amount thereof and
a brief description of the facts and
circumstances relating thereto, to the extent
known. The Notice of Third Party Claim shall
contain or be accompanied by all reasonably
appropriate documentation relating to the
circumstances giving rise to the Claim,
including, without limitation, a copy of all
pleadings and other papers served, if any.
The failure of an Indemnified Party to give
such Notice of Third Party Claim to the
Indemnifying Party or delay in giving such
Notice of Third Party Claim, will not affect
the validity or amount of the Claim and the
indemnification obligations of the
Indemnifying Party will remain in effect as
to such Claim, unless such failure or delay
prejudices the Indemnifying Party s defense
of such Claim, in which case the Indemnifying
Party will be relieved of its indemnification
obligations to the extent that it has been so
prejudiced. If within Thirty (30) days after
receiving such Notice of Third Party Claim,
the Indemnifying Party advises the
Indemnified Party that it will provide
indemnification and assume the defense at its
expense, then so long as such defense is
being conducted, the Indemnified Party shall
not settle or admit liability with respect to
the Claim and shall provide the Indemnifying
Party and defending counsel reasonable
assistance in defending against the Claim.
If the Indemnifying Party assumes a defense,
counsel shall be selected by such
Indemnifying Party, which counsel shall be
reasonably acceptable to the Indemnified
Party, and if the Indemnified Party then
retains its own counsel, it shall do so at
its own expense, and the Indemnifying Party
shall have the right to settle the Claim with
the consent of the Indemnified Party, which
consent shall not be unreasonably withheld or
delayed. If the Indemnified Party does not
receive a written notice of assumption of the
defense as hereinabove provided from the
Indemnifying Party within Thirty (30) days
after the Indemnifying Party s receipt of
such Notice of Third Party Claim, the
Indemnifying Party will be bound by any
determination made in such proceeding or any
compromise or settlement affected by the
Indemnified Party, and the Indemnified Party
thereafter may control the defense of such
proceeding and, in its sole discretion,
settle or admit liability.
b. Claims by a Party - The
determination of a Claim asserted by one or
more of the BSD Indemnitees, the An-Con
Indemnitees or the ART Indemnitees, as the
case may be, hereunder (other than as set
forth in Section 7.4a) shall be made as
follows: the Indemnified Party shall give
prompt written notice to the Indemnifying
Party of any Claim by the Indemnified Party
which has not been made pursuant to Section
7.4a, stating the nature of such Claim, the
amount thereof and a brief description of the
facts and circumstances relating thereto, to
the extent known. If the Indemnified Party
does not receive a written objection to the
notice from the Indemnifying Party within
Thirty (30) days after the Indemnifying
Party s receipt of such notice, the Claim
shall be conclusively presumed to be a
liability of the Indemnifying Party in an
amount equal to such Claim. If within the
aforesaid Thirty (30) day period the
Indemnified Party shall have received written
objection to the notice (which written
objection shall briefly describe the basis of
the objection to the notice or the amount
thereof, all in good faith), then for a
period of Sixty (60) days after the receipt
of such objection, the Parties shall attempt
to settle the disputed Claim as between the
Indemnified Party and Indemnifying Party. If
the Parties are unable to settle the disputed
Claim, either Party may submit the dispute to
arbitration as provided in Section 8.4.
ARTICLE 8
MISCELLANEOUS
8.1 Survivability. Notwithstanding
anything contained herein to the contrary,
all representations, warranties and
agreements set forth in this Agreement shall
survive and continue to bind the Parties
after the execution and delivery of this
Agreement and all other Covered Agreements,
the termination or expiration of this
Agreement and all other Covered Agreements,
and any investigation conducted by any Party,
to the extent and for as long as may be
necessary to give effect to the rights,
duties and obligations of the Parties
pursuant to this Agreement, subject to any
applicable statutes of limitations.
8.2 Law. This Agreement shall be
governed by and construed in accordance with
the laws of the state of New York, without
reference to principles of conflicts of laws.
8.3 Notices. All notices required
or permitted hereunder shall be in writing
and shall be: (a) sent by telex or facsimile
transmission (to be effective when receipt is
acknowledged unless sent after 5:00 p.m. on
any business day, in which event notice shall
be deemed received on the next business day);
(b) personally delivered; (c) sent by
certified mail, return receipt requested; or
(d) sent by a nationally recognized,
commercial overnight delivery service with
provisions for a receipt, postage or delivery
charges prepaid and, except as otherwise
provided in Section 8.3(a), shall be deemed
given when personally delivered or when
placed in the possession of such mail or
delivery service, and addressed to the
Parties, as follows:
To An-Con:
An-Con
Genetics, Inc.
734 Walt Whitman Road
Suite 207
Melville, New York 11747
Attn.: Andrew Makrides, President
Facsimile: (516) 421-5821
with a copy to:
Alfred V. Greco P.C.
666 Fifth Avenue
14th Floor
New York, New York 10103
Attn.: Alfred V. Greco, Esq.
Facsimile: (212) 582-0176
To ART:
Advanced Refractory Technologies, Inc.
699 Hertel Avenue
Buffalo, New York 14207
Attn.: Keith A. Blakely, President
Facsimile: 716-875-3746
with a copy to:
Damon & Morey LLP
1000 Cathedral Place
298 Main Street
Buffalo, New York 14202-4096
Attn.: Gust P. Pullman, Esq.
Facsimile: 716-856-5521
To BSD:
BSD Development Beta Corporation
1313 N. Market Street
Wilmington, Delaware 19801-1151
Attn: Mr. Eric R. Bashford & Mr. Norman P.
Fuchs
Facsimile: 212-889-7577
with a copy to:
Herrick, Feinstein LLP
Two Park Avenue
New York, New York 10016
Attn: Irwin A. Kishner, Esq.
Facsimile: 212-889-7577
Notice of change of address shall be given in
accordance with the provisions of this
Section 8.3 and shall be effective only upon
receipt.
8.4 Arbitration. Any controversy
or claim arising out of or pursuant to this
Agreement shall be submitted to final and
binding arbitration conducted in accordance
with the expedited Commercial Arbitration
Rules of the American Arbitration Association
( Rules ) by One (1) arbitrator appointed in
accordance with this Agreement and the Rules.
The seat of the arbitration shall be in
Albany, New York. Judgment upon any award
rendered in such arbitration may be entered
in any court of competent jurisdiction. This
Section shall not limit any Party s right to
obtain any provisional or equitable remedy,
including, without limitation, injunctive
relief from any court of competent
jurisdiction, as may be necessary in the sole
judgment of such Party to protect its rights
hereunder.
8.5 Expenses. The nonprevailing
Party or Parties in any arbitration or
litigation hereunder shall be required to
reimburse the prevailing Party or Parties for
all of its reasonable costs and expenses in
such arbitration or litigation, including,
without limitation, attorneys fees and
costs.
8.6 Parties Bound. This Agreement
shall be binding upon and shall inure to the
benefit of each Party and its respective
successors and permitted assigns, subject to
the restrictions against assignment provided
in Section 8.9.
8.7 Waiver. Failure by any Party
to insist upon strict performance of any
provision herein by any other Party shall not
be deemed a waiver by such Party of its
rights or remedies or a waiver by it of any
subsequent default by such other Party, and
no waiver shall be effective unless it is in
writing and duly executed by the Party
entitled to enforce the provision being
waived. No representation or warranty by any
Party herein shall be affected or deemed
waived by reason of any investigation made by
or on behalf of any other Party, including,
without limitation, any investigation made by
any of such other Party s representatives or
its advisors, attorneys and accountants
(collectively, the Representatives ) or by
reason of the fact that such other Party or
any of its Representatives knew or should
have known that any such representation or
warranty is or may be inaccurate.
8.8 Severability. If any provision
of this Agreement is determined by a court of
competent jurisdiction or an arbitrator to be
illegal or unenforceable, the Parties shall
use reasonable efforts to negotiate a legal
and enforceable provision reflecting the
legal and economic substance of such illegal
or unenforceable provision as closely as
possible. The invalidity of any part of this
Agreement shall not render invalid the
remainder of this Agreement.
8.9 Assignability. No Party shall
have the right to assign any of its rights,
duties or obligations hereunder without the
prior written consent of the other Parties,
which consent shall not be unreasonably
withheld or delayed; provided, however, that
ART, upon prior written notice to the other
Parties, shall have the right to: (a)
transfer and assign the An-Con Shares, the
An-Con Preferred Stock, the Additional An-Con
Shares, the Compensatory An-Con Shares and
the An-Con Conversion Shares to any Affiliate
of ART; and (b) assign its rights, duties and
obligations under this Agreement to any
Affiliate of ART which consents in writing to
be bound by the terms and conditions of this
Agreement. No assignment of any rights,
duties or obligations under this Agreement
relieves the assigning Party of primary
liability for its duties or obligations under
this Agreement, and as among the Parties, the
assigning Party shall continue to be liable
for all of its duties or obligations under
this Agreement as though no assignment has
been made.
8.10 Entire Agreement. This Agreement and
the other Covered Agreements constitute the
entire agreement by and among the Parties
regarding the subject matter contained herein
and supersede all prior and contemporaneous
undertakings and agreements by and among the
Parties, whether written or oral, with
respect to such subject matter.
8.11 Amendment. This Agreement may
not be amended except by a writing executed
by all Parties.
8.12 Cooperation. Each Party
agrees to take all such steps, execute and
deliver such further documents and perform
such acts as may be reasonably requested by
any other Party in order to effectuate the
purposes of this Agreement.
8.13 Counterparts. This Agreement
may be executed simultaneously in Two (2) or
more counterparts, any of which shall be
deemed an original, and all of which together
shall constitute one and the same instrument,
notwithstanding that all Parties are not a
signatory to the original or the same
counterpart.
8.14 Headings. The headings used
herein are inserted for convenience only and
are in no way intended to describe,
interpret, define or limit the scope, extent
or intent of this Agreement.
8.15 Confidentiality.
a. Confidential Information -
For purposes of this Agreement, Confidential
Information shall mean any and all data or
information which is regarded as confidential
and/or proprietary by a Party and which is
disclosed by such Party ( Disclosing Party )
to any other Party ( Receiving Party ) in
connection with this Agreement or any other
Covered Agreement. Confidential Information
includes, without limitation, data, formulas,
compositions, processes, descriptions, plans,
specifications, reports, studies, findings,
inventions, discoveries, innovations,
developments, improvements, modifications,
refinements, concepts, ideas, products,
product designs, business records, customer
information, pricing information, financial
information, costs, supply information,
licenses, patent applications, trade secrets,
copyrights, know-how, techniques, testing and
other methods, marketing/sales strategies and
plans and any other intellectual property
rights of any kind, whether or not patentable
or copyrightable. Confidential Information
also includes, without limitation, any and
all forms, sketches, graphs, equipment,
drawings, photographs, designs, formulations,
flowsheets, descriptions, data, samples and
other tangible materials, as well as any and
all observations, oral disclosures and any
other information (in whatever form) which
may be perceived, reproduced, transmitted or
communicated, as well as all analyses,
computations, data, studies, reports (oral
and written), and other documents and oral or
written disclosures prepared by the
Disclosing Party pertaining to, based on or
containing such Confidential Information,
whether or not patentable or copyrightable.
Confidential Information
shall not include information which: (1)
upon disclosure is generally known to the
public or after disclosure becomes generally
known to the public through no act or failure
to act on the part of the Receiving Party.
To the extent that Confidential Information
consists of a combination of elements
individually generally known to the public,
this exclusion shall not apply if such
elements are not generally known to the
public in said combination; (2) is known by
the Receiving Party prior to the date of
disclosure by the Disclosing Party. To the
extent that Confidential Information consists
of a combination of elements individually
known to the Receiving Party, this exclusion
shall not apply if the Receiving Party did
not know such elements in said combination
prior to the date of disclosure; (3) was or
is rightfully furnished to the Receiving
Party by a third party without breaching any
agreement, understanding or confidential
relationship with the Disclosing Party; or
(4) was or is independently developed by the
Receiving Party prior to or after the time of
disclosure without any breach of this
Agreement. To the extent that Confidential
Information consists of a combination of
elements which are individually independently
developed by the Receiving Party, this
exclusion shall not apply if the Receiving
Party did not independently develop such
elements in said combination; or (5) is
required to be disclosed by the Receiving
Party by judicial action pursuant to an order
of a Government Authority having jurisdiction
thereof. Prior to making any disclosure
required pursuant to an order of any
Government Authority having appropriate
jurisdiction, the Receiving Party, unless
precluded by Applicable Law from doing so,
will give notice to the Disclosing Party of
the impending disclosure, so that the
Disclosing Party may seek a protective order
or other appropriate order with respect
thereto.
b. Purpose - The purpose of
the disclosure of Confidential Information
hereunder is for purposes of enabling the
Parties to exercise their respective rights
and perform their respective obligations
hereunder and under any other Covered
Agreement, as the case may be.
c. Duty - Each Party agrees
that it shall: (1) except as otherwise
provided in Section 8.20, take all steps as
may be necessary or appropriate to protect
the confidential nature of this Agreement;
(2) except as otherwise provided in Section
8.20, not publish or disclose any terms or
conditions contained in this Agreement or any
other Covered Agreement, as the case may be
(except to the extent required for the
exercise of its rights under this Agreement
or any other Covered Agreement, as the case
may be); (3) maintain the Disclosing Party s
Confidential Information in strict secrecy by
using the same degree of care as the
Receiving Party uses for maintaining the
confidentiality of its own confidential
information (which in no event shall be less
than reasonable care); (4) not publish or
disclose the Disclosing Party s Confidential
Information in any manner or form to any
third party, except as expressly provided in
Section 8.15b and Section 8.15d; and (5) not,
without the prior written consent of the
Disclosing Party, use the Disclosing Party s
Confidential Information, except as otherwise
expressly permitted herein.
d. Permitted Disclosure - The
Disclosing Party s Confidential Information
shall only be disclosed by the Receiving
Party to its officers, directors,
shareholders and employees and to its
Representatives (as hereinafter defined) who
have a need to know and who have
confidentiality obligations to the Receiving
Party, and then only to the extent necessary
for the purpose of enabling such individuals
to perform their assigned tasks with respect
to assisting the Receiving Party in
consummating the transactions contemplated in
this Agreement or any other Covered
Agreement, as the case may be. The Receiving
Party shall inform all such individuals of
the confidential nature of the Disclosing
Party s Confidential Information.
e. Ownership - Disclosure of
Confidential Information shall not be
construed as granting to the Receiving Party,
either expressly or by implication, any
right, title or interest of any kind in any
Confidential Information. All Confidential
Information and all copies thereof
(including, without limitation, all materials
containing or embodying any Confidential
Information are and shall remain the sole
property of the Disclosing Party, and upon
the written request of the Disclosing Party,
shall be returned by the Receiving Party.
f. Filing of Covered
Agreements - Prior to filing (as required
under Applicable Law) this Agreement, any of
the Covered Agreements or any of the Earlier
BSD Agreements with any Government Authority,
including, without limitation, the SEC, An-
Con and BSD shall each request, and use its
respective best efforts to obtain,
confidential treatment for any Confidential
Information.
8.16 Third Parties. Nothing herein
expressed or implied is intended or shall be
construed to confer upon or give any Person
other than the Parties and their respective
successors and permitted assigns, any right
or remedy under or by reason of this
Agreement.
8.17 Transaction Expenses. Each
Party shall pay its own fees, costs and
expenses and those of its Representatives
with respect to the transaction contemplated
in this Agreement and with respect to the
Closing.
8.18 Transfer Taxes. An-Con shall
timely pay any and all transfer taxes, stamp
taxes and any other similar taxes, fees or
charges levied or imposed on ART, BSD or An-
Con by any Government Authority pursuant to
Applicable Law arising from or relating to
the acquisition of the BSD Shares hereunder
by An-Con.
8.19 Force Majeure. Performance by
any Party of any obligation hereunder shall
be excused if and for so long as such breach
or failure to perform is caused by a Force
Majeure, and prompt notice thereof has been
given to the other Parties. If a Party fails
to perform any obligation hereunder as a
result of a Force Majeure, said Party shall
be required to fulfill its obligations
hereunder within a reasonable time after the
Force Majeure ceases to exist.
8.20 No Public Statements. Without
the prior consent of the other Parties, which
consent shall not be unreasonably withheld or
delayed, after the Closing, no Party shall
disclose to the press or news media the
existence of or terms of this Agreement,
except as otherwise required by Applicable
Law; provided, however, subject to Section
8.15, BSD and its Affiliates, including,
without limitation, BSD s stockholders,
officers and directors as of the Closing, and
their respective agents, shall have the right
to disclose the general nature of the
transactions contemplated in this Agreement
and the Earlier BSD Agreements, but only in
connection with the sale or other disposition
of any An-Con equity securities owned by BSD
or any Affiliate of BSD, including, without
limitation, BSD s stockholders, officers and
directors as of the Closing; provided,
however, under no circumstances pursuant to
such disclosure shall any such party have the
right to disclose any Confidential
Information of ART.
8.21 Cumulative Rights and Remedies. The
rights and remedies of the Parties under this
Agreement shall be in addition to and
cumulative of, and not in lieu or exclusive
of, any other rights or remedies of the
Parties pursuant to this Agreement, at law or
in equity, except that the arbitration remedy
set forth in Section 8.4 is exclusive to the
extent provided therein. The rights and
remedies of any Party based upon, arising out
of or otherwise in respect of, any inaccuracy
in or breach of, any representation, warranty
or agreement of any other Party or failure to
fulfill any condition shall in no way be
limited by the fact that the act, omission,
occurrence or other statement of facts upon
which any claim for such inaccuracy or breach
is based may also be the subject matter of
any other representation, warranty or
agreement as to which there is no inaccuracy
or breach.
Lace-Up. ART shall not sell or otherwise
dispose (other than by a pledge or a grant of
a lien or security interest) of any An-Con
Shares, An-Con Preferred Stock, Additional
An-Con Shares, Compensatory An-Con Shares or
An-Con Conversion Shares to a third person
other than an Affiliate of ART prior to
December 31, 1998, without the prior written
consent of An-Con; provided, however, the
foregoing restriction shall not apply to a
sale or other disposition of any such shares
made pursuant to the Registration Rights
Agreement.
THE NEXT PAGE IS THE SIGNATURE PAGE<PAGE>
IN WITNESS WHEREOF, the Parties have caused
this Stock Exchange Agreement to be signed by
their duly authorized officers on the day and
year first above written.
AN-CON GENETICS, INC.
By:
Authorized Officer
ADVANCED REFRACTORY TECHNOLOGIES,
INC.
By:
Authorized Officer
BSD DEVELOPMENT BETA CORPORATION
By:
Authorized Officer
<PAGE>
EXHIBIT A
REGISTRATION RIGHTS AGREEMENT
<PAGE>
EXHIBIT B
AN-CON CERTIFICATE OF AMENDMENT
<PAGE>
EXHIBIT C
BSD CERTIFICATE OF AMENDMENT
<PAGE>
SCHEDULE 4.1
STANDING
1. Aaron Medical Industries, Inc.<PAGE>
SCHEDULE 4.3
AN-CON CAPITALIZATION
A. (i) Authorized Capitalization:
15,000,000 shares of common
stock having a par value of
$.001 (per share) ( An-Con
Common Stock ).
(ii) Common Stock Outstanding: As
of February 6, 1998, there
were a total of 8,342,097
shares of An-Con Common Stock
outstanding.
B. Warrants and Options: An-Con has
issued options to purchase shares of
An-Con Common Stock pursuant to
certain stock option plans ( Employee
Stock Options ), which Employee
Stock Options have been granted to
employees, consultants and advisors.
The outstanding Employee Stock
Options represent the rights to
acquire no more than Two Million
Four Hundred Thousand (2,400,000)
shares of An-Con Common Stock in the
aggregate. An-Con agrees to provide
ART and BSD a detailed list of the
Employee Stock Options as of the
Closing, within Thirty (30) days
after the Closing.
C. No holder of any securities of An-
Con or of any option, warrant or
other right to acquire any
securities of An-Con has the right
to include any securities issued by
An-Con in any registration statement
to be filed by An-Con, or to require
An-Con to file a registration
statement, under the Securities Act.
D. A complete list of the record and
beneficial holders of 5% or more of
the outstanding shares of An-Con
Common Stock are as follows: Andrew
Makrides, Tsang Yang Tseng, Robert
Speiser and J. Robert Saron.
<PAGE>
SCHEDULE 4.5
TITLE
An-Con to provide the contents of
this Schedule 4.5 to ART and BSD within
Thirty (30) days following the Closing.<PAGE>
SCHEDULE 4.7
NO UNDISCLOSED LIABILITIES
None.<PAGE>
SCHEDULE 4.8
ABSENCE OF CERTAIN CHANGES
None.
<PAGE>
SCHEDULE 4.10
LITIGATION
None.<PAGE>
SCHEDULE 4.15
CONTRACTS
1. Section 4.15b - An-Con to provide
the contents of this Schedule 4.15
to ART and BSD within Thirty (30)
days following the Closing.
<PAGE>
SCHEDULE 4.17
INTELLECTUAL PROPERTY
An-Con to provide the contents of
this Schedule 4.17 to ART and BSD within
Thirty (30) days following the Closing.<PAGE>
SCHEDULE 4.18
ENVIRONMENTAL PROTECTION
An-Con is in title to real property
utilized as a manufacturing facility located
at 7100 30th Avenue North, St. Petersburg,
Florida (the Property ). An-Con obtained a
guarantee as part of its acquisition of the
Property that environmental contamination
identified by a Remedial Action Plan ( RAP )
approved by the Florida Department of
Environmental Protection ( DEP ) would be
remediated at the sole cost and expense of
the former owner. The remedial activity
( Environmental Work ) required by the RAP was
approved by DEP in January of 1996. The
former owner of the Property has engaged Geo-
Ambient of St. Petersburg, Florida to perform
the Environmental Work which was
substantially completed as of the Closing.
Satisfaction of the guarantee provided by the
former owner to An-Con is to be evidenced by
the delivery of a Site Completion
Rehabilitation Order ( SCRO ) or equivalent
documentation issued by DEP approving the
Environmental Work required by the RAP.<PAGE>
SCHEDULE 5.3
CAPITALIZATION
1. Common Stock -
(a) One Hundred Twelve and
One-Half (112.5) shares
- Eric Rainer Bashford
Charitable Remainder
Unitrust.
(2) One Hundred Twelve and
One-Half (112.5) shares
- Norman P. Fuchs
Individual Retirement
Account.
2. Convertible Debenture - Gregory
Konesky is the holder of a BSD
convertible debenture in the
original principal amount of Seven
Hundred Fifty Thousand Dollars
($750,000.00), dated February 9,
1998, which debenture is convertible
into Seventy-Five (75) shares of BSD
Common Stock.
<PAGE>
EXHIBIT B
PROFIT-SHARING AGREEMENT
<PAGE>
PROFIT-SHARING AGREEMENT
THIS PROFIT-SHARING AGREEMENT
( Agreement ) is made this 9th day of
February, 1998 by and among ADVANCED
REFRACTORY TECHNOLOGIES, INC., a corporation
duly organized and existing under the laws of
the State of New York, having its principal
office at 699 Hertel Avenue, Buffalo, New
York ( ART ), the ERIC RAINER BASHFORD
CHARITABLE REMAINDER UNITRUST, a trust duly
organized and existing under the laws of the
State of New York, having its principal
office at 2689 Strang Boulevard, Yorktown
Heights, New York ( Bashford ) and the NORMAN
P. FUCHS INDIVIDUAL RETIREMENT ACCOUNT, an
individual retirement account, having its
principal office at 5 Flagpole Lane, East
Setauket, New York ( Fuchs ). (Bashford and
Fuchs are collectively referred to herein as
the Principals .)
WHEREAS, pursuant to that certain
Stock Exchange Agreement by and among ART,
An-Con Genetics, Inc. ( An-Con ) and BSD
Development Beta Corporation ( BSD ), dated
February 9, 1998 ( Stock Exchange Agreement ),
in exchange for One Thousand (1,000) shares
of Class A preferred stock of BSD, par value
$.01 per share, An-Con issued and delivered
to ART Two Million (2,000,000) shares of
common stock of An-Con, par value $.001 per
share (collectively, the An-Con Shares );
WHEREAS, pursuant to Section 6.7 of
the Stock Exchange Agreement, An-Con has
agreed to issue and deliver to ART on or
before September 6, 1998, Two Million
(2,000,000) shares of An-Con Class A
preferred stock, par value $.001 per share
(collectively, the An-Con Preferred Stock );
WHEREAS the An-Con Preferred Stock
is to be convertible into Two Million
(2,000,000) shares of common stock of An-Con,
par value $.001 per share (collectively, the
An-Con Conversion Shares ); and
WHEREAS, subject to the terms
hereof, and in consideration for, inter alia,
certain substantial financial risks assumed
by the Principals, ART desires to grant to
the Principals a right to share in the
potential profits, if any, realized by ART
upon the sale or other disposition (other
than a pledge or a grant of a lien or
security interest), of the An-Con Shares, the
An-Con Preferred Stock or the An-Con
Conversion Shares, as the case may be, to a
third Person other than an Affiliate of ART.
(The An-Con Shares, the An-Con Preferred
Stock and the An-Con Conversion Shares are
sometimes hereinafter referred to
individually as a Share and collectively as
the Shares ).
NOW, THEREFORE, for good and
valuable consideration, the receipt and
sufficiency of which are hereby acknowledged,
the parties hereto (each individually, a
Party ; collectively, the Parties ) hereby
agree as follows:
ARTICLE 1
DEFINITIONS
1.1 Definitions. For purposes of
this Agreement, the following terms shall
have the respective meanings set forth below:
a. Affiliate of a Party means
any Person (as hereinafter defined) which
Controls (as hereinafter defined), is
Controlled by, or is under common Control
with, such Party.
b. Applicable Law means any
and all applicable laws, rules, regulations,
statutes, orders and ordinances of any
Government Authority (as hereinafter
defined).
c. Consent means any consent,
certificate, approval, authorization, waiver,
permit, grant, franchise, concession,
agreement, license, exemption or order of,
registration, declaration or filing with, or
report, filing, registration or notice to,
any Person, including, without limitation,
any Government Authority.
d. Control means the
possession, directly or indirectly, of the
power to direct or cause the direction of
management or policies of a Person, whether
through the ownership of voting securities,
by contract or otherwise.
e. Government Authority means
any foreign, federal, state, local or other
government, government agency or authority or
quasi-governmental body, or any entity
exercising any executive, legislative,
judicial, regulatory or administrative
functions of or pertaining to government,
including, without limitation, any arbitrator
and any government department, board,
commission, court or tribunal.
f. Fair Market Value for
shares of common stock of An-Con, par value
$.001 per share ( An-Con Common Stock ) as of
a particular date means the closing sale
price for One (1) share of An-Con Common
Stock as reported on the primary securities
exchange on which such shares are listed or,
in the event shares of An-Con Common Stock
are not listed on any securities exchange,
the last reported sale price on the NASDAQ
National Market System ( NASDAQ/NMS ) or, in
the event no such reported sale takes place
on the day subject to determination of the
Fair Market Value, the average of the
reported closing bid and asked prices on such
securities exchange or NASDAQ/NMS, or, in the
event shares of An-Con Common Stock are not
listed on any securities exchange or quoted
on the NASDAQ/NMS, the average of the bid and
asked prices for the immediately preceding
Forty-Five (45) days as quoted on the NASDAQ
Small Cap Market, or in the event shares of
An-Con Common Stock are not quoted on the
NASDAQ Small Cap Market, the average of the
bona fide independent bid prices for the
immediately preceding Forty-Five (45) days as
reported in the NASDAQ Bulletin Board, or in
the event shares of An-Con Common Stock are
not reported in the NASDAQ Bulletin Board,
the average of the bona fide independent bid
prices for the immediately preceding Forty-
Five (45) days reported in the over-the-
counter market in the pink sheets published
by the National Quotation Bureau, Inc., or in
the event shares of An-Con Common Stock are
not so listed, quoted or included, the fair
market value as established by the good faith
determination of any nationally recognized
firm of certified public accountants selected
by ART and reasonably acceptable to the
Principals. The Fair Market Value of the An-
Con Preferred Stock shall equal the Fair
Market Value of the applicable number of
shares of An-Con Common Stock into which the
An-Con Preferred Stock is convertible.
g. Person means any
individual, proprietorship, joint venture,
corporation, partnership, limited liability
company, limited liability partnership,
trust, unincorporated organization or
Government Authority.
ARTICLE 2
PROFIT-SHARING ARRANGEMENT
2.1 Calculation. During the Term
(as hereinafter defined), in the event ART
receives cash in good funds (collectively,
the Proceeds ) as a result of: (a) the sale
or other disposition (other than a pledge or
a grant of a lien or security interest) of
all or any portion of the An-Con Shares, the
An-Con Preferred Stock or the An-Con
Conversion Shares to a third Person other
than an Affiliate of ART; (b) the sale or
other disposition (other than a pledge or a
grant of a lien or security interest) of any
securities or other property received upon or
as a result of, any sale, exchange or other
disposition (other than a pledge or a grant
of a lien or security interest) of the An-Con
Shares, the An-Con Preferred Shares or the
An-Con Conversion Shares to a third Person
other than an Affiliate of ART; or (c) the
distribution to ART of cash in excess of the
liquidation preference attributable to the
An-Con Preferred Stock, as a result of the
dissolution or liquidation of An-Con; then,
in any such event, ART shall promptly pay to
the Principals as provided in Section 2.2, an
amount equal to Fifty-Percent (50%) of any
Proceeds received by ART in excess of One
Dollar ($1.00) per Share ( Share Cost );
provided, however, that in the event An-Con
shall: (i) declare and pay to the holders of
the An-Con Shares, the An-Con Preferred
Shares or the An-Con Conversion Shares, as
the case may be, a dividend or other
distribution payable in shares of An-Con
equity securities; (ii) subdivide the
outstanding An-Con Shares, An-Con Preferred
Shares or An-Con Conversion Shares, as the
case may be, into a greater number of such
shares; (iii) combine the outstanding An-Con
Shares, An-Con Preferred Shares or An-Con
Conversion Shares, as the case may be, into a
lesser number of such shares; or (iv) effect
by a recapitalization, reorganization,
reclassification or the like, a transaction
having an equivalent effect; then, in any
such event, the Share Cost shall be
correspondingly adjusted; and provided
further, however, notwithstanding anything to
the contrary contained herein, the maximum
aggregate payment to be made by ART to the
Principals pursuant to this Agreement shall
be One Million Dollars ($1,000,000.00).
2.2 Payments to Principals. Any
payments required to be made by ART to the
Principals pursuant to Section 2.1, shall be
paid as follows: (a) One-Half to Bashford;
and
(b) One-Half to Fuchs.
2.3 Term. The term of this
Agreement ( Term ) shall commence on the date
hereof and shall expire on the earlier of:
(a) the date on which ART has paid the
Principals hereunder an aggregate of One
Million Dollars ($1,000,000.00); (b) such
date as ART shall have sold or otherwise
disposed of (other than a pledge or a grant
of a lien or security interest) to a third
Person other than an Affiliate of ART, all of
the Shares and any securities or other
property received upon or as a result of, any
sale, exchange or other disposition (other
than a pledge or a grant of a lien or
security interest) of any Shares to a third
Person other than an Affiliate of ART, and
ART has received the Proceeds related thereto
and has paid to the Principals all amounts to
which they are entitled pursuant to Section
2.1; or (c) the date of distribution to ART
of cash in excess of the liquidation
preference attributable to the An-Con
Preferred Stock, as a result of the
dissolution or liquidation of An-Con and ART
has received the Proceeds related thereto and
has paid to the Principals all amounts to
which they are entitled pursuant to Section
2.1.
2.4 Right of First Refusal. In the
event that during the Term, ART shall desire
to sell or otherwise dispose (other than a
pledge or a grant of a lien or security
interest) of any Shares to a third Person
other than an Affiliate of ART at below Fair
Market Value ( Prospective Sale ), then ART
shall, unless prohibited by Applicable Law,
promptly give written notice of the
Prospective Sale ( Notice of Prospective
Sale ) to the Principals. The Notice of
Prospective Sale shall set forth all material
terms and conditions of the Prospective Sale
(including, without limitation, the identity
of the third Person, if any), and shall
constitute an offer by ART to sell such
Shares to the Principals upon the same terms
and conditions set forth in the Notice of the
Prospective Sale. Upon receipt of the Notice
of Prospective Sale from ART and at any time
within Thirty (30) days thereafter ( Election
Period ), the Principals shall have the right
to elect in writing (upon notice to ART)
( Election ) to purchase such Shares upon the
same terms and conditions contained in the
Notice of Prospective Sale ( Right of First
Refusal ), and if the Principals make an
Election, the Principals shall have a period
of Ninety (90) days after the Election to
purchase such Shares from ART. The purchase
and sale of such Shares shall be consummated
by the Principals payment to ART of the
aggregate amount of the cash portion of the
purchase price of such Shares (adjusted to
account for any amounts ART is required to
pay the Principals pursuant to Section 2.1)
by wire transfer of immediately available
funds to an account designated by ART and by
delivery to ART to the non-cash portion of
such purchase price, if any, free and clear
of all liens and encumbrances of any kind,
upon ART s delivery to the Principals of
certificates representing the Shares to be
purchased, duly endorsed in blank and in
proper form for transfer to the Principals,
free and clear of any liens and encumbrances
of any kind created by ART. In the event:
(a) the Principals decline to purchase such
Shares by notice in writing to ART during the
Election Period; (b) the Principals fail to
notify ART within the Election Period of its
election to purchase such Shares; or (c) the
Principals give ART notice of its Election to
purchase such Shares during the Election
Period but the Principals and ART fail to
consummate such purchase and sale as provided
above; then, in any one of such events, ART
shall have the right to consummate the
Prospective Sale to a third Person (which, in
the event the identity of a third Person is
set forth in the Notice of Prospective Sale,
shall be to such third Person), upon the
terms and conditions set forth in the Notice
of Prospective Sale, but at a price per Share
equal to or greater than the price per Share
set forth in the Notice of Prospective Sale,
but only if the Prospective Sale is
consummated within a further One Hundred
Eighty (180) day period following the latest
to occur of the events referred to in clauses
(a) through (c) above. If such Prospective
Sale is not consummated within said further
One Hundred Eighty (180) day period, the
Right Of First Refusal set forth in this
Section 2.4 shall again apply.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF ART
ART hereby represents and warrants
to the Principals, as of the date hereof, as
follows:
3.1 Standing. ART is a corporation
duly organized and validly existing under the
laws of the State of New York. ART has all
requisite corporate power and authority to
conduct its business as it is now being
conducted and as presently contemplated to be
conducted and to carry out the transactions
contemplated in this Agreement.
3.2 Authority. The execution and
delivery of this Agreement and the
consummation of the transactions contemplated
herein have been duly authorized by all
necessary corporate action of ART, and ART
has all requisite corporate power and
authority to execute, deliver and perform
this Agreement. This Agreement has been duly
executed and delivered by ART and constitutes
a legal, valid and binding agreement of ART
enforceable in accordance with its terms
(except as its enforceability may be limited
by applicable bankruptcy, insolvency,
reorganization, moratorium or other laws of
general application relating to or affecting
enforcement of creditors rights or the
application of equitable principles in any
action, legal or equitable). ART has full
power and authority to perform its
obligations under this Agreement and the
transactions contemplated herein.
3.3 No Conflicts. Neither the
execution, delivery or performance of this
Agreement nor the consummation of the
transactions contemplated herein, will
conflict with or constitute a breach of or a
default under, or an event which, with or
without notice or lapse of time, or both,
would be a breach of, default under or
violation of: (a) ART s Certificate of
Incorporation or By-Laws; or (b) any
agreement, document, indenture, mortgage or
other instrument or undertaking to which ART
is a party or to which any of its properties
is subject, which breach, default or
violation would have a material adverse
effect, financial or otherwise, on ART or
would be a material violation of any
Applicable Law relating to ART.
3.4 Litigation. There is not now
pending and, to the best of ART s knowledge,
there is not threatened nor is there any
basis for, any claim, demand, litigation,
arbitration, action, suit, inquiry,
investigation or proceeding by or before any
Government Authority to which ART is or may
be a party, and which: (a) may result in a
material adverse effect, financial or
otherwise, on the condition or prospects of
ART; (b) may threaten the validity of this
Agreement; or (c) seeks to prevent, or if
successful would prevent, ART from
consummating the transactions contemplated in
this Agreement. ART is not subject to any
judgment, decree, injunction, rule, decision
or order of any Government Authority having,
or which, insofar as can be foreseen in the
future, may have, any material adverse
effect, financial or otherwise, on the
condition or prospects of ART.
3.5 Consents. There is no Consent
necessary or required in connection with the
valid execution, delivery and performance by
ART of this Agreement and the consummation of
the transactions contemplated herein.
3.6 Compliance with Law. ART has
complied in all material respects with all
Applicable Law relating to ART, and no claims
have been made to or against ART by any
Person to the contrary. ART has received no
notice of any violation of or noncompliance
with any Applicable Law which has not been
cured, which violation or noncompliance would
have a material adverse effect, financial or
otherwise, on the condition or prospects of
ART.
3.7 Brokers. No agent, finder,
broker, investment banker or other Person
acting under the authority of ART is or will
be entitled to any broker s fee or finder s
fee or any other commission or similar fee,
directly or indirectly, from ART or any
Affiliate of ART as a result of the
transaction contemplated in this Agreement.
3.8 General Warranty. No
representation or warranty by ART in this
Agreement and no statement contained in any
document, statement or certificate furnished
to the Principals by ART in connection with
the transactions contemplated in this
Agreement, contains any untrue statement of a
material fact or omits to state a material
fact necessary to make the statements
contained or incorporated herein not
misleading. All documents, instruments and
certificates delivered by or on behalf of ART
in connection with this Agreement and the
transactions contemplated herein are true,
correct and complete in all material
respects.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF BASHFORD
Bashford hereby represents and
warrants to ART, as of the date hereof, as
follows:
4.1 Standing. Bashford is a trust
duly organized and validly existing under the
laws of the State of New York. Bashford has
all requisite power and authority to carry
out the transactions contemplated in this
Agreement.
4.2 Authority. The execution and
delivery of this Agreement and the
consummation of the transactions contemplated
herein have been duly authorized by all
necessary action of Bashford, and Bashford
has all requisite power and authority to
execute, deliver and perform this Agreement.
This Agreement has been duly executed and
delivered by Bashford and constitutes a
legal, valid and binding agreement of
Bashford, enforceable in accordance with its
terms (except as its enforceability may be
limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other laws of
general application relating to or affecting
enforcement of creditors rights or the
application of equitable principles in any
action, legal or equitable). Bashford has
full power and authority to perform its
obligations under this Agreement and the
transactions contemplated herein.
4.3 No Conflicts. Neither the
execution, delivery or performance of this
Agreement nor the consummation of the
transactions contemplated herein, will
conflict with or constitute a breach of or a
default under, or an event which, with or
without notice or lapse of time, or both,
would be a breach of, default under or
violation of: (a) Bashford s governing trust
agreement; or (b) any agreement, document,
indenture, mortgage or other instrument or
undertaking to which Bashford is a party or
to which any of its properties is subject,
which breach, default or violation would be a
material violation of any Applicable Law
relating to Bashford.
4.4 Litigation. There is not now
pending and, to the best of Bashford s
knowledge, there is not threatened nor is
there any basis for, any claim, demand,
litigation, arbitration, action, suit,
inquiry, investigation or proceeding by or
before any Government Authority to which
Bashford is or may be a party, and which:
(a) may threaten the validity of this
Agreement; or (b) seeks to prevent, or if
successful would prevent, Bashford from
consummating the transactions contemplated
in this Agreement. Bashford is not subject
to any judgment, decree, injunction, rule,
decision or order of any Government Authority
having, or which, insofar as can be foreseen
in the future, may have, any material adverse
effect on Bashford s ability to perform its
obligations under this Agreement and the
transactions contemplated herein.
4.5 Consents. There is no Consent
necessary or required in connection with the
valid execution, delivery and performance by
Bashford of this Agreement and the
consummation of the transactions contemplated
herein.
4.6 Compliance with Law. Bashford
has complied in all material respects with
all Applicable Law relating to Bashford, and
no claims have been made to or against
Bashford by any Person to the contrary.
Bashford has received no notice of any
violation of or noncompliance with any
Applicable Law which has not been cured,
which violation or noncompliance would have a
material adverse effect on Bashford s ability
to perform its obligations under this
Agreement and the transactions contemplated
herein.
4.7 Brokers. No agent, finder,
broker, investment banker or other Person
acting under the authority of Bashford is or
will be entitled to any broker s fee or
finder s fee or any other commission or
similar fee, directly or indirectly, from
Bashford or any Affiliate of Bashford as a
result of the transaction contemplated in
this Agreement.
4.8 General Warranty. No
representation or warranty by Bashford in
this Agreement, and no statement contained in
any document, statement or certificate
furnished to ART by Bashford in connection
with the transactions contemplated in this
Agreement, contains any untrue statement of a
material fact or omits to state a material
fact necessary to make the statements
contained or incorporated herein not
misleading. There is no fact known to
Bashford which Bashford has not disclosed to
ART which might reasonably be expected to
have or result in a material adverse effect,
financial or otherwise, on the ability of
Bashford to perform its obligations under
this Agreement. All documents, instruments
and certificates delivered by or on behalf of
Bashford in connection with this Agreement
and the transactions contemplated herein are
true, correct and complete in all material
respects.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF FUCHS
Fuchs hereby represents or warrants
to ART, as of the date hereof, as follows:
5.1 Standing. Fuchs is an
individual retirement account duly organized,
validly existing and in good standing. Fuchs
has all requisite power and authority to
carry out the transactions contemplated in
this Agreement.
5.2 Authority. The execution and
delivery of this Agreement and the
consummation of the transactions contemplated
herein have been duly authorized by all
necessary corporate action of Fuchs, and
Fuchs has all requisite power and authority
to execute, deliver and perform this
Agreement. This Agreement has been duly
executed and delivered by Fuchs and
constitutes a legal, valid and binding
agreement of Fuchs enforceable in accordance
with its terms (except as its enforceability
may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or
other laws of general application relating to
or affecting enforcement of creditors rights
or the application of equitable principles in
any action, legal or equitable). Fuchs has
full power and authority to perform its
obligations under this Agreement and the
transactions contemplated herein.
5.3 No Conflicts. Neither the
execution, delivery or performance of this
Agreement, nor the consummation of the
transactions contemplated herein, will
conflict with or constitute a breach of or a
default under, or an event which, with or
without notice or lapse of time, or both,
would be a breach of, default under or
violation of: (a) Fuch s Constituent
Documents; or (b) any agreement, document,
indenture, mortgage or other instrument or
undertaking to which Fuchs is a party or to
which any of its properties is subject, which
breach, default or violation would be a
material violation of any Applicable Law
relating to Fuchs.
5.4 Litigation. There is not now
pending and, to the best of Fuch s knowledge,
there is not threatened nor is there any
basis for, any claim, demand, litigation,
arbitration, action, suit, inquiry,
investigation or proceeding by or before any
Government Authority to which Fuchs is or may
be a party, and which: (a) may threaten the
validity of this Agreement; or (b) seeks to
prevent, or if successful would prevent,
Fuchs from consummating the transactions
contemplated in this Agreement. Fuchs is not
subject to any judgment, decree, injunction,
rule, decision or order of any Government
Authority having, or which, insofar as can be
foreseen in the future, may have, any
material adverse effect on Fuch s ability to
perform its obligations under this Agreement
and the transactions contemplated herein.
5.5 Consents. There is no Consent
necessary or required in connection with the
valid execution, delivery and performance by
Fuchs of this Agreement, and the consummation
of the transactions contemplated herein.
5.6 Compliance with Law. Fuchs has
complied in all material respects with all
Applicable Law relating to Fuchs, and no
claims have been made to or against Fuchs by
any Person to the contrary. Fuchs has
received no notice of any violation of or
noncompliance with any Applicable Law which
has not been cured, which violation or
noncompliance would have a material adverse
effect on Fuch s ability to perform its
obligations under this Agreement and the
transactions contemplated herein.
5.7 Brokers. No agent, finder,
broker, investment banker or other Person
acting under the authority of Fuchs is or
will be entitled to any broker s fee or
finder s fee or any other commission or
similar fee, directly or indirectly, from
Fuchs or any Affiliate of Fuchs as a result
of the transactions contemplated in this
Agreement.
5.8 General Warranty. No
representation or warranty by Fuchs in this
Agreement and no statement contained in any
document, instrument or certificate furnished
to ART by Fuchs in connection with the
transactions contemplated in this Agreement,
contains any untrue statement of a material
fact or omits to state a material fact
necessary to make the statements contained
or incorporated herein not misleading. There
is no fact known to Fuchs which Fuchs has not
disclosed to ART which might reasonably be
expected to have or result in a material
adverse effect, financial or otherwise, on
the condition or prospects of Fuchs or on the
ability of Fuchs to perform its obligations
under this Agreement. All documents,
instruments and certificates delivered by or
on behalf of Fuchs in connection with this
Agreement and the transactions contemplated
herein, are true, correct and complete in all
material respects.
ARTICLE 6
MISCELLANEOUS
6.1 Survivability. Notwithstanding
anything contained herein to the contrary,
all representations, warranties and
agreements set forth in this Agreement shall
survive and continue to bind the Parties
after the execution and delivery of this
Agreement, the termination or expiration of
this Agreement, and any investigation
conducted by any Party, to the extent and for
as long as may be necessary to give effect to
the rights, duties and obligations of the
Parties pursuant to this Agreement, subject
to any applicable statutes of limitations.
6.2 Law. This Agreement shall be
governed by and construed in accordance with
the laws of the state of New York, without
reference to principles of conflicts of laws.
6.3 Notices. All notices required
or permitted hereunder shall be in writing
and shall be: (a) sent by telex or facsimile
transmission (to be effective when receipt is
acknowledged unless sent after 5:00 p.m. on
any business day, in which event notice shall
be deemed received on the next business day);
(b) personally delivered; (c) sent by
certified mail, return receipt requested; or
(d) sent by a nationally recognized,
commercial overnight delivery service with
provisions for a receipt, postage or delivery
charges prepaid and, except as otherwise
provided in Section 6.3(a), shall be deemed
given when personally delivered or when
placed in the possession of such mail or
delivery service, and addressed to the
Parties, as follows:
To ART:
Advanced Refractory Technologies, Inc.
699 Hertel Avenue
Buffalo, New York 14207
Attn.: Keith A. Blakely, President
Facsimile: 716-875-3746
with a copy to:
Damon & Morey LLP
1000 Cathedral Place
298 Main Street
Buffalo, New York 14202-4096
Attn.: Gust P. Pullman, Esq.
Facsimile: 716-856-5521
To Bashford:
Eric Rainer Bashford Charitable Remainder
Trust
2689 Strang Boulevard
Yorktown Heights, New York 10598
Attn: Mr. Eric Rainer Bashford, Trustee
Facsimile: (914) 962-1486
with a copy to:
Herrick, Feinstein LLP
Two Park Avenue
New York, New York 10016
Attn.: Irwin A. Kishner, Esq.
Facsimile: (212) 889-7577
To Fuchs:
Norman P. Fuchs Individual Retirement Account
5 Flagpole Lane
East Setauket, New York 11753
Attn: Mr. Norman P. Fuchs, Custodian
Facsimile: (516) 689-5752
with a copy to:
Herrick, Feinstein LLP
Two Park Avenue
New York, New York 10016
Attn.: Irwin A. Kishner, Esq.
Facsimile: (212) 889-7577
Notice of change of address shall be given in
accordance with the provisions of this
Section 6.3 and shall be effective only upon
receipt.
6.4 Arbitration. Any controversy
or claim arising out of or pursuant to this
Agreement shall be submitted to final and
binding arbitration conducted in accordance
with the expedited Commercial Arbitration
Rules of the American Arbitration Association
( Rules ) by One (1) arbitrator appointed in
accordance with this Agreement and the Rules.
The seat of the arbitration shall be in
Albany, New York. Judgment upon any award
rendered in such arbitration may be entered
in any court of competent jurisdiction. This
Section shall not limit any Party s right to
obtain any provisional or equitable remedy,
including, without limitation, injunctive
relief from any court of competent
jurisdiction, as may be necessary in the sole
judgment of such Party to protect its rights
hereunder.
6.5 Expenses. The nonprevailing
Party or Parties in any arbitration or
litigation hereunder shall be required to
reimburse the prevailing Party or Parties for
all of its reasonable costs and expenses in
such arbitration or litigation, including,
without limitation, attorneys fees and
costs.
6.6 Parties Bound. This Agreement
shall be binding upon and shall inure to the
benefit of each Party and its respective
legal representatives, successors and
permitted assigns, subject to the
restrictions against assignment provided in
Section 6.9.
6.7 Waiver. Failure by any Party
to insist upon strict performance of any
provision herein by any other Party shall not
be deemed a waiver by such Party of its
rights or remedies or a waiver by it of any
subsequent default by such other Party, and
no waiver shall be effective unless it is in
writing and duly executed by the Party
entitled to enforce the provision being
waived.
6.8 Severability. If any provision
of this Agreement is determined by a court of
competent jurisdiction or an arbitrator to be
illegal or unenforceable, the Parties shall
use reasonable efforts to negotiate a legal
and enforceable provision reflecting the
legal and economic substance of such illegal
or unenforceable provision as closely as
possible. The invalidity of any part of this
Agreement shall not render invalid the
remainder of this Agreement.
6.9 Assignability. No Party shall
have the right to assign any of its rights,
duties or obligations hereunder without the
prior written consent of the other Parties,
which consent shall not be unreasonably
withheld or delayed; provided, however, that
ART, upon prior written notice to the
Principals, shall have the right to assign
its rights, duties and obligations under this
Agreement to any Affiliate of ART which
consents in writing to be bound by the terms
and conditions of this Agreement. No
assignment of any rights, duties or
obligations under this Agreement relieves the
assigning Party of primary liability for its
duties or obligations under this Agreement,
and as among the Parties, the assigning Party
shall continue to be liable for all of its
duties or obligations under this Agreement as
though no assignment has been made.
6.10 Entire Agreement. This
Agreement constitutes the entire agreement by
and among the Parties regarding the subject
matter contained herein and supersedes all
prior and contemporaneous undertakings and
agreements by and among the Parties, whether
written or oral, with respect to such subject
matter.
6.11 Amendment. This Agreement may
not be amended except by a writing executed
by all Parties.
6.12 Cooperation. Each Party
agrees to take all such steps, execute and
deliver such further documents and perform
such acts as may be reasonably requested by
any other Party in order to effectuate the
purposes of this Agreement.
6.13 Counterparts. This Agreement
may be executed simultaneously in Two (2) or
more counterparts, any of which shall be
deemed an original, and all of which together
shall constitute one and the same instrument,
notwithstanding that all Parties are not a
signatory to the original or the same
counterpart.
6.14 Headings. The headings used
herein are inserted for convenience only and
are in no way intended to describe,
interpret, define or limit the scope, extent
or intent of this Agreement.
6.15 Third Parties. Nothing herein
expressed or implied is intended or shall be
construed to confer upon or give any Person
other than the Parties and their respective
legal representatives, successors and
permitted assigns, any right or remedy under
or by reason of this Agreement.
6.16 Transaction Expenses. Each
Party shall pay its own fees, costs and
expenses and those of its Representatives
with respect to the transaction contemplated
in this Agreement.
6.17 No Public Statements. Without
the prior consent of the other Parties, which
consent shall not be unreasonably withheld or
delayed, no Party shall disclose to the press
or news media the existence of or terms of
this Agreement, except as otherwise required
by Applicable Law; provided, however, the
Principals and their respective Affiliates
and agents shall have the right to disclose
the general nature of the transactions
contemplated in this Agreement but only in
connection with the sale or other disposition
of any An-Con equity securities owned by
either Principal or any Affiliate of either
Principal; provided, however, under no
circumstances pursuant to such disclosure
shall any such party have the right to
disclose any confidential or proprietary
information of ART.
6.18 Cumulative Rights and
Remedies. The rights and remedies of the
Parties under this Agreement shall be in
addition to and cumulative of, and not in
lieu or exclusive of, any other rights or
remedies of the Parties pursuant to this
Agreement, at law or in equity, except that
the arbitration remedy set forth in Section
6.4 is exclusive to the extent provided
therein. The rights and remedies of any
Party based upon, arising out of or otherwise
in respect of, any inaccuracy in or breach
of, any representation, warranty or agreement
of any other Party or failure to fulfill any
condition shall in no way be limited by the
fact that the act, omission, occurrence or
other statement of facts upon which any claim
for such inaccuracy or breach is based may
also be the subject matter of any other
representation, warranty or agreement as to
which there is no inaccuracy or breach.
IN WITNESS WHEREOF, the Parties have
caused this Profit-Sharing Agreement to be
signed by their duly authorized officers or
signatories on the day and year first above
written.
ADVANCED REFRACTORY TECHNOLOGIES,
INC.
By:
Authorized Officer
ERIC RAINER BASHFORD CHARITABLE
REMAINDER UNITRUST
By:
Authorized Signatory
NORMAN P. FUCHS INDIVIDUAL
RETIREMENT ACCOUNT
By:
Authorized Signatory
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