<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
August 18, 1999
ORYX TECHNOLOGY CORP.
---------------------
(Exact name of registrant as specified in its charter)
Delaware 1-12680 22-2115841
- -------------------------------------------------------------------------------
(State or other jurisdiction (Commission File Number) (I.R.S. Employer
of incorporation) Identification No.)
1100 Auburn Street, Fremont, California 94538
---------------------------------------------
(Address of principal executive offices)
Registrant's telephone number, including area code: (510) 492-2080
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Item 2. Acquisition or Disposition of Assets
On August 18, 1999, pursuant to the terms of an Asset Purchase
Agreement dated as of June 1, 1999 by and among Oryx Technology Corp.
("Oryx") and Oryx Advanced Materials Inc. ("OAMI"), Oryx sold to OAMI certain
specified assets associated with Oryx' carbon target assembly manufacturing
and related materials coating business (the "Materials business") for a cash
payment of $400,000 and the assumption of substantially all of the
liabilities associated with such business. The Company will retain ownership
of approximately $469,000 in accounts receivable balances relating to the
Materials business subsequent to the disposition. In addition, Oryx licensed
to OAMI certain patents and other technology associated with the purchased
assets. OAMI will pay Oryx royalty payments over ten years, with a maximum
royalty payment of $2.2 million for the first three years, based on OAMI's
gross profits.
Item 7. Financial Statements and Exhibits
(a) Not Applicable.
(b) Pro forma financial information
INTRODUCTION TO PRO FORMA FINANCIAL INFORMATION (UNAUDITED)
Pro Forma Condensed Balance Sheet
The following unaudited Pro Forma Condensed Balance Sheet reflects
the historical consolidated condensed balance sheet of Oryx Technology Corp.
("Oryx" and together with its subsidiaries, the "Company") at May 31, 1999
adjusted to give effect to the Asset Purchase Agreement dated June 1, 1999,
by and between Oryx and Oryx Advanced Materials, Inc. ("OAMI"), whereby Oryx
sold to OAMI certain specified assets for a cash payment of $400,000 and the
assumption of substantially all of the liabilities associated with such
business. In addition, the information presented gives effect to the
disposition on February 27, 1998, where Corus Investments Ltd., a Bahamas
Company, acquired 8,000,000 shares of the authorized Class A Common Stock of
Oryx Instruments and Materials Corporation ("I&M") for a purchase price of
$500,000 (the "Sale"). Prior to the Sale, I&M was a wholly owned subsidiary
of the Registrant. As part of the Sale, I&M redeemed 8,000,000 of the
10,000,000 shares of Class A Common Stock held by the Registrant for an
aggregate redemption price of $1,500,000 payable as follows: (1) $500,000
immediately, (2) $333,333 on February 27, 1999,and (3) $666,667 on February
27, 2000. These two dispositions (collectively referred to as the "I&M
Disposition") have been aggregated as they represent the final sale of one
business segment.
The unaudited Pro Forma Condensed Balance Sheet should be read in
conjunction with historical financial statements and notes thereto and the
narrative sections included elsewhere herein. Because these transactions
occurred subsequent to May 31, 1999, actual adjustments and balances will vary
from those presented in the Pro Forma Condensed Balance Sheet. However,
management believes that any differences between actual adjustments and pro
forma adjustments will not have a material effect on the pro forma financial
statement.
Pro Forma Condensed Statement of Operations
The unaudited Pro Forma Condensed Statements of Operations for the
three years ended February 28, 1999 and the three months ended May 31, 1999 are
based upon the historical condensed consolidated statements of operations of the
Company for the respective periods after
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giving effect to pro forma adjustments described in the notes thereto as if
the I&M Disposition had been consummated on March 1, 1996.
The unaudited Pro Forma Condensed Statements of Operations should be
read in conjunction with the historical financial statements and notes thereto
of the Company and the narrative sections included elsewhere herein. The Pro
Forma Condensed Statements of Operations are not necessarily indicative of what
actual results of operations would have been for the period had the transaction
occurred on March 1, 1996 and do not purport to indicate the results of future
operations.
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ORYX TECHNOLOGY CORP.
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
May 31, 1999
(Unaudited)
<TABLE>
<CAPTION>
Pro Forma
Adjustment
Reflecting
I&M Pro Forma
ASSETS Historical Disposition As Adjusted
------------- ---------------- -------------
<S> <C> <C> <C>
Current assets:
Cash and cash equivalents $ 4,544,000 $ 400,000 (A) $ 4,944,000
Accounts receivable, net of allowance for
doubtful accounts of $118,000 469,000 469,000
Inventories 146,000 (146,000)(B) -
Other current assets 371,000 (6,000)(B) 365,000
------------- -------------
Total current assets 5,530,000 5,778,000
Property and equipment, net 425,000 (34,000)(B) 391,000
Other assets 140,000 140,000
------------- -------------
$ 6,095,000 $ 6,309,000
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Capital lease and other short term obligations $ 5,000 $ 5,000
Deferred revenue 78,000 78,000
Accounts payable 266,000 (168,000)(B) 98,000
Accrued liabilities 592,000 (18,000)(B)
55,000 (C) 629,000
------------- -------------
Total current liabilities 941,000 810,000
Stockholders' equity:
Series A 2% Convertible Cumulative Preferred
Stock, $0.001 par value; 3,000,000 shares authorized;
3,750 shares issued and outstanding, liquidation
value $94,000 89,000 89,000
Common Stock, $0.001 par value; 25,000,000 shares
authorized; 15,331,000 and 13,290,464
issued and outstanding 15,000 15,000
Additional paid-in capital 23,615,000 23,615,000
Accumulated deficit (18,565,000) 345,000 (D) (18,220,000)
-------------- -------------
Total stockholders' equity 5,154,000 5,499,000
-------------- -------------
$ 6,095,000 $ 6,309,000
============== =============
</TABLE>
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NOTES TO PRO FORMA CONDENSED BALANCE SHEET
(Unaudited)
The I&M Disposition pro forma adjustments have been made to reflect the
following:
(A) Consideration of $400,000 received upon disposition of certain specified
assets and substantially all of the liabilities of the Materials business.
(B) Elimination of certain specified assets and substantially all of the
liabilities of the Materials business.
(C) Transaction costs associated with the Materials business disposition.
(D) Gain on the Materials business disposition.
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ORYX TECHNOLOGY CORP.
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
Three Months ended May 31, 1999
(Unaudited)
<TABLE>
<CAPTION>
Pro Forma
Adjustments
Reflecting Pro Forma
Historical I&M Disposition As Adjusted
---------- --------------- -----------
<S> <C> <C> <C>
Net revenue $ 1,238,000 (1,049,000) (A) $ 189,000
Cost of sales 1,076,000 (734,000) (B) 342,000
-------------- --------------
Gross profit 162,000 (153,000)
-------------- --------------
Operating expenses:
Marketing and selling 24,000 (24,000) (C) -
General and administrative 469,000 (23,000) (D) 446,000
Research and development 183,000 183,000
-------------- --------------
Total operating expenses 676,000 629,000
-------------- --------------
Loss from operations (514,000) (782,000)
Interest income (expense), net 34,000 34,000
Other Expenses (9,000) (9,000)
Net gain on sales of investment - -
-------------- --------------
Net loss (489,000) (757,000)
Dividends (1,000) (1,000)
-------------- --------------
Net loss attributable to Common Stock $ (490,000) $ (758,000)
============== ==============
Net loss per common share $ (0.03) $ (0.05)
============== ==============
Weighted average common shares used to
compute basic & diluted net loss per share 14,473,000 14,473,000
============== ==============
</TABLE>
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ORYX TECHNOLOGY CORP.
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
Year Ended February 28, 1999
(Unaudited)
<TABLE>
<CAPTION>
Pro Forma
Adjustments
Reflecting Pro Forma
Historical I&M Disposition As Adjusted
---------- --------------- -----------
<S> <C> <C> <C>
Net revenue $ 4,642,000 (4,037,000) (A) $ 605,000
Cost of sales 3,463,000 (2,509,000) (B) 954,000
-------------- --------------
Gross profit 1,179,000 (349,000)
-------------- --------------
Operating expenses:
Marketing and selling 207,000 (207,000) (C) -
General and administrative 1,604,000 (78,000) (D) 1,526,000
Research and development 419,000 419,000
-------------- --------------
Total operating expenses 2,230,000 1,945,000
-------------- --------------
Loss from operations (1,051,000) (2,294,000)
Interest income (expense), net 14,000 14,000
Other Income 363,000 (146,000) (F) 217,000
Net gain (write down) on investment (15,000) (15,000)
-------------- --------------
Net loss (689,000) (2,078,000)
Dividends and accretion (2,000) (2,000)
-------------- --------------
Net loss attributable to Common Stock $ (691,000) $ (2,080,000)
============== ==============
-------------- --------------
Net loss per common share $ (0.05) $ (0.16)
============== ==============
Weighted average common shares used to
compute basic & diluted net loss per share 13,158,000 13,158,000
============== ==============
</TABLE>
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ORYX TECHNOLOGY CORP.
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
Year Ended February 28, 1998
(Unaudited)
<TABLE>
<CAPTION>
Pro Forma
Adjustments
Reflecting Pro Forma
Historical I&M Disposition As Adjusted
-------------- ---------------- -------------
<S> <C> <C> <C>
Net revenue $ 8,449,000 (7,858,000) (A) $ 591,000
Cost of sales 6,234,000 (5,857,000) (B) 377,000
-------------- -------------
Gross profit 2,215,000 214,000
-------------- -------------
Operating expenses:
Marketing and selling 1,141,000 (1,048,000) (C) 93,000
General and administrative 2,911,000 (489,000) (D) 2,422,000
Research and development 2,669,000 (1,537,000) (E) 1,132,000
-------------- -------------
Total operating expenses 6,721,000 3,647,000
-------------- -------------
Loss from operations (4,506,000) (3,433,000)
Interest income (expense), net (350,000) (350,000)
Equity in losses of investee - -
Net gain on sales of investment 1,383,000 1,383,000
-------------- -------------
Loss from continuing operations (3,473,000) (2,400,000)
Discontinued operations:
Income (loss) from discontinued operations (3,588,000) (3,588,000)
Loss on disposal of discontinued operations (78,000) (78,000)
-------------- -------------
Income (loss) from discontinued operations (3,666,000) (3,666,000
-------------- -------------
Net loss (7,139,000) (6,066,000)
Dividends and accretion (2,000) (2,000)
-------------- -------------
Net loss attributable to Common Stock $ (7,141,000) $ (6,068,000)
============== =============
Basic and diluted loss per common share from
continuing operations $ (0.27) $ (0.18)
Basic and diluted income (loss) per common share from
discontinued operations (0.28) (0.28)
-------------- -------------
Net loss per common share $ (0.55) $ (0.46)
============== =============
Weighted average common shares used to compute
basic & diluted net loss per share 13,105,000 13,105,000
============== =============
</TABLE>
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ORYX TECHNOLOGY CORP.
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
Year Ended February 28, 1997
(Unaudited)
<TABLE>
<CAPTION>
Pro Forma
Adjustments
Reflecting Pro Forma
Historical I&M Disposition As Adjusted
-------------- ------------------ --------------
<S> <C> <C> <C>
Net revenue $ 6,470,000 (5,807,000) (A) $ 663,000
Cost of sales 4,605,000 (3,864,000) (B) 741,000
-------------- --------------
Gross profit 1,865,000 (78,000)
-------------- --------------
Operating expenses:
Marketing and selling 1,109,000 (978,000) (C) 131,000
General and administrative 2,939,000 (625,000) (D) 2,314,000
Research and development 2,157,000 (1,819,000) (E) 338,000
-------------- --------------
Total operating expenses 6,205,000 2,783,000
-------------- --------------
Loss from operations (4,340,000) (2,861,000)
Interest income (expense), net 10,000 10,000
Equity in losses of investee (20,000) (20,000)
Net gain on sales of investment - -
-------------- --------------
Loss from continuing operations (4,350,000) (2,871,000)
Discontinued operations:
Income (loss) from discontinued operations 2,348,000 2,348,000
Loss on disposal of discontinued operations
-------------- --------------
Income (loss) from discontinued operations 2,348,000 2,348,000
-------------- --------------
Net loss (2,002,000) (523,000)
Dividends and accretion (10,000) (10,000)
-------------- --------------
Net loss attributable to Common Stock $ (2,012,000) $ (533,000)
============== ==============
Basic and diluted loss per common share from
continuing operations $ (0.41) $ (0.27)
Basic and diluted income (loss) per common
share from discontinued operations 0.22 0.22
-------------- --------------
Net loss per common share $ (0.19) $ (0.05)
============== ==============
Weighted average common shares used to
compute basic & diluted net loss per share 10,650,000 10,650,000
============== ==============
</TABLE>
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NOTES TO PRO FORMA CONDENSED STATEMENT OF OPERATIONS
(Unaudited)
The pro forma adjustments for the three months ending May 31, 1999 and year
ending February 28, 1999 only reflect the operating results of the Materials
business except for the gain on the sales of I&M, as the sale of I&M occured
on Febuary 27, 1998.
The I&M Disposition pro forma adjustments have been made to reflect the
following:
(A) Reduction in revenues due to the I&M Disposition.
(B) Reduction in cost of revenues due to the I&M Disposition.
(C) Reduction in marketing costs due to the I&M Disposition.
(D) Reduction in general and administrative costs due to the I&M Disposition.
(E) Reduction in research and development due to the I&M Disposition.
(F) Reduction in gain resulting from the sale of I&M.
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(c) Exhibits
2.2 Asset Purchase Agreement dated as of June 1, 1999 by
and between Oryx Technology Corporation and Oryx Advanced Materials, Inc.
99.1 Press Release dated September 2, 1999.
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of
1934, the Registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
Date: September 2, 1999 ORYX TECHNOLOGY CORP. (Registrant)
By: /s/ Mitchel Underseth
---------------------
Mitchel Underseth
Chief Financial Officer
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EXHIBIT 2.2
ASSET PURCHASE AGREEMENT
This Agreement is made and entered into as of June 1, 1999, by and
between Oryx Technology Corp., a corporation organized and existing under the
laws of the State of Delaware ("Seller"), and Oryx Advanced Materials, Inc., a
corporation organized and existing under the laws of the State of California
("Buyer"). Together, Buyer and Seller are the only parties hereto.
R E C I T A L S
- - - - - - - -
A. Seller operates the "Intragene" and related materials coating business.
B. Seller has agreed to sell and Buyer has agreed to acquire the "Business"
(as defined below) on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements hereinafter set forth, the parties hereby covenant and agree as
follows:
1. DEFINITIONS
(a) The "Agreement" means this Agreement, the Disclosure
Schedule, and the other schedules and exhibits attached hereto or to the
Disclosure Schedule.
(b) "Assumed Liabilities" means all liabilities and
obligations, known and unknown, of Seller related to the Business to be assumed
by Buyer including, but not limited to, the liabilities and obligations listed
on EXHIBIT C attached hereto, BUT EXCLUDING any liabilities or obligations (i)
for unpaid federal, state or local taxes attributable to the Business prior to
the date hereof or (ii) resulting from any violation by Seller of federal, state
or local environmental laws in connection with Seller's operation of the
Business.
(c) The "Business" means all assets, including, but not limited
to, equipment, furniture, fixtures, inventory, customer lists, contact lists,
materials, and formulas used or useful in connection with the manufacturer of
carbon target assemblies and delivery of bonding services.
(d) The "Closing Date" of this Agreement means the date on
which the "Closing" occurs as defined in Section 6(a) below.
(e) "Disclosure Schedule" means the disclosure schedule dated
the date hereof, delivered to Buyer prior to the execution of this Agreement,
and attached hereto as EXHIBIT A.
(f) The "Purchased Assets" shall mean the assets of the
Business to be sold by Seller and purchased by Buyer as specifically listed on
EXHIBIT B. The "Purchased Assets" do not include any "Intellectual Property."
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2. RIGHTS GRANTED AND PURCHASE PRICE
(a) SALE OF ASSETS. In consideration of the payments to be
made to Seller by Buyer pursuant to the provisions of Section 2(b) below and
subject to the provisions set forth in this Agreement, Seller shall, on the
Closing Date, transfer, sell and assign to Buyer, and Buyer shall hereby
purchase from Seller, all of Seller's worldwide right, title and interest in and
to the Purchased Assets.
(b) PURCHASE PRICE. In consideration of Seller's transfer to
Buyer of the Purchased Assets, Buyer agrees to pay Seller as follows
(collectively, the "Purchase Price"):
(i) LUMP SUM PAYMENT. At the Closing, Buyer will pay to
Seller (in the form of a cashier's or certified check, or wire transfer)
$400,000.00.
(ii) ASSUMED LIABILITIES. Buyer shall assume the Assumed
Liabilities.
(c) ALLOCATION OF PURCHASE PRICE. The parties agree that the
Purchase Price shall be allocated for the federal and state tax purposes
(including, but not limited to, income, excise, sales, use, personal property,
real property and transfer taxes) among the Purchased Assets, which is in
accordance with their fair market values as set forth below:
<TABLE>
<CAPTION>
Assets
------
<S> <C>
Inventory $ 145,664.26
Furniture and Equipment $ 34, 368.25
Other $ 219,969.49
Total: $ 400,000.00
</TABLE>
The parties hereto agree to report this transaction for state and federal
tax purposes in accordance with this allocation of the Purchase Price and not to
file any tax return or report or otherwise take a position with federal or state
tax authorities which is inconsistent with such allocation.
(d) SALES TAX. Buyer shall pay sales, use, conveyance and other
like taxes (net of any applicable rebates, refunds or discounts) imposed on or
collectible by reason of the transfer of the Purchased Assets to Buyer pursuant
to this Agreement.
3. REPRESENTATIONS AND WARRANTIES OF SELLER. Seller represents and
warrants to Buyer that, except as set forth on the Disclosure Schedule, which
exceptions shall be deemed to be representations and warranties as if made
hereunder:
(a) DUE ORGANIZATION. Seller is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware.
Seller is in good standing and qualified as a foreign corporation to do business
in all other jurisdictions in which the failure to so qualify would have a
material adverse effect on its business or properties.
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(b) POWER AND AUTHORITY. Seller has the corporate power and
authority to execute and deliver this Agreement and each of the documents
contemplated hereby to which Seller is a party, and to perform its obligations
hereunder and thereunder, and the execution, delivery and performance of this
Agreement and each of the documents contemplated hereby to which Seller is a
party, have been duly and validly authorized and approved by all necessary
corporate action on the part of Seller.
(c) ENFORCEABILITY. This Agreement and each of the documents
contemplated hereby to which Seller is a party, constitute legal, valid and
binding obligations of Seller, and are enforceable against Seller in accordance
with their respective terms, except as the enforceability thereof may be limited
by applicable bankruptcy, insolvency, reorganization or other similar laws of
general application relating to creditors' rights.
(d) TITLE TO ASSETS. Seller has all worldwide rights to, and
ownership interest in, the Purchased Assets, free and clear of all claims, liens
and encumbrances, and Seller further warrants that it has no obligations to
third parties with respect to the Purchased Assets except as set forth herein.
(e) COMPLIANCE WITH LAWS. To the best of Seller's knowledge,
Seller is not in violation of any applicable statute, regulation (including
environmental and occupational safety and health laws, foreign corrupt practices
laws and related regulations), ordinance, writ, injunction, order, judgment, or
decree of any government or governmental agency, foreign or domestic, which
relates to the Purchased Assets.
(f) LITIGATION. There are no actions, suits, investigations or
proceedings pending, or to the best knowledge of Seller, threatened (i) against
Seller or any properties or rights of Seller before any court, arbitrator or
administrator or governmental body which arose out of or are based upon the
ownership or use of the Purchased Assets, and there is no judgment, order, writ
or decree of any governmental authority applicable to Seller which might have a
material adverse effect on the value of the Purchased Assets to Buyer,
(ii) challenging the ownership or use, in any respect, of the Purchased Assets,
(iii) asserting the invalidity of this Agreement or seeking to prevent any of
the transactions contemplated hereby or (iv) which would have a material adverse
impact on Seller's business or financial condition. To the knowledge of Seller,
no valid basis for any successful action, suit, investigation or proceeding of
the nature referred to above exists.
(g) CONFLICTING AGREEMENTS. Neither the execution nor delivery
by Seller of this Agreement nor compliance by Seller with the terms and
provisions hereof will (i) conflict with, or result in a breach of, the terms,
conditions or provisions of, or constitute a default under, or result in any
violation of, the Certificate of Incorporation or Bylaws of Seller, any award of
any arbitrator or any other material agreement to which Seller is subject, or
(ii) result in the creation of any lien upon the Purchased Assets. Seller is
not a party to, or otherwise subject to any provision contained in, any
instrument evidencing indebtedness, any agreement relating thereto or any other
contract or agreement (including its Certificate of Incorporation) which
restricts or otherwise limits the transfer of the Purchased Assets.
(h) TAX MATTERS. In all respects relating to the Purchased
Assets or Seller's business related to the Purchased Assets, directly or
indirectly, (i) Seller has filed all federal,
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state, local and foreign tax returns required to be filed for the jurisdictions
in which the business or assets of Seller are subject to tax, (ii) each such
return is complete, accurate and in compliance with applicable law and
regulations in all material respects, and (iii) Seller has paid or provided for
all such taxes of any nature whatsoever, with any related penalties, interest
and liabilities (any of the foregoing being referred to herein as a "Tax"),
that are or would be shown on such tax returns as due and payable on or before
the date hereof, other than such Taxes as are being contested in good faith.
(i) EMPLOYEES. To the best of Seller's knowledge, Seller is in
compliance with all applicable laws and regulations respecting employment and
employment practices, and terms and conditions of employment and wages and
hours, violation of which would have a material adverse effect upon the value of
the Purchased Assets to Buyer. The Disclosure Schedule contains (i) a true and
complete list of all employment and consulting contracts or arrangements (other
than those terminable at will) with any of Seller's employees relating to the
Purchased Assets, (ii) a true and complete list of all employees or consultants
retained by Seller relating to the Purchased Assets, with salary or compensation
rates, and (iii) the names of all employees or former employees (or consultants)
of Seller who are receiving or are entitled to receive at any time continuing
payments relating to the Purchased Assets of any kind after termination of
employment, other than under an employment contract listed in (1) above.
(j) DISCLOSURE. This Agreement, the Disclosure Schedule, the
exhibits hereto, and all certificates or written statements furnished to Buyer
by Seller in connection herewith do not contain any untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements contained herein and therein not misleading in light of the
circumstances under which they were made.
4. REPRESENTATIONS AND WARRANTIES OF BUYER. Buyer represents and
warrants to Seller as follows:
(a) DUE ORGANIZATION. Buyer is a corporation duly organized
and validly existing and in good standing under the laws of the State of
California.
(b) POWER AND AUTHORITY. Buyer has the corporate power and
authority to execute and deliver this Agreement, and each of the documents
contemplated hereby to which Buyer is a party, and to perform its obligations
hereunder and thereunder, and the execution, delivery and performance of this
Agreement and each of the documents contemplated hereby to which Buyer is a
party, have been duly and validly authorized by all necessary corporate action
on the part of Buyer. Buyer has taken all other action required by law, its
Certificate of Incorporation or Bylaws or any agreement to which it is a party
or to which it may be subject in order to execute and deliver this Agreement and
to perform its obligations hereunder.
(c) ENFORCEABILITY. This Agreement and each of the documents
contemplated hereby to which Buyer is a party, constitute legal, valid and
binding obligations of Buyer, and are enforceable against Buyer in accordance
with their respective terms, except as the enforceability thereof may be limited
by applicable bankruptcy, insolvency, reorganization or other similar laws of
general application relating to creditors' rights.
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(d) LITIGATION. There are no actions, suits, investigations or
proceedings pending, or to the best knowledge of Buyer, threatened (i) against
Buyer or any properties or rights of Buyer before any court, arbitrator or
administrator or governmental body which arose out of or are based upon the
ownership or use of the Purchased Assets and there is no judgment, order, writ
or decree of any governmental authority applicable to Buyer which might have a
material adverse effect on the value of the Purchased Assets to Buyer,
(ii) challenging the ownership or use, in any respect, of the Purchased Assets,
or (iii) asserting the invalidity of this Agreement or seeking to prevent any of
the transactions contemplated hereby. To the knowledge of Buyer, no valid basis
exists for any successful action, suit, investigation or proceeding of the
nature referred to above.
(e) CONFLICTING AGREEMENTS. Neither the execution nor delivery
by Buyer of this Agreement nor compliance by Buyer with the terms and provisions
hereof will (i) conflict with, or result in a breach of, the terms, conditions
or provisions of, or constitute a default under, or result in any violation of,
the Articles of Incorporation or Bylaws of Buyer, any award of any arbitrator or
any other material agreement to which Buyer is subject, or (ii) result in the
creation of any lien upon the Purchased Assets. Buyer is not a party, or
otherwise subject, to any provision contained in any instrument evidencing
indebtedness, any agreement relating thereto or any other contract or agreement
(including its Certificate of Incorporation) which restricts or otherwise limits
the transfer of the Purchased Assets.
5. CONDITIONS TO OBLIGATIONS OF BUYER
The obligation of Buyer to consummate the transactions
contemplated by this Agreement shall be subject to the reasonable satisfaction,
or to the waiver by Buyer in writing, on or before the Closing Date, of the
following conditions, all of which are for the sole benefit of Buyer:
(a) REPRESENTATIONS AND WARRANTIES TRUE. The representations
and warranties of Seller contained in this Agreement, and the Disclosure
Schedule, shall be true in all material respects on the Closing Date.
(b) PERFORMANCE OF COVENANTS. Seller shall have performed and
complied in all material respects with each and every covenant, agreement and
condition required by this Agreement to be performed or complied with by Seller
prior to or on the Closing Date.
(c) NO GOVERNMENTAL OR OTHER PROCEEDING OR LITIGATION. No
order of any court or administrative agency shall be in effect which restrains
or prohibits any transaction contemplated hereby or which would limit or affect
Buyer's rights hereunder; no suit, action, investigation, inquiry or proceeding
by any governmental body or other person or entity shall be pending or
threatened against Seller or Buyer which challenges the validity or legality, or
seeks to restrain the consummation, of the transactions contemplated hereby or
which seeks to limit or otherwise affect any of Buyer's rights hereunder; and no
written advice shall have been received by Seller or Buyer or their counsel from
any governmental body or other person, and remain in effect, stating that an
action or proceeding will, if any such transaction is consummated or sought to
be consummated, be filed seeking to invalidate or restrain any such transaction
or limit or otherwise affect Buyer's or Seller's right to the ownership of the
Purchased Assets.
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(d) APPROVALS AND CONSENTS. All approvals, applications,
notifications or filings of or to public authorities, federal, state, or local,
and, except as consented to by Buyer, all consents or approvals of any
non-governmental persons who are parties to contracts or other agreements to
which Seller is also a party or to which assets of Seller are subject, the
granting of which is necessary for the consummation of the transactions
contemplated hereby or for preventing any material loss or disadvantage to Buyer
by reason of such transaction, shall have been obtained, and no such consent or
approvals shall have imposed a condition to such consent or approval which in
the reasonable opinion of Buyer is unduly burdensome to the financial position
or operations of Buyer.
(e) PRE-CLOSING PURCHASES BY SELLER. Seller shall have
purchased for an aggregate purchase price not exceeding $15,000 the following
items, which shall be deemed to be part of the Purchased Assets at Closing: (i)
used van, (ii) repaired retort furnace, (iii) a vacuum packaging machine with
Argon purge, (iv) refurbished bonding room equivalent to a Class 10,000 C clean
room, and (v) had installed a closed circuit security/alarm system the monthly
obligations for which will be paid by Buyer.
(f) FINANCING. Buyer shall have received financing in an
amount not less than five hundred thousand dollars ($500,000) in connection with
the transactions contemplated by this Agreement.
(g) ADMINISTRATIVE SERVICES AGREEMENT. Seller shall have
executed the Administrative Services Agreement in substantially the form
attached hereto as attached as EXHIBIT D (the "Services Agreement").
(h) LICENSE AGREEMENT. Seller shall have executed the License
Agreement in substantially the form attached hereto as EXHIBIT E (the "License
Agreement").
6. CONDITIONS TO OBLIGATIONS OF SELLER
The obligations of Seller to consummate the transactions
contemplated by this Agreement shall be subject to the reasonable satisfaction,
or to the waiver by Seller in writing, on or before the Closing Date, of the
following conditions, all of which are for the sole benefit of Seller:
(a) REPRESENTATIONS AND WARRANTIES TRUE. The representations
and warranties of Buyer contained in this Agreement shall be true in all
material respects on the Closing Date.
(b) PERFORMANCE OF COVENANTS. Buyer shall have performed and
complied in all material respects with each and every covenant, agreement and
condition required by this Agreement to be performed or complied with by it
prior to or on the Closing Date.
(c) NO GOVERNMENTAL OR OTHER PROCEEDING OR LITIGATION. No
order of any court or administrative agency shall be in effect which restrains
or prohibits any transaction contemplated hereby or which would limit or affect
Seller's rights hereunder; no suit, action, investigation, inquiry or proceeding
by any governmental body or other person or entity shall be pending or
threatened against Buyer or Seller which challenges the validity or legality, or
seeks to restrain the consummation, of the transactions contemplated hereby or
which seeks to limit or otherwise affect any of Seller's rights hereunder; and
no written advice shall have been received
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by Buyer or Seller or their counsel from any governmental body or other person,
and remain in effect, stating that an action or proceeding will, if any such
transaction is consummated or sought to be consummated, be filed seeking to
invalidate, or restrain any such transaction or limit or otherwise affect
Buyer's or Seller's right to the ownership of the Purchased Assets.
(d) APPROVALS AND CONSENTS. All approvals, applications,
notifications, or filings of or to public authorities, federal, state, or local,
and all consents or approvals of any non-governmental persons who are parties to
contracts or other agreements to which Buyer is also a party or to which assets
of Buyer are subject, the granting of which is necessary for the consummation of
the transactions contemplated hereby, shall have been obtained.
(e) ADMINISTRATIVE SERVICES AGREEMENT. Buyer shall have
executed the Services Agreement.
(f) LICENSE AGREEMENT. Buyer shall have executed the License
Agreement.
7. EXECUTION AND CLOSING
(a) TIME, DATE AND PLACE OF CLOSING. The purchase and sale
contemplated by this Agreement shall be consummated on or before June 1, 1999 at
the offices of Manatt, Phelps & Phillips LLP, 3030 Hansen Way, Suite 100, Palo
Alto, California 94304 at such other time as the parties may mutually agree or
at such other time, date or place as the parties may mutually agree.
(b) DELIVERIES BY SELLER. Subject to the terms and conditions
hereof, at the Closing Seller will deliver or cause to be delivered to Buyer the
following:
(i) the Purchased Assets.
(ii) a duly executed bill of sale, assignment and
assumption agreement in substantially the form attached hereto as EXHIBIT F and
other instruments of transfer in form and substance satisfactory to Buyer and
its counsel and sufficient to convey to Buyer all of Seller's right, title and
interest in and to all of the Purchased Assets.
(c) DELIVERIES BY BUYER. Subject to the terms and conditions
hereof, at the Closing Buyer will deliver to Seller a cashier's or certified
check or wire transfer in the amount of $400,000.00.
(d) OTHER DOCUMENTS. Each party shall deliver to the other at
the Closing such other documents, certificates, schedules, agreements and
instruments called for by this Agreement at such time.
(e) FURTHER ASSURANCES. Seller and Buyer agree that at or
after the Closing, upon the request of the other, each shall from time to time
execute and deliver to the other all such instruments and documents or further
assurances as shall be necessary to vest in Buyer title to and possession of the
Purchased Assets, and shall provide or otherwise make available to each other
all such documents, instruments, agreements and other information and take such
further actions as shall be necessary to consummate the transactions
contemplated hereby.
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(f) PRESS RELEASE. On or immediately after the Closing Date,
the parties shall issue a joint press release announcing the purchase of the
Purchased Assets in form and substance reasonably satisfactory to the parties
hereto.
8. WARRANTIES
(a) DISCLAIMER OF WARRANTY. Except as specifically set forth
herein, the Purchased Assets as delivered to Buyer hereunder on the Closing Date
are delivered "AS IS." SELLER SPECIFICALLY DISCLAIMS ALL OTHER WARRANTIES,
EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, ALL IMPLIED WARRANTIES OF
MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.
(b) AFTER THE CLOSING DATE, SELLER SHALL NOT BE LIABLE TO
BUYER, TO BUYER'S CUSTOMERS OR ANY OTHER PERSON WITH RESPECT TO ANY CLAIMS FOR
INCIDENTAL, SPECIAL, INDIRECT OR CONSEQUENTIAL DAMAGES, INCLUDING, WITHOUT
LIMITATION, LOSS OF PROFIT, ARISING OUT OF OR IN CONNECTION WITH THE OWNERSHIP
OR USE OF THE PURCHASED ASSETS, AND BUYER AGREES TO INDEMNIFY AND HOLD HARMLESS
SELLER FROM AND AGAINST ALL SUCH CLAIMS. BUYER AGREES THAT THIS LIMITATION OF
LIABILITY IS REASONABLE AND WILL NOT CAUSE IT TO LOSE ANY EXPECTED BENEFITS,
RIGHTS OR REMEDIES UNDER THIS AGREEMENT.
9. COVENANTS
(a) MAINTENANCE OF STATUS QUO. Seller agrees that from the
date of execution of this Agreement until the Closing Date, it will not (i)
offer or sell, or negotiate with or entertain any proposals from any other
person for any such offer or sale of the Purchased Assets, or (ii) negotiate
with or entertain any proposals from any other persons for any other transaction
wherein the Purchased Assets would be acquired, directly or indirectly, by any
party other than Buyer. Seller agrees that during the period from the time it
executes this Agreement to the Closing Date, Seller will conduct its business in
the ordinary course and will not, without the prior written consent of Buyer,
enter into any contract or commitment, incur any liability or take any other
action related to the Purchased Assets where such contract, commitment,
liability or action is not in the ordinary course of business.
(b) CONSENT TO TRANSFER. Seller hereby agrees that it will use
its best efforts to obtain the consent to the transfer of any agreement relating
to Purchased Assets from any party whose consent is required.
(c) ACCESS TO RECORDS. Buyer's representatives, attorneys and
accountants have had prior to the date hereof, and Seller shall allow them to
continue to have until the Closing Date, reasonable access to the records and
files, audits and properties of Seller as well as all information relating to
taxes, commitments, contracts, titles and the financial condition of, or
otherwise pertaining to, the business and affairs of Seller relating to the
Purchased Assets. From the date hereof, Seller agrees to cause its accountants
to cooperate with Buyer in making available all financial information concerning
the Purchased Assets as is requested, and Buyer and its accountants shall have
the right to examine all working papers pertaining to examinations
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of Seller's business relating to the Purchased Assets, or preparation of its
report by Seller's accountants. Unless and until the Closing contemplated
herein is consummated, Buyer shall hold in confidence, and shall use its best
efforts to cause its representatives, attorneys and accountants to hold in
confidence, all information (unless ascertainable from public or published
information or trade sources) obtained as aforesaid, and if such Closing is not
consummated on or before July 30, 1999, Buyer shall return to Seller all such
copies of documents relating to the business, assets and operations of Seller.
After the Closing Date to the extent Seller requires access to Buyer's records
to complete audits of Seller's financial statements, Buyer shall permit such
access.
(d) "BULK SALES" NOTICE. Seller hereby agrees that it shall
indemnify and hold harmless Buyer with respect to any failure by Seller to
comply in all respects with the "bulk sales" or "bulk transfer" laws of any
jurisdiction in which such bulk sales laws apply in connection with the
transactions contemplated hereby.
(e) IMPLEMENTATION OF REPRESENTATIONS AND WARRANTIES. Each
party hereto shall use its reasonable efforts to render accurate as of the
Closing Date their respective representations and warranties contained in this
Agreement, and shall refrain from taking any action which would render
inaccurate as of the Closing Date any of such representations or warranties.
(f) COMMUNICATIONS. Between the date hereof and the Closing
Date, neither Seller nor Buyer shall furnish any communication to the public
with respect to the transactions contemplated by this Agreement, without the
prior written approval of the other as to the content thereof.
(g) CHANGE OF CONTROL. Buyer shall not enter into any
transaction which would result in a Change of Control of Buyer without the prior
written consent of Seller, which consent shall not be unreasonably withheld.
For purposes of this section, "Change of Control" shall mean any merger, sale,
consolidation, reorganization, recapitalization or other business combination
with, to, or into one or more third parties which after such event Buyer is not
the surviving entity or as a result of which Buyer's shareholders, by virtue of
their shareholdings in Buyer immediately prior to such merger, sale,
consolidation, reorganization, recapitalization or other business combination do
not own directly or indirectly own more than fifty percent (50%) of the
surviving entity immediately after such transaction.
(h) COLLECTION OF ACCOUNTS RECEIVABLE. Buyer agrees that it
shall use its bests efforts to collect on behalf of Seller any and all accounts
receivable retained by Seller and not transferred to Buyer pursuant to the terms
of this Agreement which are obligations of Buyer's customers after the closing
of the transactions' contemplated by this Agreement. Buyer further agrees that
Seller shall have priority over Buyer with respect to payment of such accounts
receivable obligations by Buyer's customers.
10. CONFIDENTIALITY
Buyer and Seller recognize and acknowledge that all papers,
documents, reports, abstracts, or summaries thereof and any and all information
relevant and pertaining to the Purchased Assets, are valuable, special and
unique assets. The parties agree not to make or
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permit to be made any copies, abstracts or summaries of these documents, except
in pursuit of their activities hereunder, and Seller agrees to hold and
maintain as confidential and proprietary all information and materials of any
sort relating to the Purchased Assets unless and until any such information or
material is public information or otherwise freely made available. The parties
hereto further agree to keep confidential and not to disclose to others, except
as required hereunder or by law, any matter or thing pertaining to the business
of the other that is ascertained through their association under this
Agreement, the disclosure of which would be contrary to the proprietary
interests of either of the parties hereto. The parties hereto agree that the
provisions of the foregoing sentence of this Section 10 shall survive until
mutually rescinded in writing by the parties hereto.
11. SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS;
INEMNIFICATION
(a) SURVIVAL. The representations, warranties and covenants of
the parties contained in this Agreement or in any certificate or instrument
delivered pursuant hereto shall survive the Closing Date and, for purposes of
the indemnification obligations of each party for breach of representations and
warranties contained herein pursuant to Section 11(b), shall survive the Closing
Date and continue for all respective Claims (as defined in Section (11(b) below)
as to which a party has given written notice of the general nature of the
Claim to the other party on or prior to two (2) years from the Closing Date.
(b) INDEMNIFICATION AND DEFENSE. Seller agrees to indemnify
and hold harmless Buyer and officers, directors, employees, attorneys, and
agents from and against any and all losses, damages, claims (including
administrative claims) costs and expenses, including reasonable attorneys' fees
(any such loss, damage, cost, expense or claim herein called a "Claim"), which
Buyer may at any time sustain or incur by reason of (i) any inaccuracy or breach
of any of the representations or warranties of Seller contained herein or in any
certificate delivered pursuant hereto or (ii) any debts or obligations of Seller
arising out of or connected with the use of the Purchased Assets or operation of
the Business prior to the Closing Date, excluding the Assumed Liabilities.
Buyer agrees to indemnify and hold harmless Seller, its officers, directors,
employees, attorneys and agents with respect to any Claim which Seller may at
any time sustain or incur (i) by reason of any inaccuracy in or breach of any of
the representations, warranties of Buyer contained herein or in any certificate
delivered pursuant hereto; or (ii) arising out of the failure of Buyer to
discharge the Assumed Liabilties.
(c) PROCEDURE FOR CLAIMS. The following procedures shall
govern the rights of a party entitled to indemnification under Section 11(b) of
this Agreement.
(i) NOTICE OF CLAIM. When a party seeking
indemnification hereunder (an "Indemnified Party") learns of any Claim for which
it wishes recovery under this Agreement, it shall notify the other party (the
"Indemnifying Party") of the Claim within thirty (30) days of the assertion of
any Claim. Any expenses for which the Indemnified Party is entitled to recover
hereunder shall be paid as incurred by the Indemnifying Party and in all events
within thirty (30) days following written demand for payment.
(ii) THIRD PARTY CLAIMS. If the Claim involves an actual
or threatened suit, proceeding, claim or demand against an Indemnified Party by
any other person (a "Third
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Party Claim"), then the Indemnifying Party shall have the right to elect, by
written notice given to the Indemnified Party either to (1) tender to the
Indemnified Party the defense or prosecution of such Claim, using experienced
counsel of the Indemnified Party's own choosing or (2) assume the defense or
prosecution of such Third Party Claim.
(iii) DEFENSE OF THIRD PARTY CLAIMS. If the defense or
prosecution of a Third Party Claim is tendered to and subsequently assumed by
the Indemnified Party pursuant to Subsection 11(c)(ii), the Indemnifying party
shall be entitled, at its own expense, to participate in the settlement or
defense, with counsel chosen by the Indemnifying Party. If the Indemnifying
Party assumes the defense or prosecution of such Third Party Claim, it will take
all steps necessary in the defense, prosecution or settlement of such Third
Party Claim and shall hold the Indemnified Party harmless from and against all
Claims caused by or arising out of any settlement thereof or any judgment in
connection therewith relating to the matter for which indemnity has been
claimed. The Indemnifying Party may not, in such defense, prosecution or
settlement of any Claim, except with the written consent of the Indemnified
Party, consent to entry of any judgment or enter into any settlement (1) which
does not include, as an unconditional term thereof, the giving to the
Indemnified Party by the third party of a full and final release from all
liability with respect to all Claims which were or reasonably should have been
raised in the action or proceeding in question, (2) which includes, as a term
thereof, any limitation, restriction or other promise which effects the right of
the Indemnified Party to carry on or conduct its businesses (then or in the
future) or which makes more expensive or less profitable, or otherwise adversely
affects, the manner in which the Indemnified Party may conduct any of its
businesses (then or in the future), or (3) which includes any requirement for
any payment by the Indemnified Party, unless such payment has been approved in
writing by the Indemnified Party.
(iv) FAILURE TO ASSUME DEFENSE OF THIRD PARTY CLAIMS. If
the Indemnifying Party does not assume the defense or prosecution of any Third
Party Claim pursuant to this Agreement, then the Indemnified Party may defend or
prosecute such Third Party Claim in such manner as it deems appropriate and all
attorneys' fees, costs and expenses so incurred by the Indemnified Party in
connection with its defense or prosecution of the Claim shall be reimbursed by
the Indemnifying Party to the Indemnified Party within thirty (30) days from
demand for payment. If settlement of such Claim is made by the Indemnified
Party or if judgment is entered against the Indemnified Party with respect to a
Claim, then the Indemnifying Party shall, within thirty (30) days following
delivery of written demand to the Indemnifying Party, discharge for the benefit
of the Indemnified Party the amount of such settlement or judgment of the Third
Party Claim without limit.
(v) MINIMUM CLAIMS FOR INDEMNIFICATION. An indemnified
party shall be entitled to indemnification under this Agreement only when the
aggregate claims for indemnification by such party exceed Five Thousand Dollars
($5,000), at which time an indemnified party shall be entitled to
indemnification for all claims, including the initial $5,000.
(d) REMEDIES. The indemnification provisions of Section 11(b)
hereof shall not be deemed exclusive and shall not prejudice any other rights or
remedies, at law or in equity, of any party under this Agreement with respect to
any matter relating to the terms, provisions, covenants or conditions of this
Agreement or any transaction contemplated hereby.
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12. TERMINATION AND ABANDONMENT
(a) TERMINATION BY SELLER. This Agreement may be terminated
and the purchase and sale of the Purchased Assets abandoned at any time prior to
the Closing Date by action of the Board of Directors of Seller upon written
notice, specifying the basis for such termination, if: in the good faith
judgment of said Board of Directors, Buyer shall have failed to comply in any
material respect with any of their respective covenants or agreements contained
in this Agreement or if any material representation or warranty of Buyer
contained in this Agreement shall have been materially inaccurate, or if any
condition precedent to Seller's obligations contained in this Agreement which
must be satisfied according to its terms prior to the Closing shall not have
been satisfied or is not capable of being satisfied.
(b) TERMINATION BY BUYER. This Agreement may be terminated,
and the purchase and sale of the Purchased Assets abandoned, at any time prior
to the Closing Date by action of the Board of Directors of Buyer upon written
notice, specifying the basis for such termination, if in the good faith judgment
of said Board of Directors, Seller shall have failed to comply in any material
respect with any of its covenants or agreements contained in this Agreement, or
if any material representation or warranty of Seller contained in this Agreement
shall have been materially inaccurate, or if any condition precedent to Buyer's
obligations contained in this Agreement which must be satisfied according to its
terms prior to the Closing shall not have been satisfied or is not capable of
being satisfied.
(c) MUTUAL CONSENT. This Agreement may be terminated, and the
purchase and sale of the Purchased Assets abandoned, at any time before the
Closing Date, by mutual consent of Seller and Buyer expressed by action of their
respective Boards of Directors.
(d) EFFECT OF TERMINATION. Upon any permitted termination
pursuant to the provision of this Section 12, both parties shall be relieved of
all further obligations under this Agreement, except for obligations under
Section 10 (Confidentiality).
13. MISCELLANEOUS.
(a) SUCCESSORS AND ASSIGNS. Except as otherwise provided
herein, the terms and conditions of this Agreement shall inure to the benefit of
and be binding upon the respective successors and assigns of the parties.
Nothing in this Agreement, express or implied, is intended to confer upon any
party other than the parties hereto or their respective successors and assigns
any rights, remedies, obligations, or liabilities under or by reason of this
Agreement, except as expressly provided in this Agreement.
(c) GOVERNING LAW. This Agreement shall be governed by and
construed under the laws of the State of California as applied to agreements
among California residents entered into and to be performed entirely within
California.
(d) COUNTERPARTS. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
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(e) TITLES AND SUBTITLES. The titles and subtitles used in
this Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
(f) NOTICES. All notices and other communications required or
permitted hereunder shall be in writing, shall be effective when given, and
shall in any event be deemed to be given (i) five (5) days after deposit with
the U.S. Postal Service or other applicable postal service, if delivered by
first class mail, postage prepaid, (ii) upon delivery, if delivered by hand,
(iii) upon delivery through Federal Express or similar overnight courier,
freight prepaid, or (iv) one day after the business day of delivery by facsimile
transmission to the facsimile number set forth on the signature page hereto, if
deliverable by facsimile transmission, with copy by first class mail, postage
prepaid, and shall be addressed, to the parties at the respective addresses set
forth on the signature page of this Agreement or at such other address as such
party may designate by ten (10) days' advance written notice to the other
parties hereto.
(g) FINDER'S FEES. Each party represents that it neither is
nor will be obligated for any finders' fee or commission in connection with this
transaction. Each party agrees to indemnify and to hold harmless the other
party from any liability for any commission or compensation in the nature of a
finders' fee (and the costs and expenses of defending against such liability or
asserted liability) for which such party or any of its officers, partners,
employees, or representatives is responsible.
(h) EXPENSES. Irrespective of whether the Closing is effected,
each party shall pay its own costs and expenses that it incurs with respect to
the negotiation, execution, delivery and performance of this Agreement. If any
action at law or in equity is necessary to enforce or interpret the terms of
this Agreement, the prevailing party shall be entitled to reasonable attorney's
fees, costs and necessary disbursements in addition to any other relief to which
such party may be entitled.
(i) AMENDMENTS AND WAIVERS. Any term of this Agreement may be
amended and the observance of any term of this Agreement may be waived (either
generally or in a particular instance and either retroactively or
prospectively), only with the written consent of the Buyer and Seller.
(j) SEVERABILITY. If one or more provisions of this Agreement
are held to be unenforceable under applicable law, such provision shall be
excluded from this Agreement and the balance of the Agreement shall be
interpreted as if such provision were so excluded and shall be enforceable in
accordance with its terms.
(k) ENTIRE AGREEMENT. This Agreement and the documents
referred to herein constitute the entire agreement among the parties with
respect to the subject matter hereof and no party shall be liable or bound to
any other party in any manner by any warranties, representations, or covenants
except as specifically set forth herein or therein.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
ORYX TECHNOLOGY CORP.
By: /s/ Mitchel Underseth
---------------------
Name: Mitchel Underseth
Title: Chief Financial Officer
Address: 1100 Auburn Street
Fremont, CA 94538
Facsimile:
-----------------
ORYX ADVANCED MATERIALS, INC.
By: /s/ Victor Tan
---------------------
Name: Victor Tan
Title: President
Address: 46713 Fremont Boulevard
Fremont, California 94538
Facsimile:
------------------
Exhibits
- --------
Disclosure Schedule - Exhibit A*
Purchased Assets - Exhibit B*
Assumed Liabilities - Exhibit C*
Administrative
Services Agreement - Exhibit D
License Agreement - Exhibit E
Bill of Sale - Exhibit F
* Omitted - Oryx Technology Corporation
agrees to furnish supplementally a copy
of any omitted schedule to the
Commission upon request.
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EXHIBIT D
ADMINISTRATIVE SERVICES AGREEMENT
<PAGE>
ADMINISTRATIVE SERVICES AGREEMENT
This Agreement is made and entered into as of June 1, 1999, by and
between Oryx Technology Corp., a corporation organized and existing under the
laws of the State of Delaware ("Seller"), and Oryx Advanced Materials, Inc., a
corporation organized and existing under the laws of the State of California
("Buyer"). Buyer and Seller are the only parties hereto.
R E C I T A L S
- - - - - - - -
A. Seller operates the Intragene and related materials coating business.
B. Seller and Buyer have entered into that certain Asset Purchase Agreement
dated June 1, 1999 (the "Purchase Agreement") pursuant to which Seller will sell
to Buyer substantially all of the assets of the Business (as defined in the
Purchase Agreement).
C. Pursuant to the terms of the Purchase Agreement, Seller has agreed to
provide certain accounting and administrative service functions for Buyer as set
forth herein.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements hereinafter set forth, the parties agree as follows:
ARTICLE I
POWERS AND DUTIES OF SELLER
1.1 SERVICES. Subject to and in accordance with the terms and
provisions of this Agreement, and subject to the direction and control of Buyer,
Seller shall provide accounting and administrative support services to Buyer, as
reasonably requested by Buyer from time to time, including: (i) accounting and
management information systems support, (ii) monthly closing of the financial
records of Buyer related to the Business and (iii) preparation of routine
periodic financial statements.
1.2 OTHER. Seller shall undertake all activities reasonably
necessary to fulfill the obligations set forth in Section 1.1 above.
Notwithstanding the foregoing, Seller shall not provide to Buyer any tax
preparation, regulatory reporting or legal services.
1.3 USE OF EMPLOYEES, AGENTS, AFFILIATES AND CONTRACTORS.
Seller shall have the right to carry out its responsibilities hereunder through
employees, agents, affiliates, and independent contractors.
ARTICLE II
STANDARD OF CARE
2.1 STANDARD OF CARE. Seller shall perform its duties hereunder in a
good, workmanlike, and efficient manner, in accordance generally with applicable
industry standards and practices. Seller shall not be liable to Buyer for any
act or omission in connection with its
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performance under this Agreement resulting in damage, loss, cost, penalty or
fine, except to the extent caused by Seller's gross negligence or willful
misconduct.
ARTICLE III
RECORDS, ACCOUNTS, AND SETTLEMENT
3.1 GENERAL ACCOUNTING RECORDS. Seller shall maintain detailed and
comprehensive accounting records on behalf of Buyer in such form and substance
as Buyer shall reasonably specify, including general ledgers, supporting and
subsidiary journals, invoices, checks, and other customary documentation,
sufficient to provide a record of miscellaneous income and expenditures and
periodic statements of financial position and the results of operations for
managerial, tax, regulatory, or other financial reporting purposes. Such
records shall be retained for the duration of the period allowed Buyer for audit
or the period necessary to comply with tax or other regulatory requirements.
The records shall reflect all obligations, advances, and credits of Buyer.
3.2 BANK ACCOUNTS. Seller shall open and maintain one or more
separate bank accounts for the payment of miscellaneous office and overhead
expenses associated with the operation of the Business.
ARTICLE IV
RENTAL
4.1 USE OF LEASED SPACE. In the event that Buyer is unable to lease
directly from Prologis ("Lessor") or sublease from Seller the space located at
46713 Fremont Boulevard, Fremont, California 94538 (the "Leased Space"), Seller
shall allow Buyer to occupy the Leased Space on the same terms and conditions
and at the same lease rate as are applicable to Seller pursuant to the terms of
an occupancy license agreement to be negotiated by Seller and Buyer. Such
occupancy license agreement shall also provide that Seller shall add Buyer as an
additional issued under Seller's insurance policy applicable to the Leased Space
and shall charge Buyer a pro rata portion of the insurance premium for such
insurance policy for the time period during which Buyer occupies the Leased
Space.
ARTICLE V
FEES
5.1 FEES. Seller shall provide the services described in Article I of
this Agreement to Buyer on a no-charge basis until December 31, 1999.
Thereafter, if the term of this Agreement is extended by agreement of the
parties, Seller and Buyer shall negotiate a mutually acceptable fee to be paid
to Seller by Buyer for all office overhead and off-site general and
administrative expenses incurred in connection with the Business, including,
without limitation the following:
a. Accounting, data processing, personnel administration,
billing, and record keeping.
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b. The fully burdened cost of office space and secretarial
services in Seller's offices allocated to the Business.
c. Rentals and other charges for office and records storage
space, telephone service, office equipment, and supplies at Seller's offices
allocated to the Business.
d. Routine industry and governmental liaison activities on
behalf of Buyer.
ARTICLE VI
TERMINATION OF AGREEMENT
6.1 TERM. This Agreement shall terminate in its entirety on December
31, 1999. Notwithstanding the foregoing, this Agreement may be renewed for such
additional term and on such terms and conditions as Seller and Buyer shall
mutually agree.
6.2 TERMINATION BY BUYER. Notwithstanding the foregoing, this
Agreement may be terminated by Buyer any time if:
a. Seller fails to perform a material obligation imposed upon it
under this Agreement and such failure continues for a period of thirty (30) days
after notice from Buyer demanding performance; or
b. A receiver, liquidator, assignee, custodian, trustee,
sequestrator, or similar official for a substantial part of Seller's assets is
appointed and such appointment is neither made ineffective nor discharged within
thirty (30) days after the making thereof, or such appointment is consented to,
requested by, or acquiesced in by Seller; or
c. Seller commences a voluntary case under any applicable
bankruptcy, insolvency, or similar law now or hereafter in effect; or consents
to the entry of an order for relief in an involuntary case under any such law or
to the taking possession by a receiver, liquidator, assignee, custodian,
trustee, sequestrator, or other similar official of any substantial part of its
assets; or makes a general assignment for the benefit of creditors; or fails
generally to pay its debts as such debts become due; or takes corporate or other
action in furtherance of any of the foregoing; or
d. Entry is made against Seller of a judgment, decree, or order
for relief affecting a substantial part of its assets by a court of competent
jurisdiction in an involuntary case commenced under any applicable bankruptcy,
insolvency, or other similar law of any jurisdiction now or hereafter in effect;
or
e. For convenience upon the delivery of thirty (30) days prior
written notice to Seller.
6.3 TERMINATION BY SELLER. Notwithstanding the foregoing, after a
period of six (6) months, this Agreement may be terminated by Seller at any time
upon thirty (30) days prior written notice to Buyer.
3
<PAGE>
ARTICLE VII
CONFIDENTIALITY
7.1 CONFIDENTIALITY. The parties agree that any and all information,
correspondence, financial statements and records and other documents transmitted
or communicated by either party to the other party shall be received and treated
in secrecy and confidence, and shall not be used by the received party, or
disclosed by the receiving party to any person or firm without the prior written
consent of the disclosing party, except as otherwise provided herein.
7.2 EXCEPTIONS. Such restrictions on use or disclosure of information
do not extend to any item of information which (a) is publicly known at the time
of its disclosure, (b) is lawfully received by the receiving party from a third
party which does not have a confidential relationship to the disclosing party,
or (c) the receiving party can demonstrate was in possession or known by it
before its receipt from the disclosing party.
ARTICLE VIII
INDEPENDENT CONTRACTOR
8.1 INDEPENDENT CONTRACTOR. Nothing in this Agreement shall in any
way be construed to constitute Seller as an agent, employee or representative of
Buyer, but Seller shall perform the services hereunder as an independent
contractor.
ARTICLE IX
GENERAL PROVISIONS
9.1 SUCCESSORS AND ASSIGNS. Except as otherwise provided herein, the
terms and conditions of this Agreement shall inure to the benefit of and be
binding upon the respective successors and assigns of the parties. Nothing in
this Agreement, express or implied, is intended to confer upon any party other
than the parties hereto or their respective successors and assigns any rights,
remedies, obligations, or liabilities under or by reason of this Agreement,
except as expressly provided in this Agreement.
9.2 GOVERNING LAW. This Agreement shall be governed by and construed
under the laws of the State of California as applied to agreements among
California residents entered into and to be performed entirely within
California.
9.3 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
9.4 TITLES AND SUBTITLES. The titles and subtitles used in this
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
4
<PAGE>
9.5 NOTICES. All notices and other communications required or
permitted hereunder shall be in writing, shall be effective when given, and
shall in any event be deemed to be given (a) five (5) days after deposit with
the U.S. Postal Service or other applicable postal service, if delivered by
first class mail, postage prepaid, (b) upon delivery, if delivered by hand, (c)
one business day after the business day of deposit with Federal Express or
similar overnight courier, freight prepaid, or (d) one day after the business
day of delivery by facsimile transmission, if deliverable by facsimile
transmission, with copy by first class mail, postage prepaid, and shall be
addressed, to the parties at the respective addresses set forth on the signature
page of this Agreement or at such other address as such party may designate by
ten (10) days' advance written notice to the other parties hereto.
9.6 AMENDMENTS AND WAIVERS. Any term of this Agreement may be amended
and the observance of any term of this Agreement may be waived (either generally
or in a particular instance and either retroactively or prospectively), only
with the written consent of the Buyer and Seller.
9.7 SEVERABILITY. If one or more provisions of this Agreement are
held to be unenforceable under applicable law, such provision shall be excluded
from this Agreement and the balance of the Agreement shall be interpreted as if
such provision were so excluded and shall be enforceable in accordance with its
terms.
9.8 ENTIRE AGREEMENT. This Agreement and the documents referred to
herein constitute the entire agreement among the parties with respect to the
subject matter hereof and no party shall be liable or bound to any other party
in any manner by any warranties, representations, or covenants except as
specifically set forth herein or therein.
5
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
ORYX TECHNOLOGY CORP.
By:
--------------------
Name:
Title:
Address: 1100 Auburn Street
Fremont, CA 94538
ORYX ADVANCED MATERIALS, INC.
By:
--------------------
Name:
Title:
Address:
--------------------
--------------------
6
<PAGE>
EXHIBIT E
LICENSE AGREEMENT
<PAGE>
LICENSE AGREEMENT
This License Agreement (the "Agreement") is made and entered into as of
June 1, 1999, by and between Oryx Technology Corp., a corporation organized and
existing under the laws of the State of Delaware ("Oryx"), and Oryx Advanced
Materials, Inc., a corporation organized and existing under the laws of the
State of California ("Licensee").
R E C I T A L S
- - - - - - - -
A. Licensee has acquired from Oryx and now intends to operate the Intragene
and related materials coating business.
B. Oryx and Licensee have entered into an Asset Purchase Agreement dated as
of June 1, 1999 (the "Purchase Agreement"), pursuant to which Oryx has
sold and Licensee has purchased certain assets on the terms and
conditions set forth therein.
C. Pursuant to the terms of the Purchase Agreement, Oryx and Licensee have
agreed to enter into this License Agreement which provides for the
license of certain proprietary rights owned by Oryx to Licensee, which
are necessary for the operation of the Business (as defined below) on the
terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements hereinafter set forth, the parties hereto hereby covenant and
agree as follows:
1. DEFINITIONS.
When used herein.
(a) The "Business" shall mean the Intragene and related coating
business acquired by Licensee pursuant to the terms of the Purchase Agreement
and now operated by Licensee.
(b) "Confidential Information" shall mean all information
related to the Licensed Technology (including Technical Information) disclosed
or made available to Licensee, its employees or its representatives by Oryx that
is marked, designated or described as confidential.
(c) The "Marks" means the trademark "Oryx Materials" and all
trade or service mark registrations (and any applications therefor) associated
therewith.
(d) "Licensed Technology" shall mean all of Oryx's proprietary
technology relating to the Business which has been licensed to Licensee
hereunder including, but not limited to, the Patents and the Marks.
(e) "Oryx Industrial Property Rights" shall mean all
Confidential Information and, whether or not the following constitute
Confidential Information, all of Oryx's patents, licenses, trademarks, trade
names, inventions, inventor's notes, copyrights, formulea know-how,
1
<PAGE>
trade secrets, drawings and designs relating to the Business represented by
the Licensed Technology.
(f) "Patents" shall mean the following patents: (i) U.S. Patent
4,535,029 dated 8/13/85, (ii) U.S. Patent 4,426,423 dated 11/17/84, (iii) U.S.
Patent 4,358,506 dated 11/9/82, (iv) U.S. Patent 4,376,806 dated 3/15/83 and (v)
U.S. Patent 4,396,677 dated 8/2/83.
(g) "Technical Information" shall mean all data in written,
tangible or machine-readable form, relating to the Oryx Industrial Property
Rights and the Licensed Technology which is disclosed to Licensee by Oryx
pursuant to the terms of this Agreement..
2. GRANT OF RIGHT.
(a) Subject to the terms and conditions herein, and full
compliance with the provisions of Section 5, Oryx grants to Licensee an
exclusive, nontransferable, worldwide right and License to use the Oryx
Industrial Property Rights solely for the manufacture, sale, lease, or other
disposition of products incorporating the Licensed Technology. Oryx further
grants to Licensee an exclusive, nontransferable right to (i) modify and make
derivative works from the Oryx Industrial Property and (ii) subject to the prior
written consent of Oryx, which shall not be unreasonably withheld, sublicense
the Oryx Industrial Property rights solely for the purposes of manufacture,
product development, distribution or related uses. The license rights granted
pursuant to this Section 2(a) shall become perpetual, irrevocable and fully paid
upon Licensor's payment in full of the royalty payments set forth in Section 3
below.
(b) Nothing in this Agreement shall be construed to grant
Licensee any right or license with respect to any product or device manufactured
by Oryx or any of its subsidiaries, or, except as specifically provided in
subsection (a) above, to grant Licensee any right to use the Oryx Industrial
Property Rights (or any portion thereof).
3. ROYALTY PAYMENTS
(a) Licensee shall pay Oryx, in cash, on a quarterly basis
forty-five (45) days after the end of each quarter (June 1-August 31, September
1-November 30, December 1-last day of February and March 1 - May 31) in arrears,
royalties based upon gross profits of the Business as set forth below, (except
that, in the first year, payments shall be due within ninety (90) days after the
end of the first quarter instead of forty-five (45) days.) Notwithstanding the
foregoing, Licensee's total royalty payments to Oryx under Section 3(b) shall
not exceed an aggregate of $2.2 million.
(b) For the period from June 1, 1999 through May 31, 2002 (such
twelve months period and each such period thereafter being the relevant annual
period hereunder), Licensee shall pay Oryx an amount equal to the first $300,000
(three hundred thousand dollars) of the Business' gross profits for each year.
The next $100,000 (one hundred thousand dollars) of the Business' gross profits
for each year shall be retained by Licensee. Thereafter, Oryx and Licensee
shall split equally (50% (fifty percent) of the Business' gross profits in
excess of $400,000 in such year.
2
<PAGE>
(i) As used herein, the term "gross profits" shall mean
the Business' gross margin after deducting all expenses associated with the
revenues of the Business. Gross profits shall be paid quarterly in arrears,
forty five (45) days after the end of such quarter, with any difference in
payments for credits and adjustments based on the average costs being made up in
the last quarterly payment for the annual period.
(ii) For purposes of calculating "gross profits" for
determining royalty payments to Oryx, (1) total payroll costs, including
benefits, shall not exceed the higher of (A) five hundred thousand dollars
($500,000), or (B) 18% of gross revenues of the Business for the applicable
quarter (including as Victor Tan's gross annual salary no more than $150,000 for
the first twenty four (24) months of this Agreement and $165,000 thereafter),
(2) total administrative, sales and marketing, research and development, and
other operating costs shall not exceed the average of such costs as a percentage
of revenues for the twelve (12) months ending February 28, 1999, gauged on an
annual basis evenly divided among the four quarters, as adjusted for inflation
measured by the CPI for the Greater San Francisco Bay Area and (3) "gross
profits" shall exclude any adjustments or write-offs to accounts receivable,
inventory and work-in-process. Any excess of the respective costs over the
limits set forth in subsections (1) and (2) in the preceding sentence shall not
be deducted from revenues in calculating gross profits.
(iii) Any sale to or by an Affiliate of Licensee to a
customer of the Business shall be considered a sale made directly by Licensee
absent Oryx's prior written consent. All sales to Affiliates shall be re-priced
as if the sales were made directly to the ultimate end user. An "Affiliate" is
deemed to be any person related by blood or marriage to any officer, director,
or stockholder of Licensee, or under the common control, directly or indirectly,
of Licensee.
(c) For the period from June 1, 2002 through the last day of
May 2009, Licensee shall pay to Oryx a royalty based upon the Business' gross
profit on an annual basis as follows:
<TABLE>
<CAPTION>
Annual Gross Profit Royalty Payment
------------------- ---------------
<S> <C>
LESS THAN $250,000 5%
$ 250,000-500,000 15%
GREATER THAN $500,000 20%
</TABLE>
Payments to Oryx shall be made as described above on a quarterly basis.
(d) Standard annual audit rights shall apply. If there is any
shortfall in royalty payments due of more than 5% for the period being audited,
then the reasonable costs of the audit shall be borne by Licensee, otherwise
Oryx shall bear the costs of such audit. No audit may occur for any period more
than eighteen (18) months after the end of the audited period, and no period
subject to audit shall be less than twelve (12) months.
3
<PAGE>
(e) After May 31, 2002, Licensee shall have the right to elect
a one-time royalty payment as follows to Oryx which shall buy out all future
royalty payments to be made under the Agreement (excluding any right to payment
accrued but not yet paid). Such one time cash payment shall be made, if at all,
on or before the immediately following June 16 of the respective year and shall
be preceded by an election notice in writing on or before June 11 of such year.
<TABLE>
<CAPTION>
After May 31 and Lump Sum Royalty Payment
before June 16 ------------------------
--------------
<S> <C>
2002 $500,000
2003 $400,000
2004 $300,000
2005 $200,000
</TABLE>
(f) Notwithstanding subsections (b) through (e) above, upon any
merger, sale, consolidation, reorganization or other business combination with,
to, or into one or more third parties which after such event Licensee is not the
surviving entity or as a result of which Licensee's shareholders, by virtue of
their shareholdings in Licensee immediately prior to such merger, sale,
consolidation, reorganization, recapitalization or other business combination do
not own directly or indirectly own more than fifty percent (50%) of the
surviving entity immediately after such transaction (a "Change of Control"),
Licensee shall be obligated to pay to Oryx a one time cash royalty payment in
lieu of any future royalty payments under this Agreement on or before the
initial closing of the transaction resulting in such Change of Control (the
"Effective Date") as follows:
<TABLE>
<CAPTION>
Effective Date:
June 1 to May 31 Lump Sum Royalty Payment
---------------- ------------------------
<S> <C>
1999 $1,750,000
2000 $1,300,000
2001 $1,000,000
2002 $ 500,000
2003 $ 400,000
2004 $ 300,000
2005 $ 200,000
</TABLE>
4. TITLE AND PROPRIETARY RIGHTS.
Title and ownership to the Oryx Industrial Property Rights and the
Licensed Technology reside in Oryx and no portion of such title or ownership is
transferred to Licensee by reason hereof.
4
<PAGE>
5. TECHNICAL INFORMATION.
Upon the closing of the transaction set forth in the Purchase Agreement,
Oryx will deliver to Licensee the Technical Information.
6. CONFIDENTIAL INFORMATION.
(a) Licensee understands that all Confidential Information is
proprietary and confidential to Oryx and Oryx and is obligated to protect and
maintain the confidentiality of the same. Licensee shall refrain from
disclosing any Confidential Information to any third party, and shall take all
necessary and proper action to preserve the secrecy and prevent disclosure of
such Confidential Information. Confidential Information shall be disclosed or
made available to Licensee's employees only on a need-to-know basis to the
extent necessary for Licensee to enjoy the benefits of the License granted
hereunder. In furtherance of the foregoing, Licensee shall establish a
reasonable security procedure to prevent unauthorized access to the Confidential
Information.
(b) Licensee shall not use any of the Confidential Information
except in connection with the activities authorized under this Agreement.
(c) Licensee shall appropriately identify and mark all
reproductions, copies, extracts or the like of any documents containing
Confidential Information as the "Property of Oryx Technology Corp," and as
"Confidential," before distributing the same to its officers, employees, or
where permitted hereunder, to others.
(d) The foregoing restrictions will not apply to information
that (i) is known to Licensee at the time of communication by Oryx to Licensee,
(ii) has become publicly known through no wrongful act of Licensee, (iii) has
been rightfully received by Licensee from a third party authorized to make such
communication without restriction, (iv) has been independently developed by
Licensee, without use of any Confidential Information, the burden of proof with
respect to such independent development resting on Licensee or (v) has been
approved for release by written authorization of Oryx.
7. REPRESENTATIONS, WARRANTIES AND INDEMNITIES
(a) REPRESENTATIONS AND WARRANTIES. Oryx warrants that, as of
the date hereof, (i) the Technical Information furnished to the Licensee under
this Agreement is the same as that Oryx uses in the Business, (ii) Oryx has the
right and authority to enter into this Agreement, (iii) to the best of its
knowledge, Oryx has all necessary power and rights to license the Technical
Information and the Oryx Industrial Property Rights as contemplated hereunder,
(iv) to the best of Oryx's knowledge the Licensed Technology, Technical
Information and Oryx Industrial Property Rights do not infringe any intellectual
property rights of any third party, including, but not limited to, any patents,
copyrights, trade secrets or trademarks, (v) Oryx has the right to grant the
licenses granted hereunder without breaching or conflicting with any agreement
of Oryx with third parties, (vi) except as disclosed to Licensee in writing,
Oryx has received no claims that the Technical Information infringes on the
industrial property rights of any third party.
5
<PAGE>
(b) INDEMNITY. Oryx agrees to indemnify and hold the Licensee
and its officers, directors, principal stockholders and other affiliates and
agents, (collectively "Affiliates") harmless from all claims, losses,
liabilities, damages, deficiencies, costs, penalties, interest and expenses,
including reasonable attorneys' fees and expenses of investigation (hereafter
individually a "Claim" and collectively "Claims") incurred by (a) Licensee or
any of its Affiliates as a result of any inaccuracy of a representation or
breach of any warranty set forth in Section 6(a) above; provided the Licensee
notifies Oryx immediately of any such actual or threatened action, given Oryx
sole control of the defense and settlement of such action, and provide Oryx with
reasonable assistance, on Oryx's request and at Oryx's expense, as established
in Section 11 of the Purchase Agreement.
(c) DISCLAIMER. EXCEPT AS EXPRESSLY SET FORTH IN THIS SECTION
6, ORYX INDUSTRIAL PROPERTY RIGHTS, LICENSED TECHNOLOGY AND TECHNICAL
INFORMATION ARE PROVIDED "AS IS" WITHOUT WARRANTY OR CONDITON OF ANY KIND,
EXPRESS OR CONDITIONS OF MERCHANTABILITY OR FITNESS FOR A LPARTICULAR PURPOSE.
8. TERM.
(a) TERM. This Agreement shall become effective as of the date
hereof and shall continue perpetually thereafter.
(b) TERMINATION FOR BREACH OF THE PURCHASE AGREEMENT. The
parties acknowledge and agree that this Agreement shall be terminated in its
entirety upon a Termination Event, as set forth below. Payments under Section 3
of this Agreement may be accelerated and this Agreement may be terminated in its
entirety by Oryx upon the conditions set forth in this Section 8(b), upon
written notice to Licensee, in the event that Licensee fails to pay in full,
when due, any payment required under Section 3 of this Agreement. If Licensee
fails to make any such payment required under Section 3 because of a material
dispute with Oryx regarding the amount of such payment, then the dispute shall
be promptly submitted to binding arbitration under the commercial arbitration
rules of the American Arbitration Association before a single arbitrator
selected jointly by Oryx and Licensee. The determination of such arbitrator
with respect to such payment under Section 3 shall be binding on Oryx and
Licensee. If Licensee fails to make any payment under Section 3 of this
Agreement (i) when there is no material dispute with Oryx regarding the amount
of such payment or (ii) after a final arbitration award has fixed the amount of
any disputed payment, Oryx may, upon written notice to Licensee, (i) accelerate
all payments due under Section 3 of this Agreement and (ii) terminate this
Agreement in its entirety, effective as of the date of such notice (a
"Termination Event"). Upon a Termination Event, this Agreement shall terminate
in its entirety.
(c) BANKRUPTCY PROTECTION. Notwithstanding any provision
contained herein to the contrary, in case a party is under any proceeding under
the U.S. Bankruptcy Code and the trustee in bankruptcy of such party or such
party as a debtor in possession rightfully elects to reject this Agreement, the
other party may, pursuant to 11 U.S.C. Section 365(n)(1) and (2), retain any and
all rights hereunder, to the maximum extent permitted by law.
6
<PAGE>
9. INFRINGEMENT BY THIRD PARTIES.
(a) INFRINGEMENT OF LICENSEE'S RIGHTS. Licensee shall promptly
notify Oryx of any third party infringement of Oryx Industrial Property Rights,
Licensed Technology and/or the Technical Information. Licensee shall have the
exclusive right to take any action necessary to abate such infringement, and
Licensee may, if necessary join Oryx in such action, and Oryx will cooperate at
Licensee's expense in the conduct of such action, including, without limitation,
providing Licensee with authority to bring suit in Oryx's name and providing
such information, data and assistance as Licensee reasonably may request. Any
recovery awarded in such suit with respect to such infringement shall be
retained by Licensee.
10. LIMITATION OF LIABILITY.
ORYX SHALL NOT BE LIABLE FOR ANY INJURY OR DAMAGE TO LICENSEE, OR
TO ANY OTHER PERSON CAUSED DIRECTLY OR INDIRECTLY BY THE USE OF THE ORYX
INDUSTRIAL PROPERTY RIGHTS OR THE SALE OR USE OF ANY PRODUCT INCORPORATING THE
LICENSED TECHNOLOGY BY LICENSEE; PROVIDED FURTHER THAT IN NO EVENT SHALL ORYX BE
LIABLE TO ANY PERSON, FIRM, OR CORPORATION FOR ANY LOSS OR INJURY TO ANY PERSON,
FIRM, OR CORPORATION FOR ANY LOSS OR INJURY TO EARNINGS, PROFITS, OR GOODWILL,
OR FOR ANY DIRECT, SPECIAL, INDIRECT, OR CONSEQUENTIAL DAMAGES ARISING OUT OF
LICENSEE'S SALE OR USE OF ANY PRODUCT INCORPORATING THE LICENSED TECHNOLOGY.
11. TRADEMARKS.
Licensee shall maintain the value of the Oryx trademarks, and
shall sell under these trademarks only those products that are of comparable or
superior quality to the same or equivalent products manufactured and sold by
Oryx. Licensee shall at least meet all specifications and warranties prescribed
and used by Oryx in manufacturing and selling such products currently enforced
by Oryx. If Licensee fails to meet such specifications or warranties, Oryx may,
at its option, terminate this Agreement with respect to the trademarks licensed
hereunder and this trademark license if such failure is not corrected entirely
within sixty (60) days after Oryx sends notice of such failure to Licensee.
12. MISCELLANEOUS.
(a) SUCCESSORS AND ASSIGNS. Licensee shall not voluntarily or
by operation of law assign, transfer, sublicense or otherwise transfer or
encumber all or any part of Licensee's rights, remedies, obligations or
liabilities under this License Agreement without the prior written consent of
Oryx, which shall not be unreasonably withheld. Except as otherwise provided
herein, the terms and conditions of this Agreement shall inure to the benefit of
and be binding upon the respective successors and permitted assigns of the
parties. Nothing in this Agreement, express or implied, is intended to confer
upon any party other than the parties hereto or their respective successors and
permitted assigns any rights, remedies, obligations, or liabilities under or by
reason of this Agreement, except as expressly provided in this Agreement.
7
<PAGE>
(b) GOVERNING LAW. This Agreement shall be governed by and
construed under the laws of the State of California as applied to agreements
among California residents entered into and to be performed entirely within
California.
(c) COUNTERPARTS. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
(d) TITLES AND SUBTITLES. The titles and subtitles used in
this Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
(e) NOTICES. All notices and other communications required or
permitted hereunder shall be in writing, shall be effective when given, and
shall in any event be deemed to be given (a) five (5) days after deposit with
the U.S. Postal Service or other applicable postal service, if delivered by
first class mail, postage prepaid, (b) upon delivery, if delivered by hand, (c)
one business day after the business day of deposit with Federal Express or
similar overnight courier, freight prepaid, or (d) one day after the business
day of delivery by facsimile transmission, if deliverable by facsimile
transmission, with copy by first class mail, postage prepaid, and shall be
addressed, to the parties at the respective addresses set forth on the signature
page of this Agreement or at such other address as such party may designate by
ten (10) days' advance written notice to the other parties hereto.
(f) AMENDMENTS AND WAIVERS. Any term of this Agreement may be
amended and the observance of any term of this Agreement may be waived (either
generally or in a particular instance and either retroactively or
prospectively), only with the written consent of the Buyer and Seller.
(g) SEVERABILITY. If one or more provisions of this Agreement
are held to be unenforceable under applicable law, such provision shall be
excluded from this Agreement and the balance of the Agreement shall be
interpreted as if such provision were so excluded and shall be enforceable in
accordance with its terms.
(h) ENTIRE AGREEMENT. This Agreement and the documents
referred to herein constitute the entire agreement among the parties with
respect to the subject matter hereof and no party shall be liable or bound to
any other party in any manner by any warranties, representations, or covenants
except as specifically set forth herein or therein.
8
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first above written.
ORYX TECHNOLOGY CORP.
By:
-----------------------------
Name:
Title:
Address: 1100 Auburn Street
Fremont, CA 94538
ORYX ADVANCED MATERIALS, INC.
By:
-----------------------------
Name:
Title:
Address:
---------------------------
---------------------------
9
<PAGE>
EXHIBIT F
BILL OF SALE
<PAGE>
BILL OF SALE, ASSIGNMENT AND ASSUMPTION AGREEMENT
BILL OF SALE, ASSIGNMENT AND ASSUMPTION AGREEMENT dated as of June 1,
1999, between Oryx Technology Corp, a Delaware corporation ("Seller"), and Oryx
Advanced Materials, Inc., a California corporation ("Buyer").
A. Buyer and Seller have executed and delivered an Asset Purchase
Agreement, dated as of June 1, 1999 (the "Purchase Agreement"), pursuant to
which Buyer has agreed to purchase from Seller certain assets of Seller related
to the Business (as defined in the Purchase Agreement) and to assume certain
liabilities of Seller related to the Business.
B. This Bill of Sale, Assignment and Assumption Agreement is being
executed and delivered in order to effect the transfer to Buyer of the Purchased
Assets (as defined in the Purchase Agreement). Terms used herein that are
defined in the Purchase Agreement but not otherwise defined herein shall have
the respective meanings assigned to them therein.
NOW, THEREFORE, in consideration of the premises and for good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged:
1. ASSIGNMENT. Seller does hereby convey, grant, bargain, sell,
transfer, assign and deliver unto Buyer, its successors and assigns, and Buyer
does hereby purchase all right, title and interest of Seller in and to the
Purchase Assets specified below:
(a) All tangible personal property, accounts, cash, cash
equivalents, inventories, machinery, vehicles, equipment, tools, fixtures,
leaseholds, computer equipment, work in process, spare parts, supplies,
equipment, furniture, office furnishings and fixtures, wherever situated,
including without limitation all items listed on EXHIBIT B to the Purchase
Agreement (it being the intention hereby to assign and transfer all the tangible
personal property owned or claimed by the Seller and necessary to, or
attributable to, the Business).
(b) The goodwill and the business appurtenant thereto and all
drawings, blueprints, specifications, privileges, permits and all other similar
intangible personal property.
(c) All papers, documents, instruments, books and records,
files agreements, books of account and other records by which the Purchased
Assets might be identified or enforced, or otherwise pertaining to the Purchased
Assets that are located at the offices or other locations used in connection
with the Purchased Assets (including, without limitation, customer invoices,
customer lists, vendor and supplier lists, drafts and other documents and
materials relating to customer transactions).
(d) The rights of Seller under the contracts, agreements,
licenses, leases, sales orders, purchase orders and other commitments relating
to the Purchased Assets specifically listed on EXHIBIT B to the Purchase
Agreement.
(e) All other assets and rights of every kind and nature, real
or personal, tangible or intangible, that are owned or claimed by Seller and
that are necessary to, or used by Seller primarily in connection with, the
Purchased Assets (excluding the rights licensed by Seller
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to Buyer pursuant to the terms of that certain License Agreement of even date
herewith), whether or not such assets are reflected in the balance sheets and
other financial statements of Seller.
TO HAVE AND TO HOLD all of the properties, assets and
rights granted and transferred hereby, with the appurtenances thereof, unto
Buyer, its successors and assigns forever, to it and their own use and benefit.
2. POWER OF ATTORNEY. (a) For the consideration aforesaid, Seller
hereby constitutes and appoints Buyer, its successors and assigns, the true and
lawful attorney or attorneys of Seller, with full power of substitution, for
Seller and in its name and stead, or otherwise, but on behalf and for the
benefit of Buyer, its successors and assigns, to demand and receive from time to
time, any and all properties hereby given, granted, bargained, sold, assigned,
transferred, conveyed, set over, confirmed and delivered and give receipts and
releases for and in respect of the same and any part thereof, and from time to
time to institute and prosecute in the name of Seller or otherwise, but for the
benefit of Buyer, its successors and assigns, any and all proceedings at law, in
equity or otherwise, which Buyer, its successors or assigns, may deem proper in
order to collect, assert or enforce any claim, right or title of any kind in and
to the properties hereby given, granted, bargained, sold, assigned, transferred,
set over, confirmed, delivered or conveyed, and to defined or compromise any or
all actions, suits or proceedings in respect of any said properties and do all
such acts and things in relation thereto as Buyer, its successors and assigns,
shall deem advisable. Seller hereby declaring that the appointment made and the
powers hereby granted are coupled with an interest and are and shall be
irrevocable by Seller in any manner and for any reason.
(b) Seller for itself and its successors and assigns, does hereby
covenant with Buyer, its successor and assigns, that Seller and its successors
and assigns will do, execute, acknowledge and deliver, or will cause to be done,
executed, acknowledged and delivered all such further acts, deeds, bills of
sale, transfers, assignments and conveyances, powers of attorney, conveying and
confirming unto Buyer, its successors and assigns, all and singular, the
properties hereby granted, sold, assigned, transferred, conveyed hand delivered
as Buyer, its successors or assigns, shall reasonably require, provided,
however, that the Buyer, its successors and assigns shall prepare all necessary
documentation.
3. ASSUMPTION OF LIABILITIES. (a) Buyer hereby assumes and agrees
to pay, perform and discharge and to indemnify Seller, its successors and
assigns, from all liabilities and obligations, known and unknown, of Seller
related to the Business, as they exist as of the date hereof including, but not
limited to, those liabilities and obligations set forth on EXHIBIT C to the
Purchase Agreement BUT EXCLUDING any liabilities or obligations (i) for unpaid
federal, state or local taxes attributable to the Business prior to the date
hereof or (ii) resulting from any violation by Seller of federal, state or local
environmental laws in connection with Seller's operation of the Business; and
(b) The assumption by Buyer of any such obligations of Seller shall not require
Buyer to pay, assume, perform or observe any such obligations so long as Buyer,
in good faith, shall contest or cause to be contested the amount or validity
thereof; provided, however, that Buyer hereby indemnifies Seller and holds it
harmless from and against any loss, cost, damage or expense arising from such
contest. Buyer's assumption of such obligations of Seller is intended to inure
solely to the benefit of Seller, its successors and assigns and notwithstanding
anything herein to the contrary, such assumption is not intended and shall not
be construed to give any
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third parties any greater or additional benefits than they would have but for
Buyer's said assumption.
(c) Apart from Buyer's assumption of the obligations of Seller
pursuant hereto, or as otherwise specifically provided for in the Agreement,
Buyer shall have no liability for or with respect to any other liability or
obligation of Seller, whether or not related to the Purchased Assets being
acquired hereunder.
4. COUNTERPARTS. This Bill of Sale, Assignment and Assumption
Agreement is executed pursuant to the Purchase Agreement and may be
simultaneously executed in two or more counterparts, each of which as so
executed shall be deemed to be an original and such counterparts together shall
constitute one and the same instrument.
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IN WITNESS WHEREOF, Seller and Buyer have caused this Bill of Sale,
Assignment and Assumption Agreement to be executed on and as of the day and year
first above written.
ORYX TECHNOLOGY CORP.
-----------------------------------
By:
Title:
ORYX ADVANCED MATERIALS, INC.
-----------------------------------
By:
Title:
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FOR IMMEDIATE RELEASE
FOR FURTHER INFORMATION CONTACT: FINANCIAL RELATIONS BOARD
ORYX TECHNOLOGY CORP. SUE DOOLEY (ANALYST)
PHILIP MICCICHE/MITCHEL UNDERSETH HANNAH BRUCE (GENERAL INFORMATION)
(510) 492-2080 (415) 986-1591
CONTINENTAL CAPITAL & EQUITY
SCOTT GIBSON
(407) 682-2001
ORYX TECHNOLOGY SELLS INTRAGENE TECHNOLOGY GROUP
SALE ALLOWS COMPANY TO FOCUS ON FASTER GROWING MARKETS
FREMONT, CA. (September 2, 1999) - Oryx Technology Corp. (Nasdaq: ORYX) today
announced the sale of certain assets of its Materials business segment to a
private investor group. The sale, which includes Oryx's carbon target assembly
manufacturing and related materials coating business, also includes access to
certain Company patents, including the Company's Intragene-TM- ceramic
metallization and joining systems technology.
The terms of the transaction call for a cash payment of $400,000, the assumption
of substantially all liabilities associated with the business as well as a
10-year royalty agreement, with a maximum royalty payment of $2.2 million for
the first three years, based on profits. As a result of the sale, Oryx will
report a one-time gain of approximately $350,000 in its third fiscal quarter
ended September 30, 1999.
Commenting on the transaction, Phil Micciche, President and Chief Executive
Officer of Oryx, said, "While this business accounted for $4 million in revenues
in fiscal 1999, sales this year have declined approximately 25% due to the
consolidation and slowdown in the disk drive industry. We, therefore, moved to
sell the operation so we could focus our resources on faster growing market
segments. Oryx is now a true development and licensing company able to further
exploit the value of our proprietary SurgX-TM- technology and utilize our
management capabilities to expand our business opportunities and achieve
profitability."
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Oryx Technology Corp.
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COMPANY PROFILE
Headquartered in Fremont, California, Oryx Technology Corp. is a technology
management company with a proprietary portfolio of high technology products
in surge protection. Oryx's common stock trades on the NASDAQ SmallCap Market
under the symbol ORYX.
FORWARD-LOOKING STATEMENTS
Certain of the matters discussed in this release are forward-looking and involve
a number of risks and uncertainties. The Company's actual results could differ
materially from those described for a variety of factors. Such factors could
include, but are not limited to, those discussed in "Risk Factors" and
"Management's Discussion and Analysis" in the Company's Form 10-KSB/A filed for
the fiscal years ended February 28, 1998 and February 28, 1999, as well as those
discussed elsewhere in other public filings made by the Company with the
Securities and Exchange Commission. Among the factors that could cause actual
results to differ materially are the following: changes in customer commitments,
maintenance of gross margin levels, market acceptance of new products both
technically and commercially, successful product development efforts, inability
to pass on price increases to customers, unavailability of products, management
of cost controls and cash resources, need for additional financing, and strong
competition.
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