Exhibit 10.5
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ASSET PURCHASE AGREEMENT
-between-
[Purchaser]
-and-
HEALTH DISCOVERY CORPORATION
As Purchaser
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Dated as of July __, 2004
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ASSET PURCHASE AGREEMENT
THIS ASSET
PURCHASE AGREEMENT, dated as of July __, 2004 (this
"Agreement"), is made by [Purchaser] (the "Seller") and Health Discovery
Corporation, a Texas
corporation (the "Purchaser").
RECITALS
WHEREAS, Seller and
certain other senior
secured lenders (with the
Seller, the "Lenders") to
Barnhill Genomics, Inc. and BIOWulf Technologies, LLC
(collectively the "Debtor"), and the Lenders held a
first-priority
security
interest in and to all of the Debtor's assets pursuant to those certain
Intellectual Property Security Agreements,
dated October 11, 2001
and February
1, 2002, as well as under
that certain Security
Agreement,
dated February 1,
2002, and that certain Senior
Secured, Super-Priority, Debtor-In-Possession Loan
Agreement, dated March, 2002,
(collectively, the "Security Agreements"), between
the Debtor and the Lenders, and under the Georgia Uniform Commercial Code
("UCC");
WHEREAS, the Debtor
was in material
payment and other
default with
respect to the Debtor's
financing from the Lenders, and on June 1, 2004, the
Lenders exercised their
rights and remedies under the Security Agreements, and
under the UCC (the
"Foreclosure");
WHEREAS, as a result
of the Foreclosure the Lenders obtained rights in
certain assets of the Debtor;
and
WHEREAS, the Purchaser
now desires to acquire each Lender's rights in
such assets;
NOW, THEREFORE,
in consideration of
the mutual terms,
conditions and
other agreements set forth
herein, the Seller and
the Purchaser hereby agree as
follows:
ARTICLE 1
PURCHASE AND SALE OF THE ASSETS
1.1. Purchase and Sale of the
Assets.
(a) On the terms
and subject to the conditions set forth in this
Agreement, the Seller agrees to sell, assign, transfer and deliver to the
Purchaser, and the Purchaser
agrees to purchase free and clear of all Liens, all
of the Seller's interest in
and to the Assets (as defined below), including all
associated goodwill of the Debtor and all
claims of the Debtor
(including
all
rights of the Debtor to sue
thereunder) against
third parties for past, present
or future infringement or dilution of any of
the Intellectual
Property
Rights
(as defined below) or for any injury to the
goodwill of the Debtor
associated
with any of the Intellectual Property Rights, in reliance upon the
representations and warranties of the Lenders
contained herein and on the terms
and conditions herein set
forth.
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(b) As used in this
Agreement, the
Schedules and Exhibits attached
hereto and the Conveyancing
Documents, the term
"Assets" shall mean and include
all of the right,
title and interest in
the assets that were formerly owned by
the Debtor, including but not
limited to:
(i) all of the patents, patent applications and patent
rights
of the Debtor
identified and
described on Schedule
1.1(b)(i) and any
patents issuing
from said applications, as well as any divisional,
continuation,
continuation-in-part,
reissue or reexamination patents
and any foreign counterparts or applications relating thereto
(collectively, the "Patents");
(ii) all of the trademarks and service marks and other
similar
rights of the Debtor (collectively, the "Trademarks");
(iii) all of the copyrights of the Debtor and all other
rights
of the Debtor in and to copyrightable works of the Debtor, and all of
the Intellectual
Property Rights of the Debtor relating to such
copyrights and other
rights including
all original
works subject
to
protection by the Copyright Laws of the United States, such works
being
in any medium now
known or hereafter
developed,
including,
but not
limited to
all content, software, graphics, animation, know-how,
technical information
and the like contained on the biowulf.com,
mindtel.com/biowulf/ and related and associated
websites;
(iv) all of the
documentation of the
Debtor relating to
the
rights, assets
and other property of the Debtor identified and
described in clauses (i) through (iii) of this Section
1.1(b);
(v) all of the business contracts of the Debtor;
(vi) all of the other assets listed on Schedule
1.1(b)(vi);
(vii) all of the Intellectual Property Rights, technical
information, Trade
Secrets, know-how,
formulations,
specifications,
processes, techniques
and data of the
Debtor which are not readily
available to others
through public means and which are not the subject
of an issued or pending patent claim of the Debtor in a county in
which
any product, service
process or part
thereof, or use of a
product or
part thereof,
which is covered in whole or in part by at least
one
unexpired claim of the Patents in the county in which any such
product,
process or part thereof is made, used, or sold or service is
rendered;
(viii) all claims of the Debtor, whether arising before or
after the Closing, to the extent such Claims relate to the
Assets;
(ix) all books, records, ledgers, files, documents,
correspondence, lists, specifications, creative materials,
advertising
and promotional
materials,
studies, reports, and other printed or
written materials formerly owned by the Debtor, and
(xi) without limitation, all other properties and assets
owned
or held by the
Lenders, which
was previously owned by the Debtor,
whether tangible or
intangible
and whether or not of
a type
falling
within any of the categories of assets or properties described
above.
(c) As used herein, the term "Intellectual Property Rights" shall
mean,
collectively, United States and foreign patents;
patent applications; patent
rights; names and tradenames;
trademarks;
service marks;
trademark and service
mark registrations; copyright registrations; copyrights (including those in
computer programs,
drawings, documentation, and specifications); proprietary
rights in technical information, Trade Secrets, know-how, formulations,
specifications, processes, techniques and data which are not
readily available
to others through public means and which are not the
subject of an issued
or
pending patent claim of the Debtor or
Lenders in a country in which the product
of a Patent is manufactured,
sold, employed or
service provided; license rights
under the intellectual property rights of third parties; and all other
intellectual property rights,
whether or not subject
to statutory
registration
or protection.
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(d) As used herein,
the term "Trade
Secrets" shall mean materials,
composition and formulas,
manufacturing methods, techniques and processes, lists
of potential customers and contacts,
names of suppliers,
market surveys,
and
marketing information which
(A) denies economic value, actual or potential, from
not being generally known to,
and not readily
ascertainable by proper means by,
other persons, and (B) is the subject of efforts
that are reasonable
under the
circumstances to maintain its
secrecy;
1.2. Conveyancing
Documents.
The Seller shall
execute and deliver to
the Purchaser upon Closing (as defined below) the following documents
(collectively, the
"Conveyancing Documents"):
(a) an Assignment
of Patents, in or substantially in the form of
Exhibit 1.2(a), covering all
of the Patents;
(b) a General
Assignment,
Bill of Sale
and Transfer Statement in
substantially in the form of
Exhibit 1.2(b), with regard to all of the Assets.
1.3. No Assumption of Liabilities. It is the express intention of the
Seller and the Purchaser
that the Purchaser
shall acquire all of
the rights of
the Seller in the Assets.
The Assets are being
purchased by the Purchaser as
separate assets, apart from any liabilities or
obligations of the Seller, the
other Lenders or the Debtor,
none of which are
being assumed by the
Purchaser.
The Purchaser is not
undertaking a continuation of the Debtor's business or any
obligations or liabilities of
the Debtor relating thereto.
1.4. Closing.
The consummation of
the purchase and sale of the Assets
(the "Closing") shall upon the satisfaction or waiver of all
conditions to the
obligations of the parties
set forth in Article 4 (the "Closing Date").
1.5. Excluded Property; etc. Anything in any of the
provisions of this
Agreement, any of the Schedules or Exhibits attached hereto or any of the
Conveyancing Documents
express or implied to the contrary notwithstanding, the
term "Assets", as used in the Transaction Documents, shall not include or be
deemed to include any of the
rights, title or
interests of the Seller, whether
now owned or hereafter
acquired, arising or existing, in and to all or any of
the property listed on Schedule 1.5 (all of such property and all of the
Seller's , the other Lenders' or the Debtor's rights, title and interests
therein and thereto being
herein collectively called the "Excluded Property").
ARTICLE 2
PAYMENT OF PURCHASE PRICE; CLOSING
2.1. Purchase Price.
The aggregate purchase
price for the Assets will
be $_____, to be paid in
accordance with Section 2.2 and Section 2.4.
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2.2. Payment of Purchase
Price. At Closing, the Purchaser shall deliver:
(a) a duly executed
promissory
note substantially in the form of
Exhibit 2.2(a) (the "Cash
Note"), which Cash
Note shall provide for the payment
of $____ within two business
days of a court of competent jurisdiction entering
a final order granting all relief requested by the Lenders in
confirming
the
Foreclosure (the
"Confirmation Proceeding"), as more fully described in the
Cash
Note (the "Initial Payment"),
and payments of $_____
due on the fourth, eighth,
twelfth and sixteenth month
anniversary of the Initial Payment, plus
(b) a duly executed
convertible promissory
note substantially in
the
form of Exhibit 2.2(b) (the
"Convertible Note"), which Convertible Note shall be
in the principal amount of $_____, which will be convertible into
_____ shares
of Purchaser common stock (the Cash Payment plus the Cash Note plus the
Convertible Promissory Note plus the Common Stock shall equal the "Purchase
Price").
2.3. Allocation of Purchase Price. The Purchase Price will be
allocated
among the Assets for all purposes (including Tax and financial accounting
purposes) as the Parties may
mutually agree. Each of the Parties hereto will not
take a position on any Tax
Return, before any
governmental
or regulatory
body
charged with the collection
of any Tax, or in any Action or Proceeding, that is
in any way inconsistent with the Purchase Price
Allocation and will
cooperate
with each other in timely
filing consistent
with such allocation on Form 8594
with the Internal Revenue
Service.
2.4. Making of Payments.
(a) All payments
required to be made by
the Purchaser
to the
Seller
hereunder shall be made by
the Purchaser to the Seller by wire transfer of funds
in accordance with the following wire transfer instructions (the "Lenders'
Account"), unless written
notice of a change in such instructions is provided to
the Purchaser pursuant to
Section 8.2 of this Agreement by Joe McKenzie, serving
as the collateral agent for
the Lenders (the "Collateral Agent"):
Wire to:
Bank:
ABA#:
Credit Account Name:
Credit Account Number:
(b) Any deposit by
Purchaser of an amount
into the Lenders'
Account
shall completely satisfy any Purchaser obligation to make payments of such
amount under this
Agreement and the
Conveyancing
Documents regardless of how
such funds are ultimately
disbursed from such
account. The
disbursement of any
deposited funds is the
complete responsibility of the Collateral Agent.
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ARTICLE 3
REPRESENTATIONS AND WARRANTIES
Each of the parties
hereto represents and
warrants to the other party
hereto that the following statements explicitly made by such party are
true,
complete and correct as of
the Closing Date:
3.1.
Representations
and Warranties
of the Seller. The Seller
represents and warrants to
the Purchaser that the following statements are true,
complete and correct as of the date hereof and will be true,
complete, and
correct as of the Closing
Date, except as otherwise set forth on
the Schedules
attached hereto, as
follows:
(a) Authority; Validity; No Conflict. Seller represents and
warrants to
the Purchaser that Seller has
the full legal right,
capacity and power,
and if
Seller is an entity,
all requisite corporate and regulatory authority and
approval required,
to enter into,
execute, deliver and perform this
Agreement
and to otherwise sell,
transfer, convey and
deliver to the Purchaser all of the
Seller's rights in the Assets
and to transfer to the Purchaser pursuant to this
Agreement all of the Seller's rights in the Assets. Neither the execution
and
delivery of this Agreement
and the Conveyancing
Documents by the Seller nor the
performance by the Seller of the transactions contemplated by this Agreement
will: (i) violate,
conflict with, result
in the acceleration of, or entitle any
party to accelerate the
maturity or the
cancellation of the
performance of any
obligation under, or result
in the creation or imposition of any lien in or upon
any of the Assets,
or constitute a default (or an event
which might, with
the
passage of time or the giving
of notice, or both,
constitute a default)
under
any lease, contract, loan or credit agreement,
license or other
instrument to
which Seller is a party or by which
Seller may be bound or affected; (ii)
violate or conflict with any
provision of any
applicable law or
judicial order
applicable to the Seller, the Lenders or the Assets; or (iii) require any
consent or approval of or filing or notice with any person, entity, or
governmental or regulatory
body.
(b) Default
by the Debtor. (i) The Debtor defaulted in material
respects in connection
with material
obligations
of the Debtor to the
Lenders
secured by the Assets;
(ii) the Lenders
exercised their post-default rights and
remedies as lenders with
respect to the Assets;
and (iii) the Lenders conducted
a commercially reasonable sale pursuant to a
properly publicized notice of sale
and otherwise complied with
applicable law in acquiring the Assets from Debtor.
(c) Sufficiency
of Assets.
The Assets
constitute all of the
assets,
tangible and intangible,
of any nature
whatsoever
obtained from the
Debtor by
the Lenders in the
Foreclosure.
(d) Title. The Lenders
collectively
own outright and have good and
marketable title to all of
the Assets, , in each case free and clear of any lien
or encumbrance. Seller has not transferred any of its interest in the
Assets
that it acquired pursuant to the Foreclosure, and at the Closing, the Seller
will convey to Purchaser all
of the Seller's interest in the Assets.
(e) Litigation;
Compliance with Laws.
Except as set forth on Schedule
3.1(e), there are no outstanding judicial
orders or decrees by which the Seller
or to the knowledge of the
Seller, the Debtors are bound, or any legal
