ASSET CONTRIBUTION AGREEMENT
BY AND AMONG
MULTICELL TECHNOLOGIES, INC.
ASTRAL THERAPEUTICS, INC.,
ALLIANCE PHARMACEUTICAL CORP.,
AND
ASTRAL, INC.
Dated as of September 7, 2005
TABLE OF CONTENTS
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Page
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ARTICLE
I
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DEFINITIONS
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2
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1.1
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Certain
Definitions
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2
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ARTICLE II
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CONTRIBUTION OF
ASSETS
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5
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2.1
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Contribution of
Assets
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5
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2.2
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Assumption of
Liabilities
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7
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2.3
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Consideration
for Contributed Assets
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8
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2.4
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Sales and Use
Taxes
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9
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2.5
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Bulk Transfer
Laws
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9
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2.6
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Closing
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9
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2.7
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Nontransferable
Assets
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10
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2.8
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Taking of
Necessary Action; Further Action
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10
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ARTICLE III
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REPRESENTATIONS
AND WARRANTIES OF TRANSFERORS
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11
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3.1
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Organization,
Qualification, and Corporate Power
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11
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3.2
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Authorization
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11
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3.3
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Capitalization
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12
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3.4
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Subsidiaries
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12
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3.5
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No
Conflicts
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12
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3.6
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Consents
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13
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3.7
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Undisclosed
Liabilities
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13
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3.8
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Legal
Compliance
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13
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3.9
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Tax
Matters
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13
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3.10
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Title of
Properties; Absence of Liens and Encumbrances; Condition of
Equipment
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15
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3.11
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Intellectual
Property
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15
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3.12
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Contracts
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19
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3.13
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Power of
Attorney
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20
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3.14
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Litigation
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20
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3.15
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Restrictions on
Business Activities
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20
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3.16
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Product
Warranty
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20
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3.17
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Guaranties;
Indemnities
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20
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3.18
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Employee
Matters and Benefit Plans
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20
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3.19
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Environment,
Health, and Safety
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21
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3.20
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No Adverse
Developments
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22
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3.21
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Complete Copies
of Materials
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22
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3.22
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Broker's
Fees
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22
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3.23
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Board
Approval
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22
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3.24
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Consideration
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22
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3.25
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Full
Disclosure
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23
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-i-
TABLE OF CONTENTS
(Continued)
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3.26
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No
Registration
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23
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3.27
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Investment
Intent
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23
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3.28
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Investment
Experience
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23
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3.29
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Speculative
Nature of Investment
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23
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3.30
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Access to
Data
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23
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3.31
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Accredited
Investor
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24
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3.32
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Residency
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24
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3.33
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Rule
144
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24
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3.34
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No Public
Market
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24
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3.35
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Tax
Advisors
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24
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ARTICLE IV
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REPRESENTATIONS
AND WARRANTIES OF MULTICELL AND TRANSFEREE
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25
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4.1
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Organization,
Qualification, and Corporate Power
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25
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4.2
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Authorization
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25
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4.3
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Capitalization
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26
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4.4
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No
Conflicts
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26
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4.5
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Consents
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26
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4.6
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Brokers'
Fees
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27
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4.7
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Full
Disclosure
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27
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ARTICLE V
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OTHER
AGREEMENTS AND COVENANTS
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27
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5.1
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Confidentiality
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27
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5.2
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Additional
Documents and Further Assurances
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28
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5.3
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Employees of
Astral
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28
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5.4
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Reasonable
Cooperation of Transferee
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28
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5.5
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Agreement to
Perform
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28
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5.6
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MultiCell's
Agreement to Perform
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28
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5.7
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Responsibility
for Taxes and Tax Returns
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28
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5.8
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Board of
Directors
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29
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5.9
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Transferee
Series A Financing
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29
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ARTICLE VI
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CONDITIONS TO
THE CLOSING
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30
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6.1
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Conditions to
MultiCell's and Transferee's Obligation to Close
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30
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6.2
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Conditions to
Transferors' Obligations
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31
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6.3
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Conditions to
Obligations of Each Party to Close
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31
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ARTICLE VII
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SURVIVAL AND
INDEMNIFICATION
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32
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7.1
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Survival of
Representations and Warranties
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32
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7.2
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Indemnity of
MultiCell and Transferee
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32
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TABLE OF CONTENTS
(Continued)
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7.3
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Indemnity of
Transferors
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32
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7.4
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Indemnification
of Third-Party Claims
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32
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ARTICLE VIII
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MISCELLANEOUS
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33
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8.1
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Press Releases
and Public Announcements
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33
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8.2
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No Third-Party
Beneficiaries
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33
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8.3
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Entire
Agreement
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33
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8.4
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Amendment
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33
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8.5
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Waivers
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34
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8.6
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Successors and
Assigns
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34
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8.7
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Counterparts
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34
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8.8
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Headings
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34
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8.9
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Notices
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34
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8.10
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Governing
Law
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35
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8.11
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Forum
Selection; Consent to Jurisdiction
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36
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8.12
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Severability
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36
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8.13
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Expenses
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36
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8.14
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Construction
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36
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8.15
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Attorneys'
Fees
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36
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8.16
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Further
Assurances
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36
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8.17
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Time of
Essence
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36
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-iii-
EXHIBITS
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Exhibit
A
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Form of
Guaranty Agreement
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Exhibit
B
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At Will
Employment, Confidential Information, Invention Assignment and
Arbitration Agreement of Transferee
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Exhibit
C
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Form of Series
A Preferred Stock Purchase Agreement of Transferee, including
Exhibits thereto
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SCHEDULES
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Schedule
2.1(b)(i)
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Assumed
Contracts
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Schedule
2.1(c)(ix)
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Additional
Excluded Assets
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Schedule
2.2(b)(ii)
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Liabilities
Arising Prior to the Closing under the Assumed Contracts
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Schedule
2.2(b)(iv)
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Liabilities
Related to the Contributed Assets Arising Prior to the Closing
Date
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Schedule
2.2(b)(v)
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Liabilities for
Hired Employees
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Schedule
6.1(e)
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Required
Consents, Waivers and Releases
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-iv-
ASSET CONTRIBUTION AGREEMENT
This
ASSET CONTRIBUTION AGREEMENT (this “ Agreement
”) is made and entered into as of September 7, 2005, by and
among MultiCell Technologies, Inc., a Delaware corporation (“
MultiCell ”), Astral Therapeutics, Inc., a
Delaware corporation and wholly owned subsidiary of MultiCell
(“ Transferee ”), Alliance Pharmaceutical
Corp., a New York corporation (“ Alliance
”), and Astral, Inc. a Delaware corporation and wholly owned
subsidiary of Alliance (“ Astral ,” and
together with Alliance, the “ Transferors
”). MultiCell, Transferee, and Transferors are sometimes
referred to herein individually as a “ Party
” and collectively as the “ Parties
.”
RECITALS
A.
Transferors desire to transfer, assign and convey to Transferee (as
a capital contribution to Transferee), and Transferee desires to
acquire from Transferors, on the terms and subject to the
conditions set forth herein, certain of the assets of Transferors
described herein, and Transferors desire Transferee to assume (with
MultiCell guaranteeing such assumption) certain of Astral’s
liabilities, which Transferee would agree to assume on the terms
and subject to the conditions set forth herein.
B.
The Board of Directors of each of MultiCell, Transferee, Alliance
and Astral believes it is in the best interests of its respective
corporation and stockholders that the transactions contemplated
hereby be consummated and, in furtherance thereof, has approved
this Agreement and the transactions contemplated hereby.
C.
Each of Alliance, as the sole stockholder of Astral, and MultiCell,
as the sole stockholder of Transferee, has approved this Agreement
and the transactions contemplated hereby.
D.
MultiCell, Transferee, and each Transferor desire to make certain
representations, warranties, covenants and other agreements in
connection with the transactions contemplated hereby.
E.
It is intended that the sale, transfer, assignment and contribution
of assets to Transferee and the assumption of the Assumed
Liabilities by MultiCell and Transferee, and the issuance of shares
of Transferee Capital Stock to each of Transferors and MultiCell,
are each intended to be reported pursuant to Section 351 of
the Code (and any comparable provisions of applicable state or
local tax laws).
NOW,
THEREFORE, in consideration of the covenants and representations
set forth herein, and for other good and valuable consideration,
the Parties agree as follows:
ARTICLE I
DEFINITIONS
1.1
Certain Definitions . As used in this Agreement, the
following terms have the following meanings (terms defined in the
singular to have a correlative meaning when used in the plural and
vice versa). Certain other terms are defined in the text of this
Agreement.
(a)
“ Affiliate ” of a Person means any other
Person that directly or indirectly, through one or more
intermediaries, controls, is controlled by, or is under common
control with such Person.
(b)
“ Astral Capital Stock ” means Astral
Common Stock.
(c)
“ Astral Common Stock ” means Common
Stock of Astral, $0.01 par value per share.
(d)
“ Assumed Contracts ” shall have the
meaning ascribed to the term in Section 2.1(b)
.
(e)
“ Business ” shall mean the business of
the Transferors or their respective Affiliates conducted or
currently proposed to be conducted under the name
Astral.
(f)
“ Code ” shall mean the Internal Revenue
Code of 1986, as amended.
(g)
“ Contributed Assets ” shall have the
meaning ascribed to the term in Section 2.1(b)
.
(h)
“ Disposal Site ” is a landfill, disposal
agent, waste hauler or recycler of Hazardous Materials.
(i)
“ Environmental Permit ” is any approval,
permit, license, clearance or consent required to be obtained from
any private person or any Governmental Authority with respect to a
Hazardous Materials Activity which is or was conducted by any
Transferor.
(j)
“ Excluded Assets ” shall have the
meaning ascribed to the term in Section 2.1(c)
.
(k)
“ Governmental Body ” means
any:
(i)
nation, province, state, county, city, town, village, district, or
other jurisdiction of any nature;
(ii)
federal, provincial, state, local, municipal, foreign, or other
government;
-2-
(iii)
governmental or quasi-governmental authority of any nature
(including any governmental agency, branch, department, official,
or entity and any court or other tribunal);
(iv)
multi-national organization or body; or
(v)
body exercising, or entitled to exercise, any administrative,
executive, judicial, legislative, police, regulatory, or taxing
authority or power of any nature.
(l)
“ Hazardous Material ” is any material or
substance that is prohibited or regulated by any Environmental Law
or that has been designated by any Governmental Authority to be
radioactive, toxic, hazardous or otherwise a danger to health,
reproduction or the environment.
(m)
“ Hazardous Materials Activity ” is the
transportation, transfer, recycling, storage, use, treatment,
manufacture, removal, remediation, release, exposure of others to,
sale, or distribution of any Hazardous Material or any product
containing a Hazardous Material.
(n)
“ Intellectual Property Rights ” means
any or all of the following and all rights in, arising out of, or
associated therewith: (i) (A) all United States, international
or foreign patent, utility model, design registration, certificate
of invention, patent of addition or substitution, or other
governmental grant for the protection of inventions or industrial
designs anywhere in the world, including any reissue, renewal,
re-examination or extension thereof; and (B) any application
for any of the foregoing, including any international, provisional,
divisional, continuation, continuation-in-part, or continued
prosecution application (“ Patents ”);
(ii) all trade secrets and other rights in know-how and
confidential or proprietary information; (iii) all copyrights,
copyright registrations, or any application therefor, in the U.S.
or any foreign country, and renewals, extensions, reversions or
restorations associated with such copyrights, and any other right
corresponding thereto throughout the world, including moral rights
(“Copyrights”); (iv) all rights in World Wide Web
addresses and domain names and applications and registrations
therefor; (vii) all trade names, brand names, logos, common law
trademarks, trade dress rights and service marks, and registrations
and applications for any of the foregoing, and all goodwill
associated therewith throughout the world (“
Trademarks ”); and (viii) any similar,
corresponding or equivalent rights to any of the foregoing anywhere
in the world, including, without limitation, moral
rights.
(o)
“ Lien ” means any mortgage, pledge,
lien, charge, claim, security interest, adverse claims of ownership
or use, restrictions on transfer, defect of title, license or other
encumbrance of any sort, other than (a) mechanic’s,
materialmen’s, and similar liens with respect to any amounts
not yet due and payable, and (b) liens for taxes not yet due
and payable.
(p)
“ MultiCell SEC Reports ” shall mean
MultiCell’s Annual Report on Form 10-KSB for the year ended
November 30, 2004, and Quarterly Report on Form 10-QSB for the
quarterly period ended May 31, 2005.
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(q)
Person ” means any individual, corporation
(including any non-profit corporation), general or limited
partnership, limited liability company, joint venture, estate,
trust, association, organization, labor union, Governmental Body or
other entity.
(r)
“ Registered Intellectual Property Rights
” means all United States, international and foreign:
(i) Patents, including applications therefor;
(ii) registered Trademarks, applications to register
Trademarks, including intent-to-use applications, or other
registrations or applications related to Trademarks;
(iii) Copyrights registrations and applications to register
Copyrights; and (iv) any other Technology that is the subject
of an application, certificate, filing, registration or other
document issued by, filed with, or recorded by, any state,
government or other public or private legal authority at any
time.
(s)
“ Representatives ” means, with respect
to a Person, that Person’s officers, directors, employees,
accountants, counsel, investment bankers, financial advisors,
agents and other representatives.
(t)
“ Technology ” shall mean any or all of
the following: (i) works of authorship including, without
limitation, computer programs, source code and executable code,
whether embodied in software, firmware or otherwise, documentation,
designs, files, net lists, records, data and mask works;
(ii) inventions (whether or not patentable and whether or not
reduced to practice), improvements, and technology;
(iii) proprietary and confidential information, including
technical data and customer and supplier lists, trade secrets,
discoveries, processes, formulas, and know how;
(iv) databases, data compilations and collections and
technical data; (v) logos, trade names, trade dress,
trademarks, service marks; (vi) World Wide Web addresses, domain
names and sites; (vii) tools, methods and processes; and (viii)
biological and other materials owned by or in the possession of
Astral, and (ix) all copies and instantiations of the foregoing in
any form and embodied in any media.
(u)
“ Transferee Common Stock ” means Common
Stock of Transferee, $0.001 par value per share.
(v)
“Transferee Material Adverse Effect” shall mean any
adverse change in the business, operations, assets (including
intangible assets), liabilities (contingent or otherwise), results
of operations or financial performance, or condition (financial or
otherwise) of MultiCell or any of its subsidiaries, which is
material to MultiCell and its subsidiaries, taken as a
whole.
(w)
“ Transferee Shares ” means 490,000
shares of Transferee Common Stock.
(x)
“ Transferor Intellectual Property ”
means any and all Technology and any and all Intellectual Property
Rights, including Transferor Registered Intellectual Property
Rights (as defined in Section 3.11(a) below), that is or are
owned (in whole or in part) by or licensed to either Transferor and
is necessary for the conduct of, or primarily used in, the
Business, or for which Astral has directly or indirectly obtained a
covenant not to be sued.
-4-
(y)
“ Transferor Material Adverse Effect ”
shall mean any adverse change in the business, operations, assets
(including intangible assets), liabilities (contingent or
otherwise), results of operations or financial performance, or
condition (financial or otherwise) of Alliance or any of its
subsidiaries (including Astral), the Business, or the Contributed
Assets, which is material to Alliance or any of its subsidiaries,
taken as a whole, or the Business, or the Contributed
Assets.
ARTICLE II
CONTRIBUTION OF ASSETS
2.1
Contribution of Assets.
(a)
Contribution . Upon the terms and subject to the conditions
set forth herein, at the Closing (as defined in
Section 2.6(a) hereof), Transferee shall accept and
acquire from Transferors, and Transferors shall irrevocably convey,
transfer, assign and deliver to Transferee, the Contributed Assets
(as defined in Section 2.1(b) hereof), free and clear
of any and all Liens.
(b)
Definition of Contributed Assets . For all purposes of and
under this Agreement, the term “ Contributed
Assets ” shall mean, refer to and include all of each
Transferor’s right, title and interest in and to all tangible
and intangible assets, properties and rights which are owned, used
or held (directly or indirectly) for use by either Transferor to
the extent owned, used or held for use by either Transferor as of
the Closing (but specifically excluding the Excluded Assets (as
defined in Section 2.1(c) hereof)) primarily in
connection with or relating directly to the Business, including,
without limitation, the following:
(i)
all rights and benefits under each of the contracts, commitments
and other agreements expressly listed or described on
Schedule 2.1(b)(i) (collectively, “ Assumed
Contracts ”);
(ii)
all operating data and original records (including computer files
and electronic media), including without limitation, books (other
than corporate minute and stock record books), records and
accounts, correspondence, research and development files, drug
master files, regulatory support files, production records,
technical, accounting, manufacturing, quality control and
procedural files and manuals, customer and vendor lists, customer
complaint files, sales and marketing literature, purchase orders
and invoices and employment records;
(iii)
original sets of all lab notebooks (or copies if required),
manufacturing procedures, equipment calibration settings and other
technical information;
(iv)
all Transferor Intellectual Property;
(v)
the current telephone number and facsimile numbers used in the
Business and all rights to the Internet website address used in the
Business;
-5-
(vi)
all rights, claims, warranty rights or other similar rights of
Transferors, with respect to the Contributed Assets, whether known,
unknown, matured or unmatured, accrued or contingent, against third
parties, including under express or implied warranties from
suppliers and claims existing at the time of the closing under
insurance policies for damage to Contributed Assets;
(vii)
all transferable rights with respect to unemployment and other
similar insurance reserves relating to any employees of Astral
transferring to Transferee or one of its Affiliates in connection
with the Agreement and transactions contemplated hereby;
(viii)
all transferable governmental permits related to the Business;
and
(ix)
all other assets, properties, claims, rights and interests of
Transferors which exist on the Closing Date, of every kind and
nature and description, whether tangible or intangible, real,
personal or mixed, wherever located, which relate primarily to or
are used or held for use primarily in connection with the Business,
other than any Excluded Assets (as defined below).
(c)
Definition of Excluded Assets . Notwithstanding anything to
the contrary set forth in this Section 2.1 or elsewhere
in this Agreement, the term “ Contributed
Assets ” shall not mean, refer to or include the
following (collectively, the “ Excluded Assets
”) to the extent owned, used or held for use by Transferors
or any of their Affiliates as of the Closing:
(i)
the employee benefit plans of Transferors;
(ii)
any contracts, commitments and other agreements to which any of the
Transferors is a party or by which any Transferor is bound not
expressly assumed in Section 2.1(b) above;
(iii)
the corporate charter and bylaws, qualifications to transact
business as a foreign corporation, arrangements with registered
agents relating to foreign qualifications, taxpayer and other
identification numbers, seals, minute books, stock transfer books,
blank stock certificates, and other documents relating to the
organization, maintenance, and existence of Astral as a
corporation;
(iv)
all cash and cash equivalents in Astral’s or Alliance’s
accounts as of the Closing;
(v)
all refunds of Taxes (as defined below) of Transferors;
(vi)
all claims, actions, deposits, prepayments, refunds, causes of
action, rights of recovery, warranty rights, rights of set off, and
rights of recoupment of any kind or nature (including any such item
relating to Taxes) relating to the Excluded Assets or the Excluded
Liabilities;
-6-
(vii)
all rights of Transferors under this Agreement, any agreement,
certificate, instrument or other document executed and delivered by
Transferors, Transferee or MultiCell in connection with the
transactions contemplated hereby, or any side agreement between
Transferors, Transferee and MultiCell entered into on or after the
date hereof;
(viii)
all books and records of Transferors which relate to the Taxes or
Excluded Assets; provided , however , Transferors
agree that it shall provide Transferee and MultiCell with copies
of, or reasonable access to, such books and records to the extent
that any such books and records relate to any of the Contributed
Assets or Assumed Liabilities; and
(ix)
all assets expressly listed or described on
Schedule 2.1(c)(ix) hereto.
2.2
Assumption of Liabilities .
(a)
Assumption . Upon the terms and subject to the conditions
set forth herein, at the Closing, Transferee shall irrevocably
assume from Transferors, and Transferors shall irrevocably convey,
transfer and assign to Transferee, all of the Assumed Liabilities
(as defined in Section 2.2(b) hereof). Transferee shall
not assume any liabilities of Transferor pursuant hereto, other
than the Assumed Liabilities. MultiCell shall guarantee the
obligations of Transferee in connection with the assumption by
Transferee of the Assumed Liabilities pursuant to the Guaranty
Agreement attached hereto as Exhibit A .
(b)
Definition of Assumed Liabilities . For all purposes of and
under this Agreement, the term “ Assumed
Liabilities ” shall mean, refer to and include the
following liabilities of each Transferor, as the case may be (but
specifically excluding the Excluded Liabilities (as defined in
Section 2.2(c) hereof)):
(i)
all obligations, duties and liabilities of Transferors continuing
after the Closing under the Assumed Contracts which become due and
payable or are required to be performed after the Closing Date,
except to the extent arising from any breach or default occurring
prior to the Closing Date;
(ii)
all obligations, duties and liabilities of Transferors arising
prior to the Closing under the Assumed Contracts expressly listed
or described on Schedule 2.2(b)(ii) ;
(iii)
all liabilities related to the Contributed Assets to the extent
arising from or related to any facts or circumstances occurring
after the Closing Date;
(iv)
all liabilities related to the Contributed Assets to the extent
arising prior to the Closing Date expressly listed or described on
Schedule 2.2(b)(iv) ;
(v)
all liabilities owed by Astral or Alliance to Stephen Chang, Ph.D,
Dan Smith and Bill Phillips (the “ Hired
Employees ”) expressly listed or described on
Schedule 2.2(b)(v) .
-7-
(c)
Definition of Excluded Liabilities . Notwithstanding
anything to the contrary set forth in this Section 2.2
or elsewhere in this Agreement, the term “Assumed
Liabilities” shall not mean, refer to or include the
following (collectively, “ Excluded
Liabilities”):
(i)
all obligations and liabilities of Transferors under this Agreement
or any other certificate, instrument or other agreement entered
into in connection with the transactions contemplated
hereby;
(ii)
any liability of Transferors for Taxes, including any liability
arising from the operation of the Business on or prior to the
Closing Date and any Transfer Taxes (as defined below);
(iii)
all accounting, consulting, finders, investment banking, legal and
similar fees and expenses incurred by Transferors in connection
with the negotiation of the Agreement, and the consummation of the
transactions contemplated hereby and thereby;
(iv)
any liabilities or obligations of Transferors under any contracts,
commitments, arrangements or agreements other than the Assumed
Contracts;
(v)
any infringement or alleged infringement of any Intellectual
Property Rights of any other Person, including but not limited to
the Transferor Intellectual Property, arising out of any action of
Transferors on or prior to the Closing Date or any misappropriation
or misuse of any Technology or any other right of another Person
arising out of any action of Transferors on or prior to Closing
Date;
(vi)
any liability of Transferors arising by reason of any violation or
alleged violation of any judgment, order, decree, statute, law,
rule of common law, code and regulations to the extent such
liability results from or arises out of events, facts or
circumstances occurring or existing on or prior to the Closing
Date;
(vii)
any liability of Transferors relating to any proceeding commenced
or made by or on behalf of an employee or former employee of
Transferors arising out of or in connection with Transferors’
conduct prior to the Closing Date or relating to any employee
benefit plan or employment practices of Transferors prior to the
Closing Date; and
(viii)
all obligations and liabilities, whether absolute or contingent,
other than Assumed Liabilities.
2.3
Consideration for Contributed Assets . On the terms
and subject to the conditions set forth in this Agreement, the
consideration for the Contributed Assets shall be
Transferee’s issuance to Alliance of the Transferee Shares.
At the Closing, Transferee will deliver to Alliance a stock
certificate registered in Alliance’s name representing the
Transferee Shares, it being acknowledged and agreed that the
issuance of the Transferee Shares to Alliance pursuant to this
Agreement, when taken together with MultiCell’s purchase of
Transferee’s Series A Preferred Stock, is intended to
qualify as an issuance of shares which is described in
Section 351 of the Code (and any comparable provisions of
applicable state or local tax laws), and each of the Parties agrees
to report and treat the transactions described in this Agreement
consistently therewith. The Parties acknowledge that the portion of
the Transferee Shares being delivered in respect of the Contributed
Assets transferred by Astral are being delivered to Alliance at the
direction of Alliance and Astral.
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2.4
Sales and Use Taxes . Transferors shall bear and pay
any and all Taxes arising out of the transfer of the Contributed
Assets to Transferee (the “ Transfer Taxes
”). To extent permitted by applicable law, Transferee shall
cooperate with Transferors and use its commercially reasonable
efforts to minimize such Transfer Taxes.
2.5
Bulk Transfer Laws . Transferee and Transferors shall
waive, to the fullest extent permitted by applicable law, any and
all bulk transfer or similar laws that may apply to the
transactions contemplated by this Agreement.
2.6
Closing .
(a)
Closing Place, Time and Date . The closing of the
transactions contemplated by this Agreement (the “
Closing ”) shall be held at the offices of
Wilson Sonsini Goodrich & Rosati, Professional
Corporation, 12235 El Camino Real, Suite 200, San Diego,
California, at 11:00 a.m. on the date hereof, or at such other
place and such other time and/or date as the Parties hereto shall
mutually agree (the actual date on which the Closing shall occur
being referred to herein as the “ Closing Date
”).
(b)
Closing Deliveries .
(i)
At the Closing, unless otherwise provided, Transferee shall
deliver, or cause to be delivered, to Transferors, as applicable,
the following, dated as of the Closing Date and executed for and on
behalf of Transferee by a duly authorized officer
thereof:
(1)
a certificate representing the Transferee Shares;
(2)
one or more instruments of assignment and assumption, in customary
form and substance reasonably satisfactory to Transferee and
Transferors and their respective counsel;
(3)
any and all other instruments, certificates and agreements
contemplated by Article VI hereof or as Transferors may reasonably
request in order to effectively make Transferee responsible for all
Assumed Liabilities pursuant hereto to the fullest extent permitted
by applicable law.
(ii)
At the Closing, Transferors shall deliver, or cause to be
delivered, to Transferee and MultiCell the following, dated as of
the Closing Date and executed for and on behalf of the applicable
Transferor by duly authorized officers thereof:
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(1)
a bill of sale, in customary form and substance reasonably
satisfactory to Transferee and Transferors and their respective
counsel;
(2)
one or more instruments of assignment and assumption, in customary
form and substance reasonably satisfactory to Transferee and
Transferors and their respective counsel;
(3)
an instrument of assignment of Patents, in customary form and
substance reasonably satisfactory to Transferee and Transferors and
their respective counsel;
(4)
any and all other instruments, certificates and agreements
contemplated by Article VI hereof or as Transferee or MultiCell may
reasonably request in order to effectively transfer to Transferee
all of the Contributed Assets pursuant hereto to the fullest extent
permitted by applicable law.
2.7
Nontransferable Assets . To the extent that any
Contributed Asset or Assumed Liability to be contributed, conveyed,
assigned, transferred, delivered or assumed to or by Transferee
pursuant hereto, or any claim, right or benefit arising thereunder
or resulting therefrom, is not capable of being contributed,
conveyed, assigned, transferred or delivered without the approval,
consent or waiver of the issuer thereof or the other party thereto,
or any third person (including a government or governmental unit),
or if such contribution, conveyance, assignment, transfer or
delivery or attempted contribution, conveyance, assignment,
transfer or delivery would constitute a breach or termination right
thereof or a violation of any law, decree, order, regulation or
other governmental edict, except as expressly otherwise provided
herein, this Agreement shall not constitute a contribution,
conveyance, assignment, transfer or delivery thereof, or an
attempted contribution, conveyance, assignment, transfer or
delivery thereof absent such approvals, consents or waivers. If any
such approval, consent or waiver shall not be obtained, or if an
attempted assignment of any such Contributed Asset or the
assumption of any Assumed Liability by Transferee would be
ineffective so that Transferee would not in fact receive all such
Contributed Assets or assume all such Assumed Liabilities pursuant
hereto, Transferors and Transferee shall cooperate in a mutually
agreeable arrangement under which Transferee would obtain the
benefits and assume the obligations of such Contributed Assets and
Assumed Liabilities in accordance with this Agreement, including
subcontracting, sub-licensing, or sub-leasing to Transferee, or
under which Transferors, at Transferee’s expense, would
enforce for the benefit of Transferee, with Transferee assuming all
of Transferors’ obligations thereunder, any and all rights of
Transferors against a third party thereto.
2.8
Taking of Necessary Action; Further Action . From time
to time after the Closing Date, at the request of either Party
hereto and at the expense of such Party, the Parties hereto shall
execute and deliver such other instruments of sale, transfer,
conveyance, assignment and confirmation and take such action as
Transferee may reasonably determine is necessary to transfer,
convey and assign to Transferee, and to confirm Transferee’s
title to or interest in the Contributed Assets, to put Transferee
in actual possession and operating control thereof and to assist
Transferee in exercising all rights with respect thereto.
Transferors hereby constitute and appoint Transferee and its
successors and assigns as their true and lawful attorney in fact
with respect to the Contributed Assets, with full power of
substitution, in the name and stead of Transferors but on behalf of
and for the benefit of the Transferee and its successors and
assigns, to demand and receive any and all of the assets,
properties, rights and business hereby conveyed, assigned, and
transferred or intended so to be, and to give receipt 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 Transferors or
otherwise, for the benefit of the Transferee or its successors and
assigns, proceedings at law, in equity, or otherwise, which the
Transferee or its successors or assigns reasonably deem proper in
order to collect or reduce to possession or endorse any of the
Contributed Assets and to do all acts and things in relation to the
Contributed Assets which the Transferee or its successors or
assigns reasonably deem desirable.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF
TRANSFERORS
Subject
to such exceptions as are specifically disclosed in the disclosure
letter (referencing the appropriate section numbers) supplied by
Transferors to MultiCell and Transferee (the “
Transferors’ Disclosure Letter ”), each
of Alliance and Astral, jointly and severally, hereby represents
and warrants to MultiCell and Transferee that the statements
contained in this Article III are true and correct as of the date
of this Agreement and will be true and correct as of the Closing
(as though made at the Closing ); provided , that the
representations and warranties made as of a specified date will be
true and correct as of such date.
3.1
Organization, Qualification, and Corporate Power .
Each Transferor is a corporation duly organized, validly existing,
and in good standing under the laws of the state of its
incorporation. Each Transferor is duly authorized to conduct
business and is in good standing under the laws of each other
jurisdiction where such qualification is required and in which the
failure to so qualify is reasonably likely to have a Transferor
Material Adverse Effect on such Transferor. There is no state other
than California in which any Transferor owns any property or in
which it has any employees, offices or operations. Each Transferor
has full corporate power and authority to carry on the businesses
in which it is engaged and to own and use the properties owned and
used by it. The operations now being conducted by Astral have not
been conducted under any other name since Astral’s inception.
The copies of Astral’s Certificate of Incorporation, Bylaws
and minute books which have been delivered to MultiCell and
Transferee are true, correct and complete as of the date hereof and
shall be as of the Closing.
3.2
Authorization . Each Transferor has full power and
authority to execute and deliver this Agreement and all agreements
and instruments delivered pursuant hereto (the “
Ancillary Agreements ”) to which it is a party,
and, subject to receipt of the requisite approval of its
stockholder, if applicable, to consummate the transactions
contemplated hereunder and to perform its obligations hereunder and
no other proceedings on the part of such Transferor are necessary
to authorize the execution, delivery and performance of this
Agreement and the Ancillary Agreements to which such Transferor is
a party except the approval of Alliance’s lender committee.
This Agreement and the Ancillary Agreements to which each
Transferor is a party and the transactions contemplated hereby and
thereby have been approved by the unanimous vote of each
Transferor’s Board of Directors. This Agreement and the
Ancillary Agreements to which each Transferor is a party constitute
the valid and legally binding obligations of such Transferor,
enforceable against such Transferor in accordance with their
respective terms and conditions, except as such enforceability may
be limited by principles of public policy and subject to the laws
of general application relating to bankruptcy, insolvency and the
relief of debtors and rules of law governing specific performance,
injunctive relief or other equitable remedies.
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3.3
Capitalization .
(a)
Capital Stock . The entire authorized capital stock of
Astral consists of 5,000,000 shares of Common Stock, 10,000 of
which are issued and outstanding, and 2,000,000 shares of Preferred
Stock, 90,000 of which are issued and outstanding. All such issued
and outstanding shares are held by Alliance. All of the issued and
outstanding shares of capital stock have been duly authorized, are
validly issued, fully paid, non-assessable and were not issued in
violation of any preemptive rights, rights of first refusal, or any
similar rights. None of the issued and outstanding shares of Astral
capital stock are subject to any preemptive rights, rights of first
refusal, or any similar rights. All of the outstanding shares of
Astral capital stock have been offered, issued and sold by Astral
in compliance with applicable federal and state securities laws.
There are no declared or accrued but unpaid dividends with respect
to any shares of capital stock of Astral.
(b)
Options, Rights or Other Agreements . Astral has not adopted
or maintained, and Astral is not obligated under, any stock option
plan or other plan providing for equity compensation of any person.
There are no options, warrants, calls, rights, commitments or
agreements of any character, written or oral, to which Astral is a
party or by which it is bound obligating Astral to issue, deliver,
sell, repurchase or redeem, or cause to be issued, delivered, sold,
repurchased or redeemed, any shares of the capital stock of Astral
or obligating Astral to grant, extend, accelerate the vesting of,
change the price of, otherwise amend or enter into any such option,
warrant, call, right, commitment or agreement. There are no
outstanding or authorized stock appreciation, phantom stock, profit
participation, or other similar rights with respect to Astral.
There are no voting trusts, proxies, or other agreements or
understandings with respect to the voting stock of
Astral.
3.4
Subsidiaries . Astral does not have, and never has
had, any subsidiaries and does not otherwise own, and has not
otherwise owned, any shares in the capital of or any interest in,
or control, directly or indirectly, any other corporation,
partnership, association, joint venture or other business entity.
In addition, there are no corporations, partnerships, associations,
joint ventures or other business entities controlled by, directly
or indirectly, any party that may be deemed to control Astral,
other than Alliance.
3.5
No Conflicts . Neither the execution and the delivery
of this Agreement and the Ancillary Agreements by any Transferor
nor the consummation of the transactions contemplated hereby and
thereby will (A) violate any constitution, statute,
regulation, rule, injunction, judgment, order, decree, ruling,
charge, or other restriction of any government, governmental
agency, or court to which any Transferor is subject,
(B) violate or conflict with any provision of the Certificate
of Incorporation or bylaws of any Transferor, or (C) conflict
with, result in a breach of, constitute a default under, result in
the acceleration of, create in any party the right to accelerate,
terminate, modify, or cancel, or require any notice or consent
under, any agreement, contract, lease, license, instrument,
franchise, permit, mortgage, indenture or other arrangement to
which any Transferor is a party or by which it is bound or to which
any of its assets are subject (or result in the imposition of any
Lien upon any of their respective assets) other than in the cases
of clauses (A) or (C) which would not in the aggregate
have a Transferor Material Adverse Effect or adversely effect the
ability of either Transferor to consummate the transactions
contemplated hereby.
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3.6
Consents . No consent, waiver, approval, order or
authorization of, or registration, declaration or filing with, any
Governmental Body or any third party, including a party to any
agreement with any Transferor, is required by or with respect to
any Transferor in connection with the execution and delivery of
this Agreement and the Ancillary Agreements or the consummation of
the transactions contemplated hereby or thereby, except for
(i) such consents, waivers, approvals, orders, authorizations,
registrations, declarations and filings as may be required under
applicable federal and state securities laws, (ii) any
applicable filings required under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended (the “ HSR
Act ”), (iii) the approval and consent of
Alliance’s lender committee, (iv) such consents,
waivers, approvals, orders, authorizations, registrations,
declarations and filings in which the failure to obtain would not
adversely affect the ability of either Transferor to consummate the
transactions contemplated hereby.
3.7
Undisclosed Liabilities . Except as set forth on
Section 3.7 of the Transferors’Disclosure Letter, Transferors
have no liability, indebtedness, obligation, expense, claim,
deficiency, guaranty or endorsement of any type (whether asserted
or unasserted, whether absolute or contingent, whether accrued or
unaccrued, whether liquidated or unliquidated, and whether due or
to become due, including any liability for taxes) (the “
Transferor Liabilities ”), except for that
which individually or in the aggregate (i) is reflected on the
balance sheet of Alliance as set forth in Alliance’s
Quarterly Report on Form 10-QSB for the period ended March 31, 2005
or (ii) has arisen after March 31, 2005 in the ordinary course
of business. Section 3.7 of the Transferors’ Disclosure
Letter further sets forth all such Transferor Liabilities that
relate to the Business as of the Closing.
3.8
Legal Compliance . Except as set forth on Section 3.8
of the Transferors’ Disclosure Letter, Transferors are in
compliance in all material respects with all applicable laws
(including rules, regulations, codes, plans, injunctions,
judgments, orders, decrees, rulings, and charges thereunder) of
federal, state, local, and foreign governments (and all agencies
thereof). No action, suit, proceeding, hearing, investigation,
charge, complaint, claim, demand, notice or inquiry is pending, or
to the knowledge of Transferors, is threatened against either
Transferor by any governmental body alleging any failure to so
comply, except to the extent that it would not have a Transferor
Material Adverse Effect. Transferors have all licenses, permits,
approvals, registrations, qualifications, certificates and other
governmental authorizations that are necessary for the operations
of the Business as currently conducted or as currently proposed to
be conducted.
3.9
Tax Matters .
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(a)
For purposes of this Agreement, (i) “ Tax
” or, collectively, “ Taxes ”,
means (i) any and all federal, state, local and foreign taxes,
assessments and other governmental charges, duties, impositions and
liabilities, including taxes based upon or measured by gross
receipts, income, profits, sales, use and occupation, and value
added, ad valorem, transfer, franchise, withholding, payroll,
recapture, employment, excise and property taxes, together with all
interest, penalties and additions imposed with respect to such
amounts; (ii) any liability for the payment of any amounts of
the type described in clause (i) as a result of being or
ceasing to be a member of an affiliated, consolidated, combined or
unitary group for any period (including, without limitation, any
liability under Treas. Reg. Section 1.1502-6 or any comparable
provision of foreign, state or local law); and (iii) any
liability for the payment of any amounts of the type described in
clause (i) or (ii) as a result of any express or implied
obligation to indemnify any other person or as a result of any
obligations under any agreements or arrangements with any other
person with respect to such amounts and including any liability for
taxes of a predecessor entity.
(b)
To the extent that failure to do so would adversely impact the
Contributed Assets or Transferee’s ownership of the
Contributed Assets, each Transferor (a) has timely paid all
Taxes it is required to pay and (b) has timely filed all
required federal, state, local and foreign returns, estimates,
information statements and reports (“ Returns
”) relating to any and all Taxes concerning or attributable
to the Contributed Assets and such Returns are true and correct and
completed in accordance with applicable law.
(c)
Astral has timely paid or withheld with respect to its employees
and other third parties (and timely paid over any withheld amounts
to the appropriate Taxing authority) all federal and state income
taxes, Federal Insurance Contribution Act, Federal Unemployment Tax
Act and other Taxes required to be withheld or paid.
(d)
No Transferor knows of any basis for the assertion of any claim for
any liabilities for unpaid Taxes for which Transferee would become
liable as a result of the transactions contemplated by this
Agreement or that would result in any Lien on any of the
Contributed Assets.
(e)
There are no Liens with respect to any Taxes upon any of the
Contributed Assets, other than with respect to Taxes not yet due
and payable.
(f)
To the extent applicable to the Contributed Assets or
Transferee’s ownership of the Contributed Assets, no
Transferor has been delinquent in the payment of any Tax, nor is
there any Tax deficiency outstanding, assessed or proposed against
any Transferor, nor has any Transferor executed any outstanding
waiver of any statute of limitations on or extension of the period
for the assessment or collection of any Tax.
(g)
To the extent applicable to the Contributed Assets or
Transferee’s ownership of the Contributed Assets, (i) no
audit or other examination of any Return of any Transferor is
presently in progress, nor has any Transferor been notified of any
request for such an audit or other examination; (ii) no
adjustment relating to any Return filed by any Transferor has been
proposed formally or, to the knowledge of any Transferor,
informally by any tax authority to any Transferor or any
representative thereof; and (iii) no claim has ever been made
by an authority in a jurisdiction where any Transferor does not
file Returns that it is or may be subject to taxation by that
jurisdiction.
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(h)
None of the Contributed Assets is “tax exempt use
property” within the meaning of Section 168(h) of the
Code.
3.10
Title of Properties; Absence of Liens and Encumbrances;
Condition of Equipment .
(a)
Astral owns no real property nor has Astral ever owned any real
property. All current leases of Astral are in full force and
effect, are valid and effective in accordance with their respective
terms, and there is not, under any of such leases, any existing
default or event of default (or event which with notice or lapse of
time, or both, would constitute a default) on the part of a
Transferor and, to the knowledge of the Transferors, on the part of
any other party thereto.
(b)
Except as set forth in Section 3.10(b) of the
Transferor Disclosure Letter, Astral has good and valid title to,
or, in the case of leased properties and assets, valid leasehold
interests in, all of its tangible properties and assets, real,
personal and mixed, used or held for use in its business, free and
clear of any Liens, except such imperfection
