Exhibit 99.2
PHARMACEUTICAL PRODUCT LICENSE AND
DISTRIBUTION AGREEMENT
Dated as of October ___, 2006
AMONG
PACIFIC BIO-PHARMACEUTICAL, INC., PRB
PHARMACEUTICALS, INC.
AND
CERTAIN SHAREHOLDERS OF PRB
PHARMACEUTICALS, INC
PHARMACEUTICAL PRODUCT LICENSE AND
DISTRIBUTION AGREEMENT
Dated as of October ___, 2006
AMONG
PACIFIC BIO-PHARMACEUTICAL, INC. PRB
PHARMACEUTICALS, INC.
AND
CERTAIN SHAREHOLDERS OF PRB
PHARMACEUTICALS, INC.
TABLE OF CONTENTS
TABLE OF CONTENTS
1. DEFINITIONS AND USAGE
1.1 Definitions
1.2 Usage
2. EXCLUSIVE LICENSE; ASSET PURCHASE;
CLOSING
2.1 Exclusive License
2.2 Assignment of Contracts and Accounts
Receivable
2.3 Consideration
2.4 Liabilities
2.5 Allocation
2.6 Closing
2.7 Closing Obligations
2.8 Consents
3. REPRESENTATIONS AND WARRANTIES OF PRB
AND SHAREHOLDERS
3.1 Enforceability; Authority; No
Conflict
3.2 Capitalization
3.3 Title to Assets;
Encumbrances
3.4 PRB Accounts Receivable
3.5 Compliance with Legal Requirements;
Governmental Authorizations
3.6 Legal Proceedings; Orders
3.7 Contracts; No Defaults
3.8 Environmental Matters
3.9 Intellectual Property
Assets
3.10 Compliance with the Foreign Corrupt
Practices Act and Export Control and Antiboycott Laws
3.11 Relationships with Related
Persons
3.12 Brokers or Finders
3.13 Securities Law Matters
3.14 Solvency
i
3.15 Disclosure
4. REPRESENTATIONS AND WARRANTIES OF
PACIFIC
4.1 Organization and Good
Standing
4.2 Authority; No Conflict
4.3 Certain Proceedings
4.4 Brokers or Finders
5.COVENANTS OF PRB PRIOR TO
CLOSING
5.1 Access and Investigation
5.2 Operation of the Business of
PRB
5.2 Negative Covenant
5.3 Required Approvals
5.4 Notification
5.6 No Negotiation
5.7 Best Efforts
5.8 Interim Financial
Statements
5.9 Change of Name
5.8 Payment of Liabilities
5.11 Current Evidence of Title
6. COVENANTS OF PACIFIC PRIOR TO
CLOSING
6.1 Required Approvals
6.2 Best Efforts
7.CONDITIONS PRECEDENT TO PACIFIC'S
OBLIGATION TO CLOSE
7.1 Accuracy of
Representations
7.2 PRB's Performance
7.3 Consents
7.4 Additional Documents
7.5 No Proceedings
7.6 No Conflict
7.7 Governmental
Authorizations
8. CONDITIONS PRECEDENT TO PRB'S
OBLIGATION TO CLOSE
8.1 Accuracy of
Representations
8.2 PACIFIC's Performance
8.3 Consents
8.4 Additional Documents
8.5 No Injunction
9. TERMINATION
9.1 Termination Events
9.2 Effect of Termination
ii
10. ADDITIONAL COVENANTS
10.1 Employees and Employee
Benefits
10.1 Payment of All Taxes
10.2 Payment of Other Retained
Liabilities
10.3 Restrictions on PRB Dissolution and
Distributions
10.4 Assistance in Proceedings
10.5 Noncompetition, Nonsolicitation and
Nondisparagement
10.6 Further Assurances
11. INDEMNIFICATION; REMEDIES
11.1 Survival
11.2 Indemnification and Reimbursement by
PRB and Shareholders
11.3 Indemnification and Reimbursement by
PRB--Environmental Matters
11.4 Indemnification and Reimbursement by
PACIFIC
11.5 Time Limitations
11.6 Third-Party Claims
11.7 Other Claims
11.8 Indemnification in Case of Strict
Liability or Indemnitee Negligence
12. CONFIDENTIALITY
12.1 Definition of Confidential
Information
12.2 Restricted Use of Confidential
Information
12.3 Exceptions
12.4 Legal Proceedings
12.5 Return or Destruction of
Confidential Information
12.6 Attorney-Client Privilege
13. GENERAL PROVISIONS
13.1 Expenses
13.2 Public Announcements
13.3 Notices
13.4 Jurisdiction; Service of
Process
13.5 Enforcement of Agreement
13.6 Waiver; Remedies
Cumulative
13.7 Entire Agreement and
Modification
13.8 Disclosure Letter
13.9 Assignments, Successors and No
Third-Party Rights
13.10 Severability
13.11 Construction
13.12 Time of Essence
13.13 Governing Law
13.14 Execution of Agreement
13.15 Shareholder Obligations
13.16 Representative of PRB and
Shareholders
iii
PHARMACEUTICAL PRODUCT LICENSE AND
DISTRIBUTION AGREEMENT
This PHARMACEUTICAL PRODUCT LICENSE AND
DISTRIBUTION AGREEMENT ("Agreement") is dated October __, 2006, by
and among Pacific Bio-Pharmaceutical, Inc., a Nevada corporation
("PACIFIC"), PRB Pharmaceuticals, Inc., a Delaware corporation
("PRB"), Charles B. Hensley ("Hensley") and Richard S. Pyo,
(“Pyo“) (Hensley and Pyo are referred to herein as
"Shareholders").
RECITALS
WHEREAS, PRB is the owner of and has the
right to grant licenses with respect to certain Technology (as
hereinafter defined), the Trademark (as hereinafter defined), the
Intellectual Property Assets (as hereinafter defined) and the
Product (as hereinafter defined);
WHEREAS, PRB wishes to grant to PACIFIC
an exclusive license to the Technology and the Intellectual
Property Assets so that PACIFIC can use and sell the Product in the
Territory (as hereinafter defined) related to the Licensed Use (as
hereinafter defined) and further develop the Technology and the
Intellectual Property Assets, and PACIFIC wishes to receive such a
license, on the terms and subject to the conditions set forth in
this Agreement;
WHEREAS, Shareholders own fourteen
million (13,250,000) shares of the common stock, par value dollars
($0.001) per share, of PRB, which constitute twenty seven percent
(27%) of the issued and outstanding shares of capital stock of
PRB;
NOW, THEREFORE, in consideration of the
mutual covenants and agreements contained herein, the parties,
intending to be legally bound, agree as follows:
Article 1.
Definitions and Usage
SECTION 1.1 DEFINITIONS
For purposes of this Agreement, the
following terms and variations thereof have the meanings specified
or referred to in this Section 1.1:
"Assets"--as defined in Section
2.1.
"Assumed Liabilities"--as defined in
Section 2.4(a).
"Best Efforts"--the efforts that a
prudent Person desirous of achieving a result would use in similar
circumstances to achieve that result as expeditiously as possible,
provided, however, that a Person required to use Best Efforts under
this Agreement will not be thereby required to take actions that
would result in a material adverse change in the benefits to such
Person of this Agreement and the Contemplated Transactions or to
dispose of or make any change to its business, expend any material
funds or incur any other material burden.
1
"Breach"--any breach of, or any
inaccuracy in, any representation or warranty or any breach of, or
failure to perform or comply with, any covenant or obligation, in
or of this Agreement or any other Contract, or any event which with
the passing of time or the giving of notice, or both, would
constitute such a breach, inaccuracy or failure.
"Bulk Sales Laws"--as defined in Section
5.8.
"Business Day"--any day other than (a)
Saturday or Sunday or (b) any other day on which banks in
California are permitted or required to be closed.
"PACIFIC"--as defined in the first
paragraph of this Agreement.
"PACIFIC Indemnified Persons"--as defined
in Section 11.2.
"Closing"--as defined in Section
2.6.
"Closing Date"--the date on which the
Closing actually takes place.
"Code"--the Internal Revenue Code of
1986.
"Confidential Information"--as defined in
Section 12.1.
"Consent"--any approval, consent,
ratification, waiver or other authorization.
"Contemplated Transactions"--all of the
transactions contemplated by this Agreement.
"Contract"--any agreement, contract,
Lease, consensual obligation, promise or undertaking
(whether written or oral and whether
express or implied), whether or not legally binding.
"Copyrights"--as defined in Section
3.9(a)(iii).
"Damages"--as defined in Section
11.2.
"Disclosure Letter"--the disclosure
letter delivered by PRB and Shareholders to PACIFIC concurrently
with the execution and delivery of this Agreement.
"Effective Time"--The time at which the
Closing is consummated.
"Consulting Agreement"--as defined in
Section 2.7(a)(vi).
"Encumbrance"--any charge, claim,
community or other marital property interest, condition, equitable
interest, lien, option, pledge, security interest, mortgage, right
of way, easement, encroachment, servitude, right of first option,
right of first refusal or similar restriction, including any
restriction on use, voting (in the case of any security or equity
interest), transfer, receipt of income or exercise of any other
attribute of ownership.
2
"Environment"--soil, land surface or
subsurface strata, surface waters (including navigable waters and
ocean waters), groundwaters, drinking water supply, stream
sediments, ambient air (including indoor air), plant and animal
life and any other environmental medium or natural
resource.
"Environmental, Health and Safety
Liabilities"--any cost, damages, expense, liability, obligation or
other responsibility arising from or under any Environmental Law or
Occupational Safety and Health Law, including those consisting of
or relating to:
(a)
any environmental, health or safety
matter or condition (including on-site or off-site contamination,
occupational safety and health and regulation of any chemical
substance or product);
(b)
any fine, penalty, judgment, award,
settlement, legal or administrative proceeding, damages, loss,
claim, demand or response, remedial or inspection cost or expense
arising under any Environmental Law or Occupational Safety and
Health Law;
(c)
financial responsibility under any
Environmental Law or Occupational Safety and Health Law for cleanup
costs or corrective action, including any cleanup, removal,
containment or other remediation or response actions ("Cleanup")
required by any Environmental Law or Occupational Safety and Health
Law (whether or not such Cleanup has been required or requested by
any Governmental Body or any other Person) and for any natural
resource damages; or
(d)
any other compliance, corrective or
remedial measure required under any Environmental Law or
Occupational Safety and Health Law.
The terms "removal," "remedial" and
"response action" include the types of activities covered by the
United States Comprehensive Environmental Response, Compensation
and Liability Act of 1980 (CERCLA).
"Environmental Law"--any Legal
Requirement that requires or relates to:
(a)
advising appropriate authorities,
employees or the public of intended or actual Releases of
pollutants or hazardous substances or materials, violations of
discharge limits or other prohibitions and the commencement of
activities, such as resource extraction or construction, that could
have significant impact on the Environment;
(b)
preventing or reducing to acceptable
levels the Release of pollutants or hazardous substances or
materials into the Environment;
(c)
reducing the quantities, preventing the
Release or minimizing the hazardous characteristics of wastes that
are generated;
(d)
assuring that products are designed,
formulated, packaged and used so that they do not present
unreasonable risks to human health or the Environment when used or
disposed of;
(e)
protecting resources, species or
ecological amenities;
(f)
reducing to acceptable levels the risks
inherent in the transportation of hazardous substances, pollutants,
oil or other potentially harmful substances;
(g)
cleaning up pollutants that have been
Released, preventing the Threat of Release or paying the costs of
such clean up or prevention; or
3
(h)
making responsible parties pay private
parties, or groups of them, for damages done to their health or the
Environment or permitting self-appointed representatives of the
public interest to recover for injuries done to public
assets.
"Exchange Act"--the Securities Exchange
Act of 1934.
"Exclusive License"--as defined in
Section 2.1.
"Facilities"--any real property,
leasehold or other interest in real property currently owned or
operated by PRB, including the Tangible Personal Property used or
operated by PRB at the respective locations of the Real Property
specified in Section 3.7. Notwithstanding the foregoing, for
purposes of the definitions of "Hazardous Activity" and "Remedial
Action" and Sections 3.8 and 11.3, "Facilities" shall mean any real
property, leasehold or other interest in real property currently or
formerly owned or operated by PRB, including the Tangible Personal
Property used or operated by PRB at the respective locations of the
Real Property specified in Section 3.7.
"GAAP"--generally accepted accounting
principles for financial reporting in the United States, applied on
a basis consistent with the basis on which the Balance Sheet and
the other financial statements referred to in Section 3.4 were
prepared.
"Governing Documents"--with respect to
any particular entity, (a) if a corporation, the articles or
certificate of incorporation and the bylaws; (b) if a general
partnership, the partnership agreement and any statement of
partnership; (c) if a limited partnership, the limited
partnership agreement and the certificate of limited partnership;
(d) if a limited liability company, the articles of organization
and operating agreement; (e) if another type of Person, any other
charter or similar document adopted or filed in connection with the
creation, formation or organization of the Person; (f) all
equityholders' agreements, voting agreements, voting trust
agreements, joint venture agreements, registration rights
agreements or other agreements or documents relating to the
organization, management or operation of any Person or relating to
the rights, duties and obligations of the equityholders of any
Person; and (g) any amendment or supplement to any of the
foregoing.
"Governmental Authorization"--any
Consent, license, registration or permit issued, granted, given or
otherwise made available by or under the authority of any
Governmental Body or pursuant to any Legal Requirement.
"Governmental Body"--any:
(a)
nation, state, county, city, town,
borough, village, district or other jurisdiction;
(b)
federal, state, local, municipal, foreign
or other government;
(c)
governmental or quasi-governmental
authority of any nature (including any agency, branch, department,
board, commission, court, tribunal or other entity exercising
governmental or quasi-governmental powers);
(d)
multinational organization or
body;
4
(e)
body exercising, or entitled or
purporting to exercise, any administrative, executive, judicial,
legislative, police, regulatory or taxing authority or power;
or
(f)
official of any of the
foregoing.
"Hazardous Activity"--the distribution,
generation, handling, importing, management, manufacturing,
processing, production, refinement, Release, storage, transfer,
transportation, treatment or use (including any withdrawal or other
use of groundwater) of Hazardous Material in, on, under, about or
from any of the Facilities or any part thereof into the Environment
and any other act, business, operation or thing that increases the
danger, or risk of danger, or poses an unreasonable risk of harm,
to persons or property on or off the Facilities.
"Hazardous Material"--any substance,
material or waste which is or will foreseeably be regulated by any
Governmental Body, including any material, substance or waste which
is defined as a "hazardous waste," "hazardous material," "hazardous
substance," "extremely hazardous waste," "restricted hazardous
waste," "contaminant," "toxic waste" or "toxic substance" under any
provision of Environmental Law, and including petroleum, petroleum
products, asbestos, presumed asbestos-containing material or
asbestos-containing material, urea formaldehyde and polychlorinated
biphenyls.
"Indemnified Person"--as defined in
Section 11.6.
"Indemnifying Person"--as defined in
Section 11.6.
"Intellectual Property Assets"--as
defined in Section 3.9(a).
"Interim Balance Sheet"--as defined in
Section 3.4.
"Inventories"--all inventories of PRB,
wherever located, including all finished goods, work in process,
raw materials, spare parts and all other materials and supplies to
be used or consumed by PRB in the production of finished
goods.
"IRS"--the United States Internal Revenue
Service and, to the extent relevant, the United States Department
of the Treasury.
"Knowledge"--an individual will be deemed
to have Knowledge of a particular fact or other matter
if:
(a)
that individual is actually aware of that
fact or matter; or
(b)
a prudent individual could be expected to
discover or otherwise become aware of that fact or matter in the
course of conducting a reasonably comprehensive investigation
regarding the accuracy of any representation or warranty contained
in this Agreement.
A Person (other than an individual) will
be deemed to have Knowledge of a particular fact or other matter if
any individual who is serving, or who has at any time served, as a
director, officer, partner, executor or trustee of that Person (or
in any similar capacity) has, or at any time had,
5
Knowledge of that fact or other matter
(as set forth in (a) and (b) above), and any such individual (and
any individual party to this Agreement) will be deemed to have
conducted a reasonably comprehensive investigation regarding the
accuracy of the representations and warranties made herein by that
Person or individual.
"Legal Requirement"--any federal, state,
local, municipal, foreign, international, multinational or other
constitution, law, ordinance, principle of common law, code,
regulation, statute or treaty.
"Liability"--with respect to any Person,
any liability or obligation of such Person of any kind, character
or description, whether known or unknown, absolute or contingent,
accrued or unaccrued, disputed or undisputed, liquidated or
unliquidated, secured or unsecured, joint or several, due or to
become due, vested or unvested, executory, determined, determinable
or otherwise, and whether or not the same is required to be accrued
on the financial statements of such Person.
“Licensed Use”—means
use of the Product as a flu vaccine.
"Marks"--as defined in Section
3.9(a)(i).
"Material Consents"--as defined in
Section 7.3.
"Order"--any order, injunction, judgment,
decree, ruling, assessment or arbitration award of any Governmental
Body or arbitrator.
"Ordinary Course of Business"--an action
taken by a Person will be deemed to have been taken in the Ordinary
Course of Business only if that action:
(a)
is consistent in nature, scope and
magnitude with the past practices of such Person and is taken in
the ordinary course of the normal, day-to-day operations of such
Person;
(b)
does not require authorization by the
board of directors or shareholders of such Person (or by any Person
or group of Persons exercising similar authority) and does not
require any other separate or special authorization of any nature;
and
(c)
is similar in nature, scope and magnitude
to actions customarily taken, without any separate or special
authorization, in the ordinary course of the normal, day-to-day
operations of other Persons that are in the same line of business
as such Person.
"Patents"--as defined in Section
3.9(a)(ii).
"Permitted Encumbrances"--as defined in
Section 3.9.
"Person"--an individual, partnership,
corporation, business trust, limited liability company, limited
liability partnership, joint stock company, trust, unincorporated
association, joint venture or other entity or a Governmental
Body.
"Proceeding"--any action, arbitration,
audit, hearing, investigation, litigation or suit (whether civil,
criminal, administrative, judicial or investigative, whether formal
or informal,
6
whether public or private) commenced,
brought, conducted or heard by or before, or otherwise involving,
any Governmental Body or arbitrator.
“Product”—means Vira 38
and Vira 38 FluStat, as described on SCHEDULE 2.1(a)
.
"Purchase Price"--as defined in Section
2.3.
"Record"--information that is inscribed
on a tangible medium or that is stored in an electronic or other
medium and is retrievable in perceivable form.
"Related Person"--
With respect to a particular
individual:
(a)
each other member of such individual's
Family;
(b)
any Person that is directly or indirectly
controlled by any one or more members of such individual's
Family;
(c)
any Person in which members of such
individual's Family hold (individually or in the aggregate) a
Material Interest; and
(d)
any Person with respect to which one or
more members of such individual's Family serves as a director,
officer, partner, executor or trustee (or in a similar
capacity).
With respect to a specified Person other
than an individual:
(a)
any Person that directly or indirectly
controls, is directly or indirectly controlled by or is directly or
indirectly under common control with such specified
Person;
(b)
any Person that holds a Material Interest
in such specified Person;
(c)
each Person that serves as a director,
officer, partner, executor or trustee of such specified Person (or
in a similar capacity);
(d)
any Person in which such specified Person
holds a Material Interest; and
(e)
any Person with respect to which such
specified Person serves as a general partner or a trustee (or in a
similar capacity).
For purposes of this definition, (a)
"control" (including "controlling," "controlled by," and "under
common control with") means the possession, direct or indirect, of
the power to direct or cause the direction of the management and
policies of a Person, whether through the ownership of voting
securities, by contract or otherwise, and shall be construed as
such term is used in the rules promulgated under the Securities
Act; (b) the "Family" of an individual includes (i) the individual,
(ii) the individual's spouse, (iii) any other natural person who is
related to the individual or the individual's spouse within the
second degree and (iv) any other natural person who resides with
such individual; and (c) "Material Interest" means direct or
indirect beneficial ownership (as defined in Rule 13d-3 under the
Exchange Act) of voting securities or other voting interests
representing at least ten percent (10%) of the outstanding voting
power of a Person or equity securities or other equity interests
representing at least ten percent (10%) of the outstanding equity
securities or equity interests in a Person.
7
"Release"--any release, spill, emission,
leaking, pumping, pouring, dumping, emptying, injection, deposit,
disposal, discharge, dispersal, leaching or migration on or into
the Environment or into or out of any property.
"Remedial Action"--all actions, including
any capital expenditures, required or voluntarily undertaken (a) to
clean up, remove, treat or in any other way address any Hazardous
Material or other substance; (b) to prevent the Release or Threat
of Release or to minimize the further Release of any Hazardous
Material or other substance so it does not migrate or endanger or
threaten to endanger public health or welfare or the Environment;
(c) to perform pre-remedial studies and investigations or
post-remedial monitoring and care; or (d) to bring all
Facilities and the operations conducted thereon into compliance
with Environmental Laws and environmental Governmental
Authorizations.
"Representative"--with respect to a
particular Person, any director, officer, manager, employee, agent,
consultant, advisor, accountant, financial advisor, legal counsel
or other representative of that Person.
"Retained Liabilities"--as defined in
Section 2.4(b).
"SEC"--the United States Securities and
Exchange Commission.
"Section"--a part or section of the
Disclosure Letter.
"Securities Act”--the Securities
Act of 1933.
"PRB"--as defined in the first paragraph
of this Agreement.
“PRB Accounts
Receivable”—as defined in Section 2.2(b).
"PRB Contract"--as defined in Section
2.1(a).
"Shareholders"--as defined in the first
paragraph of this Agreement.
“Shares”—as defined in
Section 2.3.
"Subsidiary"--with respect to any Person
(the "Owner"), any corporation or other Person of which securities
or other interests having the power to elect a majority of that
corporation's or other Person's board of directors or similar
governing body, or otherwise having the power to direct the
business and policies of that corporation or other Person (other
than securities or other interests having such power only upon the
happening of a contingency that has not occurred), are held by the
Owner or one or more of its Subsidiaries.
"Tangible Personal Property"--all
machinery, equipment, tools, furniture, office equipment, computer
hardware, supplies, materials, vehicles and other items of tangible
personal property (other than Inventories) of every kind owned or
leased by PRB (wherever located and whether or not carried on PRB's
books), together with any express or implied warranty by the
manufacturers or
8
PRBs or lessors of any item or component
part thereof and all maintenance records and other documents
relating thereto.
"Tax"--any income, gross receipts,
license, payroll, employment, excise, severance, stamp, occupation,
premium, property, environmental, windfall profit, customs,
vehicle, airplane, boat, vessel or other title or registration,
capital stock, franchise, employees' income withholding, foreign or
domestic withholding, social security, unemployment, disability,
real property, personal property, sales, use, transfer, value
added, alternative, add-on minimum and other tax, fee, assessment,
levy, tariff, charge or duty of any kind whatsoever and any
interest, penalty, addition or additional amount thereon imposed,
assessed or collected by or under the authority of any Governmental
Body or payable under any tax-sharing agreement or any other
Contract.
"Tax Return"--any return (including any
information return), report, statement, schedule, notice, form,
declaration, claim for refund or other document or information
filed with or submitted to, or required to be filed with or
submitted to, any Governmental Body in connection with the
determination, assessment, collection or payment of any Tax or in
connection with the administration, implementation or enforcement
of or compliance with any Legal Requirement relating to any
Tax.
"Third Party"--a Person that is not a
party to this Agreement.
"Third-Party Claim"--any claim against
any Indemnified Person by a Third Party, whether or not involving a
Proceeding.
"Threat of Release"--a reasonable
likelihood of a Release that may require action in order to prevent
or mitigate damage to the Environment that may result from such
Release.
"Technology" means PRB's information and
know-how related to the Product and the Intellectual Property
Assets.
"Territory" means, anywhere in the world
except in the United States of America and its territories and
possessions, both retail and wholesale sales outlets, including but
not limited to drug stores, food stores, health food stores and
mass merchandise outlets.
"Trademark" means the mark "Vira 38 and
“Vira 38 FluStat”, and any other marks used by PRB with
the Product in the Territory during the term of this
Agreement.
SECTION 1.2 USAGE
(a)
Interpretation. In this Agreement, unless
a clear contrary intention appears:
(i)
the singular number includes the plural
number and vice versa;
(ii)
reference to any Person includes such
Person's successors and assigns but, if applicable, only if such
successors and assigns are not prohibited by this Agreement, and
reference to a Person in a particular capacity excludes such Person
in any other capacity or individually;
(iii)
reference to any gender includes each
other gender;
9
(iv)
reference to any agreement, document or
instrument means such agreement, document or instrument as amended
or modified and in effect from time to time in accordance with the
terms thereof;
(v)
reference to any Legal Requirement means
such Legal Requirement as amended, modified, codified, replaced or
reenacted, in whole or in part, and in effect from time to time,
including rules and regulations promulgated thereunder, and
reference to any section or other provision of any Legal
Requirement means that provision of such Legal Requirement from
time to time in effect and constituting the substantive amendment,
modification, codification, replacement or reenactment of such
section or other provision;
(vi)
"hereunder," "hereof," "hereto,"
and words of similar import shall be deemed references to
this Agreement as a whole and not to any particular Article,
Section or other provision hereof;
(vii)
"including" (and with correlative meaning
"include") means including without limiting the generality of any
description preceding such term;
(viii)
"or" is used in the inclusive sense of
"and/or";
(ix)
with respect to the determination of any
period of time, "from" means "from and including" and "to" means
"to but excluding"; and
(x)
references to documents, instruments or
agreements shall be deemed to refer as well to all addenda,
exhibits, schedules or amendments thereto.
(b)
Accounting Terms and Determinations.
Unless otherwise specified herein, all accounting terms used herein
shall be interpreted and all accounting determinations hereunder
shall be made in accordance with GAAP.
(c)
Legal Representation of the Parties. This
Agreement was negotiated by the parties with the benefit of legal
representation, and any rule of construction or interpretation
otherwise requiring this Agreement to be construed or interpreted
against any party shall not apply to any construction or
interpretation hereof.
Article 2.
Exclusive License; Asset Purchase;
Closing
SECTION 2.1 EXCLUSIVE
LICENSE
(a)
Pursuant to the terms of this Agreement,
PRB hereby appoints PACIFIC as the exclusive licensee: (a) to
market, sell and distribute the Product (described on SCHEDULE
2.1(a) ) in the Territory, and (b) to use the Trademark,
Technology and Intellectual Property Assets in the Territory solely
in connection with marketing, selling and distributing the Product,
both solely for the Licensed Use in the Territory (the
“Exclusive License”).
(b)
For purposes of this Agreement,
"exclusive" shall mean that PRB will not directly or indirectly
market, sell or distribute the Product to: (1) any other person or
entity in the Territory for the Licensed Use in the Territory; or
(2) any other person or entity outside the Territory to market,
sell or distribute the Product for the Licensed Use in the
Territory.
10
(c)
PACIFIC will not directly or indirectly
market, promote, encourage, exploit, offer for sale or sell, or
otherwise dispose of the Product: (a) outside the Territory; or (b)
inside the Territory for use other than the Licensed Use, without
prior written consent from PRB.
(d)
If, during the term of this Agreement,
PRB, PACIFIC, or jointly PRB or the Shareholders and PACIFIC,
develop or otherwise modify or acquire any modifications to the
Technology, the Intellectual Property Assets or to the formulation
of the Product, such modifications shall be the sole and exclusive
property of PACIFIC.
(e)
PACIFIC shall promote, market, and sell
the Product for the Licensed Use in the Territory. PRB shall from
time to time furnish PACIFIC with Technology as and to the extent
PRB reasonably determines to assist PACIFIC's efforts to promote,
market, and sell the Product for the Licensed Use in the
Territory.
(f)
PRB and the Shareholders shall also
furnish such additional Technology as PACIFIC may reasonably
request in connection with any regulatory compliance regarding the
promotion, marketing, or sale of the Product for the Licensed Use
in the Territory.
(g)
PRB shall be responsible for all
decisions and actions regarding regulatory matters relating to or
involving the Product. PRB shall, with respect to any such
regulatory matters, (a) act as liaison with the FDA or other
governmental authority; (b) prepare and make all submissions
regarding the regulatory matter; (c) monitor all studies pertinent
to the regulatory matter; and (d) obtain regulatory approvals, as
reasonably deemed necessary by PRB. PACIFIC shall promptly
cooperate with PRB with respect to such regulatory matters by
providing data and information at PRB's reasonable request.
Nevertheless, PACIFIC shall maintain its own counsel for FDA or
other regulatory matters, for the sole purpose of advising PACIFIC
with regard to such regulatory matters and to any data,
information, or suggestions that PACIFIC may provide to PRB, either
at PRB's request or at PACIFIC's discretion.
(h)
Each of the parties shall promptly notify
the other party in writing of any technical or clinical advances,
useful modifications, side effects, or new government regulations
relating to the Product that shall come to its knowledge. PRB must
promptly inform PACIFIC of all actions and communications (even if
believed by PRB to be without foundation) by or threatened by a
regulatory or other governmental authority outside of the Territory
relating to the Product.
SECTION 2.2 ASSIGNMENT OF CONTRACTS
AND ACCOUNTS RECEIVABLE
Upon the terms and subject to the
conditions set forth in this Agreement, at the Closing, but
effective as of the Effective Time, Seller shall assign, transfer
and deliver to Buyer, and Buyer shall assume from Seller, free and
clear of any Encumbrances other than Permitted Encumbrances, all of
Seller's right, title and interest in and to the following assets
of Seller (but excluding the Excluded Assets):
(a)
Contracts. The contracts as
described on SCHEDULE 2.2(a) attached hereto (“PRB
Contracts”), including those listed in Section 3.7(a);
and
11
(b)
Accounts Receivable. Accounts
receivable on account of the distribution contract described on
SCHEDULE 2.2(b) .
All of the contracts to be transferred to
PACIFIC hereunder are herein referred to collectively as the
"Assets."
Notwithstanding the foregoing, the
transfer of the Assets pursuant to this Agreement shall not include
the assumption of any Liability related to the Assets unless
PACIFIC expressly assumes that Liability pursuant to Section
2.4(a).
SECTION 2.3
CONSIDERATION
The consideration for the Exclusive
License and Assets (the "Purchase Price") will be: (a) Ten Million
Five Hundred Thousand (10,500,000) shares of common stock, no par
value, of PACIFIC (the “Shares”); (b) a royalty of two
percent (2%) on annual gross revenues attributable to sales of the
Product, provided that in no case shall the annual royalty exceed
One Million Dollars ($1,000,000); and (c) the assumption of the
Assumed Liabilities (as defined below). The Purchase Price shall be
delivered to PRB in accordance with Section 2.7(b) at the
Closing.
SECTION 2.4 LIABILITIES
(a)
Assumed Liabilities. On the Closing Date,
but effective as of the Effective Time, PACIFIC shall assume and
agree to discharge only the following Liabilities of PRB (the
"Assumed Liabilities"): any Liability arising after the Effective
Time under the PRB Contracts described in Section 2.2(b) (other
than any Liability arising out of or relating to a Breach that
occurred prior to the Effective Time).
(b)
Retained Liabilities. The Retained
Liabilities shall remain the sole responsibility of and shall be
retained, paid, performed and discharged solely by PRB. "Retained
Liabilities" shall mean every Liability of PRB other than the
Assumed Liabilities, including:
(i)
any Liability arising out of or relating
to products of PRB to the extent manufactured or sold prior to the
Effective Time other than to the extent assumed under Section
2.4(a);
(ii)
any Liability under any Contract assumed
by PACIFIC pursuant to Section 2.4(a) that arises after the
Effective Time but that arises out of or relates to any Breach that
occurred prior to the Effective Time;
(iii)
any Liability for Taxes, including (A)
any Taxes arising as a result of PRB's operation of its business or
ownership of the Assets prior to the Effective Time, (B) any Taxes
that will arise as a result of the sale of the Assets pursuant to
this Agreement and (C) any deferred Taxes of any nature;
12
(iv)
any Liability under any Contract not
assumed by PACIFIC under Section 2.4(a), including any Liability
arising out of or relating to PRB's credit facilities or any
security interest related thereto;
(v)
any Liability of PRB to any Shareholder
or Related Person of PRB or any Shareholder;
(vi)
any Liability to indemnify, reimburse or
advance amounts to any officer, director, employee or agent of
PRB;
(vii)
any Liability to distribute to any of
PRB's shareholders or otherwise apply all or any part of the
consideration received hereunder;
(viii)
any Liability arising out of any
Proceeding pending as of the Effective Time;
(ix)
any Liability arising out of any
Proceeding commenced after the Effective Time and arising out
of or relating to any occurrence or event happening prior to the
Effective Time;
(x)
any Liability arising out of or resulting
from PRB's compliance or noncompliance with any Legal Requirement
or Order of any Governmental Body;
(xi)
any Liability of PRB under this Agreement
or any other document executed in connection with the Contemplated
Transactions; and
(xii)
any Liability of PRB based upon PRB's
acts or omissions occurring after the Effective Time.
SECTION 2.5 ALLOCATION
The Purchase Price shall be allocated in
accordance with Exhibit 2.5. After the Closing, the parties
shall make consistent use of the allocation, fair market value and
useful lives specified in Exhibit 2.5 for all Tax purposes and in
all filings, declarations and reports with the IRS in respect
thereof, including the reports required to be filed under Section
1060 of the Code. PACIFIC shall prepare and deliver IRS Form
8594 to PRB within forty-five (45) days after the Closing Date to
be filed with the IRS. In any Proceeding related to the
determination of any Tax, neither PACIFIC nor PRB or Shareholders
shall contend or represent that such allocation is not a correct
allocation.
SECTION 2.6 CLOSING
The purchase and sale provided for in
this Agreement (the "Closing") will take place at the offices of
PACIFIC's counsel, on such date as the PACIFIC and PRB shall
mutually agree. Subject to the provisions of Article 9,
failure to consummate the purchase and sale provided for in this
Agreement on the date and time and at the place determined pursuant
to this Section 2.6 will not result in the termination of this
Agreement and will not relieve any party of any obligation
under
13
this Agreement. In such a
situation, the Closing will occur as soon as practicable, subject
to Article 9.
SECTION 2.7 CLOSING
OBLIGATIONS
In addition to any other documents to be
delivered under other provisions of this Agreement, at the
Closing:
(a)
PRB and Shareholders, as the case may be,
shall deliver to PACIFIC:
(i)
a consulting agreement in the form of
Exhibit 2.7(a)(vi), executed by each Shareholder (the "Consulting
Agreement");
(ii)
Confidentiality, Competition and
Proprietary Information Agreement agreements in the form of Exhibit
2.7(a)(vii), executed by each Shareholder (the "Confidentiality
Agreement");
(iii)
a certificate executed by PRB and each
Shareholder as to the accuracy of their representations and
warranties as of the date of this Agreement and as of the Closing
in accordance with Section 7.1 and as to their compliance with and
performance of their covenants and obligations to be performed or
complied with at or before the Closing in accordance with Section
7.2; and
(ix)
a certificate of the Secretary of PRB
certifying, as complete and accurate as of the Closing, attached
copies of the Governing Documents of PRB, certifying and attaching
all requisite resolutions or actions of PRB's board of directors
and shareholders approving the execution and delivery of this
Agreement and the consummation of the Contemplated Transactions and
certifying to the incumbency and signatures of the officers of PRB
executing this Agreement and any other document relating to the
Contemplated Transactions and accompanied by the requisite
documents for amending the relevant Governing Documents of PRB
required to effect such change of name in form sufficient for
filing with the appropriate Governmental Body. The
PRB’s shareholder approval shall be approval by a majority of
the interests held by those shareholders of PRB other than
the Shareholders and their affiliates.
(b)
PACIFIC shall deliver to PRB and
Shareholders, as the case may be:
(i)
share certificates of PACIFIC
representing the Purchase Price;
(ii)
the Consulting Agreement executed by
PACIFIC;
(iii)
the Confidentiality Agreement executed by
PACIFIC;
(iv)
a certificate executed by PACIFIC as to
the accuracy of its representations and warranties as of the date
of this Agreement and as of the Closing in accordance with Section
8.1 and as to its compliance with and performance of its covenants
and obligations to be performed or complied with at or before the
Closing in accordance with Section 8.2; and
14
(v)
a certificate of the Secretary of PACIFIC
certifying, as complete and accurate as of the Closing, attached
copies of the Governing Documents of PACIFIC and certifying and
attaching all requisite resolutions or actions of PACIFIC's board
of directors approving the execution and delivery of this Agreement
and the consummation of the Contemplated Transactions and
certifying to the incumbency and signatures of the officers of
PACIFIC executing this Agreement and any other document relating to
the Contemplated Transactions.
(c)
PRB and the Shareholders agree that PRB
and the Shareholders shall not market or enter into any arrangement
or contract with any third party granting rights to the marketing,
sale or use of the Product, the Technology or the Intellectual
Property Assets.
SECTION 2.8 CONSENTS
(a)
If there are any Material Consents that
have not yet been obtained (or otherwise are not in full force and
effect) as of the Closing, in the case of each PRB Contract as to
which such Material Consents were not obtained (or otherwise are
not in full force and effect) (the "Restricted Material
Contracts"), PACIFIC may waive the closing conditions as to any
such Material Consent and either:
(i)
elect to have PRB continue its efforts to
obtain the Material Consents; or
(ii)
elect to have PRB retain that Restricted
Material Contract and all Liabilities arising therefrom or relating
thereto.
If PACIFIC elects to have PRB continue
its efforts to obtain any Material Consents and the Closing occurs,
notwithstanding Sections 2.1 and 2.4, neither this Agreement nor
any other document related to the consummation of the Contemplated
Transactions shall constitute a sale, assignment, assumption,
transfer, conveyance or delivery or an attempted sale, assignment,
assumption, transfer, conveyance or delivery of the Restricted
Material Contracts, and following the Closing, the parties shall
use Best Efforts, and cooperate with each other, to obtain the
Material Consent relating to each Restricted Material Contract as
quickly as practicable. Pending the obtaining of such Material
Consents relating to any Restricted Material Contract, the parties
shall cooperate with each other in any reasonable and lawful
arrangements designed to provide to PACIFIC the benefits of use of
the Restricted Material Contract for its term (or any right or
benefit arising thereunder, including the enforcement for the
benefit of PACIFIC of any and all rights of PRB against a third
party thereunder).
(b)
If there are any Consents not listed on
Exhibit 7.3 necessary for the assignment and transfer of any PRB
Contracts to PACIFIC (the "Nonmaterial Consents") which have not
yet been obtained (or otherwise are not in full force and effect)
as of the Closing, PACIFIC shall elect at the Closing, in the case
of each of the PRB Contracts as to which such Nonmaterial Consents
were not obtained (or otherwise are not in full force and effect)
(the "Restricted Nonmaterial Contracts"), whether to:
15
(i)
accept the assignment of such Restricted
Nonmaterial Contract, in which case, as between PACIFIC and PRB,
such Restricted Nonmaterial Contract shall, to the maximum extent
practicable and notwithstanding the failure to obtain the
applicable Nonmaterial Consent, be transferred at the Closing;
or
(ii)
reject the assignment of such Restricted
Nonmaterial Contract, in which case, notwithstanding Sections 2.1
and 2.4, (A) neither this Agreement nor any other document related
to the consummation of the Contemplated Transactions shall
constitute a sale, assignment, assumption, conveyance or delivery
or an attempted sale, assignment, assumption, transfer, conveyance
or delivery of such Restricted Nonmaterial Contract, and (B) PRB
shall retain such Restricted Nonmaterial Contract and all
Liabilities arising therefrom or relating thereto.
Article 3.
Representations and Warranties of PRB
and Shareholders
PRB and each Shareholder represent and
warrant, jointly and severally, to PACIFIC as follows:
SECTION 3.1 ENFORCEABILITY;
AUTHORITY; NO CONFLICT
(a)
This Agreement constitutes the legal,
valid and binding obligation of PRB and each Shareholder,
enforceable against each of them in accordance with its terms. Upon
the execution and delivery by PRB and Shareholders of the the
Consulting Agreement, the Confidentiality Agreement and each other
agreement to be executed or delivered by any or all of PRB and
Shareholders at the Closing (collectively, the "PRB's Closing
Documents"), each of PRB's Closing Documents will constitute the
legal, valid and binding obligation of each of PRB and the
Shareholders, enforceable against each of them in accordance with
its terms. PRB has the absolute and unrestricted right, power
and authority to execute and deliver this Agreement and the PRB's
Closing Documents to which it is a party and to perform its
obligations under this Agreement and the PRB's Closing Documents,
and such action has been duly authorized by all necessary action by
PRB's shareholders and board of directors. Each Shareholder
has all necessary legal capacity to enter into this Agreement and
the PRB's Closing Documents to which such Shareholder is a party
and to perform his obligations hereunder and thereunder.
(b)
Except as set forth in Section 3.1(b),
neither the execution and delivery of this Agreement nor the
consummation or performance of any of the Contemplated Transactions
will, directly or indirectly (with or without notice or lapse of
time):
(i)
Breach (A) any provision of any of the
Governing Documents of PRB or (B) any resolution adopted by the
board of directors or the shareholders of PRB;
(ii)
Breach or give any Governmental Body or
other Person the right to challenge any of the Contemplated
Transactions or to exercise any remedy or obtain any relief under
any Legal Requirement or any Order to which PRB or either
Shareholder, or any of the Assets, may be subject;
16
(iii)
contravene, conflict with or result in a
violation or breach of any of the terms or requirements of, or give
any Governmental Body the right to revoke, withdraw, suspend,
cancel, terminate or modify, any Governmental Authorization that is
held by PRB or that otherwise relates to the Assets or to the
business of PRB;
(iv)
cause PACIFIC to become subject to, or to
become liable for the payment of, any Tax;
(v)
Breach any provision of, or give any
Person the right to declare a default or exercise any remedy under,
or to accelerate the maturity or performance of, or payment under,
or to cancel, terminate or modify, any PRB Contract;
(vi)
result in the imposition or creation of
any Encumbrance upon or with respect to any of the Assets;
or
(vii)
result in any shareholder of the PRB
having the right to exercise dissenters' appraisal
rights.
(c)
Except as set forth in Section 3.1(c),
neither PRB nor either Shareholder is required to give any notice
to or obtain any Consent from any Person in connection with the
execution and delivery of this Agreement or the consummation or
performance of any of the Contemplated Transactions.
SECTION 3.2
CAPITALIZATION
The authorized equity securities of PRB
consist of one hundred million (100,000,000) shares of common
stock, par value ($ 0.001) per share, of which forty nine million
six hundred and fifty thousand (49,650,000 shares) are issued and
outstanding, of which twelve million (12,000,000) and one million
two hundred and fifty thousand (1,250,000) are owned by Hensley and
Pyo, respectively. Shareholders are and will be on the
Closing Date the record and beneficial owners and holders of the
shares owned by each of them, free and clear of all Encumbrances.
There are no Contracts relating to the issuance, sale or transfer
of any equity securities or other securities of PRB. None of the
outstanding equity securities of PRB was issued in violation of the
Securities Act of 1933, as amended (the "Securities Act"), or any
other Legal Requirement.
SECTION 3.3 TITLE TO ASSETS;
ENCUMBRANCES
PRB owns good and transferable title to
all of the Assets free and clear of any Encumbrances other than
those described in Section 3.3 ("Encumbrances"). PRB warrants
to PACIFIC that, at the time of Closing, all Assets shall be free
and clear of all Encumbrances other than those identified on
Section 3.3 as acceptable to PACIFIC ("Permitted
Encumbrances").
SECTION 3.4 PRB ACCOUNTS
RECEIVABLE
The PRB Accounts Receivable as of the
Closing Date represent or will represent valid obligations arising
from sales actually made or services actually performed by PRB in
the Ordinary
17
Course of Business. Except to the
extent paid prior to the Closing Date, such Accounts Receivable are
or will be as of the Closing Date current and collectible.
Each of such Accounts Receivable either has been or will be
collected in full, without any setoff, within ninety (90) days
after the day on which it first becomes due and payable.
There is no contest, claim, defense or right of setoff, other
than returns in the Ordinary Course of Business of PRB, under any
Contract with any account debtor of an Account Receivable relating
to the amount or validity of such Account Receivable. Section 3.4
contains a complete and accurate list of all Accounts Receivable an
the aging of each such Account Receivable as of the date of this
Agreement.
SECTION 3.5 COMPLIANCE WITH LEGAL
REQUIREMENTS; GOVERNMENTAL AUTHORIZATIONS
(a)
Except as set forth in SCHEDULE
3.5(a) :
(i)
PRB is, and at all times, has been, in
full compliance with each Legal Requirement that is or was
applicable to it an to the Assets or to the conduct or operation of
its business or the ownership or use of any of its
assets;
(ii)
no event has occurred or circumstance
exists that (with or without notice or lapse of time) (A) may
constitute or result in a violation by PRB of, or a failure on the
part of PRB to comply with, any Legal Requirement or (B) may give
rise to any obligation on the part of PRB to undertake, or to bear
all or any portion of the cost of, any remedial action of any
nature; and
(iii)
PRB has not received, at any time any
notice or other communication (whether oral or written) from any
Governmental Body or any other Person regarding (A) any actual,
alleged, possible or potential violation of, or failure to comply
with, any Legal Requirement or (B) any actual, alleged, possible or
potential obligation on the part of PRB to undertake, or to bear
all or any portion of the cost of, any remedial action of any
nature.
(b)
Schedule 3.5(b) contains a complete and
accurate list of each Governmental Authorization that is held by
PRB or that otherwise relates to PRB's business or the Assets. Each
Governmental Authorization listed or required to be listed in
Schedule 3.5(b) is valid and in full force and effect. Except as
set forth in SCHEDULE 3.5(b) :
(i)
PRB is, and at all times, has been, in
full compliance with all of the terms and requirements of each
Governmental Authorization identified or required to be identified
in Section 3.5(b);
(ii)
no event has occurred or circumstance
exists that may (with or without notice or lapse of time) (A)
constitute or result directly or indirectly in a violation of or a
failure to comply with any term or requirement of any Governmental
Authorization listed or required to be listed in Schedule 3.5(b) or
(B) result directly or indirectly in the revocation, withdrawal,
suspension, cancellation or termination of, or any modification to,
any Governmental Authorization listed or required to be listed in
Schedule 3.5(b);
18
(iii)
PRB has not received, at any time, any
notice or other communication (whether oral or written) from any
Governmental Body or any other Person regarding (A) any actual,
alleged, possible or potential violation of or failure to comply
with any term or requirement of any Governmental Authorization or
(B) any actual, proposed, possible or potential revocation,
withdrawal, suspension, cancellation, termination of or
modification to any Governmental Authorization; and
(iv)
all applications required to have been
filed for the renewal of the Governmental Authorizations listed or
required to be listed in Schedule 3.5(b) have been duly filed on a
timely basis with the appropriate Governmental Bodies, and all
other filings required to have been made with respect to such
Governmental Authorizations have been duly made on a timely basis
with the appropriate Governmental Bodies.
The Governmental Authorizations listed in
Schedule 3.5(b) collectively constitute all of the Governmental
Authorizations necessary to permit PRB to lawfully conduct and
operate its business in the manner in which it currently conducts
and operates such business and to permit PRB to own and use its
assets in the manner in which it currently owns and uses such
assets.
SECTION 3.6 LEGAL PROCEEDINGS;
ORDERS
(a)
Except as set forth in SCHEDULE
3.6(a) , there is no pending or, to PRB's Knowledge, threatened
Proceeding:
(i)
by or against PRB or that otherwise
relates to or may affect the business of, or any of the assets
owned or used by, PRB; or
(ii)
that challenges, or that may have the
effect of preventing, delaying, making illegal or otherwise
interfering with, any of the Contemplated Transactions.
To the Knowledge of PRB, no event has
occurred or circumstance exists that is reasonably likely to give
rise to or serve as a basis for the commencement of any such
Proceeding. PRB has delivered to PACIFIC copies of all
pleadings, correspondence and other documents relating to each
Proceeding listed in Schedule 3.6(a). There are no
Proceedings listed or required to be listed in Schedule 3.6(a) that
could have a material adverse effect on the business, operations,
assets, condition or prospects of PRB or upon the
Assets.
(b)
Except as set forth in SCHEDULE
3.6(b) :
(i)
there is no Order to which PRB, its
business or any of the Assets is subject; and
(ii)
to the Knowledge of PRB, no officer,
director, agent or employee of PRB is subject to any Order that
prohibits such officer, director, agent or employee from engaging
in or continuing any conduct, activity or practice relating to the
business of PRB.
(c)
Except as set forth in SCHEDULE
3.6(c) :
19
(i)
PRB is, and, at all times, has been in
compliance with all of the terms and requirements of each Order to
which it or any of the Assets is or has been subject;
(ii)
no event has occurred or circumstance
exists that is reasonably likely to constitute or result in (with
or without notice or lapse of time) a violation of or failure to
comply with any term or requirement of any Order to which PRB or
any of the Assets is subject; and
(iii)
PRB has not received, at any time, any
notice or other communication (whether oral or written) from any
Governmental Body or any other Person regarding any actual,
alleged, possible or potential violation of, or failure to comply
with, any term or requirement of any Order to which PRB or any of
the Assets is or has been subject.
SECTION 3.7 CONTRACTS; NO
DEFAULTS
(a)
Schedule 3.7(a) contains an accurate and
complete list, and PRB has delivered to PACIFIC accurate and
complete copies of each PRB Contract that relates to the
Intellectual Property Assets, the Technology or the Product.
Schedule 3.7(a) sets forth reasonably complete details
concerning such Contracts, including the parties to the Contracts,
the amount of the remaining commitment of PRB under the Contracts
and the location of PRB's office where details relating to the
Contracts are located.
(b)
Except as set forth in SCHEDULE
3.7(b) , neither Shareholder has or may acquire any rights
under, and neither Shareholder has or may become subject to any
obligation or liability under, any Contract that relates to the
business of PRB or any of the Assets.
(c)
Except as set forth in SCHEDULE
3.7(c) :
(i)
each Contract identified or required to
be identified in Schedule 3.7(a) and which is to be assigned to or
assumed by PACIFIC under this Agreement is in full force and effect
and is valid and enforceable in accordance with its
terms;
(ii)
each Contract identified or required to
be identified in Schedule 3.7(a) and which is being assigned to or
assumed by PACIFIC is assignable by PRB to PACIFIC without the
consent of any other Person; and
(iii)
to the Knowledge of PRB, no Contract
identified or required to be identified in Schedule 3.7(a) and
which is to be assigned to or assumed by PACIFIC under this
Agreement will upon completion or performance thereof have a
material adverse affect on the business, assets or condition of PRB
or the business to be conducted by PACIFIC with the
Assets.
(d)
Except as set forth in SCHEDULE
3.7(d) :
(i)
PRB is, and at all times, has been, in
compliance with all applicable terms and requirements of each PRB
Contract which is being assumed by PACIFIC;
20
(ii)
each other Person that has or had any
obligation or liability under any PRB Contract which is being
assigned to PACIFIC is, and at all times, has been, in full
compliance with all applicable terms and requirements of such
Contract;
(iii)
no event has occurred or circumstance
exists that (with or without notice or lapse of time) may
contravene, conflict with or result in a Breach of, or give PRB or
other Person the right to declare a default or exercise any remedy
under, or to accelerate the maturity or performance of, or payment
under, or to cancel, terminate or modify, any PRB Contract that is
being assigned to or assumed by PACIFIC;
(iv)
no event has occurred or circumstance
exists under or by virtue of any Contract that (with or without
notice or lapse of time) would cause the creation of any
Encumbrance affecting any of the Assets; and
(v)
PRB has not given to or received from any
other Person, at any time, any notice or other communication
(whether oral or written) regarding any actual, alleged, possible
or potential violation or Breach of, or default under, any Contract
relating to the Intellectual Property Assets which is being
assigned to or assumed by PACIFIC.
(e)
There are no renegotiations of, attempts
to renegotiate or outstanding rights to renegotiate any material
amounts paid or payable to PRB under current or completed Contracts
relating to the Intellectual Property Assets with any Person having
the contractual or statutory right to demand or require such
renegotiation and no such Person has made written demand for such
renegotiation.
(f)
Each Contract relating to the sale,
design, manufacture or provision of the Product has been entered
into
