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1 800 CONTACTS INC
·
10-Q
Aug 14, 4:54 PM ET
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1 800 CONTACTS INC 10-Q
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Contents
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(i) A one-time nonrefundable payment of Twenty-Three Million U.S. Dollars ($23,000,000 USD), payable by wire transfer or delivery of other immediately available funds upon Closing;
(ii) A one-time nonrefundable payment of Two Million U.S. Dollars ($2,000,000 USD) to be received no later than ten (10) Business Days after Menicon’s Launch in Japan;
(iii) A one-time nonrefundable payment of Three Million U.S. Dollars ($3,000,000 USD) to be received no later than ten (10) Business Days after Menicon or any of its Affiliates enters into, at its discretion, any License Agreement which results in the Launch in any Territory other than Japan;
(iv) An earn-out equal to [***] of (1) the total amount of Sales and Net Sales in Japan of FPT Products by Menicon or its Affiliates, throughout the Term; (2) the total amount of Sales and Net Sales made in any Territory other than Japan of FPT Products by Menicon or its Affiliates, throughout the Term, PROVIDED FURTHER that Menicon’s earn-out obligations applicable to such products will never, under any circumstances, exceed [***], even if Menicon subsequently incorporates additional intellectual property rights rightfully obtained from the Contacts Parties into such FPT Products or Other Products; and (3) the total amount of any Sales and Net Sales of the FPT Products pursuant to a License Agreement which allows for the sale of FPT Products in Japan by a party other than Menicon, throughout the Term;
(v) An earn-out amount equal to [***] of (1) the total amount of any Consideration payable to Menicon or its Affiliates, upon entering into a License Agreement which allows for the sale of FPT Products or Other Products in any Territory other than Japan, which Consideration is payable throughout the Term, PROVIDED FURTHER that the earn-out obligations applicable to such products will never, under any circumstances, exceed [***], even if Menicon subsequently incorporates additional intellectual property rights rightfully obtained from the Contacts Parties into such FPT Products or Other Products; and (2) the total amount of any Consideration payable to Menicon and its Affiliates, upon entering into a License Agreement which allows for the sale of Other Products in Japan, which Consideration is payable throughout the Term;
(vi) Menicon shall be entitled to deduct [***] of the commercially reasonable [***] costs actually paid by Menicon pursuant to Section 6(d)(ii) of this Agreement from their payment of the earn-out obligation as set forth above in Sections 2(e)(iv) and 2(e)(v) (however, under no circumstances shall application of this Section 2(e)(vi) result in a balance due from the Contacts Parties to Menicon) provided that Menicon shall use patent counsel approved by Contacts, such approval not to be unreasonably withheld;
(vii) Notwithstanding any other provision of this Agreement, in no event shall any earn-out payments be due upon either Sales or Net Sales by
Menicon of products which incorporate the Dual-Use Know-How or the Trade Secrets, but do not incorporate any other portion of the FPT Patents or the Other Patents. However, should any of the Trade Secrets, in whole or in part, be the subject of a patent application in one or more countries of the world, the resulting patent application(s) shall be treated as if the resulting patent application(s) was included as one of the Other Patents at the time of execution of this Agreement, subject to the earn-out terms and conditions set forth in this Section 2 of this Agreement and the Earn-Out Matrix of Exhibit B;
(viii) Any earn-out payments due pursuant to Sections 2(e)(iv) 2(e)(v) shall be paid to Contacts within twenty (20) Business Days of the end of each Reporting Period;
(ix) If Menicon or an Affiliate thereof receives any non-cash Consideration pursuant to which it is obligated to make payments pursuant to subparagraphs (iv) and (v) above, Menicon and Contacts agree to use good faith efforts to agree upon the value of such Consideration, including, where appropriate, engaging third party evaluation or assessment services, or invoking the provisions of Section 11(a) below, the costs of which shall be borne equally by Menicon and Contacts; and
(x) A summary of Menicon’s earn-out obligations as described in this Section 2(e) is attached as Exhibit B.
(i) Menicon shall:
(A) deliver to Contacts a certificate to the effect that each of the conditions specified in Section 7(b) is satisfied in all respects;
(B) execute and deliver to Contacts the Assignment and Assumption of Patents in form and substance as set forth in Exhibit C attached hereto;
(C) DELETED;
(D) execute and deliver to Contacts Termination of Current License Agreement in form and substance as set forth in Exhibit E.
(E) deliver to Contacts copies of the resolutions of the Board of Directors of Menicon evidencing the approval of the execution, delivery and performance by Menicon of this Agreement and ancillary agreements, certified by a director of Menicon to be true, complete and correct, accompanied by an English translation thereof;
(F) pay the amount specified under Section 2(e)(i) to the account(s) designated by Contacts;
(G) DELETED; and
(H) deliver to Contacts a copy of one or more agreements between Menicon and Steve Newman which incorporate the employment and royalty arrangements set forth in Section 7(b)(ix) hereof.
(ii) Contacts Parties shall:
(A) deliver to Menicon a certificate to the effect that each of the conditions specified in Section 7(a) is satisfied in all respects;
(B) execute and deliver to Menicon the Assignment and Assumption of Patents in form and substance as set forth in Exhibit C attached hereto;
(C) DELETED;
(D) execute and deliver to Menicon the Termination of Current License Agreement in form and substance as set forth in Exhibit E.
(E) deliver to Menicon copies of the resolutions of the Board of Directors of Contacts evidencing the approval of the execution, delivery and performance by Contacts of this Agreement and ancillary agreements, certified by a director of Contacts to be true, complete and correct;
(F) deliver to Menicon evidence of termination of any mortgage, pledge, Lien, security interest, encumbrance, Claim or charge of any kind against the Acquired Assets;
(G) deliver to Menicon a receipt for the amount specified under Section 2(e)(i);
(H) execute and deliver to Menicon a Bill of Sale in the form of Exhibit J hereto, for each of the (i) FPT Equipment; and (ii) Trade Secrets, Dual-Use Know-How, and Information and Records;
(I) DELETED;
(J) deliver to Menicon evidence of the consents and approvals referred to in Section 3(c) below;
(K) deliver to Menicon the Disclosure Schedule updated as of the Closing Date; and
(L) deliver to Menicon a copy of an agreement among the Contacts Parties and Steve Newman in which Mr. Newman releases the Contacts Parties from all further employment and royalty obligations relating to the Acquired Business.
(i) Schedule 2 and Schedule 4 are true and complete lists of all FPT Patents, Other Patents, and Trade Secrets, respectively. With the exception of the Dual-Use Know-How, all of the Intellectual Property is owned by the Contacts Parties free and clear of all Liens. The Dual-Use Know-How is owned by the Contacts Parties free and clear of all Liens except for the 50% undivided tenancy in common interest in the Dual-Use Know-How to be transferred to or retained by the Singapore Facility Purchaser. The FPT Patents and Other Patents are in good standing and all relevant fees relating thereto as of the date hereof have been paid. None of the Intellectual Property has been or is the subject of any pending adverse Claim, or to the Knowledge of the Contacts Parties, any threatened or potential Claim of infringement. The Contacts Parties have not received any notice that any of the Contacts Parties are in default, nor are they aware of any condition of default, under any contracts relating to the Intellectual Property. The Contacts Parties have not granted any license with respect to the Intellectual Property to any Person other than Menicon with the exception of the 50% tenancy in common interest in the Dual-Use Know-How as set forth above. Furthermore, the Contacts Parties have taken all reasonable actions to maintain the Intellectual Property. The Contacts Parties have taken reasonable security measures to protect confidential Intellectual Property. Notwithstanding the foregoing, the Contacts Parties make no representations or warranties as to infringement of third party rights by using the Intellectual Property, patentability, use or other application of the Intellectual Property, or as to the likelihood of the success of any research, development, testing, marketing, patent prosecution, or other utilization of the Intellectual Property.
(ii) To the extent that they have not already done so, the Contacts Parties will make commercially reasonable efforts to deliver to Menicon, within thirty (30) days of the Closing Date, originals or copies of all documentation with respect to the Intellectual Property, which documentation is reasonably
sufficient in detail and content to identify and explain the Intellectual Property. Such documentation includes all research data books and other documents recording the research activities which have been conducted relating to the Intellectual Property prior to the Closing.
(iii) The FPT Products, their processes, methods, designs and/or materials do not, to the Knowledge of the Contacts Parties, infringe any intellectual property of another Person.
(iv) To the Knowledge of the Contacts Parties, no Person who has contributed to or participated in the conception and development of any Intellectual Property has asserted or threatened any Claim against any of the Contacts Parties in connection with such Person’s involvement in the conception and development of such Intellectual Property. Furthermore, to the Knowledge of the Contacts Parties, no such Person has a reasonable basis for any such Claim. All such Persons have been parties to a “work-for-hire” arrangement or proprietary rights agreement with the Contacts Parties pursuant to which either (i) in accordance with any applicable Regulation, the Contacts Parties have been accorded full, effective, exclusive and original ownership of all tangible and intangible property thereby arising, or (ii) there has been conveyed to the Contacts Parties by appropriately executed instruments of assignment full, effective and exclusive ownership of all tangible and intangible property thereby arising.
(v) 1-800 CONTACTS has not, to its Knowledge, disclosed to any outside third party, including any prospective Singapore Facility Purchaser, any non-public information specifically relating to the FPT Patents, Other Patents, or Trade Secrets except for disclosures to (i) patent offices in respect to seeking patent coverage; (ii) legal advisors; (iii) technical advisors and consultants; (iv) marketing discussions and materials relating to the potential commercialization of the FPT Assets; (v) marketing discussions and materials relating to a potential sale of the FPT Assets; and (vi) all discussions and information shared with Menicon and its advisors in connection with this Agreement.
(vi) Except as specifically disclosed on the Disclosure Schedules, 1-800 CONTACTS has no Knowledge that any employees of the Contacts Parties have any information concerning the technology covered by the FPT Patents and Other Patents which would allow such employees to reduce the technology covered by the FPT Patents to practice.
(i) The Contacts Parties shall provide Menicon with such specifications and design drawings for an initial mass production line for FPT Products as have been developed by the Contacts Parties as of the time of Closing.
(ii) The Contacts Parties shall provide Menicon with access to such space, equipment, and personnel, including equipment relating to Dual-Use Know-How, at the reasonable commercial discretion of the Contacts Parties or the Singapore Facility Purchaser and upon commercially reasonable terms.
(iii) Menicon acknowledges that the Contacts Parties have completed production and delivered to Menicon any and all of the initial supply of lenses necessary for Menicon’s clinical trials in Japan, as set forth in Schedule 7, and that such lenses are fully satisfactory and acceptable. Menicon hereby releases the Contacts Parties from all obligations regarding said initial supply of lenses necessary for Menicon’s clinical trials in Japan.
(i) The Contacts Parties further agree that they will, without charge to Menicon, execute, verify, acknowledge and deliver all reasonably required further papers, including any instruments of transfer and recordable assignments, and perform such other acts as Menicon lawfully and reasonably may request from time to time, to perfect and vest title in Menicon in respect to the Intellectual Property so that all rights to the Intellectual Property are conveyed to Menicon. This provision shall not be construed so as to require the Contacts Parties to incur legal or professional fees in conjunction with such assistance.
(ii) Contacts will make available to Menicon the books and records of the Contacts Parties and, to the extent that it is reasonably able to do so, its officers, directors, employees, consultants (in each case whether then current or former) for fact finding, consultation, interviews and as witnesses in litigation related to or arising from the Intellectual Property. Menicon will pay the Contacts Parties’ actual costs and reasonable out-of-pocket expenses in complying with such requests. The Contacts Parties agree to waive any right they may have to object to Menicon retaining counsel used by the Contacts Parties relating to Intellectual Property but that waiver will not extend to litigation between the parties hereto. Each party to this Agreement will ensure that any attorney-client or other privilege inuring to the benefit of the other party is maintained to the maximum extent commercially reasonable under the circumstances and to defend or enforce the Intellectual Property in any and all countries.
(i) Menicon shall receive all right, title and interest in the indicated patents and patent applications. From the Closing Date until the one year anniversary following the Closing Date, Contacts shall reimburse Menicon up to a maximum of [***] for the prosecution of [***], provided that Menicon shall use patent counsel approved by Contacts, such approval not to be unreasonably withheld. This [***] reimbursement shall be in addition to the [***] of commercially reasonable [***] which Menicon is authorized to deduct from earnout payments as referenced in Section 2(e)(vii) herein. Contacts shall make reimbursement payments to Menicon within ten (10) Business Days of receipt of a copy of such patent counsel’s invoice to Menicon.
(ii) Menicon shall have a further obligation to continue prosecution of [***] and hereby covenant to use their best efforts to obtain allowance and issuance of such patent applications as valid, enforceable patents.
These best efforts include, but are not limited to, retaining competent patent counsel to conduct the prosecution of the indicated patent applications and timely paying all fees and giving authorization for any actions that need to be taken to advance the indicated patent applications to issuance or allowance subject to the conditions of selection of patent counsel in 6(d)(ii) above. Menicon shall promptly report all actions taken in the prosecution of the indicated patent applications. Such actions may include any action issued by a corresponding patent office in any of the indicated applications and any response to such or other actions taken by Menicon or its agents in any of the indicated patent applications. In the event that Menicon determines that its best efforts have failed and that allowance of any of the patent applications cannot be reasonably achieved, Menicon will notify Contacts of such circumstances and, prior to abandoning any rights in such application, specify to the Contacts Parties which applications they will not pursue (“Waived Applications”). Thereupon, Contacts may, at its own expense, continue prosecution of such Waived Applications on behalf of Menicon. Any patent that is issued upon any such Waived Applications shall be in the name of Menicon or its designee. Menicon shall cooperate with the Contacts Parties in any actions the Contacts Parties choose to take in such continued prosecution.
(i) With respect to the worldwide patents or patent applications as listed in items A, B, C, D, E, and M in Schedule 2 hereof, the Singapore Facility Purchaser:
(1) Will not, until the date of expiration of the last to expire of items A, B, C, D, E, and M on Schedule 2 hereto, directly or indirectly, practice, utilize, or infringe such patents or patent applications;
(2) Will not, until the date of expiration of the last to expire of items A, B, C, D, E, and M on Schedule 2 hereto, allow any of its affiliates, officers, directors, employees, stockholders, agents, contractors, or representatives, including but not limited to, former ClearLab employees who become employees or consultants of the Singapore Facility Purchaser, to directly or indirectly infringe, invalidate, or otherwise work around, develop, design, manufacture or sell any product utilizing such patents or patent applications; and
(ii) The Singapore Facility Purchaser will not, for a period of two (2) years from the Closing Date, directly or indirectly solicit former ClearLab Singapore employees who accept employment or consulting work with Menicon to work for the Singapore Facility Purchaser.
(iii) The Confidentiality and Non-Competition Agreement shall be substantially in form and substance as set forth on Exhibit G hereto. Upon Closing, the Contacts Parties shall assign all of their rights and interests in and to the Confidentiality and Non-Competition Agreement to Menicon. The Contacts Parties shall further cause any Singapore Facility Purchaser to deliver to Menicon a certificate in the form attached hereto as Exhibit K approving and consenting of such assignment.
(i) the representations and warranties set forth in Section 3 above shall be true and correct in all material respects at and as of the Closing Date, except to the extent that such representations and warranties are qualified by the term “material,” or contain terms such as “Material Adverse Effect” or “Material Adverse Change,” in which case such representations and warranties (as so written, including the term “material” or “Material”) shall be true and correct in all respects, subject to the above qualifiers, at and as of the Closing Date;
(ii) the Contacts Parties shall have performed and complied with all of their covenants hereunder in all material respects through the Closing, except to the extent that such covenants are qualified by the term “material,” or contain terms such as “Material Adverse Effect” or “Material Adverse Change,” in which case the Contacts Parties shall have performed and complied with all of such covenants (as so written, including the term “material” or “Material”) in all respects, subject to the above qualifiers, through the Closing;
(iii) Neither the Acquired Business nor the Acquired Assets shall have been materially and adversely affected as of the Closing Date in any way and no event shall have occurred which could have a Material Adverse Effect on them;
(iv) Contacts shall have delivered to Menicon a certificate to the effect that each of the conditions specified above in Section 7(a)(i) through 7(a)(iii) is satisfied in all respects;
(v) the relevant parties shall have entered into the Assignment and Assumption of Patents Agreement in form and substance as set forth in Exhibit C attached hereto and the same shall be in full force and effect;
(vi) DELETED;
(vii) The relevant parties shall have entered into Termination of Current License Agreement in form and substance as set forth in Exhibit E;
(viii) DELETED;
(ix) There shall not be pending or threatened by any Person or entity not a Party to this Agreement any suit, action or proceeding: (i) challenging or seeking to restrain or prohibit the purchase of the Acquired Assets contemplated by this Agreement or any of the other transactions contemplated by this Agreement; (ii) seeking to prohibit or limit the acquisition, ownership, or operation by Menicon of any portion of the Acquired Business; (iii) seeking to impose limitations on the ability of Menicon to acquire or hold, or exercise full rights of
ownership of, the Acquired Assets; or (iv) seeking to prohibit Menicon from effectively controlling in any material respect the Acquired Business;
(x) No action or proceeding by any Authority shall have been instituted or threatened which would enjoin, restrain or prohibit, or result in substantial Losses to Menicon as a direct consequence of executing this Agreement or the Closing. There shall not be in effect on the Closing Date any Order or Regulation restraining, enjoining, or otherwise prohibiting or making illegal the Closing; and
(xi) all actions to be taken by the Contacts Parties in connection with consummation of the transactions contemplated hereby and all certificates, instruments, and other documents required to effect the transactions contemplated hereby (including those set forth in Section 2(i)) will be reasonably satisfactory in form and substance to Menicon.
(i) the representations and warranties set forth in Section 4 above shall be true and correct in all material respects at and as of the Closing Date, except to the extent that such representations and warranties are qualified by the term “material,” or contain terms such as “Material Adverse Effect” or “Material Adverse Change,” in which case such representations and warranties (as so written, including the term “material” or “Material”) shall be true and correct in all respects, subject to the above qualifiers, at and as of the Closing Date;
(ii) Menicon shall have performed and complied with all of their covenants hereunder in all material respects through the Closing, except to the extent that such covenants are qualified by terms such as “material” and “Material Adverse Effect,” in which case Menicon shall have performed and complied with all of such covenants in all respects, subject to the above qualifiers, through the Closing;
(iii) Menicon shall have delivered to Contacts a certificate to the effect that each of the conditions specified above in Sections 7(b)(i) and 7(b)(ii) are satisfied in all respects;
(iv) The Parties shall have entered into the Assignment and Assumption of Patents Agreement in form and substance as set forth in Exhibit C attached hereto and the same shall be in full force and effect;
(v) DELETED;
(vi) The relevant parties shall have entered into Termination of Current License Agreement in form and substance as set forth in Exhibit E;
(vii) DELETED;
(viii) The Contacts Parties shall have entered into an agreement with Steve Newman pursuant to which Mr. Newman shall release the Contacts Parties from all obligations relating to Mr. Newman and his Affiliates (including but not limited to his employment by the Contacts Parties and any royalty obligations due from the Contacts Parties to Mr. Newman or his Affiliates);
(ix) Menicon shall have entered into an agreement with Steve Newman with respect to his employment by Menicon and the payment by Menicon of royalty obligations owing to him, which agreement shall contain the following provisions:
(A) An annual salary of [***];
(B) A commission of [***] of global Sales of FPT Products by Menicon or its Affiliates. The commission-bearing period shall be determined in accordance with the table below:
(C) A bonus payment of [***] upon the Launch in Japan by Menicon;
(D) The payment of [***] of all Consideration received by Menicon or its Affiliates pursuant to a License of the FPT Patents for a period which shall be determined in accordance with the table in Section 7(b)(ix)(B) above;
(E) A requirement that Mr. Newman dedicate 100% of his professional efforts to Menicon with the majority of Mr. Newman’s time spent in support of the FPT Products;
(F) Non-Competition provisions reasonably acceptable to the Contacts Parties, which shall provide that, after the Closing and prior to the Launch in Japan, Mr. Newman shall not provide services as an employee, officer, director, consultant, advisor, or in any other capacity to
any person, organization, or entity, other than directly for Menicon, including without limitation, being involved in any manner in the design, development, production, distribution, or sale of ocular treatments or enhancements including but not limited to contact lenses and, providing further, that as liquidated damages for a violation of such non-competition provisions by Mr. Newman, the [***] payments referenced under Section 1(d) above shall be withheld from Mr. Newman and paid directly from Menicon to the Contacts Parties. Such breach by Mr. Newman, if it occurs, shall be subject to one written notice and 30 day right to cure said breach;
(G) In the event Mr. Newman’s employment is terminated by Menicon for any reason other than for cause prior to June 30, [***], he shall be entitled to receive (i) his salary through June 30, [***], (ii) the bonus upon Launch in Japan as outlined in section (c) above, and (iii) shall be entitled to receive any payments due him as outlined in sections (b) and (d) above through June 30th, [***];
(H) A requirement that Mr. Newman release the Contacts Parties from any and all obligations of the Contacts Parties relating to Mr. Newman and his Affiliates (including but not limited to his employment by the Contacts Parties and any royalty obligations due from the Contacts Parties to Mr. Newman or his affiliates). Further, Mr. Newman agrees to continue to allow any future owner of the ClearLab facilities to enjoy – under the same terms and conditions - any applicable, discounted royalty licenses, royalty free licenses or royalty free use of intellectual property he has solely or has caused to be granted to the Contacts Parties under a previous course of dealing with ClearLab such that said applicable discounted royalty licenses, royalty free licenses and royalty free intellectual property shall continue in perpetuity and inure to the benefit of the subsequent purchaser of any or all of the Contacts Parties manufacturing operations.
(I) Nothing in the agreement will be construed or cause to be construed as conveying, assigning, or otherwise transferring right or title to European patent application number 0398984 titled “improved contact lens design,” U.S. Pat. No. 5,125,728 titled “Soft Contact Lens for the Correction of Astigmatism,” or any of their respective divisional, continuation, or continuation-in-part patent applications nor will any non-compete provision in the agreement prevent Mr. Newman from supporting said patent on his personal time.
(x) All actions to be taken by Menicon in connection with consummation of the transactions contemplated hereby and all certificates, instruments, and other documents required to effect the transactions contemplated hereby (including those set forth in Section 2(i)) will be reasonably satisfactory in form and substance to Contacts.
(i) If any third party (a “Third Party”) notifies any party (the “Indemnified Party”) with respect to any matter (a “Third-Party Claim”) that may give rise to a claim for indemnification against any of the other parties (the “Indemnifying Party”) under this Section 8, then the Indemnified Party shall promptly (and in any event within five (5) Business Days after receiving notice of the Third-Party Claim) notify the Indemnifying Party thereof in writing. Menicon shall be deemed to be the Indemnifying Party and Indemnified Party, as the case may be, in respect to any such matter involving Menicon or any Menicon Affiliate; and Contacts shall be deemed to be the Indemnifying Party or Indemnified Party, as the case may be, in respect to any such matter involving other Contacts Parties.
(ii) The Indemnifying Party will have the right at any time to assume and thereafter conduct the defense of the Third-Party Claim with counsel of its choice reasonably satisfactory to the Indemnified Party; provided, however, that the Indemnifying Party will not consent to the entry of any judgment on or enter into any settlement with respect to the Third-Party Claim without the prior written consent of the Indemnified Party (not to be unreasonably withheld) unless the judgment or proposed settlement involves only the payment of money damages, does not impose an injunction or other equitable relief upon the Indemnified Party and, in respect to Menicon, does not adversely affect the Acquired Business.
(iii) Unless and until the Indemnifying Party assumes the defense of the Third-Party Claim as provided in Section 8(d)(ii) above, however, the Indemnified Party may defend against the Third-Party Claim in any manner it may reasonably deem appropriate.
(iv) In no event will the Indemnified Party consent to the entry of any judgment on or enter into any settlement with respect to the Third-Party Claim without the prior written consent of the Indemnifying Party (not to be unreasonably withheld).
(i) Menicon and Contacts may terminate this Agreement by mutual written consent at any time prior to the Closing;
(ii) Menicon may terminate this Agreement by giving written notice to Contacts at any time prior to the Closing in the event (A) Contacts has given Menicon any notice prior to the Closing Date pursuant to Section 5(f) above, and (B) the development that is the subject of the notice has had a Material Adverse Effect;
(iii) Menicon may terminate this Agreement by giving written notice to Contacts at any time prior to the Closing (A) in the event any of the Contacts Parties has breached any material representation, warranty, or covenant contained in this Agreement in any material respect, Menicon has notified Contacts of the breach, and the breach has continued without cure to the Closing Date, or (B) if the Closing shall not have occurred on or before June 22, 2007, by reason of the failure of any condition precedent under Section 7(a) hereof (unless the failure results primarily from Menicon itself breaching any representation, warranty, or covenant contained in this Agreement); and
(iv) Contacts may terminate this Agreement by giving written notice to Menicon at any time prior to the Closing (A) in the event Menicon has breached any material representation, warranty, or covenant contained in this Agreement in any material respect, Contacts has notified Menicon of the breach, and the breach has continued without cure to the Closing Date, or (B) if the Closing shall not have occurred on or before June 22, 2007, by reason of the failure of any condition precedent under Section 7(b) hereof (unless the failure results primarily from any of the Contacts Parties itself breaching any representation, warranty, or covenant contained in this Agreement).
(i) any waiver, consent, extension, release, suspension or termination of some but not all of the guaranteed obligations;
(ii) any failure to give notice, whether of default, presentment or otherwise;
(iii) any amendment, modification, addition or other change in the Agreement or any agreements ancillary thereto;
(iv) failure or delay on the part of a beneficiary to the guarantee to enforce, assert or exercise any right under the Agreements or any ancillary agreement;
(v) the voluntary or involuntary liquidation, dissolution, sale or other disposition of assets, receivership, insolvency, bankruptcy, assignment for the benefit of creditors, reorganization, composition with creditors, or other similar proceedings affecting a party or its assets; or
(vi) any other circumstance which might otherwise constitute a defense or a discharge of a guarantor.
(i) The parties hereto shall attempt in good faith to resolve promptly any dispute arising out of or relating to this Agreement by negotiation. If the matter cannot be resolved in the normal course of business, either the Contacts Parties or Menicon shall give to the other party written notice of any such dispute not resolved, after which the dispute shall be referred to the principal executive officers of Contacts and Menicon, respectively, or their designees, who shall attempt to resolve the dispute. If the dispute has not been resolved by negotiation within forty-five (45) days of the written notice, either the Contacts Parties or
Menicon may submit such dispute for arbitration in accordance with Section 11(a)(ii).
(ii) Any controversy or claim arising out of or relating to this Agreement or the validity, inducement, or breach thereof that cannot be settled in accordance with Section 11(a)(i), shall be exclusively settled by binding arbitration before a single arbitrator in accordance with the Rules of Conciliation and Arbitration of the International Chamber of Commerce (“ICC”) then pertaining, except where those rules conflict with this provision, in which case this provision controls. The parties hereby consent to the jurisdiction of the applicable court for the jurisdiction in which the prevailing party to the arbitration is domiciled for the enforcement of this provision and the entry of judgment on any award rendered hereunder. Should such court for any reason lack jurisdiction, any court with jurisdiction shall enforce this clause and enter judgment on any award. The arbitration shall be held in Singapore. With respect to adjudicating any controversy or claim arising hereunder the arbitrator must apply the substantive law of the State of Delaware, and in rendering the award the arbitrator must apply the substantive law of the place of domicile of the defending party (except where that law conflicts with this clause). The arbitrator shall be neutral, independent, disinterested, impartial and shall abide by The Code of Ethics for Arbitrators in Commercial Disputes approved by the ICC. Within forty-five (45) days of initiation of arbitration, the parties shall reach agreement upon an arbitrator; and in the event of their failure to do so, the ICC Court will be called upon to select the arbitrator who shall implement the arbitration in accordance with ICC Rules except as the parties and the arbitrator otherwise agree in writing. Each party has the right before or, if the arbitrator cannot hear the matter within an acceptable period, during the arbitration to seek and obtain from the appropriate court provisional remedies such as attachment, preliminary injunction, replevin, etc., to avoid irreparable harm, maintain the status quo or preserve the subject matter of the arbitration. THE ARBITRATOR SHALL NOT AWARD ANY PARTY CONSEQUENTIAL, SPECIAL, INCIDENTAL, PUNITIVE OR EXEMPLARY DAMAGES, AND EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT TO SEEK SUCH DAMAGES.
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