Attached files
| file | filename |
|---|---|
| 8-K - Xcorporeal, Inc. | v168999_8k.htm |
| EX-4.1 - Xcorporeal, Inc. | v168999_ex4-1.htm |
| EX-2.1 - Xcorporeal, Inc. | v168999_ex2-1.htm |
| EX-99.1 - Xcorporeal, Inc. | v168999_ex99-1.htm |
AGREEMENT
This
AGREEMENT (the “Agreement”), dated as of
December 14, 2009 (the “Effective Date”), is by and
between Fresenius USA, Inc., a Massachusetts corporation with its principal
executive office at 920 Winter Street, Waltham, MA 02451 (the “FUSA”), and Xcorporeal, Inc.,
a Delaware corporation with its principal executive office at 80 Empire Drive,
Lake Forest, CA 92630 (“Xcorporeal”).
Reference
is made to that certain Asset Purchase Agreement dated as of the Effective Date,
by and among FUSA, Xcorporeal, Xcorporeal Operations, Inc. and National Quality
Care, Inc. (the “Asset Purchase
Agreement”), pursuant to which Xcorporeal, Operations and NQCI intend to
sell to FUSA the Purchased Assets. Any capitalized terms not defined
herein shall have the meanings ascribed to them in the Asset Purchase
Agreement.
WHEREAS,
in anticipation of the Closing, FUSA desires to pay Xcorporeal for certain
expenses expected to be incurred by Xcorporeal before the Closing;
and
WHEREAS,
prior to the Closing, FUSA desires to utilize certain consulting services of
Xcorporeal and Xcorporeal desires to provide such consulting services to FUSA;
and
WHEREAS,
in anticipation of the Closing, FUSA has incurred and will continue to incur
certain expenses on behalf of Xcorporeal, and the parties desire to agree upon
the terms and conditions for the repayment of such expenses by Xcorporeal in the
event the Closing fails to take place by February 28, 2010, unless otherwise
agreed to by the Sellers and FUSA.
NOW,
THEREFORE, in consideration of the premises and mutual covenants contained
herein the parties agree as follows:
1. Lease. Xcorporeal
is a lessee under that certain Standard Industrial/Commercial Lease dated
October 6, 2008, by and between Xcorporeal and Olen Commercial Realty Corp. (the
“Lease”) pertaining to
the premises located at 80 Empire Drive, Lake Forest, California
92630. Subject to the approval of the Lessor, FUSA shall, upon the
Closing Date, assume the Lease and all future obligations arising thereunder,
provided, however, that FUSA shall not assume any liability or obligation
arising, or related to, any period prior to the Closing Date. In
consideration of such assumption, Xcorporeal hereby agrees to pay to FUSA on the
Closing Date the amount of $175,000, representing approximately six (6) months
of rent and common area expenses that are expected to be incurred by FUSA under
the Lease following the Closing Date. Xcorporeal shall be entitled to receive
the return of the Letters of Credit and any other security deposits posted by it
in connection with such Lease and FUSA will reasonably cooperate with Xcorporeal
in any actions requested by Xcorporeal to ensure the return of such items on a
timely basis.
2. Consulting
Services. FUSA hereby engages, effective November 16, 2009,
Xcorporeal to perform such consulting, advisory and related services to and for
FUSA as may be reasonably requested from time to time by FUSA and its affiliates
(the “Services”), and
Xcorporeal hereby accepts such engagement by FUSA (the “Engagement”), on the terms set
forth in this Agreement, for the period beginning on the Effective Date and
ending on the Closing Date, unless sooner terminated in accordance with Section
2(d) hereof (the “Term”).
(a) Key
Personnel. The parties agree that Dr. Victor J. Gura, Barry
Fulkerson and Mark Smith (collectively, the “Key Personnel”) are essential
to the Services to be provided pursuant to the Engagement, and are the only
employees of Xcorporeal that will provide such Services, and that the assignment
of the Key Personnel to perform the Services will be continuous throughout the
term of the Engagement. The parties further agree that should any
such Key Personnel no longer be employed by Xcorporeal during the term of the
Engagement, for whatever reason, FUSA shall have the right to terminate the
Engagement immediately upon notice to Xcorporeal.
(b) Cooperation. Xcorporeal
shall use its reasonable commercial efforts in the provision of the Services
pursuant to the Engagement. Xcorporeal shall cooperate with FUSA’s
personnel, shall not interfere with the conduct of FUSA’s business and shall
observe all rules, regulations and security requirements of FUSA concerning the
safety of persons and property to the extent known to Xcorporeal.
(c) Fee. For
the Services rendered by Xcorporeal during the Term, FUSA shall pay to
Xcorporeal a fee, payable in cash in semi-monthly installments, at the following
annual rate for the full-time services of each of the Key
Personnel:
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Dr.
Victor J. Gura
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$442,000/year
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Barry
Fulkerson
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$212,000/year
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Mark
Smith
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$167,000/year
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FUSA will
also reimburse Xcorporeal for all reasonable out-of-pocket Denver, CO to Lake
Forest, CA commuting expenses incurred by Xcorporeal on behalf of Barry
Fulkerson and Mark Smith in the course of their performance of duties pursuant
to the Engagement. For purposes of clarification, the amounts above
shall be prorated for the duration of the Term and FUSA shall have no obligation
to pay any amounts other than during the Term. The parties
acknowledge that, notwithstanding the date of this Agreement, FUSA and its
affiliates have previously engaged the services of Barry Fulkerson and Mark
Smith and have paid the required fees for such services. The parties
further agree and acknowledge that any amounts paid by FUSA with respect to the
services provided by Dr. Victor J. Gura (“Gura”) pursuant to this
Agreement shall be offset against any capital contributions of FUSA or its
affiliates in connection with any HD WAK joint venture between FUSA or an
affiliate of FUSA and Gura, and potentially others related to the development of
the HD WAK and other related applications as contemplated by the exclusivity
letter between Fresenius Medical Care Holdings, Inc. and Xcorporeal, Inc. dated
as of September 21, 2009.
(d) Termination. Notwithstanding
anything to the contrary contained in this Agreement, the Engagement shall
terminate upon the earliest to occur of the following (the “Termination
Date”):
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(i) At
the election of FUSA, for cause, immediately upon written notice by FUSA to
Xcorporeal. For the purposes of this Section 2(d)(i), cause for
termination shall be deemed to exist upon (a) a good faith finding by FUSA of
the failure of Xcorporeal to perform the Services in accordance with this
Agreement, which failure comes more than thirty (30) days after Xcorporeal’s
receipt of a written notice from FUSA of such failure, (b) bad faith, gross
negligence or willful misconduct of any Key Personnel; (c) the conviction of any
Key Personnel of, or the entry of a pleading of guilty or nolo contendere by any
Key Personnel to, any crime involving moral turpitude or any felony; (d) a
knowing or willful breach by Xcorporeal or any Key Personnel of Section 2(f)(i),
which breach shall not be cured within thirty (30) days after Xcorporeal’s
receipt of a written notice from FUSA of such breach; or (e) a knowing or
willful breach by Xcorporeal or any Key Personnel of Section 2(f)(ii), which
breach shall not be cured within thirty (30) days after Xcorporeal’s receipt of
a written notice from FUSA of such breach;
(ii) The
death or disability of any Key Personnel. As used in this Agreement,
the term “disability” means the inability of Key Personnel with or without
reasonable accommodation as may be required by state or federal law, due to
physical or mental disability, for a period of sixty (60) days, to perform the
Services; and
(iii) February
28, 2010.
(e) Effect of
Termination. Upon the termination of the Engagement, FUSA
shall pay Xcorporeal (i) the consulting fees otherwise payable to Xcorporeal
under Section 2(c) through the last day of the Engagement, and (ii) all unpaid
expense reimbursements payable to Xcorporeal pursuant to Section 2(c) (together,
the “Earned/Accrued
Amounts”). Following payment of the Earned/Accrued Amounts,
FUSA shall have no further obligation to Xcorporeal pursuant to the
Engagement.
(f) Inventions and Proprietary
Information.
(i) Inventions.
(1) All
inventions, discoveries, computer programs, data, technology, designs,
innovations and improvements (whether or not patentable and whether or not
copyrightable) related to the business of FUSA (“Inventions”) which are made,
conceived, reduced to practice, created, written, designed or developed by Key
Personnel, solely or jointly with others and whether during normal business
hours or otherwise, during the performance of Services for FUSA pursuant to the
Engagement or thereafter if resulting or directly derived from Proprietary
Information (as defined below), shall be the sole property of
FUSA. Xcorporeal hereby assigns, and shall use its best efforts to
cause the Key Personnel to assign, to FUSA all Inventions and any and all
related patents, copyrights, trademarks, trade names, and other industrial and
intellectual property rights and applications therefor, in the United States and
elsewhere and appoints, and shall use its best efforts to cause the Key
Personnel to appoint, any officer of FUSA as its duly authorized attorney to
execute, file, prosecute and protect the same before any government agency,
court or authority. Upon the request of FUSA and at FUSA’s expense,
Xcorporeal shall, and shall use its best efforts to cause the Key Personnel to,
execute such further assignments, documents and other instruments as may be
reasonably necessary or desirable to fully and completely assign all Inventions
to FUSA and to assist FUSA in applying for, obtaining and enforcing patents or
copyrights or other rights in the United States and in any foreign country with
respect to any Invention. Xcorporeal also hereby waives all claims to
moral rights in any Inventions.
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(2) Xcorporeal
shall promptly disclose to FUSA all Inventions and will maintain adequate and
current written records (in the form of notes, sketches, drawings and as may be
specified by FUSA) to document the conception and/or first actual reduction to
practice of any Invention. Such written records shall be available to
and remain the sole property of FUSA at all times.
(3) Notwithstanding
the foregoing, Inventions, if any, patented or unpatented, which Xcorporeal
and/or the Key Personnel made prior to the commencement of Xcorporeal’s
engagement as consultant for FUSA are excluded from the scope of this Agreement.
To preclude any possible uncertainty, attached hereto as Exhibit A is a
complete list of all Inventions (a) that Xcorporeal and/or the Key Personnel has
or have, alone or jointly with others, conceived, developed or reduced to
practice prior to Xcorporeal’s engagement as a consultant for FUSA, (b) that
Xcorporeal and/or the Key Personnel considers to be its or their property or the
property of third parties, and (c) that Xcorporeal wishes to have excluded from
the scope of this Agreement. If disclosure of any such invention on Exhibit A would
potentially cause Xcorporeal to violate a prior confidentiality agreement,
Xcorporeal understands that it is obligated only to describe such invention in
general terms in order to avoid such violation.
(ii)
Proprietary
Information.
(1) Xcorporeal
acknowledges that its relationship with FUSA is one of high trust and confidence
and that in the course of the Services it will have access to and contact with
Proprietary Information. Subject to Section 2(f)(ii)(3), Xcorporeal
agrees that it will not, during the Term or at any time thereafter, disclose to
others, or use for its benefit or the benefit of others, any Proprietary
Information or Invention.
(2) For
purposes of this Agreement, Proprietary Information shall mean, by way of
illustration and not limitation, all information (whether or not patentable and
whether or not copyrightable) owned, possessed or used by FUSA, including,
without limitation, any Invention, formula, vendor information, customer
information, apparatus, equipment, trade secret, process, research, report,
technical data, know-how, computer program, software, software documentation,
hardware design, technology, marketing or business plan, forecast, unpublished
financial statement, budget, license, price, cost and employee list that is
communicated to, learned of, developed or otherwise acquired by Xcorporeal in
the course of it providing the Services to FUSA.
(3) Xcorporeal’s
obligations under this Section 2(f)(ii) shall not apply to any Proprietary
Information that (a) is or becomes known to the general public under
circumstances involving no unauthorized disclosure by Xcorporeal of the terms of
this Section 2(f)(ii), (b) was available to Xcorporeal or Key Personnel on a
non-confidential basis prior to disclosure by Xcorporeal, (c) is generally
disclosed to third parties by FUSA without confidentiality restrictions on such
third parties, (d) is approved for release by written authorization of an
officer of FUSA or (e) is prepared, conceived or discovered by Xcorporeal or Key
Personnel or their representatives subsequent to the Termination
Date.
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(4) Upon
termination of the Engagement or at any other time upon request by FUSA,
Xcorporeal shall promptly deliver to FUSA all records, files, memoranda, notes,
designs, data, reports, price lists, customer lists, drawings, plans, computer
programs, software, software documentation, sketches, laboratory and research
notebooks and other documents (and all copies or reproductions of such
materials) relating to the business of FUSA.
(5) Xcorporeal
represents that its retention as a consultant for FUSA and its performance of
the Engagement does not, and shall not, breach any agreement that obligates
Xcorporeal to keep in confidence any trade secrets or confidential or
proprietary information of Xcorporeal or of any other party or to refrain from
competing, directly or indirectly, with the business of any other party or
otherwise conflict with any of Xcorporeal’s agreements or obligations to any
other party. Xcorporeal shall not disclose to FUSA any trade secrets
or confidential or proprietary information of any other party.
(6) Xcorporeal
acknowledges that FUSA from time to time may have agreements with other persons
or with the United States Government, or agencies thereof, that impose
obligations or restrictions on FUSA regarding inventions made during the course
of work under such agreements or regarding the confidential nature of such
work. Xcorporeal agrees to be bound by all such obligations and
restrictions that are known to Xcorporeal and to take all action reasonably
necessary to discharge the obligations of FUSA under such agreements to the
extent such obligations relate to Xcorporeal.
(iii) Remedies. Xcorporeal
acknowledges that any breach of the provisions of this Section 2(f) shall result
in serious and irreparable injury to FUSA for which FUSA cannot be adequately
compensated by monetary damages alone. Xcorporeal agrees, therefore,
that, in addition to any other remedy it may have, FUSA shall be entitled to
enforce the specific performance of Section 2 by Xcorporeal and to seek both
temporary and permanent injunctive relief (to the extent permitted by law)
without the necessity of proving actual damages.
(g) Non-Competition. Subject
to the consummation of the transactions contemplated under the Asset Purchase
Agreement, Xcorporeal agrees that during the Term and for two (2) years
immediately thereafter, Xcorporeal will not directly or indirectly for its own
benefit or the benefit of others:
(i) render
services for a competing organization, as an employee, officer, agent, broker,
partner, or stockholder (except that Xcorporeal may own five percent (5%) or
less of the equity securities of any publicly-traded company);
(ii) hire
or seek to persuade any employee of FUSA or any of its affiliates to discontinue
employment or to become employed in any a competing organization or seek to
persuade any independent contractor or supplier to discontinue its relationship
with FUSA or any of its affiliates; and
(iii) solicit,
direct, take away or attempt to take away any business or customers of FUSA or
any of its affiliates.
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Nothing
in this Agreement shall preclude Xcorporeal or any Key Personnel from working
for a competitor of FUSA or its affiliates after termination of the Engagement,
provided that, subject
to the consummation of the transactions contemplated under the Asset Purchase
Agreement, Xcorporeal will not be engaged, directly or indirectly, in
any business in which FUSA or its affiliates are actively engaged upon
termination of the Engagement or in any new business which FUSA or its affiliate
are in the process of setting up and in which Xcorporeal had direct involvement
during the Term.
(h) Other
Agreements. Xcorporeal hereby represents that Xcorporeal is
not bound by the terms of any agreement with any other party to refrain from
using or disclosing any trade secret or confidential or proprietary information
relating to the Proprietary Information in the course of Xcorporeal’s
relationship with FUSA, to refrain from competing, directly or indirectly, with
the business of such other party or to refrain from soliciting employees,
customers or suppliers of such other party. Xcorporeal agrees to
furnish FUSA with a copy of any such agreement upon request.
(i) Independent Contractor
Status. Xcorporeal shall perform all consulting services under
Section 2 as an “independent contractor” and not as an employee or agent of
FUSA. Xcorporeal is not authorized to assume or create any obligation
or responsibility, express or implied, on behalf of, or in the name of, FUSA or
to bind FUSA in any manner.
3. Development
Expenses. Xcorporeal acknowledges and agrees that in the event
the Closing does not take place as a result of Xcorporeal consummating a
Superior Proposal, Xcorporeal shall reimburse FUSA for the following expenses,
to the extent such (other than (d) and (e) below) are reasonably incurred on
Xcorporeal’s behalf for the benefit of Xcorporeal, concurrently with the
consummation of such Superior Proposal:
(a) Tooling;
(b) Prototyping;
(c) IP
Maintenance;
(d) All
reasonably documented third party expenses incurred by FUSA in negotiating and
documenting the transactions contemplated by the Asset Purchase Agreement and
this Agreement, including reasonable attorneys’ fees and expenses;
(e) Consulting
fees; and
(f) Miscellaneous
consulting expenses, i.e. travel.
4. Notices. All
notices required or permitted under this Agreement shall be in writing and shall
be provided as set forth in the Asset Purchase Agreement.
5. Entire
Agreement. This Agreement (together with the Asset Purchase
Agreement, the schedules and exhibits thereto and other documents and agreements
delivered pursuant to the Asset Purchase Agreement, to the extent referred to
herein) constitutes the entire agreement between the parties and supersedes all
prior agreements and understandings, whether written or oral, relating to the
subject matter of this Agreement.
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6. Amendment. This
Agreement may be amended or modified only by a written instrument executed by
both FUSA and Xcorporeal.
7. Governing
Law. This Agreement shall be construed, interpreted and
enforced in accordance with the laws of the State of Delaware without regard to
its principles or conflicts of laws.
8. Successors and
Assigns. This Agreement shall be binding upon, and inure to
the benefit of, both parties and their respective successors and assigns,
including any corporation with which, or into which, FUSA may be merged or which
may succeed to its assets or business, provided, however, that subject to the
last sentence of this Section 8, the obligations of Xcorporeal are personal and
may not be assigned. Xcorporeal may assign its respective rights and obligations
hereunder, including under any agreements contemplated by this Agreement, to a
liquidating trust established for the benefit of Xcorporeal’s stockholders (the
“Xcorporeal Trust”) and
the Xcorporeal Trust may assign any or all of it respective rights and
obligations hereunder to any purchaser of a part or all of such trust’s rights,
assets and/or obligations, without the prior written consent of any other
party.
9. Interpretation. If
any restriction set forth in Section 9 is found by any court of competent
jurisdiction to be unenforceable because it extends for too long a period of
time or over too great a range of activities or in too broad a geographic area,
it shall be interpreted to extend only over the maximum period of time, range of
activities or geographic area as to which it may be enforceable.
10. Miscellaneous.
(a) No
delay or omission by FUSA or Xcorporeal in exercising any right under this
Agreement shall operate as a waiver of that or any other right. A
waiver or consent given by FUSA or Xcorporeal on any one occasion shall be
effective only in that instance and shall not be construed as a bar or waiver of
any right on any other occasion.
(b) The
captions of the sections of this Agreement are for convenience of reference only
and in no way define, limit or affect the scope or substance of any section of
this Agreement.
(c) In
the event that any provision of this Agreement shall be invalid, illegal or
otherwise unenforceable, the validity, legality and enforceability of the
remaining provisions shall in no way be affected or impaired
thereby.
(d) This
Agreement may be executed in two or more counterparts, and by the different
parties hereto in separate counterparts, each of which when executed shall be
deemed to be an original but all of which taken together shall constitute one
and the same agreement.
[Remainder
of Page Intentionally Left Blank]
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IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day
and year set forth above.
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FRESENIUS
USA, INC.
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By:
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/s/ Mohsen
Reihany
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Name:
Mohsen Reihany
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Title:
Senior Advisor To Chairman of The Board
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XCORPOREAL,
INC.
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By:
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/s/ Kelly J.
McCrann
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Name:
Kelly J. McCrann
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Title:
Chief Executive Officer
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