EXHIBIT 2.1
CONFIDENTIAL TREATMENT REQUESTED
Confidential Portions of this Agreement which have been redacted are marked with
brackets ("[ ]"). The omitted material has been filed separately with the
Securities and Exchange Commission.
372890.1
Dated: 8/15/96
SALE AGREEMENT
(1) DONALD NIXON ROSS
(2) CRYOLIFE INC.
Trevor Robinson & Co.
Howard House
70 Baker Street
Weybridge
Surrey
KT13 8AL
Tel: (01932) 859655
Fax: (01932) 847469
372890.1
THIS AGREEMENT is made the 15th day of August, 1996.
BETWEEN:
(1) MR. DONALD NIXON ROSS of 25 Upper Wimpole Street, London W1M 7TA,
England ("Mr. Ross"); and
(2) CRYOLIFE, INC. of 2211 New Market Parkway, Suite 142, Marietta,
Georgia 30067, USA, a corporation incorporated under the laws of the
State of Florida ("Cryolife")
WHEREAS
A. By three assignments each dated 18 July 1995 Mr. Ross acquired the
Patents (as defined below) and/or the then pending application(s) for
the Patents from Promedica International Inc.
B. Cryolife wishes to purchase and Mr. Ross wishes to sell to CryoLife
his right title and interest in the Patents, together with other
assets and intellectual property rights on the terms and conditions of
this agreement (the "Agreement").
IT IS AGREED:
1. Interpretation
1.1 The following words shall have the following meanings unless they
are inconsistent with the context and except where expressly
provided:
Assignments the Assignments of the Patents and the IPR
by Mr. Ross to CryoLife in the forms
attached as Schedule 3
Completion completion of the matters referred to in
clause 4
Completion Date August 30, 1996
Consulting Agreement the Agreement under which Mr.
Ross is to provide his services to
CryoLife, in the form attached as Schedule
4
CryoLife's Solicitors Trevor Robinson & Co. of Howard
House, 70 Baker Street, Weybridge, Surrey,
KT13 8AL
372890.1
-2-
IPR all industrial and intellectual property
rights of Mr. Ross in respect of the
Valves including but without limitation
the Patents, trade marks, service marks
(whether registered or unregistered)
design rights and copyrights in any part
of the world
Know-How all information (including that comprised
in or derived from formulae, techniques,
designs, specifications and drawings)
relating to the Valves, their design,
construction and/or use
Mr. Ross's Solicitor Mr. Edward J.C. Album of Exchange Tower,
1 Harbour Exchange Square, London B14
9GE
Net sales being the gross selling price of the
Valves received directly by CryoLife or
its associate companies by CryoLife's
distributors or customer, less the
commission paid by CryoLife (or its
associate companies) to representatives in
connection with the sale of the Valves
Patent those patents and patent applications
registered in the name of Mr. Ross
relating to the Valves and their use as
are more particularly described in
Schedule 1
Purchased Assets collectively, the IPR, Patents and
Stock
Shares fully paid shares of Common Stock of
CryoLife
Stock those Valves held by Mr. Ross as are more
particularly described in Schedule 2
Valves stented or unstented porcine pulmonary
heart valves
372890.1
-3-
[ ] - CONFIDENTIAL TREATMENT REQUESTED
1.2 Unless otherwise stated, references to clauses and schedules
shall be references to clauses and schedules to this
Agreement.
2. Sale and Purchase
Subject to the terms of this Agreement Mr. Ross shall sell with full
title guarantee and CryoLife shall purchase free from all liens,
charges and encumbrances as at the Completion Date, the Purchased
Assets.
3. Purchase Consideration
3.1 The consideration for the Purchased Assets and the rights
granted hereunder shall be:
3.1.1 Cash
CryoLife shall pay to Mr. Ross US$[ ] in cash at
Completion.
3.1.2 Shares
3.1.2.1 CryoLife shall issue to Mr. Ross
Shares having a value of US$[ ]
based on an average of the mid point
bid and ask prices on the NASDAQ/NMS
Quotation Service during the 30 day
period ending two business days
immediately prior to Completion.
3.1.2.2 The allotment and registration of
the Shares hereunder, the filing of
a registration statement and the
taking by CryoLife of action in
respect of the Shares shall be
unconditional obligations and shall
not be subject to any set-off or
counterclaim.
3.1.3 Royalty
CryoLife shall pay Mr. Ross a royalty for five years
after gaining approval by the United States Food and
Drug Administration to start clinical trials on the
Valves. Such royalty being the greater of the
following in each of the years following such
approval being received:
3.1.3.1 [ ]% of the Net Sales; and
3.1.3.2 Year 1 - US$ [ ]
372890.1
-4-
[ ] - CONFIDENTIAL TREATMENT REQUESTED
Year 2 - US$ [ ]
Year 3 - US$ [ ]
Year 4 - US$ [ ]
Year 5 - US$ [ ]
CryoLife shall be entitled to withhold any taxes from
the royalty payments it may be required to withhold
by the US or UK tax authorities. CryoLife shall be
deemed to have fully satisfied its obligations under
this clause by paying the net amount of the royalties
to Mr. Ross.
3.2 The considerations payable under this clause 3 shall be
allocated among the Purchased Assets as reasonably determined
by CryoLife after consultation.
4. Completion
4.1 The sale and purchase shall be completed at the offices of Mr.
Ross's Solicitor on the Completion Date when all the matters
set out in this clause 4 shall be effected.
4.2 Mr. Ross shall deliver to CryoLife or CryoLife's Solicitors;
4.2.1 the Assignments each duly executed by Mr. Ross;
4.2.2 the Consulting Agreement duly executed by Mr. Ross;
4.2.3 such additional documents, duly signed by Mr. Ross as
shall be required by CryoLife's solicitors to
complete the sale and purchase of the Purchased
Assets;
4.2.4 all documents held by Mr. Ross that may be required
by CryoLife to fully utilise the IPR and Know-How.
4.2.5 the Stock.
4.3 Upon completion of the matters referred to above:
4.3.1 CryoLife shall pay US$ [ ] to Mr. Ross's
solicitor's client account by way of telegraphic
transfer.
4.3.2 CryoLife shall deliver to Mr. Ross's solicitor
certificates representing the Shares as detailed in
clause 3.3, the shares to be registered in the name
of Mr. Ross or his nominees.
372890.1
-5-
4.3.3 CryoLife shall accept full responsibility for all and
any fee, costs or charges that may be due on
Completion to maintain the Patents and to transfer
the European Patent into patents satisfactory to
comply with the patent requirements of France,
Germany and the United Kingdom and to reimburse Mr.
Ross for any costs he has reasonably incurred (up to
a maximum of US$10,790) in connection with the same,
prior to Completion on Mr. Ross producing documentary
evidence.
4.3.4 To provide Mr. Ross with the ability to sell the
Shares detailed in Clause 3.1.2 within the U.S. or to
a U.S. person during the year following the issuance
of the Shares to Mr. Ross, CryoLife agrees at Mr.
Ross' written direction to register the Shares for
resale under the U.S. Securities laws on one occasion
and to keep the registration open for three months or
the anniversary of the issuance of the Shares to Mr.
Ross. Mr. Ross' written direction must be delivered
to CryoLife at least 45 days in advance and may
request registration to occur at any time after the
3rd month or before the 11th month after the issuance
of the Shares to Mr. Ross.
5. License
5.1 Mr. Ross hereby grants to CryoLife an exclusive perpetual
license with the right to sublicense to use the name "Ross"
for the purpose of identifying and promoting the Valves and
Mr. Ross hereby waives any right he may have to apply his name
to any other xenograft valve and shall not permit any third
party to apply the name "Ross" to such valves.
5.2 Mr. Ross warrants that he has not permitted any third party to
use the name Ross in connection with xenograft valves or
authorised such use.
5.3 Mr. Ross agrees to support any application that CryoLife may
make to register "Ross" as a trade mark as applied to
xenograft valves based on or derived from the Valves in any
jurisdiction it sees fit.
6. Warranties and Representations
Mr. Ross represents and warrants to CryoLife as follows:
6.1 that Mr. Ross has good and marketable title to the Purchased
Assets free and clear of all encumbrances, claims, security
interests, liens and charges or restrictions of any kind.
372890.1
-6-
6.2 Mr. Ross owns or has exclusive right to make, use, sell and
commercialise all of the IPR and to the knowledge of Mr. Ross
no third party has been granted a license or has been
permitted to use and/or commercialise the IPR.
6.3 No royalties, honorariums or fees are payable by Mr. Ross to
third parties by reason of the ownership or use of the IPR.
6.4 Apart from matters disclosed by Mr. Ross's solicitor to
CryoLife's solicitor in correspondence dated 7 August 1996
there is no litigation, pending or threatened, or claim
against Mr. Ross in connection with the IPR or any of the
other Purchased Assets and Mr. Ross has not received and is
not aware of any claim which contests the validity of or right
to use any of the IPR nor has Mr. Ross received any notice
that any of the IPR conflicts or will conflict with any of the
asserted rights of others.
6.5 Mr. Ross will use his best efforts to prevent any of his
warranties or representations contained in this Agreement not
being true and correct at Completion.
6.6 Mr. Ross represents and warrants that:
6.6.1 he is not a U.S. person (as defined under the U.S.
Securities Act of 1933 and rules and regulations
promulgated thereunder (collectively the "Securities
Act");
6.6.2 the securities being acquired by Mr. Ross are not
being acquired on behalf of or for the benefit of any
U.S. person and will not be held in the United States
for a one year period;
6.6.3 none of the securities being acquired by Mr. Ross
will be transferred by him in violation of the
Securities Act; and
6.6.4 he understands that none of the securities have been
registered under the Securities Act and they cannot
be sold within the United States or to a U.S. person
for one year unless they are subsequently registered
under the Securities Act or unless an exemption from
such registration is obtained.
7. Indemnification
7.1 Mr. Ross hereby indemnifies CryoLife and shall keep it
indemnified and hold it harmless from and against claims
liabilities damages losses and expenses incurred or suffered
by any of them and arising out of:
372890.1
-7-
7.1.1 any material breach of any warranty or representation
of Mr. Ross contained in this Agreement or any
inaccurate schedule or any instrument or agreement
entered into pursuant to this Agreement;
7.1.2 any action claim suit or proceeding brought by a
third party arising out of actual or alleged acts or
omissions of Mr. Ross in connection with the Valves
produced and/or used prior to Completion save for
those Valves included in the Stock;
7.1.3 any breach of the Consulting Agreement.
7.2 CryoLife hereby indemnifies Mr. Ross and shall keep him
indemnified and hold him harmless from and against all claims,
liabilities, damages, losses, costs and expenses incurred or
suffered by Mr. Ross and arising out of any action claim suit
or proceeding brought by a third party against Mr. Ross
arising out of actual or alleged acts or omissions of CryoLife
in connection with the use of the Valves and IPR after
Completion.
7.3 CryoLife shall have a right but not the obligation to set-off
against amounts otherwise due or coming due under clause 3.3
for the amounts which are indemnifiable pursuant to clause 7.1
The right of set off is not exclusive to any other right or
remedy CryoLife may have with respect to the indemnified
claims, the right of set off shall in no way limit CryoLife's
indemnification rights or the amounts, if any, which CryoLife
becomes entitled to receive thereunder.
8. Enquiries
Mr. Ross agrees to promptly refer to CryoLife all enquiries relating to
the IPR and/or Valves which Mr. Ross may receive after Completion.
9. Announcements
No announcement or disclosure concerning the terms of transactions
contemplated by or any matter ancillary to this Agreement, or its
existence shall (save as required by law) be made by Mr. Ross
whatsoever except with the prior written approval of CryoLife.
CryoLife's announcement of its acquisition (if any) shall be shown
beforehand to Mr. Ross.
10. Mr. Ross agrees that he will not take or threaten any legal action
against Tissuemed Limited of Astley Lane Industrial Estate, Astley
Lane, Swillington, Leeds, LS26 8XT at any time either prior to
Completion or thereafter without first obtaining the written consent of
CryoLife, which consent CryoLife may withhold at its absolute
discretion.
372890.1
-8-
11. General Provisions
11.1 Notices
Any and all notices or other communications required or
permitted to be given under any of the provisions of this
Agreement shall be in writing and shall be deemed to have been
duly given when (i) personally delivered or sent by overnight
or express delivery service; or (ii) sent by facsimile with a
transmission report to support the sending of the facsimile to
the parties at the addresses set forth below:
To Mr. Ross: 25 Upper Wimpole Street
London W1M 7TA
Fax No: +44 (0)171 935 0190
With a Copy to: Edward Album, Esq.
Exchange Tower
1 Harbour Exchange Square
London E14 9GE
Fax No: +44 (0)171 971 5668
To CryoLife: CryoLife, Inc.
2211 New Market Parkway
Suite 142
Marietta, Georgia 30067
USA
Fax No: 001 770 612 7889
With a Copy to: Robinson Services Limited
Howard House
70 Baker Street
Weybridge
Surrey KT13 8AL
England
Fax No: +44 (0)1932 847469
All notice shall be deemed received when received, provided
that refusal to accept delivery shall be deemed receipt.
Either party may change its address for the
372890.1
-9-
purposes of this Section by giving written notice of such
change to the other party in the manner provided in this
clause.
11.2 Assignment
This Agreement may not be assigned by any party without the
prior written consent of the other party.
11.3 Waiver
No waiver of any breach or default hereunder shall be
considered valid or effective unless in writing and signed by
the party giving such waiver, and no such waiver shall be
deemed a waiver of any subsequent breach or default of the
same or similar nature or otherwise.
11.4 Binding Effect; No Third Party Beneficiary
This Agreement is entered into for, and shall be binding upon
and inure to the exclusive benefit of, each party hereto and
their respective successors and any permitted assign, and no
other party shall derive any rights or benefits hereunder.
11.5 Counterparts
This Agreement may be executed in one or more counterparts,
all of which taken together shall be deemed one original.
11.6 Expenses
CryoLife and Mr. Ross shall each be responsible for their own
fees and expenses incurred in connection with the transaction
contemplated herein.
11.7 Survival
Indemnification obligations and CryoLife's obligations to pay
the royalties under clause 3.13 pursuant to this Agreement
shall survive Completion.
11.8 Further Documents
Each party will, whenever and as often as it shall be
requested by the other party, execute, acknowledge and deliver
or cause to be executed, acknowledged and delivered, such
further instruments and documents as may be necessary in order
to carry out the terms and conditions of this Agreement and to
complete the sale
372890.1
-10-
and transfer herein contemplated and shall do any and all
other acts as may be reasonably requested in order to carry
out the intent and purposes of this Agreement.
11.9 Severability
Should any term or provision of this Agreement or any document
required herein to be executed or delivered at the Completion
be declared invalid, void, or unenforceable, all remaining
terms and provisions hereof shall remain in full force and
effect and shall in no way be invalidated, impaired or
affected thereby.
11.10 Integration; Amendment
This Agreement (including Schedules) constitutes the entire
agreement of the parties with respect to the subject matter
hereof and may not be modified, amended or terminated except
by a written agreement specifically referring to this
Agreement signed by the parties hereto. This Agreement
supersedes any and all prior agreements and/or understandings
between the parties.
11.11 Governing Law
This Agreement shall be governed and construed in accordance
with the laws of England.
372890.1
-11-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the date set forth above.
For and on behalf of CRYOLIFE, INC.
Signed by: /s/ Steven E. Anderson
- ---------- ----------------------
Name: Steven E. Anderson
- ----- ------------------
Position: President/CEO
- --------- -------------
/s/ Donald Nixon Ross Witness /s/ E. J. C. Album
- --------------------- ------------------
DONALD NIXON ROSS E. J. C. Album
Solicitor
Exchange Tower
1 Harbour Exchange Square
Tel: 0171-971-5887
372890.1
-12-
SCHEDULES
*Schedule 1 Patents
*Schedule 2 Stock
*Schedule 3 Assignment
*Schedule 4 Consulting Agreement
* Indicates Schedules which have been omitted from this filing. The Registrant
hereby agrees to furnish to the Commission a copy of any omitted Schedule listed
above supplementally upon request.
372890.1
-13-