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EXHIBIT 2
PLAN AND AGREEMENT OF DISTRIBUTION
THIS PLAN AND AGREEMENT OF DISTRIBUTION (the "Agreement") is made as of the
day of May, 1996, between PolyMedica Industries, Inc., a Massachusetts
corporation ("PolyMedica"), and CardioTech International, Inc., a Massachusetts
corporation ("CardioTech").
RECITALS
WHEREAS, PolyMedica is the holder of 3,490,638 shares of Common Stock, $.01
par value per share, of CardioTech ("CardioTech Common Stock"), comprising
approximately 91.7% of the issued and outstanding shares of CardioTech Common
Stock; and
WHEREAS, PolyMedica has contributed certain technology and certain assets
to CardioTech and intends to make other arrangements to establish CardioTech as
a separate enterprise for the purpose of applying CardioTech's proprietary
polyurethane and related polymer technologies for use in the development,
manufacture and sale of vascular grafts and other implantable medical devices
and premium biomaterials (the "Implantable Medical Device and Materials
Business"); and
WHEREAS, it is the intention of PolyMedica to distribute all of the issued
and outstanding shares of CardioTech Common Stock held by PolyMedica to the
stockholders of PolyMedica in a transaction satisfying the requirement of
Section 355 of the Internal Revenue Code of 1986, as amended (the
"Distribution"); and
WHEREAS, PolyMedica and CardioTech have determined that it is necessary and
desirable to set forth the principal corporate transactions required to effect
the Distribution and to set forth other agreements that will govern certain
other matters following such Distribution.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
made herein, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
1.1 General. As used in this Agreement and the Exhibits hereto, the
following terms shall have the following meanings:
Action: any action, claim, suit, litigation, arbitration, inquiry,
subpoena, discovery request, proceeding or investigation by or before any court
or grand jury, any governmental or other regulatory or administrative agency or
commission or any arbitration tribunal.
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Affiliate: with respect to any specified person, a person that, directly or
indirectly, through one or more intermediaries, controls, or is controlled by,
or is under common control with, such specified person; provided, however, that
PolyMedica (and its subsidiaries) shall not be deemed to be Affiliates of
CardioTech (and its subsidiaries), and vice versa, for purposes of this
Agreement.
Agent: The First National Bank of Boston, the distribution agent appointed
by PolyMedica to distribute the shares of CardioTech Common Stock in connection
with the Distribution.
Ancillary Agreements: all of the agreements, instruments, understandings,
assignments or other arrangements entered into in connection with the
transactions contemplated hereby, including, without limitation, the License
Agreement, the Distribution Agency Agreement, the Tax Matters Agreement, the
Facilities and Services Agreement and the Subscription Agreement.
CardioTech Board: the Board of Directors of CardioTech.
CardioTech Common Stock: as defined in the Recitals.
Code: the Internal Revenue Code of 1986, as amended.
Commission: the Securities and Exchange Commission.
Distribution: as defined in the Recitals.
Distribution Agency Agreement: the Distribution Agency Agreement between
PolyMedica and the Agent, the proposed form of which is attached as Exhibit A,
providing for, among other things, the dissemination of the Information
Statement to PolyMedica stockholders as of the Distribution Record Date and the
distribution of certificates evidencing shares of CardioTech Common Stock to
such stockholders.
Distribution Date: the proposed date of effecting the Distribution, as
determined by the PolyMedica Board or the PolyMedica Special Committee.
Distribution Record Date: the date determined by the PolyMedica Board or
the PolyMedica Special Committee as of which the holders of PolyMedica Common
Stock and their respective stock holdings shall be determined for purposes of
distributing CardioTech Common Stock to such PolyMedica stockholders.
Exchange Act: the Securities Exchange Act of 1934, as amended.
Facilities and Services Agreement: the Facilities and Service Agreement
between PolyMedica and CardioTech, the proposed form of which is attached as
Exhibit B, providing for, among other
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things, the provision of certain administrative support services by PolyMedica
to CardioTech after the Distribution.
Form 10: the Registration Statement on Form 10 to be filed by CardioTech
with the Commission to effect the registration of the CardioTech Common Stock
pursuant to the Exchange Act.
Information Statement: the Information Statement, constituting a part of
the Form 10, in the form to be distributed to the holders of PolyMedica Common
Stock as of the Distribution Record Date in connection with the Distribution,
and as it may be amended or supplemented subsequent to such dissemination.
Liabilities: any and all debts, liabilities and obligations, absolute or
contingent, mature or unmature, liquidated or unliquidated, accrued or
unaccrued, known or unknown, whenever arising (unless otherwise specified in
this Agreement), including all costs and expenses relating thereto, and those
debts, liabilities and obligations arising under any law, rule, regulation,
Action, threatened Action, order or consent decree of any governmental entity or
any award of any arbitrator of any kind, and those arising under any contract,
commitment or undertaking.
License Agreement: the Amended and Restated License Agreement between
PolyMedica and CardioTech, the proposed form of which is attached as Exhibit C,
providing for, among other things, the licensing to CardioTech of the polymer
technologies in connection with the Implantable Medical Devices and Materials
Business.
Implantable Medical Device and Materials Business: as defined in the
Recitals.
PolyMedica Board: the Board of Directors of PolyMedica.
PolyMedica Common Stock: the Common Stock, $.01 par value per share, of
PolyMedica.
PolyMedica Special Committee: the Special Committee of the Board of
Directors of PolyMedica.
Securities Act: the Securities Act of 1933, as amended.
Subscription Agreement: the Amended and Restated Common Stock Subscription
Agreement between PolyMedica and CardioTech, a copy of which is attached hereto
as Exhibit D.
Tax Matters Agreement: the Tax Matters Agreement between PolyMedica and
CardioTech, the proposed form of which is attached as Exhibit E, providing for,
among other things, the allocation of liabilities with respect to federal, state
and local income taxes and the procedures for filing returns with respect to
such taxes.
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ARTICLE II
ACKNOWLEDGMENT OF MATERIAL FACTS
2.1 Organization. PolyMedica and CardioTech acknowledge that each is duly
organized, validly existing and in good standing under the laws of the
Commonwealth of Massachusetts, with requisite corporate power to own their
respective properties and assets and to carry on their respective businesses as
presently conducted or contemplated. PolyMedica is the owner of 3,490,638 of the
issued and outstanding shares of CardioTech Common Stock.
ARTICLE III
PRELIMINARY ACTION
3.1 Cooperation Prior to the Distribution
(a) Ancillary Agreements. PolyMedica and CardioTech shall use their
respective best efforts to cause, on or before the Distribution Date, the
execution and delivery by PolyMedica and CardioTech, or their respective
Affiliates, of the Ancillary Agreements and any other agreements, instruments or
other documents deemed necessary or desirable by the applicable parties to
establish and govern their post-Distribution relationships.
(b) Form 10. PolyMedica and CardioTech have prepared, and CardioTech
has filed with the Commission, the Form 10, which includes the Information
Statement, setting forth appropriate disclosure concerning CardioTech, the
Distribution and any other appropriate matters required to be stated therein.
PolyMedica and CardioTech shall use their respective reasonable efforts to cause
the Form 10 to become effective under the Exchange Act, and thereafter
PolyMedica shall promptly mail the Information Statement to all of the
appropriate holders of PolyMedica Common Stock.
(c) Blue Sky. PolyMedica and CardioTech shall take all such action
as may be necessary or appropriate under the securities or blue sky laws of
states or other political subdivisions of the United States in connection with
the transactions contemplated by this Agreement and the Ancillary Agreements.
(d) Listing. PolyMedica and CardioTech shall prepare, and CardioTech
shall file and pursue, an application to effect the listing of the CardioTech
Common Stock on the American Stock Exchange.
3.2 Consents. Each party hereto understands and agrees that no party
hereto is, in this Agreement or in any other agreement or document contemplated
by this Agreement or otherwise, representing or warranting in any way that the
obtaining of any consents or
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approvals, the execution and delivery of any agreements or the making of any
filings or applications contemplated by this Agreement will satisfy the
provisions of any or all applicable agreements or the requirements of any or all
applicable laws or judgments except as expressly represented, warranted or
covenanted herein or in the Ancillary Agreements. Notwithstanding the foregoing,
the parties shall use reasonable efforts to obtain all consents and approvals,
to enter into all agreements and to make all filings and applications which may
be required for the consummation of the transactions contemplated by this
Agreement, including, without limitation, all applicable regulatory filings or
consents under federal or state laws and all necessary consents, approvals,
agreements, filings and applications.
ARTICLE IV
THE DISTRIBUTION
4.1 The Distribution. Prior to the Distribution Date, PolyMedica shall
deliver to CardioTech the certificates for the 3,490,638 shares of CardioTech
Common Stock owned by PolyMedica, and CardioTech shall cancel such certificates.
In exchange therefor, and upon receipt from the Agent of a certificate as to the
number of shares of PolyMedica Common Stock outstanding as of the Distribution
Record Date, CardioTech shall deliver to the Agent on the Distribution Date on
behalf of PolyMedica and for the benefit of the holders of record of PolyMedica
Common Stock as of the Distribution Record Date, an omnibus stock certificate
representing in the aggregate one share of CardioTech Common Stock for every
2.21 shares of PolyMedica Common Stock outstanding as of the Distribution Record
Date. Effective as of 5:00 p.m., Boston Time, on the date of the delivery of
such omnibus stock certificate to the Agent, ownership of the CardioTech Common
Stock held by PolyMedica shall pass to PolyMedica's stockholders. PolyMedica
shall instruct the Agent to distribute, beginning on or promptly following the
Distribution Date, to such holders of PolyMedica Common Stock on the
Distribution Record Date, certificates representing one share of CardioTech
Common Stock for every 2.21 shares of PolyMedica Common Stock outstanding as of
the Distribution Record Date. CardioTech agrees to provide to the Agent
sufficient certificates in such denominations as the Agent may request in order
to effect the Distribution. All of the shares of CardioTech Common Stock issued
in the Distribution shall be fully paid, nonassessable and free of preemptive
rights. Holders of PolyMedica Common Stock shall not be required to pay cash or
other consideration for the CardioTech Common Stock received in the
Distribution.
No fractional shares of CardioTech Common Stock will be received by
PolyMedica stockholders. Fractional shares, if any, will be aggregated and sold,
on behalf of the stockholders entitled to receive such shares, by the Agent. The
Agent will use the net proceeds from the sale of fractional shares to make cash
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payments to those stockholders otherwise entitled to receive fractional shares
in proportion to their respective interests in such fractional shares.
4.2 PolyMedica Board Action
(a) The PolyMedica Board or the PolyMedica Special Committee shall
establish in its sole discretion and in accordance with all applicable rules of
the American Stock Exchange, the Distribution Record Date, the Distribution
Date, the date on which certificates representing CardioTech Common Stock shall
be mailed to holders of PolyMedica Common Stock and all appropriate procedures
in connection with the Distribution.
(b) In its sole discretion for any reason, the PolyMedica Board (or
the PolyMedica Special Committee) may rescind the declaration of the
Distribution, and after the declaration and until the Distribution Date, the
PolyMedica Board or the PolyMedica Committee may postpone, withdraw, cancel or
abandon the Distribution for any reason and simultaneously terminate this
Agreement and the Ancillary Agreements.
ARTICLE V
EMPLOYEES OF CARDIOTECH
5.1 Acknowledgments. PolyMedica and CardioTech acknowledge that CardioTech
has hired or intends to hire certain persons who are or have been employees of
PolyMedica.
ARTICLE VI
MISCELLANEOUS LIABILITIES AND INDEMNIFICATION
6.1 CardioTech Liabilities; Indemnification. CardioTech shall be liable
for any and all claims and Liabilities incurred by it subsequent to the
Distribution Date and hereby agrees to indemnify and hold harmless PolyMedica
from and against such claims and Liabilities. In addition, CardioTech hereby
assumes responsibility for all claims and Liabilities relating to the employment
of individuals by CardioTech on and after the Distribution Date. In the event
PolyMedica incurs any Liability or expense to be borne by CardioTech hereunder,
CardioTech agrees to reimburse, indemnify and hold harmless PolyMedica for any
expense or Liability associated therewith. CardioTech shall also indemnify
PolyMedica for any claim or Liability incurred by PolyMedica as a consequence of
any misstatement or omission of a material fact with respect to CardioTech based
on information supplied by CardioTech in any documents or filings prepared for
purposes of compliance or qualification under applicable securities laws in
connection with the Distribution, and related
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transactions, including, without limitation, the Information Statement and the
Form 10.
6.2 PolyMedica Liabilities; Indemnification. PolyMedica shall be liable for
any and all claims and Liabilities relating to its business and assets not
transferred to CardioTech and the Liabilities not assumed by CardioTech under
the terms of this Agreement, including, without limitation, (i) Liabilities
arising out of operation of the business of CardioTech and the Implantable
Medical Device and Materials Business (as defined in the License Agreement)
prior to the Distribution Date and (ii) Liabilities relating to the employment
of individuals prior to the Distribution Date, and hereby agrees to indemnify
and hold harmless CardioTech from and against such claims and Liabilities. In
the event CardioTech incurs any Liability or expense to be borne by PolyMedica
hereunder, PolyMedica agrees to reimburse, indemnify and hold harmless
CardioTech for any expense or Liability associated therewith. PolyMedica shall
also indemnify CardioTech for any claim or Liability incurred by CardioTech as a
consequence of any misstatement or omission of a material fact with respect to
PolyMedica based on information supplied by PolyMedica in any documents or
filings prepared for purposes of compliance or qualification under applicable
securities laws in connection with the Distribution and related transactions,
including, without limitation, the Information Statement and the Form 10.
6.3 Tax Liabilities. Notwithstanding the provisions of Sections 6.1 and
6.2, all tax Liabilities relating to the business of CardioTech including,
without limitation, income taxes, franchise taxes, sales taxes, use taxes,
payroll taxes and employment taxes, shall be assumed by the party to whom the
Liability has been allocated in the Tax Matters Agreement.
ARTICLE VII
ADDITIONAL ASSURANCES
7.1 Mutual Assurances. PolyMedica and CardioTech agree to cooperate with
respect to the implementation of this Agreement and the Ancillary Agreements and
to execute such further documents and instruments as may be necessary to confirm
the transactions contemplated hereby. Such cooperation may include joint
meetings with corporate partners, suppliers, customers and others to assure the
orderly transition of the business and assets contemplated hereby; provided,
however, that nothing herein shall be deemed to obligate either PolyMedica or
CardioTech to take any action or reach any understandings which may violate any
applicable laws. PolyMedica and CardioTech agree that they will not take any
action inconsistent with the facts and representations set forth in the
"no-action letter" request filed with the Commission in connection with the
Distribution or the conditions of the "no-action letter" received from the
Commission in connection with the same, and will
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use their best efforts to cause such facts to remain true and correct, to
satisfy such conditions and to maintain the effectiveness of such letter and, if
either PolyMedica or CardioTech shall take any such inconsistent action, or fail
to use such best efforts, it will indemnify the other party for any expense or
Liability incurred as a consequence thereof. PolyMedica and CardioTech also
agree that the Distribution is intended to qualify under Section 355 of the
Code, and that the characterization of the transactions contemplated hereunder
for tax purposes and the liability of the parties for taxes shall be governed by
the Tax Matters Agreement. Except as otherwise specifically provided herein or
as agreed between the parties from time to time, PolyMedica and CardioTech shall
bear their own expenses associated with the Distribution.
ARTICLE VIII
CONDITIONS TO EFFECTIVENESS OF DISTRIBUTION
The Distribution shall be subject to the implementation of the portions of
this Agreement which are contemplated to become effective prior to the
Distribution and to the satisfaction or waiver of the following conditions:
8.1 Board Approval. This Agreement and the Ancillary Agreements (including
exhibits and schedules) shall have been approved by the PolyMedica Board and the
CardioTech Board and shall have been executed and delivered by appropriate
officers of PolyMedica and CardioTech.
8.2 Securities Laws Compliance. The transactions contemplated hereby shall
be in compliance with applicable federal and state securities laws.
8.3 Form 10 Effective. The Form 10 shall have become effective under the
Exchange Act.
8.4 Consents. PolyMedica shall have received such consents, and shall have
received executed copies of such agreements or amendments of agreements, as it
shall deem necessary in connection with the completion of the transaction
contemplated by this Agreement.
8.5 Resignation of Officers and Directors. With the exception of Arthur A.
Siciliano, Ph.D., who will continue as an executive officer of PolyMedica and
director of Cardiotech after the Distribution, all persons who hold positions as
officers or directors of PolyMedica who are or are to become employees, officers
or directors of CardioTech shall have resigned such positions with PolyMedica.
8.6 Other Instruments. All action and other documents and instruments
deemed necessary or advisable in connection with the
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transactions contemplated hereby shall have been taken or executed, as the case
may be, in form and substance satisfactory to PolyMedica and CardioTech.
8.7 Legal Proceedings. No legal proceedings affecting or arising out of the
transactions contemplated hereby or which could otherwise affect PolyMedica or
CardioTech in a materially adverse manner shall have been commenced or
threatened against PolyMedica, CardioTech or the directors or officers of either
PolyMedica or CardioTech.
8.8 Material Changes. No material adverse change shall have occurred with
respect to PolyMedica or CardioTech, the securities markets or general economic
or financial conditions which shall, in the reasonable judgment of PolyMedica
and CardioTech, make the transactions contemplated by this Agreement
inadvisable.
ARTICLE IX
ACCESS TO INFORMATION AND SERVICES
9.1 Provision of Corporate Records. Upon CardioTech's request, PolyMedica
shall arrange as soon as practicable following the Distribution Date for the
delivery to CardioTech of existing corporate records in the possession of
PolyMedica relating to the Implantable Medical Devices and Materials Business,
together with all active agreements and any active litigation files relating to
the Implantable Medical Devices and Materials Business, except to the extent
such items are already in the possession of CardioTech. Such records shall be
the property of CardioTech but shall be available to PolyMedica for review and
duplication until PolyMedica shall notify CardioTech in writing that such
records are no longer of use to PolyMedica.
9.2 Access to Information. From and after the Distribution Date, PolyMedica
shall afford to CardioTech and its authorized accountants, counsel and other
designated representatives reasonable access (including using reasonable efforts
to give access to persons or firms possessing information) and duplicating
rights during normal business hours to all records, books, contracts,
instruments, computer data and other data and information (collectively,
"Information") within PolyMedica's possession relating to CardioTech's business,
insofar as such access is reasonably required by CardioTech. CardioTech shall
afford to PolyMedica and its authorized accountants, counsel and other
designated representatives reasonable access (including using reasonable efforts
to give access to persons or firms possessing Information) and duplicating
rights during normal business hours to Information within CardioTech's
possession relating to PolyMedica's business as constituted after the
Distribution, insofar as such access is reasonably required by PolyMedica.
Information may be requested under this Article IX for, without limitation,
audit, accounting, claims, litigation and
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tax purposes, as well as for purposes of fulfilling disclosure and reporting
obligations and for performing the transactions contemplated in this Agreement
and the Ancillary Agreements.
9.3 CardioTech Securities Filings. For a period of three years following
the Distribution Date, CardioTech shall provide to PolyMedica, promptly
following such time at which such documents shall be filed with the Commission,
copies of all documents which shall be filed by CardioTech with the Commission
pursuant to the periodic and interim reporting requirements of the Exchange Act
and the rules and regulations of the Commission promulgated thereunder.
9.4 Production of Witnesses. At all times from and after the Distribution
Date, each of PolyMedica and CardioTech shall use reasonable efforts to make
available to the other, upon written request, its officers, directors, employees
and agents as witnesses to the extent that such persons may reasonably be
required in connection with legal, administrative or other proceedings in which
the requesting party may from time to time be involved.
9.5 Reimbursement. Except to the extent otherwise contemplated by any
Ancillary Agreement, a party providing Information to the other party under this
Article IX shall be entitled to receive from the recipient, upon the
presentation of invoices therefor, payments for such amounts, relating to
supplies, disbursements and other out-of-pocket expenses, as may be reasonably
incurred in providing such Information.
9.6 Retention of Records. For a period of ten (10) years following the
Distribution Date, each of PolyMedica and CardioTech shall retain all
Information relating to the other, except as otherwise required by law or set
forth in an Ancillary Agreement or except to the extent that such Information is
in the public domain or in the possession of the other party; provided, that,
after the expiration of such retention period, such Information shall not be
destroyed or otherwise disposed of at any time, unless, prior to such
destruction or disposal, (i) the party proposing to destroy or otherwise dispose
of such Information shall provide no less than ninety (90) days' prior written
notice to the other, specifying in reasonable detail the Information proposed to
be destroyed or disposed of and (ii) if a recipient of such notice shall request
in writing prior to the scheduled date for such destruction or disposal that any
of the Information proposed to be destroyed or disposed of be delivered to such
requesting party, the party proposing the destruction or disposal shall promptly
arrange for the delivery of such of the Information as was requested, at the
expense of the party requesting such Information.
9.7 Confidentiality. Subject to any contrary requirement of law and the
right of each party to enforce its rights hereunder in any legal action, each
party shall keep strictly confidential, and
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shall cause its employees and agents to keep strictly confidential, any
Information of or concerning the other party which it or any of its agents or
employees may acquire pursuant to, or in the course of performing its
obligations under, any provisions of this Agreement or any Ancillary Agreement;
provided, however, that such obligation to maintain confidentiality shall not
apply to Information which: (i) at the time of disclosure was in the public
domain, not as a result of improper acts by the receiving party; (ii) was
already independently in the possession of the receiving party at the time of
disclosure; or (iii) is received by the receiving party from a third party who
did not receive such Information from the disclosing party under an obligation
of confidentiality.
ARTICLE X
COVENANTS
10.1 Listing. CardioTech hereby agrees to use its reasonable efforts to
effect and maintain the listing of the CardioTech Common Stock on the American
Stock Exchange.
10.2 Issuance of CardioTech Common Stock relating to Warrants. Upon the
effectiveness of the Distribution CardioTech shall issue a Warrant to John
Hancock Mutual Life Insurance Company (the "Holder") for the purchase of 245,438
shares of CardioTech Common Stock, subject to adjustment, on the terms set forth
in a Letter from CardioTech and PolyMedica to the Holder dated May , 1996, a
copy of which is attached hereto as Exhibit G.
10.3 Ancillary Agreements. The parties agree that they shall comply with
and provide all services and take any and all actions required to be provided or
taken by the terms of any and all of the Ancillary Agreements following the
Distribution.
10.4 Fees and Expenses. The parties agree that they will pay fifty percent
(50%) of the aggregate of all fees and expenses incurred by the parties
collectively in connection with the Distribution, exclusive of PolyMedica
management time.
ARTICLE XI
MISCELLANEOUS
11.1 Governing Law. This Agreement shall be governed by the laws of the
Commonwealth of Massachusetts (excluding the conflict of laws provisions
thereof).
11.2 Construction. Each provision of this Agreement shall be interpreted in
a manner to be effective and valid to the fullest extent permissible under
applicable law. The invalidity or unenforceability of any particular provision
of this Agreement
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shall not affect the other provisions of this Agreement which shall remain in
full force and effect.
11.3 Arbitration. Any dispute, controversy or claim arising out of or in
connection with this Agreement or any of the Ancillary Agreements (including any
questions of fraud or questions concerning the validity and enforceability of
this Agreement or any of the Ancillary Agreements or any of the rights herein
conveyed), shall be determined and settled by arbitration in Boston,
Massachusetts, pursuant to the commercial arbitration rules then in effect of
the American Arbitration Association as modified by this paragraph. Any award
rendered shall be final and conclusive upon the parties and a judgment thereon
may be entered in any court having competent jurisdiction. The party submitting
such dispute shall give written notice to that effect to the other party,
stating the dispute to be arbitrated and the name and address of a person
designated to act as arbitrator on its behalf. Within fifteen (15) days after
such notice, the other party shall give written notice to the first party
stating the name and address of a person designated to act as substitute on its
behalf. In the event that the second party shall fail to notify the first party
of its designation of an arbitrator within the time specified, then the first
party shall request the American Arbitration Association to appoint a second
arbitrator. The two arbitrators so chosen shall meet within fifteen (15) days
after the second arbitrator has been appointed to appoint a third arbitrator. If
the two arbitrators are unable to agree on the appointment of a third arbitrator
within such fifteen (15) day period, either party may request the American
Arbitration Association to appoint a third arbitrator. Each arbitrator appointed
hereunder shall be independent of the parties and either party may disqualify an
arbitrator who is or is affiliated with a supplier, customer or competitor of
either party without the consent of the other party. Each arbitrator shall be
reasonably knowledgeable regarding the area or areas in dispute. All costs and
expenses, including attorney's fees, of all parties incurred in any dispute
which is determined and/or settled by arbitration pursuant to this paragraph
shall be borne by the party determined to be liable in respect of such dispute;
provided, however, that if complete liability is not assessed against only one
party, the parties shall share the total costs in proportion to their respective
amounts of liability so determined. Except where clearly prevented by the area
in dispute, both parties agree to continue performing their respective
obligations under this Agreement while the dispute is being resolved. Both
parties, and the arbitrators, shall use their best efforts, subject to
reasonable prosecution of the arbitration, court order and disclosure required
under securities laws, to keep the subject matter of the arbitration and
confidential information of each party confidential, and the arbitrators are
authorized to impose such protective orders as they may deem appropriate for
such purpose. Either prior to or as part of any award, the arbitrators shall be
authorized to grant injunctive relief or other equitable remedies, including
granting security for a prospective or final
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award, but the arbitrators shall have no authority to award punitive damages or
other penalties.
11.4 Counterparts. This Agreement may be executed in counterparts, all of
which shall be considered one and the same agreement.
11.5 Exhibits. Exhibits to this Agreement shall be deemed to be an integral
part hereof, and schedules or exhibits to such Exhibits shall be deemed to be an
integral part thereof. Except as otherwise specifically provided therein, all
provisions of this Article XI shall apply to each agreement constituting an
Ancillary Agreement or to which reference is made herein.
11.6 Amendments; Waivers. This Agreement may be amended or modified only in
writing executed on behalf of PolyMedica and CardioTech. No waiver shall operate
to waive any further or future act and no failure to object of forbearance shall
operate as a waiver.
11.7 Notices. All notices, requests, demands and other communications under
this Agreement shall be in writing and shall be deemed to have been duly given
(i) on the date of service if served personally on the party to whom notice is
given, (ii) on the day of transmission if sent via facsimile transmission to the
facsimile number given below, provided telephonic confirmation of receipt is
obtained promptly after completion of transmission, (iii) on the business day
after delivery to an overnight courier service or the Express mail service
maintained by the United States Postal Service, provided receipt of delivery has
been confirmed, or (iv) on the fifth day after mailing, if mailed by registered
or certified mail, postage prepaid, properly addressed and return-receipt
requested, in all cases to the parties as follows:
PolyMedica Industries, Inc.
11 State Street
Woburn, MA 01801
Attention: Chief Executive Officer
Telephone: (617) 933-2020
Telecopier: (617) 938-6950
with a copy to:
John K.P. Stone III, Esq.
Hale and Dorr
60 State Street
Boston, MA 02109
Telephone: (617) 526-6000
Telecopier: (617) 526-5000
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or to:
CardioTech International, Inc.
11 State Street
Woburn, MA 01801
Attention: Chief Executive Officer
Telephone: (617) 933-4772
Telecopier: [ ]
with a copy to:
Mintz, Levin, Cohn, Ferris,
Glovsky and Popeo, PC
One Financial Center
41st Floor
Boston, MA 02111-2657
Attention: Jeffrey Wiesen
Telephone: (617) 542-6000
Telecopier: (617) 542-2241
11.8 Successors and Assigns. This Agreement and any of the rights and
obligations of each party hereunder shall not be assigned, in whole or in part,
without the prior written consent of the other party, which consent shall not be
unreasonably withheld, provided that either party may sell, assign, transfer,
delegate or otherwise dispose of its rights and obligations hereunder in
connection with its merger or consolidation or the sale of substantially all of
its assets. This Agreement shall be binding upon the parties and their
respective successors and assigns to the extent such assignments are in
accordance with this Section 11.8.
11.9 Interpretation. The Article and Section headings contained in this
Agreement are solely for the purpose of reference, are not part of the agreement
of the parties and shall not in any way affect the meaning or interpretation of
this Agreement. As used in this Agreement, the term "person" shall mean and
include an individual, a partnership, a joint venture, a corporation, a trust,
an unincorporated organization and a government or any department or agency
thereof. Whenever any words are used herein in the masculine gender, they shall
be construed as though they were also used in the feminine gender in all cases
where they would so apply.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.
POLYMEDICA INDUSTRIES, INC.
By:
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Name:
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Title:
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CARDIOTECH INTERNATIONAL, INC.
By:
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Name:
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Title:
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