Exhibit 10.1
ACQUISITION
RIGHT OF FIRST NEGOTIATION AGREEMENT
This Acquisition Right
of First Negotiation Agreement (the “Agreement”) is
entered into this 3rd day of November, 2006 (the “Effective
Date”), by and among Crdentia Corp., a corporation organized and
existing under the laws of the State of Delaware (the “Company”)
and MedCap Partners L.P., C. Fred Toney and James D. Durham (the “Buyers”). The Company
and the Buyers may each be referred to herein individually as a “Party” and collectively as the “Parties.”
BACKGROUND
A. In
connection with the Buyers’ transfer of $1,000,000 to a cash collateral account
for the benefit of the Company,to facilitate the additional borrowing by the
Company from Bridge Healthcare Finance, LLC (the “Advance”),
iVOW, Inc. (“iVOW”) the Company and the Buyers have
entered into that certain Stock Pledge Agreement, by and between the Company,
iVOW and the Buyers, dated as of even date hereof (the “Stock Pledge
Agreement”), pursuant to which the Company and iVOW have granted to
the Buyers a security interest in 100% of the outstanding stock of Sound Health
Solutions, Inc. (“SHS”), a
wholly-owned subsidiary of iVOW.
B. The
Company, iVOW Acquistion Corp. and iVOW have entered into that certain
Agreement and Plan of Merger dated September 20, 2006 (the “Merger Agreement”), pursuant to which the Company has agreed
to acquire iVOW for $3,500,000 in Crdentia common stock, subject to adjustment,
subject to the approval of Crdentia and iVOW common stockholders and other
closing conditions (the “Merger”).
C. As
a condition precedent to the Buyers providing the Advance, the Company has
agreed to grant the Buyers an exclusive right of first negotiation of the terms
of any agreement to acquire all or a majority of SHS (whether by merger, purchase
of SHS’s outstanding stock or purchase of SHS’s assets, or other similar
transaction) (any such agreement, a “SHS Transaction Agreement”) during the Negotiation Period, as
that term is defined below.
AGREEMENT
NOW THEREFORE, in consideration of the mutual promises
and covenants set forth below and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the Parties hereby
agree as follows:
1. DEFINITIONS.
As used in this Agreement, the following capitalized terms
have the indicated meanings:
1.1. Affiliate(s). “Affiliate(s)”
means, as of any point in time and for so long as such relationship continues
to exist with respect to any Person, any other Person which controls, is
controlled by or is under common control with such Person. A Person shall be regarded as in control of
another Person if it owns or controls more than 50% of the equity securities of
the subject Person entitled to vote in the election of directors (or, in the
case of a Person that is not a corporation, for the election of the
corresponding managing authority).
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1.2. Person. “Person”
means any individual or legal entity.
1.3. Third
Party. “Third Party” means any Person other than
the Company, the Buyers or their respective Affiliates.
2. RIGHT
OF FIRST NEGOTIATION.
2.1. Commencing
at the Effective Time of the Merger (as that term is defined in the Merger
Agreement), prior to Company negotiating a SHS Transaction Agreement with a
Third Party, the Company shall give the Buyers a period of thirty (30) days to
notify the Company whether the Buyers desire to enter into a SHS Transaction
Agreement with the Company on mutually agreeable and commercially reasonable
terms and conditions for such transaction.
If the Buyers timely notify the Company in writing of such desire, then
the Parties shall negotiate in good faith and attempt to reach mutual agreement
upon such terms and conditions for such SHS Transaction Agreement during the
period commencing at the Effective Time of the Merger and extending until the date that is sixty
(60) calendar days following the Effective Time of the Merger (the “Negotiation Period”).
2.2. If
the Buyers do not timely notify the Company of their interest in entering into
such a SHS Transaction Agreement, or if upon expiration of the Negotiation
Period the Parties are unable to agree upon such terms and conditions, then the
Company shall have no further obligation to the Buyers under this Agreement and
shall be free to enter into a SHS Transaction Agreement with any Third Party on
any terms that the Company determines in its sole discretion, and the Company
shall have no obligation to offer any such terms to the Buyers.
2.3. The
Company agrees that should the Company and the Buyers agree on the terms of the
acquisition of SHS, the Advance shall be credited against the applicable
purchase price. Any portion of the
Advance not so utilized shall be repaid on January 31, 2007 by the Company to
the Buyers with a 20% premium or risk factor thereon (i.e. if the entire
$1,000,000 is repaid, the premium shall be $200,000).
3. MISCELLANEOUS.
3.1. Termination. The Parties may terminate this Agreement at
any time by giving written notice to the other Party; provided, however, that
the Company may not terminate this Agreement without the prior written consent
of the Buyers. This Agreement shall
automatically terminate upon the termination of the Merger Agreement pursuant
to its terms.
3.2. Assignment. Neither this Agreement nor any interest under
this Agreement shall be assignable by any Party without the prior written
consent of the other Party, except that the Buyers may freely assign its
interest under this Agreement to any of their Affiliates. This Agreement shall be binding upon the
successors and permitted assigns of the Parties and the name of a Party to this
Agreement appearing herein shall be deemed to include the names of such Party’s
successors and permitted assigns to the extent necessary to carry out the
intent of this Agreement. Any assignment
not in accordance with this Section 3.2 shall be void.
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3.3. Further
Actions. Each party to this
Agreement agrees to execute, acknowledge and deliver such further instruments,
and to do all such other acts, as may be necessary or appropriate in order to
carry out the purposes and intent of the Agreement.
3.4. Correspondence
and Notices. Correspondence,
reports, documentation, and any other communication in writing between the
Parties in the course of ordinary implementation of this Agreement shall be
delivered by hand, sent by facsimile transmission (receipt verified), or by
nationally recognized overnight delivery service to the employee or
representative of the other Party who is designated by such other Party to
receive such written communication.
3.5. Amendment. No amendment, modification or supplement of
any provision of this Agreement shall be valid or effective unless made in
writing and signed by a duly authorized officer of each Party.
3.6. Waiver. No provision of the Agreement shall be waived
by any act, omission or knowledge of a Party or its agents or employees except
by an instrument in writing expressly waiving such provision and signed by a
duly authorized officer of the waiving Party.
3.7. Severability. If any clause or portion thereof in this
Agreement is for any reason held to be invalid, illegal or unenforceable, the
same shall not affect any other portion of this Agreement, as it is the intent
of the Parties that this Agreement shall be construed in such fashion as to
maintain its existence, validity and enforceability to the greatest extent
possible. In any such event, this
Agreement shall be construed as if such clause of portion thereof had never
been contained in this Agreement, and there shall be deemed substituted therefore
such provision as will most nearly carry out the intent of the Parties as
expressed in this Agreement to the fullest extent permitted by applicable law.
3.8. Descriptive
Headings. The descriptive headings of this Agreement
are for convenience only and shall be of no force or effect in construing or
interpreting any of the provisions of this Agreement.
3.9. Entire
Agreement. This Agreement constitutes and contains the
complete, final and exclusive understanding and agreement of the Parties and
cancels and supersedes any and all prior negotiations, correspondence,
understandings and agreements, whether oral or written, between the Parties
respecting the subject matter hereof and thereof.
3.10. Counterparts. This Agreement may be executed in any number
of counterparts, each of which need not contain the signature of more than one
Party but all such counterparts taken together shall constitute one and the
same agreement.
3.11. No
Third Party Rights or Obligations. No
provision of this Agreement shall be deemed or construed in any way to result
in the creation of any rights or obligation in any Person not a Party to this
Agreement.
3.12. Governing
Law. This Agreement, the rights of the parties and
all claims arising in whole or in part under or in connection herewith, will be
governed by and construed in accordance with the substantive laws in effect in the
State of Delaware, without giving effect to
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any choice or
conflict of law provision or rule that would cause the application of the laws
of any other jurisdiction.
3.13. Jurisdiction;
Venue; Service of Process.
3.13.1. Jurisdiction. Each party to this Agreement, by its
execution hereof, (a) hereby irrevocably submits to the exclusive jurisdiction
of the state courts of the State of Delaware for the purpose of any claim
between the parties arising in whole or in part under or in connection with
this Agreement, (b) hereby waives to the extent not prohibited by applicable
law, and agrees not to assert, by way of motion, as a defense or otherwise, in
any such claim, any claim that it is not subject personally to the jurisdiction
of the above-named courts, that its property is exempt or immune from
attachment or execution, that any such claim brought in one of the above-named
courts should be dismissed on grounds of forum non conveniens,
should be transferred or removed to any court other than one of the above-named
courts, or should be stayed by reason of the pendency of some other proceeding
in any other court other than one of the above-named courts, or that this
Agreement or the subject matter hereof may not be enforced in or by such court
and (c) hereby agrees not to commence any such claim other than before one of
the above-named courts. Notwithstanding
the previous sentence, a party may commence any such claim in a court other
than the above-named courts solely to seek pre-litigation attachment of assets
or preliminary injunction relief prior to litigation on the merits in the
above-named courts or for the purpose of enforcing an order or judgment issued
by one of the above-named courts.
3.13.2. Venue. Each
party agrees that for any claim between the parties arising in whole or in part
under or in connection with this Agreement, such party bring claims only in the
State of Texas. Each party further
waives any claim and will not assert that venue should properly lie in any
other location within the selected jurisdiction.
3.13.3. Service of Process. Each party hereby (a) consents to service of
process respecting any claim between the parties arising in whole or in part
under or in connection with this Agreement in any manner permitted by Delaware
law, (b) agrees that service of process made in accordance with clause (a) or
made by registered or certified mail, return receipt requested, at its address
specified pursuant to Section 3.4, will constitute good and valid service of
process in any such claim and (c) waives and agrees not to assert (by way of
motion, as a defense, or otherwise) in any such claim any claim that service of
process made in accordance with clause (a) or (b) does not constitute good and
valid service of process.
3.14. Waiver
of Jury Trial. TO THE EXTENT
NOT PROHIBITED BY APPLICABLE LAW THAT CANNOT BE WAIVED, THE PARTIES HEREBY
WAIVE, AND COVENANT THAT THEY WILL NOT ASSERT (WHETHER AS PLAINTIFF, DEFENDANT
OR OTHERWISE), ANY RIGHT TO TRIAL BY JURY IN ANY ACTION ARISING IN WHOLE OR IN
PART UNDER OR IN CONNECTION WITH THIS AGREEMENT, WHETHER NOW EXISTING OR
HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE. THE PARTIES AGREE THAT ANY OF THEM MAY FILE A
COPY OF THIS PARAGRAPH WITH ANY COURT AS WRITTEN
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EVIDENCE OF
THE KNOWING, VOLUNTARY AND BARGAINED-FOR AGREEMENT AMONG THE PARTIES
IRREVOCABLY TO WAIVE ITS RIGHT TO TRIAL BY JURY IN ANY PROCEEDING WHATSOEVER
BETWEEN THEM RELATING TO THIS AGREEMENT WILL INSTEAD BE TRIED IN A COURT OF
COMPETENT JURISDICTION BY A JUDGE SITTING WITHOUT A JURY.
3.15. Specific
Performance. The parties to
this Agreement agree that if any of the provisions of this Agreement were not
performed in accordance with their specific terms, or were otherwise breached,
irreparable damage may occur which would be extremely impractical or difficult
to measure and that as a result no adequate remedy of law may exist;
accordingly the non-defaulting party, in addition to any other available rights
or remedies, shall have the right to seek, in a court of competent
jurisdiction, specific performance of the terms of this Agreement.
[SIGNATURE
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