Published on January 4, 2006
ASSIGNMENT AGREEMENT
This Assignment Agreement (the "Assignment") is made as of December 28,
2005 by and among Patient Safety Technologies, Inc., a Delaware corporation
formerly known as Franklin Capital Corporation, as assignor (the "Assignor"),
Alan Morelli, as assignee ("Assignee"), and Digicorp, a Utah corporation (the
"Company"). This Assignment memorializes an enforceable verbal agreement entered
into between Assignor and Assignee on or around September 15, 2005.
WITNESSETH:
WHEREAS, on or about December 30, 2004, the Assignor entered into that
certain Stock Purchase Agreement dated as of December 29, 2004 (the "Purchase
Agreement") with the shareholders of the Company, set forth in Section A of the
signature page thereto (the "Principal Shareholders"), and the shareholders of
the Company set forth in Section B of the signature page thereto (the "Other
Shareholders," and together with the Principal Shareholders, the "Sellers");
WHEREAS, simultaneously with the execution of this Assignment, the
Assignor, certain of the Sellers are entering into Amendment No. 1 to the
Purchase Agreement (the "Amendment Agreement");
WHEREAS, the parties hereto desire to assign certain obligations of
Assignor pursuant to the terms of the Purchase Agreement, as amended by the
Amendment Agreement, to Assignee;
WHEREAS, as an inducement and a condition to entering into this Assignment
the Assignor, certain of the Sellers are entering into the Amendment Agreement;
and
WHEREAS, pursuant to the terms hereof, the Company desires to grant the
Assignor and Assignee registration rights with respect to the resale of the
Registrable Shares;
NOW, THEREFORE, in consideration of and for the mutual promises and
covenants contained herein, and for other good and valuable consideration, the
receipt of which is hereby acknowledged, the parties hereto hereby agree as
follows:
1. All capitalized terms not defined herein shall have the meanings
ascribed to such terms in the Purchase Agreement.
2. For value received, Assignor assigns and transfers to Assignee the
obligation of Assignor pursuant to the Purchase Agreement, as amended by the
Amendment Agreement, to purchase one million (1,000,000) of the Registrable
Shares, subject to all the conditions and terms contained in the Purchase
Agreement, as amended by the Amendment Agreement. Subject to the terms of this
Assignment and the terms of the Purchase Agreement, as amended by the Amendment
Agreement, the Assignor shall purchase two hundred twenty-four thousand
(224,000) of the Registrable Shares from the Sellers identified on Schedule I
hereto and the Assignee shall purchase one million (1,000,000) of the
Registrable Shares from the Sellers identified on Schedule I. A copy of the
Purchase Agreement is attached hereto as Exhibit A and made a part hereof by
reference.
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3. The obligations of the parties hereto are subject to and conditioned
upon the execution of the Amendment Agreement. A copy of the Amendment Agreement
is attached hereto as Exhibit B and made a part hereof by reference.
4. (a) If at any time after execution of this Assignment by all parties
hereto the Company shall determine to file with the United States Securities and
Exchange Commission (the "Commission") a registration statement (the
"Registration Statement") relating to an offering for its own account or the
account of others under the Securities Act of 1933, as amended (the "Securities
Act"), of any of its equity securities (other than on Form S-4 or Form S-8 or
their then equivalents relating to equity securities to be issued solely in
connection with an acquisition of any entity or business or equity securities
issuable in connection with employee benefit plans), the Company shall include
in such Registration Statement all of the Registrable Shares. The Company shall
use its best efforts to cause the Registration Statement to be declared
effective by the Commission as promptly as possible after the filing thereof and
shall use its best efforts to keep the Registration Statement continuously
effective under the Securities Act until the Registrable Shares have been sold
pursuant to the Purchase Agreement, as amended by the Amendment Agreement (the
"Effectiveness Period").
(b) In connection with the Company's registration obligations
hereunder, the Company shall: (i) prepare and file with the Commission such
amendments, including post-effective amendments, to the Registration Statement
and the prospectus used in connection therewith as may be necessary to keep the
Registration Statement continuously effective as to the Registrable Shares for
the Effectiveness Period; (ii) cause the related prospectus to be amended or
supplemented by any required prospectus supplement, and as so supplemented or
amended to be filed pursuant to Rule 424 promulgated under the Securities Act;
(iii) respond as promptly as reasonably possible to any comments received from
the Commission with respect to the Registration Statement or any amendment
thereto; and (iv) comply in all material respects with the provisions of the
Securities Act and the Securities Exchange Act of 1934, as amended, with respect
to the disposition of all Registrable Shares covered by the Registration
Statement during the applicable period in accordance with the intended methods
of disposition by the Assignor and Assignee set forth in the Registration
Statement as so amended or in such prospectus as so supplemented.
(c) The Company shall promptly deliver to the Assignor and Assignee,
without charge, as many copies of the final prospectus or final prospectuses and
each amendment or supplement thereto as they may reasonably request.
(d) The Company shall cooperate with the Assignor and Assignee to
facilitate the timely preparation and delivery of certificates representing the
Registrable Shares to be delivered to a transferee pursuant to the Registration
Statement, which certificates shall be free, to the extent permitted by law, of
all restrictive legends, and to enable such Registrable Shares to be in such
denominations and registered in such names as the Assignor or Assignee may
request.
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(e) The Company shall pay all fees and expenses incident to the
performance of or compliance with this Section 4, including: (i) all
registration and filing fees and expenses, including without limitation those
related to filings with the Commission; and (ii) printing expenses (including
without limitation expenses of printing certificates for Registrable Shares and
of printing prospectuses requested by the Assignor or Assignee).
5. Assignor agrees to indemnify, defend, and hold harmless the Assignee
and his agents, heirs, executors, administrators, successors and assigns (each
an "Indemnified Party", as applicable), against and in respect of all losses,
liabilities, obligations, damages, deficiencies, actions, suits, proceedings,
demands, assessments, orders, judgments, costs and expenses (including the
reasonable fees, disbursements and expenses of attorneys and consultants) of any
kind or nature whatsoever, but net of the proceeds from any insurance policies
or other third party reimbursement for such loss, to the extent sustained,
suffered or incurred by or made against any Indemnified Party, to the extent
based upon, arising out of or in connection with any claim which arises in
connection with the sale of the Shares (defined in the Purchase Agreement) sold
to the Assignee pursuant to the Purchase Agreement. The foregoing indemnity
agreement is in addition to any liability the Issuer may have by law or
otherwise.
6. This Assignment shall be construed and interpreted in accordance with
the laws of the State of California without giving effect to the conflict of
laws rules thereof or the actual domiciles of the parties.
7. This Assignment may be executed in one or more counterparts, each of
which shall be deemed an original and all of which taken together shall
constitute a single Assignment.
IN WITNESS WHEREOF, the parties have executed this Assignment as of the
day and year first written above.
ASSIGNOR:
PATIENT SAFETY TECHNOLOGIES, INC.
(FORMERLY, FRANKLIN CAPITAL CORPORATION)
By: /s/ Milton "Todd" Ault III
------------------------------------
Milton "Todd" Ault III
Chairman and Chief Executive Officer
ASSIGNOR:
/s/ Alan Morelli
----------------------------------------
Alan Morelli
[SIGNATURES CONTINUE ON FOLLOWING PAGE]
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DIGICORP
By: /s/ William B. Horne
------------------------------------
William B. Horne
Chief Executive Officer
[CONSENT OF SELLERS IS INCLUDED ON FOLLOWING PAGE]
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CONSENT OF SELLERS
The undersigned Sellers identified in the above Assignment of certain
obligations pursuant to the Purchase Agreement (defined above), as amended by
the Amendment Agreement (defined above), hereby consent to that Assignment.
Dated: Dec. 21, 2005 /s/ Don J. Colton
----------------------------------------
Don J. Colton
Dated: Dec. 21, 2005 /s/ Gregg B. Colton
----------------------------------------
Gregg B. Colton
AMERICAN DRILLING SERVICES
Dated: Dec. 21, 2005 By: /s/ Don J. Colton
------------------------------------
Don J. Colton
President
VERNAL WESTERN DRILLING
Dated: Dec. 21, 2005 By: /s/ Gregg B. Colton
------------------------------------
Gregg B. Colton
President
Dated: Dec. 22, 2005 /s/ Norman Sammis
----------------------------------------
Norman Sammis
Dated: __________, 2005 /s/ Glenn W. Stewart
----------------------------------------
Glenn W. Stewart
[SIGNATURES OF SELLERS CONTINUE ON FOLLOWING PAGE]
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PIONEER OIL AND GAS
Dated: Dec. 21, 2005 By: /s/ Don J. Colton
------------------------------------
Don J. Colton
President
Dated: Dec. 29, 2005 /s/ Andrew Buffmire
----------------------------------------
Andrew Buffmire
WHISPER INVESTMENT CO.
Dated: __________, 2005 By: /s/ Todd Groskreutz
------------------------------------
Todd Groskreutz
Manager
Dated: Dec. 22, 2005 /s/ John B. Hall
----------------------------------------
John B. Hall
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Schedule I
Allocation of Registrable Shares
Alan Morelli:
Holder of Number of
Registrable Registrable
Shares Shares
- ----------- -----------
Don J. Colton 248,775
Vernal Western Drilling 408,497
Gregg B. Colton 268,423
Norman Sammis 14,869
Glenn W. Stewart 14,869
Andrew Buffmire 44,567
-----------
Total 1,000,000
===========
Patient Safety Technologies, Inc.:
Holder of Number of
Registrable Registrable
Shares Shares
- ----------- -----------
Don J. Colton 55,725
Vernal Western Drilling 91,503
Gregg B. Colton 60,127
Norman Sammis 3,331
Glenn W. Stewart 3,331
Andrew Buffmire 9,983
-----------
Total 224,000
===========
Exhibit A
Purchase Agreement
Exhibit B
Amendment Agreement