* CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. REDACTED PORTIONS OF THIS EXHIBIT ARE MARKED
BY AN [_].
Exhibit 4.32
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ASSET PURCHASE AGREEMENT
------------------------
TABLE OF CONTENTS
ARTICLE 1 INTERPRETATION.................................................................................1
1.1 Defined Terms.....................................................................,.............1
1.2 Best of Knowledge...............................................................................5
1.3 Schedules.......................................................................................5
1.4 Currency........................................................................................5
1.5 Choice of Law and Attornment....................................................................5
1.6 Interpretation Not Affected by Headings or Party Drafting.......................................5
1.7 Number and Gender...............................................................................5
1.8 Time of Essence.................................................................................6
ARTICLE 2 PURCHASE AND SALE..............................................................................6
2.1 Purchased Assets................................................................................6
2.2 Assumption of Obligations.......................................................................6
2.3 Purchase Price..................................................................................6
2.4 Payment of Purchase Price.......................................................................6
2.5 Set-Off.........................................................................................7
2.6 Allocation of Purchase Price....................................................................7
2.7 Payment of Taxes................................................................................7
2.8 GST Election....................................................................................7
2.9 Property Taxes..................................................................................8
2.10 Obligations and Liabilities Not Assumed.........................................................8
ARTICLE 3 REPRESENTATIONS AND WARRANTIES.................................................................8
3.1 Representations and Warranties by Vendor........................................................8
3.2 Representations and Warranties by Purchaser....................................................15
ARTICLE 4 SURVIVAL AND LIMITATIONS OF REPRESENTATIONS AND
WARRANTIES..............................................................................................17
4.1 Survival of Warranties by Vendor...............................................................17
4.2 Survival of Warranties by Purchaser............................................................17
4.3 Limitations on Warranty Claims.................................................................17
ARTICLE 5 COVENANTS.....................................................................................18
5.1 Covenants by Vendor............................................................................18
5.2 Covenants by Purchaser.........................................................................19
5.3 Cooperation on Tax Matters.....................................................................19
ARTICLE 6 CONDITIONS....................................................................................20
6.1 Conditions to Obligations of Purchaser.........................................................20
6.2 Waiver or Termination by Purchaser.............................................................21
6.3 Conditions to Obligations of Vendor............................................................21
6.4 Waiver or Termination by Vendor................................................................22
ARTICLE 7 CLOSING.......................................................................................23
7.1 Closing Arrangements...........................................................................23
7.2 Documents to be Delivered......................................................................23
7.3 Possession and Risk............................................................................23
7.4 Post-Completion Administration.................................................................23
7.5 Preservation of Documents......................................................................24
ARTICLE 8 RIGHT OF FIRST REFUSAL........................................................................24
8.1 Right of First Refusal.........................................................................24
8.2 Survival.......................................................................................25
8.3 Assignment.....................................................................................26
ARTICLE 9 GENERAL PROVISIONS............................................................................26
9.1 Confidential Information.......................................................................26
9.2 Further Assurances.............................................................................26
9.3 Remedies Cumulative.....................................,......................................26
9.4 Notices........................................................................................26
9.5 Counterparts...................................................................................27
9.6 Expenses of Parties............................................................................27
9.7 Brokerage and Finder's Fees....................................................................28
9.8 Announcements..................................................................................28
9.9 Assignment.....................................................................................28
9.10 Successors and Assigns.........................................................................28
9.11 Entire Agreement...............................................................................28
9.12 Waiver.........................................................................................28
9.13 Amendments.....................................................................................29
SCHEDULES
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Schedule A - Purchased Assets
Schedule B - Allocation of Purchase Price
Schedule C - List of Employees and Consultants
Schedule D - Manufacturing Supply Agreement
Schedule E - Promissory Notes
Schedule F - Security Agreement
Schedule G - Vendor's Bring Down Certificate
Schedule H - Purchaser's Bring Down Certificate
Schedule I - Employment Offer Letter
ASSET PURCHASE AGREEMENT
THIS AGREEMENT dated the 1st day of September, 0000,
XXXXX:
KS AVICENNA INC., a corporation amalgamated under the laws of the
Province of Alberta (the "VENDOR")
-and -
QSV BIOLOGICS LTD., a corporation incorporated under the laws of
the Province of Alberta (the "PURCHASER")
WHEREAS the Vendor wishes to sell, and the Purchaser wishes to purchase the
Purchased Assets upon the terms and subject to the conditions hereinafter
contained;
NOW THEREFORE in consideration of the premises and the mutual agreements and
covenants herein contained, the Parties hereto hereby covenant and agree as
follows:
ARTICLE 1
INTERPRETATION
1.1 DEFINED TERMS
In this Agreement and in the schedules hereto, unless there is something in the
subject matter or context inconsistent therewith, the following terms and
expressions will have the following meanings:
(a) "AFFILIATE" of any person means any corporation which, directly or
indirectly, is controlled by, controls or is under direct or
indirect common control with such person;
(b) "APPLICABLE LAW" means the applicable provisions of any law,
by-law, statute, regulation, rule, ordinance, policy, order,
information letter, general bulletin, guideline criteria or
directive enacted or issued by any governmental or regulatory body
or other duly constituted public authority (whether legislative,
administrative or executive) having jurisdiction over the Vendor
or the Assets, and includes, without limitation, the applicable
provisions of any permit, licence, approval or other governmental
or regulatory authorization issued to the Vendor in respect of the
Assets or any of them;
(c) "ASSUMED CONTRACTS" means the contracts described in Exhibit 3 to
Schedule A;
(d) "ASSUMED LIABILITIES" means all obligations and liabilities
accruing after the close of business on the day before the Closing
Date under the Assumed Contracts;
(e) "BALANCE SHEET" means the balance sheet of the Vendor as at the
Balance Sheet Date;
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(f) "BALANCE SHEET DATE" means December 31, 2003;
(g) "BUSINESS" means the business of providing fermentation-based
research and biopharmaceutical development and production services
and manufacturing of biologies carried on by the Vendor, and
includes all goodwill associated with such Business;
(h) "BUSINESS DAY" means any day other than a day which is a Saturday,
a Sunday or a statutory holiday in Alberta;
(i) "CLOSING DATE" means September 1, 2004, or such other date as the
Vendor and Purchaser may agree upon;
(j) "CLOSING TIME" means 12:01 a.m. in Edmonton, Alberta on the
Closing Date or such other time on the Closing Date as the Vendor
and the Purchaser may agree upon;
(k) "DEFERRED PURCHASE PRICE AMOUNT" means the sum of $2,000,000;
(1) "ENVIRONMENTAL LAWS" means any Applicable Law relating to
protection of the environment, persons or the public welfare from
actual or potential exposure (or the effects of exposure) to any
actual or potential release, discharge, spill or emission (whether
past or present) of, or regarding the manufacture, processing,
production, gathering, transportation, handling, use, treatment,
storage or disposal of, any chemical raw material, pollutant,
contaminant or toxic, corrosive or hazardous substance or waste;
(m) "FACILITY" means the freehold property and interests therein
described in Exhibit 1 to Schedule A, including the freehold
property and interests therein described in Exhibit 1 to Schedule
A, including all rights of way, licences or rights of occupation
or easements used in the operation of the Business in connection
with such freehold property, and all plant, buildings, structures,
erections, improvements, appurtenances and fixtures situate on or
forming part of such property;
(n) "GOVERNMENTAL AUTHORITY" means any domestic or foreign
legislative, executive, judicial or administrative body or person
having or purporting to have jurisdiction in the relevant
circumstances;
(o) "HAZARDOUS SUBSTANCE" means any substance or material that is
prohibited, controlled or regulated by any Governmental Authority
pursuant to Environmental Laws, including pollutants,
contaminants, dangerous goods or substances, toxic or hazardous
substances or materials, wastes (including solid non-hazardous
wastes and subject wastes), petroleum and its derivatives and by
products and other hydrocarbons, all as defined in or pursuant to
any Environmental Law;
(p) "INTELLECTUAL PROPERTY" means unpatented technical and other
information which is not in the public domain including customer
lists, process knowledge, ideas, concepts, inventions,
discoveries, data, formulae, specifications and information
relating to materials;
(q) "INTERIM PERIOD" means the period, if any, from and including the
date of this Agreement to and including the Closing Date;
-3-
(r) "LEASEHOLD PROPERTY" means the Research Centre Lease including all
rights, licenses or rights of occupation or ancillary rights
arising thereunder;
(s) "MANUFACTURING SUPPLY AGREEMENT" means a Manufacturing Supply
Agreement in the form attached hereto as Schedule D;
(t) "MATERIAL" means, with respect to any fact, circumstance, term,
asset, agreement, contract, obligation, liability, financial
position, financial transaction, covenant, sale, disposition,
expenditure, event, change, compliance, breach, violation,
default, action, occurrence or effect (collectively, for the
purposes of this definition, a "fact") in relation to the Vendor,
the Purchased Assets, the Business or the Purchased Assets, a fact
which is material to the Vendor, Assets or Business, as
applicable, taken as a whole, having regard to the size of the
value of the Assets and stage of development of the Business;
(u) "PARTIES" means the Vendor and the Purchaser and "Party" means any
one of them;
(v) "PERMITTED ENCUMBRANCES" means;
(i) the terms and conditions of the Assumed Contracts;
(ii) easements, rights of way, servitudes and similar rights in
land, including rights of way and servitudes for highways
and other roads, railways, sewers, drains, gas and oil
pipelines, gas and water mains, electric light, power,
telephone, telegraph or cable television conduits, poles,
wires and cables and any rights of expropriation, access or
use, or any similar rights conferred or reserved by or in
any statute of Canada or Alberta;
(iii) the right reserved to or vested in any government or other
public authority by the terms of the Research Centre Lease,
or by any statutory provision to terminate such lease, or
to require annual or other periodic payments as a condition
of the continuance thereof;
(iv) the reservations, limitations, provisos and conditions in
any original grant from the Crown of any of the Purchased
Assets or interests therein, and statutory exceptions to
title;
(v) the provisions of governing municipal by-laws, including
those relating to zoning;
(w) "PERSON" means and includes any individual, corporation,
partnership, firm, joint venture, syndicate, association, trust,
government, governmental agency or board or commission or
authority, and any other form of entity or organization;
(x) "PURCHASE PRICE" means the sum of $7,000,000, which is the amount
payable by the Purchaser to the Vendor for all of the Purchased
Assets, as provided herein;
(y) "PURCHASED ASSETS" means the assets owned by the Vendor and
utilized in the conduct of the Business as set forth in Schedule A
and, for greater certainty, includes:
(i) the Facility;
-4-
(ii) the Leasehold Property;
(iii) the Assumed Contracts;
(iv) the facility, process, computer and office equipment,
materials and supplies described in Exhibit 4 to Schedule
A;
(v) the regulatory and documentation systems, including, but
not limited to, all equipment, facility, environmental,
cGMP, validation, utility and personnel files and records
and all information and equipment required to access the
said records and files, all as more particularly described
in Exhibit 5 to Schedule A;
(vi) the Intellectual Property described in Exhibit 6 to
Schedule A;
(vii) inventoried raw materials and spare parts, including, but
not limited to, certain chromatographic resins, membrane
filters, assay reagents, analytical HPLC columns, all as
described in Exhibit 7 to Schedule A, and those spare parts
for utilities, process and analytical equipment described
in Exhibit 7 to Schedule A;
(viii) all paperwork necessary to perform Installation
Qualification, Operational Qualification and Performance
Qualification on utilities, lab equipment, HVAC systems and
other equipment or assets ordered or otherwise acquired by
the Vendor, including but not limited to, purchase
specifications, purchase orders and vendor contact
information described in Exhibit 8 to Schedule A;
(ix) 150L fermenter in the process of being acquired and
installed by the Vendor described in Exhibit 9 to Schedule
A; and
(x) all other property, records, equipment, supplies or other
items described in Exhibit 10 to Schedule A;
but for greater certainty "Purchased Assets" does not include the
Xenova IP;
(z) "RESEARCH CENTRE LEASE" means the lease in the Research Centre 1
described in Exhibit 2 to Schedule A;
(aa) "TRANSMID FACILITY" shall have the meaning set forth for the term
in the Manufacturing Supply Agreement;
(bb) "WARRANTY CLAIM" means a claim made by either the Purchaser or the
Vendor based on or with respect to damages, losses, liabilities or
expenses incurred by such party arising out of or relating to the
inaccuracy or non-performance or non-fulfilment or breach of any
representation or warranty made by the other party contained in
this Agreement or contained in any document or certificate given
in order to carry out the transactions contemplated hereby; and
(cc) "XENOVA IP" means the "XENOVA IP" as defined in the Manufacturing
Supply Agreement.
-5-
1.2 BEST OF KNOWLEDGE
Any reference herein to "the best of the knowledge" of the Vendor or the
Purchaser will mean the actual knowledge of the current directors and senior
officers of the Vendor or the Purchaser, as applicable, and the knowledge which
they would have had if they had conducted a reasonably diligent inquiry into the
relevant subject matter.
1.3 SCHEDULES
The schedules attached to this Agreement are incorporated into this Agreement by
reference and are deemed to be part hereof.
1.4 CURRENCY
Unless otherwise indicated, all dollar amounts referred to in this Agreement are
in lawful money of Canada.
1.5 CHOICE OF LAW AND ATTORNMENT
This Agreement shall be governed by and construed in accordance with the laws of
the Province of Alberta and the laws of Canada applicable therein. The Parties
agree that the courts of the Province of Alberta will have jurisdiction to
determine all disputes and claims arising between the Parties.
1.6 INTERPRETATION NOT AFFECTED BY HEADINGS OR PARTY DRAFTING
The division of this Agreement into articles, sections, paragraphs,
subparagraphs and clauses and the insertion of headings are for convenience of
reference only and shall not affect the construction or interpretation of this
Agreement. The terms "this Agreement", "hereof ", "herein", "hereunder" and
similar expressions refer to this Agreement and the schedules hereto and not to
any particular article, section, paragraph, subparagraph, clause or other
portion hereof and include any agreement or instrument supplementary or
ancillary hereto. Each party hereto acknowledges that it and its legal counsel
have reviewed and participated in settling the terms of this Agreement, and the
Parties hereby agree that any rule of construction to the effect that any
ambiguity is to be resolved against the drafting party shall not be applicable
in the interpretation of this Agreement
1.7 NUMBER AND GENDER
In this Agreement, unless there is something in the subject matter or context
inconsistent therewith:
(a) words in the singular number include the plural and such words
shall be construed as if the plural had been used;
(b) words in the plural include the singular and such words shall be
construed as if the singular had been used; and
(c) words importing the use of any gender shall include all genders
where the context or party referred to so requires, and the rest
of the sentence shall be construed as if the necessary grammatical
and terminological changes had been made.
-6-
1.8 TIME OF ESSENCE
Time shall be of the essence hereof.
ARTICLE 2
PURCHASE AND SALE
2.1 PURCHASED ASSETS
On the terms and subject to the fulfillment of the conditions hereof, the Vendor
hereby agrees to sell, transfer and assign to the Purchaser, and the Purchaser
hereby agrees to purchase and accept from the Vendor the Purchased Assets.
2.2 ASSUMPTION OF OBLIGATIONS
Other than the Assumed Liabilities, the Purchaser is not assuming any debt or
obligations of the Vendor. In respect of the Assumed Liabilities, the Purchaser
shall, without requirement of any further documentation or acknowledgement,
assume full and several responsibility and liability for the due payment and
satisfaction of all obligations arising under the Assumed Contracts from and
after the Closing Time and shall indemnify and save harmless the Vendor and its
successors and assigns against and from any and all liability, loss, costs,
claims or damages of any nature (including, without limitation, indirect,
consequential and special damages, and legal costs on a solicitor/client basis)
suffered or incurred by the Vendor or any of its successors or assigns in
respect of any such obligations.
The Vendor shall, without requirement of any further documentation or
acknowledgement, assume full and several responsibility and liability for the
due payment and satisfaction of all obligations arising under the Assumed
Contracts prior to the Closing Time. The Vendor shall indemnify and save
harmless the Purchaser and its successors and assigns against and from any and
all liability, loss, costs, claims or damages of any nature (including, without
limitation, indirect, consequential and special damages, and legal costs on a
solicitor/client basis) suffered or incurred by the Purchaser or any of its
successors or assigns in respect of any such obligations;
2.3 PURCHASE PRICE
It is the intention of the Parties hereto that the purchase price payable for
the Purchased Assets shall be an amount equal to the fair market value thereof.
For the purposes hereof, it is agreed by the Parties that the price payable by
the Purchaser to the Vendor for the Purchased Assets, exclusive of any
applicable goods and services tax, will be the sum of $7,000,000.
2.4 PAYMENT OF PURCHASE PRICE
The Purchase Price will be paid as follows:
(a) Concurrently with the execution of this Agreement, the Purchaser
will pay to the Purchaser's solicitor in trust, by certified
cheque or bank draft, the sum of $5,000,000, representing the
Purchase Price less the Deferred Purchase Price Amount (the
"INITIAL PAYMENT").
(b) If the purchase and sale of the Purchased Assets is completed at
the Closing Time, the Initial Payment will be delivered in trust,
by certified cheque, bank draft or solicitor's trust cheque, to
the Vendor's solicitor and applied toward satisfaction of the
Purchase Price.
-7-
(c) On September 1, 2005, the Purchaser will pay to the Vendor, by
certified cheque or bank draft, $1,000,000 of the Deferred
Purchase Price Amount.
(d) On March 1, 2006, the Purchaser will pay to the Vendor, by
certified cheque or bank draft, the remaining $1,000,000 of the
Deferred Purchase Price Amount.
(e) The Deferred Purchase Price Amount shall be evidenced by two
promissory notes of the Purchaser in the form attached hereto as
Schedule E and the payment thereof will be secured by the
Purchaser granting to the Vendor a security interest in the
Purchased Assets pursuant to a security agreement to be delivered
to the Vendor by the Purchaser at the Closing Time in the form
attached hereto as Schedule F.
2.5 SET-OFF
The Purchaser shall be entitled, from time to time prior to March 1, 2006, on
notice in writing to the Vendor, to deduct from the final payment of the
Deferred Purchase Price payable pursuant to section 2.4(d), amounts due and
payable to the Vendor under the Manufacturing Supply Agreement in the
circumstances specified in sections 6.8 and 20.3 of the Manufacturing Supply
Agreement.
2.6 ALLOCATION OF PURCHASE PRICE
The Purchase Price shall be allocated among the Purchased Assets in the manner
set out in Schedule B attached hereto. The Vendor and the Purchaser hereby agree
that the amounts so attributed to the Purchased Assets are the respective fair
market values thereof. The Vendor and the Purchaser must each complete all tax
returns, designations and elections in a manner consistent with the such
allocation and otherwise follow such allocation for all tax purposes on and
subsequent to the Closing Date and not take any position inconsistent with such
allocation. If such allocation is disputed by any taxation or other governmental
authority, the party receiving notice of such dispute will promptly notify the
other party and the parties will use their reasonable best efforts to sustain
the allocation. The parties will share information and cooperate to the extent
reasonably necessary to permit the transactions contemplated by this Agreement
to be properly, timely and consistently reported.
2.7 PAYMENT OF TAXES
The Purchaser shall be liable for and shall pay all applicable federal goods and
services taxes, excise taxes and all other taxes (other than income taxes of the
Vendor), duties and other like charges properly payable upon and in connection
with the conveyance and transfer of the Purchased Assets to the Purchaser. The
Purchaser will prepare and file any affidavits or returns required in connection
with the foregoing at its own cost and expense. To the extent that any such
taxes are required to be paid by or are imposed upon the Vendor, the Purchaser
will reimburse, or will cause to be reimbursed, to the Vendor such taxes within
five Business Days of payment of such taxes by the Vendor. All amounts payable
by the Purchaser to the Vendor hereunder do not include such taxes. The Vendor
will do and cause to be done such things as are reasonably requested to enable
the Purchaser to comply with such obligation in an efficient manner.
2.8 GST ELECTION
The Vendor and the Purchaser will, on or before the Closing Time, jointly
execute an election as permitted by Section 167(1) of the Excise Tax Act
(Canada) in the prescribed form and containing the prescribed information to
have subsection 167(1.1) of the Excise Tax Act apply to the sale and
-8-
purchase of the Assets hereunder, to the extent applicable, so that no tax is
payable in respect of such sale and purchase under Part IX of the Excise Tax Act
The Purchaser will file such election with the Ministry of National Revenue
within the time prescribed by the Excise Tax Act. The Purchaser will provide the
Vendor with such supporting documentation as the Vendor may reasonably request
in order to confirm that such election has been made and properly filed. The
Purchaser will indemnify the Vendor and the directors, officers, employees and
agents of the Vendor for any losses, damages, expenses, liabilities, claims and
demands of whatever nature incurred by them directly or indirectly as a result
of the Vendor not collecting or remitting any tax under Part IX of the Excise
Tax Act (Canada) in respect of the sale of the Purchased Assets, or pertaining
to any failure of the Purchaser to file such election within the prescribed time
or any failure in acceptance by applicable governmental authorities of that
election. The Purchaser appoints the Vendor as the trustee for the Vendor's
directors, officers, employees and agents of the covenant of the Purchaser with
respect to such persons and the Vendor accepts such appointment,
2.9 PROPERTY TAXES
All real property taxes imposed on or with respect to the Purchased Assets for
the tax year that includes the Closing Date will be prorated between the Vendor
and the Purchaser as of the Closing Date. The Vendor will be liable for the
portion of such taxes based on the number of days in the year occurring prior to
the Closing Date, and the Purchaser will be liable for the portion of such taxes
based on the number of days in the year occurring on and after the Closing Date.
For any year in which an apportionment is required, the Purchaser will file all
required tax returns incident to these taxes assessed for the year in which the
Closing Date occurs that are not paid by the Vendor as of the Closing Date.
2.10 OBLIGATIONS AND LIABILITIES NOT ASSUMED
Except as expressly provided in this Agreement, the Purchaser does not assume
and will not be liable for any obligations or liabilities of the Vendor
whatsoever including any taxes under the Income Tax Act (Canada) or any other
taxes whatsoever that may be or become payable by the Vendor including any
income or corporation taxes resulting from or arising as a consequence of the
sale by the Vendor to the Purchaser of the Purchased Assets hereunder.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES
3.1 REPRESENTATIONS AND WARRANTIES BY VENDOR
The Vendor represents and warrants to the Purchaser as follows, and confirms
that the Purchaser is relying upon the accuracy of each of such representations
and warranties in connection with the purchase of the Purchased Assets and the
completion of the other transactions hereunder:
(a) Corporate Authority and Binding Obligation
------------------------------------------
The Vendor has good right, full corporate power and absolute
authority to enter into this Agreement and to sell, assign and
transfer the Purchased Assets to the Purchaser in the manner
contemplated herein and to perform all of the Vendor's obligations
under this Agreement. The Vendor and its shareholders and board of
directors, have taken all necessary or desirable actions, steps
and corporate and other proceedings to approve or authorize,
validly and effectively, the entering into, and the execution,
delivery and performance of, this Agreement and the sale and
transfer of the Purchased Assets by the Vendor to the Purchaser.
This Agreement is a legal, valid and binding obligation of the
Vendor,
-9-
enforceable against it in accordance with its terms subject to (i)
bankruptcy, insolvency, moratorium, reorganization and other laws
relating to or affecting the enforcement of creditors' rights
generally, and (ii) the fact that equitable remedies, including
the remedies of specific performance and injunction, may only be
granted in the discretion of a court.
(b) Financial
---------
(i) To the best of the knowledge of the Vendor, (A) the books
and records of the Vendor relating to the Business are true
and correct and present fairly and disclose in all material
respects the financial position of the Business (B) all
material financial transactions of the Vendor relating to
the Business have been accurately recorded in such books
and records and (C) to the extent possible, such books and
records have been prepared in accordance with generally
accepted accounting principles consistently applied; in
each case, consistent with a business of comparable asset
size and financial position.
(ii) To the best of the knowledge of the Vendor, the annual
financial statements of the Vendor, consisting of the
Balance Sheet and statements of income, retained earnings
and changes in financial position for the period ended on
the Balance Sheet Date, together with the review engagement
report of PricewaterhouseCoopers LLC, chartered
accountants, thereon and the notes thereto (collectively,
the "FINANCIAL STATEMENTS"), a copy of which was provided
to or otherwise made available to the Purchaser:
A. are in accordance with the books and accounts of the
Vendor as at the Balance Sheet Date;
B. are true and correct and present fairly the
financial position of the Vendor as at the Balance
Sheet Date;
C. have been prepared in accordance with generally
accepted accounting principles consistently applied;
and
D. present fairly all of the assets and liabilities of
the Vendor as at the Balance Sheet Date including
all contingent liabilities of the Vendor as at the
Balance Sheet Date.
in each case, consistent with a business of comparable
asset size and stage of development.
(c) Solvency
--------
The Vendor has not: (i) made a general assignment for the benefit
of creditors; (ii) filed any voluntary petition in bankruptcy or
suffered the filing of any involuntary petition by its creditors;
(iii) suffered the appointment of a receiver to take possession of
any of its assets; (iv) suffered the attachment or other judicial
seizure of all, or substantially all, of its assets; (v) admitted
in writing its inability to pay its debt as they come due; or (vi)
made an offer of settlement, extension or composition to its
creditors generally.
-10-
(d) Litigation; Investigations
--------------------------
To the best of the knowledge of the Vendor, there is no claim,
action, proceeding or investigation pending or threatened against
or relating to the Vendor or affecting any of the Purchased Assets
before any court or Governmental Authority or regulatory authority
or body, nor to the Vendor's knowledge is there any basis for such
claim, action, proceeding or investigation. Neither the Vendor nor
any of its assets and properties, is subject to any material
outstanding judgment, order, writ, injunction or decree.
(e) Environmental Matters
---------------------
(i) To the best of the knowledge of the Vendor (A) the
Business, as carried on by the Vendor, and the Assets are
in compliance in all material respects with all
Environmental Laws and (B) there are no facts known after
due inquiry by the Vendor that could give rise to a notice
of non-compliance in any material respect with any
Environmental Law.
(ii) To the best of the knowledge of the Vendor, the Vendor has
not used any of the facilities pertaining to the Business,
or permitted them to be used, to generate, manufacture,
refine, treat, transport, store, handle, dispose, transfer,
produce or process Hazardous Substances except in
compliance in all material respects with all Environmental
Laws.
(iii) To the best of the knowledge of the Vendor, there are no
PCB's, asbestos, urea formaldehyde foam insulation or
radioactive materials located on the Facility or the
Leasehold Property.
(iv) To the best of the knowledge of the Vendor, there has been
no material spill or leakage of any Hazardous Substance
(including, without limitation, active pharmaceutical
ingredients or transferrin) on the Facility or Leasehold
Property. For the purpose of this section, "material" means
any spill or leakage on any day in excess of 1L.
(v) To the best of the knowledge of the Vendor, the Vendor has
not been threatened with prosecution for or convicted of an
offence or been subjected to any judgment, injunction or
other proceeding or been otherwise sentenced for
non-compliance with any Environmental Laws, and it has not
settled any prosecution or other proceeding short of
conviction in connection therewith, in relation to the
Business.
(vi) To the best of the knowledge of the Vendor, the Vendor has
not received written notice, and does not have knowledge of
any facts that could give rise to any notice, that the
Vendor is potentially responsible for any material remedial
action under any Environmental Law in connection with the
Business.
(f) Zoning and Other Matters Relating to Real Property
--------------------------------------------------
(i) To the best of the knowledge of the Vendor (A) the
Facility, the Leasehold Property and the operation and
maintenance thereof, as now operated and maintained, comply
in all material respects with Applicable Law, municipal or
otherwise; (B) none of such buildings or other structures
encroaches upon any land not owned or leased by the
-11-
Vendor; and (C) there are no restrictive covenants,
municipal by-laws or other laws which in any material
respect restrict or prohibit the use of the Facility or the
buildings on the Leasehold Property for the purposes for
which it is presently being used. For greater certainty,
the Purchaser acknowledges that the "TransMID Facility" has
not been validated.
(ii) To the best of the knowledge of the Vendor, the real
property and leased premises comprising the Purchased
Assets are zoned to permit their current uses and all
buildings and other structures comprising the Purchased
Assets comply in all material respects with the bylaws and
building codes of each municipality in which they are
situate.
(iii) To the best of the knowledge of the Vendor, there are no
work orders, deficiency notices, notices of violation or
other written notices from any Governmental Authority or
board of fire insurance underwriters advising of any
violation or breach of Applicable Law and stating that any
repair, work or change is necessary or required to the
Facility or any improvements thereon, nor stating that the
Vendor is not entitled to carry out any of the activities
carried out in the Facility or any improvements thereon in
the manner that such are currently carried out. For greater
certainty, the Purchaser acknowledges that the TransMID
Facilities have not been validated, but the Vendor has
retained the services of KMI Parexel for the purposes of
performing such validation.
(g) Contracts and Commitments
-------------------------
(i) To the best of the knowledge of the Vendor, the Vendor is
not in default or breach in any material respect of any
contract referred to in Exhibit 3 to Schedule A and there
exists no condition, event or act that, with the giving of
notice or lapse of time or both, would constitute such a
default or breach, and all such contracts are in full force
and effect in all material respects.
(ii) To the best of the knowledge of the Vendor, the Vendor is
not a party to or bound by any guarantee, indemnification,
surety or similar obligation pertaining to the Business.
(h) Intellectual Property
---------------------
(i) The Xenova IP and the Intellectual Property listed in
Exhibit 6 to Schedule A includes all of the Intellectual
Property used in or required for the carrying on of the
Business.
(ii) Xenova Limited has the right to licence the Purchaser to
use the Xenova IP.
(iii) The Vendor is not a party to any contract or commitment to
pay any royalty, licence or other fee with respect to the
use of the Xenova IP or the Intellectual Property listed in
Exhibit 6 to Schedule A, except as set out in Exhibit 6 to
Schedule A.
(iv) No consents are required in order for Xenova Limited to
grant to the Purchaser, pursuant to the Manufacturing
Supply Agreement, a
-12-
non-exclusive licence to use the Xenova IP, except as set
out in Exhibit 6 to Schedule A.
(v) To the best of the knowledge of the Vendor, the Xenova IP
is not invalid or unenforceable and no infringement, misuse
or misappropriation of the Xenova IP has occurred.
(i) Employees
---------
(i) The Vendor is not a party to or bound by any contract or
commitment to pay any management fee pertaining to the
Business except as disclosed in Schedule C.
(ii) The Vendor does not have any written employment contract or
consulting contract relating to the Business with any
person whomsoever except as disclosed in Schedule C.
(iii) Schedule C sets out:
A. the names of all employees or consultants of the
Business;
B. their annual salary or remuneration;
C. their job title;
D. whether any such employees are on any approved or
statutory leave of absence and, if so, the reason
for the absence.
(iv) The Vendor is not bound by or a party to any collective
bargaining agreement relating to the Business.
(v) To the best of the knowledge of the Vendor, no trade union,
council of trade unions, employee bargaining agency or
affiliated bargaining agent:
A. holds bargaining rights with respect to any
employees of the Business by way of certification,
interim certification, voluntary recognition,
designation or successor rights;
B. has applied to be certified as the bargaining agent
of any employees of the Business; or
C. has applied to have the Vendor declared a related
employer or successor employer pursuant to
applicable labour legislation,
(vi) To the best of the knowledge of the Vendor, there are no
actual, threatened or pending organizing activities of any
trade union, council of trade unions, employee bargaining
agency or affiliated bargaining agent or any actual,
threatened or pending unfair labour practice complaints,
strikes, work stoppages, picketing, lock-outs,
hand-xxxxxxxx, boycotts, slowdowns, arbitrations,
grievances, complaints, charges or similar labour related
disputes or proceedings pertaining to the Business, and
there have not been any such activities or disputes or
proceedings within the last year, except as disclosed in
Schedule C.
-13-
(vii) To the best of the knowledge of the Vendor, all material
vacation pay for employees of the Business is properly
reflected and accrued in the books and accounts of the
Vendor.
(viii) Since July 22, 2004, there have been no changes in the
terms and conditions of employment of any employees of the
Business, including their salaries, remuneration and any
other payments to them, and there have been no changes in
any remuneration payable or benefits provided to any
officer, director, consultant or independent or dependent
contractor of the Business, and the Vendor has not agreed
or otherwise become committed to change any of the
foregoing since that date.
(j) Benefit Plans
-------------
(i) To the best of the knowledge of the Vendor, Schedule C
contains a list of every material benefit plan, program,
agreement or arrangement (whether written or unwritten)
maintained, contributed to, or provided by the Vendor or
any Affiliate thereof for the benefit of any employees or
dependent or independent contractors of the Business or
their respective dependants or beneficiaries (the "BENEFIT
PLANS") including all material bonus, deferred
compensation, incentive compensation, share purchase, share
option, stock appreciation, phantom stock, savings, profit
sharing, severance or termination pay, health or other
medical, life, disability or other insurance (whether
insured or self-insured), supplementary unemployment
benefit, pension, retirement and supplementary retirement
plans, programs, agreements and arrangements.
(ii) To the best of the knowledge of the Vendor, Schedule C
contains a list of all material compensation policies and
practices of the Vendor ("COMPENSATION POLICIES")
applicable to employees and dependent and independent
contractors of the Business.
(iii) The Vendor has delivered or otherwise made available to the
Purchaser a copy of all Benefit Plans and Compensation
Policies listed in Schedule C and, to the knowledge of the
Vendor, all amendments thereto (it being acknowledged that,
in the case of health or other medical, life, disability or
other insurance, this representation and warranty is
subject to the terms and conditions of the insurance
policies) together with a full description of such Benefit
Plans and Compensation Policies which, to the best of the
knowledge of the Vendor, have been provided to present
participants therein.
(iv) To the best of the knowledge of the Vendor, (A) no fact,
condition or circumstance exists that would materially
affect the information contained in the documents referred
to in subsection 3.1(j)(iii) and, (B) in particular, no
promises or commitments have been made by the Vendor to
amend any Benefit Plan or Compensation Policy.
(k) No Other Purchase Agreements
----------------------------
No person has any agreement, option, understanding or commitment,
or any right or privilege (whether by law, pre-emptive or
contractual) capable of becoming an agreement, option or
commitment, for the purchase or other
-14-
acquisition from the Vendor of any of the Purchased Assets, or any
rights or interest therein, other than in the ordinary course of
the Business.
(1) Contractual and Regulatory Approvals
------------------------------------
To the Vendor's knowledge, it is not under any obligation,
contractual or otherwise, to request or obtain the consent of any
person, and no permits, licences, certifications, authorizations
or approvals of, or notifications to, any federal, provincial,
municipal or local government or governmental agency, board,
commission or authority are required to be obtained by the Vendor
to permit the sale and transfer of the Purchased Assets to the
Purchaser.
(m) Status and Governmental Licences
--------------------------------
(i) The Vendor is a corporation duly incorporated and validly
subsisting in all respects under the laws of its
jurisdiction of amalgamation.
(ii) The Vendor holds all necessary licences, registrations and
qualifications from applicable Governmental Authorities in
each jurisdiction in which the nature or conduct of the
Business or any part thereof, or the nature of the
Purchased Assets or any part thereof, makes such
qualification necessary to enable the Purchased Assets to
be owned or leased and the Business to be carried on as now
conducted. For greater certainty the Purchaser acknowledges
that the TransMID Facility has not been validated.
(n) Compliance with Constating Documents, Agreements and Laws
---------------------------------------------------------
The execution, delivery and performance of this Agreement and each
of the other agreements contemplated or referred to herein by the
Vendor, as applicable, and the completion of the transactions
contemplated hereby, will not constitute or result in a violation,
breach or default, or cause the acceleration of any obligations,
under:
(i) any term or provision of any of the articles, by-laws or
other constating documents of the Vendor;
(ii) subject to obtaining any necessary contractual consents,
the terms of any indenture, agreement (written or oral),
instrument or understanding or other obligation or
restriction to which the Vendor is a party or by which it
is bound; or
(iii) subject to obtaining any necessary regulatory consents, to
the knowledge of the Vendor any term or provision of any
licences or any order of any court, governmental authority
or regulatory body or any law or regulation of any
jurisdiction in which the Business is carried on.
(o) Title to Assets
---------------
The Vendor is the owner of the Facility, has a valid leasehold
interest in the Leasehold Property and is the owner of the balance
of the Purchased Assets free and clear of all encumbrances, liens
and interests of others other than the Permitted Encumbrances. No
other person owns any assets which are being
-15-
used in the Business, except for the Xenova IP and personal
property leased by the Vendor that has been identified in Schedule
A - Exhibit 3 hereto.
(p) Complete Conveyance
-------------------
The assets included in the Purchased Assets, together with the
Xenova IP, constitute all or substantially all of the assets used
in carrying on the Business.
{q) Taxes
-----
(i) There are no liens for taxes upon the Assets, except for
statutory liens for current taxes not yet due.
(ii) The Vendor is registered under Part IX of the Excise Tax
Act (Canada) with registration number 86779 7454 RT0001.
(iii) The Vendor is not a non-resident of Canada within the
meaning of the Income Tax Act (Canada).
3.2 REPRESENTATIONS AND WARRANTIES BY PURCHASER
The Purchaser hereby represents and warrants to the Vendor as follows, and
confirms that the Vendor is relying upon the accuracy of each of such
representations and warranties in connection with the sale of the Purchased
Assets and the completion of the other transactions hereunder:
(a) Corporate Authority and Binding Obligation
------------------------------------------
The Purchaser is a corporation duly incorporated and validly
subsisting in all respects under the laws of its jurisdiction of
incorporation. The Purchaser has good right, full corporate power
and absolute authority to enter into this Agreement and to
purchase the Purchased Assets from the Vendor in the manner
contemplated herein and to perform all of the Purchaser's
obligations under this Agreement. The Purchaser and its
shareholders and board of directors have taken all necessary or
desirable actions, steps and corporate and other proceedings to
approve or authorize, validly and effectively, the entering into
of, and the execution, delivery and performance of, this Agreement
and the purchase of the Purchased Assets by the Purchaser from the
Vendor. This Agreement is a legal, valid and binding obligation of
the Purchaser, enforceable against it in accordance with its terms
subject to (i) bankruptcy, insolvency, moratorium, reorganization
and other laws relating to or affecting the enforcement of
creditors' rights generally, and (ii) the fact that equitable
remedies, including the remedies of specific performance and
injunction, may only be granted in the discretion of a court.
(b) Solvency
--------
The Vendor has not: (i) made a general assignment for the benefit
of creditors; (ii) filed any voluntary petition in bankruptcy or
suffered the filing of any involuntary petition by its creditors;
(iii) suffered the appointment of a receiver to take possession of
all, or substantially all, of its assets; (iv) suffered the
attachment or other judicial seizure of all, or substantially all,
of its assets; (v) admitted in writing its inability to pay its
debt as they come due; or (vi) made an offer of settlement,
extension or composition to its creditors generally.
-16-
(c) Litigation: Investigations
--------------------------
To the best of the knowledge of the Purchaser, there is no
material claim, action, proceeding or investigation pending or
threatened against or relating to the Vendor before any court or
Governmental Authority or regulatory authority or body, nor to the
Purchaser's knowledge is there any basis for such claim, action,
proceeding or investigation. Neither the Purchaser nor any of its
assets and properties, is subject to any material outstanding
judgement, order, writ, injunction or decree.
(d) Contractual and Regulatory Approvals
------------------------------------
To the Purchaser's knowledge, it is not under any obligation,
contractual or otherwise to request or obtain the consent of any
person, and no permits, licences, certifications, authorizations
or approvals of, or notifications to, any federal, provincial,
municipal or local government or governmental agency, board,
commission or authority are required to be obtained by the
Purchaser to permit the purchase of the Purchased Assets from the
Vendor.
(e) Compliance with Constating Documents, Agreements and Laws
---------------------------------------------------------
The execution, delivery and performance of this Agreement and each
of the other agreements contemplated or referred to herein
(including, without limitation, the Manufacturing Supply
Agreement, the promissory note referred to in section 6.3(f), the
security agreement referred to in section 6.3(g) and each other
agreement contemplated or referred to in such agreement) by the
Purchaser, and the completion of the transactions contemplated
hereby, will not constitute or result in a violation or breach of
or default under:
(i) any term or provision of any of the articles, by-laws or
other constating documents of the Purchaser;
(ii) subject to obtaining any necessary contractual consents,
the terms of any indenture, agreement (written or oral),
instrument or understanding or other obligation or
restriction to which the Purchaser is a party or by which
it is bound; or
(iii) subject to obtaining any necessary regulatory consents, to
the knowledge of the Purchaser any term or provision of any
licences, registrations or qualification of the Purchaser
or any order of any court, governmental authority or
regulatory body or any applicable law or regulation of any
jurisdiction.
(f) Investment Canada Act
---------------------
The Purchaser is not a "non-Canadian" for purposes of and within
the meaning of the Investment Canada Act.
(g) Excise Tax Act (Canada)
-----------------------
The Purchaser is registered under Part IX of the Excise Tax Act
(Canada) with registration number 855683330RT0001.
-17-
ARTICLE 4
SURVIVAL AND LIMITATIONS OF REPRESENTATIONS AND WARRANTIES
4.1 SURVIVAL OF WARRANTIES BY VENDOR
The representations and warranties made by the Vendor and contained in this
Agreement, or contained in any document or certificate given in order to carry
out the transactions contemplated hereby, will survive the closing of the
purchase of the Purchased Assets provided for herein and, notwithstanding such
closing or any investigation made by or on behalf of the Purchaser or any other
person or any knowledge of the Purchaser or any other person, shall continue in
full force and effect for the benefit of the Purchaser, subject to the following
provisions of this section.
(a) Except as provided in paragraph (b) of this section, no Warranty
Claim may be made or brought by the Purchaser after the date which
is two (2) years following the Closing Date.
(b) Any Warranty Claim which is based upon or relates to the title to
the Assets or which is based upon intentional misrepresentation or
fraud by the Vendor may be made or brought by the Purchaser at any
time.
After the expiration of the period of time referred to in paragraph (a) of this
section, the Vendor will be released from all obligations and liabilities in
respect of the representations and warranties made by the Vendor and contained
in this Agreement or in any document or certificate given in order to carry out
the transactions contemplated hereby except with respect to any claims made by
the Purchaser in writing prior to the expiration of such period and subject to
the rights of the Purchaser to make any claim permitted by paragraph (b) of this
section.
4.2 SURVIVAL OF WARRANTIES BY PURCHASER
The representations and warranties made by the Purchaser and contained in this
Agreement or contained in any document or certificate given in order to carry
out the transactions contemplated hereby will survive the closing of the
purchase and sale of the Purchased Assets provided for herein and,
notwithstanding such closing or any investigation made by or on behalf of the
Vendor or any other person or any knowledge of the Vendor or any other person,
shall continue in full force and effect for the benefit of the Vendor provided
that no Warranty Claim may be made or brought by the Vendor after the date which
is two (2) years following the Closing Date.
4.3 LIMITATIONS ON WARRANTY CLAIMS
(a) The Purchaser shall not be entitled to make a Warranty Claim if
the Purchaser has been advised in writing or otherwise has actual
knowledge prior to the Closing Time of the inaccuracy,
non-performance, non-fulfilment or breach which is the basis for
such Warranty Claim and the Purchaser completes the transactions
hereunder notwithstanding such inaccuracy, non-performance, non-
fulfilment or breach.
(b) No Warranty Claim may be made in respect of any individual
Warranty Claim unless and until the amount of such Warranty Claim
exceeds $25,000.
-18-
(c) Notwithstanding any other provisions of this Agreement or of any
agreement, certificate or other document made in order to carry
out the transactions contemplated hereby, the maximum aggregate
liability of the Vendor together in respect of all Warranty Claims
by the Purchaser will be limited to the Purchase Price.
ARTICLE 5
COVENANTS
5.1 COVENANTS BY VENDOR
The Vendor covenants to the Purchaser that it will do or cause to be done the
following:
(a) Transfer of Purchased Assets
----------------------------
At or before the Closing Time, the Vendor will cause all necessary
steps and corporate proceedings to be taken in order to permit the
Purchased Assets to be transferred to the Purchaser.
(b) General Conveyance
------------------
Immediately following the Closing Time, the Vendor will deliver to
the Purchaser good and marketable title to and exclusive
possession of the Purchased Assets, free and clear of any and all
encumbrances, liens and interests of others other than the
Permitted Encumbrances. At the Closing Time, the Vendor will
execute and deliver to the Purchaser one or more forms of general
conveyance or bills of sale in respect of the assignment,
conveyance, transfer and delivery of the Purchased Assets to the
Purchaser in form acceptable to the Purchaser. The Vendor will
also provide to the Purchaser at or prior to the Closing Time, all
real property reports, surveys and compliance certificates in its
possession.
(c) Discharge of Encumbrances
-------------------------
The Vendor shall obtain, prior to the Closing Time, registrable
discharges of all encumbrances, liens and charges which are
registered against the Purchased Assets which are not Permitted
Encumbrances. In the event that the Vendor is unable to obtain
registrable discharges from the holder of any such Encumbrance
prior to the Closing Time, it shall obtain from each such holder
who has refused to deliver a registrable discharge an undertaking
to discharge any and all Encumbrances relating to the Assets owned
by such holder upon payment of all amounts owing in respect of the
relevant Encumbrance relating to such Assets.
(d) Manufacturing Supply Agreement
------------------------------
On or prior to the Closing Date, the Vendor shall cause Xenova
Limited to execute and deliver to the Purchaser the Manufacturing
Supply Agreement and pay the [_] US deposit as required
thereunder.
-19-
(e) At the Closing Time, the Vendor will remove from the Facility and
the Leasehold Premises, all files and records relating to the
Vendor's predecessor not forming part of the Purchased Assets.
5.2 COVENANTS BY PURCHASER
The Purchaser covenants to the Vendor that it will do or cause to be done the
following:
(a) Manufacturing Supply Agreement
------------------------------
On or prior to the Closing Date, the Purchaser will execute and
deliver to Xenova Limited the Manufacturing Supply Agreement.
(b) Employees
---------
(i) The Purchaser will offer employment, effective on the
opening of business on the Closing Date, to those employees
of the Business whose names are set forth in Part 1 of
Schedule C, on the terms set forth in the offer letter
attached as Schedule I to this Agreement. The offers will
include recognition of the employees' existing contractual
entitlement to notice of termination or pay in lieu of
notice in the event employment is terminated without just
cause.
(ii) The Vendor will terminate the employment of all employees
and all consultants of the Business whose names are set
forth in Part 1 of Schedule C effective on the close of
business on the date immediately preceding the Closing Date
and will continue to be responsible for and will discharge
all obligations and liabilities for wages, severance pay,
termination pay, notice of termination of employment or pay
in lieu of such notice, damages for wrongful dismissal or
other employee benefits or claims, including vacation pay
accrued up to such time. The Purchaser will discharge all
obligations and liabilities accruing after the close of
business on the date immediately preceding the Closing Date
in respect of all employees of the Vendor in the Business
employed by the Purchaser whose names are set forth in Part
1 of Schedule C.
(iii) The Purchaser shall not, during the first 90 days from the
Closing Date, terminate the employment, either by express
notice or by constructive dismissal, of any of the
employees of the Business who have accepted offers of
employment made by the Purchaser as described herein,
except when such termination of employment is for just
cause.
5.3 COOPERATION ON TAX MATTERS
The Vendor and the Purchaser will furnish or cause to be furnished to each
other, each at its own expense, as promptly as practicable, such information and
assistance, and provide additional information and explanations of any material
provided, relating to the Assets as is reasonably necessary for the filing of
any tax returns, for the preparation of any audit, and for the prosecution or
defence of any claim, suit or proceeding relating to any adjustment or proposed
adjustment with respect to taxes.
-20-
ARTICLE 6
CONDITIONS
6.1 CONDITIONS TO OBLIGATIONS OF PURCHASER
Notwithstanding anything herein contained, the obligation of the Purchaser to
complete the transactions provided for herein will be subject to the fulfilment
of the following conditions at or prior to the Closing Time, and the Vendor
covenants to use reasonable commercial efforts to ensure that such conditions
are fulfilled.
(a) Accuracy of Representations and Warranties and Performance of
-------------------------------------------------------------
Covenants
---------
The representations and warranties of the Vendor contained in this
Agreement or in any documents delivered in order to carry out the
transactions contemplated hereby shall be true and accurate on the
date hereof and at the Closing Time with the same force and effect
as though such representations and warranties had been made as of
the Closing Time (regardless of the date as of which the
information in this Agreement or in any schedule or other document
made pursuant hereto is given). In addition, the Vendor shall have
complied in all material respects with all covenants and
agreements herein agreed to be performed or caused to be performed
by them at or prior to the Closing Time. The Vendor shall have
delivered to the Purchaser a certificate in the form of Schedule H
attached hereto confirming such matters.
(b) Material Adverse Changes
------------------------
During the Interim Period there shall have occurred no damage to
or destruction of any material part of the Assets, whether or not
covered by insurance.
(c) No Restraining Proceedings
--------------------------
No order, decision or ruling of any court, tribunal or regulatory
authority having jurisdiction shall have been made, and no action
or proceeding shall be pending or threatened which, in the opinion
of counsel to the Purchaser, is likely to result in an order,
decision or ruling to disallow, enjoin, prohibit or impose any
limitations or conditions on the purchase and sale of the
Purchased Assets contemplated hereby or the right of the Purchaser
to own the Purchased Assets.
(d) Consents
--------
All consents required to be obtained in order to carry out the
transactions contemplated hereby in compliance with all laws and
agreements binding upon the Parties hereto shall have been
obtained.
(e) Manufacturing Supply Agreement
------------------------------
On or prior to the Closing Date Xenova Limited shall have executed
and delivered to the Purchaser the Manufacturing Supply Agreement
and the Purchaser shall have received the [_] deposit required
thereunder.
(f) Financing
---------
At the Closing Time the Purchaser shall have completed its equity
financing with ALMASA Capital Inc.
-21-
(g) Applikon Contract
-----------------
At the Closing Time the Purchaser shall have confirmed that the
Applikon contract for the 150 L fermenter has been fully paid on
terms satisfactory to Applikon and the Purchaser.
(h) Opinion of Vendor's Counsel
----------------------------
At the Closing Time, the Purchaser shall have received an opinion
of legal counsel for the Vendor in form and substance reasonably
satisfactory to the Purchaser's counsel, which opinion may rely on
certificates of one or more senior officers of the Vendor as to
factual matters and may rely upon opinions of local counsel with
respect to matters governed by laws other than the laws of the
Province of Alberta and the federal laws of Canada applicable in
the Province of Alberta.
6.2 WAIVER OR TERMINATION BY PURCHASER
The conditions contained in section 6.1 hereof are inserted for the exclusive
benefit of the Purchaser and may be waived in whole or in part by the Purchaser
at any time. The Vendor acknowledges that the waiver by the Purchaser of any
condition or any part of any condition shall constitute a waiver only of such
condition or such part of such condition, as the case may be, and shall not
constitute a waiver of any covenant, agreement, representation or warranty made
by the Vendor herein that corresponds or is related to such condition or such
part of such condition, as the case may be. If any of the conditions contained
in section 6.1 hereof are not fulfilled or complied with as herein provided, the
Purchaser may, at or prior to the Closing Time at its option, rescind this
Agreement by notice in writing to the Vendor and in such event the Purchaser
shall be released from all obligations hereunder and, unless the condition or
conditions which have not been fulfilled are reasonably capable of being
fulfilled or caused to be fulfilled by the Vendor, then the Vendor shall also be
released from all obligations hereunder.
6.3 CONDITIONS TO OBLIGATIONS OF VENDOR
Notwithstanding anything herein contained, the obligations of the Vendor to
complete the transactions provided for herein will be subject to the fulfilment
of the following conditions at or prior to the Closing Time, and the Purchaser
will use its best efforts to ensure that such conditions are fulfilled.
(a) Accuracy of Representations and Warranties and Performance of
-------------------------------------------------------------
Covenants
---------
The representations and warranties of the Purchaser contained in
this Agreement or in any documents delivered in order to carry out
the transactions contemplated hereby will be true and accurate in
all material respects on the date hereof and at the Closing Time
with the same force and effect as though such representations and
warranties had been made as of the Closing Time (regardless of the
date as of which the information in this Agreement or any such
schedule or other document made pursuant hereto is given). In
addition, the Purchaser shall have complied in all material
respects with all covenants and agreements herein agreed to be
performed or caused to be performed by it at or prior to the
Closing Time. The Purchaser shall have delivered to the Vendor a
certificate in the form of Schedule I attached hereto confirming
such matters.
-22-
(b) No Restraining Proceedings
--------------------------
No order, decision or ruling of any court, tribunal or regulatory
authority having jurisdiction shall have been made, and no action
or proceeding shall be pending or threatened which, in the opinion
of counsel to the Vendor, is likely to result in an order,
decision or ruling, to disallow, enjoin or prohibit the purchase
and sale of the Purchased Assets contemplated hereby.
(c) Consents
--------
All consents required to be obtained in order to carry out the
transactions contemplated hereby in compliance with all laws and
agreements binding upon the Parties hereto shall have been
obtained.
(d) Employees
---------
Effective on the opening of business on the Closing Date, those
employees of the Business set forth in Part 1 of Schedule C shall
have been offered employment by the Purchaser in accordance with
subsection 5.2(b)(i) hereof.
(e) Manufacturing Supply Agreement
------------------------------
On or prior to the Closing Date, the Purchaser shall have executed
and delivered to Xenova Limited the Manufacturing Supply Agreement
(f) Promissory Note
---------------
The Purchaser will have delivered to the Vendor, a promissory note
in the form set out in Schedule E.
(g) Security Agreement
------------------
The Purchaser and the Vendor will have entered into a security
agreement in the form set out in Schedule F.
(h) Opinion of Purchaser's Counsel
------------------------------
At the Closing Time, the Vendor shall have received an opinion of
the legal counsel for the Purchaser in form and substance
reasonably satisfactory to the Vendor's counsel, which opinion may
rely on certificates of senior officers of the Purchaser as to
factual matters and may rely upon opinions of local counsel with
respect to matters governed by laws other than the laws of the
Province of Alberta and the federal laws of Canada applicable in
the Province of Alberta.
6.4 WAIVER OR TERMINATION BY VENDOR
The conditions contained in section 6.3 hereof are inserted for the exclusive
benefit of the Vendor and may be waived in whole or in part by the Vendor at any
time. The Purchaser acknowledges that the waiver by the Vendor of any condition
or any part of any condition shall constitute a waiver only of such condition or
such part of such condition, as the case may be, and shall not constitute a
waiver of any covenant, agreement, representation or warranty made by the
Purchaser herein that corresponds or is related to such condition or such part
of such condition, as the case may be. If any of the conditions contained in
section 6.3 hereof are not fulfilled or complied with as herein provided, the
Vendor may, at or prior to the Closing Time at its option, rescind this
Agreement by notice in writing to the Purchaser and in such event the Vendor
shall
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be released from all obligations hereunder and, unless the condition or
conditions which have not been fulfilled are reasonably capable of being
fulfilled or caused to be fulfilled by the Purchaser, then the Purchaser shall
also be released from all obligations hereunder.
ARTICLE 7
CLOSING
7.1 CLOSING ARRANGEMENTS
Subject to the terms and conditions hereof, the transactions contemplated herein
shall be completed on the Closing Date at the offices of Fraser Xxxxxx Casgrain
LLP at 0000 Xxxxxxxx Xxxxx, 00000-000 Xxxxxx, Xxxxxxxx, Xxxxxxx, X0X 0X0, or at
such other place or places as may be mutually agreed upon by the Vendor and the
Purchaser.
7.2 DOCUMENTS TO BE DELIVERED
(a) At or before the Closing Time: (i) the Vendor shall execute, or
cause to be executed, and shall deliver, or cause to be delivered,
to the Purchaser all documents, instruments and things which are
to be delivered by the Vendor pursuant to the provisions of this
Agreement; and (ii) the Purchaser shall execute, or cause to be
executed, and shall deliver, or cause to be delivered, to the
Vendor all cheques or bank drafts and all documents, instruments
and things which the Purchaser is to deliver or to cause to be
delivered pursuant to the provisions of this Agreement.
(b) At the Purchaser's sole discretion, the Purchaser may obtain at
its sole cost and expense, title insurance, with gap coverage
endorsements, providing for the payment and release of the balance
due to the Vendor on the Closing Date prior to confirmation of all
registrations at the Land Titles Office having been completed, and
notwithstanding the provisions contained in subparagraph 7.2(c).
(c) For greater certainty, all matters of payment, execution and
delivery of documents by the Purchaser and the Vendor to the other
and the registration of the Transfers of Land at the Land Titles
Office shall be deemed to be concurrent requirements, and such
payment, execution and delivery shall not be deemed complete until
everything required that is a condition thereof has been paid,
executed and delivered and until all documents required to be
registered at the Land Titles Office have been registered, subject
however to the provisions of subparagraph 7.2(b).
7.3 POSSESSION AND RISK
Possession and risk of the Assets shall pass to the Purchaser on the Closing
Date.
7.4 POST-COMPLETION ADMINISTRATION
If the purchase and sale contemplated hereby is completed, then until such time
as the Purchaser becomes recognized by third parties as the owner of the
Purchased Assets in the place of the Vendor, the Vendor shall:
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(a) hold and stand possessed of the Purchased Assets as bare trustee
for the benefit of the Purchaser, and receive and hold all
proceeds, benefits and advantages accruing in respect of the
Assets fully for the benefit, use and ownership of the Purchaser,
with the entitlement at any time to commingle any of the same with
its own or any other assets;
(b) within fifteen (15) Business Days of the date of receipt thereof,
deliver to the Purchaser all revenues, proceeds and other benefits
of any nature received by it in respect of the Assets;
(c) in a timely manner deliver to the Purchaser all third party
notices and communications received by it in respect of the
Assets;
(d) in a timely manner deliver to third parties all such notices and
communications as the Purchaser may reasonably request, and all
such monies and other items as the Purchaser may reasonably
provide in respect of the Assets; and
(e) as agent of the Purchaser, do and perform all such acts and
things, and execute and deliver all such agreements, notices and
other documents and instruments, as the Purchaser may reasonably
request for purposes of facilitating the exercise of rights
incidental to the ownership of the Assets;
provided, however, that the Vendor shall not be liable to the Purchaser for any
loss or damage suffered by the Purchaser in connection with the arrangement
established by this section 7.3, except to the extent that such loss or damage
is caused by the Vendor's gross negligence or its willful misconduct, and the
Purchaser shall indemnify and save harmless the Vendor from and against any
liability, losses, costs, claims or damages arising out of the good faith
performance by the Vendor of its obligations under this section 7.3. Nothing in
this section 7.3 contained shall be construed as restricting or limiting in any
manner any of the other covenants, warranties, representations and other
obligations of the Parties hereunder.
7.5 PRESERVATION OF DOCUMENTS
The Purchaser will preserve all books of account and accounting records relating
to the Purchased Assets and the Purchased Assets described in Exhibit 5 to
Schedule A acquired by the Purchaser for a period of six years from the Closing
Date, or for such other period as may be required by any Applicable Law, and
will permit the Vendor and its authorized representatives reasonable access
thereto in connection with the affairs of the Vendor, but the Purchaser will not
be responsible or liable to the Vendor for or as a result of any loss or
destruction of or damage to any such documents.
ARTICLE 8
RIGHT OF FIRST REFUSAL
8.1 RIGHT OF FIRST REFUSAL
The Purchaser covenants and agrees that, other than in connection with security
granted to a third party lender, it will not, directly or indirectly, sell,
assign, transfer, or otherwise dispose of, or offer to sell, assign, transfer or
otherwise dispose, or accept any offer to purchase or otherwise acquire, the
Purchased Assets, or substantially all of the assets that comprise the Purchased
Assets, or the interest of the Purchaser therein, whether its legal or
beneficial interest or both, unless the Purchaser has first complied with the
terms and conditions set out in this Section 8.1.
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If the Purchaser wishes to sell, assign, transfer or otherwise dispose of the
Purchased Assets or substantially all of the assets that comprise the Purchased
Assets (the "Assets for Sale"), then:
(a) the Purchaser shall first notify (the "Selling Notice") the Vendor
of its intention to sell, assign, transfer or otherwise dispose of
the Assets for Sale;
(b) the Purchaser and the Vendor shall then negotiate with each other
in good faith to reach agreement on terms whereby the Vendor will
purchase the Assets for Sale from the Purchaser;
(c) during the period of negotiation, the Purchaser will permit the
Vendor reasonable access to the Assets for Sale and records in
respect of them, for the purpose of permitting the Vendor to
conduct due diligence, such due diligence to be conducted
confidentially;
(d) if the Purchaser and the Vendor reach agreement on the terms of
the purchase of the Assets for Sale, the Assets for Sale shall be
sold by the Purchaser and purchased by the Vendor in accordance
with the terms and conditions so agreed;
(e) if the Purchaser and the Vendor do not reach agreement on the
terms of the purchase of the Assets for Sale within 90 days of the
Vendor's receipt of the Selling Notice, then the Purchaser shall
notify ("Terms Notice") the Vendor, within five days following, of
the terms under which the Purchaser is willing to sell the Assets
for Sale;
(f) the Vendor shall then have five days after receipt of the Terms
Notice to accept such terms or reject such terms;
(g) if the Vendor accepts the terms within the Terms Notice by way of
notice ("Acceptance Notice") to the Purchaser, the Assets for Sale
shall be sold by the Purchaser and purchased by the Vendor in
accordance with the terms and conditions set out in the Terms
Notice; and
if the Vendor rejects the terms in the Terms Notice or fails to provide an
Acceptance Notice within five days after receipt of the Terms Notice, then the
Purchaser shall thereafter be entitled to sell the Assets for Sale to any third
party purchaser, but only upon and subject to the terms and conditions contained
in the Terms Notice and not otherwise. For greater certainty, if the terms and
conditions of any sale to a third party purchaser are changed, altered or
amended in any material way from the terms and conditions contained in the Terms
Notice, the Purchaser will not be able to sell, assign, transfer or otherwise
dispose of the Assets for Sale unless it has first complied on all such
occasions with the requirements of this Article 8.
8.2 SURVIVAL
The provisions of this Article 8 will survive the completion of the purchase and
sale of the Purchased Assets on the Closing Date provided for in this Agreement
and, notwithstanding such completion, shall continue in full force and effect
for the benefit of the Vendor until such time as the Manufacturing Supply
Agreement, including any extensions and successor agreements thereto, is
terminated; provided that the Vendor shall not be entitled to the benefit of
this Article 8 if the Manufacturing Supply Agreement is terminated pursuant to
section 19.4.5 of such agreement.
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8.3 ASSIGNMENT
Notwithstanding Section 9.9, the Vendor may assign its rights under this Article
8 to Xenova Limited or any Affiliate of Xenova Limited.
ARTICLE 9
GENERAL PROVISIONS
9.1 CONFIDENTIAL INFORMATION
The Purchaser shall maintain confidential all information of a confidential
nature disclosed to it by the Vendor until such time as the transactions
contemplated hereby is completed, provided that information which is in the
public domain and information obtained by the Purchaser from other sources shall
not for the purposes hereof be considered confidential information. The Vendor
shall maintain confidential all information of a confidential nature disclosed
to the Vendor by the Purchaser, provided that information which is in the public
domain and information obtained by the Vendor from other sources shall not for
the purposes hereof be considered confidential information. If this Agreement
terminates prior to the completion of the transactions contemplated hereby, the
Purchaser and the Vendor shall from and after the date hereof maintain
confidential all information of a confidential nature now known or hereafter
disclosed in respect of the Assets and the Assets and the Purchaser,
respectively, for a period of two (2) years from the Closing Date, provided that
information which is in the public domain and information obtained by a Party
from other sources, and information which a Party is required by law to disclose
to any governmental agency, regulatory authority or the public, shall not be
considered confidential information.
9.2 FURTHER ASSURANCES
The Vendor and the Purchaser hereby covenants and agrees that at any time and
from time to time after the Closing Date it will, upon the request of the other,
do, execute, acknowledge and deliver or cause to be done, executed, acknowledged
and delivered all such further acts, deeds, assignments, transfers, conveyances
and assurances as may be required for the better carrying out and performance of
all the terms of this Agreement,
9.3 REMEDIES CUMULATIVE
The rights and remedies of the Parties under this Agreement are cumulative and
in addition to and not in substitution for any rights or remedies provided by
law. Any single or partial exercise by any party hereto of any right or remedy
for default or breach of any term, covenant or condition of this Agreement does
not waive, alter, affect or prejudice any other right or remedy to which such
party may be lawfully entitled for the same default or breach.
9.4 NOTICES
(a) Any notice, designation, communication, request, demand or other
document, required or permitted to be given or sent or delivered
hereunder to any party hereto shall be in writing and shall be
sufficiently given or sent or delivered if it is:
(i) delivered personally to an officer or director of such
party;
(ii) sent to the party entitled to receive it by registered
mail, postage prepaid, mailed in Canada; or
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(iii) sent by telecopy machine.
(b) Notices shall be sent to the following addresses or telecopy
numbers:
(i) in the case of the Vendor,
KS Avicenna Inc.
c/o 000 Xxxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxx
Attention: Xxxxxx Xxxxxx
(ii) in the case of the Purchaser,
QSV Biologics Ltd.
000 Xxxxxxxxx Xxxxx
Xxxxxxxx, Xxxxxxx X0X 0X0
or to such other address or telecopier number as the party
entitled to or receiving such notice, designation, communication,
request, demand or other document shall, by a notice given in
accordance with this section, have communicated to the party
giving or sending or delivering such notice, designation,
communication, request, demand or other document.
(c) Any notice, designation, communication, request, demand or other
document given or sent or delivered as aforesaid shall:
(i) if delivered as aforesaid, be deemed to have been given,
sent, delivered and received on the date of delivery;
(ii) if sent by mail as aforesaid, be deemed to have been given,
sent, delivered and received (but not actually received) on
the fourth Business Day following the date of mailing,
unless at any time between the date of mailing and the
fourth Business Day thereafter there is a discontinuance or
interruption of regular postal service, whether due to
strike or lockout or work slowdown, affecting postal
service at the point of dispatch or delivery or any
intermediate point, in which case the same shall be deemed
to have been given, sent, delivered and received in the
ordinary course of the mails, allowing for such
discontinuance or interruption of regular postal service;
and
(iii) if sent by telecopy machine, be deemed to have been given,
sent, delivered and received on the date the sender
receives the telecopy answer back confirming receipt by the
recipient.
9.5 COUNTERPARTS
This Agreement may be executed by facsimile or electronic transmission and in
several counterparts, each of which so executed shall be deemed to be an
original, and such counterparts together shall constitute but one and the same
instrument.
9.6 EXPENSES OF PARTIES
Each of the Parties hereto shall bear all expenses incurred by it in connection
with the preparation, negotiation, execution and delivery of this Agreement and
all documents and
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instruments executed pursuant to this Agreement including, without limitation,
the charges of their respective counsel, accountants, financial advisors and
finders.
9.7 BROKERAGE AND FINDER'S FEES
The Vendor agrees to indemnify the Purchaser and hold it harmless in respect of
any claim for brokerage or other commissions relative to this Agreement or the
transactions contemplated hereby which is caused by actions of the Vendor or any
of its Affiliates. The Purchaser will indemnify the Vendor and hold it harmless
in respect of any claim for brokerage or other commissions relative to this
Agreement or to the transactions contemplated hereby which is caused by actions
of the Purchaser or any of its Affiliates,
9.8 ANNOUNCEMENTS
Prior to the Closing Time, no announcement with respect to this Agreement will
be made by any Party hereto without the prior approval of the other Party.
Thereafter, the Purchaser agrees to consult with the Vendor as to the content,
timing and method of delivery of any announcement with respect to this
Agreement.
9.9 ASSIGNMENT
Subject to section 8.3, the rights of the Vendor hereunder shall not be
assignable without the written consent of the Purchaser. The rights of the
Purchaser hereunder shall not be assignable without the written consent of the
Vendor.
9.10 SUCCESSORS AND ASSIGNS
This Agreement shall be binding upon and enure to the benefit of the Parties
hereto and their respective successors and permitted assigns. Nothing herein,
express or implied, is intended to confer upon any person, other than the
Parties hereto and their respective successors and assigns, any rights,
remedies, obligations or liabilities under or by reason of this Agreement
9.11 ENTIRE AGREEMENT
This Agreement and the schedules referred to herein constitute the entire
agreement between the Parties hereto and supersede all prior agreements,
representations, warranties, statements, promises, information, arrangements and
understandings, whether oral or written, express or implied, with respect to the
subject matter hereof. None of the Parties hereto shall be bound or charged with
any oral or written agreements, representations, warranties, statements,
promises, information, arrangements or understandings not specifically set forth
in this Agreement or in the schedules, documents and instruments to be delivered
on or before the Closing Date pursuant to this Agreement. The Parties hereto
further acknowledge and agree that, in entering into this Agreement and in
delivering the schedules, documents and instruments to be delivered on or before
the Closing Date, they have not in any way relied, and will not in any way rely,
upon any oral or written agreements, representations, warranties, statements,
promises, information, arrangements or understandings, express or implied, not
specifically set forth in this Agreement or in such schedules, documents or
instruments.
9.12 WAIVER
Any party hereto which is entitled to the benefits of this Agreement may, and
has the right to, waive any term or condition hereof at any time on or prior to
the Closing Time; provided, however, that such waiver shall be evidenced by
written instrument duly executed on behalf of such party.
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9.13 AMENDMENTS
No modification or amendment to this Agreement may be made unless agreed to by
the Parties hereto in writing.
[The remainder of this page has been intentionally left blank]
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IN WITNESS WHEREOF the Parties hereto have duly executed this agreement under
seal as of the day and year first written above.
KS AVICENNA INC.
Per:/s/XXXXXX XXXXXX
__________________________
QSV BIOLOGICS LTD.
Per:/s/XXXXXX XXXXXXXXX
__________________________
