Exhibit 2.8
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ASSET PURCHASE AGREEMENT
BY AND BETWEEN
SYNBIOTICS CORPORATION
AND
KIRKEGAARD & PERRY LABORATORIES, INC.
DATED AS OF APRIL 18, 2000
TABLE OF CONTENTS
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ASSET PURCHASE AGREEMENT........................................................ 1
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ARTICLE 1 PURCHASE AND SALE OF ASSETS........................................... 1
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1.1 Purchase and Sale................................................ 1
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1.2 Assumed Liabilities; Retained Liabilities........................ 1
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1.3 Ancillary Documents.............................................. 2
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1.4 Purchase Price................................................... 2
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ARTICLE 2 REPRESENTATIONS AND WARRANTIES OF SELLER.............................. 3
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2.1 Corporate Organization........................................... 3
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2.2 Authorization.................................................... 3
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2.3 Title; Condition of Purchased Assets............................. 3
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2.4 No Violation..................................................... 3
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2.5 Governmental Authorities......................................... 4
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2.6 Liabilities...................................................... 4
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2.7 Purchased Assets; Purchase Orders................................ 4
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2.8 Litigation....................................................... 4
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2.9 Contracts........................................................ 5
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2.10 Compliance with Law.............................................. 5
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2.11 Licenses, Permits and Authorizations............................. 5
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2.12 Intangible Property Rights....................................... 5
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2.13 Tax Matters...................................................... 6
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2.14 Environmental and Safety Matters................................. 6
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2.15 Customers and Suppliers.......................................... 6
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2.16 Disclosure; No Misstatements..................................... 7
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2.17 Survival of Representations and Warranties....................... 7
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ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF BUYER............................... 7
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3.1 Organization; Authority.......................................... 7
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3.2 Authorization.................................................... 7
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3.3 No Conflict with Other Instruments or Agreements................. 7
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3.4 Governmental Authorities......................................... 7
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3.5 Consents......................................................... 8
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3.6 Litigation....................................................... 8
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3.7 Capitalization, Financing and Qualifications of Buyer............ 8
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3.8 Licenses, Permits and Authorizations............................. 8
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3.9 Brokers.......................................................... 8
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3.10 Disclosure; No Misstatements..................................... 8
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3.11 Survival of Representations and Warranties....................... 8
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ARTICLE 4 CONDITIONS PRECEDENT TO THE OBLIGATIONS OF BUYER...................... 9
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4.1 Performance...................................................... 9
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4.2 Related Documents................................................ 9
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4.3 Governmental Approvals........................................... 9
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4.4 Articles of Transfer............................................. 9
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4.5 Lender's Consent................................................. 9
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4.6 Third Party Consents............................................. 9
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4.7 Shareholder Approval............................................. 9
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TABLE OF CONTENTS
Page
4.8 Seller's Certificate....................................................... 9
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4.9 No Financing Condition..................................................... 10
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ARTICLE 5 CONDITIONS PRECEDENT TO THE OBLIGATIONS OF SELLER............................... 10
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5.1 Performance................................................................ 10
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5.2 Cash Payment............................................................... 10
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5.3 Related Documents.......................................................... 10
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5.4 Governmental Approvals..................................................... 10
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5.5 Third Party Consents....................................................... 10
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5.6 Buyer's Certificate........................................................ 10
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5.7 Lender's Consent........................................................... 10
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5.8 Shareholder Approval....................................................... 10
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5.9 Articles of Transfer....................................................... 11
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ARTICLE 6 BULK SALES...................................................................... 11
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ARTICLE 7 INDEMNIFICATION................................................................. 11
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7.1 Grant of Indemnity......................................................... 11
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7.2 Representation, Cooperation and Settlement................................. 12
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7.3 Survival of Representations and Warranties................................. 13
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7.4 Limitations on Liability................................................... 13
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ARTICLE 8 CLOSING......................................................................... 14
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8.1 Closing.................................................................... 14
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8.2 Deliveries By Seller....................................................... 14
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8.3 Deliveries by Buyer........................................................ 14
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8.4 Trademark Assignments and Filings.......................................... 14
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ARTICLE 9 TERMINATION..................................................................... 15
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9.1 Termination................................................................ 15
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9.2 Effect of Termination...................................................... 15
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ARTICLE 10 TRANSACTIONS SUBSEQUENT TO THE CLOSING DATE.................................... 15
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10.1 Further Assurances......................................................... 15
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10.2 Sales and Use Taxes........................................................ 15
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10.3 Employees.................................................................. 15
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10.4 Manufacturing Agreement.................................................... 16
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ARTICLE 11 MISCELLANEOUS PROVISIONS....................................................... 16
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11.1 Investigations and Survival................................................ 16
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11.2 Successors and Assigns..................................................... 16
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11.3 Governing Law; Jurisdiction and Venue; Severability........................ 16
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11.4 Entire Agreement; Modification and Waiver.................................. 17
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11.5 Notices.................................................................... 17
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11.6 Payment of Fees and Expenses............................................... 18
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11.7 No Other Representations................................................... 18
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11.8 Captions................................................................... 18
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11.9 Publicity.................................................................. 18
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11.10 Confidentiality............................................................ 18
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11.11 Counterparts............................................................... 18
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TABLE OF CONTENTS
LIST OF EXHIBITS
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EXHIBIT A Manufacturing Agreement
EXHIBIT B-1 Purchased Assets
EXHIBIT B-2 Assumed Liabilities
EXHIBIT B-3 Retained Liabilities
EXHIBIT C Secured Promissory Note
EXHIBIT D Security Agreement
EXHIBIT E License and Technical Assistance Agreement
EXHIBIT F Assumption Agreement
EXHIBIT G General Conveyance, Xxxx of Sale and Assignment
EXHIBIT H Non-Competition Agreement
EXHIBIT I Royalty Agreement
EXHIBIT J Intellectual Property Assignment
EXHIBIT K Articles of Transfer
EXHIBIT L Sellers' Disclosure Schedule
EXHIBIT M Buyer's Disclosure Schedule
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ASSET PURCHASE AGREEMENT
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This ASSET PURCHASE AGREEMENT ("Agreement") is entered into as of April 18,
2000 (the "Execution Date"), by and between SYNBIOTICS CORPORATION, a California
corporation ("Buyer") and KIRKEGAARD & PERRY LABORATORIES, INC. a Maryland
corporation ("Seller"), with reference to the following facts:
WHEREAS, Seller is in the business of, among other things, manufacturing
and selling various poultry diagnostic products and is engaged in the research,
development and promotion of poultry diagnostic products (the "Poultry
Diagnostic Business").
WHEREAS, Buyer desires to purchase and assume from Seller and Seller
desires to sell, convey and assign to Buyer, on the terms and subject to the
conditions of this Agreement, all of the assets and certain of the liabilities
of Seller related to the Poultry Diagnostic Business (the "Sale Transaction").
WHEREAS, following the closing of the Sale Transaction, Buyer desires to
engage Seller to continue to manufacture the Products, as defined in the
Transitional Manufacturing and Supply Agreement in the form attached hereto as
Exhibit A (the "Manufacturing Agreement"), for the term specified in the
Manufacturing Agreement and desires that Seller cooperate with Buyer in the
assumption by Buyer of responsibility for the manufacturing of the Products
during such period pursuant to the Manufacturing Agreement.
NOW, THEREFORE, in consideration of the foregoing premises and the
representations, warranties, covenants and agreements contained below, the
parties agree as follows:
ARTICLE 1
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PURCHASE AND SALE OF ASSETS
1.1 Purchase and Sale. On the Closing Date (as defined in Article 8
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below), Seller agrees to sell, assign and otherwise transfer to Buyer and Buyer
agrees to purchase, accept and acquire from Seller, all of Seller's right, title
and interest in and to the assets (the "Purchased Assets"). The "Purchased
Assets" shall consist of the personal properties, assets, goodwill and rights of
Seller, set forth on Exhibit B-1 as Purchased Assets, that are owned by, or
licensed to, the Seller as of the Closing and used, held for use or intended to
be used primarily in the operation or conduct of the Poultry Diagnostic
Business.
1.2 Assumed Liabilities; Retained Liabilities. On the Closing Date, Buyer
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shall assume the debts, liabilities, assessments, losses, damages, costs,
expenses or other obligations (including all debts, liabilities, assessments,
losses, damages, costs, expenses or other obligations owing to trade creditors)
related to the Purchased Assets set forth on Exhibit B-2 (the "Assumed
Liabilities") and Seller shall retain those liabilities set forth on Exhibit B-3
as Retained Liabilities (the "Retained Liabilities"). Following the Closing, (i)
all Assumed Liabilities shall be obligations and liabilities solely of, and
shall solely be legally and financially borne by, Buyer, (ii) Buyer shall be
responsible for compliance with permits and licenses affecting the
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Purchased Assets (whether or not Seller is the permit holder under such permits
and licenses), and (iii) all risk of casualty loss occurring after the Closing
relating to the Purchased Assets shall be borne by Buyer. All Retained
Liabilities shall continue to be obligations and liabilities solely of, and
shall solely be legally and financially borne by, Seller. In furtherance (and
not in limitation) of the foregoing, Buyer is not and shall not be treated or
viewed as, a successor of Seller as a matter of law.
1.3 Ancillary Documents. In connection with the sale and purchase of the
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Purchased Assets, each of Seller and Buyer shall execute and deliver to the
other each of the following agreements to which it is a party at the Closing:
(i) the Manufacturing Agreement substantially in the form attached as Exhibit A;
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(ii) the Secured Promissory Note substantially in the form attached hereto as
Exhibit C (the "Secured Note"); (iii) the Security Agreement substantially in
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the form attached hereto as Exhibit D (the "Security Agreement"); (iv) the
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License and Technical Assistance Agreement substantially in the form attached
hereto as Exhibit E ("License Agreement"); (v) the Assumption Agreement
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substantially in the form attached hereto as Exhibit F ("Assumption Agreement");
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(vi) the General Conveyance, Xxxx of Sale and Assignment substantially in the
form attached hereto as Exhibit G ("General Conveyance"); (vii) the Non-
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Competition Agreement substantially in the form attached hereto as Exhibit H
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("Non-Competition Agreement"); (vii) the Royalty Agreement substantially in the
form attached hereto as Exhibit I (the "Royalty Agreement"); (viii) the
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Intellectual Property Assignment substantially in the form attached hereto as
Exhibit J; and (ix) the Articles of Transfer substantially in the form attached
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hereto as Exhibit K. The documents and instruments that Seller and Buyer are
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required to deliver to each other at the Closing pursuant to clauses (iv)
through (ix) of this Section 1.2 shall be referred to herein collectively as the
"Conveyance Documents." The Conveyance Documents, together with the
Manufacturing Agreement, the Secured Note and the Security Agreement, are
referred to herein collectively as the "Related Documents."
1.4 Purchase Price. In consideration for the sale, transfer, assignment
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and acceptance of the Purchased Assets pursuant to this Agreement, Buyer (in
addition to assuming the Assumed Liabilities) shall pay to Seller the sum of Six
Million Dollars ($6,000,000) (the "Purchase Price"), payable as follows:
(a) $75,000 previously paid by Buyer to Seller as a good faith
deposit in connection with this Agreement;
(b) $3,425,000 at the Closing (the "Closing Cash Payment") by
certified or cashier's check or by wire transfer in immediately available
funds;
(c) $1,000,000, as evidenced by the Secured Note, in the
original principal amount of $1,000,000, payable in accordance with its terms
and Section 10.4 below, which payment obligations of Buyer are secured by
certain of the Purchased Assets pursuant to the Security Agreement; and
(d) a royalty of ten percent (10%) (but not to exceed
$1,500,000) upon the sale by Buyer of Products payable in accordance with the
Royalty Agreement.
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ARTICLE 2
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REPRESENTATIONS AND WARRANTIES
OF SELLER
For purposes of Articles 2 and 3, "Knowledge," "Known" or similar terms
mean actual knowledge and knowledge which would reasonably be expected under the
circumstances from individual officers and directors in comparable businesses)
of the officers and directors of Seller or Buyer, as the case may be, and any
employees of Seller or Buyer, as the case may be, who have knowledge of or
responsibility for the subject matter of the applicable representation and
warranty. Except as set forth in the Seller's Disclosure Schedule attached
hereto as Exhibit L (the "Seller's Disclosure Schedule") referencing the
specific section of this Article 2 the Seller hereby represents and warrants to
Buyer as follows:
2.1 Corporate Organization. Seller is a corporation duly organized,
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validly existing and in good standing under the laws of the State of Maryland
and has all requisite corporate power and authority to enter into this Agreement
and each of the Related Documents to which it is a party and perform its
obligations hereunder and thereunder.
2.2 Authorization. The execution, delivery and performance by Seller of
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this Agreement, and each of the Related Documents to which it is a party, and
the consummation by Seller of the transactions contemplated herein and therein,
have been duly authorized and approved by all necessary corporate proceedings of
Seller, subject to shareholder approval. This Agreement and each of the Related
Documents to which it is a party have been duly executed and delivered by
Seller, and assuming their due authorization, execution and delivery by Buyer,
each constitutes a legal, valid and binding agreement of Seller, subject to
shareholder approval and compliance with applicable bulk sales laws, enforceable
against Seller in accordance with its terms, except as may be limited by
bankruptcy, insolvency or other laws of general application relating to the
enforcement of creditors' rights.
2.3 Title; Condition of Purchased Assets. Except as set forth in Section
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2.3 of the Seller's Disclosure Schedule, Seller has good and marketable title or
the right to use and transfer all of the Purchased Assets, free and clear of all
mortgages, liens (tax or otherwise), pledges, charges, leases, encumbrances,
claims or restrictions of any kind or character (collectively, the
"Encumbrances"), except for (i) liens for taxes not yet due and payable, and
(ii) liens arising solely by operation of law (collectively, "Permitted
Encumbrances"). All of the tangible properties and assets included in the
Purchase Assets have been maintained and repaired for their continued operation
and are in good operating condition, reasonable wear and tear excepted, and
usable in the ordinary course of business.
2.4 No Violation. The execution, delivery and performance by Seller of
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this Agreement and each of the Related Documents to which it is a party, subject
to shareholder approval and compliance with applicable bulk sales laws, will not
(with notice and/or the lapse of time) result in a material breach or violation
of, or constitute a material default under, Seller's Articles of Incorporation,
Bylaws or any material agreement to which Seller is a party or by which Seller
is bound, and will not, to the best of Seller's Knowledge, be in violation of
any statute, judgment, order, rule or regulation in effect at the Closing Date
of any court or federal, state or other
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regulatory authority or governmental body having jurisdiction over Seller or the
Purchased Assets, except for such violations as would not have a material
adverse effect on Buyer after the Closing. To Seller's Knowledge, Seller is not
a party to, subject to or bound by any agreement or judgment, order, writ,
injunction or decree of any court or federal, state or other regulatory or
governmental body that prevents or materially impairs the consummation of the
transactions contemplated by this Agreement or the Related Documents or the
rights of the Buyer hereunder and thereunder.
2.5 Governmental Authorities. Except as set forth in Section 2.5 of the
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Seller's Disclosure Schedule, Seller is not required to submit any notice,
report or other filing to any governmental or regulatory authority, nor is any
consent, approval or authorization of any governmental or regulatory authority
required to be obtained in connection with the consummation of the transactions
contemplated hereby or in the Related Documents.
2.6 Liabilities. Except as set forth in Section 2.6 of the Seller's
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Disclosure Schedule, the Purchased Assets are not subject to any material
liabilities or obligations of whatever nature, whether absolute, accrued or
contingent. Except as set forth in Section 2.6 of the Seller's Disclosure
Schedule, Seller and its officers, employees or agents have not employed any
broker, finder or consultant or incurred any liability for any brokerage fees,
commissions, consultant's fees or finders' fees in connection with the
transactions contemplated hereby or the Related Documents.
2.7 Purchased Assets; Purchase Orders. To Seller's Knowledge and except as
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set forth on Schedule 2.7 of the Seller's Disclosure Schedule, the Purchased
Assets include all material intellectual property, equipment, inventory and all
other property which Seller uses to conduct the Poultry Diagnostic Business and
in which Seller has any right, title or interest with respect to the Poultry
Diagnostic Business. Except as set forth on Schedule 2.7 of the Seller's
Disclosure Schedule, the Purchased Assets include all the assets reasonably
necessary to operate the Poultry Diagnostic Business in all material respects in
the same manner as the Poultry Diagnostic Business was operated by Seller prior
to the Closing (except for management and financial resources and access to
technology available to Seller whose business encompasses more than the Poultry
Diagnostic Business). All customer orders relating to orders received by the
Seller prior to April 18, 2000 and outstanding on the date hereof (if any) are
listed in Section 2.7 of the Seller's Disclosure Schedule, and have arisen only
from bona fide transactions in the ordinary course of Seller's business, are, to
Seller's Knowledge, valid contracts. Except as set forth in Section 2.7 of the
Seller's Disclosure Schedule, all inventory and equipment, used in the Poultry
Diagnostic Business and included in the Purchased Assets of the Execution Date
are Seller's property and have been acquired or arisen in the ordinary course of
business, have not been pledged as collateral, are not held by Seller on
consignment from others and are being conveyed to Buyer pursuant to the General
Conveyance.
2.8 Litigation. To Seller's Knowledge and except as set forth in Section
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2.8 of the Seller's Disclosure Schedule, there are no claims, actions,
litigation, suits, proceedings or investigations pending or threatened, against
or affecting any of the Purchased Assets, the business and activities conducted
by the Poultry Diagnostic Business or the consummation of the transactions
contemplated hereby or the Related Documents, at law or in equity or before or
by any governmental or regulatory authority, agency or instrumentality or before
any arbitrator of
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any kind, and to the Seller's Knowledge, there is no valid basis, based on
Seller's commercially reasonable judgement, for any such claim, action,
litigation, suit, proceeding or investigation. Section 2.8 of the Seller's
Disclosure Schedule contains a list and brief description of all claims,
actions, litigation, suits, proceedings or investigations relating to the
Purchased Assets or the Poultry Diagnostic Business which have resulted in a
judgment, settlement, compromise, release, payment or award of any nature. Since
January 1, 1999, no governmental or regulatory authority, agency or
instrumentality has notified Seller in writing of a claim challenging the legal
right of Seller to sell any products of the Poultry Diagnostic Business or
relating to the Purchased Assets.
2.9 Contracts. Seller has made available to Buyer copies of each
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agreement, instrument, commitment, contract or other obligation of any type to
which Seller is a party or is bound reasonably relating to the Purchased Assets
or the Assumed Liabilities (collectively, the "Relevant Contracts"). Set forth
in Section 2.9 of the Seller's Disclosure Schedule is an accurate listing of the
Relevant Contracts which provide for annual payments to or from the Seller in
excess of $25,000. To Seller's Knowledge and except as set forth in Section 2.9
of the Seller's Disclosure Schedule, (i) all Relevant Contracts are in full
force and effect and are valid, binding and enforceable in all material respects
against the parties thereto in accordance with their respective terms; (ii)
Seller has complied in all material respects with the provisions of such
Relevant Contracts; (iii) no such party is in default in any material respects
under any of the terms thereof; and (iv) no event has occurred that (with the
passage of time and/or the giving of notice) would constitute a default by any
party under any provision thereof. Except as set forth in Section 2.9 of the
Seller's Disclosure Schedule, no consent, approval or authorization of any third
party on the part of Seller is required in connection with the consummation of
the transactions contemplated hereunder.
2.10 Compliance with Law. Seller has conducted the operation of the
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Poultry Diagnostic Business in compliance in all material respects with all
applicable foreign, federal, state or local laws, statutes, rules, regulations,
ordinances, codes, orders, licenses, franchises, permits, authorizations and
concessions (collectively, "Regulations"), except where the failure to comply
with such Regulations would not have a material adverse effect on Buyer after
the Closing.
2.11 Licenses, Permits and Authorizations. Section 2.11 of the Seller's
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Disclosure Schedule contains a list of all approvals, authorizations, consents,
licenses, franchises, orders and other permits of, and filings with, any
governmental authority, whether foreign, federal, state or local (collectively,
the "Permits"), which, to Seller's Knowledge, are required by Seller for the
ownership, handling, use , sale or possession of the Purchased Assets, the
noncompliance with which would have a material adverse effect on Buyer or the
Purchased Assets.
2.12 Intangible Property Rights. Schedule 2.12 of the Seller's Disclosure
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Schedule lists all of the inventions, trade secrets, licenses, trademarks, and
applications therefor that Seller uses to conduct the Poultry Diagnostic
Business (such assets and rights herein called "Rights"). Except as set forth in
Section 2.12 of the Seller's Disclosure Schedule, such Rights are not being
infringed or violated by any other person or entity. All Purchased Assets that
consist of Rights, are, and upon the consummation of the transactions
contemplated by this Agreement and the Related Documents will be, vested in
Buyer, pursuant to the terms of this Agreement and the
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License Agreement, free of any Encumbrances, except for those provided in
license agreements previously provided to the Buyer and for such Encumbrances
that would not have a material adverse effect on Buyer after the Closing. Except
as set forth in Section 2.12 of the Seller's Disclosure Schedule, Seller has not
granted any license or right to the Rights to any third party. To the Seller's
Knowledge, the Purchased Assets that consist of Rights employed by Seller in
connection with the Poultry Diagnostic Business do not infringe upon: other than
patents, any Rights, proprietary rights or intellectual property of any other
person, firm, corporation or other entity. The documents reflecting the
Purchased Assets that consist of Rights are current and accurate and sufficient
in detail and content to identify the Rights and permit the full and proper use
by Buyer, and have been provided to Buyer. Each of Seller's employees who,
either alone or in concert with others, developed, invented, discovered,
derived, programmed or designed any of the Assets that consist of Rights, or who
has Knowledge of or access to information relating to it, has been put on notice
that such Rights are proprietary to Seller and are not to be divulged or misused
and has executed a form of proprietary information and inventions agreement
provided to and approved by Buyer. To the Knowledge of Seller, the Assets that
consist of Rights are presently valid and protectable, and not part of the
public knowledge or literature, nor have they been used, divulged, or
appropriated for the benefit of any past or present employees or of Seller.
2.13 Tax Matters. All taxes, including, without limitation, income,
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property, sales, use, franchise, added value, imposed by the United States or by
any foreign country or by any state, municipality, subdivision or
instrumentality of the United States or of any foreign country, or by any other
taxing authority, which are due or payable by Seller with respect to the
Purchased Assets, and all interest and penalties thereon, whether disputed or
not, have been or will be paid in full; all tax returns required to be filed
with respect to the Purchased Assets have been or will be accurately prepared
and duly and timely filed or will be so filed after the Closing Date if due
thereafter; and all deposits required by law to be made by Seller have been or
will be duly made. Nothing in this Section 2.13 shall be construed as limiting
Seller's right to dispute taxes levied upon it.
2.14 Environmental and Safety Matters. Seller's operation of the Poultry
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Diagnostic Business has been in compliance in all material respects with, and
Seller has complied in all material respects with and is not in violation of
any, applicable United States federal, state and local laws, ordinances,
regulations and orders relating to environmental matters (collectively,
"Environmental Laws"), including, but not limited to, matters related to air
pollution, water pollution, on-site or off-site hazardous substance handling,
discharge, disposal or recovery, toxic or hazardous substances or materials,
asbestos, PCBs, employee safety, and transportation or shipping safety, and, no
written notice of violation of any such statutes, laws, ordinances, regulations
and orders with respect thereto have been received by Seller, nor, to the
Knowledge of Seller, is any such notice threatened. Seller has obtained all
material environmental permits, temporary and otherwise, required for the lawful
operation of the Poultry Diagnostic Business, and all such permits are in full
force and effect and Seller has not received written notice that any such
permits will be revoked, lapsed or otherwise subject to modification, nor to the
Knowledge of Seller is any such notice of violation, lapse or modification
threatened.
2.15 Customers and Suppliers. Section 2.15 of the Seller's Disclosure
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Schedule sets forth a list of all customers and suppliers of Seller as of the
Closing Date with respect to the
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Poultry Diagnostic Business from which the Seller has received or to which the
Seller has paid more than $5,000 within the past 12 months.
2.16 Disclosure; No Misstatements. Neither this Agreement nor the Related
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Documents, nor any other document, certificate or written statement referenced
in this Agreement or the Related Documents prepared or furnished by Seller to
Buyer contains any untrue statement of material fact or omits to state a
material fact necessary in order to make the statements contained herein and
therein not misleading as of the date hereof or thereof. Seller has disclosed to
Buyer all Known facts which are reasonably likely to have a material adverse
effect on the Purchased Assets.
2.17 Survival of Representations and Warranties. Seller's warranties and
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representations herein shall survive the Closing for the period specified in
Section 7.3(a) below.
ARTICLE 3
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REPRESENTATIONS AND WARRANTIES OF BUYER
Except as set forth in the Buyer's Disclosure Schedule attached hereto as
Exhibit M (the "Buyer's Disclosure Schedule"), Buyer hereby represents and
warrants to the Seller as follows:
3.1 Organization; Authority. Buyer is a corporation duly organized,
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validly existing and in good standing under the laws of the State of California,
and has all requisite power and authority to enter into this Agreement and each
of the Related Documents to which it is a party and perform its obligations
hereunder and thereunder.
3.2 Authorization. The execution, delivery and performance by Buyer of
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this Agreement and each of the Related Documents to which it is a party and the
consummation of the transactions contemplated herein and therein, have been duly
and validly authorized by all necessary corporate action of Buyer. This
Agreement and each of the Related Documents to which it is a party have been
duly executed and delivered and constitute the legal, valid and binding
obligations of Buyer, each enforceable in accordance with their respective
terms, except as limited by bankruptcy, insolvency, or other laws of general
application relating to the enforcement of creditor's rights.
3.3 No Conflict with Other Instruments or Agreements. The execution,
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delivery and performance by Buyer of this Agreement and each of the Related
Documents to which it is a party will not result in a material breach or
violation of, or constitute a material default under, Buyer's Articles of
Incorporation, Bylaws or any agreement to which Buyer is a party or by which
Buyer is bound or to which any of Buyer's property is subject, including but not
limited to the Credit Agreement, entered into on April 12, 2000, between Buyer
and Imperial Bank, and the Commercial Security Agreement, dated April 12, 2000,
between Buyer and Imperial Bank, and, to the best of Buyer's Knowledge, will not
be in violation of any statute, judgment, order, rule or regulation in effect at
the date hereof of any court or federal, state or other regulatory authority or
governmental body having jurisdiction over Buyer.
3.4 Governmental Authorities. Except as set forth in Section 3.4 of
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Buyer's Disclosure Schedule, Buyer is not required to obtain any consent,
approval or authorization of any
7
governmental or regulatory authority in connection with the consummation of the
transactions contemplated hereby or in the Related Documents.
3.5 Consents. Except as set forth in Section 3.5 of the Buyer's Disclosure
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Schedule, no consent, approval or authorization of any third party on the part
of Buyer is required in connection with the consummation of the transactions
contemplated hereunder.
3.6 Litigation. Except as set forth in Section 3.6 of the Buyer's
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Disclosure Schedule, there are no claims, actions, litigation, suits,
proceedings or investigations pending or, to Buyer's Knowledge, threatened
against or affecting the consummation of the transactions contemplated hereby or
by the Related Documents, at law or in equity or before or by any governmental
or regulatory authority, agency or instrumentality, or before any arbitrator of
any kind.
3.7 Capitalization, Financing and Qualifications of Buyer. Since January
-----------------------------------------------------
1, 1997, Buyer has filed with the Securities and Exchange Commission in
compliance with applicable laws and regulations the annual and quarterly reports
on Section 3.7 of the Buyer's Disclosure Schedule attached hereto including the
Report on Form 10-K for the twelve months ended December 31, 1999. Buyer has and
believes it will continue to have the financial resources, capabilities and
qualifications to perform this Agreement and each of the Related Documents to
which it is a party, including without limitation, assumption of the
responsibility for the manufacturing of the Products (as defined in the
Manufacturing Agreement) in accordance with Section 10.4 below and payment of
the Assumed Liabilities.
3.8 Licenses, Permits and Authorizations. Section 3.8 of the Buyer's
------------------------------------
Disclosure Schedule contains a list of all Permits which, to Buyer's Knowledge,
are required by Buyer for the acquisition of the Purchased Assets and the
consummation of the Sale Transaction by Buyer, the noncompliance with which
would have a material adverse effect on Buyer or the Purchased Assets.
3.9 Brokers. Except as set forth in Section 3.9 of Buyer's Disclosure
-------
Schedule, Buyer and its officers, employees or agents have not employed any
broker or finder or incurred any liability for any brokerage fees, commissions
or finder's fees in connection with the transactions contemplated hereby or the
Related Documents.
3.10 Disclosure; No Misstatements. Neither this Agreement nor the Related
----------------------------
Documents, nor any other document, certificate or written statement referenced
in this Agreement or the Related Documents or prepared or furnished by Buyer to
Seller contains any untrue statement of material fact or omits to state a
material fact necessary in order to make the statements contained herein and
therein not misleading as of the date hereof or thereof.
3.11 Survival of Representations and Warranties. Buyer's warranties and
------------------------------------------
representations herein shall survive the Closing for the period specified in
Section 7.3(b) below.
8
ARTICLE 4
---------
CONDITIONS PRECEDENT TO THE OBLIGATIONS OF BUYER
Each and every obligation of Buyer under this Agreement to be performed on
or before the Closing Date shall be subject to the satisfaction or waiver on or
before the Closing Date, of the following conditions precedent, except to the
extent that Buyer shall have waived such satisfaction in writing:
4.1 Performance. Seller shall have performed and complied with all
-----------
agreements, covenants and conditions required by this Agreement to be performed
and complied with by Seller on or before the Closing Date.
4.2 Related Documents. Seller shall have executed and delivered to Buyer
-----------------
all of the Related Documents required by their terms to be executed by Seller,
substantially in the forms attached hereto.
4.3 Governmental Approvals. As of the Closing, all authorizations,
----------------------
approvals or permits of or filings with any governmental authority that are
required by law in order to effect the transfer of the Purchased Assets, the
assumption of the Assumed Liabilities and the other transactions contemplated by
this Agreement or the Related Documents shall have been duly obtained or made
and shall be effective as of the Closing or as soon thereafter as is reasonably
practicable.
4.4 Articles of Transfer. Seller shall have filed Articles of Transfer
--------------------
relating to the Purchased Assets substantially in the form attached hereto as
Exhibit K (the "Articles") with the Maryland State Department of Assessments and
Taxation (the "MSDAT") and the MSDAT shall have accepted the Articles for
record.
4.5 Lender's Consent. Seller shall have obtained the consent of Bank of
----------------
America, N.A., Seller's principal lender, to the execution, delivery and
performance of this Agreement and the Related Documents and the consummation of
the Sale Transaction (the "Lender's Consent").
4.6 Third Party Consents. Seller shall have obtained all consents,
--------------------
assignments, approvals, waivers and authorization of third persons (other than
the Lender's Consent) as may be necessary in the reasonable view of Buyer for
Seller to consummate the transactions contemplated by this Agreement and the
Related Documents.
4.7 Shareholder Approval. The Sale Transaction and the execution, delivery
--------------------
and performance of this Agreement and the Related Documents shall have been
approved by Seller's shareholders in accordance with the Maryland General
Corporation Law.
4.8 Seller's Certificate. Buyer shall have received a certificate of the
--------------------
President or the Secretary of the Seller dated as of the Closing Date and
certifying to the fulfillment of the foregoing conditions and the absence of any
material adverse change since February 29, 2000 in the Poultry Diagnostic
Business, in form and substance acceptable to Buyer and its counsel ("Seller's
Certificate").
9
4.9 No Financing Condition. Buyer acknowledges and agrees that the
----------------------
availability of financing shall not be a condition to Buyer's obligations under
this Agreement.
ARTICLE 5
---------
CONDITIONS PRECEDENT TO THE
OBLIGATIONS OF SELLER
Each and every obligation of Seller under this Agreement to be performed on
or before the Closing Date shall be subject to the satisfaction or waiver, on or
before the Closing Date, of each of the following conditions precedent, except
to the extent that the Seller shall have waived in writing such satisfaction.
5.1 Performance. Buyer shall have performed and complied with all
-----------
agreements, covenants and conditions required by this Agreement to be performed
and complied with by Buyer on or before the Closing Date.
5.2 Cash Payment. Buyer shall at the Closing pay to Seller the Closing
------------
Cash Payment.
5.3 Related Documents. Buyer shall have executed and delivered to Seller
-----------------
all of the Related Documents required by their terms to be executed by Buyer,
substantially in the forms attached hereto.
5.4 Governmental Approvals. As of the Closing, all authorizations,
----------------------
approvals or permits of or filings with any governmental authority that are
required by law in order to effect the transfer of the Purchased Assets,
assumption of the Assumed Liabilities and the other transactions contemplated by
this Agreement of the Related Documents shall have been duly obtained or made
and shall be effective as of the Closing or as soon thereafter as is reasonably
practicable.
5.5 Third Party Consents. Buyer shall have obtained all consents,
--------------------
assignments, approvals, waivers and authorizations of third persons as may be
necessary in the reasonable view of Seller for Buyer to consummate the
transactions contemplated by this Agreement and the Related Documents.
5.6 Buyer's Certificate. Seller shall have received a certificate of the
-------------------
President, the Chief Financial Officer, or the Secretary of the Buyer dated as
of the Closing Date and certifying to the fulfillment of the foregoing
conditions and the absence of any material adverse change in its condition
(financial or otherwise), properties or business operations since the Buyer's
Report on Form 10-K for the twelve months ended December 31, 1999, as amended
and restated on or about April 13, 2000, in form and substance acceptable to
Seller and its counsel ("Buyer's Certificate").
5.7 Lender's Consent. Seller shall have obtained the Lender's Consent.
----------------
5.8 Shareholder Approval. The Sale Transaction and the execution, delivery
--------------------
and performance of this Agreement and the Related Documents shall have been
approved by Seller's shareholders in accordance with the Maryland General
Corporation Law.
10
5.9 Articles of Transfer. The MSDAT shall have accepted the Articles for
--------------------
record.
ARTICLE 6
---------
BULK SALES
Each of the parties hereby waives compliance by the other party (to the
extent compliance is required) with the bulk sales law of the State of Maryland
as set forth in Article 6 of the Maryland Uniform Commercial Code, as amended
(the "Maryland Bulk Sales Laws"), subject to Seller's indemnification of Buyer
set forth in Section 7.1(c) below.
ARTICLE 7
---------
INDEMNIFICATION
7.1 Grant of Indemnity.
------------------
(a) Indemnification by Seller. As an inducement for Buyer to
-------------------------
enter into this Agreement and the Related Documents, and acknowledging that
Buyer is relying on the indemnification provided in this Section 7 in entering
into this Agreement and the Related Documents, Seller agrees to indemnify,
defend and hold harmless Buyer and its employees, officers, directors,
representatives and agents (collectively, "Buyer Affiliates"), from and against
any actual claims, losses, liability, obligations, lawsuits, judgments,
settlements, governmental investigations, damages, costs or expenses of whatever
nature, including, without limitation, interest, penalties, reasonable
attorneys' fees, costs of investigation and all amounts paid in defense or
settlement of the foregoing, (collectively "Claims and Losses"), suffered or
incurred by Buyer or Buyer Affiliates as a result of or in connection with any
of the following: (i) any Retained Liabilities; (ii) any liabilities of the
Seller that are not Assumed Liabilities; or (iii) a breach of any obligation,
representation, warranty, covenant or agreement of Seller in this Agreement or
any Related Document, or because any representation or warranty by Seller
contained in this Agreement or any Related Document shall be materially false
(collectively, "Buyer's Damages").
(b) Seller's Indemnification Relating to Bulk Sales Laws. In
----------------------------------------------------
addition to Seller's indemnification obligations set forth in Section 7.1(a)
above, Seller agrees to indemnify Buyer and Buyer's Affiliates for any Claims or
Losses arising out of any claim asserted against Buyer or a Buyer's Affiliate by
a creditor of Seller which arises out of any failure by the parties to comply
with the Maryland Bulk Sales Laws with respect to the transactions contemplated
by this Agreement and any action brought or levy made as a result thereof (a
"Transaction Challenge"). Buyer shall promptly advise Seller of any Transaction
Challenge of which Buyer becomes aware.
(c) Indemnification by Buyer. As an inducement for Seller to
------------------------
enter into this Agreement and the Related Documents, and acknowledging that
Seller is relying on the indemnification provided in this Section 7 in entering
into this Agreement and the Related Documents, Buyer agrees to indemnify, defend
and hold harmless Seller, and its employees,
11
officers, directors, representatives and agents (collectively, "Seller
Affiliates"), from and against any Claims and Losses suffered or incurred by
Seller or Seller's Affiliates as a result of or in connection with any of the
following: (i) any Assumed Liabilities; (ii) any liabilities of Buyer that are
not Retained Liabilities; or (iii) a breach of any obligation, representation,
warranty, covenant or agreement of Buyer in this Agreement or any Related
Document, or because any representation or warranty by Buyer contained in this
Agreement or any Related Document shall be materially false (collectively,
"Seller's Damages").
7.2 Representation, Cooperation and Settlement.
------------------------------------------
(a) Each party agrees to give prompt notice to the other of any
claim against the other which might give rise to a claim based on the indemnity
contained in Sections 7.1(a), 7.1(b) and 7.1(c), stating the nature and basis of
the claim and the amount thereof.
(b) In the event any claim, action, suit or proceeding is
brought against a party (the "Indemnified Party") with respect to which the
other party (the "Indemnifying Party") may have liability under the indemnity
contained in Sections 7.1(a), 7.1(b) or 7.1(c) hereof, the Indemnified Party
shall permit the Indemnifying Party to assume the defense of any such claim or
any litigation resulting from such claim, provided that the Indemnified Party
shall not be required to permit the Indemnifying Party to assume the defense of
any third party claim which if not first paid, discharged, or otherwise complied
with would result in a material interruption or cessation of the conduct of the
Indemnified Party's business or any material part thereof or materially impair
the value of the Purchased Assets. Failure by the Indemnifying Party to notify
the Indemnified Party of its election to defend any such claim or action by a
third party within thirty (30) days after notice thereof shall have been given
by the Indemnified Party, shall be deemed a waiver of any such election. If the
Indemnifying Party assumes the defense of such claim or litigation resulting
therefrom, the obligations of the Indemnifying Party hereunder as to such claim
shall include taking all steps reasonably necessary in the defense or settlement
of such claim or litigation resulting therefrom, including the retention of
competent counsel satisfactory to the Indemnified Party, and holding the
Indemnified Party harmless from and against any and all damage resulting from,
arising out of, or incurred with respect to any settlement approved by the
Indemnifying Party or any judgment in connection with such claim or litigation
resulting therefrom. The Indemnifying Party shall not, in the defense of such
claim or litigation, consent to the entry of any judgment (other than a judgment
of dismissal on the merits without costs) except with the written consent of the
Indemnified Party nor enter into any settlement (except with the written consent
of the Indemnified Party) which does not include as an unconditional term
thereof the giving by the claimant or the plaintiff to the Indemnified Party a
release from all liability in respect to such claim or litigation in form and
substance acceptable to the Indemnified Party.
(c) If the Indemnifying Party shall not assume the defense of
any such claim by a third party or litigation resulting therefrom, the
Indemnified Party may defend against such claim or litigation. If the
Indemnified Party assumes the defense of such claim or litigation resulting
therefrom, the obligations of the Indemnified Party hereunder as to such claim
shall include taking all steps reasonably necessary in the defense or settlement
of such claim or litigation resulting therefrom, including the retention of
competent counsel satisfactory to the Indemnifying Party. The Indemnified Party
shall not, in the defense of such claim or litigation,
12
consent to the entry of any judgment (other than a judgment of dismissal on the
merits without costs) except with the written consent of the Indemnifying Party
nor enter into any settlement (except with the written consent of the
Indemnifying Party) which does not include as an unconditional term thereof the
giving by the claimant or the plaintiff to the Indemnified Party a release from
all liability in respect to such claim or litigation in form and substance
acceptable to the Indemnifying Party. The Indemnifying Party shall, in
accordance with the provisions hereof, promptly reimburse the Indemnified Party
for the amount of any settlement reasonably entered into by the Indemnified
Party and for all damage incurred by the Indemnified Party in connection with
the defense against or settlement of such claim or litigation.
7.3 Survival of Representations and Warranties.
------------------------------------------
(a) The representations and warranties of Seller contained in
Article 2 above and the covenants of Seller contained in Article 7 of this
Agreement, shall survive the Closing hereunder and shall continue in full force
and effect for a period of two (2) years after the Closing. A claim shall be
deemed made under this Section 7.3(a) and shall not be deemed to be invalid by
the terms of this Section 7.3(a) if Buyer sends written notice of such claim to
Seller prior to the expiration date of the survival period.
(b) The representations and warranties of Buyer contained in
Article 3 above (excluding the representations and warranties contained in
Section 3.7 above which shall survive for a period of three (3) years following
the Closing) and the covenants of Buyer contained in Article 7 (excluding the
indemnification obligations referenced in subsection (i) of Section 7.1(c) and
as they relate to a breach of Section 3.7 of this Agreement, which shall survive
for a period of three years following the Closing) shall survive the Closing
hereunder and shall continue in full force and effect for a period of two (2)
years after the Closing. A claim shall be deemed made under this Section 7.3(b)
and shall not be deemed to be invalid by the terms of this Section 7.3(b) if
Seller sends written notice of such claim to Buyer prior to the expiration of
the expiration date of the survival period.
7.4 Limitations on Liability.
------------------------
(a) The aggregate of Seller's liability to Buyer under this
Agreement shall be $6,000,000.
(b) Except where a party's damages are found to be caused by the
other party's actual fraud, neither party shall be liable to the other for any
special, indirect, punitive, consequential, exemplary or similar damages in any
dispute between the parties relating, directly or indirectly, to this Agreement
or the transactions contemplated hereby.
13
ARTICLE 8
---------
CLOSING
8.1 Closing. Unless this Agreement shall have been terminated pursuant to
-------
Section 9, and subject to the satisfaction or waiver of the conditions set forth
in Articles 4 and 5, the closing (the "Closing") shall be consummated at the
offices of Xxxxx & Xxxxxxx L.L.P., 000 00xx Xxxxxx, X.X., Xxxxxxxxxx, X.X., at
10:00 a.m. (Eastern Standard Time) on April 19, 2000 or as soon as reasonably
practicable after the satisfaction of or waiver of the conditions set forth in
Articles 4 and 5. The date of such Closing is herein referred to as the "Closing
Date." At the Closing, the parties to this Agreement will exchange funds,
documents, agreements, certificates and other instruments and documents so as to
cause the terms and conditions of this Agreement to be satisfied. All documents
and instruments delivered at Closing pursuant to this Article 8 shall be dated
and shall be effective for all purposes as of the Closing Date.
8.2 Deliveries By Seller. At the Closing, Seller shall deliver to Buyer:
--------------------
(a) executed copies of each of the Related Documents required by
their terms to be executed by Seller;
(b) the Seller's Certificate as required pursuant to Section
4.8;
(c) a certified copy of the Articles, as filed with and
certified by the MSDAT on the Closing Date; and
(d) copies of all approvals and consents required to be obtained
by Seller on or prior to Closing pursuant to Sections 4.3, 4.5 and 4.6,
including but not limited to the Lender's Consent.
8.3 Deliveries by Buyer. At the Closing Buyer shall pay the Closing Cash
-------------------
Payment to Seller, and shall deliver to Seller:
(a) executed copies of each of the Related Documents required by
their terms to be executed by Buyer;
(b) the Buyer's Certificate as required pursuant to Section 5.6;
and
(c) copies of all approvals and consents required to be obtained
by Buyer on or prior to Closing pursuant to Sections 5.4 and 5.5.
8.4 Trademark Assignments and Filings. Seller shall provide reasonable
---------------------------------
assistance to Buyer in affecting the transfer of trademarks and trade names,
including the execution of required trademark assignments, certificates or
documents and the filing thereof.
14
ARTICLE 9
---------
TERMINATION
9.1 Termination. Notwithstanding anything contained in this Agreement to
-----------
the contrary, this Agreement may be terminated at any time prior to the Closing:
(a) by mutual written consent of Seller and Buyer;
(b) by Buyer, if any condition to the obligations of the Buyer
under this Agreement to be complied with or performed by Seller at or before the
Closing shall not have been complied with or performed at the time required for
such compliance or performance, and such noncompliance or nonperformance shall
not have been waived by Buyer or cured by Seller within 10 days of such
noncompliance or nonperformance; or
(c) by Seller, if any condition to the obligations of the Seller
under this Agreement to be complied with or performed by the Buyer at or before
the Closing shall not have been complied with or performed at the time required
for such compliance or performance, and such noncompliance or nonperformance
shall not have been waived by Seller or cured by the Buyer within 10 days of
such noncompliance or nonperformance.
9.2 Effect of Termination. In the event of the termination of this
---------------------
Agreement pursuant to this Article 9, this Agreement shall forthwith become void
and there shall be no liability on the part of any party hereto or any of its
directors, officers, stockholders or affiliates except nothing herein shall
relieve any party from liability for any breach by such party.
ARTICLE 10
----------
TRANSACTIONS SUBSEQUENT TO THE CLOSING DATE
10.1 Further Assurances. From time to time after the Closing Date, the
------------------
parties shall execute, deliver and acknowledge all such further instruments of
transfer and conveyance and shall perform all such other acts as any other party
may reasonably request to more effectively transfer the Purchased Assets and to
otherwise carry out the transactions contemplated by this Agreement and the
Related Documents.
10.2 Sales and Use Taxes. Any sales, use or other transfer tax which is
-------------------
payable as the result of the transactions contemplated by this Agreement shall
be paid by Buyer in full compliance with applicable law. Buyer will provide
Seller with an appropriate resale certificate relating to the purchase of
Seller's inventory.
10.3 Employees. From and after the Closing, Buyer shall be permitted, but
---------
is not required, to contact and meet with such employees of Seller whose duties
directly relate to the Poultry Diagnostic Business as Buyer selects and to offer
employment to such persons as Buyer selects on terms to be determined by Buyer
(each, a "New Employee"). The parties agree that the employment relationship
between such New Employees and Buyer shall be a new employment relationship and
that Seller shall not be responsible for any compensation or benefits to any New
Employees attributable to the period of their employment by Buyer.
15
10.4 Manufacturing Agreement. Seller and Buyer agree to perform the
-----------------------
covenants and agreements set forth in Article 3 of the Manufacturing Agreement
in order to enable Buyer to assume the manufacturing of the Products in
accordance with such Manufacturing Agreement. Seller and Buyer further agree, as
contemplated by the terms of the Secured Note that (a) if Seller complies with
its obligations under Article 3 of such Manufacturing Agreement, even though the
transfer of the manufacturing to Buyer has not occurred within twelve months
from the Closing Date, Buyer is obligated to pay $800,000 (such amount is
included in, and not in addition to, the amounts set forth in Section 1.4(c)
hereof to be paid by Buyer) to Seller on the twelve-month anniversary of the
Closing Date or if such transfer of the manufacturing is completed prior to such
anniversary of the Closing Date, upon the date such transfer of the
manufacturing is completed, and (b) is obligated to pay the remaining $200,000
(such amount is included in, and not in addition to, the amounts set forth in
Section 1.4(c) hereof to be paid by Buyer) to the Seller when the transfer of
the manufacturing is completed, but in no event later than the fifteen-month
anniversary of the Closing Date. In no event shall Buyer have any right to
offset against amounts owed to Seller under the Secured Note any other amounts
that Buyer claims are owed to Buyer by Seller under this Agreement or any of the
Related Documents.
ARTICLE 11
----------
MISCELLANEOUS PROVISIONS
11.1 Investigations and Survival. The respective representations,
---------------------------
warranties, covenants and agreements of Seller and Buyer herein and in the
Related Documents, or in any certificates or other documents delivered prior to
or at the Closing, shall not be deemed modified, waived or otherwise affected by
any investigation made by any party or its representatives hereto nor shall the
same be affected by the Closing.
11.2 Successors and Assigns. This Agreement may not be assigned by a party
----------------------
without the prior written consent of the parties hereto which consent shall not
be unreasonably withheld or delayed; provided, however, this Agreement may be
assigned and the obligations hereunder delegated by the Buyer to a purchaser or
acquiror of all or substantially all of the business, stock or assets of Buyer
in whatever form of corporate transaction or to any other corporation or entity
that, directly or indirectly, through one or more intermediaries, controls, is
controlled by or under common control with Buyer without the consent of the
Seller; provided, however, that any such assignment shall not relieve Buyer of
its obligations hereunder or under any of the Related Documents. Except as
otherwise provided herein, the terms and conditions of this Agreement shall
inure to the benefit of and be binding upon the respective successors, assigns,
heirs, legatees, executors and administrators of the parties. Nothing expressed
or implied in this Agreement is intended to confer on any person other than
Buyer, Seller and their respective successors and permitted assigns any rights
or obligations under this Agreement.
11.3 Governing Law; Jurisdiction and Venue; Severability. This Agreement
---------------------------------------------------
shall be governed by and construed in accordance with the laws of the State of
Maryland, without regard to principles of conflicts of law. If any term,
covenant or condition of this Agreement is held to be to any extent invalid,
void, or otherwise unenforceable by any court or arbitrator, the remainder of
this Agreement shall not be affected thereby and each term, covenant and
condition of this Agreement shall be valid and enforceable to the fullest extent
permitted by law.
16
11.4 Entire Agreement; Modification and Waiver. This Agreement, together
-----------------------------------------
with the agreements and documents referred to herein, constitute the entire
agreement between the parties hereto with respect to the subject matter hereof
and supersede all prior and contemporaneous agreements and understandings. All
Exhibits and Schedules attached hereto are incorporated herein by this
reference. This Agreement may be modified, amended or supplemented only by a
written instrument duly executed by all parties hereto. No covenant, term or
condition or the breach thereof shall be deemed waived, unless it is waived in
writing and signed by the party against whom the waiver is claimed. Any waiver
of breach of any covenant, term or condition shall not be deemed to be a waiver
of any preceding or succeeding breach of the same or any other covenant, term or
condition. The failure of any party to insist upon strict performance of any
covenant, term or condition hereunder shall not constitute a waiver of such
party's right to demand strict compliance therewith in the future. Time is of
the essence for purposes of each and every provision of this agreement.
11.5 Notices. All payments, notices, requests, demands and other
-------
communications required or permitted hereunder shall be in writing and shall be
delivered personally (which shall include delivery by courier or overnight
delivery service) or sent by certified or registered mail postage prepaid,
certified or return receipt requested, or sent by telecopier or similar
facsimile transmission, to the parties at their respective address set forth
below or at such other address as shall be given in writing by a party to the
other party. Items delivered personally or by telecopier or facsimile shall be
deemed delivered on the date of actual delivery; items sent by certified or
regular mail shall be deemed delivered three (3) days after mailing.
If to Seller: Kirkegaard & Perry Laboratories, Inc.
0 Xxxxxx Xxxxx
Xxxxxxxxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxxxx Xxxxx, President
Telephone No.: 000-000-0000
Facsimile No.: 000-000-0000
With a copy (which shall not constitute notice) to
Xxxxx & Xxxxxxx LLP
000 Xxxxxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
Attention: Xxxxxx X. Xxxxxxx
Telephone No.: 000-000-0000
Facsimile No.: 000-000-0000
If to Buyer: Synbiotics Corporation
00000 Xxx Xxxxxxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
Attention: Chief Financial Officer
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
17
With a copy (which shall not constitute notice) to:
Xxxxxxx, Xxxxxxx & Xxxxxxxx LLP
00000 Xx Xxxxxx Xxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx Xxxxxxx, Esq.
Telephone No.: 000-000-0000
Facsimile No.: 000-000-0000
11.6 Payment of Fees and Expenses.responsible for, and shall pay, all of
----------------------------
its own legal, accounting and other transactional fees and expenses incurred in
the negotiation and preparation of this Agreement and the Related Documents and
the transactions contemplated herein and therein.
11.7 No Other Representations. Except to the extent expressly set forth in
------------------------
this Agreement or the Exhibits or Schedules attached hereto (as incorporated
herein), neither party makes any representations or warranties to the other and
disclaims all liability and responsibility for any representation, warranty,
statement or information orally or in writing to the other party, including any
opinion, information or advice which may have been provided by one party to the
other party.
11.8 Captions. The Article and Section headings used in this Agreement are
--------
for convenience or reference only and are not to be considered in construing or
interpreting any term or provision of this Agreement.
11.9 Publicity. Except as required by applicable law, neither Seller nor
---------
Buyer shall make any public announcement or otherwise communicate with any third
party, including without limitation news media, customers and government
authorities, in respect of this Agreement or the transactions contemplated
herein without prior notification to and approval by Seller (in the case of a
proposed communication by Buyer) or Buyer (in the case of a proposed
communication by Seller), and Seller and Buyer shall cooperate as to the timing
and contents of any such announcement or communication.
11.10 Confidentiality. The Confidentiality and Non-Disclosure Agreement
---------------
dated as of December 17, 1998 between Buyer and Seller remains in full force and
effect and each of the parties agrees to perform its obligations thereunder.
Each of the parties agrees that it will not disclose the existence of this
Agreement except to their respective financial, legal and other advisors, on a
"need-to-know" basis, and persons or entities with whom consents, approvals or
clearances would be required to consummate the transactions contemplated by this
Agreement and the Related Documents.
11.11 Counterparts. This Agreement may be executed in multiple copies, each
------------
of which shall be deemed an original and all of which shall constitute a single
agreement binding on all parties.
[Remainder of This Page Intentionally Left Blank]
18
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
"BUYER" "SELLER"
SYNBIOTICS CORPORATION, KIRKEGAARD & PERRY
a California corporation LABORATORIES, INC.
a Maryland corporation
By: /s/ Xxxxxxx Xxxxx By: /s/ Xxxxxx Xxxxx
----------------- ----------------
Title: Vice President - Finance Title: President
COUNTERPART SIGNATURE PAGE TO ASSET PURCHASE AGREEMENT
19
EXHIBIT A
---------
TRANSITIONAL MANUFACTURING AND SUPPLY AGREEMENT
This TRANSITIONAL MANUFACTURING AND SUPPLY AGREEMENT (this
"Agreement"), is dated as of April 18, 2000 (the "Effective Date"), by and
between Synbiotics Corporation, a California corporation ("Synbiotics"), having
its principal office at 00000 Xxx Xxxxxxxx, Xxx Xxxxx, XX 00000 and Kirkegaard
& Perry Laboratories, Inc., a Maryland corporation ("KPL"), having its principal
office at 0 Xxxxxx Xxxxx, Xxxxxxxxxxxx, Xxxxxxxx 00000.
Recitals
--------
WHEREAS, Synbiotics and KPL have entered into an Asset Purchase
Agreement, dated as of April 18, 2000 (the "Purchase Agreement"), pursuant to
which Synbiotics has agreed to acquire certain assets comprising KPL's Poultry
Diagnostics Business (as defined in the Purchase Agreement) and to assume
certain liabilities and obligations of KPL related to KPL's Poultry Diagnostics
Business;
WHEREAS, KPL will continue to manufacture and will supply Synbiotics
with certain products related to the Poultry Diagnostics Business requested by
Synbiotics for a period of time after the closing of the transactions under the
Purchase Agreement, upon the terms and conditions hereinafter set forth; and
WHEREAS, KPL and Synbiotics will implement a transition plan to enable
Synbiotics to manage an orderly transition to Synbiotics' operation of the
Poultry Diagnostics Business, including its assumption of the manufacture of the
Products (as defined below) at facilities owned or leased by Synbiotics, upon
the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and mutual covenants
and agreements herein, the parties hereto agree as follows:
ARTICLE 1: PRODUCTS
--------------------
1.1 Current Products. Pursuant to the terms of this Agreement, KPL
-----------------
shall manufacture and sell to Synbiotics, and Synbiotics shall purchase from
KPL, commercial poultry diagnostics products currently being manufactured by KPL
as identified on Exhibit A attached hereto (the "Products"). Synbiotics shall
---------
purchase all its requirements of the Products from KPL until the manufacturing
of such Products has been successfully transferred from KPL to Synbiotics, and
KPL will use commercially reasonable efforts to supply such requirements, based
upon a six-month rolling forecast of Synbiotics' requirements. Synbiotics will
provide the initial six-month rolling forecast in writing to KPL no later than
thirty (30) days after the
Effective Date, and shall update such six-month rolling forecast in writing to
KPL every three months thereafter. The estimate for the first three months of
each such six-month rolling forecast shall be binding on Synbiotics.
1.2 New or Additional Products. If Synbiotics requests that KPL
---------------------------
manufacture and supply new or additional commercial poultry diagnostic products
that are not identified on Exhibit A attached hereto, the parties agree in
--- ---------
good faith to negotiate mutually acceptable terms for the manufacture and supply
of such new or additional products, and, if such terms are mutually agreed upon,
to execute and deliver an appropriate amendment to this Agreement or a separate
agreement for such purpose. The parties acknowledge and agree that KPL shall
have no obligation to apply for and obtain any licenses or approvals from the
United States Department of Agriculture ("USDA") or other agencies or
departments of the United States Government or of any other state, local or
foreign government (collectively, "Governmental Authority") in connection with
such new or additional products; provided, however, that in the event the
parties enter into an amendment to this Agreement or a separate agreement for
the manufacture and supply of such new or additional products, KPL will provide
commercially reasonable assistance to Synbiotics in applying for such licenses
or approvals.
ARTICLE 2: PREPARATION OF PRODUCTS
-----------------------------------
2.1 Specifications. KPL shall manufacture and package the Products
--------------
pursuant to the specifications outlined in the current USDA Outline of
Production, as described or referred to in Exhibit B attached hereto. KPL shall
---------
use commercially reasonable efforts to manufacture and supply the Products
hereunder in accordance with such specifications.
2.2 Trademark. During the term of this Agreement, Synbiotics grants KPL
---------
a non-transferable, non-exclusive, royalty-free license (without right to
sublicense) to use trademarks of Synbiotics solely to manufacture and/or supply
the Products exclusively to Synbiotics pursuant to this Agreement.
2.3 Quality Control. KPL shall be responsible for performing quality
---------------
control and/or quality assurance with respect to the Products manufactured by
KPL in accordance with its current procedures.
2.4 Labeling. KPL shall label the Products with the current label or one
--------
to be provided by Synbiotics. Synbiotics shall abide by the rules and
regulations of the USDA with respect to the labelling of the Products. During
the term of this Agreement and for one year after this Agreement is terminated
in accordance with its terms, Synbiotics shall indemnify, defend and hold
harmless KPL from and against any Losses (as defined in Section 2.9 below)
arising from or in connection with any failure of Synbiotics to provide proper
warnings and instructions on its literature and labels which will be in
compliance with all state, federal and local laws. Synbiotics shall bear all
costs of printing its labels, which shall not be modified, removed or replaced
without the express consent of Synbiotics. Synbiotics shall bear all costs of
other marketing materials and associated expenses.
2.5 Inspection Rights. Synbiotics shall have the right, upon reasonable
-----------------
written notice to KPL and at mutually convenient times, to enter upon KPL's
facilities in order to
A-2
physically inspect and test any of the Products prior to shipment by KPL. In
addition, Synbiotics shall also have the right, upon reasonable notice to KPL,
to have one or more designated employees of Synbiotics present as an observer in
KPL's facilities during the manufacture of any of the Products.
2.6 Warranty. KPL warrants that the Products shall be free of defects in
--------
material and workmanship at the time of shipment of the Products. The sole
remedy of Synbiotics for breach of the above warranty shall be the return of the
defective Product at Synbiotics' sole expense. If such Product is found
defective, KPL, at KPL's sole option, shall repair or replace such Product.
Notwithstanding the foregoing, no warranty, express or implied, shall extend to
any Product that has been subjected to misuse, neglect, accident, or improper
storage or installation or that has been repaired, modified or altered by any
person or entity other than KPL. No course of dealing or usages of trade or
course of performance may be used to supplement or explain the terms of this
warranty or the obligations and rights of the parties hereto. If the warranty
herein be altered, enlarged or changed by any distributor, dealer or other
person whatsoever then Synbiotics assumes the responsibility for the additional
altered terms. Nothing contained in this Section 2.6 shall in any way limit the
scope of KPL's indemnification obligation, as set forth in Section 2.9 hereof.
2.7 Disclaimers. THE EXPRESS WARRANTY SET FORTH IN SECTION 2.6 OF THIS
-----------
AGREEMENT IS IN LIEU OF, AND SYNBIOTICS HEREBY EXPRESSLY WAIVES, ALL OTHER
GUARANTEES AND WARRANTIES OF ANY KIND, WHETHER EXPRESS, IMPLIED OR STATUTORY,
INCLUDING, WITHOUT LIMITATION, ANY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR
A PARTICULAR PURPOSE, AND ALL SUCH OTHER WARRANTIES ARE HEREBY DISCLAIMED AND
EXCLUDED BY KPL. IN NO EVENT SHALL KPL BE LIABLE FOR ANY SPECIAL, INCIDENTAL OR
CONSEQUENTIAL DAMAGES IN CONNECTION WITH OR ARISING OUT OF THE SALE OR USE OF
ANY PRODUCT, WHETHER BASED ON BREACH OF WARRANTY OR ON CONTRACT, STRICT
LIABILITY, NEGLIGENCE OR OTHERWISE, WHETHER OR NOT KPL SHALL HAVE BEEN ADVISED
AS TO THE POSSIBILITY OR REASON FOR ANY SUCH POTENTIAL LOSS OR DAMAGE. THE SOLE
AND EXCLUSIVE REMEDY FOR BREACH OF KPL'S WARRANTY OF THE PRODUCTS SHALL BE AS
STATED IN SECTION 2.6 HEREOF. IN ALL OTHER CASES KPL'S SOLE AND EXCLUSIVE
LIABILITY WITH RESPECT TO ANY MATTER ARISING FROM OR CONNECTED WITH THE SALE OR
USE OF ANY PRODUCTS, OR KPL'S PERFORMANCE UNDER THIS AGREEMENT, WHETHER BASED ON
BREACH OF WARRANTY OR ON CONTRACT, STRICT LIABILITY, NEGLIGENCE OR OTHERWISE,
SHALL NOT EXCEED THE ORIGINAL COST TO SYNBIOTICS OF THE PRODUCTS SOLD OR
PROVIDED TO SYNBIOTICS, NOTWITHSTANDING ANY FAILURE OF ESSENTIAL PURPOSE OF ANY
LIMITED REMEDY. NOTHING CONTAINED IN THIS SECTION SHALL IN ANYWAY LIMIT THE
SCOPE OF KPL'S INDEMNIFICATION OBLIGATION, AS SET FORTH IN SECTION 2.9 HEREOF.
2.8 License of Equipment. During the term of this Agreement, Synbiotics
--------------------
grants KPL a license to use the Dynex Plate Making/Casting Machine, Serial
Number 1023 (the "Equipment"). During the term of this Agreement, KPL shall, at
its own expense, (a) keep the Equipment in a suitable environment as specified
by the Equipment's manufacturer, and in good
A-3
condition and working order, ordinary wear and tear excepted; (b) maintain
insurance with an insurer having a "Best Policyholders" rating of B+ or better
covering loss of or damage to the Equipment with a $1,000 deductible per
occurrence; and (c) shall maintain commercial general liability insurance, in
the amount of at least $1,000,000, or more for each occurrence, with an insured
having a "Best Policyholders" rating of B+ or better. Each policy required by
this Section 2.8 shall name Synbiotics as an additional insured and shall
contain a clause requiring the insured to provide thirty (30) days' prior
written notice of the cancellation or any material alteration to the terms of
such policy. KPL shall furnish to Synbiotics, upon request, reasonable evidence
that all insurance required by this Section 2.8 is in effect. During the term of
this Agreement, KPL shall not make any material alteration or modification to
the Equipment without Synbiotics' prior written consent, which consent shall not
be unreasonably withheld. Upon the termination or expiration of this Agreement,
KPL shall deliver the Equipment to Synbiotics, at Synbiotics' sole cost and
expense, in accordance with written instructions provided to KPL by Synbiotics.
2.9 Indemnity. During the term of this Agreement and for two years
---------
after this Agreement is terminated in accordance with its terms, Synbiotics
shall defend, indemnify and hold harmless KPL from and against any and all
liabilities, damages, losses, obligations, costs and expenses, including
attorney's fees (collectively, a "Loss") that KPL may incur in connection with a
claim for damage to or loss of tangible personal property, breach of warranty,
or for bodily injury, sustained by any customer or user or other person or
entity (collectively, "Damage") if or where the Damage is caused by or arises in
connection with (a) improper use of Products, (b) improper disposal of Products,
(c) unauthorized modification of Products, (d) Synbiotics' fault or negligence,
(e) any warranties, representations or agreements (other than those based on
KPL's warranty or some other term of this Agreement) made by Synbiotics or its
agents in connection with sales of Products; (f) a breach by KPL of the warranty
in Section 2.6 hereof, or (g) KPL's failure to ship or otherwise provide
Products in a timely manner. During the term of this Agreement and for two years
after this Agreement is terminated in accordance with its terms, KPL shall
defend, indemnify and hold harmless Synbiotics from and against any and all
Losses that Synbiotics may incur in connection with a claim for Damage if such a
Damage is directly caused by the operation of the Equipment by KPL or (b) third
party claims arising from the failure of KPL to produce or package a Product in
accordance with the applicable outline guide for the production of such Product;
provided, however that nothing set forth in this Section 2.9 shall be construed
as imposing any liability on KPL, whether pursuant to this Section 2.9 or
otherwise, for any Damage caused by the sale, distribution, use or misuse of a
Product.
2.10 Notice of Claims. In the event that KPL shall receive a claim or
----------------
notice of a claim alleging Damage that is subject, in whole or in part, to
Synbiotics' obligation to defend, indemnify and hold harmless as set forth in
Section 2.8, KPL shall give Synbiotics written notice within 10 business days
after receipt of the claim or notice of the claim. KPL shall cooperate with
Synbiotics in every reasonable manner in the defense of such claim.
ARTICLE 3: TRANSITION PLAN
---------------------------
KPL and Synbiotics shall each use commercially reasonable efforts, and
shall cooperate with each other, to implement the transition plan set forth at
Exhibit C attached
---------
A-4
hereto, which is intended to effect an orderly transfer of the manufacturing of
the Products to Synbiotics within twelve months after the closing of the
transactions under the Purchase Agreement.
ARTICLE 4: PRICES AND PAYMENT TERMS
------------------------------------
Synbiotics shall pay KPL for the Products in accordance with the
pricing schedule set forth in Exhibit D attached hereto. All amounts required
---------
to be paid hereunder shall be paid in U.S. Dollars by check or wire transfer
within thirty (30) days after the invoice date. Such prices do not include any
applicable sales, use, value-added, excise, withholding and/or other taxes
(except income taxes imposed on KPL), custom duties, fees, freight, insurance,
handling, shipping and delivery charges, all of which shall be the
responsibility of and shall be paid by Synbiotics. All title and risk of loss
or damage to or delay of the Products shall pass to Synbiotics upon their
delivery to the common carrier or other agent or other person designated by
Synbiotics at or near KPL's manufacturing or warehousing facility in
Gaithersburg, MD. Shipping arrangements from such facility shall be at
Synbiotics' instructions and expense.
ARTICLE 5: TERM
----------------
This Agreement shall terminate on the earlier of (i) 120 days after
written notice from Synbiotics to KPL to the effect that Synbiotics has decided
to assume responsibility for manufacturing of the Products or (ii) one year
after the closing of the transactions under the Purchase Agreement. This
Agreement may be renewed for successive ninety-day terms with the mutual written
consent of the parties. The parties understand and agree that for each Product
being manufactured by KPL under this Agreement, upon the completion of the
transfer of manufacturing for such Product, KPL shall have no further
obligations to manufacture such Product.
ARTICLE 6: PURCHASE OF INVENTORY
---------------------------------
6.1 Inventory. Except as set forth in Section 6.1 with respect to
---------
raw materials, upon termination of this Agreement, Synbiotics will purchase any
or all of the principal components and packaging, supplies, and Products in
KPL's possession that are related exclusively to the Products (the "Inventory").
Synbiotics shall pay KPL an amount equal to KPL's costs for any such Inventory.
Notwithstanding the foregoing, Synbiotics shall not be required to purchase any
inventory that is damaged, obsolete or unmarketable due to a prohibition on
marketing such inventory by the USDA.
6.2 Raw Materials. After the Closing (as defined in the Purchase
-------------
Agreement), Synbiotics shall sell to KPL the raw materials included within the
Purchased Assets being sold to Synbiotics pursuant to the Purchase Agreement for
a purchase price $352,780.27. The parties acknowledge and agree that
notwithstanding such sale, KPL shall be entitled to use such raw materials to
produce the Products pursuant to this Agreement. KPL shall credit the amount of
$352,780.27 to Synbiotics ratably over 12 months from the Closing with the
balance of such amount credited to KPL upon the termination of this Agreement.
Upon the termination
A-5
or expiration of this Agreement, Synbiotics shall purchase all remaining
inventories of such raw materials at KPL's cost.
ARTICLE 7: FORCE MAJEURE
-------------------------
If the performance of this Agreement or of any obligation hereunder is
prevented, restricted or interfered with by reason of any cause beyond the
reasonable control of the affected party, the party so affected upon prompt
notice to the other party shall be excused from such performance to the extent
of such prevention, restriction or interference; provided, however, that the
-------- -------
party so affected shall use commercially reasonable efforts to avoid or remove
such causes of non-performance and shall continue performance hereunder with the
utmost dispatch whenever such causes are removed.
ARTICLE 8: RELATIONSHIP AND OTHER MATTERS
------------------------------------------
8.1 Relationship. During the term of this Agreement, the only
------------
relationship between the parties shall be as independent contractors. Except as
expressly set forth herein, neither party is authorized to, or shall undertake
to bind the other party in any way by any warranty, agreement, contract,
representation or order, whether in the name of Synbiotics or KPL or otherwise,
nor shall either party refer to or use the other's name alone or in any
combination with any other words or names, in any manner or connection
whatsoever, including in any publication, article, or any form of advertising or
publicity, except with the consent of the other party and except where required
by any Governmental Authority and then only to the extent so required.
8.2 No Restriction. This Agreement does not restrict KPL's right
--------------
during or after the term of this Agreement to distribute or sell components that
may be used in the Products, including but not limited to, antibodies,
substrates, buffers and solutions to any customers or distributors of KPL for
research or re-manufacture as contemplated under the Non-Competition Agreement
of even date herewith between Seller and Buyer.
ARTICLE 9: ASSIGNMENT AND DELEGATION
-------------------------------------
Neither of the parties shall be entitled to transfer or assign or
delegate, partially or entirely, any of its rights or obligations under this
Agreement to another without the prior written consent of the other party;
provided that either party may assign this Agreement without such consent in
connection with a merger or consolidation with an unrelated third party or
transfer to an unrelated third party of all or substantially all of such party's
assets. No assignment requiring consent hereunder shall be effective until the
assignee agrees in writing with the other party to be bound by and to perform
all of the obligations of its assignor under this Agreement, nor shall the
assignor be released from its obligations hereunder, by virtue of such
assignment or otherwise, unless the non-assigning party expressly consents in
writing to such release.
A-6
ARTICLE 10: MISCELLANEOUS
--------------------------
10.1 Notices. All notices and other communications hereunder shall be
-------
in writing and shall be deemed to have been duly given when delivered
personally, or transmitted by telecopier, receipt acknowledged, or in the case
of documented overnight delivery service or registered or certified mail, return
receipt requested, postage prepaid, on the date shown on the receipt therefore,
to the parties at the following addresses (or at such other address for a party
as shall be specified by like notice):
If to KPL:
Kirkegaard & Perry Laboratories, Inc.
0 Xxxxxx Xxxxx
Xxxxxxxxxxx, XX 00000
Attention: Xxxxxx Xxxxx, President
Fax: (000) 000-0000
with a copy (which shall not constitute notice) to:
Xxxxx & Xxxxxxx LLP
000 Xxxxxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
Attention: Xxxxxx X. Xxxxxxx
Telephone No.: 000-000-0000
Facsimile No.: 000-000-0000
If to Synbiotics:
Synbiotics Corporation
00000 Xxx Xxxxxxxx
Xxx Xxxxx, XX 00000
Attention:
Fax: (000) 000-0000
with a copy (which shall not constitute notice) to:
Xxxxxxx, Xxxxxxx & Xxxxxxxx LLP
00000 Xx Xxxxxx Xxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx Xxxxxxx, Esq.
Fax: (000) 000-0000
10.2 Severability. The invalidity or unenforceability of any provision
------------
of this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, each of which shall remain in full force and
effect.
A-7
10.3 Entire Agreement. This Agreement (with its Exhibits), together
----------------
with the Purchase Agreement with its Exhibits, contains, and is intended as, a
complete statement of all of the terms and the arrangements between the parties
hereto with respect to the matters provided for herein, and supersedes any and
all previous oral or written agreements and understandings between the parties
hereto with respect to those matters. No provision of this Agreement shall
create any rights or benefits in favor of any person or entity other than KPL
and Synbiotics.
10.4 Governing Law. This Agreement shall be governed by and construed
-------------
in accordance with the laws of the State of Maryland, without giving effect to
principles of conflicts of law. This Agreement shall be interpreted as having
been drafted jointly by both parties hereto and shall not be more strictly
construed against either party.
10.5 Good Faith and Dealing Clauses. In entering into this Agreement,
------------------------------
the parties hereto recognize that it is impracticable to make provision for
every contingency which may arise during the term of this Agreement and the
parties declare it to be their intention to exercise good faith and fair dealing
under this Agreement. If during the term of this Agreement a situation arises
that is beyond the reasonable control of either party and that is not covered by
any other provisions under this Agreement and if such situation results in a
material disadvantage to one party and a corresponding material advantage to the
other party, then at the request of either party the parties shall promptly
consult with a view towards reaching a mutually acceptable agreement dealing
with such situation.
10.6 Amendments, Waivers, etc. This Agreement may be amended,
------------------------
supplemented or modified, and any provision hereof may be waived, only pursuant
to written instrument making specific reference to this Agreement signed by each
of the parties hereto.
10.7 Waiver. The failure or delay of either party to exercise or
------
enforce any right hereunder, including termination for breach or default, shall
not be deemed to be a waiver of the right for that or any other subsequent
breach or default or for the persistence in a breach or default of a continuing
nature.
10.8 Counterparts. This Agreement may be executed and delivered in one
------------
or more counterparts, each of which shall be deemed an original hereof, and all
of which together shall constitute one and the same instrument.
10.9 Language; Headings. The official language of this Agreement is
------------------
the English language and all notices and other written materials pertaining to
this Agreement shall be maintained and delivered in the English language. Any
translation of this Agreement shall be at Synbiotics' expense and solely for its
information or use, and such translation shall not govern the rights of the
parties under this Agreement. The headings set forth in this Agreement are
solely for convenience of reference and shall not constitute a part of this
Agreement or affect its meaning, construction or effect. All references to
Sections or Exhibits are references to the Sections and Exhibits to this
Agreement.
A-8
IN WITNESS WHEREOF the parties hereto have caused this Agreement to be
executed and delivered by their respective duly authorized representatives, as
of the day and year first above written.
KIRKEGAARD & PERRY LABORATORIES, INC.
By: /s/ Xxxxxx Xxxxx
----------------
Name: Xxxxxx Xxxxx
Title: President
SYNBIOTICS CORPORATION
By: /s/ Xxxxxxx Xxxxx
-----------------
Name: Xxxxxxx Xxxxx
Title: Vice President - Finance
A-9
EXHIBIT A
Products
--------
Catalog Number Poultry Elisa Kit Tests Per Kit
-------------- --------------------------------- -------------
54-90-01 Infectious Bursal disease Plus (IBD+) 450
54-81-01 Infectious bursal Disease (IBD) 900
54-82-01 Infectious Bronchitis Virus (IBV) 900
54-83-01 Newcastle Disease Virus (NDV) 900
54-84-01 Avian Reovirus (REO) 900
54-87-05 MG/MS Combination 900*
*Kit contains 450 tests for each agent
54-86-01 Avian Encephalomyelitis Virus (AE) 900
54-93-01 Infectious laryngotracheitis (LT) 900
54-95-01 Avian Leukosis virus (ALV), antigent detection 900
54-77-01 Pasteurella multocida (PM) 900
54-87-06 AE-IBV-IBD-NDV-REO Combination 900*
*Kit contains 450 tests for each agent
54-85-01 Mycoplasma gallisepticum (MG) 900
54-96-01 Mycoplasma synoviae (MS) 900
54-78-01 Avian Influenza Virus (AIV) 900
54-80-01 Chicken Anemia Virus (CAV) 450
54-88-01 Avian Leukosis Virus, subgroup J (ALV-J) 450
54-99-01 Hemorrhagic Enteritis Virus (HEV) 900
54-72-01 Bordetella avium (BA) 900
54-89-01 Pasteurella nultocida (PM) 900
54-92-01 New Castle Disease Virus (NDV) 900
54-94-01 Mycoplasma gallisepticum (MG) 900
54-97-01 Mycoplasma synoviae (MS) 900
54-98-01 Mycoplasma meleagridis (MM) 900
454-9199 Broad Spectrum Salmonella 40
454-9194 Group-D Salmonella 40
454-9293 Campylobactor Species 40
454-9590 E-Coli 0157 40
X-00
XXXXXXX X-0
Purchased Assets
The Purchased Assets include all right, title, and interest of Seller
in and to the personal properties, assets, goodwill and rights of Seller set
forth on this Exhibit B-1 that are owned by, or licensed to, the Seller as of
the Closing and used, held for use or intended to be used primarily in the
operation or conduct of the Poultry Diagnostic Business, including the following
(but excluding the types of assets described in paragraph (a) of Schedule 2.7 of
the Seller's Disclosure Schedule and Seller's Tetramethyl benzidene
precipitating substrate, goat anti- E. coli IgG, goat anti-Salmonella IgG, goat
anti-Camplybacter IgG, and their enzyme conjugates):
(a) Dynex Plate Making/Casting machine, Serial Number 1023;
(b) copies of all books, customer lists and records, inspection
records, distributor lists and records, research records relating to poultry and
turkey products and other business records pertaining to the Poultry Diagnostic
Business and the Purchased Assets;
(c) to the extent assignable, all Relevant Contracts, and all rights
of Seller, whether now existing or hereafter arising, thereunder, including the
benefit of all deposits given by Seller pursuant thereto, relating to the
Poultry Diagnostic Business set forth in Schedule 1 to this Exhibit B-1;
------------
(d) all supplies, raw-materials, works in process, finished goods and
materials used or consumed in the Poultry Diagnostic Business existing on the
Closing Date;
(e) all rights, title and interests in and to all products relating to
the Poultry Diagnostic Business currently in development as of the Closing;
(f) all rights to the trademark "PROFLOK", and the goodwill of the
Poultry Diagnostic Business symbolized by such trademark name, including all
United States Federal and state and all foreign registrations, extensions,
renewals, applications for registrations of such or rights to register the same
worldwide, used in connection with the Poultry Diagnostic Business, and set
forth on Schedule 2 all licenses or consents to use with respect thereto, and
any and all rights of enforcement with respect to the foregoing, including all
rights worldwide to xxx for the infringement or unauthorized use thereof
(whether past, present or future) and the recovery of damages or royalties
related thereto (collectively, the "Trademarks");
(g) all technical information used in the Poultry Diagnostic Business
(including, for example, invention disclosures, trade secrets and know-how,
assemblies and detail drawings,
design manufacturing and assembling techniques and methods, design information,
parts list, databases, computer software and documentation, source code
listings, mask works, technical data, user, operation and maintenance manuals,
servicing and installation instructions relating to manufacturing processes and
apperati, design and production processes, test and inspection techniques and
procedures, material handling techniques, inspection methods and standards used
in the Poultry Diagnostic Business) and set forth in the Outlines of Production
attached as Exhibit B of the Manufacturing Agreement, and all trade secret
rights arising under the common law, state or federal law or the laws of any
foreign country, and the unencumbered right to exercise all such rights in all
media and by any manner and means now known or hereafter devised, and any and
all rights to register, patent or secure protection of such, and all rights of
action and claims for damages and benefits arising from past, present and future
infringements of such trade secret rights together with the right to xxx for and
in the name of Buyer and to collect the same for Buyer's use, all throughout the
world for the legal duration thereof, including, without limitation, those set
forth in Section 2.12 of the Seller's Disclosure Schedule (collectively, the
"Trade Secrets");
(h) all right, title and interest in and to the ProFILE software
licensed to Seller pursuant to the Consulting Services Agreement, dated between
Seller and Innov Corporation (the "Software" and together with the Trade Marks
and Trade Secrets, the "Transferred Intellectual Property"); and
(i) all of Seller's marketing literature relating to the Poultry
Diagnostic Business in Seller's possession on the Closing Date.
B-1-2
Schedule 1
----------
(a) Distributor Agreements
(i) Written Distributor Agreements
Distributor Expiration
Agricultural Development January 1998
Avenida & Associates Inc. August 31, 1994
BTI March 15, 1992
Chem-East January 2001
Egytech August 1, 2003
FELCO N/A
Golbid Co. Ltd. January 1998
(EMBARGO)
Xxxxxx Pharmaceuticals August 31, 2000
Intertech (formerly Biovida) December 31, 1998
La Ensenada N/A
LSI January 1998
Maya Laboratuar, Ltd. January 27, 1999
Merial (formerly ISBI) December 31, 1998
Modern Agropharmaceuticals January 1, 2001
Est
Nippon Biological June 30, 1999
Seravian, S. L. March 31, 2000
Xxxxx Xxxxxx Life Sciences N/A
Xxxx Medic Limited August 31, 1994
Veterquimica N/A
N/A
(ii) Any written Distributor arrangements entered into by Seller, on the one
hand, and:
AgroBio Tek Laboratorios;
Bio Diagnostics SND. BHD.;
Bio-Mediq DPC;
Carval De Colombia;
Fort Dodge Animal Health;
Xxxxxx Biotech (terminated);
Productos Quimicos Magiar SA;
PT Satwa Jawa Jaya; or
Rhenium Ltd., on the other hand,
if, and only if, Seller provides Buyer with a copy of any such written
Distributor arrangement to Buyer on or before May 18, 2000.
B-1-3
Notwithstanding the foregoing, Seller is not assigning and Buyer is not assuming
any oral contracts by and between Seller, on the one hand, and any of the
parties listed in the prior sentence.
(b) License Agreements
------------------------------------------------------------------------------------------------------------
Licensor Subject Matter of License
------------------------------------------------------------------------------------------------------------
Univ. of Maryland IBDV e/Del Recombinant C12
------------------------------------------------------------------------------------------------------------
Univ. of Maryland CAV - Monoclone, X00 Xxxx Xxxx, X00 and mab 8
------------------------------------------------------------------------------------------------------------
Univ. of Maryland R63 and mab 8
------------------------------------------------------------------------------------------------------------
Univ. of Maryland Influenza Group A Specific Monoclonal Antibodies:
LS-98-070
------------------------------------------------------------------------------------------------------------
USDA Avian Leukosis Virus Subgroup J Envelope Gene
------------------------------------------------------------------------------------------------------------
Veterinary Infectious Disease Organization Hybridoma Cell Line (15 G 4)
------------------------------------------------------------------------------------------------------------
(c) Software - Innov Agreement.
B-1-4
Schedule 2
----------
Trademarks
Country Registration No. Effective Date Expiration Date
------- ---------------- -------------- ---------------
United States No. 1,561,761 10/24/1989 10/24/2009
France No. 1,148,880 3/16/1989 3/16/2009
Benelux No. 462,552 3/11/1999 4/18/2009
United Kingdom No 1,368,834 12/12/1995 12/12/2005
Portugal No. 255,395 10/20/1992 10/20/2002
Spain No. 1,315,229 6/5/1991 6/5/2011
B-1-5
EXHIBIT B-2
Assumed Liabilities
The Assumed Liabilities shall include any and all debts, liabilities,
assessments, losses, damages, costs, expenses or other obligations (including
all debts, liabilities, assessments, losses, damages, costs, expenses or other
obligations owing to trade creditors) related to the Purchased Assets, arising
on or after the Closing Date, including but not limited to (a) customer claims
for Products sold after the Closing (b) the remaining license fees due under the
Innov Agreement.
EXHIBIT B-3
-----------
Retained Liabilities
The Retained Liabilities shall include:
(a) all liabilities of Seller that would be reflected on a balance
sheet prepared as of the Closing prepaid in accordance with generally accepted
accounting principles, except as included in the Assumed Liabilities;
(b) al1 contingent liabilities of Seller existing on the Closing Date
other than Assumed Liabilities, which shall include customer claims for products
of the Poultry Diagnostic Business sold by Seller prior to the Closing;
(c) all damages and liabilities with respect to employees, former
employees or retirees of Seller arising on or prior to the Closing Date;
(d) all liabilities of Seller existing on the Closing Date other than
Assumed Liabilities; and
(e) any liabilities arising out of a breach of a written distribution
agreement between Seller, on the one hand and any of the following, on the other
hand, (i) BioMedig DPC, (ii) Carval De Colombia, (iii) Fort Dodge Animal Health,
(iv) Xxxxxx Biotech, (v) Productos Quimicos Magiar SA, (vi) PT Satwa Jawa Jaya,
(vii) Rheniurn Ltd., (vii) Bio Diagnostics SND.BHD, and (ix) AgroBio Tek
Laboratories, to the extent any such written agreement exists on the date hereof
and such breach arises out of actions or inactions occurring on or prior to the
earlier of (a) the date any such written agreement is delivered to Buyer or (b)
May 18, 2000.
EXHIBIT C
---------
SECURED PROMISSORY NOTE
$1,000,000 As of April 18, 2000
Washington, D.C.
FOR VALUE RECEIVED, SYNBIOTICS CORPORATION, a Delaware corporation (the
"Maker"), promises to pay to the order of KIRKEGAARD & PERRY LABORATORIES, INC.,
a Maryland corporation (the "Holder"), at, or at such other place as the Holder
may from time to time designate, the aggregate principal amount of $1,000,000.
Said principal shall be due and payable as follows:
Amount Due Payment Due Date
---------- ----------------
$800,000 Upon the earlier of (i) the completion of the
transfer of the manufacturing of the Products
as defined in the Transitional Manufacturing
and Supply Agreement of even date herewith,
by and between Holder and Maker (the
"Manufacturing Agreement") from Holder to
Maker in accordance with the terms of the
Manufacturing Agreement or (ii) April 18,
2001.
$200,000 Upon the earlier of (i) the completion of the
transfer of the manufacturing of the Products
as defined in the Manufacturing Agreement
from Holder to Maker in accordance with the
terms of the Manufacturing Agreement or (ii)
July 18, 2001.
All payments hereunder shall be made in lawful money of the United States of
America.
The unpaid principal amount of this Note may be prepaid in whole or in part
at any time or times without premium or penalty. Each prepayment shall be
applied first to the payment of all accrued but unpaid interest and other
amounts accrued hereunder, if any, on the date of any such prepayment, and the
balance of any such prepayment shall be applied to installments of principal
payable hereunder in the order of maturity.
This Note evidences the obligation of the Maker to the Holder pursuant
to Section 1.4 of the Asset Purchase Agreement, dated as of April 18, 2000,
-----------
between Maker and Holder (the "Agreement"), and is secured by a Security
Agreement of even date herewith, between Maker and Holder (the "Security
Agreement"), encumbering certain assets of Maker. The Holder is entitled to the
benefits of the Security Agreement, and reference is made to the
Security Agreement for a description of the collateral and the rights and
remedies of the Holder thereunder. Neither the reference to the Agreement nor
any provision thereof shall affect or impair the absolute and unconditional
obligation of the Maker to pay the principal amount hereof when due.
The occurrence of any of the following shall constitute an event of
default ("Event of Default") hereunder: (i) failure to pay, when due, the
principal or any other sum payable hereunder, and continuance of such failure
for five (5) business days after the date on which such principal, or other sum
is due (whether upon maturity hereof, upon any installment payment day, upon
acceleration, or otherwise); (ii) an event of default by Maker under the
Security Agreement; (iii) an event of default by Maker under the Manufacturing
Agreement; or (iv) an event of default by Maker under the Royalty Agreement.
Upon the occurrence of any Event of Default hereunder, the entire principal
amount hereof, and all accrued and unpaid interest thereon, shall be
accelerated, and shall be immediately due and payable, at the option of the
Holder, without demand or notice with respect to an Event of Default specified
in clause (i) of this Agreement, and in addition thereto, and not in
substitution therefor, the Holder shall be entitled to exercise any one or more
of the rights and remedies provided by applicable law. Failure to exercise said
option or to pursue such other remedies shall not constitute a waiver of such
option or such other remedies or of the right to exercise any of the same in the
event of any subsequent Event of Default hereunder.
In the event that the principal amount hereof, or any other sum due
hereunder, is not paid when due and payable, the whole of the unpaid principal
amount evidenced hereby and all unpaid sums due hereunder shall, from the date
when such payment was due and payable until the date of payment in full thereof,
bear interest at the interest rate announced by The Wall Street Journal as the
"prime" lending rate charged by major financial institutions (the "Prime Rate")
plus two percent (2%), which rate shall commence, without notice, immediately
upon the date when said payment was due and payable. Should The Wall Street
Journal cease publishing the Prime Rate, an alternate index of similar nature
will be selected by the Maker and the Holder.
The Maker promises to pay all reasonable costs and expenses (including
without limitation reasonable attorneys' fees and disbursements) incurred in
connection with the collection hereof, and to perform each and every obligation
to be performed by the Maker under this Note.
Any payment on this Note coming due on a Saturday, a Sunday, or a day
which is a legal holiday in the place at which a payment is to be made hereunder
shall be made on the next succeeding day which is a business day in such place,
and any such extension of the time of payment shall be included in the
computation of interest hereunder.
Each Obligor (which term shall include the Maker and all makers,
sureties, guarantors, endorsers, and other persons assuming obligations pursuant
to this Note) under this Note hereby waives presentment, protest, demand, notice
of dishonor, and all other notices, and all defenses and pleas on the grounds of
any extension or extensions of the time of payments or the due dates of this
Note, in whole or in part, before or after maturity, with or without notice. No
renewal or extension of this Note, no release or surrender of any collateral
given as security for this Note, no release of any Obligor, and no delay in
enforcement of this Note or in exercising any right or
C-2
power hereunder, shall affect the liability of any Obligor. The pleading of any
statute of limitations as a defense to any demand against Obligor is expressly
waived.
No single or partial exercise by the Holder of any right hereunder
shall preclude any other or further exercise thereof or the exercise of any
other rights. No delay or omission on the part of the Holder in exercising any
right hereunder shall operate as a waiver of such right or of any other right
under this Note.
This Note and all agreements between the Maker and the Holder relating
hereto are hereby expressly limited so that in no contingency or event
whatsoever, whether by reason of acceleration or otherwise, shall the amount
paid or agreed to be paid to the Holder for the use, forbearance or detention of
money hereunder exceed the maximum amount permissible under applicable law. If
from any circumstance whatsoever fulfillment of any provision hereof, at the
time performance of such provision shall be due, shall involve transcending the
limit of validity prescribed by law, then, ipso facto, the obligation to be
----------
fulfilled shall be reduced to the limit of such validity, and if from any such
circumstance the Holder shall ever receive interest, or anything which might be
deemed interest under applicable law, which would exceed the highest lawful
rate, such amount which would be excessive interest shall be applied to the
reduction of the principal amount owing on account of this Note and not to the
payment of interest, or if such excessive interest exceeds the unpaid balance of
principal of this Note, such excess shall be refunded to the Maker. All sums
paid or agreed to be paid to the Holder for the use, forbearance or detention of
the indebtedness of the Maker to the Holder shall, to the extent permitted by
applicable law, be deemed to be amortized, prorated, allocated and spread
throughout the full term of such indebtedness until payment in full so that the
actual rate of interest on account of such indebtedness is uniform throughout
the term thereof. The terms and provisions of this paragraph shall control and
supersede every other provision of this Note and all other agreements between
the Maker and the Holder.
Whenever used herein, the words "Maker" and "Holder" and "Obligor"
shall be deemed to include their respective successors and assigns.
This Note shall be governed by and construed under and in accordance
with the laws of the State of Maryland (but not including the choice of law
rules thereof).
IN WITNESS WHEREOF, the undersigned has caused this Note to be duly
executed and delivered in its name and on its behalf on its behalf as of the day
and year first hereinabove set forth.
SYNBIOTICS CORPORATION
ATTEST:
/s/ Xxxx Xxxxxxxx By: /s/ Xxxxxxx X. Xxxxx
----------------- --------------------
Name: Xxxxxxx X. Xxxxx
Title: President and CEO
C-3
EXHIBIT D
---------
SECURITY AGREEMENT
THIS SECURITY AGREEMENT, dated as of April 18, 2000 (this "Agreement"), is
made by and between SYNBIOTICS CORPORATION, a California corporation
("Synbiotics"), and KIRKEGAARD & PERRY LABORATORIES, INC., a Maryland
corporation ("Secured Party").
WHEREAS, pursuant to an Asset Purchase Agreement of even date herewith, by
and between Synbiotics and the Secured Party (the "Purchase Agreement"),
Synbiotics has agreed to purchase the Purchased Assets (as defined in the
Purchase Agreement) from the Secured Party for a Purchase Price (as defined in
the Purchase Agreement), which Purchase Price includes a payment by Borrower to
the Secured Party in the aggregate amount of $1,000,000 pursuant to the Note (as
defined below);
WHEREAS, as a condition to the closing under the Purchase Agreement,
Synbiotics has agreed to secure the payment and performance of its obligations
to the Secured Party pursuant to this Agreement and the Secured Promissory Note,
dated of even date herewith, made by the Buyer and payable to the Secured Party
in the original principal amount of $1,000,000 (the "Note");
NOW THEREFORE, in consideration of the foregoing, the covenants and
agreements herein contained, and other valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto do hereby agree
as follows:
ARTICLE I
DEFINITIONS
Section 1.1 Defined Terms. Unless otherwise defined herein, the
-------------
capitalized terms used in this Agreement shall have the meanings assigned to
such terms as stated below:
(a) "Affiliate" shall mean, as to any person, any other person that,
directly or indirectly, controls, is controlled by or is under common control
with such person or is a director or officer of such person. For purposes of
this definition, the term "control" (including the terms "controlling",
"controlled by" and "under common control with") of a person means the
possession, direct or indirect, of the power to vote 5% or more of the voting
stock of such person or to direct or cause the direction of the management and
policies of such person, whether through the ownership of voting stock, by
contract or otherwise.
(b) "Collateral" shall mean those assets of the Synbiotics in which
the Secured Party shall have a perfected security interest, as described in
Section 2.1 herein.
-----------
(c) "Event of Default" shall have the meaning specified in Section 4.1
-----------
hereof.
(d) "Lien" shall mean and include any lien, mortgage, security
interest, pledge, charge, equity, encumbrance or right of any kind whatsoever.
(e) "Repayment Amount" shall mean the unpaid principal amount of the
Note and all other amounts due thereunder.
ARTICLE 2
SECURITY INTEREST
Section 2.1 Security. As security for the prompt and full payment of the
--------
Note and the performance by Synbiotics of all other obligations to the Secured
Party under the Note and this Agreement, whether now in existence or hereafter
created and whether primary, secondary, direct, contingent or otherwise,
Synbiotics hereby pledges, assigns and grants to the Secured Party a valid,
binding, enforceable, perfected, exclusive continuing first priority security
interest in all of Synbiotics' right, title and interest in and to the property
of Synbiotics listed on Exhibit A.
---------
All of the property and interests in property described in Exhibit A
---------
and all other property and interests in personal property which shall, from time
to time, secure the Secured Obligations are herein collectively referred to as
the "Collateral".
Section 2.2 Rights of Secured Party. Synbiotics agrees that with respect
-----------------------
to the Collateral, the Secured Party shall have all of the rights and remedies
of a secured party under any applicable laws.
ARTICLE 3
MONITORING OF COLLATERAL
Section 3.1 Inspection of Records. The Secured Party shall have the
---------------------
right, upon reasonable prior notice to Synbiotics, to call at Synbiotics' places
of business during regular business hours, before or after an Event of Default,
and without hindrance or delay, to audit, inspect, verify, check and make
extracts or photocopies from the records of Synbiotics relating to the
Collateral and other data relating to the Collateral.
Section 3.2 Notice of Events Affecting Collateral. Synbiotics,
--------------------------------------
immediately upon learning thereof, shall report to the Secured Party all matters
materially affecting the value, enforceability or collectibility of any of the
Collateral.
ARTICLE 4
EVENTS OF DEFAULT; TERMINATION
Section 4.1 Events of Default. If any of the following events shall occur
-----------------
(each an "Event of Default"), the Secured Party shall be entitled to exercise
its rights and remedies under Article 5 of this Agreement:
(a) The occurrence of any Event of Default under the Note;
D-2
(b) The occurrence of any event of default by Synbiotics under the
Transitional Manufacturing and Supply Agreement of even date herewith, by
and between Synbiotics and Secured Party ("Manufacturing Agreement");
(c) Synbiotics shall fail to make any payments when due as provided
for in the Royalty Agreement of even date herewith, between Synbiotics and
Secured Party ("Royalty Agreement"), unless otherwise suspended by the term
of such agreement;
(d) Synbiotics shall breach or fail to perform any of the obligations
set forth in this Agreement which breach or failure is not cured within 15
calendar days after notice thereof from the Secured Party to Synbiotics;
(e) Any Lien created on the property encumbered hereby shall cease to
be a valid and enforceable perfected first priority security interest in
favor of the Secured Party, or Synbiotics shall so assert in writing or any
of the Collateral shall be or become subject to any non-statutory Lien that
has priority over the Liens granted to the Secured Party hereunder; or
(f) Any event or condition shall occur and be continuing for more than
15 calendar days which causes, or which permits any lender to Synbiotics,
to declare, any material indebtedness of Synbiotics for money borrowed to
become due and payable prior to its scheduled maturity date.
Section 4.2 Termination of Agreement. This Agreement shall be terminated
------------------------
and Synbiotics shall be released from liability hereunder upon the full and
final payment to the Secured Party of all amounts owed to the Secured Party
(including, but not limited to, the Repayment Amount) and the performance of all
other obligations secured hereby.
ARTICLE 5
RIGHTS AND REMEDIES UPON AN EVENT OF DEFAULT
Section 5.1 Secured Party's Specific Rights and Remedies. In addition to
--------------------------------------------
all other rights and remedies provided by law or under the Note, the Secured
Party, upon the occurrence of any Event of Default, may:
(a) Foreclose or enforce all or any security interests, liens,
assignments, or pledges created by this Agreement or in the Note;
(b) File suit against Synbiotics;
(c) Seek specific performance or injunctive relief to enforce
performance of the undertakings, duties and agreements provided herein,
whether or not a remedy at law exists or is adequate; and
(d) Exercise any rights of a secured creditor under the Uniform
Commercial Code, as adopted and amended in Maryland, including the right to
take possession of the Collateral without the use of judicial process or
hearing of any kind.
Section 5.2 Remedies Cumulative. The rights and remedies provided in this
-------------------
Agreement and the Note, or otherwise under applicable laws shall be cumulative
and the exercise of any particular right or remedy shall not preclude the
exercise of any other rights or remedies in addition to, or as an alternative
of, such right or remedy.
Section 5.3 Obligations Are Unconditional. The payment and performance of
-----------------------------
the obligations hereunder or secured hereby shall be the absolute and
unconditional duty and obligation of Synbiotics, and, except as otherwise
provided for in the Royalty Agreement or the Manufacturing Agreement, shall be
independent of any defense or any rights of set-off, recoupment or counterclaim
which Synbiotics might otherwise have against the Secured Party, and, except as
otherwise provided for in the Royalty Agreement or the Manufacturing Agreement,
Synbiotics shall pay absolutely all payments required hereunder, free of any
deductions and without abatement, diminution or set-off. Until such time as the
obligations hereunder or secured hereby have been fully paid and performed,
Synbiotics (a) shall not suspend or discontinue any payments provided for in the
Note and except as otherwise provided for in the Royalty Agreement or the
Manufacturing Agreement, (b) shall perform and observe all of Synbiotics'
obligations contained herein, and (c) shall not terminate or attempt to
terminate this Agreement for any cause.
ARTICLE 6
MISCELLANEOUS
Section 6.1 Exercise of Rights. No failure or delay on the part of the
------------------
Secured Party to exercise any right, power or privilege under this Agreement and
no course of dealing between Synbiotics and the Secured Party shall operate as a
waiver thereof, nor shall any single or partial exercise of any right, power or
privilege under this Agreement preclude any other or further exercise thereof or
the exercise of any other right, power or privilege. To the extent permitted by
law, the rights and remedies herein expressly provided are cumulative and not
exclusive of any rights or remedies which the Secured Party would otherwise have
pursuant to law or equity. No notice to or demand on any party in any case
shall entitle such party to any other or further notice or demand in similar or
other circumstances, or constitute a waiver of the right of the other party to
any other or further action in any circumstances without notice or demand. In
the event that the consent of the Secured Party is required under the terms
hereof, it is understood and agreed that except as otherwise provided expressly
herein, the determination whether to grant or withhold such consent shall be
made solely by the Secured Party in its absolute discretion.
Section 6.2 Amendment and Waiver. This Agreement may not be amended,
--------------------
waived, supplemented, restated, or otherwise modified without the prior consent
of Synbiotics and the Secured Party.
Section 6.3 Indemnification.
---------------
(a) Synbiotics agrees to pay, and to hold the Secured Party harmless
from all liability for, any stamp taxes imposed by future changes in law
(including interest, penalties and fees) which may be payable in connection with
this Agreement or any modification of any of the foregoing.
D-4
(b) Synbiotics shall (i) indemnify and hold harmless the Secured Party
and its directors, officers, employees and Affiliates from and against all
losses, claims, damages, expenses or liabilities to which the Secured Party or
such director, officer, employee or Affiliate may become subject insofar as such
losses, claims, damages, expenses or liabilities (or actions, suits or
proceedings including any inquiry or investigation or claims in respect thereof)
are caused by or result from any errors or omissions of Borrower under this
Agreement and (ii) reimburse the Secured Party and its directors, officers,
employees or Affiliates, upon their demand, for any reasonable legal or other
expenses incurred in connection with investigating, preparing to defend or
defending any such loss, claim, damage, liability, action or claim; provided,
--------
however, that Synbiotics shall not be required to indemnify the Secured Party
-------
for any claims, damages, losses, liabilities, costs or expenses to the extent,
but only to the extent, caused by the willful misconduct or gross negligence of
such person or entity. If any action is brought against the Secured Party or
any other person indemnified or intended to be indemnified pursuant to this
Section 6.3(b), Synbiotics shall, if requested by the Secured Party or any such
--------------
indemnified person, resist and defend such action, suit or proceeding or cause
the same to be resisted and defended by counsel reasonably satisfactory to the
person or persons indemnified or intended to be indemnified. Each indemnified
person shall, unless the Secured Party or other indemnified person has made the
request described in the preceding sentence and such request has been complied
with, have the right to employ its own counsel (or staff counsel) to investigate
and control the defense of any other matter covered by such indemnity and the
reasonable fees and expenses of such counsel shall be at the expense of
Synbiotics.
(c) All obligations provided for in Sections 6.3(a) and (b)
-----------------------
herein shall survive any termination of this Agreement.
Section 6.4 Successors and Assigns. This Agreement shall bind, and the
----------------------
benefits hereof shall inure to, Synbiotics and the Secured Party and their
respective successors and assigns; provided that neither may transfer or assign
--------
any or all of its rights and obligations hereunder without the prior written
consent of the other party.
Section 6.5 Notices, Requests, Demands. Except where telephonic
--------------------------
instruction or notices are expressly authorized herein to be given, all notices,
demands, instructions, requests, consents and other communications required or
permitted to be given to or made upon any party hereto shall be given in
accordance with Section 11.5 of the Purchase Agreement.
------------
Section 6.6 Counterparts: Description Headings.
-----------------------------------
(a) This Agreement may be executed in any number of counterparts,
and by the different parties hereto on the same or separate counterparts,
each of which shall be deemed to be an original instrument but all of which
together shall constitute one and the same agreement.
(b) The descriptive headings of the various sections of this Agreement
are inserted for convenience of reference only and shall not be deemed to affect
the meaning or construction of any of the provisions hereof.
D-5
Section 6.7 Governing Law. This Agreement and the rights and obligations
-------------
of the parties under this Agreement shall be governed by and construed and
interpreted in accordance with the laws of the State of Maryland without
reference to its conflict of laws provisions.
Section 6.8 Jurisdiction, Waiver of Jury and Bond. Each of Synbiotics and
-------------------------------------
the Secured Party hereby irrevocably waives trial by jury in any action or
proceeding of any kind or nature in any court in which an action may be
commenced arising out of this Agreement or the Note or any of the transactions
contemplated herein and therein or any assignment thereof. Each of the Secured
Party and Borrower hereby agrees that the United States District Court for the
District of Maryland or, at the option of the Secured Party, any court in which
the Secured Party shall initiate legal or equitable proceedings and which has
subject matter jurisdiction over the matter in controversy, shall have
jurisdiction to hear and determine any claims or disputes between Synbiotics and
the Secured Party, pertaining directly or indirectly to this Agreement, the Note
or any of the transactions contemplated herein and therein. Synbiotics
expressly submits and consents in advance to such jurisdiction in any action or
proceeding commenced in such courts, hereby waiving personal service of the
summons and complaint, or other process or papers issued therein, and agrees
that service of such summons and complaint, or other process or papers may be
made by mail or messenger directed to it at the address set forth in Section
-------
11.5 of the Purchase Agreement and that service so made shall be deemed to be
----
completed upon the earlier of actual receipt of five (5) days after the same
shall have been posted to Synbiotics' address. The Secured Party and Synbiotics
acknowledge that the time and expense required for trial by jury exceed the time
and expense required for a bench trial and hereby waive, to the extent permitted
by law, trial by jury, and waive any bond or surety or security upon such bond
which might, but for this waiver, be required of the Secured Party. Nothing
contained in this Section 6.8 shall affect the right of the Secured Party to
-----------
serve legal process in any other manner permitted by law or affect the right of
the Secured Party to bring any action or proceeding against Synbiotics or its
property in the courts of any other jurisdiction to the extent necessary to
enforce its liens against property located in such jurisdictions. Synbiotics
waives any right it may have to claim or recover in any litigation referred to
above any special, exemplary, punitive or consequential damages or any damages
other than, or in addition to, actual damages.
Section 6.9 Severability. In the event any provision of this Agreement
------------
shall be held invalid or unenforceable by any court of competent jurisdiction,
the parties hereto agree that such holding shall not invalidate or render
unenforceable any other provision hereof or thereof. The parties hereto further
agree that the holding by any court of competent jurisdiction that any remedy
pursued by the Secured Party hereunder is unavailable or unenforceable shall not
affect in any way the ability of the Secure Party to pursue any other remedy
available to it.
Section 6.10 Entire Agreement. This Agreement completely sets forth the
----------------
agreements between the parties and fully supersedes all prior agreements, both
written and oral, relating to all matters set forth herein.
[SIGNATURE PAGE FOLLOWS]
D-6
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to
be duly executed and delivered in its name and on its behalf as of the date
first above written.
SECURED PARTY:
KIRKEGAARD & PERRY
LABORATORIES, INC.
By: /s/ Xxxxxx Xxxxx
----------------
Name: Xxxxxx Xxxxx
Title: President
SYNBIOTICS:
SYNBIOTICS CORPORATION
By: /s/ Xxxxxxx Xxxxx
-----------------
Name: Xxxxxxx Xxxxx
Title: Vice President - Finance
D-7
EXHIBIT A
The Collateral includes all of Debtor's right, title, and interest in
and to the personal properties, assets, goodwill and rights of Debtor set forth
on this Exhibit A that have been sold, assigned, or otherwise transferred to the
---------
Debtor by the Secured Party pursuant to the Asset Purchase Agreement, dated as
of April 18, 2000, between Debtor and Secured Party (the "Purchase Agreement")
and are owned by, or licensed to, the Debtor as of the date hereof including:
(a) Dynex Plate Making/Casting machine, Serial Number 1023, together
with all parts, alterations, attachments, additions, accessions, improvements,
substitutions, replacements and accessions thereto;
(b) copies of all books, customer lists and records, inspection
records, distributor lists and records, research records relating to poultry and
turkey products and other business records pertaining to Debtor's poultry
diagnostic business and the Purchased Assets (as defined in the Purchase
Agreement);
(c) to the extent assignable, all contracts, and all rights of the
Debtor, whether now existing or hereafter arising, thereunder, including the
benefit of all deposits given by the Debtor pursuant thereto, relating to the
Debtor's poultry diagnostic business, set forth in Schedule 1 to this Exhibit A;
---------
(d) all of the Debtor's supplies, raw-materials, works in process,
finished goods and materials used or consumed in the Debtor's poultry diagnostic
business existing on the date hereof and all returned reclaimed or repossess
goods, replacements and substitutions thereof;
(e) all rights, title and interests in and to all products relating to
the Debtor's poultry diagnostic business currently in development as of the date
hereof;
(f) all rights to the trademark "PROFLOK", and the goodwill of the
Debtor's poultry diagnostic business symbolized by such trademark name,
including all United States Federal and state and all foreign registrations,
extensions, renewals, applications for registrations of such or rights to
register the same worldwide, used in connection with Debtor's poultry diagnostic
business, set forth on Schedule 2, all licenses or consents to use with respect
thereto, and any and all rights of enforcement with respect to the foregoing,
including all rights worldwide to xxx for the infringement or unauthorized use
thereof (whether past, present or future) and the recovery of damages or
royalties related thereto;
(g) all technical information used in the Debtor's poultry diagnostic
business (including, for example, invention disclosures, trade secrets and know-
how, assemblies and detail drawings, design manufacturing and assembling
techniques and methods, design information, parts list, databases, computer
software and documentation, source code listings, mask works, technical data,
user, operation and maintenance manuals, servicing and installation instructions
relating to manufacturing processes and apperati, design and production
processes, test and inspection techniques and procedures, material handling
techniques, inspection methods
D-8
and standards used in the Debtor's poultry diagnostic business) and set forth in
the Outlines of Production contained in Exhibit B to the Transitional
Manufacturing and Supply Agreement of even date herewith, between Debtor and
Secured Party, and all trade secret rights arising under the common law, state
or federal law or the laws of any foreign country, and the unencumbered right to
exercise all such rights in all media and by any manner and means now known or
hereafter devised, and any and all rights to register, patent or secure
protection of such, and all rights of action and claims for damages and benefits
arising from past, present and future infringements of such trade secret rights
together with the right to xxx for and in the name of the Debtor and to collect
the same for the Debtor's use;
(h) all right, title and interest in and to the ProFILE software
licensed to the Debtor pursuant to the Consulting Services Agreement, dated July
19, 1997 between Secured Party and Innov Corporation, as assigned to Debtor (the
"Innov Agreement");
(i) all marketing literature relating to Debtor's poultry diagnostic
business in Debtor's possession on the date hereof;
(j) all accessions to, substitutions for and all replacements,
products and proceeds of the foregoing including, without limitation, proceeds
of insurance policies insuring the Collateral.
D-9
Schedule 1
----------
(1) Distributor Agreements
(a) Written distributor agreements between the Debtor and each of the
following:
(i) Agricultural Development;
(ii) AgroBio Tek Laboratorios;
(iii) Avenida & Associates Inc.;
(iv) Bio Diagnostics SND. BHD.;
(v) BTI;
(vi) Chem-East;
(vii) Egytech;
(viii) FELCO;
(ix) Golbid Co. Ltd.;
(x) Xxxxxx Pharmaceuticals;
(xi) Intertech (formerly Biovida);
(xii) La Ensenada;
(xiii) LSI;
(xiv) Maya Laboratuar, Ltd.;
(xv) Merial (formerly ISBI);
(xvi) Modern Agropharmaceuticals Est.;
(xvii) Nippon Biological;
(xviii) Seravian, S. L.;
(xix) Xxxxx Xxxxxx Life Sciences;
(xx) Xxxx Medic Limited; and
(xxi) Veterquimica;
(b) Written distributor arrangements (if any) between the Debtor and each of
the following:
(i) Bio-Mediq DPC;
(ii) Carval De Colombia;
(iii) Fort Dodge Animal Health;
(iv) Xxxxxx Biotech (terminated);
(v) Productos Quimicos Magiar SA;
(vi) PT Satwa Jawa Jaya; and
(vii) Rhenium Ltd.
D-10
(2) License Agreements between the Debtor and each of the following:
-------------------------------------------------------------------------------------------------------------------
Licensor Subject Matter of License
-------------------------------------------------------------------------------------------------------------------
Univ. of Maryland IBDV e/Del Recombinant C12
-------------------------------------------------------------------------------------------------------------------
Univ. of Maryland CAV - Monoclone, X00 Xxxx Xxxx, X00 and mab 8
-------------------------------------------------------------------------------------------------------------------
Univ. of Maryland R63 and mab 8
-------------------------------------------------------------------------------------------------------------------
Univ. of Maryland Influenza Group A Specific Monoclonal Antibodies: LS-98-070
-------------------------------------------------------------------------------------------------------------------
USDA Avian Leukosis Virus Subgroup J Envelope Gene
-------------------------------------------------------------------------------------------------------------------
Veterinary Infectious Disease Organization Hybridoma Cell Line (15 G 4)
-------------------------------------------------------------------------------------------------------------------
(3) Innov Agreement.
D-11
Schedule 2
----------
Trademarks
Country Registration No. Effective Date Expiration Date
------- ----------------
United States No. 1,561,761 10/24/1989 10/24/2009
France No. 1,148,880 3/16/1989 3/16/2009
Benelux No. 462,552 3/11/1999 4/18/2009
United Kingdom No. 1,368,834 12/12/1995 12/12/2005
Portugal No. 255,395 10/20/1992 10/20/2002
Spain No. 1,315,229 6/5/1991 6/5/2011
D-12
EXHIBIT E
---------
LICENSE AND TECHNICAL ASSISTANCE AGREEMENT
This LICENSE AND TECHNICAL ASSISTANCE AGREEMENT, (this "Agreement") is
made and entered into as of the 18th day of April, 2000 (the "Effective Date"),
between SYNBIOTICS CORPORATION, a California corporation ("Licensee") and
KIRKEGAARD & PERRY LABORATORIES, INC., a Maryland corporation ("Licensor").
WHEREAS, the parties have entered into that certain Asset Purchase
Agreement of even date herewith (the "Purchase Agreement"), pursuant to which
Licensee will purchase certain assets of Licensor relating to the development,
promotion and sale of poultry diagnostics products;
WHEREAS, Licensor has designed and developed certain ABTS substrate (1
component) ("Substrate") technologies and Conjugate (as defined below)
technologies for use in the "Poultry Diagnostic Field," as defined below; and
WHEREAS, Licensee desires to avail itself of these Substrate and
Conjugate technologies, and Licensor desires to license such technologies to
Licensee;
NOW THEREFORE, in consideration of the mutual promises contained
herein and the mutual benefits to be derived therefrom, Licensor and Licensee
agree as follows:
ARTICLE 1
Definitions
-----------
The following words and phrases will have the meanings set forth
below:
1.1 Agreement. This Agreement and the following Schedules attached
---------
hereto:
Schedule 1 Trade Secrets
----------
Schedule 2 Licensee Products
----------
1.2 Conjugate. Collectively, Licensor's HRP Goat IaG conjugate and
---------
HRP Goat Anti-Turkey conjugate.
1.3 Licensee Product(s). Each of Licensee's products manufactured for
-------------------
use in the Poultry Diagnostics Field listed on Schedule 2, whether or not
Licensee hereafter makes any changes or modifications.
1.4 Licensee Improvements. Any new technology used or developed by
---------------------
Licensee that consists of improvements to the Substrate and Conjugate
technologies after the Effective Date.
1.5 Manufacturing Agreement. That certain Transitional Manufacturing
-----------------------
and Supply Agreement between Licensor and Licensee of even date herewith.
1.6 New Inventions. Any technology, trade secrets, products or
--------------
services directly related to the Substrate or the Conjugates intended to be used
in the Poultry Diagnostics Field developed by Licensor after the Effective Date.
1.7 Poultry Diagnostics Field. The conduct of business pertaining to
-------------------------
research, development, manufacturing, sales and other activities directly
relating to the development, promotion and sale of Poultry Diagnostic Products.
Notwithstanding the foregoing, the term "Poultry Diagnostic Field" shall not
include general poultry research not directly related to the development of
poultry diagnostic products.
1.8 Poultry Diagnostic Products. Collectively, ELISA kits, Western
---------------------------
blot kits, kit components (exclusive of goat anti-chicken IgC conjugates, goat
anti-turkey conjugates and substrates such as ABTS 1 component reagent)
including virus, purified virus, viral proteins mycoplasma or mycoplasma
proteins, monoclonal antibodies targeted against avian pathogenic reagents, and
computer software that are specifically designed for the assay of infectious
agents, the monitoring of antibody titer in response to immunization or the
evaluation of the state of poultry health.
1.9 Trade Secrets. All of Licensor's existing technical expertise,
-------------
and all proprietary information, data or confidential know-how pertaining to the
design, manufacture, and use of the Substrate and the Conjugates which were
developed or acquired by Licensor and are owned by Licensor and which have been
applied to or used by Licensor in the Poultry Diagnostics Field, as set forth on
Schedule 1.
1.10 Veterinary Diagnostic Field. The conduct of business pertaining
---------------------------
to research, development, manufacturing, sales and other activities directly
relating to the development, promotion and sale of veterinary diagnostic
products. Notwithstanding the foregoing, the term "Veterinary Diagnostic Field
shall not include general veterinary research not directly related to the
development of veterinary diagnostic products.
E-2
ARTICLE 2
License
-------
Licensor hereby grants to Licensee an exclusive (even as to Licensor),
worldwide, perpetual, sublicensable, fully paid up, royalty-free right and
license under the Trade Secrets (i) to make, have made, manufacture, use or sell
any Poultry Diagnostic Products, including without limitation, the Licensee
Products and components of the Licensee Products, in the Poultry Diagnostics
Field; and (ii) to provide or deliver any services to customers, in the Poultry
Diagnostics Field. Notwithstanding anything to the contrary in this Article 2,
Licensor shall be permitted to distribute those products contained in Licensor's
1999 research product catalog (the "Research Products") to third party users for
use in fields other than the Poultry Diagnostic Field; provided, however, Seller
agrees not to knowingly sell any Substrate or Conjugate to any third party for
the purpose of manufacturing or producing products designed primarily for use in
the Poultry Diagnostic Field. Furthermore, nothing contained in this Article 2
shall be construed as prohibiting Licensor from using the Trade Secrets as
contemplated in the Manufacturing Agreement.
ARTICLE 3
Term
----
3.1 Term. This Agreement commences as of the Effective Date and will
----
remain in effect indefinitely unless and until terminated by mutual agreement of
the parties or in accordance with Section 10.3.
3.2 No Termination. Except as otherwise expressly provided in
--------------
Sections 3.1 and 10.3, this Agreement will not be subject to termination during
its term.
ARTICLE 4
Delivery and Technical Assistance
---------------------------------
4.1 Delivery.
--------
(a) Delivery Upon Closing. Licensor has furnished or made available to
---------------------
Licensee copies of such documents, information and other materials in possession
of Licensor, including without limitation, materials relating to the Trade
Secrets, as Licensor believes are reasonably necessary for Licensee to
understand, implement and use the Trade Secrets and to be able to manufacture
Licensee Products.
(b) Future Deliveries. Upon Licensee's reasonable written request from
-----------------
time to time and without charge (other than photocopy expense), Licensor will
furnish to Licensee copies of such additional documents, information and other
materials, in possession of Licensor, which have not previously been provided to
Licensee, including without limitation all materials relating to the Trade
Secrets, as are reasonably necessary for Licensee to understand, implement and
use the Trade Secrets and Licensee Products and to be able to manufacture
Licensee Products.
E-3
4.2 Technical Assistance. Notwithstanding anything to the contrary in
--------------------
Article 2.2, upon Licensee's reasonable request from time to time, Licensor
shall, at Licensee's expense and subject to mutual agreement in good faith
between the parties as to scheduling, scope of work and the projected cost of
Licensor's services, provide technical assistance to Licensee in connection with
the Trade Secrets, and in connection with the manufacture, use, delivery or sale
of Licensee Products. At Licensee's request, such technical assistance shall
include, without limitation:
(a) Advice and assistance by qualified engineers and other personnel who
have knowledge of the Trade Secrets, or experience in the manufacture and use of
Licensee Products; and
(b) Such other technical services and technical information that Licensee
may reasonably request in connection with this Agreement.
4.3 Compensation. For any services rendered upon Licensee's request
------------
pursuant to Section 4.2, Licensee will pay Licensor's normal rates customarily
charged to third parties consisting of Licensor's actual labor costs (including,
without limitation, direct costs by labor category, overhead, burden and general
and administrative expenses) plus a reasonable profit, and will reimburse
Licensor for all reasonable expenses incurred in connection with the performance
of such services (including but not limited to travel, lodging and meal
expenses).
ARTICLE 5
Protection of Trade Secrets
---------------------------
5.1 Use and Non-Disclosure. Licensee and Licensor will not use or
----------------------
permit the use of any Trade Secrets for any purpose not authorized by this
Agreement, except in connection with and subject to the terms of the
Manufacturing Agreement. Subject to the provisions of Section 5.2 and 5.3,
Licensee and Licensor will hold in confidence, and will not disclose or
communicate to any third person, any Trade Secrets. Licensee and Licensor will
take or cause to be taken all reasonably necessary precautions to prevent the
disclosure or communications of such Trade Secrets to third persons.
5.2 Exceptions. Licensee or Licensor may each disclose Trade Secrets
----------
to its employees or to any person or entity in connection with bona fide
business or financing transactions to the extent that each such disclosure is
reasonably necessary for the purpose of manufacturing, selling, delivering,
providing, installing, repairing or servicing any product (including, without
limitation Licensee Products) or providing any services or procuring goods and
services required in connection therewith or discussing or conducting such
business or financing transaction; provided that: (a) Licensee or Licensor
clearly marks any document or other material containing any Trade Secrets so
disclosed to indicate that such documents or materials contain the Trade
Secrets, (b) Licensee or Licensor requires each entity to whom such documents or
materials are disclosed to sign a written agreement limiting use thereof to the
purpose stated in such agreement, prohibiting the reproduction thereof and the
disclosure thereof to any other person and requiring the prompt return thereof
when no longer needed or such agreement is terminated, and (c) any reproduction,
note or summary of such documents or
E-4
materials immediately upon the making thereof will become the property of
Licensor. The foregoing restrictions on the use and disclosure of the Trade
Secrets shall not apply with respect to any Trade Secret (i) that is in or
(through no improper action or inaction by the disclosing party or any agent or
employee) enters the public domain, or (ii) that was rightfully in its
possession or known by Licensee prior to receipt from Licensor, or (iii) in the
case of Licensee only, that was rightfully disclosed to Licensee by another
person without restriction, or (iv) five (5) years after the Effective Date.
5.3 Accessions. Each modification, improvement and revision of any of
----------
the Trade Secrets (except for direct reproductions thereof) that is made by or
for Licensee will become the property of Licensee.
ARTICLE 6
Improvements; First Right of Offer
----------------------------------
6.1 First Right of Offer for New Inventions. Licensee will have a
---------------------------------------
right of first offer to license New Inventions in the Poultry Diagnostics Field.
Licensor shall not license or sell any New Inventions to any third party, except
in the fields of use exclusively reserved to Licensor, without first offering
such New Inventions to Licensee. Upon receipt of written notification from
Licensor as to the details of the New Invention and the specific terms of an
offer by Licensor to sell or license such New Inventions to Licensee, Licensee
shall have thirty (30) days to accept the offer. In the event that Licensee
accepts the offer, the terms of the license or sale shall be those contained in
the offer, and no other terms shall apply. If Licensee does not accept the
offer, then for a period of twelve (12) months thereafter, Licensor may license
such New Inventions to a third party, but shall not do so on terms that are more
favorable to the third party than the terms last offered by Licensor to
Licensee.
6.2 First Right of Offer for License in Veterinary Diagnostic Field.
---------------------------------------------------------------
Licensee will have a right of first offer to obtain a license to manufacture
products and to perform services using the Substrate and Conjugate technologies
in the Veterinary Diagnostic Field. Licensor shall not license or sell the
Substrate and Conjugate technologies in the Veterinary Diagnostic Field to any
third party, without first offering such opportunity to Licensee. Upon receipt
of written notification from Licensor as to the details of the proposed license
or sale of the Substrate and Conjugate technologies in the Veterinary Diagnostic
Field and the specific terms of an offer by Licensor to sell or license such
technologies to Licensee, Licensee shall have thirty (30) days to exercise its
rights under this Section 6.2. In the event that Licensee exercises its rights
under this Section 6.2, the terms of the license or sale shall be those
contained in the offer submitted to Licensor, and no other terms shall apply;
provided, however, that should Licensee choose to exercise its rights under this
Section 6.2 and license the Substrate and Conjugate technologies, Licensee shall
receive an exclusive, perpetual, royalty-free license in exchange for a one-time
license fee of twenty-five thousand dollars ($25,000). If Licensee does not
exercise its rights under this Section 6.2, then for a period of twelve (12)
months thereafter, Licensor may license or sell the Substrate and Conjugate
technologies to a third party, but shall not do so on terms that are more
favorable to the third party than the terms last offered by Licensor to
Licensee.
E-5
6.3 Licensee Improvement(s). Licensee shall promptly disclose to
-----------------------
Licensor in writing all Licensee Improvements.
6.4 Expiration of Right of First Offer and Obligation to Disclose
-------------------------------------------------------------
Licensee Improvements. Notwithstanding anything to the contrary in this
---------------------
Agreement, the rights of first offer in Sections 6.1 and 6.2 shall expire five
(5) years after the Effective Date, and any Licensee Improvements developed or
created at any time after five (5) years after the Effective Date shall not be
included as part of the licenses granted hereunder.
ARTICLE 7
Cooperation in Obtaining Government Approval
--------------------------------------------
Licensor and Licensee promptly will seek all necessary governmental
approvals and licenses that may be required in connection herewith and will
cooperate with each other in every reasonable way to obtain such approval.
Nothing in this Agreement will be deemed to require either party to agree to any
revision or modification of this Agreement that may be required to obtain any
governmental approval.
ARTICLE 8
Default; Remedy; Termination
----------------------------
8.1 Default. A "default" shall exist under this Agreement if either
-------
party fails to perform any written obligation to be performed by it hereunder
within thirty (30) days after written notice from the other party that time for
such performance has passed or, if no such time is prescribed, within thirty
(30) days after written notice from the other party.
8.2 Remedy. If a party is in default hereunder, the party not in
------
default may pursue any remedy available to it at law or in equity if the noticed
default is not cured within the notice period. Termination of this Agreement is
not a remedy for default; this Agreement may be terminated only pursuant to
Sections 3.1 or 8.3.
8.3 Termination by Licensor. Licensor may terminate this Agreement
-----------------------
only in the event that (i) Licensee has not made each payment when due under the
Purchase Agreement and the documents relating thereto, (ii) Licensor has
provided written notice to the Licensee of such failure to pay, (iii) Licensor
has not received payment within ten (10) days after the receipt by Licensee of
the written notice described in (ii) above of the amount then due under the
Purchase Agreement and (iv) Licensor delivers to Licensee a written termination
notice following such ten (10) day period and before such payment is received by
Licensor.
8.4 Performance After Termination. Upon termination of this Agreement
-----------------------------
pursuant to Section 8.3, (a) all right, title and interest to the Licensee
Products, the Licensed Services and any other rights or licenses granted during
the term of this Agreement shall revert back to Licensor; (b) Licensee will
promptly (1) discontinue the use of, and will destroy or return to Licensor or
its designee, all documents and all copies thereof relating to Licensor's
proprietary and confidential information regardless of the form or medium in
which such information is stored, including but not limited to, Trade Secrets
and all notes, summaries and other documents
E-6
or materials containing information relating to such information, and (2)
refrain from any manufacture, delivery or sale involving in any manner
whatsoever, directly or indirectly, use or utilization of any license or any
other right granted under this Agreement.
ARTICLE 9
Miscellaneous
-------------
9.1 Notices. All notices and communications required or permitted to
-------
be given under this Agreement shall be sufficient only if written in English and
personally delivered, delivered by a major commercial rapid delivery courier
service with tracking capabilities or mailed by certified or registered mail,
return receipt requested, with postage or delivery charges prepaid and addressed
to a party at its address set forth below (unless by such notice a different
person or address will have been designated by notice pursuant to this Section).
If not received sooner, notice by mail will be deemed received five (5) days
after deposit in the U.S. mails.
Licensor: Kirkegaard & Perry Laboratories
0 Xxxxxx Xxxxx
Xxxxxxxxxxxx, Xxxxxxxx 00000-0000
Attn: Xxxxxx Xxxxx, President
E-7
with a copy to (which shall not constitute notice) to:
Xxxxx & Xxxxxxx LLP
000 Xxxxxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000-0000
Attn: Xxxxxx X. Xxxxxxx, Esq.
Licensee: Synbiotics Corporation
00000 Xxx Xxxxxxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
Attn: Chief Financial Officer
with a copy (which shall not constitute notice) to:
Xxxxxxx, Xxxxxxx & Xxxxxxxx LLP
00000 Xx Xxxxxx Xxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
Attn: Xxxxxx X. Xxxxxxx, Esq.
9.2 Assignments. Neither party shall assign or transfer any of its
-----------
respective rights or delegate any of its duties under this Agreement without the
prior written consent of the other party, except for assignment or transfer to a
subsidiary or affiliate of the Licensor or in connection with the sale or
transfer of all of the assets.
9.3 Headings. The headings and titles to the Articles and Sections of
--------
this Agreement are inserted for convenience only and will not be deemed a part
hereof or affect the construction or interpretation of any provision hereof.
9.4 Remedies. Unless otherwise expressly provided herein, the rights
--------
and remedies hereunder are in addition to, and not in limitation of, other
rights and remedies under this Agreement, and exercise of one right or remedy
will not be deemed a waiver of any other right or remedy.
9.5 Modification - Waiver. No cancellation, modification, amendment,
---------------------
deletion, addition or other change in this Agreement or any provision hereof, or
waiver of any right or remedy herein provided, will be effective for any purpose
unless specifically set forth in a writing signed by the party to be bound
thereby. No waiver of any right or remedy in respect of any occurrence or event
on one occasion will be deemed a waiver of such right or remedy in respect of
such occurrence or event on any other occasion.
E-8
9.6 Entire Agreement. This Agreement supersedes all other
----------------
agreements, oral or written, heretofore made with respect to the subject hereof
and the transactions contemplated hereby and, with the Schedules hereto and in
conjunction with the Purchase Agreement and the Related Documents (as defined in
the Purchase Agreement), contains the entire agreement of the parties.
9.7 Controlling Law. All questions concerning the validity and
---------------
operation of this Agreement and performance of the obligations imposed upon the
parties hereunder will be governed by the substantive laws of the State of
Maryland, without regard to its conflicts of laws principles.
9.8 Successors and Assigns. The provisions of this Agreement will be
----------------------
binding upon and inure to the benefit of Licensor and Licensee and their
respective successors and authorized assigns. This provision will not be deemed
to expand or otherwise affect the limitations on assignment and delegation set
forth in Section 9.2.
9.9 Product Marking. Licensee Products manufactured, delivered or
---------------
sold by Licensee will be marked by Licensee in conformance with the patent and
copyright laws of the countries of manufacture, use and sale.
9.10 Publicity. Except as the other party gives its prior written
---------
consent, neither Licensor nor Licensee will use the name of the other party in
any publicity, product announcement, brochure, advertising, product labeling,
promotion or otherwise for any purpose.
9.11 Counterparts. This Agreement has been executed in several
------------
counterparts, each of which will be deemed to be an original copy hereof.
9.12 Attorney's Fees. In the event of any dispute or litigation
---------------
relating to this Agreement, the prevailing party shall be entitled to reasonable
attorneys' fees and court costs from the other party(ies).
E-9
IN WITNESS WHEREOF, each of the parties has caused this Agreement to
be duly executed and delivered in its name and on its behalf as of the Effective
Date.
LICENSOR: LICENSEE:
KIRKEGAARD & PERRY SYNBIOTICS CORPORATION,
LABORATORIES, INC. a California corporation
a Maryland corporation
By: /s/ Xxxxxx Xxxxx By: /s/ Xxxxxxx Xxxxx
---------------- -----------------
Title: President Title: Vice President - Finance
E-10
SCHEDULE 1
----------
Trade Secrets
The Trade Secrets for the Substrate and Conjugates are set forth in
Licensor's manufacturing protocols and procedures.
E-11
SCHEDULE 2
----------
Licensee Products
Catalog Number Poultry Elisa Kit Tests Per Kit
-------------- ------------------------------------------------ -------------
54-90-01 Infectious Bursal disease Plus (IBD+) 450
54-81-01 Infectious bursal Disease (IBD) 900
54-82-01 Infectious Bronchitis Virus (IBV) 900
54-83-01 Newcastle Disease Virus (NDV) 900
54-84-01 Avian Reovirus (REO) 900
54-87-05 MG/MS Combination 900*
*Kit contains 450 tests for each agent
54-86-01 Avian Encephalomyelitis Virus (AE) 900
54-93-01 Infectious laryngotracheitis (LT) 900
54-95-01 Avian Leukosis virus (ALV), antigent detection 900
54-77-01 Pasteurella multocida (PM) 900
54-87-06 AE-IBV-IBD-NDV-REO Combination 900*
*Kit contains 450 tests for each agent
54-85-01 Mycoplasma gallisepticum (MG) 900
54-96-01 Mycoplasma synoviae (MS) 900
54-78-01 Avian Influenza Virus (AIV) 900
54-80-01 Chicken Anemia Virus (CAV) 450
54-88-01 Avian Leukosis Virus, subgroup J (ALV-J) 450
54-99-01 Hemorrhagic Enteritis Virus (HEV) 900
54-72-01 Bordetella avium (BA) 900
54-89-01 Pasteurella nultocida (PM) 900
54-92-01 New Castle Disease Virus (NDV) 900
54-94-01 Mycoplasma gallisepticum (MG) 900
54-97-01 Mycoplasma synoviae (MS) 900
54-98-01 Mycoplasma meleagridis (MM) 900
86-12-10 Profile Software Ver. 3.0, 3.5"
86-12-11 Profile Software Ver. 3.0, 5.25"
454-9199 Broad Spectrum Salmonella 40
454-9194 Group-D Salmonella 40
454-9293 Campylobactor Species 40
454-9590 E-Coli 0157 40
E-12
EXHIBIT F
---------
ASSUMPTION AGREEMENT
This Assumption Agreement (the "Agreement") is made and entered into
as of this 18th day of April, 2000 by Kirkegaard & Perry Laboratories, Inc., a
Maryland corporation ("Seller"), and Synbiotics Corporation, a California
corporation ("Buyer").
WHEREAS, pursuant to an Asset Purchase Agreement of even date
herewith, by and between Seller and Buyer (the "Asset Purchase Agreement"),
Seller has agreed to sell and Buyer has agreed to purchase the Purchased Assets
and to assume the Assumed Liabilities; and
WHEREAS, pursuant to Section 8.3(a) of the Asset Purchase Agreement,
--------------
Buyer is required to execute and deliver this Agreement at the Closing;
NOW, THEREFORE, in consideration of the foregoing and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereby agree as follows:
1. Defined Terms. Terms not otherwise defined herein shall have the
-------------
meanings set forth in the Asset Purchase Agreement.
2. Assumption. Upon the terms and subject to the conditions set
----------
forth herein and in the Asset Purchase Agreement, Buyer hereby assumes and
agrees to pay, honor, discharge and perform, as the case may be, in a timely
manner and in accordance with their respective terms, the Assumed Liabilities.
3. Retained Liabilities. Notwithstanding the assumption by Buyer of
--------------------
the Assumed Liabilities, Buyer is not assuming and shall not be liable to Seller
or any other person for obligations or liabilities of Seller other than the
Assumed Liabilities. The Assumed Liabilities shall not include the Retained
Liabilities.
4. Further Assurances. Each party hereto agrees to execute, deliver
------------------
and file such additional instruments and to take such other actions as any other
party may reasonably request in order to effectuate the purposes of this
Agreement.
5. Successors and Assigns. The terms and provisions of this
----------------------
Agreement and the respective rights and obligations of the parties hereunder
shall be binding upon their respective
successors and assigns. The terms and provisions of this Agreement may be
enforced only by the parties hereto and their respective successors and assigns.
6. Governing Law. This Agreement shall be governed by, and construed
-------------
and enforced in accordance with, the laws of the State of Maryland, without
regard to the principles thereof relating to conflicts or choice of laws.
[SIGNATURE PAGE FOLLOWS]
F-2
IN WITNESS WHEREOF, each of the parties has caused this Agreement to
be duly executed and delivered in its name and on its behalf as of the date
first set forth above.
SELLER:
KIRKEGAARD & PERRY LABORATORIES, INC.
By: /s/ Xxxxxx Xxxxx
----------------
Name: Xxxxxx Xxxxx
Title: President
BUYER:
SYNBIOTICS CORPORATION
By: /s/ Xxxxxxx Xxxxx
-----------------
Name: Xxxxxxx Xxxxx
Title: Vice President - Finance
F-3
EXHIBIT G
---------
GENERAL CONVEYANCE. XXXX OF SALE AND ASSIGNMENT
KIRKEGAARD & PERRY LABORATORIES, a Maryland corporation (the "Seller"),
hereby grants, conveys and assigns as of April 18, 2000 (the "Effective Date"),
unto SYNBIOTICS CORPORATION, a California corporation ("Buyer"), pursuant to
that certain Asset Purchase Agreement between the Seller and Buyer dated as of
April 18, 2000 (the "Purchase Agreement"), all of the Seller's right, title and
interest in and to all the assets and personal properties (whether tangible or
intangible and whether owned or leased by Seller), of every kind, character and
description and wherever situated which are identified as Purchased Assets in
Exhibit X-x to the Purchase Agreement (the assets and properties identified in
(i) and (ii) above are collectively referred to as the "Assets").
TO HAVE AND TO HOLD the Assets unto Buyer, its successors and assigns
forever, subject to the terms and conditions of that certain Transitional
Manufacturing and Supply Agreement of even date herewith between Buyer and
Seller.
The Seller and its successors hereby agree to take all actions reasonably
necessary to obtain any necessary consents for the transfer of the Assets to
Buyer and, upon the receipt of such consents, to provide to the Buyer the
benefits of title to such Assets. All the Assets shall automatically be deemed
to have been assigned to Buyer as of the Closing Date (as defined in the
Purchase Agreement). Effective as of the Closing Date, Buyer shall be entitled
to the full economic benefit of ownership of the Assets and shall not be liable
for any loss, damage or charge arising out of acts or omissions of the Seller
occurring prior to the Closing Date with respect to the Assets or the conduct of
Seller's business, except with respect to such losses, damages or charges that
are Assumed Liabilities (as defined in the Purchase Agreement), which Buyer
shall assume in accordance with the terms and conditions of the Purchase
Agreement.
THE SELLER FOR ITSELF AND ITS SUCCESSORS, AGREES THAT they or such
successors will hereafter cause the execution and delivery of any further
assignments, instruments of transfer, bills of sale, powers of attorney or
conveyances and perform other acts, as may be reasonably necessary or desirable
to fully vest in Buyer title to and enjoyment of the Assets assigned or intended
to so be pursuant to this Agreement.
IN WITNESS WHEREOF, the Seller has caused this General Conveyance, Xxxx of Sale
and Assignment to be duly executed and delivered in its name and on its behalf
as of the date first written above.
SELLER:
KIRKEGAARD & PERRY
LABORATORIES, INC.,
a Maryland corporation
By: /s/ Xxxxxx Xxxxx
----------------
Title: President
[SIGNATURE PAGE TO GENERAL CONVEYANCE,
XXXX OF SALE AND ASSIGNMENT]
G-2
EXHIBIT H
---------
NON-COMPETITION AGREEMENT
-------------------------
THIS NON-COMPETITION AGREEMENT (this "Agreement") is entered into as of
April 18, 2000 (the "Effective Date"), by and among SYNBIOTICS CORPORATION, a
California corporation ("Buyer"), and KIRKEGAARD & PERRY LABORATORIES, INC., a
Maryland corporation ("Seller") with reference to the following facts:
A. WHEREAS, pursuant to that certain Asset Purchase Agreement of even
date herewith, by and between Buyer and Seller (the "Purchase Agreement"), Buyer
is purchasing and assuming from Seller and Seller is selling, conveying and
assigning to Buyer, on the terms and subject to the conditions of the Purchase
Agreement, certain of the assets and certain of the liabilities of Seller
related to its poultry diagnostic business.
B. Buyer intends to maintain and operate a business based, in substantial
part, on the Assets.
C. The execution of this Agreement by the Seller is a material inducement
for Buyer's execution of the Purchase Agreement.
D. The parties hereto desire to provide for the protection of the value
of the Purchased Assets (as defined in the Purchase Agreement) being acquired by
Buyer pursuant to the Purchase Agreement, and to provide protection to the
business and confidential information of Buyer.
NOW, THEREFORE, in consideration of the foregoing premises and the mutual
terms, covenants and conditions contained in the Purchase Agreement and this
Agreement, the parties hereby agree as follows:
1. Non-Competition. During the term of this Agreement, without the prior
---------------
written consent of Buyer, Seller shall not directly or indirectly, (a) use any
trade secrets used in the production of Products (as defined in the Transitional
Manufacturing and Supply Agreement of even date herewith, by and between Buyer
and Seller (the "Manufacturing Agreement")), or (b) engage in any business
involving the sale of products designed primarily for poultry diagnostics
anywhere in the world, except in connection with performance of its obligations
under the Manufacturing Agreement , the License and Technical Assistance
Agreement of even date herewith by and between Buyer and Seller (the "License
Agreement"), and the Royalty Agreement of even date herewith, between Seller and
Buyer (the "Royalty Agreement").
Nothing contained in this Section 1 or any other provision in this
Agreement shall be construed as prohibiting or otherwise restricting Seller's
right and ability to sell any of the products listed in its 1999 research
product catalog ("Research Products") to third parties for uses in fields other
than research, development, manufacturing, sales and other activities directly
relating to the development, promotion and sale of poultry diagnostic products
(the "Poultry Diagnostic Field"), provided, however that Seller agrees not to
knowingly sell any Substrate or
Conjugate (as such terms are defined in the License Agreement) to any third
party for the purpose of manufacturing or producing products designed primarily
for use in the Poultry Diagnostic Field.
2. Term and Termination. This Agreement shall extend for a period of
---------------------
three (3) years after the date hereof. This Agreement shall terminate and
Seller shall be released from all of its obligations hereunder in the event
Buyer defaults under any of the following: (i) the Secured Promissory Note of
even date herewith, made by Buyer and payable to Seller in the original
principal amount of $1,000,000 (the "Note"), (ii) the Security Agreement of even
date herewith, by and between Seller and Buyer (the "Security Agreement") or
(iii) the Royalty Agreement; provided, however, that Seller provides Buyer
notice of such default and such default is not cured within the applicable cure
periods set forth in the Note, the Security Agreement or the Royalty Agreement,
as the case may be, unless such cure period is extended or waived by mutual
agreement of the parties.
3. Remedies. Seller acknowledges and agrees that its compliance with the
---------
covenants contained in Section 1 hereof are reasonable and necessary to protect
the goodwill and value of the Purchased Assets. Seller further acknowledges and
agrees that a breach of the covenants in Section 1 hereof will result in
immediate, irreparable and continuing damage to Buyer for which there will be no
adequate remedy at law; and agrees that in the event of any such breach or
violation or any threatened or intended breach or violation of the aforesaid
covenants, the Buyer and its respective successors and assigns may be entitled
to temporary, preliminary and permanent injunctive relief and/or restraining
orders enjoining and restraining such breach or violation or such threatened or
intended breach or violation and/or other equitable relief (without needing to
post any bond or other security) in addition to such other and further relief as
may be proper. Seller hereby represents (i) that it has thoroughly reviewed the
terms of this Agreement, including the geographic areas and time periods stated
herein, (ii) that its experience and/or abilities are such that observance of
this Agreement will not cause undue hardship or unreasonably interfere with its
ability to conduct its business and (iii) that it has reviewed the limitations
imposed by this Agreement with independent counsel.
4. Severability. In the event any portion of this Agreement shall for any
------------
reason be held to be illegal or unenforceable to any extent, such portion shall
be deemed to read in such a way so as to render it legal and enforceable to the
maximum extent possible in every respect, so as to effectuate the parties'
expressed intent to the maximum extent possible, and the remaining portions of
this Agreement shall remain in full force and effect. Without limitation, the
parties agree and intend that the covenants and agreements contained in this
Agreement shall be deemed to be a series of separate covenants and agreements,
one for each and every political subdivision of the covered area. If, in any
judicial proceeding, a court shall refuse to enforce in such action the separate
covenants and agreements deemed included herein then, at the option of Buyer,
wholly unenforceable covenants and agreements shall be deemed eliminated from
the provisions hereof for the purpose of such proceeding to the extent necessary
to permit the remaining separate covenants and agreements to be enforced in such
proceeding. This Agreement is separate and severable from the Purchase
Agreement and the various agreements executed pursuant thereto. The Purchase
Agreement and the various agreements executed pursuant thereto shall remain in
full force and effect notwithstanding any holding that this Agreement is illegal
or unenforceable to any extent.
H-2
5. Notices. All payments, notices, requests, demands and other
--------
communications required or permitted hereunder shall be in writing and shall be
delivered personally (which shall include delivery by courier or overnight
delivery service) or sent by certified or registered mail, postage prepaid,
certified or return receipt requested or sent by telecopier or other similar
facsimile transmission to the parties at their respective address set forth
below or at such other address as shall be given in writing by a party to the
other parties. Items delivered personally or by telecopier or facsimile shall
be deemed delivered on the date of actual delivery; items sent by certified or
registered mail shall be deemed delivered three (3) days after mailing.
Seller: Kirkegaard & Perry Laboratories
0 Xxxxxx Xxxxx
Xxxxxxxxxxxx, Xxxxxxxx 00000-0000
Attn: Xxxxxx Xxxxx, President
Facsimile: (000) 000-0000
with a copy (which shall constitute notice) to:
Xxxxx & Xxxxxxx, LLP
000 00xx Xxxxxx, X.X.
Xxxxxxxxxx, XX 2004
Attn: Xxxxxx X. Xxxxxxx, Esq.
Facsimile: (000) 000-0000
Buyer: Synbiotics Corporation
00000 Xxx Xxxxxxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
Attn: Chief Financial Officer
Facsimile: (000) 000-0000
with a copy to (which shall not constitute notice)
to:
Xxxxxxx, Xxxxxxx & Xxxxxxxx LLP
00000 Xx Xxxxxx Xxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
Attn: Xxxxxx X. Xxxxxxx, Esq.
Facsimile: (000) 000-0000
6. Amendments and Waivers. This Agreement may be modified, amended or
-----------------------
supplemented only by a written instrument duly executed by all parties hereto.
No covenant, term or condition or the breach thereof shall be deemed waived,
unless it is waived in writing and signed by the party against whom the waiver
is claimed. Any waiver of breach of any covenant, term or condition shall not
be deemed to be a waiver of any preceding or succeeding breach of the same or
any other covenant, term or condition. The failure of any party to insist upon
strict performance of any covenant, term or condition hereunder shall not
constitute a waiver of such party's right to demand strict compliance therewith
in the future.
7. Successors and Assigns. This Agreement may not be assigned by a party
----------------------
without the prior written consent of the other party; provided, however, the
Buyer may assign its rights
H-3
and delegate its obligations under this Agreement to a purchaser of all or
substantially all of the business, stock or assets of the Buyer in whatever form
or to any of Buyer's Affiliates without the consent of the Seller; provided,
that such assignee agrees to assume and perform all of Borrower's obligations
hereunder. Except as otherwise provided herein, the terms and conditions of this
Agreement shall inure to the benefit of and be binding upon the respective
successors and assigns of the parties.
8. Governing Law; Jurisdiction and Venue. This Agreement shall be
--------------------------------------
governed by and construed in accordance with the laws of the State of Maryland,
without regard to principles of conflicts of law.
9. Attorneys' Fees. In the event that any legal action becomes necessary
----------------
to enforce or interpret the terms of this Agreement, the prevailing party shall
be entitled, in addition to its court costs, to such reasonable attorneys' fees
and expenses and expert witness fees as may be fixed by a court of competent
jurisdiction.
10. Counterparts. This Agreement may be executed in multiple copies, each
-------------
of which shall be deemed an original and all of which together shall constitute
a single agreement binding on all parties.
11. Entire Agreement. This Agreement (together with documents and
-----------------
agreements entered into herewith) constitutes the entire agreement between the
parties hereto with respect to the subject matter hereof and supersedes all
prior and contemporaneous agreements and understandings. Each party to this
Agreement acknowledges that no promises or agreements have been made by any
party, or any one acting on behalf of any party, that are not embodied in this
Agreement with respect to the subject matter hereof.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
H-4
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to
be duly executed and delivered in its name and on its behalf as of the date
first written above.
BUYER: SELLER:
SYNBIOTICS CORPORATION, KIRKEGAARD & PERRY LABORATORIES,
a California corporation INC., a Maryland corporation
By: /s/ Xxxxxxx Xxxxx By: /s/ Xxxxxx Xxxxx
----------------- ----------------
Title: Vice President - Finance Title: President
EXHIBIT I
---------
Royalty Agreement
This Agreement is made as of the 18th day of April, 2000 (the
"Effective Date"), between Kirkegaard & Perry Laboratories, Inc., a
Maryland corporation ("Seller"), and Synbiotics Corporation, a California
corporation ("Buyer").
WHEREAS, Seller owns all rights, title and interest in certain assets
used in the production of poultry diagnostic products.
WHEREAS, pursuant to an Asset Purchase Agreement of even date
herewith, between Seller and Buyer (the "Purchase Agreement"), Seller is
transferring its right, title and interest in and to the Purchased Assets (as
defined in the Purchase Agreement) to Buyer;
WHEREAS, as part of the consideration for the purchase of the
Purchased Assets, the parties agree that Buyer shall pay Seller a royalty on all
sales of the Poultry Diagnostic Products (as defined below) by the Buyer and its
agents, distributors and dealers, for a period of 4 years from the Closing (as
defined in the Purchase Agreement);
WHEREAS, the parties desire to set forth the terms regarding the
royalty relationship,
NOW, THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties agree as follows:
1. DEFINITIONS
1.1 "Poultry Diagnostic Products" means collectively, those poultry diagnostic
kits (a) manufactured and distributed by Buyer from and after the Closing
and (b) manufactured by Seller by and on behalf of Buyer pursuant to the
Transitional Manufacturing and
H-5
Supply Agreement of even date herewith, by and between Seller and Buyer
from and after the Closing, and distributed by Buyer and its agents,
distributors and dealers. The term Poultry Diagnostic Products shall
include, but not be limited to, the types of kits set forth on Schedule 1
attached hereto.
1.2 "Clients" means the end users or prospective end users of any of the
Poultry Diagnostic Products.
1.3 "Territory" means worldwide.
1.4 "Contract Year" means the period commencing on the Effective Date of this
Agreement and continuing for a period of twelve months and each succeeding
twelve-month period hereafter during the term of this Agreement.
1.5 "Net Revenues" means the total revenues derived from the sale of Poultry
Diagnostic Products in the Territory during the Term by Buyer or Buyer's
Representatives during the applicable calculation period, less allowances
and returns (excluding allowances or discounts to affiliates of Buyer).
1.6 "Buyer's Representatives" means an individual or entity who acts as an
agent, distributor or dealer for and on behalf of Buyer with respect to the
sale or distribution of Poultry Diagnostic Products.
2. OWNERSHIP
2.1 Buyer shall own all right, title and interest in and to the Poultry
Diagnostic Products.
3. PAYMENT OF ROYALTIES
3.1 Within thirty (30) days after the end of each calendar quarter during a
Contract Year, Buyer shall pay Seller a Quarterly Royalty Payment. For
purposes of this Agreement, the term Quarterly Royalty Payment shall be an
amount equal to ten percent (10%) of the Net Revenues recognized by Buyer
during the applicable calendar quarter.
3.2 In no event shall the aggregate Quarterly Royalty Payments exceed the sum
of $1,500,000.
4. BUYER'S MARKETING RESPONSIBILITIES AND OTHER DUTIES
4.1 Buyer shall use its best efforts to sell, promote and support the sale of
Poultry Diagnostic Products throughout the Territory.
H-6
4.2 Buyer shall maintain books and records sufficient to demonstrate its
compliance with this Agreement, including, without limitation, complete
accounting records relating to the sale and distribution of the Poultry
Diagnostic Product by Buyer.
5. INDEMNITY
Buyer shall indemnify and hold Seller harmless from any and all damages,
liabilities or costs asserted against or incurred by Seller arising out of
the sale, distribution or use of the Poultry Diagnostic Products, including
but not limited to any claims asserted against Seller by end-users of the
Poultry Diagnostic Products and or Buyer's agents, distributors and
dealers.
6. TERM AND TERMINATION
6.1 The term of this Agreement (the "Term") shall commence on the Effective
Date and shall continue for a period of four (4) years thereafter.
6.2 Upon the expiration or termination of this Agreement, Seller shall be
entitled to receive and Buyer shall pay within thirty (30) days the
applicable Quarterly Royalty Payment with respect to any Net Revenues
received by Buyer (a) during the calendar quarter in which expiration or
termination occurred but prior to such expiration or termination, and (b)
after such date of expiration or termination or with respect to any offers
to purchase Poultry Diagnostic Products actually received by Buyer on or
before the date of expiration or termination of this Agreement.
7. GROSS AND SUBSTANTIAL NON-PERFORMANCE, SUSPENSION OF PAYMENTS
During the first twelve months this Agreement is in effect, in the event
(a) of gross and substantial non-performance by Seller of its material
obligations under the Manufacturing Agreement, which non-performance is not
attributable directly or indirectly to the acts or inactions of Buyer, and
(b) Buyer has pursued its rights and remedies under the Manufacturing
Agreement and has not been reasonably compensated for the damages caused by
such non-performance, then Buyer shall notify Seller of its intention to
suspend payments under this Agreement as provided for in this Section 7 and
the basis therefor. Upon receipt of such notice, Seller shall have 45 days
to cure such non-performance. In the event Seller is not able to cure such
non-performance within such period, then Buyer shall have the right to
suspend payments under this Agreement with respect to Products for which
manufacturing has not been transferred to Synbiotics pursuant to this
Agreement until Buyer has received reasonable compensation for such non-
performance after taking into account the remedies exercised by Buyer under
the Manufacturing Agreement.
8. LIMITATION OF LIABILITY
IN NO EVENT SHALL EITHER PARTY HERETO BE ENTITLED TO SPECIAL, INDIRECT,
PUNITIVE, CONSEQUENTIAL, EXEMPLARY OR SIMILAR DAMAGES, INCLUDING (UNLESS
BUYER HAS THE RIGHT TO SUSPEND
H-7
PAYMENTS HEREUNDER IN ACCORDANCE WITH SECTION 7) LOST PROFITS, FOR BREACH
OF THIS AGREEMENT; PROVIDED, HOWEVER, THE LIMITATIONS SET FORTH IN THIS
-------- -------
SECTION 8 SHALL NOT APPLY IN THE EVENT A PARTY'S DAMAGES ARE FOUND TO BE
CAUSED BY THE OTHER PARTY'S ACTUAL FRAUD. NOTHING SET FORTH IN THIS SECTION
8 SHALL BE CONSTRUED AS LIMITING SELLER'S RIGHT TO RECOVER QUARTERLY
ROYALTY PAYMENTS FROM BUYER IN THE EVENT OF A BREACH OF THIS AGREEMENT OR
OTHERWISE.
H-8
9. MISCELLANEOUS
9.1 Buyer agrees that, at Seller's discretion, both during the life of this
Agreement and for a period of two years from the expiration or termination
hereof Seller or an accounting firm selected by Seller may examine Buyer's
books and records solely for the purpose of verifying compliance with this
Agreement. Seller shall hold and shall cause any accounting firm selected
by Seller to hold the information so received by it in confidence. In the
event that the books and records show that Seller was underpaid under this
agreement, Buyer shall immediately pay the overdue amount to Seller and
shall pay all the costs of the accounting examination.
9.2 Neither this Agreement nor any of Buyer's rights or duties hereunder shall
be assigned or otherwise transferred by Buyer without Seller's prior
written consent.
9.3 Buyer and Seller agree that each is an independent contractor and neither
is an agent, partner or joint venturer of the other, unless otherwise
specified. No debts or obligations shall be incurred by either party in
the other party's name or on its behalf, and neither party shall be
responsible or liable for the debts and obligations of the other party.
9.4 Any waiver by either party of any of its rights hereunder shall be deemed
applicable only to the specific event or matter then at hand and shall not
be deemed a waiver or abandonment of any other rights hereunder; and this
Agreement shall continue in full force and effect as though such previous
waiver had not occurred.
9.5 If any provisions of this Agreement is found to be illegal, invalid or
unenforceable, such finding will not affect the legality, validity or
enforceability of the other provisions of this Agreement, which will remain
in effect.
9.6 Neither of the parties to this Agreement shall be liable for any default or
delay by an event or circumstances beyond the reasonable control of such
party. The party affected shall use every reasonable effort to eliminate
or correct the cause preventing performance hereunder as soon as possible.
The provisions of this Section 9.6 shall not apply to any obligations under
this Agreement of either party to pay the other party any amounts owing
hereunder.
9.7 This Agreement hereto constitutes the entire agreement between the parties
with regard to the subject matter of this Agreement and supersedes all
previous communications, whether oral or written, between the parties with
respect to such subject matter. Neither the course of conduct between the
parties nor trade usage shall modify or alter this Agreement. If either
party issues a purchase order or other writing addressing the subject
matter of this Agreement, such purchase order or writing shall be for such
party's internal purposes only, and the terms and conditions contained
therein shall have no force or effect.
9.8 This Agreement is governed by the laws of the State of Maryland, without
regard to the conflict rules thereof, and each party submits to the
exclusive jurisdiction of that State.
9.9 Any notice required or permitted under this Agreement shall be given in
accordance with Section 11.5 of the Purchase Agreement.
H-9
IN WITNESS WHEREOF, each of the parties has caused this Agreement to e
duly executed and delivered in its name and on its behalf as of the date first
set forth above.
SELLER:
KIRKEGAARD & PERRY LABORATORIES, INC.
By: /s/ Xxxxxx Xxxxx
----------------
Name: Xxxxxx Xxxxx
Title: President
BUYER:
SYNBIOTICS CORPORATION
By: /s/ Xxxxxxx Xxxxx
-----------------
Name: Xxxxxxx Xxxxx
Title: Vice President - Finance
H-10
SCHEDULE 1
----------
Poultry Diagnostic Kits
Catalog Number Poultry Elisa Kit Tests Per Kit
-------------- ----------------- -------------
54-90-01 Infectious Bursal disease Plus (IBD+) 450
54-81-01 Infectious bursal Disease (IBD) 900
54-82-01 Infectious Bronchitis Virus (IBV) 900
54-83-01 Newcastle Disease Virus (NDV) 900
54-84-01 Avian Reovirus (REO) 900
54-87-05 MG/MS Combination 900*
*Kit contains 450 tests for each agent
54-86-01 Avian Encephalomyelitis Virus (AE) 900
54-93-01 Infectious laryngotracheitis (LT) 900
54-95-01 Avian Leukosis virus (ALV), antigent detection 900
54-77-01 Pasteurella multocida (PM) 900
54-87-06 AE-IBV-IBD-NDV-REO Combination 900*
*Kit contains 450 tests for each agent
54-85-01 Mycoplasma gallisepticum (MG) 900
54-96-01 Mycoplasma synoviae (MS) 900
54-78-01 Avian Influenza Virus (AIV) 900
54-80-01 Chicken Anemia Virus (CAV) 450
54-88-01 Avian Leukosis Virus, subgroup J (ALV-J) 450
54-99-01 Hemorrhagic Enteritis Virus (HEV) 900
54-72-01 Bordetella avium (BA) 900
54-89-01 Pasteurella nultocida (PM) 900
54-92-01 New Castle Disease Virus (NDV) 900
54-94-01 Mycoplasma gallisepticum (MG) 900
54-97-01 Mycoplasma synoviae (MS) 900
54-98-01 Mycoplasma meleagridis (MM) 900
86-12-10 Profile Software Ver. 3.0, 3.5"
86-12-11 Profile Software Ver. 3.0, 5.25"
454-9199 Broad Spectrum Salmonella 40
454-9194 Group-D Salmonella 40
454-9293 Campylobactor Species 40
454-9590 E-Coli 0157 40
I-11
EXHIBIT J
---------
INTELLECTUAL PROPERTY ASSIGNMENT
This Intellectual Property Assignment is entered into this 18th day of
April 2000 by and among KIRKEGAARD & PERRY LABORATORY, INC., a Maryland
corporation ("Assignor"), and SYNBIOTICS CORPORATION, a California corporation
("Assignee").
WHEREAS, Assignee and Assignor are parties to that certain Asset Purchase
Agreement dated April 18, 2000 (the "Purchase Agreement") (initially capitalized
terms used herein and not otherwise defined herein shall have the meanings given
to such terms in the Purchase Agreement); and
WHEREAS, the execution and delivery of this Intellectual Property
Assignment is a condition precedent to Assignee's obligations under the Purchase
Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:
1. Assignor assigns to Assignee, and Assignee hereby accepts such
assignment of, Assignor's entire right, title and interest in and to all of the
Transferred Intellectual Property (as such intellectual property is defined and
described in paragraph (h) of Exhibit B-1 to the Purchase Agreement, including,
without limitation, all rights to damages and payments for past, present or
future infringements or misappropriations thereof in all countries and the
goodwill of the Poultry Diagnostic Business and operations of the Assignor
associated with the Transferred Intellectual Property.
2. The rights, title and interest assigned under Section 1 above shall be
---------
for Assignee's own use and enjoyment, and for the use and enjoyment of
Assignee's successors, assigns or other legal representatives, as fully and
entirely as the same would have been held and enjoyed by Assignor if this
assignment and sale had not been made.
3. Assignor authorizes and requests the Commissioner of Patents and
Trademarks of the United States, and an official of any country or countries
foreign to the United States, whose duty it is to register patents, trademarks
or copyrights, to record Assignee as the assignee and owner of the Transferred
Intellectual Property, to the extent such recordation is required by law for the
effective transfer thereof.
4. Concurrently with the execution of this Intellectual Property
Assignment, Assignor shall deliver the original papers, applications, and other
official documents relating to all patents and trademarks, and other Transferred
Intellectual Property, assigned under Section 1 above (to the extent such
---------
transfer is permitted under applicable law).
5. Assignor hereby covenants and agrees that it shall cease and refrain
from all use of all rights, title, and interests assigned under Section 1 above
---------
in all countries of the world as of the date hereof, except as permitted or
contemplated under the Transitional Manufacturing and Supply Agreement of even
date herewith, by and between Assignor and Assignee (the "Manufacturing
Agreement") and the License and Technical Assistance Agreement of even date
herewith, between Assignor and Assignee (the "License Agreement").
6. With respect to the Transferred Intellectual Property, Assignor will,
from and after the Closing Date (i) use the same level of its effort to keep
such Transferred Intellectual Property confidential as it uses to protect its
own confidential information (except that Assignor may not make any disclosure
of the Transferred Intellectual Property to any acquiror or investor who
directly competes or indicates an intent to compete with Assignee in the
production and distribution of poultry diagnostic products (a "Competitor"), or
to any Competitor which the Assignor is proposing to acquire, invest in or
otherwise partner with, including continuing to protect the confidential nature
of such Transferred Intellectual Property as if the sale provided for in the
Purchase Agreement had not occurred), (ii) not disclose the Transferred
Intellectual Property to any third party, except as permitted or required under
applicable law or as permitted or contemplated under the Manufacturing Agreement
or License Agreement, and (iii) not use the Transferred Intellectual Property,
except as permitted or contemplated under the Manufacturing Agreement or the
License Agreement. From time to time after the date hereof, Assignor will
execute and deliver, or cause its affiliates to execute and deliver, to Assignee
such instruments of sale, transfer, conveyance, assignment and delivery, and
such consents, assurances, powers of attorney and other instruments as may be
reasonably requested by Assignee or its counsel in order to vest in Assignee all
right, title and interest of Assignor in and to the Purchased Assets and
otherwise in order to carry out the purpose and intent of this Intellectual
Property Assignment.
7. This Intellectual Property Assignment, together with the Purchase
Agreement and all documents executed in connection with the Purchase Agreement,
constitutes the entire agreement and understanding between and among the parties
hereto with respect to the matters set forth herein, and supersedes and replaces
any prior agreements and understandings, whether oral or written, between and
among them with respect to such matters. Notwithstanding any other provisions of
this Intellectual Property Assignment to the contrary, nothing contained in this
Intellectual Property Assignment shall in any way supersede, modify, replace,
amend, change, rescind, waive, exceed, expand, enlarge or in any way affect the
provisions, including warranties, covenants, agreements, conditions,
representations, or in general any of the rights and remedies, and any of the
obligations and indemnifications of Assignor or Assignee set forth in the
Purchase Agreement nor shall this Intellectual Property Assignment expand or
enlarge any remedies under the Purchase Agreement including without limitation
any limits on indemnification specified therein. This Intellectual Property
Assignment is intended only to effect the transfer of certain property
transferred pursuant to the Purchase Agreement and shall be governed entirely in
accordance with the terms and conditions of the Purchase Agreement.
10. This Intellectual Property Assignment shall in all respects be
construed in accordance with and governed by the laws of the State of Maryland
without giving effect to its conflicts-of-laws principles.
11. This Intellectual Property Assignment may be executed by the parties
herein in separate counterparts and by facsimile, each of which when so executed
and delivered shall be an original, but all such counterparts and facsimile
shall together shall constitute one and the same instrument.
[SIGNATURE PAGE TO FOLLOW]
J-2
IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
duly executed and delivered in its name and on its behalf as of the date first
set forth above.
SYNBIOTICS CORPORATION, KIRKEGAARD & PERRY LABORATORIES, INC.,
a California corporation a Delaware corporation
By: /s/ Xxxxxxx Xxxxx By: /s/ Xxxxxx Xxxxx
----------------- ----------------
Name: Xxxxxxx Xxxxx Name: Xxxxxx Xxxxx
Title: Vice President - Finance Title: President
[SIGNATURE PAGE TO THE INTELLECTUAL PROPERTY ASSIGNMENT]
J-3
ACKNOWLEDGMENT
)
DISTRICT OF COLUMBIA ) ss.
)
On April 19, 2000, before me, Xxxxxxx Xxxxx-Xxxxxxxxx, Notary Public,
personally appeared Xxxxxxx Xxxxx and Xxxxxx Xxxxx, personally known to me (or
proved to me on the basis of satisfactory evidence) to be the person(s) whose
name(s) is/are subscribed to the within instrument and acknowledged to me that
he/she/they respectively executed the same in their authorized capacity(ies),
and that by his/her/their signature(s) on the instrument the persons, or the
entity upon behalf of which the person(s) acted, executed the instrument.
WITNESS my hand and official seal.
[SEAL]
/s/ Xxxxxxx Xxxxx-Xxxxxxxxx
---------------------------
Notary Public in and for the
aforesaid County and State
J-4
EXHIBIT K
---------
ARTICLES OF TRANSFER
FIRST: Kirkegaard & Perry Laboratories, Inc., a corporation organized and
existing under the laws of the State of Maryland ("Transferor"), agrees to the
sale of substantially all of its property and assets (sometimes referred to
herein as the "Sale Transaction"), as set forth in the Purchase Agreement (as
defined below). The terms and conditions thereof and the mode of carrying the
same into effect are as set forth in the Asset Purchase Agreement, dated as of
April 18, 2000, between the Transferee (as defined below) and the Transferor
(the "Purchase Agreement"), and as set forth in these Articles of Transfer (the
"Articles").
SECOND: The name of the transferee of such property and assets is
Synbiotics Corporation, a California corporation (the "Transferee"), and the
post office address of the principal place of business of such Transferee is
00000 Xxx Xxxxxxxx, Xxx Xxxxx, Xxxxxxxxxx 00000.
THIRD: The parties to these Articles are the Transferor and the Transferee,
a corporation organized on the 25th day of March, 1982 under the General
Corporation Law of the State of California.
FOURTH: The nature and amount of the consideration to be paid, by or on
behalf of the Transferee, for the assets of the Transferor to be sold to
Transferee in the Sale Transaction are as follows:
Transferee will (a) pay Transferor an aggregate of up to
$6,000,000 for certain assets of Transferor, such payment
consisting of (i) a $3,500,000 cash payment, (ii) additional cash
payments in the future equal to, in the aggregate, $1,000,000,
subject to certain terms, including the eventual transfer by
Transferor to Transferee of certain manufacturing operations of
Transferor relating to products in the poultry diagnostic
business, and (iii) certain royalty payments over a specified
period of years based on worldwide sales of products in the
poultry diagnostic business, which payments are not to exceed, in
the aggregate, $1,500,000, and (b) assume certain liabilities of
Transferor, all as set forth in the Purchase Agreement.
FIFTH: The principal office of the Transferor is located in the County of
Xxxxxxxxxx, State of Maryland. The Transferor owns no interest in land in the
State of Maryland.
SIXTH: The location of the principal office of the Transferee is 00000 Xxx
Xxxxxxxx, Xxx Xxxxx, Xxxxxxxxxx 00000, and the name and post office address of a
resident agent of the Transferee in Maryland, service of process upon whom shall
bind the Transferee in any action,
suit or proceeding pending at the time of the filing of these Articles or
thereafter instituted or filed against it under the provisions of Title 3 of the
Corporations and Associations Article of the Annotated Code is Maryland is The
Corporation Trust Incorporated, 000 Xxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxx 00000.
SEVENTH: The Sale Transaction was (a) duly advised by the Board of
Directors of the Transferor adopting a resolution on March 20, 2000, declaring
that said sale of all or substantially all of the property and assets of the
Transferor herein proposed was advisable substantially upon the terms and
conditions set forth in the Purchase Agreement and these Articles and directing
that the Sale Transaction be submitted for action by the stockholders of the
Transferor and (b) duly approved by the stockholders of Transferor by the
unanimous written consent of stockholders entitled to vote thereon.
EIGHTH: The Sale Transaction to be effected by these Articles was duly
advised, authorized and approved by the Transferee in the manner and by the vote
required by the laws of the State of California, the state of organization of
the Transferee, and by the charter of the Transferee.
K-2
IN WITNESS WHEREOF, Kirkegaard & Perry Laboratories, Inc. and Synbiotics
Corporation, the parties hereto, have caused these Articles to be signed in
their respective corporate names and on their behalf by their respective
presidents (or vice-presidents) and witnessed by their respective duly
authorized officers all as of the 18th day of April, 2000.
Witnessed: KIRKEGAARD & PERRY
LABORATORIES, INC.
/s/ Xxxxxxx Xxxxx By: /s/ Xxxxxx Xxxxx
----------------- ----------------
Name: Xxxxxxx Xxxxx Name: Xxxxxx Xxxxx
Title: Executive Vice President Title: President
Witnessed: SYNBIOTICS CORPORATION
/s/ Xxxx X. Rosinack By: /s/ Xxxxxxx X. Xxxxx
-------------------- --------------------
Name: Xxxx X. Rosinack Name: Xxxxxxx X. Xxxxx
Title: President, Animal Health Title: President and Chief Executive Officer
K-3
THE UNDERSIGNED, President of Kirkegaard & Perry Laboratories, Inc., who
executed on behalf of said corporation the foregoing Articles of Transfer of
which this certificate is made a part, hereby acknowledges, in the name and on
behalf of said corporation, the foregoing Articles of Transfer to be the
corporate act of said corporation and further certifies that, to the best of his
knowledge, information and belief, the matters and facts set forth herein with
respect to the approval thereof are true in all material respects, under the
penalties of perjury.
/s/ Xxxxxx Xxxxx
----------------
Name: Xxxxxx Xxxxx
Title: President
THE UNDERSIGNED, President and Chief Executive Officer of Synbiotics
Corporation, who executed on behalf of said corporation the foregoing Articles
of Transfer, of which this certificate is made a part, hereby acknowledges, in
the name and on behalf of said corporation, the foregoing Articles of Transfer
to be the corporate act of said corporation and further certifies that, to the
best of his knowledge, information and belief, the matters and facts set forth
therein with respect to the approval thereof are true in all material respects,
under the penalties of perjury.
/s/ Xxxxxxx X. Xxxxx
--------------------
Name: Xxxxxxx X. Xxxxx
Title: President and Chief Executive Officer
K-4
EXHIBIT L
---------
SELLER'S DISCLOSURE SCHEDULE
FOR THE
ASSET PURCHASE AGREEMENT
BY AND BETWEEN
SYNBIOTICS CORPORATION
AND
KIRKEGAARD & PERRY LABORATORIES, INC.
DATED AS OF APRIL 18, 2000
Please refer to the Asset Purchase Agreement, dated as of April 18,
2000 (the "Agreement"), by and between Synbiotics Corporation, a California
corporation ("Buyer), and Kirkegaard & Perry Laboratories, Inc., a Maryland
corporation ("Seller"). These Schedules, which together comprise Seller's
Disclosure Schedule under the Agreement, are being delivered with, and form part
of, the Agreement.
The Schedules are qualified in their entirety by reference to the
specific provisions of the Agreement and are not intended to constitute, and
shall not be construed as constituting, representations or warranties of Seller,
except as and to the extent provided in the Agreement. In some respects, the
Schedules may also provide information not strictly called for by the Agreement
where it was thought that such additional information might be helpful. No
implication should be drawn that any information provided in the Schedules is
necessarily material or otherwise required to be disclosed or that the inclusion
of such information establishes or implies a standard of materiality, a standard
for what is or is not in the ordinary course of business or any other standard
set forth in the Agreement.
The following also pertains to the Schedules as they relate to the Agreement:
At Buyer's request, various representatives of Seller have delivered,
and may in the future deliver, to Buyer (outside of the Agreement and the
Schedules) certain forecasts and estimates, including forecasts and estimates of
revenues and costs and assessments of certain contingencies and reserves. Buyer
has also received, and may in the future receive, during the conduct of its due
diligence and business investigations, information with respect to Seller for
the purpose of assisting Buyer in forming its own conclusions regarding the
business and the financial condition of Seller. However, Seller makes no
representation or warranty outside the Agreement and the Schedules with respect
to such disclosures or information.
Capitalized terms used in the Schedules shall, unless the context
indicates otherwise, have the same meanings as in the Agreement. Seller has
used its best efforts to cross reference sections of the Schedules and a
reference in any Section or subsection of the Schedules to another Section or
subsection shall be deemed to incorporate the matters so referenced.
Headings have been inserted for convenience of reference only and
shall not have the effect of amending or changing the content or meaning of the
information disclosed in the Schedules.
L-2
Section 2.3 - Title; Condition of Purchased Assets
(a) Seller may not transfer or assign its rights to the United States
Department of Agriculture ("USDA") licenses listed on the attached Attachment
2.3(a) (the "USDA Licenses"). Seller will provide the USDA with notice of its
intent to manufacture the Products for and on behalf of Buyer pursuant to the
Manufacturing Agreement utilizing such licenses. Buyer will have to obtain such
licenses in its own name in order to directly manufacture the Products.
(b) Pursuant to the applicable provisions of the License Agreements listed on
the attached Attachment 2.3(b), Seller must obtain the consent of the licensors
prior to assigning or transferring its right, title and interest in and to such
license agreements to Buyer. Seller is in the process of obtaining such
consents.
(c) Pursuant to Section 5A and other applicable provisions of the Loan
Agreement, dated April 3, 1998, between Bank of America, N.A. ("Bank") and
Seller, as modified and extended (the "Loan Agreement"), Seller may not, without
the Bank's prior written consent, sell, lease, assign or transfer any assets
except in the normal cause of its business. Seller has obtained the Bank's
consent to the transaction contemplated by the Agreement.
(d) Pursuant to a Security Agreement, dated April 3, 1998, by and between Bank
and Seller (the "Security Agreement"), Seller granted Bank a security interest
in certain assets of Seller, including the Purchase Assets, to secure Seller's
obligations under the Loan Agreement.
(e) Many of Seller's distributor agreements may not be assigned by Seller
without the prior written consent of the other party to such agreement,
including the distributor agreements set forth on Attachment 2.3(c). Seller is
in the process of obtaining such consents, but no assurance can be given that
Seller will obtain all such consents prior to the Closing.
L-3
[INTENTIONALLY LEFT BLANK]
L-4
Attachment 2.3(a)
-----------------
USDA Licenses
-------------
KPL Product Effective Date
Company License Code
-------------------------------- -------------------------------------------------------------- ---------------- ----------------
United States Department of Establishment - Non-Transferable 12/6//1990
Agriculture
United States Department of Avian Encephalomyelitis Antibody Test Kit - code 5006 54-86-01 10/26/1992
Agriculture
United States Department of Avian Influenze Virus Antibody Test Kit - Code 5004 54-78-01 7/1/1996
Agriculture
United States Department of Avian Leukosis Virus Antigen Test Kit - Code 5007 54-88-01 4/13/1992
Agriculture
United States Department of Bordetella Avium Antibody Test Kit - Code 5015 54-72-01 7/18/1994
Agriculture
United States Department of Hemorrhagic Enteritis Antibody Test Kit - Code 57E1 54-99-01 5/12/1993
Agriculture
United States Department of Infectious Bursal Disease Antibody Test Kit - Code 5040 54-81-01 9/11/1987
Agriculture
United States Department of Infectious Bursal Disease Antibody Test Kit - Code 5040.01 54-90-01 3/23/1989
Agriculture
United States Department of Infectious Bronchitis Virus Antibody Test Kit - Code 5030 54-82-01 2/3/1998
Agriculture
United States Department of Fowl Laryngotracheitis Antibody Test Kit - Code 5601 54-93-01 10/31/1990
Agriculture
United States Department of Mycoplasma Gallisepticum Antibody Test Kit - Code 5070 54-85-01 7/115/1991
Agriculture
United States Department of Mycoplasma Gallisepticum Antibody Test Kit - Code 5070.01 54-94-01 7/5/1991
Agriculture
United States Department of Mycoplasma Meleagrisis Antibody Test Kit - Code 51720 54-98-01 7/5/1991
Agriculture
L-5
United States Department of Mycoplasma Synoviae Antibody Test Kit - Code 5173 54-97-01 9/6/1991
Agriculture
United States Department of Mycoplasma Synoviae Antibody Test Kit - Code 5173.01 54-96-01 7/3/1991
Agriculture
United States Department of NewCastle Disease Antibody Test Kit - Code 5080 54-83-01 12/24/1987
Agriculture
United States Department of NewCastle Disease Antibody Test Kit - Code 5080.01 54-92-01 5/16/1991
Agriculture
United States Department of Pasteuralla Multocida Antibody Test Kit - Code 5130 54-77-01 1/4/1994
Agriculture
United States Department of Pasteuralla Multocida Antibody Test Kit - Code 5130.01 54-89-01 10/24/1994
Agriculture
United States Department of Avian Reovirus Antibody Test Kit - Code 5008 54-84-01 12/24/1987
Agriculture
United States Department of Mycoplasma Gallisepticum-Synoviae Antibody Test Kit - Code 5074 54-87-05 1/22/1996
Agriculture
United States Department of Avian Encephalcmyelitis-Bronchitis-Bursal Disease-NewCastle Disease- 54-87-06 3/11/1996
Agriculture Reovirus Antibody Test Kit Code - 5106
L-6
Attachment 2.3(b)
License Agreements Requiring Consent to Assign
Pursuant to the applicable clauses of the License Agreements between
Seller and each of the USDA, University of Maryland and the Veterinary
Infectious Disease Organization ("VIDO"), Seller must obtain the consent of the
other party to such License Agreements prior to assigning them.
L-7
Attachment 2.3(c)
Distributor Agreements Requiring Consent to Assign
Pursuant to the applicable clauses of the distributor agreements
between Seller and each of the distributors listed below, Seller must obtain the
consent of the other party to such distribution agreements prior to assigning
them.
(i) Modern Agropharmaceuticals and Trading Establishment (Lebanon,
Syria, Jordan).
(ii) Maya Laboratuar, Ltd. (Turkey).
(iii) Chem-East (Hungary).
(iv) Egytech (Egypt)
(v) All-Russia Research Institute of Animal Health, ARRIAH (Russia
and other former Soviet Union countries).
L-8
Section 2.4 - No Violation
See Section 2.3 for a description of the Loan Agreement and the
Security Agreement.
See Section 2.3(a) for a description of the consents required under
the License Agreements.
See Section 2.3(b) for a description of the consents required under
Seller's distributor agreements.
L-9
Section 2.5 - Governmental Authorities
See Section 2.3 of the Seller's Disclosure Schedule with respect to
the USDA Licenses and the notices to be provided by Seller to the USDA.
L-10
Section 2.6 -Liabilities
(a) Pursuant to a letter agreement dated December 15, 1999, Seller
agreed to pay The Sage Group a success fee upon the sale of the Poultry
Diagnostic Business.
(b) Pursuant to a License Agreement, dated January 2000, between
Seller and the University of Saskatchewan as represented by the Veterinary
Infectious Disease Organization ("Vido") (the "Vido Agreement"), Seller owes
Vido royalties totaling $9,000 on Product 54-99-01.
(c) Pursuant to a Consulting Services Agreement dated July 19, 1997,
between Innov Corporation ("Innov") and Seller (the "Innov Agreement"), Innov
will provide support for the ProFILE software acquired from Innov by Seller. The
Innov Agreement has a remaining term of 21 months. The balance of the fee owed
by Seller to Innov under the Innov Agreement is $37,854.17. Upon payment of the
balance of this fee, Innov will release the source code for the ProFILE software
to Buyer.
L-11
Section 2.7 - Purchased Assets; Purchase Orders.
(a) The Purchased Assets do not include any office furniture or
equipment or any of the following types of laboratory equipment: laboratory
benches, general laboratory equipment, pumps, tanks, general laboratory
glassware, centrifuges and rotors, single and multi-channel pipettes, computers,
ELISA plate readers, refrigerators and freezers, ultra-freezer, cold room,
tissue culture hoods, incubators, plate storage cabinets, liquid fill
dispensers, liquid concentrators or solution formulation tanks/mixers. Buyer
will need to obtain a fully equipped laboratory containing the types of
equipment noted above in order to operate the Poultry Diagnostic Business in all
material respects in the same manner as the Poultry Diagnostic Business was
operated by Seller prior to the Closing.
(b) Certain of the Purchased Assets have been pledged by Seller to the
Bank pursuant to the Security Agreement.
L-12
Section 2.8 - Litigation
None
L-13
Section 2.9 - Contracts
(a) Attached hereto as Attached 2.9(a) is a list of Seller's
distributor agreements and arrangements which are in effect as of the date
hereof
(b) Item (2) of Attachment 2.9(a) sets forth a list of the
distributors whose written distribution agreements with Seller have expired but
who continue to distribute Seller's poultry diagnostic products on behalf of
Seller.
(c) Item (3) of Attachment 2.9(a) sets forth a list of the
distributors with whom Seller has oral arrangements providing for the
distribution of Seller's poultry diagnostic products by such distributors.
(d) See Section 2.12 for a description of the License Agreements.
(e) See Section 2.3(b) for a description of the License Agreements for
which Seller must obtain the applicable licensor's consent in order to assign
such License Agreements to Buyer.
(f) Attached hereto as Attachment 2.9(b) is a list of the Relevant
Contracts that provide for annual payments to or from Seller in excess of
$25,000.
(g) See Section 2.9 for a description of the Innov Agreement.
(h) Seller has engaged AgroBio Tek Laboratories as its sales agent to
represent Seller in Central America, Latin America and South America.
L-14
Attachment 2.9(a)
Distributor Summary
1. Set forth below is a summary of the parties with whom Seller has
written agreements that are currently in effect providing for the distribution
of poultry diagnostic products:
Distributor Document Type Expiration
Chem-East Agreement January 2001
Egytech Agreement August 1, 2003
Xxxxxx Pharmaceuticals Agreement August 31, 2000
Modern Agropharmaceuticals Est. Agreement January 1, 2001
Seravian, S. L. Agreement March 31, 2000
2 Set forth below is a list of the parties with whom Seller has
previously entered into written agreements which have expired. Notwithstanding
the expiration of such agreements, Seller continues to distributes products
through such distributors.
Distributor Document Type Expiration
Agricultural Development Agreement January 1998
Avenida & Associates Inc. Letter of Intent August 31, 1994
BTI Agreement March 15, 1992
Bio Diagnostics SND. BHD. Letter N/A
FELCO Statement N/A
Golbid Co. Ltd Agreement January 1998
(EMBARGO)
Intertech (formerly Biovida) December 31, 1998
La Ensenada Letter of Intent N/A
LSI Agreement January 1998
Maya Laboratuar, Ltd. Agreement January 27, 1999
Merial (formerly ISBI) Agreement December 31, 1998
Nippon Biological Agreement June 30, 1999
Xxxxx Xxxxxx Life Sciences Statement N/A
WardMedic Limited Agreement August 31, 1994
Veterquimica Letter N/A
L-15
3.Set forth below is a list of the parties with whom Seller has oral
arrangements providing for the distribution of poultry diagnostic products:
Bio-Mediq DPC
Carval De Colombia
Fort Dodge Animal Health
Xxxxxx Biotech (terminated)
Productos Quimicos Magiar SA
PT Satwa Jawa Jaya Rhenium Ltd.
L-16
Attachment 2.9(b)
Innov Agreement
L-17
Section 2.10 - Compliance with Law
None
L-18
Section 2.11- Licenses, Permits and Authorizations
(a) Attached hereto as Attachment 2.11(a) is a summary of Seller's
export permits.
(b) See Section 2.3(a) for a description and listing of the USDA
Licenses
(c) See Section 2.12(a) for a description of Seller's registered
trademarks.
(d) See Section 2.3 for a description of the Loan Agreement.
L-19
Attachment 2.11(a)
Export Permits
(a) Government of Canada Permit to Import Veterinary Biologics
Permit No. D10/K3
Government of Canada Permit to Import Veterinary Biologics
Permit No. P6.10/K3
Government of Canada Permit to Import Veterinary Biologics
Permit No. C10/K3
Government of Canada Permit to Import Veterinary Biologics
Permit No. C5.11/K3
Government of Canada Permit to Import Veterinary Biologics
Permit No. A-1999-02186-4
Government of Canada Permit to Import Veterinary Biologics
Permit No. C27/K3
(b) Japan requires importers of poultry diagnostic products to obtain
permits to import samples of such products into Japan. Seller's Japanese
distributor has obtained such a permit. Other countries impose similar
requirements. Such permits are typically acquired by Seller's distributors.
(c) Prior to distributing Mycoplasma diagnostic kits in certain
states, Seller must obtain the approval of the applicable state authorities. As
of April 18, 2000, Seller has obtained approval from the applicable state
officials in all fifty states to distribute such kits, with the exception of the
States of Idaho and North Dakota and the Commonwealth of Massachusetts. Certain
states have authorized Seller to distribute these diagnostic kits to specific
laboratories in such states and/or have limited the types of diagnostic kits
that may be distributed in such states. A list of these states and the
restrictions imposed are set forth below.
(1) Alabama - X.X. Xxxxxxx Diagnostic Lab, Auburn, AL
(2) Florida: Florida Dept. of Agriculture and Consumer Services,
Animal Disease Diagnostic Lab, Kissimmee, FL.
(3) Hawaii: USDA approved diagnostic labs only
(4) Indiana: Turkey - all state and commercial labs; Chicken -
NPIP approved labs and Purdue Animal Disease Diagnostic Lab,
West Lafayette, IN.
(5) Iowa: Turkey - All state and commercial labs, Chicken -
NVSL, Ames, IA; Veterinary Xxxxxxxxxx Xxx, Xxxx Xxxxx
Xxxxxxxxxx,
X-00
Xxxx, XX; Drs. Koehnk and Feldman, Jewell, IA; Hy-Vac Lab
Egg Co., Gowrie, IA; Hy-Line International. Dallar Center,
IA.
(6) Kentucky: Chicken Only - USDA/APHIS/VS, Frankfort, Livestock
Disease Diagnostic Ctr., U. of Kentucky, Lexington, KY;
Xxxxxx State University, Breathitt Veterinary Center,
Hopkinsville, KY
(7) Maine: Chicken Only
(8) Minnesota: Solvay - Xxxxxxxx Labs, Mendota Heights, MN;
Willmar Poultry Co., Willmar, MN; U. of Minn., St. Xxxx, MN;
State Poultry Testing Lab, Willmar, MN; Xxxxxxx Labs,
Willmar, MN; Xx. X.X. Xxxxx, Atwater Lab, Atwater, MN.
(9) Montana: Dr. Xxxxxxx Xxxxx, Montana Dept. of Livestock
Diagnostic Lab, Bozeman, MT.
(10) Nevada: Animal Disease Lab, Nevada Dept. of Agriculture,
Reno, NV.
(11) New York: New York State Diagnostic Lab, Cornell University,
Ithaca, NY; C.P. (USA) Inc., NY, NY.
(12) North Carolina: Cuddy Farms, Marshville, NC; Xxxxxxx'x of
Warsaw, Warsaw, NC; Goldsboro Milling, Goldsboro, NC; Xxxxxx
Farms, Stanfield, NC; Xxxxx Xxxx Company, Wingate, NC; Xx.
Xxxxx Xxx, NC State University, College of Veterinary
Medicine, Raleigh, NC; Tarheel Hatchery, Raeford, NC;
Xxxxxxxx Farms, Clinton, NC.
(13) Ohio: Chicken Only
(14) Oregon: Department of Agriculture and Animal Health (all
diagnostic products must be registered with the Oregon
Department of Agriculture and a $65 fee paid for each
product (one time) prior to sale).
(15) Rhode Island: Department of Health, Providence, RI.
(16) South Dakota: South Dakota Veterinary Diagnostic Lab,
Brookings, SD.
(17) Utah: Turkey Only
(18) Vermont: Vermont Dept. of Agriculture, Food and Markets Lab,
Waterbury, VT.
(19) Wyoming: Wyoming State Veterinary Lab, Laramie, WY.
L-21
Section 2.12 - Intangible Property Rights
(a) Attached hereto are Attachment 2.12(a) is a summary of the
Seller's trademarks relating to or used in the Poultry Diagnostic Business
(b) Attached hereto as Attachment 2.12(b) is a summary of the license
agreements (the "License Agreements") to which Seller is a party pursuant to
which Seller licenses intellectual property used in the Poultry Diagnostic
Business.
(c) Seller maintains laboratory notebooks and files that contain the
product specifications and procedures for manufacturing the Seller's poultry
diagnostic products. These notebooks and files are maintained at Seller's
principal offices.
(d) See Section 2.6 for a description of the Innov Agreement and the
ProFILE software.
L-22
Attachment 2.12(a)
Trademarks
Country Registration No. Effective Date Expiration Date
United States No. 1,561,761 10/24/1989 10/24/2009
France No. 1,148,880 3/16/1989 3/16/2009
Benelux No. 462,552 3/11/1999 4/18/2009
United Kingdom No 1,368,834 12/12/1995 12/12/2005
Portugal No. 255,395 10/20/1992 10/20/2002
Spain No. 1,315,229 6/5/1991 6/5/2011
L-23
Attachment 2.12(b)
License Agreements
Licensor Subject Matter of License
--------------------------------------------------------------------------------
Univ. of Maryland IABDV e/Del Recombinant C12
Univ. of Maryland CAV - Monoclone, R25 Cell Line R63 and mab 8
Univ. of Maryland R63 and mab 8
Univ. of Maryland Influenza Group A Specific Monoclonal Antibodies: LS-98-070
USDA Avian Leukosis Virus Subgroup J Envelope Xxxx
XXXX Hybridoma Cell Line (15 G 4)
L-24
Section 2.13 - Tax Matters
None.
L-25
Section 2.14 - Environmental and Safety Matters
None.
L-26
Section 2.15 - Customers and Suppliers
(a) Attached hereto as Attachment 2.15(a) is Seller's customer list
as of March 31, 2000.
(b) Attached whereto as Attachment 2.15(b) is a list of Seller's
suppliers as of March 31, 2000.
L-27
EXHIBIT M
---------
BUYER'S DISCLOSURE SCHEDULE
FOR THE
ASSET PURCHASE AGREEMENT
BY AND BETWEEN
SYNBIOTICS CORPORATION
AND
KIRKEGAARD & PERRY LABORATORIES, INC.
DATED AS OF APRIL 18, 2000
Section 3.4 - Governmental Authority
None
M-2
Section 3.5 - Consents
None
M-3
Section 3.6 - Litigation
1. Synbiotics x. Xxxxx, U.S. Xxxxxxxx Xxxxx, Xxxxxxxx Xxxxxxxx
X-0
Section 3.7 - Securities and Exchange Commission Reports
1. Annual Report - Form 10-KSB filed on April 13, 2000
2. Amended Quarterly Report - Form 10-QSB filed on April 13, 2000
3. Amended Quarterly Report - Form 10-QSB filed on April 13, 2000
4. Amended Quarterly Report - Form 10-QSB filed on April 13, 2000
5. Amended Quarterly Report - Form 10-QSB filed on April 13, 2000
6. Quarterly Report - Form 10-QSB filed on November 15, 1999
7. Quarterly Report - Form 10-QSB filed on August 16, 1999
8. Quarterly Report - Form 10-QSB filed on May 14, 1999
9. Annual Report - Form 10-KSB filed on March 30, 1999
10. Quarterly Report - Form 10-QSB filed on November 16, 1998
11. Quarterly Report - Form 10-QSB filed on August 14, 1998
12. Quarterly Report - Form 10-QSB filed on May 15, 1998
13. Annual Report - Form 10-KSB filed on April 14, 1998
14. Quarterly Report - Form 10-QSB filed on November 14, 1997
15. Quarterly Report - Form 10-QSB filed on August 14, 1997
16. Quarterly Report - Form 10-QSB filed on May 14, 1997
17. Annual Report - Form 10-KSB filed on March 31, 1997
M-5
