ASSET PURCHASE AGREEMENT
BETWEEN
ZONAGEN, INC.,
FERTILITY TECHNOLOGIES, INC.
AND
SAGE BIOPHARMA, INC.
Dated as of March 1, 1999
TABLE OF CONTENTS
PAGE
NUMBER
ARTICLE I
TRANSFER OF BUSINESS, PROPERTIES AND ASSETS...................................... 1
1.1 Sale and Transfer of Business, Properties and Assets............................. 1
1.2 Assumption of Liabilities........................................................ 1
1.3 Excluded Liabilities............................................................. 2
1.4 Purchase Price................................................................... 3
1.5 Payment of Estimated Purchase Price.............................................. 3
1.6 Adjustment to Purchase Price..................................................... 3
1.7 Allocation of Purchase Price..................................................... 4
ARTICLE II
CLOSING.......................................................................... 5
2.1 The Closing...................................................................... 5
2.2 Instruments of Conveyance, Transfer, Assumption, Etc............................. 5
2.3 Further Assurances............................................................... 5
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE SELLER AND ZONAGEN......................... 6
3.1 Organization and Good Standing................................................... 6
3.2 Authorization of Agreement....................................................... 6
3.3 Capitalization................................................................... 6
3.4 No Subsidiaries.................................................................. 7
3.5 Corporate Records................................................................ 7
3.6 Conflicts; Consents of Third Parties............................................. 7
3.7 Title to Assets.................................................................. 7
3.8 Financial Statements............................................................. 7
3.9 No Undisclosed Liabilities....................................................... 8
3.10 Absence of Certain Developments.................................................. 8
3.11 Taxes............................................................................ 9
3.12 Real Property.................................................................... 11
3.13 Tangible Personal Property....................................................... 12
3.14 Intangible Property.............................................................. 12
3.15 Material Contracts............................................................... 13
3.16 Employee Benefits................................................................ 13
3.17 Labor............................................................................ 14
3.18 Litigation....................................................................... 15
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3.19 Compliance with Laws; Permits.................................................... 15
3.20 Environmental Matters............................................................ 15
3.21 Insurance........................................................................ 16
3.22 Inventories; Receivables; Payables............................................... 16
3.23 Related Party Transactions....................................................... 17
3.24 Relationships with Customers and Suppliers....................................... 17
3.25 Banks............................................................................ 18
3.26 No Misrepresentation............................................................. 18
3.27 Financial Advisors............................................................... 18
3.28 Shared Services.................................................................. 18
3.29 Asset Transfers.................................................................. 18
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PURCHASER...................................... 18
4.1 Organization and Good Standing................................................... 18
4.2 Authorization of Agreement....................................................... 18
4.3 Conflicts; Consents of Third Parties............................................. 19
4.4 Litigation....................................................................... 19
4.5 Financial Advisors............................................................... 19
ARTICLE V
COVENANTS........................................................................ 19
5.1 General.......................................................................... 20
5.2 Transition....................................................................... 20
5.3 Confidentiality.................................................................. 20
5.4 Bulk Transfer Laws............................................................... 21
5.5 Publicity........................................................................ 21
5.6 Use of Name...................................................................... 21
5.7 Notification of Taxing Authorities............................................... 21
5.8 Mutual Release................................................................... 21
6.1 Conditions Precedent to Obligations of Purchaser................................. 22
6.2 Conditions Precedent to Obligations of Seller.................................... 22
ARTICLE VII
DOCUMENTS TO BE DELIVERED........................................................ 23
7.1 Documents to be Delivered by Seller and Zonagen.................................. 23
7.2 Documents to be Delivered by the Purchaser....................................... 24
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ARTICLE VIII
INDEMNIFICATION.................................................................. 24
8.1 Non-Tax Indemnification.......................................................... 24
8.2 Limitations on Indemnification for Breaches of Representations and Warranties.... 25
8.3 Non-Tax Indemnification Procedures............................................... 25
8.4 Tax Matters...................................................................... 26
8.5 Tax Treatment of Indemnity Payments.............................................. 29
8.6 Maximum Indemnity Amount......................................................... 29
ARTICLE IX
NONCOMPETITION................................................................... 29
9.1 Non-Solicitation and Non-Competition............................................. 29
ARTICLE X
MISCELLANEOUS.................................................................... 30
10.1 Certain Definitions.............................................................. 30
10.2 Payment of Sales, Use or Similar Taxes........................................... 36
10.3 Survival of Representations and Warranties....................................... 36
10.4 Expenses......................................................................... 37
10.5 Further Assurances............................................................... 37
10.6 Submission to Jurisdiction; Consent to Service of Process........................ 37
10.7 Entire Agreement; Amendments and Waivers......................................... 37
10.8 Governing Law.................................................................... 38
10.9 Table of Contents and Headings................................................... 38
10.10 Notices.......................................................................... 38
10.11 Severability..................................................................... 39
10.12 Binding Effect; Assignment....................................................... 39
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SCHEDULES AND EXHIBITS:
Exhibit A -Form of Transition Services Agreement
Exhibit B -Form of Xxxx of Sale
Exhibit C -Form of Opinion of Seller' Counsel
Schedule 1.1(a)-Scheduled Tangible Assets
Schedule 1.1(b)-Excluded Assets
Schedule 3.1 -List of jurisdictions where the Business is qualified to do
business
Schedule 3.10 -Absence of Certain Developments
Schedule 3.11 -Tax matters
Schedule 3.12 -List of Real Property
Schedule 3.13 -Tangible Personal Property
Schedule 3.14 -Intangible Property
Schedule 3.15 -Material Contracts
Schedule 3.16 -Employee Benefits
Schedule 3.17 -Labor
Schedule 3.18 -Litigation
Schedule 3.19 -Environment Matters
Schedule 3.20 -Insurance
Schedule 3.21 -Related Party Transactions
Schedule 3.22 -Customers and Suppliers
Schedule 3.23 -Banks
Schedule 3.24 -Brokers
Schedule 3.25 -Shares Services
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ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT is made as of March 1, 1999 (herein,
together with the Schedules and Exhibits attached hereto referred to as the
"Agreement") between ZONAGEN, INC., a Delaware corporation ("Zonagen"),
FERTILITY TECHNOLOGIES, INC., a Massachusetts corporation ("FTI" or "Seller"),
and SAGE BIOPHARMA, INC., a Delaware corporation (the "Purchaser").
WHEREAS, FTI is a wholly owned subsidiary of Zonagen engaged in the
business of distributing and selling products for infertility diagnostics and
assisted reproduction technique procedures (the "Business");
WHEREAS, Seller desires to sell and convey to Purchaser, and Purchaser
desires to purchase and assume from Seller, certain assets and certain
liabilities relating to the Business as described herein, upon the terms and
subject to the conditions of this Agreement; and
WHEREAS, Zonagen, as sole Stockholder of FTI, desires to facilitate the
sale by FTI of the Business and accordingly, is willing to enter into the
Transition Services Agreement, this Agreement, and take the other actions
contemplated by this Agreement, upon the terms and subject to the conditions of
this Agreement; and
WHEREAS, certain terms used in this Agreement are defined in
Section 10.1.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements hereinafter contained, the parties hereby agree as
follows:
ARTICLE I
TRANSFER OF BUSINESS, PROPERTIES AND ASSETS
1.1 Sale and Transfer of Business, Properties and Assets. Subject to the
terms and conditions of this Agreement, at the Closing, Seller shall sell,
transfer, convey, assign and deliver to Purchaser and Purchaser shall purchase
from Seller, the Purchased Assets. It is understood and agreed that those assets
listed on Schedule 1.1(a) hereto shall be included, without limitation, in the
Purchased Assets (the "Scheduled Tangible Assets") and those assets listed on
Schedule 1.1(b) hereto shall be excluded, without limitation, from the Purchased
Assets (the "Excluded Assets"). In addition, Zonagen shall, at the Closing,
assign its obligations and rights under the License Agreements referenced in
Items 4, 5 and 6 to Schedule 3.14 to Purchaser.
1.2 Assumption of Liabilities. Upon the terms and subject to the
conditions contained herein, at the Closing, Purchaser shall assume only the
following Liabilities of the Business (the "Assumed Liabilities"):
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(a) all Liabilities accruing, arising out of, or relating to the
Contracts listed on Schedule 3.15 hereto or under the License Agreement
referenced in Items 4, 5 and 6 to Schedule 3.14 hereto, solely to the
extent such Liabilities either (i) are reflected on the Balance Sheet or
incurred after the Balance Sheet Date in the ordinary course of business
consistent with past practice, and constitute Current Liabilities, or (ii)
relate to periods from and after the Closing Date;
(b) all of the accounts payable and other accrued expenses (other than
those relating to Taxes not yet due and payable but which relate to periods
prior to the Determination Date) relating to the Business set forth in the
Balance Sheet or incurred after the Balance Sheet Date in the ordinary
course of business consistent with past practice, in each case, solely to
the extent constituting Current Liabilities; and
(c) all Taxes to the extent specifically provided in Section 8.4 of this
Agreement.
1.3 Excluded Liabilities. Notwithstanding any other provision of this
Agreement, except for the Assumed Liabilities specified in Section 1.2,
Purchaser shall not assume or be responsible for any other Liabilities of Seller
or Zonagen or any of their respective Affiliates ("Excluded Liabilities"),
including, without limitation, any and all Liabilities relating to or arising
out of any of the following:
(a) (i) the sponsorship, administration, contribution obligation of any
entity under any Employee Benefit Plan or Pension Plan or termination of
any Employee Benefit Plan or Pension Plan on or prior to the Closing Date,
(ii) the termination of employment of any employee of the Business,
including, without limitation, Xxx Xxxxxx, or (iii) except as expressly
assumed by Purchaser pursuant to Section 2.2(b) hereof, any Liability of
Seller to any employee, including, without limitation, Xxx X. Xxx, arising
on or prior to the Closing Date;
(b) any cause of action, whether or not pending or threatened on the
Closing Date, except to the extent arising from acts or omissions that
occurred during periods after the Closing Date;
(c) any failure or alleged failure to comply with, or any violation or
alleged violation of, (i) any Permit applicable to the Business or (ii) any
Contract or lease, in each case, which failure or violation occurred or was
alleged to have occurred prior to the Closing Date;
(d) any infringement or alleged infringement of the rights of any other
Person arising out of the use of any Intellectual Property in connection
with the Business prior to the Closing Date;
(e) any Liability for any Taxes (i) arising from the operation of the
Business or the ownership of the Purchased Assets on or before the Closing
Date (ii) arising
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pursuant to any Tax allocation or sharing agreement or (iii) to the extent
Seller or Zonagen has specifically agreed to be liable in Section 8.4 of
this Agreement;
(f) any Liabilities pursuant to Environmental Laws and costs and
expenses arising from, relating to, in respect of, or incurred in
connection with (i) any real property, business entities or assets, whether
domestic or foreign, formerly owned, occupied or operated by or in
connection with the Business, (ii) the transportation or disposal of any
Hazardous Substances to or at any offsite facility or location by or in
connection with the Business occurring prior to the Closing Date and (iii)
conditions existing or events occurring on or prior to the Closing Date on
any real property owned, occupied or operated by or in connection with the
Business as of the Closing Date;
(g) any Liabilities of Seller under all retention agreements, severance
agreements, change of control agreements and similar arrangements;
(h) all intercompany obligations and liabilities owed by the Business to
Seller or its Affiliates; or
(i) any indebtedness incurred prior to the Closing Date.
1.4 Purchase Price. Subject to the terms and conditions of this
Agreement, and in reliance on the representations, warranties, undertakings and
agreements of Seller and Zonagen made hereunder, and in consideration of such
sale, conveyance, transfer, assignment and delivery, Purchaser agrees to (i) pay
to Seller $2,250,000 (the "Purchase Price"), subject to adjustment as provided
in Section 1.6 below, and (ii) assume the Assumed Liabilities pursuant to this
Agreement.
1.5 Payment of Estimated Purchase Price. On the Closing Date, the
Purchaser shall pay to the Seller an aggregate of $2,250,000 (the "Estimated
Purchase Price"), which shall be paid by the delivery to Seller of a certified
or bank cashier's check in New York Clearing House Funds, payable to the order
of Seller or, at the Seller's option, by wire transfer of immediately available
funds into an account designated by the Seller.
1.6 Adjustment to Purchase Price.
(a) As soon as practicable following the Closing Date, Zonagen shall
deliver to Purchaser a balance sheet of the Business (the "Determination
Date Balance Sheet") as at the close of business on February 28, 1999 (the
"Determination Date"). The Determination Date Balance Sheet shall be based
upon the books and records of Seller, shall be prepared in accordance with
GAAP applied on a basis consistent with the Financial Statements referred
to in Section 3.8, and shall present fairly the financial position of the
Business as of the Determination Date. Concurrently with the delivery of
the Determination Date Balance Sheet, Zonagen shall deliver to Purchaser a
notice (the "Current Assets and Current Liabilities Notice") specifying (i)
the amount of current assets of the Business as of the Determination Date
included in the Purchased Assets, excluding cash and cash equivalents (the
"Determination Date Current Assets"), as determined by Zonagen in good
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faith based on the Determination Date Balance Sheet (the "Current Assets
Determination") and (ii) the amount of current liabilities of the Business
as of the Determination Date included in the Assumed Liabilities (the
"Determination Date Current Liabilities"), as determined by Zonagen in good
faith based on the Determination Date Balance Sheet (the "Current
Liabilities Determination"). The Current Assets Determination and the
Current Liabilities Determination shall become final (the "Final Current
Assets and Current Liabilities Determination") thirty (30) days after the
Current Assets and Current Liabilities Notice is so delivered by Zonagen
unless Purchaser sets forth any objection thereto in a written notice to
Zonagen, which notice shall include the basis for Purchaser's objection to
the Current Assets Determination or the Current Liabilities Determination,
as the case may be, and Purchaser's own determination of the Determination
Date Current Assets or the Determination Date Current Liabilities during
such thirty (30) day period, in which event the parties shall endeavor in
good faith to resolve such dispute within fifteen (15) days after such
notice and failing such resolution to mutually agree upon a partner of a
Big Five accounting firm to resolve such dispute promptly, and in no event
later than 30 days after the 15-day dispute resolution period, and whose
determination shall be final and conclusive. The fees and expenses of the
accounting firm selected to resolve any dispute with respect to either the
Determination Date Current Assets or the Determination Date Current
Liabilities, as the case may be, under this Section 1.6(a) shall be borne
equally by Purchaser and Zonagen.
(b) Within 5 days of the Final Current Assets and Current Liabilities
Determination, Zonagen shall pay to Purchaser, by the delivery to Purchaser
of a certified or bank cashier's check in New York Clearing House funds,
payable to the order of Purchaser or, at Purchaser's option, by wire
transfer of immediately available funds to an account designated by
Purchaser, the amount, if any, by which $416,191 shall exceed the
difference of the Determination Date Current Assets less the Determination
Date Current Liabilities as so determined (the "Determination Date Working
Capital"). If the amount of the Determination Date Working Capital shall
exceed $416,191, Purchaser shall pay to Zonagen, by the delivery to Zonagen
of a certified or bank cashier's check in New York Clearing House funds,
payable to the order of Zonagen or, at Zonagen's option, by wire transfer
of immediately available funds to an account designated by Zonagen, the
amount of such excess.
1.7 Allocation of Purchase Price. The Purchase Price (together with any
liabilities assumed hereunder and other relevant items) shall be allocated among
the Purchased Assets in accordance with the requirements of Section 1060 of the
Internal Revenue Code of 1986, as amended (the "Code"). Zonagen and Purchaser
shall use their reasonable best efforts to agree upon such allocation. Purchaser
shall provide to Zonagen a schedule and supporting material reflecting such
allocation for Zonagen's review and consent. Such consent shall not be
unreasonably withheld. Zonagen, Seller and Purchaser each agrees to report and
file all Tax Returns (including amended Tax Returns and claims for refund)
consistent with such allocation, and shall take no position contrary thereto or
inconsistent therewith (including, without limitation, in any audits or
examinations by any taxing authority or any other proceedings). Zonagen, Seller
and Purchaser shall cooperate in the filing of any forms (including Form 8594)
with respect to such allocation, including any amendments to such forms required
with respect to any adjustment to the Purchase Price
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pursuant to this Agreement. Notwithstanding any other provisions of this
Agreement, the foregoing agreement shall survive the Closing Date without
limitation.
ARTICLE II
CLOSING
2.1 The Closing. Subject to the conditions set forth in Sections 6.1 and
6.2 hereof (or the waiver thereof by the party entitled to waive that
condition), the closing of the transactions contemplated by this Agreement (the
"Closing") shall take place at the offices of Weil, Gotshal & Xxxxxx LLP, 000
Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, on March 11, 1999, or such other place
or on such other date as Seller, Zonagen and Purchaser may mutually agree. The
date on which the Closing shall be held is referred to in this Agreement as the
"Closing Date".
2.2 Instruments of Conveyance, Transfer, Assumption, Etc.
(a) Seller shall execute and deliver to Purchaser at the Closing: (i)
one or more bills of sale, substantially in the form attached hereto as
Exhibit B, conveying the Purchased Assets to Purchaser and (ii) assignments
with respect to each of the contracts and other agreements and rights to be
assigned to Purchaser hereunder and, where required for such assignment,
the consent or waiver of any third party, in each case in form reasonably
satisfactory to Purchaser.
(b) In addition, at the Closing, Seller shall take all steps requisite
to put Purchaser in actual possession and operating control of the
Purchased Assets, including, without limitation, disclosure to such Persons
as the Purchaser may designate of Seller's trade secrets and other
proprietary information pertaining to the Business.
2.3 Further Assurances. At the Closing and from time to time after the
Closing but not in excess of six months following the Closing, (i) at the
request of Purchaser, Seller shall promptly execute and deliver to Purchaser
such certificates and other instruments of sale, conveyance, assignment and
transfer, and take such other action, as may reasonably be requested by
Purchaser more effectively to confirm any obligation assumed by Purchaser
pursuant to the Assumed Liabilities and to convey, assign and transfer to and
vest in Purchaser or to put Purchaser in possession of the Purchased Assets, and
(ii) at the request of Seller, Purchaser shall promptly execute and deliver to
Seller such certificates and other instruments of assumption, and take such
other action, to confirm and carry out the assumption by Purchaser of the
Assumed Liabilities. To the extent that any consents, waivers or approvals
necessary to convey items of Purchased Assets to Purchaser are not obtained
prior to the Closing, Seller and Zonagen shall use their reasonable best efforts
to: (i) provide to Purchaser, at the request of Purchaser, the benefits of any
such Purchased Asset, and hold the same in trust for Purchaser; (ii) cooperate
in any reasonable and lawful arrangement, approved by Purchaser, designed to
provide such benefits to Purchaser; and (iii) enforce and perform, at the
request of Purchaser, for the account of Purchaser, any rights or obligations of
Seller arising from any Purchased Asset against or in respect of any
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third person (including a government or Governmental Body) including the right
to elect to terminate any contract, arrangement or agreement in accordance with
the terms thereof upon the advice of Purchaser.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE SELLER AND ZONAGEN
Zonagen and FTI jointly and severally hereby represent and warrant to
the Purchaser that:
3.1 Organization and Good Standing.
Each of FTI and Zonagen is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation as set forth above and has all requisite corporate power and
authority to own, lease and operate its properties and to carry on its business
as now conducted. FTI is duly qualified or authorized to do business as a
foreign corporation and is in good standing under the laws of each jurisdiction
in which it owns or leases real property and each other jurisdiction in which
the conduct of its business or the ownership of its properties requires such
qualification or authorization, except where the failure to be so qualified or
authorized would not have a Material Adverse Effect. Schedule 3.1 sets forth a
list of all states in which FTI is authorized or qualified to do business.
3.2 Authorization of Agreement. Each of FTI and Zonagen has all
requisite power, authority and legal capacity to execute and deliver this
Agreement, the Transition Services Agreement in the form of Exhibit A hereto
(the "Transition Services Agreement"), and each other agreement, document, or
instrument or certificate to be executed by either of them in connection with
the consummation of the transactions contemplated by this Agreement (together
with this Agreement and the Transition Services Agreement, the "Seller
Documents"), and to consummate the transactions contemplated hereby and thereby.
This Agreement has been, and each of the Seller Documents will be at or prior to
the Closing, duly and validly executed and delivered by FTI and Zonagen as the
case may be, and (assuming the due authorization, execution and delivery by the
other parties hereto and thereto) this Agreement constitutes, and each of the
Seller Documents when so executed and delivered will constitute, legal, valid
and binding obligations of FTI and/or Zonagen, as the case may be, enforceable
against such party in accordance with their respective terms, subject to
applicable bankruptcy, insolvency, reorganization, moratorium and similar laws
affecting creditors' rights and remedies generally, and subject, as to
enforceability, to general principles of equity, including principles of
commercial reasonableness, good faith and fair dealing (regardless of whether
enforcement is sought in a proceeding at law or in equity).
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3.3 Capitalization. The authorized capital stock of FTI consists of
15,000 shares of common Stock, no par value per share (the "Common Stock"). As
of the date hereof, there are 10,000 shares of Common Stock issued and
outstanding and no shares of Common Stock are held by FTI as treasury stock.
All of the issued and outstanding shares of Common Stock were duly authorized
for issuance and are validly issued, fully paid and non-assessable.
3.4 No Subsidiaries. The Purchased Assets do not include any stock or
other equity interest in any other Person.
3.5 Corporate Records. Seller has delivered to Purchaser true, correct
and complete copies of the certificate of incorporation (certified by the
Secretary of State or other appropriate official of the applicable jurisdiction
of organization) and by-laws (certified by the secretary, assistant secretary or
other appropriate officer) or comparable organizational documents of FTI.
3.6 Conflicts; Consents of Third Parties. (a) None of the execution and
delivery by Seller or Zonagen of this Agreement and the Seller Documents, the
consummation of the transactions contemplated hereby or thereby, or compliance
by the Seller or Zonagen with any of the provisions hereof or thereof will (i)
conflict with, or result in the breach of, any provision of the certificate of
incorporation or by-laws or comparable organizational documents of FTI; (ii)
conflict with, violate, result in the breach or termination of, or constitute a
default under any note, bond, mortgage, indenture, license, agreement or other
instrument or obligation to which Seller is a party or by which Seller or any of
its properties or assets are bound except as disclosed in Schedule 3.6 hereto;
(iii) violate any statute, rule, regulation, order or decree of any governmental
body or authority by which Seller is bound; or (iv) result in the creation of
any Lien upon the properties or assets of Seller.
(b) No consent, waiver, Order or Permit of, or declaration or filing
with, or notification to, any Person or Governmental Body is required on
the part of the Seller in connection with the execution and delivery of
this Agreement or the Seller Documents, or the compliance by the Seller,
with any of the provisions hereof or thereof, except as provided in
Schedule 3.6 hereto.
3.7 Title to Assets. Schedule 1.1(a) sets forth (i) the tangible assets
of the Business (including equipment, furniture, furnishings, leasehold
improvements, vehicles and fixtures), the location of such items and the
original book value and depreciated book value of such assets where available;
and (ii) all individual refundable deposits, prepaid expenses, deferred charges
and similar assets as of the Balance Sheet Date. FTI has good and marketable
title to, or a valid leasehold interest in, the properties and assets used in
the Business, located on the Business Premises, or shown on the Balance Sheet or
acquired after the date thereof, free and clear of all Liens, except for
Permitted Exceptions and properties and assets disposed of in the ordinary
course of business consistent with past practice since the date of the Balance
Sheet.
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3.8 Financial Statements. Seller has delivered to Purchaser copies of
the unaudited balance sheets of FTI as at December 31, 1996, 1997 and 1998 and
the related unaudited statements of income of FTI for the years then ended (such
unaudited statements are referred to herein as the "Financial Statements"). Each
of the Financial Statements is complete and correct in all material respects,
has been prepared in accordance with GAAP (subject to normal year-end
adjustments) and in conformity with the practices consistently applied by FTI
without modification of the accounting principles used in the preparation
thereof and presents fairly the financial position and results of operations of
FTI as at the dates and for the periods indicated. The schedule dated March 8,
1999 of international sales by vendor of FTI for the years 1996, 1997 and 1998
is complete and accurate in all material respects.
For the purposes hereof, the unaudited balance sheet of FTI as at
December 31, 1998 is referred to as the "Balance Sheet" and December 31, 1998,
is referred to as the "Balance Sheet Date."
3.9 No Undisclosed Liabilities. Seller has no indebtedness, obligations
or liabilities of any kind (whether accrued, absolute, contingent or otherwise,
and whether due or to become due) that would have been required to be reflected
in, reserved against or otherwise described on the Balance Sheet or in the notes
thereto in accordance with GAAP which was not fully reflected in, reserved
against or otherwise described in the Balance Sheet or the notes thereto or was
not incurred in the ordinary course of business consistent with past practice
since the Balance Sheet Date.
3.10 Absence of Certain Developments. Except as expressly contemplated
by this Agreement or as set forth in Schedule 3.10, since the Balance Sheet
Date:
(a) there has not been any Material Adverse Change nor has there
occurred any event which is reasonably likely to result in a Material
Adverse Change;
(b) there has not been any damage, destruction or loss, whether or not
covered by insurance, with respect to the property and assets of the
Business having a replacement cost of more than $10,000 for any single loss
or $25,000 for all such losses;
(c) there has not been any declaration, setting aside or payment of any
dividend or other distribution in respect of any shares of capital stock of
FTI or any repurchase, redemption or other acquisition by Seller or Zonagen
of any outstanding shares of capital stock or other securities of, or other
ownership interest in, FTI;
(d) Seller has not awarded or paid any bonuses to employees of FTI with
respect to the fiscal year ended December 31, 1998, except to the extent
accrued on the Balance Sheet or entered into any employment, deferred
compensation, severance or similar agreement (nor amended any such
agreement) or agreed to increase the compensation payable or to become
payable to any employees, agents or representatives of FTI or agreed to
increase the coverage or benefits available under any severance pay,
termination pay, vacation pay, company awards, salary continuation for
disability, sick leave, deferred
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compensation, bonus or other incentive compensation, insurance, pension or
other employee benefit plan, payment or arrangement made to, for or with
such directors, officers, employees, agents or representatives (other than
normal increases in the ordinary course of business consistent with past
practice and that in the aggregate have not resulted in a material increase
in the benefits or compensation expense of FTI);
(e) there has not been any change by FTI or Zonagen in accounting or Tax
reporting principles, methods or policies;
(f) Neither FTI nor Zonagen has not entered into any transaction or
Contract with respect to the Business or conducted the Business other than
in the ordinary course consistent with past practice;
(g) Seller has not failed to promptly pay and discharge current
liabilities with respect to the Business except where disputed in good
faith by appropriate proceedings;
(h) Neither FTI nor Zonagen has with respect to the Business made any
loans, advances or capital contributions to, or investments in, any Person
or paid any fees or expenses to Zonagen or any Affiliate of Zonagen;
(i) Neither FTI nor Zonagen has with respect to the Business mortgaged,
pledged or subjected to any Lien any of the Purchased Assets, or acquired
any assets or sold, assigned, transferred, conveyed, leased or otherwise
disposed of any assets of the Business, except for assets acquired or sold,
assigned, transferred, conveyed, leased or otherwise disposed of in the
ordinary course of business consistent with past practice;
(j) Neither FTI nor Zonagen has with respect to the Business discharged
or satisfied any Lien, or paid any obligation or liability (fixed or
contingent), except in the ordinary course of business consistent with past
practice and which, in the aggregate, would not be material to the
Business;
(k) Neither FTI nor Zonagen has with respect to the Business canceled or
compromised any debt or claim or amended, canceled, terminated,
relinquished, waived or released any Contract or right except in the
ordinary course of business consistent with past practice and which, in the
aggregate, would not be material to the Business;
(l) Neither FTI nor Zonagen has with respect to the Business made or
committed to make any capital expenditures or capital additions or
betterments in excess of $10,000 individually or $25,000 in the aggregate;
(m) Neither FTI nor Zonagen has instituted or settled any material Legal
Proceeding with respect to the Business except as contemplated in Section
6.1(g); and
(n) Neither FTI nor Zonagen has agreed to do anything set forth in this
Section 3.10.
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3.11 Taxes.
(a) Except as set forth in Schedule 3.11(a), (i) all material Tax
Returns required to be filed by, on behalf of, or with respect to the
Business have been filed on a timely basis with the appropriate Taxing
Authority in which such Tax Returns are required to be filed (after giving
effect to any valid extensions of time in which to make such filings); and
(ii) all material Taxes due and payable in respect of such Tax Returns with
respect to the Business (whether or not shown on such returns) have been
fully and timely paid or are adequately provided for in the Financial
Statements.
(b) With respect to the Business, Seller and its Affiliates do not have
any liability for Taxes of any other Person pursuant to Treas. Reg.
(S) 1.1502-6 (or any similar provision of state, local or foreign law);
(c) With respect to the Business, Seller and its Affiliates have duly
and timely withheld and paid over to the appropriate Taxing Authority all
Taxes and other amounts required to be so withheld and paid over for all
periods under all applicable laws in connection with amounts paid or owing
to any employee, independent contractor, subcontractor, lender, stockholder
or other third party or other personnel supplied by any third party.
(d) Except as set forth in Schedule 3.11(d), neither the Seller nor any
of its Affiliates (i) has received notice (written or oral) of any
assessment or intent to make any assessment by any Taxing Authority
regarding Taxes imposed on or with respect to the Business for any period
for which Tax Returns have been filed; (ii) has received any notice
(written or oral) of a claim made by any Taxing Authority in a jurisdiction
where such parties do not file Tax Returns with respect to the Business
that any of them is or may be subject to taxation by that jurisdiction or
is obliged to act as withholding agent under the laws of that jurisdiction
with respect to the Business; (iii) has any knowledge that there is a
dispute or claim concerning any Tax Liability of Seller or its Affiliates
with respect to the Business claimed or raised by any Taxing Authority
during any presently pending audit or proceeding; and (iv) has any waiver
or extension of any statute of limitations that is either in effect or has
been in connection with any Tax Returns with respect to the Business.
(e) There are no Liens on any of the assets of the Business that arose
in connection with any failure (or alleged failure) to pay any Taxes.
(f) Except as set forth in Schedule 3.11(f), the performance of the
transactions contemplated by this Agreement will not (either alone or upon
the occurrence of any additional or subsequent event) result in, nor do the
Assumed Liabilities otherwise provide for, any payment by Purchaser that
would constitute an "excess parachute payment" within the meaning of
Section 280G of the Code.
(g) Seller is not a foreign person within the meaning of Section 1445 of
the Code.
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(h) Except as set forth in Schedule 3.11(h), none of the assets of the
Business is (i) property required to be treated as being owned by another
Person pursuant to the provisions of Section 168(f)(8) of the Internal
Revenue Code of 1954, as amended and in effect immediately prior to the
enactment of the Tax Reform Act of 1986; (ii) "tax-exempt use property"
within the meaning of Section 168(h) of the Code; or (iii) tax exempt bond
financed property within the meaning of Section 168(g)(5) of the Code.
(i) Schedule 3.11(i) sets forth each and every Taxing Jurisdiction in
which the nature of the Business or the Purchased Assets either requires
Seller to (i) file income or franchise tax returns, (ii) collect sales or
use taxes, or (iii) pay ad valorem real or personal property taxes.
Schedule 3.11(i) also sets forth each and every Taxing Jurisdiction in
which (i) consummation of the transactions that are the subject of this
Agreement subjects the Purchaser to a liability for any Taxes of Seller or
its Affiliates; or (ii) the nature of Seller's business or assets requires
the Seller or Purchaser to notify a Taxing Authority of the transactions
that are the subject of this Agreement, if the failure to make such
notification would subject Purchaser to a liability for any Taxes of Seller
or its Affiliates.
3.12 Real Property.
(a) Schedule 3.12(a) sets forth a complete list of (i) all real property
and interests in real property owned in fee by FTI (individually, an "Owned
Property" and collectively, the "Owned Properties"), and (ii) all real
property and interests in real property leased by FTI (individually, a
"Real Property Lease" and the real properties specified in such leases,
together with the Owned Properties, being referred to herein individually
as a "Company Property" and collectively as the "Company Properties") as
lessee or lessor. The Company Property constitutes all interests in real
property currently used or currently held for use in connection with the
Business and which are necessary for the continued operation of the
Business as currently conducted. FTI has a valid and enforceable leasehold
interest under each of the Real Property Leases, subject to applicable
bankruptcy, insolvency, reorganization, moratorium and similar laws
affecting creditors' rights and remedies generally and subject, as to
enforceability, to general principles of equity (regardless of whether
enforcement is sought in a proceeding at law or in equity), and FTI has not
received any written notice of any default or event that with notice or
lapse of time, or both, would constitute a default by FTI under any of the
Real Property Leases. All of the Company Property, buildings, fixtures and
improvements thereon owned or leased by FTI are in good operating condition
and repair (subject to normal wear and tear). Seller has delivered or
otherwise made available to the Purchaser true, correct and complete copies
of (i) all deeds, title reports and surveys for the Owned Properties and
(ii) the Real Property Leases, together with all amendments, modifications
or supplements, if any, thereto.
(b) Seller has all material certificates of occupancy and Permits of any
Governmental Body necessary or useful for the current use and operation of
each Company Property, and Seller has fully complied with all material
conditions of the Permits applicable to the Business. No default or
violation, or event that with the lapse of time or giving of notice or both
would become a default or violation, has occurred in the due observance of
any Permit.
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(c) There does not exist any actual or, to the knowledge of Seller,
threatened or contemplated condemnation or eminent domain proceedings that
affect any Company Property or any part thereof, and Seller has not
received any notice, oral or written, of the intention of any Governmental
Body or other Person to take or use all or any part thereof.
(d) Seller has not received any written notice from any insurance
company that has issued a policy with respect to any Company Property
requiring performance of any structural or other repairs or alterations to
such Company Property.
(e) Seller does not hold, and is not obligated under or a party to, any
option, right of first refusal or other contractual right to purchase,
acquire, sell, assign or dispose of any real estate or any portion thereof
or interest therein.
3.13 Tangible Personal Property.
(a) Schedule 3.13(a) sets forth all leases of personal property
("Personal Property Leases") involving annual payments in excess of $10,000
relating to personal property used in the Business. Seller has delivered or
otherwise made available to Purchaser true, correct and complete copies of
the Personal Property Leases, together with all amendments, modifications
or supplements thereto.
(b) Seller has a valid leasehold interest under each of the Personal
Property Leases under which either Seller is a lessee, subject to
applicable bankruptcy, insolvency, reorganization, moratorium and similar
laws affecting creditors' rights and remedies generally and subject, as to
enforceability, to general principles of equity (regardless of whether
enforcement is sought in a proceeding at law or in equity), and there is no
default under any Personal Property Lease by Seller or, to the knowledge of
Seller, by any other party thereto, and no event has occurred that with the
lapse of time or the giving of notice or both would constitute a default
thereunder.
(c) Seller has good and marketable title to all of the items of tangible
personal property reflected in the Balance Sheet (except as sold or
disposed of subsequent to the date thereof in the ordinary course of
business consistent with past practice), free and clear of any and all
Liens other than the Permitted Exceptions. All such items of tangible
personal property which, individually or in the aggregate, are material to
the operation of the Business are in good condition and in a state of good
maintenance and repair (ordinary wear and tear excepted) and are suitable
for the purposes used; provided, however, that no representation is made
with respect to compliance with year 2000 issues.
(d) All of the items of tangible personal property used by Seller under
the Personal Property Leases are in good condition and repair (ordinary
wear and tear excepted) and are suitable for the purposes used.
3.14 Intangible Property. Schedule 3.14 contains a complete and correct
list of each patent, trademark, trade name, service xxxx and copyright owned or
used by FTI or
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by Zonagen with respect to the Business as well as all registrations thereof and
pending applications therefor, and each license or other agreement relating
thereto. Except as set forth on Schedule 3.14, each of the foregoing is owned by
the party shown on such Schedule as owning the same, free and clear of all
mortgages, claims, liens, security interests, charges and encumbrances and is in
good standing and not the subject of any challenge. There have been no claims
made and neither Zonagen nor Seller has received any notice or otherwise knows
or has reason to believe that any of the foregoing is invalid or conflicts with
the asserted rights of others. Zonagen and Seller possess all patents, patent
licenses, trade names, trademarks, service marks, brand marks, brand names,
copyrights, know-how, formulate and other proprietary and trade rights necessary
for the conduct of the Business as now conducted, not subject to any
restrictions and without any known conflict with the rights of others and
neither Zonagen nor Seller has forfeited or otherwise relinquished any such
patent, patent license, trade name, trademark, service xxxx, brand xxxx, brand
name, copyright, know-how, formulate or other proprietary right necessary for
the conduct of the Business as conducted on the date hereof. Neither Zonagen nor
Seller is under any obligation to pay any royalties or similar payments in
connection with any license relating to the Business, except as to the License
Agreements described in Items 4, 5 and 6 to Schedule 3.14.
3.15 Material Contracts. Schedule 3.15 sets forth all of the following
Contracts to which Seller is a party or by which it is bound with respect to the
Business (collectively, the "Material Contracts"): (i) Contracts with any
officer, director or Affiliate of Seller; (ii) Contracts with any labor union or
association representing any employee of the Business; (iii) Contracts pursuant
to which any party is required to purchase or sell a stated portion of its
requirements or output from or to another party; (iv) Contracts for the sale of
any of the assets of the Business other than in the ordinary course of business
or for the grant to any person of any preferential rights to purchase any of its
assets; (v) joint venture agreements; (vi) material Contracts containing
covenants of Seller, or any employee of Seller with respect to the Business, not
to compete with any Person or with the Business; (vii) Contracts providing for
exclusive rights with respect to the purchase or sale of any goods or services
by or to Seller in respect of the Business; (viii) Contracts relating to the
borrowing of money; (ix) royalty arrangements or (x) any Contracts, with vendors
and all other Contracts, which involve the expenditure of more than $25,000 in
the aggregate or $10,000 annually or require performance by any party more than
one year from the date hereof. There have been made available to Purchaser, its
Affiliates and their representatives true and complete copies of all of the
Material Contracts. Except as set forth on Schedule 3.15, all of the Material
Contracts and other agreements are in full force and effect and are the legal,
valid and binding obligation of Seller, enforceable against such parties in
accordance with its terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium and similar laws affecting creditors' rights and
remedies generally and subject, as to enforceability, to general principles of
equity (regardless of whether enforcement is sought in a proceeding at law or in
equity). Except as set forth on Schedule 3.15, Seller is not in default in any
material respect under any Material Contracts, nor, to the knowledge of Seller,
is any other party to any Material Contract in default thereunder in any
material respect.
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3.16 Employee Benefits.
(a) Schedule 3.16(a) sets forth a complete and correct list of (i) all
"employee benefit plans", as defined in Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), and any other
pension plans or employee benefit arrangements, programs or payroll
practices (including, without limitation, severance pay, vacation pay,
company awards, salary continuation for disability, sick leave, retirement,
deferred compensation, bonus or other incentive compensation, stock
purchase arrangements or policies, hospitalization, medical insurance, life
insurance and scholarship programs) maintained by Seller or Zonagen or to
which Seller or Zonagen contributes or is obligated to contribute
thereunder with respect to employees of the Business ("Employee Benefit
Plans") and (ii) all "employee pension plans", as defined in Section 3(2)
of ERISA, maintained by Seller or Zonagen or any trade or business (whether
or not incorporated) which are under control, or which are treated as a
single employer, with FTI under Section 414(b), (c), (m) or (o) of the
("ERISA Affiliate") or to which Seller or any ERISA Affiliate contributed
or is obligated to contribute thereunder ("Pension Plans"). Schedule
3.16(a) clearly identifies, in separate categories, Employee Benefit Plans
or Pension Plans that are (i) subject to Section 4063 and 4064 of ERISA
("Multiple Employer Plans"), (ii) multiemployer plans (as defined in
Section 4001(a)(3) of ERISA) ("Multiemployer Plans") or (iii) "benefit
plans", within the meaning of Section 5000(b)(1) of the Code providing
continuing benefits after the termination of employment (other than as
required by Section 4980B of the Code or Part 6 of Title I of ERISA and at
the former employee's or his beneficiary's sole expense).
(b) Seller does not have any withdrawal or other liability (contingent
or otherwise) under Title IV of ERISA with respect to any Multiple Employer
Plan or Multiemployer Plan, as a result of the transactions contemplated by
this Agreement.
(c) Neither the execution and delivery of this Agreement nor the
consummation of the transactions contemplated hereby will (i) result in any
payment becoming due to any employee of the Business; (ii) increase any
benefits otherwise payable under any Employee Benefit Plan or Pension Plan;
or (iii) result in the acceleration of the time of payment or vesting of
any such benefits.
3.17 Labor.
(a) Except as set forth on Schedule 3.17(a), Seller is not a party to
any labor or collective bargaining agreement and there are no labor or
collective bargaining agreements which pertain to employees of the
Business. Seller has delivered or otherwise made available to Purchaser
true, correct and complete copies of the labor or collective bargaining
agreements listed on Schedule 3.17(a), together with all amendments,
modifications or supplements thereto.
(b) Except as set forth on Schedule 3.17(b), no employees of the
Business are represented by any labor organization. No labor organization
or group of employees of the Business has made a pending demand for
recognition, and there are no representation proceedings or petitions
seeking a representation proceeding presently pending or, to the
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knowledge of the Seller, threatened to be brought or filed, with the
National Labor Relations Board or other labor relations tribunal. There is
no organizing activity involving the Business pending or, to the knowledge
of Seller, threatened by any labor organization or group of employees of
the Business.
(c) There are no (i) strikes, work stoppages, slowdowns, lockouts or
arbitrations or (ii) material grievances or other labor disputes pending
or, to the knowledge of the Seller, threatened against or involving the
Business. There are no unfair labor practice charges, grievances or
complaints pending or, to the knowledge of Seller, threatened by or on
behalf of any employee or group of employees of the Business.
3.18 Litigation. Except as set forth in Schedule 3.18, there is no suit,
action, proceeding, investigation, claim or order pending or, to the knowledge
of Seller or Zonagen, overtly threatened against Seller relating to the Business
(or to the knowledge of Seller or Zonagen, pending or threatened, against any of
the officers, directors or key employees of FTI with respect to their business
activities on behalf of Seller), or to which Seller is otherwise a party, which,
if adversely determined, would have a Material Adverse Effect, before any court,
or before any governmental department, commission, board, agency, or
instrumentality; nor to the knowledge of Seller is there any reasonable basis
for any such action, proceeding, or investigation. Seller is not subject to any
judgment, order or decree of any court or governmental agency relating to the
Business except to the extent the same are not reasonably likely to have a
Material Adverse Effect and Seller is not engaged in any legal action to recover
monies due it or for damages sustained by it in relation to the Business.
3.19 Compliance with Laws; Permits. Seller is in compliance with all
Laws applicable to the Business or the Purchased Assets, except for such non-
compliances as would not, individually or in the aggregate, have a Material
Adverse Effect. Seller has all governmental permits and approvals from state,
federal or local authorities which are required to operate the Business, except
for those the absence of which would not, individually or in the aggregate, have
a Material Adverse Effect.
3.20 Environmental Matters. Except as set forth on Schedule 3.20 hereto:
(a) the operations of the Business are in compliance with all applicable
Environmental Laws and all permits issued pursuant to Environmental Laws or
otherwise;
(b) FTI has obtained all permits required under all applicable
Environmental Laws necessary to operate its business;
(c) Seller is not the subject of any outstanding written order or
Contract with any governmental authority or Person with respect to the
Business concerning (i) Environmental Laws, (ii) Remedial Action or (iii)
any Release or threatened Release of a Hazardous Material;
15
(d) Seller has not received any written communication alleging both that
Seller with respect to the Business may be in violation of any
Environmental Law, or any permit issued pursuant to Environmental Law, or
may have any liability under any Environmental Law;
(e) Seller does not have, with respect to the Business, any current
contingent liability in connection with any Release of any Hazardous
Materials into the indoor or outdoor environment (whether on-site or off-
site);
(f) to Seller's knowledge, there are no investigations of the Business
or the Purchased Assets, pending or threatened which could lead to the
imposition of any liability pursuant to Environmental Law;
(g) there is not located at any of the properties of the Business any
(i) underground storage tank, (ii) asbestos-containing material or (iii)
equipment containing polychlorinated biphenyls; and,
(h) Seller has provided to Purchaser all environmentally related audits,
studies, reports, analyses, and results of investigations that have been
performed with respect to the currently or previously owned, leased or
operated properties of FTI or the Business.
3.21 Insurance. Schedule 3.21 sets forth a complete and accurate list of
all policies of insurance of any kind or nature currently covering the Business
or any employees, properties or assets of the Business, including, without
limitation, policies of life, disability, fire, theft, workers compensation,
employee fidelity, product liability and other casualty and liability insurance.
All such policies are in full force and effect, and, to the Seller's knowledge,
FTI is not in default of any provision thereof, except for such defaults as
would not, individually or in the aggregate, have a Material Adverse Effect.
3.22 Inventories; Receivables; Payables.
(a) The inventories of the Business are in good and marketable
condition, and are saleable in the ordinary course of business. Adequate
reserves have been reflected in the Balance Sheet for shorts, drops, off-
cuts, obsolete or otherwise unusable inventory, which reserves were
calculated in a manner consistent with past practice and in accordance with
GAAP consistently applied.
(b) All accounts receivable of the Business have arisen from bona fide
transactions in the ordinary course of business consistent with past
practice. Except as disclosed on Schedule 3.22, all accounts receivable of
the Business reflected on the Balance Sheet are good and collectible at the
aggregate recorded amounts thereof, net of any applicable reserve for
returns or doubtful accounts reflected thereon, which reserves are adequate
and were calculated in a manner consistent with past practice and in
accordance with GAAP consistently applied. All accounts receivable arising
after the Balance Sheet Date and prior to the Closing Date are good and
collectible at the aggregate recorded amounts thereof, net of any
applicable reserve for returns or doubtful accounts, which
16
reserves are adequate and were calculated in a manner consistent with past
practice and in accordance with GAAP consistently applied.
(c) All accounts payable of the Business reflected in the Balance Sheet
or arising after the date thereof are the result of bona fide transactions
in the ordinary course of business and have been paid or are not yet due
and payable.
3.23 Related Party Transactions. Except as set forth on Schedule 3.23,
neither Seller nor any of its Affiliates has borrowed any moneys from or has
outstanding any indebtedness or other similar obligations to the Business.
Except as set forth in Schedule 3.23, neither Seller nor its Affiliates nor any
officer or employee of any of them (i) owns any direct or indirect interest of
any kind in, or controls or is a director, officer, employee or partner of, or
consultant to, or lender to or borrower from or has the right to participate in
the profits of, any Person which is (A) a competitor, supplier, customer,
landlord, tenant, creditor or debtor of FTI, (B) engaged in a business related
to the Business, or (C) a participant in any transaction to which FTI or Zonagen
with respect to the Business is a party or is a party to any Contract with FTI
or Zonagen with respect to the Business to any Contract with FTI.
3.24 Relationships with Customers and Suppliers. (a) Seller and Zonagen
believe that the relationships of Seller with the existing customers and
suppliers of the Business are sound, and, to the knowledge of the Seller, except
as disclosed in Schedule 3.24 there is no reasonable basis to believe that any
of the primary customers or suppliers of the Business will materially and
adversely change the manner in which they currently conduct business with FTI,
provided, however that nothing herein is intended to express any representation
or warranty on any impact that this Agreement and the transactions contemplated
herein may have on any such relationships.
(b) To the knowledge of Seller and Zonagen, there has been no written or
oral communication, fact, event or action which exists or has occurred
within 120 days prior to the date of this Agreement that would indicate
that any of the following shall terminate or materially reduce its business
with FTI:
(i) any current customer of the Business which accounted for over 5% of
total consolidated net sales of FTI for its most recently completed fiscal
year; or
(ii) any current supplier of items essential to the conduct of the
Business, which items cannot be replaced at comparable cost and the loss of
which would have a Material Adverse Effect.
(c) Since the Balance Sheet Date, (A) FTI has retained all sales
personnel employed in connection with the operation of the Business and (B)
no customer (or group of customers) purchasing in the aggregate of $25,000
in products and services of the Business on a yearly basis has terminated
its relationship with FTI.
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(d) The database to be furnished at Closing by Seller to Purchaser
contains the names and addresses of all customers of the Business during
fiscal year 1998. All contracts and agreements with such customers are
valid, effective and enforceable and Schedule 3.24 sets forth all customers
who have account balances that are in excess of 90 days past due and the
amount of any such delinquent account balances.
3.25 Banks. Schedule 3.25 contains a complete and correct list of the
names and locations of all banks in which FTI has accounts or safe deposit boxes
and the names of all persons authorized to draw thereon or to have access
thereto. Except as set forth on Schedule 3.25, no person holds a power of
attorney to act on behalf of FTI.
3.26 No Misrepresentation. No representation or warranty of Seller or
Zonagen contained in this Agreement or in any schedule hereto or in any
certificate or other instrument furnished by Seller or Zonagen to Purchaser
pursuant to the terms hereof, to the extent such representations and warranties
relate to Seller, Zonagen or the Business contains any untrue statement of a
material fact or omits to state a material fact necessary to make the statements
contained herein or therein, in light of the circumstances under which they were
made, not misleading.
3.27 Financial Advisors. Except as set forth on Schedule 3.27, no Person
has acted, directly or indirectly, as a broker, finder or financial advisor for
the Seller or Zonagen in connection with the transactions contemplated by this
Agreement and no Person is entitled to any fee or commission or like payment in
respect thereof.
3.28 Shared Services. Except as described in Schedule 3.28 hereto, there
are no material assets or services of or provided to FTI that are allocated or
shared between FTI and any other operating unit, division or business of
Zonagen.
3.29 Asset Transfers. Prior to the execution and delivery of this
Agreement, Zonagen has conveyed to FTI those assets of Zonagen and its
Affiliates used in or relating to the Business as set forth on Schedule 3.29,
and FTI has conveyed to Zonagen all cash on hand and in all bank accounts on the
Determination Date and those assets of FTI, unrelated to the Business as set
forth on Schedule 3.29.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser hereby represents and warrants to Seller and Zonagen that:
4.1 Organization and Good Standing. Purchaser is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware.
4.2 Authorization of Agreement. Purchaser has full corporate power and
authority to execute and deliver this Agreement, the Transition Services
Agreement and each other agreement, document, instrument or certificate
contemplated by this Agreement or to
18
be executed by Purchaser in connection with the consummation of the transactions
contemplated hereby and thereby (together with the Transition Services
Agreement, the "Purchaser Documents"), and to consummate the transactions
contemplated hereby and thereby. The execution, delivery and performance by
Purchaser of this Agreement and each Purchaser Document have been duly
authorized by all necessary corporate action on behalf of the Purchaser. This
Agreement has been, and each Purchaser Document will be at or prior to the
Closing, duly executed and delivered by Purchaser and (assuming the due
authorization, execution and delivery by the other parties hereto and thereto)
this Agreement constitutes, and each Purchaser Document when so executed and
delivered will constitute, legal, valid and binding obligations of Purchaser,
enforceable against the Purchaser in accordance with their respective terms,
subject to applicable bankruptcy, insolvency, reorganization, moratorium and
similar laws affecting creditors' rights and remedies generally, and subject, as
to enforceability, to general principles of equity, including principles of
commercial reasonableness, good faith and fair dealing (regardless of whether
enforcement is sought in a proceeding at law or in equity).
4.3 Conflicts; Consents of Third Parties.
(a) Neither the execution and delivery by Purchaser of this Agreement
and of the Purchaser Documents, nor the compliance by Purchaser with any of
the provisions hereof or thereof will (i) conflict with, or result in the
breach of, any provision of the certificate of incorporation or by-laws of
Purchaser, (ii) conflict with, violate, result in the breach of, or
constitute a default under any note, bond, mortgage, indenture, license,
agreement or other obligation to which the Purchaser is a party or by which
Purchaser or its properties or assets are bound or (iii) violate any
statute, rule, regulation, order or decree of any Governmental Body or
authority by which Purchaser is bound, except, in the case of clauses (ii)
and (iii), for such violations, breaches or defaults as would not,
individually or in the aggregate, have a Material Adverse Effect on the
business, properties, results of operations, prospects, conditions
(financial or otherwise) of Purchaser and its subsidiaries, taken as a
whole.
(b) No consent, waiver, approval, Order, Permit or authorization of, or
declaration or filing with, or notification to, any Person or Governmental
Body is required on the part of Purchaser in connection with the execution
and delivery of this Agreement or the Purchaser Documents or the compliance
by Purchaser with any of the provisions hereof or thereof.
4.4 Litigation. There are no Legal Proceedings pending or, to the
knowledge of Purchaser, threatened that are reasonably likely to prohibit or
restrain the ability of Purchaser to enter into this Agreement or consummate the
transactions contemplated hereby.
4.5 Financial Advisors. No Person has acted, directly or indirectly, as
a broker, finder or financial advisor for the Purchaser in connection with the
transactions contemplated by this Agreement and no person is entitled to any fee
or commission or like payment in respect thereof.
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ARTICLE V
COVENANTS
The parties hereto agree as follows with respect to the period following
the Closing:
5.1 General. In the event that at any time after the Closing any further
action is necessary or desirable to carry out the purposes of this Agreement,
each of the parties hereto will take such further action (including the
execution and delivery of such further instruments and documents) as any other
party reasonably may request, all at the sole cost and expense of the requesting
party (unless the requesting party is entitled to indemnification therefor under
Article VIII below). Seller acknowledges and agrees that from and after the
Closing, Purchaser will be entitled to possession of all documents, books,
records, agreements, and financial data of any sort relating to the Purchased
Assets or the Business, provided that Seller will be afforded access thereto
upon request for the purpose of preparing Tax Returns, complying with the terms
of Section 1.6 hereof, dealing with examinations or audits or performing their
indemnification obligations under Article VIII hereof.
5.2 Transition. Unless otherwise requested by Purchaser, Seller will
not, and will cause their Affiliates not to, take any action that is designed or
intended to have the effect of discouraging any lessor, licensor, customer,
supplier, or other business associate of FTI or Zonagen with respect to the
Business from maintaining the same business relationships with Purchaser after
the Closing as it maintained with respect to the Business prior to the Closing.
5.3 Confidentiality. Seller and Zonagen will treat and hold as such all
of the Confidential Information, refrain from using any of the Confidential
Information except in connection with this Agreement, and deliver promptly to
Purchaser or destroy, at the request and option of Purchaser, all tangible
embodiments (and all copies) of the Confidential Information which are in their
possession. In the event that Seller or Zonagen is requested or required (by
oral question or request for information or documents in any legal proceeding,
interrogatory, subpoena, civil investigative demand, or similar process) to
disclose any Confidential Information, such party will notify Purchaser promptly
of the request or requirement so that Purchaser may seek an appropriate
protective order or waive compliance with the provisions of this Section 5.3.
If, in the absence of a protective order or the receipt of a waiver hereunder,
Seller or Zonagen is, on the advice of counsel, compelled to disclose any
Confidential Information to any tribunal or else stand liable for contempt, then
Seller or Zonagen may disclose the Confidential Information to such tribunal;
provided, however, that Seller or Zonagen shall use its reasonable efforts to
obtain, at the request of Purchaser, an order or other assurance that
confidential treatment will be accorded to such portion of the Confidential
Information required to be disclosed as Purchaser shall designate. The foregoing
provisions shall not apply to any Confidential Information which is generally
available to the public immediately prior to the time of disclosure, or was
disclosed to Seller or Zonagen by a third party not in violation of an existing
confidentiality agreement
20
with or duty in favor of Purchaser; is independently developed by employees of
Seller or Zonagen not privy to such Confidential Information; or is necessary to
be disclosed in order for Seller or Zonagen to comply with the terms of this
Agreement. The obligations contained herein terminate on the third anniversary
of the Closing Date.
5.4 Bulk Transfer Laws. Notwithstanding anything to the contrary in this
Agreement, the parties hereby waive compliance with any bulk transfer or similar
laws of any jurisdiction in connection with the transactions contemplated by
this Agreement.
5.5 Publicity. Neither the Seller, Zonagen nor the Purchaser shall issue
any press release or public announcement concerning this Agreement or the
transactions contemplated hereby without obtaining the prior written approval of
the other party hereto, which approval will not be unreasonably withheld or
delayed, unless, in the sole judgment of the Purchaser or Zonagen, disclosure is
otherwise required by applicable Law or by the applicable rules of any stock
exchange on which Purchaser or Zonagen lists securities, provided that, to the
extent required by applicable law, the party intending to make such release
shall use its best efforts consistent with such applicable law to consult with
the other party with respect to the text thereof.
5.6 Use of Name. To the knowledge of Seller, upon the consummation of
the transaction contemplated hereby, Purchaser shall have the sole right to the
use of the name "Fertility Technologies, Inc." and the Seller shall not, and
shall not cause or permit any Affiliate to, use such name or any variation of
simulation thereof in any venture involving the Business or any related
business. Promptly following the Closing, FTI shall change its corporate name in
order to comply herewith.
5.7 Notification of Taxing Authorities. Except as otherwise provided in
Section 8.4, Seller shall notify any Taxing Authority of the transactions
contemplated by this Agreement in the form and in the manner required by
applicable Tax law and regulations in any Taxing Jurisdiction, if the failure to
make such notifications or receive any available tax clearances would subject
Purchaser to any Taxes of Seller or its Affiliates.
5.8 Mutual Release. The parties hereto, for good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
forever release and discharge the other and their present and former parents,
subsidiaries and affiliates and each of their present and former officers,
employees, directors, agents, attorneys, successors and assigns from any and all
actions, causes of action, suits, debts sums of money, judgments, claims and any
liability whatsoever, known or unknown, matured or unmatured, which either party
had or hereafter has, can, shall or may have, from the beginning of the world to
the date hereof, pertaining to the litigations styled Sage BioPharma, Inc. et.
al. v. Vivan et al., No. 98 Civ. 8360 (S.D.N.Y.) and Sage BioPharma, Inc. et.
al. x. Xxxxxx et. al., Xx. 00 Xxx. 0000 (X.X. Xx.). Nothing in this mutual
release shall be construed in any way to release the parties hereto from any
liability, if any should arise, relating to this Agreement or the Transition
Services Agreement or the documents entered into in connection herewith or
therewith or the transactions contemplated hereby or thereby.
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ARTICLE VI
CONDITIONS TO CLOSING
6.1 Conditions Precedent to Obligations of Purchaser. The obligation of
the Purchaser to consummate the transactions contemplated by this Agreement is
subject to the fulfillment, on or prior to the Closing Date, of each of the
following conditions (any or all of which may be waived by Purchaser in whole or
in part to the extent permitted by applicable law):
(a) all representations and warranties of Seller and Zonagen contained
herein qualified as to materiality shall be true and correct, and the
representations and warranties of the Seller and Zonagen contained herein
not qualified as to materiality shall be true and correct in all material
respects, at and as of the Closing Date, except to the extent expressly
made as of an earlier date;
(b) Seller and Zonagen shall have performed and complied in all material
respects with all obligations and covenants required by this Agreement to
be performed or complied with by Seller and Zonagen on or prior to the
Closing Date;
(c) there shall not have been or occurred any Material Adverse Change
since the Balance Sheet Date;
(d) Seller and/or Zonagen shall have obtained all consents and waivers
referred to in Section 3.6 hereof, in a form reasonably satisfactory to
Purchaser, which are necessary to consummate the transactions contemplated
by this Agreement and the Seller Documents;
(e) no Legal Proceedings shall have been instituted or threatened or
claim or demand made against Seller, Zonagen, or Purchaser seeking to
restrain or prohibit or to obtain damages which individually or in the
aggregate would reasonably be expected to have a Material Adverse Effect on
the Business, with respect to the consummation of the transactions
contemplated hereby, and there shall not be in effect any Order by a
Governmental Body of competent jurisdiction restraining, enjoining or
otherwise prohibiting the consummation of the transactions contemplated
hereby;
(f) Seller shall provide Purchaser with an affidavit of non-foreign
status that complies with Section 1445 of the Code (a "FIRPTA Affidavit");
(g) Purchaser and Seller shall have caused the dismissal of the
litigation between them or their Affiliates and employees pursuant to
mutually agreeable documentation; and
(h) Seller has obtained from all Taxing Authorities located in the
Taxing Jurisdictions listed in Schedule 3.11 any tax clearances available
under the laws of the applicable Taxing Jurisdiction relieving Purchaser of
any liabilities of Seller or its Affiliates, except as otherwise provided
in Section 8.4.
22
6.2 Conditions Precedent to Obligations of Seller. The obligations of
Seller and Zonagen to consummate the transactions contemplated by this Agreement
are subject to the fulfillment, prior to or on the Closing Date, of each of the
following conditions (any or all of which may be waived by Seller or Zonagen in
whole or in part to the extent permitted by applicable law):
(a) all representations and warranties of Purchaser contained herein
qualified as to materiality shall be true and correct, and all
representations and warranties of Purchaser contained herein not qualified
as to materiality shall be true and correct in all material respects, at
and as of the Closing Date except to the extent expressly made as of an
earlier date;
(b) Purchaser shall have performed and complied in all material respects
with all obligations and covenants required by this Agreement to be
performed or complied with by Purchaser on or prior to the Closing Date;
(c) there shall not be in effect any Order by a Governmental Body of
competent jurisdiction restraining, enjoining or otherwise prohibiting the
consummation of the transactions contemplated hereby; and
(d) Purchaser and Seller shall have caused the dismissal of the
litigation between them or their Affiliates and employees pursuant to
mutually agreeable documentation.
ARTICLE VII
DOCUMENTS TO BE DELIVERED
7.1 Documents to be Delivered by Seller and Zonagen. At the Closing,
Seller and Zonagen shall deliver, or cause to be delivered, to Purchaser the
following:
(a) certificates (dated the Closing Date and in form and substance
reasonably satisfactory to the Purchaser) executed on behalf of the Seller
and Zonagen certifying as to the fulfillment of the conditions specified in
Sections 6.1(a), 6.1(b), 6.1(c) and 6.1(e);
(b) the opinion of Xxxxxxx & Xxxxx LLP, counsel to the Seller and
Zonagen dated the Closing Date and in form and substance acceptable to
Purchaser;
(c) copies of all consents and waivers referred to in Section 6.1(d)
hereof;
(d) duly executed FIRPTA Affidavits for the Seller;
(e) the Transition Services Agreement, dated as of the Closing Date,
duly executed by Zonagen and FTI;
23
(f) a receipt for the Estimated Purchase Price paid at Closing; and
(g) such other documents as Purchaser shall reasonably request.
7.2 Documents to be Delivered by the Purchaser. At the Closing,
Purchaser shall deliver to Seller and Zonagen the following:
(a) an instrument of assumption of the Assumed Liabilities, in form and
substance acceptable to Seller and Zonagen;
(b) the Estimated Purchase Price payable on the Closing;
(c) the Transition Services Agreement, dated as of the Closing Date,
duly executed by Purchaser; and
(d) such other documents as Seller shall reasonably request.
ARTICLE VIII
INDEMNIFICATION
8.1 Non-Tax Indemnification.
(a) Subject to Sections 8.2, 8.3, 8.6 and 10.3 hereof, Seller and
Zonagen jointly and severally hereby agree to indemnify and hold the
Purchaser and its directors, officers, employees, Affiliates, agents,
successors and assigns (collectively, the "Purchaser Indemnified Parties")
harmless from and against any and all losses, liabilities, obligations,
damages, costs and expenses based upon, attributable to or resulting from
(i) the failure of any representation or warranty of Seller and Zonagen set
forth in Article III hereof, or any representation or warranty contained in
any certificate delivered by or on behalf of Seller or Zonagen pursuant to
this Agreement, to be true and correct in all respects as of the date made;
(ii) the breach of any covenant or other agreement on the part of Seller or
Zonagen under this Agreement and (iii) any Excluded Liabilities and any
other liabilities relating to the Business resulting from the activities of
the Business prior to the Closing Date other than the Assumed Liabilities,
together with any and all notices, actions, suits, proceedings, claims,
demands, assessments, judgments, costs, penalties and expenses, including
attorneys' and other professionals' fees and disbursements (collectively,
"Expenses") incident to any and all losses, liabilities, obligations,
damages, costs and expenses with respect to which indemnification is
provided hereunder (collectively, "Losses").
(b) Subject to Section 8.2, Purchaser hereby agrees to indemnify and
hold Seller, Zonagen and their respective directors, officers, employees,
Affiliates, agents, successors and assigns (collectively, the "Seller
Indemnified Parties") harmless from and against, subject to Section 10.3,
any and all Losses based upon, attributable to or resulting from (i) the
failure of any representation or warranty of Purchaser set forth in Article
IV hereof, or any representation or warranty contained in any certificate
delivered by or on
24
behalf of the Purchaser pursuant to this Agreement, to be true and correct
in all respects as of the date made, (ii) the breach of any covenant or
other agreement on the part of the Purchaser under this Agreement, and
(iii) any Assumed Liabilities and any other Liabilities relating to the
Business (other than the Excluded Liabilities) occurring from and after the
Closing Date, together with any and all Expenses incident to the foregoing.
8.2 Limitations on Indemnification for Breaches of Representations and
Warranties.
An indemnifying party shall not have any liability under Section
8.1(a)(i) or Section 8.1(b)(i) hereof unless the aggregate amount of Losses,
Expenses and Taxes to the indemnified parties finally determined to arise
thereunder, exceeds $25,000 (the "Basket") and, in such event, the indemnifying
party shall be required to pay the entire amount of such Losses and Expenses in
excess of $25,000 (the "Deductible"), subject to the terms of Sections 8.3, 8.6,
and 10.3 in all cases.
8.3 Non-Tax Indemnification Procedures.
(a) In the event that any Legal Proceedings shall be instituted or that
any claim or demand ("Claim") shall be asserted by any Person in respect of
which payment may be sought under Section 8.1 hereof (regardless of the
Basket or the Deductible referred to above), the indemnified party shall
reasonably and promptly cause written notice of the assertion of any Claim
of which it has knowledge which is covered by this indemnity to be
forwarded to the indemnifying party. The indemnifying party shall have the
right, at its sole option and expense, to be represented by counsel of its
choice, which must be reasonably satisfactory to the indemnified party, and
to defend against, negotiate, settle or otherwise deal with any Claim which
relates to any Losses indemnified against hereunder. If the indemnifying
party elects to defend against, negotiate, settle or otherwise deal with
any Claim which relates to any Losses indemnified against hereunder, it
shall within ten (10) days (or sooner, if the nature of the Claim so
requires) notify the indemnified party of its intent to do so and
acknowledge its responsibility for such claims hereunder, in which event
the indemnifying party shall be entitled to control the defense of the
claims in its sole discretion and to settle any such claim so long as the
indemnified parties shall be completely discharged and released therefrom.
If the indemnifying party elects not to defend against, negotiate, settle
or otherwise deal with any Claim which relates to any Losses indemnified
against hereunder, fails to notify the indemnified party of its election as
herein provided or contests its obligation to indemnify the indemnified
party for such Losses under this Agreement, the indemnified party may
defend against, negotiate, settle or otherwise deal with such Claim. If the
indemnifying party shall assume the defense of any Claim, the indemnified
party may participate, at his or its own expense, in the defense of such
Claim; provided, however, that such indemnified party shall be entitled to
participate in any such defense with separate counsel at the expense of the
indemnifying party if, (i) so requested by the indemnifying party to
participate or (ii) in the reasonable opinion of counsel to the indemnified
party and indemnifying party, a conflict or potential conflict exists
between the indemnified party and the indemnifying party that would make
such separate representation advisable; and provided, further, that the
indemnifying party shall not be required to pay for
25
more than one such counsel for all indemnified parties in connection with
any Claim. The parties hereto agree to cooperate fully with each other in
connection with the defense, negotiation or settlement of any such Claim,
provided, however, that the indemnified party shall not settle any such
Claim without the prior written consent of the indemnifying party which
shall not be unreasonably withheld.
(b) After any final judgment or award shall have been rendered by a
court, arbitration board or administrative agency of competent jurisdiction
and the expiration of the time in which to appeal therefrom, or a
settlement shall have been consummated, or the indemnified party and the
indemnifying party shall have arrived at a mutually binding agreement with
respect to a Claim hereunder, the indemnified party shall forward to the
indemnifying party notice of any sums due and owing by the indemnifying
party pursuant to this Agreement with respect to such matter and the
indemnifying party shall be required to pay all of the sums so due and
owing to the indemnified party by wire transfer of immediately available
funds within 10 business days after the date of such notice.
(c) The failure of the indemnified party to give reasonably prompt
notice of any Claim shall not release, waive or otherwise affect the
indemnifying party's obligations with respect thereto except to the extent
that the indemnifying party can demonstrate actual loss and prejudice as a
result of such failure.
8.4 Tax Matters.
(a) Except as otherwise provided in this Section 8.4, all Taxes incurred
in connection with this Agreement and the transaction contemplated hereby
shall be borne by Seller, and Seller, at its own expense, will file, to the
extent required by applicable law, all necessary Tax Returns and other
documentation with respect to all such Taxes, and, if required by
applicable law, the Purchaser will join in the execution of any such Tax
Returns or other documentation.
(b) All personal property, real estate, occupancy, sewage and water
Taxes, assessments and other charges, if any, on or with respect to the
Business and operation of the Purchased Assets will be pro rated as of the
Determination Date, with Seller liable to the extent such items relate to
any time period through the Determination Date and Purchaser liable to the
extent such items relate to periods subsequent to the Determination Date.
Purchaser shall prepare and timely file all Tax Returns required to be
filed after the Determination Date with respect to the Purchased Assets, if
any, and shall duly and timely pay all such Taxes shown to be due on such
Tax Returns. Purchaser shall make such Tax Returns available for Seller's
review no later than fifteen (15) Business Days prior to the due date for
filing such Tax Returns. Within ten (10) Business Days after receipt of
such Tax Returns, Seller shall pay to Purchaser its proportionate share of
the amount shown as due on such Tax Returns determined in accordance with
this Section 8.4(b).
(c) Seller and Zonagen jointly and severally shall be liable for and
shall pay (and shall indemnify and hold harmless Purchaser against) one
half of all sales, use, stamp, documentary, filing, recording, transfer or
similar fees or taxes or governmental
26
charges (including, without limitation, real property transfer gains taxes,
UCC-3 filing fees,m FAA, ICC, DOT, real estate or motor vehicle
registration, title recording or filing fees and other amounts payable in
respect of transfer filings) as levied by any Taxing Authority or
Governmental Body in connection with the transactions contemplated by this
Agreement (other than taxes measured by or with respect to income imposed
on Seller, Zonagen, or on Purchaser). Purchaser shall be liable for and
shall pay (and shall indemnify and hold harmless Seller against) one half
of all sales, use, stamp, documentary, filing, recording, transfer or
similar fees or taxes or governmental charges (including, without
limitation, real property transfer gains taxes, UCC-3 filing fees, FAA,
ICC, DOT, real estate and motor vehicle registration, title recording or
filing fees and other amounts payable in respect of transfer filings) as
levied by any Taxing Authority or Governmental Body in connection with the
transactions contemplated by this Agreement. Seller hereby agrees to file
all necessary documents (including, but not limited to, all Tax Returns)
with respect to all such amounts in a timely manner.
(d) Purchaser agrees to pay to Seller an amount by which (a) the excess
of (i) the amount of Massachusetts Corporate Excise Tax for the year
exceeds (ii) the amount of Massachusetts Corporate Excise Tax that would
have been imposed had the transactions contemplated by this Agreement not
occurred exceeds (b) the amount of tax payable in Massachusetts by the
stockholders of Seller had they sold the stock of Seller to Purchaser for
an amount equal to the Purchase Price; provided, however, that the
Purchaser shall not be required to pay, indemnify or hold harmless the
Seller or Zonagen for any Massachusetts Corporate Excise Tax incurred under
this Section 8.4(d) in an aggregate amount in excess of $50,000. Seller
hereby agrees to file all necessary documents (including, but not limited,
to Tax Returns) relating to the Massachusetts Corporate Excise Tax.
(e) Each of Purchaser and Seller shall provide the other with such
assistance as may reasonably be requested by the other party in connection
with the preparation of any Tax Returns, any audits or other examination by
any Taxing Authority, or any judicial or administrative proceedings
relating to liability for Taxes arising under Section 8.4(a), (b), (c) or
(d), and each will retain and provide the requesting party with any records
or information which may be relevant to such return, audit or examination,
proceedings or determination. Any information obtained pursuant to this
Section 8.4(e) or pursuant to any other section hereof providing for the
sharing of information or review of any Tax Returns or other schedules
relating to Taxes shall be kept confidential by the parties hereto.
(f) Tax Indemnification. (i) Without duplication, Seller and Zonagen
jointly and severally shall indemnify, defend and hold the Purchaser
Indemnified Parties harmless from and against any and all Taxes (including
interest and penalties) which may be suffered or incurred by them in
respect of the sale of Purchased Assets herein except to the extent that
Purchaser may be liable for Taxes under Section 8.4(b),(c) or (d); and (ii)
Purchaser shall indemnify, defend and hold Seller and Zonagen harmless with
respect to all Taxes (including interest and penalties) for which the
Purchaser is liable under Section 8.4(b), (c) or (d).
27
(g) Further Indemnification. Without duplication, Seller shall also
indemnify, defend and hold harmless Purchaser from and against all losses,
liabilities, damages, deficiencies, costs of expenses (including, without
limitation, interest, penalties and reasonable attorneys' fees and
disbursements) in respect of any Taxes of the Seller, whether or not such
liability could have been avoided by timely invoking the procedure
available by law to notify any Taxing Authority of the transactions
contemplated by this Agreement.
(h) Tax Contest. (i) The Seller shall notify the Purchaser in writing
within thirty (30) days of receipt of written notice of any pending or
threatened tax examination, audit or other administrative or judicial
proceeding (a "Tax Contest") that could reasonably be expected to result in
an indemnification obligation under Section 8.4(f) or (g); (ii) If an issue
relates to any period ending on or prior to the Determination Date or to
any Taxes for which the Seller is liable in full hereunder, the Seller
shall, at its expense, control the defense and settlement of such Tax
Contest. If the Tax Contest relates to any period beginning after the
Determination Date or are to any Taxes for which the Purchaser is liable in
full hereunder, the Purchaser shall, at its own expense, control the
defense and settlement of such Tax Contest. The party not in control of the
defense shall have the right to observe the conduct of any Tax Contest at
its expense, including through its own counsel and other professional
experts; and (iii) If an issue raised in any Tax Contest controlled by one
party or jointly controlled could materially affect the liability for Taxes
of the other party, the controlling party shall not, and neither party in
the case of joint control shall, enter into a final settlement without the
written consent of the other party, which consent shall not be unreasonably
withheld. Where a party withholds its consent to any final settlement, that
party may continue or initiate further proceedings, at its own expense, and
the liability of the party that wished to settle (as between the consenting
and the non-consenting party) shall not exceed the liability that would
have resulted from the proposed final settlement (including interest,
additions to tax, and penalties that have accrued at that time), and the
non-consenting party shall indemnify the consenting party for such Taxes.
(i) Disputes. In the event that a dispute arises between the Seller and
the Purchaser as to the amount of Taxes, or indemnification, the parties
shall attempt in good faith to resolve such dispute, and any agreed upon
amount shall be paid to the appropriate party. If such dispute is not
resolved thirty (30) days thereafter, the parties shall submit the dispute
to a mutually agreed upon third party arbitrator for resolution, which
resolution shall be final, conclusive and binding on the parties.
Notwithstanding anything in this Agreement to the contrary, the fees and
expenses of the arbitrator in resolving the dispute shall be borne equally
by the Seller and the Purchaser. Any payment required to be made as a
result of the resolution of the dispute by such arbitrator shall be made
within ten (10) days after such resolution, together with any interest
determined by said arbitrator to be appropriate.
(j) Preparation of Form W-2s. Pursuant to Section 5 of Revenue Procedure
96-60, 1966-2 C.B. 399, provided that the Seller provides Purchaser with
all necessary payroll records for the calendar year which includes the
Closing Date, Purchaser shall furnish a Form W-2 to each employee employed
by Purchaser who had been employed by the Seller disclosing all wages and
other compensation paid for such calendar year, and taxes withheld
therefrom, and the Seller shall be relieved of the responsibility to do so.
28
8.5 Tax Treatment of Indemnity Payments. Seller and Purchaser agree to
treat any indemnity payment made pursuant to this Article VIII as an adjustment
to the Purchase Price for federal, state, local and foreign income tax purposes.
8.6 Maximum Indemnity Amount. Under no circumstances shall Seller or
Zonagen be required to indemnify and hold harmless the Purchaser Indemnified
Parties under this Agreement with respect to Losses or Expenses incurred by the
Purchaser Indemnified Parties (other than in respect of Excluded Liabilities or
Taxes) in an aggregate amount in excess of $250,000 (the "Maximum Indemnity
Amount").
Notwithstanding anything herein to the contrary, (i) the amount of
Losses, Expenses and Taxes indemnifiable by Seller and Zonagen hereunder shall
be reduced by the amount of (a) insurance proceeds, or (b) amounts from third
parties, regardless of when received, and (ii) the Seller and Zonagen shall not
have liability for punitive or exemplary damages.
Except for (i) remedies that cannot be waived as a matter of law and
(ii) remedies set forth in any agreement, instrument or document being or to be
executed and delivered by Purchaser, Zonagen or Seller under this Agreement or
in connection herewith on the Closing Date, this Article VIII shall be the
exclusive remedy of Purchaser for any breach of any representation or warranty,
or any breach of any covenant or agreement contained herein or in any closing
document executed or delivered pursuant to the provisions hereof.
ARTICLE IX
NONCOMPETITION
9.1 Non-Solicitation and Non-Competition. Seller and Zonagen jointly and
severally agree as follows:
(a) For the period from and after the Closing Date until the third
anniversary of the Closing Date (the "Non-Competition Period"), neither
Seller nor Zonagen shall (the "Restricted Parties" and individually, a
"Restricted Party"), directly or indirectly, provide any of the specific
services or market any of the products currently provided or marketed by
the Business or products or services substantially similar thereto with
respect to any geographic area for which services are being provided by FTI
as of the Closing Date.
(b) During the Non-Competition Period each Restricted Party shall not,
for its own benefit or for the benefit of any Person other than the
Purchaser, (i) solicit, or assist any Person other than Purchaser to
solicit, any officer, director, executive or employee of the Business to
leave his employment, or (ii) hire or cause to be hired, or engage as a
partner, contractor, sub-contractor, employee or consultant, any present
officer, director, executive or employee of the Business.
29
(c) During the Non-Competition Period, each Restricted Party shall not
solicit or encourage any customer, client, supplier or other person or
entity to terminate, curtail or otherwise limit its business relationship
with Purchaser, or otherwise direct or attempt to direct any client of the
Purchaser or interfere with any business relationships of the Purchaser.
(d) Each Restricted Party acknowledges that (i) the markets to be served
by the Business are national in scope and are not dependent on the
geographic location of the executive personnel or the businesses by which
they are employed; and (ii) the above covenants are manifestly reasonable
on their face, and the parties expressly agree that such restrictions have
been designed to be reasonable and no greater than is required for the
protection of the Purchaser and are a significant element of the
consideration hereunder.
(e) If the final judgment of a court of competent jurisdiction declares
that any term or provision of this Section 9.1 is invalid or unenforceable,
the parties agree that the court making the determination of invalidity or
unenforceability shall have the power to reduce the scope, duration, or
area of the term or provision, to delete specific words or phrases, or to
replace any invalid or unenforceable term or provision with a term or
provision that is valid and enforceable and that comes closest to
expressing the intention of the invalid or unenforceable term or provision,
and this Agreement shall be enforceable as so modified after the expiration
of the time within which the judgment may be appealed.
ARTICLE X
MISCELLANEOUS
10.1 Certain Definitions. For purposes of this Agreement, the following
terms shall have the meanings specified in this Section 10.1:
"Affiliates" means, with respect to any Person, any other Person
controlling, controlled by or under common control with such Person.
"Assumed Liabilities" has the meaning set forth in section 1.2.
"Books and Records" shall mean (a) all records and lists of Seller
pertaining to the Purchased Assets, (b) all records and lists of Seller
pertaining to the Business, customers, suppliers or personnel of the Business,
including, without limitation, a list of customers of the Business, (c) all
product, business and marketing plans of Seller relating to the Business, and
(d) all books, ledgers, files, reports, plans, drawings and operating records of
every kind maintained by Seller relating to the Business.
"Business" has the meaning set forth in the preamble hereto.
"Business Day" means any day of the year on which national banking
institutions in New York are open to the public for conducting business and are
not required or authorized to close.
30
"Business Premises" shall mean all premises under the lease listed on
Schedule 3.12 attached hereto.
"Closing" has the meaning set forth in Section 3.1.
"Code" means the Internal Revenue Code of 1986, as amended.
"Company Property" shall have the meaning ascribed to such term in
Section 3.12(a) hereof.
"Confidential Information" means any material information concerning the
Business that is not already generally available to the public and which Seller
in its normal course of business considers to be proprietary.
"Contract" means any Contract, agreement, indenture, note, bond, loan,
instrument, lease, commitment or other arrangement or agreement.
"Contract Rights" shall mean all of Seller's rights and obligations
under the Contracts listed in Schedule 3.15 attached hereto.
"Determination Date" has the meaning set forth in Section 1.6
"Determination Date Balance Sheet" has the meaning set forth in
Section 1.6.
"Determination Date Working Capital" has the meaning set forth in
Section 1.6.
"Environmental Law" means any foreign, federal, state or local statute,
regulation, ordinance, or rule of common law as now or hereafter in effect in
any way relating to the protection of human health and safety or the environment
including, without limitation, the Comprehensive Environmental Response,
Compensation and Liability Act (42 U.S.C. (S) 9601 et seq.), the Hazardous
Materials Transportation Act (49 U.S.C. App. (S) 1801 et seq.), the Resource
Conservation and Recovery Act (42 U.S.C. (S) 6901 et seq.), the Clean Water Act
(33 U.S.C. (S) 1251 et seq.), the Clean Air Act (42 U.S.C. (S) 7401 et seq.) the
Toxic Substances Control Act (15 U.S.C. (S) 2601 et seq.), the Federal
Insecticide, Fungicide, and Rodenticide Act (7 U.S.C. (S) 136 et seq.), and the
Occupational Safety and Health Act (29 U.S.C. (S) 651 et seq.), and the
regulations promulgated pursuant thereto.
"Estimated Purchase Price" shall have the meaning ascribed to such term
in Section 1.5 hereof.
"Excluded Assets" has the meaning set forth in Section 1.1.
"Excluded Liabilities" has the meaning set forth in Section 1.3.
"Financial Statements" has the meaning set forth in Section 3.8.
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"Fixtures and Equipment" shall mean all of the furniture, fixtures,
furnishings, machinery, vehicles, spare parts, supplies, equipment, and other
tangible personal property owned by Seller, and used primarily in connection
with the Business as described on Schedule 1.1(a).
"GAAP" means United States generally accepted accounting principles as
in effect from time to time.
"Governmental Body" means any government or governmental or regulatory
body thereof, or political subdivision thereof, whether federal, state, local or
foreign, or any agency, instrumentality or authority thereof, or any court or
arbitrator (public or private).
"Hazardous Material" means any substance, material or waste which is
regulated by the United States the foreign jurisdictions in which the Company
conducts business, or any state or local governmental authority including,
without limitation, petroleum and its by-products, asbestos, and any material or
substance which is defined as a "hazardous waste," "hazardous substance,"
"hazardous material," "restricted hazardous waste," "industrial waste," "solid
waste," "contaminant," "pollutant," "toxic waste" or "toxic substance" under any
provision of Environmental Law.
"Intellectual Property" means (a) all inventions (whether patentable or
unpatentable and whether or not reduced to practice), all improvements thereto,
and all patents, patent applications, and patent disclosures, together with all
reissuances, continuations, continuations-in-part, revisions, extensions, and
reexaminations thereof, (b) all trademarks, service marks, trade dress, logos,
trade names, internet domain names and corporate names, together with all
translations, adaptations, derivations, and combinations thereof and including
all goodwill associated therewith, and all applications, registrations and
renewals in connection therewith, (c) all copyrightable works, all copyrights,
and all applications, registrations and renewals in connection therewith, (d)
all mask works and all applications, registrations and renewals in connection
therewith, (e) all trade secrets and Confidential Information (including ideas,
research and development, know-how, formulas, compositions, manufacturing and
production processes and techniques, technical data, designs, drawings,
specifications, customer and supplier lists, pricing, cost, profit and sales
information, business, marketing and research and development plans and
proposals and other information of a similar nature), (f) all computer software
and programs (including data and related documentation), and (g) all copies and
tangible embodiments thereof (in whatever form or medium).
"Inventory" shall mean all of the Business' inventory held for resale or
on order by the Business and all of Seller's sample inventory, raw materials,
work in process, finished products, wrapping, supply and packaging items and
similar items, if any, in each case, relating to the Business and owned by
Seller on the Determination Date, whether on hand, in transit or on order,
provided, however, that Inventory shall not include merchandise which has been
sold to customers.
32
"Law" means any federal, state, local or foreign law (including common
law), statute, code, ordinance, rule, regulation or other requirement.
"Leasehold Estates" shall mean all of Seller's rights and obligations as
lessee under the leases listed on Schedule 3.12 attached hereto.
"Leasehold Improvements" shall mean all leasehold improvements situated
in or on any Real Property leased by Seller relating to the Business.
"Legal Proceeding" means any judicial, administrative or arbitral
actions, suits, proceedings (public or private), claims or governmental
proceedings.
"Liability" means any liability (whether known or unknown, whether
asserted or unasserted, whether absolute or contingent, whether accrued or
unaccrued, whether liquidated or unliquidated, and whether due or to become
due), including any liability for Taxes.
"Lien" means any lien, pledge, mortgage, deed of trust, security
interest, claim, lease, charge, option, right of first refusal, easement,
servitude, transfer restriction under any shareholder or similar agreement,
encumbrance or any other restriction or limitation whatsoever.
"Material Adverse Change" means any material adverse change in the
business, properties, results of operations, prospects, condition (financial or
otherwise) of FTI or Purchaser, as the case may be.
"Material Adverse Effect" means any effect which has resulted in, or is
reasonably likely to result in, a Material Adverse Change.
"Material Contracts" shall have the meaning ascribed to such terms in
Section 3.15.
"Order" means any order, injunction, judgment, decree, ruling, writ,
assessment or arbitration award.
"Owned Properties" shall have the meaning ascribed to such term in
Section 3.12.
"Permits" means any approvals, authorizations, consents, licenses,
permits or certificates.
"Permitted Exceptions" means (i) all defects, exceptions, restrictions,
easements, rights of way and encumbrances disclosed in policies of title
insurance which have been made available to Purchaser; (ii) statutory liens for
current taxes, assessments or other governmental charges not yet delinquent or
the amount or validity of which is being contested in good faith by appropriate
proceedings, provided an appropriate reserve is
33
established therefor; (iii) mechanics', carriers', workers', repairers' and
similar Liens arising or incurred in the ordinary course of business that are
not material to the business, operations and financial condition of the property
so encumbered or the Company; (iv) zoning, entitlement and other land use and
environmental regulations by any Governmental Body, provided that such
regulations have not been violated; and (v) such other imperfections in title,
charges, easements, restrictions and encumbrances which do not materially
detract from the value of or materially interfere with the present use of any
Company Property subject thereto or affected thereby.
"Person" means any individual, corporation, partnership, firm, joint
venture, association, joint-stock company, trust, unincorporated organization,
Governmental Body or other entity.
"Personal Property Lease" shall have the meaning ascribed to such term
in Section 3.13.
"Purchase Price" has the meaning set forth in Section 1.4.
"Purchased Assets" shall mean all of the assets and all other
properties, and rights of every nature, kind and description, tangible and
intangible (including goodwill), whether real, personal or mixed, whether
accrued, contingent or otherwise and whether now existing or hereinafter
acquired, that relate to and are used in the Business as the same exists on the
Determination Date, including, without limitation:
(a) all Contract Rights;
(b) all Leasehold Estates;
(c) all Leasehold Improvements;
(d) all Fixtures and Equipment;
(e) all Inventory;
(f) all Books and Records;
(g) all notes, accounts receivable (excluding intercompany and
interdivisional accounts receivable) and all notes, bonds and other
evidences of indebtedness of and rights to receive payment from any person
or entity (in all cases, whether or not billed) and the benefit of security
therefore, in each case, relating to the Business, solely to the extent, in
the case of any Current Asset, that the Seller therein is a client with
respect to which the Business is continuing to provide services or that
Seller has a reasonable expectation of continuing to provide services as of
the Closing Date;
(h) all cash and other proceeds from the conduct of the Business,
including proceeds of accounts receivable, in whatever form received, to
the extent received by Seller
34
in respect of the Business after February 28, 1999, other than any such
cash or other proceeds disposed of by Seller in the ordinary course of
business consistent with past practice and in accordance with the
representations and warranties set forth in this Agreement;
(i) all computer hardware and software used by Seller in the operation
of the Business as described on Schedule 1.1(a) hereto;
(j) all Permits relating to the Business (to the extent transferable);
(k) all owned Intellectual Property and licensed Intellectual Property,
including, without limitation, that listed on Schedule 3.14 attached
hereto;
(l) the name "Fertility Technologies, Inc.", FTI's logo and all goodwill
associated therewith or with the Business;
(m) all available supplies, sales literature, promotional literature,
customer, supplier and distributor lists, art work, samples display units
and purchasing records utilized in the Business;
(n) all telephone and fax numbers utilized in the Business;
(o) all rights under or pursuant to all warranties, representations,
indemnities and guaranties made by suppliers, contractors and manufacturers
in connection with the Purchased Assets or services furnished to the
Business or affecting the Purchased Assets, to the extent such warranties,
representations, indemnities and guaranties are assignable;
(p) all claims, causes of action, choses in action, rights of recovery
and rights of set-off of any kind against any Person arising out of or
relating to the Business, the Purchased Assets or the Assumed Liabilities;
(q) all prepaid expenses, deferred charges, advance payments, security
deposits and prepaid items of Seller relating to the Business; and
(r) all other assets reflected on the Balance Sheet other than those
assets disposed of in the ordinary course of business consistent with past
practice subsequent to the date of the Balance Sheet.
"Purchaser Documents" has the meaning set forth in Section 4.2.
"Purchaser Indemnity Claim" has the meaning set forth in Section 8.1.
"Real Property Lease" shall have the meaning ascribed to such term in
Section 3.12.
35
"Release" means any release, spill, emission, leaking, pumping,
injection, deposit, disposal, discharge, dispersal, or leaching into the indoor
or outdoor environment, or into or out of any property;
"Remedial Action" means all actions to (x) clean up, remove, treat or in
any other way address any Hazardous Material; (y) prevent the Release of any
Hazardous Material so it does not endanger or threaten to endanger public health
or welfare or the indoor or outdoor environment; or (z) perform pre-remedial
studies and investigations or post-remedial monitoring and care.
"Seller" has the meaning set forth in the preamble hereto.
"Seller Documents" has the meaning set forth in Section 3.2.
"Subsidiary" means any Person of which a majority of the outstanding
voting securities or other voting equity interests are owned, directly or
indirectly, by FTI.
"Taxes" means (i) all federal, state, local or foreign taxes, charges,
fees, imposts, levies or other assessments, including, without limitation, all
net income, gross receipts, capital, sales, use, ad valorem, value added,
transfer, franchise, profits, inventory, capital stock, license, withholding,
payroll, employment, social security, unemployment, excise, severance, stamp,
occupation, property and estimated taxes, customs duties, fees, assessments and
charges of any kind whatsoever, (ii) all interest, penalties, fines, additions
to tax or additional amounts imposed by any Taxing Authority in connection with
any item described in clause (i) and (iii) any transferee liability in respect
of any items described in clauses (i) and (ii).
"Tax Returns" means all returns, declarations, reports, estimates,
information returns and statements required to be filed in respect of any Taxes.
"Taxing Authority" means any department, bureau or agency of any Taxing
Jurisdiction having the legal authority to collect Taxes, or administer the Tax
laws of any Taxing Jurisdiction, or with whom or which Tax Returns are required
to be filed.
"Taxing Jurisdiction" shall mean the United States of America, any
foreign country, any state or local government, or any political subdivision of
any of the foregoing, that imposes or administers any Tax, or which requires, by
statute, regulation or otherwise, the filing of any Tax Return.
10.2 Payment of Sales, Use or Similar Taxes. All sales, use, transfer,
intangible, recordation, documentary stamp or similar Taxes or charges, of any
nature whatsoever, applicable to, or resulting from, the transactions
contemplated by this Agreement shall be borne equally by Seller and Purchaser,
except as otherwise provided in Section 8.4.
10.3 Survival of Representations and Warranties. The parties hereto
hereby agree that the representations and warranties contained in this Agreement
or in any
36
certificate, document or instrument delivered in connection herewith, shall
survive the execution and delivery of this Agreement, and the Closing hereunder,
regardless of any investigation made by the parties hereto; provided, however,
that any claims or actions with respect thereto (other than claims for
indemnifications with respect to the representation and warranties contained in
Sections 3.7, 3.11, 3.16, 3.20, 3.27 and 4.5 which shall survive for periods
coterminous with any applicable statutes of limitation) shall terminate unless
within twelve (12) months after the Closing Date written notice of such claims
is given to Seller or Purchaser (as applicable) or such actions are commenced
and continuing.
10.4 Expenses. Except as otherwise provided in this Agreement, Seller
and Purchaser shall each bear their own expenses incurred in connection with the
negotiation and execution of this Agreement and each other agreement, document
and instrument contemplated by this Agreement and the consummation of the
transactions contemplated hereby and thereby.
10.5 Further Assurances. Seller, Zonagen and Purchaser each agrees to
execute and deliver such other documents or agreements and to take such other
action as may be reasonably necessary or desirable for the implementation of
this Agreement and the consummation of the transactions contemplated hereby.
10.6 Submission to Jurisdiction; Consent to Service of Process.
(a) The parties hereto hereby irrevocably submit to the non-exclusive
jurisdiction of any federal or state court located within the State of
Delaware over any dispute arising out of or relating to this Agreement or
any of the transactions contemplated hereby and each party hereby
irrevocably agrees that all claims in respect of such dispute or any suit,
action proceeding related thereto may be heard and determined in such
courts. The parties hereby irrevocably waive, to the fullest extent
permitted by applicable law, any objection which they may now or hereafter
have to the laying of venue of any such dispute brought in such court or
any defense of inconvenient forum for the maintenance of such dispute. Each
of the parties hereto agrees that a judgment in any such dispute may be
enforced in other jurisdictions by suit on the judgment or in any other
manner provided by law.
(b) Each of the parties hereto hereby consents to process being served
by any party to this Agreement in any suit, action or proceeding by the
mailing of a copy thereof in accordance with the provisions of Section
10.10.
10.7 Entire Agreement; Amendments and Waivers. This Agreement (including
the schedules and exhibits hereto), represents the entire understanding and
agreement between the parties hereto with respect to the subject matter hereof
and can be amended, supplemented or changed, and any provision hereof can be
waived, only by written instrument making specific reference to this Agreement
signed by the party against whom enforcement of any such amendment, supplement,
modification or waiver is sought. No action taken pursuant to this Agreement,
including without limitation, any investigation by or on behalf of any party,
shall be deemed to constitute a waiver by the party taking such action
37
of compliance with any representation, warranty, covenant or agreement contained
herein. The waiver by any party hereto of a breach of any provision of this
Agreement shall not operate or be construed as a further or continuing waiver of
such breach or as a waiver of any other or subsequent breach. No failure on the
part of any party to exercise, and no delay in exercising, any right, power or
remedy hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise of such right, power or remedy by such party preclude any other
or further exercise thereof or the exercise of any other right, power or remedy.
All remedies hereunder are cumulative and are not exclusive of any other
remedies provided by law.
10.8 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware.
10.9 Table of Contents and Headings. The table of contents and section
headings of this Agreement are for reference purposes only and are to be given
no effect in the construction or interpretation of this Agreement.
10.10 Notices. All notices and other communications under this Agreement
shall be in writing and shall be deemed given when delivered personally or
mailed by certified mail, return receipt requested, to the parties (and shall
also be transmitted by facsimile to the Persons receiving copies thereof) at the
following addresses (or to such other address as a party may have specified by
notice given to the other party pursuant to this provision):
If to the Seller or Zonagen, to:
x/x Xxxxxxx, Inc.
0000 Xxxxxxxxxx Xxxxx, Xxxxx X-0
The Woodlands, Texas 77380
Attention: Xxxxxx Xxxxxxxx
Facsimile: (000) 000-0000
With a copy to:
Xxxxxxx & Xxxxx LLP
0000 Xxxxxxxxxx Xxxxx, Xxxxx 000
Xxx Xxxxxxxxx, Xxxxx 00000
Attention: Xxxxxxx Xxxxxx
Facsimile: (000) 000-0000
38
If to Purchaser, to:
000 Xxxx Xxxxxx
Xxxx Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxxx
Facsimile: (000) 000-0000
With a copy to:
Weil, Gotshal & Xxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxx
Facsimile: (000) 000-0000
10.11 Severability. If any provision of this Agreement is invalid or
unenforceable, the balance of this Agreement shall remain in effect.
10.12 Binding Effect; Assignment. This Agreement shall be binding upon
and inure to the benefit of the parties and their respective successors and
permitted assigns. Nothing in this Agreement shall create or be deemed to create
any third party beneficiary rights in any person or entity not a party to this
Agreement except as provided below. No assignment of this Agreement or of any
rights or obligations hereunder may be made by either the Seller or the
Purchaser (by operation of law or otherwise) without the prior written consent
of the other parties hereto and any attempted assignment without the required
consents shall be void; provided, however, that Purchaser may assign this
Agreement and any or all rights or obligations hereunder (including, without
limitation, Purchaser's rights to purchase the Purchased Assets and Purchaser's
rights to seek indemnification hereunder) to any Affiliate of Purchaser. Upon
any such permitted assignment, the references in this Agreement to Purchaser
shall also apply to any such assignee unless the context otherwise requires.
39
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first written above.
ZONAGEN, INC.
By: /s/ Xxxxx Xxxxx, Xx.
-------------------------------------
Name: Xxxxx Xxxxx, Xx.
Title: Vice President & CFO
FERTILITY TECHNOLOGIES, INC.
By: /s/ Xxxxx Xxxxx, Xx.
-------------------------------------
Name: Xxxxx Xxxxx, Xx.
Title: General Manager
SAGE BIOPHARMA, INC.
By: /s/ Xxxxx X. Xxxxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: President & CEO
40
