EX-10.26 2 dex1026.htm ASSET PURCHASE AGREEMENT ASSET PURCHASE AGREEMENT
Exhibit 10.26
THIS ASSET PURCHASE AGREEMENT (this “Agreement”), is made as of August 11, 2006 (the “Effective Date”), by and among Cardium Therapeutics, Inc., a Delaware corporation (“Parent”), Cardium Biologics, Inc., a Delaware corporation (“Buyer”), and Tissue Repair Company, a Delaware corporation (“Seller”). Certain capitalized terms used in this Agreement are defined on Exhibit A hereto.
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(a) Excluded Patent Rights. The Excluded Patent Rights (as defined below);
(c) Insurance Policies. All insurance policies (except to the extent specified in Section 1.1(k));
(f) Cash. All cash and cash equivalents;
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(h) Other Books and Records. Originals of the Other Books and Records;
(a) Any assets, properties or Contracts that are not included in the Purchased Assets;
(b) Any breaches of any Seller Contract on or prior to the Closing Date or any payments or amounts due or other obligations under any Seller Contract on or prior to the Closing Date;
(c) Taxes attributable to or imposed upon Seller, or attributable to or imposed upon the Purchased Assets or the Business which are allocable to the Pre-Closing Period;
(d) Any loans, other indebtedness, or accounts payable;
(e) Accidents, misconduct, negligence, or breach of fiduciary duty occurring on or prior to the Closing Date;
(f) Any legal proceeding initiated at any time, to the extent related to any action or omission on or prior to the Closing Date, including, without limitation, any Liability for: (i) infringement or misappropriation of Intellectual Property Rights; (ii) injury, death, property damage or losses caused by the Purchased Assets or the Seller Products; or (iii) violations of any Legal Requirements;
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(g) Any and all payments, Liabilities, obligations and responsibilities relating to (collectively, the “Contractor Obligations”): (i) accrued but unpaid salary, bonuses, commissions, overtime, deferred compensation, accrued and unused paid vacation and other paid leave, obligations under any incentive compensation plan, estimated entitlements to receive supplementary retirement benefits or allowances (whether pursuant to a contractual obligation or otherwise), severance payments, termination pay and other special compensation of any kind paid to, accrued with respect to, or that would be payable to (whether or not as a result of the Transaction), any present or former Contractor of Seller; (ii) Seller Benefit Plans or any employee group medical, dental or life insurance plans or any other employee matter; and/or (iii) the termination of any Contractor prior to the Closing Date in accordance with this Agreement or in connection with this Transaction;
(h) Payments to employees or for payroll Taxes relating to compensation to Seller’s Contractors allocable to any period through and including the Closing Date;
(i) Seller’s performance of this Agreement and the Transaction;
(j) Any Environmental Law, which Liability relates to or arises out of (i) any acts or omissions of Seller on or prior to the Closing Date or (ii) any facts, circumstances or conditions existing on or prior to the Closing Date relating to Hazardous Substances, including, without limitation, any management, disposal or arranging for disposal of Hazardous Substances in connection with the Business or the Purchased Assets or Assumed Liabilities or activities or operations occurring or conducted in connection with any predecessor operations of the Business or otherwise; provided that parties acknowledge and agree that as of the Closing Date Buyer will acquire and be responsible for disposal of those Purchased Assets set forth in Schedule 1.4(j);
(k) Any Liability for expenses and fees incurred by Seller incidental to the preparation of the Transaction Documents, preparation or delivery of materials or information requested by Buyer, and the consummation of the Transaction, including, without limitation, all broker, counsel and accounting fees;
(l) Any Liability arising out of transactions, commitments, infringements, acts or omissions not in the Ordinary Course of Business;
(m) Any Legal Requirement applicable to Seller, the Purchased Assets or the Assumed Liabilities on or prior to the Closing Date or any Liability for a violation of such a Legal Requirement;
(n) Any Liability to any stockholders of Seller;
(o) Any Liability to Matrigen, Selective Genetics (formerly known as Prizm Pharmaceuticals, Inc.) or any of their respective affiliates or Representatives;
(p) Any Liability arising out of or relating to the following agreements (collectively, the “Prior Agreements”): (i) the Agreement and Plan of Merger, by and among Matrigen, Selective Genetics and the other parties signatory thereto; (ii) the Asset Purchase Agreement, dated as of November 23, 2004, by and between Selective Genetics and Seller; and/or (iii) any other third party contract or arrangement (whether written or oral) that relates to
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Seller’s acquisition of its right, title and interest in and to the Purchased Assets unless otherwise expressly assumed by Buyer in this Agreement;
(q) Any Liability arising out of or in any way relating to Seller’s relationship with its Contractors (as defined below), including, without limitation, the hiring, engagement and termination of its Contractors;
(r) Any Liability for credit balances, credit memos and all other amounts due to customers, suppliers, dealers and distributors; and
(s) Any costs or expenses incurred in shutting down and removing equipment not purchased by Buyer and any expenses associated with any Seller Contracts not assumed by Buyer hereunder.
1.5 Assignment and Assumption.
(a) Notwithstanding anything herein to the contrary, if an attempted sale, assignment, transfer or delivery of any Purchased Asset would be ineffective without the Consent of any third party, or if such an act would violate the rights of any third party in the Purchased Assets or otherwise affect adversely the rights of Buyer in the Purchased Assets, and the applicable Consent has not been obtained on or prior to the Closing Date, this Agreement shall not constitute an actual or attempted sale, assignment, transfer or delivery of such Purchased Asset (each, a “Restricted Asset”). Unless and until any such Consent is obtained, such Restricted Asset shall not constitute a Purchased Asset and any associated Liability shall not constitute an Assumed Liability for any purpose hereunder. Within sixty (60) days of the Closing Date, Buyer may designate in its sole discretion any Material Contract, not included as a Seller Contract, as a Restricted Asset hereunder.
(b) In any such case, if the Closing has occurred, Seller shall use commercially reasonable efforts to obtain, as soon as practicable, such Consent. Buyer shall cooperate reasonably with Seller in obtaining such Consents, provided, that Buyer shall not be required unless Buyer expressly agrees to pay any cash consideration therefor or give or allow to remain in effect any guaranty, letter of credit, performance bond or other financial assurance.
(c) Until such Consent shall have been obtained, Buyer shall at its expense (unless Seller failed to disclose to Buyer the existence of such Restricted Asset prior to the Closing, in which case the following actions shall be at Seller’s sole expense) effect an alternate arrangement, in the form of a license, sublease, operating agreement or other arrangement, in any case reasonably satisfactory to Buyer, which results in Buyer receiving all the benefits and bearing all the ordinary course costs, Liabilities and other obligations with respect to each Restricted Asset.
(d) The parties acknowledge and agree that the Post-Closing Contracts shall not be assigned to, or assumed by, Buyer on the Closing Date. On and after the Closing Date, upon written notice to Seller, Buyer shall have the right, but not the obligation, to either (i) require Seller to assign the Post-Closing Contracts to Buyer or (ii) use commercially reasonable efforts to assist Buyer in entering into new agreements with the counterparties to the Post-Closing Contracts. Seller agrees that each Post-Closing Contract shall be deemed an Excluded
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Asset and an Excluded Liability until Buyer expressly assumes such Post-Closing Contract in accordance with this Section 1.5, and Seller will not terminate or breach (or cause a breach of) the Post-Closing Contracts for a period of sixty (60) days following the Closing Date in furtherance of the provisions set forth herein.
(a) At Closing, Buyer will deliver to Seller One Million Dollars ($1,000,000) in cash;
(b) Subject to terms and conditions of this Agreement including (without limitation) Section 10.5, Buyer will deliver the Milestone Payment (as defined below) on the date(s) and in the manner and amount set forth in Section 2.2 of this Agreement;
(c) Subject to terms and conditions of this Agreement including (without limitation) Section 10.5, Buyer will deliver certain royalties relating to Excellarate on the date(s) and in the manner and amount set forth in Section 2.3 of this Agreement; and
(d) Subject to terms and conditions of this Agreement including (without limitation) Section 10.5, Buyer will issue and deliver the Warrants on the date and in the manner and amount set forth in Section 2.4 of this Agreement.
(a) In connection with Buyer’s initiation or planned initiation of a Phase 2 Clinical Trial for Excellarate (as defined below) Buyer shall pay to Seller an aggregate amount of One Million Dollars ($1,000,000) in cash (the “Milestone Payment”) as follows:
(i) Five Hundred Thousand Dollars ($500,000) of the Milestone Payment would be paid upon the earlier of (in either event, the “First Milestone Payment Date”): (A) the first administration following the Closing Date to a patient in a Phase 2 Clinical Trial of Excellarate sponsored by Buyer, its licensee or their respective Affiliates; or (B) the date that is eighteen (18) months following the Closing; and
(ii) The remaining Five Hundred Thousand Dollars ($500,000) of the Milestone Payment would be paid on the first anniversary of the First Milestone Payment Date.
(b) Buyer shall have the right and option, but not the obligation, to deliver and return to Seller the Closing Date Assets (as defined below) free from any liens or encumbrances that are solely attributable to Buyer’s actions after the Closing Date at any time prior to the First Milestone Payment Date in exchange for the termination of Buyer’s obligation to deliver the Milestone Payment and its other obligations hereunder. Effective upon Seller’s receipt of a
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written notice from Buyer stating that it is exercising its rights under this subsection (b) and conveying its right, title and interest in and to such Closing Date Assets to Seller, (i) neither Parent nor Buyer shall have any further continuing obligation under this Agreement including (without limitation) any obligation to pay the Milestone Payment under this Section 2.2, pay royalties pursuant to Section 2.3 or issue Warrants, make payments or provide Substitute Equity under Section 2.4 and (ii) Seller shall promptly deliver to Buyer all documents and certificates necessary or appropriate to evidence the termination of Buyer’s obligations pursuant to this Agreement. For purposes of this Agreement, “Closing Date Assets” shall mean the following Purchased Assets (and only to the extent that Buyer has the power to transfer such Purchased Assets to Seller): (i) a sample aliquot of the biological materials specified in Schedule 2.2(b)(i) in the form and condition (and subject to any Encumbrances) existing as of the Closing Date, (ii) the Seller Intellectual Property set forth in Schedule 2.2(b)(ii) in the form and condition (and subject to any Encumbrances) existing as of the Closing Date, and (iii) any remaining materials, Supplies, Machinery and Equipment, and Personal Property, as is in their then-present form and subject to any reasonable wear and tear and subject to the conduct of Buyer’s business in a commercially reasonable fashion, and (iv) the Material Contracts to the extent transferable (and subject to a release from assignee(s) in form and substance satisfactory to Buyer).
(a) During the Royalty Term, Buyer shall pay to Seller royalties equal to ten percent (10%) of Net Sales of Excellarate, subject to the following adjustments: (i) Buyer, its licensees or their respective Affiliates shall have the right to offset the Reimbursable Development Costs, such offset not to exceed Five Million Dollars ($5,000,000) in any calendar year, until the full amount of the Reimbursable Development Costs have been recovered by Buyer; and (ii) if Buyer, its licensee or their respective Affiliates are required to pay royalties to any third party in order to research, develop, make, use, offer for sale, sell or import Excellarate, then Buyer shall have the right to credit the full amount of such third party royalty payments against the royalties owing to Seller hereunder on up to the first One Hundred Million Dollars ($100,000,000) in Net Sales in any calendar year. Buyer would pay third party royalties in any calendar year on Net Sales above One Hundred Million Dollars ($100,000,000); provided, however, to the extent any such third party royalty payments (A) are owing under an agreement entered into after Closing, and (B) are based on a royalty rate, in any calendar year during which such credit may apply, owing on up to the first One Hundred Million Dollars ($100,000,000) in Net Sales in any calendar year that exceeds the royalty rate owing on more than One Hundred Million Dollars ($100,000,000) in Net Sales in such calendar year, then, unless Seller consents (which consent shall not be unreasonably withheld or delayed), Buyer shall include an adjustment (if necessary) to the final royalty payment owing to Seller for the last quarter of each calendar year so that the amount of third party royalty payments owing under such agreement that are credited in such calendar year are limited to the weighted average royalty rate actually paid under such agreement for such calendar year times the Net Sales, up to One Hundred Million Dollars ($100,000,000), in such calendar year.
(b) Within sixty (60) days after the end of each calendar quarter during the term of this Agreement following the first to occur of the First Commercial Sale of Excellarate by Buyer, its licensee or their respective Affiliates, Buyer shall furnish to Seller a quarterly written report showing in reasonably specific detail: (i) the calculation of Net Sales during such
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calendar quarter; (ii) the calculation of the royalties, if any, that shall have accrued based upon such Net Sales; (iii) with respect to the final royalty report for each calendar year, any adjustment (if necessary) to the third party payments credited during such calendar year required by Section 2.3(a); (iv) the withholding taxes, if any, required by law to be deducted; and (v) the exchange rates, if any, used in determining the amount of United States dollars. With respect to sales of Excellarate invoiced in United States dollars, all amounts shall be expressed in United States dollars. With respect to Net Sales invoiced in a currency other than United States dollars, all amounts shall be expressed both in the currency in which the distribution is invoiced and in the United States dollar equivalent. The United States dollar equivalent shall be calculated using the average of the exchange rate (local currency per US$1) published in The Wall Street Journal, Western Edition, under the heading “Currency Trading” on the last business day of each month during the applicable calendar quarter.
(c) Royalties shown to have accrued by each royalty report provided for under Section 2.3(b) above shall be due on the date such royalty report is due. Payment of royalties in whole or in part may be made in advance of such due date.
(d) If at any time legal restrictions prevent the prompt remittance of part or all royalties with respect to any country where Excellarate is sold, Buyer shall have the right, in its sole discretion, to make such payments by depositing the amount thereof in local currency to Seller’s account in a bank or other depository institution in such country. If the royalty rate specified in this Agreement should exceed the permissible rate established in any country, the royalty rate for sales in such country shall be adjusted to the highest legally permissible or government-approved rate.
(e) Buyer shall be entitled to deduct the amount of any withholding taxes, value-added taxes or other similar taxes, levies or charges with respect to such amounts, other than United States taxes, payable by Buyer, its licensees or their respective Affiliates, or any taxes required to be withheld by Buyer, its licensees or their respective Affiliates to the extent Buyer, its licensees or their respective Affiliates pay to the appropriate governmental authority on behalf of Seller such taxes, levies or charges. Buyer promptly shall deliver to Seller proof of payment of all such taxes, levies and other charges, together with copies of all communications from or with such governmental authority with respect thereto. In the event that Buyer withholds or pays any such taxes, levies or other charges, Buyer agrees to reasonably cooperate in connection with the filing of any claim for refund of such amounts and with respect to any audit, litigation or other proceeding (whether formal or informal) relating to such claim for refund. Seller shall have the exclusive authority to control all aspects of any such claim for refund, audit, litigation or other proceeding, subject to Buyer’s consent which will not be unreasonably withheld. Buyer shall forward to Seller (i) copies of any notice or other information Buyer may receive relating to any such claim for refund, audit, litigation or other proceeding and (ii) the amount of any refund of taxes, levies or other charges which were previously withheld or paid by Buyer pursuant to this Section 2.3(e) (including any interest thereon), in each case within thirty (30) days of Buyer’s receipt thereof, unless the payment of said amounts to Seller will prejudice Buyer. Buyer and Seller further agree that they will cooperate in executing such forms as may be required to qualify for an exemption from withholding under applicable tax treaties, including amendments to this Agreement to the extent necessary to qualify for such treaty exemption.
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(f) Upon the written request of Seller and not more than once in each calendar year, Buyer shall permit an independent certified public accounting firm of internationally recognized standing selected by Seller and reasonably acceptable to Buyer, at Seller’s expense, to have access during normal business hours to such of the financial records of Buyer as may be reasonably necessary to verify the accuracy of the payment reports hereunder for the eight (8) calendar quarters immediately prior to the date of such request (other than records for which Seller has already conducted an audit under this Section). If such accounting firm concludes that additional amounts were owed during the audited period, Buyer shall pay such additional amounts within thirty (30) days after the date Seller delivers to Buyer such accounting firm’s written report so concluding. The fees charged by such accounting firm shall be paid by Seller; provided, however, if the audit discloses that the royalties payable by Buyer for such period are more than one hundred ten percent (110%) of the royalties actually paid for such period, then Buyer shall pay the reasonable fees and expenses charged by such accounting firm. Seller shall cause its accounting firm to retain all financial information subject to review under this Section in strict confidence; provided, however, that Buyer shall have the right to require that such accounting firm, prior to conducting such audit, enter into an appropriate non-disclosure agreement with Buyer regarding such financial information. The accounting firm shall disclose to Seller only whether the reports are correct or not and the amount of any discrepancy. No other information shall be shared. Seller shall treat all such financial information as Buyer’s Confidential Information.
(g) Buyer shall have the one-time right and option, but not the obligation, to terminate its obligation to deliver royalties to Seller pursuant to this Section 2.3 by delivering to Seller the Royalty Payout upon the completion of the earlier of (i) the fifth full calendar year of Net Sales or (ii) a calendar year in which Net Sales during such calendar year exceed Two Hundred Fifty Million Dollars ($250,000,000) (in either event, a “Royalty Termination Trigger”). Buyer’s obligation to pay future royalties pursuant to this Section 2.3 shall terminate and be of no further force and effect effective as of the date that Buyer delivers (i) written notice of the Royalty Termination Trigger and (ii) the Royalty Payout. For purposes of this Agreement, the “Royalty Payout” shall mean an amount equal to Thirty Percent (30%) of the Net Sales for the calendar year relating to the corresponding Royalty Termination Trigger, and payable in, at Buyer’s sole discretion, either cash, Common Stock, equity securities that are listed on a national stock exchange, over-the-counter bulletin board, NASDAQ Capital Market or on the NASDAQ Global Market of a successor-in-interest (“Successor”) to all or substantially all of the Purchased Assets in their then current state, the Buyer’s business or the Parent’s business of a substantially equivalent nature and value as Parent’s Common Stock (“Substitute Equity”), or a combination of the foregoing. To the extent that all or a portion of the Royalty Payout is in Common Stock or Substitute Equity, then Buyer shall cause Parent or Successor to use commercially reasonable efforts to promptly register such equity securities by preparing and filing a registration statement on Form S-3 or similar document or registration in compliance with the Securities Act of 1933, as amended; provided, that, if such registration statement is not declared effective by the SEC on or prior to the issuance of such Substitute Equity, then Buyer at its sole discretion can either deliver the full Royalty Payout in cash or deliver a combination of (x) cash equal to satisfy Seller’s then-applicable federal taxes directly relating to the issuance of such Substitute Equity, with (y) the remaining Royalty Payout in shares of Substitute Equity.
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(a) Subject to Section 2.4(b) of this Agreement, Buyer will cause Parent to issue stock purchase warrants exercisable into up to an aggregate of Two Million (2,000,000) shares of Common Stock (each in the form attached hereto as Exhibit B, a “Warrant” and collectively “Warrants”) upon the occurrence of the following (in each case, a “Diligence Failure Event”):
(i) Buyer will cause Parent to issue a Warrant exercisable into Five Hundred Thousand (500,000) shares of Common Stock within thirty (30) days after the date that is eighteen (18) months following the Closing if Buyer has failed to initiate a Phase 2 Clinical Trial wound healing clinical study by such date;
(ii) Buyer will cause Parent to issue a Warrant exercisable into Five Hundred Thousand (500,000) shares of Common Stock within thirty (30) days after the date that is thirty-six (36) months following the initiation of the Phase 2 Clinical Trial wound healing clinical study if Buyer has failed to complete a Phase 2 Clinical Trial wound healing clinical study by such date;
(iii) In the event that Buyer receives positive Phase 2 Clinical Trial data, then Buyer will cause Parent to issue a Warrant exercisable into Five Hundred Thousand (500,000) shares of Common Stock within thirty (30) days after the date that is eighteen (18) months following the completion of the Phase 2 Clinical Trial unblinding if Buyer has failed to initiate a Phase 3 wound healing clinical study by such date; and
(iv) In the event that Buyer receives positive Phase 2 Clinical Trial data, then Buyer will cause Parent to issue a Warrant exercisable into Five Hundred Thousand (500,000) shares of Common Stock within thirty (30) days after the date that is thirty-six (36) months following the initiation of the Phase 3 wound healing clinical study if Buyer has failed to complete the Phase 3 wound healing clinical study by such date.
(b) Each Warrant that is issued pursuant to this Section 2.4 shall (i) be immediately exercisable, (ii) have a term of five (5) years from the original issuance date, (iii) have a cashless exercise provision as provided in the form of Warrant, and (iv) have an exercise price per share of Four Dollars ($4.00); provided, however, that in lieu of issuing any or all Warrants pursuant to this Section 2.4 and provided that the Share Price (as defined below) is at least Eight Dollars ($8.00), Buyer, in its sole election, may deliver either (x) an amount in cash equal to the value of the Warrant(s) as calculated below or (y) if Buyer elects to issue Substitute Equity of a substantially equivalent nature and value as Warrant(s) for the Parent’s Common Stock, then a combination of cash sufficient to satisfy Seller’s then-applicable federal taxes directly relating to the issuance of such Substitute Equity, with the remaining value of the Warrant(s) to be paid in shares of such Substitute Equity; provided, further, that any such payment will be calculated based on the product of (i) (x) the average of the high and low sales price per share of Parent’s Common Stock as reported on a national stock exchange, over-the-counter bulletin board, NASDAQ Capital Market or on the NASDAQ Global Market during the twenty trading days ending one day prior to the date such Warrant would otherwise be issued (the “Share Price”), minus (y) the exercise price per share of such Warrant, and multiplied by
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(ii) the number of shares of Parent’s Common Stock issuable under such Warrant that Buyer elects to pay in cash or by Substitute Equity; provided, further, that Buyer may at its sole discretion cause Parent to issue all or a portion of the Warrants described in this Section 2.4 even if a Diligence Failure Event has not occurred with respect to such Warrant(s).
(c) Failure to achieve any of the milestones described in Section 2.4(a) shall not give rise to the obligation to issue any Warrant to the extent failure or delay to achieve the applicable milestone relates to technical matters associated with the product candidate (i.e. Excellarate) and/or its manufacture or development, including, for example, matters associated with its safety or efficacy, manufacture, testing in humans or regulatory concerns (individually, a “Product-related Limitation,” and collectively, the “Product-related Limitations”).
(d) Subject to subsection (c) above, Seller shall have the one-time right and option, but not the obligation, to acquire the Purchased Assets after the Closing only upon the occurrence of both of the following conditions: (i) Seller returns any issued Warrants and acknowledges in writing the termination of any of Seller’s rights in and to any unissued Warrants; and (ii) Buyer or its Affiliate, licensee or agent was principally responsible for a Diligence Failure Event and has failed to correct such Diligence Failure Event within a six-month period following the occurrence of such Diligence Failure Event; provided, however, that a Diligence Failure Event shall not be deemed to occur if Buyer has failed to reach the corresponding target or milestone due in whole or substantially due to delays caused by Product-related Limitations, and any corresponding six-month period described in subsection (ii) shall be extended for a period of time equal to the existence or duration of such Product-related Limitations; provided, further that Seller’s right and option under this subsection (d) shall terminate in its entirety and be of no further force and effect in the event that Seller exercises or transfers any of its Warrants. Within five (5) days of Buyer’s receipt of a written notice from Seller stating that it is exercising its rights under this subsection (e), (i) Buyer shall deliver to Seller all right, title and interest in and to the Purchased Assets (as is in their then-present form and to the extent that such Purchased Assets are transferable to Seller), and (ii) Seller shall return any issued Warrants, acknowledge in writing the termination of any of Seller’s rights in and to any unissued Warrants, and deliver all additional documents and certificates necessary or appropriate to evidence the transfer and/or cancellation of such Warrants in form and substance satisfactory to Buyer.
(e) Within forty five (45) days after the end of each June and December until the initiation of the first Phase 2 wound healing clinical study, and within forty five (45) days after the end of each December until the completion of the first Phase 3 wound healing clinical study, Buyer shall prepare and provide a non-confidential written summary report regarding the status of the clinical development of Excellarate since the Closing or the previous status report (whichever is later).
2.5 Transfer Taxes; Prorations.
(a) Notwithstanding any Legal Requirements to the contrary, Buyer shall be responsible for and shall pay any Transfer Taxes when due.
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(b) Buyer shall, at its own expense, file all necessary Tax Returns with respect to all such Transfer Taxes; provided, that, if required by any Legal Requirement, Seller will join in the execution of any such Tax Returns. To the extent that Buyer’s payment of Transfer Taxes satisfies any obligation of Seller, such amount shall be considered to be an adjustment to the purchase price.
(c) Seller shall be responsible for and shall pay any Taxes arising or resulting from or in connection with the conduct of the Business or the ownership of the Purchased Assets attributable to the Pre-Closing Period. Buyer shall be responsible for and shall pay any Taxes arising or resulting from or in connection with the conduct of the Business or the ownership of the Purchased Assets attributable to the Post-Closing Period.
(d) All real property, personal property, ad valorem or other similar Taxes (not including income Taxes) levied with respect to the Purchased Assets or the Business for a taxable period which includes (but does not end on) the Closing Date shall be apportioned between Buyer and Seller based on the number of days included in such period through and including the Closing Date and the number of days included in such period after the Closing Date.
(d) On or before the Closing Date, Seller shall furnish to Buyer Tax clearance certificates under California Revenue and Taxation Code Section 6812 and California Unemployment Insurance Code Section 1732 releasing Buyer from Liability with respect to any sales or use Tax or employment Tax Liability of Seller.
2.6 Allocation of Purchase Price.
(a) The parties agree that the purchase of assets under this Agreement is intended to be and shall be treated for federal income Tax purposes as an “applicable asset acquisition” within the meaning of Section 1060 of the Code. The parties agree to allocate, in accordance with all applicable Treasury Regulations promulgated under Section 1060 of the Code, the aggregate consideration paid by Buyer (consisting of the purchase price, as adjusted, the Assumed Liabilities, and all other relevant items that are properly includible in determining the amount realized by Seller for federal income Tax purposes (the “Total Tax Consideration”)) among the Purchased Assets. Such allocation shall be made in a manner consistent with the fair market values of the Purchased Assets as are agreed between the parties. Seller and Buyer shall work in good faith to complete an allocation schedule (the “Allocation Schedule”) within sixty (60) days of the Closing, which shall set forth the fair market values of the Purchased Assets that the parties agree to use in making such allocation. Buyer shall deliver to the Seller a statement containing Buyer’s proposed allocation of the Total Tax Consideration among the Purchased Assets (the “Allocation Statement”) and a draft IRS Form 8594 as proposed to be included by Buyer with its Tax Return for the taxable year of the Closing. Within thirty (30) days after receipt of the Allocation Statement, Seller shall review and comment on the Allocation Statement, and provide to Buyer a draft IRS Form 8594 proposed to be included by Seller in its Tax Return for the taxable year of the Closing. The parties agree that: (i) a proposed allocation will be determined by each party after good faith negotiations between the parties; (ii) they shall cooperate with each other in connection with the preparation, execution and filing of all Tax Returns related to such allocation, provided, that if the parties do not agree upon an
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allocation, then each party will use its respective allocation; and (iii) they shall promptly advise each other regarding the existence of any Tax audit, controversy or litigation related to such allocation.
(b) In the event that the parties have mutually agreed upon an Allocation Schedule, then Buyer and Seller agree to (i) be bound by the Allocation Schedule and Allocation Statement, (ii) act in a manner consistent with the Allocation Schedule and Allocation Statement as finally agreed between the parties in filing of all state and United States federal income tax returns (including, without limitation, filing their Forms 8594 with their United States federal income Tax Returns for the taxable year that includes the Closing Date), (iii) amend such Allocation Statement and Forms 8594 as required to reflect any adjustments to the Total Tax Consideration, including without limitation by reason of adjustments to the purchase price and (iv) in the course of any Tax audit, Tax review or Tax litigation relating thereto, to take no position and cause their Affiliates to take no position inconsistent with the Allocation Schedule, the Allocation Statement or the Forms 8594 for any Tax purpose, without the written consent of the other party or unless specifically required pursuant to a determination by an applicable Tax Authority.
(a) General Assignment and Xxxx of Sale. General Assignment and Xxxx of Sale covering all of the applicable Purchased Assets, substantially in the form attached hereto as Exhibit C (the “General Assignment and Xxxx of Sale”);
(i) a trademark assignment, substantially in the form of Exhibit D attached hereto, for all of the Trademark Rights (the “Trademark Assignment”);
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(ii) a patent assignment, substantially in the form of Exhibit E hereto, for all of the Patent Rights (the “Patent Assignment”);
(iii) a copyright assignment, substantially in the form of Exhibit F hereto, for all of the Copyrights (the “Copyright Assignment”); and
(iv) a domain name assignment, substantially in the form of Exhibit G attached hereto, for all of the Domain Names (the “Domain Name Assignment”);
(d) Assignment of Leases. Assignments of all Real Property Leases and Personal Property Leases;
(e) UM Agreements. Fully-executed amendments, addenda and consents to assignment in form and substance satisfactory to Buyer for (as well as evidence of Seller’s payments to the University of Michigan arising out of or related to under) the UM Agreements, including, without limitation, the: (i) Third Amendment to License Agreement, dated August 8, 2006, by and between Seller and the Regents of the University of Michigan; and (ii) the letter agreement, by and among Seller, Buyer and the Regents of the University of Michigan, pursuant to which the University of Michigan acknowledges and agrees that Seller’s pre-Closing payments and post-closing payment schedule to the University of Michigan are in satisfaction of all outstanding obligations and amounts payable by Seller to the University of Michigan under the UM Agreements.
(g) Releases. Executed releases, in a form satisfactory to Buyer, from such individuals and the Offerees releasing Seller, Parent and Buyer from all claims against Seller, Parent and Buyer arising on or before the Closing Date (collectively, the “Releases”);
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delivered as a condition to Closing (to the extent that the Closing Date occurs after the Effective Date);
(k) Employment Arrangements and Consulting Agreements. Countersigned employment offers from such Contractors as determined by Buyer, in a form and substance satisfactory to Buyer, relating to the employment or consulting arrangement with Buyer after the Closing (collectively, the “Employment Agreements”) and to be delivered as a condition to Closing (to the extent that the Closing Date occurs after the Effective Date);
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Liabilities that are not Assumed Liabilities, (ii) seek to have the Transaction set aside as a fraudulent conveyance or fraudulent transfer, or (iii) commence bankruptcy or other similar proceedings against Seller;
(b) Closing Cash Payment. One Million Dollars ($1,000,000) in cash pursuant to Section 2.1(a) of this Agreement.
(b) Assignments of Leases. Assignments of all Real Property Leases and Personal Property Leases; and
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ARTICLE 4. REPRESENTATIONS AND WARRANTIES OF SELLER
Except as set forth in the corresponding sections of the disclosure schedule of Seller delivered to Buyer concurrently with the execution and delivery of this Agreement (the “Seller Disclosure Schedule”) (provided, that if any fact or item disclosed in any section of the Seller Disclosure Schedule shall be relevant to any other section of this Agreement, then such fact or item shall be deemed to be disclosed with respect to such other section of this Agreement, but only to the extent to which it is readily apparent on its face that such fact or item relates), Seller hereby represents and warrants to Buyer that, as of the Effective Date (and, to the extent that the Closing does not occur on the Effective Date, as of the Closing Date):
4.1 Organization and Qualification. Seller is a corporation duly organized, validly existing and in good standing under the laws of Delaware, and has all requisite power and authority to own, lease and operate its properties and to carry on its business as now being conducted. Seller is duly qualified or licensed as a foreign corporation to conduct business and is in good standing in California and each other jurisdiction where the character of the properties owned, leased or operated by it or the nature of its business makes such qualification or licensing necessary.
4.3 No Conflicts; Required Consents.
(a) No Consents other than those set forth in Section 4.3 of the Seller Disclosure Schedule are required with respect to Seller’s execution and delivery of this Agreement, the other Transaction Documents, and the consummation of the Transaction including the assignment of all Material Contracts. The execution, delivery and performance of this Agreement and the other Transaction Documents by Seller do not and will not, with or without notice or lapse of time: (i) conflict with or violate Seller’s Certificate of Incorporation or bylaws or equivalent organizational documents; (ii) conflict with or violate any Legal Requirement applicable to Seller or by which any property or asset of Seller is bound or affected; (iii) assuming the Consents listed in Section 4.3 of the Seller Disclosure Schedule are obtained, result in any breach of or constitute a default under, or give to others any right of termination,
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amendment, acceleration or cancellation of, or result in the creation of any Encumbrance on any property or asset of Seller pursuant to, any note, bond, mortgage, indenture, contract, agreement, lease, license, permit, franchise or other instrument or obligation including without limitation, the Prior Agreements; (iv) violate or conflict with any other material restriction of any kind or character to which Seller is subject; (v) require Seller to obtain any Consent of, or make or deliver any filing or notice to, a Governmental Authority; or (vi) result in any stockholder of the Seller having the right to exercise any dissenters’ appraisal rights.
(b) Without limiting the foregoing, (i) Seller does not have any ongoing obligations or commitments to Matrigen or Selective Genetics except as specifically described in Schedule 4.3(b) and (ii) the execution, delivery and performance of this Agreement and the other Transaction Documents by Seller do not and will not, with or without notice or lapse of time, violate or otherwise conflict with any rights that Matrigen or Selective Genetics may hold under any contract or arrangement (whether written or oral) or affect Seller’s right, title and interest in and to any of the Purchased Assets.
(a) Seller has delivered to Buyer the audited balance sheets, and the related statements of operations, changes in stockholders’ equity and cash flows, of Seller as of and for the fiscal years ended December 31, 2005 and 2004, together with the notes thereto. Prior to Closing, or within one week thereafter, Seller will have delivered to Buyer the unaudited balance sheets, and the related unaudited statements of operations, changes in stockholders’ equity and cash flows, of Seller (the “Interim Balance Sheet”) as of and for the six months ended June 30, 2006 (the “Interim Balance Sheet Date”). The foregoing audited and unaudited financial statements are referred to collectively herein as the “Financial Statements.”
(b) All of the Financial Statements: (i) are true, accurate and complete in all respects; (ii) are consistent with the Books and Records of Seller; (iii) present fairly and accurately the financial condition of Seller as of the respective dates thereof and the results of operations, changes in stockholders’ equity and cash flows of Seller for the periods covered thereby; and (iv) have been prepared in accordance with GAAP, applied on a consistent basis throughout the periods covered. Seller maintains a standard system of accounting and internal controls established and administered in accordance with good business practices sufficient to permit the preparations of consolidated and consolidating financial statements in accordance with GAAP.
(c) The books of account and other financial Books and Records of Seller, all of which have been made available to Buyer, are complete and correct and represent actual, bonafide transactions and have been maintained in accordance with sound business practices.
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(d) Seller has no Knowledge of any fact or circumstance which would prevent Parent and its auditor from preparing, auditing and timely filing the Historical Financial Information with the SEC as required to satisfy the Parent’s obligations in connection therewith.
(a) With regard to Purchased Assets, Section 4.9(a), of the Seller Disclosure Schedule provides a true and complete list of each of the following contracts to which Seller is party (collectively, the “Material Contracts”):
(i) Real Property Leases, Personal Property Leases, insurance policies, Contracts involving the license (or covenant not to xxx for the infringement of intellectual property rights), assignment or transfer of any Seller Intellectual Property or of Seller’s information systems or software to or from Seller (other than licenses to Seller arising from the purchase of generally available “off the shelf” or other standard products), Contracts with current Contractors, Seller Benefit Plans and Governmental Approvals;
(ii) Any Contract for capital expenditures or for the purchase of goods or services in excess of Ten Thousand Dollars ($10,000), except those incurred in the Ordinary Course of Business and to be performed in three (3) months or less;
(iii) Any Contract obligating Seller to sell or deliver any product or service at a price which does not cover the cost (including labor, materials and production overhead) plus the customary profit margin associated with such product or service;
(iv) Any Contract involving financing or borrowing of money, or evidencing indebtedness, any Liability for borrowed money, any obligation for the deferred purchase price of property in excess of Ten Thousand Dollars ($10,000) (excluding normal trade payables) or guaranteeing in any way any Contract in connection with any Person;
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(v) Any joint venture, partnership, cooperative arrangement or any other Contract involving a sharing of profits;
(vi) Any Contract with any Governmental Authority;
(vii) Any Contract with respect to the discharge, storage or removal of effluent, waste or pollutants;
(viii) Any Contract (A) pursuant to which Seller obtains (or purports to obtain) any right, title or interest in or to any Intellectual Property Rights (or any tangible or intangible embodiments thereof) or pursuant to which Seller grants to any other Person any right, title or interest in or to any Intellectual Property Rights (or any tangible or intangible embodiments thereof), including, without limitation, any license of technology (or covenant not to xxx for the infringement of intellectual property rights) to or from Seller, and/or (B) involving a royalty arrangement pursuant to which Seller has the obligation to pay, or the right to receive, royalty payments;
(ix) Any power of attorney, proxy or similar instrument;
(x) Any Contract for the manufacture, service or maintenance of any product of the Business;
(xi) Any Contract for the purchase or sale of any assets other than in the Ordinary Course of Business or for the option or preferential rights to purchase or sell any assets;
(xii) Any requirement or output Contract;
(xiii) Any Contract to indemnify any Person or to share in or contribute to the Liability of any Person;
(xiv) Any Contract containing covenants not to compete in any line of business or with any Person in any geographical area or that would otherwise result in Buyer being bound by, or subject to, any non-compete or other restriction on the operation or scope of its businesses, including, without limitation, the Business;
(xv) Any Contract related to the acquisition of a business or the equity of any other Entity;
(xvi) Any other Contract which (x) provides for payment or performance by either party thereto having an aggregate value of Ten Thousand Dollars ($10,000) or more; (y) is not terminable without payment or penalty on thirty (30) days (or less) notice; or (z) is between, inter alia, an Affiliate and Seller;
(xvii) Any other Contract that involves future payments, performance of services or delivery of goods or materials to or by Seller of an aggregate amount or value in excess of Ten Thousand Dollars ($10,000), on an annual basis, or that otherwise is material to the Business or prospects of Seller;
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(xviii) Any other Contract material to the Business;
(xix) Any customer or supplier Contract not entered into in the Ordinary Course of Business for usual quantities and at normal prices; and
(xx) Any proposed arrangement currently under negotiation by and between Seller and a third party of a type that, if entered into, would be a Contract described in any of (i) through (xx) above.
True, accurate and complete copies of each written Material Contract and true and complete written summaries of each oral Material Contract (including all amendments, supplements, modifications and waivers thereof) have been delivered to Buyer by Seller.
(b) Except otherwise noted in Schedule 4.9(b) each Material Contract is currently valid and in full force and effect, and is enforceable by Seller in accordance with its terms. Seller is not in default, and no party has notified Seller that it is in default, under any Material Contract. No event has occurred, and no circumstance or condition exists, that might, with or without notice or lapse of time: (i) result in a violation or breach of any of the provisions of any Material Contract; (ii) give any Person the right to declare a default or exercise any remedy under any Material Contract; (iii) give any Person the right to accelerate the maturity or performance of any Material Contract or to cancel, terminate or modify any Material Contract; or (iv) otherwise have a Material Adverse Effect on Seller in connection with any Material Contract.
(c) Except otherwise noted in Schedule 4.9(c) Seller has not waived any of its rights under any Material Contract. Each Person against which Seller has or may acquire any rights under any Material Contract is solvent and able to satisfy such Person’s material Liabilities to Seller. Seller’s performance of the Material Contracts will not result in any violation of or failure by Seller to comply with any Legal Requirement. The Material Contracts constitute all of the Contracts necessary to enable Seller to conduct the Business in the manner in which such Business is currently being conducted and in the manner in which such Business is proposed to be conducted. The assignment to Buyer of any of the Seller Contracts shall not result in Buyer being bound by, or subject to, any non-compete or other restriction on the operation or scope if its businesses, including, without limitation, the Business.
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has been improperly filed or as to which any insurer has questioned, disputed or denied Liability; and (g) Seller has not received any notice of, nor does Seller have any Knowledge of any facts that might result in, a material increase in the premium for the policy. Seller is and has been insured by insurers which are reasonably believed by Seller to be of recognized financial responsibility and solvency, against such losses and risks and in such amounts as are customary in the businesses in which it is engaged.
4.11 Title; Sufficiency; Condition of Assets.
(a) Except otherwise noted in Schedule 4.9, Seller has good and valid title, and has full right and power to sell, convey, assign, transfer and deliver to Buyer good and valid title, to all of the Purchased Assets free and clear of any Encumbrances. The Purchased Assets are not subject to any preemptive right, right of first refusal or other right or restriction.
(b) Except otherwise noted in Schedule 4.9, the sale, transfer and assignment of the Purchased Assets as contemplated by this Agreement will give Buyer possession of, and the right to use, all the assets required for (i) conducting the Business as presently conducted and as proposed to be conducted, and (ii) the initiation and completion of all clinical trials and studies necessary or appropriate for the commercialization, sale and distribution of Excellarate and the initiation and completion of Phase 2 Clinical Trials and Phase 3 wound healing clinical studies. Upon Closing, Buyer will be entitled to the continued possession and use of all Purchased Assets. Except for the Purchased Assets or Excluded Patent Rights, there are no other assets, properties or rights, including, without limitation, Intellectual Property Rights, that are required by Seller, or that will be required by Buyer after the Closing, to conduct the Business in the manner in which Seller currently conducts the Business.
(c) The Purchased Assets: (i) are in good operating condition and repair, ordinary and reasonable wear and tear excepted; (ii) have been maintained in a manner consistent with the past maintenance practices of Seller consistent with industry practices; (iii) are suitable and adequate for continued use in the Ordinary Course of Business and in conformity with the engineering specifications for products relating to the Business; and (iv) conform to all Legal Requirements; provided, however, that the representations and warranties in this subsection (c) shall be to the best of Seller’s Knowledge to the extent applicable to the Non-Excellarate Assets.
(a) Seller does not own any real property. Schedule 1.1(e) sets forth an accurate and complete list of all Real Property Leases. Seller has delivered to Buyer accurate and complete copies of each Real Property Lease and all amendments and modifications thereto. All Real Property Leases, and all amendments and modifications thereto, are in full force and effect and have not been modified or amended, and there exists no default under any such lease by Seller, nor any event which, with notice or lapse of time or both, would constitute a default thereunder by Seller or, to Seller’s Knowledge, by any third party. To Seller’s Knowledge, there is no pending, contemplated or threatened condemnation of any of the buildings, land, fixtures or improvements relating to the Real Property Leases or the Leased Real Property or any part thereof. There are no parties in possession or, to Seller’s Knowledge, parties having any current or future right to occupy any of the Real Property Leases during the terms of such Real
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(b) To Seller’s Knowledge, there are no material defects in the physical condition of any of the Leased Real Property, including, without limitation, structural elements, mechanical systems, parking and loading areas, and all buildings and improvements relating thereto are in good operating condition and repair, ordinary and reasonable wear and tear expected and have been well maintained. To Seller’s Knowledge, all water, sewer, gas, electric, telephone, drainage and other utilities required by Law or necessary for the operation of the Leased Real Property have been connected under valid permits and pursuant to valid easements where required, and are sufficient to service the Leased Real Property and are in good operating condition.
(a) Section 4.13(a)(i) of the Seller Disclosure Schedule lists all of the Patent Rights, and all of the Trademark Rights registered with any governmental body or for which an application has been filed and is currently active or pending with any governmental body, owned by Seller, setting forth in each case the jurisdictions in which patents have been issued and patent applications have been filed. Section 4.13(a)(ii) of the Seller Disclosure Schedule lists all of the Patent Rights, and all of the Trademark Rights registered with any governmental body or for which an application has been filed and is currently active or pending with any governmental body, in which Seller has any right, title or interest pursuant to a written agreement executed by Seller, other than those owned by Seller, setting forth in each case the jurisdictions in which patents have been issued and patent applications have been filed.
(b) Except as set forth in Section 4.13(b) of the Seller Disclosure Schedule, Seller does not jointly own, or pursuant to a written agreement executed by Seller license or claim any right, title or interest, with any other Person any Intellectual Property Rights. Except as set forth in Section 4.13(b) of the Seller Disclosure Schedule, no third party has challenged or has threatened to challenge Seller’s right, title or interest in, to or under the Intellectual Property Rights in which Seller has (or purports to have) any right, title or interest, or the validity, enforceability or claim construction of any issued patents within Patent Rights comprising such Intellectual Property Rights, nor are there any facts known to Seller that Seller believes are reasonably likely to give rise to a conclusion of invalidity, unenforceability or narrowing of claim construction.
(c) Section 4.13(c) of the Seller Disclosure Schedule lists all contracts, agreements, licenses and other arrangements under which Seller has acquired any right, title or interest in, under or to any Intellectual Property Rights, other than (i) standardized nonexclusive licenses that are available to the public generally and were obtained by Seller in the ordinary course of business, and (ii) assignment of inventions from employees. With respect to each
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contract, agreement, license or other arrangement required to be listed in Section 4.13(c) of the Seller Disclosure Schedule, (A) each is in full force and effect as of the Closing Date, (B) Seller is in compliance with the terms and conditions thereof (including without limitation all diligence obligations), (C) there exists no default (or condition which, with the passage of time, the giving or notice or both) which would give rise to a right to terminate, convert rights to non-exclusive or otherwise limit rights granted to Seller, (D) any Intellectual Property Rights at any time licensed to Seller that have reverted to the licensor are not material to the conduct of its business as conducted prior to or on the Closing Date, or the making, using, offering for sale, selling or importing of those products or the performance of those services currently contemplated by Seller as a part of its business, and (E) any Intellectual Property Rights generated pursuant to the Roundtable Research Agreement effective as of July 1, 1995 (as amended) with the Regents of the University of Michigan that are not licensed to Seller are not material to the conduct of its business as conducted prior to or on the Closing Date, or the making, using, offering for sale, selling or importing of those products or the performance of those services currently contemplated by Seller as a part of its business.
(d) Except as set forth in Section 4.13(d) of the Seller Disclosure Schedule, to the knowledge of Seller, no third party has asserted or threatened a claim which would adversely affect Seller’s ownership rights to, or rights under, nor are there any facts known to Seller that Seller believes are reasonably likely to adversely affect Seller’s ownership rights to or under, (i) any of the Intellectual Property Rights in which Seller has any right, title or interest, or (ii) any contract, agreement, license or any other arrangement under which Seller claims any right, title or interest under any Intellectual Property Rights.
(e) Except as set forth in Section 4.13(e) of the Seller Disclosure Schedule, all Patent Rights owned or exclusively licensed by Seller have been duly filed or registered (as applicable) with the applicable Governmental Authorities, and maintained, including the submission of all necessary filings and fees in accordance with the legal and administrative requirements or the appropriate jurisdictions, and have not lapsed, expired or been abandoned. Except as set forth in Section 4.13(e) of the Seller Disclosure Schedule, to Seller’s knowledge (i) all Patent Rights owned or exclusively licensed by Seller have been prosecuted in good faith, (ii) there are no inventorship challenges to any such Patent Rights, (iii) no interference has been declared or provoked relating to any such Patent Rights, (iv) all issued patents within such Patent Rights are valid and enforceable, and (v) all required maintenance and annual fees have been fully paid, and all fees paid during prosecution and after issuance of any patent have been paid in the correct entity status amounts, with respect to such Patent Rights. Except as expressly disclosed in writing to Buyer prior to the date of this Agreement and except for documents cited by a patent examiner or by the patent applicant in an information disclosure statement, with respect to any Patent Rights owned or exclusively licensed by Seller, there does not exist any material fact known to Seller that Seller reasonably believes would (i) preclude the issuance of any patents from patent applications included in such Intellectual Property Rights (with valid claims not materially narrower in scope than the claims as currently pending in those applications), (ii) render any patents included in such Patent Rights invalid or unenforceable, or (iii) cause the claims of any patents included in such Patent Rights to be narrowed.
(f) Except as set forth in Section 4.13(f) of the Seller Disclosure Schedule, (i) Seller has not entered into any covenant not to compete or contract, agreement or other
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arrangement limiting its ability to transact business in any market, field or geographical area or with any Person, and (ii) Seller is not subject to any contract, agreement or other arrangement that restricts the use, transfer, delivery or licensing of Intellectual Property Rights in which Seller has any right, title or interest (or any tangible embodiment thereof) other than (A) as set forth in Material Contracts by which Seller obtained such Intellectual Property Rights, complete and accurate copies of which either have been delivered to Buyer, and (B) standardized nonexclusive licenses that are available to the public generally and were obtained by Seller in the ordinary course of business.
(g) Seller has taken commercially reasonable steps and precautions to protect and maintain the confidentiality of all Know-How Rights in which Seller has any right, title or interest and otherwise to maintain and protect the value of all such Know-How Rights.
(h) Except as set forth in Section 4.13(h) of the Seller Disclosure Schedule, Seller has not granted, licensed or conveyed to any third party, pursuant to any written or oral contract, agreement, license or other arrangement, any license or other right, title or interest in, to or under (i) any Intellectual Property Rights in which Seller has any right, title or interest (or any tangible embodiment thereof), or (ii) any future Intellectual Property Rights (or any tangible embodiment thereof) to be developed in the future from Intellectual Property Rights in which Seller has any right, title or interest. Seller has not transferred any tangible embodiment that is the subject of Patent Rights or Know-How Rights owned or exclusively licensed by Seller without having the recipient thereof execute a written agreement regarding the non-transfer and non-use (other than research uses only) thereof. Seller has not disclosed any Patent Rights or Know-How Right owned or exclusively licensed by Seller to a third party without having the recipient thereof execute a written agreement regarding the non-disclosure and non-use (other than research uses only) thereof, other than the disclosure of Patent Rights disclosed after the filing thereof. Any Intellectual Property Rights in which Dyax Corporation has been granted any rights by Seller are not material to the conduct of its business as conducted prior to or on the Closing Date, or the making, using, offering for sale, selling or importing of those products or the performance of those services currently contemplated by Seller as a part of its business. Any Intellectual Property Rights generated pursuant to any contract, agreement, license or other arrangement with Crucell Holland BV or Matrix Pharmaceuticals, Inc. (or their respective Affiliates), that are not owned by Seller, or licensed to Seller with the right to grant sublicenses, are not material to the conduct of its business as conducted prior to or on the Closing Date, or the making, using, offering for sale, selling or importing of those products or the performance of those services currently contemplated by Seller as a part of its business.
(i) Except as set forth in Section 4.13(i) of the Seller Disclosure Schedule, (i) there are no royalties, fees or other amounts payable by Seller to any Person by reason of the ownership (other than customary fees and amounts payable for filing, prosecuting and maintaining Patent Rights, Trademarks and Copyrights), use, sale or disposition of Intellectual Property Rights (or any tangible embodiment thereof), and (ii) there are no obligations to pay any such royalties, fees or other amounts that are currently payable or past due.
(j) Except as set forth in Section 4.13(j) of the Seller Disclosure Schedule, to the knowledge of Seller no Intellectual Property Rights owned or exclusively licensed by Seller have been infringed or misappropriated by any third party. To the knowledge of Seller, there is
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no unauthorized use, disclosure or misappropriation of any Intellectual Property Rights in which Seller has any right, title or interest by any current or former officer, manager, director, stockholder, member, employee, consultant or independent contractor of Seller.
(k) Except as set forth in Section 4.13(k) of the Seller Disclosure Schedule, Seller has not entered into any written or oral contract, agreement, license or other arrangement to indemnify any other person against any charge of infringement of any Intellectual Property Rights.
(l) All current and former officers and employees of Seller have executed and delivered to Seller an agreement regarding the protection of proprietary information and the assignment to Seller of any Intellectual Property Rights arising from services performed for Seller by such persons, the form of which has been provided to Buyer. All current and former consultants and independent contractors (other than academic institutions) to Seller have executed and delivered to Seller an agreement in the form provided to Buyer regarding the protection of proprietary information and the assignment to Seller of any Intellectual Property Rights arising from services performed for Seller by such persons. No employee or independent contractor of Seller is in material violation of any term of any patent disclosure agreement or employment contract or any other contract or agreement relating to the relationship of any such employee or independent contractor with Seller.
(m) Seller owns and has good and marketable title to all Intellectual Property Rights purported to be owned by Seller and used in the business of Seller as conducted prior to or on the date of this Agreement and to make, use, offer for sale, sell or import those products and perform those services currently contemplated by Seller as a part of its business. The grants to Seller of all other Intellectual Property Rights used in the business of Seller, as conducted prior to or on the date of this Agreement and to make, use, offer for sale, sell or import those products and perform those services currently contemplated by Seller as a part of its business, are valid and enforceable. Except as set forth in Section 4.13(m) to the Seller Disclosure Schedule, to the knowledge of Seller, the Intellectual Property Rights in which Seller has any right, title or interest collectively constitute all of the Intellectual Property Rights necessary to enable Seller to conduct its business as conducted prior to or on the date of this Agreement and to make, use, offer for sale, sell or import those products and perform those services currently contemplated by Seller as a part of its business.
(n) Except as set forth in Section 4.13(n) to the Seller Disclosure Schedule, (i) to the knowledge of Seller, the conduct of its business as conducted prior to or on the Closing Date, and the making, using, offering for sale, selling or importing of those products and the performance of those services currently contemplated by Seller as a part of its business, does not infringe, constitute contributory infringement, inducement to infringe, misappropriation or unlawful use of Intellectual Property Rights of any other Person, and (ii) Seller has not received any notice or other communication asserting any of the foregoing.
(o) Notwithstanding the foregoing, the representations and warranties in this Section 4.13 shall be the best of Seller’s Knowledge to the extent applicable to the Non-Excellarate Assets.
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(a) There has not been any material and adverse change in the business relationship of Seller with any supplier which it purchased during the period from December 8, 2004 to the Effective Date. Section 4.14(a) of the Seller Disclosure Schedule sets forth an accurate and complete list of all suppliers of the Business. Seller’s relationships with its suppliers are good commercial working relationships, and Seller has not received, nor is aware of, any notice or intent from a supplier to terminate its relationship with Seller.
4.15 Employees and Consultants.
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(e) Unions. Seller has no collective bargaining agreements with any of its employees. There is no labor union organizing or election activity pending or, to Seller’s Knowledge, threatened with respect to Seller.
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any Environmental Law (as defined below); (b) any property owned, operated, leased or used by Seller and any facilities and operations thereon are presently in compliance in all respects with all applicable Environmental Laws; (c) Seller has never entered into or been subject to any judgment, consent decree, compliance order or administrative order with respect to any environmental or health and safety matter or received any request for information, notice, demand letter, administrative inquiry or formal or informal complaint or claim with respect to any environmental or health and safety matter or the enforcement of any Environmental Law; and (d) Seller does not have any Knowledge that any of the items enumerated in subsection (c) of this paragraph will be forthcoming.
(a) Except as otherwise described in Schedule 4.20(a), Seller has timely filed all Tax Returns relating to the Business (including for purposes of this Section 4.20, without limitation, the acquisition, ownership and use of the Purchased Assets) that it is required to have filed. All such Tax Returns are true, correct and complete in all material respects. All Taxes required to have been paid by the Seller (whether or not shown to be payable on such Tax Returns or on subsequent assessments with respect thereto) have been paid in full on a timely basis. Seller does not have any Liabilities for Taxes not yet required to have been paid, other than Liabilities for Taxes reflected on the Interim Balance Sheet, or incurred in the Ordinary Course of Business or in connection with the purchase and sale under this Agreement since the date of the Interim Balance Sheet.
(b) Seller has complied in all respects with all applicable laws, rules and regulations relating to withholding Taxes and information reporting, and, within the time and in the manner prescribed by law, Seller has withheld from employee wages and other payments and paid over to the proper Governmental Authorities all amounts required to have been so withheld and paid over all Taxes (whether or not relating to the Business) all amounts required to have been so withheld and paid over in connection with amounts paid or owing by Seller to any employee, independent contractor, creditor, stockholder, or other third party.
(c) There are no liens for Taxes on the Purchased Assets, other than liens for Taxes not yet due and payable.
(d) Except as otherwise described in Schedule 4.20(d), no audit or other proceeding concerning any Tax Return or Tax Liability relating to the Business is currently pending or, to the Seller’s Knowledge, threatened. There are no existing circumstances which reasonably may be expected to result in the assertion of any claim for Taxes against the Seller with respect to the Business by any Governmental Authority with respect to any period for which Tax Returns are required to have been filed or Tax is required to have been paid. No issue has been raised by any Governmental Authority with respect to Taxes of the Seller concerning the Business in any prior examination which, by application of the same or similar principles, could reasonably be expected to result in a proposed deficiency for any other taxable period relating to the Business. No claim has ever been made in writing, or, to the Seller’s Knowledge, otherwise, by any Governmental Authority in a jurisdiction where Seller does not file Tax Returns relating to the Business that Seller is or may be subject to taxation by that jurisdiction with respect to the Business.
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(e) Seller has treated itself as owner of each of the Purchased Assets for Tax purposes. None of the Purchased Assets is the subject of a “safe-harbor lease” within the provisions of former Section 168(f)(8) of the Code, as in effect prior to amendment by the Tax Equity and Fiscal Responsibility Act of 1982. None of the Purchased Assets directly or indirectly secures any debt the interest on which is tax exempt under Section 103(a) of the Code. None of the Purchased Assets is “tax-exempt use property” within the meaning of Section 168(h) of the Code.
(f) Seller is not a party to any contract or agreement that will have continuing effect after the Closing Date and is an Assumed Liability that under certain circumstances could require any payment (or be deemed to give rise to any payment) that would be a parachute payment within the meaning of Section 280G of the Code.
(g) Seller, in connection with the Business, (i) is not a party to any joint venture, partnership or other agreement or arrangement which is treated as a partnership for federal income Tax purposes, (ii) does not own any interest in an entity which constitutes a Purchased Asset (or which owns a Purchased Asset) that is either is treated as an entity disregarded as separate from its owner for federal Tax purposes, or is an entity as to which an election pursuant to Treasury Regulations Section 301.7701-3 has been made.
(h) The transactions set forth in this Agreement are not subject to the Tax withholding provisions of Section 3406 of the Code (back-up withholding) or of any other provision of Law.
(i) Seller is a “United States person” within the meaning of Section 7701(a)(30) of the Code.
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4.23 Transactions with Affiliates. There are no existing contracts, transactions, indebtedness or other arrangements, or any related series thereof, between Seller, on the one hand, and any of the directors, officers or other Affiliates of Seller, on the other hand.
4.26 Bulk Sales. There are no “bulk sales” Legal Requirements applicable to the Transaction.
4.27 Foreign Corrupt Practices Act.
(a) During the five (5)-year period prior to the Closing Date, Seller has not (nor, to Seller’s Knowledge, has any director, officer, agent, or employee of Seller nor any other Person, acting on behalf of Seller) directly or indirectly in respect of the Business: (i) used any of Seller’s funds for unlawful contributions, gifts, entertainment or other unlawful expenses relating to political activity; (ii) made any unlawful payment to foreign or domestic government officials or employees or to foreign or domestic political parties or campaigns from Seller’s funds; (iii) violated any provision of the Foreign Corrupt Practices Act of 1977; (iv) established or maintained any unlawful or unrecorded fund of Seller’s monies or other assets; (v) made any false or fictitious entry on the books or records of Seller; or (vi) made any bribe, rebate, payoff, influence payment, kickback or other unlawful payment, to any Person, private or public, regardless of form, whether in money, property or services, to obtain favorable treatment in securing business or to obtain special concessions for Seller, or to pay for favorable treatment for business secured or for special concessions already obtained for Seller.
(b) Seller and, to Seller’s Knowledge, its Representatives have not, to obtain or retain business, directly or indirectly offered, paid or promised to pay, or authorized the payment of, any money or other thing of value (including any fee, gift, sample, travel expense or entertainment with a value in excess of one hundred dollars ($100.00) in the aggregate to any one individual in any year) or any commission payment in excess of any amount permitted by law to: (i) any Person who is an official, officer, agent, employee or representative of any
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Governmental Authority or of any existing or prospective customer (whether government owned or nongovernment owned); (ii) any political party or official thereof; (iii) any candidate for political or political party office; or (iv) any other individual or entity; while knowing or having reason to believe that all or any portion of such money or thing of value would be offered, given, or promises, directly or indirectly, to any such official, officer, agent, employee, representative, political party, political party official, candidate, individual, or any entity affiliated with such customer, political party or official or political office.
(c) Seller has made all payments to third parties by check mailed to such third parties’ principal place of business or by wire transfer to a bank located in the same jurisdiction as such party’s principal place of business. Each transaction is properly and accurately recorded on the Books and Records of Seller, and each document upon which entries in Seller’s Books and Records are based is complete and accurate in all respects. Seller maintains a system of internal accounting controls adequate to insure that Seller maintains no off-the-books accounts and that Seller’s assets are used only in accordance with Seller’s management directives.
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Seller is not aware of any facts that would cause Seller to initiate any such notice or action; and Seller does not have any Knowledge or reason to believe that any Governmental Authority or third party intends to initiate any such notice or action.
ARTICLE 5. REPRESENTATIONS AND WARRANTIES OF BUYER AND PARENT
Except as set forth in the corresponding sections of the disclosure schedules of Buyer and Parent delivered to Seller concurrently with the execution and delivery of this Agreement (the “Buyer Disclosure Schedules”) (provided, that if any fact or item disclosed in any section of the Buyer Disclosure Schedule shall be relevant to any other section of this Agreement, then such fact or item shall be deemed to be disclosed with respect to such other section of this Agreement, but only to the extent to which it is readily apparent on its face that such fact or item relates), Buyer and Parent hereby represent and warrant to Seller that, as of the Effective Date (and, to the extent that the Closing does not occur on the Effective Date, as of the Closing Date):
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(a) conflict with or violate the Certificate of Incorporation or bylaws or equivalent organizational documents of Parent or Buyer;
(b) conflict with or violate any Legal Requirement applicable to Parent or Buyer or by which any property or asset of Parent or Buyer is bound or affected, except where the existence of such conflict or violation would not, individually or in the aggregate, have a Material Adverse Effect;
(c) assuming the Consents listed in Section 5.3 of the Buyer Disclosure Schedule are obtained, result in any breach of or constitute a default under, or give to others any right of termination, amendment, acceleration or cancellation of, or result in the creation of any Encumbrance on any property or asset of Parent or Buyer pursuant to, any note, bond, mortgage, indenture, contract, agreement, lease, license, permit, franchise or other instrument or obligation, except where the existence of such breach, default or right or the creation of such Encumbrance would not, individually or in the aggregate, have a Material Adverse Effect;
(d) violate or conflict with any other material restriction of any kind or character to which Parent or Buyer is subject, except where the existence of such violation or conflict would not, individually or in the aggregate, have a Material Adverse Effect; or
(e) require Parent or Buyer to obtain any Consent of, or make or deliver any filing or notice to, a Governmental Authority.
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ARTICLE 6. [RESERVED.]
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(a) From and after the Closing and subject to Buyer’s reimbursement of certain audit fees in accordance with Section 7.1, Seller shall assist Buyer in preparing and delivering to Parent and Buyer, or causing to be prepared and delivered to Parent and Buyer, the historical financial information of the Business which Parent reasonably determines is required to be audited and filed by Parent with the SEC pursuant to Item 9 of the Current Report on Form 8-K as contemplated by the Exchange Act, and the rules and regulations promulgated thereunder as such required financial information is modified by any relief granted to Parent by the SEC with respect to the scope of financial information required to be filed (the “Historical Financial Information”). Seller shall use best efforts to ensure that the Historical Financial Information will be prepared in accordance with GAAP as of the dates and for the periods indicated. Seller will also cooperate in all reasonable respects with Parent’s auditors (the “Audit
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Accountants”) in connection with this audit of the Historical Financial Information, including, without limitation, the preparation, execution and delivery of management representation letters by Seller’s Contractors reasonably necessary to complete such audit.
(b) Subject to Buyer’s reimbursement of certain audit fees in accordance with Section 7.1, Seller will cooperate in all reasonable respects with Parent in Parent’s preparation of the pro forma financial information relating to the acquisition of the Business to the extent Parent reasonably determines such pro forma financial information is required to be filed by Parent with the SEC pursuant to Item 9 of the Current Report on Form 8-K as contemplated by the Exchange Act and the rules and regulations promulgated thereunder (the “Pro Forma Information,” and together with the Historical Financial Information, the “Required Information”), including, without limitation, providing such financial and other information, records and documents relating to the Business as may be necessary to prepare such Pro Forma Information, providing access to such of Seller’s personnel, advisors and accountants as may be necessary to prepare such Pro Forma Information, and generally cooperating with Parent’s reasonable requests in order to facilitate such preparation.
(c) The parties acknowledge that any Parent filings under the Securities Act that require the Required Information also necessitate timely cooperation, including, without limitation, cooperation in the performance of incremental audit procedures necessary, by Seller to facilitate the execution and filing of an accountant’s consent. Seller covenants and agrees to promptly cooperate from and after the Closing Date to facilitate such actions and will use commercially reasonable efforts to facilitate the Audit Accountant’s performance of such procedures.
7.8 Pre-Clinical Research Grant.
(a) The parties acknowledge and agree that (i) except for the Pre-Closing Federal Grant Receivables, the Seller is assigning to Buyer all right, title and interest in and to Seller’s pre-clinical federal research grant relating to the study of cardiovascular angiogenesis (the “Federal Grant”), and that Buyer shall have the sole and exclusive right to direct, control, and manage the Federal Grant and all communications to third parties related thereto, and (ii) Seller shall provide reasonable access to its Representatives and any and all Excluded Assets in furtherance of Buyer’s performance under the Federal Grant. The parties acknowledge and agree that any services performed (and related Confidential Information and other work product) by Xxxxxxx Xxxxxxxxx and Xxxx XxXxxxxxx in furtherance of this Section, together with any Patent Rights and any other Intellectual Property Rights therein, shall be deemed Purchased Assets for purposes of this Agreement.
(b) On and after the Closing, each of Seller, Xxxxxxx Xxxxxxxxx and Xxxx XxXxxxxxx shall use reasonable efforts to fully transfer the Federal Grant to Buyer, including, without limitation, any and all future grant funds and funding commitments existing or arising prior to, on and after the Closing. Upon Seller’s transfer of the Federal Grant to Buyer and upon Buyer’s or Parent’s request, each of Seller, Xxxxxxx Xxxxxxxxx and Xxxx XxXxxxxxx shall use reasonable efforts to amend the scope as requested by Buyer or Parent of the Federal Grant to facilitate the evaluation of cardiovascular angiogenesis and myocardial repair and restoration based on Buyer and/or Parent’s AdIGF-1 growth factor technology. Prior to the full transfer of
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the Federal Grant from Seller to Buyer, then each of Seller, Seller’s key personnel, Xxxxxxx Xxxxxxxxx and Xxxx XxXxxxxxx shall use reasonable efforts to perform (and arrange for the work under the Federal Grant to be performed) in a manner that is designed to be useful for potential application of relevant technologies as determined in Buyer’s sole discretion.
ARTICLE 8. [RESERVED.]
(a) by the mutual written consent of Buyer and Seller;
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(b) by either Buyer or Seller if the other party is in breach of any provision of this Agreement, provided, that the terminating party is not, on the date of termination, in material breach of any material provision of this Agreement; and
(c) by either Buyer or Seller if the Closing has not occurred on or prior to August 19, 2006 (the “Outside Closing Date”) for any reason, provided, that the terminating party shall not have breached its obligations hereunder in any manner that shall have contributed to the failure to consummate the Closing by such date.
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Agreements; and/or (l) any noncompliance with applicable bulk sales or fraudulent transfer Legal Requirements in connection with the Transaction for the period of time specified in Section 10.1. Nothing in this Section 10.2 shall be construed to mean that Seller’s officers and directors will held personally liable for any Damages hereunder.
10.3 Procedures for Indemnification.
(a) The Indemnitee shall give written notice (the “Indemnification Notice”) of any Damages or the commencement of any Proceeding by a third party with respect to any matter referred to in Section 10.2 thereof to the Indemnitor, which Indemnification Notice shall include a description of the Damages or Proceeding, the amount thereof (if known and quantifiable) and the basis for the Damages or Proceeding; provided, that failure of the Indemnitee to give the Indemnification Notice as provided herein shall not relieve the Indemnitor of its obligations hereunder.
(b) If the Indemnitor does not object to the Damages within twenty (20) Business Days of Indemnitee’s delivery of the Indemnification Notice to Indemnitor, after Indemnitee’s delivery of a written notice of cancellation (the “Cancellation Notice”) to the Indemnitor, Indemnitor shall pay the aggregate amount of Damages set forth in the Indemnification Notice within five (5) Business Days of Indemnitee’s delivery of the Cancellation Notice. Indemnitor may object to the claim on the Indemnification Notice by delivery to Indemnitee of such objection in writing within twenty (20) Business Days of Indemnitee’s delivery of the Indemnification Notice to Indemnitor. In case Indemnitor shall so object in writing to any claim or claims by Indemnitee made in any Indemnification Notice, Indemnitee shall have thirty (30) days after receipt of such objection to respond in a written statement that describes the nature of such objection and/or Indemnitor’s assessment of the amount of the Damages. If after such thirty (30) day period there remains a dispute as to any claims, Indemnitee and Indemnitor shall attempt in good faith for thirty (30) days to agree upon the rights of the respective parties with respect to each of such claims. If no agreement can be reached after good faith negotiation between the parties pursuant to this Section, then the parties shall subject such dispute to the dispute resolution procedures set forth in Section 11.13.
(c) Indemnitor shall be entitled to participate in the defense of such action, lawsuit, proceeding, investigation or other claim giving rise to an Indemnitee’s claim for indemnification at such Indemnitor’s expense, and at its option (subject to the limitations set forth below) shall be entitled to assume the defense thereof by appointing a nationally recognized and reputable counsel reasonably acceptable to the Indemnitee to be the lead counsel in connection with such defense; provided that:
(i) the Indemnitee shall be entitled to participate in the defense of such claim and to employ counsel of its choice for such purpose; provided that the fees and expenses of such separate counsel shall be borne by the Indemnitee (other than any fees and expenses of such separate counsel that are incurred prior to the date the Indemnitor effectively assumes control of such defense which, notwithstanding the foregoing, shall be borne by the Indemnitor, and except that the Indemnitor shall pay all of the fees and expenses of such separate counsel if the Indemnitee has been advised by counsel that a reasonable likelihood exists of a conflict of interest between the Indemnitor and the Indemnitee);
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(ii) the Indemnitor shall not be entitled to assume control of such defense (unless otherwise agreed to in writing by the Indemnitee) and shall pay the fees and expenses of counsel retained by the Indemnitee if: (A) the claim for indemnification relates to or arises in connection with any criminal or quasi-criminal proceeding, action, indictment, allegation or investigation; (B) the Indemnitee reasonably believes an adverse determination with respect to the action, lawsuit, investigation, proceeding or other claim giving rise to such claim for indemnification would be detrimental to or injure the Indemnitee’s reputation or future business prospects; (C) the claim seeks an injunction or equitable relief against the Indemnitee; (D) the Indemnitee has been advised by counsel that a reasonable likelihood exists of a conflict of interest between the Indemnitor and the Indemnitee; (E) the claim involves environmental matters in which case the Indemnitee shall have sole control and management authority over the resolution of such claim (including hiring legal counsel and environmental consultants, conducting environmental investigations and cleanups, negotiating with governmental agencies and third parties and defending or settling claims and actions); provided that the Indemnitee shall keep the Indemnitor apprised of any major developments relating to any environmental claim; (F) upon petition by the Indemnitee, the appropriate court or arbitral rules that the Indemnitor failed or is failing to vigorously prosecute or defend such claim; or (G) the Indemnitee reasonably believes that the Damages relating to the claim could exceed the maximum amount that such Indemnitee could then be entitled to recover under the applicable provisions of Article 10; and
(iii) if the Indemnitor shall control the defense of any such claim, the Indemnitor shall obtain the prior written consent of the Indemnitee before entering into any settlement of a claim or ceasing to defend such claim if, pursuant to or as a result of such settlement or cessation, injunctive or other equitable relief will be imposed against the Indemnitee or if such settlement does not expressly and unconditionally release the Indemnitee from all Liabilities with respect to such claim, without prejudice. Notwithstanding anything to the contrary contained in this Agreement or otherwise, neither Seller nor Buyer shall be responsible for any special, incidental, punitive or consequential Damages (including Damages for lost profits).
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warranties, covenants and obligations of the Indemnitor contained herein will not be affected by any investigation or diligence conducted by the Indemnitee with respect to, or any knowledge acquired (or capable of being acquired) by the Indemnitor, at any time whether before or after the executed and delivery of this Agreement or the Closing Date, with respect to the accuracy or inaccuracy of or compliance with, any such representation, warranty, covenant or obligation. In determining the amount of any indemnity, there shall be taken into account any insurance proceeds or other similar recovery or offset realized, directly or indirectly, by the party to be indemnified. In no event shall any Tax benefit obtained or obtainable by the Indemnitee be taken into account in determining the amount of Damages, and all Damages shall be increased to take account of any Tax cost incurred by the Indemnitee arising from receipt or accrual of indemnity payments (grossed up for such increase).
(a) In the case of Taxes arising in a taxable period relating to the Business that includes, but does not end on, the Closing Date, except as provided in paragraph (b) below, the allocation of such Taxes between a Pre-Closing Period and a Post-Closing Period shall be made on the basis of an interim closing of the books as of the end of the Closing Date.
(b) In the case of any Taxes that are payable for a taxable period that includes, but does not end on, the Closing Date, for purposes of this Agreement the portion of such Tax which relates to the Pre-Closing Period included in such taxable period shall (i) except as provided in (ii) and (iii) below, to the extent feasible, be determined on a specific identification basis, according to the date of the event or transaction giving rise to the Tax, (ii) in the case of any Taxes that are periodically assessed ad valorem Taxes and Taxes not otherwise reasonably allocable to specific transactions or events, other than Taxes based upon or related to income or receipts, or franchise Taxes, be deemed to be the amount of such Tax for the entire taxable period multiplied by a fraction, the numerator of which is the number of days in the taxable period ending on the Closing Date, and the denominator of which is the number of days in the entire taxable period, and (iii) in the case of any Tax based upon or related to income or receipts, or franchise Taxes, be deemed equal to the amount which would be payable if the relevant taxable period ended as of the end of the Closing Date. All determinations necessary to give effect to the foregoing allocations shall be made in a manner consistent with the prior practice of the Seller.
(c) The party paying any Tax for a period that includes but does not end on the Closing Date shall be entitled to payment from the other party with respect to the Taxes allocated to that other party under Section 10.6. Such payment shall be made in cash within ten
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(10) days of a written demand therefor, which demand shall not be made more than fifteen (15) days prior to the due date of such Tax.
ARTICLE 11. MISCELLANEOUS PROVISIONS
If to Parent or Buyer: | Cardium Therapeutics, Inc. | |
0000 Xxxxxx Xxxxxx Xxxxx, Xxxxx 000 | ||
Xxx Xxxxx, Xxxxxxxxxx 00000 | ||
Attention: Chief Business Officer | ||
and General Counsel | ||
Telephone No.: (000) 000-0000 | ||
Facsimile No.: (000) 000-0000 | ||
With a copy, which shall not constitute notice, given in the manner prescribed above, to:
| ||
Xxxxxxxx & Xxxxxxxx LLP | ||
00000 Xxxx Xxxxx Xxxxx, Xxxxx 000 | ||
Xxx Xxxxx, Xxxxxxxxxx, 00000-0000 | ||
Attn: Xxxx X. xx Xxxxx, Esq. | ||
Telephone No.: (000) 000-0000 | ||
Facsimile No.: (000) 000-0000 | ||
If to Seller: | Xxxxxxx Coie LLP | |
0000 Xxxxx Xxxxxx Xxxxx 0000 | ||
Xxxxxxx, XX 00000-0000 | ||
Attention: Xxxxx X. Lisbacken | ||
Telephone No.: (000) 000-0000 | ||
Facsimile No.: (000) 000-0000 |
With a copy, which shall not constitute notice, given in the manner prescribed above, to:
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Any party may alter its notice address by notifying the other parties of such change of address in conformity with the provisions of this Section.
11.3 Governing Law; Dispute Resolution. This Agreement is to be construed in accordance with and governed by the internal laws of the State of California (as permitted by Section 1646.5 of the California Civil Code or any similar successor provision) or any similar successor provision, without giving effect to any choice of law rule that would cause the application of the laws of any jurisdiction other than the internal laws of the State of California to the rights and duties of the parties. If a dispute arises between any of the parties relating to the interpretation or performance of this Agreement, and with the exception of any claim for a temporary restraining order or preliminary or permanent injunctive relief to enjoin any breach or threatened breach hereof, such dispute shall be settled by a single arbitrator selected by Buyer and reasonably acceptable by Seller, with such arbitration to be held in San Diego, California, in accordance with the Commercial Arbitration Rules of the American Arbitration Association, and judgment upon the award rendered by the arbitrator may be entered in any court having jurisdiction thereof in accordance with Section 11.13. The arbitrator must be knowledgeable in the subject matter at issue in the dispute. The arbitrator shall make his or her decision in accordance with the terms of this Agreement and applicable law. Each party shall bear its own costs and legal fees associated with such arbitration. The decision of the arbitrator shall be final and may be sued on or enforced by the party in whose favor it runs in a court of competent jurisdiction in accordance with Section 11.13 at the option of the successful party. The rights and obligations of the parties to arbitrate any dispute relating to the interpretation or performance of this Agreement shall survive the expiration of this Agreement for any reason. The arbitrator shall be empowered to award specific performance, injunctive relief and other equitable remedies as well as damages, but shall not be empowered to award punitive or exemplary damages.
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11.11 Construction. The construction of this Agreement shall not take into consideration the party who drafted or whose representative drafted any portion of this Agreement, and no canon of construction shall be applied that resolves ambiguities against the drafter of a document. The parties are sophisticated and have been represented by lawyers throughout this Transaction who have carefully negotiated the provisions hereof. As a consequence, the parties do not believe the presumption of California Civil Code Section 1654 and similar laws or rules relating to the interpretation of contracts against the drafter of any particular clause should be applied in this case and therefore waive its effects.
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11.13 Jurisdiction. Subject to Section 11.3, any action or proceeding seeking to enforce any provision of, or based on any right arising out of, this Agreement may be brought against any of the parties only in the courts of the State of California, County of San Diego, or, if it has or can acquire the necessary jurisdiction, in the United States District Court for the Southern District of California. Subject to Section 11.3, each of the parties consents to the exclusive jurisdiction of such courts (and the appropriate appellate courts) in any such action or proceeding and waives any objection to venue laid therein. Process in any action or proceeding referred to in the preceding sentence may be served on any party anywhere in the world.
[Signatures Follow On a Separate Page]
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IN WITNESS WHEREOF, each of the parties has caused this Asset Purchase Agreement to be executed on its behalf by their respective officers thereunto duly authorized all as of the Effective Date.
“Seller” | ||
Tissue Repair Company, a Delaware corporation | ||
By: | /s/ Xxxxxxx Xxxxxxxxx |
Name: | Xxxxxxx Xxxxxxxxx |
Title: | President | |
“Buyer” | ||
Cardium Biologics, Inc, a Delaware corporation | ||
By: | /s/ Xxxxx Xxxxx |
Name: | Xxxxx Xxxxx |
Title: | Chief Business Officer | |
“Parent” | ||
Cardium Therapeutics, Inc. | ||
By: | /s/ Xxxxx Xxxxx |
Name: | Xxxxx Xxxxx |
Title: | Chief Business Officer | |
Acknowledged and agreed as to Sections 7.8 and 7.9 | ||
Xxxxxxx Xxxxxxxxx | ||
By: | /s/ Xxxxxxx Xxxxxxxxx |
Xxxx XxXxxxxxx | ||
By: | /s/ Xxxx XxXxxxxxx |
[SIGNATURE PAGE TO ASSET PURCHASE AGREEMENT]
EXHIBIT A
CERTAIN DEFINITIONS
“12 Month Period” shall have the meaning specified in Section 7.10.
“Affiliate” shall mean any member of the immediate family (including spouse, brother, sister, descendant, ancestor or in-law) of any officer, director or holder of five percent (5%) or more of the outstanding equity interests of Seller or any corporation, partnership, trust or other entity in which Seller or any such family member has a five percent (5%) or greater interest or is a director, officer, partner or trustee. The term Affiliate shall also include any entity which controls, is controlled by, is under common control with any of the individuals or entities described in the preceding sentence.
“Agreement” shall mean the Asset Purchase Agreement to which this Exhibit A is attached (including the Seller Disclosure Schedule and all other schedules and exhibits attached hereto), as amended from time to time.
“Allocation Schedule” shall have the meaning specified in Section 2.6(a).
“Allocation Statement” shall have the meaning specified in Section 2.6(a).
“Applicable Regulatory Laws” shall have the meaning specified in Section 4.29.
“Approvals” shall have the meaning specified in Section 4.26.
“Assignment and Assumption” shall have the meaning specified in Section 3.4(a).
“Assumed Liabilities” shall have the meaning specified in Section 1.3.
“Audit Accountants” shall have the meaning specified in Section 7.7(a).
“Books and Records” shall have the meaning specified in Section 1.1(l).
“Business” shall have the meaning set forth in the first Recital.
“Business Day” means any day other than (a) a Saturday or a Sunday or (b) a day on which banking and savings and loan institutions are authorized or required by law to be closed.
“Buyer” shall have the meaning set forth in the Preamble.
“Buyer Disclosure Schedule” shall have the meaning specified in Article 5.
“Cancellation Notice” shall have the meaning specified in Section 10.3(b).
“Closing” shall have the meaning specified in Section 3.1.
i
“Closing Date” shall have the meaning specified in Section 3.1.
“Closing Date Assets” shall have the meaning specified in Section 2.2(b).
“Code” shall mean the Internal Revenue Code of 1986, as amended.
“Common Stock” shall mean Parent’s common stock, par value $0.0001 per share.
“Confidential Information” shall mean all Know-How Rights and other confidential and/or proprietary information of a Person, including, without limitation, (i) information derived from reports, investigations, research, work in progress, codes, marketing and sales programs, financial projections, cost summaries, pricing formula, contract analyses, financial information, projections, confidential filings with any state or federal agency, and all other confidential concepts, methods of doing business, ideas, materials or information prepared or performed for, by or on behalf of such Person by its employees, officers, directors, agents, representatives or consultants and (ii) all of the foregoing items in subsection (i) that Seller assigns to Buyer pursuant to this Agreement (notwithstanding the fact that Seller was aware of such confidential information before any such disclosure to Parent or Buyer).
“Consent” shall mean any approval, consent, ratification, permission, waiver or authorization (including any Governmental Approval).
“Contract” shall mean any agreement, contract, consensual obligation, promise, understanding, arrangement, commitment or undertaking of any nature (whether written or oral and whether express or implied), whether or not legally binding.
“Contractor Obligations” shall have the meaning specified in Section 1.4(g).
“Contractors” shall have the meaning specified in Section 4.15(a).
“Copyright Assignment” shall have the meaning specified in Section 3.2(b).
“Copyrights” shall mean all copyrights (whether registered or not), applications therefor, moral rights and other rights associated with original works of authorship (whether by statute, common law or otherwise).
“Damages” shall mean and include any loss (including diminution in value), damage, injury, decline in value, lost opportunity, Liability, claim, demand, settlement, judgment, award, fine, penalty, Tax, fee (including any legal fee, accounting fee, expert fee or advisory fee), charge, cost (including any cost of investigation) or expense of any nature (including reasonable attorneys’ fees in accordance with Section 11.14).
“Defined Benefit Plan” shall mean either a plan described in Section 3(35) of ERISA or a plan subject to the minimum funding standards set forth in Section 302 of ERISA and Section 412 of the Code.
ii
“Deposits and Advances” shall have the meaning specified in Section 1.1(h).
“Diligence Failure Event” shall have the meaning specified in Section 2.4.
“Domain Name” shall mean xxx.xxxxxxxxxxxxxxxxxxx.xxx, xxx.x-x-xx.xxx and any other domain names relating to the Business.
“Domain Name Assignment” shall have the meaning specified in Section 3.2(b).
“Effective Date” shall have the meaning specified in the Preamble.
“Employment Agreements” shall have the meaning specified in Section 3.2(k).
“Encumbrance” shall mean any lien, pledge, hypothecation, charge, mortgage, security interest, encumbrance, equity, trust, equitable interest, claim, preference, right of possession, lease, tenancy, license, encroachment, covenant, infringement, interference, Order, proxy, option, right of first refusal, preemptive right, community property interest, legend, defect, impediment, exception, reservation, limitation, impairment, imperfection of title, condition or restriction of any nature (including any restriction on the voting of any security, any restriction on the transfer of any security or other asset, any restriction on the receipt of any income derived from any asset, any restriction on the use of any asset and any restriction on the possession, exercise or transfer of any other attribute of ownership of any asset).
“Entity” shall mean any corporation (including any non-profit corporation), general partnership, limited partnership, limited liability partnership, joint venture, estate, trust or company (including any limited liability company or joint stock company).
“Environmental Law” shall mean any environmental or health or safety-related law, regulation, rule, ordinance, or by-law at the foreign, federal, state or local level, whether existing as of the Effective Date, previously enforced, or subsequently enacted.
“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended.
“Excellarate” shall mean Adenovirus Vector Encoding Human PDGF-B Gene Embedded in Bovine Type 1 Collagen Matrix as described in BB-IND-10360 (U.S. FDA).
“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.
“Excluded Assets” shall have the meaning specified in Section 1.2.
“Excluded Liabilities” shall have the meaning specified in Section 1.4.
“Excluded Patent Rights” shall mean (a) the patents and patent applications listed on Schedule 1.1(g), (b) all divisions, continuations, continuations-in-part, that claim priority to, or common priority with, the patent applications described in clause (a) or the patent applications that resulted in the patents described in clause (a), and (c) all patents that have issued or in the future
iii
issue from any of the foregoing patent applications, including utility, model and design patents and certificates of invention, together with any reissues, renewals, extensions or additions thereto.
“FDA” means the U.S. Food and Drug Administration.
“Federal Grant” shall have the meaning specified in Section 7.8.
“Financial Statements” shall have the meaning specified in Section 4.5(a).
“First Commercial Sale” shall mean, with respect to any country, the first sale of Excellarate after all applicable marketing and pricing approvals (if any) have been granted by the applicable governing health authority of such country.
“First Milestone Payment Date” shall have the meaning specified in Section 2.2(a).
“GAM” shall have the meaning specified in the Recitals.
“GAAP” means U.S. generally accepted accounting principles in effect on the date on which they are to be applied pursuant to this Agreement, applied consistently throughout the relevant periods.
“General Assignment and Xxxx of Sale” shall have the meaning specified in Section 3.2(a).
“Governmental Approval” shall mean any: (a) permit, license, certificate, concession, approval, consent, ratification, permission, clearance, confirmation, exemption, waiver, franchise, certification, designation, rating, registration, variance, qualification, accreditation or authorization issued, granted, given or otherwise made available by or under the authority of any Governmental Authority or pursuant to any Legal Requirement, including, without limitation, the FDA; or (b) right under any Contract with any Governmental Authority, including, without limitation, the FDA.
“Governmental Authority” shall mean any: (a) nation, principality, state, commonwealth, province, territory, county, municipality, district or other jurisdiction of any nature; (b) federal, state, local, municipal, foreign or other government; (c) governmental or quasi governmental authority of any nature (including any governmental division, subdivision, department, agency, bureau, branch, office, commission, council, board, instrumentality, officer, official, representative, organization, unit, body or Entity and any court or other tribunal), including, without limitation, the FDA; (d) multinational organization or body; or (e) individual, Entity or body exercising, or entitled to exercise, any executive, legislative, judicial, administrative, regulatory, police, military or taxing or arbitral authority or power of any nature.
“Hired Contractors” shall have the meaning specified in Section 7.5(a).
“Historical Financial Information” shall have the meaning specified in Section 7.7(a).
iv
“Indemnification Determination Date” shall mean the date that the final amount of the Damages are determined by the parties or a court of competent jurisdiction pursuant to the indemnification procedures set forth in Section 10.3.
“Indemnification Notice” shall have the meaning specified in Section 10.3(a).
“Indemnitee” shall have the meaning specified in Section 10.2.
“Indemnitor” shall have the meaning specified in Section 10.2.
“Independent Accounting Firm” shall mean an independent accounting firm of international reputation mutually acceptable to Buyer and Seller.
“Insurance Policies” shall have the meaning specified in Section 4.10.
“Intellectual Property Rights” shall mean all of the following in any country: (a) Patent Rights, Know-How Rights, Copyrights, Trademark Rights domain name registrations, moral rights and other intellectual property rights; and (b) the right (whether at law, in equity by contract or otherwise) to use or otherwise exploit any of the foregoing.
“Interest Rate” shall mean the prime rate as published in the Wall Street Journal.
“Interim Balance Sheet” shall have the meaning specified in Section 4.5(a).
“Interim Balance Sheet Date” shall have the meaning specified in Section 4.5(a).
“IRS” means the Internal Revenue Service.
“Knowledge” An individual shall be deemed to have “Knowledge” of a particular fact or other matter if: (a) such individual is actually aware of such fact or other matter or (b) a prudent individual could be expected to discover or otherwise become aware of such fact or other matter in the course of conducting after due and diligent inquiry concerning the truth or existence of such fact or other matter. Seller shall be deemed to have “Knowledge” of a particular fact or other matter if Xxxxxxx Xxxxxxxxx, Xxxx XxXxxxxxx, Xxxxxx Xxxxxx, Xxxx Xxxxxx or any of its other directors, officers or employees with the authority to establish policy for Seller actually has knowledge of or should have been able to obtain knowledge of such fact or other matter after due and diligent inquiry of Seller’s employees, Representatives, advisors, attorneys and accountants.
“Know-How Rights” means all trade secret rights and other know-how rights (whether at law, in equity or otherwise).
“Leased Real Property” shall have the meaning set forth in Section 1.1(e).
“Legal Requirement” shall mean any federal, state, local, municipal, foreign or other law, statute, legislation, constitution, principle of common law, resolution, ordinance, code, Order, edict,
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decree, proclamation, treaty, convention, rule, regulation, permit, ruling, directive, pronouncement, requirement (licensing or otherwise), specification, determination, decision, opinion or interpretation that is, has been or may in the future be issued, enacted, adopted, passed, approved, promulgated, made, implemented or otherwise put into effect by or under the authority of any Governmental Authority.
“Liability” shall mean any debt, obligation, duty or liability of any nature (including any unknown, undisclosed, unmatured, unaccrued, unasserted, contingent, indirect, conditional, implied, vicarious, derivative, joint, several or secondary liability), regardless of whether such debt, obligation, duty or liability would be required to be disclosed on a balance sheet prepared in accordance with generally accepted accounting principles and regardless of whether such debt, obligation, duty or liability is immediately due and payable.
“Machinery and Equipment” shall have the meaning specified in Section 1.1(c).
“Material Adverse Effect” means:
(a) with respect to Parent or Buyer, any event, change or effect that, when taken individually or together with all other adverse events, changes and effects, is or is reasonably likely to prevent or materially delay consummation of the Transaction or otherwise to prevent Parent or Buyer or its respective subsidiaries from performing its obligations under this Agreement; and
(b) with respect to Seller, any event, change or effect that, when taken individually or together with all other adverse events, changes and effects, is or is reasonably likely (i) to be materially adverse to the condition (financial or otherwise), properties, assets (including Purchased Assets), Liabilities (including Assumed Liabilities), business, operations, results of operations or prospects of Seller or the Business or (ii) to prevent or materially delay consummation of the Transaction or otherwise to prevent Seller from performing its obligations under this Agreement.
“Material Contracts” shall have the meaning specified in Section 4.9.
“Material Supplier” shall have the meaning specified in Section 4.14(a).
“Matrigen” shall mean Matrigen, Inc.
“Milestone Payment” shall have the meaning specified in Section 2.2.
“Multiemployer Plan” shall mean a plan described in Section 3(37) of ERISA.
“Net Sales” shall mean the gross sales price of Excellarate invoiced by Buyer, its licensees or their respective Affiliates to customers who are not Affiliates (or are Affiliates but are the end users) less, to the extent actually paid or accrued by such party, (a) credits, allowances, discounts and rebates to, and chargebacks from the account of, such customers for spoiled, damaged, out-dated and returned product; (b) freight and insurance costs incurred in transporting product to
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such customers; (c) cash, quantity and trade discounts, rebates and other price reductions for product given to such customers under price reduction programs; (d) sales, use, value-added and other direct taxes incurred on the sale of such product to such customers; (e) customs duties, surcharges and other governmental charges incurred in exporting or importing such product to such customers; and (f) a reasonable allowance determined by Buyer in accordance with generally accepted accounting principles for bad debts.
“Noncompetition Agreement” shall have the meaning specified in Section 3.2(i).
“Non-Excellarate Assets” shall mean those assets that are not applicable to Excellarate and are specifically identified and listed in Schedule 4.11(c).
“Offer Letters” shall have the meaning specified in Section 3.2(j).
“Offerees” shall have the meaning specified in Section 3.2(j).
“Other Books and Records” shall have the meaning specified in Section 1.1(l).
“Order” shall mean any: (a) temporary, preliminary or permanent order, judgment, injunction, edict, decree, ruling, pronouncement, determination, decision, opinion, verdict, sentence, stipulation, subpoena, writ or award that is or has been issued, made, entered, rendered or otherwise put into effect by or under the authority of any court, administrative agency or other Governmental Authority; or (b) Contract with any Governmental Authority that is or has been entered into in connection with any Proceeding.
“Ordinary Course of Business” shall describe any action taken by a party if: (a) such action is consistent with such party’s past practices and is taken in the ordinary course of such party’s normal day to day operations; (b) such action is taken in accordance with sound and prudent business practices; (c) such action is not required to be authorized by such party’s stockholders, board of directors or any committee thereof and does not require any other separate or special authorization of any nature; and (d) such action is similar in nature and magnitude to actions customarily taken, without any separate or special authorization, in the ordinary course of the normal day to day operations of other Entities that are engaged in businesses similar to such party’s business.
“Outside Closing Date” shall have meaning specified in Section 9.1(c).
“Parent” shall have the meaning specified in the Preamble.
“Patent Assignment” shall have the meaning specified in Section 3.2(b).
“Patent Rights” means all issued patents and pending patent applications (including without limitation utility models, design patents, certificates of invention and applications for certificates of invention and priority rights) in any country, including all provisional applications, substitutions, continuations, continuations-in-part, divisions, renewals, reissues, re-examinations and extensions thereof.
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“Person” shall mean any individual, Entity or Governmental Authority.
“Personal Property” shall have the meaning specified in Section 1.1(d).
“Personal Property Leases” shall have the meaning specified in Section 1.1(f).
“Phase 2 Clinical Trial” shall mean a human clinical trial in the United States that is intended to initially evaluate the effectiveness of a product for a particular indication or indications in patients with the disease or indication under study or that would otherwise satisfy requirements of 21 CFR 312.21(b).
“Post-Closing Contracts” shall collectively refer to Seller’s third-party agreements with Scios Nova Inc. and Takeda Chemical Industries, Ltd.
“Post-Closing Period” shall mean any taxable period beginning after the close of business on the Closing Date or, in the case of any Tax period which includes, but does not begin, after the close of business on the Closing Date, the portion of such period beginning after the close of business on the Closing Date.
“Pre-Closing Federal Grant Receivables” shall have the meaning specified in Section 1.2(g).
“Pre-Closing Period” shall mean any taxable period ending on or before the close of business on the Closing Date or, in the case of any taxable period which includes, but does not end on, the Closing Date, the portion of such period up to and including the Closing Date.
“Prior Agreements” shall have the meaning specified in Section 1.4(p).
“Proceeding” shall mean any action, suit, litigation, arbitration, proceeding (including any civil, criminal, administrative, investigative or appellate proceeding), prosecution, contest, hearing, inquiry, inquest, audit, examination or investigation that is, has been or may in the future be commenced, brought, conducted or heard at law or in equity or before any Governmental Authority or any arbitrator or arbitration panel.
“Product-related Limitation” shall have the meaning specified in Section 2.4(c).
“Pro Forma Information” shall have the meaning specified in Section 7.7(b).
“Purchased Assets” shall have the meaning specified in Section 1.1.
“Real Property Leases” shall have the meaning specified in Section 1.1(e).
“Receivables” shall have the meaning specified in Section 1.1(a).
“Registered Intellectual Property Rights” shall mean all United States, international and foreign: (a) Patent Rights, including applications therefor; (b) registered Trademarks Rights, applications to register Trademark Rights, including intent-to-use applications, or other registrations or applications related to Trademark Rights; (c) Copyright registrations and applications to register
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Copyrights; and (d) any other Intellectual Property Rights that is the subject of an application, certificate, filing, registration or other document issued by, filed with, or recorded by, any state, government or other public legal authority at any time.
“Regulatory Authorizations” shall have the meaning specified in Section 4.29.
“Reimbursable Development Costs” shall mean fifty percent (50%) of the fully-burdened internal costs to, and the out-of pocket costs paid to third parties by, Buyer, its licensees or their respective Affiliates in connection with the development and regulatory approval of Excellarate after the Closing Date.
“Releases” shall have the meaning specified in Section 3.2(g).
“Representatives” shall mean officers, directors, employees, attorneys, accountants, advisors, agents, distributors, licensees, stockholders, stockholders, subsidiaries and lenders of a party. In addition, all Affiliates of Seller shall be deemed to be “Representatives” of Seller.
“Required Information” shall have the meaning specified in Section 7.7(b).
“Restricted Asset” shall have the meaning specified in Section 1.5(a).
“Royalty Payout” shall have the meaning specified in Section 2.3(g).
“Royalty Term” shall mean, with respect to each country, the term for which a Valid Claim remains in effect and would be infringed by the use, offer for sale, sale or import of Excellarate in such country.
“Royalty Termination Trigger” shall have the meaning specified in Section 2.3(g).
“SEC” shall mean the Securities and Exchange Commission.
“Securities Act” shall mean the Securities Act of 1933, as amended.
“Selective Genetics” shall mean Selective Genetics, Inc., which was formerly known as Prizm Pharmaceuticals, Inc.
“Seller” shall have the meaning set forth in the Preamble; provided, however, that for purposes of Section 4.13, “Seller” shall mean Tissue Repair Company and all predecessors in interest to the Purchased Assets, including, without limitation, Prizm Pharmaceuticals, Inc., Prizm Acquisition Corporation and Selective Genetics.
“Seller Benefit Plans” shall have the meaning specified in Section 4.16.
“Seller Claims” shall have the meaning specified in Section 1.1(k).
“Seller Contracts” shall have the meaning specified in Section 1.1(i).
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“Seller Disclosure Schedule” shall have the meaning specified in Article 4.
“Seller Intellectual Property” shall mean all Intellectual Property Rights related to the Business, the Purchased Assets or the Assumed Liabilities and held by Seller, whether owned or controlled, licensed, owned or controlled by or for, licensed to, or otherwise held by or for the benefit of Seller.
“Seller Products” shall mean all products and services manufactured, made, designed, maintained, supported, developed, sold, licensed, marketed, or otherwise distributed or provided (or planned or envisioned to be manufactured, made, designed, maintained, supported, developed, sold, licensed, marketed, or otherwise distributed or provided) by or for Seller (including all versions and releases thereof, whether already distributed or provided, under development, planned or conceived, or otherwise), together with any related materials, information or data, including, without limitation, the names, numbers (e.g., part numbers) and packaging associated with such products and services.
“Share Price” shall have the meaning set forth in Section 2.4(b).
“Substitute Equity” shall have the meaning specified in Section 2.3(g).
“Supplies” shall have the meaning specified in Section 1.1(b).
“Successor” shall have the meaning specified in Section 2.3(g).
“Tax” (and, with correlative meaning, “Taxes” and “Taxable”) means any federal, state, local, foreign or other tax or similar governmental fee, levy, assessment or charge of any king whatsoever, including, without limitation, all income, gross receipts, license, payroll, employment, excise, severance, stamp, occupation, premium, windfall profits, environmental, customs duties, capital stock, ad valorem, value added, inventory, franchise, profits, withholding, social security (or similar), unemployment, disability, real property, personal property, unclaimed property, escheat, sales, use, transfer, registration, alternative or add-on minimum, or estimated tax, and including any interest, penalty, or addition thereto, whether disputed or not, together with any penalty, addition to tax or additional amount with respect thereto, and any interest on any of the foregoing.
“Tax Authority” means any Governmental Authority responsible for the imposition, assessment or collection of any Tax.
“Tax Return” shall mean any return, statement, declaration, notice, certificate or other document that is or has been filed with or submitted to, or required to be filed with or submitted to, any Governmental Authority in connection with the determination, assessment, collection or payment of any Tax or in connection with the administration, implementation or enforcement of or compliance with any Legal Requirement related to any Tax.
“Total Tax Consideration” shall have the meaning specified in Section 2.6(a).
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“Trademark Assignment” shall have the meaning specified in Section 3.2(b).
“Trademark Rights” shall mean all trademarks (whether registered or not), service marks (whether registered or not), tradenames, applications for any of the foregoing, and all goodwill associated with any of the foregoing.
“Transaction” shall mean, collectively, the transactions contemplated by this Agreement.
“Transaction Documents” shall mean this Agreement, the Noncompetition Agreement, the Offer Letters, the Employment Agreements, the Releases, the Assignment and Assumption and all other agreements, certificates, instruments, documents and writings delivered by Parent, Buyer and/or Seller in connection with the Transaction.
“Transfer Taxes” shall mean all federal, state, local or foreign sales, use, transfer, real property transfer, mortgage recording, stamp duty, value-added or similar Taxes that may be imposed in connection with the transfer of Purchased Assets to Buyer or assumption of Assumed Liabilities, pursuant to this Agreement, together with any additions to Tax or penalties with respect thereto and any interest on the foregoing.
“UM Agreements” mean the following agreements with the University of Michigan: (i) the roundtable research agreement dated July 13,1995 (as extended June 28, 2000, May 21, 2001, June 24, 2002 and July 28, 2004, and supplemented by Supplement Nos. 1, 2, 3, 4, 5, 6 and 7); and (ii) the license agreement dated July 13, 1995 (as amended August 10, 1995, and February 1, 2004).
“Valid Claim” shall mean a claim of an issued and unexpired patent included within the Patent Rights comprising the Purchased Assets, which has not been held permanently revoked, unenforceable or invalid by a decision of a court or other governmental agency of competent jurisdiction, unappealable or unappealed within the time allowed for appeal, and which has not been admitted to be invalid or unenforceable through reissue or disclaimer or otherwise.
“Warrant” shall have the meaning specified in Section 2.4.
“Working Capital” as of a given date shall mean the amount calculated by subtracting the current Liabilities of Seller included in the Assumed Liabilities as of that date from the current assets of Seller included in the Purchased Assets as of that date.
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