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EXHIBIT 2.1
ASSET PURCHASE AGREEMENT
AGREEMENT made as of the 10th day of August, 1999 (the "Agreement") by and
among DynCorp, a Delaware corporation with its principal offices located at 0000
Xxxxxx Xxxxxx Xxxxx, Xxxxxx, Xxxxxxxx 00000-0000 ("DynCorp"), DynCorp
Biotechnology and Health Services, Inc., a Virginia corporation with its
principal offices located at 0000 Xxxxxx Xxxxxx Xxxxx, Xxxxxx, Xxxxxxxx
00000-0000 ("Biotech Services") and Novavax, Inc., a Delaware corporation with
its principal offices located at 0000 Xxxxxxxx Xxxx, Xxxxxxxx, Xxxxxxxx (the
"Buyer"). Each of DynCorp and Biotech Services are hereinafter individually
referred to as a "Seller" and collectively referred to as the "Sellers."
W I T N E S S E T H:
WHEREAS, based upon the representations and warranties herein made by
Sellers and subject to the terms, conditions and undertakings of Sellers
contained in this Agreement, Buyer desires to purchase from Sellers all of
Sellers' assets, properties and business relating to the Division (as
hereinafter defined), except for the assets specified in Section 1.2 hereto; and
WHEREAS, based upon the representations and warranties herein made by Buyer
and subject to the terms, conditions and undertakings of Buyer contained in this
Agreement, Sellers desire to sell to Buyer all of Sellers' assets, properties
and business relating to the Division, except for the assets specified in
Section 1.2 hereto;
NOW, THEREFORE, in consideration of the mutual promises contained in this
Agreement, the parties to this Agreement, intending to be legally bound, do
hereby agree as follows:
ARTICLE I. PURCHASE AND SALE OF THE ASSETS.
1.1 Purchase and Sale of the Assets. Subject to the terms of this
Agreement, at the Closing (as defined in Section 1.9), Sellers shall sell,
assign and transfer, free and clear of all liens, mortgages, security interests,
charges and encumbrances, to Buyer, and Buyer shall purchase, all of Sellers'
right, title and interest in and to the assets and properties used directly and
exclusively by the Division (as defined below) in the design, development and
production of vaccines (the "Business"), except for the assets specified in
Section 1.2 hereto, together with the Sellers' right to perform the Business.
Such assets, properties and business are hereinafter referred to as the
"Assets." The Assets include, without limitation, all of Sellers' right, title
and interest in the following:
(a) All tangible personal property and fixtures of Sellers' division
known as DynCorp Biomedical Services Laboratory (the "Division") located at any
of (i) the Division's office and laboratory facilities at Xxx Xxxx Xxxxx,
Xxxxxxxxx, Xxxxxxxx; (ii) repository facilities operated by McKesson
BioServices; and (iii) the Division's off-site storage facility.
(b) All of the Division's intangible personal property, including (i)
the name "Biomedical Services Laboratory" and the goodwill of the Business
conducted therewith or symbolized thereby; (ii) all copyrights, patents, patent
applications, processes, formulae, scientific and/or technical information,
trade secrets, licenses, franchises, customer lists, supplier lists, plans,
reports, samples, prototypes, know-how, all items in application, development or
other pending status and all similar items which are used in the conduct of the
Business, including without limitation the Intellectual Property described on
Schedule 2.7 hereto, (iii) all rights, subject to related obligations to
perform, pursuant to research contracts, distributorship agreements,
interinstitutional research and development agreements, sales contracts,
purchase orders, employee agreements, employee proprietary agreements,
repository service contracts and all other contracts, including without
limitation those contracts and agreements listed on Schedule 2.8 hereto, (iv)
all rights (as
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lessor or lessee) under leases of real and personal property, (v) all computer
programs and source disks, program documentation, tapes, manuals, forms, guides
and other materials with respect thereto, and (vi) all federal, state, local or
foreign governmental or regulatory permits, licenses, approvals and franchises
issued to or received by the Division in connection with the operation of the
Business or ownership of the Assets; and
(c) All inventories of the Division, including, without limitation,
inventories of vaccines, chemicals, supplies and general merchandise of any
kind;
(d) All books and records relating to the operation of the Division
that are located in Rockville, Maryland and copies of all books and records
relating to the operation of the Division which are located elsewhere, but
excluding the original corporate minute book of Sellers wherever located.
1.2 Excluded Assets. Excluded from Section 1.1 above are (i) all cash and
accounts receivable relating to the Division and all rights under any purchase
orders with Jenner Biotherapies, Inc.; (ii) any rights in business operations
software which are licensed to Sellers, including the systems known as Deltek,
PDS, PeopleSoft and PC Anywhere; and (iii) any rights to use the name 'DynCorp',
except as otherwise provided in Section 3.3 below. The parties expressly
acknowledge that DynCorp's ownership interest in DynPort LLC, a Virginia limited
liability company which is partially owned by DynCorp, or in Contract No.
DAMD17-98-C-8024 (the "JVAP Contract") between DynPort LLC and the U.S. Army
Medical Research Acquisition Activity or any follow-on or successor contract,
and Sellers' activities relating to the JVAP Contract are unrelated to the
Division and are not part of the Assets.
1.3 Assumed Liabilities. Buyer shall assume no obligations or liabilities
of Sellers, except those liabilities listed on Schedule 1.3 and those
liabilities under the contracts and commitments listed on Schedule 2.8 attached
hereto (other than any open purchase orders and contracts with Jenner and Xxxxxx
Xxxxxxxxx University), all of which Buyer hereby agrees to assume and pay,
perform or otherwise discharge.
1.4 Instruments of Transfer. At the Closing, Sellers shall deliver to Buyer
such bills of sale, assignments and other good and sufficient instruments of
conveyance and transfer, in form and substance satisfactory to Buyer and its
counsel, as shall be effective to convey and transfer to, and vest in, Buyer
title to the Assets. Simultaneously with such delivery, Sellers shall take such
action as may be necessary to place Buyer in possession and control of the
Assets. From and after the Closing, at Buyer's request and without further
consideration, Sellers shall execute and deliver such other instruments and take
such other action as Buyer may reasonably require more effectively to convey and
transfer to and vest in Buyer title to the Assets, and to place Buyer in
possession and control thereof.
1.5 Non-Assignable Contracts. In the event that any contract, lease,
permit, license or other agreement, right or asset which the Sellers are to
assign to Buyer hereunder is not assignable without the consent of another
party, or if such assignment triggers a change in the obligations of the
assignee (such as an increase in rent or payment of brokerage commissions) or if
such assignment or attempted assignment would constitute a breach thereof, this
Agreement shall not constitute such an assignment or attempted assignment
thereof. Each party shall use its best efforts to obtain all such consents to
assignment by the Sellers to Buyer. If the parties are unable to obtain any such
consent, each party will cooperate with the other in any reasonable arrangement
designed to provide to Buyer the benefits under any such contract, lease,
permit, license or other agreement.
1.6 Bulk Sales Compliance. Buyer and Sellers hereby waive compliance with
the requirements of any applicable laws relating to bulk sales, and Sellers
agree fully to indemnify and
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hold Buyer harmless from any and all claims based on the failure of Sellers to
comply with any requirement of any such law.
1.7 Purchase Price. Subject to the terms and conditions of this Agreement,
in reliance on the representations, warranties and agreements of the Sellers
contained in this Agreement, and in consideration of the sale and assignment of
the Assets, the Buyer shall deliver to the Sellers at the Closing, as the
purchase price for the Assets, Five Hundred Ninety Two Thousand Dollars
($592,000), payable at the Closing by certified or cashier's check or by wire
transfer (the "Purchase Price").
1.8 Allocation of Purchase Price. Sellers and Buyer agree to allocate the
consideration paid hereunder in accordance with Internal Revenue Code Section
1060. Buyer and Sellers shall use reasonably diligent efforts to agree to such
allocation within 30 days of the Closing Date. In addition, Sellers and Buyer
hereby agree to file timely any information that may be required to be filed
pursuant to Treasury Regulations promulgated under Section 1060.
1.9 The Closing. The Closing of the purchase and sale of the Assets (the
"Closing") shall take place at 2:00 p.m. at the offices of Buyer on the 10th day
of August, 1999, or at such other time and place as the parties mutually agree
upon (the "Closing Date").
ARTICLE II. REPRESENTATIONS AND WARRANTIES OF THE SELLERS.
As a material inducement to the Buyer to enter into and perform this
Agreement, the Sellers, jointly and severally, represent and warrant that:
2.1 Organization and Corporate Authority. DynCorp is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware with full corporate power and authority to own or lease and use its
properties and assets, to carry on its business as now conducted and as proposed
to be conducted, to execute and deliver this Agreement and to carry out the
transactions contemplated by this Agreement. Biotech Services is a corporation
duly organized, validly existing and in good standing under the laws of the
Commonwealth of Virginia with full corporate power and authority to own or lease
and use its properties and assets, to carry on its business as now conducted and
as proposed to be conducted, to execute and deliver this Agreement and to carry
out the transactions contemplated by this Agreement. Each of the Sellers is duly
qualified to do business and is in good standing as a foreign corporation under
the laws of the state of Maryland and every other jurisdiction in which the
failure to so qualify would have a Material Adverse Effect. For the purposes of
this Agreement, "Material Adverse Effect" shall mean any event, circumstance,
condition, development or occurrence causing, resulting in or having (or with
the passage of time reasonable likely to cause, result in or have) a material
adverse effect on the financial condition, business, properties, results of
operations or prospects of the Division.
2.2 Authority. The execution and delivery by the Sellers of this Agreement
and all other agreements and instruments required by the provisions of this
Agreement have been duly authorized by all necessary action of the respective
Boards of Directors and stockholders of the Sellers, and the consummation of the
transactions herein or therein contemplated will not conflict with or violate
any provision of law or the charter or By-Laws of either of the Sellers, or
result in a violation of or default under, or require any consent, approval,
notice, filing or permit under any law, regulation, order, writ, injunction or
decree of any judicial, governmental or arbitral agency or authority or of any
agreement, instrument, lease, license, mortgage, deed of trust or other document
to which either of the Sellers is a party, or by which either of the Sellers is
bound, or to which either of the Sellers or any of the Assets is subject, or
result in the creation or imposition of any lien, charge, encumbrance or
security interest of any nature whatsoever upon any of the Assets pursuant to
the terms of any such agreement or instrument. This Agreement, and all other
agreements contemplated hereby which are to be executed by either of the
Sellers, when executed and delivered
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by such Seller(s), will constitute the valid and legally binding obligations of
such Seller(s), enforceable in accordance with their terms, except as the
enforceability of the Agreement or such other agreements may be limited by
bankruptcy, insolvency, reorganization, moratorium, or similar laws relating to
or affecting generally the enforcement of creditors' rights and except as the
remedy of specific performance and other equitable relief may be unavailable in
certain cases.
2.3 Financial Statements. The Sellers have delivered to the Buyer unaudited
Statements of Assets Acquired and Liabilities Assumed of the Division as at
December 31, 1998 and July 29, 1999 together with the related Statements of
Operating Revenue and Expenses for the fiscal periods then ended. Such financial
statements present fairly, in all material respects, the assets acquired and
liabilities assumed of the Division as of such dates and its operating revenue
and expenses for the fiscal periods shown.
2.4 Absence of Undisclosed Liabilities. Except as set forth on Schedule
2.4, the Sellers have no liabilities with respect to the Division of any nature,
whether accrued, absolute, contingent or otherwise, asserted or unasserted,
known or unknown, that will become the obligation of Buyer as a consequence of
the transactions contemplated by this Agreement.
2.5 No Material Adverse Change. Except as set forth on Schedule 2.5, since
December 31, 1998, (a) there has been no Material Adverse Effect; (b) the
physical properties owned or leased by the Sellers and used by the Division have
not suffered any material destruction or damage, regardless of whether or not
the loss suffered was insured; (c) the Division has conducted its business
solely in the ordinary course and consistently with its past practices; (d)
there has not been any change in accounting principles, practices or methods
with respect to the Division; (e) there has not been any material asset sold or
disposed of (except inventory sold in the ordinary course of business), or any
material asset of the Division mortgaged, pledged or subjected to any lien,
charge or other encumbrance; (f) there has not been any amendment or termination
of any material contract or agreement to which either of the Sellers is a party
relating to the Division; and (g) there has not been any material increase in
the compensation payable by the Division to its officers, key employees or
consultants.
2.6 Property. The Sellers own no real estate used by the Division. The
Sellers have good and marketable title, free and clear from any liens,
mortgages, security interests, pledges, charges or encumbrances (hereinafter
"Claims and Encumbrances") of any nature whatsoever, except those disclosed on
Schedule 2.6, to all interests in the Assets, owned by it as reflected on the
balance sheet of December 31, 1998 or thereafter acquired. The Claims and
Encumbrances set forth on Schedule 2.6 do not singly or in the aggregate impair
the use of such property. All material tangible personal property, including
machinery and equipment, of the Division has been properly maintained and is in
good order and repair. Set forth on Schedule 2.6 hereto is a true and complete
list of (a) all items of tangible personal property (including vaccines,
chemicals and supplies) used in the operation of the Division and having a book
value of $1,000 or more; and (b) all real estate leases and capital equipment
leases with respect to property used by the Division to which either of the
Sellers is a party as of the date hereof. The Sellers have delivered a true and
correct copy of each real estate lease and capital equipment lease to the Buyer.
All such leases are in good standing, valid, binding and enforceable in
accordance with their respective terms, and there is not any existing default of
the lessor or lessee, or any event which with notice or lapse of time or both
would become a default, under any such material lease.
2.7 Intellectual Property. Except as described on Schedule 2.7, the Sellers
have exclusive ownership of, or exclusive license to use, all Intellectual
Property (as defined in the next paragraph) used or to be used in the business
of the Division as presently conducted or as proposed to be conducted. Except as
described on Schedule 2.7, the Sellers have the right to use, without infringing
any claims or rights of other persons, all Intellectual Property required for or
incident to the Division's products or its business as presently conducted or as
proposed to be conducted by
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the Division. Except as described on Schedule 2.7, the Sellers are not obligated
or liable to make any payments of royalties, fees or otherwise to any person
under any Intellectual Property in connection with the business of the Division
as now conducted or as proposed to be conducted. Except as described on Schedule
2.7, the Sellers' rights in all of such Intellectual Property are freely
transferable. All licenses or other agreements under which either of the Sellers
is granted rights in Intellectual Property or has granted rights to others in
Intellectual Property are in full force and effect, there are no defaults by any
party to such licenses or agreements. To the knowledge of the Sellers after due
inquiry, licensors under such licenses and other agreements have and had all
requisite power and authority to grant the rights purported to be conferred
thereby. The Sellers have used its best efforts to protect the proprietary
nature of each item of Intellectual Property and to maintain in confidence all
trade secrets and confidential information that it owns or uses. To the
knowledge of the Sellers after due inquiry, no other person or entity is
infringing, violating or misappropriating any of the Intellectual Property that
the Sellers own or uses. None of the activities or business currently conducted
by the Division, or conducted by the Division at any time, infringes, violates
or constitutes a misappropriation of, any Intellectual Property rights of any
other person or entity. The Sellers have not received any notice, claim or
protest alleging any such infringement or violation. The Sellers have not given
any indemnification to any person for or against any infringement,
misappropriation or other conflict with respect to any item of Intellectual
Property. The Sellers are not aware that any of the employees of the Division is
obligated under any contract, or subject to any judgment or governmental order,
that would restrict or interfere with such employee's best efforts on behalf of
the business of the Division as now conducted or as proposed to be conducted.
The Sellers are not aware that any of the employees of the Division, as a result
of performing services for the Sellers, is in violation of any employment
contract between such employee and any person respecting any Intellectual
Property rights of such person.
For purposes of this Agreement, "Intellectual Property" means all (a)
computer software, source code and object code, data and documentation, (b)
trademarks, service marks, trade drafts, logos, trade names and corporate names
and registrations and applications for registration thereof, (c) copyrights and
registrations and applications for registration thereof, (d) mask works and
registrations and applications for registration thereof, (e) patents, patent
applications, patent disclosures and all related continuation,
continuation-in-part, divisional, reissue, reexamination, utility, model,
certificate of invention and design patents, patent applications, registrations
and applications for registrations, (f) trade secrets and confidential business
information, whether patentable or unpatentable and whether or not reduced to
practice, know-how, manufacturing and production processes and techniques,
research and development information, copyrightable works, financial, marketing
and business data, pricing and cost information, business and marketing plans
and customer and supplier lists and information, (g) other proprietary rights
relating to any of the foregoing, and (h) copies and tangible embodiments
thereof, in each case owned or used by the Division,
2.8 Contracts and Commitments. Except as listed and described on Schedule
2.8 hereto and except with respect to such items as are not primarily related to
the business of the Division or the Assets:
(a) neither Seller is a party to any contract or commitment for the
purchase of merchandise, material or supplies, or any contract or open customer
purchase order for the sale of any of the same, which involves an amount in
excess of $5,000 in the case of any single contract or commitment or $10,000 in
the aggregate;
(b) neither Seller is a party to any written or oral, express or
implied, machinery, equipment or motor vehicle lease or purchase contract;
patent license agreement; software license agreement; manufacturing license
agreement or any other license agreement; development agreement; royalty
contract; research contract; government contract; interinstitutional research
and development agreement; repository services contract; sales, distribution,
brokerage, advertising
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agency, advertising or promotional contract; agency agreement; territorial or
franchise agreement; agreement limiting the Sellers' freedom to compete in any
line of business in any geographic area; commitment or agreement for any
material capital expenditure or leasehold improvement; registration rights
agreement; or any other material contract or advance commitment, which is not
terminable at the will of the Sellers, as the case may be, upon 30 days' notice
without liability or penalty or license agreements of any kind; provided,
however, that disclosure pursuant to this Section 2.8 (b) is not required with
respect to individual contracts of the nature described in Section 2.8 (a) above
which are for amount of $5,000 or less;
(c) the Sellers have not made any purchase commitments in excess of
normal, ordinary and usual requirements, but has adequate purchase commitments
to meet its existing business requirements;
(d) the Sellers have no outstanding contracts or commitments with its
customers to sell products at prices materially below those in its published
catalogs or price lists, or to grant any material rebates, cash discounts,
allowances or similar concessions to customers;
(e) the Sellers have not given to any individual or entity any power
of attorney which is presently outstanding or in force for any purpose
whatsoever;
(f) neither Seller is in default, nor is there any fact or event which
with notice or lapse of time, or both, would constitute a default under any
contracts made or obligations owed by the Sellers, nor has there been within the
past year any termination or default under any contract, lease, agreement or
license of the Sellers, each of which remains in full force and effect;
(g) the Sellers have not guaranteed or assumed responsibility for the
debts or obligations of any other individual or entity; and
(h) neither Seller is a party to any loan agreement, line of credit or
revolving credit arrangement, or any similar arrangement with any bank,
financial institution, or other lender, or any other person.
The contracts or commitments listed on Schedule 2.8 hereto do not, singly
or in the aggregate, materially and adversely affect the business, properties,
assets, financial condition or prospects of the Division, except as set forth on
Schedule 2.5.
Schedule 2.8 sets forth, with respect to each open customer contract, the
name of the customer, the value of the contract, the amount billed to date, the
percentage of completion of the contract, the estimated cost to complete the
contract and the expected margin under the contract.
2.9 Litigation. Except as described on Schedule 2.9, there are no actions,
suits, arbitrations, proceedings, claims, investigations or inquiries, now
pending, pending at any time since January 1, 1996 or, to the knowledge of the
Sellers after due inquiry, threatened, before any court, commission, agency or
other administrative, judicial or arbitral authority against either of the
Sellers and affecting the Division, any of the Division's officers or employees
in such capacity, or its business or properties, or that would interfere with
the marketing of the products or services of the Division or the transactions
contemplated by this Agreement, and no event has occurred nor does any condition
exist on the basis of which any such proceeding might properly be instituted
with any substantial chance of recovery. The Sellers are not the subject of any
judicial, governmental, municipal or arbitral order or decree with respect to
the Division, other than those of general application. The Sellers are not
delinquent in the filing of any appearance, answer, counterclaim or other
pleading reasonably required for the defense of its interests or the
preservation of its rights as a litigant in connection with any of the matters
disclosed on Schedule 2.9.
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2.10 Employment Matters. Except as described on Schedule 2.10, neither
Seller is a party to any contract, express or implied, with any officer,
employee, agent, consultant, independent contractor, sales representative,
licensee or adviser of the Division, (a) which is not terminable at the will of
the Sellers upon not more than 30 days' notice without liability or penalty; (b)
the benefits of which are contingent, or the terms of which are materially
altered, upon the occurrence of a transaction involving the Sellers of the
nature of any of the transactions contemplated by this Agreement; or (c) any of
the benefits of which will be materially increased, or the vesting of benefits
of which will be accelerated, by the occurrence of any of the transactions
contemplated by this Agreement or the value of any of the benefits of which will
be calculated on the basis of any of the transactions contemplated by this
Agreement. True and complete copies of any agreements listed in Schedule 2.10
have been delivered to the Buyer. There is not pending or, to the knowledge of
the Sellers after due inquiry, threatened against the Sellers any grievance,
labor dispute, organizational activity, strike or work stoppage that affects or
may affect the business of the Division or that may disrupt its operations. The
Sellers are not a party to any collective bargaining agreement with respect to
the Division. To the knowledge of the Sellers after due inquiry, no employee of
either of the Sellers is bound by any agreement with a previous employer that
adversely affects the Division in any way. Schedule 2.10 hereto is a true and
complete list of all current salaried employees of the Sellers who work in the
Division, together with the amount currently being paid to each such person on
an annual basis.
Except as disclosed on Schedule 2.10, with respect to the Division, the
Sellers do not have, nor have they ever had, any employee benefit plans within
the meaning of Section 3(3) of the Employee Retirement Income Security Act of
1974 ("ERISA") nor any employee pension benefit plans within the meaning of
Section 3(2) of the ERISA nor any trust thereunder, and no such plan or trust
has been terminated. With respect to each such employee benefit plan or employee
pension benefit plan listed on Schedule 2.10 related to the Division, (a) no
Reportable Event as defined in the ERISA has occurred, (b) Pension Benefit
Guaranty Corporation ("PBGC") has not instituted proceedings to terminate any
such plan, (c) the Sellers have not incurred any liability to PBGC, nor has it
instituted nor does it intend to institute proceedings to terminate or withdraw
from any plan, and has not ceased nor does it intend to cease operations at a
facility or facilities where such cessation has resulted or would result in a
separation from employment of more than 20% of the total number of employees of
the Sellers, (d) each such plan has been maintained and funded in accordance
with its terms and with all provisions of ERISA and of the Internal Revenue Code
applicable thereto, (e) neither of the Sellers nor any 10% stockholder of either
Seller nor the trustee of any of the plans has engaged in any Prohibited
Transaction, as defined in ERISA, with respect to any of the plans listed on
Schedule 2.10, (f) there are no proceedings instituted or threatened with
respect to any of the plans listed on Schedule 2.10 by either the Internal
Revenue Service, United States Department of Labor, or any participant or
beneficiary and (g) all accrued benefits under the plans are fully funded.
2.11 Finder's Fee. The Sellers have not incurred any obligation of any kind
whatsoever to any person for an investment banking, brokerage or finder's fee in
connection with the transactions contemplated by this Agreement.
2.12 Transactional Approvals. Except as set forth on Schedule 2.12, no
approval, authorization, order, license, permit, franchise or consent of, or
registration, qualification or filing with, or notice to, any judicial or
governmental agency or authority, or any other person or entity is required in
connection with the execution, delivery or performance by the Sellers of this
Agreement. No consent of any person who is a party to a contract with respect to
the Division's business is required to be obtained on the part of the Sellers to
consummate the transactions contemplated herein and continue the business of the
Division as previously conducted by the Sellers.
2.13 Necessary Permits. The Sellers have all necessary permits, licenses,
orders and approvals of any federal, state, municipal or local governmental or
regulatory bodies for it to operate
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the Division's facilities as presently operated and to conduct its business as
presently conducted ("Necessary Permits"). All such Necessary Permits possessed
by the Sellers are in full force and effect and (a) to the knowledge of the
Sellers after due inquiry, no suspension or cancellation of any Necessary Permit
is threatened, (b) there is no reason to believe that on expiration any
Necessary Permit will not be renewed, and (c) none of the Necessary Permits will
be adversely affected by the consummation of the transactions contemplated in
this Agreement.
2.14 Compliance with Laws. The Sellers are in compliance with all
applicable statutes, ordinances, orders, rules and regulations promulgated by
any federal, state, municipal or other governmental authority which apply to the
conduct of the business of the Division, and the Sellers have not received
written notice of a violation or alleged violation of any such statute,
ordinance, order, rule or regulation and are not aware that any such notice
shall be issued.
2.15 Environmental Matters. Except as described on Schedule 2.15, the
Sellers have never generated, transported, used, stored, treated, disposed of or
managed any hazardous waste in connection with the business of the Division. To
the knowledge of the Sellers after due inquiry, no oil or hazardous material has
ever been or is threatened to be spilled, released, or disposed of at any site
presently or formerly owned, operated, leased, or used by the Sellers in
connection with the business of the Division, or has ever come to be located in
the soil or groundwater at any such site. With respect to the Division, to the
knowledge of Sellers after due inquiry, the Sellers do not presently own,
operate, lease, or use, nor have they previously owned, operated, leased or used
any site on which underground storage tanks are or at any time were located and
no lien has ever been imposed by any governmental agency on any property,
facility, machinery, or equipment owned, operated, leased, or used by either of
the Sellers in connection with the presence of any hazardous material. With
respect to the Division, the Sellers have never entered into or been subject to
any judgment, consent decree, compliance order, or administrative order with
respect to any environmental, 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 such environmental, health and
safety matter or the enforcement of any law relating to the environment, health
and safety and the Sellers do not have any knowledge or reason to know that any
will be forthcoming.
2.16 Transactions with Interested Persons. Except for normal advances for
business expenses incurred in the ordinary course of business of the Division,
no officer or employee of the Division or any affiliate of any of the foregoing
persons has any loan or other obligation outstanding to or from the Sellers, or
for which either of the Sellers is or may be liable under a guaranty or
otherwise, or has any interest in any firm, person or entity with which the
Sellers have entered into contract, lease or understanding with respect to the
Division, or with which the Division does business, or in any equipment or other
property, real or personal, tangible or intangible, including, without
limitation, any item of Intellectual Property, used in connection with or
pertaining to the business of the Division.
2.17 Suppliers. Schedule 2.17 lists all suppliers to which the Division
made payments during the year ended December 31, 1998, or expects to make
payments during the year ending December 31, 1999, in excess of $5,000. Sellers
have no information which might reasonably indicate that any of the suppliers
listed on Schedule 2.17 intend to cease purchasing from, selling to, or dealing
with, the Division, nor has any information been brought to the Sellers'
attention which might reasonably lead it to believe any such customer or
supplier intends to alter in any material respect the amount of such purchases,
sales or the extent of dealings with the Division or would alter in any material
respect such purchases, sales or dealings in the event of the consummation of
the transactions contemplated by this Agreement. Sellers and the Division have
no information which might reasonably indicate, nor has any information been
brought to their attention which might reasonably lead them to believe that any
supplier will not be able to fulfill outstanding or
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currently anticipated purchase orders placed by the Division or that any
customer will cancel outstanding or currently anticipated purchase orders placed
with the Division.
2.18 Government Contracts.
(a) For purposes of this Section 2.18 alone (i) the term "Government"
shall mean any agency, division, subdivision, audit group or procuring office of
the U.S. federal government, including without limitation the employees or
agents thereof; (ii) the term "Division" shall mean the Division and its
officers, employees, agents, representatives and consultants; and (iii) the term
"Contract" shall mean any Government prime contract, any subcontract at whatever
tier under a Government prime contract or reseller of products or services to
the Government, or any basic ordering agreement, letter contract, purchase order
or delivery order of any kind, including without limitation, as to all of the
foregoing, all amendments, modifications and options thereunder or relating
thereto, as well as Cooperative Agreements, Cooperation Research and Development
Agreements ("CRADAs") or Other Agreements (as that term is defined in federal
procurement), in each case with respect to the Division.
(b) Schedule 2.18 contains a true and complete list of (i) all
Contracts (including without limitation options) currently in force (including
contracts where the Division's performance obligations have been completed but
the contract has not yet been closed out) between the Sellers with respect to
the Division and either the Government or any prime contractor or subcontractor
of the Government or reseller of products or services to the Government, (ii)
all outstanding quotations, bids and proposals submitted by the Division, which
the Sellers believe are still subject to acceptance, to either the Government or
any proposed prime contractor or subcontractor of the Government or reseller of
products or services to the Government with respect to any Contract with the
Government, and (iii) all Contracts (including without limitation options) on
which delivery or performance is currently in an unsatisfactory or delinquent
status or is behind schedule and formal or informal notice of which has been
received by the Division, which status or delay, individually or in the
aggregate, would be material to the Business Condition of the Division and (iv)
all contracts that have been completed but where the Division has continuing
warranty or other service obligations, including software upgrade.
(c) The Division has complied with all statutory and regulatory and
contractual requirements with respect to each Contract awarded to the Division
and each and every bid, quotation or proposal submitted by the Division to the
Government or any prospective prime contractor or subcontractor of the
Government or reseller of products or services to the Government with respect to
any Contract with the Government.
(d) The Division has complied with each certification and
representation executed, acknowledged or set forth by the Sellers on behalf of
the Division with respect to each Contract awarded to the Division and each bid,
quotation or proposal submitted by the Division to the Government or any
prospective prime contractor or subcontractor of the Government or reseller of
products or services to the Government.
(e) The Division has fully complied in all material respects with all
clauses, provisions and requirements incorporated expressly, by reference or by
operation of law in each Contract awarded to the Division.
(f) All certifications, representations or disclosure statements
submitted to the Government or any proposed prime contractor or subcontractor of
the Government or reseller of products or services to the Government by the
Division with respect to any Contract were accurate as of the date of
submission.
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(g) All facts set forth by the Sellers on behalf of the Division in
any disclosure statement submitted by the Division to the Government or any
prospective prime contractor or subcontractor of the Government or reseller of
products or services to the Government were accurate as of the date of
submission.
(h) Neither the Government nor any of the Government's prime
contractors, subcontractors or reseller of products or services to the
Government has notified the Division that the Division has breached or violated
any regulation, statute, certification, representation or clause, provision or
requirement with respect to any Contract awarded to the Division or with respect
to any bid, quotation or proposal submitted by the Division.
(i) The Division is not currently debarred or suspended from doing
business with the Government, and the Sellers do not have any knowledge of any
circumstances that would be reasonably expected to warrant the institution of
debarment or suspension proceedings against the Division in the future.
(j) No show cause notices, cure notices or default terminations have
been issued against the Division with respect to any of its Contracts.
(k) No negative determinations of responsibility have been issued
against the Division with respect to any bid, quotation or proposal submitted by
the Division.
(l) No costs incurred by the Division have been formally questioned or
disallowed as a result of a finding or determination of any kind by the
Government, other than questions or immaterial disallowances during customary
audits and reviews.
(m) Neither the Government nor any prime contractor or subcontractor
under a Government prime contract or reseller of products or services to the
Government has withheld or setoff, or attempted to withhold or setoff, monies
due to the Division under any of its Contracts.
(n) The Sellers do not have any knowledge of any irregularities,
misstatements or omissions relating to any of the Contracts or any of the
Division's bids, quotations or proposals, past or present, that have led to or
have a reasonable likelihood of leading to (i) any administrative, civil or
criminal investigation or indictment of the Division, (ii) the formal
questioning or disallowance of any costs submitted for payment by the Division,
(iii) the recoupment of any payments previously made to the Division, or (iv)
the assessment of any material penalties or damages of any kind against the
Division, arising out of such irregularities, misstatements or omissions.
(o) The Division is not currently under administrative, civil or
criminal indictment or, to the knowledge of Sellers after due inquiry,
investigation with respect to any alleged irregularity, misstatement or omission
arising under or in any way relating to any of its Contracts or other contracts,
bids, quotations or proposals, past or present.
(p) There exist (i) no material outstanding claims against the
Division either by the Government or by any prime contractor, subcontractor or
reseller of products or services to the Government, vendor or other third party
arising under or relating to any Contract, (ii) no facts which are known by
Sellers upon which such a claim reasonably may be based in the future, (iii) no
material dispute between the Division and the Government or any prime
contractor, subcontractor or reseller of products or services to the Government
or vendor arising under or relating to any Contract, and (iv) no facts which are
known by Sellers over which such a dispute would reasonably be expected to arise
in the future.
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(q) The Division is not undergoing and has not undergone any audit,
and the Sellers do not have any knowledge of any basis that would reasonably be
expected to lead to audits in the future, arising under or relating to any
Contract, other than customary audits and reviews.
(r) The Division has no interest in any pending or potential claims
against the Government or against any prime contractor, subcontractor or
reseller of products or services to the Government or vendor arising under or
relating to any Contract, except for routine demands for payment.
(s) The Division has entered into no financing arrangements with
respect to the performance of any current Contract referenced in Schedule 2.18.
(t) The Division has made available to the Buyer true and correct
copies of all Contracts listed in Schedule 2.18 and all quotations, bids or
proposals listed in Schedule 2.18.
(u) The Division possesses all necessary security clearances and
permits for the execution of its obligations under any Contract to which it is
currently a party or on which it has submitted a bid or proposal. The Division
has never been denied a facility security clearance, and none of its employees
has been denied a personal clearance for reasons that would materially affect
the Division.
(v) The Division has complied, and is complying, with all statutes,
regulations and contract clauses regarding the delivery of vaccines and
technical data, including without limitation proper marking of deliverables.
(w) The Division has disclosed to the Buyer all information relating
to any GSA schedule the Division has with the United States government or any
situation where the Division has authorized another entity to have its products
or services on a GSA schedule, and the Division has provided the Buyer all
documentation in its possession relating to the schedule, including without
limitation the contracts/schedules, any proposals submitted in support of the
contracts/schedules, all correspondence with the United States government or any
other entity regarding the schedules or proposals, and any audit reports,
letters or notices related thereto.
2.19 Year 2000 Compliance.
(a) For the purpose of this Section 2.19, "Year 2000 Compliant" shall
mean that products will perform without error, loss of data or loss of
functionality arising from any failure to process, calculate, compare or
sequence date data accurately, including without limitation calculations from,
into and between centuries and the years 1999 and 2000 and leap year
calculations, and will not cause any associated products or systems in which the
Division's products may be used to fail in any of the ways described above.
(b) To the knowledge of Sellers after due inquiry, all of the
Division's internal business and information systems are Year 2000 Compliant,
such that the Division will not experience any interruption in business or
impact on operations, including without limitation the Division's ability to
support customers using its products, from any change in system performance or
functionality related to date processing.
2.20 Disclosure. No statement, representation or warranty made by the
Sellers in this Agreement and no statement made in any of the certificates,
financial statements, exhibits, schedules or other documents furnished by the
Sellers or the Division pursuant to this Agreement is false or misleading or
omits to state any fact necessary to make any such representation or statement
not misleading. There is no fact known to the Sellers that materially and
adversely affects or in the future may materially and adversely affect the
business, property, condition (financial or otherwise),
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or results of operations of the Division and which has not been set forth in
this Agreement or in an exhibit or schedule hereto.
ARTICLE III. COVENANTS OF THE SELLERS.
As a material inducement to the Buyer to enter into and perform this
Agreement, the Sellers, jointly and severally, hereby make the following
covenants and agreements:
3.1 Conduct of the Business of the Division Prior to the Closing. The
Sellers agree that, from the date hereof to the Closing, except as otherwise
consented to or approved by the Buyer in writing or as required by this
Agreement:
(a) no funds shall be borrowed or loaned by the Sellers with respect
to the Division, no capital expenditure shall be incurred or contracted for by
the Sellers with respect to the Division and the Sellers shall not sell, lease,
mortgage, pledge, assign, license or otherwise encumber or dispose of any of the
Assets, except for the sale of inventory in the ordinary course of business;
(b) the Sellers shall conduct the business of the Division in, and
only in, the ordinary course;
(c) the Sellers shall keep the Buyer informed as to all material
happenings and events relating to the Division, including any change in the
state of facts disclosed in Article II hereof, and shall afford to the Buyer and
its representatives free access to the properties, books and records of the
Division, and free access to all personnel, suppliers, customers and independent
providers of professional services to the Division, so the Buyer may have full
opportunity to make such investigation as they shall desire of the affairs of
the Division; and
(d) the Sellers shall use its best efforts to cause the conditions
precedent to the Buyer's obligation to consummate the transactions contemplated
hereby to be fulfilled.
3.2 Public Announcements. The Sellers agree that any press release or other
disclosure of information to the press or any third party with respect to this
Agreement or the transactions contemplated hereby shall require the prior
approval of the Sellers and the Buyer, which approval shall not be unreasonably
withheld, provided that the Sellers shall not be prevented from making such
disclosure as they shall be advised by counsel is required by law.
3.3 Use of Name. Sellers agree that, following the Closing, the Buyer may
identify itself as a successor in interest to the DynCorp Biomedical Services
Laboratory. Buyer shall have no other rights to the use of the name "DynCorp" or
any variation thereof.
3.4 Audited Financial Statements. If Buyer chooses to engage an accounting
firm, at Buyer's expense, to perform an audit of the Division's financial
statements, Sellers agree to provide any reasonable assistance requested by
Buyer in connection with such audit, including providing access to Sellers'
books and ledgers.
ARTICLE IV. REPRESENTATIONS AND WARRANTIES OF THE BUYER.
As a material inducement to the Sellers to enter into and perform this
Agreement, the Buyer represents and warrants, that:
4.1 Organization of the Buyer. Buyer is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware
with full corporate power and authority to own or lease and use its properties
and assets, to carry on its business as now conducted, to execute and deliver
this Agreement and to carry out the transactions contemplated by this Agreement.
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4.2 Enforceability of the Agreement. The execution and delivery by the
Buyer of this Agreement and all other agreements and instruments required by the
provisions of this Agreement and the consummation of the transactions herein or
therein contemplated will not conflict with or violate any provision of law or
result in a violation of or default in any provision of any regulation, order,
writ, injunction or decree of any judicial, governmental or arbitral agency or
authority or of any agreement or instrument to which the Buyer is a party, or by
which the Buyer is bound or to which the Buyer is subject. The Buyer has full
right, power and authority to execute, deliver and perform this Agreement and
all other documents contemplated hereby. This Agreement, and all other
agreements contemplated hereby which are to be executed by the Buyer, when
executed and delivered by the Buyer, will constitute the valid and legally
binding obligations of the Buyer, enforceable in accordance with their terms,
except as the enforceability of the Agreement or such other agreements may be
limited by bankruptcy, insolvency, reorganization, moratorium, or similar laws
relating to or affecting generally the enforcement of creditors' rights and
except as the remedy of specific performance may be unavailable in certain
cases.
4.3 Buyer Financial Statements. Buyer's audited financial statements as of
December 31, 1998 contained in its Annual Report on Form 10-K for the fiscal
year then ended present fairly, in all material respects, the financial position
and results of operations of Buyer as of the respective dates and for the
respective periods indicated, and have been prepared in conformity with
generally accepted accounting principles applied on a basis consistent (except
as otherwise noted) with prior periods.
4.4 Litigation. There are no actions, suits, arbitrations, proceedings,
claims, investigations or inquiries, now pending or, to the knowledge of the
Buyer after due inquiry, threatened, before any court, commission, agency or
other administrative, judicial, or arbitral authority against the Buyer or its
business or properties, and no event has occurred nor does any condition exist
on the basis of which any such proceeding might properly be instituted with any
substantial chance of recovery. The Buyer is not the subject of any judicial,
governmental, municipal or arbitral order or decree, other than those of general
application.
4.5 Finder's Fee. The Buyer has not incurred any obligation of any kind
whatsoever to any person for an investment banking, brokerage or finder's fee in
connection with the transactions contemplated by this Agreement.
4.6 Transactional Approvals. No approval, authorization, order, license,
permit, franchise or consent of, or registration, qualification or filing with,
or notice to, any judicial or governmental agency or authority, or any other
person or entity is required in connection with the execution, delivery or
performance by the Buyer of this Agreement.
ARTICLE V. COVENANTS OF THE BUYER.
As a material inducement to the Sellers to enter into and perform this
Agreement, the Buyer hereby makes the following covenants and agreements:
5.1 Consummation of Transactions. The Buyer shall use its best efforts to
cause the conditions precedent to the Sellers' obligation to consummate the
transactions contemplated hereby to be fulfilled.
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5.2 Public Announcements. The Buyer agrees that any press release or other
disclosure of information to the press or any third party with respect to this
Agreement or the transactions contemplated hereby shall require the prior
approval of the Sellers and the Buyer, which approval shall not be unreasonably
withheld, provided that the Buyer shall not be prevented from making such
disclosure as it shall be advised by counsel is required by law.
5.3 Matters Regarding Jenner Biotherapies, Inc. Sellers have set forth on
Schedule 5.3 a list of open purchase orders between DynCorp and Jenner
Biotherapies, Inc ("Jenner") for work performed by the Division for Jenner.
These open purchase orders are being retained by Sellers in accordance with
Section 1.2 above.
(a) Until DynCorp notifies Buyer in writing that it has received
payment of the full amounts set forth on Schedule 5.3, Buyer agrees not to
perform work for Jenner of the same type performed by the Division prior to
Closing.
(b) All documentation, including draft and final reports, and products
developed in connection with or in any way related to services performed by the
Division under various purchase orders issued by Jenner between 1995 and the
Closing Date shall remain the property of DynCorp and shall not transfer with
the sale of the Division under this Agreement. Buyer further agrees to maintain
such documentation and products on behalf of DynCorp in its facility or at such
other place as such materials are customarily maintained, at Buyer's expense and
in accordance with the Division's customary procedures for such maintenance,
unless and until DynCorp authorizes transfer of such documentation and products
in writing, to Jenner, DynCorp, a third party or Buyer.
5.4 Collection of Other Receivables. Sellers have set forth on Schedule 5.4
a list of billed and unbilled accounts receivable due DynCorp for work
previously performed by the Division for customers other than Jenner, which is
dated as of August 9, 1999. These accounts receivable are being retained by
Sellers in accordance with Section 1.2 above. To the extent that any such
accounts receivable are collected by the Buyer after the Closing Date, the Buyer
shall hold such monies in trust for the Sellers, and transmit to Sellers at
least once every month all such monies collected, together with an accounting
thereof. In addition, Buyer agrees to provide a reasonable amount of assistance,
as reasonably requested by Sellers, to collect the accounts receivable retained
by the Sellers. DynCorp may, from time to time following the Closing, provide
updated copies of Schedule 5.4 to Buyer, reflecting increases in receivables due
to receipt of subsequent vendor invoices and other charges on time-and-materials
contracts or other changes due to post-Closing adjustments, including but not
limited to changes in Government billing rates, billing of unbilled amounts,
receipt of payments by DynCorp and correction of errors.
ARTICLE VA. COVENANTS OF THE BUYER AND THE SELLERS.
Section 5A.1 Novation of Government Contracts.
(a) The parties recognize that novation of the Government Contracts is
necessary for the full transfer and assignment of the Government Contracts to
the Buyer and that application for novation cannot be made until after the
execution of this Agreement. As used in this Article 5A, the term "Government
Contracts" includes Current Proposals relating to potential government contracts
and contracts issued in response thereto.
(b) Promptly following the execution of this Agreement, each party
shall complete its respective portion of the documentation required for novation
of each Government Contract by Federal Acquisition Regulation 42.1204(c), as
identified for each party on Exhibit F, and the Sellers shall deliver their
portion to the Buyer. On behalf of the Sellers, the Buyer shall promptly submit
the required documentation to the appropriate contracting officer and provide a
copy thereof to the Sellers. Each party will thereafter, promptly and in
coordination with the other party, respond
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appropriately to any requests from the contracting officer for additional
information or documentation relating to such novation. Each party shall keep
the other fully informed, on a current and timely basis, as to the progress of
the novation process and provide copies of all letters, correspondence, and
other material documents to or from the Government with respect thereto.
(c) In the interim period between (A) the Closing Date and (B) the
novation of each of the Government Contracts, or the Retransfer Event as
hereafter defined, or final close-out and payment of the respective Government
Contract, whichever first occurs (as to each individual Contract, the "Interim
Period"):
(i) The Buyer will perform the Sellers' obligations under each of
the Government Contracts in lieu of the Sellers, in accordance with a
subcontract to be executed by the parties at the Closing in the form set forth
in Exhibit F, and the terms, conditions, and requirements of the respective
Government Contract, in a good and workmanlike manner as though such novation
had occurred. The Sellers, promptly following execution of this Agreement, will
advise the respective contracting officer of the intended subcontract and
facilitate appropriate meetings between the Buyer and the contracting officer.
(ii) Any modification to a Government Contract approved by the
Sellers prior to the Closing Date will be duly executed by the Sellers.
(iii) Any other correspondence, invoices, or other written
submissions, including requests for equitable adjustments, claims, contract
modifications, and requests for final decisions will be prepared by the Buyer in
the name of the Sellers, coordinated with and submitted for approval, which
approval shall not unreasonably be withheld or delayed, promptly signed by the
Sellers if approved, and promptly submitted by the Buyer to the Government. The
Sellers shall respond promptly to any request for approval. In this context, the
Sellers hereby designate Xxxxxx Xxxxxxx as the "Sellers' Designated Contract
Representative" to receive and execute such documents, and the Buyer hereby
designates Xxxx Xxxxxx as the "Buyer's Designated Contract Representative" for
all Government Contracts, to submit such documents to, and receive such
documents from, the Sellers' Designated Contract Representative. Either party
may change its Designated Contract Representative by written notice to the
other. In addition, if any certification is required, the Buyer shall certify to
the Sellers in writing that such certification is proper under the Contract
Disputes Act of 1978 (the "CDA"), and not in violation of the False Claims Act,
and upon receipt of such certification the Sellers shall promptly review and
certify the claim under the CDA for submittal to and decision by the contracting
officer.
(iv) Following the Closing Date, the Sellers will be responsible
for preparing and certifying all pre-Closing Date cost claims, including all of
the Sellers' direct, indirect, and general and administrative cost claims, for
each Government Contract through the Closing Date. The Sellers will promptly
submit such claims to the contracting officer through the Buyer.
(v) During the Interim Period, each party will cooperate fully at
its own cost and reasonably assist the other to obtain novation of each
Government Contract into the name of the Buyer and under substantially the same
terms and conditions as in effect at the time of Closing and without materially
adverse conditions upon either the Sellers or the Buyer, and to facilitate
performance thereof by the Buyer. Neither party will take any action intended to
interfere with or delay novation.
(vi) If the appropriate contracting officer refuses to allow the
Buyer to perform a Government Contract pursuant to a subcontract during the
Interim Period, has not acted on the request for novation on a Government
Contract by August 10, 2001, or refuses to permit novation of a Government
Contract under substantially the same terms and conditions as in effect at
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the time of the Closing in the name of the Buyer and without material adverse
conditions upon either the Sellers or the Buyer and, (A) such decision is no
longer appealable by law or regulation, or (B) the parties jointly agree that
such decision cannot or should not as a practical matter be further pursued,
appealed, or submitted for reconsideration, the parties shall for a period of 30
days consult in good faith on how to proceed. If the parties fail within such
period to agree jointly on the disposition of the affected Government Contract,
either the Buyer or the Sellers may elect to cause all remaining performance
obligations under such contract to be retransferred to the Sellers (a
"Retransfer Event"). Upon such Retransfer Event, the Interim Period will end as
to such contract, and all performance obligations, payments, expenses, cost
reimbursements, fees, and other matters attributable to the period subsequent to
the Interim Period will be for the account of the Sellers. The parties will
thereupon negotiate in good faith and agree upon an equitable adjustment to the
Purchase Price, considering the relative value of the respective Government
Contract and the Buyer's net-of-tax profit to date under the respective
subcontract.
(d) If a Retransfer Event occurs as to any Government Contract, the
Buyer shall remain responsible for payment of all expenses incurred and other
matters and shall be entitled to retain all cost reimbursements and fees and
other entitlements applicable to the Interim Period for such Government
Contract.
ARTICLE VI. CONDITIONS PRECEDENT TO THE BUYER'S OBLIGATIONS.
All obligations of the Buyer under this Agreement are subject to the
fulfillment and satisfaction, prior to or at the Closing, of each of the
following conditions, any one or more of which may be waived by the Buyer:
6.1 Representations and Warranties True on the Closing Date. The
representations and warranties of the Sellers contained in this Agreement shall
be true on and as of the Closing Date as though newly made on and as of that
date (except for the Financial Statements, which shall continue to be true as of
the respective dates and for the respective periods covered thereby).
6.2 Delivery of Instruments of Transfer. The Sellers shall have delivered
to Buyer such duly executed instruments of transfer of the Assets as Buyer or
its counsel may reasonably require.
6.3 No Material Adverse Change. There shall not have been any material
adverse change in the financial condition, results of operations, assets,
liabilities, business or future prospects of the Division from that shown in the
Financial Statements. No action or proceeding shall have been instituted or
threatened prior to or as of the Closing Date before any court or governmental
body or authority pertaining to the transactions contemplated by this Agreement,
the result of which could prevent or make illegal the consummation of such
transactions, or which could be materially adverse to the business or financial
condition of the Division. The business and properties of the Division shall not
have been materially and adversely affected in any way as a result of fire,
explosion, earthquake or other natural disaster, accident, labor dispute, any
action of the United States or any other governmental authority, riot, civil
disturbance, or act of God, nor shall the United States have become involved in
a declared state of war or national emergency.
6.4 Opinion of Counsel to the Sellers. The Sellers shall have delivered to
the Buyer at the Closing an opinion, dated as of the Closing Date, of X.
Xxxxxxxxxx Xxxxxx, counsel to the Sellers, substantially in the form attached
hereto as Exhibit A.
6.5 Sellers' Performance. Each of the obligations of the Sellers to be
performed on or before the Closing Date pursuant to the terms of this Agreement
shall have been duly performed on or before the Closing Date.
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6.6 Approval of Documentation. The form and substance of all certificates
and other documents to be delivered by the Sellers hereunder shall be
satisfactory in all reasonable respects to the Buyer and its counsel.
6.7 Employment Agreements. Each of Xx. Xxxxx Xxxxxx and Dr. Xxxxx Xxxxxxxx
shall have entered into an Employment Agreement with the Buyer, substantially in
the forms attached hereto as Exhibits B and C, respectively.
6.8 Landlord Consent. The landlord of the Division's facility at Xxx Xxxx
Xxxxx, Xxxxx 000, Xxxxxxxxx, Xxxxxxxx, shall have consented to the assignment by
Biotech Services of the lease of such facility to Buyer.
6.9 Other Third Party Consents. Buyer shall have received all written
consents, assignments, waivers, authorizations and other certificates reasonably
deemed necessary by Buyer's legal counsel to provide for the continuation in
full force and effect of any and all contracts and leases of Sellers with
respect to the Division, including without limitation all outstanding research
contracts and operating leases.
6.10 Covenant Not to Compete. Seller shall have entered into a
Non-Competition Agreement with the Buyer, substantially in the form attached
hereto as Exhibit E.
ARTICLE VII. CONDITIONS PRECEDENT TO THE SELLERS' OBLIGATIONS.
All obligations of the Sellers under this Agreement are subject to the
fulfillment and satisfaction, prior to or on the Closing Date, of each of the
following conditions, any one or more of which may be waived by the Sellers.
7.1 Representations and Warranties True on the Closing Date. The
representations and warranties of the Buyer contained in the Agreement shall be
true on and as of the Closing Date as though newly made on and as of that date.
7.2 Delivery of Consideration. The Buyer shall have delivered to the
Sellers the consideration specified in Section 1.7.
7.3 Absence of Litigation. No action or proceeding shall have been
instituted or threatened prior to or as of the Closing Date before any court or
governmental body or authority pertaining to the transactions contemplated by
this Agreement, the result of which could prevent or make illegal the
consummation of such transactions.
7.4 The Buyer's Performance. Each of the obligations of the Buyer to be
performed on or before the Closing Date pursuant to the terms of this Agreement
shall have been duly performed on or before the Closing Date.
7.5 Approval of Documentation. The form and substance of all certificates
and other documents to be delivered by the Buyer hereunder shall be satisfactory
in all reasonable respects to the Sellers and its counsel.
7.6 Opinion of Counsel to the Buyer. The Buyer shall have delivered to the
Sellers at the Closing an opinion, dated as of the Closing Date, of White &
XxXxxxxxx, P.C., counsel to the Buyer, substantially in the form attached hereto
as Exhibit D.
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ARTICLE VIII. INDEMNIFICATION.
8.1 Compensation and Indemnification by the Sellers. Subject to all of the
provisions of this Article VIII, the Sellers, jointly and severally, by their
execution of this Agreement, hereby agree to indemnify, defend with counsel
reasonably satisfactory to the Buyer, save and hold the Buyer and any of its
respective officers, directors, stockholders, employees, affiliates, and
assignees (collectively, "indemnified persons" and individually, an "indemnified
person") harmless from and against, and to compensate them for, any and all,
demands, claims, actions, causes of action, assessments, damages, liabilities,
losses, expenses, judgments or deficiencies of any nature whatsoever (including,
without limitation, reasonable attorneys' fees and other costs and expenses
incident to any suit, action or proceeding) (collectively, "Losses") received,
incurred or sustained by an indemnified person which shall arise, in whole or in
part, out of or result from: (a) any breach of any representation, warranty or
covenant (including, without limitation, those contained in Article II) or
non-fulfillment of any obligation of the Sellers under this Agreement or under
any exhibit, schedule, certificate or other document furnished in connection
with this Agreement; (b) any claim (including, without limitation, a claim based
on contract, warranty or tort) arising out of the sale of any product or service
of the Division which was sold prior to the Closing Date or any services
rendered by or on behalf of the Division prior to the Closing Date; (c) the
litigation, if any, disclosed on Schedule 2.9 hereto and all related
proceedings; or (d) any federal, state, local or other tax liability, or any
assessment in the nature of any tax, including interest and penalties thereon,
with respect to any fiscal period of the Sellers or portion of a period prior to
the Closing Date, or any tax liability, including interest and penalties
thereon, arising as a result of the Closing.
8.2 Limitations on Indemnification by the Sellers. Notwithstanding the
foregoing, (a) the right of the Buyer to indemnification under Section 8.1 above
shall be subject to the time limitation set forth in Section 8.5 below, (b) no
indemnification shall be payable pursuant to Section 8.1 (a) above to the Buyer
unless the total of all claims for indemnification pursuant to Section 8.1 (a)
shall exceed $10,000 in the aggregate, whereupon the full amount of such claims
shall be recoverable in accordance with the terms hereof, such amount being a
threshold and not a deductible and (c) the aggregate liability of Sellers
pursuant to this Article VIII shall not exceed $740,000 (less any required
payment(s) not made pursuant to the Non-Competition Agreement referred to in
Section 6.10); provided, however, that these limitations shall not apply to any
indemnification with respect to Losses arising from the fraud, wilful
misrepresentation or deliberate or wilful breach by the Sellers of any of their
representations, warranties or covenants herein or in any agreement, certificate
or instrument delivered pursuant hereto.
8.3 Compensation and Indemnification by the Buyer. Subject to all of the
provisions of this Article VIII, the Buyer, by its execution of this Agreement,
hereby agrees to indemnify, defend with counsel reasonably satisfactory to the
Sellers, save and hold the Sellers and any of their respective officers,
directors, stockholders, employees, affiliates, and assignees (collectively,
"indemnified persons" and individually, an "indemnified person") harmless from
and against, and to compensate them for, any and all Losses received, incurred
or sustained by an indemnified person which shall arise, in whole or in part,
out of or result from any breach of any representation, warranty or covenant
(including, without limitation, those contained in Article IV) or
non-fulfillment of any obligation of the Buyer under this Agreement or under any
exhibit, schedule, certificate or other document furnished in connection with
this Agreement.
8.4 Limitations on Indemnification by the Buyer. Notwithstanding the
foregoing, (a) the right of the Sellers to indemnification under Section 8.3
above shall be subject to the time limitation set forth in Section 8.5 below,
(b) no indemnification shall be payable pursuant to Section 8.3 above to the
Sellers unless the total of all claims for indemnification pursuant to Section
8.3 shall exceed $10,000 in the aggregate, whereupon the full amount of such
claims shall be recoverable in accordance with the terms hereof, such amount
being a threshold and not a deductible and (c) the aggregate liability of Buyer
pursuant to this Article VIII shall not exceed $740,000; provided,
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however, that these limitations shall not apply to any indemnification with
respect to Losses arising from the fraud, wilful misrepresentation or deliberate
or wilful breach by the Buyer of any of its representations, warranties or
covenants herein or in any agreement, certificate or instrument delivered
pursuant hereto.
8.5 Survival of Representations and Warranties. The representations,
warranties, covenants and obligations of the parties set forth in this Agreement
shall survive any investigation at any time made by or on behalf of the other
parties and shall survive the Closing for three years, notwithstanding the
establishment of a shorter period by any applicable statute of limitations, the
provisions of which are hereby waived, except that liability with respect to any
representation, warranty, covenant or obligation as to which a claim, or notice
of a proposed claim, is made within such three-year period shall continue until
finally determined and paid. Any claim under this Article VIII by an indemnified
person must be made by written notice to the indemnifying party within said
three-year period.
8.6 Third Party Claims. Should any claims be made or suit or proceeding be
instituted against an indemnified person within the aforesaid three-year period
which, if valid or prosecuted successfully, would be a matter for which such
indemnified person is entitled to be defended, saved harmless or indemnified
under this Article VIII (a "Third Party Claim"), such indemnified party shall
notify the indemnifying party in writing concerning the same promptly after the
assertion or commencement thereof. The indemnified party shall file in a timely
manner any answer or pleading with respect to a suit or proceeding if such
action is necessary to avoid default or other adverse result. The indemnifying
party shall control the defense of any Third Party Claim and shall use its best
efforts to defeat or minimize any loss resulting from such Third Party Claim.
The indemnifying party shall provide the indemnified person with such additional
information and opportunity for consultation as may reasonably be requested by
it. Such indemnified person shall be entitled, at its own expense, to
participate in the defense of a Third Party Claim and to engage counsel for such
purpose. In the event of any dispute regarding the reasonableness of a proposed
settlement, the party which will bear the larger financial loss resulting from
such settlement will make the final determination in respect thereto, which
determination will be final and binding on all involved parties. The indemnified
person shall render all assistance as the indemnifying party shall reasonably
request in the defense of any Third Party Claim.
8.7 Set-Off. Any amount or amounts due from an indemnifying person to an
indemnified person under this Article VIII may be paid at the indemnifying
person's option by set-off against any amount or amounts owing from the
indemnified person to the indemnifying person pursuant to any instrument,
document or contract, to the extent such amounts are sufficient, without
prejudice to the indemnifying person's right to pursue any other remedies at law
or in equity.
ARTICLE IX. GENERAL.
9.1 Transactional Costs. The Sellers shall be responsible for their own
legal, accounting and other consulting services attendant to the negotiation and
drafting of this Agreement and to the transactions contemplated by this
Agreement (the "Transaction Costs"). The Division has not paid or incurred any
Transaction Costs, and shall not pay, incur or be responsible in any way for any
Transaction Costs. The Buyer shall be responsible for its own Transaction Costs.
9.2 Further Assurances. The parties hereto agree to execute and deliver any
and all papers and documents that may be reasonably necessary to carry out the
terms of this Agreement.
9.3 Entire Agreement. All exhibits and schedules hereto shall be deemed to
be incorporated into and made part of this Agreement. This Agreement, together
with the exhibits and schedules hereto, contains the entire agreement between
the parties, and there are no agreements,
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representations or warranties by any of the parties hereto that are not set
forth or referred to herein. This Agreement may not be amended or revised except
by a writing signed by the parties hereto.
9.4 Binding Effect; Assignment. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns; provided, however, that this Agreement and all rights hereunder may not
be assigned by the Sellers or the Buyer, except by prior written consent of the
other party.
9.5 Separate Counterparts. This Agreement may be executed in several
identical counterparts, all of which when taken together shall constitute but
one instrument, and it shall not be necessary in any court of law to introduce
more than one executed counterpart in proving this Agreement.
9.6 Notices. All notices, requests, demands or other communication required
or permitted hereunder, to be effective, shall be in writing and shall be deemed
to have been given if personally delivered or sent by facsimile transmission,
upon receipt, or if sent by registered or certified mail or by Federal Express,
upon the sooner of the date on which receipt is acknowledged or the expiration
of three days after deposit in U.S. mails, postage and fees prepaid or two days
after delivery to Federal Express. All notices shall be sent to a party at the
following addresses: if to the Buyer: Novavax, Inc., 0000 Xxxxxxxx Xxxx,
Xxxxxxxx, Xxxxxxxx, Attention: Xxxx X. Xxxxxx, President [Fax: (000) 000-0000],
with a copy to: Xxxxx X. Xxxxx, White & XxXxxxxxx, P.C., 00 Xxxxxxx Xxxxxx,
Xxxxxxxxx, Xxxxxxxxxxxxx 00000 [Fax: (000) 000-0000], and if to the Sellers:
DynCorp, 0000 Xxxxxx Xxxxxx Xxxxx, Xxxxxx, Xxxxxxxx 00000-0000, Attention: Xxxxx
X. Xxxxxxxxx, Senior Vice President & General Counsel [Fax: (000) 000-0000],
unless and until notice of another or different address shall be given as
provided herein.
9.7 Severability. The provisions of this Agreement are severable and the
invalidity of any provision shall not affect the validity of any other
provision.
9.8 Captions; Gender. The captions herein have been inserted solely for
convenience of reference and in no way define, limit or describe the scope or
substance of any provision of this Agreement. All pronouns used herein shall
include both the masculine and feminine gender as the context requires.
9.9 Governing Law. The execution, interpretation and performance of this
Agreement shall be governed by the internal laws of the State of Delaware
without giving effect to its conflict of laws provisions.
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IN WITNESS WHEREOF, the parties hereto have duly executed this Asset
Purchase Agreement as of the date first written above.
DYNCORP NOVAVAX, INC.
By: By:
--------------------------------- ---------------------------------
Name: Name:
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Title: Title:
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DYNCORP BIOTECHNOLOGY AND
HEALTH SERVICES, INC.
By:
---------------------------------
Name:
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Title:
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