EXHIBIT 2.1
ASSET PURCHASE AGREEMENT
by and between
XXXXXX HEALTHCARE CORPORATION
and
UROGEN CORP.
ASSET PURCHASE AGREEMENT
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ASSET PURCHASE AGREEMENT ("Agreement"), made this 28th day of February,
1998, by and between XXXXXX HEALTHCARE CORPORATION, a Delaware corporation with
offices at 0000 Xxxx Xxxx Xxxx, Xxxxxxxxx, Xxxxxxxx 00000 (the "Seller"), and
UROGEN CORP., a Delaware corporation with offices at 00000 Xxxxxx Xxx, Xxxxx X,
Xxx Xxxxx, Xxxxxxxxxx, 00000 ("Buyer").
RECITALS
WHEREAS, the Seller currently operates a business segment known as the
Molecular Biology Unit of its Biotech Business Group (the "Unit");
WHEREAS, the business in which the Unit is engaged includes the research
and development of the Mini-Ad Vector Technology (as hereinafter defined);
WHEREAS, the Buyer desires to purchase from Seller, and the Seller desires
to sell to Buyer, the Mini-Ad Vector Technology, together with certain other
property related to the research, development, manufacture, use and sale of
products utilizing the Mini-Ad Vector Technology, on and subject to the terms
and conditions of this Agreement.
NOW THEREFORE, in consideration of the mutual covenants and promises herein
contained, the parties agree as follows:
TERMS
1. Definitions and Interpretation.
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1.1 Definitions. Capitalized terms used herein shall have the following
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meanings:
"Actions" shall mean claims, actions, suits, audits, proceedings or
investigations, whether at law, in equity or admiralty, and whether or not
before any Tribunal or any Authority.
"Affiliate" shall mean, with respect to any party, any entity (i) which
directly, or indirectly through one or more intermediaries, Controls, is
Controlled by, or is under common Control with, the party or (ii) fifty percent
(50%) or more of the voting capital stock (or in the case of an entity which is
not a corporation, fifty percent (50%) or more of the equity interest) of which
is beneficially owned or held by a party or any of such party's Subsidiaries.
"Assets" shall refer to the following assets and properties owned by the
Seller and used, held or arising in connection with the business of the Unit
relating to the Mini-Ad Vector Technology:
a. all Intellectual Property Rights which exclusively relate to the Mini-
Ad Vector Technology, including but not limited to those described on
Schedules 3.7(A), (B), (C) and (D) attached hereto;
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b. all goodwill relating exclusively to the Mini-Ad Vector Technology;
c. (i) any inventions which may have been made and in which Seller owns
rights pursuant to the Clinical Studies Agreement between McMaster
University and Seller dated April 4, 1996; and (ii) any inventions
relating to adenoviral vector which may have been made or which are
made in the future, and in which Seller owns rights pursuant to the
July 1, 1996 agreement between Seller and the Chinese Academy of
Military Medical Services.
d. all furniture, supplies, tools, machinery, equipment and materials
listed on Schedule 1.1(A), attached hereto;
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e. all quantities of finished goods inventory of Mini-Ad Vector Products
("Included Inventory") existing on the Closing Date;
f. all right, title and interest of the Seller in or with respect to the
contracts and agreements listed on Schedule 1.1(B) attached hereto
(the "Included Agreements");
g. all books and records including, without limitation, laboratory
notebooks, operating manuals, procedures manuals, drawings and
specifications relating exclusively to the Mini-Ad Vector Technology;
h. to the extent such transfer or assignment is permitted by applicable
law, rule or regulation, all of (i) the foreign marketing and clinical
authorizations, clearances and approvals set forth on Schedule 3.4(A),
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and (ii) the FDA Submissions set forth on Schedule 3.4(B), and with
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respect to each of (i) and (ii) which solely relate to Mini-Ad Vector
Technology and/or Mini-Ad Vector Products;
i. all of Seller's right, title and interest in any existing or future
claims or causes of action against suppliers or vendors of Included
Inventory or any other Assets;
j. all of Seller's rights, title and interest to any prepayments or
deposits in connection with the Assets; and
k. the biologics listed on Schedule 1.1(C) attached hereto (the
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"Biologics").
The Assets described in items a, b and c above are hereinafter referred to from
time to time as the "Intellectual Property Assets". The Assets described in
items d through k above, inclusive, are hereinafter referred to from time to
time as the "Other Assets". Notwithstanding any other terms or provisions of
this Agreement to the contrary, the defined term "Assets" shall not include any
of the following:
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i. any cash or cash equivalents;
ii. the agreements listed on Schedule 1.1(D) attached hereto
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(collectively, the "Excluded Agreements");
iii. any real property;
iv. any of the Intellectual Property listed on Schedule 1.1(E) attached
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hereto, any Intellectual Property Rights that are the subject of the
Seller License Agreement, and any Shrinkwrap Software;
v. any books or records not relating exclusively to the Mini-Ad Vector
Technology or the Assets (provided, however, that upon the Buyer's
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request the Seller shall provide to Buyer copies of Seller's books and
records which relate, but not exclusively, to the Mini-Ad Vector
Technology or the Assets, redacted to exclude information which does
not relate to the Mini-Ad Vector Technology or the Assets); or
vi. any accounts receivable.
"Assigned Contracts" shall have the meaning assigned thereto in the
definition of "Assumed Liabilities".
"Assumed Liabilities" shall mean liabilities and obligations of the Seller,
other than accounts payable and Excepted Obligations, under any Included
Agreements of the Seller which (a) are validly and effectively assigned to the
Buyer under this Agreement and (b) conform to the representations and warranties
with respect thereto contained in this Agreement (the "Assigned Contracts"),
subject to the following: (i) in the case of rental payments under leases of
personal property, only to the extent that such rental payments relate to
periods after the Closing Date and (ii) in the case of all other obligations
under the Assigned Contracts, only to the extent that the obligation (including
payment) is by its terms first to be performed after the Closing Date.
"Authority" shall mean any Federal, state, municipal, foreign or other
government or governmental department, commission, board, bureau, agency or
instrumentality.
"Business Day" shall mean any day other than (a) a Saturday or Sunday or
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(b) a day on which commercial banks in California are authorized or required by
law to close.
"Buyer" shall have the meaning assigned thereto in the Preamble to this
Agreement.
"Buyer Common Stock" shall mean the common stock of the Buyer, $.001 par
value per share.
"Buyer's Counsel's Opinion" shall mean the opinion of Buyer's legal
counsel, Wilson, Sonsini, Xxxxxxxx & Xxxxxx, with respect to this Agreement,
the other Transaction Documents, and
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the transactions contemplated hereby and thereby, the form and content of which
shall be negotiated after the execution and delivery hereof and prior to the
Closing.
"Buyer Liabilities" shall have the meaning assigned thereto in Section
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2.4(C).
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"Buyer Preferred Stock" shall mean Series B and Series C Convertible
Preferred Stock of Buyer, par value $.001, having rights, preferences and
designations (including a per share liquidation value of $1,000 as set forth on
Exhibit A to this Agreement.
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"Closing Date" shall have the meaning assigned thereto in Section 2.5.
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"Closing" shall have the meaning assigned thereto in Section 2.5.
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"COBRA" shall mean the Consolidated Omnibus Budget Reconciliation Act of
1985.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Contaminants" shall mean any material, pollutant, substance or waste which
is defined in, regulated by, or subject to any Environmental Law, including
asbestos and asbestos containing materials.
"Control" shall mean the possession, directly or indirectly, of the power
to direct or cause the direction of the management and policies of an entity
(other than a natural person), whether through the ownership of voting capital
stock, by contract or otherwise.
"Copyrights" shall mean United States and foreign copyrights, whether
registered or unregistered.
"Credit Agreement" shall mean an annual equity line of credit agreement
between the Buyer and the Seller and dated as of the Closing Date, the
provisions of which shall be negotiated by the parties after the execution and
delivery hereof and prior to the Closing.
"Customized Software" shall mean all Software owned by or licensed to the
Seller and used by the Seller exclusively in connection with the Mini-Ad Vector
Technology, other than Shrinkwrap Software.
"Development Agreement" shall mean a development agreement between the
Buyer and the Seller and dated as of the Closing Date, the provisions of which
shall be negotiated by the parties after the execution and delivery hereof and
prior to the Closing, which shall contain (at a minimum) the terms and
conditions set forth in Exhibit B attached to this Agreement.
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"Distribution Agreement" shall mean a distribution agreement between the
Buyer and the Seller and dated as of the Closing Date, the provisions of which
shall be negotiated by the parties after the execution and delivery hereof and
prior to the Closing, which shall contain (at a minimum) the terms and
conditions set forth in Exhibit C attached to this Agreement.
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"Encumbrance" shall mean any lien, charge, security interest, encumbrance
or claim, whether legal or equitable.
"Environmental Laws" shall mean any and all laws, statutes, codes, rules,
regulations, ordinances, orders, writs, decrees and injunctions of any Authority
relating to the protection or pollution of the environment, or community health
and safety, including the Comprehensive Environmental Response Compensation and
Liability Act, as amended, the Federal Solid Waste Disposal Act, as amended by
the Resource Conservation and Recovery Act and the Hazardous and Solid Waste
Amendments, the Clean Air Act, the Clean Water Act, the Toxic Substances Control
Act, the Safe Drinking Water Act and any similar or analogous statutes,
regulations and decisional law of any Authority.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended, and the rules and regulations promulgated thereunder.
"ERISA Benefit Plans" shall mean any (i) "employee pension benefit plan"
(as such term is defined in Section 3(2) of ERISA), (ii) "multiemployer plan"
(as such term is defined in Section 3(37) of ERISA), or (iii) "welfare benefit
plan" (as such term is defined in Section 3(1) of ERISA).
"Excepted Obligations" shall mean:
(a) any debt, liability or obligation arising from any breach of any
covenant, representation or warranty in any Assigned Contract arising prior to
the Closing;
(b) any debt, liability or obligation arising from any action,
circumstance or omission, occurring or existing on or prior to the Closing Date,
which (with or without notice, the passage of time or both) is, or would become,
a breach of any Assigned Contract on the part of the Seller; and
(c) any debt, liability or obligation arising under any Assigned
Contract as to which the Seller shall already have received any payment or other
consideration, to the extent of fair value of such payment or other
consideration.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder.
"FDA" shall mean the U.S. Food and Drug Administration.
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"Fully Loaded Cost" shall mean for either party, such party's cost of
manufacturing, performing or acquiring any items or services, in accordance with
GAAP and, with respect to each party, in accordance with such party's normal
accounting policies, all consistently applied.
"GAAP" shall mean generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board, applied on a consistent basis.
"Included Agreements" shall have the meaning assigned thereto in the
definition of "Assets".
"Indemnified Party" shall have the meaning assigned thereto in Section
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8.2(F).
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"Indemnifying Party" shall have the meaning assigned thereto in Section
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8.2(F).
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"Information" shall mean confidential ideas, trade secrets, technology,
know-how, inventions (whether or not patentable) and improvements thereto,
concepts, methods, processes, formulae, reports, data, customer lists, mailing
lists, business plans, or other proprietary information.
"Intellectual Property" shall mean Copyrights, Patents, Trademarks,
Information and Software.
"Intellectual Property Right" shall mean any right possessed by any person
or entity which arises as a result of his or its ownership, license or use of,
or of any application for, or application for registration of, any Intellectual
Property.
"Investment Agreement" shall mean an investment agreement between the Buyer
and the Seller and dated as of the Closing Date, the provisions of which shall
be negotiated by the parties after the execution and delivery hereof and prior
to the Closing, which shall contain (at a minimum) the terms and conditions set
forth in Exhibit D attached to this Agreement.
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"Licenses" shall mean licenses, authorizations, authorities, approvals,
permits and certificates.
"Losses" shall mean liabilities, claims, losses, costs, damages, and
expenses (including reasonable attorneys' fees and expenses), whether incurred
in connection with a claim, controversy or dispute between the parties hereto or
between a party hereto and one or more third parties.
"Material Adverse Effect", with respect to the Seller or the Buyer, means a
material adverse effect, or the occurrence or existence of facts or
circumstances that would reasonably be expected to result in a material adverse
effect, on the business, assets, liabilities, results of operations, properties,
financial or operating condition of (i) the Unit, in the case of the Seller, and
(ii) Buyer
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and its subsidiaries taken as a whole, in the case of Buyer, or on the ability
of any such Person (and to the extent applicable, its subsidiaries) to
consummate the transactions contemplated hereunder.
"Mini-Ad Vector Technology" shall mean technology developed by Seller and
relating to adenoviral vectors for gene therapy.
"Mini-Ad Vector Products" shall mean all products which utilize the Mini-Ad
Vector Technology.
"Non-Assumed Liabilities" shall have the meaning assigned thereto in
Section 2.4(A).
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"Non-ERISA Plans" shall mean, in respect of any Person, each and every (i)
employee collective bargaining agreement, employment agreement (other than
employment agreements terminable by such Person without premium or penalty on
notice of 30 days or less under which the only monetary obligation of such
person is to make current wage or salary payments and provide current fringe
benefits), consulting, advisory or service agreement (as to the latter three,
where such person is the recipient of the services); deferred compensation
agreement, confidentiality agreement or covenant not to compete (other than
confidentiality agreements and covenants not to compete contained in agreements
which are required to be disclosed by such Person hereunder), (ii) contract or
agreement with any officer, director or employee (other than employment
agreements disclosed in response to clause (i) or excluded from the scope of
clause (i)), agent, or attorney-in-fact of such Person; or (iii) stock option,
stock purchase, bonus or other incentive plan or agreement.
"Orders" shall mean any order, writ, injunction or decree of any Tribunal
or Authority.
"Patents" shall mean United States and foreign patents, continuations,
continuations-in-part, divisions, reissues, reexaminations, extensions and
disclosures.
"PBGC" shall mean the Pension Benefit Guaranty Corporation.
"Permitted Encumbrances" shall mean (a) liens for taxes and other
governmental charges and assessments which are not yet due and payable, (b)
liens of landlords and liens of carriers, warehousemen, mechanics and
materialmen and other like liens arising in the ordinary course of business for
sums not yet due and payable, (c) liens on deposits or pledges to secure
obligations under workmen's compensation, social security or similar laws and
(d) other liens, encumbrance(s) or imperfections on property which are not
material in amount or do not materially detract from the value of or materially
impair the existing use of the property affected by such lien, encumbrance(s) or
imperfection.
"Person" shall mean any individual, corporation, partnership, limited
partnership, limited liability partnership, joint venture, limited liability
company, association, joint-stock company, trust, unincorporated organization,
Authority or other entity.
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"PTO" shall mean the United States Patent and Trademark Office.
"Purchase Consideration" shall have the meaning assigned thereto in Section
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2.2.
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"Registration Rights Agreement" shall mean a registration rights agreement
between the Buyer and the Seller and dated as of the Closing Date, the
provisions of which shall be negotiated by the parties after the execution and
delivery hereof and prior to the Closing, which shall contain (at a minimum) the
terms and conditions set forth in Exhibit E attached to this Agreement.
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"Representatives" shall mean, with respect to any Person, such Person's
officers, directors, employees, independent contractors, agents and
representatives.
"Round Lake Facility" shall mean the facility, located at WG 2 3S Route 120
& Xxxxxx Road, Round Lake, Illinois, in which the Unit currently conducts
certain of its operations.
"Royalty Agreement" shall mean a royalty agreement between the Buyer and
the Seller and dated as of the Closing Date, the provisions of which shall be
negotiated by the parties after the execution and delivery hereof and prior to
the Closing.
"SEC" shall mean the United States Securities and Exchange Commission.
"SEC Reports" shall mean all forms, reports and documents required to be
filed with the SEC pursuant to the Securities Act or the Exchange Act.
"Securities Act" shall mean the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.
"Security Agreement" shall mean an agreement between Buyer, as grantor, and
Seller, as grantee, to be negotiated after the execution and delivery hereof and
prior to the Closing, pursuant to which the Buyer shall grant to Seller a first
priority security interest in the Intellectual Property Assets for a period
beginning on the Closing Date and ending twenty four (24) months following the
Closing Date.
"Seller" shall have the meaning assigned thereto in the Preamble to this
Agreement.
"Seller License Agreement" shall mean a license agreement between the Buyer
and the Seller, to be negotiated after the execution and delivery hereof, and
prior to the Closing, relating to the non-exclusive licensing by Seller to Buyer
of certain Intellectual Property Rights of Seller (other than the Assets)
existing as of the Closing Date which shall be required by Buyer as currently
utilized by the Unit to research and develop the Mini-Ad Vector Technology and
to make, use and sell the Mini-Ad Vector Products, subject to existing licenses
and agreements by which Seller may be bound.
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"Services Agreement" shall mean an agreement between the Buyer and the
Seller, to be negotiated after the execution and delivery hereof and prior to
the Closing, relating to manufacturing, regulatory and other support services
(other than those covered by the other Transaction Documents) which shall
provide, among other terms to be mutually agreed by the parties, for the Seller
to provide to the Buyer, at its Fully Loaded Cost, certain of such services of
the type which are now rendered by the Seller in respect of the Unit, for a
specified period following the Closing.
"Seyfarth Opinion" shall mean the opinion of Seyfarth, Shaw, Xxxxxxxxxxx &
Xxxxxxxxx, counsel to the Seller, with respect to this Agreement, the other
Transaction Documents, and the transactions contemplated hereby and thereby, the
form and content of which shall be negotiated after the execution and delivery
hereof and prior to the Closing.
"Shrinkwrap Software" shall mean all Software that is available in consumer
retail stores and subject to form shrinkwrap license agreements.
"Software" shall mean computer software programs and software systems,
including, without limitation, all database applications, compilations, tool
sets, compilers, higher level or "proprietary" languages, related documentation
and materials, whether in source code, object code or human readable form.
"Stockholders' Agreement" shall mean a stockholders' agreement by and among
the Seller, the Buyer and certain of the Buyer's stockholders, dated as of the
Closing Date, the provisions of which shall be negotiated by the parties after
the execution and delivery hereof and prior to the Closing, which shall contain
(at a minimum) the terms and conditions set forth in Exhibit F attached to this
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Agreement.
"Subsidiary" shall mean, as to any party, any corporation of which more
than 50% of the outstanding capital stock having ordinary voting power to elect
a majority of the board of directors of such corporation (irrespective of
whether or not at the time stock of any other class or classes of such
corporation shall have or might have voting power by reason of the happening of
any contingency) is at the time directly or indirectly owned by the party, by
one or more of its subsidiaries, or by the party and one or more of its
subsidiaries.
"Taxes" shall mean all taxes, including all Federal, state, local, foreign
and other income, franchise, sales, use, property, payroll, stamp, withholding,
environmental, alternative or add-on minimum and other taxes, assessments,
charges, duties, fees, levies or other governmental charges of any kind
whatsoever, and all estimated taxes, deficiency assessments, additions to tax,
penalties and interest, and any contractual or other obligation to indemnity or
reimburse any person with respect to any such assessment.
"Tax Return" shall mean, in respect of any Person, any report, statement,
return, declaration of estimated Tax or other information required to be
supplied by or on behalf of such Person to a Tax Authority in connection with
Taxes, or with respect to grants of Tax exemption, including any
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consolidated, combined, unitary, joint or other return filed by any person that
properly includes the income, deductions or other Tax information concerning
such Person.
"Third Party Claim" shall mean, in respect of any party hereto, any claim,
or the commencement, or possible commencement, of any Action with respect to
which indemnification is or is reasonably likely to be claimed by such party
pursuant to Section 8.
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"Trademarks" shall mean United States, state and foreign trademarks,
service marks, logos, trade dress and trade names, whether registered or
unregistered.
"Transaction Documents" shall mean the following:
(i) the Distribution Agreement,
(ii) the Registration Rights Agreement,
(iii) the Stockholders' Agreement,
(iv) the Credit Agreement,
(v) the Development Agreement,
(vi) the Seller License Agreement,
(vii) the Services Agreement,
(viii) the Royalty Agreement,
(ix) the Investment Agreement,
(x) the Security Agreement,
(xi) and each of the other agreements, documents and instruments
being, or to be, executed in connection with the transactions
contemplated hereunder.
"Transactional Taxes" shall mean all sales, use, transfer, conveyance, bulk
transfer, business and occupation, value added or other such Taxes, duties,
excises or governmental charges imposed by any taxing jurisdiction.
"Tribunal" shall mean any domestic or foreign court, arbitration board or
other tribunal.
"Unit" shall have the meaning assigned thereto in the Preamble to this
Agreement.
1.2 Interpretation.
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(A) In respect of any of the Seller or the Buyer, the terms "to the
knowledge of" such Person and "awareness of" such party, and variations thereof,
shall be deemed to refer to the actual knowledge and/or awareness (without any
requirement of inquiry) of the Relevant Persons of such Party. In respect of the
Seller, the term "Relevant Persons" shall be deemed to refer to (i) Xxxxxx X.
Xxxxxxx, Xxxxxxx X. Xxxxxxx, Wei-Xxx Xxxxx, MD, Ph.D., Xxxxx X. Xxxxx, and
Xxxxxxx Xxxxxxxxxxx and (ii) any other person who, prior to the Closing Date,
shall succeed to the position or office now held by any of the foregoing persons
in (i). In respect of the Buyer, the term "Relevant Persons" shall be deemed to
refer to (i) Xxxx Xxxxxxx, Xxxx Xxxxxxx, Xxxxxx Xxxxx, and (ii) any other
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person who, prior to the Closing Date, shall succeed to the position or office
now held by any of the foregoing persons in (i).
(B) Whenever in this Agreement the phrase "in the ordinary course of
business" is used, it shall be construed as meaning "in the ordinary course of
business and substantially consistent with prior practice."
(C) Whenever in this Agreement the term "including" is used, it shall
be construed as meaning "including but not limited to."
(D) All accounting terms not specifically defined herein shall be
construed in accordance with GAAP in effect at the Closing.
(E) Whenever in this Agreement the term "agreement" is used, it shall
be deemed to refer to commitments, leases, licenses, contracts and agreements.
(F) Whenever in this Agreement the term "party to" is used in regard
to an agreement, it shall be construed as meaning "party to or bound by".
(G) Whenever in this Agreement the singular is used, it shall include
the plural if the context so requires, and whenever the masculine gender is used
in this Agreement, it shall be construed as if the masculine, feminine or neuter
gender, respectively, has been used where the context so dictates, with the rest
of the sentence being construed as if the grammatical and terminological changes
thereby rendered necessary have been made.
2. Purchase and Sale of the Assets; Closing.
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2.1 Purchase and Sale. In reliance on the representations and warranties
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contained herein and subject to all of the terms and conditions hereof, the
Seller hereby agrees to sell, assign, transfer and deliver (or cause to be sold,
assigned, transferred and delivered) to the Buyer, and the Buyer agrees to
purchase from the Seller, on the Closing Date, all of the Seller's right, title
and interest in and to the Assets. With respect to the immediately preceding
sentence only, the phrase "Seller's right, title and interest in and to the
Assets" shall, with respect to the Intellectual Property Assets, include the
right, title and interest of Seller's parent corporation, Xxxxxx International
Inc., in and to the Intellectual Property Assets. Subject to the Distribution
Agreement, Seller shall hold the tangible Assets at the Round Lake Facility for
a period not to exceed six months from the date of Closing on behalf of Buyer
until Buyer directs Seller in writing to deliver such tangible Assets to Buyer
in California ("Buyer's Notice of Delivery"). Buyer's Notice of Delivery shall
specify the method of delivery and destination, and the Assets will be delivered
by Seller FOB the Round Lake Facility per Buyer's Notice of Delivery. Until the
tangible Assets are delivered to Buyer as provided for in this Section 2.1, the
Seller shall be responsible for storing and maintaining the tangible assets in
good working order, with any extraordinary costs of maintenance subject to the
pre-approval of Buyer, and the Buyer shall reimburse the Seller for the Seller's
Fully Loaded Costs for such storage and
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maintenance. Buyer and Seller shall bear equally the costs for de-installing,
packing and shipping the tangible Assets to Buyer.
2.2 Purchase Consideration. In consideration of the sale, assignment and
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transfer of the Assets pursuant to Section 2.1 hereof, Buyer agrees to issue to
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the Seller Seven Million Five Hundred Forty-Three Thousand Four Hundred Thirty
(7,543,430) shares of Buyer Common Stock, or such greater number of shares of
Buyer Common Stock such that immediately following the Closing Seller will hold
fifty percent (50%) of the outstanding shares of Buyer Common Stock ("Common
Stock Consideration"), which percentage may be adjusted downward for any equity
investment in Buyer prior to the Closing; provided, however, that Seller shall
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have previously approved, in its sole discretion, any such equity investment.
2.3 Payment. At the Closing provided for in Section 2.5 hereof, the Buyer
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shall deliver to the Seller certificates representing the Common Stock
Consideration and such certificates shall bear the legends set forth in the
Registration Rights Agreement and/or the Stockholders Agreement.
2.4 Liabilities.
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(A) Liabilities Not Assumed. Except as specifically provided in
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Section 2.4(B), the Buyer neither assumes nor shall be obligated to pay, perform
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or discharge, and the Seller hereby agrees to pay, perform, discharge or
otherwise satisfy in due course and to hold the Buyer harmless from, any and all
debts, liabilities and obligations of the Seller, whether known or unknown,
fixed, contingent or otherwise, including, without limitation, all Taxes and
liabilities under Environmental Laws relating to or arising from any Seller
operations and/or the Assets up to and including the Closing Date (all such non-
assumed liabilities being hereinafter collectively referred to as the "Non-
Assumed Liabilities").
(B) Assumed Liabilities. In addition to the consideration payable
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pursuant to Section 2.2 hereof, and subject to the terms and conditions set
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forth in this Agreement, effective as of the Closing Date, the Buyer hereby
assumes only the Assumed Liabilities.
(C) Buyer Liabilities. The Seller shall have no liability for any
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obligations of the Buyer that are incurred or arise after the Closing Date
("Buyer Liabilities") except to the extent (i) otherwise provided in this
Agreement or any Transaction Document or (ii) that any such liability arises
from a wrongful act or omission on the part of the Seller, any Affiliate of
Seller or any Representative of any of the foregoing.
2.5 Closing. The closing of the purchase and sale of the Assets hereunder
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(the "Closing") shall be held at the offices of the Buyer, as promptly as
reasonably practicable following the date on which the last of the conditions
set forth in Section 6 has been satisfied or waived in accordance with the terms
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of this Agreement, or on such other date, and at such other time and place, as
the Seller and the Buyer shall mutually agree in writing (the day of occurrence
of the Closing being referred to hereinafter as the "Closing Date").
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3. Representations and Warranties of the Seller. The Seller represents and
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warrants to the Buyer as of the date hereof, and as of the Closing Date, as
follows:
3.1 Good Standing. The Seller is a corporation organized, validly existing
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and in good standing under the laws of the State of Delaware, and with respect
to the Mini-Ad Vector Technology and the Assets, has all necessary corporate
power and authority to own, lease and operate its properties and to carry on its
business as the same is now being conducted. True, accurate and complete copies
of the Certificate of Incorporation and By-Laws of the Seller have been provided
to the Buyer.
3.2 Authority. Subject to the approval of Seller's Board of Directors, the
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Seller possesses full right, corporate power and legal authority to execute and
deliver this Agreement and the Transaction Documents to which the Seller is a
party and to perform each of the agreements and make each of the representations
and warranties on its part to be performed and made hereunder and thereunder.
Subject to the approval of Seller's Board of Directors, the execution and
delivery of this Agreement and the Transaction Documents to which the Seller is
a party and the consummation by it of the transactions contemplated hereby and
thereby have been duly and validly authorized by all necessary corporate action
on the part of the Seller. This Agreement has been duly and validly executed by
the Seller and constitutes, and the Transaction Documents (upon and subject to
their execution and delivery by all parties thereto) shall constitute, the
legal, valid and binding obligations of the Seller enforceable against it in
accordance with their terms subject to the qualification that the enforceability
thereof may be limited by bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and similar laws, now or hereafter in effect,
affecting creditors' rights and except that the availability of equitable
remedies, including specific performance, is subject to the discretion of the
court before which any proceeding for the enforcement thereof may be brought.
Except as set forth on Schedule 3.2, the execution and delivery of this
------------
Agreement and the Transaction Documents to which the Seller is a party and the
performance by it of all of the transactions contemplated herein and therein do
not and shall not (with or without the giving of notice or the passage of time
or both) (A) violate or conflict with the Certificate of Incorporation or By-
laws of the Seller, or (B) (1) violate or conflict with any law, rule, ruling,
determination, ordinance or regulation of any Authority or any condition or
provision of, (2) result in the creation or imposition of any Encumbrance upon
any of the Assets of the Seller pursuant to, (3) accelerate or create, or permit
the acceleration or creation of, any liability or obligation of the Seller
under, or (4) cause a termination under or give rise to a right of termination
under, the terms of, any contract, mortgage, lien, lease, agreement, indenture,
trust, instrument, order, judgment or decree to which the Seller is a party or
which is binding upon the Seller (it being agreed that this subsection (B) shall
be deemed to refer only to the Assets, liabilities, obligations, contracts,
mortgages, liens, leases, agreements, indentures, trusts, instruments, orders,
judgments and decrees which relate to or affect the Mini-Ad Vector Technology,
the Assets and/or the Assumed Liabilities and which are being transferred to,
assumed by or sublicensed to the Buyer, as the case may be); provided, however,
that the existence of any such violations, conflicts, encumbrances,
accelerations, creations, terminations or rights of termination shall not be
deemed to be a breach of this Section 3.2 unless, individually
-----------
13
or in the aggregate, they would have a Material Adverse Effect on the Unit or
(subsequent to the Closing) on the Buyer.
3.3 Consents and Approvals. Except as set forth on Schedule 3.2 and
---------------------- ------------
Schedule 3.3 , no other action or consent, whether corporate or otherwise,
------------
including action or consent by any Authority or any other third party, is
necessary in connection with the execution, delivery, validity or enforceability
of this Agreement or the Transaction Documents with respect to the Seller or the
consummation by it of the transactions contemplated hereby and thereby.
3.4 Regulatory Matters.
------------------
(A) Schedule 3.4A sets forth a true and correct list of all foreign
-------------
marketing and clinical authorizations, clearances, approvals and related
submissions, if any, which (i) relate to the Mini-Ad Vector Technology and/or
Mini-Ad Vector Products and (ii) are either (a) submitted and pending, or (b)
cleared and/or approved.
(B) Schedule 3.4B sets forth a true and correct list of all PMA's,
-------------
510(k)'s, IDE's, IND's, MAF's, DMF's, ELA's, PLA's and other FDA related
submissions, if any, which (i) relate to the Mini-Ad Vector Technology and/or
Mini-Ad Vector Products and (ii) are either (a) submitted and pending, or (b)
cleared and/or approved.
3.5 Taxes. Except as set forth in Schedule 3.5:
----- ------------
(A) As a business segment of the Seller, the Unit does not file Tax
Returns;
(B) The Seller has, in respect of the Unit and the Assets, withheld
proper and accurate amounts (including from persons now or previously employed
by the Unit for income Taxes and Social Security and other payroll Taxes) for
all periods in compliance with all relevant Tax laws and other withholding
provisions of all applicable laws; and either paid such amounts to the relevant
Tax Authorities or set them aside in accounts for such purpose; provided,
--------
however, that no failure to so withhold, pay or set aside such Taxes shall
-------
constitute a breach of this Section 3.5(B) unless such failure would have a
--------------
Material Adverse Effect after the Closing on the Buyer;
(C) the Seller has, since its incorporation, been a "C"
corporation, as defined in Section 1361(a) of the Code; and
---------------
(D) to the Seller's knowledge, no transaction contemplated by this
Agreement is subject to withholding under Section 1445 of the Code.
------------
14
3.6 Title; Tangible Personal Property
---------------------------------
(A) Except as set forth in Schedule 3.6(A), each material item of
tangible personal property included in the Assets, as well as each material item
of personal property covered by a lease included in the Included Agreements, is
located at the Round Lake Facility.
(B) Except as set forth in Schedule 3.6(B) hereto, the Seller (or
---------------
with respect to the Intellectual Property Assets, its parent corporation, Xxxxxx
International Inc.) is the sole and exclusive owner of and has good and valid
title to all of the Assets (except for the Biologics, for which the Seller makes
no representation or warranty and which are being sold to Buyer "as is"), free
and clear of all Encumbrances, except for Permitted Encumbrances.
3.7 Intellectual Property.
---------------------
(A) Schedule 3.7(A) contains a list and description of all Patents
---------------
and Trademarks currently owned by or licensed to the Seller (or its parent
corporation, Xxxxxx International Inc.) and which exclusively relate to the
Mini-Ad Vector Technology (separately identifying those which are owned and
those which are licensed and, if not owned by the Seller, identifying the owner
thereof, if any).
(B) Schedule 3.7(B) contains a list and description of all material
---------------
Copyrights (registered or unregistered) owned by or licensed to the Seller and
which exclusively relate to the Mini-Ad Vector Technology (in the case of
licensed Copyrights, identifying the owner thereof and the related work).
(C) Schedule 3.7(C) contains a list of (i) all applications for
---------------
registration of any Intellectual Property (other than Patents) owned by or
licensed to the Seller and which exclusively relate to the Mini-Ad Vector
Technology as well as a list of all existing registrations of any such
Intellectual Property (in either case, identifying the Intellectual Property,
the application or registration number and the jurisdiction thereof) and (ii)
pending applications for any Patents which exclusively relate to the Mini-Ad
Vector Technology where the Seller (or its parent corporation, Xxxxxx
International Inc.) is listed as the owner or is the licensee of any of the
underlying technology (identifying the subject matter of the application, the
relevant application number, the jurisdiction thereof and the owner thereof).
True and correct copies of all such applications and registrations have been
provided to the Buyer.
(D) Schedule 3.7(D) contains a list and description (showing in each
---------------
case the parties thereto and, in the event the same has not been reduced to
writing, the material terms thereof) of all material agreements and licenses to
which the Seller is a party or by which it is bound which entitle the Seller or
a third party to use, or restrict the Seller's or a third-party's use of, (i)
any Copyrights, Patents, Trademarks or Information owned by, licensed to, or
used by, the Seller (or its
15
parent corporation, Xxxxxx International Inc.) exclusively in connection with
the Mini-Ad Vector Technology or (ii) any Customized Software.
(E) Except as disclosed in Schedule 3.7(E): (i) those Intellectual
---------------
Property Assets consisting of Patent, Copyright or Trademark registrations, are
valid and in full force and effect, and (ii) neither the Seller nor its parent
corporation, Xxxxxx International Inc., has received written notice of any
outstanding challenges, by any third party, either to any such Patent, Copyright
or Trademark registrations or to any of the applications described in Section
-------
3.7(C).
------
(F) Except as disclosed in Schedule 3.7(F), the Seller is not aware
---------------
that there now exists any use, by a third party, of any Intellectual Property
which violates any Intellectual Property Right of the Seller (or its parent
corporation, Xxxxxx International Inc.) in the Intellectual Property Assets.
(G) Except as set forth in Schedule 3.7(G), and except for the
---------------
Biologics, (i) to the Seller's knowledge, no infringement of any material
Intellectual Property Right of any other person or entity has occurred or
results in any way from the use, manufacture and sale of the Mini-Ad Vector
Technology or Mini-Ad Vector Products, and (ii) no claim of any infringement by
the Seller of any material Intellectual Property Right of any other person or
entity has been made, asserted or threatened in writing against and to the
Seller (or its parent corporation, Xxxxxx International Inc.) relating to any of
the Intellectual Property Assets. The Seller makes no representation or
warranty with respect to the infringement of third party Intellectual Property
Rights by the Biologics, all of which are being sold to the Buyer "as is."
(H) Schedule 3.7(H), contains a list and description of all Patents
---------------
which are to be licensed by Seller (or its parent corporation, Xxxxxx
International Inc.) to Buyer under the Seller License Agreement.
3.8 Contracts and Commitments.
-------------------------
(A) Except as set forth on Schedule 3.8(A), there is no existing
---------------
material breach of any of the Included Agreements by Seller; to the knowledge of
Seller, and subject to the foregoing, no event has occurred which, with the
lapse of time or the giving of notice or both, is reasonably likely to
constitute a material breach of any such agreement by Seller or give rise to a
right on the part of any of the other parties thereto to terminate such
agreement or to deprive Seller of any material right, or accelerate any of its
material obligations, thereunder.
(B) Except as set forth on Schedule 3.8(B), to the knowledge of
---------------
Seller, there is no existing material breach of any of the Included Agreements
by any party (other than Seller) thereto and no event has occurred which, with
the lapse of time or the giving of notice or both, is reasonably likely to
constitute a material breach thereof by such other party or give rise to a right
on the part of Seller to terminate such agreement or to deprive the other party
of any right, or accelerate any obligation of such party, thereunder.
16
(C) Except as set forth on Schedule 3.8(C), there are no current
---------------
circumstances which create a reasonable probability that Seller will not, or
will be unable to, fulfill any of its material obligations, under any of the
Included Agreements.
(D) Seller has not, during the current term of any insurance policy
which provides coverage with respect to persons, properties or operations of the
Unit, received any notice canceling or threatening to cancel or refusing to
renew, based (to the knowledge of Seller) on reasons relating directly to the
business of the Unit, within the last twelve months.
3.9 Labor Relations. Schedule 3.9 sets forth a list of all of Seller's
--------------- ------------
employees in the Unit whose work relates to the Mini-Ad Vector Technology, none
of whom is subject to union or collective bargaining agreements by which the
Seller is bound or subject. The Seller has not at any time during the last five
years had, nor is there now to the knowledge of the Seller threatened, a strike,
picket, work stoppage, work slowdown, union organizing activity or other labor
trouble that has had or would be reasonably likely to have a Material Adverse
Effect on the Unit.
3.10 Legal Proceedings.
-----------------
(A) Except as set forth on Schedule 3.10(A) attached hereto, there
----------------
are no Actions pending, or to the knowledge of the Seller, threatened against or
affecting the Seller, which relate to the Assets or the Unit; and the Seller is
not in default with respect to any Order which has been issued against the
Seller in connection with the Assets or the Unit. Except as set forth on
Schedule 3.10(A), to Seller's knowledge there are no Orders issued against the
----------------
Seller which relate to the Assets or the Unit.
(B) Except as set forth on Schedule 3.10(B), there are no Actions in
----------------
which the Seller, in connection with the Assets, is either a plaintiff or, if
not a formal proceeding, an aggrieved party or claimant.
3.11 Compliance with Law. Except as set forth in Schedule 3.11, in
------------------- -------------
connection with the operations of the Unit relating to the Assets, (i) the
Seller has complied in all respects with, and (ii) all of the Assets are in
compliance in all respects with, all material laws, orders, rules, and
regulations of each Authority having jurisdiction over the Unit or its
operations or properties, where the failure to so comply would have a Material
Adverse Effect on the Unit.
3.12 Absence of Certain Changes. Except as specifically disclosed in the
--------------------------
SEC Reports filed by Seller on or prior to the date of this Agreement or as set
forth on Schedule 3.12, and except for this Agreement and the Transaction
-------------
Documents, since December 31, 1997, Seller has not entered into any material
transaction, or, in any material respect, conducted business or operations of
the Unit relating to the Mini-Ad Vector Technology or the Assets other than in
the ordinary course of business consistent with past practice.
17
3.13 Compensation. Schedule 3.13 sets forth a true and correct list of the
------------ -------------
(a) names, (b) positions and (c) compensation arrangements (including annualized
salary, bonus and commission arrangements), monetary or otherwise, of all
current employees of the Unit whose work relates to the Mini-Ad Vector
Technology. Except as set forth on Schedule 3.13, to the Seller's knowledge, no
-------------
such employee has provided notice to the Seller with regard to either
cancellation or other termination of his or her relationship with the Seller.
3.14 Books and Records. The books and records of the Seller included in
-----------------
the Assets accurately reflect all material Assets, and all material liabilities
and transactions of the Unit relating to the Mini-Ad Vector Technology.
3.15 Brokers. No broker, finder or other such Person or entity is entitled
-------
to receive a finder's or broker's fee or commission with respect to the
transactions contemplated hereby based on arrangements made by or on behalf of
the Seller.
3.16 Benefits Received. The Seller has not:
-----------------
(A) received any payment or other consideration for any products or
services that the Buyer will be obligated hereunder to deliver; or
(B) received any payment or other benefit for or with respect to any
other obligation that the Buyer will be obligated hereunder to perform.
3.17 Inventory. Attached hereto as Schedule 3.17 is a true and correct
--------- -------------
list describing, for any Included Inventory held by the Seller as of December
31, 1997, the aggregate book value of such Included Inventory as of such date.
3.18 Experience. The Seller is experienced in evaluating companies such as
----------
the Buyer, is able to fend for itself in transactions such as the one
contemplated by this Agreement, has such knowledge and experience in financial
and business matters that it is capable of evaluating the merits and risks of
its prospective investment in the Buyer, and has the ability to bear the
economic risks of the investment.
3.19 Investment. The Seller is acquiring the Buyer Common Stock and will
----------
acquire any Buyer Preferred Stock for investment for the Seller's own account
and not with the view to, or for resale in connection with, any distribution
thereof. The Seller understands that the Buyer Common Stock (and any Buyer
Preferred Stock) to be acquired by Seller has not been and will not be
registered under the Securities Act by reason of a specific exemption from the
registration provisions of the Securities Act which depends upon, among other
things, the bona fide nature of the investment intent as expressed herein. The
Seller further represents that it does not have any contract, undertaking,
agreement or arrangement with any person to sell, transfer or grant
participation to any third person with respect to any of the Buyer Common Stock
(or any Buyer Preferred Stock) to be acquired by Seller. The Seller understands
and acknowledges that the offering and issuance of the
18
Buyer Common Stock pursuant to this Agreement, and any issuance of Buyer
Preferred Stock, will not be registered under the Securities Act on the ground
that the sale provided for in this Agreement and the issuance of securities
hereunder is exempt from the registration requirements of the Securities Act
based on, among other things, the bona fide nature of the investment intent as
expressed herein.
3.20 Rule 144. The Seller acknowledges that the Buyer Common Stock (and
--------
any Buyer Preferred Stock) to be acquired by Seller must be held indefinitely
unless subsequently registered under the Securities Act or an exemption from
such registration is available. The Seller is aware of the provisions of Rule
144 promulgated under the Securities Act which permit limited resale of certain
securities purchased in a private placement subject to the satisfaction of
certain conditions. In connection therewith, the Seller acknowledges that the
Buyer will make a notation on its stock books regarding the restrictions on
transfers set forth in this Section 3.20 and will transfer securities on its
------------
books only to the extent not inconsistent therewith and with the Stockholders'
Agreement. The Seller acknowledges that all shares representing Buyer Common
Stock (and any Buyer Preferred Stock) to be acquired by Seller will bear
appropriate restrictive legends reflecting the transfer restrictions reflected
in this Section 3.20 as well as in the Stockholders' Agreement.
------------
3.21 No Public Market. The Seller understands that no public market now
----------------
exists for the securities of the Buyer; that it is not expected that a public
market will ever exist for the Buyer Preferred Stock; and that it is uncertain
whether a public market will ever exist for the Buyer Common Stock.
3.22 Access to Data. For purposes of satisfying the applicable
--------------
requirements for exemption from registration relating to the issuance of the
Buyer Common Stock, the Seller acknowledges that it has received and reviewed
information about the Buyer and has had an opportunity to discuss Buyer's
business, management and financial affairs with its management and to review
their facilities.
3.23 Full Disclosure. Without limiting any of the foregoing, no
---------------
representation or warranty by the Seller herein and no other written statement
or certificate furnished by or on behalf of the Seller to the Buyer or its
Representatives pursuant to this Agreement or in connection with the
transactions contemplated hereby contains any untrue statement of a material
fact or omits to state a material fact necessary in order to make the statements
contained herein or therein not misleading. There is no fact known to the Seller
that has not been disclosed in this Agreement which would reasonably be expected
to materially and adversely affect the ability of the Seller to perform its
obligations under this Agreement.
4. Representations and Warranties of the Buyer. The Buyer represents and
-------------------------------------------
warrants to the Seller as of the date hereof, and as of the Closing Date, as
follows:
4.1 Good Standing. The Buyer is a corporation organized, validly existing
-------------
and in good standing under the laws of the State of Delaware, with all necessary
corporate power and authority
19
to own, lease and operate its properties and to carry on its business as the
same is now being conducted. True, accurate and complete copies of the
Certificate of Incorporation and By-Laws of the Buyer have been provided to the
Seller.
4.2 Authority. The Buyer possesses full right, corporate power and legal
---------
authority to execute and deliver this Agreement and the Transaction Documents to
which the Buyer is a party and to perform each of the agreements and make each
of the representations and warranties on its part to be performed and made
hereunder and thereunder. The execution and delivery of this Agreement and the
Transaction Documents to which the Buyer is a party and the consummation by it
of the transactions contemplated hereby and thereby have been duly and validly
authorized by all necessary corporate action on the part of the Buyer. This
Agreement has been duly and validly executed by the Buyer and constitutes, and
the Transaction Documents (upon and subject to their execution and delivery by
all parties thereto) shall constitute, the legal, valid and binding obligations
of the Buyer enforceable against it in accordance with their terms subject to
the qualification that the enforceability thereof may be limited by bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and similar laws,
now or hereafter in effect, affecting creditors' rights and except that the
availability of equitable remedies, including specific performance, is subject
to the discretion of the court before which any proceeding for the enforcement
thereof may be brought. Except as set forth on Schedule 4.2, the execution and
------------
delivery of this Agreement and the Transaction Documents to which the Buyer is a
party and the performance by it of all of the transactions contemplated herein
and therein do not and shall not (with or without the giving of notice or the
passage of time or both) (A) violate or conflict with the Certificate of
Incorporation or By-laws of the Buyer, or (B) (1) violate or conflict with any
law, rule, ruling, determination, ordinance or regulation of any Authority or
any condition or provision of, (2) result in the creation or imposition of any
Encumbrance upon any of the property or assets of the Buyer pursuant to, (3)
accelerate or create, or permit the acceleration or creation of, any liability
or obligation of the Buyer under, or (4) cause a termination under or give rise
to a right of termination under, the terms of any contract, mortgage, lien,
lease, agreement, indenture, trust, instrument, order, judgment or decree to
which the Buyer is a party or which is binding upon the Buyer; provided,
--------
however, that the existence of any such violations, conflicts, encumbrances,
-------
accelerations, creations, terminations or rights of termination shall not be
deemed to be a breach of this Section 4.2 unless, individually or in the
-----------
aggregate, they would have a Material Adverse Effect on the Buyer.
4.3 Consents and Approvals. Except at set forth on Schedule 4.3, no other
---------------------- ------------
action or consent, whether corporate or otherwise, including action or consent
by any Authority, is necessary in connection with the execution, delivery,
validity or enforceability of this Agreement or the Transaction Documents with
respect to the Buyer or the consummation by it of the transactions contemplated
hereby and thereby.
4.4 Capitalization. Except as set forth on Schedule 4.4, the authorized
-------------- ------------
capital stock of the Buyer consists, or will consist prior to the Closing, of
(a) Forty Million (40,000,000) shares of Buyer Common Stock, of which Seven
Million Five Hundred Forty-Three Thousand Four Hundred Thirty (7,543,430) shares
are issued and outstanding on the date of this Agreement and (b) Five
20
Million (5,000,000) shares of preferred stock, of which no shares are issued and
outstanding on the date of this Agreement. Except as set forth on Schedule 4.4
------------
or as specified in the Exhibits hereto, there are no other issued or outstanding
securities or equivalents thereof of the Buyer. Except as set forth on Schedule
--------
4.4 or as specified in the Exhibits hereto, there are no outstanding obligations
---
of the Buyer to repurchase, redeem or otherwise acquire any securities of the
Buyer, other than the Buyer's obligation to convert the Buyer Convertible
Preferred Stock into shares of Buyer Common Stock.
4.5 Valid Issuance of Buyer Common Stock, and Buyer's Preferred Stock.
-----------------------------------------------------------------
The shares of Buyer Common Stock representing the Common Stock Consideration,
when authorized, issued and delivered in accordance with the terms of this
Agreement for the consideration expressed herein, will be duly and validly
authorized and issued, fully paid, and nonassessable, and will be free of
restrictions on transfer, other than restrictions on transfer under this
Agreement, the Stockholders' Agreement and the other Transaction Documents and
under applicable state and Federal securities laws. Immediately following
issuance at Closing, the Common Stock Consideration shall represent 50% of the
Buyer Common Stock then issued and outstanding. The Buyer Preferred Stock has
been duly authorized and validly reserved for issuance and, upon issuance and
receipt of payment therefor, in accordance with the terms of the Transaction
Documents, will be duly and validly authorized and issued, fully paid and
nonassessable, and will be free of restrictions on transfer other than
restrictions on transfer under this Agreement, the Stockholders' Agreement and
the other Transaction Documents and under applicable state and Federal
securities laws.
4.6 Taxes.
-----
(A) Except as set forth on Schedule 4.6, all Tax Returns required to
------------
be filed by Buyer have been properly completed and filed on a timely basis and
in correct form on or prior to the date hereof. As of the time of filing, the
foregoing Tax Returns correctly reflected the facts regarding the income,
business, assets, operations, activities, status or other matters of Buyer or
any other information required to be shown thereon, and no extension of time
within which to file any such Tax Return has been requested or granted.
(B) With respect to all amounts in respect of Taxes imposed upon
Buyer, or for which Buyer could be liable, whether to taxing Authorities or to
other persons or entities, with respect to all taxable periods or portions of
periods ending on or before the Closing Date, all applicable tax laws and
agreements have been fully complied with, and all such amounts required to be
paid by Buyer, to taxing Authorities or others, on or before the date hereof
have been paid.
4.7 Brokers. No broker, finder or other such Person or entity is entitled
-------
to receive a finder's or broker's fee or commission with respect to, the
transactions contemplated hereby based on arrangements made by or on behalf of
the Buyer.
4.8 SEC Documents; Financial Statements. Buyer has furnished or made
-----------------------------------
available to the Seller true and complete copies of all reports or registration
statements filed by it with the SEC under
21
the Exchange Act for all periods since January 1, 1996, all in the form so filed
(all of the foregoing being collectively referred to as the "SEC Documents"). As
of their respective filing dates, the SEC Documents complied in all material
respects with the requirements of the Securities Act, or the Exchange Act, as
the case may be, and none of the SEC Documents contained any untrue statement of
a material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements made therein, in light of the
circumstances in which they were made, not misleading, except to the extent
corrected by a document subsequently filed with the SEC. The financial
statements of Buyer, including the notes thereto, included in the SEC Documents
(the "Buyer Financial Statements") comply as to form in all material respects
with applicable accounting requirements and with the published rules and
regulations of the SEC with respect thereto, have been prepared in accordance
with GAAP consistently applied (except as may be indicated in the notes thereto
or, in the case of unaudited statements, as permitted by Form 10-Q of the SEC)
and present fairly the financial position of Buyer at the dates thereof and the
results of its operations and cash flows for the periods then ended (subject, in
the case of unaudited statements, to normal audit adjustments). There has been
no change in Buyer accounting policies except as described in the notes to the
Buyer Financial Statements.
4.9 Absence of Certain Changes. Since the Interim Financial Statement
--------------------------
Date, except as set forth on Schedule 4.9, and except for this Agreement and the
------------
Transaction Documents, Buyer has not entered into any material transaction, or,
in any material respect, conducted its business or operations other than in the
ordinary course of business consistent with past practice. Since the Interim
Financial Statement Date, Buyer has not suffered or had any adverse change in
its business, results of operations, assets or financial condition, other than
those changes that are in the ordinary course of business, none of which
(individually or in the aggregate) would have, or constitute, a Material Adverse
Effect on Buyer.
4.10 Legal Proceedings.
-----------------
(A) Except as set forth on Schedule 4.10 attached hereto, there are
-------------
no Actions pending, or to the knowledge of Buyer, threatened, against or
affecting Buyer or any Subsidiary of Buyer; and neither Buyer nor any Subsidiary
of Buyer is in default with respect to any Order which has been issued against
it. Except as set forth on Schedule 4.10, there are no Orders issued against
-------------
Buyer or any Subsidiary of Buyer.
(B) Except as set forth on Schedule 4.10, there are no Actions in
-------------
which Buyer or a Subsidiary of Buyer is either a plaintiff or, if not a formal
proceeding, an aggrieved party or claimant.
4.1 Compliance with Law. Except as set forth on Schedule 4.11, Buyer and
------------------- -------------
each Subsidiary of Buyer has complied in all material respects with, and each
such entity and all of its properties are in compliance in all material respects
with, all material laws, orders, rules, and regulations of each Authority having
jurisdiction over such entity or its operations or properties.
22
4.12 Contracts and Commitments.
-------------------------
(A) Except as set forth on Schedule 4.12(A), there is no existing
----------------
material breach of any contract or agreement to which Buyer or any Subsidiary of
Buyer is a party by Buyer or the relevant Subsidiary of Buyer; to the knowledge
of Buyer, and subject to the foregoing, no event has occurred which, with the
lapse of time or the giving of notice or both, is reasonably likely to
constitute a material breach of any such agreement by Buyer or the relevant
Subsidiary of Buyer or give rise to a right on the part of any of the other
parties thereto to terminate such agreement or to deprive Buyer or the relevant
Subsidiary of Buyer of any material right, or accelerate any of its material
obligations, thereunder.
(B) Except as set forth on Schedule 4.12(B), to the knowledge of
----------------
Buyer, there is no existing material breach of any contract or agreement to
which Buyer or any Subsidiary of Buyer is a party by any party (other than Buyer
and the relevant Subsidiary of Buyer) thereto and no event has occurred which,
with the lapse of time or the giving of notice or both, is reasonably likely to
constitute a material breach thereof by such other party or give rise to a right
on the part of Buyer or the relevant Subsidiary of Buyer to terminate such
agreement or to deprive the other party of any right, or accelerate any
obligation of such party, thereunder.
(C) Except as set forth on Schedule 4.12(C), to the knowledge of
----------------
Buyer, there are no current circumstances which create a reasonable probability
that Buyer or any Subsidiary of Buyer will not, or will be unable to, fulfill
any of its material obligations, under any material agreement to which it is a
party.
(D) Buyer (or the relevant Subsidiary of Buyer, in the case of
insurance held by a Subsidiary of Buyer) has not, during the current term of any
insurance policy which provides coverage with respect to persons, properties or
operations of Buyer or any Subsidiary of Buyer, received any notice canceling or
threatening to cancel or refusing to renew, based (to the knowledge of Buyer) on
reasons relating directly to the business of Buyer or any Subsidiary of Buyer,
any such policy, and no policy insuring any such persons, properties or
operations has, based (to the knowledge of Buyer) on reasons relating directly
to the business if Buyer or any Subsidiary of Buyer, been canceled by the
insurer within the last twelve months.
4.13 Intellectual Property.
---------------------
(A) Schedule 4.13(A) contains a list and description of all Patents
----------------
and Trademarks currently owned by or licensed to Buyer or any Subsidiary of
Buyer (separately identifying those which are owned and those which are licensed
and, if not owned by such entity, identifying the owner thereof, if any).
(B) Schedule 4.13(B) contains a list and description of all material
----------------
Copyrights (registered or unregistered) licensed to Buyer or any Subsidiary of
Buyer (identifying the owner thereof and the related work).
23
(C) Schedule 4.13(C) contains a list of (i) all applications for
----------------
registration of any Intellectual Property owned by or licensed to Buyer or any
Subsidiary of Buyer as well as a list of all existing registrations of any such
Intellectual Property (in either case, identifying the Intellectual Property,
the application or registration number and the jurisdiction thereof) and (ii)
pending applications for any Patents where Buyer or any Subsidiary of Buyer is
listed as the owner or is the licensee of any of the underlying technology
(identifying the subject matter of the application, the relevant application
number, the jurisdiction thereof and the owner thereof). True and correct
copies of all such applications and registrations have been provided to the
Seller.
(D) Schedule 4.13(D) contains a list of all material documents
----------------
relating to product clearances relating to Patent infringement performed by or
on behalf of Buyer or any Subsidiary of Buyer. Buyer has delivered to the
Seller true and correct copies of all such documents, if any.
(E) Schedule 4.13(E) contains a list (showing in each case the parties
----------------
thereto and, in the event the same has not been reduced to writing, the material
terms thereof) of all material agreements and licenses to which Buyer or any
Subsidiary of Buyer is a party or by which it is bound which entitle Buyer or
any Subsidiary of Buyer or a third party to use, or restrict Buyer's or any
Subsidiary of Buyer's or a third-party's use of, any Copyrights, Patents,
Trademarks or Information owned by, licensed to, or used by, Buyer or any
Subsidiary of Buyer. Buyer has delivered to the Seller true and correct copies
of all such documents, if any.
(F) Except as disclosed in Schedule 4.13(F): (i) to the knowledge of
----------------
Buyer, all Patents, and all Copyright and Trademark registrations, owned by
Buyer or any Subsidiary of Buyer are valid and in full force and effect, and
(ii) Buyer has not received written notice of any outstanding challenges, by any
third party, either to any such Patents or registrations or to any of the
applications described in Section 4.13(C).
---------------
(G) Except as disclosed in Schedule 4.13(G), Buyer is not aware that
----------------
there now exists any use, by a third party, of any Intellectual Property which
violates any material Intellectual Property Right of Buyer or any Subsidiary of
Buyer.
(H) Except as set forth in Schedule 4.13(H), (i) to Buyer's knowledge,
----------------
no infringement of any material Intellectual Property Right of any other person
or entity has occurred or results in any way from the current operations of
Buyer or any Subsidiary of Buyer, and (ii) no claim of any infringement by Buyer
or any Subsidiary of Buyer of any material Intellectual Property Right of any
other person or entity has been made, asserted or threatened in writing against
and to Buyer or any Subsidiary of Buyer.
4.14 Environmental Matters.
---------------------
(A) Schedule 4.14(A) lists all written notices received by Buyer or
----------------
any Subsidiary of Buyer of violations of Environmental Laws or environmental
claims from environmental Authorities since January 1, 1993. Buyer has
delivered to the Seller true and correct copies of all
24
such notices, claims and reports, as well as all reports of Buyer or any
Subsidiary of Buyer filed with such Authorities since such date.
(B) Except as set forth in Schedule 4.14(B), to the knowledge of
----------------
Buyer, (i) there has been no release or discharge by Buyer (or any other Person)
of any Contaminant in or on any facility of Buyer or any Subsidiary of Buyer (or
the land upon which it is situated) and (ii) there otherwise exist no
Contaminants on or in any such real property of Buyer or any Subsidiary of
Buyer, in any material quantity, which, in either case, would (a) constitute or
have constituted a material violation of any Environmental Law, or (b) give rise
to an obligation on the part of Buyer or any Subsidiary of Buyer, its assigns or
successors in interest to effect an environmental cleanup or remediation.
4.15 Labor Relations. Buyer and its Subsidiaries collectively employ ___
---------------
employees, none of whom is subject to union or collective bargaining agreements
by which such entity is bound or subject. None of such entities has, at any
time during the last five years, had, nor is there now to the knowledge of Buyer
threatened, a strike, picket, work stoppage, work slowdown, union organizing
activity or other labor trouble that has had or would be reasonably likely to
have a Material Adverse Effect on Buyer.
4.16 Employee Benefit Plans.
----------------------
(A) Except as set forth in Schedule 4.16(A), neither Buyer nor any
----------------
Subsidiary of Buyer is a party to or bound by any oral or written Non-ERISA
Plans.
(B) Except as set forth in Schedule 4.16(B), Buyer and each Subsidiary
----------------
of Buyer does not maintain, has never maintained, is not required to contribute
to, and has never been required to contribute to or pay any amount with respect
to, and has no liability with respect to any ERISA Benefit Plans. Except as set
forth in Schedule 4.16(B), and, to the best of Buyer's knowledge, each of the
----------------
plans described in Schedule 4.16(B) that is an ERISA Benefit Plan ("Buyer Group
----------------
ERISA Benefit Plan") complies in form and is operated in all material respects
in accordance with the requirements of ERISA and, where applicable, the Code.
Buyer and, to the knowledge of Buyer, each Subsidiary of Buyer, as applicable,
has complied with the health care continuation requirements of Section 601, et.
seq., of ERISA with respect to its employees and their spouses, former spouses
and dependents.
(C) Except as set forth on Schedule 4.16(C), Buyer has delivered to
----------------
the Seller, with respect to each Buyer Group ERISA Benefit Plan, correct and
complete copies of (i) all plan documents and amendments, trust agreements and
insurance contracts and policies, (ii) the current and, to the extent available,
the prior summary plan description, (iii) the most recent financial statements,
if any, and (iv) where applicable, a determination letter of the Internal
Revenue Service evidencing the plan's qualification under the Code.
25
(D) Neither Buyer nor any Subsidiary of Buyer has any obligations
under any Buyer Group ERISA Benefit Plan or otherwise to provide health benefits
to former employees of Buyer or any Subsidiary of Buyer, except as specifically
required by law. Neither Buyer nor any Subsidiary of Buyer has any liability,
potential or otherwise, under Section 4069 or Section 4212(c) of ERISA. Neither
Buyer nor any Subsidiary of Buyer has ever made a contribution to a voluntary
employees' beneficiary association described in Section 501(c)(9) of the Code.
(E) Neither Buyer nor, to the knowledge of Buyer, any Subsidiary of
Buyer or any other "disqualified person" (within the meaning of Section 4975 of
the Code) or "party in interest" (within the meaning of Section 3(14) of ERISA)
has engaged in any "prohibited transaction" (within the meaning of Section 4975
of the Code or Section 406 of ERISA) with respect to any Buyer Group ERISA
Benefit Plan which could subject any such Plan (or its related trust) or Buyer
or any Subsidiary of Buyer or any officer, director or employee of Buyer or any
Subsidiary of Buyer to the penalty or tax under Section 402(i) or Section 402(1)
of ERISA or Section 4975 of the Code.
(F) There is no pending or, to the knowledge of Buyer, threatened
claim which alleges any violation of ERISA or any other law (i) by or on behalf
of any Buyer Group ERISA Benefit Plan or (ii) by any employee of Buyer or any
Subsidiary of Buyer or any plan participant or beneficiary against any such
plan.
(G) There does not now exist (and has not in the past existed) an
"employee pension benefit plan," as defined in Section 3(2) of ERISA, maintained
by Buyer or any Subsidiary of Buyer or to which Buyer or any Subsidiary of Buyer
contributes or is required to contribute (or contributed or was required to
contribute in the past), including any multiemployer employee pension benefit
plan, other than an individual account plan within the meaning of Section 3(34)
or ERISA.
(H) Except as set forth on Schedule 4.16(H), there has been no
----------------
complete or partial termination of any Buyer Group ERISA Benefit Plan and no
action taken by Buyer or its Affiliates at any time during the three years
preceding the Closing date which has or will result in termination of any
employee benefit plan in effect during such period; nor has there been any
"reportable event," as such term is defined in Section 4043(c) of ERISA and the
regulations promulgated thereunder, with respect to any Buyer Group ERISA
Benefit Plan; and except by reason of discontinuance of any Buyer Group ERISA
Benefit Plan as a result of or following the transactions contemplated by this
Agreement, no Buyer Group ERISA Benefit Plan or other employee plan, arrangement
or agreement of Buyer or any Subsidiary of Buyer provides for additional or
accelerated payments or other consideration to be made on account of the
transactions contemplated by this Agreement.
4.17 Books and Records. Except as set forth in Schedule 4.17, all of the
----------------- -------------
books and records of Buyer and each Subsidiary of Buyer (including all minute
books and stock records) are accurate and complete in all material respects, are
kept in the ordinary course of business and are maintained at the principal
offices of Buyer or the relevant Subsidiary of Buyer.
4.18 Subsidiaries of Buyer. The Buyer has no Subsidiaries.
---------------------
26
4.19 Experience. Buyer is experienced in evaluating companies, technology
----------
and businesses such as the Mini-Ad Vector Technology and the business of the
Unit relating to the Mini-Ad Vector Technology and is able to fend for itself in
transactions such as the one contemplated by this Agreement, has such knowledge,
sophistication, and experience in financial and business matters that it is
capable of evaluating the merits and risks of (i) the acquisition and assumption
of the Assets and the Assumed Liabilities pursuant to the terms and conditions
of this Agreement and (ii) its prospective investment as contemplated by the
Transaction Documents, and has the ability to bear the economic risks of the
investment.
4.20 Full Disclosure. Without limiting any of the foregoing, no
---------------
representation or warranty by Buyer herein and no other written statement or
certificate furnished by or on behalf of Buyer to the Seller or its
Representatives pursuant to this Agreement or in connection with the
transactions contemplated hereby contains any untrue statement of a material
fact or omits to state a material fact necessary in order to make the statements
contained herein or therein not misleading. There is no fact known to Buyer
that has not been disclosed in this Agreement which (i) has had, or would
reasonably be expected to have, a Material Adverse Effect on Buyer or (ii) which
would reasonably be expected to materially and adversely affect the ability of
Buyer to perform its obligations under this Agreement.
5. Certain Covenants and Agreements.
--------------------------------
5.1 Pre-Closing Covenants.
---------------------
(A) Covenants of the Seller. From the date hereof (except as set
-----------------------
forth in Section 5.1(A) (vii) below) until the Closing Date, the Seller
--------------------
covenants that it shall do the following (it being agreed by Buyer that it shall
not unreasonably withhold its consent, which shall not be valid unless in
writing, to any proposed departures, by the Seller, from the provisions of
Sections 5.1(A)(ix)-(xv) below):
------------------------
(i) preserve and maintain its corporate existence and good
standing in the jurisdiction of its incorporation and in the State of Illinois;
(ii) maintain, keep and preserve, in all material respects,
all of the Assets;
(ii) keep reasonably adequate books and records with respect
to the Assets;
(iv) maintain the insurance policies in effect as of the date
of this Agreement which relate to the Assets;
(v) comply (with respect to the persons, assets and operations of
the Unit), in all material respects, with all applicable laws, rules,
regulations and orders;
27
(vi) at any reasonable time and from time to time, (a) permit the
Buyer, or any agent or representative of either, to examine and make copies and
abstracts from any and all of the Seller's records and books relating to the
Assets and visit and inspect any and all of the Assets and (b) make available
its officers and employees to discuss with the Buyer and its representatives the
Assets and the Mini-Ad Vector Technology;
(vi) in the event and to the extent, that events or circumstances
occur or arise, or the Seller becomes aware of events or circumstances, which
render any of the representations and warranties set forth in Section 3 hereof
---------
inaccurate, and without limiting in any way the Buyer's rights under Section
-------
6.1, promptly notify the Buyer thereof by delivering to Buyer new, updated or
amended (and black-lined) Schedules relating to such events or circumstances;
(vi) exercise commercially reasonable efforts to: (a) preserve
intact, in all material respects, the Assets, and (b) keep available the
services of the Designated Employees (as that term is defined in Section
-------
5.1(B)(iv) below);
----------
(ix) not mortgage, pledge or subject any of the Assets to any
Encumbrance, other than Permitted Encumbrances;
(x) not sell, transfer or otherwise dispose of any of the
Assets, except in connection with (i) the sale of inventory in the ordinary
course of business or (ii) the sale or other disposal in the ordinary course of
business of any of the Other Assets no longer needed for the operation of the
Unit without reasonable prior written notice to Buyer;
(xi) not waive, release or compromise any material claims or
rights of the Seller relating to the Assets;
(xii) not, except in the ordinary course of business, increase
the compensation (including severance and termination pay) payable to any
employees of the Unit; or enter into any agreement with any employee of the Unit
providing for a salary in excess of $50,000 per year;
(xiii) not amend or terminate any Included Agreement, other than
in the ordinary course of business and provided that such amendment or
termination would not have a Material Adverse Effect on the Unit;
(xiv) except as set forth on Schedules 3.7(A)-(H), inclusive,
not abandon or forfeit any Intellectual Property, or any application for
protection or registration of any Intellectual Property, included in the Assets;
and
(xv) provide such assistance as may be reasonably requested by
the Buyer in connection with the employment by the Buyer of the Designated
Employees (as that term is
28
defined in Section 5.1(B)(iv) below) and provide the applicable severance
benefits for those employees of the Unit who are not Designated Employees.
(B) Covenants of Buyer. From the date hereof (except as set forth in
------------------
Section 5.1(B)(vi) below) until the Closing Date, Buyer covenants that it shall,
and shall (except with respect to item (vi) below) cause each Subsidiary of
Buyer to:
(i) continue to operate, in all material respects, in the
ordinary course of business;
(ii) provide to the Seller copies of all management letters,
audit letters and reports, including all drafts or preliminary versions of such
letters and reports, in each case, prepared by its outside auditors in
connection with any audit of its internal controls and procedures;
(iii) not issue, deliver or sell, or authorize or propose to
issue, deliver or sell (whether through the granting of options, warrants,
commitments, subscriptions, rights to purchase or otherwise), any shares of its
capital stock of any class or series, or any other securities in excess of two
percent (2%) of such class or series of stock, other than options, warrants,
commitments, subscriptions or rights to purchase under plans or arrangements
existing as of the Closing Date in aggregate amounts as set forth in Schedule
--------
4.4, and provided that any such issuance, delivery or sale of stock shall not
---
reduce the Seller's Common Stock Consideration to less the percentage of the
outstanding Buyer Common Stock determined pursuant to the provisions of Section
-------
2.2.
---
(iv) designate to the Seller those employees of the Unit whose
services (as newly-hired employees) the Buyer is interested in employing
subsequent to the Closing (such people as may be so designated by the Buyer from
time to time prior to Closing, and whom Seller agrees may be employed by the
Buyer subsequent to the Closing, being referred to as the "Designated
Employees"), and offer to each such Designated Employee employment at a salary
comparable to such Designated Employee's current salary with the Seller, and
fund the cost of such Designated Employee's relocation expenses in connection
with such employment by the Buyer;
(v) at any reasonable time and from time to time, (a) permit
the Seller, or any representative or agent of the Seller, to examine and make
copies and abstracts from any and all of its records and books and visit and
inspect any and all of its assets and properties and (b) make available its
officers, employees and independent accountants to discuss with the Seller and
its representatives its affairs, finances and accounts; and
(vi) in the event and to the extent, that events or
circumstances occur or arise, or Buyer becomes aware of events or circumstances,
which render any of the representations and warranties set forth in Section 4
hereof inaccurate, and without limiting in any way the Seller's rights under
Section
-------
6.2, promptly notify the Seller thereof by delivering to the Seller new, updated
---
or amended (and black-lined) Schedules relating to such events or circumstances.
29
(C) Filings. The Buyer and the Seller shall each (and shall each
-------
cause their Affiliated entities, as appropriate, to) (i) promptly take all such
action as may be necessary under any laws applicable to or necessary for, and
will file and, if appropriate, use their reasonable best efforts to have
declared effective or approved, all documents and notifications with all
Authorities which they deem necessary or appropriate for, the consummation of
the transactions contemplated hereby and, (ii) promptly give any other party
hereto information requested by such other party pertaining to it and its
Subsidiaries and Affiliates which is reasonably necessary to enable such other
party to take such actions and file in a timely manner all reports and documents
required to be so filed by or under applicable laws.
(D) Plan for Designated Employees. The Buyer and the Seller shall
-----------------------------
develop a mutually agreeable plan for the issuance of options to purchase Buyer
Common Stock to Designated Employees who are employed by the Buyer subsequent to
the Closing.
(E) Due Diligence. Each party shall give the other party's officers,
-------------
employees, attorneys, consultants and accountants reasonable access during
normal business hours to all of the properties, books, contracts, documents,
records and personnel of such party as relate to this Agreement, the Transaction
Documents, and the transactions contemplated hereby and thereby, and shall
furnish such information relevant thereto as the other party may reasonably
request, and each party shall cooperate with the representatives of the other
party. Each party hereto shall have completed its due diligence to its
satisfaction by no later than one month after the date hereof.
(F) Buyer shall reimburse Seller for all reasonable non-hemophilia
related expenses which the Unit has incurred since January 1, 1998; provided,
--------
however, that the amount of such reimbursement shall not exceed $35,000 of such
-------
expenses per month during such period; and provided, further, that Buyer shall
-------- -------
not be required to reimburse Seller for such expenses in the event that (i)
Seller's Board of Directors does not approve this Agreement and the transactions
contemplated hereby or (ii) this Agreement is terminated pursuant to Section
-------
13(B) hereof. In the event this Agreement is terminated for any other reason,
-----
Buyer's obligation to reimburse Seller for all reasonable non-hemophilia related
expenses of the Unit shall continue.
5.2 Post-Closing Covenants.
----------------------
(A) Assignability. To the extent that any lease, contract, license,
-------------
agreement, sales or purchase order, commitment, property interest or other asset
included in the Assets, or any claim, right or benefit arising thereunder or
resulting therefrom (each an "Interest") is not capable of being sold, assigned,
transferred or conveyed without the approval, consent, novation or waiver of the
issuer thereof or the other party or parties thereto, or any other third person
(including an Authority), or would be breached in the event of a sale,
assignment, transfer, or conveyance without such approval, consent or waiver,
this Agreement shall not, in the event any such issuer or third party shall
object to such assignment, constitute a sale, assignment, transfer or conveyance
thereof, or an attempted sale, assignment, transfer or conveyance thereof absent
such approval, consent or waiver.
30
At the request of the Buyer, the Seller shall use its commercially reasonable
best efforts, both prior and subsequent to the Closing Date, to obtain all
necessary approvals, consents or waivers necessary to convey to the Buyer each
such Interest as soon as reasonably practicable; provided, however, that the
-------- -------
Seller shall not be required to pay any additional consideration in order to
obtain such approvals, consents or waivers. To the extent any of the approvals,
consents or waivers referred to in this Section 5.2(A) have not been obtained as
--------------
of the Closing, the Seller shall, during the remaining term of such Interest
(and without limiting the Buyer's right to have the Seller persist, post-
Closing, in attempting to obtain any such approval, consent or waiver), exercise
commercially reasonable best efforts to cooperate with the Buyer in any
reasonable and lawful arrangements designed to provide the benefits of such
Interest to the Buyer.
(B) Facilitation of Possession. Subsequent to the Closing, the
--------------------------
Seller, at the request of the Buyer, shall write letters to, and otherwise
communicate with third parties, and do such other reasonable acts and things as
may be necessary or appropriate, to facilitate the gaining of possession by the
Buyer of the Assets.
(C) Intellectual Property. The Seller shall cooperate, and shall
---------------------
cause its Representatives to cooperate, with the Buyer in (i) obtaining,
maintaining, enforcing, defending and confirming the Buyer's ownership of the
Intellectual Property included in the Assets and (ii) enforcing and defending
the Intellectual Property Rights arising from the Intellectual Property Assets.
The Buyer shall reimburse the Seller's reasonable out of pocket costs,
including, without limitation, reasonable attorneys fees, incurred in connection
therewith.
(D) Preferred Stock. Buyer shall not issue or sell any shares of
---------------
Buyer Preferred Stock to any person other than the Seller or an Affiliate of the
Seller, so long as the Seller or any Affiliate of the Seller remains the
beneficial owner of any shares of Buyer Preferred Stock.
(E) Employee Benefit Plans. Buyer shall have adopted employee benefit
----------------------
plans reasonably equivalent to those currently in place for employees of the
Unit by the Closing Date; provided, however that Buyer may elect to continue the
-------- -------
urrent health/medical coverage for the Designated Employees under COBRA until
such time as the Designated Employees are relocated to San Diego.
(F) Books and Records. Seller shall, upon Buyer's request, provide
-----------------
copies of any books and records not exclusively relating to the Mini-Ad Vector
Technology or the Assets, redacted to exclude information which does not relate
to the Mini-Ad Vector Technology or the Assets, which the Buyer has determined
it requires in addition to the books and records it received at Closing. Buyer
shall reimburse Seller for the cost of all such copies made pursuant to this
Section 5.2(F).
--------------
(G) Taxes. To the extent relevant to the Assets and the Unit, Seller
-----
shall (i) provide Buyer with such assistance as may reasonably be required in
connection with the preparation of any Tax Return of Buyer and the conduct of
any audit or other examination by any taxing authority or in connection with
judicial or administrative proceedings for Buyer relating to any
31
liability for Taxes of Buyer and (ii) retain and provide Buyer with all records
or other information in Seller's possession that may be relevant to the
preparation of any Tax Returns, or the conduct of any audit or examination, or
other tax proceeding in each case, relating directly to the Buyer.
(H) Financial Statements. To the extent relevant to the Assets and
--------------------
the Unit, Seller shall (i) provide Buyer with such assistance as may reasonably
be required in connection with the preparation of any financial statements of
Buyer for periods prior to the Closing and (ii) retain and provide Buyer with
all records or other information in Seller's possession that may be relevant to
the preparation of any financial statements of Buyer for periods prior to the
Closing.
6. Conditions to Obligations of the Buyer and the Seller
-----------------------------------------------------
6.1 The Buyer's Conditions.
----------------------
The obligations of the Buyer to consummate the transactions
contemplated hereunder are conditioned upon the following, any or all of which
may be waived by the Buyer in its sole and absolute discretion:
(A) All representations and warranties of the Seller contained in
this Agreement that are qualified as to materiality shall be true and correct on
and as of the Closing Date with the same force and effect as though such
representations and warranties had been made on and as of the Closing Date, and
all representations and warranties of the Seller contained in this Agreement
which are not so qualified shall, in all material respects, be true and correct
on and as of the Closing Date with the same force and effect as though such
representations and warranties had been made on and as of the Closing Date.
(B) The Seller shall, in all material respects, have performed and
complied with all of the covenants and agreements required by or pursuant to
this Agreement, or any Exhibit or instrument delivered pursuant to this
-------
Agreement, to be performed or complied with by it on or prior to the Closing
Date.
(C) The Seller shall have obtained and delivered to the Buyer
consents, in form reasonably satisfactory to the Buyer, executed by every party
(other than the Seller) to every material Included Agreement to which the Seller
becomes a party after the date hereof whose consent to the assignment and
delegation of such agreement to the Buyer is required in order to avoid a
violation of such agreement.
(D) The Seller and the Buyer shall, simultaneously with the Closing,
have executed and delivered the Transaction Documents.
(E) The Seyfarth Opinion shall, simultaneously with the Closing, have
been delivered to the Buyer.
32
6.2 The Seller's Conditions.
-----------------------
The obligations of the Seller to consummate the transactions
contemplated hereunder are conditioned upon the following, any or all of which
may be waived by the Seller in its sole and absolute discretion:
(A) All warranties and representations of the Buyer contained in this
Agreement that are qualified as to materiality shall be true and correct on and
as of the Closing Date with the same force and effect as though such
representations and warranties had been made on and as of the Closing Date, and
all representations and warranties of the Buyer which are not so qualified
shall, in all material respects, be true and correct on and as of the Closing
Date with the same force and effect as though such representations and
warranties had been made on and as of the Closing Date.
(B) The Buyer shall, in all material respects, have performed and
complied with all of the covenants and agreements required by or pursuant to
this Agreement, or any Exhibit, or instrument delivered pursuant to this
-------
Agreement, to be performed or complied with by it on or prior to the Closing
Date.
(C) The Seller and the Buyer shall, simultaneously with the Closing,
have executed and delivered the Transaction Documents.
(D) The Buyer's Counsel's Opinion shall, simultaneously with the
Closing, have been delivered to the Seller.
(E) Buyer shall have completed a financing of $[ * ] or more from a
third party on terms that are mutually agreeable to the parties hereto.
(F) The execution, delivery and performance of this Agreement and the
transactions contemplated hereby shall have been approved and authorized by the
Board of Directors of the Seller.
6.3 Mutual Conditions.
-----------------
The respective obligations of each party hereto to consummate the
transactions contemplated hereunder are conditioned upon the following:
(A) No order of any court or Authority shall be in effect which
restrains or prohibits the transactions contemplated hereby, and no suit, action
or proceeding by any Authority or other person shall be pending or threatened
which seeks to restrain the consummation, or challenges the validity or
legality, of the transactions contemplated by this Agreement.
(B) All other consents, approvals or orders of any Authority, the
granting of which is required for the lawful consummation of the transactions
contemplated hereby, shall have been
33
obtained; and all other waiting and notification periods specified under
applicable law the termination or expiration of which is necessary for such
consummation shall have been terminated or shall have expired.
(C) The Buyer and the Seller shall have developed a mutually
agreeable plan for the issuance of options to purchase Buyer Common Stock to
Designated Employees who are employed by the Buyer subsequent to the Closing.
7. Deliveries of the Parties.
-------------------------
7.1 The Seller's Deliveries to the Buyer. At the Closing, the Seller
-------------------------------------
shall deliver, or cause to be delivered, to the Buyer the following:
(i) a Xxxx of Sale from the Seller and from each other entity,
if any, which shall then own any Included Inventory or other assets constituting
Assets, each to be in a form reasonably satisfactory to the Buyer;
(ii) a good standing certificate, dated as of a date not more
than five days prior to the Closing Date, as to the corporate existence and good
standing of the Seller, certified by the Secretary of State of Delaware;
(iii) such individual or general contract assignments as Buyer
shall reasonably request;
(iv) all governmental or other third party approvals, consents,
grants, and licenses, if any, required to be procured by the Seller in
connection with the transactions contemplated hereby;
(v) a certificate of the Secretary of the Seller certifying
and including the resolutions of the Board of Directors of Seller authorizing
the execution, delivery and performance of this Agreement and the Transaction
Documents, and the transactions contemplated hereby and thereby, and attesting
to the incumbency and signatures of all officers executing any documents in
connection with the transactions contemplated by this Agreement and the
Transaction Documents;
(vi) an executed copy of each of the Transaction Documents to
which the Seller is a party;
(vii) such other executed assignments, bills of sale,
endorsements, notices, consents, novations, assurances and such other
instruments of conveyance and transfer as counsel for the Buyer shall reasonably
request and as shall be effective to vest in the Buyer the Seller's rights,
title and interest in the Assets;
34
(viii) an executed and notarized assignment of United States
patents/patent applications for each United States patent or patent application
included in the Assets, the form of which assignment shall be reasonably
satisfactory to the Buyer; and
(ix) the Seyfarth Opinion.
7.2 Deliveries of Buyer to the Seller. At the Closing, Buyer shall
----------------------------------
deliver to the Seller the following:
(i) the Common Stock Consideration due at Closing to the
Seller pursuant to Section 2.2 hereof;
-----------
(ii) a good standing certificate, dated as of a date not more
than five days prior to the Closing Date, as to the corporate existence and good
standing of the Buyer, certified by the Secretary of State of the State of
Delaware.
(iii) all governmental or other approvals, consents, grants and
licenses, if any, required to be procured by the Buyer in connection with the
transactions contemplated hereby;
(iv) an executed copy of each of the Transaction Documents to
which the Buyer is a party;
(v) a certificate of the Secretary of the Buyer certifying and
including the resolutions of the Board of Directors authorizing the execution,
delivery and performance of this Agreement and the Transaction Documents, and
the transactions contemplated hereby and thereby, and attesting to the
incumbency and signatures of all officers executing any documents in connection
with the transactions contemplated by this Agreement and the Transaction
Documents; and
(vi) the Buyer's Counsel's Opinion.
8. Survival of Representations: Indemnities.
----------------------------------------
8.1 Survival.
--------
All representations and warranties contained in, or in any certificate
delivered pursuant to or in connection with, this Agreement (the Agreement,
together with such other certificates, being collectively referred to as
"Documents") shall survive the Closing of the transactions contemplated under
this Agreement until one (1) year from the Closing Date. All covenants and
agreements contained in any Document shall survive in accordance with their
terms.
35
8.2 Indemnity.
---------
(A) The Seller agrees to indemnify and hold the Buyer harmless from and
against (i) any and all Losses which the Buyer shall sustain by reason of or in
connection with the breach or inaccuracy of, or failure to comply with, any of
the representations, warranties, covenants or undertakings, contained in any
Document, made by the Seller, (ii) the Non-Assumed Liabilities, (iii) any
broker's or finder's fee or commission due to any brokers with respect to the
transactions contemplated hereby, and (iv) any and all Losses which the Buyer
shall sustain in connection with (a) claims by third parties arising in
connection with the Non-Assumed Liabilities, or (b) claims by third parties that
they are due a broker's or finder's fee or similar compensation with respect to
the transactions contemplated hereby, which claims arise out of actions of the
Seller or any Representative of the Seller. Notwithstanding the foregoing, the
Buyer shall not be entitled to any indemnification under this Section 8.2 (A)
---------------
with respect to any Losses incurred by the Buyer as a result of the breach of
any representation or warranty contained in Section 3 hereof, unless and until
---------
the amount of all Losses arising from breaches of representations and warranties
contained in Section 3 shall, in the aggregate, exceed $100,000, provided,
--------- --------
however, that at the time the aggregate amount of all such Losses exceeds
-------
$100,000, Buyer shall be entitled to indemnification for the full amount of all
such Losses; provided, further, that the immediately preceding limitation shall
-------- -------
not apply in the case of any fraudulent breach.
(B) Buyer agrees to indemnify and hold the Seller harmless from and
against (i) any and all Losses which the Seller shall sustain by reason of or in
connection with the breach or inaccuracy of any of the representations,
warranties, covenants or undertakings contained in any Document, made by the
Buyer, (ii) the Assumed Liabilities, (iii) any broker's or finder's fee or
commission due to any brokers with respect to the transactions contemplated
hereby, and (iv) any and all Losses which the Seller shall sustain in connection
with claims by third parties that they are due a finder's or broker's fee or
similar compensation with respect to the transactions contemplated hereby, which
claims arise out of actions of the Buyer or any of its Representatives;
provided, however, that the Seller shall not be entitled to any indemnification
-------- -------
under this Section 8.2(B) with respect to any Losses incurred by the Seller as a
--------------
result of the breach of any representation or warranty contained in Section 4
hereof, unless and until the amount of all Losses arising from breaches of
representations and warranties contained in Section 4 shall, in the aggregate,
---------
exceed $100,000, provided, however, that at the time the aggregate amount of all
-------- -------
such Losses exceeds $100,000, Seller shall be entitled to indemnification for
the full amount of all such Losses; provided, further, however, that the
-------- -------
immediately preceding limitation shall not apply in the case of any fraudulent
breach.
(C) The Buyer agrees to indemnify and hold the Seller harmless from and
against (i) the Buyer's Liabilities and (ii) any and all Losses which the Seller
shall sustain in connection with claims by third parties arising in connection
with the Buyer's Liabilities (subject to the exceptions set forth in Section
-------
2.4(c) hereof).
------
36
(D) (i) Notwithstanding anything to the contrary contained herein, but
subject in any event to the rest of this Section 8.2(D), the maximum indemnity
--------------
which the Seller could become obligated to provide to the Buyer, in the
aggregate, under Section 8.2(A) for breaches of representations, warranties,
--------------
covenants and/or undertakings is $2,500,000 (in cash or securities, as more
specifically provided below); provided, however, that notwithstanding the
foregoing, any indemnity or payment to which the Buyer may be or become entitled
under Sections 2.4(A), 8.2(A)(ii), (iii) and (iv), 9, 12 and 16.6 shall be paid
--------------------------- ----- -- - -- ----
by the Seller, notwithstanding such $2,500,000 cap.
(ii) In the event that the Seller becomes liable to indemnify Buyer
for Losses under Section 8.2(A) for breaches of representations, warranties,
--------------
covenants and/or undertakings, any indemnified Losses shall be payable,
. firstly, by surrender (i.e., cancellation) of indebtedness otherwise
owed to the Seller under the Credit Agreement, such
surrender/cancellation to be made on a dollar-for-dollar basis in
accordance with the amount of Losses to be indemnified;
. secondly, by surrender (i.e., transfer of ownership) to Buyer of
shares of Buyer Preferred Stock (each share of Buyer Preferred Stock
shall be valued at the price Seller paid for such Buyer Preferred
Stock), such surrender to be made on a dollar-for-dollar basis in
accordance with the amount of Losses to be indemnified; and
. thirdly, at Seller's election, by payment of cash or by surrender
(i.e., transfer of ownership) to Buyer of shares of Buyer Common
Stock, such Buyer Common Stock to be valued at the most recent value
established by the Board of Directors of the Buyer for the Buyer
Common Stock for the purposes of the options to be issued to
Designated Employees and such surrender to be made on a dollar-for-
dollar basis in accordance with the amount of Losses to be
indemnified.
(E) Notwithstanding anything to the contrary contained herein, the maximum
aggregate indemnity which the Buyer could, in the aggregate, become obligated to
provide to the Seller under Section 8.2(B) for breaches of representations,
--------------
warranties, covenants and/or undertakings is $2,500,000; provided, however, that
notwithstanding the foregoing, any indemnity or payment to which the Seller may
be or become entitled under Sections 2.4(B), 2.4(C), 5.2(C)(i), 8.2(B)(ii),
---------------------------------- ----------
(iii) and (iv), 8.2(C), 9, 12 and 16.6 shall be paid by the Buyer,
----- -- ------ - -- ----
notwithstanding such $2,500,000 cap.
(F) Within a reasonable period of time after receipt by any party hereto
of notification of the assertion by a third party, of any Third Party Claim
(such recipient being referred to hereinafter as an "Indemnified Party"), such
Indemnified Party shall give written notice of such Third Party Claim to each
party which has, or would reasonably be expected to have, an obligation to
indemnify such Indemnified Party under this Section 8 (an "Indemnifying Party");
---------
provided, however, that the failure to so notify the Indemnifying Party shall
-------- -------
not relieve him or it of any indemnity obligations hereunder unless, and to the
extent, the Indemnifying Party's rights have been adversely affected by
37
any such failure or delay. The Indemnifying Party shall (upon its delivery to
the Indemnified Party of a written acknowledgment and agreement that, if such
Third Party Claim shall be adversely determined, the Indemnifying Party shall be
fully responsible hereunder to indemnify the Indemnified Party with respect to
such Third Party Claim) have the option, upon notice to the Indemnified Party,
to assume control of the defense of the Third Party Claim and the Indemnified
Party may participate at its own expense in (but not control) the Third Party
Claim (with counsel selected by it in its discretion) if it notifies the
Indemnified Party in writing of its intention so to participate; provided,
--------
however, that the Indemnifying Party shall not consent to the entry of any
-------
judgment or enter into any settlement, except with the written consent of the
Indemnified Party, which does not include as an unconditional term thereof the
giving by the claimant or plaintiff to the Indemnified Party and its Affiliates
and Representatives of a release from all liability in respect of such Action or
which imposes any injunctive relief upon the Indemnified Party or any of its
Affiliates or Representatives. In the event of such assumption, the Indemnified
Party shall cooperate fully in the defense of the Third Party Claim as and to
the extent reasonably requested by the Indemnifying Party (such cooperation
shall include the retention and, upon the request of the Indemnifying Party, the
provision to such party of records and information which are reasonably relevant
to such claim or demand and making employees available on a mutually convenient
basis to provide additional information and explanation of any material provided
hereunder). In the absence of any such assumption of the defense, the
Indemnifying Party shall be obligated to cooperate in accordance with the
preceding sentence.
(G) The provisions of this Section 8 are the exclusive remedy of any party
---------
to this Agreement against any other party to this Agreement for any claim for
breach of any covenant, agreement, representation, warranty or other provision
of this Agreement (other than a claim for specific performance or injunctive
relief or a claim based upon fraud) with the intent that all such claims shall
be subject to the limitations and other provisions contained in this Section 8.
---------
(H) In no event shall any party hereto be entitled to or recover
exemplary, punitive, special, consequential or liquidated damages or lost
profits in any action under this Agreement or relating to the subject matter
hereof.
9. Transactional and Other Taxes.
-----------------------------
(A) Transactional Taxes. The Buyer shall bear and pay any and all
-------------------
applicable Transactional Taxes with respect to the sale, transfer, or assignment
of the Assets or otherwise on account of this Agreement or the transactions
contemplated herein.
(B) Personal Property Taxes. All personal property taxes relating to
-----------------------
any and all personal property conveyed pursuant to this Agreement shall be pro-
rated between the Buyer and the Seller in accordance with the relationship of
the Closing Date to the entire relevant tax year. Any payment owed in respect
of such pro-ration shall be made at Closing.
38
10. Further Assurances and Cooperation. Following the date hereof, and
----------------------------------
subject to the terms and conditions hereof, each of the Seller and the Buyer
agrees to execute and deliver such documents and take such other action as shall
be reasonably requested by the other party to carry out and effectuate the
transactions contemplated by this Agreement. On and subsequent to the Closing
Date, each party covenants and warrants that it shall, whenever and as often as
it shall be reasonably requested to do so by another party to this Agreement,
execute, acknowledge and deliver or cause to be executed, acknowledged and
delivered, any and all such further documents and instruments as may be
reasonably necessary, expedient or proper in order to complete any and all of
the conveyances, transfers, sales and assignments herein provided for.
11. Notices. All notices, requests, demands, and other communications
-------
permitted or required under this Agreement shall be in writing and shall be
either personally delivered (including couriers such as Federal Express) or sent
by pre-paid certified mail, return receipt requested, or facsimile transmission,
with a confirmation copy personally delivered or sent by pre-paid certified
mail, addressed or transmitted to the address or number stated below of the
party to which notice is given, or to such other address or number as such party
may have fixed by notice given in accordance with the terms hereof:
To the Buyer:
UroGen Corp.
00000 Xxxxxx Xxx, Xxxxx X
Xxx Xxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxx
Facsimile: (000) 000-0000
With a copy to:
Wilson, Sonsini, Xxxxxxxx & Xxxxxx
000 Xxxx Xxxx Xxxx
Xxxx Xxxx, Xxxxxxxxxx 00000-0000
Attention: Xxxxxxx X. Xxxxxxx, Esq.
Facsimile: (000) 000-0000
39
To the Seller:
Xxxxxx Healthcare Corporation
0000 Xxxx Xxxx Xxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attention: President - Venture Management
Associate General Counsel
Facsimile: (000) 000-0000
With a copy to:
Seyfarth, Shaw, Xxxxxxxxxxx & Xxxxxxxxx
00 Xxxx Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxxxxxxxxx X. Xxxxx, Esq.
Facsimile: (000) 000-0000
Any notice, sent as provided above, shall be deemed given if personally
delivered or, if sent by certified mail, upon delivery at the address provided
for above (or, in the event delivery is refused, the first date on which
delivery was tendered) or, if sent by facsimile transmission, upon receipt by
the sender of confirmation of delivery.
12. Expenses. Subject to the terms of Section 8 hereof, each party hereto
-------- ---------
shall bear its own expenses (including all attorneys', accountants', investment
bankers', brokers', representatives' and consultants' fees) incurred in
connection with the negotiation, preparation, consummation and performance of
this Agreement and the other Transaction Documents and the transactions
contemplated hereby and thereby.
13. Termination. This Agreement may be terminated at any time on or prior to
-----------
the Closing Date:
(A) by mutual consent of the Seller and the Buyer;
(B) by the Buyer, if (i) there has been a material misrepresentation
or breach on the part of the Seller with respect to any representation or
warranty of the Seller set forth herein, or (ii) there has been any material
failure on the part of the Seller to comply with any of its obligations or to
perform any of its covenants hereunder, which failure, if capable of remedy, has
not been remedied within 15 days of receipt by the Seller of notice thereof, or
(iii) any of the conditions set forth in Section 6.1 or 6.3 shall not have been
------------------
fulfilled within 90 days of the date hereof (other than by virtue of a breach of
this Agreement by the Buyer) and the fulfillment thereof shall not have been
waived by the Buyer; or
(C) by the Seller, if (i) there has been a material misrepresentation
or breach on the part of the Buyer in any of its representations or warranties
set forth herein, or (ii) there has been
40
any material failure on the part of the Buyer to comply with any of its
obligations or to perform any of its covenants hereunder, which failure, if
capable of remedy, has not been remedied within 15 days of receipt by the Buyer
of notice thereof, or (iii) any of the conditions set forth in Section 6.2 or
--------------
6.3 shall not have been fulfilled within 90 days of the date hereof (other than
---
by virtue of a breach of the Agreement by the Seller) and the fulfillment
thereof shall not have been waived by the Seller.
A termination pursuant to Section 13(B) or (C) shall be effective
--------------------
immediately upon delivery of a notice of termination by the party or parties
having the right to terminate to the other party or parties. In the event of a
termination of this Agreement, as provided above, this Agreement shall forthwith
terminate and there shall be no liability on the part of Buyer or the Seller,
except for amounts payable, if any, under Section 5.1(F) or for liability
--------------
arising from a breach of this Agreement.
14. Disclaimer. The Seller shall not be deemed to have made to the Buyer any
----------
representation or warranty other than as expressly made by the Seller in Section
3 hereof. Without limiting the generality of the foregoing, and notwithstanding
any otherwise express representations and warranties made by the Seller in
Section 3 hereof, THE SELLER MAKES NO REPRESENTATION OR WARRANTY TO THE BUYER
WITH RESPECT TO, AND WITH RESPECT TO PARAGRAPH (C) BELOW ONLY, THE BUYER MAKES
NO REPRESENTATION OR WARRANTY TO THE SELLER WITH RESPECT TO:
(A) ANY FINANCIAL INFORMATION WITH RESPECT TO THE UNIT OR ANY
PROJECTIONS, ESTIMATES OR BUDGETS HERETOFORE DELIVERED TO OR MADE AVAILABLE TO
THE BUYER OF FUTURE REVENUES, EXPENSES OR EXPENDITURES OR FUTURE RESULTS OF
OPERATIONS; OR
(B) ANY ASSETS CONSISTING OF FURNITURE, SUPPLIES, TOOLS, MACHINERY,
EQUIPMENT, MATERIALS OR THE BIOLOGICS, EXCEPT AS EXPRESSLY SET FORTH IN SECTION
3 HEREOF, AND EXPRESSLY DISCLAIMS ANY WARRANTIES, EXPRESSED OR IMPLIED, OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE (ALL SUCH ASSETS BEING SOLD
TO THE BUYER ON AN "AS IS" BASIS); OR
(C) EXCEPT AS COVERED BY A REPRESENTATION AND WARRANTY CONTAINED IN
SECTION 3 OR 4 HEREOF, ANY OTHER INFORMATION OR DOCUMENTS (FINANCIAL OR
OTHERWISE) MADE AVAILABLE TO THE PARTIES HERETO OR THEIR COUNSEL, ACCOUNTANTS OR
ADVISERS WITH RESPECT TO THE OTHER PARTY HERETO.
15. Allocation of Consideration. The parties shall exercise their good faith
---------------------------
efforts to agree upon how the consideration paid or given for the Assets
(including but not limited to the Purchase Consideration) shall be allocated.
In the event that any such agreement is executed and delivered by the parties,
such consideration shall be deemed, for all purposes (including those relating
to Taxes of any kind whatsoever), to be allocated to the Assets in accordance
therewith and, without limiting the foregoing, any IRS Forms 8594 shall be
prepared consistent therewith.
41
16. Miscellaneous.
-------------
16.1 Entire Agreement: No Modification. This Agreement, including the
---------------------------------
Exhibits, Schedules, Transaction Documents and instruments delivered pursuant
-------- ---------
hereto, sets forth the entire agreement and understanding between the parties
hereto as to the specific subject matter hereof and thereof, and merges and
supersedes all prior discussions, agreements and understandings of every kind
and nature between them with respect to the specific subject matter hereof and
thereof, and no party hereto shall be bound by any condition, definition,
warranty or representation other than as expressly provided for in this
Agreement. This Agreement shall not be changed or amended except by a writing
signed by the Buyer and the Seller.
16.2 Waiver of Breach. The waiver by a party of a breach or violation by
----------------
any other party of any provision of this Agreement shall not operate or be
construed as a waiver of any subsequent breach or violation by any party of the
same or any other provision of this Agreement. No such waiver shall be
effective unless in writing signed by the party claimed to have made the waiver.
16.3 Benefit of Parties; Assignment. This Agreement shall be binding upon
------------------------------
and shall inure to the benefit of the parties hereto and their respective heirs,
executors, legal representatives, successors and permitted assigns. No party
shall have the right to assign or delegate any of its rights or obligations
arising hereunder, except with the prior written consent of each other party
hereto; provided, however, that any party may assign any or all of its rights,
-------- -------
and delegate any or all of its obligations, hereunder to any person or entity
who shall, by merger, consolidation, transfer of assets or otherwise, have
acquired all or substantially all of the assets (not counting cash and cash
equivalents) of such party; provided, further, that no such delegation shall
-------- -------
relieve the delegating party of the obligation to satisfy and discharge the
obligation(s) so delegated. Notwithstanding the foregoing, the Seller shall
have the right to assign this Agreement, and any rights and obligations arising
hereunder, to an Affiliate of the Seller without the prior written consent of
any other party hereto; provided, that no such assignment shall relieve the
Seller of any of its obligations hereunder. Any purported assignment or
delegation in violation of this Section 16.3 shall be null and void ab initio.
------------ -- ------
16.4 Headings. The headings of the sections and paragraphs of this
--------
Agreement are inserted for convenience of reference only and shall not
constitute a part hereof.
16. Governing Law; Jurisdiction. This Agreement shall be governed by and
---------------------------
construed in accordance with the laws of the State of California without giving
effect to principles of conflict of laws. Subject to Section 16.6 below, each
party to this Agreement expressly and irrevocably (A) agrees that any legal
action or proceeding under, arising out of or in any manner relating to, this
Agreement, or any other Document delivered in connection herewith, if brought by
the Buyer shall be brought in any court of the State of Illinois located in Xxxx
County or in the United States District Court for the Northern District of
Illinois, or, if brought by the Seller shall be brought in any court of the
State of California located in San Diego County or in the United States District
Court for the Southern District of California, (B) consents and submits to the
personal jurisdiction of any of such
42
courts in any such action or proceeding, (C) consents to the service of any
complaint, summons, notice or other process relating to any such action or
proceeding by delivery thereof to him, her or it by hand or by any other manner
provided for in Section 11, (D) waives any claim or defense in any such action
----------
or proceeding based on any alleged lack of personal jurisdiction, improper venue
or forum non conveniens or any similar basis, and (E) waives all rights, if any,
----- --- ----------
to trial by jury with respect to any such action or proceeding. Subject to
Section 16.6 below, nothing in this Section shall affect or impair in any manner
or to any extent the right of any party to commence legal proceedings or
otherwise proceed against any other party in any jurisdiction or to serve
process in any manner permitted by law.
16.6 Dispute Resolution.
------------------
(A) Provisional Remedies: The procedures specified in this Section
16.6 shall be the sole and exclusive procedures for the resolution of disputes
between the parties arising out of or relating to this Agreement; provided,
---------
however, that a party, without prejudice to these procedures, may seek a
-------
preliminary injunction or other provisional relief if, in its sole judgment,
such action is deemed necessary to avoid irreparable damage or to preserve the
status quo. During such action, the parties will continue to participate in good
faith in the procedures specified in this Section 16.6.
(B) Negotiations Between Executives: The parties will attempt in good
faith to resolve promptly any claim or controversy arising out of or relating to
the execution, interpretation or performance of this Agreement (including the
validity, scope and enforceability of the provisions contained in this Section
16.6).
(C) Arbitration: In the event that any dispute arising out of or
relating to this Agreement or its breach, termination or validity has not been
resolved after good faith negotiation pursuant to the procedures of Section
16.6(B) within thirty (30) days following either party delivering notice of such
dispute to the other party hereto, such dispute shall, upon written notice by
either party to the other, be finally settled by arbitration administered by
JAMS/Endispute in accordance with the provisions of its Comprehensive
Arbitration Rules and Procedures and the United States Federal Arbitration Act,
as modified below:
(i) The arbitration shall be heard by a panel of three (3)
independent and impartial arbitrators all of whom shall be
selected from a list of neutral arbitrators supplied by the
JAMS/Endispute. From such list, each of Seller and Buyer shall
select one (1) arbitrator, and the arbitrators so selected shall
select a third. The panel shall designate one (1) among them to
serve as chair.
(ii) The arbitration proceedings shall be conducted: (a) if
notice demanding arbitration is delivered by the Buyer to the
Seller, in Xxxx County, Illinois, or (b) if notice demanding
43
arbitration is delivered by the Seller to the Buyer, in San Diego
County, California.
(iii) Any party may seek interim or provisional remedies under
the Federal Rules of Civil Procedure and the United States
Federal Arbitration Act as necessary to protect the rights or
property of the party pending the decision of the arbitrators.
(iv) The parties shall allow and participate in limited
discovery for the production of documents and taking of
depositions, which shall be conducted in accordance with the
Comprehensive Arbitration Rules and Procedures of JAMS/Endispute.
All discovery shall be completed within sixty (60) days following
the filing of the answer or other responsive pleading. Unresolved
discovery disputes shall be brought to the attention of the chair
of the arbitration panel and may be disposed of by the chair.
(v) Each party shall have up to fifty (50) hours to present
evidence and argument in a hearing before the panel of
arbitrators, provided that the chair of the panel of arbitrators
may establish such longer times for presentations as the chair
deems appropriate.
(vi) The arbitration award shall be rendered by the arbitrators
within fifteen (15) business days after conclusion of the hearing
of the matter, shall be in writing and shall specify the factual
and legal basis for the award. Judgment thereon may be entered in
any court having jurisdiction thereof.
(vii) The arbitrators are empowered to order money damages in
compensation for a party's actual damages, specific performance
or other appropriate relief to cure a breach; provided, however,
--------- -------
that the arbitrators will have no authority to award special,
punitive or exemplary damages, or other money damages that are
not measured by the prevailing party's actual damages.
(D) Performance During Dispute: Each party is required to continue to
perform its obligations under this Agreement pending final resolution of any
dispute arising out of or relating
44
to this Agreement, unless to do so would be commercially impossible or
impractical under the circumstances.
(E) Costs of Arbitration: The party which is found to have been more
at fault in a dispute arbitrated under this Section 16.6 shall be responsible
------------
for paying the costs and expenses, including reasonable attorney's fees, which
the other party has incurred in such arbitration.
16.7 Multiple Counterparts; Execution by Fax. This Agreement may be
---------------------------------------
signed in any number of counterparts which taken together shall constitute one
and the same instrument. This Agreement may be executed and delivered by
exchange of facsimile copies showing the signatures of the parties hereto, and
those signatures need not be affixed to the same copy. The facsimile copies
showing the signatures of the parties will constitute originally signed copies
of the same agreement requiring no further execution.
16.8 Exhibits, Schedules. All Exhibits and Schedules referred to in this
------------------- -------- ---------
Agreement are attached hereto and are incorporated herein by reference as if
fully set forth herein.
16.9 Construction. The language in all parts of this Agreement shall in
------------
all cases be construed as a whole according to its fair meaning, strictly
neither for nor against any party hereto, and without implying a presumption
that the terms thereof shall be more strictly construed against one party by
reason of the rule of construction that a document is to be construed more
strictly against the person who himself or through his agent prepared the same,
it being agreed that representatives of both parties have participated in the
preparation hereof.
16.10 Publicity. No party to this Agreement shall issue or cause the
---------
publication of any press release or other public announcement with respect to
this Agreement or the transactions contemplated hereby without first providing a
draft of such press release or announcement to the other parties and obtaining
the consent of the other parties hereto, which consent shall not be unreasonably
withheld; provided, however, that nothing herein shall prevent any party from
-------- -------
making any disclosure required by law, including, without limitation, the
requirements of the SEC, the Securities Act and the rules promulgated
thereunder, or any applicable stock exchange or the Nasdaq Stock Market.
[THE REMAINDER OF THIS PAGE HAS INTENTIONALLY BEEN LEFT BLANK]
IN WITNESS WHEREOF, the parties hereto have executed this Agreement,
as of the date first above written.
SELLER:
XXXXXX HEALTHCARE CORPORATION
45
By: /s/ Xxxxxx X. Xxxxxxx
----------------------------------------
Title: President, Venture Management
-------------------------------------
BUYER:
UROGEN CORP.
By: Xxxx X. Xxxxxxx
----------------------------------------
Title: President and CEO
--------------------------------------------
46
