EXHIBIT 10.24
ASSET PURCHASE AGREEMENT
AMONG
SMITHKLINE XXXXXXX CLINICAL LABORATORIES, INC.,
SMITHKLINE XXXXXXX DIAGNOSTIC SYSTEMS CO.,
AND
EXIGENT DIAGNOSTICS, INC.,
NOVEMBER 7, 1996
TABLE OF CONTENTS
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Page
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ARTICLE I - DEFINITIONS..................................................... 2
ARTICLE II - PURCHASE AND SALE OF ASSETS.................................... 7
2.1. Purchase and Sale of Assets................................. 7
2.2. Purchased Assets............................................ 7
2.3. Excluded Assets............................................. 8
ARTICLE III - ASSUMPTION OF LIABILITIES..................................... 9
3.1. Assumption of Assumed Liabilities........................... 9
3.2. Assumed Liabilities......................................... 9
3.3. No Other Liabilities Assumed................................ 10
ARTICLE IV - CLOSING........................................................ 10
4.1. Closing Date................................................ 10
4.2. Deliveries at the Closing................................... 10
ARTICLE V - PURCHASE PRICE AND PAYMENT...................................... 12
5.1. Purchase Price Payment...................................... 12
ARTICLE VI - REPRESENTATIONS AND WARRANTIES OF THE SELLER................... 12
6.1. Representations and Warranties of SBD....................... 13
(a) Due Incorporation........................................... 13
(b) Power and Authority of SBD.................................. 13
(c) Financial Statements........................................ 13
(d) Tax Matters................................................. 14
(e) Good Title Conveyed, Etc.................................... 15
(f) Consents and Approvals...................................... 16
(g) No Violation................................................ 16
(h) Absence of Certain Changes.................................. 17
6.2. Representations and Warranties of SBCL...................... 17
(a) Due Incorporation........................................... 18
(b) Power and Authority of SBCL................................. 18
(c) Good Title Conveyed, Etc.................................... 18
(d) Consents and Approvals...................................... 19
(e) No Violation................................................ 19
ARTICLE VII - REPRESENTATIONS AND WARRANTIES OF THE BUYER................... 20
7.1. Due Incorporation........................................... 20
7.2. Power and Authority of the Buyer............................ 20
7.3. Consents and Approvals...................................... 21
7.4. No Violation................................................ 21
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7.5. Condition of Purchased Assets.............................. 21
7.6. Nonreliance................................................ 22
7.7. Interim Activities......................................... 22
7.8. Outstanding Securities..................................... 23
ARTICLE VIII - COVENANTS OF THE PARTIES.................................... 23
8.1. Antidilution of the Seller's Equity
in the Buyer............................................... 23
8.2. Tax Matters................................................ 24
8.3. Employee Matters........................................... 25
8.4. Pension and Section 401(k) Matters......................... 28
8.5. Employee Plan Obligations.................................. 29
8.6. Vesting of Employee Stock Options.......................... 32
8.7. Consummation of Transactions............................... 32
8.8. Cooperation................................................ 32
8.9. Books and Records.......................................... 32
8.10. Consents................................................... 33
8.11. The Seller's Agreement Regarding
Confidentiality............................................ 34
8.12. The Buyer's Agreement Regarding
Confidentiality............................................ 36
8.13. Public Announcements....................................... 38
8.14. Use of the Seller's Facilities............................. 38
8.15. Credit Facility............................................ 39
8.16. Funding of Operating Expenses.............................. 39
8.17. Payments to Immunomatrix................................... 40
8.18. Stockholders Agreement..................................... 40
8.19. Further Assurances......................................... 40
8.20. Notice of Financing........................................ 41
8.21. Use of Name................................................ 41
ARTICLE IX - SURVIVAL; INDEMNIFICATION..................................... 42
9.1. Survival of Representations and Warranties................. 42
9.2. Indemnification............................................ 43
9.3. Third-Party Claims......................................... 45
ARTICLE X - MISCELLANEOUS PROVISIONS....................................... 47
10.1. Expenses................................................... 47
10.2. Payment of Taxes Upon Transfer of
Purchased Assets........................................... 47
10.3. Execution in Counterparts.................................. 48
10.4. Notices.................................................... 48
10.5. Waivers.................................................... 49
10.6. Amendment.................................................. 49
10.7. Entire Agreement........................................... 49
10.8. Applicable Law............................................. 49
10.9. Relationship of the Parties................................ 50
10.10. Headings................................................... 50
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10.11. Assignments................................................ 50
10.12. Binding Effect; Benefits................................... 50
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ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT ("Agreement") dated as of the 7th day of
November, 1996, among SmithKline Xxxxxxx Clinical Laboratories, Inc., a company
organized under the laws of the Commonwealth of Pennsylvania, having a principal
place of business at 0000 Xxxxx Xxxxxxxxxxxx Xxxx, Xxxxxxxxxxxx, XX 00000
("SBCL"), SmithKline Xxxxxxx Diagnostic Systems Co., a limited liability company
organized under the laws of the Commonwealth of Pennsylvania, having a principal
place of business at 0000 Xxxxx Xxxxxxxxxxxx Xxxx, Xxxxxxxxxxxx, XX 00000
("SBD") (SBCL and SBD collectively, the "Seller"), and Exigent Diagnostics,
Inc., a company organized under the laws of the State of Delaware, having a
principal place of business at 0000 Xxxxxxx Xxxxxxx, Xxxxxx Xxxx, XX 00000 (the
"Buyer"),
WITNESSETH:
WHEREAS, SBD is engaged in the research and development of point-of-
care diagnostic tests, and owns certain assets for use in such business; and
WHEREAS, SBCL owns certain assets used by SBD in conducting such
business; and
WHEREAS, the Buyer desires to purchase and the Seller desires to sell,
on the terms and conditions set forth in this
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Agreement, the assets used by SBD in conducting such business; and
WHEREAS, the Seller desires to assign and the Buyer desires to assume,
on the terms and conditions set forth in this Agreement, certain liabilities;
and
WHEREAS, the Buyer and the Seller agree to take certain other actions,
as set forth below, in light of the Seller's intended withdrawal from direct
involvement in the point-of-care diagnostic test business.
NOW, THEREFORE, in consideration of the mutual agreements contained
herein and for other good and valuable consideration described herein, the
Seller and the Buyer agree as follows:
ARTICLE I
DEFINITIONS
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The following terms shall have the following respective meanings when
used in this Agreement, unless the context shall require otherwise:
1.1. "Affiliate" shall mean any corporation, firm, partnership or
other entity, whether de jure or de facto, which directly or indirectly owns, is
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owned by or is under common ownership with a party to this Agreement to the
extent of at least fifty percent (50%) of the equity (or such lesser percentage
which is the maximum allowed to be owned by a foreign corporation in a
particular jurisdiction) having the power to
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vote on or direct the affairs of the entity and any person, firm, partnership,
corporation or other entity actually controlled by, controlling or under common
control with a party to this Agreement.
1.2. "Agreement" shall have the meaning set forth in the preamble
hereof.
1.3. "Assigned Contracts" shall mean the contracts to be assigned
by the Seller to the Buyer pursuant to this Agreement, as listed in Schedule 1
hereto.
1.4. "Assumed Liabilities" shall have the meaning set forth in
Section 3.2 hereof.
1.5. "Assumption Agreement" shall have the meaning set forth in
Section 4.2(b)(I) hereof.
1.6. "Base Balance Sheet" shall have the meaning set forth in
Section 2.2(a) hereof.
1.7. "Base Date" shall have the meaning set forth in Section 2.2(a)
hereof.
1.8. "Xxxx of Sale" shall have the meaning set forth in Section
4.2(a)(I) hereof.
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1.9. "Business" shall mean the business of research and development
of point-of-care diagnostic testing products conducted within SBD prior to the
Closing Date; provided, however, that the Business shall not include any
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contractual relations or other dealings between SBD (or its Affiliates) and
Immunomatrix, Inc.
1.10. "Buyer" has the meaning set forth in the preamble hereof.
1.11. "Buyer Group" shall have the meaning set forth in Section
9.2(a) hereof.
1.12. "Claim" shall have the meaning set forth in Section 9.1
hereof.
1.13. "Closing" shall have the meaning set forth in Section 4.1
hereof.
1.14. "Closing Date" shall have the meaning set forth in Section 4.1
hereof.
1.15. "Code" shall have the meaning set forth in Section 6.1(d)(3)
hereof.
1.16. "Common Stock" shall mean the common stock of the Buyer, par
value $.01 per share.
1.17. "Consents" shall have the meaning set forth in Section 8.10
hereof.
1.18. "Damages" shall have the meaning set forth in Section 9.2(a)
hereof.
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1.19. "Distribution and Supply Agreement" shall have the meaning set
forth in Section 4.2(a)(iii) hereof.
1.20. "Employees" shall have the meaning set forth in Section 8.3(a)
hereof.
1.21. "Excluded Assets" shall have the meaning set forth in Section
2.3 hereof.
1.22. "Financing" shall have the meaning set forth in Section
8.12(a) hereof.
1.23. "Immunomatrix License" shall have the meaning set forth in
Section 2.3(b) hereof.
1.24. "Indemnified Party" shall have the meaning set forth in
Section 9.3(a) hereof.
1.25. "Indemnifying Party" shall have the meaning set forth in
Section 9.3(a) hereof.
1.26. "Liens" shall have the meaning set forth in 6.1(h)(1) hereof.
1.27. "Loan Agreement" shall have the meaning set forth in Section
8.15 hereof.
1.28. "NASDAQ" shall mean the National Association of Securities
Dealers Automatic Quotation System.
1.29. "1934 Act" shall have the meaning set forth in Section 8.11(a)
hereof.
1.30. "Note" shall have the meaning set forth in Section 8.16
hereof.
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1.31. "Operating Expenses" shall have the meaning set forth in
Section 8.16 hereof.
1.32 "Principals" shall mean X. Xxxxxxx Stoughton and Xxxxxx X.
Xxxxx.
1.33. "Purchased Assets" shall have the meaning set forth in Section
2.2 hereof.
1.34. "Registration Rights Agreement" shall have the meaning set
forth in Section 4.2(a)(iv) hereof.
1.35. "SBCL" shall have the meaning set forth in the preamble
hereof.
1.36 "SBCL Assets" shall have the meaning set forth in Section 2.2
hereof.
1.37. "SBD" shall have the meaning set forth in the preamble hereof.
1.38. "SBD Assets" shall have the meaning set forth in Section 2.2
hereof.
1.39. "Seller" shall have the meaning set forth in the preamble
hereof.
1.40. "Seller Group" shall have the meaning set forth in Section
9.2(c) hereof.
1.41. "Services Agreement" shall have the meaning set forth in
Section 4.2(a)(vii) hereof.
1.42. "Shareholders Agreement" shall have the meaning set forth in
Section 4.2(a)(v) hereof.
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1.43. "Taxes" shall have the meaning set forth in Section 6.1(d)(3)
hereof.
1.44. "Tax Return" shall have the meaning set forth in Section
6.1(d)(3) hereof.
1.45. "Termination Date" shall have the meaning set forth in Section
9.1 hereof.
1.46. "Third-Party Claims" shall have the meaning set forth in
Section 9.3 hereof.
ARTICLE II
PURCHASE AND SALE OF ASSETS
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2.1. Purchase and Sale of Assets. Subject to the terms and
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conditions of this Agreement, on the Closing Date, the Seller shall sell,
transfer, convey, assign and deliver (or will cause to be sold, transferred,
conveyed, assigned and delivered) to the Buyer and the Buyer shall purchase,
acquire and accept (or cause to be purchased, acquired and accepted) from the
Seller, the Purchased Assets.
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2.2. Purchased Assets. The Purchased Assets shall mean the
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following rights, properties, assets, claims, and contracts (but only, in the
case of the contracts, if the liabilities associated with such assets or under
such contracts are assumed by the Buyer in accordance with the provisions of
Article III hereof) of the Seller relating to the Business: (a) all fixed and
intangible assets that are reflected on the pro forma balance sheet of SBD dated
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as of June 27, 1996 (the "Base Date"), a copy of which is attached hereto as
Schedule 2 (the "Base Balance Sheet"); (b) such items of capital equipment owned
by SBD as are listed in Schedule 3 hereto, and such other assets, tangible or
intangible, as SBD shall have acquired in the ordinary course of business
between the Base Date and the Closing Date (collectively, the "SBD Assets"); (c)
the Assigned Contracts, subject to receipt by SBD of all third-party consents
and approvals required therefor; (d) computer hardware, other office equipment,
and other assets owned by SBCL and used by or for the benefit of SBD in the
Business as of the Base Date, as listed in Schedule 4 hereto (collectively, the
"SBCL Assets"); (e) all books and records currently in the possession or under
the control of the Seller relating exclusively to the research and development
activities conducted by the Seller in connection with the Business; and (f) the
Trademark Use Application filed by SmithKline Xxxxxxx Corporation and any
trademark registered
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pursuant thereto, relating to the xxxx "Exigent Diagnostics"; provided, however,
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that the Purchased Assets shall not include any Excluded Assets (as defined in
Section 2.3 hereof).
2.3. Excluded Assets. Notwithstanding anything contained in
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Section 2.2 hereof, the Purchased Assets shall not include any of the following
assets (the "Excluded Assets"): (a) all proprietary software and related data,
as more specifically listed in Schedule 5 hereto, used in connection with the
computer hardware and equipment listed in Schedule 4 hereto; (b) that certain
Amended and Restated Distribution and Supply Agreement by and between the Seller
and Immunomatrix, Inc. (the "Immunomatrix License"); and (c) that certain
Amended and Restated Option Agreement, by and between the Seller and
Immunomatrix, Inc.
ARTICLE III
ASSUMPTION OF LIABILITIES
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3.1. Assumption of Assumed Liabilities. Subject to the terms and
---------------------------------
conditions of this Agreement, on the Closing Date, the Seller shall assign to
the Buyer, and the Buyer shall assume, the Assumed Liabilities (as defined in
Section 3.2 hereof). The Buyer agrees that, from and after such assumption, the
Seller will be completely released and discharged from any and all obligations
of any kind whatsoever relating to or arising out of the Assumed Liabilities.
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3.2. Assumed Liabilities. The liabilities of the Seller to be
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transferred and assumed (the "Assumed Liabilities") by the Buyer shall be: (a)
all liabilities that are reflected on the Base Balance Sheet, other than the
accrued liability for Employee vacation pay; (b) such obligations relating to
the Business as shall have been incurred by or behalf of the Seller between the
Base Date and the Closing Date in the ordinary course of the Business or with
the authorization (or under the supervision) of the Principals, and all
liabilities relating to or arising out of such obligations and out of any other
events that have occurred between the Base Date and the Closing Date; and (c)
certain obligations of the Seller relating to Employees, to the extent
specifically provided in Sections 8.3 and 8.4 hereof.
3.3. No Other Liabilities Assumed. Except as and to the extent
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otherwise expressly provided in this Agreement, the Buyer has not agreed to pay,
shall not be required to assume and shall not have any liability or obligation,
direct or indirect, absolute or contingent, of the Seller or any other person,
including without limitation any intercompany obligations of SBD or SBCL to any
other entity in connection with taxes or otherwise.
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ARTICLE IV
CLOSING
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4.1. Closing Date. Subject to the terms and conditions of this
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Agreement, the closing of the purchase and sale of the Purchased Assets and the
assumption of the Assumed Liabilities (the "Closing") shall be conducted at the
offices of Pepper, Xxxxxxxx & Xxxxxxx, 0000 Xxx Xxxxx Xxxxxx, Xxxxxxxxxxxx,
Xxxxxxxxxxxx 00000 at 10:00 A.M. on the date first above written (the "Closing
Date").
4.2. Deliveries at the Closing.
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(a) At the Closing the Seller shall deliver or cause to be
delivered to the Buyer: (i) a duly- executed xxxx of sale for all personal
property that comprises part of the Purchased Assets (the "Xxxx of Sale"); (ii)
a duly-executed counterpart of an assignment and assumption agreement (the
"Undertaking and Assumption Agreement"); (iii) a duly-executed counterpart of a
distribution and supply agreement (the "Distribution and Supply Agreement");
(iv) a duly-executed counterpart of a registration rights agreement (the
"Registration Rights Agreement"); (v) a duly-executed counterpart of a trademark
assignment agreement (the "Trademark Assignment"); (vi) all such other deeds,
endorsements, assignments and other instruments as are necessary to transfer to
the Buyer good and marketable title to the Purchased Assets at the Closing;
(vii) any payments required to be made by the Seller to the Buyer at the Closing
pursuant to Sections 8.15 and 8.16 hereof; and (viii) all other previously
undelivered documents required hereby to be delivered by the Seller to the Buyer
at or prior to the Closing in connection with the transactions contemplated by
this Agreement.
(b) At the Closing, the Buyer shall deliver or cause to be
delivered to the Seller: (i) a duly- executed counterpart of the Undertaking and
Assumption Agreement; (ii) a certificate representing the shares of Common Stock
referred to
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in Section 5.1 hereof; (iii) a duly-executed counterpart of the Distribution and
Supply Agreement; (iv) a duly-executed counterpart of the Registration Rights
Agreement; (v) a duly-executed counterpart of the Trademark Assignment; (vi) a
copy of a signed commitment letter, reasonably satisfactory to the Seller, with
respect to the Financing; (vii) a copy of a signed commitment letter, reasonably
satisfactory to the Seller, with respect to the $1 million bridge loan facility
provided to the Buyer by Exigent Partners, L.P. (the "Bridge Loan"); (viii) a
certificate signed by X. Xxxxxxx Stoughton stating that all conditions to
drawdown under the Bridge Loan have been met as of the Closing Date; and (ix)
all other previously undelivered documents required hereby to be delivered by
the Buyer to the Seller at or prior to the Closing in connection with the
transactions contemplated by this Agreement.
ARTICLE V
PURCHASE PRICE AND PAYMENT
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5.1. Purchase Price Payment. On the Closing Date, the Buyer shall
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issue or cause to be issued to the Seller a certificate representing such number
of shares of Common Stock as will, after the issuance thereof, comprise five
percent (5%) of all issued and outstanding shares of Common Stock as
consideration (in addition to the Buyer's assumption of the Assumed Liabilities)
for the sale of the Purchased Assets.
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ARTICLE VI
REPRESENTATIONS AND
WARRANTIES OF THE SELLER
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6.1. Representations and Warranties of SBD. SBD represents and
-------------------------------------
warrants to the Buyer as follows:
(a) Due Incorporation. SBD is a limited liability company
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duly organized, validly existing and in good standing under the laws of the
Commonwealth of Pennsylvania and has the full corporate power and lawful
authority to carry on its business as it is now being conducted and to own the
properties and assets it now owns.
(b) Power and Authority of SBD. SBD has the full legal right
--------------------------
and power and all authority and approval required to enter into, execute and
deliver this Agreement, and to perform fully its obligations under this
Agreement. This Agreement is a valid and binding agreement of SBD enforceable in
accordance with its terms, except that (I) such enforcement may be subject to
bankruptcy, insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights, and (ii) the remedy of
specific performance and injunctive and other forms of equitable relief may be
subject to equitable defenses and to the discretion of the court before which
any proceeding therefor may be brought.
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(c) Financial Statements. SBD has delivered to the Buyer a
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copy of the Base Balance Sheet, which has been prepared from the books and
records of SBD in conformity with generally-accepted accounting principles and
SBD's accounting principles, which have been consistently applied, and fairly
presents as of the date thereof the results of operation of the Business for the
period then ended and the book value of the Purchased Assets and the Assumed
Liabilities reflected therein.
(d) Tax Matters.
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(1) SBD has filed or caused to be filed with the appropriate
governmental agencies all Tax Returns (as hereinafter defined) and reports
required to be filed, and has maintained, or caused to be maintained, all
required records with respect to Taxes (as hereinafter defined), with respect to
or covering the Business and the Purchased Assets, and has paid in full all
Taxes, if any, shown to be due on such Tax Returns and reports, or otherwise due
or claimed to be due from them by any taxing authority for all periods up to and
including the date of this Agreement.
(2) All Taxes that SBD is required by law to withhold or collect
in connection with, or related to, the Purchased Assets or the Business through
the Closing Date have been or will be duly withheld or collected and, to the
extent
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required, have been or will be paid to the proper governmental authorities or
properly deposited as required by applicable laws.
(3) "Taxes" shall mean all taxes, charges, fees, levies or other
assessments, including, without limitation, income, excise, property, sale and
franchise taxes (including any interest, penalties or additions attributable to
or imposed on or with respect to any such assessment) imposed by the United
States or any other jurisdiction in which SBD conducts activities with respect
to the Purchased Assets and the Business or is subject to taxing jurisdiction
with respect to the Purchased Assets and the Business, and any state, province,
county, local or other government, taxing authority, or subdivision thereof.
"Code" shall mean the United States Internal Revenue Code of 1986, as amended.
"Tax Return" shall mean any return, report, information return or other document
(including any related or supporting information) filed or required to be filed
with any governmental entity or other authority in connection with the
determination, assessment or collection of any Tax (whether or not such Tax is
imposed on SBD) or the administration of any laws, regulations or administrative
requirements relating to any Tax.
(e) Good Title Conveyed, Etc. SBD has complete and unrestricted
------------------------
power and the unqualified right to sell, assign, transfer and deliver to the
Buyer, and upon consummation of the transactions contemplated by this Agreement,
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the Buyer will acquire, good, valid and marketable title to, the SBD Assets,
free and clear of all Liens, except for (I) Liens which, either individually or
in the aggregate, are not material to the Business or the Purchased Assets, or
(ii) those Liens listed in Schedule 6 hereto. The Xxxx of Sale and the deeds,
endorsements, assignments and other instruments to be executed and delivered to
the Buyer by SBD at the Closing will be valid and binding obligations of the
Seller enforceable in accordance with their terms, and will effectively vest in
the Buyer good, valid and marketable title to the SBD Assets.
(f) Consents and Approvals. Except with respect to the Assigned
----------------------
Contracts, no material consent, approval, license, permit or authorization of,
or material declaration, filing or registration with, any third party or any
governmental or regulatory authority is required in connection with the
execution and delivery of this Agreement by SBD, or the consummation by SBD of
the transactions contemplated hereby.
(g) No Violation. Neither the execution and delivery of this
------------
Agreement nor the consummation of the transactions contemplated hereby will
violate any provisions of the certificate of incorporation or by-laws of SBD, or
violate any statute or law or any judgment, decree, order, regulation or rule of
any court or governmental authority, or result in a breach of the terms,
conditions or provisions of, or constitute a
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default under, any instrument, agreement, mortgage, judgment, order, award,
decree, or other restriction to which it is a party or by which it is bound.
(h) Absence of Certain Changes. The officers of SBD (other
--------------------------
than the Principals) have not, with respect to the operation of the Business
since the Base Date:
(1) Permitted or allowed any of the Purchased Assets (real or
personal, tangible or intangible) to be subjected to any mortgage, pledge, lien,
security interest, encumbrance, restriction or charge of any kind ("Liens"),
except for Liens for current taxes not yet due and Liens that have arisen by
operation of law for amounts not yet payable;
(2) Sold, transferred, or otherwise disposed of any of its
properties or assets (real or personal, tangible or intangible) used or useful
in the Business, except in the ordinary course of the Business and consistent
with past practice;
(3) Incurred any liability in connection with the Business other
than in the ordinary course of the Business consistent with past practice;
(4) Conducted the Business other than in the ordinary course and
consistent with past practice, except as disclosed in this Agreement; or
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(5) Agreed, whether in writing or otherwise, to take any action
described in this Section 6.1(h).
6.2. Representations and Warranties of SBCL. SBCL represents and
--------------------------------------
warrants to the Buyer as follows:
(a) Due Incorporation. SBCL is a corporation duly organized,
-----------------
validly existing and in good standing under the laws of the Commonwealth of
Pennsylvania and has the full corporate power and lawful authority to carry on
its business as it is now being conducted and to own the properties and assets
it now owns.
(b) Power and Authority of SBCL. SBCL has the full legal right
---------------------------
and power and all authority and approval required to enter into, execute and
deliver this Agreement, and to perform fully its obligations under this
Agreement. This Agreement is a valid and binding agreement of SBCL enforceable
in accordance with its terms, except that (I) such enforcement may be subject to
bankruptcy, insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights, and (ii) the remedy of
specific performance and injunctive and other forms of equitable relief may be
subject to equitable defenses and to the discretion of the court before which
any proceeding therefor may be brought.
(c) Good Title Conveyed, Etc. SBCL has complete and
------------------------
unrestricted power and the unqualified right to
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sell, assign, transfer and deliver to the Buyer, and upon consummation of the
transactions contemplated by this Agreement, the Buyer will acquire, good, valid
and marketable title to, the SBCL Assets, free and clear of all Liens, except
for (I) Liens which, either individually or in the aggregate, are not material
to the Business or the SBCL Assets, or (ii) those Liens listed in Schedule 6
hereto. The Xxxx of Sale and the deeds, endorsements, assignments and other
instruments to be executed and delivered to the Buyer by SBCL at the Closing
will be valid and binding obligations of the Seller enforceable in accordance
with their terms, and will effectively vest in the Buyer good, valid and
marketable title to the SBCL Assets.
(d) Consents and Approvals. Except with respect to the Assigned
----------------------
Contracts, no material consent, approval, license, permit or authorization of,
or material declaration, filing or registration with, any third party or any
governmental or regulatory authority is required in connection with the
execution and delivery of this Agreement by SBCL, or the consummation by SBCL of
the transactions contemplated hereby.
(e) No Violation. Neither the execution and delivery of this
------------
Agreement nor the consummation of the transactions contemplated hereby will
violate any provisions of the certificate of incorporation or by-laws of SBCL,
or violate any statute or law or any judgment, decree, order, regulation or
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rule of any court or governmental authority, or result in a breach of the terms,
conditions or provisions of, or constitute a default under, any instrument,
agreement, mortgage, judgment, order, award, decree, or other restriction to
which it is a party or by which it is bound.
ARTICLE VII
REPRESENTATIONS AND
WARRANTIES OF THE BUYER
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The Buyer represents and warrants to the Seller as follows :
7.1. Due Incorporation. The Buyer is a corporation duly
-----------------
organized, validly existing and in good standing under the laws of the State of
Delaware and has the full corporate power and lawful authority to carry on its
business as it is now being conducted and to own the properties and assets it
now owns.
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7.2. Power and Authority of the Buyer. The Buyer has the full
--------------------------------
legal right and power and all authority and approval required to enter into,
execute and deliver this Agreement, and to perform fully its obligations under
this Agreement. This Agreement is a valid and binding agreement of the Buyer
enforceable in accordance with its terms, except that (I) such enforcement may
be subject to bankruptcy, insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect relating to creditors' rights, and (ii)
the remedy of specific performance and injunctive and other forms of equitable
relief may be subject to equitable defenses and to the discretion of the court
before which any proceeding therefor may be brought.
7.3. Consents and Approvals. Except with respect to the Assigned
----------------------
Contracts, no material consent, approval, license, permit or authorization of,
or material declaration, filing or registration with, any third party or any
governmental or regulatory authority is required in connection with the
execution and delivery of this Agreement by the Buyer, or the consummation by
the Buyer of the transactions contemplated hereby.
7.4. No Violation. Neither the execution and delivery of this
------------
Agreement nor the consummation of the transactions contemplated hereby will
violate any provisions of the certificate of incorporation or by-laws of the
Buyer, or
-22-
violate any statute or law or any judgment, decree, order, regulation or rule of
any court or governmental authority, or result in a breach of the terms,
conditions or provisions of, or constitute a default under, any instrument,
agreement, mortgage, judgment, order, award, decree, or other restriction to
which it is a party or by which it is bound.
7.5. Condition of Purchased Assets. EXCEPT AS OTHERWISE
----------------------------- -------------------
EXPRESSLY STATED HEREIN, THE BUYER UNDERSTANDS AND AGREES THAT THE PURCHASED
----------------------------------------------------------------------------
ASSETS WILL BE SOLD, ASSIGNED, CONVEYED, TRANSFERRED AND DELIVERED TO THE
-------------------------------------------------------------------------
BUYER IN AN "AS IS" CONDITION ON A "WHERE IS" BASIS, WITHOUT ANY WARRANTY OF
----------------------------------------------------------------------------
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR ANY OTHER WARRANTY,
--------------------------------------------------------------------------
EXPRESS OR IMPLIED.
------------------
7.6. Nonreliance. In connection with its decision to acquire the
-----------
Purchased Assets, the Buyer acknowledges that it is not relying upon any
financial projections, budgets or other forward-looking financial data with
respect to the Purchased Assets or the Business prepared by or furnished to it
by or on behalf of the Seller and that the Seller is making no representation or
warranty with respect thereto.
7.7. Interim Activities. Except as otherwise expressly provided
------------------
in this Agreement, between the Base Date and the Closing Date, the Buyer has
used its best efforts to cause the Principals to cause the Employees to conduct
the Business in
-23-
the ordinary course consistent with past practice, subject to the terms and
conditions of this Agreement, and not to enter into any third-party contracts
relating to the Business, or make any capital expenditures or incur or assume
any liabilities, in the name of or on behalf of SBD or SBCL, other than (i)
expenditures for the capital equipment listed in Schedule 3 hereto and (ii) such
other contracts incidental to the conduct of the Business as the Seller has
approved in writing. To the best knowledge of the Buyer, during such period, the
Employees have conducted the Business and refrained from entering into third-
party contracts, in conformity with the preceding sentence.
7.8. Outstanding Securities. As of the Closing, the Buyer has
----------------------
issued and outstanding the number of shares of Common Stock and other
securities, including without limitation, options, warrants, notes, bonds or
other equity or debt securities, listed in Annex E hereto. The beneficial owners
of such securities as of the Closing are as listed in Annex E.
ARTICLE VIII
COVENANTS OF THE PARTIES
------------------------
The Seller and the Buyer hereby covenant and agree as follows:
-24-
8.1. Antidilution of the Seller's Equity in the Buyer. In the
------------------------------------------------
event that, after the Closing, the Buyer shall issue additional shares of Common
Stock (including without limitation any shares issued upon the exercise of
warrants held by Xxxxxxx Xxxxx Securities Incorporated), securities exercisable
or convertible into shares of Common Stock or any other form of equity security
with voting rights to any third party in consideration or for capital
contributions, then in connection with such issuances, until such contributions
equal cumulatively Seven Million Dollars (US $7,000,000) (or, in the event that
the outstanding balance under the Loan Agreement and the Note is not converted
(mandatorily or otherwise) into Common Stock as contemplated therein, Five
Million Dollars (US $5,000,000))(the applicable dollar amount being herein
referred to as the "Financing Threshold"), the Buyer shall issue additional
shares of Common Stock to the Seller, without payment of additional
consideration (or for payment of $.01 per share of Common Share if required for
such shares to be deemed to be fully paid and non-assessable), as necessary in
order to avoid dilution of the Seller's percentage equity interest in the Buyer.
Thereafter, the Buyer may dilute the Seller's percentage equity interest in the
Buyer only on a pro rata basis, as the equity interests in the Buyer of other
--- ----
investors are diluted. Notwithstanding the foregoing, prior to achieving the
Financing Threshold the Buyer
-25-
may issue stock options to key employees (with or without consideration), in a
total amount to be mutually agreed by the Buyer and the Seller, which agreement
shall not be unreasonably withheld, delayed or conditioned, without triggering
the Seller's right to receive additional shares of Common Stock pursuant to this
Section 8.1; provided, however, that any consideration paid by such key with
-------- -------
employees respect to such stock options shall not be credited toward the
achievement of the Financing Threshold.
8.2. Tax Matters. The Seller shall be liable for all Taxes payable
-----------
with respect to the operations of the Business and the Purchased Assets through
the Closing Date, and the Seller shall be responsible for timely filing the
appropriate Tax Returns and reports with respect to the operations of the
Business and the Purchased Assets through and including the Closing Date. The
Buyer shall be liable for all Taxes payable with respect to the operations of
the Business and the Purchased Assets after the Closing Date, and the Buyer
shall be responsible for filing the necessary Tax Returns and reports with
respect to the operations of the Business after that date.
8.3. Employee Matters. The Buyer shall offer to hire substantially
----------------
all Employees as of the Closing Date, each at a rate of base salary or pay at
least equal to the rate of base salary or pay of such Employee immediately prior
to the Closing
-26-
Date, and with employee benefits comparable to the employee benefits provided to
such Employee immediately prior to the Closing Date. The Buyer shall not be
obligated to maintain a defined benefit pension plan or to provide any other
particular benefit, whether in nature or amount, as long as the total benefit
package that the Buyer provides to each Employee is comparable to the benefit
package provided to such Employee immediately prior to the Closing Date. Such
employment by the Buyer of individuals who are employed in the Business shall
occur on the terms and conditions provided herein.
(a) Schedule 7 hereto sets forth a list of the employees of
SBD who are employed in connection with the Business ("Employees"), together
with their respective titles and dates of employment.
(b) The Employees shall cease to be employees of SBD on the
Closing Date. The Buyer acknowledges the Seller's position that the Employees
shall not be entitled to any termination or severance pay as a result of the
termination of their employment with SBD, and the Buyer will cooperate with the
Seller to provide continuity of employment by providing the current compensation
and benefits described in this Section 8.3. The Seller will provide termination
or severance pay, in accordance with and subject to the terms of the Seller's
severance pay plan as in effect on the Closing Date, to any
-27-
Employee who does not receive an offer of employment from the Buyer, and to any
Employee who declines the Buyer's offer of employment (provided that, in the
case of an Employee who declines the Buyer's offer of employment, the Seller
shall provide termination or severance pay to the Employee only if the Buyer
agrees in writing not to hire the Employee during the twelve-month period
following the Closing Date).
(c) Except as otherwise expressly provided in this Section 8.3,
the Buyer shall have no obligation or liability with respect to any claims by
any Employees or former employees of SBD arising by reason of the sale or
purchase of the Purchased Assets pursuant to this Agreement or by reason of
their employment, or the termination of such employment, with SBD on or prior to
the Closing Date. Without limitation of the foregoing, the Buyer shall not
assume any obligation or liability with respect to, or receive any assets from,
any employee benefit plan with respect to the Employees, or with respect to any
employment practices or policies maintained by SBD with respect to the
Employees, to the extent that such obligations, liabilities, or assets relate to
the Employees' employment with SBD on or prior to the Closing Date.
(d) The Seller shall be responsible for all wages, salaries,
employee benefit plan costs and claims, vacation pay, workers' compensation
claims, and all other employment
-28-
benefits and costs incurred as a result of events occurring prior to and
including the Closing Date with respect to the Employees and their dependents
and related to their employment by SBD, except to the extent that such items are
reflected on the Base Balance Sheet as Assumed Liabilities or Section 8.5 hereof
otherwise provides. The Seller shall remain liable for retiree medical and life
insurance benefits, if any, with respect to all Employees retiring on or prior
to the Closing Date, in accordance with and subject to the terms of any retiree
medical or retiree life insurance plan maintained by the Seller that is
applicable to such Employee.
(e) With respect to those Employees who become employees of the
Buyer, the Buyer shall be responsible for (i) all wages, salaries, employee
benefit plan costs and claims, earned sales bonuses or management bonuses,
workers' compensation claims, and all other employment benefits and costs
incurred as a result of events occurring prior to and including the Closing Date
with respect to the Employees and their dependents and related to their
employment by SBD, to the extent that such items are reflected on the Base
Balance Sheet as Assumed Liabilities, and (ii) all wages, salaries, employee
benefit plan costs and claims, vacation pay, earned sales bonuses or management
bonuses, workers' compensation claims, severance or other termination
-29-
benefits, and all other employment benefits and costs incurred as a result of
events occurring after the Closing Date.
(f) After the Closing Date, the Seller agrees to cooperate
with the Buyer to enable the Buyer to have successorship status with respect to
the Business for the limited purpose of qualifying as a successor corporation
under the applicable provisions of the Federal Insurance Contributions Act, the
Federal Unemployment Tax Act, state unemployment insurance acts, and state
temporary disability acts. The Seller agrees to cooperate with the Buyer in all
filings necessary to obtain such successorship status.
8.4. Pension and Section 401(k) Matters. Effective as of the
----------------------------------
Closing Date, the Seller shall treat the Employees as fully vested in their
accrued pension benefits, and in their employee- and employer-derived account
balances under the Seller's section 401(k) plan, irrespective of whether they
were fully vested immediately prior to the Closing Date. No provision of this
Agreement shall require the Seller to treat the termination of the Employees'
employment with SBD on the Closing Date as a "separation from service" or as a
"termination of employment" for purposes of any pension plan, retirement savings
plan, or other retirement arrangement maintained by the Seller. Except as
provided above with respect to vesting, the Employees' rights under any
retirement arrangement maintained by the Seller
-30-
(including, but not limited to, any right to distributions) shall be determined
solely by the applicable provisions of the retirement arrangement, as in effect
on the Closing Date and as amended from time to time thereafter.
8.5. Employee Plan Obligations.
-------------------------
(a) With respect to Employees who are covered by the
Seller's health and dental insurance plans, and who become employees of the
Buyer as of the Closing Date, the Seller shall:
(I) at all times prior to the Closing Date and, if
requested in writing by the Buyer, for a period up to eighteen (18)
months from the Closing Date, maintain insurance coverage levels as in
effect under such plans on the date of this Agreement, and as amended
from time to time thereafter to comply with changes in applicable law,
with respect to such Employees and their beneficiaries; and
(ii) be responsible for any payments required by such
coverage with respect to claims incurred while such coverage remains
in effect and submitted by Employees or their beneficiaries within the
claims filing period provided under such plans.
The Seller's obligation to maintain the health and dental insurance coverage
described in this Section 8.5(a) shall
-31-
terminate as soon as the Buyer establishes the equivalent insurance coverage
described below in Section 8.5(b).
(b) With respect to Employees who are covered by the Seller's
health and dental insurance plans and who become employees of the Buyer as of
the Closing Date, the Buyer shall:
(I) Within eighteen (18) months of the Closing Date,
provide insurance coverage that is substantially equivalent to the
coverage provided by the plans identified in Section 8.5(a); and
(ii) be responsible for any payments required by such
substantially equivalent coverage with respect to claims incurred by
such Employees or their beneficiaries after the Buyer's insurance
coverage is established; and
(iii) reimburse the Seller for the cost of providing such
health and dental insurance following the Closing Date at a rate equal
to the cost charged by the Seller to the Business for active employee
coverage as of the Closing Date.
(c) If an Employee becomes an employee of the Buyer as of the
Closing Date, and the Employee (or a beneficiary of the Employee) incurs a
"qualifying event" after the Closing Date that entitles such individual to
health care
-32-
continuation ("COBRA") coverage under the Seller's plan, the following rules
shall apply:
(I) the Buyer shall use its best efforts to assume
the obligation to provide COBRA coverage to such individual under the
Buyer's plan on and after the date on which the Buyer establishes the
substantially equivalent coverage described in Section 8.5(b); and
(ii) to the extent that the Buyer is not able to
provide COBRA coverage to such individual, the Seller shall continue
to provide the coverage under the Seller's plan for the remainder of
the eighteen-month continuation coverage period; and
(iii) during any period in which an individual
receives COBRA coverage under the Seller's plan as a result of a
qualifying event described in this Section 8.5(c), the Seller may
charge the individual the full amount of the applicable COBRA premium.
8.6. Vesting of Employee Stock Options. The Seller agrees to treat
---------------------------------
as vested as of the Closing Date any and all stock options issued by the Seller
or one of its Affiliates pursuant to an Employee Stock Option Plan that are held
by
-33-
Employees who shall be terminated by SBD as of the Closing Date and shall enter
the employ of the Buyer as of such date.
8.7. Consummation of Transactions. Each party shall use its
----------------------------
commercially reasonable efforts to cause all conditions precedent to its
obligations to consummate the transactions contemplated by this Agreement to be
satisfied.
8.8. Cooperation. Each party shall cooperate fully with the
-----------
other in preparing and filing all notices, applications, reports and other
instruments and documents which are required by any statute, rule, regulation or
order in connection with the consummation of the transactions contemplated by
this Agreement.
8.9. Books and Records. The Seller agrees to permit the Buyer
-----------------
and its authorized representatives, including legal counsel and independent
accountants, upon reasonable notice, to have full access at reasonable business
hours to the books and records of the Seller relating to the Business and the
Purchased Assets (other than the books and records comprising part of the
Purchased Assets). The Buyer and the Seller each agree to preserve until
December 31, 2006, all records in their possession relating to any of the
Purchased Assets, Assumed Liabilities or the Business or the transactions
contemplated herein. In the event that any party hereto needs access to records
in the possession of another party hereto relating to any
-34-
of the Purchased Assets, Assumed Liabilities or the Business or the transactions
contemplated herein for any legitimate purpose, it will allow representatives of
such other party access to such records during regular business hours at its
place of business for the sole purpose of obtaining information for such use and
will permit such other party to make extracts and copies thereof (at their
expense) as may be necessary or convenient.
8.10. Consents. From and after the Closing Date, the Seller shall
--------
use its best reasonable efforts to obtain at the earliest practicable date all
consents or waivers of third parties to the Assigned Contracts and other
instruments (collectively, "Consents") necessary to the consummation of the
transactions contemplated hereby or to assign or transfer effectively to the
Buyer the Purchased Assets and will provide the Buyer with copies of each such
Consent after it is obtained. Anything contained in this Section 8.10 to the
contrary notwithstanding, this Agreement shall not constitute an agreement to
assign any contract, including without limitation the Assigned Contracts, if an
attempted assignment thereof without the consent of the other party thereto
would constitute a breach thereof. In the event that the Seller shall be unable
to secure any such Consent, then the Seller shall use reasonable efforts to make
available to the Buyer the economic benefits of the relevant Assigned Contract.
-35-
8.11. The Seller's Agreement Regarding Confidentiality. (a) The
------------------------------------------------
Seller covenants that, after the Closing, it will not, without the prior written
consent of the Buyer, disclose to any person confidential information relating
to or concerning the Purchased Assets, the Business, or the Buyer, except to its
officers, directors, employees and representatives who need to know such
information for purposes of taxes, accounting, pending litigation and other
matters necessary in respect of the Seller's ownership, prior to the Closing
Date, of the Purchased Assets or the Business, unless, in the unqualified
opinion of counsel to the Seller, disclosure is required to be made under the
Securities Act of 1933, the Securities Exchange Act of 1934, as amended (the
"1934 Act"), or other applicable law or the regulations of the New York Stock
Exchange. In the event that the Seller is requested or required by documents
subpoena, civil investigative demand, interrogatories, requests for information,
or other similar process to disclose any information supplied to the Seller in
the course of its ownership of the Purchased Assets, the Seller shall provide
the Buyer with prompt notice of such request or demands or other similar process
so that the Buyer may seek an appropriate protective order or, if such request,
demand or other similar process is not mandatory, waive the Seller's compliance
with the provisions of this Section 8.12(a) as appropriate.
-36-
(b) The term confidential information as used in this Section 8.11
does not include information which (I) becomes generally available to the public
other than as a result of disclosure by the Seller, (ii) was available on a non-
confidential basis prior to its disclosure by the Seller, or (iii) becomes
available to the Seller on a non-confidential basis from a source other than the
Buyer, provided that such source is not bound by a confidentiality agreement
with the Buyer or its representatives.
(c) For purposes of this Section 8.11, the Seller shall include
the Seller, its Affiliates, and any of their respective directors, officers,
employees and representatives.
(d) No failure or delay by the Buyer in exercising any right,
power or privilege under this Section 8.11 shall operate as a waiver thereof,
nor shall any single or partial exercise thereof preclude any other or further
exercise thereof or the exercise of any other right, power or privilege
hereunder.
8.12. The Buyer's Agreement Regarding Confidentiality. (a) The
-----------------------------------------------
Buyer covenants that, after the Closing, it will not, without the prior written
consent of the Seller, disclose to any person confidential information relating
to the Seller and its Affiliates which was acquired by the Buyer
-37-
in connection with the transaction contemplated herein, except to its officers,
directors, employees and representatives who need to know such information for
purposes of taxes, accounting, pending litigation and other matters, unless, in
the unqualified opinion of counsel to the Buyer, disclosure is required to be
made under the Securities Act of 1933, the 1934 Act, or other applicable law or
the regulations of a national securities exchange or NASDAQ, including without
limitation any disclosure required to be made in connection with the $7.5
million private placement of Common Stock to be underwritten by Xxxxxxx Xxxxx
Securities Incorporated (the "Financing"). The Seller acknowledges having
received a copy of selected pages from the private placement memorandum draft
(the "PPM") prepared by the Buyer in connection with the Financing, attached
hereto as Annex D, and approves the disclosure therein of any Seller-related
information for purposes of the Financing. In the event that the Buyer is
requested or required by documents subpoena, civil investigative demand,
interrogatories, requests for information, or other similar process to disclose
any of such information supplied to the Buyer, the Buyer shall provide the
Seller with prompt notice of such request or demands or other similar process so
that the Seller may seek an appropriate protective order or, if such request,
demand or other similar process is not
-38-
mandatory, waive the Buyer's compliance with the provisions of this Section
8.12, as appropriate.
(b) The term confidential information as used in this Section 8.12
does not include information which (I) becomes generally available to the public
other than as a result of disclosure by the Buyer, (ii) was available on a non-
confidential basis prior to its disclosure by the Buyer, or (iii) becomes
available to the Buyer on a non-confidential basis from a source other than the
Seller, provided that such source is not bound by a confidentiality agreement
with the Seller or its representatives.
(c) For purposes of this Section 8.12 the Buyer shall include the
Buyer, its Affiliates, and any of their respective directors, officers,
employees and representatives.
(d) No failure or delay by the Seller in exercising any right,
power or privilege under this Section 8.12 shall operate as a waiver thereof,
nor shall any single or partial exercise thereof preclude any other or further
exercise thereof or the exercise of any other right, power or privilege
hereunder.
-39-
8.13. Public Announcements. The Buyer and the Seller agree not to,
--------------------
without the other's prior written consent (which consent shall not be
unreasonably withheld or delayed), issue any press releases or otherwise make
any public statements with respect to the transactions contemplated herein.
Each party agrees to furnish to the other at least three (3) business days in
advance of any public announcement drafts of any such disclosures which are in
written form and written statements of the substance of any disclosures which
are verbally communicated. Failure by the recipient party to provide the
furnishing party with written objections within three (3) business days after
receipt of any such draft shall constitute consent thereto. Notwithstanding
anything to the contrary in this Section 8.13, (I) the Buyer may distribute the
PPM in connection with the Financing without obtaining the Seller's prior
written approval and (ii) either party may issue any press release or make any
public statement without the approval of the other as may be required by law.
8.14. Use of the Seller's Facilities. From the date of this
------------------------------
Agreement through December 31, 1996, the Seller shall permit the Employees
(other than X. Xxxxxxx Stoughton) who become employees of the Buyer to maintain
their offices at the Seller's facility located in Van Nuys, California, and
shall permit X. Xxxxxxx Stoughton to maintain an office at the Seller's
-40-
facility located in King of Prussia, Pennsylvania, in each case at no charge to
the Buyer. The Buyer agrees to provide suitable offices for the Employees from
and after January 1, 1997, and agrees to use its best efforts to cause the
Employees to vacate the Seller's facilities not later than December 31, 1996
(except in the case of X. Xxxxxxx Stoughton, who may remain at the Seller's King
of Prussia facility until April 1, 1997).
8.15. Credit Facility. SmithKline Xxxxxxx Corporation and the
---------------
Buyer have executed and delivered a loan and security agreement in the form of
Annex A hereto (the "Loan Agreement") and the Buyer has executed and delivered a
promissory note in the form of Annex B hereto (the "Note"). At the Closing, and
notwithstanding the terms and conditions of the Loan Agreement setting forth
conditions to drawdowns of funds thereunder, the Seller shall cause SmithKline
Xxxxxxx Corporation to disburse to the Buyer any amounts undisbursed as of the
Closing Date under the Loan Agreement. The parties hereby acknowledge and agree
that the Loan Agreement shall be deemed amended in accordance with this Section
8.16, as of the date hereof.
8.16. Funding of Operating Expenses. At the Closing, the Seller
-----------------------------
shall disburse to the Buyer any amounts undisbursed as of the Closing Date of
the aggregate amount of One Million Eight Hundred Thousand Dollars (US
$1,800,000) of
-41-
Operating Expenses of SBD that the Seller agreed to fund during the months of
July through October, 1996. For purposes of this Agreement, "Operating
Expenses" shall mean expenses and costs incurred in the ordinary course in
conducting the Business, consistent with past practice.
8.17. Payments to Immunomatrix. In the event that the Buyer shall
------------------------
enter into an agreement with Immunomatrix, Inc., after the Closing Date, for the
commercialization of certain point-of-care diagnostic testing products, then the
Buyer shall notify the Seller thereof and provide the Seller with a summary of
the financial terms thereof, within five (5) business days after execution
thereof.
8.18. Stockholders Agreement. The parties agree to enter into a
----------------------
Stockholders Agreement substantially in the form of Annex A hereto prior to the
initial closing of the Financing (or such later date as the parties may mutually
agree), and to use their best efforts to cause the other prospective parties
thereto to do so.
8.19. Further Assurances. The Seller agrees to do, execute and
------------------
deliver, or cause to be done, executed and delivered, all such further acts and
instruments as the Buyer may reasonably request in order more fully to
effectuate the sale and assignment provided for in this Agreement. The Buyer
agrees to do, execute and deliver, or cause to be done, executed and delivered,
all
-42-
such further acts and instruments as the Seller may reasonably request in order
more fully to effectuate the purchase and assumption provided for in this
Agreement.
8.20. Notice of Financing. The Buyer agrees to give the Seller
-------------------
notice of the closing of the Financing in an aggregate amount of not less than
Four Million Dollars (U.S. $4,000,000), within five business days thereafter.
8.21. Use of Name. The Buyer agrees not to use or cause other to
-----------
use, or to make reference to for any purpose after the Closing in any publicly
disseminated document, the names "SmithKline Xxxxxxx," "SmithKline Xxxxxxx
Clinical Laboratories," "SmithKline Xxxxxxx Diagnostic Systems" or any variant
thereof. Exept as expressly set forth elsewhere in this Agreement, the Seller
does not grant to the Buyer any trademark license of any kind whatsoever.
ARTICLE IX
SURVIVAL; INDEMNIFICATION
-------------------------
-43-
9.1. Survival of Representations and Warranties. All representations
------------------------------------------
and warranties made in Articles VI and VII hereof shall survive the Closing and
continue for two (2) years from the Closing Date; provided, however, that those
-------- -------
representations and warranties made by SBD in Section 6.1(e) hereof and those
representations and warranties made by SBCL in Section 6.2(c) hereof shall
survive the Closing and continue for a period of twenty (20) years from the
Closing Date. Any right of indemnification pursuant to this Section 9.1 with
respect to a claimed breach of a representation or warranty shall expire at the
date of termination of the representation or warranty claimed to be breached
(the "Termination Date"), unless on or prior to the Termination Date a Claim (as
defined herein) has been made to the party from whom indemnification is sought.
Provided that a Claim is timely made, it may continue to be asserted beyond the
Termination Date of the representation and warranty to which such Claim relates.
As used in this Agreement, a Claim means a written notice asserting a breach of
a representation, warranty, covenant, agreement or obligation specified in this
Agreement, which shall reasonably set forth, in light of the information then
known to the party giving such notice, a description of and estimate (if then
reasonable to make) of the amount of damages involved in such breach.
-44-
9.2. Indemnification. (a) After the Closing Date, SBD hereby agrees
---------------
to defend and, promptly upon the determination of the Damages (as defined below)
arising from or relating to any Claim, to indemnify and hold harmless the Buyer,
its Affiliates, and their respective directors, officers, shareholders and
employees (collectively, the "Buyer Group"), as the case may be, from and
against all demands, claims, actions or causes of action, assessments, losses,
damages, liabilities, costs and expenses, including, without limitation,
interest, penalties and attorneys' fees, disbursements and expenses
(collectively, the "Damages") asserted against, resulting to, or imposed upon or
incurred by any member of the Buyer Group, directly or indirectly, (I) by reason
of, or resulting from, or which constitutes, a breach of any representation,
warranty, covenant, agreement or other obligation of the Seller or SBD contained
in or made pursuant to this Agreement or (ii) by reason of, or resulting from,
any occurrence relating to the Excluded Assets.
(b) After the Closing Date, SBCL hereby agrees to defend and,
promptly upon the determination of the Damages arising from or relating to any
Claim, to indemnify and hold harmless the Buyer Group from and against all
Damages asserted against, resulting to, or imposed upon or incurred by any
member of the Buyer Group, directly or indirectly, by reason
-45-
of, or resulting from, or which constitutes, a breach of any representation or
warranty of SBCL contained in or made pursuant to this Agreement.
(c) After the Closing Date, the Buyer hereby agrees to defend
and, promptly upon the determination of the Damages arising from or relating to
any Claim, to indemnify and hold harmless the Seller, its Affiliates, and each
of their respective directors, officers, shareholders, and employees
(collectively, the "Seller Group"), as the case may be, from and against all
Damages asserted against, resulting to, or imposed upon or incurred by any
member of the Seller Group, directly or indirectly, (I) by reason of, or
resulting from, or which constitutes a breach of any representation, warranty,
covenant, agreement or other obligation of the Buyer contained in or made
pursuant to this Agreement or (ii) by reason of, or resulting from the operation
of the Business or the Purchased Assets after the Closing Date.
(d) Nothing in this Article IX shall be construed to affect
the rights to reimbursement or indemnification under other provisions of this
Agreement, notwithstanding that the matter for which reimbursement or indemnity
is sought also constitutes a matter for which an indemnity could be sought under
this Article IX; provided,
--------
-46-
however, that there shall not be any duplication or reimbursement or
-------
indemnification with respect to any such matter.
9.3. Third-Party Claims. The obligations and liabilities of any of
------------------
the parties to this Agreement under Section 9.2 hereof with respect to all items
indemnified against in Section 9.2 hereof and which are initiated by third
parties (the "Third-Party Claims") shall be subject to the following terms and
conditions:
(a) Upon receipt of written notice of any Third-Party Claim
asserted against, resulting to, imposed upon or incurred by any member of the
Buyer Group or the Seller Group, as the case may be (the "Indemnified Party"),
the party receiving such written notice (the "Indemnifying Party") will
undertake the defense thereof by counsel of its own choosing, which counsel
shall be reasonably satisfactory to the Indemnified Party, provided that if in
--------
the Indemnified Party's reasonable judgment a conflict of interest may exist
between such Indemnified Party and the Indemnifying Party with respect to such
Third-Party Claim, such Indemnified Party shall be entitled to select counsel of
its own choosing, in which event the Indemnified Party shall be obligated to pay
the fees and expenses of such counsel.
(b) If within a reasonable time after written notice of any
Third-Party Claim, the Indemnifying Party fails to defend the Indemnified Party
against whom such Third-
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Party Claim has been asserted, the Indemnified Party shall have the right to
undertake the defense, compromise or settlement of such Third-Party Claim on
behalf of and for the account and at the risk of the Indemnifying Party.
(c) Anything in this Section 9.3 to the contrary
notwithstanding, (I) if there is a reasonable probability in the Indemnified
Party's judgment that a claim may materially and adversely affect the
Indemnified Party or any of its Affiliates, directors, officers, shareholders or
employees against whom a Third-Party Claim is asserted other than as a result of
money damages or other money payments, the person against whom such Third-Party
Claim is asserted shall have the right to defend, co-defend, compromise or
settle such Third-Party Claim and (ii) the prior written consent of such person
against whom such Third-Party Claim is asserted, shall be required in connection
with the settlement or compromise of any claim or the entry of any judgment
relating to any such Third-Party Claim, only if such settlement, compromise or
judgment does not include as an unconditional term thereof the giving by the
claimant or the plaintiff to such person against whom such Third-Party Claim is
asserted, of a release from all liabilities in respect of such Third-Party
Claim.
(d) The Indemnifying Party shall provide the Indemnified Party
or any of its Affiliates, directors, officers,
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shareholders or employees against whom a Third-Party Claim is asserted with
access to all records and documents of the Indemnified Party relating to any
Third-Party Claim. The Indemnified Party will provide the Indemnifying Party
with access to all records and documents of the Indemnified party relating to
any Third-Party Claim.
ARTICLE X
MISCELLANEOUS PROVISIONS
------------------------
10.1. Expenses. Except as otherwise provided in this Agreement,
--------
whether or not the transactions contemplated hereby are consummated, all
expenses in connection with such transactions will be paid by the party
incurring said expenses.
10.2. Payment of Taxes Upon Transfer of Purchased Assets. The Buyer
--------------------------------------------------
agrees to bear all sales, use, transfer, recording and other similar taxes and
fees (but excluding any income, capital gains or similar taxes imposed on the
income or gain of the Seller, which will be borne solely by the Seller) arising
out of or in connection with the transactions contemplated by this Agreement,
without regard to whether such taxes and fees would otherwise be imposed on the
Seller. Each party shall use its best efforts to avail itself of any available
exemptions from any such taxes or fees, and shall cooperate with the other in
providing any information and documentation that may be necessary to obtain such
exemptions.
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10.3. Execution in Counterparts. This Agreement may be executed in
-------------------------
two or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same document.
10.4. Notices. All notices, requests, demands and other
-------
communications which are required or may be given pursuant to the terms of this
Agreement shall be in writing and shall be deemed given when delivered by hand,
mailed by registered mail, postage prepaid, return receipt requested, or
transmitted by facsimile, as follows:
If to the Buyer:
Exigent Diagnostics, Incorporated
Seven Xxxxxxx Xxxx
Xxxxxx, Xxxxxxxxxxxx 00000
Attention: X. Xxxxxxx Stoughton
With a copy to:
Xxxxx Xxxxxxx, Esquire
Pepper, Xxxxxxxx & Xxxxxxx
0000 Xxx Xxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000-0000
If to the Seller:
SmithKline Xxxxxxx Corporation
One Franklin Plaza (Mail Code FP 2225)
P. O. Xxx 0000
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: Chief Operating Officer
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With a copy to:
SmithKline Xxxxxxx Corporation
One Franklin Plaza (Mail Code FP 2225)
X.X. Xxx 0000
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: General Counsel,
Corporate Law-U.S.
or to such other address as any party shall have designated by notice in writing
to the other parties.
10.5. Waivers. No waiver of any provision of this Agreement shall be
-------
effective as against the waiving party unless such waiver is in writing signed
by the waiving party. Waiver by a party as provided in this Section shall not be
construed as, or constitute either a continuing waiver or a waiver of any other
matter.
10.6. Amendment. This Agreement may only be modified, supplemented
---------
or amended by a written instrument executed by all of the parties to it.
10.7. Entire Agreement. This Agreement (together with the Schedules
----------------
and Annexes hereto and the other agreements expressly identified in this
Agreement) constitutes the entire agreement of the parties with respect to its
subject matter, and supersedes all prior agreements and understandings of the
parties, oral and written, with respect to its subject matter.
10.8. Applicable Law. This Agreement shall be governed by and
--------------
construed in accordance with the laws of the
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Commonwealth of Pennsylvania without giving effect to any of the choice of law
rules thereof.
10.9. Relationship of the Parties. The relationship between the
---------------------------
Seller and the Buyer established by this Agreement is solely that of vendor and
vendee and nothing contained herein shall be deemed to create a joint venture
among the Buyer and the Seller.
10.10. Headings. The headings contained in this Agreement are for
--------
the sole purpose of convenience of reference, and shall not in any way limit or
affect the meaning or interpretation of any of the terms or provisions of this
Agreement.
10.11. Assignments. This Agreement may not be assigned or delegated
-----------
by either party without the prior written consent of the other party.
10.12. Binding Effect; Benefits. This Agreement shall inure to the
------------------------
benefit of, and be binding upon, the parties to it and their respective
successors, permitted assigns and other transferees. Nothing contained in this
Agreement, express or implied, is intended to confer upon any person other than
the parties to it and their respective successors, permitted assigns and other
transferees, any rights or remedies under or by reason of this Agreement.
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IN WITNESS WHEREOF, this Agreement has been executed by duly
authorized officers of each of the parties and the Secretary of each such party
has caused its corporate seal to be affixed, all as of the date first above
written.
SMITHKLINE XXXXXXX CLINICAL EXIGENT DIAGNOSTICS, INC.
LABORATORIES, INC.
By: /s/ Xxxxxx X. Xxxxxxxxx By: /s/ X. Xxxxxxx Stoughton
--------------------------- ----------------------------
Xxxxxx X. Xxxxxxxxx X. Xxxxxxx Stoughton
Attorney-in-Fact Chairman and Chief
Executive Officer
[EXECUTIONS CONTINUED]
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SMITHKLINE XXXXXXX DIAGNOSTIC
SYSTEMS CO.
By: /s/ Xxxxxx X. Xxxxxxxxx
--------------------------
Xxxxxx X. Xxxxxxxxx
Attorney-in-Fact
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DISCLOSURE SCHEDULE
DATED AS OF NOVEMBER 7, 1996
PURSUANT TO THE
ASSET PURCHASE AGREEMENT
DATED AS OF NOVEMBER 7, 1996
AMONG
SMITHKLINE XXXXXXX CLINICAL LABORATORIES, INC.,
SMITHKLINE XXXXXXX DIAGNOSTIC SYSTEMS CO.,
AND
EXIGENT DIAGNOSTICS, INC.,
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CONTENTS
--------
Schedule
--------
Assigned Contracts.................................................... 1
Base Balance Sheet.................................................... 2
Capital Equipment..................................................... 3
Computer Hardware and Office Equipment................................ 4
Proprietary Software and Date......................................... 5
Liens................................................................. 6
Employees............................................................. 7
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SCHEDULE 1
ASSIGNED CONTRACTS
------------------
I. SELLER:
------
(I) Agreement Number CPO28255 Cost Type Agreement between Battelle
Memorial Institute through its Battelle Columbus Operations and
SmithKline Xxxxxxx Corporation, dated as of November 14, 1995.
(ii) Agreement between Xxxxxx, Inc. and SmithKline Xxxxxxx
Corporation, dated as of February 28, 1996.
(iii) Preliminary Agreement between United Medical Manufacturing
Company and SmithKline Xxxxxxx Corporation, dated as of May 10,
1995.
All of the Assigned Contracts were assigned by SmithKline Xxxxxxx
Corporation to SBD as of November 5, 1996.
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SCHEDULE 2
BASE BALANCE SHEET
------------------
See Attached
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SCHEDULE 3
CAPITAL EQUIPMENT
-----------------
See Attached
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SCHEDULE 4
COMPUTER HARDWARE AND OFFICE EQUIPMENT
--------------------------------------
Description Serial #
----------- --------
Compaq DeskPro 590 #6552-HSX2-Q610
with NEC MultiSync XE15 monitor
*Compaq DeskPro 590 #CNT-75MD-B6NJ
with NEC MultiSync XE15 monitor
Compaq Smart Station #6550-HFP2-F281
Murata F-75 plain paper fax machine FCC Reg. # EDUJPN-18639-FA-E
HP LaserJet 5MP USFB-068-260
Sony Computer Display #5504160
Compaq Series 3030 Deskpro 50M #6225-HBP3-0065
Keyboard #2201-146C-E165
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SCHEDULE 5
PROPRIETARY SOFTWARE AND DATA
-----------------------------
None
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SCHEDULE 6
LIENS
-----
1. SmithKline Xxxxxxx Diagnostic Systems Co.:
. There are no Federal or state tax liens of record at the Xxxxxxxxxx
County, Pennsylvania Prothonotary's office through October 8, 1996.
2. SmithKline Xxxxxxx Clinical Laboratories, Inc.:
. There are no Federal tax liens of record at the Xxxxxxxxxx County,
Pennsylvania Prothonotary's office through October 8, 1996, and there
are no state tax liens of record at the Xxxxxxxxxx County,
Pennsylvania Prothonotary's office through October 24, 1996.
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SCHEDULE 7
EMPLOYEES
---------
See Attached
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ANNEXES
-------
Stockholders Agreement................................................. A
Loan Agreement......................................................... B
Note................................................................... C
Private Placement Memorandum Excerpt................................... D
Outstanding Securities................................................. E
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