EXHIBIT 2.2
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ASSET PURCHASE AGREEMENT
BY AND AMONG
VERTEX PHARMACEUTICALS INCORPORATED,
PANVERA LLC,
AND
INVITROGEN CORPORATION
FEBRUARY 4, 2003
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TABLE OF CONTENTS
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ARTICLE I DEFINITIONS ................................................1
1.1 Definitions .................................................1
ARTICLE II ASSET PURCHASE ............................................8
2.1 Purchase and Sale of Assets; Assumption of Liabilities ......8
2.2 Purchase Price and Related Matters .........................12
2.3 The Closing ................................................14
2.4 Further Assurances .........................................15
2.5 Owner Obligations ..........................................16
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE OWNER AND
THE SELLER .................................................16
3.1 Organization, Qualification and
Limited Liability Company Power ..........................16
3.2 Authority; Required Filings and Consents ...................16
3.3 Noncontravention ...........................................17
3.4 Title to Business Assets ...................................18
3.5 Employee Benefit Plans .....................................18
3.6 Financial Information ......................................20
3.7 Absence of Certain Changes .................................20
3.8 Intellectual Property ......................................21
3.9 Material Contracts .........................................24
3.10 Product Liability; Litigation ..............................25
3.11 Environmental Matters ......................................25
3.12 Legal Compliance ...........................................27
3.13 Applicable Permits .........................................27
3.14 Brokers' Fees ..............................................27
3.15 Warranty Claims ............................................27
3.16 Taxes ......................................................27
3.17 Inventory ..................................................29
3.18 Absence of Undisclosed Liabilities .........................29
3.19 Real Estate ................................................29
3.20 Exports and Customs ........................................32
3.21 Insurance ..................................................32
3.22 Labor Relations ............................................32
3.23 WARN Act ...................................................32
3.24 Accounts Receivable ........................................33
3.25 Customers ..................................................33
3.26 Disclosures Regarding Business Assets ......................33
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE BUYER ..............34
4.1 Organization ...............................................34
4.2 Authority ..................................................34
4.3 Noncontravention ...........................................34
4.4 Litigation .................................................35
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TABLE OF CONTENTS
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4.5 Brokers' Fees ..............................................35
4.6 Representations and Warranties .............................35
ARTICLE V PRE-CLOSING COVENANTS .....................................35
5.1 Closing Efforts; Xxxx-Xxxxx-Xxxxxx Act;
Obligations of Other Vertex Parties ......................35
5.2 Operation of the Business ..................................37
5.3 Access. ....................................................40
5.4 Exclusivity. ...............................................40
5.5 Notice of Litigation .......................................41
5.6 Supplements to the Seller Disclosure Schedule ..............41
ARTICLE VI CONDITIONS PRECEDENT TO CLOSING ..........................42
6.1 Conditions to Obligations of the Buyer .....................42
6.2 Conditions to Obligations of the
Owner and the Seller .......................................43
ARTICLE VII INDEMNIFICATION .........................................44
7.1 Indemnification by the Owner and the Seller ................44
7.2 Indemnification by the Buyer ...............................45
7.3 Claims for Indemnification .................................45
7.4 Survival ...................................................46
7.5 Limitations ................................................47
7.6 Treatment of Indemnification Payments ......................48
7.7 Effect of Closing ..........................................48
ARTICLE VIII TERMINATION ............................................48
8.1 Termination of Agreement ...................................48
8.2 Effect of Termination ......................................49
ARTICLE IX ADDITIONAL COVENANTS .....................................49
9.1 Taxes. .....................................................49
9.2 UCC Matters ................................................50
9.3 Discharge of Business Obligations ..........................50
9.4 Change of the Seller's Name ................................50
9.5 Public Announcement ........................................50
9.6 Post Closing Obligation to Employees .......................51
9.7 Non-Solicitation of Employees ..............................52
9.8 Delivery of Certain Business Records .......................52
9.9 Confidentiality and Nonuse Obligations .....................53
9.10 Limitations on Granted or Retained Rights ..................53
ARTICLE X POST-CLOSING AGREEMENTS ...................................53
10.1 Collection of Receivables ..................................53
10.2 Use of Aurora Trade Name ...................................53
10.3 Access to Business Records .................................54
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TABLE OF CONTENTS
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ARTICLE XI MISCELLANEOUS ............................................54
11.1 No Third-Party Beneficiaries ...............................54
11.2 Entire Agreement. ..........................................54
11.3 Succession and Assignment ..................................54
11.4 Notices ....................................................55
11.5 Amendments and Waivers .....................................55
11.6 Severability ...............................................55
11.7 Expenses ...................................................56
11.8 Specific Performance .......................................56
11.9 Governing Law ..............................................56
11.10 Construction ...............................................56
11.11 Waiver of Jury Trial .......................................56
11.12 Incorporation of Exhibits and Schedules ....................56
11.13 Counterparts and Facsimile Signature .......................57
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SCHEDULES:
Schedule 1 Business Material Adverse Effect
Schedule 1.1 Permitted Encumbrances
Schedule 1.1(a) Products
Schedule 2.1(a)(i) Real Estate
Schedule 2.1(a)(iii) Trademarks and Patent Rights
Schedule 2.1(a)(vi) Investments
Schedule 2.1(b)(i) Instrumentation Assets
Schedule 5.1(a)(i) Consent Costs and Upfront License Fees
Schedule 5.1(a)(iv) Instrumentation License
Schedule 5.2(e) Exceptions to Interim Operations Covenants
Schedule 5.2(e)(xiv) Changes in Employee Compensation
Schedule 5.2(e)(xv) Additional Seller Employees
Schedule 5.6(b) MTA's To Be Determined as to Assignment
Schedule 6.1(f) Applicable Permits
Schedule 6.1(h) Third-Party Consents to be Obtained by Seller
Schedule 7.1(d) Certain Indemnification Items
Schedule 9.6(a) Seller Employees
THE SELLER DISCLOSURE SCHEDULES:
Section 3.1(c) Equity Interests
Section 3.3(c) Consents under Material Contracts
Section 3.5(a) Employee Benefit Plans
Section 3.5(f) Parachute Payments
Section 3.6(a) Financial Information
Section 3.7 Absence of Certain Changes
Section 3.8(a) Intellectual Property - Material Agreements
Section 3.8(b) Third-Party Claims/Joint Licenses and Co-Owned Patents
Section 3.8(d) Exceptions to Validity
Section 3.8(e) Licenses, Covenants Not to Compete, etc.
Section 3.8(f) Conveyances of Proprietary Assets
Section 3.8(g) Royalty Obligations
Section 3.8(i) Infringement Notice Instances
Section 3.9 Material Contracts
Section 3.10 Product Liability; Litigation
Section 3.11(a) Environmental Permits
Section 3.11(b) Violation of Environmental Laws
Section 3.11(g) Release of Hazardous Substances
Section 3.11(h) Environmental Consents
Section 3.11(i) Environmental Matters
Section 3.13 Permits
Section 3.14 Brokers' Fees
Section 3.15 Warranty Claims
Section 3.16(a) Taxes
Section 3.17 Inventory
Section 3.18 Undisclosed Liabilities
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Section 3.19(a) Real Estate
Section 3.20 Exports and Customs
Section 3.21 Insurance
Section 3.24 Accounts Receivable
Section 3.25 Customers
EXHIBITS:
Exhibit A Xxxx of Sale
Exhibit B Assignment and Assumption Agreement
Exhibit C Non-Competition Agreement
Exhibit D Shared Know-How Agreement
Exhibit E Transition Services Agreement
Exhibit F Supply Agreement
Exhibit G-1 Form of Contract Administration Agreement (Assay)
Exhibit G-2 Form of Contract Assignment and Administration Agreement
(Instrumentation)
Exhibit H-1- H-11 Amended and Restated Technology Agreements
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[Vertex shall provide supplementally a copy of any omitted schedule to the
Securities and Exchange Commission upon request]
ASSET PURCHASE AGREEMENT
This
ASSET PURCHASE AGREEMENT (the "AGREEMENT") is entered into as of
February 4, 2003, by and among Vertex Pharmaceuticals Incorporated, a
Massachusetts corporation (the "OWNER"), PanVera LLC, a Delaware limited
liability company (the "SELLER") and Invitrogen Corporation, a Delaware
corporation (the "BUYER"). The Owner, the Seller and the Buyer are referred to
herein individually as a "PARTY" and collectively as the "PARTIES."
INTRODUCTION
The Seller is engaged in, among other matters, the business of developing,
manufacturing and selling life sciences discovery products, probes, proteins and
reagents, and assay development services;
The Owner is engaged in, among other matters, the business of discovering,
developing and commercializing ethical pharmaceutical products independently and
with partners; and
The Buyer desires to purchase from the Seller, and the Seller desires to
sell to the Buyer, all of the Seller's right, title and interest in and to
substantially all of the assets and properties of the Seller, subject to the
assumption by the Buyer of specified related liabilities, upon the terms and
conditions set forth herein.
TERMS
NOW, THEREFORE, in consideration of the representations, warranties,
covenants and agreements contained in this Agreement and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Parties agree as follows:
ARTICLE I
DEFINITIONS
1.1 DEFINITIONS. Whenever used in this Agreement, the terms defined
below shall have the indicated meaning:
"ACCOUNT PARTIES" shall have the meaning set forth in Section 10.1.
"ACCOUNTING FIRM" shall have the meaning set forth in Section 2.2(b)(iii).
"ACQUIRED ASSETS" shall have the meaning set forth in Section 2.1(a).
"ADJUSTMENT AMOUNT" shall have the meaning set forth in Section 2.2(b)(i).
"AFFILIATE" means, with respect to any Person, any Person which directly
or indirectly through stock ownership or otherwise either controls, or is
controlled by or under common control with, such Person.
"AGREEMENT" shall have the meaning set forth in the preamble.
"AMENDED AND RESTATED TECHNOLOGY AGREEMENTS" shall mean the agreements in
the forms attached hereto as Exhibits H-1 through H-11.
"ANCILLARY AGREEMENTS" shall have the meaning set forth in Section 2.3(b).
"APPLICABLE ACCOUNTING PRINCIPLES" means United States generally accepted
accounting principles ("GAAP") (applied on a "going concern" basis without
reflecting the transactions contemplated under this Agreement).
"APPLICABLE PERMITS" shall have the meaning set forth in Section 3.13 and
shall not include Environmental Permits.
"ASSIGNED CONTRACTS" shall have the meaning set forth in Section
2.1(a)(ii).
"ASSIGNMENT AND ASSUMPTION AGREEMENT" shall mean the Assignment and
Assumption Agreement in the form of EXHIBIT B hereto.
"ASSIGNMENT OF GROUND LEASE" means an Assignment of Ground Lease in form
reasonably acceptable to the Buyer.
"ASSUMED LIABILITIES" shall have the meaning set forth in Section 2.1(c).
"AURORA" means Aurora Biosciences Corporation, formerly a Delaware
corporation and wholly owned subsidiary of Owner, which was merged with and into
Vertex San Diego on July 1, 2002.
"BENEFIT PLANS" shall have the meaning set forth in Section 3.5(a).
"XXXX OF SALE" means the Xxxx of Sale in the form of EXHIBIT A hereto.
"BUSINESS" means, collectively, (a) the business of the Vertex Parties, at
the time this Agreement is executed, of developing, manufacturing and/or
commercializing proteins, reagents and/or assays listed on SCHEDULE 1.1(a),
providing services related thereto and/or licensing of intellectual property or
confidential information related thereto, (b) performing the obligations of the
Vertex Parties under the Assigned Contracts and (c) developing, manufacturing
and/or commercializing products and providing services that would require rights
under any Proprietary Asset that is listed on SCHEDULE 2.1(a)(iii) to this
Agreement or in Parts 1 or 2 of SECTION 3.8(a) OF THE SELLER DISCLOSURE SCHEDULE
or Part 2 of SECTION 3.8(b) OF THE SELLER DISCLOSURE SCHEDULE, and/or licensing
of intellectual property or confidential information related thereto; provided,
however, that "Business" excludes the Instrumentation Assets, and further
excludes the activities of the Vertex Parties (other than the Seller) which
would not be prohibited by the Non-Competition Agreement or would be permitted
under the Amended and Restated Technology Agreements.
"BUSINESS ASSETS" shall have the meaning set forth in Section 2.1(a).
"BUSINESS DAY" shall have the meaning set forth in Section 2.3(a).
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"BUSINESS MATERIAL ADVERSE EFFECT" means (i) any effect that is materially
adverse to the Business Assets or the Business, as operated, and as proposed to
be operated, by Seller on the date of this Agreement, taken as a whole, other
than (a) any such effect resulting from changes in the general financial markets
or from changes in the international or national markets for the products made
or proposed to be made by use of the Business Assets which have not had a
materially disproportionate impact on the Business, (b) any such effect
resulting solely from the occurrence of the matters set forth on SCHEDULE 1
hereto or (c) any such effect resulting solely from the identity of Buyer, each
of (b) and (c) as proven by the Seller; or (ii) any matter that materially
impairs the ability of the Seller or the Owner to consummate the transactions
contemplated by this Agreement.
"BUYER" shall have the meaning set forth in the preamble.
"BUYER CERTIFICATE" shall have the meaning set forth in Section 6.2(d).
"BUYER INDEMNITEES" shall have the meaning set forth in Section 7.1.
"BUYER MATERIAL ADVERSE EFFECT" shall have the meaning set forth in
Section 4.3(b).
"BUYER RECEIVABLES ACCOUNT" shall have the meaning set forth in Section
10.1.
"CERCLA" shall have the meaning set forth in Section 3.11(f).
"CLAIM NOTICE" shall have the meaning set forth in Section 7.3(b).
"CLOSING" shall have the meaning set forth in Section 2.3(a).
"CLOSING BALANCE SHEET" shall have the meaning set forth in Section
2.2(b)(i).
"CLOSING DATE" shall have the meaning set forth in Section 2.3(a).
"CODE" means the Internal Revenue Code of 1986, as amended.
"CONFIDENTIALITY AGREEMENT" shall have the meaning set forth in Section
5.3.
"CONTRACT ADMINISTRATION AGREEMENT (ASSAY)" shall mean the Contract
Administration Agreement in the form of EXHIBIT G-1 hereto.
"CONTRACT ADMINISTRATION AGREEMENT (INSTRUMENTATION)" shall mean the
Contract Administration Agreement in the form of EXHIBIT G-2 hereto.
"DAMAGES" shall have the meaning set forth in Section 7.1.
"EMPLOYEES" shall have the meaning set forth in Section 3.5(g)(iii).
"ENVIRONMENTAL LAW" means any foreign, federal, state, provincial, or
municipal statute, rule, regulation, ordinance, directives, orders or decrees of
any Governmental Authority in effect on or before the Closing Date and relating
to the protection of the environment, including
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without limitation pertaining to the presence, manufacture, processing, use,
treatment, storage, disposal, transportation, handling, generation or Release of
Hazardous Substances.
"ENVIRONMENTAL LIABILITIES" means any and all Liabilities (including
without limitation the costs of investigation, clean up actions, remedial
actions or other response costs) arising out of or relating to any of the
following conditions or events to the extent such conditions or events occur on
or before the Closing Date: (a) environmental conditions, including the presence
or Release or exposure to Hazardous Substances at, on, in, from or around the
Real Estate, (b) the off-site transportation, storage, treatment, recycling,
disposal or arrangement for disposal of or distribution of Hazardous Substances
by or on behalf of the Seller or any of its predecessors in connection with the
Business or the Business Assets, and (c) any violation of any Environmental Law
(including any costs and expenses reasonably incurred after Closing to come into
compliance with such Environmental Law).
"ENVIRONMENTAL PERMITS" shall have the meaning set forth in Section
3.11(a).
"ERISA" shall have the meaning set forth in Section 3.5(g)(i).
"ERISA AFFILIATE" shall have the meaning set forth in Section 3.5(g)(ii).
"EXCLUDED ASSETS" shall have the meaning set forth in Section 2.1(b).
"EXCLUDED LIABILITIES" shall have the meaning set forth in Section 2.1(d).
"FINANCIAL STATEMENTS" shall have the meaning set forth in Section 3.6(a).
"FORMER EMPLOYEES" shall have the meaning set forth in Section 3.5(g)(iv).
"FORMER SELLER EMPLOYEE" shall have the meaning set forth in Section
9.6(a).
"GAAP" shall have the meaning set forth in the definition of "APPLICABLE
ACCOUNTING PRINCIPLES."
"GOVERNMENTAL AUTHORITY" means any governmental department, commission,
board, bureau, agency, court or other instrumentality of the United States or
foreign country or any county, jurisdiction, municipality or other political
subdivision thereof or any other supranational organization of sovereign states.
"GOVERNMENTAL FILINGS" shall have the meaning set forth in Section
5.1(a)(ii).
"XXXX-XXXXX-XXXXXX ACT" shall have the meaning set forth in Section
3.2(c)3.
"HAZARDOUS SUBSTANCE" means any hazardous or toxic substance, pollutant,
material, waste or contaminant that is regulated by an Environmental Law.
"INDEMNIFIED PARTY" shall have the meaning set forth in Section 7.3(a).
"INDEMNIFYING PARTY" shall have the meaning set forth in Section 7.3(a).
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"IRS" means the Internal Revenue Service of the United State of America.
"INSTRUMENTATION ASSETS" shall have the meaning set forth in Section
2.1(b)(i).
"INVESTMENTS" shall have the meaning set forth in Section 2.1(a)(vi).
"KEY CUSTOMER" shall have the meaning set forth in Section 3.25.
"KNOW-HOW" means any and all confidential information and data of any kind
and in any form whatsoever owned by the Seller and generated or used by the
Seller in connection with the Business including, without limitation,
techniques, inventions, practices, methods, knowledge, know-how, skill,
software, experience, test data (including pharmacological, toxicological and
clinical test data), analytical and quality assurance and quality control data
and information, marketing, cost, and sales information and manufacturing
technology, data and descriptions, compositions and assays.
"KNOWLEDGE OF THE BUYER" means the actual knowledge of any senior officer
of the Buyer after reasonable inquiry within Buyer and its Affiliates with
respect to the matter in question.
"KNOWLEDGE OF THE SELLER" means the actual knowledge of any senior officer
of the Seller, Owner and Vertex San Diego after reasonable inquiry within Seller
and its Affiliates with respect to the matter in question.
"LEASE" means that certain University Research Park Ground Lease, as
amended, dated October 1, 1998, by and between University Research Park, Inc.
and PanVera Corporation.
"LETTER" shall have the meaning set forth in Section 10.1.
"LIABILITY" means any liability or obligation (whether known or unknown,
whether asserted or unasserted, whether absolute or contingent, whether accrued
or unaccrued, whether liquidated or unliquidated and whether due or to become
due).
"LIEN" means any lien, charge, claim, pledge, security interest,
conditional sale agreement or other title retention agreement, lease, mortgage,
security agreement, right of first refusal, option, restriction, license,
covenant, or other encumbrance (including title defects of any kind whatsoever,
or the filing of, or agreement to give any financing statement under the Uniform
Commercial Code or statute or law of any jurisdiction).
"MANAGED" shall have the meaning set forth in Section 3.11(c).
"MANAGEMENT" shall have the meaning set forth in Section 3.11(c).
"MATERIAL CONTRACT" shall have the meaning set forth in Section 3.9.
"MATERIAL LOSS" shall mean a loss or damage suffered or incurred by a
Party or other adverse circumstance affecting a Party which has a reasonable
likelihood of being valued at $2,500,000 or more.
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"NON-COMPETITION AGREEMENT" means the Non-Competition Agreement in the
form of EXHIBIT C hereto.
"NOVEMBER 30 BALANCE SHEET" shall have the meaning set forth in Section
3.6(a).
"NOVEMBER 30 INCOME STATEMENT" shall have the meaning set forth in Section
3.6(a).
"OWNER" shall have the meaning set forth in the preamble.
"PANVERA CORPORATION" means PanVera Corporation, formerly a Wisconsin
corporation, which was indirectly merged into the Seller on July 1, 2002.
"PARTIES" shall have the meaning set forth in the preamble.
"PATENT RIGHTS" shall have the meaning set forth in Section 2.1(a)(iii).
"PERMITTED ENCUMBRANCES" means any (i) liens for Taxes and assessments
arising in the ordinary course of business that are not yet due and payable,
(ii) mechanic's, workmen's, repairmen's, warehousemen's, carrier's or other like
liens arising or incurred in the ordinary course of business and not material in
amount and (iii) those Liens set forth on SCHEDULE 1.1 hereto.
"PERSON" means an individual, a corporation, a limited liability company,
a partnership, an association, a trust or other entity or organization,
including a federal, state, local or foreign government or regulatory entity or
political subdivision or an agency or instrumentality thereof.
"PROPRIETARY ASSET" means any and all of the following in any country: (a)
patents (including utility models, design patents, certifications of invention,
extensions, reissues, reexaminations and the like), patent applications
(including provisionals, divisionals, continuations and continuations-in-part),
trademarks (whether registered or unregistered), trademark applications, trade
names, fictitious business names, service marks (whether registered or
unregistered), service xxxx applications, copyrights (whether registered or
unregistered), copyright applications, moral rights, maskworks, maskwork
applications, trade secrets, Know- How, computer software, computer programs,
source code, algorithms, inventions, discoveries, technology and other
intellectual property rights and intangible assets; and (b) the right (whether
at law, in equity by contract or otherwise) to use or otherwise exploit any of
the foregoing.
"PURCHASE PRICE" shall have the meaning set forth in Section 2.2(a).
"REAL ESTATE" means the real property set forth on SCHEDULE 2.1(a)(i).
"REFERENCE AMOUNT" shall have the meaning set forth in Section 2.2(b)(i).
"RELEASE" means any spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, dumping, or disposing
(including the abandonment or discarding of barrels, containers, and other
closed receptacles containing any Hazardous Substances) or the threat thereof.
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"SELLER" shall have the meaning set forth in the preamble.
"SELLER CERTIFICATE" shall have the meaning set forth in Section 6.1(d).
"SELLER DISCLOSURE SCHEDULE" means the Seller Disclosure Schedule provided
for in Article III, as supplemented and amended in accordance with the
provisions of Section 5.6(a). The disclosure of any item in any Section of the
Seller Disclosure Schedule shall constitute disclosure of that item in any and
all Sections of the Seller Disclosure Schedule as to which such disclosure would
reasonably pertain and be readily apparent on its face.
"SELLER EMPLOYEES" shall have the meaning set forth in Section 9.6(a).
"SELLER INDEMNITEES" shall have the meaning set forth in Section 7.2.
"SHARED KNOW-HOW" shall have the meaning given such term in the Shared
Know-How Agreement.
"SHARED KNOW-HOW AGREEMENT" means the Shared Know-How Agreement in the
form of EXHIBIT D hereto.
"STRADDLE PERIOD" means any Taxable period that includes, but does not end
on the Closing Date.
"SUPPLY AGREEMENT" means the Supply Agreement in the form of EXHIBIT F
hereto.
"TAXES" (including, with correlative meaning, the terms "TAX" and
"TAXABLE") shall mean all taxes of any kind imposed by a federal, state, local
or foreign Governmental Authority, including but not limited to (i) all taxes,
domestic or foreign, including without limitation any income (net, gross or
other, including recapture of any tax items such as investment tax credits),
alternative or add-on minimum tax, gross income, gross receipts, gains, sales,
use, leasing, lease, user, ad valorem, transfer, recording, franchise, profits,
property (real or personal, tangible or intangible), fuel, license, withholding,
payroll, employment, unemployment, social security, excise, severance, stamp,
occupation, premium, environmental or windfall profit tax, custom, duty or other
tax, or other like assessment or charge of any kind whatsoever, together with
any interest, levies, assessments, charges, penalties and additions, (ii) any
joint or several liability of such Person with any other Person for the payment
of any amounts of the type described in (i) of this definition and (iii) any
liability for the payment of any amounts of the type described in (i) as a
result of any express or implied obligation to indemnify any other Person.
"TAX RETURNS" means all reports, returns, schedules and any other
documents required to be filed with respect to Taxes and all claims for refunds
of Taxes.
"THIRD-PARTY" shall mean any Person who is not a Party to this Agreement
or an Affiliate of a Party to this Agreement.
"THIRD-PARTY CLAIM" shall have the meaning set forth in Section 7.3(a).
"THIRD-PARTY CONSENTS" shall have the meaning set forth in Section
5.1(a)(i).
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"TRADEMARKS" shall have the meaning set forth in Section 2.1(a)(iii).
"TRANSFER DOCUMENTS" shall have the meaning set forth in Section 2.3(b).
"TRANSITION SERVICES AGREEMENT" means the Transition Services Agreement in
the form of EXHIBIT E hereto.
"TRANSFERRED EMPLOYEES" shall have the meaning set forth in Section
9.6(b).
"VERTEX PARTIES" means the Seller, the Owner, Vertex San Diego, PanVera
Corporation, Aurora, each of their successors and assigns, and each of their
respective Affiliates.
"VERTEX SAN DIEGO" means Vertex Pharmaceuticals (San Diego) LLC, a
Delaware limited liability company and a wholly owned subsidiary of the Owner.
"WARN ACT" shall have the meaning set forth in Section 3.23.
ARTICLE II
ASSET PURCHASE
2.1 PURCHASE AND SALE OF ASSETS; ASSUMPTION OF LIABILITIES.
(a) TRANSFER OF ASSETS. At the Closing the Seller shall, and the
Owner shall cause the Seller to, sell, convey, assign, transfer and deliver to
the Buyer (or one or more of its assignees), and the Buyer shall purchase and
acquire from the Seller, all of the Seller's right, title and interest in and to
the Business Assets, free and clear of all Liens other than Permitted
Encumbrances. For purposes of this Agreement, the "BUSINESS ASSETS" shall mean
all assets used in the operation of the Business by the Seller on the date of
this Agreement (other than those assets disposed of by the Seller on or prior to
the Closing Date but only to the extent permitted by Section 5.2 hereof) plus
any assets acquired by the Seller following the date of this Agreement and on or
prior to the Closing Date, but excluding the Excluded Assets. The Business
Assets which are owned by the Seller, including the Assigned Contracts (pursuant
to which Assigned Contracts the Seller has been provided its rights in certain
of the Business Assets), are referred to hereinafter as the "ACQUIRED ASSETS."
The Business Assets to which the Seller is transferring all of its right, title
and interest include without limitation the following:
(i) the real property, leaseholds, subleases and
interests therein, options or similar rights to purchase, lease, use or occupy
real property and buildings, structures, facilities, fixtures and other
improvements thereon and appurtenances thereto, that are listed by premises,
building or street address, and tax lot number on SCHEDULE 2.1(a)(i) hereto
(collectively, the "REAL ESTATE");
(ii) all oral and written contracts, agreements, leases,
subleases, licenses, and other arrangements used in the Business, including,
without limitation, the Material Contracts (the "ASSIGNED CONTRACTS");
(iii) all Proprietary Assets generated or used by or on
behalf of the Seller in connection with the Business, including, without
limitation, those trademarks and trade
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names and registrations thereof and registration applications therefor set forth
on SCHEDULE 2.1(a)(iii) hereto (the "TRADEMARKS") and those patents (including
any extension, reissue, reexamination or the like relating thereto) and patent
applications (including any provisional, divisional, continuation or
continuation in part) set forth on SCHEDULE 2.1(a)(iii) hereto (the "PATENT
RIGHTS");
(iv) all actions, claims, causes of action, rights of
recovery, choses in action or rights to set off, whether arising out of
occurrences before or after the Closing Date, including Third-Party warranties
and guarantees and other similar contractual rights as to third parties held by
or in favor of any of the Vertex Parties with respect to any of the Business
Assets, except for those described in clauses (i) and (iii) of the definition of
"EXCLUDED ASSETS";
(v) all of the Seller's accounts receivable and other
receivables relating to the Business Assets or arising out of the conduct of the
Business;
(vi) subject to the provisions of Section 2.2(c), below,
those equity securities set forth on SCHEDULE 2.1(a)(vi) (the "INVESTMENTS");
and
(vii) all other assets and properties reflected on the
Closing Balance Sheet.
(b) EXCLUDED ASSETS. The Buyer shall not be entitled or obligated
to purchase any of the Excluded Assets. "EXCLUDED ASSETS" shall mean any assets,
properties or rights of any Vertex Party other than the Seller, together with
the following assets, properties and rights of the Seller:
(i) those assets described on SCHEDULE 2.1(b)(i) hereto,
which were conveyed by Seller to Aurora Biosystems LLC, prior to the date of
this Agreement but subsequent to the date of the November 30 Balance Sheet (the
"INSTRUMENTATION ASSETS");
(ii) any cash or short-term marketable securities (which
for purposes hereof shall be deemed to not include any of the Investments);
(iii) rights to insurance claims, related refunds and
proceeds of claims asserted against third parties which arise out of occurrences
before or after the Closing Date, including rights with respect to Third-Party
warranties and guarantees and other similar contractual rights held by or in
favor of any of the Vertex Parties with respect to any of the Business Assets,
solely to the extent the Seller, and not the Buyer, bears or is responsible for
the matter to which such right or action relates (whether because the matter
relates to an Excluded Liability or otherwise), and then only to the extent of
amounts paid by the Seller with respect thereto (including by way of any
reduction in the Purchase Price);
(iv) all assets relating to the Benefit Plans and other
policies, programs and agreements set forth in SECTION 3.5(a) OF THE SELLER
DISCLOSURE SCHEDULE;
(v) all refunds of any Tax, except as provided in
Section 5.2(d)(viii);
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(vi) Shared Know-How including that Shared Know-How which
is the subject of the Shared Know-How Agreement;
(vii) as provided for more fully in Section 2.2(c), below,
any Investments with respect to which a Third-Party exercises a right of first
refusal;
(viii) any trade names or trademarks not used in the
Business and owned by Vertex San Diego, including without limitation those
previously used by Aurora;
(ix) any and all agreements by and between the Seller and
either of Takara Shuzo Co., Ltd. or Xxxxxx Scientific Company, LLC, any accounts
receivable related to such agreements and any inventory related to the Takara
Shuzo Agreement;
(x) Seller's limited liability company membership
interest in Aurora Biosystems LLC;
(xi) Sublease dated June 29, 2002 between OMM, Inc. and
PanVera LLC to Master Lease between OMM, Inc. and CalWest Industrial Holdings,
LLC for real property located at 0000 Xxxxxxxx Xxxx, Xxxxx 000, Xxx Xxxxx, XX;
and
(xii) that certain Credit Agreement dated as of May 22,
2002, by and between PanVera Corporation and M&I Bank of Southern Wisconsin, and
all related rights and documents.
(c) ASSUMED LIABILITIES. The Buyer shall (x) be responsible for
all Liabilities associated with the Buyer's ownership, operation and use of the
Business Assets and the Business from and after the Closing and (y) at the
Closing, assume and agree to pay, perform and discharge when due the following
additional Liabilities (the Liabilities specified in the foregoing clauses (x)
and (y) being herein referred to as the "ASSUMED LIABILITIES"):
(i) all Liabilities set forth or reflected on the
Closing Balance Sheet;
(ii) all Liabilities arising out of or relating to the
replacement or return of, or any claim for breach of warranty in respect of or
refund of the purchase price of, products sold out of inventory by the Seller on
or prior to the Closing Date (although the Parties recognize that the Buyer may
be entitled to indemnification for such Liabilities to the extent their
assertion indicates a breach of a representation or warranty of the Seller made
herein);
(iii) all Liabilities with respect to actions, suits,
proceedings, disputes, claims or investigations arising out of or related to the
use of the Business Assets after the Closing Date;
(iv) all Liabilities arising out of or relating to the
replacement or return of, or any claim for breach of warranty in respect of or
refund of the purchase price of products, instrumentation, services and
technologies which constitute Business Assets or which are manufactured or
provided through the use of the Business Assets, in each case after the Closing
Date;
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(v) subject to Section 2.1(d)(i) below, any Liability
with respect to the period after the Closing Date under the Assigned Contracts
other than Liabilities under the Assigned Contracts being retained by the Seller
pursuant to the Ancillary Agreements; and
(vi) all Liabilities in respect of Taxes for which the
Buyer is liable pursuant to Section 9.1.
(d) EXCLUDED LIABILITIES. Except as otherwise set forth in Section
2.1(c), the Buyer shall not assume or be responsible for any of the following
Liabilities of the Seller (the "EXCLUDED LIABILITIES"):
(i) any Liabilities of the Seller or any other Vertex
Party relating to the Business Assets and the Business with respect to the
period on or prior to the Closing Date and not set forth or reflected on the
Closing Balance Sheet, to the extent of such Liability for the period up to and
including the Closing Date;
(ii) all Environmental Liabilities;
(iii) all Liabilities under any employee benefit plan
established or maintained by the Seller or to which the Seller contributes or in
which any employee of the Seller participates prior to the Closing Date or any
Liability for the termination of any such employee benefit plan;
(iv) all Liabilities in respect of Taxes for which the
Seller and the Owner are liable pursuant to Section 9.1; and
(v) all liabilities related to the Excluded Assets.
(e) CONSENT OF THIRD PARTIES. To the extent that the assignment of
all or any portion of any Assigned Contract shall require the consent of the
other party thereto or any other Third-Party, this Agreement shall not
constitute an agreement to assign any such Assigned Contract if an attempted
assignment without any such consent would constitute a breach or violation
thereof. In order, however, to provide the Buyer the full realization and value
of every Assigned Contract, each of the Owner and the Seller agree that on and
after the Closing it will, and will cause each Vertex Party as appropriate to,
at the request and under the direction of the Buyer and at the Buyer's sole cost
and expense, in the name of the Seller or otherwise as the Buyer shall specify,
take all reasonable actions (including the appointment of the Buyer as
attorney-in-fact for the Seller) and do or cause to be done all such things as
shall in the reasonable opinion of the Buyer or its counsel be necessary or
proper (i) to assure that the rights of the Seller and each applicable Vertex
Party under such Assigned Contracts shall be preserved for the benefit of or
transferred or issued to the Buyer, (ii) to facilitate receipt of the
consideration to be received by the Seller or the applicable Vertex Party in and
under every such Assigned Contract, which consideration shall be held for the
benefit of, and shall be delivered to, the Buyer, and (iii) to enforce
provisions under such Assigned Contracts restricting or prohibiting use,
transfer or disclosure of any confidential information relating to the Business
or any Acquired Asset against third parties bound by such provisions. Nothing in
this Section 2.1(e) shall in any way diminish the Owner's and the Seller's
obligations under Sections 5.1(a)(i) and 6.1(h) hereof.
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2.2 PURCHASE PRICE AND RELATED MATTERS.
(a) PURCHASE PRICE. In consideration of the sale and transfer of
the Seller's right, title and interest in the Business Assets, the Buyer shall
assume the Assumed Liabilities as provided in Section 2.1(c) and shall pay to
the Seller an aggregate purchase price of Ninety Five Million Dollars
($95,000,000) (the "PURCHASE PRICE"). At the Closing, the Buyer shall pay the
Purchase Price to the Seller by wire transfer of immediately available funds to
the account designated by the Seller in writing at least two (2) Business Days
prior to the Closing Date.
(b) POST-CLOSING ADJUSTMENT TO PURCHASE PRICE.
(i) Within sixty (60) days after the Closing, the Buyer
shall prepare and deliver to the Seller a balance sheet (the "CLOSING BALANCE
SHEET") of the Seller as of the Closing Date, determined in accordance with the
Applicable Accounting Principles applied on a consistent basis and this
Agreement, except that there shall be no accrual for any Liabilities which are
Excluded Liabilities under Sections 2.1(d)(ii) through (v), together with a
calculation of the Adjustment Amount; provided, that the value of the
Investments as set forth on the Closing Balance Sheet shall be the same as the
value of the Investments as set forth on the November 30 Balance Sheet. For
purposes hereof (y) "ADJUSTMENT AMOUNT" means the dollar amount, if any, by
which the net assets of the Seller as set forth on the Closing Balance Sheet is
greater or less than the Reference Amount; and (z) "REFERENCE AMOUNT" means Ten
Million Dollars ($10,000,000), less the amount set forth on the November 30
Balance Sheet with respect to any Investment that is not conveyed to the Buyer
hereunder on the Closing Date as provided for in Section 2.2(c) below.
(ii) If within forty-five (45) days following delivery of
the Closing Balance Sheet, the Seller has not given the Buyer written notice of
its objection as to any item set forth or reflected therein or omitted therefrom
or as to the calculation of any amount set forth or reflected therein (which
notice shall state the basis of its objection), then the Closing Balance Sheet
shall be binding and conclusive on the Parties and be used in computing the
Adjustment Amount.
(iii) If the Seller duly gives the Buyer such notice of
objection, and if the Seller and the Buyer fail to resolve the issues
outstanding with respect to the Closing Balance Sheet within thirty (30) days of
the Buyer's receipt of the Seller's objection notice, the Seller and the Buyer
shall submit the matters in dispute for resolution to KPMG (the "ACCOUNTING
FIRM"), which shall, within thirty (30) days after such submission, determine
and report to the Parties upon such disputed matters, and such report shall be
final, binding and conclusive on the Parties with respect to the matters in
dispute. The fees and disbursements of the Accounting Firm shall be allocated
between the Buyer and the Seller so that the Seller's share of such fees and
disbursements shall be in the same proportion that the aggregate dollar amount
of the matters in dispute so submitted by the Seller to the Accounting Firm that
is unsuccessfully disputed by the Seller (as finally determined by the
Accounting Firm) bears to the total dollar amount of such disputed matters so
submitted by the Seller to the Accounting Firm.
(iv) The Purchase Price shall be decreased (or increased,
as the case may be), on a dollar for dollar basis, by the Adjustment Amount as
finally determined, and the
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Seller shall, and Owner shall cause the Seller to, pay the Buyer (or, in the
case of an increase in the Purchase Price, the Buyer shall pay to the Seller)
the Adjustment Amount in cash by wire transfer of immediately available funds.
The Seller or the Buyer shall make any payment required as a result of an
adjustment to the Purchase Price pursuant to this Section 2.2(b) within ten (10)
Business Days after the Adjustment Amount has been finally determined in
accordance with this Section 2.2(b).
(c) ADJUSTMENT OF PURCHASE PRICE FOR INVESTMENTS.
(i) The right of the Seller to sell and convey certain
of the Investments to the Buyer pursuant hereto, and the right of Vertex San
Diego to convey certain of the Investments to Seller, are subject to rights of
first refusal, which, if exercised, will result in Seller not being able to so
sell and convey, or the Buyer to purchase, such Investments. If any such right
of first refusal is exercised, then the Purchase Price shall be reduced, on a
dollar for dollar basis, by the value set forth in SCHEDULE 2.1(a)(vi) with
respect to the particular Investment not conveyed to the Buyer hereunder due to
the exercise of such right of first refusal. Such reduction in the Purchase
Price shall be made prior to the Closing, and shall reduce the Purchase Price,
if the right of first refusal is exercised with respect to an Investment on or
before the Closing Date. If a right of first refusal is not exercised on or
before the Closing Date in accordance with its terms as in effect on the Closing
Date, but remains exercisable thereafter, the Investment in question shall not
be conveyed at the Closing pursuant to this Agreement, the Purchase Price shall
be reduced, and such Investment shall be conveyed to the Buyer upon the
expiration of such right of first refusal; at which time the Purchase Price
shall be increased, on a dollar for dollar basis, following the Closing by the
value of such Investment set forth in SCHEDULE 2.1(a)(vi) and the Buyer shall
pay the Seller such amount in cash by wire transfer of immediately available
funds promptly (and not more than three (3) Business Days) following the
conveyance of such Investment.
(ii) The Parties acknowledge that as of the date of this
Agreement SCHEDULE 2.1(a)(vi) does not contain a definitive value for one of the
Investments that is subject to a right of first refusal. To the extent the right
of first refusal related to such Investment has not been terminated or waived by
the date thirty (30) days from the date hereof, Buyer and the Seller shall
negotiate in good faith to agree on a value to ascribe to such Investment, and
SCHEDULE 2.1(a)(vi) shall be amended to reflect the agreed to value. In the
event Buyer and the Seller have not been able to agree on a value to ascribe to
such Investment by the date forty (40) days from the date hereof, the value
proposed by Buyer, as determined by Buyer pursuant to Section 1060 of the Code,
shall be used for purposes of this Section 2.2(c) and SCHEDULE 2.1(a)(vi) shall
be amended to reflect such value.
(d) ALLOCATION OF PURCHASE PRICE. The aggregate amount of the
Purchase Price paid by the Buyer hereunder and the Assumed Liabilities shall be
allocated among the Acquired Assets and the Non-Competition Agreement for Tax
purposes, in compliance with Section 1060 of the Code, and any comparable
provisions of state, local, foreign or other applicable Tax laws.
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2.3 THE CLOSING.
(a) TIME AND LOCATION. The closing of the transactions
contemplated by this Agreement (the "CLOSING") shall take place at the offices
of Xxxx Xxxx Xxxx & Freidenrich LLP on a mutually agreed date as soon as
practicable, but in no event more than three (3) Business Days after the first
date on which the conditions to the obligations of the Parties to consummate the
transactions contemplated hereby have been satisfied or waived (the "CLOSING
DATE"). A "BUSINESS DAY" shall mean any day other than (i) a Saturday or Sunday
or (ii) a day on which banking institutions located in San Diego,
California are
permitted or required by law, executive order or governmental decree to remain
closed. The transfer of the Seller's right, title and interest in the Business
Assets by the Seller to the Buyer shall be deemed to occur at 12:01 a.m., PST
time, on the Closing Date.
(b) ACTIONS AT THE CLOSING. At the Closing:
(i) the Seller shall deliver (or cause to be delivered)
to the Buyer the various certificates, instruments and documents required to be
delivered under Section 6.1;
(ii) the Buyer shall deliver (or cause to be delivered)
to the Seller the various certificates, instruments and documents required to be
delivered under Section 6.2;
(iii) the Seller shall execute and deliver to the Buyer
the Xxxx of Sale;
(iv) the Buyer and the Seller shall execute and deliver
the Assignment and Assumption Agreement;
(v) the Buyer and the Owner shall execute and deliver
the Non-Competition Agreement;
(vi) the Buyer, the Seller and the Owner shall execute
and deliver the Shared Know-How Agreement;
(vii) the Buyer, the Seller and the Owner shall execute
and deliver the Transition Services Agreement;
(viii) the Buyer and Vertex San Diego shall (and the Owner
shall cause Vertex San Diego to) execute and deliver the Contract Administration
Agreement (Assay) and the Buyer and Aurora Biosystems LLC shall (and the Owner
shall cause Aurora Biosystems LLC to) executed and deliver the Contract
Administration Agreement (Instrumentation);
(ix) the Buyer and the appropriate Vertex Parties shall
(and the Owner shall cause the appropriate Vertex Parties to) execute and
deliver the Amended and Restated Technology Agreements;
(x) the Buyer shall pay to the Seller the Purchase Price
in accordance with the provisions of, and subject to the adjustment described
in, Section 2.2 hereof;
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(xi) the Seller shall deliver to the Buyer, or otherwise
put the Buyer in possession and control of, all of the Acquired Assets of a
tangible nature (including any certificates representing Investments transferred
to the Buyer, in the form duly endorsed for transfer);
(xii) the Buyer and the Seller shall execute and deliver
to each other a cross-receipt evidencing the transactions referred to above;
(xiii) the Owner and the Buyer shall execute and deliver
the Supply Agreement;
(xiv) the Seller shall execute and deliver to the Buyer
the Assignment of Ground Lease, and shall deliver all tenant files, tenant
correspondence and repair records;
(xv) the Seller shall have delivered to the Buyer lien
releases, pay-off letters and UCC-3 termination statements as may be necessary
to evidence the release and termination of all liens (other than Permitted
Encumbrances) on the Acquired Assets and on the Seller's right, title and
interest in the Business Assets that are not owned by the Seller;
(xvi) the Owner and the Seller shall execute and deliver
certificates as required under Section 1445 of the Code and Section 1.1445-2(b)
of the Treasury regulations; PROVIDED, HOWEVER, that if either the Owner or the
Seller fails or refuses to deliver the certificate required to confirm it is not
a "foreign person" as such term is defined in Section 1445(f)(3) of the Code, or
the Buyer has actual knowledge that such certificate is false, the Buyer shall
deduct and withhold from the Purchase Price a Tax as required by Section 1445 of
the Code; and, PROVIDED, FURTHER, that, in the event of any such withholding,
the Closing hereunder shall not be otherwise affected, the Buyer shall remit
such amount to and file the required form with the IRS, and each of the Owner
and the Seller, in the event of any claimed over-withholding, (A) shall be
limited solely to an action against the IRS for a refund, and (B) hereby waives
any right of action against the Buyer on account of such withholding; and
(xvii) the Seller shall deliver all keys, access codes and
combinations to all locks, and other security devices to the Real Estate.
The agreements and instruments referred to in clauses (iii), (iv), (xii),
(xiv) and (xv) above are referred to herein as the "TRANSFER DOCUMENTS," and the
Transfer Documents and the agreements referred to in clauses (v), (vi), (vii),
(viii), (ix) and (xiii) above are collectively referred to herein as the
"ANCILLARY AGREEMENTS".
2.4 FURTHER ASSURANCES. At any time and from time to time after the
Closing Date, as and when requested by any Party hereto and at such Party's
expense, the Buyer, the Owner and the Seller shall, and the Owner and the Seller
shall cause Vertex San Diego and Aurora Biosystems LLC to, promptly execute and
deliver, or cause to be executed and delivered, all such documents, instruments
and certificates and shall take, or cause to be taken, all such further or other
actions as are reasonably necessary to fully vest in the Buyer title to the
Seller's right, title and interest in the Business Assets.
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2.5 OWNER OBLIGATIONS. The Owner hereby undertakes to cause the Vertex
Parties to perform all of their obligations under this Agreement and the
Ancillary Agreements, including, without limitation, sale and transfer of the
Seller's right, title and interest in the Business Assets and performance of any
indemnification obligations of the Seller to the Buyer. To the extent that any
Vertex Party fails to perform or discharge any of such obligations, the Owner
acknowledges and agrees that it shall do so and that its obligation to do so
shall be joint and several with the original Vertex Party to such obligation.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE
OWNER AND THE SELLER
Each of the Owner and the Seller jointly and severally represents and
warrants to the Buyer that the statements contained in this Article III are true
and correct as of the date hereof, except as otherwise set forth in the Seller
Disclosure Schedule provided by the Seller to the Buyer.
3.1 ORGANIZATION, QUALIFICATION AND LIMITED LIABILITY COMPANY POWER.
(a) The Owner is a corporation duly organized, validly existing
and in good standing under the laws of The Commonwealth of Massachusetts. The
Seller is a limited liability company duly organized, validly existing and in
good standing under the laws of the State of Delaware, and is duly qualified to
transact business and in good standing in each jurisdiction in which the nature
of its operations requires such qualification, except where the failure to so
qualify is not reasonably likely to have a Business Material Adverse Effect.
(b) The Seller has all requisite limited liability company power
and authority to carry on the business in which it is now engaged and to own and
use the properties now owned and used by it. A true and correct copy of the
certificate of formation and operating agreement of the Seller, as well as the
articles of organization and by-laws of Owner, have been provided to the Buyer
prior to the date hereof.
(c) Except as set forth in SECTION 3.1(c) OF THE SELLER DISCLOSURE
SCHEDULE, the Seller does not own any shares of capital stock of, or equity
interest of any nature in, any Person. The Seller is not obligated to make any
future investment in or capital contribution to any Person.
3.2 AUTHORITY; REQUIRED FILINGS AND CONSENTS.
(a) The Owner has all corporate power and authority to execute and
deliver this Agreement and the Ancillary Agreements to which it will be a party
and to perform its obligations hereunder and thereunder. The execution and
delivery by the Owner of this Agreement and the Ancillary Agreements to which it
will be a party and the consummation by the Owner of the transactions
contemplated hereby and thereby have been duly authorized by all necessary
corporate action on the part of the Owner and no other authorization or consent
of the Owner's directors or stockholders is necessary. This Agreement has been,
and such Ancillary Agreements will be, duly executed and delivered by the Owner
and, assuming this Agreement and each such Ancillary Agreement constitute the
legal, valid and binding obligation of the other
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Parties thereto (other than any Affiliate of Owner), this Agreement constitutes,
and each such Ancillary Agreement will constitute, a legal, valid and binding
obligation of the Owner, enforceable against the Owner in accordance with its
terms, except as such enforceability may be limited by general principles of
equity (whether asserted in a proceeding at law or in equity) or by bankruptcy
or similar laws affecting the rights of creditors generally.
(b) The Seller has all limited liability company power and
authority to execute and deliver this Agreement and the Ancillary Agreements to
which it will be a party and to perform its obligations hereunder and
thereunder. The execution and delivery by the Seller of this Agreement and the
Ancillary Agreements to which it will be a party and the consummation by the
Seller of the transactions contemplated hereby and thereby have been duly
authorized by all necessary limited liability company action on the part of the
Seller and no other authorization or consent of the Seller's managers or members
is necessary. This Agreement has been, and such Ancillary Agreements will be,
duly executed and delivered by the Seller and, assuming this Agreement and each
such Ancillary Agreement constitute the legal, valid and binding obligation of
the other Parties thereto (other than any Affiliate of Owner), this Agreement
constitutes, and each such Ancillary Agreement will constitute, a legal, valid
and binding obligation of the Seller, enforceable against the Seller in
accordance with its terms, except as such enforceability may be limited by
general principles of equity (whether asserted in a proceeding at law or in
equity) or by bankruptcy or similar laws affecting the rights of creditors
generally.
(c) Subject to compliance with the applicable requirements of the
Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended (the
"XXXX-XXXXX-XXXXXX ACT") no consent, approval, order or authorization of, or
registration, declaration or filing with, any Governmental Authority is required
by or with respect to the Owner or Seller in connection with the execution and
delivery of this Agreement or the consummation of the transactions contemplated
hereby, except for such other consents, authorizations, filings, approvals and
registrations which, if not obtained or made, would not prevent or materially
alter or delay any of the transactions contemplated by this Agreement or have a
Business Material Adverse Effect.
3.3 NONCONTRAVENTION. Subject to compliance with the applicable
requirements of the Xxxx-Xxxxx-Xxxxxx Act, and applicable foreign antitrust or
trade regulation laws, none of (i) the execution and delivery by the Owner and
the Seller of this Agreement and the Ancillary Agreements to which each will be
a party, (ii) the execution and deliver by Vertex San Diego or Aurora Biosystems
LLC of the Ancillary Agreements to which each will be a party, (iii) the
consummation by the Owner and the Seller of the transactions contemplated hereby
or thereby and (iv) the consummation by Vertex San Diego and Aurora Biosystems
LLC of the transactions contemplated by the Ancillary Agreements to which each
of them is a party, will:
(a) conflict with or violate any provision of the articles of
organization or the bylaws of the Owner;
(b) conflict with or violate any provision of the certificate of
formation or limited liability company agreement of the Seller, Vertex San Diego
or Aurora Biosystems LLC;
(c) except as set forth in SECTION 3.3(c) OF THE SELLER DISCLOSURE
SCHEDULE, conflict with, result in a breach of, constitute (with or without due
notice or lapse of time or both) a
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default under, result in the acceleration of obligations under, create in any
party the right to terminate or modify, or require any notice, consent or waiver
under any Material Contract, or any other contract or agreement that is material
to Vertex San Diego or Aurora Biosystems LLC;
(d) violate any order, writ, injunction or decree to which the
Seller or any other Vertex Party or any of their respective properties or assets
is subject; or
(e) violate any statute, rule or regulation applicable to the
Seller or any other Vertex Party or any of their respective properties or
assets.
3.4 TITLE TO BUSINESS ASSETS.
(a) Except for Permitted Encumbrances, the Seller has good and
valid title to the Business Assets that it owns, and a valid leasehold or
license interest in the Business Assets it leases or licenses, free and clear of
all Liens. The tangible assets included in the Business Assets that the Seller
owns, leases or otherwise controls are in good operating condition and repair,
normal wear and tear excepted.
(b) The Business Assets, together with the rights granted to the
Buyer pursuant to this Agreement and the Ancillary Agreements, constitute and on
the Closing Date will constitute all of the assets used in the Business and
properties in which any Vertex Party has an ownership interest or contractual
right, other than those assets or properties used by the Vertex Parties (other
than the Seller) in activities which would not be prohibited by the
Non-Competition Agreement or would be permitted under the Amended and Restated
Technology Agreements.
3.5 EMPLOYEE BENEFIT PLANS.
(a) Set forth on SECTION 3.5(a) OF THE SELLER DISCLOSURE SCHEDULE
is a true and complete list of each (i) "employee benefit plan" as defined in
Section 3(3) of ERISA (including any "multiemployer plan" as defined in Section
3(37) of ERISA) and (ii) all other pension, retirement, supplemental retirement,
deferred compensation, excess benefit, profit sharing, employment, bonus,
incentive, equity purchase, equity ownership, equity option, equity appreciation
right, severance, salary continuation, termination, change-of-control, health,
life, disability, group insurance, vacation, holiday, sick-day, sabbatical and
fringe benefit plan, program, contract, or arrangement (whether written or
unwritten, qualified or nonqualified, funded or unfunded, foreign or domestic
and subject to ERISA or not, including any that have been frozen or terminated )
maintained, contributed to, or required to be contributed to, by the Seller or
any of its ERISA Affiliates in respect of any Employee or Former Employee, or
under which the Seller or any of its ERISA Affiliates has any liability with
respect to any Employee or Former Employee (the "BENEFIT PLANS").
(b) As applicable with respect to each Benefit Plan, the Seller
has made available to the Buyer, true and complete copies of each Benefit Plan,
including all amendments thereto, and in the case of an unwritten Benefit Plan,
a written description thereof.
(c) Each Benefit Plan has been maintained, operated and
administered in material compliance in all respects with its terms and any
related documents or agreements and the applicable provisions of all laws
including ERISA and the Code.
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(d) No Benefit Plan is now or at any time has been a
"multiemployer plan" within the meaning of Section 3(37) of ERISA. Neither the
Seller nor any ERISA Affiliate has ever contributed to or been required to
contribute to a multiemployer plan and neither the Seller nor any ERISA
Affiliate has any liability (contract or otherwise) relating to the withdrawal
or partial withdrawal from a multiemployer plan. No Benefit Plan is now or at
any time has been subject to Part 3, Subtitle B of Title I of ERISA or Title IV
of ERISA.
(e) No Benefit Plan provides material benefits, including death or
medical benefits, beyond termination of service or retirement other than (i)
coverage mandated by law or (ii) death or retirement benefits under a Benefit
Plan qualified under Section 401(a) of the Code. Neither the Seller nor any of
its ERISA Affiliates have made a written or oral representation to any Employee
or Former Employee promising or guaranteeing any employer paid continuation of
medical, dental, life or disability coverage for any period of time beyond
retirement or termination of employment.
(f) Except as set forth on SECTION 3.5(f) OF THE SELLER DISCLOSURE
SCHEDULE, no Benefit Plan provides for payments or benefits that would result in
the payment of any "parachute payments" within the meaning of Sections 280G or
4999 of the Code either individually or in conjunction with other Benefit Plans.
(g) As used herein,
(i) "ERISA" means the Employee Retirement Income
Security Act of 1974, as amended.
(ii) "ERISA AFFILIATE" means (i) any corporation included
with the Seller in a controlled group of corporations within the meaning of
Section 414(b) of the Code; (ii) any trade or business (whether or not
incorporated) which is under common control with the Seller within the meaning
of Section 414(c) of the Code; (iii) any member of an affiliated service group
of which the Seller is a member within the meaning of Section 414(m) of the
Code; or (iv) any other person or entity treated as an affiliate of the Seller
under Section 414(o) of the Code.
(iii) "EMPLOYEES" shall mean all individuals with whom the
Seller or any ERISA Affiliate maintains on the specified date, an
employer-employee relationship and whose primary responsibilities relate to the
Business.
(iv) "FORMER EMPLOYEES" means all individuals who were
previously employed by the Seller or any of its ERISA Affiliates and whose
primary responsibilities related to the Business but who are no longer so
employed on the Closing Date, including any such individual receiving long-term
disability benefits.
3.6 FINANCIAL INFORMATION.
(a) The pro-forma balance sheet of the Business as of November 30,
2002, which is set forth on SECTION 3.6(a) OF THE SELLER DISCLOSURE SCHEDULE
(the "NOVEMBER 30 BALANCE SHEET") and the pro-forma income statement of the
Business as of November 30, 2002, which is set forth on SECTION 3.6(a) OF THE
SELLER DISCLOSURE SCHEDULE (the "NOVEMBER 30 INCOME
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STATEMENT" and collectively with the November 30 Balance Sheet, the "FINANCIAL
STATEMENTS"), have been derived from the books of account of the Seller by the
Seller in the ordinary course of business.
(b) The Financial Statements are true and correct in all material
respects, were prepared in accordance with GAAP applied on a consistent basis
and fairly reflect in reasonable detail all assets and liabilities and the
financial position of the Business as of the date thereof, subject to year-end
and audit adjustments which will not, in the aggregate, be material, and except
that the Financial Statements do not contain footnotes.
3.7 ABSENCE OF CERTAIN CHANGES. Since November 30, 2002, except as
disclosed in Section 3.7 of the Seller Disclosure Schedule, with respect to the
Business and the Business Assets, there has not been:
(a) any incurrence, assumption or guarantee of any Liability other
than in the ordinary course of business consistent with past practice;
(b) any discharge or satisfaction of any Liens or payment or
satisfaction of any obligation or Liability thereof or associated therewith
other than in the ordinary course of business consistent with past practice;
(c) any change or any threat of any change in any relations with,
or any loss or threat of loss of, any of the material suppliers, clients or
customers thereof or otherwise relating thereto;
(d) any disposition of or failure to keep in effect any rights in,
to or for the use of any Applicable Permit;
(e) any modification, amendment or termination of, or the entering
into of any new Material Contract or any cancellation, modification or waiver of
any material debts or claims held by the Seller or any waiver of any other
rights of the Seller;
(f) any damage, destruction or casualty loss affecting the
Business or an Acquired Asset in excess of $100,000 per incident or in the
aggregate, whether or not covered by insurance;
(g) any change by the Seller in its method of accounting or
keeping of its books of account or accounting practice that relates to the
Business, an Acquired Asset or an Assumed Liability, including any change in any
assumptions underlying or methods of calculating any bad debt, contingency, Tax
or other reserves or any change in estimates or valuations;
(h) any sale, transfer or other disposition of any assets,
properties or rights of the Business, except in the ordinary course of business
consistent with past practice which are not material in the aggregate, except
with respect to any cash or short-term marketable securities (other than the
Investments) set forth or reflected on the November 30 Balance Sheet, and except
for the conveyance by Seller of the Instrumentation Assets;
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(i) any commitments or agreements for capital expenditures or
capital additions or betterments relating to the Business exceeding $50,000 in
the aggregate, except such as may be involved in the ordinary repair,
maintenance or replacement of assets not exceeding an additional $50,000 in the
aggregate;
(j) other than with respect to travel expense reimbursement and
employee compensation and benefits in the ordinary course of business consistent
with past practice, any payment, distribution, loan or advance of any amount to,
or sale, transfer or lease of properties or assets (real, personal, or mixed,
tangible or intangible) to, or the entering into of any agreement or arrangement
to do so with, any officers or managers of the Seller (or any of its officers,
managers or directors), or any "associate" (as such term is defined in Rule 405
under the Securities Act of 1933, as amended) thereof;
(k) any mortgage, pledge or subjection to Lien of any kind on any
assets, tangible or intangible, of the Business except for Permitted
Encumbrances;
(l) the granting of any material increase in the compensation
payable or to become payable by the Seller to its managers, officers or
employees other than increases in the ordinary course of business to employees
who are not managers or officers;
(m) any material transaction, agreement or event outside the
ordinary course of the conduct of the Business;
(n) the agreement, whether in writing or otherwise, to take any
action described in this Section 3.7, or which would constitute a breach of any
of the representations and warranties of the Owner and the Seller contained in
this Agreement;
(o) any other changes in the financial condition of the Business,
except for any changes that would not reasonably be expected to result in a
Business Material Adverse Effect and except for any changes that involve or
affect only Excluded Assets or Excluded Liabilities (including, without
limitation, the conveyance by Seller of the Instrumentation Assets subsequent to
such date); or
(p) any Business Material Adverse Effect.
3.8 INTELLECTUAL PROPERTY.
(a) Part 1 of SECTION 3.8(a) OF THE SELLER DISCLOSURE SCHEDULE
lists all of the Proprietary Assets included in the Business Assets which are
patents, patent applications, trademarks or trademark applications wholly owned
by Seller, setting forth in each case the jurisdictions in which patents have
been issued, patent applications have been filed, trademarks have been
registered and trademark applications have been filed. Part 2 of SECTION 3.8(a)
OF THE SELLER DISCLOSURE SCHEDULE lists all of the Proprietary Assets included
in the Business Assets which are patents, patent applications, trademarks and
trademark applications, other than those wholly or co-owned by Seller, setting
forth in each case the jurisdictions in which patents have been issued, patent
applications have been filed, trademarks have been registered and trademark
applications have been filed. Part 3 of SECTION 3.8(a) OF THE SELLER DISCLOSURE
SCHEDULE lists all oral and written contracts, agreements, licenses and other
arrangements under which any Vertex
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Party is licensed or otherwise permitted to use any Proprietary Assets included
in the Business Assets, other than standardized nonexclusive licenses that are
available to the public generally and were obtained by Seller in the ordinary
course of business.
(b) Except as set forth in Part 1 of SECTION 3.8(b) OF THE SELLER
DISCLOSURE SCHEDULE, no Third Party has asserted a claim, nor, to the knowledge
of the Seller, are there any facts which could give rise to a claim, which would
adversely affect the Seller's ownership rights to, or rights under, (i) any of
the Proprietary Assets included in the Business Assets which are owned by
Seller, or (ii) any contracts, agreements, licenses and other arrangements under
which any Vertex Party is licensed or otherwise permitted to use any Proprietary
Asset included in the Business Assets, other than those described in clause (i)
above. Except as set forth in Part 2 of SECTION 3.8(b) OF THE SELLER DISCLOSURE
SCHEDULE, the Seller does not jointly own or license with any other Person any
Proprietary Assets included in the Business Assets which are patents, patent
applications, trademarks or trademark applications.
(c) No current, or (to the knowledge of Seller) former, officer,
manager, director, stockholder, member, employee, consultant or independent
contractor of the Vertex Parties has any right, title or interest in, to or
under any Proprietary Asset included in the Business Assets.
(d) Except as set forth in SECTION 3.8(d) OF THE SELLER DISCLOSURE
SCHEDULE, all Proprietary Assets that (i) are filed or registered with any
Governmental Authority, and (ii) either (A) are required to be listed in Part 1
of SECTION 3.8(a) OF THE SELLER DISCLOSURE SCHEDULE or (B) a Vertex Party has
the right to control the prosecution thereof and are required to be listed in
Part 2 of SECTION 3.8(a) OF THE SELLER DISCLOSURE SCHEDULE or Part 2 of SECTION
3.8(b) OF THE SELLER DISCLOSURE SCHEDULE, have been duly filed or registered (as
applicable), and maintained, including the submission of all necessary filings
and fees in accordance with the legal and administrative requirements or the
appropriate jurisdictions, and have not lapsed, expired or been abandoned.
Except as set forth in SECTION 3.8(d) OF THE SELLER DISCLOSURE SCHEDULE, with
respect to all of the issued patents and pending patent applications that either
are required to be listed in Part 1 of SECTION 3.8(a) OF THE SELLER DISCLOSURE
SCHEDULE, or a Vertex Party has the right to control the prosecution thereof and
are required to be listed in Part 2 of SECTION 3.8(a) OF THE SELLER DISCLOSURE
SCHEDULE or Part 2 of SECTION 3.8(b) OF THE SELLER DISCLOSURE SCHEDULE, (i) to
the knowledge of the Seller, all of such patents and patent applications
disclose patentable subject matter, and (ii) to the knowledge of the Seller with
respect to events prior to July 18, 2001 regarding patents and patent
applications included in the Business Assets to which rights were acquired by
virtue of the Owner's acquisition of Aurora by merger effective on July 18,
2001, and without such qualification as to all other events, (A) there are no
inventorship challenges, and (B) no interference been declared or provoked.
Except as set forth in SECTION 3.8(d) OF THE SELLER DISCLOSURE SCHEDULE, to the
knowledge of the Seller, with respect to all of the issued patents and pending
patent applications that a Vertex Party does not have the right to control the
prosecution thereof and are required to be listed in Part 2 of SECTION 3.8(a) OF
THE SELLER DISCLOSURE SCHEDULE, (i) all of such patents and patent applications
disclose patentable subject matter, (ii) there are no inventorship challenges,
and (iii) no interference been declared or provoked. Except as expressly
disclosed in writing to Buyer prior to the date of this Agreement, to the
knowledge of the Seller, there does not exist any material fact with respect to
the issued patents and pending patent applications included in the Business
Assets that would (i) preclude the issuance of any patents from patent
applications included in the Business Assets (with valid
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claims no less broad in scope than the claims as currently pending in those
applications), (ii) render any patents included in the Business Assets invalid
or unenforceable, or (iii) cause the claims of any patents included in the
Business Assets to be narrowed. Except as expressly disclosed in writing to
Buyer prior to the date of this Agreement, to the knowledge of the Seller, there
does not exist any material fact with respect to the trademarks and trademark
applications included in the Business Assets that would (i) preclude the
issuance of any trademarks from trademark applications included in the Business
Assets, or (ii) render any trademarks included in the Business Assets invalid or
unenforceable. No Vertex Party has received written, or (to the knowledge of the
Seller) oral, notice that a Third Party has challenged or has threatened to
challenge such Vertex Party's rights to, the validity, enforceability or claim
construction of any Proprietary Asset included in the Business Assets.
(e) Except as set forth in SECTION 3.8(e) OF THE SELLER DISCLOSURE
SCHEDULE, no Vertex Party has entered into any covenant not to compete or
contract limiting its ability to transact business in any market, field or
geographical area or with any Person with respect to the Business.
(f) Except as set forth in SECTION 3.8(f) OF THE SELLER DISCLOSURE
SCHEDULE, no Vertex Party (or to the knowledge of Seller, with respect to events
prior to July 18, 2001, any predecessor in interest to the Business, such as
Aurora) has granted, licensed, conveyed or permitted to any Third Party,
pursuant to any written, or (to the knowledge of the Seller) oral, contract,
agreement, license or other arrangement, any license or other right in, to or
under (i) any of the Proprietary Assets (or tangible embodiments thereof)
included in the Business Assets, or (ii) any future Proprietary Assets to be
developed from the Business Assets (or tangible embodiments thereof). Except as
set forth in SECTION 3.8(f) OF THE SELLER DISCLOSURE SCHEDULE, there have been
no instances, since July 18, 2001, where a Vertex Party transferred or disclosed
Proprietary Assets included in the Business Assets (or any tangible embodiments
thereof) to a Third Party without having the recipient thereof execute a written
agreement regarding the non-disclosure and non-use (other than research uses
only) thereof. There have been no instances, where a Vertex Party transferred or
disclosed Proprietary Assets included in the Business Assets (or any tangible
embodiments thereof) to another Vertex Party with rights in favor of the
recipient greater than the rights retained by the Seller pursuant to the
Ancillary Agreements.
(g) Except as set forth in SECTION 3.8(g) TO THE SELLER DISCLOSURE
SCHEDULE, there are no outstanding material obligations to pay a royalty, make
milestone payments or provide other considerations to any other Person in
connection with any Proprietary Asset that is included in the Business Assets.
(h) Except as disclosed in writing to the Buyer prior to the date
of this Agreement, to the knowledge of the Seller, the conduct of the Business
as conducted as of the Closing Date does not infringe, constitute contributory
infringement, inducement to infringe or the misappropriation of Proprietary
Assets of any other Person and, without regard to the knowledge of the Seller,
neither the Owner nor the Seller has received a written notice asserting any of
the foregoing.
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(i) Part 1 of SECTION 3.8(i) TO THE SELLER DISCLOSURE SCHEDULE
identifies those instances where (to the knowledge of Seller with respect to
Aurora) a Vertex Party has provided written notice to a Third Party asserting
that a Proprietary Asset that is included in the Business Assets has been
infringed or misappropriated by any Third Party. Part 2 of SECTION 3.8(i) TO THE
SELLER DISCLOSURE SCHEDULE identifies those instances, to the knowledge of (i)
any patent agent or patent attorney currently employed by the Owner, Seller or
Vertex San Diego or Xxxx Xxxxxxxxx and Xxxxx "XXXX" Xxxxxxxx, where a Vertex
Party reasonably believes that a Proprietary Asset that is included in the
Business Assets has been infringed or misappropriated by any Third Party.
3.9 MATERIAL CONTRACTS. SECTION 3.9 OF THE SELLER DISCLOSURE SCHEDULE
lists all of the following types of contracts or agreements to which the Seller
is a party or by which it is bound (each a "MATERIAL CONTRACT" and collectively
the "MATERIAL CONTRACTS"):
(a) contract or agreement related to the Business involving the
receipt or payment by the Seller of aggregate consideration of more than
$100,000;
(b) contract or agreement that restricts the Seller from operating
the Business (as currently being conducted and as proposed to be conducted by it
on the date of this Agreement) anywhere in the world or any portion thereof;
(c) contract or agreement granting any exclusive rights to any
party;
(d) contract or agreement evidencing indebtedness for borrowed or
loaned money in excess of $100,000 or mortgaging, pledging or otherwise placing
a Lien on any of the Business Assets;
(e) contract or agreement evidencing the in-licensing of
technology that is used in the conduct of the Business, other than standardized
nonexclusive licenses that are available to the public generally and were
obtained by Seller in the ordinary course of business;
(f) contract or agreement to provide funds to or make any
investment in any other Person (in the form of a loan, capital contribution or
otherwise);
(g) contract or agreement creating a partnership or joint venture
pursuant to which the Seller is a partner or joint venturer; and
(h) contract or agreement that is otherwise material to the
operation of the Business and the Business Assets taken as a whole.
The Seller has made available or delivered to the Buyer a complete and accurate
copy of each written Material Contract including any modifications or amendments
thereto. Each Material Contract is a valid and binding obligation of the Seller,
and, to the knowledge of the Seller, of each other party thereto. Each Material
Contract that was oral when entered into by the Seller has been reduced to
writing. Except as set forth on SECTION 3.9 OF THE SELLER DISCLOSURE SCHEDULE,
neither the Seller nor any other Vertex Party is in material breach of any
condition, term or provision of, or in material default under, any Material
Contract. To the knowledge of Seller, no other party is in material default
under or in material breach or violation of, nor is there
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any valid basis for any claim of material default by another party under, or any
material breach or violation by another party of, any Material Contract.
3.10 PRODUCT LIABILITY; LITIGATION. SECTION 3.10 OF THE SELLER DISCLOSURE
SCHEDULE lists each of the following, and except as set forth on SECTION 3.10 OF
THE SELLER DISCLOSURE SCHEDULE, none of the following exist: (a) any asserted
product liability claim, including such claims based on strict product
liability, negligence, other tort theories, or breach of express or implied
warranty, or to the knowledge of the Seller, any such claim which has been
threatened against any Vertex Party relating to any products of the Business nor
to the knowledge of Seller is there a reasonable basis for such claim; (b)
judgment, order, decree, stipulation or injunction of any Governmental Authority
specifically naming any Vertex Party or, to the knowledge of the Seller, to
which any Vertex Party is subject to (other than orders of general
applicability), that relates to the Business; and (c) action, suit or proceeding
by or before any Governmental Authority to which any Vertex Party is a party
that relates to the Business. Except as set forth in SECTION 3.10 OF THE SELLER
DISCLOSURE SCHEDULE, there is no civil, criminal or administrative action, suit,
hearing, or proceeding pending before any court, arbitrator or authority or, to
the knowledge of the Seller, (i) threatened against any Vertex Party and (ii)
relating to the Business or any of the Business Assets. Except as disclosed in
SECTION 3.10 OF THE SELLER DISCLOSURE SCHEDULE, there are currently no
outstanding judgments, decrees or orders of any court or Governmental Authority
against any Vertex Party, which relate to or arise out of the conduct of the
Business or the use of the Business Assets.
3.11 ENVIRONMENTAL MATTERS.
(a) The Seller holds and is and has been in material compliance
with all material permits, certificates, licenses, approvals, registrations and
authorizations required pursuant to Environmental Laws ("ENVIRONMENTAL PERMITS")
necessary or required in connection with the Business or the ownership and
operation of the Acquired Assets and the use of the Business Assets, and all of
such Environmental Permits are in full force and effect and timely applications
for renewal filed. All such Environmental Permits are listed in SECTION 3.11(a)
OF THE SELLER DISCLOSURE SCHEDULE and any that are not transferable to the Buyer
are so designated. The Seller will assist the Buyer in preparing and filing all
applications for transfer of applicable Environmental Permits.
(b) Except as otherwise set forth on SECTION 3.11(b) OF THE SELLER
DISCLOSURE SCHEDULE, the Seller is not in material violation of applicable
Environmental Laws.
(c) No notice, citation, summons or order has been issued, no
complaint has been filed, no penalty has been assessed and no investigation or
review is pending, or to the knowledge of the Seller, threatened, by any
Governmental Authority or other entity with respect to the Business, the
Acquired Assets or the Seller's use of the Business Assets that are not owned by
the Seller: (i) with respect to any alleged violation by the Seller of any
Environmental Law, or (ii) with respect to any alleged failure by the Seller or
any other Vertex Party to have any Environmental Permit in connection with the
Business or a Business Asset, or (c) with respect to any use, possession
generation, treatment, storage, recycling, transportation, disposal or
distribution (collectively, "MANAGEMENT", or as a verb, "MANAGED") of, Release
of or exposure to
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any Hazardous Substances relating to or in connection with the Business, the
Acquired Assets or the Seller's use of the Business Assets that are not owned by
the Seller.
(d) The Seller has not received any request for information,
notice of claim, demand or notification that it is or may be potentially
responsible with respect to any investigation or clean-up of any Release of any
Hazardous Substance relating to or in connection with the Business or the
Business Assets.
(e) To the knowledge of the Seller, no polychlorinated biphenyls,
formaldehyde or insulating material containing urea formaldehyde or
asbestos-containing materials are present at any property owned, or operated or
leased, but not owned, by the Seller in connection with the Business, the
Acquired Assets or the Seller's use of the Business Assets that are not owned by
the Seller, nor are there any underground storage tanks at any property to be
transferred to the Buyer hereunder.
(f) No Hazardous Substance Managed by the Seller in connection
with the Business has come to be located at any site which is listed or proposed
for listing under the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended, ("CERCLA"), CERCLIS or on any similar state
list of which any Vertex Party has received notice, which is the subject of
federal, state or local enforcement actions or other investigations which may
lead to claims against the Seller or the Buyer for clean-up costs, remedial
work, damages to natural resources or for personal injury claims, including, but
not limited to, claims under CERCLA.
(g) Except as otherwise set forth on SECTION 3.11(g) OF THE SELLER
DISCLOSURE SCHEDULE, to the knowledge of the Seller, no Hazardous Substance has
been Released in connection with the Business, or to the knowledge of Seller,
has otherwise been Released at, on, about or under the Real Estate.
(h) Except as set forth on SECTION 3.11(h) OF THE SELLER
DISCLOSURE SCHEDULE, no consent, approval or authorization of, or registration
or filing with any person, including any environmental Governmental Authority,
is required pursuant to Environmental Laws in connection with the execution and
delivery of this Agreement or the consummation of the transactions contemplated
hereby.
(i) To the knowledge of the Seller, except as listed in SECTION
3.11(i) OF THE SELLER DISCLOSURE SCHEDULE, there have been no environmental
inspections, investigations, studies, audits, tests, reviews or other analyses
conducted with respect to the Real Estate. The Seller and the Owner have
delivered or made available to the Buyer true and complete copies of all
inspections, investigations, reports, studies, audits, tests, sampling results,
monitoring, evaluations or analyses possessed by the Seller and/or the Owner
pertaining to any Hazardous Substance in, on, beneath or adjacent to any of the
Real Estate, or to which the Seller and/or the Owner have sent any Hazardous
Substance in connection with the Business, or concerning compliance by the
Seller and/or the Owner, or any Person for whose conduct they are legally
responsible, with any Environmental Law with respect to the Business.
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3.12 LEGAL COMPLIANCE. The Seller is in material compliance with all laws
(including rules and regulations thereunder) of any federal, state or foreign
government, or any Governmental Authority, relating to the Business or its
conduct, or the Business Assets or their use. The Parties recognize and agree
that the representation and warranty contained in the first sentence of this
SECTION 3.12 shall not be applicable to the following matters as to which
specific representations and warranties have been agreed to by the Parties as
set forth in the following Sections of this Agreement: SECTION 3.5 (Benefit
Plans), SECTION 3.11 (Environmental Matters), SECTION 3.16 (Taxes), SECTION 3.13
(certificates of occupancy), SECTION 3.19(g) (zoning and access), SECTION 3.20
(Exports and Customs), SECTION 3.22 (Labor Relations) and SECTION 3.23 (WARN
Act).
3.13 APPLICABLE PERMITS. SECTION 3.13 OF THE SELLER DISCLOSURE SCHEDULE
lists all material permits, licenses, franchises, certificates of occupancy or
authorizations from any Governmental Authority required to conduct the Business
and to use the Business Assets in the conduct of the Business (other than
Environmental Permits which are listed in SECTION 3.11(a) OF THE SELLER
DISCLOSURE SCHEDULE), which are hereinafter referred to collectively as the
"APPLICABLE PERMITS". The Seller possesses each Applicable Permit, each
Applicable Permit is in full force and effect, the Seller is not in violation of
or default under any Applicable Permit and all applicable fees and charges for
such Applicable Permits that are already due and payable have been paid in full.
To the knowledge of the Seller, no suspension or cancellation of any such
Applicable Permit has been threatened in writing or otherwise.
3.14 BROKERS' FEES. Except as set forth in SECTION 3.14 OF THE SELLER
DISCLOSURE SCHEDULE, the Seller does not have any liability or obligation to pay
any fees or commissions to any broker, finder or agent with respect to the
transactions contemplated by this Agreement.
3.15 WARRANTY CLAIMS. SECTION 3.15 OF THE SELLER DISCLOSURE SCHEDULE sets
forth the aggregate amounts incurred by Aurora and by the Seller in fulfilling
warranty obligations in respect of its Beacon instruments in each full fiscal
year since January 1, 1999 and during the eleven-month period ended November 30,
2002, along with the applicable guaranty, warranty and indemnity provisions.
Owner and Seller have not incurred more than $50,000 in fulfilling warrant
obligations in respect of all other products of the Business in each full fiscal
year since January 1, 1999 and during the eleven-month period ended November 30,
2002.
3.16 TAXES.
(a) Except as disclosed in SECTION 3.16(a) OF THE SELLER
DISCLOSURE SCHEDULE, to the knowledge of the Seller, (i) the Seller (or other
applicable Vertex Party) has timely filed (or will timely file) all Tax Returns
required to be filed by it for Tax periods ending on or before the Closing Date
relating to the Business Assets or the Business; (ii) all such Tax Returns are
(or will be) true, complete, and correct in all material respects and disclose
(or will disclose) all Taxes required to be paid by the Seller (or other
applicable Vertex Party) for the periods covered thereby and all Taxes shown to
be due on such Tax Returns have been (or will be) timely paid; (iii) all Taxes
(whether or not shown on any Tax Return) owed by the Seller (or other applicable
Vertex Party) relating to the Business Assets or the Business and required to be
paid with respect to Tax periods ending on or before the Closing Date have been
(or will be) timely paid or are being presently or will be contested in good
faith; (iv) neither the Seller nor any other applicable
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Vertex Party has waived or been requested to waive any statute of limitations in
respect of Taxes relating to the Business Assets or the Business; (v) there is
no action, suit, investigation, audit, claim or assessment pending, proposed or
threatened with respect to Taxes owed by the Seller (or other applicable Vertex
Party) relating to the Business Assets or the Business; (vi) all deficiencies
asserted or assessments made as a result of any examination of the Tax Returns
referred to in clause (i) have been paid in full; (vii) all monies required to
be withheld by the Seller (including from Employees for income Taxes and social
security and other payroll and employment Taxes) have been collected or
withheld, and either paid to the respective Governmental Authorities, set aside
in accounts for such purpose, or accrued, reserved against and entered upon the
books and records of the Business; (viii) none of the Acquired Assets is
"tax-exempt use property" within the meaning of Section 168(h) of the Code; (ix)
there are no Liens for Taxes upon the Acquired Assets except Permitted
Encumbrances; (x) no Governmental Authority with respect to which the Seller
does not file Tax Returns has claimed that the Seller (or other applicable
Vertex Party) is or may be subject to Taxes relating to the Business Assets or
Business by that Governmental Authority; (xi) none of the Acquired Assets
consists of an interest in an entity that is classified as a partnership for
United States federal income tax purposes; (xii) none of the Acquired Assets
consists of equity securities in an entity that, at any time, has been a member
of any federal, state, local or foreign consolidated, unitary, combined,
affiliated or similar group of corporations of which the Seller is or was a
member; (xiii) the Seller is not a United States shareholder (as defined in
Section 951(b) of the Code) with respect to any Acquired Asset that constitutes
an interest in a foreign corporation; (xiv) the Seller is not a party to any
tax-sharing agreement or similar arrangement with any other party (nor is any
other Vertex Party with respect to the Business and the Business Assets), and
neither the Seller nor any other Vertex Party has assumed or agreed to pay any
Tax obligations of, or with respect to any transaction relating to, any other
Person or agreed to indemnify any other Person with respect to any Tax related
to the Business or the Business Assets; (xv) neither the Seller nor any Vertex
Party has filed any consent agreement under Section 341(f) of the Code or agreed
to have Section 341(f)(4) apply to any disposition of assets owned by the
Seller; (xvi) the Seller is not a party to any contract, agreement, plan or
arrangement, including but not limited to the provisions of this Agreement,
covering any Employee or former Employee which, individually or collectively,
could reasonably be expected to give rise to the payment of any amount that
would not be deductible as an expense by the Seller pursuant to Sections 280G,
404 or 162(m) of the Code or by similar applicable law; (xvii) the Seller is not
required to make any adjustment under Section 481 of the Code or corresponding
provision of state, local or foreign law by reason of any change in accounting
method; and (xviii) the Seller does not have any liability for the Taxes of any
Person under Treasury Regulation Section 1.1502-6 (or any similar provision of
state, local or foreign law) as a transferee or successor, by contract or
otherwise.
(b) No transaction contemplated by this Agreement is subject to
withholding under Section 1445 of the Code and no sales Taxes, use Taxes, other
similar Taxes will be imposed on the transfer of the Seller's right, title and
interest in the Business Assets or the assumption of the Assumed Liabilities.
3.17 INVENTORY. Except as set forth on SECTION 3.17 OF THE SELLER
DISCLOSURE SCHEDULE, the inventory reflected on the November 30 Balance Sheet
(i) is carried at not in excess of the lower of cost or net realizable value in
accordance with GAAP; (ii) was acquired and maintained in the ordinary course of
business; (iii) is of good and merchantable quality within industry
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standards; and (iv) except with respect to obsolete inventory reflected in the
November 30 Balance Sheet, is usable and/or saleable within a period of not less
than one (1) year. Except for claims disclosed in SECTION 3.15 OF THE SELLER
DISCLOSURE SCHEDULE and claims within the $50,000 limitation described in
Section 3.15, neither the Owner nor the Seller has within the past two (2) years
received notice of any liability or obligation with respect to the return of
inventory purchased from the Business and in the possession of wholesalers,
retailers or other customers for breach of warranty or otherwise, and to the
knowledge of the Seller, there is no reasonable basis for such liability or
obligation. All material inventory of the Business is located on the premises of
the Seller in Madison, Wisconsin.
3.18 ABSENCE OF UNDISCLOSED LIABILITIES. Except as disclosed in SECTION
3.18 OF THE SELLER DISCLOSURE SCHEDULE, the Seller has no Liabilities required
to be reflected on the face of a balance sheet prepared in accordance with GAAP,
except:
(a) those Liabilities set forth or reflected on the November 30
Balance Sheet and not heretofore paid or discharged;
(b) Liabilities incurred by the Seller in the ordinary cause of
business since November 30, 2002 which are not material individually or in the
aggregate; and
(c) Liabilities arising in the ordinary course of business under
the Assigned Contracts (specifically excluding any Liabilities arising out of
any breach or default (including for this purpose any event which, with notice
or passage of time or both would constitute such a breach or default) by the
Seller of any provision of any Assigned Contract).
3.19 REAL ESTATE.
(a) SECTION 3.19(a) OF THE SELLER DISCLOSURE SCHEDULE sets forth a
correct list by premises, building, street address and tax lot number, and
summary descriptions of all Real Estate owned, leased or used by the Owner or
the Seller in the Business and identifies all surveys and title insurance
policies in the Seller's possession covering any of, and all leases (whether as
tenant or landlord) relating to, such properties. SECTION 3.19(a) OF THE SELLER
DISCLOSURE SCHEDULE also identifies as to the Lease: (i) square footage; (ii)
name of the landlord; (iii) the date and effective date; (iv) the expiration
date, if any; (v) the monthly minimum charge, if any; (vi) arrearages, if any,
and whether the latest payment due has been paid; (vii) any amount prepaid;
(viii) a description of all documents constituting the Lease, including without
limitation (A) landlord waiver of landlord liens, (B) subordination,
non-disturbance and attornment agreements, (C) estoppel certificates and (D)
recognition agreements; (ix) the amount or description of any concessions,
allowances, rebates, refunds, deposits, setoffs, or escrows relating to it; (x)
any options to renew, extend, purchase, cancel or terminate; (xi) any defaults,
outstanding notices of defaults of any kind or nature whatsoever, claims of
defaults or similar claim; (xii) any guaranties, letters of credit or other
Third-Party credit enhancements; and (xiii) any written or oral notices of
increases in operating expenses, taxes or of expenditures for capital
improvements.
(b) The Seller has a valid and existing leasehold interest under
the Lease for the term set forth thereto in SECTION 3.19(a) OF THE SELLER
DISCLOSURE SCHEDULE.
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(c) The Seller has provided to the Buyer a true and complete copy
of the Lease.
(d) Except as set forth on SECTION 3.19(a) OF THE SELLER
DISCLOSURE SCHEDULE, (i) the Seller is entitled to and has exclusive possession
of the Real Estate, (ii) the Real Estate is not subject to any lease, tenancy or
license or any agreement to grant such lease, tenancy or license, (iii) there is
no person in possession or occupation of or who has or claims any right to
possession or occupation of the Real Estate, and (iv) there are no easements of
any kind in respect of the Real Estate adversely affecting the rights of the
Seller therein to use the Real Estate for the conduct of the Business as
presently conducted.
(e) With respect to the Real Estate:
(i) At the effective date of the Lease, to the knowledge
the Seller, the lessor had good title to its leasehold interest in the Real
Estate covered thereby and either (A) all consents necessary for the lessor to
execute and deliver the Lease were obtained or (B) no such consents were
required under the Lease.
(ii) To the knowledge of the Seller, there are no
circumstances that would entitle or require the lessor to exercise any power of
entry upon or of taking possession of any of such Real Estate.
(iii) The Seller is not in default under any of the terms
of the Lease.
(iv) No notice of any alleged breach of any of the terms
of the Lease has been served on or received by the Seller.
(v) Except as set forth on SECTION 3.19(a) OF THE SELLER
DISCLOSURE SCHEDULE, the Seller has paid all rents and service charges to the
extent such rents and charges are due and payable.
(vi) To the knowledge of the Seller, the lessor is not in
default under any of the terms of the Lease.
(f) Each of the properties comprising the Real Estate is available
for immediate use in the operation of the Business and for the purpose for which
such property currently is being utilized.
(g) No written notice of violation of any applicable laws relating
to zoning, health and safety of, and access to, the improvements on the Real
Estate (including without limitation, the Americans With Disabilities Act) has
been served on or received by the Seller, and, to the knowledge of Seller, the
Real Estate is zoned for the purposes for which it is being used by the Seller.
Further, no written notice of violation of any applicable laws, rules or
regulations, or licenses and permits required by governmental or regulatory
authorities, in connection with the use, occupancy, ownership or operation of
the Real Estate (including the buildings located thereon) has been served on or
received by the Seller.
(h) Subject to the terms and conditions of the Lease and except as
set forth on SECTION 3.19(a) OF THE SELLER DISCLOSURE SCHEDULE, the Seller has
full legal rights under the Lease
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to the use and enjoyment of all of the Real Estate for the operation of the
Business as presently conducted by the Seller.
(i) The Seller has not entered into any commitment (whether
legally binding or not) with any Person who owns or occupies any property
adjacent or near to any of the Real Estate to do any act or thing or make any
payment to any person in connection with or relating to any use or occupancy of
the Real Estate by any Person.
(j) No resolution, proposal, order, act or other notice of any
acquisition by condemnation or otherwise of any of the Real Estate or the roads
abutting the Real Estate by any Governmental Authority has been served on or
received by the Seller, nor has any notice of a proposed or filed suit, action
or proceeding for condemnation of the Real Estate, the roads abutting the Real
Estate or affecting the Real Estate been served on or received by the Seller,
nor does Seller have any actual knowledge thereof.
(k) The Real Estate is served by drainage, water, electricity, gas
and telecommunications services which is adequate for the operation of the
Business as presently conducted by the Seller.
(l) Except as set forth on SECTION 3.19(a) OF THE SELLER
DISCLOSURE SCHEDULE, the Seller has not assigned any lease or tenancy in the
Real Estate.
(m) Other than the rights of the Buyer pursuant to this Agreement,
there are no outstanding options or rights of first refusal to purchase the Real
Estate, or any portion thereof or interest therein.
(n) There has been no labor performed, material purchased or any
other construction, whether direct or indirect, in connection with the Real
Estate which could be the basis of any liens, claims or actions of any
subcontractor, laborer, mechanic or materialman for labor performed or material
supplied which are not being paid in the ordinary course of business.
(o) There are no suits, actions or proceedings pending against the
Seller with respect to the Real Estate or any part thereof which, if adversely
decided, would affect the Buyer's use of the Real Estate or would adversely
affect the Real Estate in any manner.
(p) Other than Permitted Encumbrances, all fixtures, furniture and
equipment located on or in the Real Estate are free and clear of any and all
claims, liens, demands, charges, attachments or encumbrances.
(q) The Seller has not received notice of any unpaid private
assessments or liens under any declarations of covenants, conditions and
restrictions.
(r) The Seller has not received any written notice from any
Governmental Authority in connection with the Seller's occupancy, use or
operation, or the condition of, the Real Estate, including any notice regarding
any non-compliance with laws, which would adversely affect the Real Estate in
any material respect after the Closing.
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3.20 EXPORTS AND CUSTOMS. Except as set forth in SECTION 3.20 OF THE
SELLER DISCLOSURE SCHEDULE, the Seller is in compliance in all material respects
with all applicable export and customs statutes, rules and regulations of the
United States and any applicable foreign Governmental Authority relating to the
products, services and technologies of the Business.
3.21 INSURANCE. SECTION 3.21 OF THE SELLER DISCLOSURE SCHEDULE contains a
complete and correct list of all policies of insurance held by any Vertex Party
covering any of the Business Assets, true, correct and complete copies of which
have been made available to the Buyer. All such policies are in full force and
effect. All premiums due on such policies have been paid in full. There is no
default with respect to any provision contained in any such policy that could
have an adverse effect upon the ability of the insured to collect insurance
proceeds under such policy, nor has there been any failure by the insured to
give any notice or present any claim under any such policy in a timely fashion
or in the manner or detail required by the policy. No notice of cancellation or
non-renewal with respect to, or disallowance of any claim under, any such policy
has been received by the Seller.
3.22 LABOR RELATIONS.
(a) No Employee is represented by any union or other labor
organization. There is no unfair labor practice charge pending or, to the
knowledge of the Seller, threatened against the Seller relating to any of the
Employees or Former Employees. There are no negotiations or strikes, disputes,
slow downs or stoppages relating to the Business pending or, to the knowledge of
the Seller, threatened against or involving Employees or the Business. No labor
grievance relating to any of the Employees or Former Employees is pending. The
Seller has not in the past three years experienced any work stoppage or other
labor difficulty or organizational activity relating to any of the Employees or
the Business.
(b) There are no pending claims against the Seller or the Business
(whether under federal or state law, employment agreements or otherwise)
asserted or to the knowledge of the Seller, threatened by any Employee or Former
Employee on account of or for (i) overtime pay, other than overtime pay for work
done during the current payroll period; (ii) wages or salary for any period
other than the current payroll period; (iii) any amount of vacation or
sabbatical pay or pay in lieu of vacation or time off; or (iv) any violation of
any statute, ordinance or regulation relating to minimum wages or maximum hours
at work. To the knowledge of the Seller, no basis for such claims exist.
3.23 WARN ACT. Since the enactment of the Worker Adjustment and
Retraining Notification Act, as amended (the "WARN ACT"), the Seller has not
effectuated (i) a "plant closing" (as defined in the WARN Act) affecting any
site of employment or one or more facilities or operating units within any site
of employment or facility of the Business; or (ii) a "mass layofF" (as defined
in the WARN Act) affecting any site of employment or one or more facilities or
operating units within any site of employment or facility of the Business; nor
has the Seller been affected by any transaction or engaged in layoffs or
employment terminations with respect to the Business sufficient in number to
trigger application of any similar state or local law. None of the current
Employees has suffered an "employment loss" (as defined in the WARN Act) within
six months prior to date hereof.
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3.24 ACCOUNTS RECEIVABLE. Except as set forth on SECTION 3.24 OF THE
SELLER DISCLOSURE SCHEDULE, the accounts receivable of the Seller arising from
the Business as set forth on the November 30 Balance Sheet and arising since the
date thereof are valid receivables arising from sales actually made and services
actually performed by the Seller in the ordinary course of business and
consistent with GAAP; are not subject to any valid defenses, setoffs or
counterclaims; and are generally collectible within ninety (90) days after
billing at the full recorded amount thereof, less in the case of accounts
receivable appearing on the November 30 Balance Sheet, the recorded allowance
for doubtful accounts reflected thereon (and with respect to those arising since
the November 30 Balance Sheet, less a comparable provision for doubtful
accounts). The allowance for doubtful accounts on the November 30 Balance Sheet
has been determined in accordance with GAAP applied on a consistent basis.
3.25 CUSTOMERS. SECTION 3.25 OF THE SELLER DISCLOSURE SCHEDULE sets forth
(i) the names of the five (5) largest customers of the Business (direct or
indirect), in terms of sales over the eleven (11) months ended November 30, 2002
(the "KEY CUSTOMERS"), and (ii) the sales of the Seller to each of the Key
Customers. Except as set forth in SECTION 3.25 OF THE SELLER DISCLOSURE
SCHEDULE, neither the Owner nor Seller has received any notice in the twelve
(12) months preceding the date of this Agreement nor has any present knowledge
that any Key Customer intends to terminate or materially reduce its business
with Seller.
3.26 DISCLOSURES REGARDING BUSINESS ASSETS. EXCEPT FOR THE
REPRESENTATIONS AND WARRANTIES SET FORTH IN THIS AGREEMENT, THE SELLER EXPRESSLY
DISCLAIMS ANY REPRESENTATIONS OR WARRANTIES OF ANY KIND OR NATURE, EXPRESS OR
IMPLIED, AS TO LIABILITIES, OPERATIONS, TITLE, CONDITION, VALUE OR QUALITY OF
THE BUSINESS ASSETS OR THE PROSPECTS, FINANCIAL OR OTHERWISE, RISKS AND OTHER
INCIDENTS OF THE BUSINESS ASSETS. EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES
SET FORTH IN THIS AGREEMENT, THE SELLER SPECIFICALLY DISCLAIMS ANY
REPRESENTATION OR WARRANTY OF MERCHANTABILITY, USAGE, OR SUITABILITY OR FITNESS
FOR ANY PARTICULAR PURPOSE WITH RESPECT TO THE BUSINESS ASSETS OR ANY PART
THEREOF, OR AS TO THE WORKMANSHIP THEREOF, OR THE ABSENCE OF ANY DEFECTS
THEREIN, WHETHER LATENT OR PATENT, OR COMPLIANCE WITH ENVIRONMENTAL
REQUIREMENTS, OR WHETHER THE SELLER POSSESSES SUFFICIENT REAL PROPERTY, PERSONAL
PROPERTY OR INTELLECTUAL PROPERTY TO OPERATE THE BUSINESS. OTHER THAN THE SELLER
DISCLOSURE SCHEDULE, NO SCHEDULE OR EXHIBIT TO THIS AGREEMENT OR ANY RELATED
COMMUNICATIONS MADE BY THE SELLER OR ANY VERTEX PARTY, OR BY ANY BROKER OR
INVESTMENT BANKER, OR ANY ORAL, WRITTEN OR ELECTRONIC RESPONSE TO ANY
INFORMATION REQUEST PROVIDED TO BUYER, WILL CAUSE OR CREATE ANY REPRESENTATION
OR WARRANTY, EXPRESS OR IMPLIED, OTHER THAN THOSE SET FORTH IN THIS AGREEMENT.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE
BUYER
The Buyer represents and warrants to the Owner and the Seller that the
statements contained in this Article IV are true and correct as of the date
hereof.
4.1 ORGANIZATION. The Buyer is a corporation, duly organized, validly
existing and in good standing under the laws of the state of Delaware.
4.2 AUTHORITY. The Buyer has all requisite corporate power and authority
to execute and deliver this Agreement and the Ancillary Agreements and to
perform its obligations hereunder and thereunder. The execution and delivery by
the Buyer of this Agreement and the Ancillary Agreements and the consummation by
the Buyer of the transactions contemplated hereby and thereby have been duly
authorized by all necessary corporate action on the part of the Buyer and no
other authorization or consent of the Buyer or its shareholders is necessary.
This Agreement has been, and such Ancillary Agreements will be, duly executed
and delivered by the Buyer and, assuming this Agreement and each such Ancillary
Agreement constitute the valid and binding obligation of the other Parties
thereto, this Agreement constitutes, and each such Ancillary Agreement will
constitute, a valid and binding obligation of the Buyer, enforceable against the
Buyer in accordance with its terms.
4.3 NONCONTRAVENTION. Subject to compliance with the applicable
requirements of the Xxxx-Xxxxx-Xxxxxx Act and applicable foreign antitrust or
trade regulation laws, neither the execution and delivery by the Buyer of this
Agreement and the Ancillary Agreements nor the consummation by the Buyer of the
transactions contemplated hereby or thereby, will:
(a) conflict with or violate any provision of the certificate of
incorporation or by-laws of the Buyer;
(b) require on the part of the Buyer any filing with, or permit,
authorization, consent or approval of, any Governmental Authority, except for
any filing, permit, authorization, consent or approval which if not obtained or
made would not reasonably be expected to materially impair the ability of the
Buyer to consummate the transactions contemplated by this Agreement (a "BUYER
MATERIAL ADVERSE EFFECT");
(c) conflict with, result in a breach of, constitute (with or
without due notice or lapse of time or both) a default under, result in the
acceleration of obligations under, create in any party any right to terminate or
modify, or require any notice, consent or waiver under, any contract or
agreement to which the Buyer is a party or by which the Buyer is bound, except
for (i) any conflict, breach, default, acceleration or right to terminate or
modify that would not reasonably be expected to result in a Buyer Material
Adverse Effect or (ii) any notice, consent or waiver the absence of which would
not reasonably be expected to result in a Buyer Material Adverse Effect;
(d) violate any order, writ, injunction or decree specifically
naming the Buyer or any of its respective properties or assets which would
reasonably be expected to have a Buyer Material Adverse Effect; or
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(e) violate any statute, rule or regulation applicable to the
Buyer or any of its properties or assets, except for any violation that would
not reasonably be expected to result in a Buyer Material Adverse Effect.
4.4 LITIGATION. There are no actions, suits, claims or legal,
administrative or arbitratorial proceedings pending against, or, to the
knowledge of the Buyer, threatened against, the Buyer which would reasonably be
expected to have a Buyer Material Adverse Effect.
4.5 BROKERS' FEES. The Buyer has no liability or obligation to pay any
fees or commissions to any broker, finder or agent with respect to the
transactions contemplated by this Agreement.
4.6 REPRESENTATIONS AND WARRANTIES. The representations and warranties
set forth in this Agreement constitute the sole and exclusive representations
and warranties of the Seller and the Owner in connection with the transactions
contemplated hereby. There are no representations, warranties, covenants,
understandings or agreements among the Parties regarding the Business Assets,
the Assumed Liabilities or the Business or their transfer other than those
contained in this Agreement and the Ancillary Agreements. Except for the
representations and warranties expressly set forth in this Agreement, the Buyer
disclaims reliance on any representations, warranties or guarantees, either
express or implied, by the Seller or the Owner or any of their Affiliates
including, without limitation, any oral, written or electronic response to any
information request provided to the Buyer. PRIOR TO THE EXECUTION OF THIS
AGREEMENT, THE BUYER HAS CONDUCTED TO ITS SATISFACTION ALL NECESSARY AND
SUFFICIENT EXAMINATION OF THE BUSINESS ASSETS AND THE BUSINESS, AND IS RELYING
ON ITS OWN EXAMINATION OF THE BUSINESS ASSETS, AND IS NOT RELYING ON ANY
REPRESENTATION OR WARRANTY MADE BY THE SELLER (OTHER THAN THOSE SET FORTH IN
THIS AGREEMENT), OR ANY PERSON PURPORTING TO ACT ON BEHALF OF THE SELLER.
ARTICLE V
PRE-CLOSING COVENANTS
5.1 CLOSING EFFORTS; XXXX-XXXXX-XXXXXX ACT; OBLIGATIONS OF OTHER VERTEX
PARTIES.
(a) Subject to the terms hereof, including Sections 5.1(b) and
5.1(c), the Buyer, the Owner and the Seller shall, and the Owner and the Seller
shall cause each of the other Vertex Parties to, use commercially reasonable
efforts to take all actions and to do all things reasonably necessary or
advisable to consummate the transactions contemplated by this Agreement,
including using reasonable commercial efforts to:
(i) obtain all waivers, permits, consents, approvals or
other authorizations from Governmental Authorities and from other third parties
(including those consents listed in SECTION 3.3(c) OF THE SELLER DISCLOSURE
SCHEDULE) (the "THIRD-PARTY CONSENTS"); provided that the Buyer shall not be
required to make any payment to obtain any consent listed in SECTION 3.3(c) OF
THE SELLER DISCLOSURE SCHEDULE, and no Vertex Party shall be required to make
any payment to obtain any such consent other than as set forth on SCHEDULE
5.1(a)(i) attached hereto;
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(ii) effect all registrations, filings and notices with
or to Governmental Authorities (the "GOVERNMENTAL FILINGS");
(iii) obtain from each of the counterparties to the
contemplated Contract Administration Agreements, prior to Closing, the novations
described in Section 2.7 of the Contract Administration Agreement; and
(iv) Prior to the Closing, the Owner shall cause Vertex
San Diego to have taken the actions described in SCHEDULE 5.1(a)(iv).
(v) otherwise comply in all material respects with all
applicable laws and regulations in connection with the consummation of the
transactions contemplated by this Agreement.
The Owner and the Seller shall not, and the Owner and the Seller shall cause the
other Vertex Parties not to, without prior consent of the Buyer, agree to any
condition for obtaining any of the Third-Party Consents that would affect in an
adverse manner the Business Assets or the Business. Each of the Parties shall
promptly notify the other Parties hereto in writing of any fact, condition or
event known to it that would reasonably be expected to prohibit, make unlawful
or delay the consummation of the transactions contemplated by this Agreement,
including any material default under any Material Contract or event that becomes
known to the Seller that, with notice or lapse of time or both, would become a
material default under any Material Contract.
(b) Without limiting the generality of the foregoing, the Buyer,
the Owner and the Seller shall:
(i) promptly file any Notification and Report Forms and
related material that it may be required to file with the Federal Trade
Commission and the Antitrust Division of the United States Department of Justice
under the Xxxx-Xxxxx-Xxxxxx Act;
(ii) use commercially reasonable efforts to obtain an
early termination of the applicable waiting period under the Xxxx-Xxxxx-Xxxxxx
Act;
(iii) make any further filings or information submissions
pursuant thereto that may be reasonably necessary or advisable; and
(iv) promptly make any filings or submissions required
under any applicable foreign antitrust or trade regulation law.
The Buyer, the Owner and the Seller shall act diligently and reasonably, and
will cooperate with each other, to transfer all transferable Governmental
Authority licenses of the Seller or any other Vertex Party relating to the
Business Assets and secure any approvals of any Governmental Authority required
to be obtained by them that relate to such transactions. The Owner and the
Seller shall not, without the prior consent of the Buyer, agree to any condition
for obtaining any of the approvals that would affect the Business Assets or the
Business in an adverse manner. Each of the Parties shall use commercially
reasonable efforts to resolve any objections that may be asserted by any
Governmental Authority with respect to the transactions contemplated hereby, and
shall cooperate with each other to contest any challenges to the transactions
contemplated
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hereby by any Governmental Authority. Each of the Parties shall promptly inform
the others of any material communication received by such Party from the Federal
Trade Commission, the Antitrust Division of the Department of Justice or any
other Governmental Authority regarding any of the transactions contemplated
hereby (unless the provision of such information would (x) violate the
provisions of any applicable laws or regulations (including without limitation
those relating to security clearance or export controls) or any confidentiality
agreement or (y) cause the loss of the attorney-client privilege with respect
thereto).
(c) Notwithstanding the foregoing, nothing contained in this
Agreement shall require or obligate the Buyer or its Affiliates:
(i) to initiate, pursue or defend any litigation (or
threatened litigation) to which any Governmental Authority (including the
Antitrust Division of the Department of Justice and the Federal Trade
Commission) is a party;
(ii) to agree or otherwise become subject to any material
limitations on (A) the right of the Buyer effectively to control or operate the
Business or the Buyer's right, title and interest in the Business Assets, (B)
the right of the Buyer or its Affiliates to acquire or use the Business Assets,
or (C) the right of the Buyer to exercise full rights of ownership of the
Acquired Assets; or
(iii) to agree or otherwise be required to sell or
otherwise dispose of, hold separate (through the establishment of a trust or
otherwise), or divest itself of all or any portion of the business, assets or
operations of the Buyer, any Affiliate of the Buyer, the Business or any of the
Buyer's right, title and interest in the Business Assets.
5.2 OPERATION OF THE BUSINESS. Except as contemplated by this Agreement,
during the period from the date of this Agreement until the Closing Date, the
Buyer, the Seller and the Owner agree that, prior to the Closing, unless the
Buyer shall otherwise consent in writing, the following provisions shall apply:
(a) the Seller shall carry on the Business in the ordinary course;
(b) the Seller shall use commercially reasonable efforts to
maintain and preserve the Business intact, maintain the insurance of the
Business at historic levels, comply with all material laws, preserve the
goodwill of suppliers, customers and others having business relations with the
Business and maintain the Business, as well as the Seller's books of account,
records and files related to the conduct of the Business, all in the ordinary
course of business;
(c) the Owner or the Seller shall inform the Buyer in writing of
any event or circumstance that (i) has or could reasonably be expected to have a
Business Material Adverse Effect, (ii) is a breach of a representation,
warranty, covenant or agreement of the Seller or Owner herein or that (iii) is
listed on SCHEDULE 1 hereof, each no later than three (3) Business Days after
obtaining knowledge of such an event or circumstance;
(d) the Owner and the Seller shall inform the Buyer in writing of
any event or circumstance that has or could reasonably be expected to have a
material adverse effect with
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respect to the Real Estate no later than three (3) Business Days after obtaining
knowledge of such an event or circumstance, including, without limitation:
(i) a fire or other casualty causing significant damage
to the Real Estate;
(ii) receipt of notice of eminent domain proceedings or
condemnation of all or any part of the Real Estate;
(iii) receipt of a notice from any Governmental Authority
or insurance underwriter relating to the condition, use or occupancy of the Real
Estate or any real estate adjacent to the Real Estate or setting forth any
requirements with respect thereto;
(iv) receipt or delivery of any default or termination
notice or claim of offset or defense to the payment of rent from any tenant of
all or any portion of the Real Estate;
(v) receipt of any notice of default from the holder of
any lien or security interest in the Real Estate or any portion thereof;
(vi) notice of any actual or threatened litigation
against the Seller affecting or relating to the Real Estate;
(vii) the commencement of any strike, lock-out, boycott or
other labor trouble affecting the Real Estate; or
(viii) receipt of any Tax assessment disputes prior to
Closing, and the Seller will not agree to any changes in the real estate Tax
assessment, nor settle, withdraw or otherwise compromise any pending claims with
respect to prior Tax assessments without the Buyer's prior written consent, and,
if any proceedings shall result in any reduction of assessment and/or Tax for
the Tax year in which the Closing occurs, it is agreed that the amount of Tax
savings or refund for such Tax year less the fees and disbursements in
connection with such proceedings, shall be apportioned between the parties as of
the date the real estate Taxes are apportioned under this Agreement;
(e) except as contemplated by this Agreement, or except with the
Buyer's express written approval, the Seller shall not, except as otherwise
provided for in SCHEDULE 5.2(e):
(i) commit to make, or make, any capital expenditure in
excess of $100,000 in the aggregate relating to the Business;
(ii) except as otherwise permitted by Section 5.2(e)(vii)
below, enter into any contract, agreement or arrangement (oral or written) which
would constitute a Material Contract of the type identified in Section 3.9(a),
3.9(b), 3.9(c), 3.9(d), 3.9(f), 3.9(g) or 3.9(h);
(iii) enter into any other type of contract, agreement or
arrangement (oral or written) which would constitute a Material Contract under
Section 3.9(e) hereof, unless such contract, agreement or arrangement is entered
into in the ordinary course of business pursuant to standard terms and
conditions and does not involve the receipt or payment by the
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Seller of aggregate consideration or value of more than $50,000, and then only
after first consulting with the Buyer (although, as to this type of Material
Contract, Buyer's prior written consent shall not be required as a precondition
to the Seller's entering into such Material Contract);
(iv) enter into any contract, agreement or arrangement
(oral or written) that requires the consent or approval of any Third-Party to
consummate the transactions described in this Agreement or any Ancillary
Agreement;
(v) cancel or make any modifications or amendments to
any Material Contract;
(vi) sell, lease (as lessor), transfer or otherwise
dispose of any Business Assets, other than inventory sold in the ordinary course
of business and other than cash or short-term marketable securities (other than
the Investments);
(vii) grant or transfer any rights to the Proprietary
Assets that are part of the Business Assets (other than any non-exclusive,
non-perpetual licenses entered into in the ordinary course of business pursuant
to standard terms and conditions which (a) do not involve the receipt or payment
by the Seller of aggregate consideration or value of more than $200,000 and (b)
do not provide for the use of rights that were exclusive to the Vertex Parties
prior to such license, and then only after first consulting with the Buyer
(although Buyer's prior written consent shall not be required as a pre-condition
to the Seller's entering into such license));
(viii) fail to prosecute, defend and maintain in a manner
consistent with past practice any Proprietary Assets that are part of the
Business Assets;
(ix) mortgage or pledge any Business Assets, except for
Permitted Encumbrances;
(x) cancel any debts owed to or claims held by the
Seller relating to the Business (including the settlement of any claim or
litigation) other than in the ordinary course of business;
(xi) accelerate or delay collection of any notes or
accounts receivable generated by the Business in advance of or beyond their
regular due dates or the dates when the receivable would have been collected in
the ordinary course of the Business;
(xii) change the accounting policies applied in the
preparation of the November 30 Balance Sheet, or make or revoke any Tax election
or settle or compromise any Tax liability that would affect the Business Assets
or the Assumed Liabilities after the Closing;
(xiii) prepare or file any Tax Return with respect to the
Business Assets or the Assumed Liabilities inconsistent with past practice or,
on any such Tax Return, take any position, make any election, or adopt any
method that is inconsistent with the position taken, elections made or methods
used in preparing similar Tax Returns with respect to the Business Assets or the
Assumed Liabilities in prior periods;
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(xiv) make or promise to make any severance or termination
benefits or any increase in any salaries, rates of pay or other compensation or
benefits of any Seller Employees, except for customary increases and
progressions for employees consistent with past practices which increases and
progressions were made in the ordinary course of business and except for matters
set forth on SCHEDULE 5.2(e)(xiv);
(xv) hire any additional Employees, except as set forth
on SCHEDULE 5.2(e)(xv); or
(xvi) enter into any agreement or commitment to take any
action prohibited by this Section 5.2.
5.3 ACCESS. During the period from the date of this Agreement until the
Closing Date, the Owner and the Seller shall permit representatives of the Buyer
to have access (at reasonable times, on reasonable (and in any event not less
than three Business Days') prior written notice and in a manner that in the
reasonable opinion of Owner will not interfere with the normal business
operations of the Business or the business of the Vertex Parties) to the Real
Estate and other operational locations of the Business for inspecting,
investigating, measuring, surveying and making related inquiries and audits of
the Real Estate, financial and accounting records, contracts, personnel and
other records and documents of the Seller pertaining to the Business (including
for the purpose of conducting environmental investigations). Notwithstanding the
foregoing, the Owner and the Seller shall not be obligated to provide any
information, documents or access to any person unless the Buyer is responsible,
pursuant to the terms of the Confidentiality Agreement dated September 25, 2002
(the "CONFIDENTIALITY AGREEMENT") between the Owner and the Buyer, for the use
and disclosure of any information obtained by such person from the Vertex
Parties, or such person enters into a confidentiality agreement with the Owner
and the Seller on terms that are substantially the same as those set forth in
the Confidentiality Agreement. The Buyer, the Owner and the Seller acknowledge
and agree that the Confidentiality Agreement remains in full force and effect
and that information provided by the Owner or the Seller to the Buyer or the
Parent or their Affiliates pursuant to this Agreement prior to the Closing shall
be treated in accordance with the Confidentiality Agreement. If this Agreement
is terminated prior to the Closing, the Confidentiality Agreement shall remain
in full force and effect in accordance with its terms. If the Closing occurs,
the Confidentiality Agreement, insofar as it covers information relating to the
Business Assets, shall terminate effective as of the Closing, but shall remain
in effect insofar as it covers other information disclosed thereunder.
5.4 EXCLUSIVITY. During the period from the date of this Agreement until
the Closing Date, or, if earlier, the termination of this Agreement, each of the
Owner and the Seller shall not, directly or indirectly, authorize or permit any
of its officers, directors, managers, employees, agents, advisors or
representatives to, (a) initiate, solicit or encourage any proposal, offer or
discussion with any party (other than the Buyer) concerning any acquisition of
any portion of the Business or any of the equity of the Seller; (b) engage in
discussions or negotiations with any party (other than the Buyer) concerning any
such acquisition transaction; (c) enter into any agreement relating to any such
acquisition transaction; (d) furnish to any Person nonpublic information
relating to the Business; or (e) take any other action to cooperate in any way,
or facilitate any inquiries or the making of any proposal that constitutes, or
may reasonably be
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expected to lead to, any such acquisition transaction. The Owner and the Seller
shall notify the Buyer if it receives a proposal for the acquisition of the
Business or the Seller on or after the date hereof and prior to the Closing;
provided, that the Owner and the Seller shall be under no obligation to disclose
to the Buyer the identity of the Person making any such acquisition proposal nor
the terms thereof; and provided, further, that nothing in this Section 5.4 shall
obligate the Seller or the Owner to disclose to the Buyer any proposal to
acquire the Owner or any of the Owner's other subsidiaries or businesses other
than the Business and the Seller.
5.5 NOTICE OF LITIGATION. The Buyer will promptly notify the Owner and
the Seller of any action, suit or proceeding that is instituted or threatened
against the Buyer to restrain, prohibit or otherwise challenge the legality of
any transaction described in this Agreement arising prior to the Closing Date.
The Owner and the Seller will promptly notify the Buyer of any action, suit or
proceeding that is instituted or threatened against the Seller to restrain,
prohibit or otherwise challenge the legality of any transaction described in
this Agreement arising prior to the Closing Date. The Owner and the Seller will
promptly notify the Buyer of any lawsuit, claim, proceeding or investigation
that is threatened, brought or asserted against Seller that would have been
listed in Article III if the lawsuit, claim, proceeding or investigation had
arisen prior to the date of this Agreement.
5.6 SUPPLEMENTS TO THE SELLER DISCLOSURE SCHEDULE.
(a) As promptly as practicable, the Owner and the Seller will
provide the Buyer with a supplement or amendment to the Seller Disclosure
Schedule with respect to any matter, condition or occurrence hereafter arising
which, if existing or occurring on the date of this Agreement, would have been
required to be set forth or described in such Seller Disclosure Schedule, and if
not so set forth or described, would have constituted a material breach of this
Agreement. In addition, the Owner and the Seller shall promptly inform the
Buyer, and the Buyer will promptly inform the Owner and the Seller, of any fact
or event which comes to its attention, the existence of which constitutes or
likely will constitute a material breach of any representation or warranty of
the other party in this Agreement; PROVIDED, that except as otherwise provided
in Section 7.7 hereof, no such action shall be deemed to cure any breach of or
alter any representation or warranty made in this Agreement so as to (a) permit
the Closing to occur unless the Buyer (or the Seller, as the case may be)
specifically agrees thereto in writing or (b) affect the Buyer's (or the
Seller's, as the case may be) rights to indemnification hereunder.
(b) As promptly as practicable after the date of this Agreement,
the Owner and the Buyer shall make a good faith determination of whether or not
the material transfer agreements listed on SCHEDULE 5.6(b) attached hereto are
to become Assigned Contracts. In making such determination, the Parties will be
guided by the principle that the provisions of such material transfer agreements
which relate to materials transferred to the Seller prior to the Closing Date
(or the entire material transfer agreement, if the agreement relates only to
such materials) will be assigned to the Seller, for subsequent assignment to the
Buyer. In the event a dispute arises between the Parties with respect to the
determination by the Owner and the Buyer, there shall be a rebuttable
presumption that the agreements that are the subject of the dispute are to be
Assigned Contracts. Upon a determination that a material transfer agreement (or
a portion thereof) is to be an Assigned Contract, such material transfer
agreement (or the portion of such agreement which relates to materials
previously transferred to the Seller) will be assigned to the
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Seller prior to the Closing Date, and in connection with the Closing the Buyer
will grant such licenses to the Vertex Parties as may be reasonably necessary to
permit the Vertex Parties to share the benefit of any rights under such material
transfer agreements which are granted back to the Buyer (as the assignee of such
agreements).
ARTICLE VI
CONDITIONS PRECEDENT TO CLOSING
6.1 CONDITIONS TO OBLIGATIONS OF THE BUYER. The obligation of the Buyer
to consummate the transactions contemplated hereby at the Closing is subject to
the satisfaction (or waiver by the Buyer) of the following conditions:
(a) without giving effect to any supplement or amendment to the
Seller Disclosure Schedule, the representations and warranties of the Owner and
the Seller set forth in Article III shall have been true and correct in all
material respects (other than those that are qualified as to materiality, which
shall have been true and correct in all respects) when made (except where any
such failure of such representations and warranties to be true in all material
respects does not result in or involve a Material Loss to the Seller, the
Business Assets or the Business) and as of the Closing Date as though made again
on the Closing Date (except where any such failure of such representations and
warranties to be true in all material aspects as though made again on the
Closing Date would not constitute a Business Material Adverse Effect);
(b) each of the Vertex Parties shall have performed or complied in
all material respects with the agreements and covenants required to be performed
or complied with by it under this Agreement as of or prior to the Closing;
(c) no action, suit or proceeding shall be pending by or before
any Governmental Authority seeking to prevent consummation of the transactions
contemplated by this Agreement or any of the Ancillary Agreements, and no
judgment, order, decree, stipulation or injunction enjoining or preventing the
consummation of the transactions contemplated by this Agreement or any of the
Ancillary Agreements shall be in effect;
(d) the Owner and the Seller shall have delivered to the Buyer a
certificate (the "SELLER CERTIFICATE") signed by a duly authorized officer of
the Seller to the effect that each of the conditions specified in clauses (a)
through (c) (insofar as clause (c) relates to an action, suit or proceeding
involving, or a judgment, order, decree, stipulation or injunction against, the
Seller) of this Section 6.1 have been satisfied;
(e) the Buyer shall have received from Xxxxxxx X. Xxxxx, Esq.,
Senior Vice President and General Counsel of Owner, an opinion dated the Closing
Date, in form and substance satisfactory to the Buyer;
(f) the Applicable Permits listed on SCHEDULE 6.1(f) shall have
been renewed or be in effect and, if required, transferred or reissued to the
Buyer;
(g) the applicable waiting period (and any extensions thereof)
under the Xxxx-Xxxxx-Xxxxxx Act shall have expired or otherwise been terminated;
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(h) the Owner and the Seller shall have obtained (or caused to be
obtained) in form reasonably acceptable to the Buyer all of the Third-Party
Consents set forth on SCHEDULE 6.1(h), and effected all of the Governmental
Filings which are required on the part of the Owner and the Seller to consummate
the transactions contemplated by this Agreement;
(i) the Buyer shall have received such other customary
certificates (such as a certificate of good standing of the Seller in the
jurisdiction of formation of the Seller and a certified copy of the Seller's
limited liability company agreement, and certificates as to the incumbency of
officers and the adoption of authorizing resolutions by the Seller's members and
managers) as it shall reasonably request in connection with the Closing;
(j) the Owner and the Seller shall have delivered all
certificates, instruments, contracts and other documents to be delivered by each
of them pursuant to Section 2.3(b) (including all applicable Ancillary
Agreements);
(k) no Business Material Adverse Effect shall have occurred;
(l) the Seller shall execute and deliver such affidavit of no
mechanics' lien or parties in possession as shall be required by a title company
to insure the Buyer's title to the Real Estate without exception for such; and
(m) the Buyer shall have obtained a title policy for the Real
Property excluding from coverage only standard exceptions and the Permitted
Encumbrances and in an amount reasonably satisfactory to it.
6.2 CONDITIONS TO OBLIGATIONS OF THE OWNER AND THE SELLER. The
obligation of the Owner and the Seller to consummate the transactions
contemplated hereby at the Closing is subject to the satisfaction (or waiver by
the Owner and the Seller) of the following conditions:
(a) the representations and warranties of the Buyer set forth in
Article IV shall have been true and correct in all material respects (other than
those that are qualified as to materiality, which shall have been true and
correct in all respects) when made (except where any such failure of such
representations and warranties to be true in all material respects would not
result in or involve a Material Loss to the Buyer), and as of the Closing Date
as though made again on the Closing Date (except where any such failure of such
representations and warranties to be true in all material aspects as though made
again on the Closing Date would not constitute a Buyer Material Adverse Effect);
(b) the Buyer shall have performed or complied in all material
respects with its agreements and covenants required to be performed or complied
with by it under this Agreement as of or prior to the Closing;
(c) no action, suit or proceeding shall be pending by or before
any Governmental Authority seeking to prevent consummation of the transactions
contemplated by this Agreement or any of the Ancillary Agreements, and no
judgment, order, decree, stipulation or injunction enjoining or preventing
consummation of the transactions contemplated by this Agreement or any of the
Ancillary Agreements shall be in effect;
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(d) the Buyer shall have delivered to the Seller a certificate
(the "BUYER CERTIFICATE") signed by a duly authorized officer of the Buyer to
the effect that each of the conditions specified in clauses (a) through (c)
(insofar as clause (c) relates to an action, suit or proceeding involving, or a
judgment, order, decree, stipulation or injunction against, the Buyer) of this
Section 6.2 have been satisfied;
(e) the Seller shall have received from in house counsel of the
Buyer opinions dated the Closing Date in form and substance satisfactory to the
Seller;
(f) the applicable waiting period (and any extensions thereof)
under the Xxxx-Xxxxx-Xxxxxx Act shall have expired or otherwise been terminated;
(g) the Buyer shall have effected all of the Governmental Filings
which are required on the part of the Buyer to consummate the transactions
contemplated by this Agreement;
(h) the Seller shall have received such other customary
certificates (such as certificates as to the incumbency of officers and the
adoption of authorizing resolutions by the Buyer's board of directors) as it
shall reasonably request in connection with the Closing;
(i) the Buyer shall have delivered all certificates, instruments,
contracts and other documents to be delivered by it pursuant to Section 2.3(b)
(including all applicable Ancillary Agreements); and
(j) no Buyer Material Adverse Effect shall have occurred.
ARTICLE VII
INDEMNIFICATION
7.1 INDEMNIFICATION BY THE OWNER AND THE SELLER. Subject to the terms
and conditions of this Article VII, from and after the Closing, the Owner and
the Seller shall, on a joint and several basis, indemnify the Buyer and its
officers, directors, managers, employees, agents, representatives and its
Affiliates and their officers, directors, managers, employees, agents and
representatives (the "BUYER INDEMNITEES") in respect of, and hold the Buyer
Indemnitees harmless against, any and all liabilities, obligations, judgments,
interest, losses, assessments, damages, fines, fees, penalties, costs and
expenses (determined on a pre-tax basis, but after credit for applicable
insurance proceeds actually received by an Indemnified Party with respect to
such previously described liabilities, losses and the like, whether such receipt
is before or after payment by an Indemnifying Party, subrogation rights of the
Indemnified Party's insurers being hereby waived, and also including, without
limitation, reasonable attorneys' fees and reasonable expenses of investigating
and defending claims, lawsuits, complaints, actions or other pending or
threatened litigation) (collectively the "DAMAGES") incurred or suffered by any
of the Buyer Indemnitees to the extent resulting from or attributable to:
(a) any breach of any representation or warranty of the Owner or
the Seller contained in this Agreement;
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(b) any failure by any Vertex Party to perform or observe any
covenant or agreement required to be performed or observed by that Vertex Party
contained in this Agreement or any Transfer Document;
(c) any failure by the Vertex Parties to pay, perform or discharge
any Excluded Liabilities; or
(d) the items set forth on SCHEDULE 7.1(d), which items will be
deemed to be Third-Party Claims in the event claims are made with respect
thereto.
7.2 INDEMNIFICATION BY THE BUYER. Subject to the terms and conditions of
this Article VII, from and after the Closing, the Buyer shall indemnify each of
the Owner and the Seller and its officers, directors, managers, employees,
agents, representatives and its Affiliates and their officers, directors,
managers, employees, agents and representatives (the "SELLER INDEMNITEES") in
respect of, and hold the Seller Indemnitees harmless against, any and all
Damages incurred or suffered by any of the Seller Indemnitees to the extent
resulting from or attributable to:
(a) any breach of any representation or warranty of the Buyer
contained in this Agreement;
(b) any failure by the Buyer to perform or observe any covenant or
agreement required to be performed or observed by it contained in this Agreement
or any Transfer Document; or
(c) any failure by the Buyer to pay, perform or discharge any
Assumed Liabilities.
7.3 CLAIMS FOR INDEMNIFICATION.
(a) THIRD-PARTY CLAIMS. All claims for indemnification made under
this Agreement resulting from, related to or arising out of a claim made by a
Third-Party against an Indemnified Party (as defined below) shall be made in
accordance with the following procedures. A person entitled to indemnification
under this Article VII (an "INDEMNIFIED PARTY") shall give prompt written
notification to the person from whom indemnification is sought (the
"INDEMNIFYING PARTY") of the commencement of any action, suit or proceeding
relating to a claim by a Third-Party (a "THIRD-PARTY CLAIM") for which
indemnification may be sought or, if earlier, upon the assertion of any such
claim by a Third-Party. Such notification shall include a description in
reasonable detail (to the extent known by the Indemnified Party) of the facts
constituting the basis for such Third-Party Claim and the amount of the Damages
claimed. Within thirty (30) days after delivery of such notification, the
Indemnifying Party may, upon written notice thereof to the Indemnified Party,
assume control of the defense of such Third-Party Claim. If the Indemnifying
Party does not assume control of such defense, the Indemnified Party shall
control such defense. The party not controlling such defense may participate
therein at its own expense; provided that if the Indemnifying Party assumes
control of such defense and the Indemnified Party reasonably concludes, based on
advice from counsel, that the Indemnifying Party and the Indemnified Party have
conflicting interests with respect to such Third-Party Claim, the reasonable
fees and expenses of counsel to the Indemnified Party solely in connection
therewith shall be considered "Damages" for purposes of this Agreement;
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PROVIDED, HOWEVER, that in no event shall the Indemnifying Party be responsible
for the fees and expenses of more than one counsel for all Indemnified Parties.
The Party controlling such defense shall keep the other Parties advised of the
status of such Third-Party Claim and the defense thereof and shall consider
recommendations made by the other Parties with respect thereto. Unless and until
an Indemnified Party has waived its claim for indemnification under this Article
VII with respect to a Third-Party Claim, the Indemnified Party shall not agree
to any settlement of such Third-Party Claim without the prior written consent of
the Indemnifying Party, which will not be unreasonably withheld. The
Indemnifying Party shall not agree to any settlement of such Third-Party Claim
that does not include a complete release of the Indemnified Party from all
liability with respect thereto or that imposes any liability or obligation on
the Indemnified Party or that restricts any of the rights purported to be
transferred pursuant to this Agreement without the prior written consent of the
Indemnified Party, which consent will not be unreasonably withheld.
(b) PROCEDURE FOR OTHER CLAIMS. An Indemnified Party wishing to
assert a claim for indemnification under this Article VII which is not subject
to Section 7.3(a) shall deliver to the Indemnifying Party a written notice (a
"CLAIM NOTICE") which contains a statement that the Indemnified Party is
entitled to indemnification under this Article VII, the amount of Damages
incurred, if then ascertainable, and a reasonable explanation of the basis of
the claim for indemnification and the Damages incurred. Within thirty (30) days
after delivery of a Claim Notice, the Indemnifying Party shall deliver to the
Indemnified Party a written response in which the Indemnifying Party shall: (i)
agree that the Indemnified Party is entitled to indemnification hereunder (in
which case the Indemnifying Party shall make payment to the Indemnified Party,
by check or by wire transfer, in an amount equal to the Damages incurred or
suffered), or (ii) contest that the Indemnified Party is entitled to
indemnification hereunder or the amount of Damages claimed by the Indemnifying
Party. If the Indemnifying Party in such response contests the right to
indemnification hereunder, or if the Parties are unable to agree on the amount
of Damages incurred or suffered, the Indemnifying Party and the Indemnified
Party shall each have the right to submit such dispute to a court of competent
jurisdiction in accordance with the provisions of Section 11.9.
7.4 SURVIVAL.
(a) The representations and warranties of the Owner, the Seller,
and the Buyer set forth in this Agreement shall survive the Closing and the
consummation of the transactions contemplated hereby and continue until fifteen
(15) months after the Closing Date, at which time they shall expire; PROVIDED,
HOWEVER, (i) the representations and warranties contained in Sections 3.11 and
3.16 shall survive for sixty (60) days beyond the applicable statute of
limitations and (ii) the representations and warranties of the Owner and the
Seller contained in Sections 3.1, 3.2, and 3.14 and of the Buyer contained in
Sections 4.1, 4.2, and 4.5 shall survive the Closing and the consummation of the
transactions contemplated hereby without limitation.
(b) If an indemnification claim under Section 7.1(a) or Section
7.2(a) is properly asserted in writing pursuant to Section 7.3 prior to the
expiration as provided in Section 7.4(a) of the representation or warranty that
is the basis for such claim, then such representation or warranty shall survive
until, but only for the purpose of, the resolution of such claim.
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(c) The covenants and agreements of the Parties contained in this
Agreement and the Transfer Documents shall survive the Closing and the
consummation of the transactions contemplated hereby.
7.5 LIMITATIONS.
(a) Notwithstanding anything to the contrary contained in this
Agreement, the following limitations shall apply to indemnification claims under
this Agreement:
(i) no claim shall be valid and assertable under Section
7.1(a) or Section 7.2(a) unless the aggregate amount of Damages incurred by the
Indemnified Party under Section 7.1(a) or Section 7.2(a), as applicable, exceeds
Three Hundred Thousand Dollars ($300,000), in which case the Indemnified Party
will have the right to indemnification for all Damages incurred in excess of
Three Hundred Thousand Dollars ($300,000);
(ii) notwithstanding anything to the contrary contained
in this Article VII, the Owner and the Seller shall not have any obligation to
indemnify the Buyer Indemnitees under Section 7.1(a) and with respect to Items 1
and 5 of SCHEDULE 7.1(d) in an amount in excess of fifty percent (50%) of the
Purchase Price in the aggregate;
(iii) notwithstanding anything to the contrary contained
in this Article VII, the Owner and the Seller shall not have any obligation to
indemnify the Buyer Indemnitees with respect to Item 2 on SCHEDULE 7.1(d) in
excess of the amount set forth in Item 2 of SCHEDULE 7.1(d);
(iv) notwithstanding anything to the contrary contained
in this Article VII, the Owner and the Seller shall not have any obligation to
indemnify the Buyer Indemnitees under Section 7.1(a) with respect to any matter
with respect to which they are also entitled to indemnification under Section
7.1(d); and
(v) notwithstanding anything to the contrary contained
in this Article VII, the Buyer shall not have any obligation under Section
7.2(a) to indemnify the Seller Indemnitees in an amount in excess of fifty
percent (50%) of the Purchase Price in the aggregate.
(b) Notwithstanding anything to the contrary contained in this
Article VII, no limitation or condition of liability provided in Section 7.5(a)
shall apply to a breach of Sections 3.1, 3.2, 3.14, 3.16, 4.1, 4.2 or 4.5
hereof.
(c) The indemnification rights of the Parties under this Article
VII are the sole and exclusive remedies for any breach of representation or
warranty made by any Party in this Agreement; provided, that the foregoing
(including but not limited to the limitations set forth in Section 7.5(a)
hereof) shall not be deemed to limit the right of any Party to pursue
indemnification or other remedies for claims involving fraud or intentional
misconduct.
7.6 TREATMENT OF INDEMNIFICATION PAYMENTS. All indemnification payments
made under this Agreement shall be treated by the Parties as an adjustment to
the Purchase Price to the maximum extent allowable under applicable law.
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7.7 EFFECT OF CLOSING. Upon the Closing, any condition to the
obligations of any Party hereunder contained in Article VI that has not been
satisfied, including any representation, warranty or covenant which to the
actual knowledge of any Party has been materially breached or left unsatisfied
by any other Party and which material breach or failure to satisfy by such other
Party is a condition precedent to the first Party's obligation to consummate the
transactions contemplated hereby, will be deemed to be waived by the Parties,
and each Party will be deemed to fully release and forever discharge the other
Parties on account of any and all claims, demands, or charges, known or unknown,
with respect to the same. Nothing in this Section 7.7 shall be deemed to affect
any provision herein which expressly survives the Closing or pertains to matters
which occur after the Closing.
ARTICLE VIII
TERMINATION
8.1 TERMINATION OF AGREEMENT. The Parties may terminate this Agreement
prior to the Closing as provided below:
(a) the Parties may terminate this Agreement by mutual written
consent;
(b) the Buyer may terminate this Agreement by giving written
notice to the Seller and the Owner if the Seller or the Owner has materially
breached any representation, warranty, covenant or agreement contained in this
Agreement and such breach (i) would cause the conditions set forth in Section
6.1 not to be satisfied and (ii) is not cured within thirty (30) days following
delivery by the Buyer to the Owner and the Seller of written notice of such
breach;
(c) the Owner and the Seller may terminate this Agreement by
giving written notice to the Buyer if the Buyer has materially breached any
representation, warranty, covenant or agreement contained in this Agreement and
such breach (i) would cause the conditions set forth in Section 6.1 not to be
satisfied and (ii) is not cured within thirty (30) days following delivery by
the Seller and the Owner to the Buyer of written notice of such breach;
(d) the Buyer may terminate this Agreement by giving written
notice to the Owner and the Seller if the Closing shall not have occurred on or
before May 15, 2003 provided that the Buyer is not in material breach under this
Agreement at the time it seeks to terminate under this Section 8.1(d);
(e) the Owner and the Seller may terminate this Agreement by
giving written notice to the Buyer if the Closing shall not have occurred on or
before May 15, 2003 provided that the Owner and the Seller are not in material
breach under this Agreement at the time they seek to terminate under this
Section 8.1(e).
8.2 EFFECT OF TERMINATION. If any Party terminates this Agreement
pursuant to Section 8.1, all obligations of the Parties hereunder shall
terminate without any liability of any Party to the other Parties except for the
provisions of Sections 3.14 and 4.5 relating to brokerage, Section 9.5 relating
to press releases and announcements, Section 9.7 relating to solicitation of
employees and Section 11.7 relating to expenses shall survive such termination,
as shall the provisions of the Confidentiality Agreement in accordance with its
terms. Notwithstanding the foregoing, termination of this Agreement shall not
relieve any Party of
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liability for any breach by such Party, prior to the termination of this
Agreement, of any covenant or agreement contained in this Agreement or impair
the right of any Party to obtain such remedies as may be available to it in law
or equity with respect to such a breach of any covenant or agreement contained
in this Agreement by another Party.
ARTICLE IX
ADDITIONAL COVENANTS
9.1 TAXES.
(a) Except to extent included within the Assumed Liabilities, the
Owner and the Seller shall be jointly and severally liable for and pay, and
pursuant to Article VII shall indemnify each Buyer Indemnitee from and against,
all Taxes (including, without limitation, any amounts owed by a Buyer Indemnitee
relating to Taxes pursuant to a contract or otherwise) applicable to the
Business, and the Seller's right, title and interest in Business Assets, in each
case attributable to Taxable years or periods ending on or prior to the Closing
Date and, with respect to any Straddle Period, the portion of such Straddle
Period ending on and including the Closing Date. In addition to the Assumed
Liabilities, the Buyer shall be solely liable for and pay, and pursuant to
Article VII shall indemnify each Seller Indemnitee from and against, all Taxes
applicable to the Business, the Buyer's right, title and interest in the
Business Assets and the Assumed Liabilities that are attributable to taxable
years or periods beginning after the Closing Date and, with respect to any
Straddle Period, the portion of such Straddle Period beginning after the Closing
Date. For purposes of this Agreement, any Straddle Period shall be treated on a
"closing of the books" basis as two partial periods, one ending at the close of
business on the Closing Date and the other beginning on the day after the
Closing Date, except that Taxes (such as property Taxes) imposed on a periodic
basis shall be allocated on a daily basis.
(b) Notwithstanding paragraph (a), any sales Tax, use Tax, real
property transfer or gains Tax, asset transfer Tax, documentary stamp Tax or
similar Tax attributable to the sale or transfer of the Business, the Acquired
Assets, the Seller's right, title and interest in the Business Assets not owned
by the Seller or the Assumed Liabilities shall be paid by the Owner and the
Seller. The Buyer agrees to timely sign and deliver such certificates or forms
as may be necessary or appropriate to establish an exemption from (or otherwise
reduce), or file Tax Returns with respect to, such Taxes.
(c) The Owner and the Seller or the Buyer, as the case may be,
shall provide reimbursement for any Tax paid by one party all or a portion of
which is the responsibility of the other party in accordance with the terms of
this Section 9.1. Not later than thirty (30) days prior to the payment of any
such Tax, the party paying such Tax shall give notice to the other party of the
Tax payable and the portion which is the liability of each party, although
failure to do so will not relieve the other party from its liability hereunder.
(d) After the Closing Date, the Buyer, the Owner and the Seller
shall reasonably (i) cooperate in preparing for any audits of, or disputes with
Governmental Authorities regarding, any Tax Returns of the Business or the
Business Assets required to be filed by any of the Parties, and (ii) make
available to the other and to any Governmental Authority as reasonably requested
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all information, records, and documents in their possession or control relating
to Taxes of the Business or the Business Assets.
9.2 UCC MATTERS. From and after the Closing Date, the Owner and the
Seller shall promptly refer all inquiries with respect to ownership or operation
of the Business Assets or the Business to the Buyer. In addition, the Owner and
the Seller shall execute such documents and financing statements as the Buyer
may request from time to time to evidence transfer of the Seller's right, title
and interest in the Business Assets to the Buyer, including, without limitation,
any necessary assignment of financing statements.
9.30 DISCHARGE OF BUSINESS OBLIGATIONS. Except with respect to the
Assumed Liabilities, from and after the Closing, each of the Owner and the
Seller shall pay and discharge, in accordance with past practice, all
obligations and liabilities incurred prior to the Closing in respect of the
Business, its operations or the assets and properties used therein, including
any liabilities or obligations to Employees, any Governmental Authority and
clients and customers of the Business.
9.4 CHANGE OF THE SELLER'S NAME. As of the Closing Date, the Seller
shall, and the Owner shall cause the Seller to, change its limited liability
company name and its fictitious name to such name not containing the word
"PanVera," or any name similar to or derivative of such name, as the Buyer shall
reasonably approve. The Seller and the Owner, at the request of the Buyer, will
take such action as may be necessary or appropriate to permit the Buyer to
qualify as a foreign corporation to do business in the Seller's name or conduct
business using the Seller's name in the State of Wisconsin and other states and
jurisdictions.
9.5 PUBLIC ANNOUNCEMENT. Prior to Closing, no Party hereto shall make or
issue, or cause to be made or issued, any public announcement or written
statement concerning this Agreement or the transactions contemplated hereby
(except to the respective representatives, directors, managers and officers of
the Buyer, the Owner, the Seller and their Affiliates) without the prior written
consent of the other Parties (which will not be unreasonably withheld or
delayed); provided, however, that any Party may make any such announcement or
statement it believes in good faith is required by applicable law or any listing
or trading agreement concerning its publicly-traded securities without such
consent, so long as the disclosing Party provides the other Parties with a
reasonable opportunity to review and comment on such disclosure in advance of
its being made, if doing so will not cause the disclosing Party to fail to meet
the legal or other requirements mandating such disclosure.
9.6 POST CLOSING OBLIGATION TO EMPLOYEES.
(a) SCHEDULE 9.6(a) contains a true and correct list of the name,
job title, current base salary or hourly wage, date of hire, current vacation
entitlement and assigned location of all Employees actively employed (as of the
date of this Agreement), including any such individual on short-term disability
or approved leave of absence who was so employed immediately before such
disability or absence. At the Closing, the Owner and the Seller shall provide to
the Buyer an updated SCHEDULE 9.6(a) which shall disclose all the information
required under the preceding sentence as of the day prior to Closing. All
individuals included on the original SCHEDULE 9.6(a), plus all individuals
included on the updated SCHEDULE 9.6(a) whose hiring was approved by
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Buyer, are herein referred to as the "SELLER EMPLOYEES." With respect to any
Seller Employee who is not actively employed due to short-term disability or
approved leave of absence, the updated SCHEDULE 9.6(a) shall indicate the reason
for such absence and the date such individual is reasonably expected to return
to active employment. If a Seller Employee who is not actively employed at the
time of Closing due to short-term disability or approved leave of absence is, in
the reasonable opinion of the Buyer, unfit to return to active employment with
the Buyer within 30 days of the expected return date indicated on the updated
SCHEDULE 9.6(a) or otherwise does not commence active employment with the Buyer
within such 30 day period, such individual shall be considered a "FORMER SELLER
EMPLOYEE" for all purposes under this Agreement.
(b) Effective as of 12:01 a.m. on the Closing Date, the Owner and
the Seller shall cause the employment of all Seller Employees (other than those
individuals who are not actively employed due to short-term disability or
approved leave of absence, whose employment shall be terminated upon their
return to active employment) to be terminated. Effective as of 12:01 a.m. on the
Closing Date, the Buyer shall offer employment to all Seller Employees
terminated in accordance with the preceding sentence (except that with respect
to those individuals on short-term disability or an approved leave of absence,
subject to their commencement of active employment with the Buyer within thirty
(30) days of their expected return date as indicated on updated SCHEDULE 9.6(a),
the Buyer shall offer employment to such individuals upon their return from
short-term disability or approved leave of absence) on terms and conditions
determined by the Buyer in its sole discretion. All Seller Employees to whom the
Buyer offers employment and who accept such employment are herein referred to as
the "TRANSFERRED EMPLOYEES." Nothing in this Section 9.6 shall limit the Buyer's
authority to terminate the employment of any Transferred Employee at any time
and for whatever reason. Beginning on the first Business Day following the
execution of this Agreement, the Seller shall provide or make available to the
Buyer, to the extent permitted by applicable law, such information regarding the
Transferred Employees as is contained in the Seller's personnel records,
including without limitation information regarding accrued or incurred but
unpaid liabilities for wages, vacations, deferred compensation,
medical/dental/vision, workers' compensation, disability and other welfare
benefit claims.
(c) The Owner and the Seller shall be responsible for the payment
of any Seller Employee benefits that become due to any Transferred Employees as
a result of their termination by the Seller in accordance with Section 9.6(b).
(d) The Owner and the Seller shall be responsible for all legally
mandated health care continuation coverage for Seller Employees and Former
Seller Employees and their covered dependents who had or have a loss of coverage
due to a "qualifying event" (within the meaning of Section 603 of ERISA) which
occurred or occurs on or prior to the Closing Date including without limitation,
any loss of coverage that results directly or indirectly from the transaction
contemplated by this Agreement.
(e) The Seller and the Owner shall retain liability for payment of
any long-term or short-term disability benefits to any Seller Employee or Former
Seller Employee that relate to a disability which was first disclosed prior to
the Closing Date.
(f) The Seller, the Owner and the Buyer hereby acknowledge and
agree that in conformity with the Standard Procedure of IRS Revenue Procedure
96-60, 1996-2 C.B. 399,
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(i) the Owner and the Seller will be responsible for and perform all Tax
withholding, payment and reporting duties with respect to any wages and other
compensation paid by the Owner or the Seller to any Seller Employee in
connection with employment on or prior to the Closing Date; and (ii) the Buyer
will be responsible for and perform all Tax withholding, payment, and reporting
duties with respect to any wages and other compensation paid by the Buyer to any
Transferred Employee in connection with employment after the Closing Date.
(g) The Seller and the Buyer hereby acknowledge and agree that (i)
in accordance with Section 2101(b)(i) of the WARN Act, the Seller will be
responsible for all required notices prior to the Closing Date, and the Buyer
will be responsible for all required notices on or after the Closing Date, and
(ii) all of the Seller Employees as of the Closing Date (other than those
individuals who are not actively employed on the Closing Date due to short-term
disability or approved leave of absence) will be deemed to have become employees
of the Buyer immediately on the Closing Date for purposes of the WARN Act.
9.7 NON-SOLICITATION OF EMPLOYEES. Other than with respect to the offer
of employment made by Buyer to the Seller Employees contemplated in Section 9.6
hereof, the Parties covenant and agree, for themselves and their Affiliates,
that they will not at any time on or before the Closing, or at any time during
the two (2) year period following the Closing or, if this Agreement is
terminated prior to the Closing, then at any time during the one-year period
following the effective date of such termination, solicit to employ (other than
by general advertisements) any person who is, at the time of such solicitation
or immediately prior to such employment, an employee of the other Parties or any
of their respective Affiliates without the written consent of the Party that
employs such employee.
9.8 DELIVERY OF CERTAIN BUSINESS RECORDS. Within fifteen (15) days
following the Closing, the Seller shall deliver to the Buyer copies of all
invoices to customers and other customer records, customer and supplier lists,
credit files, correspondence, marketing studies, sales presentations, consultant
reports, research and development studies, product development studies or
reports, quality control test results and other quality control records and
reports, patent files, regulatory files, quality files and all other records,
files, documents and information in the Seller's possession or control however
maintained or stored (including computer diskettes and other electronic media),
used or developed primarily in connection with the use of the Business Assets or
the conduct of the Business. The Seller shall also deliver to the Buyer copies
of all brochures and other promotional and printed materials, trade show
materials (including displays), videos, advertising and/or marketing materials
in the Seller's possession or control which were used or developed primarily in
connection with the use of the Business Assets or the conduct of the Business.
9.9 CONFIDENTIALITY AND NONUSE OBLIGATIONS. The Owner and the Seller
acknowledge and agree that the Vertex Parties shall continue to be bound by
their obligations of confidentiality and nonuse under the Assigned Contracts (in
the form they exist on the Closing Date and without regard to any amendment or
modification after the Closing Date unless otherwise agreed to in writing by the
Owner or the Seller) to the same extent as if they remained a party thereto.
9.10 LIMITATIONS ON GRANTED OR RETAINED RIGHTS. If and to the extent that
the Seller, Vertex San Diego, or any predecessor entity to the Business, has
granted, licensed, permitted or
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conveyed to any Affiliate, pursuant to any written or oral contract, agreement,
license or other arrangement, any license or other right in, to or under the
intellectual property rights that are included in the Acquired Assets (or any
tangible embodiments thereof) that are broader than the rights that are granted
to or retained by Vertex San Diego under the Amended and Restated Technology
Agreements, then such license or other right granted, licensed, permitted or
conveyed to such Affiliate shall be limited hereafter to the extent of the
rights that are granted to or retained by Vertex San Diego under the Amended and
Restated Technology Agreements.
ARTICLE X
POST-CLOSING AGREEMENTS
10.1 COLLECTION OF RECEIVABLES. The Owner and the Seller shall, by letter
prepared by the Buyer and reasonably acceptable to the Seller (the "LETTER"),
authorize, instruct and direct that the account parties of all accounts, notes
and receivables (including insurance proceeds) constituting Acquired Assets
(such parties, the "ACCOUNT PARTIES") shall make and deliver all payments
relating thereto on or after the Closing to such location, bank and account (the
"BUYER RECEIVABLES ACCOUNT") as the Buyer shall specify. The Letter shall cover
all such matters as the Buyer and the Seller shall reasonably determine. If,
notwithstanding such Letter, any of the Account Parties remit payments on or
after the Closing directly or indirectly to the Seller instead of to the Buyer
Receivables Account, the Owner and the Seller shall promptly deliver all such
payments (including but not limited to negotiable instruments which shall be
duly endorsed by the Seller to the order of the Buyer) to the Buyer. The Seller
hereby irrevocably designates, makes, constitutes and appoints the Buyer (and
all persons designated by the Buyer) as its true and lawful attorney-in-fact to
do any of the following in the sole discretion of the Buyer: to receive, give
receipts for, take, endorse, assign, deliver, deposit, demand, collect, xxx on,
compound, and give acquittance for any and all information, documents, payments
forms (including negotiable and non-negotiable instruments) and proceeds
received by the Buyer via the Buyer Receivables Account or from the Owner or the
Seller that relate to the accounts, notes and receivables (including insurance
proceeds) of the Account Parties constituting Acquired Assets.
10.2 USE OF AURORA TRADE NAME. The Buyer agrees that it will not, and
will not permit any of its Affiliates to, use any trade name or trade xxxx
containing the Aurora name, whether in connection with the use of the Business
Assets and the conduct of the Business or otherwise; provided, that for a period
of twenty-four (24) months following the Closing the Buyer shall be permitted to
state in its marketing materials with respect to products produced through the
use of the Business Assets that certain of such Business Assets were formerly
owned or operated by Aurora.
10.3 ACCESS TO BUSINESS RECORDS. The Buyer agrees that the Seller, the
Owner and their representatives (provided such representatives are subject to a
duty of confidentiality with the Seller or the Owner with respect to such
matters) shall have reasonable access during normal business hours to all of the
financial books and records with respect to the Business and the Business Assets
delivered to the Buyer at or following the Closing, and to make copies thereof
(which copies shall not be disclosed by the Seller or the Owner to any third
party other than (a) in confidence to their attorneys, accountants, tax
preparers, financial advisors, and lenders, (b) as necessary to fulfill standard
or legally required corporate or regulatory reporting or disclosure
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requirements, or (c) as may be necessary to enforce the terms of, or otherwise
comply with, this Agreement, or as may be otherwise required by law). The Seller
and Owner agree that the Buyer and its representatives shall have reasonable
access during normal business hours to the financial books and records of Seller
and Owner as necessary to fulfill standard or legally required corporate or
regulatory reporting or disclosure requirements arising from the transactions
contemplated by this Agreement, and to make copies thereof (which copies shall
not be disclosed by the Buyer to any third party other than (a) in confidence to
their attorneys, accountants, tax preparers, financial advisors, and lenders,
(b) as necessary to fulfill standard or legally required corporate or regulatory
reporting or disclosure requirements, or (c) as may be necessary to enforce the
terms of, or otherwise comply with, this Agreement, or as may be otherwise
required by law)
ARTICLE XI
MISCELLANEOUS
11.1 NO THIRD-PARTY BENEFICIARIES. This Agreement shall not confer any
rights or remedies upon any person other than the Parties and their respective
successors and permitted assigns and, to the extent specified herein, their
respective Affiliates.
11.2 ENTIRE AGREEMENT. This Agreement (including the documents referred
to herein), the Ancillary Agreements and the Confidentiality Agreement
constitute the entire agreement among the Owner, the Seller and the Buyer with
respect to the subject matter hereof. This Agreement and the Ancillary
Agreements supersede any prior agreements or understandings among the Owner, the
Seller or the Buyer and any representations or statements made by or on behalf
of the Owner, the Seller or the Buyer, whether written or oral, with respect to
the subject matter hereof, other than the Confidentiality Agreement which shall
terminate effective at the Closing.
11.3 SUCCESSION AND ASSIGNMENT. No Party may assign or delegate either
this Agreement or any of its rights, interests, or obligations hereunder without
the prior written approval of the other Parties. Notwithstanding the foregoing,
this Agreement, and all rights hereunder may be assigned in whole or in part,
without such consent, by the Buyer to any other wholly owned subsidiary of the
Buyer, provided that such assignee agrees in writing to be bound by the
provisions of this Section 11.3 and such assignment shall not release the Buyer
from its obligations hereunder. This Agreement shall be binding upon and inure
to the benefit of the Parties and their respective successors and permitted
assigns.
11.4 NOTICES. All notices, requests, demands, claims and other
communications hereunder shall be in writing. Any notice, request, demand, claim
or other communication hereunder shall be sent to the intended recipient as set
forth below:
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If to the Buyer or the Parent: If to the Seller or the Owner:
Invitrogen Corporation Vertex Pharmaceuticals Incorporated
0000 Xxxxxxx Xxxxxx 000 Xxxxxxx Xxxxxx
Xxxxxxxx, XX 00000 Xxxxxxxxx, XX 00000
Telecopy: 000-000-0000 Telecopy: 000-000-0000
Attention: General Counsel Attention: Chairman and CEO
With a Copy to: With a Copy to:
Xxxx Xxxx Xxxx & Freidenrich LLP Senior Vice President and General Counsel
0000 Xxxxxxxxx Xxxxx, Xxxxx 0000 Vertex Pharmaceuticals Incorporated
Xxx Xxxxx, XX 00000-0000 000 Xxxxxxx Xxxxxx
Telecopy: 000-000-0000 Xxxxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxx Telecopy: 000-000-0000
Any Party may give any notice, request, demand, claim, or other communication
hereunder using any reasonable means (including personal delivery, expedited
courier, messenger service, telecopy, telex, ordinary mail, or electronic mail),
but no such notice, request, demand, claim or other communication shall be
deemed to have been duly given unless and until it actually is received by the
Party for whom it is intended. Any Party may change the address to which
notices, requests, demands, claims and other communications hereunder are to be
delivered by giving the other Parties notice in the manner herein set forth.
11.5 AMENDMENTS AND WAIVERS. The Parties may mutually amend or waive any
provision of this Agreement at any time. Except as otherwise provided in Section
7.7, no amendment or waiver of any provision of this Agreement shall be valid
unless the same shall be in writing and signed by the Parties. No waiver by any
Party of any default, misrepresentation, or breach of warranty or covenant
hereunder, whether intentional or not, shall be deemed to extend to any prior or
subsequent default, misrepresentation or breach of warranty or covenant
hereunder or affect in any way any rights arising by virtue of any prior or
subsequent such occurrence.
11.6 SEVERABILITY. Any term or provision of this Agreement that is
invalid or unenforceable in any situation in any jurisdiction shall not affect
the validity or enforceability of the remaining terms and provisions hereof or
the validity or enforceability of the offending term or provision in any other
situation or in any other jurisdiction.
11.7 EXPENSES. Except as otherwise specifically provided to the contrary
in this Agreement, each of the Parties shall bear its own costs and expenses
(including legal fees and expenses) incurred in connection with this Agreement
and the transactions contemplated hereby.
11.8 SPECIFIC PERFORMANCE. Each Party acknowledges and agrees that the
other Parties will be damaged irreparably in the event any of the provisions of
this Agreement are not performed in accordance with their specific terms or
otherwise are breached. Accordingly, each Party agrees that the other Parties
shall be entitled to seek an injunction or injunctions to prevent breaches of
the provisions of this Agreement and to enforce specifically this Agreement and
the
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terms and provisions hereof in any action instituted in any state or federal
court sitting in the State of
California in accordance with Section 11.9.
11.9 GOVERNING LAW. This Agreement and any disputes hereunder shall be
governed by and construed in accordance with the internal laws of the State of
California without giving effect to any choice or conflict of law provision or
rule (whether of the State of
California or any other jurisdiction) that would
cause the application of laws of any jurisdiction other than those of the State
of
California.
11.10 CONSTRUCTION.
(a) The language used in this Agreement shall be deemed to be the
language chosen by the Parties to express their mutual intent, and no rule of
strict construction shall be applied against any Party.
(b) Any reference to any federal, state, local, or foreign statute
or law shall be deemed also to refer to all rules and regulations promulgated
thereunder, unless the context requires otherwise.
(c) The Section headings contained in this Agreement are inserted
for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
(d) Any reference herein to an Article, Section or clause shall be
deemed to refer to an Article, Section or clause of this Agreement, unless the
context clearly indicates otherwise.
(e) All references to "$" or "Dollars" refer to currency of the
United States of America.
11.11 WAIVER OF JURY TRIAL. To the extent permitted by applicable law,
each Party hereby irrevocably waives all rights to trial by jury in any action,
proceeding or counterclaim (whether based on contract, tort or otherwise)
arising out of or relating to this Agreement or the transactions contemplated
hereby or the actions of any Party in the negotiation, administration,
performance and enforcement of this Agreement.
11.12 INCORPORATION OF EXHIBITS AND SCHEDULES. The Exhibits and Schedules
identified in this Agreement are incorporated herein by reference and made a
part hereof.
11.13 COUNTERPARTS AND FACSIMILE SIGNATURE. This Agreement may be executed
in one or more counterparts, each of which shall be deemed an original but all
of which together shall constitute one and the same instrument. This Agreement
may be executed by facsimile signature.
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[remainder of page intentionally left blank]
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IN WITNESS WHEREOF, the Parties have executed this Agreement as of the
date first above written.
VERTEX PHARMACEUTICALS
INCORPORATED
By: /s/ Xxxxxx X. Xxxxx
---------------------------------
Name: Xxxxxx X. Xxxxx
Title: Chairman and CEO
PANVERA LLC
By: /s/ Xxxxxx X. Xxxxx
---------------------------------
Name: Xxxxxx X. Xxxxx
Title: President
INVITROGEN CORPORATION
By: /s/ Xxxx Xxxxxxxx
---------------------------------
Name: Xxxx Xxxxxxxx
Title: Vice President, Corporate
Development
[SIGNATURE PAGE TO
ASSET PURCHASE AGREEMENT]
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