EXHIBIT 10.6
ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement is made as of _________, 1998 by and between
Illumina, Inc., a California corporation ("Buyer") and nGenetics, Inc., a
California corporation ("Seller"). This Asset Purchase Agreement, including all
schedules and exhibits, is referred to as the "Purchase Agreement."
RECITALS
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A. Seller develops technology related to high throughput genetic decoding
(the "Business").
B. Seller desires to sell and Buyer desires to purchase all of the assets
of Seller used in the Business.
AGREEMENT
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NOW, THEREFORE, the parties agree as follows:
1. PURCHASE OF ASSETS AND ASSUMPTION OF LIABILITIES
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1.1 Purchase of Assets. At the Closing, Seller will sell, transfer,
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and convey to Buyer, and Buyer will purchase from Seller the following assets as
listed in Schedule 1.1 (the "Assets"):
(a) Equipment. All equipment, furniture and other tangible
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personal property owned by Seller.
(b) Intellectual Property. All right, title and interest of
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Seller in and to all patents, copyrights, trademarks, service marks, trade
names, trade secrets, mask works, proprietary information, technology rights and
licenses, proprietary rights and processes, know-how, research and development
in progress, all domestic and foreign applications, registrations and renewals
of any of the foregoing, and any and all other intellectual property including,
without limitation, all things authored, discovered, developed, made, perfected,
improved, designed, engineered, devised, acquired, produced, conceived or first
reduced to practice by Seller or any of its employees in the course of their
employment by Seller, including but not limited to those that are relevant to an
understanding or the continuation of the Business, whether tangible or
intangible, improvements, inventions, works of authorship, formulas, processes,
routines, subroutines, techniques, concepts, object code, flow charts, diagrams,
coding sheets, source code, listings and annotations, programmers' notes,
information, work papers, work product and other materials of any types
whatsoever, and all rights of any kind in or to any of the foregoing
(collectively, the "Intellectual Property") which are relevant or applicable to
the Business.
(c) Claims. All claims of Seller against any parties relating to
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items included in the Assets, including, without limitation, unliquidated rights
under manufactures' and
vendors' warranties or guaranties, claims for trade secret misappropriation and
infringement of the Intellectual Property, and claims for breach of employee
proprietary information agreements.
(d) Permits and Licenses. Government permits and licenses used in
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the conduct of the Business, to the extent transferable.
(e) Books and Records. All information, files and records
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directly relating to the foregoing and which Buyer reasonably expects may be
useful to Buyer. In case of any disagreement as to whether an item directly
relates to the foregoing, Buyer shall be permitted to copy such item.
1.2 Assumption of Liabilities. Buyer shall not assume and shall not
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be obligated to pay, discharge, or indemnify any party, with respect to any
obligations or liabilities of, or claims against, Seller, whether now or
hereafter existing or created (collectively, "Claims"), including but not
limited to:
(i) Any Claims under any expressed or implied contracts
relating to products or services, including without limitation Claims with
respect to product warranties or product liabilities;
(ii) taxes of any nature whatsoever of Seller arising from
the operation of the Business or the ownership of the Assets for any period (or
portion of any period) ending on or prior to the Closing Date ("Seller Taxes");
(iii) Claims under any employee agreements, including profit
sharing, pension, or other equity benefit or ERISA plan for Seller's employees;
and
(iv) Any other Claims arising out of the operation of the
Business or the ownership of the Assets prior to the date of this Purchase
Agreement.
1.3 Consideration. In consideration for the transfer of the Assets,
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Buyer shall covenant to pay to Seller [*] worth of Series B Preferred Stock of
the Buyer, issued immediately upon the closing of the Buyer's next round of
equity financing and at the same price and on the same terms as are offered to
the other purchasers therein.
2. CLOSING
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2.1 The Closing. The closing of the purchase of the Assets (the
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"Closing") shall be held at the offices of Illumina, Inc., 0000 Xxxxx Xxxxxx
Xxxxx, Xxxxx 000, Xxx Xxxxx, Xxxxxxxxxx on _________, 1998, or such other place
and date as the parties shall agree (the "Closing Date").
2.2 Actions at the Closing. At the Closing, Seller shall execute and
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deliver to Buyer any bills of sale, endorsements, assignments and other
instruments as Buyer shall reasonably request, or as necessary or appropriate,
to sell, convey, assign, transfer and deliver to Buyer good title to all the
Assets, free and clear of any security interest, mortgage, lien, charge, adverse
claim or
____________________
[*] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS.
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restriction of any kind, and to evidence the due execution, delivery and
performance of this Purchase Agreement.
2.3 Taking of Necessary Action; Further Action. If, at any time after
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the Closing Date, any further action is necessary or desirable to carry out the
purposes of this Purchase Agreement and to vest Buyer with full right, title and
possession to all Assets, the officers and directors of Seller are fully
authorized in the name of Seller or otherwise to take, and will take, all such
lawful and necessary and/or desirable action.
3. REPRESENTATIONS AND WARRANTIES OF SELLER
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Seller represents and warrants to Buyer as follows:
3.1 Authority, Approval and Enforceability.
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(a) Corporate Existence. Seller is a corporation duly
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organized, validly existing and in good standing under the laws of California.
Seller has all requisite corporate power and authority to own, lease and operate
its properties and to carry on its business as conducted before the Closing.
(b) Power to Execute Purchase Agreement. Seller has full
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power and authority to execute and to deliver this Purchase Agreement, and to
perform its obligations under this Purchase Agreement. All actions of Seller
necessary for such execution, delivery and performance have been duly taken.
(c) Enforceability. Upon the due execution and delivery by
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the parties, this Purchase Agreement will be a binding obligation of Seller
enforceable against Seller in accordance with its terms, except as may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting creditors' rights generally.
3.2 Compliance with Applicable Laws. Seller has duly complied with all
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applicable laws, rules, regulations, ordinances, and all judgments, orders,
rulings, and decrees of all federal, state and local governmental authorities
(collectively, "Laws"), subject to such exceptions as shall have no material
adverse affect on the Assets or the Business. Seller has not received
notification of any asserted present or past failure to so comply with any Laws.
Seller is not aware of any pending or threatened legal or administrative
proceedings or investigations, which, if determined adversely to Seller, would
result in any material adverse change to the Business or to any of the Assets or
would materially affect the ability of Seller to perform its obligations
hereunder.
3.3 Absence of Conflicts. The execution and delivery by Seller of
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this Purchase Agreement does not, and the performance and consummation of the
transactions contemplated by this Purchase Agreement will not, result in any
conflict with, breach or violation of or default, termination or forfeiture
under (or upon the failure to give notice or the lapse of time, or both, result
in any conflict with, breach or violation of, or default, termination or
forfeiture under) any terms or provisions of the Articles of Incorporation, as
amended, or Bylaws, as amended, of Seller, or any statute, rule, regulation,
judicial or governmental decree, order, judgment, agreement, lease, loan
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agreement, debenture, indenture, mortgage or other instrument binding upon
Seller or to which Seller is a party.
3.4 No Third Party Options. There are no existing agreements,
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options, commitments or rights with, of or to any person to acquire any of
Seller's assets or rights included in the Assets or any interest therein,
subject to such exceptions as shall have no material adverse effect on Seller's
ability to transfer to Buyer the Assets or the Business in conformity with the
terms and provisions of this Purchase Agreement.
3.5 Taxes. The Seller has prepared and filed all required federal,
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state, local and foreign returns, estimates, information statements and reports
relating to any and all federal, state, local and foreign taxes, assessments and
other governmental charges, duties, impositions and liabilities, together with
all interest, penalties and additions imposed with respect to such amounts and
any obligations under any agreements or arrangements with any other person with
respect to such amounts and including any liability for taxes of a predecessor
entity ("Taxes"). Seller has paid all Taxes it is required to pay and has
withheld with respect to its employees all federal and state income taxes, FICA,
FUTA and other Taxes required to be withheld.
3.6 Litigation. There is no suit, action (equitable, legal,
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administrative or otherwise), proceeding or investigation of any kind pending
or, to Seller's knowledge, threatened against Seller that would have a material
adverse effect on the value of the Assets, the operation of the Business by
Buyer or the transactions contemplated by this Purchase Agreement, nor does
Seller know of any reasonably likely basis for any such suit, action, proceeding
or investigation.
3.7 Licenses and Other Rights. To Seller's knowledge, Seller has all
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permits, licenses and similar authority from governmental authorities necessary
for the conduct of the Business as presently conducted. To Seller's knowledge,
Seller is not in default under any of such permits, licenses or other similar
authority.
3.8 Required Consents and Approvals. All governmental and other third
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party consents or approvals required to be obtained by Seller to consummate the
transactions contemplated hereby have been obtained.
3.9 Title to Assets. The Assets are not held under any leases,
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security agreements, conditional sales contracts, or other title retention
arrangements.
3.10 Tangible Assets. All material items of tangible property
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included in the Assets are in good operating condition and repair, subject to
normal wear and maintenance and are currently usable in the ordinary course of
business.
3.11 Agreements. Seller has made available or provided Buyer complete
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and accurate copies of all agreements, written and oral, to which Seller is a
party, or of which Seller is aware, and which affect the operation of the
Business by Buyer.
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3.12 Intellectual Property Rights.
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(a) Seller owns all right, title and interest in (including the
right to assign or transfer) and to all of the Intellectual Property and the
Intellectual Property is so owned free and clear of all liens, claims and
encumbrances and no other person, including without limitation, any present or
former employee, consultant, officer, or director of Seller, has any right
whatsoever therein. Seller does not have any obligation to compensate any person
or entity for the use of any Intellectual Property nor has Seller granted to any
person or entity any license, option or other right to use in any manner any
Intellectual Property whether requiring the payment of royalties or not. Seller
has the exclusive right to use, sell, license and dispose of, the exclusive
right to bring actions for the infringement of, and otherwise exercise, all of
the Intellectual Property.
(b) The Intellectual Property is freely transferable and
assignable to Buyer and the execution, delivery and performance of this Purchase
Agreement, and documentation related to this Purchase Agreement delivered by
Seller contemporaneously herewith, and the consummation of the transactions
hereby and thereby, will not breach, violate or conflict with any instrument or
agreement governing any of the Intellectual Property, or impair the right of
Buyer to use, sell, license or dispose of the Intellectual Property, or to bring
any action for, the infringement of, any of the Intellectual Property.
(c) To the Seller's knowledge, the Intellectual Property does
not violate any copyright, patent, trade secret or other intellectual property
rights or other rights of any other person or entity. To the Seller's knowledge,
neither Seller nor any present or former employee or consultant thereof has
violated any intellectual property rights of any other person or entity and
Buyer's conducting the Business in the ordinary course shall not violate any
such third party rights.
(d) To the knowledge of Seller, no third party is infringing any
of the Intellectual Property.
(e) Seller has taken all reasonable steps necessary or
appropriate (including, without limitation, entering into appropriate
confidentiality, nondisclosure and noncompetition agreements with all officers,
directors, subcontractors, employees, licensees and entities that serve Seller)
to safeguard and maintain the secrecy and confidentiality of, and establish
Seller's proprietary rights in, all of the Intellectual Property.
(f) All trade secrets and all embodiments thereof which are
related to the Business are presently and as of the Closing Date will be located
at Seller's facilities except for those which have been or will be delivered to
Buyer pursuant to this Purchase Agreement.
3.13 Brokers. Seller has not employed any investment bankers, finders
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or brokers or incurred any liability for brokerage fees, commissions or similar
payments in connection with this transaction contemplated hereby.
3.14 Disclosure. No representation or warranty by Seller contained in
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this Purchase Agreement and no statement contained in any certificate, schedule
or exhibit or list furnished to Buyer in connection with this Purchase Agreement
or the transactions contemplated
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hereby contains or will contain any untrue statement of fact or omits to state a
material fact necessary to make the statements or information therein not
misleading.
4. REPRESENTATIONS AND WARRANTIES OF BUYER
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Buyer represents and warrants to Seller as follows:
4.1 Approval, Authorization and Enforceability.
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(a) Corporate Existence. Buyer is a corporation duly organized,
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validly existing and in good standing under the laws of the State of California.
(b) Power to Execute Agreement. Buyer has full power and
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authority to execute, deliver and perform its obligations under this Purchase
Agreement. All actions of Buyer necessary for such execution, delivery and
performance have been or, as of the Closing Date, will have been duly taken.
(c) Absence of Conflicts. The execution and delivery by Buyer of
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this Purchase Agreement does not, and the performance and consummation of the
transactions contemplated by this Purchase Agreement will not, result in any
conflict with, breach or violation of or default, termination or forfeiture
under (or upon the failure to give notice or the lapse of time, or both, result
in any conflict with, breach or violation of, or default, termination or
forfeiture under) any terms or provisions of the Articles of Incorporation, as
amended, or Bylaws, as amended, of Buyer, or any statute, rule, regulation,
judicial or governmental decree, order, judgment, agreement, lease, loan
agreement, debenture, indenture, mortgage or other instrument binding upon Buyer
or to which Buyer is a party.
(d) Enforceability. Upon the due execution and delivery by the
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parties, this Purchase Agreement will be a binding obligation of Buyer
enforceable against Buyer in accordance with its terms, except as may be limited
by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting creditors' rights generally.
4.2 Litigation. There is no suit, action (equitable, legal,
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administrative or otherwise), proceeding or investigation of any kind pending or
threatened against Buyer, and there is no factual basis for any such suit,
action, proceeding or investigation of which Buyer is aware, which could
materially affect the ability of Buyer to carry out the transactions
contemplated hereunder in accordance with the terms hereof.
4.3 Required Consents and Approvals. All governmental and other third
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party consents or approvals required to be obtained by Buyer to consummate the
transactions contemplated hereby have been obtained.
4.4 Brokers. Buyer has not employed any broker or finder or incurred
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any liability for any brokerage fees, commissions or similar payments in
connection with the transactions contemplated hereby.
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5. ADDITIONAL COVENANTS RELATING TO THE SALE OF ASSETS
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5.1 Allocation of Consideration. The amount paid by Buyer shall be
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allocated among the Assets, as described on Schedule 5.1 in accordance with
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Section 1060 of the Internal Revenue Code of 1986, as amended, and any
regulations promulgated thereunder. No party to this Purchase Agreement will
take a position on any federal or state tax return, before any governmental
agency charged with the collection of any income tax, or in any judicial
proceeding that is in any way inconsistent with Schedule 5.1.
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5.2 Sales Taxes. Buyer will be solely responsible for and will pay
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the cost of any sales taxes payable in connection with the sale, assignment, and
transfer of the Assets pursuant to this Purchase Agreement.
5.3 Tax Liability and Returns. Buyer shall not assume and Seller
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shall be responsible for and pay when due (i) all Seller Taxes relating or
attributable to the Assets or the Business for the period (or that portion of
any period) ending on or prior to the Closing Date and (ii) all Taxes
attributable to or incurred in connection with the operations of Seller.
5.4 Cooperation and Records Retention. Seller and Buyer shall (i)
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each provide the other with such assistance as may reasonably be requested by
them in connection with the preparation of any tax return, or in connection with
any audit or other examination by any taxing authority or any judicial or
administrative proceedings relating to liability for taxes or in connection with
any litigation or financial audit involving the Business, (ii) each retain and
provide the other, with any records or other information which may be relevant
to any such tax return, audit or examination, suit, proceeding or determination,
and (iii) each provide the other with any final determination of any such audit
or examination, suit, proceeding or determination that affects any amount
required to be shown on any tax return of the other for any period or otherwise.
5.5 Bulk Sales Law. Buyer understands that Seller will not comply
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with any bulk sales or similar laws applicable to the purchase and sale of the
Assets.
6. GENERAL PROVISIONS.
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6.1 Notices. Any notice, demand or request required or permitted to
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be given by either party pursuant to the terms of this Purchase Agreement shall
be in writing and shall be deemed given when delivered personally or by
facsimile transmission to the party to be notified, or three (3) days after
deposit in the U.S. mail, by registered or certified mail with postage prepaid,
and addressed to the parties at the addresses of the parties set forth below or
at such other address as a party may request by notifying the other in writing.
BUYER:
Illumina, Inc.
0000 Xxxxx Xxxxxx Xxxxx, Xxx. 000
Xxx Xxxxx, Xxxxxxxxxx 00000
Attention: Xxxx X. Xxxxxxxxxxx
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SELLER:
nGenetics, Inc.
Attention: Xxxx Xxxx
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6.2 Entire Agreement; Amendment. This Purchase Agreement may be
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amended by the parties only by an instrument in writing signed on behalf of each
of the parties. This Purchase Agreement constitutes the entire agreement and
supersedes all prior and contemporaneous agreements and understandings, both
written and oral, among the parties with respect to the subject matter hereof.
6.3 Governing Law. This Purchase Agreement shall be governed by and
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construed in accordance with the laws of the State of California as applied to
agreements made and performed in California by residents of California.
6.4 Counterparts. This Purchase Agreement may be executed in
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counterparts, each of which shall be deemed an original and together shall
constitute one agreement.
6.5 Specific Performance. The parties acknowledge that damages would
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be an inadequate remedy for any breach of the provisions of this Purchase
Agreement and agree that the obligations of the parties hereunder shall be
specifically enforceable.
6.6 Third Parties. This Purchase Agreement is not intended, and
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shall not been construed, to confer upon any person other than the parties any
rights or remedies.
6.7 Headings. The headings contained in this Purchase Agreement are
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for reference only and shall not affect the meaning of any section.
6.8 Fees, Costs and Expenses. Unless specifically stated to the
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contrary in this Purchase Agreement, all expenses incurred in connection with
the consummation of the transactions contemplated by this Purchase Agreement
shall be the sole responsibility of the party incurring such expenses.
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IN WITNESS WHEREOF, the parties have executed this Purchase Agreement as of
the date first written above.
"BUYER" ILLUMINA, INC.
By:______________________________
Xxxx X. Xxxxxxxxxxx, President
"SELLER" nGENETICS, INC.
By:_____________________________
Title:__________________________
SIGNATURE PAGE TO ASSET PURCHASE AGREEMENT
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Schedule 1.1
nGenetics Assets
1. Intellectual Property
[*]
2. PPE Assets
Computers:
Dell Inspiron 233 MHz Pentium laptop computer. Service tag X000X.
Xxxx Xxxxxxxx 000 XXx Xxxxxxx laptop computer. Service tag CFXNF.
Software:
Microsoft Office (2 copies), Virus Scan, Norton Utilities (2 copies), Adobe
Photoshop.
Other:
Brother Fax 1270
4 Drawer File Cabinets (2)
Palm Pilot
Zip Drive
Prototypes of Magnetic Bead Array Synthesizer Flow-Cell
____________________
[*] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS.
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