EXHIBIT 2.1
ASSET PURCHASE AGREEMENT
BY AND AMONG
RULES-BASED MEDICINE, INC.,
LUMINEX CORPORATION
AND
RBM ACQUISITION, INC.
TABLE OF CONTENTS
PAGE NO.
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ARTICLE 1 PURCHASE AND SALE OF ASSETS...................................1
1.1 Purchase and Sale of Assets.........................................1
1.2 Assumed Liabilities.................................................1
1.3 Purchase Price......................................................1
1.4 The Closing.........................................................2
1.5 Passage of Title at Closing.........................................4
1.6 Allocation of Purchase Price........................................4
1.7 Further Assurances..................................................4
1.8 Third Party Consents................................................5
ARTICLE 2 REPRESENTATIONS AND WARRANTIES OF SELLER AND LUMINEX..........5
2.1 Organization and Good Standing......................................5
2.2 Authorization, Validity and Effect of Agreements....................5
2.3 No Violation........................................................5
2.4 Title to Assets; Assumed Liabilities................................5
2.5 No Brokers..........................................................6
2.6 Governmental Approvals..............................................6
2.7 Investment Representations..........................................6
2.8 No Litigation.......................................................6
2.9 No Knowledge of Breach by Buyer.....................................6
ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF BUYER.......................6
3.1 Existence; Good Standing; Corporate Authority.......................6
3.2 Validity and Effect of Agreements...................................7
3.3 No Violation........................................................7
3.4 Valid Issuance......................................................7
3.5 Offering............................................................7
3.6 Governmental Approvals..............................................8
3.7 Subsidiaries........................................................8
3.8 Capitalization......................................................8
3.9 Capital Investments in Buyer........................................8
3.10 Limited Operations..................................................8
3.11 No Litigation.......................................................9
3.12 Consents and Approvals..............................................9
3.13 Proprietary Information.............................................9
3.14 Insurance...........................................................9
3.15 Compliance with Agreements..........................................9
3.16 Transactions With Affiliates.......................................10
3.17 Compliance with Laws...............................................10
3.18 No Brokers.........................................................10
3.19 Intellectual Property..............................................10
3.20 Customers; Marketing...............................................10
3.21 Acquired Microspheres, Reagents, Supplies and Other Consumables....11
3.22 Corporate Records; Other Information...............................11
3.23 Full Disclosure; No Knowledge of Breach by Seller or Luminex.......11
ARTICLE 4 COVENANTS....................................................12
4.1 General Covenants..................................................12
4.2 Covenants of Seller................................................12
4.3 Covenants of Buyer.................................................13
ARTICLE 5 CONDITIONS...................................................15
5.1 Conditions to Obligations of Seller................................15
5.2 Conditions to Obligations of Buyer.................................15
ARTICLE 6 TERMINATION..................................................16
6.1 Termination by Mutual Consent......................................16
6.2 Termination by Either Buyer or Seller..............................16
6.3 Termination by Seller..............................................16
6.4 Termination by Buyer...............................................16
6.5 Effect of Termination and Abandonment..............................16
6.6 Extension; Waiver..................................................17
ARTICLE 7 INDEMNIFICATION..............................................17
7.1 General Indemnification by Buyer...................................17
7.2 General Indemnification by Seller and Luminex......................17
7.3 Expiration and Limitation..........................................18
7.4 Indemnification Procedures.........................................18
7.5 Survival of Representations, Warranties and Covenants..............20
7.6 Remedies Cumulative................................................20
7.7 Compliance with Bulk Sales Laws....................................20
ARTICLE 8 GENERAL PROVISIONS...........................................21
8.1 Notices............................................................21
8.2 Assignment; Binding Effect; Benefit................................22
8.3 Entire Agreement...................................................22
8.4 Amendment..........................................................22
8.5 Governing Law......................................................22
8.6 Counterparts.......................................................22
8.7 Waivers............................................................22
8.8 Incorporation of Exhibits..........................................23
8.9 Severability.......................................................23
8.10 Expenses...........................................................23
8.11 Change in Name.....................................................23
8.12 Enforcement of Agreement...........................................23
8.13 Headings...........................................................23
8.14 Officers of Buyer and Seller.......................................23
This ASSET PURCHASE AGREEMENT (the "Agreement") is effective as of the
5th day of September, 2002, by and between Rules-Based Medicine, Inc., a
Delaware corporation ("Seller"), and wholly-owned subsidiary of Luminex
Corporation, a Delaware corporation ("Luminex"), Luminex and RBM Acquisition,
Inc., a Delaware corporation ("Buyer").
WHEREAS, Luminex and Seller desire to sell certain assets to Buyer at
the Closing (as hereinafter defined) associated with the RBM Business (as
hereinafter defined), and Buyer desires to purchase certain assets from and
assume the liabilities of Luminex and Seller all on the terms and subject to the
conditions set forth in this Agreement; and
WHEREAS, the RBM Business is herein defined as the business of
developing and commercializing testing services and reagent kit products for the
pharmaceutical, diagnostics, toxicology, epidemiology and biotechnology markets,
generating and selling access to a database of information from blood samples
and other fluids or tissues and determining the relevance of such information
and establishing an intellectual property position around the relationship of
the information to health and disease, including diagnostics, prognostics and
therapeutics (the "RBM Business").
NOW, THEREFORE, in consideration of the foregoing and the mutual
promises herein made, and of the representations, warranties, covenants, and
agreements contained herein, the parties hereto hereby agree as follows:
ARTICLE 1
PURCHASE AND SALE OF ASSETS
1.1 PURCHASE AND SALE OF ASSETS. Subject to all the terms and conditions
of this Agreement, at the Closing, Luminex and Seller shall sell, transfer,
convey, assign and deliver to Buyer and Buyer shall purchase, acquire and accept
from Luminex and Seller the assets described in Schedule 1.1 attached hereto and
made a part hereof, wherever located (collectively, the "Assets").
1.2 ASSUMED LIABILITIES. Notwithstanding anything herein to the
contrary, Buyer shall assume all Luminex and/or Seller liabilities associated
with the RBM Business, including, but not limited to, all operating liabilities
of Luminex and/or Seller associated with the RBM Business and the employment
agreements of any transferring employees as set forth on Schedule 1.2 attached
hereto and made a part hereof (collectively, the "Assumed Liabilities").
"Assumed Liabilities" shall not include (i) the items listed on Schedule 8.10
(which shall be paid by the parties hereto as set forth therein) or (ii) the
"Retained Liabilities" noted as such on Schedule 1.2. At the Closing, upon
delivery of the Xxxx of Sale (in the form of Exhibit A) and the Assignment and
Assumption Agreement (in the form of Exhibit B), Buyer shall assume and agree to
pay or discharge when due in accordance with their respective terms, whenever
arising, direct or indirect, absolute or contingent, the Assumed Liabilities.
1.3 PURCHASE PRICE.
(a) The purchase price (the "Purchase Price") for the Assets and the
other obligations and agreements described or referred to in this Agreement
shall be (i) 990,000 shares
of Series A Preferred Stock, $.001 par value per share of Buyer (the "Series A
Preferred Stock") which shall have such rights, terms and conditions as set
forth in the Certificate of Designations of Series A Redeemable Preferred Stock,
$.001 par value per share of Buyer, the terms of which are set forth as Exhibit
C hereto, plus (ii) 901,000 shares of common stock, $0.001 par value per share
of Buyer (the "Common Stock", collectively with the Series A Preferred Stock,
the "Shares'), which shall have such terms as set forth in Section 1.3(b) of
this Agreement.
(b) Luminex shall be issued shares of Common Stock equal to ten
percent (10%) of the fully diluted capital stock of Buyer (the "Equity
Interest"). The Equity Interest shall not be subject to dilution except
subsequent to an initial public offering of Buyer's Common Stock in a Qualified
Public Offering and, accordingly Buyer agrees that, in connection with any
future issuance of capital stock, at any time up to and including the issue of
Common Stock in the initial Qualified Public Offering, to issue Seller shares of
Common Stock equal to ten percent (10%) of the total amount of the fully diluted
capital stock to be issued in connection with such future issuance(s). For
purposes of this Agreement, the term "Qualified Public Offering" shall mean a
firm commitment underwritten public offering of Common Stock in the aggregate of
not less than fifty million dollars ($50,000,000), a price per share of not less
than ten dollars ($10.00) per share and listing of such securities on a national
exchange or The Nasdaq Stock Market. Buyer's obligation to issue additional
Common Stock shall cease following a Qualified Public Offering.
1.4 THE CLOSING.
(a) Time and Place. Subject to the terms and conditions of this
Agreement, the closing under this Agreement (the "Closing") will take place at
the offices of Seller, at 10:00 a.m., Central Daylight Time, and remotely at
such other offices and locations as may be suited for delivery by facsimile or
overnight courier, on the first business day immediately following the date on
which the last to be fulfilled or waived of the conditions set forth in Article
5 shall be fulfilled or waived in accordance herewith or at such other time,
date, or place as Buyer and Seller may agree. The date on which the Closing
occurs is referred to herein as the "Closing Date" and is September 5, 2002.
(b) Parties' Obligations at Closing.
(i) At the Closing, Buyer will deliver to Seller:
(A) the Shares;
(B) a copy of the resolutions of the Board of Directors of
Buyer certified by Buyer's corporate secretary, as appropriate,
authorizing the execution, delivery, and performance of this
Agreement and the other documents referenced herein and the
consummation of the transactions contemplated hereby; and
(C) a certificate of Buyer certifying (i) as to the accuracy
of the representations and warranties of Buyer at the date of this
Agreement and at and as of the Closing, (ii) that Buyer has
performed or complied with the covenants, agreements, terms, and
conditions to be performed or complied with by Buyer at or prior to
the Closing, and (iii) that there have been no events, changes or
effects
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with respect to Buyer having a Buyer Material Adverse Effect (as
defined in Section 3.1);
(D) a certificate of good standing of Buyer, certified by
the Secretary of State of Delaware;
(E) any required consent or approval necessary to transfer
the Assets to Buyer and of a creditor, contract party, or public or
governmental authority to the transactions contemplated hereby
required of Buyer;
(F) a duly executed Assignment and Assumption Agreement
substantially in the form of Exhibit B;
(G) a duly executed Non-Competition Agreement substantially
in the form of Exhibit D;
(H) a duly executed Transition Services Agreement
substantially in the form of Exhibit E;
(I) a duly executed Development and Supply Agreement and
side letter substantially in the form of Exhibit F;
(J) a duly executed General Release and Non-Compete
Agreement for the benefit of Luminex, Seller and their affiliates
from each of the Transferring Employees substantially in the form
of Exhibit G;
(K) a duly executed Registration Rights Agreement
substantially in the form of Exhibit H;
(L) a duly executed Consultant Agreement and General Release
Agreement substantially in the form of Exhibit I; and
(M) such other certificates or documents as Seller, Luminex
or their counsel may reasonably request.
(ii) At the Closing, Luminex and Seller will deliver to Buyer:
(A) such deeds, bills of sale, endorsements, assignments and
other good and sufficient instruments of conveyance and transfer as
shall be effective to vest in Buyer all of Seller's title to and
interest in the Assets (except minute and stock books and similar
corporate records and any other documents and records which Seller
is required by law to retain in its possession), those of Seller's
contracts and commitments described in Section 1.2 as Assumed
Liabilities, and, simultaneously with such delivery, will take such
steps as may be necessary to put Buyer in actual possession and
operating control of the Assets, all in substantially the forms of
Exhibit A and B;
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(B) a copy of the resolutions of the Board of Directors of
Luminex and Seller, certified by the appropriate corporate
secretary, and a copy of the resolutions of the sole shareholder of
Seller authorizing the execution, delivery, and performance of this
Agreement and the other documents referenced herein and the
consummation of the transactions contemplated hereby;
(C) certificates of Seller certifying (i) as to the accuracy
of the representations and warranties of Seller at the date of this
Agreement and at and as of the Closing, and (ii) that Seller has
performed or complied with the covenants, agreements, terms and
conditions to be performed or complied with by Seller at or prior to
the Closing;
(D) any required consent or approval necessary to transfer
the Assets to Buyer and of a creditor, contract party, or public or
governmental authority to the transactions contemplated hereby;
(E) a duly executed Non-Competition Agreement with Buyer
substantially in the form of Exhibit D;
(F) a duly executed Transition Services Agreement
substantially in the form of Exhibit E;
(G) a duly executed Development and Supply Agreement and
side letter substantially in the form of Exhibit F;
(H) a duly executed Registration Rights Agreement
substantially in the form of Exhibit H;
(I) a wire transfer or certified check in the amount
contemplated by Section 4.2(a); and
(J) a duly executed Consultant Agreement and General Release
Agreement substantially in the form of Exhibit I.
1.5 PASSAGE OF TITLE AT CLOSING. At the Closing, upon delivery of the
instruments of sale, conveyance, assignment, transfer and delivery, title to the
Assets shall pass to Buyer.
1.6 ALLOCATION OF PURCHASE PRICE. The Purchase Price and the Assumed
Liabilities as finally determined shall be allocated among the Assets acquired
hereunder as described on Schedule 1.6 hereof. Seller, Luminex and Buyer each
hereby covenant and agree that they will not take a position on any income 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 the
terms of this Section 1.6.
1.7 FURTHER ASSURANCES. Each of the parties hereto will cooperate with
the other and execute and deliver to the other parties hereto such other
instruments and documents, and take such other actions, as may be reasonably
requested from time to time by any other party hereto as necessary to carry out,
evidence and confirm the intended purposes of this Agreement.
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1.8 THIRD PARTY CONSENTS. To the extent that Seller's or Luminex's
rights under any agreement, contract, commitment, lease, permits or other Asset
to be assigned to Buyer hereunder may not be assigned without the consent of
another person, which consent has not been obtained, this Agreement shall not
constitute an agreement to assign the same if an attempted assignment would
constitute a breach thereof or be unlawful, and Seller and Luminex, at their
expense, shall use their commercially reasonable efforts to obtain any such
required consent(s) as promptly as possible. If any such consent shall not be
obtained or if any attempted assignment would be ineffective or would impair
Buyer's rights under the Asset in question so that Buyer would not in effect
acquire the benefit of all such rights, Seller and Luminex shall act after the
Closing as Buyer's agent in order to obtain for it the benefits thereunder and
shall cooperate with Buyer in any other reasonable arrangement designed to
provide such benefits to Buyer.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES OF SELLER AND LUMINEX
To induce Buyer to enter into this Agreement and consummate the
transactions contemplated hereby, Seller and Luminex, as noted, represent,
warrant, and agree as follows:
2.1 ORGANIZATION AND GOOD STANDING. Each of Seller and Luminex is a
corporation duly organized, validly existing, and in good standing under the
laws of the State of Delaware and each has full corporate power and authority to
enter into this Agreement and to consummate the transactions contemplated
hereby.
2.2 AUTHORIZATION, VALIDITY AND EFFECT OF AGREEMENTS. Seller and Luminex
each has the requisite power and authority to execute, perform and deliver this
Agreement and all agreements and documents contemplated hereby (to which Seller
and/or Luminex are a party). This Agreement constitutes, and all agreements and
documents contemplated hereby (when executed and delivered pursuant hereto for
value received) will constitute, the valid and legally binding obligations of
Seller and Luminex enforceable in accordance with their respective terms,
subject to applicable bankruptcy, insolvency, moratorium or other similar laws
relating to creditors' rights and general principles of equity.
2.3 NO VIOLATION. Neither the execution and delivery by Seller and
Luminex of this Agreement, nor the consummation of the transactions contemplated
hereby in accordance with the terms hereof, will: (i) violate any provision of
any United States federal, state or local statute, law, ordinance, rule or
regulation or any decree or order of any governmental body thereof; (ii) violate
any provisions of the certificate of incorporation or bylaws of Seller or
Luminex; (iii) violate any provision of, or result in the creation of any lien,
security interest, charge, or encumbrance upon any of the Assets pursuant to,
any material commitment, lease, contract, or other material agreement or
instrument to which Seller is a party; or (iv) violate any governmental permit
or license or any order, arbitration award, judgment, writ, injunction, decree,
statute, rule, or regulation applicable to Seller.
2.4 TITLE TO ASSETS; ASSUMED LIABILITIES. Seller and Luminex represent
and warrant that Seller and Luminex own good and transferable title to the
Assets, which, to the knowledge of the officers of Luminex and Seller, are free
and clear of all liens, claims, restrictions,
5
obligations and encumbrances. To the knowledge of the officers of Seller and
Luminex, the liabilities set forth on Schedule 1.2 constitute all of the
liabilities of the RBM Business.
2.5 NO BROKERS. Neither Luminex nor Seller has entered into any
contract, arrangement, or understanding with any person or firm that may result
in the obligation of Seller or Luminex to pay any finder's fees, brokerage or
agent's commissions, or other like payments in connection with the negotiations
leading to this Agreement or the consummation of the transactions contemplated
hereby.
2.6 GOVERNMENTAL APPROVALS. No registration or filing with, or consent
or approval of or other action by, any federal, state or other governmental
agency or instrumentality is or will be necessary for the valid execution,
delivery and performance by Seller and Luminex of this Agreement or the
documents referenced herein.
2.7 INVESTMENT REPRESENTATIONS. The Shares will be acquired for the
account of Luminex for investment and not with a view to, or for resale in
connection with any distribution. Luminex has no contract, undertaking,
arrangement, or agreement with any person to sell or transfer or to have any
person sell for Seller all or any portion of the Shares. Luminex represents that
(i) it is aware that its investment in Buyer is speculative in nature and
involves a high degree of risk and that Buyer is a newly formed entity with no
history of operations, and (ii) no assurances are or have been made regarding
the likelihood of profitable operations by the Buyer. Luminex understands that
no governmental agency has passed upon or made any recommendation or endorsement
of an investment in the Shares. The Shares will not be registered for sale under
any applicable securities laws and the certificates for such shares shall bear
an appropriate legend.
2.8 NO LITIGATION. There is no claim, suit, action, proceeding or
investigation pending or, to the knowledge of Seller or Luminex, threatened at
law or in equity or before or by any federal, state, municipal or other
governmental department, commission, board, agency, instrument or authority that
could affect the transactions contemplated hereby. Neither Seller nor Luminex
knows or has any reason to know of any basis for any such claim, suit, action or
proceeding. Neither Seller nor Luminex is subject to any currently existing
order, writ, judgment, injunction, or decree that could affect the Assets.
2.9 NO KNOWLEDGE OF BREACH BY BUYER. No officer of Seller or Luminex has
knowledge that Buyer is in breach of any of its representations and warranties
contained in this Agreement.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF BUYER
To induce Seller and Luminex to enter into this Agreement and
consummate the transactions contemplated hereby, Buyer represents, warrants, and
agrees as follows:
3.1 EXISTENCE; GOOD STANDING; CORPORATE AUTHORITY. Buyer is a
corporation duly organized, validly existing, and in good standing under the
laws of the State of Delaware. Buyer is qualified to do business as a foreign
corporation and is in good standing under the laws of any state of the United
States in which the character of the properties owned or leased by it therein or
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in which the transaction of business requires such qualification, except where
the failure to be so qualified would not have a material adverse effect on the
business, results of operations, financial condition or prospects of Buyer (a
"Buyer Material Adverse Effect"). Buyer has all requisite corporate power and
authority to (i) own, operate, and lease its properties, (ii) carry on its
business as now conducted and as proposed to be conducted, (iii) execute,
deliver and perform this Agreement and all agreements and documents contemplated
hereby, and (iv) issue, sell, and deliver the Series A Preferred Stock and the
Common Stock, contemplated hereby.
3.2 VALIDITY AND EFFECT OF AGREEMENTS. This Agreement constitutes, and
all agreements and documents contemplated hereby (when executed and delivered
pursuant hereto) will constitute, the valid and legally binding obligations of
Buyer, enforceable in accordance with their respective terms, subject to
applicable bankruptcy, insolvency, moratorium or other similar laws relating to
creditors' rights and general principles of equity.
3.3 NO VIOLATION. Neither the execution and delivery by Buyer of this
Agreement, nor the consummation by Buyer of the transactions contemplated hereby
in accordance with the terms hereof, will: (i) violate any provision of any
United States federal, state or local statute, law, ordinance, rule or
regulation or any decree or order of any governmental body thereof; (ii)
conflict with or result in a breach of any provisions of the certificate of
incorporation or bylaws of Buyer; (iii) conflict with, result in a breach of any
provision of or the modification or termination of, constitute a default under,
cause to accelerate the maturity of, or result in the creation or imposition of
any lien, security interest, charge, or encumbrance upon any of the assets of
Buyer pursuant to any commitment, lease, contract, or other agreement or
instrument to which Buyer is a party; or (iv) violate or result in a change in
any rights or obligations under any governmental permit or license or any order,
arbitration award, judgment, writ, injunction, decree, statute, rule, or
regulation applicable to Buyer.
3.4 VALID ISSUANCE. The shares of Series A Preferred Stock and the
shares of Common Stock to be issued to Luminex have been duly authorized and,
when issued and delivered in accordance with this Agreement, will be validly
issued, fully paid, and nonassessable shares of Series A Preferred Stock and
Common Stock, respectively, with no personal liability attaching to the
ownership thereof solely by virtue of being a holder thereof, and will be free
and clear of all liens, charges, restrictions, claims, and encumbrances. Neither
the issuance, sale or delivery of the Series A Preferred Stock nor the issuance,
sale, or delivery of the Common Stock is subject to any preemptive right of
stockholders of Buyer or to any right of first refusal or other right in favor
of any person which has not been waived or which has not elapsed.
3.5 OFFERING. The offer, sale and issuance of the Series A Preferred
Stock and the Common Stock as contemplated by this Agreement will be issued in
compliance with all applicable federal and state securities laws. Neither Buyer
nor any agent on its behalf has solicited or will solicit any offers to sell or
has offered to sell or will offer to sell all or any part of either the Series A
Preferred Stock or the Common Stock to any person, persons or entity so as to
bring the sale of such Series A Preferred Stock or Common Stock by Buyer within
the registration provisions of any federal or state securities laws. Buyer has
not made any advertisement relating to the sale of the Series A Preferred Stock
or Common Stock in printed public media, radio, television or
telecommunications, including electronic display.
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3.6 GOVERNMENTAL APPROVALS. No registration or filing with, or consent
or approval of or other action by, any federal, state or other governmental
agency or instrumentality is or will be necessary for (i) the valid execution,
deliver, and performance by Buyer of this Agreement or the documents referenced
herein, or (ii) the offer, issuance, sale and delivery of the Series A Preferred
Stock or the Common Stock, other than filings pursuant to federal or state
securities laws (all of which filings have been made by Buyer, other than those
that are required to be made after the Closing and that will be duly made on a
timely basis) in connection with the sale of the Series A Preferred Stock and
the Common Stock.
3.7 SUBSIDIARIES. Buyer does not (directly or indirectly) own any equity
securities or other legal and/or beneficial interests in any corporations,
partnerships, limited liability companies, business trusts, or joint ventures,
or in any other unincorporated trade or business enterprises.
3.8 CAPITALIZATION. The authorized capital stock of Buyer consists of
9,010,000 shares of Common Stock, $.001 par value per share, of which 8,109,000
shares are issued and outstanding and 990,000 shares of Series A Preferred
Stock, of which no shares are issued and outstanding. Buyer has no other
outstanding capital stock, bonds, debentures, notes or other obligations the
holders of which have the right to vote (or which are convertible into or
exercisable for securities having the right to vote) with the stockholders of
Buyer on any matter. All issued and outstanding shares of Buyer's capital stock
have been issued in compliance with all federal and state securities laws and
are duly authorized, validly issued, fully paid, nonassessable and free of
preemptive rights. Except as set forth on Schedule 3.8, there are no options,
warrants, calls, subscriptions, convertible securities, or other rights or
commitments that obligate Buyer to issue, transfer or sell its capital stock.
None of the outstanding shares of Buyer's capital stock are subject to any
voting trust agreement, lien, encumbrance, security interest, restriction or
claim. Schedule 3.8 attached hereto contains a true and complete list of the
holders of the securities of Buyer, showing the number of shares of Common
Stock, preferred stock or other securities of Buyer held by each stockholder as
of the date of this Agreement (and will be updated as of the Closing Date)
together with the number of stock options, warrants, convertible notes and/or
convertible securities issued by Buyer and the holders of such stock options,
warrants, convertible notes and/or other convertible securities.
3.9 CAPITAL INVESTMENTS IN BUYER. Schedule 3.9 sets forth a list of
persons and/or entities that Buyer, its officers, directors or representatives
have contacted (orally or in writing) as of the date hereof regarding a capital
investment in Buyer in the form of equity, debt or convertible debt.
3.10 LIMITED OPERATIONS. Buyer was incorporated under the laws of the
State of Delaware on July 31, 2002. Buyer has not engaged in any material
operations since inception. To the knowledge of the officers of Buyer, the
internal operating reports of Seller dated June 30, 2002 (attached hereto as
Exhibit J) fairly present the assets and liabilities of the RBM Business as of
such date substantially in accordance with accounting principles used by Luminex
and Seller generally for such reports. To the knowledge of the officers of
Buyer, the assets set forth on Schedule 1.1 constitute all of the assets of the
RBM Business and the liabilities set forth on Schedule 1.2 constitute all of the
liabilities of the RBM Business.
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3.11 NO LITIGATION. There is no claim, suit, action, proceeding or
investigation pending or, to the knowledge of Buyer, threatened against or
affecting Buyer or any of its officers or directors in such capacity at law or
in equity or before or by any federal, state, municipal or other governmental
department, commission, board, agency, instrument or authority. Buyer does not
know or have any reason to know of any basis for any such claim, suit, action or
proceeding. Buyer is not subject to any currently existing order, writ,
judgment, injunction, or decree relating to its operations.
3.12 CONSENTS AND APPROVALS. Buyer has obtained, or shall obtain prior
to Closing all consents, approvals, authorizations or orders of third parties,
including governmental authorities, necessary for the authorization, execution
and performance of this Agreement by Buyer. To the knowledge of the officers of
Buyer, Schedule 3.12 contains an accurate and complete list of all contracts
entered into by Seller or Luminex that relate to the Assets, Assumed Liabilities
or to the RBM Business.
3.13 PROPRIETARY INFORMATION. Each of the employees, officers and
consultants of Buyer has (or prior to Closing will have), a validly existing
agreement providing for confidentiality and protection of intellectual property
(a "Proprietary Information Agreement") with Buyer, such agreements are in full
force and effect, and copies of such agreements have been (and will be) provided
to counsel to Seller. No third party has claimed or, to Buyer's knowledge, has
reason to claim that any person employed by or affiliated with Buyer has (i)
violated or may be violating any of the terms or conditions of his employment,
non-competition, or non-disclosure agreement with such third party; (ii)
disclosed or may be disclosing or utilized or may be utilizing any trade secret
or proprietary information or documentation of such third party; or (iii)
interfered or may be interfering in the employment relationship between such
third party and any of its present or former employees. To the knowledge of the
officers of Buyer, no person employed by or affiliated with Buyer has violated
any confidential relationship that such person may have had with any third party
in connection with the development or sale of any service or product or proposed
service or product of Buyer.
3.14 INSURANCE. Buyer has in full force and effect fire and casualty
insurance policies, with extended coverage, sufficient in amount (subject to
reasonable deductibles) to allow it to replace any of its tangible personal
property that might be damaged or destroyed.
3.15 COMPLIANCE WITH AGREEMENTS. Buyer is in compliance with all of the
terms and provisions of its certificate of incorporation, bylaws and other
organizational documents, as amended. Buyer, and to the knowledge of the
officers of Buyer, each other party thereto has in all material respects
performed all the obligations required to be performed by it to date (or each
nonperforming party has received a valid, enforceable, and irrevocable written
waiver with respect to its nonperformance), has received no notice of default,
and is not in default (with due notice or lapse of time or both) under any
lease, contract, or agreement now in effect to which Buyer is a party or by
which any such entity or any such entity's property may be bound. Buyer has no
present expectation or intention of not fully performing all of its obligations
under each such lease, contract, or other agreement, and Buyer has no knowledge
of any breach or anticipated breach by the other party to any contract or
commitment to which Buyer is a party.
9
3.16 TRANSACTIONS WITH AFFILIATES. Except as set forth on Schedule 3.16,
no employee, officer or director of Buyer or member of his or her immediate
family is indebted to Buyer, nor is Buyer indebted (or committed to make loans
or extend or guarantee credit) to any of them. To the knowledge of the officers
of Buyer, none of such persons has any direct or indirect ownership interest in
any firm or corporation with which Buyer is affiliated or with which Buyer has a
business relationship, or any firm or corporation that competes with Buyer,
except that employees, officers or directors of Buyer and members of their
immediate families may own stock in publicly traded companies that may compete
with Buyer. No member of the immediate family of any officer or director of
Buyer is directly or indirectly interested in any material contract with Buyer.
3.17 COMPLIANCE WITH LAWS. The operations of Buyer have been conducted
in compliance with all applicable laws and regulations, including, without
limitation, all applicable laws, regulations, orders and requirements
promulgated by any governmental authority of competent jurisdiction and relating
to consumer protection, equal opportunity, health care industry regulation,
environmental protection, fire, and occupational safety matters. Buyer has not
received written notice of any violation (or of any investigation, inspection,
audit, or other proceeding by any governmental authority involving allegations
of any violation) of any applicable law, and, to the knowledge of Buyer, no
investigation, inspection, audit, or other proceeding by any governmental
authority involving allegations of violation of any applicable law has been
threatened or contemplated. Buyer has no knowledge of any pending legislation or
regulation that would have a material adverse effect on (i) the business of
Buyer, or (ii) the transactions contemplated by this Agreement or any of the
other agreements contemplated hereunder or executed herewith.
3.18 NO BROKERS. Buyer has not entered into any contract, arrangement or
understanding with any person or firm which may result in the obligation of
Buyer to pay any finder's fees, brokerage or agent's commissions or other like
payments in connection with the negotiations leading to this Agreement or the
consummation of the transactions contemplated hereby. Buyer is not aware of any
claim for payment of any finder's fees, brokerage or agent's commissions or
other like payments in connection with the negotiations leading to this
Agreement or the consummation of the transactions contemplated hereby.
3.19 INTELLECTUAL PROPERTY. Schedule 3.19 sets forth all of the
intellectual property of the RBM Business including any trade secret, formula,
process, concept, method or know-how related thereto. To the knowledge of the
officers of Buyer, no other intellectual property of the RBM Business currently
exists. To the knowledge of the officers of Buyer, the intellectual property of
the RBM Business does not infringe upon any patent, trademark, trade name,
servicemark, copyright or trade secret owned or claimed by a third party.
3.20 CUSTOMERS; MARKETING. To the knowledge of the officers of Buyer,
Schedule 3.20(a) contains a complete list of all customers or known potential
customers of Luminex or Seller or individuals, corporations, partnerships, joint
ventures or any other entity ("Persons") (known to be such by any of such
officers) that any of the Transferring Employees have contacted since January 1,
2002 or anticipate contacting prior to March 31, 2003 with respect to the RBM
Business. To the knowledge of the officers of Buyer, Schedule 3.20(b) contains a
complete list of any and all persons (i) to whom Buyer anticipates marketing its
products or
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services between the Closing Date and March 31, 2003, and (ii) who (a) are
currently or formerly have been customers or potential customers of Luminex or
(b) are Persons the Transferring Employees have contacted prior to the date
hereof for the purpose of establishing a business or strategic relationship.
3.21 ACQUIRED MICROSPHERES, REAGENTS, SUPPLIES AND OTHER CONSUMABLES.
The quantity of microspheres and coupled microspheres being transferred by
Seller and/or Luminex to Buyer pursuant to this Agreement (collectively, the
"Acquired Microspheres") are, to the knowledge of Buyer, anticipated in good
faith to be sufficient for Buyer's purposes from the effective date until
November 1, 2002. Buyer anticipates that the Acquired Microspheres are the only
microspheres to be used in the RBM Business during such period and Buyer will
obtain additional microspheres as required for its business from Luminex
pursuant to the Development and Supply Agreement. The Acquired Microspheres may
not be resold by Buyer or its affiliates to any third party.
The quantity of reagents, supplies and other consumables used in the
RBM Business being transferred by Seller and/or Luminex to Buyer pursuant to
this Agreement is set forth in Schedule 1.1 and constitutes the only reagents,
supplies and other consumables being transferred by Seller and/or Luminex to
Buyer pursuant to this Agreement.
3.22 CORPORATE RECORDS; OTHER INFORMATION. Buyer has delivered or
provided to Seller for its review true, complete and correct copies of the
following items, as amended and presently in effect, for Buyer: (a) certificate
of incorporation, (b) bylaws, (c) minute books, and (d) stock registration books
(all hereinafter referred to as the "Corporate Records"). The minute books
contain a record of all shareholder, director and committee meetings and actions
taken without a meeting from the date of Buyer's incorporation to the date
hereof. The stock registration books are complete and accurate and contain a
complete record of all transactions in Buyer's capital stock from the date of
its incorporation to the date hereof. All documents and other information as to
existing facts relating to Buyer and its assets and liabilities which have been
provided to Seller in connection with this Agreement are true, correct, and
complete in all material respects except to the extent that any such documents
or other written information was later specifically supplemented or corrected
prior to the date of this Agreement with additional documents or written
information that were provided to Seller.
3.23 FULL DISCLOSURE; NO KNOWLEDGE OF BREACH BY SELLER OR LUMINEX. All
of the information provided by Buyer and representatives herein or in the
schedules and exhibits attached hereto is true, correct, and complete, and no
representation, warranty, or statement made by Buyer in or pursuant to this
Agreement or in the schedules and exhibits attached hereto contains or will
contain any untrue statement of a material fact or omits or will omit to state
any material fact necessary to make such representation, warranty, or statement
not misleading. Buyer has not withheld from Luminex and Seller disclosure of any
event, condition or fact which, to the knowledge of the officers of Buyer, (i)
is material to the RBM Business or (ii) may adversely affect Buyer's assets,
prospects or condition (financial or otherwise), and which is not otherwise
known to the officers of Seller or Luminex. Buyer has no knowledge that Seller
or Luminex is in breach of any of its representations and warranties contained
in this Agreement.
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ARTICLE 4
COVENANTS
4.1 GENERAL COVENANTS
(a) Transferring Employees. Seller and/or Luminex employees, each as
set forth on Schedule 4.1 (the "Transferring Employees"), shall terminate their
employment with Luminex, effective as of the close of business on the date
immediately preceding the Closing (the "Date of Termination"). Except as noted
on Schedule 4.1, such persons shall be offered employment with Buyer, with such
employment to be effective as of the Closing Date. Luminex agrees and covenants
each of the Transferring Employees will be entitled to exercise his or her
vested options for the purchase of Luminex common stock, $.001 par value per
share, for the lesser of (i) the life of the option or (ii) two (2) years from
the date of termination of employment with Luminex. All unvested options to
purchase Luminex common stock held by the Transferring Employees shall be
terminated as of the Date of Termination.
4.2 COVENANTS OF SELLER
(a) Funding Commitment. Luminex has agreed to fund up to $1,100,000
to the RBM Business during the period beginning July 1, 2002 and ending
September 30, 2002 (the "Commitment"). Any amount of the Commitment that Luminex
has not funded to Seller as of the Closing Date will be funded to Buyer in cash
on the Closing Date based on the preliminary schedule described in the next
sentence. On the Closing Date, Luminex and Seller will provide a preliminary
schedule of the amounts funded from July 1, 2002 to the Closing Date for Buyer's
review and approval, and Luminex, Seller and Buyer shall each have an
opportunity to review such information as may be necessary to finalize such
schedule within thirty (30) days from the Closing Date. The parties shall make a
cash settlement once such schedule is finalized.
(b) Conduct of Business Pending the Closing. Until the Closing,
without the prior written consent of Buyer:
(i) Seller will not do or omit to do any act, or permit any act
or omission to act, which would cause a breach of any material contract,
commitment or obligation of Seller relating to the Assets, or any breach of any
representation, warranty, covenant or agreement made by Seller herein;
(ii) Seller will duly comply with all laws applicable to Seller
and the Assets and all laws, compliance with which is required for the valid
consummation of the transactions contemplated by this Agreement; or
(iii) Seller will not sell, assign license, mortgage, pledge or
subject to lien or any other encumbrance any Assets.
(c) Confidentiality. Seller, Luminex and their respective officers,
directors, employees and agents (collectively "Representatives") as a result of
their current and future relationships with Buyer have and will obtain
confidential, non-public information regarding the business of Buyer. Seller,
Luminex and their respective Representatives agree to keep all such
12
information confidential and will not (except as required by applicable law
(including any public disclosure law), regulation or legal process), without
Buyer's prior written consent, disclose any confidential information of Buyer in
any manner whatsoever. In the event Seller, Luminex or their respective
Representatives are required by law (other than public disclosure laws),
regulation or legal process to disclose any such information, such party will
notify Buyer promptly so it may seek a protective order or other appropriate
remedy.
(d) Access to Information. Following the Closing, Luminex shall
provide Buyer (at Buyer's expense) with such reasonable assistance, including
the provision of available relevant records or other information and reasonable
access to and cooperation of any personnel within Seller's or Luminex's employ,
as may be reasonably requested by Buyer in connection with the preparation of
any financial statement or tax return, or any audit or examination by any taxing
authority, or any judicial or administrative proceeding related to the
transactions contemplated hereby.
(e) Employees. For a period of two (2) years following Closing Date,
Luminex shall not solicit (directly or indirectly) or hire employees of Buyer
(as of the date hereof or anytime during the period of restrictions in this
Section 4.2(e)).
(f) Certain Notifications. At all times prior to the Closing, Seller
shall promptly notify Buyer in writing of the occurrence of any event which will
result, or has a reasonable prospect of resulting, in the failure to satisfy any
of the conditions specified in Section 5.2.
4.3 COVENANTS OF BUYER.
(a) Confidentiality.
(i) In the event the transactions contemplated in this Agreement
are not consummated, regardless of the reason therefor, Buyer will promptly
return to Seller all records and information provided by Seller and Luminex.
(ii) Buyer and its Representatives as a result of their historic
and/or current and future relationships with Luminex and Seller have and will
obtain confidential, non-public information regarding the business of Luminex
and Seller. Buyer and its Representatives agree to keep all such information
confidential and will not (except as required by applicable law, regulation or
legal process), without Luminex's prior written consent, disclose any
confidential information of Luminex and/or Seller in any manner whatsoever. In
the event Buyer or its Representatives are required by law, regulation or legal
process to disclose any such information, such party will notify Luminex
promptly so it may seek a protective order or other appropriate remedy.
(b) Access to Information. Following the Closing, Buyer shall
provide Seller and Luminex with such reasonable access to and cooperation of any
personnel within its employ, as may be reasonably requested by either of them in
connection with the preparation of any financial statement or tax return, or any
audit or examination by any taxing authority, or any judicial or administrative
proceeding relating to the transactions contemplated hereby.
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(c) Certain Notifications. At all times prior to Closing, Buyer
shall promptly notify Seller in writing of any occurrence of any event which
will result, or has a reasonable prospect of resulting, in the failure to
satisfy any of the conditions specified in Section 5.1.
(d) Public Announcements. Buyer will not, without the written
consent of Luminex, make any public disclosure of the transactions contemplated
hereby. Nothing contained in this Section 4.3(d) shall prevent Buyer from
furnishing any information to any governmental entity or pursuant to the
requirements of any applicable law; provided, however, that Buyer shall not make
any such disclosure without first notifying Luminex and allowing a reasonable
opportunity to seek injunctive relief from (or a protective order with respect
to) the obligation to make such disclosure.
(e) Transfer Taxes. All sales or transfer taxes, including, but not
limited to, document recording fees, transfer taxes, sales and excise taxes,
arising out of or in connection with the consummation of the transactions
contemplated hereby shall be paid by Buyer.
(f) Pre-Closing Actions. Between the date hereof and continuing
until Closing, Buyer shall not take any action that would cause or tend to cause
the conditions upon the obligations of the parties hereto to effect the
transactions contemplated hereby not to be fulfilled including, without
limitation, taking, or causing to be taken, or permitting or suffering to be
taken or to exist, any action, condition, or thing that would cause the
representations and warranties made by them herein not to be true, correct,
complete, and accurate as of the Closing Date.
(g) Keeping of Records and Books of Account. From and after the date
hereof, Buyer shall keep adequate records and books of account, in which
complete entries will be made in accordance with GAAP consistently applied,
reflecting all financial transactions of Buyer and in which, for each fiscal
year, all proper reserves for depreciation, depletion, obsolescence,
amortization, taxes, bad debts, and other purposes in connection with its
business shall be made.
(h) Compliance with Laws. From and after the date hereof, Buyer
shall comply in all material respects with all applicable laws.
(i) Insurance. Buyer shall maintain as to its properties and
business, with financially sound and reputable insurers, insurance against such
casualties and contingencies and of such types and in such amounts as is
customary for companies similarly situated, which insurance shall be deemed by
Buyer to be sufficient.
(j) Termination of Covenants. The covenants of Buyer under Section
4.3(g), (h) and (i) will terminate upon the earliest of: (i) completion of a
Qualified Public Offering, or (ii) acquisition of all or substantially all the
assets of Buyer by an unaffiliated third party, or (iii) complete redemption of
all shares of the Series A Preferred Stock.
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ARTICLE 5
CONDITIONS
5.1 CONDITIONS TO OBLIGATIONS OF SELLER. The obligations of Seller and
Luminex to effect the transactions contemplated by this Agreement shall be
subject to the fulfillment at or prior to the Closing Date of the following
conditions:
(a) Buyer shall have performed its covenants and agreements
contained in this Agreement required to be performed on or prior to the Closing
Date and the representations and warranties of Buyer contained in this Agreement
and in any document delivered in connection herewith shall be true and correct
as of the Closing Date.
(b) From the date of this Agreement through the Closing, there shall
not have occurred, in the sole discretion of Seller, any material change in the
financial condition, business, or operations of Buyer.
(c) No action or proceeding shall have been instituted by a court or
any other governmental body or by any governmental agency or public authority to
restrain or prohibit the transactions being contemplated by this Agreement or to
obtain an amount of damages or other material relief in connection with the
execution of the Agreement or related agreements and no governmental agency
shall have given notice to any party hereto to the effect that consummation of
the transactions contemplated by this agreement would constitute a violation of
law or that it intends to commence proceedings to restrain consummation of the
transaction contemplated by this Agreement.
(d) All consents, authorizations, orders, and approvals of (or
filings or registrations with) any governmental commission, board, or other
regulatory body required in connection with the execution, delivery, and
performance of this Agreement shall have been obtained or made, except for
filings in connection with the transactions contemplated by this Agreement and
any other documents required to be filed after the Closing.
(e) Seller shall have received all items required to be delivered by
Section 1.4(b)(i).
5.2 CONDITIONS TO OBLIGATIONS OF BUYER. The obligations of Buyer under
this Agreement shall be subject to the fulfillment at or prior to the Closing
Date of the following conditions:
(a) Seller and Luminex, respectively, shall have performed its
covenants and agreements contained in this Agreement required to be performed on
or prior to the Closing Date and the representations and warranties of Seller
and Luminex contained in this Agreement and in any document delivered in
connection herewith shall be true and correct as of the Closing Date.
(b) No action or proceeding shall have been instituted before a
court or other governmental body by any governmental agency or public authority
to restrain or prohibit the transactions contemplated by this Agreement or to
obtain an amount of damages or other material relief in connection with the
execution of the Agreement or the related agreements and no governmental agency
shall have given notice to any party hereto to the effect that
15
consummation of the transactions contemplated by this Agreement would constitute
a violation of any law or that it intends to commence proceedings to restrain
consummation of the transactions contemplated by this Agreement.
(c) All consents, authorizations, orders, and approvals of (or
filings or registrations with) any governmental commission, board, or other
regulatory body required in connection with the execution, delivery, and
performance of this Agreement shall have been obtained or made, except for
filings in connection with the transactions contemplated by this Agreement and
any other documents required to be filed after the Closing.
(d) Buyer shall have received all items required to be delivered by
Section 1.4(b)(ii).
ARTICLE 6
TERMINATION
6.1 TERMINATION BY MUTUAL CONSENT. This Agreement may be terminated at
any time prior to the Closing, by the mutual consent of Buyer and Seller.
6.2 TERMINATION BY EITHER BUYER OR SELLER. This Agreement may be
terminated by Buyer or Seller if (a) the Closing shall not have occurred by
September 6, 2002, or (b) a United States federal or state court of competent
jurisdiction or United States federal or state governmental, regulatory, or
administrative agency or commission shall have issued an order, decree, or
ruling or taken any other action permanently restraining, enjoining, or
otherwise prohibiting the transactions contemplated by this Agreement and such
order, decree, ruling, or other action shall have become final and
non-appealable; provided, that the party seeking to terminate this Agreement
pursuant to this clause (b) shall have used all reasonable efforts to remove
such injunction, order, or decree.
6.3 TERMINATION BY SELLER. This Agreement may be terminated at any time
prior to the Closing by Seller, if (a) there has been a breach by Buyer of any
representation or warranty contained in this Agreement which would have or would
be reasonably likely to have a Buyer Material Adverse Effect, or (b) there has
been a material breach of any of the covenants or agreements set forth in this
Agreement on the part of Buyer, which breach is not curable or, if curable, is
not cured within 15 days after written notice of such breach is given by Seller
to Buyer.
6.4 TERMINATION BY BUYER. This Agreement may be terminated by Buyer if
(a) there has been a breach by Seller of any representation or warranty
contained in this Agreement which would have or would be reasonably likely to
have a material adverse effect on the business, results of operations, a
financial condition or prospects of the RBM Business, or (b) there has been a
material breach of any of the covenants or agreements set forth in this
Agreement on the part of Seller, which breach is not curable or, if curable, is
not cured within 15 days after written notice of such breach is given by Buyer
to Seller.
6.5 EFFECT OF TERMINATION AND ABANDONMENT. Upon termination of this
Agreement pursuant to this Article 6, this Agreement shall be void and of no
other effect, and there shall be no liability by reason of this Agreement or the
termination thereof on the part of any party hereto
16
(other than for breach of a covenant contained herein), or on the part of the
respective directors, officers, employees, agents, or shareholders of any of
them.
6.6 EXTENSION; WAIVER. At any time prior to the Closing, any party
hereto may, to the extent legally allowed, (a) extend the time for the
performance of any of the obligations or other acts of the other parties hereto,
(b) waive any inaccuracies in the representations and warranties made to such
party contained herein or in any document delivered pursuant hereto, and (c)
waive compliance with any of the agreements or conditions for the benefit of
such party contained herein. Any agreement on the part of a party hereto to any
such extension or waiver shall be valid only if set forth in an instrument in
writing signed on behalf of such party.
ARTICLE 7
INDEMNIFICATION
7.1 GENERAL INDEMNIFICATION BY BUYER. Buyer covenants and agrees to
indemnify, defend, protect and hold harmless Seller, Luminex and their officers,
directors, employees, stockholders, assigns, successors and affiliates
(individually, each a "Seller Indemnified Party" and collectively, "Seller
Indemnified Parties") from, against and in respect of:
(a) all liabilities, losses, claims, damages, punitive damages,
causes of action, lawsuits, administrative proceedings (including informal
proceedings), investigations, audits, demands, assessments, adjustments,
judgments, settlement payments, deficiencies, penalties, fines, interest
(including interest from the date of such damages) and costs and expenses
(including, without limitation, reasonable attorneys' fees and disbursements of
every kind, nature and description) (collectively, "Damages") suffered,
sustained, incurred or paid by Seller Indemnified Parties in connection with,
resulting from or arising out of, directly or indirectly:
(i) the Assumed Liabilities which Buyer assumes specifically
pursuant to this Agreement;
(ii) any and all actions, suits, claims or legal,
administrative, arbitration, governmental or other proceedings or
investigations against any Seller Indemnified Party that relate to the
RBM Business as conducted after the Closing Date;
(iii) any breach of any representation or warranty of Buyer set
forth in this Agreement or any schedule or certificate delivered by or
on behalf of Buyer in connection therewith; or
(iv) any nonfulfillment of any covenant or agreement by Buyer
under this Agreement; and
(b) any and all Damages incident to any of the foregoing or to the
enforcement of this Section 7.1.
7.2 GENERAL INDEMNIFICATION BY SELLER AND LUMINEX. Seller and Luminex,
jointly and severally, covenant and agree to indemnify, defend, protect and hold
harmless Buyer and its officers, directors, employees, shareholders, assigns,
successors and affiliates (individually, each
17
a "Buyer Indemnified Party" and collectively, "Buyer Indemnified Parties") from,
against and in respect of:
(a) all Damages suffered, sustained, incurred or paid by Buyer
Indemnified Parties in connection with, resulting from or arising out of,
directly or indirectly:
(i) any breach of any representation or warranty of Seller
and/or Luminex set forth in this Agreement or any schedule or
certificate delivered to Buyer pursuant hereto; and
(ii) any nonfulfillment of any covenant or agreement by Seller
under this Agreement; and
(b) any and all Damages incident to any of the foregoing or to the
enforcement of this Section 7.2.
7.3 EXPIRATION AND LIMITATION. Notwithstanding the above:
(a) The indemnification obligations under this Article 7, or under
any certificate or writing furnished in connection herewith, shall terminate at
the date that is the later of:
(i) five (5) years after the Closing Date (subject to such
modification as set forth below), except for those covenant obligations
that continue thereafter; or
(ii) the final resolution of claims or demands pending as of the
date described in clause (i) of this Section 7.3.
Notwithstanding the foregoing, the reference to "five (5) years" in subparagraph
(i) above will be reduced to such date that is the later of: (A) the date upon
which the Series A Preferred Stock is fully redeemed by Buyer or (B) two and one
half (2.5) years following the Closing Date.
(b) Neither party shall be liable under its indemnification
obligation with respect to breaches of its representations and warranties under
this Agreement unless and until the aggregate amount of all Damages attributable
to all such breaches by such party exceed the sum of $50,000.00, in which case
the Indemnified Party shall be entitled to seek indemnification for all Damages
without regard to the limitation set forth in this Section 7.3(b).
7.4 INDEMNIFICATION PROCEDURES. All claims or demands for
indemnification under this Article 7 ("Claims") shall be asserted and resolved
as follows:
(a) In the event that any Indemnified Party has a Claim against any
party obligated to provide indemnification pursuant to Section 7.1 or 7.2 hereof
(the "Indemnifying Party") which does not involve a Claim being asserted against
or sought to be collected by a third party, the Indemnified Party shall with
reasonable promptness notify the Chief Executive Officer or his or her
designated successor as the representative of Buyer or Seller, as applicable
(the "Representative") of such Claim. When reporting a Claim to the
Representative, the Indemnified Party shall specify the nature of such Claim and
the amount or the estimated amount thereof to
18
the extent then feasible (the "Claim Notice"). If the Representative does not
notify the Indemnified Party within thirty (30) days after the date of delivery
of the Claim Notice that the Indemnifying Party disputes such Claim, with a
detailed statement of the basis for such position, the amount of such Claim
shall be conclusively deemed a liability of the Indemnifying Party hereunder. If
an objection is made in writing in accordance with this Section 7.4(a), the
Indemnified Party shall respond in a written statement to the objection within
thirty (30) days and, for sixty (60) days thereafter, attempt in good faith to
agree upon the rights of the respective parties with respect to each of such
Claims (and, if the parties should so agree, a memorandum setting forth such
agreement shall be prepared and signed by both parties).
(i) In the event that any Claim for which the Indemnifying Party
would be liable to any Indemnified Party hereunder is asserted against
an Indemnified Party by a third party (a "Third Party Claim"), the
Indemnified Party shall deliver a Claim Notice to the appropriate
Representative. The Representative shall have thirty (30) days from date
of delivery of the Claim Notice (the "Notice Period") to notify the
Indemnified Party (A) whether the Indemnifying Party disputes liability
to the Indemnified Party hereunder with respect to the Third Party
Claim, and, if so, the basis for such a dispute, and (B) if the
Indemnifying Party does not dispute liability, whether or not it
desires, at its sole cost and expense, to defend against the Third Party
Claim, provided that the Indemnified Party is hereby authorized (but not
obligated), prior to and during the Notice Period, to file any motion,
answer or other pleading and to take any other action which the
Indemnified Party shall deem necessary or appropriate to protect the
Indemnified Party's interests.
(ii) In the event that the Representative notifies the
Indemnified Party within the Notice Period that the Indemnifying Party
does not dispute its obligation to indemnify with respect to the Third
Party Claim, the Indemnifying Party shall defend the Indemnified Party
against such Third Party Claim by appropriate proceedings, provided
that, unless the Indemnified Party otherwise agrees in writing, the
Indemnifying Party may not settle any Third Party Claim (in whole or in
part) if such settlement does not include a complete and unconditional
release of the Indemnified Party. If the Indemnified Party desires to
participate in, but not control, any such defense or settlement, the
Indemnified Party may do so at its sole cost and expense. If the
Indemnifying Party elects not to defend the Indemnified Party against a
Third Party Claim, whether by failure of such party to give the
Indemnified Party timely notice as provided herein or otherwise, then
the Indemnified Party, without waiving any rights against such party,
may settle or defend against such Third Party Claim in the Indemnified
Party's sole discretion and the Indemnified Party shall be entitled to
recover from the Indemnifying Party the amount of any settlement or
judgment and, on an ongoing basis, all indemnifiable costs and expenses
of the Indemnified Party with respect thereto, including interest from
the date such costs and expenses were incurred.
(iii) If at any time in the reasonable opinion of the
Indemnified Party, notice of which shall be given in writing to the
appropriate Representative, any Third Party Claim seeks material
prospective relief which could have an adverse effect on the Indemnified
Party, the Indemnified Party shall have the right to control or assume
(as the case may be) the defense of any such Third Party Claim and the
amount of any judgment
19
or settlement and the reasonable costs and expenses of defense shall be
included as part of the indemnification obligations of the Indemnifying
Party hereunder. If the Indemnified Party elects to exercise such right,
the Indemnifying Party shall have the right to participate in, but not
control, the defense of such Third Party Claim at the sole cost and
expense of the Indemnifying Party.
(b) Nothing herein shall be deemed to prevent any Indemnified Party
from making a Claim, and any Indemnified Party may make a Claim hereunder, for
potential or contingent Damages, provided the Claim Notice sets forth the
specific basis for any such potential or contingent claim or demand to the
extent then feasible and the Indemnified Party has reasonable grounds to believe
that such Claim may be made.
(c) Subject to the provisions of Section 7.3, the Indemnified
Party's failure to give reasonably prompt notice as required by this Section 7.4
of any actual, threatened or possible claim or demand which may give rise to a
right of indemnification hereunder shall not relieve the Indemnifying Party of
any liability which the Indemnifying Party may have to the Indemnified Party
unless the failure to give such notice materially and adversely prejudiced the
Indemnifying Party.
(d) The parties will make appropriate adjustments for any tax
benefits, tax detriments or insurance proceeds in determining the amount of any
indemnification obligation under this Article 7, provided that no Indemnified
Party shall be obligated to continue pursuing any payment pursuant to the terms
of any insurance policy.
7.5 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS. All
representations, warranties and covenants made by Seller, Luminex and Buyer
pursuant to this Agreement or in any document delivered pursuant hereto shall be
deemed to have been made on the date of this Agreement (except as otherwise
provided herein) and, if the Closing occurs, as of the Closing Date. The
representations of Seller, Luminex and Buyer will survive the Closing and will
remain in effect until, and will expire upon, the termination of the
indemnification obligations as provided in Section 7.3. No investigation or
other examination by Buyer or its designees or representatives shall affect the
term of survival of any representation or warranty contained herein (or in any
certificate or other document delivered pursuant hereto or in connection
herewith) or the right of any Indemnified Party to seek indemnification pursuant
to this Article 7.
7.6 REMEDIES CUMULATIVE. The remedies set forth in this Article 7 are
cumulative and shall not be construed to restrict or otherwise affect any other
remedies that may be available to the Indemnified Party under any other
agreement or pursuant to statutory or common law.
7.7 COMPLIANCE WITH BULK SALES LAWS. Buyer, Seller and Luminex hereby
waive compliance by Buyer, Seller and Luminex with the bulk sales law and any
other similar laws in any applicable jurisdiction in respect of the transactions
contemplated by this Agreement. Buyer shall indemnify Seller and Luminex from,
and hold each of them harmless against, any liabilities, damages, costs and
expenses resulting from or arising out of (i) the parties' failure to comply
with any such laws in respect of the transactions contemplated by this
Agreement, or (ii) any action brought or levy made as a result thereof.
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ARTICLE 8
GENERAL PROVISIONS
8.1 NOTICES. Every notice or other communication required or
contemplated by this Agreement by any party shall be delivered by (i) personal
delivery, (ii) postage prepaid, return receipt requested, registered or
certified mail (airmail if available), or the equivalent of registered or
certified mail under the laws of the country where mailed, (iii) overnight
courier or (iv) facsimile with confirmation copy sent simultaneously in the
manner contemplated by clauses (i), (ii) or (iii) of this Section 8.1, in each
case addressed to the party for whom intended at the following address:
If to Seller or Luminex:
Rules-Based Medicine, Inc.
Luminex Corporation
00000 Xxxxxxxxxx Xxxxxxxxx
Xxxxxx, Xxxxx 00000-0000
Fax: (000) 000-0000
Attn: General Counsel
with a copy to:
Bass, Xxxxx & Xxxx PLC
0000 Xxxxx Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
Fax: (000) 000-0000
Attn: Xxxxxx X. Xxxxx III
If to Buyer:
RBM Acquisition, Inc.
0 Xxxxx Xxxx
Xxxxxx, Xxxxx 00000
with a copy to:
J. Xxxxxxx Xxxxxxx
Xxxxxxx, Xxxxxxx & Xxxxx, L.L.P.
0000 Xx. Xxxxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Fax: (000) 000-0000
21
or at such other address as the intended recipient previously shall have
designated by written notice to the other party. Notice by registered or
certified mail shall be effective on the date it is officially recorded as
delivered to the intended by return receipt or equivalent, and in the absence of
such record of delivery, the effective date shall be presumed to have been the
third business day after it was deposited in the mail. All notices and other
communications required or contemplated by this Agreement to be delivered in
person or sent by courier shall be deemed to have been delivered to and received
by the addressee and shall be effective on the date of personal delivery;
notices delivered by facsimile with simultaneous confirmation copy by registered
or certified or equivalent mail or courier shall be deemed delivered to or
received by the addressee and effective on the date sent. Notice not given in
writing shall be effective only if acknowledged in writing by a duly authorized
representative of the party to whom it was given.
8.2 ASSIGNMENT; BINDING EFFECT; BENEFIT. Neither this Agreement nor any
of the rights, interests, or obligations hereunder shall be assigned by any of
the parties hereto (whether by operation of law or otherwise) without the prior
written consent of the other parties. Subject to the preceding sentence, this
Agreement shall be binding upon and shall inure to the benefit of the parties
hereto and their respective successors and assigns.
8.3 ENTIRE AGREEMENT. This Agreement, the exhibits, schedules, and any
documents delivered by the parties in connection herewith constitute the entire
agreement among the parties with respect to the subject matter hereof and
supersede all prior and contemporaneous agreements and understandings among the
parties with respect thereto. No addition to or modification of any provision of
this Agreement shall be binding upon any party hereto unless made in writing and
signed by all parties hereto.
8.4 AMENDMENT. This Agreement may be amended by the parties hereto, by
action taken by their respective Boards of Directors. This Agreement may not be
amended except by an instrument in writing signed on behalf of each of the
parties hereto.
8.5 GOVERNING LAW. The validity of this Agreement, the construction of
its terms and the determination of the rights and duties of the parties hereto
shall be governed by and construed in accordance with the laws of the State of
Delaware applicable to contracts made and to be performed wholly within such
state, without reference to the choice-of-law principles thereof.
8.6 COUNTERPARTS. This Agreement, or any document to be delivered
herewith, may be executed by the parties hereto in separate counterparts, each
of which when so executed and delivered shall be an original, but all such
counterparts shall together constitute one and the same instrument. Each
counterpart may consist of a number of copies hereof each signed by less than
all, but together signed by all of the parties hereto. Execution and delivery of
this Agreement, or any document to be delivered herewith, by exchange of
facsimile copies bearing the facsimile signature of a party hereto shall
constitute a valid and binding execution and delivery of this Agreement or such
other document by such party. Such facsimile copies shall constitute enforceable
original documents.
8.7 WAIVERS. Except as provided in this Agreement, no action taken
pursuant to this Agreement, including, without limitation, any investigation by
or on behalf of any party, shall be
22
deemed to constitute a waiver by the party taking such action of compliance with
any representations, warranties, covenants, or agreements contained in this
Agreement. The waiver by any party hereto of a breach of any provision hereunder
shall not operate or be construed as a waiver of any prior or subsequent breach
of the same or any other provision hereunder.
8.8 INCORPORATION OF EXHIBITS. The schedules and the exhibits attached
hereto and referred to herein are hereby incorporated herein and made a part
hereof for all purposes as if fully set forth herein.
8.9 SEVERABILITY. Any term or provision of this Agreement that is
invalid or unenforceable in any jurisdiction shall, as to that jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction. If any provision of this
Agreement is so broad as to be unenforceable, the provision shall be interpreted
to be only so broad as is enforceable.
8.10 EXPENSES. Buyer and Seller/Luminex each agree to pay one-half of
the total expenses incurred by Seller and Luminex in connection with the
transactions contemplated hereby as set forth in Schedule 8.10. In addition,
each party will pay its own counsel's fees and expenses incurred in negotiating
the transaction documents, including, without limitation, negotiation of the
Summary of Terms, this Agreement and all documents referred to in this
Agreement, and the closing of the transactions contemplated hereby.
8.11 CHANGE IN NAME. On the Closing Date, Seller shall deliver to Buyer
all such executed documents as may be required to change Seller's name on that
date to another name bearing no similarity to Rules-Based Medicine, Inc.,
including, but not limited to a name change amendment with the Secretary of
State of Delaware, and an appropriate name change notice for each state where
Seller is qualified to do business.
8.12 ENFORCEMENT OF AGREEMENT. The parties hereto agree that irreparable
damage would occur in the event that any of the provisions of this Agreement
were not performed in accordance with their specific terms or were otherwise
breached. It is accordingly agreed that the parties shall be entitled to an
injunction or injunctions to prevent breaches of this Agreement and to enforce
specifically the terms and provisions hereof in any court of competent
jurisdiction, this being in addition to any other remedy to which they are
entitled by contract, at law, or in equity.
8.13 HEADINGS. The article and section headings contained in this
Agreement are for reference purposes only and will not affect in any way the
meaning or interpretation of this Agreement.
8.14 OFFICERS OF BUYER AND SELLER. For purposes of this Agreement, the
officers of Buyer shall include such persons designated as such by Buyer's
corporate action and in any event shall include Xxxx Xxxxxxxx, Xxxxxxx Spain,
Xxxxx Xxxxx and Xxxxx Xxxxxx. For purposes of this Agreement, the officers of
Seller and Luminex shall include Xxxxx Xxxxxx,
23
Xxxxx XxXxxx and Xxxxxxx Xxxxxx. Any references to the "knowledge" of such
persons shall mean the actual knowledge of the persons so identified.
[Remainder of page intentionally left blank; signature page follows]
24
IN WITNESS WHEREOF, the parties have executed this Agreement and caused
the same to be duly delivered on their behalf on the day and year first written
above.
RULES-BASED MEDICINE, INC.
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------------------------
Name: Xxxxxxx X. Xxxxxx
--------------------------------------
Title: Acting Chief Financial Officer
-------------------------------------
LUMINEX CORPORATION
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------------------------
Name: Xxxxxxx X. Xxxxxx
--------------------------------------
Title: Acting Chief Financial Officer
-------------------------------------
RBM ACQUISITION, INC.
By: /s/ Xxxx X. Xxxxxxxx, Ph.D.
--------------------------------------------
Name: Xxxx X. Xxxxxxxx, Ph.D.
--------------------------------------
Title: President and Chief Executive Officer
-------------------------------------
ATTACHMENTS AND EXHIBITS
Exhibits
--------
Exhibit A Form of Xxxx of Sale
Exhibit B Form of Assignment and Assumption Agreement
Exhibit C Form of Certificate of Designations
Exhibit D Form of Non-Competition Agreement
Exhibit E Form of Transition Services Agreement
Exhibit F Form of Development and Supply Agreement
Exhibit G Form of General Release and Non-Compete Agreement
Exhibit H Form of Registration Rights Agreement
Exhibit I Form of Consultant Agreement and General Release Agreement for Xxxx
Xxxxxxxx
Exhibit J Operating Reports of Seller
SCHEDULES
Schedule 1.1 Assets
Schedule 1.2 Assumed Liabilities
Schedule 1.6 Purchase Price Allocation
Schedule 3.8 Capitalization
Schedule 3.9 Capital Investments in Buyer
Schedule 3.12 Contracts
Schedule 3.16 Transactions with Affiliates
Schedule 3.19 Intellectual Property
Schedule 3.20(a) Parties Contacted by Transferring Employees
Schedule 3.20(b) Persons to Whom Buyer Anticipates Marketing Products or
Services
Schedule 4.1 Transferring Employees
Schedule 8.10 Transaction Expenses
