Exhibit 2(a)
ASSET PURCHASE AGREEMENT
This ASSET PURCHASE AGREEMENT is made and entered into as of this
14th day of May, 2003 (the "Signing Date"), by and between Plexus Vaccine Inc.,
a California corporation ("Seller"), and SIGA Technologies, Inc., a Delaware
corporation ("Buyer").
RECITALS
A. Seller is a company engaged in the research, development and
design of vaccine products for human and veterinary markets (the "Business").
B. Seller desires to sell and assign to Buyer, and Buyer desires to
purchase and assume from Seller, certain assets, rights and obligations related
to the Business on the terms and subject to the conditions set forth in this
Agreement (the "Acquisition").
C. Seller and Buyer mutually desire that the Acquisition constitute
a reorganization within the meaning of Section 368(a)(1)(C) of the Internal
Revenue Code of 1986, as amended (the "Code"), pursuant to which Seller sells
substantially all of its assets to Buyer in exchange for the Shares (as defined
herein) and Buyer's assumption of the Assumed Liabilities (as defined herein),
and then Seller promptly dissolves and distributes the Shares to Seller's
stockholders.
D. The parties are signing and entering into this Agreement as of
the Signing Date. The parties contemplate closing the transactions contemplated
by this Agreement after the Signing Date, once all of the conditions set forth
in Article VIII are satisfied.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements hereinafter set forth and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged by each party, the
parties, intending legally to be bound, agree as follows:
ARTICLE I
DEFINITIONS
As used in this Agreement, the following terms shall have the
meanings set forth in this Article I:
1.1 "Accounts Receivable" means all accounts receivable and notes
receivable and other claims for money or other obligations due to Seller arising
out of the Business.
1.2 "Acquired Assets" means all of the assets, properties,
including, without limitation, Intellectual Property, rights and claims of every
kind and description of Seller used in the Business (other than the Excluded
Assets), whether real or personal, tangible or intangible, vested or unvested,
contingent or otherwise, wherever located and whether now existing or hereafter
acquired, including, without limitation, all goodwill associated therewith, as
the same
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shall exist on the Closing Date, whether or not any of such assets, properties,
rights or claims have any value for accounting purposes or are carried or
reflected on or specifically referred to in Seller's books or financial
statements, which are set forth on Schedule 1.2.
1.3 "Acquisition" has the meaning assigned to it in the preamble.
1.4 "Affiliate" means, with respect to a specified Person, any other
Person which controls, is controlled by or is under common control with such
specified Person. For purposes of the definition of Affiliate, the term
"control" (including the terms "controls", "controlled by", and "under common
control with") means the possession, direct or indirect, of the power to direct
or cause the direction of the management and policies of a Person, whether
through the ownership of voting securities, by contract or otherwise.
1.5 "Agreement" means this Agreement and all Exhibits and Schedules
attached hereto, as the same may be amended, supplemented or modified from time
to time.
1.6 "Assignment and Assumption Agreement" means the assignment and
assumption agreement to be executed by Buyer and Seller at the Closing,
substantially in the form attached hereto as Exhibit A.
1.7 "Assumed Liabilities" means (i) the Leases, (ii) all obligations
of Seller under any Purchased Contract, to the extent that any such obligations
arise or accrue on or after the close of business on the Closing Date, and are
consistent with the representations, warranties and agreements of Seller under
this Agreement, (iii) all liabilities and obligations of Seller identified on
Schedule 1.7(iii), (iv) indebtedness of Seller in the aggregate amount of up to
$100,000 evidenced by bridge notes, which are not convertible into equity
securities of Seller, identified on Schedule 1.7(iv) and (v) all indebtedness of
Seller evidenced by promissory notes dated March 27, 2003 and April 28, 2003 in
favor of Buyer in the principal amount of $50,000 and $20,000, respectively.
Under no circumstances (except as expressly stated in the immediately preceding
sentence) shall the Assumed Liabilities include, without limitation, any debt,
liability (whether absolute, accrued, contingent or otherwise), or other
obligation of or owing by Seller (i) associated with or relating to any Excluded
Liability, (ii) associated with or relating to any compensation or benefits of
any director, officer, employee, former employee, independent contractor, agent,
representative or other personnel of Seller or any Plans or (iii) associated
with or relating to any Excluded Asset.
1.8 "Balance Sheet" means the balance sheet of Seller, prepared in
accordance with GAAP, as of December 31, 2002.
1.9 "Xxxx of Sale" means the xxxx of sale and assignment to be
executed by Seller at the Closing, substantially in the form attached hereto as
Exhibit B.
1.10 "Xxxxxxx Employment Agreement" means the employment agreement
to be executed by Buyer and Xxxxx Xxxxxxx at the Closing, substantially in the
form attached hereto as Exhibit C.
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1.11 "Business" has the meaning assigned to it in the preamble.
1.12 "Buyer" has the meaning assigned to it in the preamble.
1.13 "Buyer Common Stock" means common stock, $.0001 par value per
share, of Buyer.
1.14 "Buyer Options" has the meaning assigned to it in Section 7.2.
1.15 "Buyer Warrants" has the meaning assigned to it in Section 7.3.
1.16 "Closing" has the meaning assigned to it in Section 3.2.
1.17 "Closing Date" has the meaning assigned to it in Section 3.2.
1.18 "COBRA" has the meaning assigned to it in Section 6.9(e).
1.19 "Code" has the meaning assigned to it in the preamble.
1.20 "Confidential Records" has the meaning assigned to it in
Section 7.8(b).
1.21 "Contracts" has the meaning assigned to it in Section 4.12.
1.22 "Copyright" means all copyrights in both published works and
unpublished works, including training manuals, marketing and promotional
materials, internal reports, business plans and any other expressions, mask
works and software and videos, whether registered or unregistered, and all
registrations or applications in connection therewith, whether owned, used,
licensed or leased by Seller as licensee or licensor and that have been used or
are used in or are material to the conduct of the Business as it is currently
conducted or as proposed to be conducted.
1.23 "Employees" has the meaning assigned to it in Section 6.9(a).
1.24 "Environmental Laws" means any and all Laws and other
requirements relating to the environment, natural resources, or public or
employee health and safety.
1.25 "Environmental Costs and Liabilities" means any and all losses,
liabilities, obligations, damages, fines, penalties, judgments, actions, claims,
Liens, costs and expenses (including, without limitation, fees, disbursements
and reasonable expenses of legal counsel, experts, engineers and consultants and
the costs of investigation and feasibility studies and remediation activities)
arising from or under any Environmental Law or order or contract with any
governmental or regulatory authority or Person.
1.26 "ERISA" has the meaning assigned to it in Section 4.17(c).
1.27 "Excluded Assets" has the meaning assigned to it in Section
2.2.
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1.28 "Excluded Liabilities" means any and all debts, Taxes, claims,
Losses, Plans, liabilities (whether absolute, accrued, contingent or otherwise),
Liens and any other obligations of or owing by Seller other than the Assumed
Liabilities. Without limiting the generality of the foregoing, "Excluded
Liabilities" shall include those liabilities listed on Schedule 1.28.
1.29 "Financial Statements" means the (i) balance sheet of the
Business as of December 31, 2002, and (ii) statements of income, cash flow, and
stockholders' equity of the Business for the year ended December 31, 2002, each
of which have been prepared in accordance with GAAP and audited by
PricewaterhouseCoopers LLP.
1.30 "GAAP" means United States' generally accepted accounting
principles, consistently applied.
1.31 "Goodwill" means all goodwill associated with the name, assets,
properties and rights of Seller in the Business.
1.32 "Intellectual Property" means all Marks, Patents, Copyrights,
Licensed Rights, Net Names and Trade Secrets, including, without limitation,
those items identified on Schedules 4.14(b) through 4.14(h).
1.33 "Interim Financial Statements" means (i) the balance sheet of
the Business as of March 31, 2003 and (ii) the statements of income, cash flow,
and stockholders' equity of the Business for the period ending on March 31,
2003.
1.34 "Investor Questionnaire" means the investor questionnaire to be
executed by each stockholder of Seller and delivered to Buyer at the Closing,
substantially in the form attached hereto as Exhibit D.
1.35 Reserved.
1.36 "Law" means, with respect to any Person, any United States
federal, state or local, and any foreign national, state or local, law, statute,
common law, ordinance, code, rule, regulation, order, judgment or decree
applicable to such Person.
1.37 "Lease Assignment" means the assignment and assumption of
subleases agreement to be executed by Buyer and Seller at the Closing, in the
form attached as Exhibit F.
1.38 "Leases" means (i) the sublease agreement dated as of November
1, 2001, between Cisco Systems, Inc. and Seller, relating to office space
located at Rancho Xxxxxxxx Financial Plaza, 00000 Xxxxxxxx Xxxxx Xxxxx, Xxxxx
000, Xxx Xxxxx, XX 00000, and (ii) the Month to Month Sublease, dated as of June
1, 2001, between QED Bioscience Inc. and Seller, relating to the laboratory
space located at 00000 Xxx Xxxxxxxx, Xxxxx 000, Xxx Xxxxx, XX 00000.
1.39 "Liabilities" means all liabilities and obligations, secured or
unsecured, whether absolute, accrued, contingent or otherwise, whether known or
unknown and whether or not due, including liabilities for Taxes.
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1.40 "Licensed Rights" has the meaning assigned to it in Section
4.14(c).
1.41 "Lien" means, with respect to any asset of any Person, any
mortgage, lien, pledge, charge, interest, condition, restriction, security
interest, debt, Tax, claim, option, liability, obligation and/or encumbrance of
any kind (whether matured or unmatured) in respect of such asset.
1.42 "Losses" means any and all damages, claims, losses,
Liabilities, Environmental Costs and Liabilities and expenses (including,
without limitation, reasonable expenses of investigation and reasonable
attorneys' fees and expenses).
1.43 "Marks" means all trademarks, service marks, trade names,
common law trademarks, business names (including, without limitation, "Plexus
Vaccines"), Internet domain names, trade dress, slogans, and the goodwill
associated therewith, and all registrations or applications therefor, whether
owned, used, licensed or leased by Seller as licensee or licensor and that have
been used or are used in or are material to the conduct of the Business as it is
currently conducted or as proposed to be conducted.
1.44 "Net Names" has the meaning assigned to it in Section 4.14(h).
1.45 "Officer's Certificate" means the certificate of the president
of Seller, substantially in the form attached hereto as Exhibit G.
1.46 "Option Agreement" means each option agreement to be executed
by Buyer in favor of each Seller Option Holder at the Closing, substantially in
the form attached hereto as Exhibit H.
1.47 "Patents" means all patents, patent applications and inventions
and discoveries that may be patentable, whether owned, used, licensed or leased
by Seller as licensee or licensor and that have been used or are used in or are
material to the conduct of the Business as it is currently conducted or as
proposed to be conducted.
1.48 "Permit" has the meaning assigned to it in Section 4.23.
1.49 "Permitted Liens" means (a) any lien for Taxes which are not
yet due, or (b) any carrier's, warehouseman's, mechanic's, materialman's,
repairman's, landlord's or similar statutory or inchoate lien incidental to the
ordinary conduct of business which involves an obligation that is not past due.
1.50 "Person" means any individual, corporation, partnership,
limited liability company, joint venture, association, trust, unincorporated
organization, governmental body or authority or any other entity.
1.51 "Plans" has the meaning assigned to it in Section 4.17(a).
1.52 "Providing Party" has the meaning assigned to it in Section
6.7.
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1.53 "Purchase Price" has the meaning assigned to it in Section
3.1(b).
1.54 "Purchased Contracts" means all of the Contracts listed or
described on Schedule 4.12(a) other than the Excluded Contracts.
1.55 "Registration Rights Agreement" means the registration rights
agreement to be executed by Buyer and Seller at the Closing, substantially in
the form attached hereto as Exhibit I.
1.56 "Related Documents" means, collectively, all agreements,
instruments and other documents described herein or related hereto, including,
without limitation, the Xxxx of Sale, the Assumption Agreement, the Secretary's
Certificate, the Registration Rights Agreement and the Lease Assignment.
1.57 "Related Person" has the meaning assigned to it in Section
4.22.
1.58 "Requesting party" has the meaning assigned to it in Section
6.7.
1.59 "Required Consents" has the meaning assigned to it in Section
4.4.
1.60 "Secretary's Certificate" means the certificate of the
secretary of Seller as to incumbency and other matters, substantially in the
form attached hereto as Exhibit J.
1.61 "Securities Act" means the Securities Act of 1933, as amended.
1.62 "Seller" has the meaning assigned to it in the preamble.
1.63 "Seller Common Stock" has the meaning assigned to it in Section
4.1(b).
1.64 "Seller Option Holder" means each of the holders of record, as
of the date of this Agreement, of options to purchase shares of Seller Common
Stock, as set forth on Schedule 7.2.
1.65 "Seller Warrant Holder" means each of the holders of record, as
of the date of this Agreement, of warrants to purchase shares of Seller Common
Stock, as set forth on Schedules 7.3A, 7.3B and 7.3C.
1.66 "Shares" has the meaning assigned to it in Section 3.1(a).
1.67 "Signing Date" has the meaning assigned to it in the
introductory paragraph to this Agreement.
1.68 "Tax Return" means any return, declaration, report, claim or
refund or information return or statement relating to Taxes, including any
schedule or attachment thereto and any amendment thereof.
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1.69 "Taxes" means all taxes, assessments, fees, levies and similar
charges of any kind whatsoever imposed by any United States federal, state or
local taxing authority or any foreign taxing authority, including, without
limitation, interest, penalties and additions thereto.
1.70 "Trade Secret" means all trade secrets, know-how, confidential
information, lists of potential customers, technical information, proprietary
information, technologies, processes and formulae, source code, algorithms,
architecture, structure, display screens and development tools, data, plans,
drawings and blue prints, whether tangible or intangible and whether or however
stored, compiled, or memorialized physically, electronically, photographically,
or otherwise, whether owned, used, licensed or leased by Seller as licensee or
licensor and that have been used or are used in or are material to the conduct
of the Business as it is currently conducted or as proposed to be conducted.
1.71 "Transferred Employees" has the meaning assigned to it in
Section 6.9(a).
1.72 "Warrant Agreement" means each warrant agreement to be executed
by Buyer at the Closing in favor of the Seller Warrant Holders identified on
Schedule 7.3A and in Item 3 on Schedule 7.3C to receive the Buyer Warrants at
the Closing, substantially in the form attached hereto as Exhibit K.
ARTICLE II
PURCHASE AND SALE OF ACQUIRED ASSETS
2.1 Purchase and Sale of Acquired Assets. Subject to and upon the
terms set forth in this Agreement, effective upon the Closing, Seller shall
transfer, convey, assign and deliver to Buyer, free and clear of all Liens other
than the Assumed Liabilities, and Buyer shall purchase and accept from Seller,
all of Seller's right, title and interest in, to and under the Acquired Assets.
At the Closing, Seller shall execute and deliver to Buyer the
Xxxx of Sale, Assignment and Assumption Agreement, the Lease Assignment, and
such other deeds, endorsements, assignments and other good and sufficient
instruments of conveyance and transfer as Buyer may request to vest in Buyer all
the right, title and interest of Seller, in, to or under any or all of the
Acquired Assets, free and clear of all Liens other than the Assumed Liabilities.
2.2 Excluded Assets. The purchase of the Acquired Assets by Buyer
and sale of the Acquired Assets by Seller contemplated by this Agreement shall
not include any assets not identified on Schedule 1.2 and shall include, without
limitation:
(a) cash, accounts receivable, notes receivable and bank
accounts, solely to the extent necessary to satisfy the obligations or
liabilities of Seller in connection with Seller's liquidation and dissolution in
accordance with Section 6.2;
(b) corporate entity of Seller, and related corporate minute
book, stock book, tax returns and records;
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(c) insurance policies and proceeds therefrom, except to the
extent that such proceeds are for an Acquired Asset or an Assumed Liability;
(d) the Permits identified on Schedule 4.23 as Permits which
either will not be fully transferable by Seller to Buyer or will be terminated
or become terminable as a result of the transactions contemplated hereby; and
(e) all claims, causes of action and choses in action to the
extent (i) related to any Excluded Asset and necessary for Seller to get the
benefit of such Excluded Asset or (ii) available as a defense, counterclaim,
cross-claim, offset or third-party claim in connection with any Excluded
Liability, to the extent necessary to reduce or eliminate such Excluded
Liability.
Such assets shall be referred to as the "Excluded Assets" and shall not
constitute part of the Acquired Assets for any purpose.
2.3 Liabilities. Effective upon the Closing, the Acquired Assets
shall be conveyed to Buyer free and clear of all Liens other than the Assumed
Liabilities. The parties hereto acknowledge that Buyer is not and will not be a
successor-in-interest to Seller and that Buyer will not assume any Lien or any
liability of Seller whatsoever (whether absolute, accrued, contingent or
otherwise) other than the Assumed Liabilities. Buyer will not be required to
defend any suit or claim arising out of any act or omission of Seller. Effective
upon the Closing, subject to the terms hereof, Buyer shall assume all of the
Assumed Liabilities. All of the Excluded Liabilities shall be retained by and
remain obligations of Seller.
ARTICLE III
PURCHASE PRICE; CLOSING; TERMINATION
3.1 Purchase Price. Buyer shall deliver to Seller at the Closing a
stock certificate registered in Seller's name representing 1,950,000 shares of
Buyer Common Stock (the "Shares").
3.2 Assumption of Liabilities. On and subject to the terms and
conditions of this Agreement, Buyer shall assume and become responsible for all
of the Assumed Liabilities at the Closing. Buyer will not assume or have any
responsibility, however, with respect to any other obligation or liability of
Seller not included within the definition of Assumed Liabilities.
3.3 Closing. The consummation of the purchase and sale of the
Acquired Assets (the "Closing") shall be held at 4:00 p.m. on the second
business day following the satisfaction (or waiver by the party so entitled) of
all of the conditions set forth in Article VIII or at such other date and time
agreed to by the parties, at the offices of Xxxxxx Xxxxx Xxxxxxxx & Xxxxxxx LLP,
000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000. The date and time at which the
Closing actually occurs is hereinafter referred to as the "Closing Date."
3.4 Termination. This Agreement may be terminated:
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(a) by written notice of Buyer or Seller delivered to the
other party, if the Closing has not occurred by May 30, 2003; or
(b) by written notice of Buyer delivered to Seller, if Seller
delivers to Buyer updated Schedules pursuant to Section 4.28 or Section 6.11 and
any of such updated Schedules are not acceptable to Buyer, in Buyer's sole
discretion.
In the event of termination of this Agreement by either Buyer or Seller as
provided in this Agreement, this Agreement shall forthwith become void (except
as set forth in this Section 3.4, in Section 7.8(b) and in Article X and Article
XII, which shall survive the termination) and there shall be no liability on the
part of Buyer or Seller except for any breach of any of their respective
obligations under Section 7.8(b), Article X and Article XII. Notwithstanding the
foregoing, no party hereto shall be relieved from liability for any material
breach of this Agreement.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to and covenants and agrees with
Buyer, subject to disclosures in the Schedules attached hereto, as follows:
4.1 Organization; Qualification and Capital Structure.
(a) Seller is a corporation duly organized, validly existing
and in good standing under the Laws of the State of California and has all
requisite corporate power and authority to conduct the Business as presently
conducted and to own and lease its properties and assets relating to the
Business. Seller was incorporated in the State of California on April 27, 2001.
Seller is qualified to do business as a foreign corporation and is in good
standing in each jurisdiction in which the ownership or lease of property
relating to the Business or the conduct of the Business requires such
qualification.
(b) The authorized capital stock of Seller consists solely of
eighty million (80,000,000) shares of common stock, no par value, of Seller
("Seller Common Stock") and twenty million (20,000,000) shares of preferred
stock, no par value, of Seller. Seller has no outstanding shares of such
preferred stock. Seller has only 2,744,000 shares of Seller Common Stock issued
and outstanding. Except as set forth on Schedule 7.2 and Schedules 7.3A, 7.3B
and 7.3C, there are no outstanding or authorized options, warrants, calls,
rights, commitments, conversion rights or agreements of any character whatsoever
to which Seller is a party, or by which Seller is bound, that could require
Seller to issue, deliver, sell or otherwise transfer or offer to sell or
otherwise transfer or cause to be issued, delivered, sold, transferred or
offered for sale or transfer, any shares of capital stock of Seller or
securities convertible into or exchangeable for shares of capital stock of
Seller, or that could require Seller to grant, extend or enter into any such
option, warrant, call, right, commitment, conversion right or agreement. There
are no voting trusts or other agreements or understandings to which Seller is a
party with
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respect to the transfer, voting or registration of the capital stock of Seller.
No shares of capital stock of Seller were issued in violation of any federal or
state securities laws or in violation of the pre-emptive rights of any Person.
4.2 Authorization. Seller has all requisite power and authority to
execute and deliver this Agreement and the Related Documents to which it is a
party and to perform its obligations hereunder and thereunder. The execution,
delivery and performance of this Agreement and the Related Documents to which
Seller is a party have been duly authorized and approved by all necessary
corporate proceedings on the part of Seller. This Agreement and the Related
Documents to which Seller is a party have been duly executed and delivered by
Seller and (assuming that this Agreement and the Related Documents to which
Buyer is a party have been duly authorized, executed and delivered by Buyer)
constitute legal, valid and binding obligations of Seller, enforceable against
Seller in accordance with their terms, except as such enforceability may be
limited by bankruptcy, insolvency, moratorium or other laws of general
applicability affecting the rights of creditors and by general equitable
principles.
4.3 No Violations or Conflicts. Neither the execution and delivery
of, or performance under, this Agreement or the applicable Related Documents by
Seller nor the consummation by Seller of the transactions contemplated by this
Agreement or the applicable Related Documents does or will (i) violate any
provision of Seller's organizational or governing documents, (ii) result in a
violation or breach of, or constitute a default or an event of default under,
any indenture, mortgage, bond, contract, license, lease, agreement, Permit,
instrument or other obligation to which Seller is a party or by which any of its
properties or any of the Acquired Assets is bound, (iii) violate any Law, writ,
judgment, injunction or court decree to which Seller or its properties is
subject, or (iv) result in the creation or imposition of any Lien on any
Acquired Asset.
4.4 Consents and Approvals. Except as set forth on Schedule 4.4
(collectively, the "Required Consents"), no consent, approval or authorization
of, or declaration, filing or registration with, any United States federal,
state or local governmental or regulatory agency or authority or any foreign
national, state or local agency or authority or any other Person is required to
be made or obtained by Seller in connection with the execution, delivery or
performance of this Agreement or the applicable Related Documents by Seller. All
of the Required Consents have been obtained prior to the Closing Date and are in
full force and effect on such date.
4.5 Financial Statements. Seller has previously delivered to Buyer
unaudited drafts of the Financial Statements and the Interim Financial
Statements, which Financial Statements are attached hereto as Schedule 4.5(a)
and which Interim Financial Statements are attached hereto as Schedule 4.5(b).
Prior to the Closing, the Financial Statements are to be audited, and the
audited Financial Statements will be attached hereto as the final version of
Schedule 4.5(a). The Financial Statements, once audited, will have been prepared
in accordance with GAAP and fairly present, in all material respects, the
financial position and results of operations of Seller as of the dates and for
the periods presented therein, applied on a consistent basis during the periods
concerned except as otherwise noted therein. Prior to the Closing, the Financial
Statements will be audited by PricewaterhouseCoopers LLP.
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4.6 Assets.
(a) Seller has good and marketable title to all of the
Acquired Assets free and clear of any Lien other than Permitted Liens, excepting
leased assets, as to which Seller has good and marketable title to the lease
interest. The Balance Sheet (as of its date) and the applicable portions of this
Agreement accurately and completely describe the Acquired Assets and the Assumed
Liabilities. Upon consummation of the transactions contemplated hereby, Buyer
will have acquired good and marketable title in and to, or, in the case of
assets which are leased or licensed pursuant to Purchased Contracts, a valid
leasehold interest or license in, each of the Acquired Assets, free and clear of
all Liens other than the Assumed Liabilities. The tangible assets and properties
included in the Acquired Assets, taken as a whole, are in good working order,
reasonable wear and tear excepted and are reasonably suitable for the uses for
which they are currently used.
(b) The Acquired Assets constitute all of the assets used in
the Business, other than the Excluded Assets, and are sufficient for the
continued conduct of the Business after the Closing Date in the same manner as
conducted prior to the Closing Date. The Acquired Assets, taken as a whole,
constitute all the properties and assets relating to or used or held for use in
connection with the Business during the past twelve months (except cash disposed
of, accounts receivable collected, prepaid expenses realized, contracts fully
performed and properties or assets replaced by equivalent or superior properties
or assets, in each case in the ordinary course of business or the Excluded
Assets). There are no material assets or properties used primarily in the
operation of the Business and owned by a third party that will not be leased or
licensed to Buyer under current leases or license agreements.
4.7 Intentionally Omitted.
4.8 Undisclosed Liabilities; Solvency. Seller has no liabilities
(whether absolute, accrued, contingent or otherwise), claims, obligations or
other Liens relating to the Business, except as disclosed on the Balance Sheet,
Schedule 1.7(iii) or Schedule 4.8. Seller is not a party to any bankruptcy
proceeding, whether voluntary or involuntary, actual or threatened, and has not
made an assignment of its assets for the benefit of any creditor or otherwise.
After the consummation of the transactions contemplated hereby, Seller will
remain solvent.
4.9 Absence of Certain Changes. Since the date of the Balance Sheet,
Seller has conducted and operated the Business in the ordinary course consistent
with past practice, and except as set forth in Schedule 4.9, there has not
occurred any of the following:
(a) change, or any event or development involving a
prospective change, in the condition (financial or otherwise), results of
operations, assets, liabilities or reserves of the Business, except for changes
which have not had and could not reasonably be expected to have, individually or
in the aggregate, a material adverse effect;
(b) amendment or termination of, or default by Seller or, to
Seller's knowledge, any other party, under any Contract or any destruction,
damage or other loss to any of the material properties or assets of the
Business, whether or not covered by insurance;
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(c) sale, lease, or other disposition of any properties or
assets related to the Business;
(d) purchase, lease or other acquisition of any properties or
assets related to the Business or other capital expenditures related to the
Business or with respect to the Acquired Assets other than in the ordinary
course of business;
(e) increase in the compensation payable or to become payable
to any of the employees or other personnel of Seller except for normal periodic
increases in the ordinary course of business consistent with past practice to
employees or personnel of Seller;
(f) entering into or amendment of any employment agreement
(except in the ordinary course of business consistent with past practice and for
employment agreements substantially similar to Seller's standard-form employment
agreement);
(g) any material adverse change in its relations with any of
the employees or other personnel of Seller, agents or clients of the Business;
(h) any (A) incurrence, assumption or guarantee by Seller of
any debt for borrowed money; (B) issuance or sale of any securities convertible
into or exchangeable for debt securities of Seller; or (C) issuance or sale of
options or other rights to acquire from Seller, directly or indirectly, debt
securities of Seller or any securities convertible into or exchangeable for any
such debt securities;
(i) any creation or assumption by Seller of any mortgage,
pledge, material security interest or lien or other encumbrance on any asset;
(j) any making of any loan, advance or capital contribution to
or investment in any person other than travel loans or advances made in the
ordinary course of business of Seller;
(k) any transfer or grant of any right to use, sell or license
any of its Intellectual Property;
(l) change in accounting methods or principles or cost
allocation procedures that affect the financial statements of the Business; or
(m) any agreement or commitment to take any action described
in this Section 4.9.
4.10 Conduct of Business. Since January 1, 2002, except as noted in
Schedule 4.9, Seller has conducted the operations and affairs only according to
its ordinary and usual course of business, consistent with past practice. No
part of the Business is or has been operated by any Person other than Seller
since acquisition of the Business by Seller.
4.11 Products; Customers. Seller is a development stage company
engaged in the research, development and design of vaccine products for human
and veterinary markets.
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Seller has not commercialized any products, performed any services or solicited
or had any customers or clients, other than for the research services performed
pursuant to the Contracts.
4.12 Contracts and Commitments. Schedule 4.12(a) sets forth a true,
complete and correct list and description of all agreements, oral or written, to
which, as of the Closing Date, Seller is a party or by which Seller is bound
relating to the Business (collectively, the "Contracts"), other than any
Contract that relates solely to an Excluded Asset. Except as set forth on
Schedule 4.12(b), Seller is not in default or breach of any of the Contracts
and, to the best knowledge of Seller, no other party to any of the Contracts is
in default or breach thereof. Seller has delivered to Buyer a true, complete and
correct copy of each written Contract or a summary thereof if an oral Contract.
Seller has not assigned, delegated or otherwise transferred any of its rights or
obligations with respect to any Contract or any Acquired Asset.
4.13 Litigation. There is no, and has been no, civil, criminal or
administrative action, suit, claim, hearing, investigation or proceeding
pending, or to the best knowledge of Seller, threatened, against Seller (or any
Affiliate, director, officer, employee, agent and representative or other
personnel of Seller), relating to the Business or its personnel or clients, in
any court, by any governmental entity, regulatory or administrative agency or
any other Person or before any arbitrator or other tribunal. Seller is not and
has not been subject to any action, order, writ, judgment, injunction or decree
of any court, governmental entity or administrative or regulatory agency
relating to the Business.
4.14 Intellectual Property.
(a) Neither Seller nor its Affiliates has received any notice
of any judicial, administrative or arbitration proceeding instituted against
Seller or its Affiliates, or of any claim or threatened claim by any Person
against any of them alleging that the conduct of the Business infringes any
patent, trademark, trade name, service xxxx, copyright or other property right
of any other Person. The Seller and its Affiliates use, market or sell, nor
proposes to use, market or sell, any product or service that violates or would
violate any Intellectual Property of a third party.
(b) The Seller (i) owns all right, title and interest in and
to the Intellectual Property used or held for use in the Business, free and
clear of all Liens, or (ii) licenses or otherwise possesses legally enforceable
rights to use the Intellectual Property used or held for use in the Business.
Except as disclosed on Schedule 4.14(b), Seller has made all necessary filings
and recordations to protect and maintain its interest in the Intellectual
Property owned or controlled by Seller and its Affiliates.
(c) Schedule 4.14(c) sets forth all agreements, memorandums or
other undertakings that grant licenses, sublicenses or other rights of use of
any Intellectual Property owned by a third party and licensed to Seller or its
Affiliates and used or held for use in the Business (the "Licensed Rights").
Such Licensed Rights are valid and authorized by the terms under which Seller or
its Affiliates licenses or otherwise uses such Licensed Rights. Neither Seller
nor its Affiliates are in default in the payment of any royalties, license fees
or other consideration to any owner or licensor of any Licensed Rights used in
or necessary for the
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conduct of the Business as now conducted and as proposed to be conducted or to
any agent or representative of any such owner or licensor by reason of the use
thereof by Seller or its Affiliates nor otherwise are in default in any material
respect in the performance of any of their obligations to any such owner or
licensor, and no such owner or licensor, nor any such agent or representative,
has notified Seller or its Affiliates of any claim of any such default.
(d) Schedule 4.14(d) sets forth all agreements, memorandums or
other undertakings that grant licenses, sublicenses, or other rights of use of
Intellectual Property or the Licensed Rights granted by Seller and its
Affiliates. To the extent Seller holds or controls any such Licensed Rights,
Seller hereby assign all rights and interest in such Licensed Rights to Buyer
and will execute any necessary documentation associated therewith.
(e) (i) Schedule 4.14(e) contains a true, correct and complete
list of all domestic and foreign Patents owned or controlled by Seller or its
Affiliates; (ii) all Patents are in full force and effect; (iii) all prior art
known to Seller or its Affiliates which may be or may have been pertinent to the
examination of any United States patent or patent application listed on Schedule
4.14(e) has been cited to the United States Patent and Trademark Office; (iv)
all Patents are in compliance with formal legal requirements, are subsisting,
and all maintenance fees, annuities and the like have been paid; (v) except as
set forth on Schedule 4.14(e), none of the Patents has been challenged or
threatened in any way by any Person or to the knowledge of Seller infringed, and
none of the products or technology used, sold or licensed or proposed for use,
sale or license by Seller and its Affiliates infringes or is alleged to infringe
any rights of any Person; and (vi) all products covered by the Patents have been
marked with appropriate patent notices.
(f) (i) Schedule 4.14(f) contains a true, correct and complete
list of all domestic and foreign Marks owned or controlled by Seller or its
Affiliates; (ii) all Marks are in full-force and effect; (iii) all Marks are in
compliance with formal legal requirements, are valid and subsisting, and all
maintenance fees, annuities and the like have been paid; (iv) none of the Marks
is infringed or has been challenged or threatened in any way by any Person, and
none of the Marks infringes or is alleged to infringe any trademarks, service
marks, trade names, or trade dress of any other Person; and (iv) all materials
encompassed by the Marks have been marked with appropriate trademark and
registration notices.
(g) (i) Schedule 4.14(g) contains a true, correct and complete
list of all domestic and foreign Copyrights, and applications and registrations
therefore, owned or controlled by Seller or its Affiliates; (ii) all the
Copyrights owned by Seller or its Affiliates, whether or not registered, are in
compliance with formal legal requirements, are valid and enforceable, and all
maintenance fees, annuities and the like have been paid; (iii) none of the
Copyrights is infringed or has been challenged or threatened in any way, and
none of the subject matter of any of the Copyrights infringes or is alleged to
infringe any copyright of any Person or is derivative work based on the work of
any other Person; and (iv) all works encompassed by the Copyrights have been
marked with appropriate copyright notices.
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(h) (i) Schedule 4.14(h) contains a true, correct and complete
list of all Internet domain names of Seller and its Affiliates (the "Net
Names"); (ii) all Net Names have been registered in the name of Seller or its
Affiliates and are in compliance with all formal legal requirements, except as
noted in Schedule 4.14(h); (iii) no Net Name has been or is now involved in any
dispute, opposition, invalidation or cancellation proceeding, and no such action
has been threatened; (iv) no Net Name is infringed or has been challenged or
threatened in any way, and no Net Name infringes, interferes with or is alleged
to infringe or interfere with the trademark, copyright or domain name of any
other Person, except as noted in Schedule 4.14(h); and (v) to the knowledge of
Seller, there is no domain name application pending of any other Person that
would or potentially would interfere with or infringe any Net Name.
(i) The Seller has taken reasonable precautions to protect the
secrecy, confidentiality and value of its Trade Secrets. With respect to each
Trade Secret, the documentation relating to such Trade Secret is current,
accurate and sufficient in detail and content to identify and explain it and to
allow its full and proper use without reliance on the knowledge or memory of any
individual. The Trade Secrets have not been used, divulged or appropriated
either for the benefit of any Person (other than to Seller and its Affiliates)
or to the detriment of Seller or its Affiliates. None of the Trade Secrets is
subject to any adverse claim or has been challenged or threatened in any way.
4.15 Compliance with Laws. Seller is in compliance with and the
Business has been operated in compliance with Seller's organizational and
governing documents and all Laws, including, without limitation, all
Environmental Laws and all rules of the Securities and Exchange Commission, and
any other governmental entity, regulatory or administrative agency or other
Person which regulates any other services rendered by Seller. Seller has not
received notice from any governmental entity, regulatory or administrative
agency or other Person alleging that it is not in compliance with, or in
violation of, any Law or any such rule.
4.16 Properties. Schedule 4.16(a) sets forth a true, complete and
correct list of all of the real property that is leased or subleased by Seller
and used in the Business. Seller enjoys peaceful and undisturbed possession of
all such properties leased to it, and such properties are free and clear of all
Liens. Seller owns no real property used in the Business. Schedule 4.16(b) sets
forth a true, complete and correct list of all leases of personal property used
by Seller in the conduct of the Business or by which any Acquired Asset is
bound. Seller has good and marketable title to the leasehold interests in all
personal property leased by it for use in the Business free and clear of all
Liens. All property included in the Acquired Assets is in good condition,
ordinary wear and tear excepted.
4.17 Employee Benefit Plans; ERISA.
(a) Schedule 4.17(a) sets forth a true, complete and correct
list of all employee benefit plans, programs, policies and arrangements (the
"Plans") that Seller has maintained on behalf of current or former directors,
officers, employees or other personnel of Seller employed in the Business.
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(b) (i) There has been no prohibited transaction within the
meaning of Section 406 of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA"), or Section 4975 of the Code, with respect to any of the
Plans; (ii) there is no outstanding liability under Title IV of ERISA with
respect to any of the Plans; (iii) none of the Plans has incurred any
"accumulated funding deficiency" (as defined in Section 302 of ERISA and Section
412 of the Code) whether or not waived, as of the last day of the most recent
fiscal year of each of the Plans ended prior to the date of this Agreement; and
(iv) each of the Plans has been operated and administered in all material
respects in accordance with applicable Laws. Seller has no Plans that are
multiemployer plans within the meaning of Section 3(37) of ERISA.
(c) There are no amendments to any Plan that have been adopted
or approved, nor has Seller undertaken to make any such amendments or to adopt
or approve any new Plan, except for changes which Seller may make as part of its
ordinary business practices that affect its employees generally in the same
manner as they affect employees or personnel of the Business.
4.18 Insurance. Schedule 4.18 sets forth a true, complete and
correct list, and a summary description of the coverage provided thereby, of all
liability insurance policies maintained by Seller or any other Person with
respect to the Business or the Acquired Assets. All of such policies are in full
force and effect. All premiums due on such insurance policies have been paid.
There are no pending claims with respect to Seller or the Acquired Assets under
any such insurance policies and there are no claims as to which the insurers
have notified Seller that they intend to deny liability. There is no existing
default under any such insurance policies.
4.19 Records. The books and records of Seller relating to the
Business are true, complete and correct in all material respects and there have
been no transactions involving Seller and the Business which properly should
have been set forth therein and which have not been accurately so set forth.
4.20 Employees and Consultants.
(a) Schedule 4.20(a) contains a complete and accurate list of
all the employees or other personnel of the Business as of the most recent
practicable date, as specified on such list, showing for each employee or other
personnel of the Business (i) the position held and aggregate annual
compensation for Seller's last fiscal year, such employee or other personnel's
service recognized by Seller for purposes of the Plans (including service with
predecessor employers, if applicable, and any prior unbridged service with
Seller), such employees or other personnel's eligible vacation, and any
employment agreement to which such employee or other personnel is a party, (ii)
whether such employees or other personnel is actively at work as of such date,
(iii) if such employee or other personnel is not actively at work as of such
date, the nature of his or her absence (e.g., vacation, illness, short-term
disability or leave of absence under the Family and Medical Leave Act) and his
or her expected or required date of return to active service, and (iv) whether
such employee or other personnel has executed Seller's standard form employment
agreement or any other agreement with Seller or in connection with the Business.
None of the employees or other personnel of the Business is covered by any
union, collective bargaining or other similar labor agreements.
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(b) None of the employees or other personnel of the Business
is covered by any union, collective bargaining or other similar labor agreement,
and Seller is under no obligation to negotiate any such agreement with respect
to any such individuals. As related to the Business, there is not presently
pending or existing, and to Seller's knowledge there is not threatened, (i) any
strike, or material slowdown, picketing work stoppage or other material labor
dispute, or (ii) any application for certification of a collective bargaining
agent. As related to the Business, (A) no labor organization or group of
employees of Seller has made a pending demand for recognition or certification,
and there are and have been no representation or certification proceedings or
petitions seeking a representation proceeding, with the National Labor Relations
Board or any other labor relations tribunal or authority, nor have any such
demands, proceedings or petitions been brought or filed or threatened to be
brought or filed within the past five years, and (B) there have not been at any
time within the last five years, any actual or, to Seller's knowledge, any
threatened organizing activities, strikes, work stoppages, slowdowns, lockouts,
arbitrations, grievances, or other material labor disputes against or involving
Seller.
(c) Seller is in compliance with all applicable Laws
(including any legal obligation to engage in affirmative action), agreements and
contracts relating to employment practices, terms and conditions of employment,
and the employment of former, current, and prospective employees, independent
contractors and "leased employees" (within the meaning of section 414(n) of the
Code) of the Business including all such Laws, agreements and contracts relating
to wages, hours, collective bargaining, employment discrimination, immigration,
disability, civil rights, fair labor standards, occupational safety and health,
workers' compensation, pay equity, wrongful discharge and violation of the
potential rights of such former, current, and prospective employees, independent
contractors and leased employees, and has timely prepared and filed all
appropriate forms (including Immigration and Naturalization Service Form I-9)
required by any relevant governmental authority. Seller is not engaged in any
unfair labor practice.
(d) No notice has been received by Seller of any complaint
filed against Seller claiming that Seller has violated any applicable employment
standards, human rights or other labor Laws or any complaints or proceedings of
any kind involving the Business or, to the knowledge of Seller, against any of
the employees of the Business or threatened to be filed against Seller before
any federal, state, local or foreign agency or labor relations board, including
without limitation the National Labor Relations Board and the Equal Employment
Opportunity Commission. No notice has been received by Seller of the intent of
any federal, state, local or foreign agency responsible for the enforcement of
labor or employment laws to conduct an investigation of Seller, and, to the
knowledge of Seller, no such investigation is in progress.
(e) There are no outstanding orders or charges against Seller
under any occupational health or safety legislation and, to the knowledge of
Seller, none have been threatened. All material levies, assessments and
penalties made against Seller pursuant to all applicable workers compensation
legislation as of the date hereof have been paid by Seller and Seller has not
been reassessed under any such legislation.
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(f) Seller has not made any statements or representations or
distributed any written material to any employees of the Business regarding
continued employment subsequent to the Closing.
(g) Seller represents that it has paid or made provision for
the payment of all amounts of salaries, commissions, bonuses, incentives and
other compensation, all benefits, including without limitation all accrued
vacation time, and all other current liabilities that are payable or required to
be paid to any employees or other personnel of the Business prior to the Closing
or in respect of services rendered to Seller as of the Closing. Buyer shall have
no responsibility or liability to any of Seller's employees, consultants, or
agents for services rendered to Seller at any time, including without limitation
prior to the Closing, regardless of whether such person subsequently becomes
employed by or otherwise associated with Seller.
4.21 Taxes. All Tax Returns required to be filed by or on behalf of
Seller have been timely filed, and all such Tax Returns are complete and
accurate. All Taxes owed by Seller for periods through the Closing Date, whether
or not shown on any Tax Return, have been paid in full. Seller is not currently
the beneficiary of any extension of time within which to file any Tax Return. No
claim has ever been made by any authority in any jurisdiction where Seller does
not file Tax Returns that it is or may be subject to taxation by that
jurisdiction. There are no Liens for Taxes on any of the Acquired Assets. Seller
has withheld and paid all Taxes required to have been withheld and paid in
connection with amounts paid or owing to any third party. Seller has properly
collected and remitted all required sales Taxes. There is no audit, examination,
deficiency, or refund litigation pending or threatened with respect to any Taxes
owed by Seller. All Taxes due with respect to completed and settled examinations
or concluded litigation relating to Seller have been paid in full. Seller has
not executed an extension or waiver of any statute of limitations on the
assessment or collection of any Tax that is currently in effect. No rulings have
been issued by or agreements entered into with any relevant governmental tax
authority with respect to Seller. Seller is not a party to any Tax allocation or
sharing agreement and has no liability for the Taxes of any other Person.
4.22 Relationships with Related Persons. No Affiliate, director,
officer, employee, agent, representative or other personnel of Seller, nor any
spouse or child or other family member of any of them, or any Person associated
with any of them (each of the foregoing, a "Related Person"), has any interest
in any assets or properties used in or pertaining to the Business, except as
disclosed in Schedule 4.22. No Related Person has owned, directly or indirectly,
and whether on an individual, joint or other basis, any equity interest or any
other financial or profit interest in a Person that has (i) had business
dealings with Seller or (ii) engaged in competition with Seller, except as
disclosed in Schedule 4.22. Except with respect to employment and compensation
arrangements with employees in the ordinary course of business which are
otherwise disclosed hereunder, no Related Person is a party to any contract,
agreement or arrangement with, or has any claim or right against, or owes any
amounts to, Seller. All loans, payables and other amounts due to or from a
Related Person and Seller and/or its Affiliates are listed in Schedule 4.22.
4.23 Permits. Schedule 4.23 sets forth a true, complete and correct
list of all approvals, permits, certificates, qualifications, authorizations,
licenses, franchises, consents,
18
orders and registrations of all United States federal, state and local, and all
foreign national, state and local, governmental or regulatory agencies and
authorities and any other governmental entities or other Person which are
necessary for Seller to conduct the Business (collectively the "Permits"). The
Permits are valid and in full force and effect. Except as disclosed on Schedule
4.23, the Permits are fully transferable by Seller to Buyer and none of the
Permits will be terminated or become terminable as a result of the transactions
contemplated hereby.
4.24 Subsidiaries. Seller does not directly or indirectly own nor
has it made any investment in any of the capital stock of, or any other
proprietary interest in, any other Person, other than Plexus Denmark ApS, a
Denmark corporation and wholly-owned subsidiary of Seller, which has no
significant assets, no liabilities and no operations.
4.25 Brokers and Finders. No broker or finder has acted for Seller
or its Affiliates, directors, officers, employees, agents, representatives and
other personnel in connection with this Agreement or any Related Document or the
transactions contemplated hereunder or thereunder and no broker or finder
retained by Seller or its Affiliates, directors, officers, employees, agents,
representatives or other personnel is entitled to any brokerage or finder's fee
with respect to this Agreement or any Related Document or such transactions.
4.26 Disclosure. No representation or warranty by Seller contained
in this Agreement or any Related Document or any statement or certificate
furnished by Seller to Buyer or its representatives in connection herewith or
therewith or pursuant hereto or thereto contains any untrue statement of a
material fact, or omits to state any material fact required to make the
statements herein or therein contained not misleading or necessary in order to
provide a prospective purchaser of the Acquired Assets or the Assumed
Liabilities with adequate information as to Seller and its properties, assets,
liabilities, business, condition and prospects, and Seller has disclosed to
Buyer in writing all material adverse facts known to it relating to the same.
There is no fact (other than matters of a general economic or political nature
which do not affect the Business uniquely) known to Seller which might
reasonably be expected to have a material adverse effect on the properties,
assets, liabilities, business or condition of Seller relating to the Business.
All projections, forecasts and other forward looking information furnished to
Buyer by or on behalf of Seller were prepared in good faith and based upon
reasonable estimates and the facts and circumstances then known to Seller and
nothing has come to the attention of Seller which would cause it to change any
such projections, forecasts or other forward looking information.
4.27 Investment Representations.
(a) Seller is acquiring the Shares for its own account, and not for
any other Person, for investment only and with no intention of distributing or
reselling (and Seller will not distribute or resell) such Shares or any part
thereof or interest therein in any transaction that would violate the
registration requirements of the securities laws of the United States, or any
state or non-U.S. jurisdiction, without prejudice, however, to the rights of
Seller at all times to sell or otherwise dispose of all or any part of its
Shares under an effective registration statement or applicable exemption from
registration under the Securities Act and any applicable state securities law.
Seller has no contract, undertaking, agreement or arrangement with any Person to
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sell, transfer or pledge to such Person its Shares, any interest therein, or any
part thereof, and Seller has no present plans to enter into any such contract,
undertaking, agreement or arrangement. Notwithstanding the foregoing, and as an
exception to the foregoing, and as contemplated by Recital C and Section 6.2,
Seller will distribute the Shares to Seller's stockholders.
(b) Seller is either (i) an accredited investor as that term is
defined in Rule 501 under the Securities Act, or (ii) has, either alone or with
its purchaser representative or representatives as that term is defined in Rule
501 under the Securities Act, such knowledge and experience in financial and
business matters that Seller is capable of evaluating the merits and risks of an
investment in Buyer Common Stock.
(c) Seller understands that the Shares have not yet been registered
under the Securities Act. Seller is fully aware of the restrictions on sale,
transferability and assignment of Shares as set forth in the certificates
representing the Shares referred to in Section 4.27(d) below, and that Seller
must bear the economic risk of Seller's investment for an indefinite period of
time. Seller has no need for any liquidity in its investment for an indefinite
period of time, and is able to bear the economic risk of losing its entire
investment.
(d) Seller agrees that, so long as required by law, certificates
evidencing the Shares and any securities issued in exchange for or in respect
thereof shall bear a legend to the following effect:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE
SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD
OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT AND APPLICABLE STATE SECURITIES
LAWS OR PURSUANT TO AN APPLICABLE EXEMPTION FROM
THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT AND SUCH STATE SECURITIES LAWS."
4.28. Updates to Schedules. Prior to the Closing Date, Seller will
update the Schedules to identify any new information applicable to the foregoing
representations, which updated Schedules will be attached hereto as the final
version thereof; provided, however, that if such updated Schedules are not
acceptable to Buyer, in Buyer's sole discretion, Buyer shall have the right to
terminate this Agreement in accordance with Section 3.4(b).
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ARTICLE V
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to and covenants and agrees with Seller as
follows:
5.1 Organization and Qualification. Buyer is a corporation duly
organized, validly existing and in good standing under the Laws of the State of
Delaware and has all requisite corporate power and authority to conduct its
business as presently conducted and to own and lease its properties and assets.
5.2 Authorization. Buyer has all requisite corporate power and
authority to execute and deliver this Agreement and the Related Documents to
which it is a party and to perform its obligations hereunder and thereunder. The
execution, delivery and performance of this Agreement and the Related Documents
to which Buyer is a party have been duly authorized and approved by all
necessary corporate proceedings on the part of Buyer. This Agreement and the
Related Documents to which Buyer is a party have been duly executed and
delivered by Buyer and (assuming that this Agreement and the Related Documents
to which Seller is a party have been duly authorized, executed and delivered by
Seller) constitute the legal, valid and binding obligations of Buyer,
enforceable against Buyer in accordance with their terms, except as such
enforceability may be limited by bankruptcy, insolvency, moratorium or other
laws of general applicability affecting the rights of creditors and by general
equitable principles.
5.3 No Violations or Conflicts. Neither the execution and delivery
of, or performance under, this Agreement or the applicable Related Documents by
Buyer nor the consummation by it of the transactions contemplated by this
Agreement or the applicable Related Documents does or will (i) violate any
provision of its organizational or governing documents, (ii) result in a
violation or breach of, or constitute a default or an event of default under,
any indenture, mortgage, bond, contract, license, lease, agreement, permit,
instrument or other obligation to which it is a party or by which any of its
assets is bound, or (iii) violate any Law, writ, judgment, injunction or court
decree to which it or its properties is subject.
5.4 Consents and Approvals. No consent, approval or authorization
of, or declaration, filing or registration with, any United States federal,
state or local governmental or regulatory agency or authority or any foreign
national, state or local governmental or regulatory agency or authority is
required to be made or obtained by Buyer in connection with its execution,
delivery or performance of this Agreement or the applicable Related Documents.
5.5 Brokers and Finders. No broker or finder has acted for Buyer or
its Affiliates in connection with this Agreement or any Related Documents or the
transactions contemplated hereunder or thereunder and no broker or finder
retained by Buyer or its Affiliates is entitled to any brokerage or finder's fee
with respect to this Agreement or any Related Documents or such transactions.
5.6 Disclosure. The representations and warranties of Buyer
contained herein, when read together with Buyer's annual report on Form 10-K for
the year ended December 31,
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2002, do not contain any untrue statement of material fact or omit to state a
material fact necessary to make the statements therein, in light of the
circumstances under which they are made, not misleading.
ARTICLE VI
COVENANTS
6.1 Cessation of Business. From and after the Closing, Seller shall
cease to conduct the Business.
6.2 Distribution of the Shares. As soon as practicable after the
Closing, Seller shall distribute the Shares received by it pursuant to Section
3.1(a) to its stockholders in liquidation and dissolution of Seller. Buyer
hereby consents to a transfer of the Shares (and rights under the Registration
Rights Agreement) to Seller's stockholders upon the liquidation and dissolution
of Seller pursuant to this Section 6.2.
6.3 Performance of Excluded Liabilities. Seller shall timely pay or
perform, as applicable, all liabilities and obligations that constitute Excluded
Liabilities prior to its liquidation and dissolution in accordance with Section
6.2.
6.4 Provision of Records. Seller shall arrange as soon as
practicable following the Closing Date, to the extent not previously delivered
in connection with the transactions contemplated herein, for transportation, at
Buyer's cost, to Buyer of the records in the possession of Seller which are part
of the Acquired Assets, including, without limitation, all agreements,
litigation files, filings with governmental agencies relating to the Acquired
Assets and all employment, independent contractor, personnel and payroll records
of any individual employed by or otherwise associated with Seller at the Closing
Date.
6.5 Use of Name. Following the Closing Date, Seller shall not use
any corporate, trade, or service name including the words and marks "Plexus
Vaccines" or any confusingly similar words, other than in connection with
Seller's liquidation and dissolution.
6.6 Receipt of Property Relating to Acquired Assets. If Seller or
any of Seller's Affiliates, or any other Person acting for or in concert with
any of the foregoing Persons, shall receive any money, check, note, draft,
instrument, payment or other property relating to or as proceeds of the Acquired
Assets or the Assumed Liabilities or any part thereof, each such Person shall
receive all such items in trust for, and as the sole and exclusive property of,
Buyer and, immediately upon receipt thereof, shall notify Buyer in writing of
such receipt and shall remit the same (or cause the same to be remitted) in kind
to Buyer in the manner specified by Buyer.
6.7 Mutual Cooperation. After the Closing Date, Seller and Buyer
will use their reasonable efforts to provide to the other party (the "Requesting
Party") such records and information and to make available to the Requesting
Party such employees or other personnel, in each case as may be reasonably
requested in writing by the Requesting Party, for the purpose of
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assisting the Requesting Party in responding to governmental inquiries, making
required governmental filings or defending or prosecuting any action or other
proceeding involving any Person other than the party providing such information
or records or making available such employees or other personnel (the "Providing
Party"); provided, however, that no Providing Party shall be required to (i)
incur any out-of-pocket expenses, (ii) provide information, records or employees
or other personnel under circumstances which the Providing Party believes in its
sole reasonable determination may expose it to liability to any Person or may
prejudice any commercial, legal or other interest of the Providing Party, or
(iii) take any action that in the Providing Party's sole reasonable
determination unreasonably interferes with its business.
6.8 Insurance Tails. Seller may elect, at its discretion, to obtain
such "tail insurance" coverage as Seller deems appropriate.
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6.9 Employment Matters.
(a) Except as provided otherwise in a written agreement,
including, without limitation, the Xxxxxxx Employment Agreement, Buyer shall be
under no obligation to employ or continue to employ any individual for any
period. In addition to Xxxxx Xxxxxxx, it is understood and agreed among the
parties that Buyer will offer employment effective as of the close of business
on the Closing Date to only those other employees of Seller set forth on
Schedule 6.9(a) (the "Employees") in connection with the purchase of the
Acquired Assets, subject to the satisfaction of the conditions set forth in
Buyer's offer letters, including without limitation, Buyer's completion of
background checks and other pre-employment procedures with respect to such
employees and such employees' execution of the relevant documents relative to
such employees' respective positions with Buyer. Buyer's employment of the
Employees shall be on an "at-will" basis and on such other terms and conditions
of employment as Buyer shall offer in its sole discretion. Those Employees who
accept Buyer's offer of employment and who commence working with Buyer shall be
referred to hereinafter as the "Transferred Employees."
(b) With respect to each Transferred Employee, Seller hereby
waives and releases each such individual from any and all contractual, common
law or other restrictions enforceable by Seller on the employment, activities or
other conduct of such individuals after their termination of employment with
Seller (other than the obligation not to disclose confidential information of
Seller and its Affiliates).
(c) Except as set forth on Schedule 1.7(iii), and in Section
7.2, Seller shall be solely responsible for any and all liabilities in respect
of employees and other personnel of the Business, including the Transferred
Employees, and their beneficiaries and dependents, relating to or arising out of
or in connection with (i) the employment or the actual or constructive
termination of employment of any employee of the Business by Seller (including,
without limitation, in connection with the consummation of the transactions
contemplated by this Agreement), (ii) the participation in or accrual of
benefits or compensation under, or the failure to participate in or to accrue
compensation under, any Plan or Plans and (iii) accrued but unpaid salaries,
wages, bonuses, incentive compensation, vacation or sick pay or other
compensation or payroll items (including, without limitation, deferred
compensation). Seller shall be solely responsible for meeting and Buyer shall
have no liability in respect of any obligations under Part 6 of Subtitle B of
Title I of ERISA and Section 4980B of the Code in respect of each of Seller's
employees who incur a "qualifying event" on or before the Closing Date or as a
result of the transactions contemplated hereby.
(d) Except as set forth on Schedule 1.7(iii), and in Section
7.2, all retirement, severance, deferred compensation, incentive, stock option,
vacation, bonus, unemployment, partnership or other payments, distributions or
benefits payable to or accrued in favor of directors, officers, employees,
independent contractors, agents, representatives or other personnel of Seller on
or prior to the Closing Date, whether or not pursuant to any Plans and whether
or not such directors, officers, employees, independent contractors, agents,
representatives or other personnel become employees, personnel, partners or
principals of Buyer, shall be Excluded Liabilities and remain the sole
obligations of Seller. Except as set forth on Schedule 1.7(iii), and in Section
7.2, Buyer shall have no obligation to pay any retirement,
24
severance, deferred compensation, incentive, stock option, vacation, bonus,
unemployment, partnership or other payments, distributions or benefits that the
Employees or any other Person may have accrued up to and including the Closing
Date as a director, officer, employee, independent contractor, agent,
representative or other personnel of Seller or otherwise.
(e) Seller agrees to cause Administaff Companies II, L.P. to
provide coverage to qualified beneficiaries who are already receiving health
and/or dental coverage on the Closing Date under Section 4980B of the Code
(hereinafter "COBRA") to the extent required under COBRA. Seller agrees to cause
Administaff Companies II, L.P. to offer health and/or dental coverage to the
extent required under COBRA to individuals whose qualifying event occurs before
or on the Closing Date. Buyer agrees to offer health and/or dental coverage as
required under COBRA to Transferred Employees whose qualifying event occurs
after the Closing Date to the extent required under COBRA.
6.10 Confidentiality Agreements. Seller or its representatives or
Affiliates have entered into various confidentiality agreements. To the extent
not prohibited thereunder, Seller shall deliver to Buyer copies of any such
agreements. Prior to the Closing, Seller shall not terminate, amend, modify or
supplement, in each case adversely to Buyer's interest, or grant any consent or
waiver under or with respect to, any of such confidentiality agreements without
Buyer's prior written consent. Seller shall, at the request and expense of
Buyer, promptly enforce any remedies against breaches of such confidentiality
agreements to the extent such breaches relate to or affect the Business and
Buyer shall have the right, at its own expense, to participate in any such
enforcement actions.
6.11 Updated Information. If either party becomes aware, prior to
the Closing, of any information which is inconsistent with the information
represented by Seller in this Agreement and the Schedules, the party shall so
inform the other party, and the Schedules shall be updated accordingly and
attached hereto as the final version thereof; provided, however, that if such
updated Schedules are not acceptable to Buyer, in Buyer's sole discretion, Buyer
shall have the right to terminate this Agreement in accordance with Section
3.4(b).
6.12 Conduct of Business Pending the Closing. (a) From the date
hereof through the Closing Date or the earlier termination of this Agreement,
except as may be expressly permitted or contemplated by this Agreement, or the
Schedules attached hereto, or as otherwise agreed to in writing by Buyer, Seller
shall cause the Business to be conducted in the usual, regular and ordinary
course of business, consistent with past practice, and shall use its diligent
efforts to preserve intact the Business, keep available the services of its
employees and preserve its relationships with clients, suppliers, licensees,
licensors, distributors, agents and others having business dealings with the
Business. Without limiting the generality of the foregoing, without the prior
written consent of Buyer, except as expressly permitted or contemplated by this
Agreement, or the Schedules attached hereto, during the period from the date
hereof to the Closing Date or the earlier termination of this Agreement, Seller:
(i) shall not acquire or agree to acquire any business
related to the Business;
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(ii) shall not sell (including by sale-leaseback), lease,
transfer, license (whether on an exclusive or
non-exclusive basis), mortgage or otherwise encumber or
subject to any Lien, any Acquired Assets or interests
therein;
(iii) shall maintain in full force and effect policies of
insurance covering the Business;
(iv) shall not incur or permit the incurrence of any
liability related to the Business that would constitute
an Assumed Liability, other than for accruals in the
ordinary course of business;
(v) shall not enter into or amend any employment, severance,
special pay arrangement with respect to termination of
employment or other arrangement or agreement with any
executive officers, managing directors, directors,
managers or associates;
(vi) shall not increase any salaries or other compensation
payable to any managing directors, directors, managers
or associates except in the ordinary course of business
and consistent with past practice or to any additional
managing directors, directors, managers, employees or
consultants, except in the ordinary course of business
and consistent with past practice;
(vii) shall not adopt, enter into or amend, or become
obligated under, any new, bonus, profit sharing,
compensation, collective bargaining, stock option,
pension, retirement, deferred compensation, health care,
employment or other employee benefit plan, agreement,
trust, fund or arrangement for the benefit or welfare of
any employee or retiree, except as required to comply
with changes in applicable law occurring after the date
hereof;
(viii) shall not enter into any contract, license or other
agreement that contains any provision that, as a result
of the consummation of the transactions contemplated by
this Agreement, would (assuming that the other party's
consent or approval is not obtained, to the extent
required) result in any penalty, additional payments or
forfeiture that would be payable or sufferable by Buyer
at or after the Closing Date;
(ix) shall not make any single new commitment or increase any
single previous commitment for capital expenditures for
the Business in an amount exceeding $10,000;
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(x) shall not accelerate or delay the sale of the services
of the Business, except as may be necessary in the
ordinary course of business in arm's-length third party
transactions;
(xi) shall not sell, assign, transfer, license, abandon or
convey any of the Intellectual Property except in the
ordinary course of business consistent with past
practice in arm's-length third party transactions;
(xii) except as would not adversely affect Buyer, shall not
change any method of Tax accounting, make any material
Tax election, file any Tax Return other than in a manner
consistent with past practice, or settle any material
Tax Claim;
(xiii) shall use reasonable efforts (A) to cause to be
satisfied the conditions set forth in Article VIII which
are under the control of Seller, and (B) shall not take
actions which cause the representations set forth in
Article IV to change in any material adverse way,
subject however as to both (A) and (B), Seller remains
free to make whatever reasonable business decisions
Seller deems to be necessary or appropriate under the
applicable circumstances for the ongoing business
operations and survival of Seller;
(xiv) shall not waive or compromise any material claim or
right or fail to renew any Permit; and
(xv) shall not authorize any of, or commit or agree to take
any of, the foregoing actions.
(b) Seller will promptly advise Buyer in writing of (i) any event
known to Seller which would render any representation or warranty of Seller
contained in this Agreement or any Related Document, if made on or as of the
date of such event or the date of the Closing, untrue or inaccurate in any
respect, (ii) any change, condition or event that has or could reasonably be
expected to have material adverse effect or (iii) any failure of Seller to
comply with or satisfy in any respect any covenant, condition or agreement to be
complied with or satisfied hereunder. Notwithstanding the disclosure to Buyer of
any matter pursuant to this Section 6.12(b), Seller shall not be relieved of any
liability for, nor shall the providing of such information by Seller to Buyer be
deemed a waiver or, (A) the breach of any representation, warranty, covenant or
agreement of Seller contained in this Agreement or any Related Document or (B)
the related indemnification obligations of Seller under Section 10.2.
(c) Seller, on the one hand, and Buyer, on the other hand, will
promptly give notice to the other upon becoming aware that any action is pending
or threatened by or before any governmental authority, in each case with respect
to the transactions contemplated by this Agreement or any Related Document.
Seller, on the other hand, and Buyer, on the other hand,
27
(i) will cooperate with each other in connection with the prosecution,
investigation or defense of any such action, (ii) will supply promptly all
information reasonably and legally requested by the other, by any such
governmental authority or by any party to any such action and (iii) will each
use their reasonable efforts to cause any such action to be determined as
promptly as practicable and in a manner which does not impact adversely on, and
is consistent with, the transactions contemplated by this Agreement and the
Related Documents.
6.13 Cooperation. Subject to compliance with applicable law, from
the date hereof through the Closing Date or the earlier termination of this
Agreement, Seller shall confer on a regular and frequent basis with one or more
representatives of Buyer to report operational matters of materiality and the
general status of ongoing operations of the Business. During the period from the
date hereof to the Closing Date or the earlier termination of this Agreement,
Buyer shall be entitled to have one or more representatives present during the
hours that business is conducted at each of the properties of Seller where the
Business is conducted.
6.14 No Negotiation or Solicitation. From the date hereof through
the Closing Date, Seller will not, and Seller will cause Seller's officers,
directors, employees, representatives and agents not, and will use best efforts
to cause its Affiliates not, to, directly or indirectly, solicit or negotiate
with, or provide any nonpublic information relating to either Seller or afford
access to the properties, books or records of Seller to any third party that may
be considering an acquisition of either the Business or any substantial part of
its assets, or otherwise cooperate in any way with or assist or participate in,
or facilitate or encourage any attempt by any person to do or seek any of the
foregoing. Seller represents and warrants that it is not currently engaged in
any of the foregoing except with Buyer. Seller shall immediately (but in any
event within 24 hours) notify Buyer (i) after receipt of any offer or indication
that any person is considering making an offer for any such acquisition, which
notice shall include the terms and conditions of such offer or indication and
the identity of such person and (ii) upon receipt of any request for nonpublic
information relating to Seller or for access to the properties, books or records
of Seller from any person that may be considering any such acquisition.
6.15 Access to Information. Upon reasonable notice Seller shall
afford to Buyer and its partners, principals, members, stockholders, officers,
directors, employees, accountants, counsel, financial advisors and other
representatives, access during normal business hours throughout the period prior
to the Closing Date, or the earlier termination of this Agreement, to all of the
properties, books and records relating to the Acquired Assets, the Assumed
Liabilities, the Business and all matters pertaining thereto and, during such
period, Seller shall furnish promptly to Buyer all information concerning the
Acquired Assets, the Assumed Liabilities, the Business and all matters
pertaining thereto as Buyer may reasonably request. Seller will provide or cause
to be provided to Buyer, at Buyer's expense, such copies or extracts of
documents and records related to the Acquired Assets, the Assumed Liabilities,
the Business and all matters pertaining thereto as Buyer may reasonably request.
6.16 Consents. Seller shall use its diligent efforts to obtain
consents of all governmental entities and other persons necessary for the
consummation of the transactions contemplated by this Agreement.
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6.17 Consummation of Transaction, Consents, Approvals and Filings.
Subject to the terms and conditions of this Agreement, each of the parties
hereto shall use all reasonable efforts to take, or cause to be taken, all
action and to do, or cause to be done, all things necessary, proper or advisable
under applicable laws and regulations to consummate and make effective the
transactions contemplated by this Agreement, including using reasonable efforts
to obtain all necessary or appropriate waivers, consents and approvals, and
effecting all necessary registrations and filings. Buyer shall make or cause to
be made all filings and submissions under laws and regulations applicable to
Buyer, if any, as may be required for the consummation of the transactions
contemplated by this Agreement. Seller shall make or cause to be made all such
other filings and submissions under laws and regulations applicable to Seller,
if any, as may be required for the consummation of the transactions contemplated
by this Agreement. Buyer, on the one hand, and Seller, on the other, shall
coordinate and cooperate in exchanging such information and reasonable
assistance as may be requested by either of them in connection with the filings
and submissions contemplated by this Section 6.17. Buyer, on the one hand, and
Seller, on the other, shall each promptly provide the other or their respective
counsel with copies of all filings made by such party with any governmental
entity in connection with this Agreement and the transactions contemplated
hereby.
ARTICLE VII
CERTAIN OTHER COVENANTS
7.1 Board of Directors. Effective upon the Closing, the Board of
Directors of Buyer shall consist of the following individuals: five directors
nominated by Buyer and three directors nominated by Seller (namely, Xxxxxxx
Xxxxxx, Xxxxxxx X. Xxxxxx and Xxxxx Xxxxx) and an additional director to be
mutually agreed upon. Effective upon Closing, each of the three directors
nominated by Seller will receive options to purchase 100,000 shares of Buyer
Common stock at an exercise price per share equal to the closing price of one
share of Buyer Common Stock on the Nasdaq SmallCap Market on the Signing Date.
7.2 Issuance of Options. At the Closing, Buyer shall issue options
to purchase an aggregate of 171,250 shares of Buyer Common Stock at an exercise
price per share equal to the average closing price of one share of Buyer Common
Stock on the Nasdaq SmallCap Market on the Signing Date and the two immediately
previous days thereto to the Seller Option Holders pursuant to Option Agreements
(collectively, the "Buyer Options"). The amount of shares underlying each Buyer
Option granted to each Seller Option Holder shall be as set forth on Schedule
7.2. For purposes of clarity, each Seller Option Holder set forth on Schedule
7.2 shall receive a Buyer Option to purchase one share of Buyer Common Stock for
each four shares of Seller Common Stock underlying such Seller Option Holder's
options to purchase shares of Seller Common Stock.
7.3 Issuance of Warrants. At the Closing, Buyer shall issue warrants
to purchase an aggregate of 19,700 shares of Buyer Common Stock at an exercise
price equal to the average closing price of one share of Buyer Common Stock on
the Nasdaq SmallCap Market on
29
the Signing Date and the two immediately previous days thereto to the Seller
Warrant Holders as so listed in Schedule 7.3A and Item 3 of Schedule 7.3C
pursuant to Warrant Agreements (collectively, the "Buyer Warrants"). The amount
of shares underlying each Buyer Warrant granted to each Seller Warrant Holder
shall be as set forth on Schedule 7.3A and Item 3 of Schedule 7.3C. For purposes
of clarity, each Seller Warrant Holder set forth on Schedule 7.3A and Item 3 of
Schedule 7.3C shall receive a Buyer Warrant to purchase one share of Buyer
Common Stock for each four shares of Seller Common Stock underlying such Seller
Warrant Holder's warrants to purchase shares of Seller Common Stock.
7.4 Sales Taxes. Buyer shall pay for any sales tax, if any, imposed
on the sale and transfer of the Acquired Assets pursuant to this Agreement.
7.5 Intentionally Omitted.
7.6 Tax Consequences. It is intended that the Acquisition shall
constitute a reorganization within the meaning of Section 368(a)(1)(C) of the
Code and that this Agreement shall constitute a "plan of reorganization" for the
purposes of Treasury Regulation Section 1.368-1(c). Each party hereto
acknowledges and agrees that it is solely relying on its own representatives and
advisors with regard to the tax consequences of the Acquisition and not on the
representations of any other party hereto, and that such Person assumes its own
tax risk with respect to the characterization of Acquisition as a reorganization
under the Code. Notwithstanding any provision contained herein to the contrary,
each party hereto (and its employees, representatives and other agents) is
permitted to disclose, without limitation of any kind, the tax treatment and tax
structure of the Acquisition, within the meaning of Treasury Regulation section
1.6011-4, and all materials of any kind that are provided to such party relating
to such tax treatment and tax structure.
7.7 Public Statements. The parties shall consult with each other
prior to issuing any press release or making any public announcement with
respect to this Agreement, or the transactions contemplated hereby (including
the financial terms hereunder), and shall not issue any such press release or
public announcement prior to such consultation or to which the other party shall
reasonably object, except as may be required by law or judicial process. Seller
shall not make any statement to, or otherwise communicate (whether orally or in
writing) with, any employee or customer of, or supplier to, Seller, regarding
this Agreement, the transactions contemplated hereby or the conduct of the
Business except for any statement or communication (i) with respect to which
Buyer shall have previously consented or (ii) which shall have been provided to
Seller by Buyer for the express purpose of making a statement to, or otherwise
communicating with, any such employee or customer.
7.8 Proprietary Information, Confidential Records, Intellectual
Property Rights.
(a) Proprietary Information. Seller covenants that it shall
not at any time hereafter, directly or indirectly, use for its own purpose or
for the benefit of any Person other than Buyer at Buyer's request, or disclose,
any proprietary information to any Person, unless such disclosure has been
authorized in writing by Buyer. For purposes of this Agreement,
30
the term "proprietary information" shall include, but is not limited to: (a) the
name and address of any vendor of the Business and any information concerning
the transactions or relations of any vendor with Seller or any of its
Affiliates, directors, officers, employees, agents, representatives or other
personnel; (b) any Intellectual Property, or any information concerning any
Intellectual Property employed by Seller in the Business but not generally known
to its vendors or competitors, or under development by or being tested by Seller
but not at the time offered generally to vendors; (c) any information relating
to business methods, policies or procedures, computer software or systems used
by Seller or Seller's pricing or marketing methods, margins, capital needs or
operating results; (d) any information which is generally regarded as
confidential or proprietary in any business engaged in by Seller in the
Business; (e) any business plans, budgets, advertising or marketing plans
relating to Seller or the Business; (f) any information contained in any written
or oral policies and procedures of Seller used in the Business; (g) any
information belonging to vendors of Seller in the Business or any other Person
which Seller has agreed to hold in confidence in connection with the Business;
(h) proprietary or confidential information of Buyer, including, without
limitation, human resource and employee benefits-related information, made
available to Seller in connection with the evaluation and negotiation of the
transactions contemplated hereby; and (i) all written, graphic and other
material relating to any of the foregoing. Information that is not novel or
copyrighted or patented may nonetheless be proprietary information. The term
"proprietary information" shall not include information generally available to
and known by the public but shall include information which becomes public as a
result of a breach of an obligation of confidentiality by Seller or any of the
Affiliates of Seller.
(b) Confidentiality and Surrender of Records. Seller shall not
at any time directly or indirectly publish, make known or in any fashion
disclose any Confidential Records to, or permit any inspection or copying of
such Confidential Records by, any Person, nor shall Seller retain the same, and
Seller will deliver promptly to Buyer any of the same upon the Closing. For
purposes hereof, "Confidential Records" means all correspondence, memoranda,
files, manuals, books, lists, financial, operating or marketing records,
magnetic tape, or electronic or other media or equipment of any kind which may
be in the possession of Seller or under any of its control or accessible to it
which contain any proprietary information that relates to the Business, the
Acquired Assets or the Assumed Liabilities. All Confidential Records shall be
and remain the sole property of Buyer from and after the Closing.
Notwithstanding the foregoing, Seller may use all of Seller's records and the
information contained therein to prepare Seller's tax returns.
(c) Inventions and Patents. All Intellectual Property,
including without limitation, any methods of operations (including policies,
procedures, products, improvements, software, ideas and discoveries, whether
patentable or copyrightable or not) conceived or made by Seller, either alone or
jointly with others, shall upon the Closing become the sole and exclusive
property of Buyer. Seller will promptly perform all actions reasonably requested
by Buyer to establish and confirm such ownership by Buyer, including, without
limitation, cooperating with and assisting Buyer in obtaining patents,
copyrights, servicemarks and trademarks for Buyer in the United States and in
foreign countries. In the event that Seller fails to take any action requested
by Buyer pursuant to this Section 7.8(c) within ten (10) days of
31
notice from Buyer, Buyer may take such action on behalf of Seller for which
purpose Seller hereby irrevocably appoints Buyer as its attorney-in-fact which
appointment is coupled with an interest. Effective upon the Closing, all right,
title and interest owned or held by Seller or its Affiliates to any and all
Intellectual Property related to or connected with the Business, either alone or
jointly with others, is hereby assigned to and belongs to Buyer.
(d) Certain Permitted Disclosures and Uses. Sections 7.8(a)
and (b) above shall not prevent any disclosure required by law or order of a
court or governmental agency provided that Seller, prior to any such disclosure,
shall give Buyer prompt written notice of any such requirement and shall
cooperate with Buyer in obtaining a protective order or other means of
protecting the confidentiality of all proprietary information and Confidential
Records.
7.9 Further Assurances. At and from time to time following the
Closing, Seller shall, and shall cause its Affiliates, directors, officers,
employees, agents, representatives and other personnel to, execute, deliver,
file and record any and all agreements, instruments, certificates or other
documents and take such other actions as may be reasonably necessary or
desirable to consummate or implement expeditiously the transactions contemplated
by this Agreement. Without limiting any other right or remedy of Buyer, at and
from time to time following the Closing, Seller shall, and shall cause its
Affiliates, directors, officers, employees, agents, representatives and other
personnel, to, in the case of Permits and Purchased Contracts included in the
Acquired Assets (a) which cannot be transferred or assigned effectively without
the consents of other Persons which consents have not been obtained prior to the
Closing, cooperate with Buyer at its request in endeavoring to obtain such
consents promptly, and if any such consent is not obtained, use their
commercially reasonable efforts to secure to Buyer the benefits thereof in some
other manner reasonably acceptable to Buyer or (b) which are otherwise not
transferable or assignable, use their commercially reasonable efforts jointly
with Buyer to secure to Buyer the benefits thereof in some other manner
reasonably acceptable to Buyer.
7.10 Funding. Buyer hereby agrees to use its diligent efforts to
raise at least $750,000 of new equity funding within forty-five (45) days after
the Closing; and Buyer hereby agrees to dedicate, restrict and use at least
$750,000 of its existing funds or new funds to fund the research development and
business operations for the Acquired Assets.
ARTICLE VIII
CONDITIONS
8.1 Conditions to Each Party's Obligations to Effect the
Transactions Contemplated Hereby. The respective obligations of each party 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) No temporary restraining order, preliminary or permanent
injunction or other order or decree by any court of competent jurisdiction which
prevents the consummation of the transactions contemplated hereby or imposes
material conditions with
32
respect thereto shall have been issued and remain in effect (each party agreeing
to use its reasonable efforts to have any such injunction, order or decree
lifted).
(b) No action shall have been taken, and no statute, rule or
regulation shall have been enacted, by any state or Federal government or
governmental agency which would prevent the consummation of the transactions
contemplated by this Agreement or impose material conditions with respect
thereto.
(c) All consents and approvals of governmental entities
legally required for the consummation of the transactions contemplated by this
Agreement shall have been obtained and be in effect at the Closing Date, except
those for which failure to obtain such consents and approvals would not,
individually or in the aggregate, have a material adverse effect or materially
impair the ability of any party to this Agreement to consummate the transactions
contemplated by this Agreement.
(d) Each party shall have conducted a due diligence
investigation and review of such factual, legal, accounting, environmental,
health and safety, structural, tax and other due diligence that such party deems
relevant, in such party's sole and absolute discretion, for the consummation of
the transactions contemplated hereby, and the results of such investigation and
review shall be satisfactory to such party in its sole and absolute discretion.
8.2 Conditions to Obligations of Seller to Effect the Transactions
Contemplated Hereby. The obligations of Seller to effect the transactions
contemplated by this Agreement shall be subject to the fulfillment at or prior
to the Closing Date of the following additional conditions, any of which may be
waived by Seller in its sole discretion:
(a) Buyer shall have performed all obligations required to be
performed by it under this Agreement at or prior to the Closing Date, and the
representations and warranties of Buyer contained in this Agreement shall be
true and correct on and as of the Signing Date and the Closing Date, except to
the extent that any such representation or warranty expressly relates to another
date (in which case, as of such date) and Seller shall have received a
certificate signed on behalf of Buyer by an executive officer of Buyer, to such
effect;
(b) Seller shall have received a stock certificate registered
in Seller's name representing the Shares;
(c) Seller shall have received the Assignment and Assumption
Agreement, duly executed by Buyer;
(d) Seller shall have received the Registration Rights
Agreement, duly executed by Buyer;
(e) Seller shall have received the Lease Assignment, duly
executed by Buyer;
33
(f) Xxxxx Xxxxxxx and Buyer shall have entered into the
Xxxxxxx Employment Agreement;
(g) Buyer shall have issued and delivered the Buyer Options
and the Buyer Warrants as specified on Schedule 7.2 and Schedule 7.3A and Item 3
of Schedule 7.3C;
(h) Buyer shall have made offers of employment to the
employees listed on Schedule 6.9(a);
(i) Seller shall have received approval from more than 50% of
Seller's outstanding shares for the sale of assets specified in this Agreement;
and
(j) Seller shall have received all such other documents and
instruments as Seller may reasonably request or as may be otherwise necessary or
desirable to evidence and effect the assumption by Buyer of the Assumed
Liabilities, duly executed by Buyer.
8.3 Conditions to Obligations of Buyer to Effect the Transactions
Contemplated Hereby. The obligations of Buyer to effect the transactions
contemplated by this Agreement shall be subject to the fulfillment at or prior
to the Closing Date of the following additional conditions, any of which may be
waived by Buyer in its sole discretion:
(a) Seller shall have performed all obligations required to be
performed by it under this Agreement at or prior to the Closing Date, and the
representations and warranties of Seller contained in this Agreement shall be
true and correct in on and as of the Closing Date, except to the extent that any
such representation or warranty expressly relates to another date (in which
case, as of such date) and Buyer shall have received an Officer's Certificate
signed on behalf of Seller by an executive officer of Seller, to such effect;
(b) The consent or approval of each third party whose consent
or approval shall be required in connection with the transactions contemplated
hereby under any Purchased Contract included in the Acquired Assets shall have
been obtained;
(c) Buyer shall have received the Xxxx of Sale duly executed
and delivered by Seller;
(d) Buyer shall have received the Assignment and Assumption
Agreement, duly executed by Seller;
(e) Buyer shall have received the Secretary's Certificate,
duly executed by the secretary of Seller;
(f) Buyer shall have received the Registration Rights
Agreement, duly executed by Seller;
(g) Seller shall have received approval from more than 50% of
Seller's outstanding shares for the sale of assets specified in this Agreement;
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(h) Xxxxx Xxxxxxx and Buyer shall have entered into the
Xxxxxxx Employment Agreement;
(i) Each person listed on Schedule 6.9(a) shall have accepted
an offer of employment from Buyer;
(j) Seller shall have obtained all Required Consents;
(k) Buyer shall have received an Investor Questionnaire, duly
executed by each stockholder of Seller;
(l) Seller shall have caused the issuance or transfer of the
Permits of Seller to Buyer in form and substance the same as the Permits which
were held by Seller, and Seller shall have given and made all required notices
and reports to the appropriate governmental bodies and Persons with respect to
the Permits that may be necessary for the sale and purchase of the Business and
the ownership, operation and use of the Acquired Assets by Buyer after the
Closing Date;
(m) Buyer shall have received the audited Financial
Statements;
(n) Buyer shall have received the Lease Assignment, duly
executed by Seller;
(o) Each of the Seller Warrant Holders identified on Schedule
7.3B and in Items 1 and 2 of Schedule 7.3C shall have exercised his or her
warrants to purchase shares of Seller Common Stock and shall have converted the
notes identified on Schedule 7.3B into shares of Seller Common Stock.
(p) Seller shall have delivered estoppel certificates, in form
satisfactory to Buyer and its counsel, from the lessor, and any sublessor, with
respect to each Lease, to the extent required under the Leases; and
(q) Buyer shall have received all such other bills of sale,
assignments and other instruments of assignment, transfer or conveyance as Buyer
may reasonably request or as may be otherwise necessary or desirable to evidence
and effect the sale, transfer, assignment, conveyance and delivery of the
Acquired Assets to Buyer and to put Buyer in actual possession or control of the
Acquired Assets, duly executed by Seller.
ARTICLE IX
GENERAL PROVISIONS
9.1 Notices. All notices, consents and other communications given or
made pursuant to this Agreement shall be in writing and shall be (i) sent by
registered or certified mail, return receipt requested, (ii) hand delivered or
(iii) sent by prepaid overnight carrier, with a
35
record of receipt, to the parties at the following addresses (or at such other
addresses as shall be specified by the parties by like notice):
(a) if to Buyer:
SIGA Technologies, Inc.
000 Xxxxxxxxx Xxxxxx, Xxxxx 000
Xxx Xxxx, Xxx Xxxx 00000
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
Attention: Xxxxxx Xxxxxxxx
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with a copy to:
Xxxxxx Xxxxx Xxxxxxxx & Xxxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
Attention: Xxxxx X. Xxxxxx, Esq.
(b) if to Seller:
Plexus Vaccine Inc.
00000 Xxxxxxxx Xxxxx Xxxxx
Xxxxx 000-X
Xxx Xxxxx, XX 00000
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
Attention: Xxxxx Xxxxxxx
with a copy to:
Xxxx Xxxx Xxxx & Freidenrich
0000 Xxxxxxxxx Xxxxx, Xxxxx 0000
Xxx Xxxxx, XX 00000-0000
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
Attention: Xxxx Xxxx, Esq.
Each notice or communication shall be deemed to have been given on the date
received.
9.2 Construction. Unless the context clearly indicates otherwise,
words denoting the male, female or neuter gender shall include all genders, and
words denoting the singular shall include the plural and vice versa. The
headings contained in this Agreement are for reference purposes only and shall
not affect in any way the meaning or interpretation of this Agreement.
9.3 Entire Agreement. This Agreement together with the Related
Documents constitutes the entire agreement between the parties and supersedes
all other prior agreements and understandings, both written and oral, among the
parties, or any of them, with respect to the subject matter hereof.
9.4 Binding Effects. This Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective successors, heirs,
personal representatives, executors and permitted assigns and is not intended to
confer upon any other Person (including,
37
without limitation, any directors, officers, partners, members, principals,
managers, employees, independent contractors, consultants, agents,
representatives or other personnel of Seller), any rights or remedies hereunder,
9.5 Governing Law; Jurisdiction; Venue. This Agreement shall be
governed, including, without limitation, as to validity, interpretation and
effect, by the internal Laws of the State of New York, without regard to the
principles of conflicts of laws. Each of the parties hereto irrevocably submits
to the jurisdiction of any California or New York state or federal court in
respect of any suit or proceeding related to or arising out of this Agreement.
Each party hereto also hereby irrevocably waives any objection to the laying of
the venue of any such suit or proceeding in any such court and further waives
any claim that any such suit or proceeding brought in any such court has been
brought in an inconvenient forum. In addition to any other form of service of
process authorized by law, service of process in any suit or proceeding
hereunder shall be sufficient if mailed to each party hereto at the address
specified in Section 9.1, and such service shall constitute "personal service"
for purposes of such suit or proceeding.
9.6 Ambiguity. Each party hereto acknowledges that it has been
advised and represented by counsel in the negotiation, execution and delivery of
this Agreement and accordingly agrees that if an ambiguity exists with respect
to any provision of this Agreement, such provision shall not be construed
against the party because such party or its representatives drafted such
provision.
9.7 Rights and Remedies. The rights and remedies provided for in
this Agreement are not exclusive, but are in addition to all other rights and
remedies at law, in equity or otherwise.
9.8 Counterparts; Facsimiles. This Agreement may be executed in two
or more counterparts, each of which shall be an original and all of which
together shall constitute a single agreement. A party may transmit its signed
copies of this Agreement and the Related Documents by facsimile, and such
transmission shall be valid delivery of the signed Agreement and Related
Documents, respectively.
9.9 Assignment. Neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by any of the parties
hereto without the prior written consent of Buyer, on the one hand, and Seller,
on the other, except, in the case of Buyer, (i) to an Affiliate or an entity
that succeeds to all or a substantial part of the Acquired Assets or one or more
of its subsidiaries, and (ii) after the Closing, to a purchaser of substantially
all of the Business or the Acquired Assets. No party shall be relieved of any
liability arising hereunder in respect of any assignment pursuant to this
Section, unless such assignor has received a written release expressly excepting
such assignor from any liability that may arise hereunder. Seller may transfer
and assign the Shares and the Registration Rights Agreement to Seller's
stockholders in connection with its liquidation and dissolution pursuant to
Section 6.2.
9.10 Waiver; Amendment. No waiver of any term, condition or
obligation of this Agreement shall be valid unless in writing and signed by the
waiving party. No failure or delay by any party hereto at any time to require
the other parties hereto to perform strictly in
38
accordance with the terms hereof shall preclude any party from requiring
performance by the other parties hereto at any later time. No waiver of any one
or several of the terms, conditions or obligations of this Agreement, and no
partial waiver thereof, shall be construed as a waiver of any of the other
terms, conditions or obligations of this Agreement. This Agreement may not be
amended, changed or modified in any fashion except by written instrument signed
by Buyer and Seller.
9.11 Fees and Expenses. All fees, costs and expenses incurred in
connection with the preparation, negotiation, execution, delivery or performance
of this Agreement, the Related Documents and the transactions contemplated
hereby or thereby shall be the responsibility of and paid by the party incurring
such fees, costs or expenses, except for expenses set forth on Schedule
1.7(iii), which are assumed by Buyer pursuant to this Agreement. Further, all
fees and charges of PricewaterhouseCoopers LLP incurred in connection with this
Agreement shall be paid by Buyer. Seller shall bear and pay all U.S. Federal,
state and local Taxes that arise out of or as a result of the consummation of
this Agreement or the transactions contemplated hereby, except for sales tax (if
any) which is to be paid by Buyer pursuant to Section 7.4. In addition, Seller
agrees to indemnify and hold Buyer harmless from and against any and all Losses
incurred or suffered by Buyer as a result of any failure by Seller to comply
with any "bulk sales," "bulk transfer" or similar Laws.
9.12 Public Announcements. No public announcement or similar
publicity with respect to this Agreement, the Related Documents or the
transactions contemplated hereby or thereby will be issued by any Person
including, without limitation, any party hereto, without the prior written
consent of Buyer; provided, however, that Buyer and Seller shall each be
permitted, upon prior notice to the other party, to make such disclosures to the
public or governmental authorities as their respective counsel shall deem
necessary to maintain compliance with, or to prevent violation of, applicable
Laws.
9.13 Severability. If any provision of this Agreement, including,
without limitation, Article VII or any part thereof, or the application of any
such provision to any Person or circumstances shall be determined by any court
of competent jurisdiction to be invalid or unenforceable to any extent, the
remainder of this Agreement, or the application of such provision to such Person
or circumstances other than those to which it is so determined to be invalid or
unenforceable, shall not be affected thereby, and each provision hereof shall be
enforced to the fullest extent permitted by law. If any provision of this
Agreement, including, without limitation, Article VII, or any part thereof, is
held to be invalid or unenforceable because of the scope or duration of or the
area covered by such provision, the parties hereto agree that the court making
such determination shall reduce the scope, duration and/or area of such
provision (and shall substitute appropriate provisions for any such invalid or
unenforceable provisions) in order to make such provision enforceable to the
fullest extent permitted by law and/or shall delete specific words and phrases,
and such modified provision shall then be enforceable and shall be enforced.
9.14 Waiver of Right to Trial by Jury. EACH PARTY HEREBY IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE
TO A TRIAL BY JURY IN RESPECT OF ANY SUIT,
39
ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY RELATED DOCUMENT.
IN WITNESS WHEREOF, each party hereto has duly executed this
Agreement as of the date first above written.
PLEXUS VACCINES INC.
By: /s/ Xxxxx X. Xxxxxxx
------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: President and Chief Executive
Officer
SIGA TECHNOLOGIES, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Acting Chief Executive
Officer and Chief Financial
Officer
40
