Exhibit 2.3
AGREEMENT
by and among
VIMRx PHARMACEUTICALS INC.
and
INNOVIR LABORATORIES, INC.
Dated: November 21, 1996
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TABLE OF CONTENTS
Page
AGREEMENT ............................................................1
ARTICLE 1 EXCHANGE ................................................1
1.1 Exchange.............................................1
ARTICLE 2 REPRESENTATIONS AND WARRANTIES OF VIMRx ................2
2.1 Organization and Authority...........................2
2.2 Capitalization.......................................2
2.3 Subsidiaries....................................... 2
2.4 Articles of Incorporation, By-Laws and
Corporate Records................................. 2
2.5 Governmental Authorizations and Other Consents..... 3
2.6 Non-Contravention.................................. 3
2.7 Financial Statements............................... 3
2.8 Tangible Property.................................. 4
2.9 Real Property and Leases........................... 4
2.10 Intellectual Property.............................. 4
2.11 Tax Matters........................................ 4
2.12 Compliance with Laws............................... 5
2.13 Permits and Licenses............................... 5
2.14 Contracts and Agreements........................... 5
2.15 Employee Benefits.................................. 5
2.16 Accounts Payable................................... 6
2.17 Liabilities........................................ 6
2.18 Actions and Proceedings............................ 6
2.19 Bank Accounts, Guarantees and Powers............... 6
2.20 Absence of Changes................................. 6
2.21 Employee Relations................................. 7
2.22 Affiliated Transactions............................ 7
2.23 Brokers' Fees...................................... 8
2.24 Full Disclosure.................................... 8
2.25 Employee Compensation.............................. 8
2.26 Authority.......................................... 8
2.27 Title to the VHL Shares............................ 8
2.28 Examination of Documents, Investment Purposes and
Legending of Innovir Shares and Innovir Warrants.. 8
2.29 Insurance.......................................... 9
2.30 Environmental...................................... 9
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ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF INNOVIR.......... 9
3.1 Organization....................................... 9
3.2 Authority and Consent.............................. 10
3.3 Non-Contravention.................................. 10
3.4 Capitalization..................................... 10
3.5 Intellectual Property.............................. 10
3.6 Actions and Proceedings............................ 11
3.7 Absence of Changes................................. 11
3.8 The Innovir Shares................................. 11
3.9 The Innovir Warrants............................... 12
3.11 Documents Delivered................................ 12
ARTICLE 4 CONDUCT PENDING CLOSING BY VHL AND
THE SUBSIDIARIES ................................. 12
4.1 Conduct of Business................................ 12
4.2 Certain Prohibited Activities...................... 13
4.3 Reports; Taxes; Etc................................ 13
4.4 Access to Information.............................. 13
4.5 Further Assurances................................. 14
4.6 Tax Adjustments.................................... 14
4.7 Governmental Notification and Approvals............ 14
ARTICLE 5 CONDUCT PENDING CLOSING BY INNOVIR ................ 14
5.1 Conduct of Business................................ 14
5.2 Certain Prohibited Activities...................... 14
5.3 Reports; Taxes; Etc................................ 15
5.4 Access to Information.............................. 15
5.5 Further Assurances................................. 15
5.6 Tax Adjustments.................................... 16
5.7 Governmental Notification and Approvals............ 16
ARTICLE 6 COVENANTS OF VIMRx AND INNOVIR..................... 16
6.1 Necessary Assurances............................... 16
6.2 Filings and Consents............................... 16
6.3 Government Filings................................. 16
6.4 Public Announcements............................... 17
6.5 Confidentiality.................................... 17
6.6 Expenses........................................... 17
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ARTICLE 7 ADDITIONAL COVENANTS............................... 17
7.1 VIMRx Covenants.................................... 17
7.2 Innovir Covenant................................... 17
ARTICLE 8 CONDITIONS TO CLOSING.............................. 18
8.1 Conditions to Obligations of Innovir............... 18
8.2 Conditions to Obligations of VIMRx................. 19
ARTICLE 9 CLOSING............................................ 19
9.1 Closing Date....................................... 19
9.2 Deliveries by VIMRx................................ 20
9.3 Deliveries by Innovir.............................. 20
ARTICLE 10 SURVIVAL................................................ 21
10.1 Survival........................................... 21
ARTICLE 11 INDEMNIFICATION......................................... 21
11.1 Indemnification.................................... 21
11.2 Access............................................. 22
ARTICLE 12 MISCELLANEOUS PROVISIONS................................ 22
12.1 Amendment and Modification......................... 22
12.2 Waiver of Compliance............................... 22
12.3 Notices............................................ 22
12.4 Assignment......................................... 23
12.5 Third Parties...................................... 24
12.6 Governing Law...................................... 24
12.7 Counterparts....................................... 24
12.8 Headings........................................... 24
12.9 Entire Agreement................................... 24
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AGREEMENT
AGREEMENT (the "Agreement") made this 21st day of November, 1996 by and
among VIMRx Pharmaceuticals Inc., a Delaware corporation with offices at ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("VIMRx"), and Innovir
Laboratories, Inc., a Delaware corporation with offices at ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ("Innovir").
R E C I T A L S
WHEREAS, Innovir is desirous of acquiring all of the issued and outstanding
shares of the capital stock of VIMRx Holdings, Ltd., a Delaware corporation
("VHL") consisting of 12,000 shares of common stock, $.01 par value (the "VHL
Shares"), solely in exchange for 8,666,6661 shares of Innovir's Class D
Convertible Preferred Stock, par value $.06 per share (the "Innovir Shares") and
five-year warrants to purchase 1,000,000 shares of Innovir's Common Stock at
$1.00 per share and 1,000,000 shares at $2.00 per share (the "Innovir
Warrants"); and
WHEREAS, VIMRx is the owner of the VHL Shares and is desirous of exchanging
the VHL Shares for the Innovir Shares and has agreed to cause VHL to advance
$1,000,000 to Innovir concurrent with the signing of this Agreement;
NOW, THEREFORE, Innovir and VIMRx hereby agree as follows:
ARTICLE 1
EXCHANGE
1.1 Exchange. Subject to the terms and conditions of this Agreement and in
reliance upon the representations, warranties and covenants herein contained, on
the date of closing specified in Section 9.1 (the "Closing Date"), VIMRx hereby
agrees to assign, transfer and deliver the VHL Shares to Innovir or its designee
and, in exchange therefor, Innovir hereby agrees to issue and deliver the
Innovir Shares and the Innovir Warrants to VIMRx.
----------
1 The number of Innovir Shares were calculated valuing VHL at
$13,000,000 following an additional $3,000,000 cash infusion to be made prior to
closing, divided by $1.50, the per share value attributed to the Innovir Shares.
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ARTICLE 2
REPRESENTATIONS AND WARRANTIES OF VIMRx
VIMRx represents and warrants to Innovir that:
2.1 Organization and Authority. VHL is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware,
has all requisite corporate power and authority to own, lease and operate its
properties and carry on its business as now conducted, and is not required to be
qualified as a foreign corporation in any other jurisdiction.
2.2 Capitalization. The authorized capital stock of VHL consists of 120,000
shares of common stock, $.01 par value. The VHL Shares have been duly authorized
and are validly issued, fully paid and nonassessable, constitute the only shares
of VHL outstanding and there are no outstanding rights, subscriptions, warrants,
calls, preemptive rights, options or other agreements or commitments of any kind
or character to purchase or otherwise to acquire from VHL any shares of its
capital stock or any other security, and no security or obligation of any kind
convertible into the capital stock or other security of VHL exists in favor of
any person, corporation, partnership, trust, incorporated or unincorporated
association, joint venture, joint stock company, government (or any agency or
political subdivision thereof) or other entity of any kind ("Person").
2.3 Subsidiaries. VPI (UK) Ltd., incorporated in England, VPI Gesellschaft
fur die Entwicklung und Synthese von Oligomeren mbH, organized in Germany, and
Ribonetics GmbH Gesellschaft fur molekulare Therapie, organized in Germany, are
wholly-owned subsidiaries of VHL (collectively, the "Subsidiaries" and
individually, a "Subsidiary") and the only subsidiaries of VHL. Each Subsidiary
has been duly organized and is validly existing and in good standing under the
laws of its respective jurisdiction of organization, with full corporate power
and authority to own, lease and operate its respective properties, no Subsidiary
is required to qualify to do business in the United States, and there are no
outstanding rights, subscriptions, warrants, calls, preemptive rights, options
or other agreements or commitments of any kind or character to purchase or
otherwise to acquire from any Subsidiary any shares of its capital stock or any
other security, and no security or obligation of any kind convertible into the
capital stock or other security of any Subsidiary exists in favor of any Person.
2.4 Articles of Incorporation, By-Laws and Corporate Records. The copies of
the Certificate of Incorporation, By-Laws, stock transfer, minute books and
corporate records of VHL and the copies of the Memorandum of Association and/or
organizational documents of each Subsidiary, which have been made available to
Innovir, are true and correct copies.
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2.5 Governmental Authorizations and Other Consents. Except as set forth on
Schedule 2.5, no consent, order, license, approval or authorization of, or
exemption by, or registration or declaration or filing with, any governmental
authority, bureau or agency, and no consent or approval of any other Person, is
required to be obtained or made in connection with the performance by VIMRx
and/or VHL or any Subsidiary of this Agreement or the consummation of the
transactions contemplated to be performed by each of them hereunder.
2.6 Non-Contravention. Except as set forth on Schedule 2.6, the performance
of this Agreement will not (i) violate any provision of the Certificate of
Incorporation or By-Laws of VIMRx or VHL or the equivalent organizational
documents of any Subsidiary; (ii) violate, conflict with or result in the breach
or termination of, or constitute an amendment to, or otherwise give any Person
the right to terminate, or constitute (or with notice or lapse of time or both
would constitute) a default (by way of substitution, novation or otherwise)
under the terms of, any contract, mortgage, lease, bond, indenture, agreement,
franchise or other instrument or obligation to which VHL or any Subsidiary is a
party or by which VHL or any Subsidiary or any of their respective assets or
properties are bound or affected; (iii) result in the creation of any lien,
mortgage, claim, charge, security interest, encumbrance, restriction or
limitation (collectively, "Liens") upon the properties or assets of VHL or any
Subsidiary pursuant to the terms of any contract, mortgage, lease, bond,
indenture, agreement, franchise or other instrument or obligation; (iv) violate
any judgment, order, injunction, decree or award of any court, arbitrator,
administrative agency or governmental or regulatory body against, or binding
upon, VHL or any Subsidiary or any of their respective securities, properties,
assets or business; (v) constitute a violation by VHL or any Subsidiary of any
statute, law, rule or regulation of any jurisdiction as such statute, law, rule
or regulation relates to VHL or any Subsidiary or to any of their respective
securities, properties, assets or business; or (vi) violate any Permit (as
defined in Section 2.14).
2.7 Financial Statements. The unaudited balance sheet of VHL and its
Subsidiaries as at September 30, 1996 (the "September 30, 1996 Balance Sheet")
and the related unaudited statement of income for the nine months then ended
(together with the September 30, 1996 Balance Sheet, the "September 30, 1996
Financial Statements"), together with the balance sheet of VHL and its
Subsidiaries as at December 31, 1995 (the "December 31, 1995 Balance Sheet") and
the related statements of income, capital and cash flows for each of the years
from inception through December 31, 1995 audited by independent certified public
accountants (the "Audited Financial Statements") to be delivered to Innovir
prior to the Closing Date will be prepared in accordance with generally accepted
accounting principles ("GAAP") consistently applied, be true and correct and
present fairly the financial condition and the results of operations and cash
flows of VHL and its Subsidiaries as at the respective dates and for the
respective periods covered thereby.
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2.8 Tangible Property. VHL and the Subsidiaries have good and marketable
title to all of the assets reflected on the September 30, 1996 Balance Sheet,
free and clear of all Liens, except for those assets leased under leases listed
on Schedule 2.8.
Real Property and Leases. (a) VHL and the Subsidiaries own no real property.
(b) Schedule 2.9(b) sets forth a true and correct list of all
leases, subleases or other agreements under which VHL or any
Subsidiary is lessee or lessor of any real property or has any
interest in real property and, except as set forth in Schedule 2.9(b),
there are no rights or options held by VHL or any Subsidiary or any
contractual obligations to purchase or otherwise acquire (including by
way of lease or sublease) any interest in or use of any real property,
nor any rights or options granted by VHL or any Subsidiary, or any
contractual obligations to sell or otherwise dispose of (including by
way of lease or sublease) any interest in or use of any real property.
All such leases, subleases and other agreements are in full force and
effect and constitute legal, valid and binding obligations of the
respective parties thereto, with no existing or claimed default or
event of default, or event which with notice or lapse of time or both
would constitute a default or event of default, by VHL, any Subsidiary
or, to the knowledge of VIMRx, by any other party thereto, which would
materially and adversely affect VHL or any Subsidiary, and grant the
leasehold estates or other interests they purport to grant with the
right to quiet possession. VHL and the Subsidiaries are not in
violation of any building, zoning, health, safety, environmental or
other law, rule or regulation and no notice from any Person has been
served upon VHL or any Subsidiary claiming any such violation.
2.10 Intellectual Property. Schedule 2.10 sets forth (i) all trademarks,
trade names, trade secrets, patents, inventions, processes, copyrights,
copyright rights or other intellectual property rights (or applications
therefor) used by VHL and the Subsidiaries in connection with their respective
business, (ii) whether such property is owned, licensed or leased, and (iii) a
summary of the terms of the license or lease. VHL has not made any commercial
sale of synthetic catalytic oligonucleotides in the United States through the
date hereof.
2.11 Tax Matters. VHL and the Subsidiaries have timely filed all applicable
tax returns, estimates and reports (collectively, "Returns") required to be
filed by them through the date hereof, copies of which have been delivered to
Innovir, which Returns accurately reflect the taxes, if any, due for the periods
indicated, and have paid in full all income, gross receipts, value added,
excise, property, franchise, sales, use, employment, payroll and other taxes of
any kind whatsoever (collectively, "Taxes") shown to be due by such Returns, and
have established adequate reserves with respect to any liabilities for Taxes
accrued through December 31, 1995 which are reflected on the December 31, 1995
Balance Sheet and VIMRx has no knowledge of any unassessed deficiency for Taxes
proposed or threatened against VHL and the Subsidiaries, and no taxing authority
has raised any issue which, if adversely determined, would result in a liability
for any Tax which has not been reserved against on the December 31, 1995 Balance
Sheet. No extensions with respect to the dates on which any Return was or is due
to be filed by VHL or any Subsidiary nor any waivers or agreements by VHL and
32
the Subsidiaries for the extension of time for the assessment or payment of any
Taxes are in force. Neither VHL nor any Subsidiary has been, nor currently is
being, audited by any tax authority.
2.12 Compliance with Laws. VHL and the Subsidiaries are not in violation of
any applicable law, rule or regulation, the violation of which could materially
and adversely affect their assets, properties, liabilities, business, results of
operations, condition (financial or otherwise) or prospects, nor does VIMRx know
of the enactment, promulgation or adoption of any such law, rule or regulation
which is not yet effective.
2.13 Permits and Licenses. Except as set forth on Schedule 2.13, VHL and
the Subsidiaries have duly obtained and hold in full force and effect all
consents, authorizations, permits, licenses, orders or approvals of, and has
made all declarations and filings with, all federal, state or local governmental
or regulatory bodies that are material or necessary in the conduct of their
respective business (collectively, the "Permits"); all the Permits were duly
obtained and are in full force and effect; no violations are or have been
recorded in respect of any such Permit and no proceeding is pending or
threatened to revoke, deny or limit any such Permit.
2.14 Contracts and Agreements. Schedule 2.14 lists and briefly describes
all written or oral contracts, agreements, leases, mortgages and commitments to
which VHL or any Subsidiary is a party/or by which any of them may be bound
involving in excess of $25,000, including, without limitation, all collaboration
agreements, management agreements, joint venture agreements, leases, guarantees
and indemnifications, employment and consulting agreements and instruments of
indebtedness (individually, a "Contract" and, collectively, "Contracts"), true
and correct copies of which have been made available to Innovir. All Contracts
constitute legal, valid and binding obligations of VHL or the Subsidiaries and,
to the best knowledge of VIMRx, of the other parties thereto, and are in full
force and effect on the date hereof, and VHL or the Subsidiaries have paid in
full all amounts due thereunder which are due and payable and are not in default
under any such Contract nor, to the best knowledge of VIMRx, is any other party
to any such Contract in default thereunder, nor does any condition exist that
with notice or lapse of time or both would constitute a default or event of
default thereunder by VHL or the Subsidiaries or, to the best knowledge of
VIMRx, by any other Person. Except as set forth in Schedule 2.5, no Contract
requires the consent or approval of a third party in connection with the
performance by VHL or any Subsidiary of this Agreement or the transactions
contemplated to be performed by it hereunder.
2.15 Employee Benefits. Except as set forth on Schedule 2.15, there are no
pension, retirement, savings, disability, medical, dental or other health plans,
life insurance (including any individual life insurance policy as to which VHL
or any Subsidiary makes premium payments whether or not VHL or the Subsidiary is
the owner, beneficiary, or both, of such policy) or other death benefit plans,
profit sharing, deferred compensation, stock option, bonus or other incentive
plans, vacation benefit plans, severance plans, or other employee benefit plans
or arrangements (whether written or arising from custom).
33
2.16 Accounts Payable. Except as set forth on Schedule 2.16, no accounts
payable of VHL or any Subsidiary have arisen subsequent to September 30, 1996
that exceed $10,000 for any one payee or $25,000 in the aggregate.
2.17 Liabilities. There are no material liabilities or obligations of VHL
and the Subsidiaries either accrued, absolute, contingent or otherwise
("Liabilities"), whether or not of a kind required by GAAP to be set forth on a
financial statement, except (i) those accrued, reflected or otherwise provided
for on the September 30, 1996 Balance Sheet furnished to Innovir, (ii) those
incurred in the ordinary course of business since September 30, 1996, consistent
with past practices, and which in the aggregate do not exceed $25,000 and (iii)
those listed on Schedule 2.17.
2.18 Actions and Proceedings. Except as set forth on Schedule 2.18, there
are no claims, actions, suits, arbitrations, proceedings, investigations or
inquiries, whether at law or in equity and whether or not before any court,
private body or group, governmental department, commission, board, agency or
instrumentality (collectively, "Actions"), pending, or to the knowledge of
VIMRx, threatened against, involving or affecting VHL, any Subsidiary or any of
their respective assets, whether or not fully or partially covered by insurance,
or which would give rise to any right of indemnification by any Person from VHL
or any Subsidiary, and there are no outstanding orders, writs, injunctions,
awards, sentences or decrees of any court, private body or group, governmental
department, commission, board, agency or instrumentality against, involving or
affecting VHL or any Subsidiary or their respective assets or business.
2.19 Bank Accounts, Guarantees and Powers. Schedule 2.19 sets forth (i) a
list of all accounts, borrowing resolutions and deposit boxes maintained by VHL
and each Subsidiary at any bank or other financial institution and the names of
the persons authorized to effect transactions in such accounts, to borrow
pursuant to such resolutions and with access to such boxes; (ii) all agreements
or commitments of VHL and each Subsidiary guaranteeing the payment of money or
the performance of other contracts by any third persons; and (iii) the names of
all Persons holding general or special powers of attorney from VHL or a
Subsidiary, together with a summary of the terms thereof.
2.20 Absence of Changes. Except as set forth in Schedule 2.20, since
September 30, 1996, VHL and the Subsidiaries have carried on their respective
business in the ordinary course, and there has not been:
(i) any material adverse change in their respective business condition
(financial or otherwise), results of operations or liabilities;
(ii) any pending or threatened amendment, modification, or termination
of any agreement or Permit which is material to their respective
business;
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(iii) any disposition or acquisition of any of their respective assets
or properties, other than in the ordinary course, which exceed $2,500
in the aggregate;
(iv) any damage, destruction or other casualty loss (whether or not
covered by insurance) adversely affecting or that could reasonably be
expected to adversely affect their respective business or assets;
(v) any increase in the compensation of any of their respective
employees or consultants; or
(vi) except in the ordinary course, the incurrence of any obligation
or liability (whether matured, unmatured, absolute, accrued,
contingent or otherwise) which exceed $2,500 in the aggregate.
2.21 Employee Relations. VHL and the Subsidiaries have not at any time
during the last five years had, or to the knowledge of VIMRx is there now
threatened, a strike, picket, work stoppage, work slowdown, or other labor
trouble or dispute, and VIMRx has no knowledge of the proposed resignation of
any employee of VHL or any Subsidiary whose annual salary exceeds $25,000.
2.22 Affiliated Transactions. For purposes of this Section, an "Affiliate"
means VIMRx or any employee, officer or director of VHL or any Subsidiary or any
spouse or family member (including in-laws) of, or any corporation or other
entity "controlled by" (as such term is defined in Rule 405 of the General Rules
and Regulations under the Securities Act of 1993, as amended), any such persons
or in which any such person has an equity or ownership interest exceeding five
percent.
(a) Except as specifically set forth (including dollar amounts)
on Schedule 2.22, as of the date hereof, no Affiliate is indebted to,
or is a creditor of, VHL or any Subsidiary.
(b) During the past three (3) years, except as set forth on
Schedule 2.22 neither VHL nor any Subsidiary has, directly or
indirectly, purchased, leased from or otherwise acquired any property
or obtained any services from, or sold, leased to or otherwise
disposed of any property or furnished any services to, or otherwise
dealt with, any Affiliate nor is VHL or any Subsidiary a party to any
contract, agreement, license, commitment or other arrangement, written
or oral, express or implied, with an Affiliate except as disclosed on
such schedule.
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2.23 Brokers' Fees. There is no broker, finder or other intermediary
retained by VIMRx, VHL or any Subsidiary who might be entitled to a fee or
commission in connection with the transactions contemplated hereby.
2.24 Full Disclosure. All documents, schedules, financial statements and
other materials delivered or made available by or on behalf of VIMRx or VHL or
any Subsidiary to Innovir in connection with this Agreement and the transactions
contemplated hereby are true and correct in all material respects. The
information furnished to Innovir by or on behalf of VIMRx, VHL or any Subsidiary
in connection with this Agreement and the transactions contemplated hereby does
not, in light of the circumstances under which the statements contained in the
information so furnished were made, contain any untrue statement of a material
fact or omit to state any material fact necessary to make the statements
contained therein not false or misleading.
2.25 Employee Compensation. Schedule 2.25 lists all employees of VHL and
each Subsidiary, setting forth their respective annual salaries, whether they
are employed under contract or at will, and the expiration date of each
contract.
2.26 Authority. This Agreement has been duly executed and delivered by
VIMRx and is a valid and binding agreement of VIMRx enforceable against VIMRx in
accordance with its terms, except as may be limited by applicable bankruptcy,
insolvency or similar laws affecting creditors' rights generally or the
availability of equitable remedies.
2.27 Title to the VHL Shares. VIMRx owns the VHL Shares, free and clear of
all Liens and, upon delivery to Innovir of the certificates therefor duly
endorsed for transfer to Innovir, Innovir will acquire good, valid, indefeasible
and marketable title thereto, free and clear of any and all Liens.
2.28 Examination of Documents, Investment Purposes and Legending of Innovir
Shares and Examination of Documents, Investment Purposes and Legending of
Innovir Shares and Innovir Warrants. VIMRx has examined the Annual Report on
Form 10-K of Innovir for the fiscal year ended September 30, 1995 (the "1995
Form 10-K"), Innovir's Quarterly Reports on Form 10-Q for the quarters ended
December 31, 1995, March 31, 1996 and June 30, 1996, Innovir's Proxy Statement
for its 1994 Annual Meeting of Stockholders and Innovir's 1994 Annual Report to
Stockholders, has had the opportunity to discuss Innovir's operations with
Innovir's officers and employees, and is acquiring the Innovir Shares and the
Innovir Warrants for its own account for investment within the contemplation of
the Securities Act of 1933, as amended (the "Securities Act") and not with a
view to the transfer or resale thereof, and consents to the legending of the
certificates for the Innovir Shares to be received with a legend in
substantially the following form:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT") AND MAY NOT BE SOLD, TRANSFERRED OR
ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE ACT FOR THESE SHARES OR AN OPINION
OF INNOVIR'S COUNSEL THAT REGISTRATION IS NOT
REQUIRED",
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and to the affixation of a similar legend on the Innovir Warrants.
2.29 Insurance. Schedule 2.29 contains a list of all insurance policies
covering the respective assets, businesses, operations, employees, officers and
directors of VHL and each Subsidiary, and the dates through which each such
policy is effective. Each such policy is in full force and effect and evidence
of the effectiveness of each such policy has been delivered to Innovir. Except
as set forth in Schedule 2.29, there is no claim by VHL or any Subsidiary
pending under any of such policies as to which coverage has been questioned,
denied or disputed by the underwriters of such policies. All premiums payable
under such policies have been paid, and VHL and each Subsidiary is otherwise in
full compliance with the terms and conditions of such policies. Such policies
are of the types and in the amounts customarily carried by Persons conducting
businesses similar to those of VHL and the Subsidiaries. Neither VIMRx, VHL nor
any Subsidiary has any knowledge of any threatened termination of any of such
policies.
2.30 Environmental. VHL and each Subsidiary currently operates, and at all
times in the past has operated, in compliance with all applicable laws,
statutes, codes, ordinances, rules, regulations, or other requirements relating
to the protection of human health and safety, the environment, or hazardous or
toxic substances or waste, pollutants or contaminants ("Environmental Laws").
None of VIMRx, VHL or any Subsidiary has received any notification of any
present or past failure on the part of VHL or any Subsidiary to comply with any
applicable Environmental Laws. No Lien has attached to, and no basis exists for
the attachment of any Lien to, any revenues of VHL or any Subsidiary or their
respective assets pursuant to any Environmental Laws. There has not been any
Phase I, Phase II or other environmental report conducted by or on behalf of VHL
or any Subsidiary with respect to their respective properties or assets.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF INNOVIR
Innovir represents and warrants to VIMRx that:
3.1 Organization. Innovir is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware, has all requisite
corporate power and authority to own, lease and operate its properties and to
carry on its business as now being conducted, and is duly qualified and licensed
as a foreign corporation to transact business and is in good standing in each
jurisdiction in which it is required to be so qualified or authorized.
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3.2 Authority and Consent. This Agreement has been duly authorized,
executed and delivered by Innovir and is a valid and binding agreement of
Innovir enforceable against Innovir in accordance with its terms, except as may
be limited by applicable bankruptcy, insolvency or similar laws affecting
creditors' rights generally or the availability of equitable remedies and no
consent or approval is required of any Person in connection with the performance
by Innovir of this Agreement or the consummation by Innovir of the transactions
contemplated hereby.
3.3 Non-Contravention. Except as set forth on Schedule 3.3, the performance
of this Agreement by Innovir will not (i) violate any provision of its
Certificate of Incorporation or By-Laws; (ii) violate, conflict with or result
in the breach or termination of, or constitute an amendment to, or otherwise
give any Person the right to terminate, or constitute (or with notice or lapse
of time or both would constitute) a default (by way of substitution, novation or
otherwise) under the terms of, any contract, mortgage, lease, bond, indenture,
agreement, franchise or other instrument or obligation to which Innovir is a
party or by which it or any of its assets or properties are bound or affected;
(iii) result in the creation of any Liens upon the properties or assets of
Innovir pursuant to the terms of any contract, mortgage, lease, bond, indenture,
agreement, franchise or other instrument or obligation; (iv) violate any
judgment, order, injunction, decree or award of any court, arbitrator,
administrative agency or governmental or regulatory body against, or binding
upon, Innovir or any of its securities, properties, assets or business; (v)
constitute a violation by Innovir of any statute, law, rule or regulation of any
jurisdiction as such statute, law, rule or regulation relates to Innovir or to
any of its securities, properties, assets or business; (vi) violate any Permit
(as defined in Section 2.13); or (vi) result in an adjustment to the conversion
or exercise price of any of Innovir's outstanding securities.
3.4 Capitalization. Innovir's authorized capital stock consists of (i)
15,000,000 shares of preferred stock, of which 297,000 shares of Class B
Convertible Preferred Stock and 20,000 shares of Class C Convertible Preferred
Stock are issued and outstanding, and (ii) 35,000,000 shares of Common Stock, of
which 11,780,646 shares are issued and outstanding, 14,616,500 shares are
reserved for issuance upon exercise of warrants (8,000,000 shares at a price of
$.50 per share and 6,616,500 shares at prices ranging from $0.05 per share to
$10.67 per share and averaging $5.07 per share), 1,646,625 shares are reserved
for issuance upon exercise of outstanding employee stock options at prices
ranging from $0.97 per share to $12.00 per share and averaging $4.21 per share,
629,289 shares are reserved for issuance upon conversion of convertible
preferred stock and 519,736 shares are reserved for future option grants under
Innovir's stock option plan.
3.5 Intellectual Property. Schedule 3.5 sets forth (i) all trademarks,
trade names, trade secrets, patents, inventions, processes, copyrights,
copyright rights or other intellectual property rights (or applications
therefor) used by Innovir in connection with its business, (ii) whether such
property is owned, licensed or leased, and (iii) a summary of the terms of the
license or lease.
38
3.6 Actions and Proceedings. Except as set forth on Schedule 3.6, there are
no Actions pending, or to the knowledge of Innovir threatened against, involving
or affecting Innovir or any of its assets, whether or not fully or partially
covered by insurance or which would give rise to any right of indemnification by
any Person from Innovir, and there are no outstanding orders, writs,
injunctions, awards, sentences or decrees of any court, private body or group,
governmental department, commission, board, agency or instrumentality against,
involving or affecting Innovir, its assets or business.
3.7 Absence of Changes. Except as set forth in Schedule 3.7, since
September 30, 1996, Innovir has carried on its business in the ordinary course,
and there has not been:
(i) any material adverse change in its business condition
(financial or otherwise), results of operations or liabilities;
(ii) any pending or threatened amendment, modification, or
termination of any agreement or Permit which is material to its
business;
(iii) any disposition or acquisition of any of its assets or
properties, other than in the ordinary course, which exceed
$2,500 in the aggregate;
(iv) any damage, destruction or other casualty loss (whether or
not covered by insurance) adversely affecting or that could
reasonably be expected to adversely affect its business or
assets;
(v) any modification to any existing, or the adoption or entrance
into any new, employee benefit plan, employment agreement or
consulting agreement, or the increase in the compensation of any
of its employees or consultants; or
(vi) except in the ordinary course, the incurrence of any
obligation or liability (whether matured, unmatured, absolute,
accrued, contingent or otherwise) which exceed $2,500 in the
aggregate.
3.8 The Innovir Shares. The Innovir Shares to be delivered hereby, when
issued and delivered in accordance with the terms of this Agreement, will be
validly issued, fully paid and non-assessable and will conform to the terms
thereof set forth on Schedule 3.8 and, following the increase of Innovir's
authorized Common Stock to 70,000,000 shares, the shares of Innovir's Common
Stock issuable upon conversion thereof will be duly reserved for issuance and,
when issued upon such conversion, will be validly issued, fully paid and
non-assessable.
39
3.9 The Innovir Warrants. The Innovir Warrants to be delivered hereby, when
issued and delivered in accordance with the terms of this Agreement, will be
duly authorized and executed, will conform to the terms thereof set forth on
Schedule 3.9 and will constitute valid and legally binding obligations of
Innovir, enforceable in accordance with their terms and, following the increase
of Innovir's authorized Common Stock to 70,000,000 shares, the shares of
Innovir's Common Stock issuable upon exercise thereof will be duly reserved for
issuance and, when issued upon such exercise, will be validly issued, fully paid
and non-assessable.
3.10 Investment Purposes. Innovir is acquiring the VHL Shares for its own
account for investment within the contemplation of the Securities Act and not
with a view to the transfer or resale thereof.
3.11 Documents Delivered. Innovir has delivered to VIMRx, Innovir's (i)
Annual Report on Form 10-K for its fiscal year ended September 30, 1995 (ii)
Quarterly Reports on Form 10-Q for the quarters ended December 31, 1995, March
31, 1996 and June 30, 1996 (iii) Proxy Statement for its 1994 Annual Meeting of
Stockholders and (iv) its Prospectus dated October 8, 1996 and the related
Registration Statement on Form S-3 (collectively, the "SEC Documents"). The SEC
Documents, including the financial statements included therein, complied as to
form with the requirements of the Securities Exchange Act of 1934, as amended
and the rules and regulations thereunder (and, with respect to the Registration
Statement on Form S-3, the Securities Act), were true and complete in all
material respects as at their respective dates, and did not contain any untrue
statement of a material fact nor omit to state any material fact required to be
stated therein or necessary to make the statements contained therein, in light
of the circumstances under which they were made, not misleading. The unaudited
financial statements of Innovir as at September 30, 1996 and for the three years
then ended delivered to VIMRx have been prepared in accordance with GAAP
consistently applied, are true and correct and present fairly the financial
condition and the results of operations and cash flows of Innovir as at the
respective dates and for the respective periods covered thereby, except as
disclosed in Schedule 3.11.
ARTICLE 4
CONDUCT PENDING CLOSING BY VHL AND THE SUBSIDIARIES
From the date hereof and until the Closing Date, except as otherwise
provided by this Agreement or as agreed by Innovir in writing, VIMRx hereby
covenants and agrees that it shall cause VHL and each Subsidiary to comply with
each of the following covenants:
4.1 Conduct of Business. To conduct its business in the ordinary course
consistent with past practice, maintain adequate insurance, preserve intact its
business organization and employees, maintain satisfactory relationships with
its independent agents, and others having business relationships with it,
40
maintain its books and records in its usual manner and not make any change in
its financial reporting, or accounting practices or policies, or in its
reserving practices or policies.
4.2 Certain Prohibited Activities. Not to (i) issue, sell or deliver, or
agree to issue, sell or deliver, any shares of its capital stock or any other
security (whether authorized and unissued or held as treasury shares), or grant
or issue, or agree to grant or issue, any subscription, option, warrant or other
right calling for the issue, sale or delivery thereof; (ii) declare or pay any
dividend or distribution on any shares of its capital stock; (iii) purchase,
redeem or otherwise acquire any shares of its capital stock; (iv) make any
change in any pension or employee benefit plan or arrangement, or any collective
bargaining agreement, or enter into, amend, modify or terminate any arrangement
or agreement with any officer, director, employee, independent contractor,
representative; (v) create, incur, assume or guarantee any indebtedness for
borrowed money; (vi) make any capital expenditure, or purchase, lease or license
any real or personal property which exceed $2,500 in the aggregate; (vii) sell
or otherwise dispose of or pledge any of its assets (tangible or intangible) or
cancel any debts or claims (including, without limitation, accounts receivable)
owing to it, except in the ordinary course of business which does not otherwise
violate this Agreement; (viii) merge or consolidate with any other Person or
acquire control of all or any substantial portion of the assets of any other
Person or take any steps incident to, or in furtherance of, merging or
consolidating with or acquiring control of all or any substantial portion of the
assets of any other Person, whether by entering into an agreement providing
therefor or otherwise; (ix) make or cause to be made any alteration in the
manner of keeping its books, accounts or records or in the accounting practices
and principles therein and theretofore reflected, except as required by law; (x)
effect or agree to any change in its articles or similar instruments of
organization (except that VHL is discontinuing in the Islands of Bermuda and
domesticating in the State of Delaware) or By-Laws; (xi) settle or agree to
settle any claim, action, suit or proceeding involving the payment or receipt of
more than $5,000, individually, or $10,000, in the aggregate; (xii) enter into
any other transaction or agreement which is not in the ordinary and usual course
of business; or (xiii) agree or commit to do any of the foregoing.
4.3 Reports; Taxes; Etc. To duly and timely file, or cause to be duly and
timely filed, all filings, declarations, reports or returns required to be filed
with governmental authorities and to promptly pay all taxes, assessments and
governmental charges lawfully levied or assessed.
4.4 Access to Information. To afford Innovir, its counsel, financial
advisors, auditors and other authorized representatives full access, upon
reasonable prior notice and during normal business hours, to its offices,
properties, books and records and to its employees, agents and independent
accountants, and to furnish to Innovir, its counsel, financial advisors,
auditors and other authorized representatives such financial and operating data
and other information as may reasonably be requested, and to instruct its
employees, counsel and financial advisors to cooperate with Innovir in Innovir's
due diligence.
41
4.5 Further Assurances. To do or cause to be done such further acts and
things and deliver or cause to be delivered to Innovir such additional
assignments, agreements, powers and instruments as Innovir may reasonably
require or deem reasonably advisable to carry into effect the purposes of this
Agreement or the other agreements to be entered into in connection with the
transactions contemplated hereby or to better assure and confirm the rights,
powers and remedies of Innovir hereunder and thereunder.
4.6 Tax Adjustments. To promptly notify Innovir of all proposed adjustments
contained in examination reports received from any tax authority to any Return
relating to adjustment for tax years prior to and including the Closing Date
which could materially adversely affect VHL, any Subsidiary or Innovir and to
provide Innovir and its representatives such information and records as they may
reasonably request with respect to such adjustments. Innovir shall have the
right to participate in and pay its own expenses relating to the contest of all
such proposed adjustments which might adversely affect Innovir by the creation
of adverse precedent or otherwise.
4.7 Governmental Notification and Approvals. To prepare promptly, file and
diligently pursue with the appropriate governmental agencies all documentation
and information required by law or requested by each such agency to be filed to
permit the consummation of the transactions contemplated hereby.
ARTICLE 5
CONDUCT PENDING CLOSING BY INNOVIR
From the date hereof and until the Closing Date, except as otherwise
provided by this Agreement or as agreed by VIMRx in writing, Innovir hereby
covenants and agrees, as follows:
5.1 Conduct of Business. To conduct its business in the ordinary course
consistent with past practice, maintain adequate insurance, preserve intact its
business organization and employees, maintain satisfactory relationships with
its independent agents, and others having business relationships with it,
maintain its books and records in its usual manner and not make any change in
its financial reporting, or accounting practices or policies, or in its
reserving practices or policies.
5.2 Certain Prohibited Activities. Not to (i) issue, sell or deliver, or
agree to issue, sell or deliver, any shares of its capital stock or any other
security (whether authorized and unissued or held as treasury shares), other
than upon the exercise of outstanding options or warrants or upon conversion of
outstanding preferred stock, or grant or issue, or agree to grant or issue, any
subscription, option, warrant or other right calling for the issue, sale or
delivery thereof, except that Innovir may grant (x) new employee stock options
to purchase Innovir's Common Stock at $1.30 per share in replacement of existing
employee stock options and to employees who have not theretofore been granted
42
options, all such grants of stock options being substantially in accordance with
Schedule 5.2, with new vesting provisions approved by VIMRx and provided that
such vesting provisions do not accelerate upon the consummation of the
transactions herein provided and (y) warrants to purchase 20,000 shares of
Innovir's Common Stock at $1.50 per share to New York State Science and
Technology Foundation, (ii) declare or pay any dividend or distribution on any
shares of its capital stock; (iii) purchase, redeem or otherwise acquire any
shares of its capital stock; (iv) make any change in any pension or employee
benefit plan or arrangement, or any collective bargaining agreement, or enter
into, amend, modify or terminate any arrangement or agreement with any officer,
director, employee, independent contractor, representative; (v) create, incur,
assume or guarantee any indebtedness for borrowed money; (vi) make any capital
expenditure, or purchase, lease or license any real or personal property which
exceed $2,500 in the aggregate; (vii) sell or otherwise dispose of or pledge any
of its assets (tangible or intangible) or cancel any debts or claims (including,
without limitation, accounts receivable) owing to it, except in the ordinary
course of business which does not otherwise violate this Agreement; (viii) merge
or consolidate with any other Person or acquire control of all or any
substantial portion of the assets of any other Person or take any steps incident
to, or in furtherance of, merging or consolidating with or acquiring control of
all or any substantial portion of the assets of any other Person, whether by
entering into an agreement providing therefor or otherwise; (ix) make or cause
to be made any alteration in the manner of keeping its books, accounts or
records or in the accounting practices and principles therein and theretofore
reflected, except as required by law; (x) effect or agree to any change in its
Certificate of Incorporation or By-laws; (xi) settle or agree to settle any
claim, action, suit or proceeding involving the payment or receipt of more than
$5,000, individually, or $10,000, in the aggregate; (xii) enter into any other
transaction or agreement which is not in the ordinary and usual course of
business; or (xiii) agree or commit to do any of the foregoing.
5.3 Reports; Taxes; Etc. To duly and timely file, or cause to be duly and
timely filed, all filings, declarations, reports or returns required to be filed
with governmental authorities and to promptly pay all taxes, assessments and
governmental charges lawfully levied or assessed.
5.4 Access to Information. To afford VIMRx, its counsel, financial
advisors, auditors and other authorized representatives full access, upon
reasonable prior notice and during normal business hours, to its offices,
properties, books and records and to its employees, agents and independent
accountants, and to furnish VIMRx, its counsel, financial advisors, auditors and
other authorized representatives such financial and operating data and other
information as may reasonably be requested, and to instruct its employees,
counsel and financial advisors to cooperate with VIMRx in VIMRx's due diligence.
5.5 Further Assurances. To do or cause to be done such further acts and
things and deliver or cause to be delivered to VIMRx such additional
assignments, agreements, powers and instruments as VIMRx may reasonably require
or deem reasonably advisable to carry into effect the purposes of this Agreement
43
or the other agreements to be entered into in connection with the transactions
contemplated hereby or to better assure and confirm the rights, powers and
remedies of VIMRx hereunder and thereunder.
5.6 Tax Adjustments. To promptly notify VIMRx of all proposed adjustments
contained in examination reports received from any tax authority to any Return
relating to adjustment for tax years prior to and including the Closing Date
which could materially adversely affect Innovir and to provide VIMRx and its
representatives such information and records as they may reasonably request with
respect to such adjustments.
5.7 Governmental Notification and Approvals. To prepare promptly, file and
diligently pursue with the appropriate governmental agencies all documentation
and information required by law or requested by each such agency to be filed to
permit the consummation of the transactions contemplated hereby.
ARTICLE 6
COVENANTS OF VIMRx AND INNOVIR
VIMRx and Innovir hereby severally covenant and agree:
6.1 Necessary Assurances. To take, or cause to be taken, all actions and to
do, or cause to be done, all things reasonably necessary or desirable under
applicable laws and regulations to consummate the transactions contemplated by
this Agreement expeditiously, including executing and delivering such further
documents, certificates, applications and agreements as reasonably may be
necessary or desirable.
6.2 Filings and Consents. To cooperate (i) with respect to any filing with
any governmental body, agency, official or authority required in connection with
this Agreement or the consummation of the transactions contemplated hereby and
(ii) with respect to any actions, consents, approvals or waivers required to be
obtained from parties to any material contracts in connection with this
Agreement or the consummation of the transactions contemplated hereby.
6.3 Government Filings. To make any and all filings required to be made
with any and all governmental authorities in connection with the consummation of
the transactions contemplated herein, including, if required, the notification
required by the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act (the "HSR" Act) and any requested or
supplementary filings thereto in such manner and at such places as are specified
in the HSR Act and the applicable rules and regulations thereunder, and any
other notifications to, or filings with, regulatory authorities. Innovir shall
pay the fee due in connection with the filing, if required, of the notification
required under the HSR Act; provided, however, that Innovir shall not be
required to pay such fee in the event that such notification relates only to the
transaction between Aries and VIMRx referred to in clause (ii) of Section 9.1
hereof.
44
6.4 Public Announcements. To consult with each other before issuing any
press release or otherwise making any public statement with respect to the
transactions contemplated by this Agreement and not to issue any such press
release or make any such public statement without the prior approval of the
other party, except as may be required by any applicable law, rule, regulation
or regulatory agency requirement.
6.5 Confidentiality. To treat as confidential all information concerning
Innovir (in the case of VIMRx, VHL and the Subsidiaries) and VIMRx, VHL and the
Subsidiaries (in the case of Innovir) provided in connection with the
transactions contemplated hereby, except to the extent that such information was
in the public domain, prior to the provision thereof to the other party or
thereafter is in the public domain other than through the release, directly or
indirectly, by the party to whom the information was furnished.
6.6 Expenses. To bear their respective expenses incurred in connection with
the preparation, execution and performance of this Agreement and the transaction
contemplated hereby, including without limitation, all fees and expenses of
their respective legal counsel, financial advisors, auditors and other
representatives.
ARTICLE 7
ADDITIONAL COVENANTS
7.1 VIMRx Covenants. VIMRx hereby covenants and agrees (i) to exercise its
warrants to purchase 1,000,000 shares of Innovir's Common Stock at $1.00 per
share within 30 days after receipt of a written request by the Board of
Directors of Innovir subsequent to May 31, 1997 specifying that Innovir has
insufficient funds to continue its operations past 30 days from the date of the
request, (ii) to pay the costs of the capital equipment ordered and listed on
Schedule 2.20 to the extent any payments are due thereon, and (iii) to vote the
Innovir Shares and its shares of Innovir's Common Stock in favor of the items
specified in sections 7.2 (i) and 7.2 (ii) below.
7.2 Innovir Covenant. Innovir hereby covenants and agrees, conditional upon
the closing, to convene a meeting of its stockholders to vote upon (i) the
election of five directors, three of whom shall be designees of VIMRx, one of
whom shall not be a VIMRx director, officer or employee, (ii) an amendment to
Innovir's Certificate of Incorporation to increase its authorized Common Stock
to 70,000,000 shares and (iii) such further specified action as Innovir and
VIMRx shall agree.
45
ARTICLE 8
CONDITIONS TO CLOSING
8.1 Conditions to Obligations of Innovir. The obligations of Innovir
hereunder are conditioned upon the following:
(a) All warranties and representations of VIMRx contained in this
Agreement or in any Schedule or instrument delivered hereunder or
otherwise made in connection with the transactions contemplated hereby
shall be true and correct on and as of the Closing Date, with the same
force and effect as if made on and as of the Closing Date.
(b) VHL and VIMRx shall have performed and complied with all of
the covenants and agreements required by or pursuant to this Agreement
and any Schedule or instrument delivered hereunder to be performed or
complied with on or prior to the Closing Date.
(c) No suit, action, investigation or proceeding before or by any
federal or state court or governmental or regulatory authority shall
have been commenced, and no suit, action or proceeding by any
governmental or regulatory authority shall have been threatened,
against VIMRx, VHL, any Subsidiary or Innovir seeking to restrain,
prevent or modify the transactions contemplated hereby or seeking
material damages in connection with any of such transactions and no
order of any court or administrative agency to restrain, prohibit or
nullify the consummation of the transactions contemplated herein shall
be outstanding as of the Closing Date.
(d) All governmental authorities having jurisdiction, to the
extent required by law, shall have consented to or approved the
consummation of the transactions contemplated by this Agreement.
(e) As at the Closing Date, VHL shall have cash and cash
equivalents of $3,000,000 in excess of its stated liabilities.
(f) As at the Closing Date, The Aries Fund, A Cayman Island Trust
and The Aries Domestic Fund, L.P., a Delaware limited partnership (
collectively, "Aries") shall have exercised warrants to acquire
6,000,000 shares of Innovir's Common Stock at an aggregate exercise
price of $3,000,000.
(g) Receipt of the Audited Financial Statements and the September
30, 1996 Financial Statements.
(h) All documents delivered and action taken pursuant hereto
shall be satisfactory in form and substance to Innovir and its
counsel.
46
8.2 Conditions to Obligations of VIMRx. The obligations of VIMRx hereunder
are conditioned upon the following:
(a) All warranties and representations of Innovir contained in
this Agreement shall be true and correct on and as of the Closing Date
with the same force and effect as if made on and as of the Closing
Date.
(b) Innovir shall have performed and complied with all of the
covenants and agreements required by or pursuant to this Agreement and
any Schedule or instrument delivered hereunder to be performed or
complied with on or prior to the Closing Date.
(c) No suit, action, investigation or proceeding before or by any
federal or state court or governmental or regulatory authority shall
have been commenced, and no suit, action or proceeding by any
governmental or regulatory authority shall have been threatened,
against VIMRx, VHL, any Subsidiary or Innovir seeking to restrain,
prevent or modify the transactions contemplated hereby or seeking
material damages in connection with any of such transactions and no
order of any court or administrative agency to restrain, prohibit, or
nullify the consummation of the transactions contemplated herein shall
be outstanding as of the Closing Date.
(d) All governmental authorities having jurisdiction, to the
extent required by law, shall have consented to or approved the
consummation of the transactions contemplated by this Agreement.
(e) As at the Closing Date, Aries shall have exercised warrants
to acquire 6,000,000 shares of Innovir's Common Stock at an aggregate
exercise price of $3,000,000.
(f) All documents delivered and action taken pursuant hereto
shall be satisfactory in form and substance to VIMRx and its counsel.
ARTICLE 9
CLOSING
9.1 Closing Date. The closing of the transactions contemplated by this
Agreement (the "Closing") shall be conditional upon and shall take place
concurrently with the closing of (i) the exercise by Aries of warrants to
purchase 6,000,000 shares of Innovir's Common Stock and (ii) the exchange by
Aries with VIMRx of 9,500,000 shares of Innovir's Common Stock owned by Aries
for VIMRx Common Stock, on December 4, 1996, or such other date as the parties
may fix, (the "Closing Date") at the offices of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & Green, P.C.,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇.
47
9.2 Deliveries by VIMRx. At the Closing, VIMRx shall deliver to Innovir the
following:
(a) Stock certificates for the VHL Shares, duly endorsed for
transfer to Innovir or its designee and the stock certificates for the
outstanding shares of the capital stock of the Subsidiaries.
(b) The minute book, stock book and stock ledger of VHL and the
Subsidiaries.
(c) A copy of the Certificate of Incorporation of VHL, certified
by the appropriate governmental official having authority therefor.
(d) An agreement providing for the provision of administrative
and related services by VIMRx to Innovir and for submission by VIMRx
to Innovir of potential licenses and other arrangements relating to,
but limited to, catalytic oligonucleotides, duly executed by VIMRx.
(e) The written resignations of the directors and officers of VHL
and the Subsidiaries as requested by Innovir.
(f) An officers' certificate by the President and the Chief
Financial Officer of VIMRx confirming as at the Closing Date the
correctness of the warranties and representations of VIMRx in the
agreement and compliance by VIMRx and VHL of the covenants and
agreements to be performed by them under the agreement.
(g) The opinion of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & Green, P.C., counsel to
VIMRx, addressed to Innovir, as to Sections 2.1, 2.2, 2.3 (as to due
organization and subsistence of the Subsidiaries), 2.18, 2.26 and
2.27.
9.3 Deliveries by Innovir. At the Closing, Innovir shall deliver to VIMRx,
the following:
(a) Stock certificates for the Innovir Shares and the Innovir
Warrants registered in the name of VIMRx.
(b) An officers' certificate by the Chief Executive Officer and
the Chief Financial Officer of Innovir confirming as at the Closing
Date the correctness of the warranties and representations of Innovir
in the agreement and compliance by Innovir of the covenants and
agreements to be performed by Innovir under the agreement.
(c) A Secretary's certificate as to (i) the passage of
resolutions reducing the size of Innovir's Board of Directors to five
directors, (ii) the receipt and acceptance of written resignations
from all directors of Innovir, other than ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and one
48
other director, and (iii) the passage of resolutions electing as
directors of Innovir ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and a third
designee of VIMRx who shall not be a director, officer or employee of
VIMRx or Innovir.
(d) An agreement providing for the provision of administrative
and related services by VIMRx to Innovir and for submission by VIMRx
to Innovir of potential licenses and other arrangements relating to,
but limited to, catalytic oligonucleotides, duly executed by Innovir.
(e) The opinion of ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ L.L.P., counsel to
Innovir, addressed to VIMRx, as to Sections 3.1, 3.2, 3.4, 3.6, 3.8,
and 3.9.
ARTICLE 10
SURVIVAL
10.1 Survival. All representations and warranties made in this Agreement
shall survive the delivery of this Agreement and remain in full force and effect
until December 31, 1997.
ARTICLE 11
INDEMNIFICATION
11.1 Indemnification.
(a) Indemnification by VIMRx. VIMRx hereby agrees to indemnify
and hold harmless Innovir from and against any and all losses,
liabilities, damages, obligations, costs and expenses, including,
without limitation, amounts paid in settlement and reasonable costs
and expenses of investigating, preparing to defend and defending any
claim, action, suit, proceeding, inquiry or investigation in respect
thereof (such losses, liabilities, damages, obligations, costs and
expenses as hereinabove set forth, collectively "Damages") incurred by
Innovir, resulting from, relating to, or arising out of the inaccuracy
of any representation or warranty herein by VIMRx or the breach of any
covenant herein by VIMRx.
(b) Indemnification by Innovir. Innovir hereby agrees to
indemnify and hold harmless VIMRx from and against any and all Damages
incurred by VIMRx resulting from, relating to, or arising out of the
inaccuracy of any representation or warranty herein by Innovir or the
breach of any covenant contained herein by Innovir.
(c) Procedure. If any action, suit, proceeding or claim shall be
brought against the party to be indemnified by any third party, which
action, suit, proceeding or claim, if determined adversely to the
interest of the party to be indemnified and which would entitle the
party to be indemnified to indemnity pursuant to this Section 11.1,
the party to be indemnified shall promptly notify the indemnifying
49
party of the same in writing and, if the indemnifying party so elects,
the indemnifying party shall assume the defense thereof, including the
employment of counsel satisfactory to the party to be indemnified and
the payment of all reasonable costs and expenses in respect thereof.
The party to be indemnified shall have the right to employ counsel
separate from any counsel employed by the indemnifying party in any
action, suit, proceeding or claim and to control (or, if the party to
be indemnified has elected to allow the indemnifying party to assume
the defense thereof, participate in) the defense thereof and the fees
and expenses of such counsel employed by the party to be indemnified
shall be at the expense of the party to be indemnified. The
indemnifying party shall not be liable for any settlement of any such
action, suit, proceeding or claim effected without his or its written
consent (which shall not be unreasonably withheld), but if settled
with the written consent of the indemnifying party, or if there shall
be a final judgment for plaintiff in any such action, the indemnifying
party agrees to indemnify and hold harmless the party to be
indemnified from and against any loss, liability, obligation, damage,
cost or expense by reason of such settlement or judgment.
11.2 Access. In the event that Innovir delivers to VIMRx notice of a claim
for indemnification, Innovir shall provide VIMRx reasonable access to the books
and records of VHL and any Subsidiary (and of Innovir in the event Innovir has
possession of the requisite books and records) with respect to any matters
giving rise to such claim.
ARTICLE 12
MISCELLANEOUS PROVISIONS
12.1 Amendment and Modification. This Agreement may be amended, modified
and supplemented only by a writing signed by Innovir and VIMRx.
12.2 Waiver of Compliance. Any failure of Innovir or VIMRx to comply with
any obligation, covenant, agreement or condition herein contained may be
expressly waived, in writing only, by (i) Innovir in the case of any failure of
VIMRx or (ii) VIMRx in the case of any failure of Innovir. Such waiver shall be
effective only in the specific instance and for the specific purpose for which
made or given.
12.3 Notices. All notices, requests, demands and other communications
required or permitted hereunder shall be in writing and shall be deemed to have
been duly given when delivered by hand, or when mailed by certified or
registered mail (return receipt requested), postage prepaid or when delivered by
fax (evidenced by confirmation of successful transmission), as follows:
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A. If to Innovir:
Innovir Laboratories, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Fax # (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
With a copy to:
▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ L.L.P.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Fax # (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
or to such other person or place as Innovir shall designate by notice in
the manner provided in this Section 12.3;
B. If to VIMRx:
VIMRX Pharmaceuticals Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax # (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
With a copy to:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & Green, P.C.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Fax # (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, Esq.
or to such other person as VIMRx shall designate by notice in the manner
provided in this Section 12.3.
12.4 Assignment. This Agreement shall be binding upon and inure to the
benefit of Innovir and its successors and assigns, and to VIMRx and its
successors and assigns, but neither this Agreement nor any of the rights,
interests and obligations hereunder shall be assigned by either of Innovir or
VIMRx without the prior written consent of the other.
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12.5 Third Parties. This Agreement is not intended to and shall not be
construed to give any Person other than the parties hereto any interest or
rights (including, without limitation, any third party beneficiary rights) with
respect to or in connection with any agreement or provision contained herein or
contemplated hereby.
12.6 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York, without regard to principles
of conflicts of laws.
12.7 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which taken
together shall constitute one and the same instrument.
12.8 Headings. The headings of the sections, schedules and articles of this
Agreement are inserted for the sake of convenience only and shall not constitute
a part hereof.
12.9 Entire Agreement. This Agreement, including the schedules and
exhibits, contains the entire understanding of the parties in respect of the
subject matter contained herein and therein and there are no other terms or
conditions, representations or warranties, written or oral, express or implied,
except as set forth herein.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed as of the day and year first above written.
INNOVIR LABORATORIES, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇. ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇,
Chief Executive Officer
VIMRx PHARMACEUTICALS INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, President
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Schedules
The following is a list of schedules not filed herewith. The Registrant
hereby agrees to supplementally furnish to the Securities and Exchange
Commission a copy of such schedules upon request.
Schedule Description
2.5...................... Governmental Authorizations and Other Consents
2.6...................... Non-Contravention
2.8...................... Tangible Property
2.9(b)................... Leased Real Property
2.10..................... Intellectual Property
2.13..................... Permits and Licenses
2.14..................... Contracts and Agreements
2.15..................... Employee Benefits
2.16..................... Accounts Payable
2.17..................... Liabilities
2.18..................... Actions and Proceedings
2.19..................... Bank Accounts, Guarantees and Powers
2.20..................... Absence of Changes
2.22..................... Affiliated Transactions
2.25..................... Employee Compensation
2.29..................... Insurance
3.3...................... Non-Contravention
3.5...................... Intellectual Property
3.6...................... Actions and Proceedings
3.7...................... Absence of Changes
3.8...................... The Innovir Shares
3.9...................... The Innovir Warrants
3.11..................... Documents Delivered
5.2...................... Certain Prohibited Activities
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