EXHIBIT 2.1
ASSET PURCHASE AGREEMENT
BY AND BETWEEN
VIMRX PHARMACEUTICALS INC.
XXXXXX HEALTHCARE CORPORATION
AND
BIT ACQUISITION CORP.
ASSET PURCHASE AGREEMENT
ASSET PURCHASE AGREEMENT, made this 10th day of October, 1997, by and among
XXXXXX HEALTHCARE CORPORATION, a Delaware corporation with offices at 0000
Xxxx Xxxx Xxxx, Xxxxxxxxx, Xxxxxxxx 00000 (the "Seller"), VIMRx
PHARMACEUTICALS INC., a Delaware corporation with offices at 0000 Xxxxxxxxxxx
Xxxx, Xxxxx 000, Xxxxxxxxxx, Xxxxxxxx 00000 ("VIMRx") and BIT ACQUISITION
CORP., a Delaware corporation with offices at 0000 Xxxxxxxxxxx Xxxx, Xxxxx
000, Xxxxxxxxxx, Xxxxxxxx 00000 (the "Buyer").
WHEREAS, the Seller currently operates a business segment known as the
Immunotherapy Division of its Biotech Business Group (the "Division");
WHEREAS, the business in which the Division is engaged is the ex vivo cell
therapy business described in Exhibit A attached hereto (such business being
hereinafter referred to as the "Business");
WHEREAS, the Seller and VIMRx desire to enter into a strategic alliance by
engaging in the Business through the Buyer, which is currently a wholly-owned
subsidiary of VIMRx;
WHEREAS, the strategic alliance will be created pursuant to the sale and
transfer or license of certain technology relating to the use of cells for the
treatment, mitigation or prophylaxis of diseases, including research into such
activities, together with certain other property related to the manufacture,
use and sale of the products of the Business;
WHEREAS, as a condition to the obligations of the parties under this
Agreement, the parties will enter into, among other things, manufacturing and
supply agreements for the manufacture and supply of the Isolex(R) and
Maxsep(R) Products (as hereinafter defined), certain antibodies and other
components of the Isolex(R) and Maxsep(R) Products and certain other products
of the Business; certain license agreements to grant the right to use certain
technology relating to the Business; the Distribution Agreement (as
hereinafter defined) providing for the marketing, sales and distribution of
the Isolex(R) and Maxsep(R) Products and certain other products of the
Business; and the Services Agreement (as hereinafter defined) relating to the
provision, by the Seller to the Buyer, of certain Business-related services
previously supplied by other divisions of the Seller to the Division;
WHEREAS, to that end, the Seller desires, among other things, to have the
Buyer acquire, and the Buyer desires to acquire, the Assets (as hereinafter
defined); and
WHEREAS, the parties wish to set forth their agreement with respect to the
purchase and the sale of such Assets and a mutual investment in the Buyer;
NOW THEREFORE, in consideration of the mutual covenants and promises herein
contained, the parties agree as follows:
1.Definitions and Interpretation.
1.1 Definitions. Capitalized terms used herein shall have the following
meanings:
"Acquired Securities" shall mean the VIMRx Common Stock, VIMRx Preferred
Stock, Buyer Common Stock and the Warrant acquired by the Seller pursuant to
Section 2.2, together with the Buyer Convertible Debentures acquired by the
Seller pursuant to Section 8.3(B).
"Actions" shall mean claims, actions, suits, audits, proceedings or
investigations, whether at law, in equity or admiralty, and whether or not
before any Tribunal or any Authority.
"Affiliate" shall mean, with respect to any party, any entity (i) which
directly, or indirectly through one or more intermediaries, Controls, is
Controlled by, or is under common Control with, the party or (ii) fifty
percent
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(50%) or more of the voting capital stock (or in the case of an entity which
is not a corporation, fifty percent (50%) or more of the equity interest) of
which is beneficially owned or held by a party or any of such party's
Subsidiaries.
"Affiliated Transaction" shall mean, in respect of any Person, any
transaction, or series of similar transactions, or any currently proposed
transaction, to which such Person is a party, in which the amount involved
exceeds $60,000 and in which any Affiliate of such Person had, or will have, a
direct or indirect material interest (but excluding, in any event,
transactions, between divisions of the same Person and transactions between a
Person and any consolidated subsidiary of such Person).
"Aggregate Agreed Value" shall have the meaning assigned thereto in Section
2.2(C).
"Agreed Value" shall mean the average of the closing sale prices of VIMRx
Common Stock on the 15 trading days preceding, but not including, the date
falling five days prior to the Closing Date, as reported by Nasdaq.
"Antibody Manufacturing and Storage Agreement" shall mean the Antibody
Manufacturing and Storage Agreement substantially in the form annexed hereto
as Exhibit B.
"Assets" shall mean the assets set forth or described in Schedule 2.1.
"Assigned Contracts" shall have the meaning assigned thereto in Exhibit C.
"Assignment of Xxxxxx Lease" shall mean an assignment document assigning to
the Buyer the lease relating to the Xxxxxx Facility, the form and content of
which shall be reasonably satisfactory to the Buyer.
"Assumed Liabilities" shall have the meaning assigned thereto in Exhibit C.
"Authority" shall mean any Federal, state, municipal, foreign or other
government or governmental department, commission, board, bureau, agency or
instrumentality.
"BDG" shall mean Xxxxxx Deutschland GmbH, an indirect subsidiary of an
Affiliate of the Seller.
"Business" shall have the meaning assigned thereto in the Preamble to this
Agreement.
"Business Day" shall mean any day other than (a) a Saturday or Sunday or (b)
a day on which commercial banks in Illinois, New York or Delaware are
authorized or required by law to close.
"Buyer" shall have the meaning assigned thereto in the Preamble to this
Agreement.
"Buyer Common Stock" shall mean the common stock of the Buyer, $.001 par
value per share.
"Buyer Convertible Debentures" shall mean each or all, as the context may
require, of (i) the convertible debenture issued by the Buyer to the Seller,
in the forms annexed hereto as Exhibits D and E, and/or (ii) the convertible
debenture issued by the Buyer to VIMRx, in the form annexed hereto as Exhibit
F.
"Buyer Liabilities" shall have the meaning assigned thereto in Section
2.5(C).
"Cambes" shall mean Cambes, Ltd., a Delaware corporation.
"Cash Position" shall mean, in respect of the Buyer and as of the date of
determination, (1) the total amount of cash, cash equivalents and short-term
investments owned by the Buyer minus (2) the then total outstanding principal
amount of the Buyer's indebtedness to the Seller for borrowed sums.
"CellPro" shall mean CellPro, Inc., a Delaware corporation.
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"CellPro Litigation" shall have the meaning assigned thereto in Section
16.1.
"Chiron Collaboration Agreement" shall mean that certain Collaboration
Agreement, dated as of December 27, 1996, between Chiron Corporation and the
Seller.
"Chiron Sublicense" shall mean that certain sublicense from the Seller to
the Buyer relating to breast cancer antibodies licensed from Cetus Oncology
Corporation, d/b/a/ Chiron Therapeutics, to the Seller, in substantially the
form annexed hereto as Exhibit G.
"Class A Assets" shall have the meaning assigned thereto in Schedule 2.1.
"Class B Assets" shall have the meaning assigned thereto in Schedule 2.1.
"Closing Date" shall have the meaning assigned thereto in Section 2.6.
"Closing" shall have the meaning assigned thereto in Section 2.6.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Non-Competition and Confidentiality Agreement" shall mean the Non-
Competition and Confidentiality Agreement between the Seller and the Buyer
substantially in the form annexed hereto as Exhibit H.
"Contaminants" shall mean any material, pollutant, substance or waste which
is defined in, regulated by, or subject to any Environmental Law, including
asbestos and asbestos containing materials.
"Control" shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of an entity
(other than a natural person), whether through the ownership of voting capital
stock, by contract or otherwise.
"Controlled Subsidiary" shall mean, with respect to any Person, any other
Person in which such first Person owns, directly or indirectly, 50% or more of
the outstanding equity interest.
"Conversion Securities" shall mean any VIMRx Common Stock or Buyer Common
Stock issuable upon conversion or exercise of certain Acquired Securities.
"Copyrights" shall mean United States and foreign copyrights, whether
registered or unregistered.
"Customized Software" shall mean all Software owned by, licensed to or used
by the Seller in connection with the Division, other than Shrinkwrap Software.
"Data Room" shall mean Room 313 at the Xxxxxx Facility.
"Disclosure Period" shall mean the period commencing on the date hereof and
ending at 5:00 p.m. (Eastern time) on the date falling 14 days after (but not
including) the date hereof; provided, however, that in the event that such
14th day shall not be a Business Day, the Disclosure Period shall instead end
at 5:00 p.m. (Eastern time) on the next succeeding Business Day.
"Distribution Agreement" shall mean the Marketing, Sales and Distribution
Agreement substantially in the form annexed hereto as Exhibit I.
"Division" shall have the meaning assigned thereto in the Preamble to this
Agreement.
"Dorken Sublicense" shall mean that certain sublicense from BDG to the Buyer
relating to "B" cells licensed from Xxxx. Xxxxx Xxxxxx to BDG in substantially
the form annexed hereto as Exhibit J.
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"Encumbrance" shall mean any lien, charge, security interest, encumbrance or
claim, whether legal or equitable.
"Environmental Laws" shall mean any and all laws, statutes, codes, rules,
regulations, ordinances, orders, writs, decrees and injunctions of any
Authority relating to the protection or pollution of the environment, or
community health and safety, including the Comprehensive Environmental
Response Compensation and Liability Act, as amended, the Federal Solid Waste
Disposal Act, as amended by the Resource Conservation and Recovery Act and the
Hazardous and Solid Waste Amendments, the Clean Air Act, the Clean Water Act,
the Toxic Substances Control Act, the Safe Drinking Water Act and any similar
or analogous statutes, regulations and decisional law of any Authority.
"Xxxxxxx Opinion" shall mean the opinion of Xxxxxxx Xxxxxx & Green, P.C.
with respect to this Agreement and the transactions contemplated hereby, the
form and content of which shall be negotiated after the execution and delivery
hereof.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended, and the rules and regulations promulgated thereunder.
"ERISA Benefit Plans" shall mean any (i) "employee pension benefit plan" (as
such term is defined in Section 3(2) of ERISA), (ii) "multiemployer plan" (as
such term is defined in Section 3(37) of ERISA), or (iii) "welfare benefit
plan" (as such term is defined in Section 3(1) of ERISA).
"Excepted Obligations" shall mean the obligations set forth or described in
subsection 2 of Exhibit C.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder.
"Execution Schedule" shall mean that certain disclosure schedule (composed
of various sections) which is being delivered by the Seller to the Buyer in
connection herewith, but which is not an attachment to the Agreement. In all
other respects, references in this Agreement to "Schedules" shall be deemed
also to refer to the Execution Schedule.
"FDA" shall mean the U.S. Food and Drug Administration.
"First BD License" shall have the meaning assigned thereto in Section 16.1.
"First BD Sublicense" shall mean that certain sublicense, from the Seller to
the Buyer relating to CD34+ cell population and related antibody and method
patents licensed from Becton, Xxxxxxxxx and Company to the Seller, in
substantially the form annexed hereto as Exhibit K.
"GAAP" shall mean generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board, applied on a consistent basis.
"Hardware and Disposables Manufacturing Agreement" shall mean that certain
Hardware and Disposables Manufacturing Agreement between the Buyer and the
Seller substantially in the form annexed hereto as Exhibit L.
"Hardware and Disposables Supply Agreement" shall mean that certain Hardware
and Disposables Supply Agreement between the Buyer and the Seller
substantially in the form annexed hereto as Exhibit M.
"Xxxx-Xxxxx" shall mean the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976, as amended, and the rules and regulations promulgated thereunder.
"HHS" shall mean the United States Department of Health and Human Services.
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"Improvements" shall mean all buildings, structures and improvements located
on the Real Estate.
"Included Agreements" shall have the meaning assigned thereto in Schedule
2.1.
"Indemnified Party" shall have the meaning assigned thereto in Section 9.2.
"Indemnifying Party" shall have the meaning assigned thereto in Section 9.2.
"Information" shall mean confidential ideas, trade secrets, technology,
know-how, inventions (whether or not patentable) and improvements thereto,
concepts, methods, processes, formulae, reports, data, customer lists, mailing
lists, business plans, or other proprietary information.
"Innovir" shall mean Innovir Laboratories, Inc., a Delaware corporation.
"Innovir Common Stock" shall mean the common stock of Innovir, $.013 par
value per share.
"VIMRx Holdings" shall mean Innovir Holdings, Ltd., a Delaware corporation.
"VIMRx Holdings Common Stock" shall mean the common stock of Innovir
Holdings, $.01 par value per share.
"Innovir UK" shall mean Innovir Limited, an English private limited company.
"Innovir UK Ordinary Shares" shall mean the common shares of Innovir UK, one
pound par value per share.
"Innovir Germany" shall mean Innovir Gesellschaft fur die Entwicklung und
Synthese von Oligomeren mbH, a Gesellschaft mit beschrankter Halftung
organized under the laws of the Federal Republic of Germany.
"Innovir Preferred Stock" shall mean the Preferred Stock of Innovir, par
value $.06 per share, including Class B Preferred Stock and Preferred Stock
undesignated as to class or series.
"Intellectual Property" shall mean Copyrights, Patents, Trademarks,
Information and Software.
"Intellectual Property Right" shall mean any right possessed by any person
or entity which arises as a result of his or its ownership, license or use of,
or of any application for, or application for registration of, any
Intellectual Property.
"Inventory Entity" shall have the meaning set forth in Section 3.21 hereto.
"Isolex(R) and Maxsep(R) Technology" shall have the meaning assigned thereto
in the Hardware and Disposables Manufacturing Agreement.
"Isolex(R) and Maxsep(R) Products" shall have the meaning assigned thereto
in the Hardware and Disposables Manufacturing Agreement.
"KPMG" shall mean KPMG Peat Marwick LLP.
"Licenses" shall mean licenses, authorizations, authorities, approvals,
permits and certificates.
"Losses" shall mean liabilities, claims, losses, costs, damages, and
expenses (including without limitation, reasonable attorneys' fees and
expenses), whether incurred in connection with a claim, controversy or dispute
between the parties hereto or between a party hereto and one or more third
parties.
"Manufactured Products" shall mean (i) all Isolex(R) and Maxsep(R) Products
listed on Schedule I attached to the Hardware and Disposables Manufacturing
Agreement and all components thereof, in each case as currently
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produced by the Seller utilizing the Isolex(R) and Maxsep(R) Technology;
provided, however, that Manufactured Products shall not include those products
or components to be manufactured or supplied by the Seller under the Hardware
and Disposables Supply Agreement; (ii) all "Antibodies" (as that term is
defined in the Antibody Manufacturing and Storage Agreement) specified in
Schedule I attached to the Antibody Manufacturing and Storage Agreement, in
each case as currently produced by the Seller; and (iii) the products
currently used in the research and development program of the Business.
"Material Adverse Effect", with respect to the Seller, the Buyer or VIMRx,
means a material adverse effect, or the occurrence or existence of facts or
circumstances that would reasonably be expected to result in a material
adverse effect, on the business, assets, liabilities, results of operations,
properties, financial or operating condition of (i) the Division, in the case
of the Seller, (ii) VIMRx and its subsidiaries (other than the Buyer) taken as
a whole, in the case of VIMRx, and (iii) the Buyer and its subsidiaries, if
any, taken as a whole, in the case of the Buyer, or on the ability of any such
Person (and to the extent applicable, its subsidiaries) to consummate the
transactions contemplated hereunder.
"Milestone" shall mean each of the regulatory approval milestones set forth
on Exhibit N to this Agreement.
"Milestone Payment" shall mean each and any of the payments to be made to
the Seller pursuant to Section 6.2(A) to this Agreement.
"Munich Facility" shall mean the facility, located at Xxxxxxxxxxxxx 0-0 X-
00000 Xxxxxxxxxxxxxxx, Xxxxxxx, in which BDG currently conducts certain
operations on behalf of the Division.
"Nasdaq" shall mean the Nasdaq Stock Market.
"Net Projected Expenses" shall mean, in respect of the Buyer as of any given
Occurrence Date, the excess, if any, of (i) the total cash operating expenses
(excluding depreciation, amortization and similar non-cash items) projected by
the Buyer to be incurred by the Buyer during the 12-month period immediately
succeeding such Occurrence Date minus (ii) the total amount of revenue and
income, from whatsoever source, projected by the Buyer to be earned by the
Buyer during such 12-month period.
"NIH" shall mean the National Institutes of Health.
"Non-Assumed Liabilities" shall have the meaning assigned thereto in Section
2.5(A).
"Non-ERISA Plans" shall mean, in respect of any Person, each and every (i)
employee collective bargaining agreement, employment agreement (other than
employment agreements terminable by such Person without premium or penalty on
notice of 30 days or less under which the only monetary obligation of such
person is to make current wage or salary payments and provide current fringe
benefits), consulting, advisory or service agreement (as to the latter three,
where such person is the recipient of the services); deferred compensation
agreement, confidentiality agreement or covenant not to compete (other than
confidentiality agreements and covenants not to compete contained in
agreements which are required to be disclosed by such Person hereunder), (ii)
contract or agreement with any officer, director or employee (other than
employment agreements disclosed in response to clause (i) or excluded from the
scope of clause (i)), agent, or attorney-in-fact of such Person; or (iii)
stock option, stock purchase, bonus or other incentive plan or agreement.
"Occurrence Date" shall mean, with respect to any given Milestone, the date
on which such Milestone shall occur, if at all.
"Orders" shall mean any order, writ, injunction or decree of any Tribunal or
Authority.
"Owned Software" shall mean all Software owned by the Seller and used in the
Business of the Division.
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"Xxxxxx Facility" shall mean the facility, located at 9 Xxxxxx, Irvine,
California, in which the Division currently conducts certain of its
operations.
"Patents" shall mean United States and foreign patents, continuations,
continuations-in-part, divisions, reissues, reexaminations, extensions and
disclosures.
"Patent Rights" shall have the meaning assigned thereto in Section 16.1.
"Plan A Projections" shall mean the financial projections, relating to the
Buyer, which are included as Section 1 of the Execution Schedule.
"PBGC" shall mean the Pension Benefit Guaranty Corporation.
"Permitted Encumbrances" shall mean (a) liens for taxes and other
governmental charges and assessments which are not yet due and payable, (b)
liens of landlords and liens of carriers, warehousemen, mechanics and
materialmen and other like liens arising in the ordinary course of business
for sums not yet due and payable, (c) liens on deposits or pledges to secure
obligations under workmen's compensation, social security or similar laws and
(d) other liens, encumbrance(s) or imperfections on property which are not
material in amount or do not materially detract from the value of or
materially impair the existing use of the property affected by such lien,
encumbrance(s) or imperfection.
"Person" shall mean any individual, corporation, partnership, limited
partnership, limited liability partnership, joint venture, limited liability
company, association, joint-stock company, trust, unincorporated organization,
Authority or other entity.
"Primary Licenses" shall mean the following agreements: (i) the License
Agreement between the Seller and Becton, Xxxxxxxxx and Company, dated August
24, 1990 as amended on November 10, 1993 and March 30, 1995 (relating to CD34+
cell population and related antibody and method patents); (ii) the License
Agreement between the Seller and Becton, Xxxxxxxxx and Company, dated June 1,
1993 (relating to "B" cell antibodies); (iii) the Non-Exclusive License
Agreement between the Seller and Cetus Oncology Corporation d/b/a Chiron
Therapeutics, dated March 28, 1996 (relating to breast cancer antibodies); and
(iv) the Agreement between BDG and Xxxxxxxxx Xxxxx Xxxxxx, dated October 20,
1994 (relating to "B" cells).
"Proxy Statement" shall have the meaning assigned thereto in Section 5.16.
"PTO" shall mean the United States Patent and Trademark Office.
"Purchase Consideration" shall have the meaning assigned thereto in Section
2.2.
"Real Property" shall have the meaning assigned thereto in Section 3.7(B).
"Registration Rights Agreement" shall mean the registration rights agreement
substantially in the form annexed hereto as Exhibit O.
"Representatives" shall mean, with respect to any Person, such Person's
officer's, directors, employees, independent contractors, agents and
representatives.
"Ribonetics" shall mean Ribonetics Gesellschaft fur molekulare therapie
GmbH, a Gesellschaft mit beschrankter Halftung organized under the laws of the
Federal Republic of Germany.
"Round Lake Facility" shall mean the facility, located at WG 2-3S Route 120
& Xxxxxx Road, Round Lake, Illinois, in which the Division currently conducts
certain of its operations.
"Royalty Assignment and Agreement" shall mean the royalty assignment and
agreement substantially in the form annexed hereto as Exhibit P.
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"Saxholm Litigation" shall mean the certain litigation identified as Saxholm
AS x. Xxxxxx Healthcare Corp., Civil Action No. 94 C 5408, which is pending in
the Northern District of Illinois, Eastern Division.
"SEC" shall mean the United States Securities and Exchange Commission.
"Second BD Sublicense" shall mean that certain sublicense, from the Seller
to the Buyer relating to "B" cell antibodies licensed from Becton, Xxxxxxxxx
and Company to the Seller, in substantially the form annexed hereto as Exhibit
Q.
"SEC Reports" shall mean all forms, reports and documents required to be
filed with the SEC pursuant to the Securities Act or the Exchange Act.
"Section 14.2 Date" shall mean that date falling 21 days after (but not
including) the date hereof; provided, however, that in the event that such
21st day shall not be a Business Day, the Section 14.2 Date shall instead be
the next succeeding Business Day.
"Securities Act" shall mean the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.
"Seller" shall have the meaning assigned thereto in the Preamble to this
Agreement.
"Services Agreement" shall mean an agreement between the Buyer and the
Seller, to be negotiated after the execution and delivery hereof, relating to
manufacturing, regulatory and other support services (other than those covered
by (i) the Hardware and Disposables Manufacturing Agreement, (ii) the
Distribution Agreement and (iii) the other Transaction Documents) which shall
provide, among other terms to be mutually agreed by the parties, for the
Seller to provide to the Buyer, at its fully-loaded cost, certain services (of
the type which are now rendered by the Seller in respect of the Division).
"Seyfarth Opinion" shall mean the opinion of Seyfarth, Shaw, Xxxxxxxxxxx &
Xxxxxxxxx with respect to this Agreement and the transactions contemplated
hereby, the form and content of which shall be negotiated after the execution
and delivery hereof.
"Shrinkwrap Software" shall mean all Software that is available in consumer
retail stores and subject to form shrinkwrap license agreements.
"Software" shall mean computer software programs and software systems,
including, without limitation, all database applications, compilations, tool
sets, compilers, higher level or "proprietary" languages, related
documentation and materials, whether in source code, object code or human
readable form as well as all Copyrights, if any, appurtenant thereto.
"Stockholders' Agreement" shall mean the stockholders' agreement between
VIMRx and the Seller substantially in the form annexed hereto as Exhibit R.
"Sublicenses" shall mean, collectively, the Chiron Sublicense, the Dorken
Sublicense and the First and Second BD Sublicenses.
"Subsidiary" shall mean, as to any party, any corporation of which more than
50% of the outstanding capital stock having ordinary voting power to elect a
majority of the board of directors of such corporation (irrespective of
whether or not at the time stock of any other class or classes of such
corporation shall have or might have voting power by reason of the happening
of any contingency) is at the time directly or indirectly owned by the party,
by one or more of its subsidiaries, or by the party and one or more of its
subsidiaries.
"Tax Return" shall mean, in respect of any Person, any report, statement,
return, declaration of estimated Tax or other information required to be
supplied by or on behalf of such Person to a Tax Authority in connection
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with Taxes, or with respect to grants of Tax exemption, including any
consolidated, combined, unitary, joint or other return filed by any person
that properly includes the income, deductions or other Tax information
concerning such Person.
"Taxes" shall mean all taxes, including all Federal, state, local, foreign
and other income, franchise, sales, use, property, payroll, stamp,
withholding, environmental, alternative or add-on minimum and other taxes,
assessments, charges, duties, fees, levies or other governmental charges of
any kind whatsoever, and all estimated taxes, deficiency assessments,
additions to tax, penalties and interest, and any contractual or other
obligation to indemnity or reimburse any person with respect to any such
assessment.
"Third Party Claim" shall mean, in respect of any party hereto, any claim,
or the commencement, or possible commencement, of any Action with respect to
which indemnification is or is reasonably likely to be claimed by such party
pursuant to Section 9.
"Trademarks" shall mean United States, state and foreign trademarks, service
marks, logos, trade dress and trade names, whether registered or unregistered.
"Transaction Documents" shall mean the following:
(i) the Distribution Agreement,
(ii) the Non-Competition and Confidentiality Agreement,
(iii) the Assignment of Xxxxxx Lease,
(iv) the Registration Rights Agreement,
(v) the First BD Sublicense,
(vi) the Second BD Sublicense,
(vii) the Dorken Sublicense,
(viii) the Chiron Sublicense,
(ix) the Stockholders' Agreement,
(x) the Services Agreement,
(xi) the Antibody Manufacturing and Storage Agreement,
(xii) the Royalty Assignment and Agreement,
(xiii) the Hardware and Disposables Manufacturing Agreement,
(xiv) the Hardware and Disposables Supply Agreement,
(xv) the Voting Agreement,
(xvi) and each of the other agreements, documents and instruments being, or
to be, executed in connection with the transactions contemplated
hereunder.
"Transactional Taxes" shall mean all sales, use, transfer, conveyance, bulk
transfer, business and occupation, value added or other such Taxes, duties,
excises or governmental charges imposed by any taxing jurisdiction.
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"Tribunal" shall mean any domestic or foreign court, arbitration board or
other tribunal.
"VGI" shall mean VIMRx Genomics, Inc., a Delaware corporation.
"VGI Common Stock" shall mean the common stock of VGI, $.01 par value per
share.
"VIMRx Common Stock" shall mean the common stock of VIMRx, $.001 par value
per share.
"VIMRx Preferred Stock" shall mean Series A Convertible Preferred Stock of
VIMRx, par value $.001, having rights, preferences and designations (including
a per share liquidation value of $1,000) as set forth on Exhibit S to this
Agreement.
"VIMRx" shall have the meaning assigned thereto in the Preamble to this
Agreement.
"Voting Agreement" shall mean that certain Voting Agreement, between the
Seller, VIMRx, Xxxxxxx X. Xxxxxxx, Xxxxxx X. Xxxxxxx, Xxxxxxxx X. Xxxx,
Xxxxxxx X. Xxxxxxxxx, M.D., Xxxx X. Xxxx, M.D. and Paramount Capital Asset
Management Inc. substantially in the form annexed hereto as Exhibit T.
"Warrant" shall mean a stock purchase warrant, substantially in the form
annexed hereto as Exhibit U, for the purchase of 6.383 additional shares of
the Buyer Common Stock (which number of shares, if issued at Closing, would
represent, immediately after issuance thereof, 6% of all issued and
outstanding Buyer Common Stock) at an aggregate exercise price of $6,000,000.
1.2 Interpretation.
(A)In respect of any of the Seller, the Buyer or VIMRx, the terms "to the
knowledge of" such Person and "awareness of" such party, and variations
thereof, shall be deemed to refer to the actual knowledge and/or awareness
(without any requirement of inquiry) of the Relevant Persons of such Party.
In respect of the Seller, the term "Relevant Persons" shall be deemed to
refer to (i) Xxxxxx X. Xxxxxxx, Xxxx X. Xxxx, Xxxxxxx X. Xxxxxxxx, Xxxxxx
X. Xxx Xxxx, Xxxxxx Xxxxxxx, Xxxxxxx Xxxxxx, Xxxxxxx Xxxxxx, Xxxxx Xxxxxxx,
Xxxxx Xxxxx, Xxxxxxx Xxxxxxxx, Xxx Xxxxxxxx, Xxxxx Xxxxx, Xxxxxx Xxxxxxx,
Xxxxxxxx Xxxxx, Xxxxxxx X. Lake, Xxxx X. Xxxxxxxx, Xxxxx Xxxxxxx, Xxxxx
Xxxxx, and (ii) any other person who, prior to the Closing Date, shall
succeed to the position or office now held by any of the foregoing persons
in (i). In respect of the Buyer, the term "Relevant Persons" shall be
deemed to refer to (i) Xxxxxxx X. Xxxxxxx, L. Xxxxxxx XxXxxxxx, Xxxxxxx X.
X'Xxxxxxx, Xxxxxx X. Xxxxxxxxxx, Xxx X. Xxxx and Xxxxx X. Xxxxxxx, Ph.D.,
and (ii) any other person who, prior to the Closing Date, shall succeed to
the position or office now held by any of the foregoing persons in (i). In
respect of VIMRx, the term "Relevant Persons" shall be deemed to refer to
(i) Xxxxxxx X. Xxxxxxx, L. Xxxxxxx XxXxxxxx, Xxxxxxx X. X'Xxxxxxx, Xxxxxx
X. Xxxxxxxxxx, Xxx X. Xxxx, Xxxxxxx X. Xxxxx, Ph.D., Xxxxxx Xxxxxx, Ph.D.,
Xxxxx Xxxxx, M.D. and Xxxxx X. Xxxxxxx, Ph.D., and (ii) any other person
who, prior to the Closing Date, shall succeed to the position or office now
held by any of the foregoing persons in (i).
(B)Whenever in this Agreement the phrase "in the ordinary course of
business" is used, it shall be construed as meaning "in the ordinary course
of business and substantially consistent with prior practice."
(C)Whenever in this Agreement the term "including" is used, it shall be
construed as meaning "including but not limited to."
(D)All accounting terms not specifically defined herein shall be
construed in accordance with GAAP in effect at the Closing.
(E)Whenever in this Agreement the term "agreement" is used, it shall be
deemed to refer to commitments, leases, licenses, contracts and agreements.
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(F)Whenever in this Agreement the term "party to" is used in regard to an
agreement, it shall be construed as meaning "party to or bound by".
(G)Notwithstanding anything to the contrary in this Agreement, in
connection with any representations or warranties relating to (i)
Manufactured Products to be acquired by the Buyer from third parties, and
(ii) products currently used in the research and development program of the
Business, and which form a part of the Manufactured Products, neither the
Seller nor any of its officers, directors, employees or representatives,
including without limitation those individuals set forth in Section 1.2(A)
hereof, shall have any obligation or requirement of any kind whatsoever to
conduct any inquiry to support such representations and warranties.
2.Purchase and Sale of the Assets; Closing.
2.1 Purchase and Sale.
(A)In reliance on the representations and warranties contained herein and
subject to all of the terms and conditions hereof, the Seller hereby agrees
to sell, assign, transfer and deliver (or cause to be sold, assigned,
transferred and delivered) to the Buyer and the Buyer agrees to purchase
from the Seller, on the Closing Date, all of the Seller's right, title and
interest in and to the Class A Assets, as set forth or described on
Schedule 2.1 hereto.
(B)In reliance on the representations and warranties contained herein and
subject to all of the terms and conditions hereof, the Seller hereby agrees
to sell, assign, transfer and deliver (or cause to be sold, assigned,
transferred and delivered) to VIMRx and VIMRx agrees to purchase from the
Seller, on the Closing Date, all of the Seller's right, title and interest
in and to the Class B Assets, as set forth or described on Schedule 2.1
hereto; provided, however, that notwithstanding the foregoing, VIMRx
hereby, effective as of the Closing Date (and for the consideration
described in Section 2.4 below), assigns to the Buyer all of VIMRx's rights
to receive all of the Seller's right, title and interest in and to the
Class B Assets, with the result that the Class B Assets shall be conveyed
directly to the Buyer.
2.2 Purchase Consideration. In consideration of the sale, assignment and
transfer of the Class A Assets and Class B Assets pursuant to Section 2.1
hereof, VIMRx or the Buyer, as the case may be, agrees to pay or issue to the
Seller the following consideration (the "Purchase Consideration"):
(A)eleven million (11,000,000) shares of VIMRx Common Stock;
(B)forty thousand (40,000) shares of VIMRx Preferred Stock;
(C)in the event that the aggregate Agreed Value of the eleven million
shares of VIMRx Common Stock issued pursuant to Section 2.2(A) hereof
(hereinafter, the "Aggregate Agreed Value") shall be less than $50,000,000,
such additional number of shares of VIMRx Preferred Stock as shall equal
the result obtained by dividing, by 1,000, the difference of $50,000,000
minus the Aggregate Agreed Value; provided, however, that in lieu of any
fractional share which might otherwise be due pursuant to such formula,
VIMRx shall pay to the Seller an equivalent amount in cash (based on a
liquidation value of $1,000);
(D)Nineteen and one-half (19.5) shares of Buyer Common Stock, which will
represent, immediately after the issuance thereof, 19.5% of all issued and
outstanding Buyer Common Stock; and
(E)the Warrant.
2.3 Payment. At the Closing provided for in Section 2.6 hereof, the Buyer
and VIMRx, as the case may be, shall deliver to the Seller certificates
representing the VIMRx Common Stock, VIMRx Preferred Stock and Buyer Common
Stock provided for in Section 2.2, together with the Warrant, against delivery
of the items designated to be delivered by the Seller at Closing pursuant to
Section 8.1.
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2.4 Issuance to VIMRx. In consideration for the agreement of VIMRx to assign
to the Buyer its rights to acquire the Class B Assets, as provided in Section
2.1(B), the Buyer shall, on the Closing Date, issue to VIMRx 80.5 shares of
Buyer Common Stock, which will represent, immediately after the issuance
thereof, 80.5% of all issued and outstanding Buyer Common Stock.
2.5 Liabilities.
(A)Liabilities Not Assumed. Except as specifically provided in Section
2.5(B), the Buyer and VIMRx neither assume nor shall be obligated to pay,
perform or discharge, and the Seller hereby agrees to pay, perform,
discharge or otherwise satisfy in due course and to hold the Buyer and
VIMRx harmless from, any and all debts, liabilities and obligations of the
Seller, whether known or unknown, fixed, contingent or otherwise, including
all Taxes arising from any Seller operations up to and including the
Closing Date (all such non-assumed liabilities being hereinafter
collectively referred to as the "Non-Assumed Liabilities").
(B)Assumed Liabilities. In addition to the consideration payable pursuant
to Section 2.2 hereof, and subject to the terms and conditions set forth in
this Agreement, effective as of the Closing Date, the Buyer hereby assumes
only those liabilities of the Seller specifically set forth on Exhibit C
(the "Assumed Liabilities").
(C)Buyer Liabilities. The Seller shall have no liability for any
obligations of the Buyer that are incurred or arise after the Closing Date
("Buyer Liabilities") except to the extent (i) otherwise provided in this
Agreement or any Transaction Document or (ii) that any such liability
arises from a wrongful act or omission on the part of the Seller, any
Affiliate of Seller or any Representative of any of the foregoing.
(D)No Assumption by VIMRx. In connection with the assignment, by VIMRx to
the Buyer, of the rights described in Section 2.1(B), VIMRx neither
assumes, nor shall be obligated to pay, perform or discharge, any debts,
obligations or liabilities of the Seller, whether known or unknown, fixed,
contingent or otherwise.
2.6 Closing. The closing of the purchase and sale of the Assets hereunder
(the "Closing") shall be held at the offices of the Seller located at the
Xxxxxx Facility, as promptly as reasonably practicable following the date on
which the last of the conditions set forth in Section 7 has been satisfied or
waived in accordance with the terms of this Agreement, or on such other date,
and at such other time and place, as the Seller and the Buyer shall mutually
agree in writing (the day of occurrence of the Closing being referred to
hereinafter as the "Closing Date").
3.Representations and Warranties of the Seller
The Seller represents and warrants to the Buyer and VIMRx as of the end of
the Disclosure Period, and as of the Closing Date, as follows:
3.1 Good Standing.
The Seller is a corporation organized, validly existing and in good standing
under the laws of the State of Delaware, and with respect to the Business of
the Division, has all necessary corporate power and authority to own, lease
and operate its properties and to carry on the Business as the same is now
being conducted. True, accurate and complete copies of the Certificate of
Incorporation and By-Laws of the Seller have been provided to the Buyer.
3.2 Authority.
The Seller possesses full right, corporate power and legal authority to
execute and deliver this Agreement and the Transaction Documents to which the
Seller is a party and to perform each of the agreements and make
12
each of the representations and warranties on its part to be performed and
made hereunder and thereunder. The execution and delivery of this Agreement
and the Transaction Documents to which the Seller is a party and the
consummation by it of the transactions contemplated hereby and thereby have
been duly and validly authorized by all necessary corporate action on the part
of the Seller. This Agreement has been duly and validly executed by the Seller
and constitutes, and the Transaction Documents (upon and subject to their
execution and delivery by all parties thereto) shall constitute, the legal,
valid and binding obligation of the Seller enforceable against it in
accordance with their terms subject to the qualification that the
enforceability thereof may be limited by bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and similar laws, now or hereafter in
effect, affecting creditors' rights and except that the availability of
equitable remedies, including specific performance, is subject to the
discretion of the court before which any proceeding for the enforcement
thereof may be brought. Except as set forth on Schedule 3.2, the execution and
delivery of this Agreement and the Transaction Documents to which the Seller
is a party and the performance by it of all of the transactions contemplated
herein and therein do not and shall not (with or without the giving of notice
or the passage of time or both) (A) violate or conflict with the Certificate
of Incorporation or By-laws of the Seller, or (B) (1) violate or conflict with
any law, rule, ruling, determination, ordinance or regulation of any Authority
or any condition or provision of, (2) result in the creation or imposition of
any Encumbrance upon any of the Assets of the Seller pursuant to, (3)
accelerate or create, or permit the acceleration or creation of, any liability
or obligation of the Seller under, or (4) cause a termination under or give
rise to a right of termination under, the terms of, any contract, mortgage,
lien, lease, agreement, indenture, trust, instrument, order, judgment or
decree to which the Seller is a party or which is binding upon the Seller (it
being agreed that this subsection (B) shall be deemed to refer only to the
Assets, liabilities, obligations, contracts, mortgages, liens, leases,
agreements, indentures, trusts, instruments, orders, judgments and decrees
which relate to or affect the Division and which are being transferred to,
assumed by or sublicensed to the Buyer, as the case may be); provided,
however, that the existence of any such violations, conflicts, encumbrances,
accelerations, creations, terminations or rights of termination shall not be
deemed to be a breach of this Section 3.2 unless, individually or in the
aggregate, they would have a Material Adverse Effect on the Division or
(subsequent to the Closing) on the Buyer.
3.3 Consents and Approvals.
Except at set forth on Schedule 3.3, no other action or consent, whether
corporate or otherwise, including action or consent by any Authority, is
necessary in connection with the execution, delivery, validity or
enforceability of this Agreement or the Transaction Documents with respect to
the Seller or the consummation by it of the transactions contemplated hereby
and thereby.
3.4 Financial Statements.
To the knowledge of the Seller, the representations contained in paragraph
numbers 1 through 14 of that certain Management Representation Letter, dated
July 28, 1997, to KPMG from the Seller (executed by Messrs. Xxxx and Xxxxxxx
and Xxx. Xxxxx) are true and correct.
3.5 FDA and Related Regulatory Matters.
(A)Except as otherwise disclosed in Schedule 3.5(A), all current products
of the Business which shall constitute Manufactured Products, Supplied
Products, Antibodies, Reagents and Reagent Kits under the Hardware and
Disposables Manufacturing Agreement, the Hardware and Disposables Supply
Agreement, and/or the Antibody Manufacturing and Storage Agreement, and all
components thereof (all such products and components being collectively
referred to as the "Current Xxxxxx Products") and which are manufactured by
the Seller or any Affiliate of the Seller, are in compliance, in all
material respects, with all applicable requirements of the FDA and any
analogous Authority in any country or other jurisdiction in which such
Current Xxxxxx Products are manufactured, processed, packaged, labeled,
held or sold.
(B)Except as otherwise disclosed in Schedule 3.5(B), to the Seller's
knowledge, all Current Xxxxxx Products which are manufactured, processed,
packaged, labeled or held by Persons other than the Seller or
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any Affiliate of the Seller are in compliance, in all material respects,
with all applicable requirements of the FDA and any analogous Authority in
any country or other jurisdiction in which such Current Xxxxxx Products are
manufactured, processed, packaged, labeled, held or sold.
(C)Except as otherwise disclosed in Schedule 3.5(C), all facilities,
owned or operated by Seller or any Affiliate of Seller, at which any
Current Xxxxxx Products are manufactured, processed, packaged, labeled or
held are in compliance, in all material respects, with all applicable
requirements of the FDA and any analogous Authority in any country or other
jurisdiction in which such Current Xxxxxx Products are manufactured,
processed, packaged, labeled, held or sold.
(D)Except as otherwise disclosed in Schedule 3.5(D), to the Seller's
knowledge, all facilities, owned or operated by Persons other than Seller
or any Affiliate of Seller, in which any Current Xxxxxx Products are
manufactured, processed, packaged, labeled, held or sold are in compliance,
in all material respects, with all applicable requirements of the FDA and
any analogous Authority in any country or other jurisdiction in which such
Current Xxxxxx Products are manufactured, processed, packaged, labeled,
held or sold.
(E)The Seller and each relevant Affiliate of Seller has obtained all
required marketing and clinical authorizations, clearances or approvals in
each foreign country in which it distributes any Current Xxxxxx Products
(including all approvals necessary for the Seller or such Affiliate to be
paid or reimbursed therefor). Schedule 3.5(E) sets forth a true and correct
list of such foreign marketing and clinical authorizations, clearances and
approvals.
(F)Schedule 3.5(F) sets forth a true and correct list of all PMA's,
510(k)'s, IDE's, IND's, MAF's, DMF's, ELA's, PLA's and other FDA related
submissions ("FDA Submissions") which (i) relate to Current Xxxxxx Products
and (ii) are either (a) submitted and pending, or (b) cleared and/or
approved.
(G)Except as set forth in Schedule 3.5(G), non-clinical data supporting
the quality and integrity of the safety data in all FDA Submissions listed
on Schedule 3.5(F) were generated in compliance, in all material respects,
with all applicable requirements under Federal, state, local or foreign
law.
(H)Except as set forth in Schedule 3.5(H), the Seller and each Affiliate
of the Seller is in compliance, in all material respects, with all MDR
requirements as set forth in 21 C.F.R. Parts 803 and 804, as well as with
all analogous state, local and foreign laws, in connection with each
facility referred to in Section 3.5(C); provided, however, that this
representation shall apply only to the extent that such MDR (or analogous)
requirements relate to Current Xxxxxx Products.
(I)Except as set forth in Schedule 3.5(I), to the Seller's knowledge, the
relevant responsible party is in compliance, in all material respects, with
all MDR requirements as set forth in 21 C.F.R. Parts 803 and 804, as well
as with all analogous state, local and foreign laws, in connection with
each facility referred to in Section 3.5(D); provided, however, that this
representation shall apply only to the extent that such MDR (or analogous)
requirements relate to Current Xxxxxx Products.
(J)Except as set forth in Schedule 3.5(J), in regard to the Current
Xxxxxx Products, the Seller and each Affiliate has complied in all material
respects with the applicable import and export provisions of federal, state
and local law as well as the applicable import and export laws of relevant
foreign countries. When exporting Current Xxxxxx Products pursuant to 21
U.S.C. (S)382(b), the Seller and each relevant Affiliate has provided the
FDA with written notice as required by 21 U.S.C. (S)382(g). When required
for purposes of import of Current Xxxxxx Products into foreign countries,
the Seller and/or any relevant Affiliate has obtained all required FDA
certifications for provision to the relevant foreign Authorities.
(K)All FDA Submissions listed on Schedule 3.5(F) were prepared in
compliance, in all material respects, with applicable FDA laws and relevant
agency guidance documents and contain all necessary data and information
required to be contained therein under applicable law and policy.
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(L)In connection with the Current Xxxxxx Products and the facilities
referred to in Section 3.5(C) (including the operations conducted therein)
neither Seller, nor any Affiliate of Seller nor any Representative of any
of the foregoing, has made an untrue statement of a material fact or a
fraudulent statement to the FDA or any other Authority, failed to disclose
a material fact required to be disclosed to the FDA or any such other
Authority, or committed any act that would reasonably be expected to
provide a basis for the FDA to invoke its policy respecting "Fraud, Untrue
Statements of Material Facts, Bribery, and Illegal Gratuities," as set
forth in 56 Fed. Reg. 46191 (September 10, 1991) or for any such other
Authority to invoke any analogous policy.
(M)None of the clinical data which was used in connection with any of the
FDA Submissions listed on Schedule 3.5(F), or any required marketing or
clinical authorizations, clearances and approvals described in Section
3.5(E) above, was collected or obtained from a clinical investigator who
was at the time disqualified by the FDA or any other Authority.
3.6 Taxes.
Except as set forth in Schedule 3.6:
(A)As a division of the Seller, the Division does not file Tax Returns;
(B)The Seller has, in respect of the Division and the Assets, withheld
proper and accurate amounts (including from persons now or previously
employed by the Division for income Taxes and Social Security and other
payroll Taxes) for all periods in compliance with all relevant Tax laws and
other withholding provisions of all applicable laws; and either paid such
amounts to the relevant Tax Authorities or set them aside in accounts for
such purpose; provided, however, that no failure to so withhold, pay or set
aside such Taxes shall constitute a breach of this Section 3.6(B) unless
such failure would have a Material Adverse Effect on the Division;
(C)the Seller has, since its incorporation, been a "C" corporation, as
defined in Section 1361(a) of the Code; and
(D)no transaction contemplated by this Agreement is subject to
withholding under Section 1445 of the Code.
3.7 Title; Tangible Personal Property and Real Property.
(A)The net book value of the furniture, fixtures and equipment included
in the Assets shall, as of the Closing Date, be not less than $7.2 million.
Except as set forth in Schedule 3.7(A), each material item of tangible
personal property included in the Assets, as well as each material item of
personal property covered by a lease included in the Included Agreements,
is in reasonable working order. Each such item of owned or leased property
is located in the Xxxxxx Facility.
(B)The Seller leases the Xxxxxx Facility pursuant to a lease disclosed on
Schedule 3.0(A) (such facility, together with the land upon which it is
situated, shall collectively be referred to herein as the "Real
Property.").
(C)With respect only to the Real Property, to the knowledge of the Seller
(except for the representation relating to receipt of written notice in the
second clause of subsection (iii), which is not qualified by knowledge):
(i)the use being made thereof by the Seller is in conformity with
valid and subsisting certificates of occupancy issued therefor;
15
(ii)neither the whole nor any portion of the Real Property is in the
process of being condemned, requisitioned or otherwise taken by any
Authority, and no such condemnation, requisition or taking is
threatened;
(iii)the Real Property complies in all material respects with all
building, fire, zoning and other ordinances and regulations of all
Authorities applicable thereto; and the Seller has not received any
written notice (and is unaware of having received any verbal notice) of
any alleged violation of any of the foregoing;
(iv)the use, occupancy and operation of the Real Property as
currently used, occupied and operated by the Seller in connection with
the Business of the Division does not constitute a materially
nonconforming use under any applicable law, regulation or ordinance;
(v)the Seller has a valid leasehold interest in the Xxxxxx Facility
lease free and clear of Encumbrances, other than Permitted
Encumbrances; and
(vi)the Xxxxxx Facility, including the roof and structural elements
thereof and the systems and facilities included therein, are in
reasonable operating condition and repair.
(D)The Seller is the sole and exclusive owner of and has good and valid
title to all of the Assets free and clear of all Encumbrances, except for
Permitted Encumbrances and except as set forth in Schedule 3.7(D) hereto.
(E)The Assets, together with the performance by the Seller of its
obligations under the Transaction Documents, are sufficient to enable the
Buyer (i) to conduct the Business, in all material respects, as it was
conducted by the Division prior to the Closing (the parties recognizing
that changes in the conduct of the Business may result from differences in
personnel arising from, for example, the fact that certain employees of the
Seller may not become employees of the Buyer), subject to the Seller's
rights and obligations under the Chiron Collaboration Agreement, and (ii)
to achieve the levels of financial performance contemplated by the Plan A
Projections; provided, however, that nothing herein shall be construed to
constitute a guarantee of performance by the Seller of the financial
performance by the Buyer of the Plan A Projections. There are no rights or
assets retained by the Seller and/or its Affiliates that would prevent the
Buyer from conducting the Business, in all material respects, as it was
conducted prior to the Closing, subject to (i) any rights retained with
respect to the Seller's performance of its obligations under the Chiron
Collaboration Agreement, (ii) rights relating to the products or components
to be manufactured or supplied by the Seller under the Hardware and
Disposables Supply Agreement and (iii) the rights under the Primary
Licenses.
3.8 Intellectual Property.
(A)Schedule 3.8(A) contains a list and description of all Patents and
Trademarks currently owned by or licensed to the Seller in connection with
the Division (separately identifying those which are owned and those which
are licensed and, if not owned by the Seller, identifying the owner
thereof, if any).
(B)Schedule 3.8(B) contains a list and description of all material
Copyrights (registered or unregistered) licensed to the Seller in
connection with the Division (identifying the owner thereof and the related
work).
(C)Schedule 3.8(C) contains a list of (i) all applications for
registration of any Intellectual Property (other than Patents) owned by or
licensed to the Seller in connection with the Division (other than
applications relating to Supplied Products or products acquired by the
Buyer from third parties) as well as a list of all existing registrations
of any such Intellectual Property (in either case, identifying the
Intellectual Property, the application or registration number and the
jurisdiction thereof) and (ii) pending applications for any Patents
relating to Intellectual Property used in connection with the Division
(other than applications
16
relating to Supplied Products or products acquired by the Buyer from third
parties) where the Seller is listed as the owner or is the licensee of any
of the underlying technology (identifying the subject matter of the
application, the relevant application number, the jurisdiction thereof and
the owner thereof). True and correct copies of all such applications and
registrations have been provided to the Buyer.
(D)Except as set forth on Schedule 3.8(D), such Schedule contains a list
of all material documents relating to product clearances for Patent
infringement performed by or on behalf of the Seller with respect to (i)
all Isolex(R) and Maxsep(R) Products and (ii) all other Manufactured
Products. The Seller has delivered to the Buyer true and correct copies of
all such documents.
(E)Schedule 3.8(E) contains a list and description (showing in each case
the parties thereto and, in the event the same has not been reduced to
writing, the material terms thereof) of all material agreements and
licenses to which the Seller is a party or by which it is bound which
entitle the Seller or a third party to use, or restrict the Seller's or a
third-party's use of, (i) any Copyrights, Patents, Trademarks or
Information owned by, licensed to, or used by, the Seller in connection
with the Division or (ii) any Customized Software.
(F)Schedule 3.8(F) contains a list and description, showing in each case
the owner or licensor, of all Customized Software.
(G)Except as disclosed in Schedule 3.8(G): (i) to the knowledge of the
Seller, all Patents, and all Copyright and Trademark registrations, owned
by the Seller in connection with Manufactured Products are valid and in
full force and effect, and (ii) the Seller has not received written notice
(and is unaware of having received any verbal notice) of any outstanding
challenges, by any third party, either to any such Patents or registrations
or to any of the applications described in Section 3.8(C).
(H)Except as disclosed in Schedule 3.8(H), the Seller is not aware that
there now exists any use, by a third party, of any Intellectual Property
which violates any material Intellectual Property Right of the Seller (in
connection with Manufactured Products).
(I)Except as set forth in Schedule 3.8(I), (i) to the Seller's knowledge,
no infringement of any material Intellectual Property Right of any other
person or entity has occurred or results in any way from the current
operations of the Division or the Business, and (ii) no claim of any
infringement by the Seller (in connection with the Division or the
Business) of any material Intellectual Property Right of any other person
or entity has been made, asserted or threatened in writing (and the Seller
is unaware of any verbal such claims) against and to the Seller.
(J)Except as set forth on Schedule 3.8(J), there is no existing material
breach, by the Seller, of any material agreement by which the Seller has
granted or received a license or sublicense of an Intellectual Property
Right, including, but not limited to, the Primary Licenses ("Material
Intellectual Property Agreements") by the Seller. To the Seller's
knowledge, and subject to the foregoing, each of the Material Intellectual
Property Agreements is valid, enforceable and in full force and effect,
except to the extent the enforceability thereof may be affected by
applicable bankruptcy, reorganization, insolvency, moratorium or other
similar laws or general principles of equity. To the Sellers' knowledge,
except as set forth in Schedule 3.8(J), no material default, by any party
other than the Seller, exists under any of the Material Intellectual
Property Agreements and no event has occurred which, with the lapse of time
or the giving of notice or both is reasonably likely to constitute a
material breach of any such agreement by the Seller or give rise to a right
on the part of any of the other parties thereto to terminate such agreement
or to deprive the Seller of any material right, or accelerate any of its
material obligations, thereunder.
(K)Except as disclosed in Schedule 3.8(K): (i) the Owned Software is not
subject to any transfer, assignment, site, equipment, or other operational
limitations; (ii) the Owned Software is eligible for protection and
registration under applicable copyright law and, to the knowledge of the
Seller, has not been
17
forfeited to the public domain; (iii) the Seller has copies of all releases
or separate versions of the Owned Software so that the same may be subject
to registration in the United States Copyright Office; (iv) the Seller has
all right, title and interest in and to the Owned Software; (v) the Seller
has developed the Owned Software through its own efforts and for its own
account without the aid or use of any consultants, agents, independent
contractors or persons or entities other than persons who are (or were at
the time) employees of the Seller; and (vi) any Owned Software includes the
source code, object code and system documentation, used for the
development, maintenance, implementation and use thereof.
(L)Except as disclosed in Schedule 3.8(L), all employees, agents,
consultants or contractors who have contributed to or participated in the
creation or development of any copyrightable, patentable or trade secret
material on behalf of the Seller or any predecessor in interest thereto
either: (x) is a party to a valid written agreement under which the Seller
is deemed to be the original owner/author of all property rights therein;
or (y) has executed, or is obligated pursuant to an existing agreement to
execute, a valid agreement assigning to the Seller (or such predecessor in
interest, as applicable) all right, title and interest in such material;
provided, however, that this Section 3.8(L) shall not apply to any
copyrightable, patentable or trade secret material which, whether
considered individually or in the aggregate, is not material to the
operation of the Business.
(M)Subject to Section 1.2(G) hereof, with respect to all representations
in this Section 3.8 which are made to the Seller's "knowledge" or which
involve the Seller's "awareness" of any facts or circumstances, the Seller
represents and warrants that it has performed a reasonable due diligence
review with respect to the subject matter thereof.
3.9 Environmental Matters.
(A)Schedule 3.9 lists all written notices (and all verbal notices of
which the Seller is aware) received by the Seller of violations of
Environmental Laws or environmental claims from environmental Authorities
since January 1, 1992 (in each case, only to the extent that they relate(d)
to the Xxxxxx Facility). The Seller has delivered to the Buyer true and
correct copies of all such notices, claims and reports, as well as all
reports of the Seller filed with such Authorities since such date which
relate to the Division.
(B)Except as set forth in Schedule 3.9, with respect only to the Xxxxxx
Facility, to the knowledge of the Seller, (i) there has been no release or
discharge by the Seller (or any other Person) of any Contaminant in or on
the Xxxxxx Facility (or the land upon which it is situated) and (ii) there
otherwise exist no Contaminants on or in any such real property, in any
material quantity, which, in either case, would (a) constitute or have
constituted a material violation of any Environmental Law, or (b) give rise
to an obligation on the part of the Seller, its assigns or successors in
interest to effect any environmental cleanup or remediation.
3.10 Contracts and Commitments.
(A)Except as set forth on Schedule 3.10(A), the Seller is not, solely in
connection with the Division, a party to any written or oral:
(i)cooperative research and development agreement, supply agreement,
research agreement, research funding agreement, clinical trial
agreement, cell processing laboratory agreement, investigator
agreement, development agreement, consulting agreement, incoming
material transfer agreement, or outgoing material transfer agreement;
(ii)lease of real property, or commitment, contract or agreement for
the purchase or sale of real property;
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(iii)royalty, distribution, agency or license agreement (license
agreements shall include, but not be limited to, any agreement pursuant
to which the Seller or any third party is licensed, or otherwise
afforded the right, to use, sell, reproduce or exploit any Intellectual
Property);
(iv)agreement of employment with any officer, employee, director,
professional person, or independent contractor (including consultants)
which is not terminable, at the discretion of the Seller, without
payment or other penalty, on 30 (or fewer) days' notice from the
Seller;
(v)agreement (including a collective bargaining agreement) with any
labor union or other representative of employees;
(vi)agreement guaranteeing the payment or performance of the
obligations of others;
(vii)lease of any personal property under which aggregate payments
exceed $15,000 per year;
(viii) agreement not made in the ordinary course of business
involving a sum in excess of $15,000;
(ix)agreement (except leases of personal property) for the purchase
or sale of products or other personal property, or the provision or
purchase of services, involving a sum in excess of $15,000;
(x)partnership or joint venture agreement;
(xi)security, pledge or escrow agreement or any other agreement
creating or providing for the creation of any Encumbrance;
(xii) agreement restricting in any way the ability of the Seller to
engage in any enterprise;
(xiii) agreement (other than agreements of employment with an
officer, employee, director, professional person or independent
contractor) restricting in any way the ability of a third party to
engage in any enterprise;
(xiv) agreement obligating the Seller to pay any commission, finder's
fee or other such contingent remuneration;
(xv)agreement under which the Seller is obligated to provide or
expend services, property or cash with a fair market value in excess of
$15,000; or
(xvi) agreement, not otherwise required to be disclosed on Schedule
3.10(A) pursuant to the above provisions of this Section 3.10(A), which
constitutes an Included Agreement.
(B)True and correct copies of those agreements which are required to be
disclosed on Schedule 3.10(A) and which have been reduced to writing have
been delivered to the Buyer, and Schedule 3.10(B) contains a true and
correct description of all material terms of those of such agreements which
have not been reduced to writing.
(C)Except as set forth on Schedule 3.10(C), there is no existing material
breach of any Included Agreement, or any Primary License, by the Seller. To
the Seller's knowledge, and subject to the foregoing, each of the Included
Agreements, and each Primary License, is valid, enforceable and in full
force and effect, except to the extent the enforceability thereof may be
affected by applicable bankruptcy, reorganization, insolvency, moratorium
or other similar laws or general principles of equity, and no event has
occurred which, with the lapse of time or the giving of notice or both is
reasonably likely to constitute a material breach of any such agreement by
the Seller or give rise to a right on the part of any of the other parties
thereto to terminate such agreement or to deprive the Seller of any
material right, or accelerate any of its material obligations, thereunder.
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(D)Except as set forth on Schedule 3.10(D), to the knowledge of the
Seller, there is no existing material breach of any Included Agreement, or
any Primary License, by any party (other than the Seller) thereto, and no
event has occurred which, with the lapse of time or the giving of notice or
both, is reasonably likely to constitute a material breach thereof by such
other party or give rise to a right on the part of the Seller to terminate
such agreement or to deprive the other party of any right, or accelerate
any obligation of such party, thereunder.
(E)Except as set forth on Schedule 3.10(E), to the knowledge of the
Seller, there are no circumstances which, if true, create a reasonable
probability that the Seller will not, or will be unable to, fulfill any of
its material obligations, under any material Included Agreement or any
Primary License.
(F)The Seller (or the relevant Affiliate, in the case of insurance held
by an Affiliate) has not, during the current term of any insurance policy
which provides coverage with respect to persons, properties or operations
of the Division, received any notice canceling or threatening to cancel or
refusing to renew, based (to the knowledge of the Seller) on reasons
relating directly to the Business or the Division, any such policy, and no
policy insuring any such persons, properties or operations has, based (to
the knowledge of the Seller) on reasons relating directly to the Business
or the Division, been canceled by the insurer within the last twelve
months.
3.11 Labor Relations.
The Seller employs 88 employees in the Division in the United States,
none of whom is subject to union or collective bargaining agreements by
which the Seller is bound or subject. The name of each such employee is
listed on Schedule 3.11. The Seller has not at any time during the last
five years, had, nor is there now to the knowledge of the Seller
threatened, a strike, picket, work stoppage, work slowdown, union
organizing activity or other labor trouble that has had or would be
reasonably likely to have a Material Adverse Effect on the Division. The
Seller is not aware of any pending or threatened union activity, strike,
picketing, work stoppage, work slowdown or other labor trouble with respect
to the employees of any of the providers of goods and services listed on
Schedule 3.15 which would be reasonably likely to have a Material Adverse
Effect on the Division.
3.12 Legal Proceedings.
(A)Except as set forth on Schedule 3.12(A) attached hereto, there are no
Actions pending, or to the knowledge of the Seller, threatened against or
affecting the Seller, which relate to the Division or to any Assets used in
connection with the Division; and the Seller is not in default with respect
to any Order which has been issued against the Seller in connection with
the operations of the Division. Except as set forth on Schedule 3.12(A),
there are no Orders issued against the Seller which relate to the
operations of the Division. True and correct copies of the pleadings (or,
if there are no pleadings, then all material documents (including
correspondence) setting forth the nature of the Action) relating to all
Actions required to be disclosed on Schedule 3.12(A) (other than workers
compensation claims and the CellPro and Saxholm Litigations) have been
delivered to the Buyer.
(B)Except as set forth on Schedule 3.12(B), there are no Actions in which
the Seller, in connection with the operations of the Division, is either a
plaintiff or, if not a formal proceeding, an aggrieved party or claimant.
True and correct copies of the pleadings (or, if there are no pleadings,
then all material documents (including correspondence) setting forth the
nature of the Action) relating to all such Actions have been delivered to
the Buyer.
3.13 Compliance with Law.
(A)Except as set forth in Schedule 3.13(A), in connection with the
operations of the Division, (i) the Seller has complied in all material
respects with, and (ii) the Seller, and all of its properties, are in
20
compliance in all material respects with, all material laws, orders, rules,
and regulations of each Authority having jurisdiction over the Division or
its operations or properties.
(B)Schedule 3.13(B) attached hereto sets forth a true and complete list
and description of every License required of the Seller for the operations
of the Division conducted at the Xxxxxx Facility.
(C)Schedule 3.13(C) sets forth a true and correct list, with respect only
to the Xxxxxx Facility, for the period since January 1, 1992, of (i) all
investigations and inspections, performed by the Seller or by any third
party (including any Authority and any third party commissioned by or on
behalf of the Seller), designed to evaluate the conformity of any physical
plant occupied by the Seller in connection with the operations of the
Xxxxxx Facility or any personal property contained, or any process or
activities taking place, therein with any Federal, state or local law,
regulation or ordinance relating to the environment or human health or
safety (including OSHA), (ii) any written reports created, commissioned or
received by or on behalf of the Seller arising out of any such
investigation or inspection ("Health and Safety Reports"), and (iii) any
notices received by the Seller (but only in relation to property, plant or
equipment occupied or used by, or activities engaged in, by the Seller at
the Xxxxxx Facility) relating to alleged violations of any such laws,
regulations or ordinances (other than Environmental Laws) ("Violation
Notices"). The Seller has delivered to the Buyer true and correct copies of
all such Health and Safety Reports and Violation Notices.
3.14 Absence of Certain Changes since Balance Sheet Date.
Except as set forth on Schedule 3.14 hereto, since June 30, 1997, the
Seller has not suffered, done or agreed to do (orally or in writing) any of
the following in respect of or relating to the Division or the Business:
(A)mortgage, pledge or subject any of the Assets to any Encumbrance,
other than Permitted Encumbrances;
(B)sell, transfer or otherwise dispose of any assets or property included
in the Assets, except in connection with (i) the sale of inventory in the
ordinary course of business or (ii) the sale or other disposal of assets no
longer needed for the operation of the Division in the ordinary course of
business;
(C)waive, release or compromise any material claims or rights of the
Seller relating to the operation of the Division (other than claims or
rights relating to the CellPro and Saxholm Litigations);
(D)except in the ordinary course of business, increase the compensation
(including severance and termination pay) payable to any employees of the
Division; or enter into any agreement with any employee of the Division
providing for a salary in excess of $50,000 per year;
(E)enter into any material transaction or agreement other than in the
ordinary course of business;
(F)enter into or amend any contract or other agreement, which constitutes
or shall constitute part of the Included Agreements, pursuant to which it
agrees to indemnify any party or to refrain from competing with any party;
(G)suffer or incur any damage, construction delay or halt, breach of
contract, destruction or loss materially adversely affecting the assets,
properties, business, operations or financial condition of the Division;
(H)(i) materially change any of its business policies or practices
relating solely to the Division, including, without limitation, those
relating to advertising, marketing, pricing, purchasing, personnel, budget,
job acquisition or bidding, the collection of accounts receivable or the
payment of accounts payable, or (ii) make any material change in the types,
nature, composition or quality of the products of the Division.
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(I)(i) terminate or fail to renew or (ii) receive any statement
indicating that the other party was considering, was desirous of or
threatened to, terminate or fail to renew, any Included Agreement that is
or was material to the assets, properties, business operations or financial
condition of the Division; or
(J)suffer or have any adverse change in the business, results of
operations, assets or financial condition of the Division, other than those
changes that are in the ordinary course of business, none of which
(individually or in the aggregate) would have, or constitute, a Material
Adverse Effect on the Division.
3.15 Suppliers.
Schedule 3.15 attached hereto sets forth, as to the Division, the ten
largest suppliers (including other divisions of the Seller) of goods and/or
services to it, in each case with respect to each of the fiscal year ended
December 31, 1996 and the six months ended June 30, 1997. Except as set
forth on Schedule 3.15, no such supplier (excluding for these purposes
other divisions of the Seller) listed on Schedule 3.15 (i) has canceled or
otherwise terminated or provided written (or, to the knowledge of the
Seller, verbal) notice to the Seller indicating that it was considering,
was desirous of or was threatening to cancel or otherwise terminate, or to
decrease or limit, its relationship with, the Division, (ii) has, during
the last 12 months, decreased materially the sale of its services, supplies
or materials to the Division or, (iii) has provided written (or, to the
knowledge of the Seller, verbal) notice to the Seller that (a) he or it
will not, or is likely to not, do business with the Buyer, subsequent to
the Closing Date, on substantially the same terms as he or it has
traditionally done business with the Division or (b) he or it is
considering altering, in any material respect, or has decided to alter, in
any material respect, the terms under which he or it has traditionally done
business with the Division.
3.16 Compensation.
Section 2 of the Execution Schedule sets forth a true and correct list of
the (a) names, (b) positions and (c) compensation arrangements (including
annualized salary, bonus and commission arrangements), monetary or
otherwise, of all current employees of the Division who, during the year
ended December 31, 1996 or during the period from January 1, 1997 through
June 30, 1997, earned annual (or, in the case of the June 30 period,
annualized) compensation of at least $50,000. Except as set forth on
Schedule 3.16, no such employee has provided written (or, to the Seller's
knowledge, verbal) notice to the Seller with regard to either cancellation
or other termination of his or her relationship with the Seller.
3.17 Affiliated Transactions.
Schedule 3.17 sets forth a list of all Affiliated Transactions between or
among the Seller and any one or more of its Affiliates since January 1,
1996.
3.18 Books and Records.
The books and records of the Seller included in the Assets accurately
reflect all material Assets, and all material liabilities and transactions
of the Seller relating to the Division.
3.19 Brokers.
Other than The Craves Group and Xxxxxx Brothers, no broker, finder or
other such Person or entity is entitled to receive a finder's or broker's
fee or commission with respect to the transactions contemplated hereby
based on arrangements made by or on behalf of the Seller.
3.20 Benefits Received.
The Seller has not:
(A)received any payment or other consideration for any products or
services that the Buyer will be obligated hereunder to deliver; or
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(B)received any payment or other benefit for or with respect to any other
obligation that the Buyer will be obligated hereunder to perform.
3.21 Inventory.
(A)All finished goods inventory relating to the Division is owned either
by the Seller or by one of the following entities: Allegiance Healthcare,
Inc., a Delaware corporation, Baxter Export corporation, a Nevada
corporation, Xxxxxx, X.X., a Belgian corporation, BDG, Xxxxxx Medical AB, a
Swedish corporation, Xxxxxx Healthcare, S.A., a Panamanian corporation,
Xxxxxx A/S, a Danish corporation, Xxxxxx X.X., a Swiss corporation, Xxxxxx
Oy, a Finnish corporation, Baxter GES, m.b.H., a German corporation, Baxter
S.p.A., an Italian corporation, Xxxxxx Travenol N.V., a Belgian
corporation, Xxxxxx Healthcare Ltd., a United Kingdom corporation, Xxxxxx
B.V., a Netherlands corporation, Xxxxxx X.X., a French corporation, Baxter
Limited, a Japanese corporation, Xxxxxx Healthcare Pty, Ltd., an Australian
corporation and Xxxxxx Healthcare Ltd., a Taiwanese corporation (each of
the foregoing entities being referred to as an "Inventory Entity").
(B)The finished goods inventory included in the Assets ("Included
Inventory") was acquired in the ordinary course of business, in customary
quantities.
(C)All items of Included Inventory have been manufactured in accordance
with the specifications, procedures, product drawings/blueprints and
regulatory requirements applicable thereto and are free from defects in
workmanship.
(D)Attached hereto as Schedule 3.21(D) is a true and correct list
showing, for each physical location where Included Inventory was held by
the Seller or any Inventory Entity as of August 31, 1997, (i) the street
address of such location and (ii) the aggregate book value of all Included
Inventory held at such location as of such date.
3.22 Experience.
The Seller is experienced in evaluating companies such as the Buyer and
VIMRx, is able to fend for itself in transactions such as the one
contemplated by this Agreement, has such knowledge and experience in
financial and business matters that it is capable of evaluating the merits
and risks of its prospective investment in the Buyer and VIMRx, and has the
ability to bear the economic risks of the investment.
3.23 Investment.
The Seller is acquiring the Acquired Securities and will acquire any
Conversion Securities for investment for the Seller's own account and not
with the view to, or for resale in connection with, and distribution
thereof. The Seller understands that the Acquired Securities (and any
Conversion Securities) have not been and will not be registered under the
Securities Act by reason of a specific exemption from the registration
provisions of the Securities Act which depends upon, among other things,
the bona fide nature of the investment intent as expressed herein. The
Seller further represents that it does not have any contract, undertaking,
agreement or arrangement with any person to sell, transfer or grant
participation to any third person with respect to any of the Acquired
Securities (or any Conversion Securities). The Seller understands and
acknowledges that the offering and issuance of the Acquired Securities
pursuant to this Agreement, and any issuance of Conversion Securities will
not be registered under the Securities Act on the ground that the sale
provided for in this Agreement and the issuance of securities hereunder is
exempt from the registration requirements of the Securities Act based on,
among other things, the bona fide nature of the investment intent as
expressed herein.
3.24 Rule 144.
The Seller acknowledges that the Acquired Securities (and any Conversion
Securities) must be held indefinitely unless subsequently registered under
the Securities Act or an exemption from such registration
23
is available. The Seller is aware of the provisions of Rule 144 promulgated
under the Securities Act which permit limited resale of certain securities
purchased in a private placement subject to the satisfaction of certain
conditions. In connection therewith, the Seller acknowledges that the Buyer
and VIMRx will make a notation on their stock books regarding the
restrictions on transfers set forth in this Section 3.24 and will transfer
securities on their books only to the extent not inconsistent therewith and
with the Stockholders' Agreement. The Seller acknowledges that all shares
representing Acquired Securities (and any Conversion Securities) will bear
appropriate restrictive legends reflecting the transfer restrictions
reflected in this Section 3.24 as well as in the Stockholders' Agreement.
3.25 No Public Market.
The Seller understands that no public market now exists for the
securities of the Buyer or for the VIMRx Preferred Stock; that it is not
expected that a public market will ever exist for the VIMRx Preferred
Stock, and that it is uncertain whether a public market will ever exist for
the Buyer Common Stock.
3.26 Access to Data.
For purposes of satisfying the applicable requirements for the exemptions
from registration relating to the issuance of the Acquired Securities, the
Seller acknowledges that it has received and reviewed information about
VIMRx and the Buyer and has had an opportunity to discuss VIMRx's and the
Buyer's business, management and financial affairs with its management and
to review their facilities.
3.27 Full Disclosure.
Without limiting any of the foregoing, no representation or warranty by
the Seller herein and no other statement or certificate furnished by or on
behalf of the Seller to the Buyer or its Representatives pursuant to this
Agreement or in connection with the transactions contemplated hereby
contains any untrue statement of a material fact or omits to state a
material fact necessary in order to make the statements contained herein or
therein not misleading. There is no fact known to the Seller that has not
been disclosed in this Agreement which (i) has had, or would reasonably be
expected to have, a Material Adverse Effect on the Division or the Business
or (ii) which would reasonably be expected to materially and adversely
affect the ability of the Seller to perform its obligations under this
Agreement.
3.28 Proxy-Related Information.
None of the information provided in writing by the Seller or its
Representatives to VIMRx for inclusion in the Proxy Statement, pursuant to
Section 6.1(A)(x), shall contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements contained in
the Proxy Statement, in light of the circumstances under which they are
made, not misleading.
4.Representations and Warranties of the Buyer.
The Buyer represents and warrants to the Seller, as of the end of the
Disclosure Period and as of the Closing Date, as follows:
4.1 Good Standing.
The Buyer is a corporation organized, validly existing and in good
standing under the laws of the State of Delaware, with all necessary
corporate power and authority to own, lease and operate its properties and
to carry on its business as the same is now being conducted. True, accurate
and complete copies of the Certificate of Incorporation and By-Laws of the
Buyer have been provided to the Seller.
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4.2 Authority.
The Buyer possesses full right, corporate power and legal authority to
execute and deliver this Agreement and the Transaction Documents to which
the Buyer is a party and to perform each of the agreements and make each of
the representations and warranties on its part to be performed and made
hereunder and thereunder. The execution and delivery of this Agreement and
the Transaction Documents to which the Buyer is a party and the
consummation by it of the transactions contemplated hereby and thereby have
been duly and validly authorized by all necessary corporate action on the
part of the Buyer. This Agreement has been duly and validly executed by the
Buyer and constitutes, and the Transaction Documents (upon and subject to
their execution and delivery by all parties thereto) shall constitute, the
legal, valid and binding obligation of the Buyer enforceable against it in
accordance with their terms subject to the qualification that the
enforceability thereof may be limited by bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and similar laws, now or hereafter
in effect, affecting creditors' rights and except that the availability of
equitable remedies, including specific performance, is subject to the
discretion of the court before which any proceeding for the enforcement
thereof may be brought. Except as set forth on Schedule 4.2, the execution
and delivery of this Agreement and the Transaction Documents to which the
Buyer is a party and the performance by it of all of the transactions
contemplated herein and therein do not and shall not (with or without the
giving of notice or the passage of time or both) (A) violate or conflict
with the Certificate of Incorporation or By-laws of the Buyer, or (B) (1)
violate or conflict with any law, rule, ruling, determination, ordinance or
regulation of any Authority or any condition or provision of, (2) result in
the creation or imposition of any Encumbrance upon any of the property or
assets of the Buyer pursuant to, (3) accelerate or create, or permit the
acceleration or creation of, any liability or obligation of the Buyer
under, or (4) cause a termination under or give rise to a right of
termination under, the terms of any contract, mortgage, lien, lease,
agreement, indenture, trust, instrument, order, judgment or decree to which
the Buyer is a party or which is binding upon the Buyer; provided, however,
that the existence of any such violations, conflicts, encumbrances,
accelerations, creations, terminations or rights of termination shall not
be deemed to be a breach of this Section 4.2 unless, individually or in the
aggregate, they would have a Material Adverse Effect on the Buyer.
4.3 Consents and Approvals.
Except at set forth on Schedule 4.3, no other action or consent, whether
corporate or otherwise, including action or consent by any Authority, is
necessary in connection with the execution, delivery, validity or
enforceability of this Agreement or the Transaction Documents with respect
to the Buyer or the consummation by it of the transactions contemplated
hereby and thereby.
4.4 Capitalization.
The authorized capital stock of the Buyer consists, or will consist prior
to the Closing, of ten thousand (10,000) shares of Buyer Common Stock, of
which no shares are issued and outstanding on the date of this Agreement.
Upon issuance, all shares of Buyer Common Stock issued pursuant to this
Agreement will be duly authorized, validly issued, fully paid and
nonassessable. As of the Closing Date, (i) the Warrant shall be
outstanding, which shall permit the Seller to purchase an aggregate of
6.383 shares of Buyer Common Stock and (ii) the Buyer Convertible
Debentures shall be outstanding, under the terms of which the Seller and
VIMRx shall be permitted to convert such debt into shares of Buyer Common
Stock. Except as set forth in this Agreement or as a result of the exercise
of options to purchase shares reserved for issuance under the Buyer's
employee stock option plan described in Section 7.2(D) hereof, there are no
outstanding securities of the Buyer. As of the Closing Date, and excluding
any shares of Buyer Common Stock reserved for issuance under the Buyer's
employee stock option plan, or pursuant to the terms of the Warrant and the
Buyer Convertible Debentures, VIMRx will own 80.5% and the Seller will own
19.5% of the issued and outstanding shares of Buyer Common Stock. There are
no outstanding obligations of the Buyer to repurchase, redeem or otherwise
acquire any securities of the Buyer, other than the Buyer's obligation to
convert the Buyer Convertible Debentures into shares of Buyer Common Stock.
25
4.5 Valid Issuance of Common Stock.
The Shares of Buyer Common Stock that are being acquired by the Seller
hereunder, when authorized, issued and delivered in accordance with the
terms of this Agreement for the consideration expressed herein, will be
duly and validly authorized and issued, fully paid, and nonassessable, and
will be free of restrictions on transfer other than restrictions on
transfer under this Agreement, the Stockholders' Agreement and the other
Transaction Documents and under applicable state and Federal securities
laws. The Buyer Common Stock issuable upon exercise of the Warrant has been
duly authorized and validly reserved for issuance and, upon issuance upon
such exercise in accordance with the terms of the Warrant, will be duly and
validly authorized and issued, fully paid, and nonassessable and will be
free of restrictions on transfer other than restrictions on transfer under
this Agreement, the Stockholders' Agreement and the other Transaction
Documents and under applicable state and Federal securities laws.
4.6 Brokers.
Other than Lazard Freres & Co., L.L.C., no broker, finder or other such
Person or entity is entitled to receive a finder's or broker's fee or
commission with respect to, the transactions contemplated hereby based on
arrangements made by or on behalf of the Buyer.
4.7 No Prior Activities.
Since the date of its incorporation, the Buyer has not engaged in any
activities other than in connection with or as contemplated by this
Agreement.
4.8 Full Disclosure.
Without limiting any of the foregoing, no representation or warranty by
the Buyer herein and no other statement or certificate furnished by or on
behalf of the Buyer to the Seller or its Representatives pursuant to this
Agreement or in connection with the transactions contemplated hereby
contains any untrue statement of a material fact or omits to state a
material fact necessary in order to make the statements contained herein or
therein not misleading. There is no fact known to the Buyer that has not
been disclosed in this Agreement which (i) has had, or would reasonably be
expected to have, a Material Adverse Effect on the Buyer or (ii) which
would reasonably be expected to materially and adversely affect the ability
of the Buyer to perform its obligations under this Agreement.
5.Representations and Warranties of VIMRx.
VIMRx represents and warrants to the Seller, as of the end of the Disclosure
Period and as of the Closing Date, as follows:
5.1 Good Standing.
(A)VIMRx is a corporation organized, validly existing and in good
standing under the laws of the State of Delaware, with all necessary
corporate power and authority to own, lease and operate its properties and
to carry on its business as the same is now being conducted. True, accurate
and complete copies of the Certificate of Incorporation and By-Laws of
VIMRx have been provided to the Seller.
(B)Innovir is a corporation organized, validly existing and in good
standing under the laws of the State of Delaware, with all necessary
corporate power and authority to own, lease and operate its properties and
to carry on its business as the same is now being conducted. True, accurate
and complete copies of the Certificate of Incorporation and By-Laws of
Innovir have been provided to the Seller.
(C)VIMRx Holdings is a corporation organized, validly existing and in
good standing under the laws of the State of Delaware, with all necessary
corporate power and authority to own, lease and operate its
26
properties and to carry on its business as the same is now being conducted.
True, accurate and complete copies of the Certificate of Incorporation and
By-Laws of VIMRx Holdings have been provided to the Seller.
(D)Innovir UK is a private limited company organized, validly existing
and in good standing under the laws of England, with all necessary
corporate power and authority to own, lease and operate its properties and
to carry on its business as the same is now being conducted. True, accurate
and complete copies of the Memorandum and Articles of Association of
Innovir UK have been provided to the Seller.
(E)VPI Germany is a Gesellschaft mit beschrankter Halftung organized,
validly existing and in good standing under the laws of the Federal
Republic of Germany, with all necessary corporate power and authority to
own, lease and operate its properties and to carry on its business as the
same is now being conducted. True, accurate and complete copies of the
initial Gesellschaftsvertrag, of VPI Germany have been provided to the
Seller.
(F)VGI is a corporation organized, validly existing and in good standing
under the laws of the State of Delaware, with all necessary corporate power
and authority to own, lease and operate its properties and to carry on its
business as the same is now being conducted. True, accurate and complete
copies of the Certificate of Incorporation and By-Laws of VGI have been
provided to the Seller.
(G)Ribonetics is a Gesellschaft mit beschrankter Halftung organized,
validly existing and in good standing under the laws of the Federal
Republic of Germany, with all necessary corporate power and authority to
own, lease and operate its properties and to carry on its business as the
same is now being conducted. True, accurate and complete copies of the
initial Gesellschaftsvertrag of Ribonetics have been provided to the
Seller.
5.2 Authority.
VIMRx possesses full right, corporate power and legal authority to
execute and deliver this Agreement and the Transaction Documents to which
VIMRx is a party and to perform each of the agreements and make each of the
representations and warranties on its part to be performed and made
hereunder and thereunder. The execution and delivery of this Agreement and
the Transaction Documents to which VIMRx is a party and the consummation by
it of the transactions contemplated hereby and thereby have been duly and
validly authorized by the Board of Directors of VIMRx. Upon and subject to
the approval and adoption of this Agreement and the transactions
contemplated hereby by the requisite vote of VIMRx's stockholders in
accordance with applicable Delaware General Corporation Laws, the execution
and delivery of this Agreement and the Transaction Documents and the
consummation by VIMRx of the transactions contemplated by this Agreement
and the Transaction Documents (including the issuance of VIMRx Common Stock
to the Seller as part of the consideration paid to the Seller pursuant to
this Agreement) shall have been approved by all necessary corporate action
on the part of VIMRx. This Agreement has been duly and validly executed by
VIMRx and constitutes, and the Transaction Documents (upon and subject to
their execution and delivery by all parties thereto) shall constitute, the
legal, valid and binding obligation of VIMRx enforceable against it in
accordance with their terms subject to the qualification that the
enforceability thereof may be limited by bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and similar laws, now or hereafter
in effect, affecting creditors' rights and except that the availability of
equitable remedies, including specific performance, is subject to the
discretion of the court before which any proceeding for the enforcement
thereof may be brought. Except as set forth on Schedule 5.2, the execution
and delivery of this Agreement and the Transaction Documents to which VIMRx
is a party and the performance by it of all of the transactions
contemplated herein and therein do not and shall not (with or without the
giving of notice or the passage of time or both) (A) violate or conflict
with the Certificate of Incorporation or By-laws of VIMRx or any Controlled
Subsidiary, or (B) (1) violate or conflict with any law, rule, ruling,
determination, ordinance or regulation of any Authority or any condition or
provision of, (2) result in the creation or imposition of any Encumbrance
upon any of the property or assets
27
of VIMRx or any Controlled Subsidiary pursuant to, (3) accelerate or
create, or permit the acceleration or creation of, any liability or
obligation of VIMRx or any Controlled Subsidiary under, or (4) cause a
termination under or give rise to a right of termination under, the terms
of any contract, mortgage, lien, lease, agreement, indenture, trust,
instrument, order, judgment or decree to which VIMRx or any Controlled
Subsidiary is a party or which is binding upon VIMRx or any Controlled
Subsidiary; provided, however, that the existence of any such violations,
conflicts, encumbrances, accelerations, creations, terminations or rights
of termination shall not be deemed to be a breach of this Section 5.2
unless, individually or in the aggregate, they would have a Material
Adverse Effect on VIMRx.
5.3 Consents and Approvals.
Except at set forth on Schedule 5.3, no other action, consent, filing or
approval, whether corporate or otherwise, including action or consent by
any Authority, is necessary in connection with the execution, delivery,
validity or enforceability of this Agreement or the other Transaction
Documents with respect to VIMRx or the consummation by it of the
transactions contemplated hereby and thereby.
5.4 Capitalization.
(A)The authorized capital stock of VIMRx consists, or will consist on or
prior to the Closing, of:
(i)Common Stock. 120,000,000 shares of VIMRx Common Stock, of which
55,358,676 shares are issued and outstanding on the date of this
Agreement.
(ii)Preferred Stock. One Million (1,000,000) shares of blank check
preferred stock, $.001 par value (none of which are issued or
outstanding on the date hereof) of which 100,000 shares shall be VIMRx
Preferred Stock.
All issued and outstanding shares of VIMRx Common Stock have been duly
authorized and validly issued and are fully paid and nonassessable. As of
the date hereof, options, calls and other rights to purchase an aggregate
10,396,506 shares of VIMRx Common Stock are outstanding and the weighted
average exercise price of such options, calls and commitments is $1.48 per
share of VIMRx Common Stock. Except as set forth in this Agreement or in
Schedule 5.4(A), and except as a result of the exercise of the options,
calls and commitments outstanding on this date, there are no outstanding
securities of VIMRx. There are no outstanding obligations of VIMRx or any
of its subsidiaries to repurchase, redeem or otherwise acquire any
securities of VIMRx, other than VIMRx's obligation to repurchase options
under, and in accordance with the express terms of, the employment
agreements set forth on Schedule 5.4(A) (accurate and complete copies of
which have previously been delivered to the Seller).
(B)The authorized capital stock of Innovir consists of:
(i)Common Stock. 70,000,000 shares of Innovir Common Stock, of which
29,750,529 shares are issued and outstanding on the date of this
Agreement.
(ii)Preferred Stock. 15,000,000 shares of Innovir Preferred Stock, of
which 280,000 shares of Class B Preferred Shares are issued and
outstanding on the date of this Agreement.
All issued and outstanding shares of Innovir Common Stock have been duly
authorized and validly issued and are fully paid and nonassessable. As of
the date hereof, options, calls and other rights to purchase an aggregate
10,008,487 shares of Innovir Common Stock are outstanding and the weighted
average exercise price of such options, calls and commitments is $3.87 per
share of Innovir Common Stock. Except as set forth in this Agreement or in
Schedule 5.4(B), and except as a result of the exercise of the options,
calls and commitments outstanding on this date, there are no outstanding
securities of Innovir. Except as set forth on Schedule 5.4(B), there are no
outstanding obligations of Innovir to repurchase, redeem or otherwise
acquire any securities of Innovir.
28
(C)The authorized capital stock of VIMRx Holdings consists of:
(i)Common Stock. 120,000 shares of VIMRx Holdings Common Stock, of
which 12,000 shares are issued and outstanding on the date of this
Agreement.
All issued and outstanding shares of VIMRx Holdings Common Stock have
been duly authorized and validly issued and are fully paid and
nonassessable. As of the date hereof, there are no options, calls or other
rights to purchase any shares of VIMRx Holdings Common Stock. Except as set
forth in this Agreement or in Schedule 5.4(C), there are no outstanding
securities of VIMRx Holdings. Except as set forth on Schedule 5.4(C), there
are no outstanding obligations of VIMRx Holdings to repurchase, redeem or
otherwise acquire any securities of VIMRx Holdings.
(D)The authorized capital stock of Innovir UK consists of:
(i)Common Stock. 1,000 Ordinary Shares of which 1,000 shares are
issued and outstanding on the date of this Agreement.
All issued and outstanding Innovir UK Ordinary Shares have been duly
authorized and validly issued and are fully paid and nonassessable. Except
as set forth in this Agreement or in Schedule 5.4(D), there are no
outstanding securities of Innovir UK. Except as set forth on Schedule
5.4(D), there are no outstanding obligations of Innovir UK to repurchase,
redeem or otherwise acquire any securities of Innovir UK.
(E)Innovir Germany is authorized to issue an unlimited amount of share
capital. The issued share capital of Innovir Germany is DM 50,000 all of
which is issued to VIMRx Holdings. There are no other equity interests
authorized, issued or outstanding in Innovir Germany.
(F)The authorized capital stock of VGI consists of:
(i)Common Stock. 5,000 shares of VGI Common Stock, of which 1,000
shares are issued and outstanding on the date of this Agreement.
All issued and outstanding shares of VGI Common Stock have been duly
authorized and validly issued and are fully paid and nonassessable. Except
as set forth in this Agreement or in Schedule 5.4(F), there are no
outstanding securities of VGI. Except as set forth on Schedule 5.4(F),
there are no outstanding obligations of VGI to repurchase, redeem or
otherwise acquire any securities of VGI.
(G)Ribonetics is authorized to issue an unlimited amount of share
capital. The issued share capital of Ribonetics is DM 50,000 all of which
is issued to VIMRx Holdings. There are no other equity interests
authorized, issued or outstanding in Ribonetics.
5.5 Valid Issuance of Preferred and Common Stock.
The shares of VIMRx Preferred Stock and VIMRx Common Stock that are being
acquired by the Seller hereunder, when authorized, issued and delivered in
accordance with the terms of this Agreement for the consideration expressed
herein, will be duly and validly authorized and issued, fully paid and
nonassessable, and will be free of restrictions on transfer other than
restrictions on transfer under this Agreement and the other Transaction
Documents and under applicable state and federal securities laws. The VIMRx
Common Stock issuable upon conversion of the VIMRx Preferred Stock acquired
under this Agreement has been duly authorized and validly reserved for
issuance and, upon issuance upon such conversion in accordance with the
terms of the Certificate of Incorporation of VIMRx, will be duly and
validly authorized and issued, fully paid, and nonassessable and will be
free of restrictions on transfer other than restrictions on transfer under
this Agreement and the other Transaction Documents and under applicable
state and Federal securities laws.
29
5.6 Brokers.
Other than Lazard Freres & Co., L.L.C., no broker, finder or other such
Person or entity is entitled to receive a finder's or broker's fee or
commission with respect to, the transactions contemplated hereby based on
arrangements made by or on behalf of VIMRx.
5.7 Financial Statements.
(A)Except as set forth on Schedule 5.7(A), VIMRx and Innovir have filed
all SEC Reports, if any, required to be filed by them with the SEC since
January 1, 1995 and December 23, 1996, respectively, each of which has
complied as to form in all material respects with applicable requirements
of the Securities Act and the Exchange Act. As of their respective dates,
none of such SEC Reports contained any untrue statement of a material fact
or omitted to state a material fact required to be stated therein or
necessary in order the make the statements therein, in light of the
circumstances under which they were made, not misleading. The audited
consolidated financial statements and unaudited consolidated interim
financial statements of VIMRx included in its SEC Reports have been
prepared in conformity with GAAP applied on a consistent basis (except as
may be indicated in the notes thereto), and present fairly, in all material
respects, the consolidated financial position of VIMRx as of the dates
thereof and their consolidated results of operations and cash flows for the
periods then ended (subject to normal year-end adjustments in the case of
any unaudited interim financial statements).
(B)Except (i) as disclosed or recorded in the unaudited consolidated
balance sheet of VIMRx at June 30, 1997 (including any notes or schedules
thereto), (ii) as set forth on the Schedules to this Agreement and (iii)
for liabilities incurred in the ordinary course of business, since June 30,
1997, which would not have a Material Adverse Effect on VIMRx or any
Controlled Subsidiary, VIMRx and the Controlled Subsidiaries have no
material liabilities of any nature (whether arising out of contract, tort,
statute or otherwise and whether direct or indirect, accrued, matured,
asserted or unasserted, absolute contingent or otherwise).
5.8 Absence of Certain Changes.
Since June 30, 1997, except as specifically disclosed in the SEC Reports
filed by VIMRx on or prior to the date of this Agreement or as set forth on
Schedule 5.8, and except for this Agreement and the Transaction Documents,
neither VIMRx nor Innovir has entered into any material transaction, or, in
any material respect, conducted its business or operations other than in
the ordinary course of business consistent with past practice. Since June
30, 1997, neither VIMRx nor Innovir has suffered or had any adverse change
in its business, results of operations, assets or financial condition,
other than those changes that are in the ordinary course of business, none
of which (individually or in the aggregate) would have, or constitute, a
Material Adverse Effect on VIMRx or Innovir.
5.9 Legal Proceedings.
(A)Except as set forth on Schedule 5.9 attached hereto, there are no
Actions pending, or to the knowledge of VIMRx, threatened against or
affecting VIMRx or any Controlled Subsidiary; and neither VIMRx nor any
Controlled Subsidiary is in default with respect to any Order which has
been issued against it. Except as set forth on Schedule 5.9, there are no
Orders issued against VIMRx or any Controlled Subsidiary. True and correct
copies of the pleadings (or, if there are no pleadings, then all material
documents (including correspondence) setting forth the nature of the
Action) relating to all Actions required to be disclosed on Schedule 5.9
(other than worker compensation claims) have been delivered to the Seller.
(B)Except as set forth on Schedule 5.9, there are no Actions in which
VIMRx or a Controlled Subsidiary is either a plaintiff or, if not a formal
proceeding, an aggrieved party or claimant. True and correct copies of the
pleadings (or, if there are no pleadings, then all material documents
(including correspondence) setting forth the nature of the Action) relating
to all such Actions have been delivered to the Seller.
30
5.10 Compliance with Law.
Except as set forth on Schedule 5.10, VIMRx and each Controlled
Subsidiary has complied in all material respects with, and each such entity
and all of its properties are in compliance in all material respects with,
all material laws, orders, rules, and regulations of each Authority having
jurisdiction over such entity or its operations or properties.
5.11 Contracts and Commitments.
(A)Except as set forth on Schedule 5.11(A), there is no existing material
breach of any contract or agreement to which VIMRx or any Controlled
Subsidiary is a party by VIMRx or the relevant Controlled Subsidiary; to
the knowledge of VIMRx, and subject to the foregoing, no event has occurred
which, with the lapse of time or the giving of notice or both, is
reasonably likely to constitute a material breach of any such agreement by
VIMRx or the relevant Controlled Subsidiary or give rise to a right on the
part of any of the other parties thereto to terminate such agreement or to
deprive VIMRx or the relevant Controlled Subsidiary of any material right,
or accelerate any of its material obligations, thereunder.
(B)Except as set forth on Schedule 5.11(B), to the knowledge of VIMRx,
there is no existing material breach of any contract or agreement to which
VIMRx or any Controlled Subsidiary is a party by any party (other than
VIMRx and the relevant Controlled Subsidiary) thereto and no event has
occurred which, with the lapse of time or the giving of notice or both, is
reasonably likely to constitute a material breach thereof by such other
party or give rise to a right on the part of VIMRx or the relevant
Controlled Subsidiary to terminate such agreement or to deprive the other
party of any right, or accelerate any obligation of such party, thereunder.
(C)Except as set forth on Schedule 5.11(C), to the knowledge of VIMRx,
there are no circumstances which, if true, create a reasonable probability
that VIMRx or any Controlled Subsidiary will not, or will be unable to,
fulfill any of its material obligations, under any material agreement to
which it is a party.
(D)VIMRx (or the relevant Controlled Subsidiary, in the case of insurance
held by a Controlled Subsidiary) has not, during the current term of any
insurance policy which provides coverage with respect to persons,
properties or operations of VIMRx or any Controlled Subsidiary, received
any notice canceling or threatening to cancel or refusing to renew, based
(to the knowledge of VIMRx) on reasons relating directly to the business if
VIMRx or any Controlled Subsidiary, any such policy, and no policy insuring
any such persons, properties or operations has, based (to the knowledge of
VIMRx) on reasons relating directly to the business if VIMRx or any
Controlled Subsidiary, been canceled by the insurer within the last twelve
months.
5.12 Intellectual Property.
(A)Schedule 5.12(A) contains a list and description of all Patents and
Trademarks currently owned by or licensed to VIMRx or any Controlled
Subsidiary (separately identifying those which are owned and those which
are licensed and, if not owned by such entity, identifying the owner
thereof, if any).
(B)Schedule 5.12(B) contains a list and description of all material
Copyrights (registered or unregistered) licensed to VIMRx or any Controlled
Subsidiary (identifying the owner thereof and the related work).
(C)Schedule 5.12(C) contains a list of (i) all applications for
registration of any Intellectual Property owned by or licensed to VIMRx or
any Controlled Subsidiary as well as a list of all existing registrations
of any such Intellectual Property (in either case, identifying the
Intellectual Property, the application or registration number and the
jurisdiction thereof) and (ii) pending applications for any Patents where
VIMRx or any Controlled Subsidiary is listed as the owner or is the
licensee of any of the underlying technology
31
(identifying the subject matter of the application, the relevant
application number, the jurisdiction thereof and the owner thereof). True
and correct copies of all such applications and registrations have been
provided to the Seller.
(D)Schedule 5.12(D) contains a list of all material documents relating to
product clearances relating to Patent infringement performed by or on
behalf of VIMRx or any Controlled Subsidiary. VIMRx has delivered to the
Seller true and correct copies of all such documents, if any.
(E)Schedule 5.12(E) contains a list and description (showing in each case
the parties thereto and, in the event the same has not been reduced to
writing, the material terms thereof) of all material agreements and
licenses to which VIMRx or any Controlled Subsidiary is a party or by which
it is bound which entitle VIMRx or any Controlled Subsidiary or a third
party to use, or restrict VIMRx's or any Controlled Subsidiary's or a
third-party's use of, (i) any Copyrights, Patents, Trademarks or
Information owned by, licensed to, or used by, VIMRx or any Controlled
Subsidiary.
(F)Except as disclosed in Schedule 5.12(F): (i) to the knowledge of
VIMRx, all Patents, and all Copyright and Trademark registrations, owned by
VIMRx or any Controlled Subsidiary are valid and in full force and effect,
and (ii) VIMRx has not received written notice (and is unaware of having
received any verbal notice) of any outstanding challenges, by any third
party, either to any such Patents or registrations or to any of the
applications described in Section 5.12(C).
(G)Except as disclosed in Schedule 5.12(G), VIMRx is not aware that there
now exists any use, by a third party, of any Intellectual Property which
violates any material Intellectual Property Right of VIMRx or any
Controlled Subsidiary.
(H)Except as set forth in Schedule 5.12(H), (i) to VIMRx's knowledge, no
infringement of any material Intellectual Property Right of any other
person or entity has occurred or results in any way from the current
operations of VIMRx or any Controlled Subsidiary, and (ii) no claim of any
infringement by VIMRx or any Controlled Subsidiary of any material
Intellectual Property Right of any other person or entity has been made,
asserted or threatened in writing (and VIMRx is unaware of any verbal such
claims) against and to VIMRx.
(I)With respect to all representations in this Section 5.12 which are
made to VIMRx's "knowledge" or which involve VIMRx's "awareness" of any
facts or circumstances, VIMRx represents and warrants that it has performed
a reasonable due diligence review with respect to the subject matter
thereof.
5.13 Environmental Matters.
(A)Schedule 5.13(A) lists all written notices (and all verbal notices of
which VIMRx is aware) received by VIMRx or any Controlled Subsidiary of
violations of Environmental Laws or environmental claims from environmental
Authorities since January 1, 1992 (in each case, only to the extent that
they relate(d) to a facility currently being occupied by VIMRx or such
Controlled Subsidiary). VIMRx has delivered to the Seller true and correct
copies of all such notices, claims and reports, as well as all reports of
VIMRx or any Controlled Subsidiary filed with such Authorities since such
date.
(B)Except as set forth in Schedule 5.13(B), with respect only to any
facility currently occupied by VIMRx or any Controlled Subsidiary, to the
knowledge of VIMRx, (i) there has been no release or discharge by VIMRx (or
any other Person) of any Contaminant in or on any such facility (or the
land upon which it is situated) and (ii) there otherwise exist no
Contaminants on or in any such real property, in any material quantity,
which, in either case, would (a) constitute or have constituted a material
violation of any Environmental Law, or (b) give rise to an obligation on
the part of VIMRx or any Controlled Subsidiary, its assigns or successors
in interest to effect an environmental cleanup or remediation.
32
5.14 Labor Relations.
VIMRx, Innovir, Innovir Holdings, Innovir UK, Innovir Germany, VGI and
Ribonetics employ 12, 31, 0, 10, 12, 2 and 0 employees, respectively, none
of whom is subject to union or collective bargaining agreements by which
such entity is bound or subject. None of such entities has, at any time
during the last five years, had, nor is there now to the knowledge of VIMRx
threatened, a strike, picket, work stoppage, work slowdown, union
organizing activity or other labor trouble that has had or would be
reasonably likely to have a Material Adverse Effect on VIMRx.
5.15 Employee Benefit Plans.
(A)Except as set forth in Schedule 5.15(A), neither VIMRx nor any
Controlled Subsidiary is a party to or bound by any oral or written Non-
ERISA Plans.
(B)Except as set forth in Schedule 5.15(B), VIMRx and each Controlled
Subsidiary does not maintain, has never maintained, is not required to
contribute to, and has never been required to contribute to or pay any
amount with respect to, and has no liability with respect to any ERISA
Benefit Plans. Except as set forth in Schedule 5.15(B), and, to the best of
VIMRx's knowledge, each of the plans described in Schedule 5.15(B) that is
an ERISA Benefit Plan ("VIMRx Group ERISA Benefit Plan") complies in form
and is operated in all material respects in accordance with the
requirements of ERISA and, where applicable, the Code. VIMRx and, to the
knowledge of VIMRx, each Controlled Subsidiary, as applicable, has complied
with the health care continuation requirements of Section 601, et. seq., of
ERISA with respect to its employees and their spouses, former spouses and
dependents.
(C)Except as set forth on Schedule 5.15(C), VIMRx has delivered to the
Seller, with respect to each VIMRx Group ERISA Benefit Plan, correct and
complete copies of (i) all plan documents and amendments, trust agreements
and insurance contracts and policies, (ii) the current and, to the extent
available, the prior summary plan description, (iii) the most recent
financial statements, if any, and (iv) where applicable, a determination
letter of the Internal Revenue Service evidencing the plan's qualification
under the Code.
(D)Neither VIMRx nor any Controlled Subsidiary has any obligations under
any VIMRx Group ERISA Benefit Plan or otherwise to provide health benefits
to former employees of VIMRx or any Controlled Subsidiary, except as
specifically required by law. Neither VIMRx nor any Controlled Subsidiary
has any liability, potential or otherwise, under Section 4069 or Section
4212(c) of ERISA. Neither VIMRx nor any Controlled Subsidiary has ever made
a contribution to a voluntary employees' beneficiary association described
in Section 501(c)(9) of the Code.
(E)Neither VIMRx nor, to the knowledge of VIMRx, any Controlled
Subsidiary or any other "disqualified person" (within the meaning of
Section 4975 of the Code) or "party in interest" (within the meaning of
Section 3(14) of ERISA) has engaged in any "prohibited transaction" (within
the meaning of Section 4975 of the Code or Section 406 of ERISA) with
respect to any VIMRx Group ERISA Benefit Plan which could subject any such
Plan (or its related trust) or VIMRx or any Controlled Subsidiary or any
officer, director or employee of VIMRx or any Controlled Subsidiary to the
penalty or tax under Section 402(i) or Section 402(1) of ERISA or Section
4975 of the Code.
(F)There is no pending or, to the knowledge of VIMRx, threatened claim
which alleges any violation of ERISA or any other law (i) by or on behalf
of any VIMRx Group ERISA Benefit Plan or (ii) by any employee of VIMRx or
any Controlled Subsidiary or any plan participant or beneficiary against
any such plan.
(G)There does not now exist (and has not in the past existed) an
"employee pension benefit plan," as defined in Section 3(2) of ERISA,
maintained by VIMRx or any Controlled Subsidiary or to which VIMRx or any
Controlled Subsidiary contributes or is required to contribute (or
contributed or was required
33
to contribute in the past), including any multiemployer employee pension
benefit plan, other than an individual account plan within the meaning of
Section 3(34) or ERISA.
(H)Except as set forth on Schedule 5.15(H), there has been no complete or
partial termination of any VIMRx Group ERISA Benefit Plan and no action
taken by VIMRx or its Affiliates at any time during the three years
preceding the Closing date which has or will result in termination of any
employee benefit plan in effect during such period; nor has there been any
"reportable event," as such term is defined in Section 4043(c) of ERISA and
the regulations promulgated thereunder, with respect to any VIMRx Group
ERISA Benefit Plan; and except by reason of discontinuance of any VIMRx
Group ERISA Benefit Plan as a result of or following the transactions
contemplated by this Agreement, no VIMRx Group ERISA Benefit Plan or other
employee plan, arrangement or agreement of VIMRx or any Controlled
Subsidiary provides for additional or accelerated payments or other
consideration to be made on account of the transactions contemplated by
this Agreement.
5.16 Proxy Statement.
The Proxy Statement on Schedule 14A to be prepared by VIMRx and delivered
to its stockholders in connection with the stockholders' meeting referenced
to in Section 6.1(B)(v) (the "Proxy Statement") shall not, at the time it
is delivered to stockholders, contain any untrue statement of material fact
or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of the
circumstances under which they are made, not misleading; provided, that
this representation shall be deemed not to apply to any written information
provided by the Seller or its Representatives to VIMRx for inclusion in the
Proxy Statement. The Proxy Statement will comply as to form in all material
respects with the applicable provisions of the Exchange Act and the rules
and regulations thereunder.
5.17 Books and Records.
Except as set forth in Schedule 5.17, all of the books and records of
VIMRx and each Controlled Subsidiary (including all minute books and stock
records) are accurate and complete in all material respects, are kept in
the ordinary course of business and are maintained at the principal offices
of VIMRx or the relevant Controlled Subsidiary.
5.18 Financial Ability.
VIMRx has the financial ability and resources to purchase $10,000,000 in
principal amount of the Buyer Convertible Debentures to be issued to it by
the Buyer on the Closing Date.
5.19 Experience.
VIMRx is experienced in evaluating companies and businesses such as the
Business of the Division and is able to fend for itself in transactions
such as the one contemplated by this Agreement, has such knowledge,
sophistication, and experience in financial and business matters that it is
capable of evaluating the merits and risks of (i) the acquisition of the
Assets of the Division pursuant to the terms and conditions of this
Agreement and (ii) its prospective investment in the Buyer and the Seller,
and has the ability to bear the economic risks of the investment.
5.20 Controlled Subsidiaries.
Innovir, VIMRx Holdings, Innovir UK, Innovir Germany, Cambes, VGI and
Ribonetics are the only Controlled Subsidiaries of VIMRx; provided,
however, that references elsewhere in this Agreement to "Controlled
Subsidiary" shall be deemed not to refer to Cambes.
34
5.21 Full Disclosure.
Without limiting any of the foregoing, no representation or warranty by
VIMRx herein and no other statement or certificate furnished by or on
behalf of VIMRx to the Seller or its Representatives pursuant to this
Agreement or in connection with the transactions contemplated hereby
contains any untrue statement of a material fact or omits to state a
material fact necessary in order to make the statements contained herein or
therein not misleading. There is no fact known to VIMRx that has not been
disclosed in this Agreement which (i) has had, or would reasonably be
expected to have, a Material Adverse Effect on VIMRx or (ii) which would
reasonably be expected to materially and adversely affect the ability of
VIMRx to perform its obligations under this Agreement.
6.Certain Covenants and Agreements.
6.1 Pre-Closing Covenants.
(A)Covenants of the Seller. From the date hereof (except as set forth in
Section 6.1(A) (viii) below) until the Closing Date, the Seller covenants
that it shall do the following (it being agreed by Buyer that it shall not
unreasonably withhold its consent, which shall not be valid unless in
writing, to any proposed departures, by the Seller, from the provisions of
Sections 6.1(A)(xi)-(xviii) below):
(i) preserve and maintain its corporate existence and good standing
in the jurisdiction of its incorporation;
(ii) continue to operate the Division, in all material respects, in
the ordinary course of business;
(iii) maintain, keep and preserve, in all material respects, all of
the material properties and assets used in the operation of the
Division;
(iv) keep reasonably adequate books and records with respect to the
Division;
(v) maintain the insurance policies in effect as of the date of this
Agreement which relate to the Assets, or operations, of the Division;
(vi) comply (with respect to the persons, assets and operations of
the Division), in all material respects, with all applicable laws,
rules, regulations and orders;
(vii) at any reasonable time and from time to time, (a) permit the
Buyer and VIMRx, or any agent or representative of either, to examine
and make copies and abstracts from any and all of the Seller's records
and books relating to the Division and visit and inspect any and all of
its assets and properties relating to the Division and (b) make
available its officers, employees and independent accountants to
discuss with the Buyer, VIMRx and their representatives the Division's
affairs, finances and accounts;
(viii) in the event and to the extent, that events or circumstances
occur or arise, or the Seller becomes aware of events or circumstances,
which render any of the representations and warranties set forth in
Section 3 hereof inaccurate, and without limiting in any way the
Buyer's rights under Section 7.1, promptly notify the Buyer and VIMRx
thereof by delivering to Buyer and VIMRx new, updated or amended (and
red-lined) Schedules relating to such events or circumstances (it being
agreed by the parties that, notwithstanding any other provision hereof,
this Section 6.1(A)(viii) shall apply (a) only during the period
beginning on the day following the end of the Disclosure Period and
ending on the Closing Date and (b) only in the event that this
Agreement shall not have been terminated in accordance with Section
14.2);
(ix)exercise commercially reasonable efforts to: (a) preserve intact,
in all material respects, the Division's business organization, (b)
keep available the services of its employees and (c) maintain
35
satisfactory relationships with suppliers, contractors, customers,
creditors and others having business relationships with the Seller or
the Division;
(x) promptly provide to VIMRx, at its request and in writing, all
information, with respect to the Seller and its business, properties,
personnel and operations, required for inclusion in the Proxy Statement
and, to the extent that any information previously provided to VIMRx is
discovered to be false or misleading, provide to VIMRx, in writing,
such additional or different information as may be required to correct
such deficiency;
(xi) not mortgage, pledge or subject any of the Assets to any
Encumbrance, other than Permitted Encumbrances;
(xii) not sell, transfer or otherwise dispose of any assets or
property included in the Assets, except in connection with (i) the sale
of inventory in the ordinary course of business or (ii) the sale or
other disposal of assets no longer needed for the operation of the
Division in the ordinary course of business;
(xiii) not waive, release or compromise any material claims or rights
of the Seller relating to the operation of the Division (other than in
connection with the CellPro and Saxholm Litigations);
(xiv) not, except in the ordinary course of business, increase the
compensation (including severance and termination pay) payable to any
employees of the Division; or enter into any agreement with any
employee of the Division providing for a salary in excess of $50,000
per year;
(xv) not (a) enter into any material transaction or agreement with
respect to the Division or (b) amend or terminate any Included
Agreement or Primary License, other than in the ordinary course of
business;
(xvi) not enter into or amend any contract or other agreement, which
constitutes or shall constitute part of the Assumed Liabilities, in
connection with the Division pursuant to which it agrees to indemnify
any party or to refrain from competing with any party;
(xvii) not (i) materially change any of its business policies or
practices relating solely to the Division, including, without
limitation, those relating to advertising, marketing, pricing,
purchasing, personnel, budget, job acquisition or bidding, (ii) make
any material change in the types, nature, composition or quality of the
products of the Division; and
(xviii) not abandon or forfeit any Intellectual Property, or any
application for protection or registration (including patenting) of any
Intellectual Property included in the Assets.
(B)Covenants of VIMRx. From the date hereof (except as set forth in
Section 6.1(B)(vii) below) until the Closing Date, VIMRx covenants that it
shall, and shall (except with respect to items (iv), (v) and (vii) below)
cause the Buyer and each Controlled Subsidiary to:
(i)continue to operate, in all material respects, in the ordinary
course of business;
(ii) provide to the Seller copies of all management letters, audit
letters and reports, including, without limitation, all drafts or
preliminary versions of such letters and reports, in each case,
prepared by its outside auditors in connection with any audit of its
internal controls and procedures;
(iii)not issue, deliver or sell, or authorize or propose to issue,
deliver or sell (whether through the granting of options, warrants,
commitments, subscriptions, rights to purchase or otherwise), any
shares of its capital stock of any class or series, or any other
securities other than options, warrants, commitments, subscriptions or
rights to purchase under arrangements existing as of the Closing Date
in amounts previously disclosed in writing to the Seller;
36
(iv)promptly (but in any event on or prior to October 15, 1997)
prepare and file the Proxy Statement, and prior to filing the Proxy
Statement with the SEC, submit such material to the Seller and its
counsel and provide the Seller and its counsel a reasonable opportunity
to review and comment upon such materials;
(v)duly and promptly call, give notice of, convene and hold a
stockholders' meeting for the purpose of considering and taking action
upon this Agreement and the Transaction Documents and the transactions
contemplated hereunder, and, subject to the fiduciary duties of the
Board of Directors of VIMRx under applicable law, include in the Proxy
Statement the recommendation of the Board of Directors of VIMRx that
stockholders of VIMRx vote in favor of the approval and adoption of
this Agreement and the transactions contemplated hereby;
(vi)at any reasonable time and from time to time, (a) permit the
Seller, or any representative or agent of the Seller, to examine and
make copies and abstracts from any and all of its records and books and
visit and inspect any and all of its assets and properties and (b) make
available its officers, employees and independent accountants to
discuss with the Seller and its representatives its affairs, finances
and accounts; and
(vii)in the event and to the extent, that events or circumstances
occur or arise, or VIMRx becomes aware of events or circumstances,
which render any of the representations and warranties set forth in
Section 5 hereof inaccurate, and without limiting in any way the
Seller's rights under Section 7.2, promptly notify the Seller thereof
by delivering to the Seller new, updated or amended (and red-lined)
Schedules relating to such events or circumstances (it being agreed by
the parties that, notwithstanding any other provision hereof, this
Section 6.1(B)(vii) shall apply (a) only during the period beginning on
the day following the end of the Disclosure Period and ending on the
Closing Date and (b) only in the event that this Agreement shall not
have been terminated in accordance with Section 14.2);
(C)Filings. The Buyer and/or VIMRx, as appropriate, shall, and the Seller
shall (and shall cause its Affiliated entities, as appropriate, to) (i)
promptly file, and use their best efforts to respond as promptly as
practicable to all inquiries received from the Federal Trade Commission or
the Antitrust Division of the Department of Justice for additional
information or documentation with respect to, the Notification and Report
Forms required to be filed under Xxxx-Xxxxx in connection with the
transactions contemplated hereby, (ii) promptly take all such action as may
be necessary under any laws applicable to or necessary for, and will file
and, if appropriate, use their reasonable best efforts to have declared
effective or approved all documents and notifications with all Authorities
which they deem necessary or appropriate for, the consummation of the
transactions contemplated hereby and, (iii) promptly give any other party
hereto information requested by such other party pertaining to it and its
subsidiaries and Affiliates which is reasonably necessary to enable such
other party to take such actions and file in a timely manner all reports
and documents required to be so filed by or under applicable laws.
(D)Negotiations with Others. From the date hereof until the Closing Date,
neither the Seller nor any of its Affiliates or Representatives, directly
or indirectly, will (i) solicit or initiate discussions or engage in
negotiations or discussions with any other person or entity (other than the
Buyer or any of its Affiliates or Representatives) involving (x) the
possible acquisition of a substantial portion of the Assets, or (y) any
form of extraordinary transaction that involves the Division or the
Business (a "Competing Transaction"); (ii) provide information to any
person or entity (other than the Buyer or its Affiliates or
Representatives) with respect to a possible Competing Transaction (except
that the Buyer acknowledges that the Seller provided such information to
third parties, subject to confidentiality agreements, prior to June 11,
1997) or (iii) enter into any Competing Transaction with any person or
entity other than the Buyer or any of its Affiliates. If the Seller
receives any offer or proposal to enter into any Competing Transaction or
to enter into any negotiation relating thereto, the Seller immediately will
notify the Buyer of the existence of such offer or proposal, which notice
shall include information as to the identity of the offeror or the party
making any such proposal and the specific terms of such offer or proposal.
37
6.2 Post-Closing Covenants.
(A)Milestone Payments. The parties agree that subsequent to the Closing,
the Seller shall have the additional rights set forth below:
(i)Upon the occurrence of each Milestone, the Seller shall have the
right to receive from the Buyer, within 45 days after the applicable
Occurrence Date, the amount set forth opposite such Milestone on
Exhibit N.
(ii)The Buyer agrees that, in the event that, as of the Occurrence
Date relating to any Milestone, the Cash Position of the Buyer shall be
less than Net Projected Expenses, VIMRx shall, within 45 days of such
Occurrence Date, lend to the Buyer (for the purpose of enabling the
Buyer to pay the applicable Milestone Payment) a sum equal to such
Milestone Payment. In consideration of any such loan, the Buyer shall
execute and deliver to VIMRx a subordinated promissory note,
substantially in the form annexed hereto as Exhibit V.
(B)Assignability. To the extent that any lease, contract, license,
agreement, sales or purchase order, commitment, property interest or other
asset included in the Assets, or any claim, right or benefit arising
thereunder or resulting therefrom (each an "Interest") is not capable of
being sold, assigned, transferred or conveyed without the approval,
consent, novation or waiver of the issuer thereof or the other party or
parties thereto, or any other third person (including an Authority) (or
would be breached in the event of a sale, assignment, transfer, or
conveyance without such approval, consent or waiver), this Agreement shall
not, in the event any such issuer or third party shall object to such
assignment, constitute a sale, assignment, transfer or conveyance thereof,
or an attempted sale, assignment, transfer or conveyance thereof absent
such approval, consent or waiver. At the request of the Buyer, the Seller
shall use its commercially reasonable best efforts, both prior and
subsequent to the Closing Date, to obtain all necessary approvals, consents
or waivers necessary to convey to the Buyer each such Interest as soon as
reasonably practicable; provided, however, that the Seller shall not be
required to pay any additional consideration in order to obtain such
approvals, consents or waivers. To the extent any of the approvals,
consents or waivers referred to in this Section 6.2(B) have not been
obtained as of the Closing, the Seller shall, during the remaining term of
such Interest (and without limiting the Buyer's right to have the Seller
persist, post-Closing, in attempting to obtain any such approval, consent
or waiver), exercise commercially reasonable best efforts to cooperate with
the Buyer in any reasonable and lawful arrangements designed to provide the
benefits of such Interest to the Buyer.
(C)Facilitation of Possession. Subsequent to the Closing, the Seller, at
the request of the Buyer, shall write letters to, and otherwise communicate
with third parties, and do such other reasonable acts and things as may be
necessary or appropriate, to facilitate the gaining of possession, by the
Buyer of the Assets.
(D)Management Slate. The Seller agrees (so long as (i) it shall own 3% or
more of the issued and outstanding capital stock of VIMRx and (ii) its
representative (if it shall have chosen to designate one) shall retain a
seat on the VIMRx Board of Directors, per Section 6.2(E) below) to vote all
of its shares of stock in VIMRx (whether at meetings, pursuant to written
consents or otherwise) for the election to the Board of Directors of VIMRx
of all candidates who are recommended to be elected thereto by the then-
current Board of Directors.
(E)Board Seat. VIMRx agrees that until the date on which the Seller shall
cease to own at least 3% of the issued and outstanding capital stock of
VIMRx, VIMRx shall nominate and recommend to its stockholders, and to vote
all shares for which management receives a proxy (other than proxies to the
contrary) for the election of one Person selected by the Seller as its
representative to the Board of Directors of VIMRx.
(F)Internal Control Procedures. VIMRx agrees that it shall (i) cause its
outside auditors to perform an audit of the internal controls and
procedures of VIMRx, and (ii) adopt all recommendations regarding such
internal controls and procedures as its Board of Directors shall deem to be
appropriate for adoption.
38
(G)Round Lake and Munich Employees. The Seller shall bear the expenses
and costs incurred in connection with the closing of the Round Lake
Facility and the expenses and costs of relocating employees of the Seller
employed at the Round Lake Facility to the Xxxxxx Facility; provided,
however, that such relocation shall be in accordance with standard
relocation policies of the Seller in effect as of the date of this
Agreement and the expenses and costs of relocating such employees (which
shall be borne by the Seller hereunder) shall not exceed those which would
be borne by the Seller under such standard relocation policies of the
Seller. The Seller shall bear the expenses and costs incurred in connection
with the closing of the Munich Facility; provided, however, that the Seller
shall not bear any expenses or costs incurred in connection with the
relocation of any employees of the Munich Facility to the Xxxxxx Facility
or any other facility operated by or on behalf of the Buyer.
(H)Intellectual Property. The Seller shall cooperate, and shall cause its
Representatives to cooperate, with the Buyer in (i) obtaining, maintaining,
enforcing, defending and confirming the Buyer's ownership of the
Intellectual Property included in the Assets (and the Buyer shall reimburse
the Seller's reasonable out of pocket costs, including, without limitation,
reasonable attorneys fees, incurred in connection therewith) and (ii)
enforcing and defending the Intellectual Property Rights arising from the
Primary Licenses.
(I)Chiron Obligations. (i) The Buyer hereby acknowledges that the Seller
has performance obligations under the Chiron Collaboration Agreement and
agrees, at the Seller's request, to allow the Seller to satisfy the
Seller's performance obligations under the Chiron Collaboration Agreement
including, without limitation (a) allowing the Seller to achieve a
Qualifying Acceptance by the Seller (as that term is defined in the Chiron
Collaboration Agreement), (b) after a Qualifying Acceptance has been
achieved, to permit the Seller to develop and/or manufacture to the
Seller's specifications, a Semi-Automated Xxxxxx System (as that term is
defined in the Chiron Collaboration Agreement), and (c) allowing the Seller
to perform all other obligations of the Seller; provided, that the Semi-
Automated Xxxxxx System will not involve Ex Vivo Cell Processing (as that
term is defined in the Hardware and Disposables Manufacturing Agreement).
Without limitation of the foregoing, and notwithstanding any terms of
this Agreement or the other Transaction Documents to the contrary, the
Buyer agrees, (i) at the request of Seller, to provide to Seller such
assistance and information (at Seller's cost) as may be reasonably required
for Seller to comply with its obligations under Sections 3.8 and 3.9 of the
Chiron Collaboration Agreement and (ii) to abide by the exclusivity
provisions of Section 3.1 of the Chiron Collaboration Agreement pursuant to
clause b(ii) of the third sentence of Section 3.5(a) of the Chiron
Collaboration Agreement in the same manner as such provisions apply to
Xxxxxx. The Buyer further agrees that the Buyer will not, directly or
indirectly (in the event Buyer otherwise has the right to do so), and/or
shall not require Seller to, violate the terms of Section 8.4 of the Chiron
Collaboration Agreement.
(ii)The Semi-Automated Xxxxxx System shall be distributed by the
Seller in compliance with the Non-Competition and Confidentiality
Agreement.
(iii)In return for the Buyer's agreeing to the above, the Seller will
use commercially reasonable efforts to obtain from Chiron Corporation,
a Delaware corporation, the right to grant a sublicense to the Buyer
and its Affiliates under (and on the same terms as) the license granted
to the Seller in Section 2.1(b) of the Chiron Collaboration Agreement.
In the event that the Seller shall obtain such right, the Seller will
grant such sublicense to the Buyer and its Affiliates.
(iv)The Seller shall indemnify and hold harmless the Buyer from and
against any claims of patent or other Intellectual Property
infringement, and any product liability claims, incurred by the Buyer
in connection with the Seller's performance of its obligations under
the Chiron Collaboration Agreement; provided, however, that this
indemnity shall not apply to any claims arising out of actions or
omissions of the Buyer or the performance of Buyer's obligations under
any sublicense, referred to in Section 6.2(I)(iii) above, which it may
enter into with Seller, with the consent of Chiron.
39
(J)Potential Post-Closing Adjustment.
(i)Within 120 days after the Closing Date, the Buyer shall prepare
and deliver to the Seller, or cause to be prepared and delivered to the
Seller, a statement (the "FFE Statement") showing the Buyer's good
faith determination, based on a physical inventory, as to the aggregate
net book value of all furniture, fixtures and equipment included in the
Assets (hereinafter, the "Net Book Value"). The Seller shall reimburse
the Buyer for the out-of-pocket costs incurred by the Buyer in so
preparing, or causing to be prepared, the FFE Statement, but in no
event shall the Seller be obligated to reimburse the Buyer for an
aggregate amount of more than $20,000.
(ii)Within 45 days after the date on which the Buyer shall have
delivered the FFE Statement to the Seller (such 45th day being the
"Lapse Date"), the Seller shall notify the Buyer as to whether the
Seller disputes the FFE Statement (such notice being the "FFE Notice").
In the event that the Seller shall, prior to the Lapse Date, notify the
Buyer that it agrees with the FFE Statement, the FFE Statement shall be
deemed, on the date of giving of such notice, to have been finally
determined for purposes of Section 6.2(J)(iv). In the event that the
Seller fails to deliver an FFE Notice to the Buyer on or before such
45th day, the Seller shall be deemed to have agreed to the FFE
Statement and the FFE Statement shall be deemed likewise to have been
finally determined for purposes of Section 6.2(J)(iv).
(iii)In the event that the Seller timely delivers an FFE Notice which
indicates that it disputes the FFE Statement, the Seller and the Buyer
shall, during the 30-day period after the date on which the FFE Notice
shall have been given to the Buyer, negotiate in good faith to resolve
any disagreements with respect to the FFE Statement. If at the end of
such 30-day period, no such resolution is reached, such disagreements
shall, under the principles set forth in this Section 6.2(J), be
resolved by a "Big Six" firm of independent accountants (other than
KPMG and Price Waterhouse) upon which the Seller and the Buyer shall
agree (the "Jointly Selected Firm"), and such firm shall review the FFE
Statement and determine whether any revisions thereto are appropriate.
If the parties are unable, within five days after the expiration of
such 30 day period, to agree upon the Jointly Selected Firm, the Seller
and the Buyer shall cause an independent mutually acceptable third
party to write the names of each of such other four "Big Six" firms on
four pieces of paper and then draw one of such names blindly, and
randomly, from a container (the firm so chosen being referred to as the
"Appointed Firm"). The parties shall retain the Appointed Firm to
review and, if appropriate, revise the FFE Statement. The Jointly
Selected Firm or the Appointed Firm, as the case may be, shall be
instructed promptly to discharge its task and to deliver written notice
of its decision (and, if appropriate, a revised FFE Statement)
simultaneously to the Buyer and the Seller. The date as of which the
Buyer and the Seller shall have received such notice shall be the date
on which the FFE Statement shall be deemed to have been finally
determined for purposes of Section 6.2(J)(iv). The determination made
by the Jointly Selected Firm or the Appointed Firm shall be conclusive
and binding on the parties hereto, absent manifest error. The fees and
disbursements of the Jointly Selected Firm or the Appointed Firm, as
the case may be, shall be divided equally between the Seller, on the
one hand, and the Buyer, on the other hand.
(iv)Within 10 days after the date on which the FFE Statement shall
have been finally determined pursuant to the above provisions, the
parties shall comply with either subsection (a) or (b) below, as
applicable:
(a)if the Net Book Value shown on the final FFE Statement shall
equal or exceed $7,200,000, no adjustment shall be in order and no
additional sum shall be payable by Seller to Buyer;
(b)if the Net Book Value shall be less than $7,200,000, the Seller
shall pay to the Buyer the excess of (1) $7,200,000 over (2) the Net
Book Value.
40
(K)Preferred Stock. VIMRx shall not issue or sell any shares of VIMRx
Preferred Stock to any person other than the Seller or an Affiliate of the
Seller, so long as the Seller or any Affiliate of the Seller remains the
beneficial owner of any shares of VIMRx Preferred Stock.
7.Conditions to Obligations of the Buyer, VIMRx and the Seller
7.1 The Buyer's and VIMRx's Conditions.
The obligations of the Buyer and VIMRx to consummate the transactions
contemplated hereunder are conditioned upon the following, any or all of
which may be waived by the Buyer and VIMRx in their sole and absolute
discretion:
(A)All representations and warranties of the Seller contained in this
Agreement that are qualified as to materiality shall be true and correct on
and as of the Closing Date with the same force and effect as though such
representations and warranties had been made on and as of the Closing Date,
and all representations and warranties of the Seller contained in this
Agreement which are not so qualified shall, in all material respects, be
true and correct on and as of the Closing Date with the same force and
effect as though such representations and warranties had been made on and
as of the Closing Date.
(B)The Seller shall, in all material respects, have performed and
complied with all of the covenants and agreements (including the agreement
to make the deliveries set forth in Section 8.1) required by or pursuant to
this Agreement, or any Exhibit or instrument delivered pursuant to this
Agreement, to be performed or complied with by it on or prior to the
Closing Date.
(C)The Buyer shall have received an executed consent from The Irvine
Company, in form reasonably satisfactory to the Buyer, consenting to the
assignment and delegation to the Seller of the lease relating to the Xxxxxx
Facility.
(D)The Buyer shall have received an executed estoppel certificate, in
form and substance reasonably satisfactory to the Buyer, from The Irvine
Company relating to the aforesaid lease.
(E)The Seller shall have obtained and delivered to the Buyer consents, in
form reasonably satisfactory to the Buyer, executed by (i) every party
(other than the Seller) to each agreement set forth on Exhibit W,
consenting to the assignment and delegation to the Buyer of such agreement
and (ii) every party (other than the Seller) to every material Included
Agreement to which the Seller becomes a party after the date hereof whose
consent to the assignment and delegation of such agreement to the Buyer is
required in order to avoid a violation of such agreement.
(F)The Seller and the Buyer shall, simultaneously with the Closing, have
executed and delivered the Services Agreement.
(G)At least 75% of all of the Division's United States employees to whom
the Buyer shall have sent an offer letter (to be drafted by the Buyer and
containing a statement requesting the recipient to countersign it if such
recipient is interested in becoming an employee of the Buyer) shall have
countersigned such letter and delivered it to the Buyer; provided, however,
that this condition shall be waived and shall be deemed to have been
satisfied unless (i) the Buyer shall have mailed such offer letter to said
employees on or prior to November 12, 1997 and (ii) such offer letter shall
contain a statement from the Buyer requesting a response from each employee
recipient on or prior to November 26, 1997.
(H)The Seller shall have obtained and delivered to the Buyer consents, in
form reasonably satisfactory to the Buyer, from Becton, Xxxxxxxxx and
Company, Cetus Oncology Corporation and Xxxxx Xxxxxx relating to the
permission of such parties to execute and deliver the First BD Sublicense,
the Second BD Sublicense, the Dorken Sublicense and the Chiron Sublicense,
as the case may be.
41
(I)The Seyfarth Opinion shall, simultaneously with the Closing, have been
delivered to the Buyer and VIMRx.
7.2 The Seller's Conditions.
The obligations of the Seller to consummate the transactions contemplated
hereunder are conditioned upon the following, any or all of which may be
waived by the Seller in its sole and absolute discretion:
(A)All warranties and representations of the Buyer and VIMRx contained in
this Agreement that are qualified as to materiality shall be true and
correct on and as of the Closing Date with the same force and effect as
though such representations and warranties had been made on and as of the
Closing Date, and all representations and warranties of the Buyer and VIMRx
which are not so qualified shall, in all material respects, be true and
correct on and as of the Closing Date with the same force and effect as
though such representations and warranties had been made on and as of the
Closing Date.
(B)The Buyer and VIMRx shall, in all material respects, have performed
and complied with all of the covenants and agreements (including the
agreements to make the deliveries set forth in Sections 8.2 and 8.3)
required by or pursuant to this Agreement, or any Exhibit, Section or
instrument delivered pursuant to this Agreement, to be performed or
complied with by them on or prior to the Closing Date.
(C)The Xxxxxxx Opinion shall, simultaneously with the Closing, have been
delivered to the Seller.
(D)The Buyer shall have adopted an employee stock option plan.
7.3 Mutual Conditions.
The respective obligations of each party hereto to consummate the
transactions contemplated hereunder are conditioned upon the following:
(A)This Agreement and the transactions contemplated hereby shall have
been approved and adopted by the requisite vote of VIMRx's stockholders in
accordance with applicable Delaware General Corporation Laws and the rules
and regulations of Nasdaq.
(B)No order of any court or Authority shall be in effect which restrains
or prohibits the transactions contemplated hereby or which would materially
limit or materially and adversely affect the ability of the Buyer to
conduct the Business of the Division as now conducted by it, and no suit,
action or proceeding by any Authority or other person shall be pending or
threatened which seeks to restrain the consummation, or challenges the
validity or legality, of the transactions contemplated by this Agreement or
which would, if successful, materially limit or materially and adversely
affect the ability of the Buyer to conduct the business of the Division.
(C)Any waiting period applicable under Xxxx-Xxxxx and relating to the
transactions contemplated hereby shall have terminated or expired.
(D)All other consents, approvals or orders of any Authority, the granting
of which is required for the lawful consummation of the transactions
contemplated hereby, shall have been obtained; and all other waiting and
notification periods specified under applicable law the termination or
expiration of which is necessary for such consummation shall have been
terminated or shall have expired.
(E)VIMRx shall have mailed the Proxy Statement to the VIMRx stockholders
and such Proxy Statement shall have included the recommendation of the
VIMRx Board of Directors that the stockholders of VIMRx vote in favor of
the approval and adoption of the actions to authorize and issue the VIMRx
Preferred Stock and issue the VIMRx Common Stock to the Seller pursuant to
this Agreement.
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8.Deliveries of the Parties.
8.1 The Seller's Deliveries.
(A)To the Buyer. At the Closing, the Seller shall deliver, or cause to be
delivered, to the Buyer the following:
(i)a Xxxx of Sale from the Seller, and a Xxxx of Sale from each
Inventory Entity (and from each other entity, if any, which shall then
own any Included Inventory or other assets constituting Assets), each
to be in a form reasonably satisfactory to the Buyer;
(ii)a good standing certificate, dated as of a date not more than
five days prior to the Closing Date, as to the corporate existence and
good standing of the Seller, certified by the Secretary of State of
Delaware;
(iii)[intentionally omitted];
(iv)such individual or general contract assignments as Buyer shall
reasonably request;
(v)all governmental or other approvals, consents, grants, and
licenses, if any, required to be procured by the Seller in connection
with the transactions contemplated hereby;
(vi)[INTENTIONALLY OMITTED];
(vii)a certificate of the Secretary of the Seller certifying and
including the resolutions of the Board of Directors authorizing the
execution, delivery and performance of this Agreement and the
transactions contemplated hereby and attesting to the incumbency and
signatures of all officers executing any documents in connection with
the transactions contemplated by this Agreement;
(viii) an executed copy of each of the Transaction Documents to which
the Seller is a party;
(ix)the sum of $10 million, representing the purchase price for the
Buyer Convertible Debenture described in Section 8.3(B)(i), such sum to
be paid by wire transfer of immediately available Federal funds to an
account of the Buyer designated by the Buyer;
(x)the additional sum of $20 million, representing the price for the
purchase of the additional Buyer Convertible Debenture described in
Section 8.3(B)(ii), such sum to be paid in the same manner provided for
in clause (ix) above;
(xi)such other executed assignments, bills of sale, endorsements,
notices, consents, novations, assurances and such other instruments of
conveyance and transfer as counsel for the Buyer shall reasonably
request and as shall be effective to vest in the Buyer the Seller's
rights, title and interest in the Assets;
(xii)a separate letter to the FDA (on the Seller's letterhead),
executed by an authorized officer of the Seller and complying with
relevant FDA laws and policy, in respect of each of the categories of
FDA Submissions listed in Schedule 3.5(F) assigning to the Buyer all of
the Seller's right, title and interest in and to each FDA Submission
listed on Schedule 3.5.
(xiii) an executed and notarized assignment of the United States
registration for each trademark included in the Assets which is
registered with the PTO, the form of which assignment shall be
reasonably satisfactory to the Buyer;
(xiv) an executed and notarized assignment of the United States
trademark application for each trademark included in the Assets which
is the subject of an application for registration filed with the PTO,
the form of which assignment shall be reasonably satisfactory to the
Buyer;
43
(xv)an executed and notarized assignment of United States
patents/patent applications for each United States patent or patent
application included in the Assets, the form of which assignment shall
be reasonably satisfactory to the Buyer.
(xvi) a true and correct certificate (the precise form of which shall
be reasonably satisfactory to KPMG) showing, for each physical location
where Included Inventory was held by the Seller or any Inventory Entity
as of last day of the month immediately preceding the month in which
the Closing shall occur, (i) the street address of each location, (ii)
the number of units of each kind of Included Inventory at such location
as of such date and (iii) for each such kind of Included Inventory
thereat, the aggregate book value of all units of such kind of Included
Inventory at such location.
(B)To VIMRx. At the Closing, the Seller shall deliver to VIMRx the
following:
(i)an executed copy of each of the Transaction Documents to which the
Seller is a party; and
(ii)[intentionally omitted].
8.2 Deliveries of VIMRx.
(A)To the Seller. At the Closing, VIMRx shall deliver to the Seller the
following:
(i)the Purchase Consideration due at Closing to the Seller pursuant
to Sections 2.2 (A), (B) and (C) hereof;
(ii)an executed copy of each of the Transaction Documents to which
each of VIMRx and the Seller is a party; and
(iii)[intentionally omitted].
(B)To the Buyer. At the Closing, VIMRx shall deliver to the Buyer the
following:
(i)the sum of $10 million, representing the purchase price for the
Buyer Convertible Debenture described in Section 8.3(A)(i), such sum to
be paid by wire transfer of immediately available federal funds to an
account of the Buyer designated by the Buyer; and
(ii)an executed copy of each of the Transaction Documents to which
each of the Buyer and VIMRx is a party.
8.3 Deliveries of the Buyer.
(A)To VIMRx. At the Closing, the Buyer shall deliver to VIMRx the
following:
(i)an executed Buyer Convertible Debenture, substantially in the form
annexed hereto as Exhibit F in respect, and in the principal amount, of
the $10 million paid by VIMRx pursuant to Section 8.2(B)(i); and
(ii)an executed copy of each of the Transaction Documents to which
each of VIMRx and the Buyer is a party; and
(iii)80.5 shares of Buyer Common Stock.
(B)To the Seller. At the Closing, the Buyer shall deliver to the Seller
the following:
(i)an executed Buyer Convertible Debenture, substantially in the form
annexed hereto as Exhibit D in respect, and in the principal amount, of
the $10 million paid by the Seller pursuant to Section 8.1(A)(ix);
44
(ii)an executed Buyer Convertible Debenture, substantially in the
form annexed hereto as Exhibit E in respect, and in the principal
amount, of the $20 million paid by the Seller pursuant to Section
8.1(A)(x);
(iii)an executed Warrant; and
(iv)an executed copy of each of the Transaction Documents to which
the Buyer is a party.
9.Survival of Representations: Indemnities.
9.1 Survival.
All representations and warranties contained in, or in any certificate
delivered pursuant to or in connection with, this Agreement (the Agreement,
together with such other certificates, being collectively referred to as
"Documents") shall survive the Closing of the transactions contemplated
under this Agreement until March 31, 1999; provided, however, that the
representations and warranties set forth in Sections 3.7(D), 3.8, 3.12,
4.4, 5.4, 5.9 and 5.12 shall survive the Closing for a period of five
years. All covenants and agreements contained in any Document shall survive
in accordance with their terms; provided, however, that for the removal of
doubt, none of the covenants set forth in Section 6.1 or 6.2 shall survive
the termination of this Agreement in accordance with Section 14.
9.2 Indemnity.
(A)The Seller agrees to indemnify, and hold the Buyer and VIMRx harmless
from and against (i) any and all Losses which the Buyer or VIMRx shall
sustain by reason of or in connection with the breach or inaccuracy of, or
failure to comply with, any of the representations, warranties, covenants
or undertakings, contained in any Document, made by the Seller, (ii) the
Non-Assumed Liabilities, (iii) any broker's or finder's fee or commission
due to Xxxxxx Brothers or The Craves Group with respect to the transactions
contemplated hereby, (iv) any and all Losses which the Buyer or VIMRx shall
sustain in connection with (a) claims by third parties arising in
connection with the Non-Assumed Liabilities, or (b) claims by third parties
(including but not limited to Xxxxxx Brothers and The Craves Group) that
they are due a broker's or finder's fee or similar compensation with
respect to the transactions contemplated hereby, which claims arise out of
actions of the Seller or any Representative of the Seller and (v) any and
all Losses which the Buyer or VIMRx shall sustain by reason of or in
connection with (a) any violation of Environmental Law, committed by the
Seller or any of its Representatives, in respect of the Xxxxxx Facility or
the land upon which it is situated, during the Seller's occupancy thereof,
(b) subject to Section 10 hereof, any Taxes arising out of the operations
of the Seller up to and including the Closing Date, (c) any violation of
ERISA committed by the Seller or any of its Representatives, (d) the
Saxholm Litigation and any litigation which may be brought against Buyer
and/or VIMRx alleging infringement of one or more of Saxholm U.S. patents
4,324,859, 4,657,868 and 4,992,377 and foreign equivalents due to
manufacture, use, importation or sale of Isolex(R) and/or Maxsep(R)
Products (except to the extent that any such Losses arise out of
infringement resulting from changes made by the Buyer in design or
operation of the accused device) and (e) the antitrust-related counterclaim
against the Seller in the CellPro Litigation. Notwithstanding the
foregoing, the Buyer and VIMRx shall not be entitled to any indemnification
under this Section 9.2 (A) with respect to any Losses incurred by the Buyer
or VIMRx as a result of the breach of any representation or warranty
contained in Section 3 hereof, other than Losses pursuant to breaches of
Sections 3.7(D), 3.12 or 3.19, unless and until the aggregate amount of all
Losses arising from breaches of representations and warranties contained in
Section 3 shall exceed $400,000 and then only to the extent that such
aggregate amount shall exceed $400,000; provided, further, that the
immediately preceding proviso shall not apply in the case of any fraudulent
breach.
(B)VIMRx agrees to indemnify and hold the Seller harmless from and
against (i) any and all Losses which the Seller shall sustain by reason of
or in connection with the breach or inaccuracy of any of the
45
representations or warranties, contained in any Document, made by the Buyer
and/or VIMRx, (ii) any broker's or finder's fee or commission due to
Lazard, Freres with respect to the transactions contemplated hereby, and
(iii) any and all Losses which the Seller shall sustain in connection with
claims by third parties that they are due a finder's or broker's fee or
similar compensation with respect to the transactions contemplated hereby,
which claims arise out of actions of the Buyer or VIMRx or any
Representatives of either; provided, however, that the Seller shall not be
entitled to any indemnification under this Section 9.2(B) with respect to
any Losses incurred by the Seller as a result of the breach of any
representation or warranty contained in Section 4 or 5 hereof, other than
Losses pursuant to breaches of Sections 4.5, 4.6, 5.5, 5.6 or 5.9, unless
and until the aggregate amount of all Losses arising from breaches of
representations and warranties contained in Section 4 or 5 shall exceed, in
the aggregate, $400,000 and then only to the extent that such aggregate
amount shall exceed $400,000; provided, further, however, that the
immediately preceding proviso shall not apply in the case of any fraudulent
breach.
(C)The Buyer agrees to indemnify and hold the Seller harmless from and
against (i) any and all Losses which the Seller shall sustain by reason of
or in connection with the breach of, or failure to comply with, any of the
covenants or undertakings, contained in any Document, made by the Buyer,
(ii) the Buyer's Liabilities (except to the extent that such liabilities
are to be borne by the Seller pursuant to this Agreement or any Transaction
Document and except to the extent that the same arise from a wrongful act
or omission on the part of the Seller, any Affiliate of Seller or any
Representative of any of the foregoing), and (iii) any and all Losses which
the Seller shall sustain in connection with claims by third parties arising
in connection with the Buyer's Liabilities (except as stated in the above
parenthetical); provided, however, that subsection (i) of this Section
9.2(C) shall be deemed to refer to breaches and failures of the Buyer only
to the extent that the same exist and/or persist subsequent to the Closing
Date.
(D) VIMRx agrees to indemnify and hold the Seller harmless from and
against (i) any and all Losses which the Seller shall sustain by reason of
or in connection with the breach of, or failure to comply with, any of the
covenants or undertakings, contained in any Document, made by VIMRx and
(ii) any and all Losses which the Seller shall sustain by reason of or in
connection with the breach of, or failure to comply with, any of the
covenants or undertakings, contained in any Document, made by the Buyer;
provided, however, that subsection (ii) of this Section 9.2(D) shall be
deemed to refer to breaches and failures of the Buyer only to the extent
that the same exist and/or persist during the period beginning on the date
hereof and ending on the Closing Date.
(E)(i) Notwithstanding anything to the contrary contained herein, but
subject in any event to the rest of this Section 9.2(E), the maximum
indemnity which the Seller could become obligated to provide to the Buyer
and/or VIMRx, in the aggregate, under Section 9.2(A) for breaches of
representations, warranties, covenants and/or undertakings is $18,000,000
(in cash or securities, as more specifically provided below); provided,
however, that notwithstanding the foregoing, any indemnity or payment to
which the Buyer or VIMRx may be or become entitled under Sections 2.5(A),
6.2(G), 6.2(I)(iv), 6.2(J)(i) (last sentence only), 6.2(J)(iii) (last
sentence only), 6.2(J)(iv), 9.2(A)(ii)-(v) (other than Section 9.2(A)(v)(a)
thereof), 10, 13, 16.1(C), 16.1(G) (proviso only), 16.1(H) (second sentence
only) and 16.4(A) shall be paid by the Seller notwithstanding such
$18,000,000 cap.
(ii)In the event that the Seller becomes liable to indemnify VIMRx
for Losses under Section 9.2(A) for breaches of representations,
warranties, covenants and/or undertakings, the first $5,000,000 of such
indemnified Losses shall be payable only in cash. Any indemnified
Losses in excess of $5,000,000 shall be payable, at the option of the
Seller, either in cash or by way of the Seller's surrender (i.e.,
transfer of ownership) to VIMRx of shares of VIMRx Preferred Stock. For
the purposes of this Section 9.2, each share of VIMRx Preferred Stock
shall be valued at its $1,000 liquidation value. Therefore, for
example, in the event that the Seller became obligated to VIMRx for
$1,000,000 (over and above the first $5,000,000, which would be payable
in cash), the Seller would have the right to satisfy such liability by
the surrender of 1,000 shares of VIMRx Preferred Stock. Notwithstanding
46
anything herein to the contrary, VIMRx acknowledges and agrees that,
although it may become entitled to indemnification from Seller under
Section 9.2 based upon Losses directly incurred by Buyer (and not
directly by VIMRx), to the extent that Buyer has been made whole for
any such Loss which has been directly incurred by it, VIMRx shall (to
avoid "double recovery" for the same Loss) lose its right to be
indemnified with respect to such Loss.
(iii)In the event that the Seller becomes liable to indemnify the
Buyer for Losses under Section 9.2(A) for breaches of representations,
warranties, covenants and/or undertakings, the first $5,000,000 of such
indemnified Losses shall be payable to the Buyer only in cash. Any
indemnified Losses in excess of $5,000,000 shall be payable, at the
option of the Seller, either in cash or by the surrender (i.e.,
cancellation) of indebtedness otherwise owed to the Seller under the
Buyer Convertible Debentures, such surrender/cancellation to be made on
a dollar-for-dollar basis in accordance with the amount of Losses to be
indemnified.
(F)Notwithstanding anything to the contrary contained herein, the maximum
aggregate indemnity which the Buyer and/or VIMRx could, in the aggregate,
become obligated to provide to the Seller under Section 9.2(B) for breaches
of representations, warranties, covenants and/or undertakings is
$18,000,000; provided, however, that notwithstanding the foregoing, any
indemnity or payment to which the Seller may be or become entitled under
Sections 2.5(B), 6.2(A)(i), 6.2(H) (parenthetical contained in subsection
(i) only), 6.2(J)(iii) (last sentence only), 9.2(B)(ii) and (iii),
9.2(C)(ii) and (iii), 10, 13 and 16.4(C) shall be paid by the Buyer or
VIMRx, as the case may be, notwithstanding such $18,000,000 cap.
(G)Within a reasonable period of time after receipt by any party hereto
of notification of the assertion by a third party, of any Third Party Claim
(such recipient being referred to hereinafter as an "Indemnified Party"),
such Indemnified Party shall give written notice of such Third Party Claim
to each party which has, or would reasonably be expected to have, an
obligation to indemnify such Indemnified Party under this Section 9 (an
"Indemnifying Party"); provided, however, that the failure to so notify the
Indemnifying Party shall not relieve him or it of any indemnity obligations
hereunder unless, and to the extent, the Indemnifying Party's rights have
been adversely affected by any such failure or delay. The Indemnifying
Party shall (upon its delivery to the Indemnified Party of a written
acknowledgment and agreement that, if such Third Party Claim shall be
adversely determined, the Indemnifying Party shall be fully responsible
hereunder to indemnify the Indemnified Party with respect to such Third
Party Claim) have the option, upon notice to the Indemnified Party, to
assume control of the defense of the Third Party Claim and the Indemnified
Party may participate at its own expense in (but not control) the Third
Party Claim (with counsel selected by it in its discretion) if it notifies
the Indemnified Party in writing of its intention so to participate;
provided, however, that the Indemnifying Party shall not consent to the
entry of any judgment or enter into any settlement, except with the written
consent of the Indemnified Party, which does not include as an
unconditional term thereof the giving by the claimant or plaintiff to the
Indemnified Party and its Affiliates and Representatives of a release from
all liability in respect of such Action or which imposes any injunctive
relief upon the Indemnified Party or any of its Affiliates or
Representatives. In the event of such assumption, the Indemnified Party
shall cooperate fully in the defense of the Third Party Claim as and to the
extent reasonably requested by the Indemnifying Party (such cooperation
shall include the retention and, upon the request of the Indemnifying
Party, the provision to such party of records and information which are
reasonably relevant to such claim or demand and making employees available
on a mutually convenient basis to provide additional information and
explanation of any material provided hereunder). In the absence of any such
assumption of the defense, the Indemnifying Party shall be obligated to
cooperate in accordance with the preceding sentence.
(H)The provisions of this Section 9 are the exclusive remedy of any party
to this Agreement against any other party to this Agreement for any claim
for breach of any covenant, agreement, representation, warranty or other
provision of this Agreement (other than a claim for specific performance or
injunctive relief or a claim based upon fraud) with the intent that all
such claims shall be subject to the limitations and other provisions
contained in this Section 9.
47
(I)In no event shall any party hereto be entitled to or recover exemplary
or punitive damages in any action under this Agreement or relating to the
subject matter hereof.
10.Transactional and Other Taxes.
(A)Transactional Taxes. The Buyer and the Seller shall each bear one-half
of any applicable Transactional Taxes with respect to the sale, transfer,
or assignment of the Assets or otherwise on account of this Agreement or
the transactions contemplated herein.
(B)Personal Property Taxes. All personal property taxes relating to any
and all personal property conveyed pursuant to this Agreement shall be pro-
rated between the Buyer and the Seller in accordance with the relationship
of the Closing Date to the entire relevant tax year. Any payment owed in
respect of such pro-ration shall be made at Closing.
(C)Utilities. All utility accounts relating to the Xxxxxx Facility will
be read as of the commencement of business on the Closing Date. The Seller
shall be responsible for all utility charges accruing up to said time and
the Buyer shall be responsible for all utility charges accruing thereafter.
11.Further Assurances and Cooperation.
Following the date hereof, and subject to the terms and conditions hereof,
each of the Seller, VIMRx and the Buyer severally agrees to execute and
deliver such documents and take such other action as shall be reasonably
requested by the other party to carry out and effectuate the transactions
contemplated by this Agreement. On and subsequent to the Closing Date, each
party severally covenants and warrants that it shall, whenever and as often as
it shall be reasonably requested to do so by another party to this Agreement,
execute, acknowledge and deliver or cause to be executed, acknowledged and
delivered, any and all such further documents and instruments as may be
reasonably necessary, expedient or proper in order to complete any and all of
the conveyances, transfers, sales and assignments herein provided for. Without
limiting the foregoing, this Section 11 shall apply in particular to any items
of the type described in Section 8.1(A)(xi) which are not delivered on the
Closing Date (e.g., foreign registrations of the trademark ISOLEX(R)).
12.Notices.
All notices, requests, demands, and other communications permitted or
required under this Agreement shall be in writing and shall be either
personally delivered (including couriers such as FedEx) or sent by pre-paid
certified mail, return receipt requested or facsimile transmission, with a
confirmation copy personally delivered or sent by pre-paid certified mail,
addressed or transmitted to the address or number stated below of the party to
which notice is given, or to such other address or number as such party may
have fixed by notice given in accordance with the terms hereof:
To the Buyer:
BIT Acquisition Corp.
c/o VIMRx Pharmaceuticals Inc.
0000 Xxxxxxxxxxx Xxxx
Xxxxx 000
Xxxxxxxxxx, Xxxxxxxx 00000
Attention:Chief Executive Officer
Facsimile:(000) 000-0000
48
With a copy to:
Xxxxxxx Xxxxxx & Green, P.C.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention:Xxxxxx X. Xxxxxxxxxx, Esq.
or Xxxxx X. Xxxxxxxx, Esq.
Facsimile:(000) 000-0000
To VIMRx:
VIMRx Pharmaceuticals Inc.
0000 Xxxxxxxxxxx Xxxx
Xxxxx 000
Xxxxxxxxxx, Xxxxxxxx 00000
Attention:Chief Executive Officer
Facsimile:(000) 000-0000
With a copy to:
Xxxxxxx Xxxxxx Green, P.C.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention:Xxxxxx X. Xxxxxxxxxx, Esq.
or Xxxxx X. Xxxxxxxx, Esq.
Facsimile:(000) 000-0000
To the Seller:
Xxxxxx Healthcare Corporation
0000 Xxxx Xxxx Xxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attention:President--Biotech Business Group
President--Venture Management
General Counsel--Biotech Business Group
Facsimile:
With a copy to:
Seyfarth, Shaw, Xxxxxxxxxxx & Xxxxxxxxx
00 Xxxx Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000-0000
Attention:Xxxxxxxxxxx X. Xxxxx, Esq.
Facsimile:(000) 000-0000
Any notice, sent as provided above, shall be deemed given, if sent by
certified mail, upon delivery at the address provided for above (or, in the
event delivery is refused, the first date on which delivery was tendered) or,
if sent by facsimile transmission, upon receipt by the sender of confirmation
of delivery.
13.Expenses.
Subject to the terms of Section 9 hereof, each party hereto shall bear its
own expenses (including all attorneys' and accountants' fees) incurred in
connection with the negotiation, preparation, consummation and
49
performance of this Agreement and the other Documents and the transactions
contemplated hereby and thereby. The Buyer and the Seller shall each bear one-
half of any filing fees or similar payments to any Authority incurred in
connection with any filings or other actions required to be taken hereunder in
respect of Xxxx-Xxxxx. Notwithstanding anything to the contrary contained in
this Section 13, the parties agree that the Seller shall bear the first
$100,000 of expenses and costs relating to the audit services referred to in
that certain KPMG Engagement Letter, dated July 24, 1997, relating to the
Division, with all expenses and costs relating thereto which are in excess of
$100,000 to be borne solely by the Buyer.
14.Termination.
14.1 Conditions.
This Agreement may be terminated at any time on or prior to the Closing
Date:
(A)by mutual consent of the Seller, the Buyer and VIMRx;
(B)by the Buyer and VIMRx, if (i) there has been a material
misrepresentation or breach on the part of the Seller with respect to any
representation or warranty of the Seller set forth herein, or (ii) there
has been any material failure on the part of the Seller to comply with any
of its obligations or to perform any of its covenants hereunder, which
failure, if capable of remedy, has not been remedied within 15 days of
receipt by the Seller of notice thereof, or (iii) any of the conditions set
forth in Section 7.1 or 7.3 shall not have been fulfilled by December 31,
1997 (other than by virtue of a breach of this Agreement by the Buyer or
VIMRx) and the fulfillment thereof shall not have been waived by the Buyer
and VIMRx; or
(C)by the Seller, if (i) there has been a material misrepresentation or
breach on the part of the Buyer or VIMRx in any of its representations or
warranties set forth herein, or (ii) there has been any material failure on
the part of the Buyer or VIMRx to comply with any of its obligations or to
perform any of its covenants hereunder, which failure, if capable of
remedy, has not been remedied within 15 days of receipt by the Buyer or
VIMRx, as appropriate, of notice thereof, or (iii) any of the conditions
set forth in Section 7.2 or 7.3 shall not have been fulfilled by December
31, 1997 (other than by virtue of a breach of the Agreement by the Seller)
and the fulfillment thereof shall not have been waived by the Seller.
14.2 Special Termination Right.
(A)In addition to the rights of termination provided for in Section 14.1,
and in recognition of the fact that (i) notwithstanding the execution and
delivery hereof, each of the Buyer, the Seller and VIMRx is continuing to
perform its own ongoing due diligence in connection with the transactions
contemplated hereby, (ii) each of the parties hereto may not have fully
completed either the Schedules relating to its representations and
warranties or its own analysis of the Schedules heretofore submitted by the
other parties hereto and (iii) the parties have not fully completed or
agreed upon Schedule 2.1, the Seller, on the one hand, and the Buyer and
VIMRx jointly, on the other hand, shall have the right, which may be
exercised in their sole and absolute discretion, to terminate this
Agreement at any time on, or prior to, the Section 14.2 Date.
(B)During the Disclosure Period, the Seller, the Buyer and VIMRx shall
have the right (but not the obligation) both to supply Schedules (relating
to Sections 3, 4 and 5, respectively) to the party or parties to whom the
related representation and warranty is being made (the "Receiving Party")
and to modify, in any respect, any such Schedule which shall theretofore
have been provided by it to the Receiving Party. In the event that neither
the Buyer and VIMRx, on the one hand, nor the Seller, on the other hand,
shall have validly terminated this Agreement pursuant to Section 14.2(A) on
or prior to the Section 14.2 Date, references in this Agreement to any
Schedule delivered or attached pursuant to Section 3, 4 or 5, as the case
may be, shall be deemed to refer to the last version of such Schedule which
was provided to the Receiving Party prior to the end of the Disclosure
Period, regardless whether such version purported to be
50
"final"or "draft" (it being the intent of the parties to give to each such
"last version" the same status as a Schedule attached to a purchase
agreement at the time of execution and delivery). In that connection, in
the event that Section 3, 4 or 5 provides for a Schedule but no Schedule
(whether "draft", "final" or other) shall have been provided, prior to the
end of the Disclosure Period, by the party making the related
representation and warranty, such party shall be deemed, for all purposes
of this Agreement, to have provided such Schedule immediately prior to the
end of the Disclosure Period in completely blank form (i.e., with no
information or writing on it). Any information which is first provided on a
version of a Schedule which version is not received by the Receiving Party
until after the Disclosure Period shall not be deemed to have been received
by the Receiving Party until after the Section 14.2 Date. No information
shall be deemed to have been included on a Schedule unless such information
shall have been delivered to the Receiving Party in a writing at the top of
each page of which writing appears the words "Xxxxxx/VIMRx" and the number
of the related Schedule (e.g., "Schedule 3.5").
(C)During the Disclosure Period, the Seller shall have the right (but not
the obligation) to supply Schedule 2.1 to the Buyer and VIMRx and to
modify, in any respect, any version of such Schedule which shall
theretofore have been provided by it to the Buyer and VIMRx. In the event
that neither the Buyer and VIMRx, on the one hand, nor the Seller, on the
other hand, shall have validly terminated this Agreement pursuant to
Section 14.2(A) on or prior to the Section 14.2 Date, references in this
Agreement to Schedule 2.1 shall be deemed to refer to the last version of
such Schedule which was provided to the Buyer and VIMRx prior to the end of
the Disclosure Period, regardless whether such version purported to be
"final"or "draft" (it being the intent of the parties to give to such "last
version" the same status as a Schedule attached to a purchase agreement at
the time of execution and delivery). No modification to Schedule 2.1 shall
be deemed to have been made by the Seller prior to the end of the
Disclosure Period unless such modification shall have been delivered to the
Buyer and VIMRx in a writing at the top of each page of which writing
appears the words "Xxxxxx/VIMRx" and "Schedule 2.1." After the end of the
Disclosure Period, no modification to Schedule 2.1 shall be effective
unless agreed to in writing by each party hereto.
(D)Each party hereto acknowledges that, for purposes of determining
whether the conditions stated in Sections 7.1(A) and 7.2(A) have been
satisfied, the representations and warranties in Sections 3, 4 and 5, as
provided in such Sections, are being deemed to have been made immediately
prior to the end of the Disclosure Period rather than on the date of
execution and delivery hereof.
(E)Notwithstanding anything to the contrary herein, the valid termination
of this Agreement in accordance with Section 14.2 shall not give rise to
any liability of any party hereto.
14.3 Effective Date.
A termination pursuant to Section 14.1(B) or (C) or Section 14.2(A) shall
be effective immediately upon delivery of a notice of termination by the
party or parties having the right to terminate to the other party or
parties.
14.4 No Liability.
In the event of a termination of this Agreement, as provided above, this
Agreement shall forthwith terminate and there shall be no liability on the
part of VIMRx, the Buyer or the Seller, except for liability arising from a
breach of this Agreement.
15.Employment.
The Buyer shall make offers of employment to at least 75% of the persons who
are employed by the Division, in the United States, immediately prior to the
Closing.
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16.Certain Additional Covenants and Acknowledgments.
16.1 CellPro Litigation.
The parties understand and agree that matters pertaining to the potential
infringement by CellPro of the patents and technology licensed to the
Seller pursuant to that certain License Agreement between Becton, Xxxxxxxxx
and Company and the Seller, dated August 24, 1990, as amended on November
10, 1993 and further amended on March 30, 1995 (the "First BD License"),
including the conduct of the CellPro Litigation, will remain the
responsibility of the Seller, as set forth below:
(A)The Seller will vigorously pursue in good faith and for the benefit of
the Buyer in the pending litigation entitled Xxxxx Xxxxxxx University v.
CellPro, No. 94-105-RRM (D. Del.) (the "CellPro Litigation") its legal
remedies against CellPro for infringement of certain of the patent rights
embodied in the First BD License, which patent rights are to be sublicensed
to the Buyer (the "Patent Rights");
(B)The Seller will vigorously defend the Patent Rights in any actions or
proceedings with respect to CellPro that have been or may in the future be
brought in any court of law or before the HHS or NIH, including proceedings
seeking a compulsory license to CellPro of technology included in the
Patent Rights;
(C)The Seller will bear the full cost and expense of the CellPro
Litigation and any other such litigation or other protective defense action
or proceeding, including without limitation, attorneys' fees and expenses,
and fees and expenses of public relations advisors, accountants, experts,
and other advisors or consultants, that are incurred in connection
therewith;
(D)The Seller will retain any award of damages or other recovery
attributable to the infringing use of such Patent Rights by CellPro;
(E)The Seller will consult with the Buyer concerning the conduct of any
litigation or action described above;
(F)The Seller will obtain the Buyer's consent to all material decisions,
including settlement and other strategic decisions, relating to the CellPro
Litigation and any other litigation or action described above or related
thereto, which consent shall not be unreasonably withheld or delayed;
provided, however, that in the event that the Seller shall seek to grant a
license to CellPro, then the Buyer shall have the right to withhold its
approval thereto in its sole and absolute discretion without being subject
to the aforementioned "unreasonably withheld" standard.
(G)The Buyer will abide by and comply with any settlement or commitment
with or to HHS or NIH, made by the Seller with regard to CellPro, after
approval thereof by the Buyer (which approval shall not be unreasonably
withheld or delayed unless, in the Buyer's good faith opinion, such
decision will materially adversely affect the Buyer's ability to achieve
the Plan A Projections) including but not limited to the commitments made
by the Seller to HHS, as set forth below, provided that the Seller will
bear the full cost and expense of such compliance to the extent such cost
and expense exceeds the projected cost and expense thereof included in the
Plan A Projections. Notwithstanding anything to the contrary contained
herein, the commitments made by the Seller to HHS, with which the Buyer
will consent, and agree to cooperate with the Seller in assuring complete
satisfaction of, include the following:
(i)The Seller will use its best efforts to ensure in the CellPro
Litigation that any injunctive relief against CellPro entered by the
federal court will permit CellPro's continued sale of its Ceprate(R) SC
products and its continued provision of those products to clinicians
involved in clinical trials, pending FDA approval of a medically
equivalent or superior alternative;
(ii)If CellPro reduces support of any clinical site that does not
already have the Seller's Isolex(R) 300 System available as an
alternative, the Seller will install its device at the CellPro site
free of charge
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and will make its best efforts to provide that site with support
comparable to that which CellPro was providing on comparable contract
terms. The Seller will also provide all necessary clinical, regulatory
and technical support to put the Isolex(R) 300 system into operation as
quickly as possible;
(iii)If CellPro reduces support for any clinical site, the Seller
will take steps to assure that there will be no gap in patient access
to the technology; and
(iv)The Seller will retain the responsibility and the ability to
support the clinical and research needs for stem cells for transplant
through retaining a non-exclusive license to the Patent Rights,
continuing to manufacture the Isolex(R) devices under the
Manufacturing, Supply and Distribution Agreements, and continuing as
the exclusive worldwide distributor for the Isolex(R) 300 System in
support of stem cell selection for the treatment of cancer.
(H)The Buyer shall take all actions the Seller reasonably deems necessary
or appropriate to assist the Seller in pursuing the CellPro Litigation,
and/or other matters related to CellPro. The Seller will reimburse the
Buyer for all reasonable out-of-pocket expenses associated with providing
such cooperation or otherwise incurred by the Buyer in connection with the
CellPro Litigation, including but not limited to attorneys' and other
professionals' fees and expenses, that may be incurred in the event the
Buyer is made a party to the CellPro Litigation.
16.2 Employee Covenants.
The parties agree that the following shall apply in respect of the
employees of the Division:
(A)The Buyer shall have the right to designate to the Seller those
employees of the Division (other than Xxxx Xxxxxxxxx, Xxxxxxx Xxxxxx,
Xxxxxxxx Xxxxxxx, Xxxxx Xxxxxxxxx and Xxxxx Xxxxxxx) whose services (as
newly-hired employees) the Buyer is interested in retaining subsequent to
the Closing (such people as may be so designated by the Buyer from time to
time prior to Closing being referred to as the "Designated Employees"). The
Seller shall encourage each Designated Employee to accept employment with
the Buyer.
(B)The Buyer shall also have the right to designate one or more, at its
discretion, of the Designated Employees as "key" employees (such people as
may be so designated by the Buyer from time to time prior to Closing being
referred to as "Key Employees"). In the event that any Key Employee
declines to accept employment with the Buyer, the Seller shall exercise
commercially reasonable best efforts to continue to employ each and every
such person, for a period of at least one year following the Closing, in
such capacity as will enable such person to devote substantially all his or
her business time to working on those aspects of the post-Closing
Buyer/Seller relationship with which such person has familiarity; provided,
however, that (i) except to the extent provided in the Services Agreement,
in no event shall the Seller be required to increase the direct or indirect
compensation payable to such Key Employee in order to retain such
employee's services and (ii) to the extent and under the circumstances
provided in the Services Agreement, the Buyer shall reimburse the Seller
for the fully-loaded costs of such Key Employee. If the Buyer should
request from time to time that any particular such Key Employee be focused
on any particular project or area of competence, the Seller shall not
unreasonably withhold its consent to such request.
16.3 Disclaimer.
The Seller shall not be deemed to have made to the Buyer any
representation or warranty other than as expressly made by the Seller in
Article 3 hereof. Without limiting the generality of the foregoing, and
notwithstanding any otherwise express representations and warranties made
by the Seller in Article 3 hereof, the Seller makes no representation or
warranty to the Buyer with respect to:
(A)any projections, estimates or budgets heretofore delivered to or made
available to the Buyer of future revenues, expenses or expenditures or
future results of operations; or
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(B)except as covered by a representation and warranty contained in
Article 3 hereof, any other information or documents (financial or
otherwise) made available to the Buyer or its counsel, accountants or
advisers with respect to the Seller.
16.4 Delayed FDA Approval.
(A)In the event (i) the Buyer has not received notification before
January 1, 1998, that an application for premarket approval for commercial
marketing of an Isolex 300SA or 300i System in the United States is
approved by the FDA ("FDA Approval"), or (ii) such FDA Approval is received
but the Seller is unable to manufacture Isolex 300SA or 300i Systems, as
the case may be, in compliance with the Federal Food, Drug and Cosmetic
Act, the Public Health Service Act and FDA implementing regulations, the
Seller shall remit to the Buyer all CellPro Profit Margin Payments (as
hereinafter defined) received by the Seller in respect of the period
commencing January 1, 1998 and ending on the first date the Seller has
received FDA Approval and is able to deliver to the Buyer Isolex 300SA or
300i Systems, as the case may be, which comply with said Acts and
regulations conforming to such FDA Approval.
(B)"CellPro Profit Margin Payments" shall mean any and all payments (i)
made pursuant to any court order affecting CellPro, or any agreement
between CellPro and the Seller, regarding CellPro's infringement of
Intellectual Property Rights of the Seller embodied in the Isolex Products,
and (ii) which are received by the Seller as compensation for, or damages
in respect of, sales by or on behalf of CellPro on or after the Closing
Date, of any product infringing any Intellectual Property Rights of the
Seller embodied in the Isolex Products. The term "CellPro Profit Margin
Payments" specifically excludes (a) damages or compensation payable to
Xxxxx Xxxxxxx University and/or Becton, Xxxxxxxxx and Company in respect of
such infringement, (b) royalty payments made to Xxxxx Xxxxxxx University
and/or Becton, Xxxxxxxxx and Company in respect of any such damages or
other compensation paid to the Seller, and (c) any reimbursement for
attorney's fees received by Seller from Xxxxx Xxxxxxx University.
(C)In the event the Seller becomes obligated to repay or refund any
CellPro Profit Margin Payment received by the Buyer, to CellPro, its
bankruptcy estate, its trustee in bankruptcy or its creditors, by reason of
such payment being held to constitute a preference under any bankruptcy or
insolvency law, the Buyer shall pay to the Seller the amount of such
payment promptly after receipt of notice from the Seller of such
obligation.
16.5 Allocation of Consideration.
The parties shall exercise their good faith efforts to agree upon how the
consideration paid or given for the Class A Assets and Class B Assets
(including but not limited to the Purchase Consideration and the Milestone
Payments) shall be allocated. In the event that any such agreement is
executed and delivered by the parties, such consideration shall be deemed,
for all purposes (including those relating to Taxes of any kind
whatsoever), to be allocated to the Class A Assets and Class B Assets in
accordance therewith and, without limiting the foregoing, any IRS Forms
8594 shall be prepared consistent therewith.
17.Miscellaneous.
17.1 Entire Agreement: No Modification.
This Agreement, including the Exhibits, Schedules and instruments
delivered pursuant hereto, sets forth the entire agreement and
understanding between the parties hereto as to the specific subject matter
hereof and thereof, and merges and supersedes all prior discussions,
agreements and understandings of every kind and nature between them with
respect to the specific subject matter hereof and thereof, and no party
hereto shall be bound by any condition, definition, warranty or
representation other than as expressly provided for in this Agreement,
provided, however, that the parties hereto acknowledge and agree that the
Primary Licenses are not being made a part of this Agreement and shall not
be integrated into this Agreement. This
54
Agreement shall not be changed or amended except by a writing signed by the
Buyer, VIMRx and the Seller.
17.2 Waiver of Breach.
The waiver by a party of a breach or violation by any other party of any
provision of this Agreement shall not operate or be construed as a waiver
of any subsequent breach or violation by any party of the same or any other
provision of this Agreement. No such waiver shall be effective unless in
writing signed by the party claimed to have made the waiver.
17.3 Benefit of Parties; Assignment.
This Agreement shall be binding upon and shall inure to the benefit of
the parties hereto and their respective heirs, executors, legal
representatives, successors and permitted assigns. No party shall have the
right to assign or delegate any of its rights or obligations arising
hereunder, except with the prior written consent of each other party
hereto; provided, however, that any party may assign any or all of its
rights, and delegate any or all of its obligations, hereunder to any person
or entity who shall, by merger, consolidation, transfer of assets or
otherwise, have acquired all or substantially all of the assets (not
counting cash and cash equivalents) of such party; provided, further, that
no such delegation shall relieve the delegating party of the obligation to
satisfy and discharge the obligation(s) so delegated. Notwithstanding the
foregoing, the Seller shall have the right to assign this Agreement, and
any rights and obligations arising hereunder, to an Affiliate of the Seller
without the prior written consent of any other party hereto; provided, that
no such assignment shall relieve the Seller of any of its obligations
hereunder. Any purported assignment or delegation in violation of this
Section 17.3 shall be null and void ab initio.
17.4 Headings.
The headings of the sections and paragraphs of this Agreement are
inserted for convenience of reference only and shall not constitute a part
hereof.
17.5 Governing Law; Jurisdiction
This Agreement shall be governed by and construed in accordance with the
laws of the State of Delaware without giving effect to principles of
conflict of laws. Each party to this Agreement expressly and irrevocably
(A) consents that any legal action or proceeding against it under, arising
out of or in any manner relating to, this Agreement, or any other Document
delivered in connection herewith, may be brought in any court of the State
of Delaware located within the District of Delaware or in the United States
District Court for the District of Delaware, (B) consents and submits to
the personal jurisdiction of any of such courts in any such action or
proceeding, (C) consents to the service of any complaint, summons, notice
or other process relating to any such action or proceeding by delivery
thereof to him, her or it by hand or by any other manner provided for in
Section 12, (D) waives any claim or defense in any such action or
proceeding based on any alleged lack of personal jurisdiction, improper
venue or forum non conveniens or any similar basis, and (E) waives all
rights, if any, to trial by jury with respect to any such action or
proceeding. Nothing in this Section shall affect or impair in any manner or
to any extent the right of any party to commence legal proceedings or
otherwise proceed against any other party in any jurisdiction or to serve
process in any manner permitted by law.
17.6 Multiple Counterparts; Execution by Fax.
This Agreement may be signed in any number of counterparts which taken
together shall constitute one and the same instrument. This Agreement may
be executed and delivered by exchange of facsimile copies showing the
signatures of the parties hereto, and those signatures need not be affixed
to the same copy. The facsimile copies showing the signatures of the
parties will constitute originally signed copies of the same agreement
requiring no further execution.
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17.7 Exhibits, Schedules.
All Exhibits and Schedules referred to in this Agreement are attached
hereto and are incorporated herein by reference as if fully set forth
herein.
17.8 Construction.
The language in all parts of this Agreement shall in all cases be
construed as a whole according to its fair meaning, strictly neither for
nor against any party hereto, and without implying a presumption that the
terms thereof shall be more strictly construed against one party by reason
of the rule of construction that a document is to be construed more
strictly against the person who himself or through his agent prepared the
same, it being agreed that representatives of both parties have
participated in the preparation hereof.
17.9 Publicity.
No party to this Agreement shall issue or cause the publication of any
press release or other public announcement with respect to this Agreement
or the transactions contemplated hereby without first providing a draft of
such press release or announcement to the other parties and obtaining the
consent of the other parties hereto; provided, however, that nothing herein
shall prevent any party from making any disclosure required by law.
17.10 Number and Gender.
Whenever in this Agreement the singular is used, it shall include the
plural if the context so requires, and whenever the masculine gender is
used in this Agreement, it shall be construed as if the masculine, feminine
or neuter gender, respectively, has been used where the context so
dictates, with the rest of the sentence being construed as if the
grammatical and terminological changes thereby rendered necessary have been
made.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement, as of the
date first above written.
VIMRx:
VIMRx PHARMACEUTICALS INC.
By: /s/ Xxxxxxx X. Xxxxxxx
-----------------------------------------
Title: Chief Executive Officer
--------------------------------------
SELLER:
XXXXXX HEALTH CARE CORPORATION
By: /s/ Xxxxxx X. Xxxxxxx
-----------------------------------------
Title: President-Venture Management (Biotech)
--------------------------------------
BUYER:
BIT ACQUISITION CORP.
By: /s/ Xxxxxxx X. Xxxxxxx
-----------------------------------------
Title: President
--------------------------------------
