EXECUTION COPY
ASSET PURCHASE AGREEMENT
BY AND BETWEEN
SAIGENE CORPORATION
AS SELLER
AND
PACIFIC BIOMETRICS, INC., A DELAWARE CORPORATION
AND
PACIFIC BIOMETRICS, INC., A WASHINGTON CORPORATION
AS BUYER
DATED AS OF JUNE 27, 2002
TABLE OF CONTENTS
Page
----
1. Definitions........................................................2
1.1 Defined Terms.............................................2
1.2 Other Definitional and Interpretive Matters...............8
2. Purchase and Sale of Certain Assets................................9
2.1 Purchase and Sale of Assets...............................9
2.2 Excluded Assets...........................................9
2.3 Purchase Price...........................................10
2.4 Assumed Liabilities......................................11
2.5 Excluded Liabilities.....................................11
2.6 Option to Purchase Certain Assets........................11
2.7 Further Assurances; Further Conveyances
and Assumptions; Consent of Third Parties..............11
2.8 Bulk Sales Law...........................................12
2.9 Taxes....................................................12
3. Representations and Warranties of Seller..........................13
3.1 Organization and Qualification...........................13
3.2 Authorization; Binding Effect............................13
3.3 Non-Contravention; Consents..............................13
3.4 Title to Purchased Assets; Principal
Equipment; Compliance with Leases........................14
3.5 Permits, Licenses........................................14
3.6 Compliance With Laws; Litigation.........................15
3.7 Contracts................................................15
3.8 Intellectual Property....................................15
3.9 Rule 144.................................................16
3.10 Brokers..................................................16
3.13 Investment Representations...............................18
3.14 No Other Representations or Warranties...................18
4. Representations and Warranties of Parent and Buyer................19
4.1 Organization and Qualification...........................19
4.2 Authorization; Binding Effect............................19
4.3 No Violations............................................20
4.4 Capitalization...........................................20
4.5 Subsidiaries.............................................21
4.6 Validity of Shares.......................................21
4.7 Absence of Changes.......................................21
4.8 Severance Arrangements...................................21
4.9 Full Disclosure..........................................21
4.10 Permits..................................................22
4.11 Brokers..................................................22
4.12 No Other Representations and Warranties..................22
4.13 Organization and Qualification...........................22
4.14 Authorization; Binding Effect............................23
4.15 No Violations............................................23
4.16 Absence of Changes.......................................24
4.17 Severance Arrangements...................................24
4.18 Full Disclosure..........................................24
4.19 Permits..................................................24
5. Certain Covenants.................................................24
5.1 Access and Information...................................24
5.2 Conduct of Business......................................26
5.3 Tax Reporting and Allocation of Consideration............27
5.4 Leased Equipment.........................................27
5.5 Regulatory Compliance....................................27
5.6 Contacts with Suppliers, Employees and Customers.........27
5.7 Use of Seller's Name.....................................28
5.8 Termination of Prior Purchase Agreement..................29
5.9 Best Efforts.............................................29
6. Confidential Nature of Information................................30
6.1 Confidentiality Agreement................................30
6.2 Seller's Proprietary Information.........................30
7. Closing...........................................................31
7.1 Deliveries by Seller.....................................32
7.2 Deliveries by Buyer......................................32
7.3 Closing Date.............................................33
8. Conditions Precedent to Closing...................................33
8.1 General Conditions.......................................33
8.2 Conditions Precedent to Buyer's Obligations..............34
8.3 Conditions Precedent to Seller's Obligations.............35
9. Post Closing......................................................35
9.1 Effect of Breach Prior to Closing........................36
9.2 Survival of Representations and Warranties...............36
9.3 General Agreement to Indemnify...........................36
9.4 General Procedures for Indemnification...................38
9.5 Amendments to Capital of Buyer...........................39
9.6 Pools of Stock...........................................39
9.8 Board of Directors.......................................40
9.9 Consulting Agreements....................................40
10. Miscellaneous Provisions..........................................40
10.1 Notices..................................................40
10.2 Expenses.................................................41
10.3 Entire Agreement; Modification...........................41
10.4 Assignment; Binding Effect; Severability.................42
10.5 Governing Law; Jurisdiction; Venue.......................42
10.6 Execution in Counterparts; Facsimile Signatures..........42
10.7 Public Announcement......................................42
10.8 No Third-Party Beneficiaries.............................43
11. Termination and Waiver............................................43
11.1 Termination..............................................43
11.2 Effect of Termination....................................43
11.3 Waiver of Agreement......................................43
11.4 Amendment of Agreement...................................44
SCHEDULES
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Schedule 2.1 Purchased Assets
Schedule 2.2 Excluded Assets
Schedule 2.3 Shareholders to Receive the Shares
Schedule 2.4 Assumed Liabilities
Schedule 2.5 Excluded Liabilities
Schedule 2.7(b) Non-Assignable Assets
Schedule 3.3(b) Required Consents
Schedule 3.4(a) Encumbered Assets
Schedule 3.4(b) Lease Obligations
Schedule 3.5 Permits
Schedule 3.6(a) Compliance with Laws
Schedule 3.6(b) Litigation
Schedule 3.6(c) Impairments
Schedule 3.7(a) Material Contracts
Schedule 3.7(b) Notice of Defaults
Schedule 3.8(a) Licenses
Schedule 3.8(b) Intellectual Property Claims
Schedule 3.8(e) Required Consents
Schedule 3.11 Changes or Events
Schedule 3.15 Creditors over $100,000
Schedule 4.3(b) Buyer Consents
Schedule 4.7 Changes Since Last Financial Statement
Schedule 4.8 Severance Arrangements
Schedule 4.15(b) Buyer Consents
Schedule 4.16 Severance Arrangements
Schedule 5.2 Exceptions to Seller's Conduct of Business
Schedule 9.6(a) Recipients of Pools of Stock and Options
Schedule 9.6(b) Accrued Dividends
Schedule 9.9(b) Duties of Xxxx Xxxxx
EXHIBITS
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Exhibit A Form of Assignment and Xxxx of Sale
Exhibit B Form of Assumption Agreement
Exhibit C Form of Intellectual Property Agreement
Exhibit D Form of Promissory Note
Exhibit E Form of Option Agreement
Exhibit F Form of Amendment to Management Agreement
Exhibit G Form of Opinion of Counsel for Seller
Exhibit H Form of Opinion of Counsel for Buyer and Parent
Exhibit I Form of Creditor Consent
Exhibit J Form of Non-Compete/Confidentiality Agreement
AGREEMENT FOR THE PURCHASE AND SALE OF ASSETS
THIS AGREEMENT FOR THE PURCHASE AND SALE OF ASSETS ("Agreement") is
made as of June 27, 2002 by and between SAIGENE CORPORATION, a Delaware
corporation, having its principal office at 000 Xxxx Xxxxxxxx, Xxxxxxx,
Xxxxxxxxxx 00000 ("Seller" or "Saigene"); PACIFIC BIOMETRICS, INC., a Delaware
corporation ("Parent"), having its principal office at 00000 Xxxxxx Xxxxxxx,
Xxxxx 000, Xxxxxxx Xxxxx, Xxxxxxxxxx 00000; and PACIFIC BIOMETRICS, INC., a
Washington corporation ("Buyer"), having its principal office at 000 Xxxx
Xxxxxxxx, Xxxxxxx, Xxxxxxxxxx 00000.
RECITALS
A. WHEREAS the parties previously entered into an Agreement for
Purchase and Sale of Assets, dated April 18, 2000, as amended by the First
Amendment to Agreement of Purchase and Sale dated as of June 22, 2000 and the
Second Amendment to Agreement of Purchase and Sale dated as of August 4, 2000,
whereby Seller was to purchase substantially all of the assets of Buyer (the
agreement, together with all amendments, is referred to herein as the "Prior
Purchase Agreement");
B. WHEREAS in anticipation of the Prior Purchase Agreement, the parties
also entered into a Management Agreement, dated September 15, 1999, whereby
Seller took control of the day-to-day management of the laboratory business of
Buyer (the "Management Agreement");
C. WHEREAS the parties are now desirous of terminating the Prior
Purchase Agreement, amending the Management Agreement, and closing the
transaction pursuant to the terms of this Agreement (with the termination of the
Prior Purchase Agreement and amendment of the Management contingent upon the
Closing of this transaction);
D. WHEREAS, Seller is, among other things, engaged in research,
development, and commercialization of biotechnical products, including a number
of DNA based diagnostic processes, cell viability platform technology, and a
proprietary method for DNA amplification (collectively, the "Business");
E. WHEREAS, the Business is composed of certain assets and liabilities
that are currently part of Seller;
F. WHEREAS, Seller desires to sell, transfer and assign to Buyer, and
Buyer desires to purchase and assume from Seller, the Purchased Assets (as
hereinafter defined), and Buyer is willing to assume the Assumed Liabilities (as
hereinafter defined), in each case as more fully described and upon the terms
and subject to the conditions set forth herein; and
G. WHEREAS, Seller and Buyer desire to enter into each Assignment and
Xxxx of Sale, each Assumption Agreement and the Intellectual Property Agreement
and the other agreements referenced herein, the forms of which are attached as
exhibits to this Agreement (collectively, the "Collateral Agreements").
NOW, THEREFORE, in consideration of the mutual agreements and covenants
herein contained and intending to be legally bound hereby, the parties hereto
hereby agree as follows:
1. DEFINITIONS
1.1 DEFINED TERMS
For the purposes of this Agreement, in addition to the words and
phrases that are described throughout the body of this Agreement, the following
words and phrases will have the following meanings:
"Affiliate" of any Person means any Person that controls, is
controlled by, or is under common control with such Person. As used herein,
"control" means the possession, directly or indirectly, of the power to direct
or cause the direction of the management and policies of such entity, whether
through ownership of voting securities or other interests, by contract or
otherwise; provided, however, that Parent and/or Buyer shall not be deemed an
Affiliate of Seller (and vice versa) as a result of the existence of or
provisions contained in the Management Agreement.
"Agreement" has the meaning assigned in the preamble hereof.
"Asset Acquisition Statement" has the meaning assigned in Section
5.3.
"Assignment and Xxxx of Sale" means each agreement in substantially
the form set forth as Exhibit A.
"Assumed Liabilities" means the liabilities and obligations of
Seller assumed by Buyer pursuant to the Assumption Agreement and Section 2.4.
"Assumption Agreement" means each agreement in substantially the
form set forth as Exhibit B.
"Business" has the meaning assigned in Recital D hereof.
"Business Day" means a day that is not a Saturday, a Sunday or a
statutory or civic holiday in the State of California or any other day on which
the principal offices of Seller or Buyer are closed or become closed prior to
2:00 p.m. local time.
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"Business Employees" means the employees of Seller employed in the
Business.
"Business Records" means all books, records, ledgers and files or
other similar information used primarily in the conduct of the Business,
including price lists, customer lists, vendor lists, mailing lists, warranty
information, catalogs, sales promotion literature, advertising materials,
brochures, records of operation, standard forms of documents, manuals of
operations or business procedures, research materials and product testing
reports required by any national, federal, state, provincial or local court,
administrative body or other Governmental Body of any country, but excluding any
such items to the extent (1) they are included in, or primarily related to, any
Excluded Assets or Excluded Liabilities, (2) any applicable Law prohibits their
transfer, or (3) they are confidential personnel records.
"Buyer" has the meaning assigned in the preamble hereof, and is a
wholly-owned subsidiary of Parent.
"Closing" means the closing of the transactions described in
Article 7.
"Closing Date" means the date of the Closing as determined pursuant
to Section 7.3.
"Code" means the U.S. Internal Revenue Code of 1986, as amended.
"Collateral Agreements" has the meaning assigned in Recital G
hereof.
"Contaminant" has the meaning assigned in Section 3.12(a).
"Contracts" means all Third-Party contracts, agreements, leases and
subleases, supply contracts, purchase orders, sales orders and instruments used
or held for use in each case primarily in the conduct of the Business, that will
be in effect on the Closing Date to which Seller is a party, including, but not
limited to, (1) for the lease of furniture and office equipment, (2) for the
provision of goods or services by the Business or for the Business, (3) for the
purchase of goods, procurement or supply of raw materials, supplies, Inventory
or other components, or (4) any such contracts, agreements, instruments and
leases referred to in clauses (1) - (3), inclusive, entered into between the
date hereof and outstanding as of the Closing Date by Seller, but "Contracts"
excludes the Excluded Contracts.
"Counsel for Buyer" means Xxxxxxxxx Ball Xxxxxx Xxxxxx &
Xxxxxxxxxxx, LLP.
"Counsel for Seller" means Burkhalter, Michaels, Xxxxxxx & Xxxxxx
LLP.
"Encumbrance" means any lien, claim, charge, security interest,
mortgage, pledge, easement, conditional sale or other title retention agreement,
covenant or other similar
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restrictions or third party rights affecting the Purchased Assets other than
Permitted Encumbrances.
"Environmental Laws" has the meaning assigned in Section 3.12(a).
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder.
"Excluded Assets" means the properties and assets of the Business
excluded from the Purchased Assets by Section 2.2.
"Excluded Contracts" means those Contracts (1) identified in
Schedule 2.2, (2) under which performance by Seller or an Affiliate has been
completed and for which there is no remaining warranty, maintenance, or support
obligation, (3) relating to any General Purchase Agreement, except to the extent
such General Purchase Agreement involves or is related to the Purchased Assets,
and (4) relating solely to Excluded Assets or Excluded Liabilities.
"Excluded Liabilities" means the liabilities and obligations that
are not assumed by Buyer as provided in Section 2.5.
"Existing Inventory" has the meaning assigned in Section 5.6(a)(3).
"Fixtures and Supplies" means all furniture, furnishings and other
tangible personal property owned by Seller, including laboratory, testing,
diagnostic and development equipment, desks, tables, chairs, file cabinets and
other storage devices and office supplies, but excluding any such items related
to Excluded Assets or Excluded Liabilities.
"Governmental Body" means any legislative, executive or judicial
unit of any governmental entity (foreign, federal, state or local) or any
department, commission, board, agency, bureau, official or other regulatory,
administrative or judicial authority thereof.
"Governmental Permits" means all governmental permits and licenses,
certificates of inspection, approvals or other authorizations issued to Seller
with respect to the Business and otherwise necessary for the operation of the
Business as currently conducted under applicable Laws.
"Indemnified Party" has the meaning assigned in Section 9.3(a).
"Indemnifying Party" has the meaning assigned in Section 9.4(a).
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"Intellectual Property Agreement" means the agreement in
substantially the form set forth as Exhibit C.
"Inventory" means all inventory, wherever located, including raw
materials, work in process, recycled materials, finished products, inventoriable
supplies, and non-capital spare parts owned by Seller and used or held for use
primarily in the conduct of the Business, and any rights of Seller to the
warranties received from suppliers and any related claims, credits, rights of
recovery and setoff with respect to such Inventory, but excluding any inventory
related to Excluded Assets or Excluded Liabilities.
"IRS" means the U.S. Internal Revenue Service.
"Know-How" has the meaning assigned in Section 5.1(d).
"Laws" shall mean any national, federal, state, provincial or local
law, statute, ordinance, rule, regulation, code, order, judgment, injunction or
decree of any country.
"Leased Equipment" means the computers, servers, machinery and
equipment and other similar items leased and used by Seller primarily in the
conduct of the Business but excluding any such items related to Excluded Assets
or Excluded Liabilities.
"Licenses" means all licenses, agreements and other arrangements
identified on Schedule 2.1 under which Seller has the right to use any
Proprietary Information of a Third Party to the extent used or held for use
primarily in the conduct of the Business but not the Nonassignable Licenses or
any such items related to Excluded Assets or Excluded Liabilities.
"Licensed Intellectual Property" means the Proprietary Information
of Seller licensed to Buyer pursuant to, and as specifically identified and set
forth in, the Intellectual Property Agreement.
"Losses" has the meaning assigned in Section 9.3(a).
"Management Agreement" has the meaning assigned in Recital B
hereof.
"Marked Assets" has the meaning assigned in Section 5.6(a)(2).
"Marked Instrumentalities" has the meaning assigned in Section
5.6(a)(3).
"Material Adverse Effect" means, with respect to a Person, any
condition or event that has material and adverse effect upon the financial
condition or results of operations of the assets, properties, prospects or
business of such Person, taken as a whole, and does not include (1) industry or
general economic downturns, except due to terrorist or similar acts or events or
(2) conditions or events arising out of or resulting from actions of the other
party or parties to this Agreement.
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"Material Contracts" has the meaning assigned in Section 3.7.
"Nonassignable Assets" has the meaning assigned in Section 2.7(b).
"Nonassignable Licenses" means those Licenses of Proprietary
Information as to which Seller or an Affiliate is the licensee that are (1) not
by their terms assignable to Buyer and not material to the Purchased Assets or
the Business or (2) solely related to other businesses of Seller or an Affiliate
and not to the Business.
"Other Marked Assets" has the meaning assigned in Section
5.6(a)(3).
"Parent" has the meaning assigned in the preamble hereof.
"Permitted Encumbrances" means any (1) Encumbrance that will
constitute an Assumed Liability to the extent assignable, (2) liens for Taxes,
assessments and other governmental charges or of landlords, liens of carriers,
warehouseman, mechanics and material men incurred in the ordinary course of
business, in each case for sums not yet due and, (3) liens incurred or deposits
made in the ordinary course of business in connection with workers'
compensation, unemployment insurance and other types of social security or to
secure the performance of tenders, statutory obligations, surety and appeal
bonds, bids, leases, government contracts, performance and return of money bonds
and similar obligations, and (4) any Encumbrance or minor imperfection in title
and minor encroachments, if any, not material in amount that, individually or in
the aggregate, do not and will not, to the best of Seller's present knowledge,
in the future materially interfere with the conduct of the Business or with the
use, transfer or disposition of the Purchased Assets and do not and will not, to
the best of Seller's present knowledge, in the future materially affect the
value of the Purchased Assets.
"Person" means any individual, corporation, partnership, firm,
association, joint venture, joint stock company, trust, unincorporated
organization, limited liability company or other entity, foreign or domestic, or
any foreign, federal, state or local government or regulatory, administrative or
political subdivision or agency, department or instrumentality thereof.
"Preferred Stock" means the Series A Convertible Preferred Stock,
par value $.01 per share, of Parent.
"Principal Equipment" means the computers, servers, machinery and
equipment, laboratory, testing, diagnostic and development equipment and other
similar items used by Seller in the conduct of the Business or primarily related
to the Purchased Assets, but not the Leased Equipment or any such items
primarily related to Excluded Assets or Excluded Liabilities. Principal
Equipment includes rights to the warranties received from the manufacturers and
distributors of said items and to any related claims, credits, rights of
recovery and setoff with respect to said items.
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"Prior Purchase Agreement" has the meaning assigned in Recital A
hereof.
"Promissory Note" has the meaning assigned in Section 2.3(c).
"Proprietary Information" means all information (whether or not
protectable by patent, copyright, mask works or trade secret rights) not
generally known to the public (except for patents), including, but not limited
to, works of authorship, inventions, discoveries, patentable subject matter,
patents, patent applications, industrial models, industrial designs, trade
secrets, trade secret rights, software, works, copyrightable subject matters,
copyright rights and registrations, dies, molds, tools and tooling, mask works,
know-how and show-how, trademarks, trade names, service marks, emblems, logos,
insignia and related marks and registrations, specifications, technical manuals
and data, libraries, blueprints, drawings, proprietary processes, product
information and development work-in-process.
"Public Reports" has the meaning assigned in Section 4.4(b).
"Purchase Price" has the meaning assigned in Section 2.3.
"Purchased Assets" has the meaning assigned in Section 2.1.
"Reasonable Commercial Efforts" means that the obligated party is
required to make a diligent, reasonable and good faith effort to accomplish the
applicable objective. Such obligation, however, does not necessarily require an
expenditure of funds or the incurrence of a liability on the part of the
obligated party, nor does it require that the obligated party act in a manner
that would be contrary to normal commercial practices in order to accomplish the
objective. The fact that the objective is or is not actually accomplished is no
indication that the obligated party did or did not in fact utilize its
reasonable commercial efforts in attempting to accomplish the objective.
"Release" has the meaning assigned in Section 3.12(a).
"Required Consents" has the meaning assigned in Section 3.3(b).
"Saigene" has the meaning assigned in the preamble hereof.
"Securities Act" shall mean the Securities Act of 1933, as amended,
and the rules and regulations promulgated thereunder.
"Seller" has the meaning assigned in the preamble hereof.
"Seller Marks" has the meaning assigned in Section 5.6(a)(1).
"Shares" has the meaning assigned in Section 2.3(b).
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"Subsidiary" means (1) any corporation in an unbroken chain of
corporations beginning with Seller, Parent, or Buyer, as applicable, if each of
the corporations other than the last corporation in the unbroken chain then owns
stock possessing 50% or more of the total combined voting power of all classes
of stock in one of the other corporations in such chain, (2) any partnership in
which such party is a general partner or (3) any partnership, corporation,
limited liability company or similar entity that such party controls, through
the ownership of interests or otherwise.
"Taxes" means all taxes of any kind, charges, fees, customs,
levies, duties, imposts, required deposits or other assessments, including,
without limitation, all net income, capital gains, gross income, gross receipt,
property, franchise, sales, use, excise, withholding, payroll, employment,
social security, worker's compensation, unemployment, occupation, capital stock,
ad valorem, value added, transfer, gains, profits, net worth, asset,
transaction, taxes, and other taxes and interest, penalties, or additions to tax
with respect thereto imposed upon any Person by any Governmental Body under
applicable Law.
"Third Party" means any Person not an Affiliate of the other
referenced Person or Persons.
"Third-Party Claim" has the meaning assigned in Section 9.4(a).
1.2 OTHER DEFINITIONAL AND INTERPRETIVE MATTERS
Unless otherwise expressly provided, for purposes of this
Agreement, the following rules of interpretation shall apply:
Calculation of Time Period. When calculating the period of time
before which, within which or following which any act is to be done or step
taken pursuant to this Agreement, the date that is the reference date in
calculating such period shall be excluded. If the last day of such period is a
non-Business Day, the period in question shall end on the next succeeding
Business Day.
Gender and Number. Any reference in this Agreement to gender shall
include all genders, and words imparting the singular number only shall include
the plural and vice versa.
Headings. The provision of a Table of Contents, the division of
this Agreement into Articles, Sections and other subdivisions and the insertion
of headings are for convenience of reference only and shall not affect or be
utilized in construing or interpreting this Agreement. All references in this
Agreement to any "Section" are to the corresponding Section of this Agreement
unless otherwise specified.
Herein. The words such as "herein," "hereinafter," "hereof," and
"hereunder" refer to this Agreement as a whole and not merely to a subdivision
in which such words appear unless the context otherwise requires.
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Including. The word "including" or any variation thereof means
"including, without limitation" and shall not be construed to limit any general
statement that it follows to the specific or similar items or matters
immediately following it.
Schedules and Exhibits. The Schedules and Exhibits attached to this
Agreement shall be construed with and as an integral part of this Agreement to
the same extent as if the same had been set forth verbatim herein.
2. PURCHASE AND SALE OF CERTAIN ASSETS
2.1 PURCHASE AND SALE OF ASSETS
(a) Upon the terms and subject to the conditions of this
Agreement and in reliance on the representations and warranties contained
herein, on the Closing Date, Seller shall grant, bargain, sell, transfer,
assign, convey and deliver to Buyer, and Buyer shall purchase, acquire and
accept from Seller, all of Seller's right, title and interest in, to and under
the Purchased Assets. For purposes of this Agreement, "Purchased Assets" shall
mean all the assets, properties and rights used by Seller, whether tangible or
intangible, real, personal or mixed, set forth or described in Schedule 2.1,
including, without limitation, the Licensed Intellectual Property, Material
Contracts, Principal Equipment and Licenses, whether or not any of such assets,
properties or rights have any value for accounting purposes or are carried or
reflected on or specifically referred to in Seller's financial statements.
(b) At the Closing, Seller will provide, by licenses, to
Buyer in accordance with the Intellectual Property Agreement, all of the
Licensed Intellectual Property which is necessary for Buyer to manufacture,
test, repair, distribute and sell Licensed Products (as defined in the
Intellectual Property Agreement), as such Licensed Products existed as of the
Closing Date.
2.2 EXCLUDED ASSETS
Notwithstanding the provisions of Section 2.1, it is hereby
expressly acknowledged and agreed that the Purchased Assets shall not include,
and Seller is not selling, transferring, assigning, conveying or delivering to
Buyer, and Buyer is not purchasing, acquiring or accepting from Seller, the
following (the rights, properties and assets expressly excluded by this Section
2.2 from the Purchased Assets being referred to herein as the "Excluded
Assets"):
(a) any of Seller's or its Affiliate's receivables, cash,
bank deposits or similar cash items or employee receivables;
(b) any (1) confidential personnel and medical records,
subject to Section 2.6(a) below, pertaining to any Business Employee; (2) other
books and records that Seller or any Affiliate is required by Law to retain or
that Seller reasonably determines are necessary or advisable to retain;
provided, however, that Buyer shall have the right to make copies of any
portions of such retained books and records that relate to the Business or any
of the
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Purchased Assets; and (3) any information management system of Seller or any
Affiliate other than those used primarily in the conduct of the Business and
contained within computer hardware included as a Purchased Asset pursuant to
Section 2.1;
(c) any claim, right or interest of Seller or any Affiliate
in or to any refund, rebate, abatement or other recovery for Taxes previously
paid, together with any interest due thereon or penalty rebate arising
therefrom, for any periods prior to the Closing Date;
(d) the Excluded Contracts and the Nonassignable Licenses,
which are listed on Schedule 2.2;
(e) any insurance policies or rights of proceeds thereof;
(f) the Excluded Leased Equipment;
(g) the property or assets specifically identified on
Schedule 2.2;
(h) any of Seller's or any Affiliate's rights, claims or
causes of action against Third Parties relating to the assets, properties,
business or operations of Seller or any Affiliate arising out of transactions
occurring prior to the Closing Date;
(i) all other assets, properties, interests and rights of
Seller or any Affiliate not specifically set forth on Schedule 2.1; and
(j) current and pending research grants and applications
therefor that relate exclusively to the Excluded Assets.
2.3 PURCHASE PRICE
In consideration of the sale, transfer, assignment,
conveyance and delivery by Seller of the Purchased Assets to Buyer, Buyer will
deliver (or will cause to be delivered) the following to Seller at the Closing:
(a) The Assumption Agreement relating to the Assumed
Liabilities;
(b) Twenty One Million (21,000,000) shares (subject to
adjustment as provided in subsection (d)) of Parent's common stock, par value
$.01 per share (the "Shares"). The Shares will be issued in the name of Seller
or to its order as provided in Schedule 2.3, and must be validly issued,
fully-paid, non-assessable, and free and clear of any claim, suit, proceeding,
call, commitment, voting trust, proxy, or limitation of any kind or nature
whatsoever, except for restrictions and limitations, in each case, imposed by
operation of Law, including federal and state securities laws; and
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(c) A promissory note executed by Buyer and guaranteed by
Parent, on the terms and in the form of Exhibit D, in favor of Seller in the
principal amount of $223,697.00 (the "Promissory Note").
The Shares, the Promissory Note, and the assumption of the
Assumed Liabilities pursuant to the Assumption Agreement are collectively
referred to as the "Purchase Price."
2.4 ASSUMED LIABILITIES
On the Closing Date, Buyer shall execute and deliver to
Seller one or more Assumption Agreements pursuant to which Buyer shall accept,
assume and agree to pay, perform or otherwise discharge, in accordance with the
respective terms and subject to the respective conditions thereof, the
liabilities and obligations of Seller pursuant to and under the Assumed
Liabilities. "Assumed Liabilities" shall mean only those liabilities and
obligations of Seller listed on Schedule 2.4 and will exclude, without
limitation, those listed as Excluded Liabilities in Section 2.5.
2.5 EXCLUDED LIABILITIES
Buyer shall not assume or be obligated to pay, perform or
otherwise assume or discharge those liabilities or obligations of Seller,
whether direct or indirect, known or unknown, absolute or contingent, unless
specifically assumed under Section 2.4 (all of such liabilities and obligations
not so assumed being referred to herein as the "Excluded Liabilities").
2.6 OPTION TO PURCHASE CERTAIN ASSETS
As part of the Closing, Buyer and Seller will execute an
Option Agreement, in the form of Exhibit E, whereby Seller will grant an option
to Buyer to purchase certain of the Excluded Assets. The assets subject to
purchase, the purchase price, duration, and other terms and conditions of the
option are as set forth in Exhibit E.
2.7 FURTHER ASSURANCES; FURTHER CONVEYANCES AND
ASSUMPTIONS; CONSENT OF THIRD PARTIES
(a) From time to time following the Closing, Seller and
Buyer shall, and shall cause their respective Affiliates to, execute,
acknowledge and deliver all such further conveyances, notices, assumptions,
releases and acquittances and such other instruments, and shall take such
further actions, as may be necessary or appropriate to assure fully to Buyer and
its respective successors or assigns, all of the properties, rights, titles,
interests, estates, remedies, powers and privileges intended to be conveyed to
Buyer under this Agreement and the Collateral Agreements and to assure fully to
Seller and its Affiliates and their successors and assigns, the assumption of
the liabilities and obligations intended to be assumed by Buyer under this
Agreement and the Collateral Agreements, and to otherwise make effective the
transactions contemplated hereby and thereby.
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(b) Nothing in this Agreement nor the consummation of the
transactions contemplated hereby shall be construed as an attempt or agreement
to assign any Purchased Asset, including any Contract, License, Governmental
Permit, certificate, approval, authorization or other right, which by its terms
or by Law is nonassignable without the consent of a Third Party or a
Governmental Body or is cancelable by a Third Party in the event of an
assignment ("Nonassignable Assets") unless and until such consents are given.
Such Nonassignable Assets are set forth on Schedule 2.7(b). Seller agrees that
it will, and that it will cause its Affiliates, to cooperate with Buyer at its
request and to use reasonable commercial efforts to obtain such consents
promptly.
(c) Buyer and Seller agree to use their respective
reasonable commercial efforts to obtain, or to cause to be obtained, any
consent, substitution, approval, or amendment required to novate all obligations
under any and all Contracts or other obligations or liabilities that constitute
Assumed Liabilities or to obtain in writing the unconditional release of Seller
and its Affiliates so that, in any such case, Buyer and its Affiliates will be
solely responsible for such liabilities and obligations. To the extent permitted
by applicable Law, in the event consents to the assignment thereof cannot be
obtained, such Nonassignable Assets will be held, as and from the Closing Date,
by Seller or its Affiliates in trust for Buyer and the covenants and obligations
thereunder shall be performed by Buyer in Seller's or one of its Affiliate's
name and all benefits and obligations existing thereunder shall be for Buyer's
account. Seller shall take or cause to be taken at Buyer's expense such action
in its name or otherwise as Buyer may reasonably request so as to provide Buyer
with the benefits of the Nonassignable Assets and to effect collection of money
or other consideration to become due and payable under the Nonassignable Assets,
and Seller or its Affiliates shall promptly pay over to Buyer all money or other
consideration received by it in respect to all Nonassignable Assets. Buyer (or
Seller on behalf of Buyer) shall timely make all payments and shall otherwise
timely satisfy all obligations relating to the Nonassignable Assets.
(d) As of and from the Closing Date, Seller on behalf of
itself and its Affiliates authorizes Buyer, to the extent permitted by
applicable Law and the terms of the Nonassignable Assets, at Buyer's expense, to
perform all the obligations and receive all the benefits of Seller or its
Affiliates under the Nonassignable Assets and appoints Buyer its
attorney-in-fact to act in its name on its behalf or in the name of the
applicable Affiliate of Seller and on such Affiliate's behalf with respect
thereto. Buyer shall timely make all payments and shall otherwise timely satisfy
all obligations relating to the Nonassignable Assets, except to the extent any
such payments or obligations are contested or disputed in good faith.
2.8 TAXES
Each of the parties hereto shall be responsible and shall
pay for its own Taxes and all recording and filing fees that may be imposed,
assessed or payable by reason of the operation or as a result of this Agreement
including the sales, transfers, leases, rentals, licenses, and assignments
contemplated hereby, that are applicable to each such party.
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3. REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Buyer that:
3.1 ORGANIZATION AND QUALIFICATION
Seller is a corporation duly organized, validly existing and
in good standing under the Laws of the State of Delaware and has all requisite
corporate power and authority to carry on the Business as currently conducted
and to own or lease and operate its properties, including the Purchased Assets.
Seller is duly qualified to do business and is in good standing as a foreign
corporation (in any jurisdiction that recognizes such concept) in each
jurisdiction where the ownership or operation of its assets or the conduct of
its business requires such qualification, except for failures to be so qualified
or in good standing, as the case may be, that could not reasonably be expected
to have a Material Adverse Effect.
3.2 AUTHORIZATION; BINDING EFFECT
(a) Seller has all requisite corporate power and authority
to execute and deliver this Agreement and the Collateral Agreements to which it
will be a party and to effect the transactions contemplated hereby and thereby
and has duly authorized the execution, delivery and performance of this
Agreement and the Collateral Agreements by all requisite corporate action.
(b) This Agreement has been duly executed and delivered by
Seller, and this Agreement is, and the Collateral Agreements to which Seller
will be a party when duly executed and delivered by Seller will be, valid and
legally binding obligations of Seller, enforceable against it, as applicable, in
accordance with their respective terms, except to the extent that enforcement of
the rights and remedies created hereby and thereby may be affected by
bankruptcy, reorganization, moratorium, insolvency and similar Laws of general
application affecting the rights and remedies of creditors and by general equity
principles.
3.3 NON-CONTRAVENTION; CONSENTS
(a) Assuming that all Required Consents listed in Schedule
3.3(b) have been obtained, the execution, delivery and performance of this
Agreement by Seller and the Collateral Agreements by Seller and the consummation
of the transactions contemplated hereby and thereby do not and will not: (1)
result in a breach or violation of any provision of Seller's charter or by-laws;
(2) violate or result in a breach of or constitute an occurrence of default
under any provision of, result in the acceleration or cancellation of any
obligation under, or give rise to a right by any Person to terminate or amend
its obligations under, any mortgage, deed of trust, conveyance to secure debt,
note, loan, indenture, lien, lease, agreement, instrument, order, judgment,
decree or other arrangement or commitment to which Seller is a party or by which
it or its assets or properties are bound or (3) violate any Law, order,
judgment, decree, rule or regulation of any court or any Governmental Body
having jurisdiction over Seller or any of its properties.
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(b) No consent, approval, order or authorization of, or
registration, declaration or filing with, any Person is required to be obtained
by Seller in connection with the execution and delivery of this Agreement and
the Collateral Agreements or for the consummation of the transactions
contemplated hereby or thereby other than (1) consents or approvals of Third
Parties that are required to transfer or assign to Buyer any Purchased Assets or
assign the benefits of or delegate performance with regard thereto, (2) those
set forth in Schedule 3.3(b) (items (1) and (2) being referred to herein as the
"Required Consents"), and (3) such consents, approvals, orders, authorizations,
registrations, declarations or filings where failure of compliance could not
reasonably be expected to have a Material Adverse Effect on Seller's ability to
consummate the transaction contemplated hereby.
3.4 TITLE TO PURCHASED ASSETS; PRINCIPAL EQUIPMENT;
COMPLIANCE WITH LEASES
(a) Except as set forth in Schedule 3.4(a), Seller has good
and valid title to, or a valid and binding leasehold interest or license in, the
Purchased Assets free and clear of any Encumbrance. Except as set forth in
Schedule 3.4(a), the Purchased Assets constitute all of the assets, interests
and rights necessary to exploit the technology and intellectual property
transferred hereunder.
(b) Except as set forth on Schedule 3.4(b), Seller has, and
as of the Closing Date, will have, complied with all obligations under all
leases constituting or relating to any of the Purchased Assets or Assumed
Liabilities, and all such leases are in full force and effect and Seller is
unaware of any defaults or breaches thereunder or circumstances that may give
rise to any defaults or breaches thereunder.
3.5 PERMITS, LICENSES
(a) Except as set forth on Schedule 3.5, there are no
material Governmental Permits necessary for or used by Seller to own, lease,
operate or use the Purchased Assets as now being operated or used, which
Governmental Permits are required by currently effective Laws.
(b) Each Governmental Permit identified on Schedule 3.5 is
valid and in full force and effect, and Seller is not in default, violation or
breach thereof. No proceeding is pending or, to Seller's knowledge, threatened
to revoke or limit any such Governmental Permit. Seller does not know of any
basis or circumstances that may result in any such proceeding or default,
violation or breach, and none of such Governmental Permits will be revoked,
suspended or otherwise adversely affected by the consummation of the
transactions contemplated hereby. Seller has provided to Buyer a true and
complete copy of each such Governmental Permit, including all amendments
thereto.
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3.6 COMPLIANCE WITH LAWS; LITIGATION
(a) Except as set forth on Schedule 3.6(a), to the best of
Seller's knowledge, Seller is in compliance with all applicable Laws and all
decrees, orders, judgments, permits and licenses (individually and in the
aggregate) of or from Governmental Bodies, involving or relating to the
Purchased Assets, except for failures to comply that could not reasonably be
expected to have a Material Adverse Effect on the Purchased Assets.
(b) Except as set forth on Schedule 3.6(b), there are no
actions, suits, proceedings or governmental investigations pending or, to
Seller's knowledge, threatened against it that could be reasonably expected to
have a Material Adverse Effect on, or in any way relate to or involve, the
Purchased Assets.
(c) Except as set forth on Schedule 3.6(c), there is no
agreement, judgment, injunction, order or decree binding upon Seller that has or
could reasonably be expected to have the effect of prohibiting or materially
impairing the use of the Purchased Assets by Buyer.
3.7 CONTRACTS
Schedule 3.7(a) contains a complete and accurate list of all
outstanding Contracts that (A) would impose material obligations or
contingencies upon Buyer or with respect to the Purchased Assets, and (B) (1)
were entered into by the Seller in the five year period prior to the Closing
Date (2) would require over the full term thereof payments by or to Seller,
post-Closing, of more than $10,000 and (3) relate to the Purchased Assets
(collectively, the "Material Contracts"). Each of such Material Contracts is
valid, binding and enforceable against Seller and, to Seller's knowledge, the
other parties thereto in accordance with its terms and is in full force and
effect. Except as set forth on Schedule 3.7(b), Seller has not received any
notice that it is in default or breach of or is otherwise delinquent in
performance under any such Material Contracts which default or breach could
reasonably be expected to have a Material Adverse Effect, and, to Seller's
knowledge, each of the other parties thereto has performed in all material
respects all obligations required to be performed by it under, and is not in
default in any material respect under, any of such Material Contracts and no
event has occurred that, with notice or lapse of time, or both, would constitute
such a default.
3.8 INTELLECTUAL PROPERTY
(a) Schedule 3.8(a) sets forth a complete and accurate list
of all Licenses and Licensed Intellectual Property. Seller owns or has a legally
enforceable right to use and to transfer to Buyer all right, title and interest
in and to such Licenses and the Licensed Intellectual Property as contemplated
hereunder.
(b) Except as set forth in Schedule 3.8(b), there are no
claims or demands of any Third Party pending, or to the knowledge of Seller,
threatened that pertain to the Licenses or the Licensed Intellectual Property.
No proceedings have been instituted, or, to
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Seller's knowledge, are threatened which challenge the rights of Seller with
respect to the Licenses and the Licensed Intellectual Property, including, the
use and transfer thereof.
(c) To Seller's knowledge, none of Licensed Intellectual
Property licensed or assigned under the Intellectual Property Agreement
infringes any patent, trademark, copyright or other intellectual property rights
of any third party or involves misappropriation of any trade secret of any third
party. To Seller's knowledge, no third party is infringing the intellectual
property rights with respect to any of the Licensed Intellectual Property.
(d) Seller has used Reasonable Commercial Efforts to
maintain its proprietary and trade secret rights with respect to the Purchased
Assets and Licensed Intellectual Property, as well as the confidentiality of all
source code and other non-public information relating thereto, and no such right
has heretofore been assigned, transferred, or licensed to any other Person.
(e) Except as set forth on Schedule 3.8(e), each License or
Licensed Intellectual Property right or agreement may be assigned to Buyer
without the consent of the other parties thereto.
3.9 RULE 144
Seller acknowledges that the Shares must be held
indefinitely unless subsequently registered under the Securities Act or an
exemption from such registration is available. Seller is aware of the provisions
of Rule 144 promulgated under the Securities Act which permits limited resale of
shares purchased in a private placement subject to the satisfaction of certain
conditions, including, among other things, the existence of a public market for
the shares, the availability of certain current public information about the
Company, the resale occurring not less than one (1) year after a party has
purchased and paid for the security to be sold, the sale being effected through
a "broker's transaction" or in transactions directly with a "market maker" (as
provided by Rule 144(f)) and the number of shares being sold during any three
(3) month period not exceeding specified limitations.
3.10 BROKERS
No broker, investment bank, financial advisor or other
Person is entitled to any broker's, finder's, financial advisor's or other
similar fee or commission in connection with the transactions contemplated by
this Agreement based on arrangements made by or on behalf of Seller or an
Affiliate.
3.11 ABSENCE OF CERTAIN CHANGES OR EVENTS
Except as set forth on Schedule 3.11 and as otherwise
contemplated in this Agreement, since December 31, 2001, neither Seller nor any
of its Affiliates have made any material change in the Business or its
operations or in the manner of conducting the Business or its operations, or
suffered any event, violation or other matter that would have a Material
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Adverse Effect on the Purchased Assets, and no fact or condition exists that
would reasonably be expected to cause a Material Adverse Effect, to Seller's
present knowledge, in the future on the Purchased Assets.
3.12 ENVIRONMENTAL MATTERS
(a) To the best of Seller's knowledge, the operations of the
Seller and its Affiliates, as it relates to the Purchased Assets or the
transactions contemplated hereby, comply with all applicable federal, state,
local and foreign Laws, codes, regulations, requirements, directives, orders and
common law, and all administrative or Judicial interpretations thereof that may
be enforced by any Governmental Body, other Person or court, relating to
pollution, the protection of human health, the protection of the environment or
the emission, discharge, disposal, storage, transportation, Release (as defined
below) or threatened Release of materials in or into the environment, including
the Occupational Safety and Health Act (collectively "Environmental Laws").
"Release" means release, spill, emission, leaking, pumping, injection, deposit,
disposal, discharge, dispersal, leaching or migration into the environment or
into or out of any property, including the movement or Contaminants through or
in the air, soil, surface water, groundwater or leased real property or other
property. "Contaminant" means any pollutant contaminant, chemical or industrial
hazardous or toxic material or waste for which liability or standards of conduct
are imposed under Environmental Laws, and includes asbestos or
asbestos-containing materials, PCBs, and petroleum, oil or petroleum or oil
products or derivatives.
(b) Each of the Seller and its Affiliates is not subject to
any judicial, administrative or other proceeding, order or settlement alleging
or addressing a violation of or liability or indebtedness under any
Environmental Law.
(c) None of the Seller or its Affiliates has received any
notice or claim (whether written or oral) to the effect that it is or may be
liable to any Governmental Body or any other Person as a result of the Release
or threatened Release of a Contaminant, and to the knowledge of the Seller and
its Affiliates, there are no existing or prior facts, circumstances or
conditions that could reasonably form the basis for such a notice or claim
against the Seller or its Affiliates.
3.13 DISCLOSURE
The representations and warranties by the Seller in this
Agreement and the Collateral Agreements and the statements contained in the
Seller's schedules, certificates, documents, exhibits and agreements referred to
herein or therein or otherwise furnished or to be furnished by Seller to Buyer
or Parent pursuant to this Agreement and the Collateral Agreements or in
connection with the transactions contemplated hereby or thereby do not and will
not contain any untrue statement of a material fact and do not and will not omit
to state any material fact necessary to make the statements herein or therein,
in light of the circumstances under which they were made, not misleading. Seller
has delivered to Buyer or its counsel true and complete copies of all material
certificates, exhibits, schedules, agreements or documents, relating to the
Purchased Assets and has notified the Buyer or its counsel of all events, facts,
circumstances,
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violations or other matters that to the best of its knowledge may have a
Material Adverse Effect on the Purchased Assets, transactions contemplated in
this Agreement or the Collateral Agreements, or the business or operations of
the Buyer or Parent subsequent to the consummation of the transactions
contemplated hereby.
3.14 INVESTMENT REPRESENTATIONS
Seller acknowledges, represents and warrants that:
(a) the Shares are being acquired for the account of Seller
and not with a view to, or for sale in connection with, the distribution
thereof, nor with any present intention of distributing or selling any of such
Shares;
(b) it has been advised that the Shares have not been
registered under the Securities Act on the ground that no distribution or public
offering of the Shares are to be effected, and in this connection Parent is
relying in part on their representations set forth in this Section;
(c) the transfer of the Shares has not been registered under
the Securities Act, and the Shares must be held indefinitely unless subsequently
registered under the Securities Act or an exemption from such registration is
available, and Parent is under no obligation to register the Shares; and
(d) Parent has provided Seller with the opportunity to meet
and confer with representatives of Parent regarding all aspects of its business
and has afforded Seller the opportunity to obtain additional information
concerning Parent and has answered all questions to the satisfaction of Seller.
3.15 FRAUDULENT CONVEYANCE; INSOLVENCY
The Purchase Price represents fair consideration for the
Purchased Assets and Seller acknowledges that this Agreement, the Collateral
Agreements and the transactions contemplated herein and therein have been
negotiated and entered into on an arm's length basis. Seller further
acknowledges that it has entered into this Agreement in good faith and with no
intent to hinder, delay or defraud its present or future creditors. Set forth on
Schedule 3.15 is a list of all of Seller's creditors to whom Seller owes more
than $100,000, which list represents in the aggregate at least 75% of all
creditors (by dollar amount owed) of Seller. As a condition of closing, Seller
shall provide Buyer with written consent to the consummation of the transaction,
on a form approved by Buyer (attached hereto as Exhibit I), from each creditor
set forth on Schedule 3.15.
3.16 NO OTHER REPRESENTATIONS OR WARRANTIES
Except for the representations and warranties contained in
this Agreement, the Collateral Agreements and the schedules, exhibits,
instruments and documents related
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thereto, none of Seller, any Affiliate or any other Person makes any other
representations or warranties, and Seller hereby disclaims any other
representations or warranties, whether made by Seller or any Affiliate, or any
of their officers, directors, employees, agents or representatives. To the
extent reasonably discernable from its context, disclosure by Buyer or Parent in
the attached Schedules under any section number will be deemed to be disclosed
and incorporated into any other section number under this Agreement.
4. REPRESENTATIONS AND WARRANTIES OF PARENT AND BUYER
Parent represents and warrants to Seller those matters described in
Sections 4.1 through 4.12, inclusive, and Buyer represents and warrants to
Seller those matters described in Sections 4.13 through 4.19, inclusive;
provided that, the Seller acknowledges that, pursuant to the terms of the
Management Agreement, Seller has had control of the day-to-day operations of
Buyer's laboratory business since approximately September 15, 1999, and,
accordingly, Buyer's representations and warranties set forth in Sections 4.15
through 4.19, inclusive, are limited to only those acts and events occurring
prior to said date or which Buyer has actual knowledge of (but Buyer has no duty
of inquiry with respect to acts or events arising after said date, and Buyer
will not be making any such inquiry).
4.1 ORGANIZATION AND QUALIFICATION
Parent is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware, and Parent has all
requisite corporate power and authority to carry on its business as currently
conducted and to own or lease and operate its properties. Parent is duly
qualified to do business and is in good standing as a foreign corporation (in
any jurisdiction that recognizes such concept) in each jurisdiction where the
ownership or operation of its assets or the conduct of its business requires
such qualification, except for failures to be so qualified or in good standing,
as the case may be, that could not reasonably be expected to have a Material
Adverse Effect on the Parent's business taken as a whole.
4.2 AUTHORIZATION; BINDING EFFECT
(a) Parent has all requisite corporate power and authority
to execute and deliver this Agreement and the Collateral Agreements and to
effect the transactions contemplated hereby and thereby and has duly authorized
the execution, delivery and performance of this Agreement and the Collateral
Agreements by all requisite corporate action.
(b) This Agreement has been duly executed and delivered by
Parent, and this Agreement is, and the Collateral Agreements when duly executed
and delivered by Parent will be, valid and legally binding obligations of
Parent, enforceable against it in accordance with their terms, except to the
extent that enforcement of the rights and remedies created hereby and thereby
may be affected by bankruptcy, reorganization, moratorium, insolvency and
similar Laws of general application affecting the rights and remedies of
creditors and by general equity principles.
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4.3 NO VIOLATIONS
(a) Assuming that all required consents set forth on
Schedule 4.3(b) have been obtained, the execution, delivery and performance of
this Agreement by Parent and the Collateral Agreements by Parent and the
consummation of the transactions contemplated hereby and thereby do not and will
not (1) result in a breach or violation of any provision of Parent's charter or
by-laws, (2) violate or result in a breach of or constitute an occurrence of
default under any provision of, result in the acceleration or cancellation of
any obligation under, or give rise to a right by any Person to terminate or
amend its obligations under, any material mortgage, deed of trust, conveyance to
secure debt, note, loan, indenture, lien, lease, agreement, instrument, order,
judgment, decree or other material arrangement or commitment to which Parent is
a party or by which it or its assets or properties are bound, or (3) violate any
material Laws, order, judgment, decree, rule or regulation of any court or any
Governmental Body having jurisdiction over Parent or any of its properties.
(b) Except as set forth on Schedule 4.3(b), no consent,
approval, order or authorization of, or registration, declaration or filing
with, any Person is required to be obtained by Parent in connection with the
execution and delivery of this Agreement and the Collateral Agreements or the
consummation of the transactions contemplated hereby or thereby other than such
consents, approvals, orders, authorizations, registrations, declarations or
filings where failure of compliance would not, individually or in the aggregate,
have a material adverse effect on Parent's ability to consummate the
transactions contemplated hereby.
4.4 CAPITALIZATION
As of the date hereof, the authorized capital stock of
Parent consists of:
(a) Five Million (5,000,000) shares of Preferred Stock, One
Million Five Hundred Fifty Thousand (1,550,000) of which have been designated
Series A Preferred Stock, of which 1,550,000 are issued and outstanding as of
the date hereof. The rights, preferences, privileges and restrictions on the
Series A Preferred are set forth in Parent's charter.
(b) Thirty Million (30,000,000) shares of Common Stock, of
which 3,810,171 shares are duly and validly issued, fully paid, non-assessable
and outstanding as of the date hereof. Parent has reserved Two Million
(2,000,000) shares of Common Stock for issuance to employees and directors of,
and consultants to, Parent pursuant to one or more plans approved by Parent's
Board of Directors. Except as contemplated by this Agreement, the Collateral
Agreements or set forth in Parent's reports filed with the Securities and
Exchange Commission pursuant to the Exchange Act (the "Public Reports"), there
are no other outstanding warrants, options, conversion privileges, preemptive
rights, or other rights or agreements to purchase or otherwise acquire or issue
any equity securities of Parent. Except as contemplated by this Agreement, the
Collateral Agreements or the Public Reports, Parent is not a party or subject to
any agreement or understanding, and there is no agreement or understanding
between any
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persons and/or entities, which affects or relates to the voting or giving of
written consents with respect to any security or by a director of Parent.
4.5 SUBSIDIARIES
Except for Buyer and Bioquant, Inc., which Parent represents
are wholly-owned Subsidiaries of Parent, Parent does not presently own, have any
investment in, or control, directly or indirectly, any other Subsidiaries,
associations or other business entities. Parent is not a participant in any
joint venture or partnership.
4.6 VALIDITY OF SHARES
The Shares, when issued, sold and delivered in accordance
with the terms and for the consideration expressed in this Agreement shall be
duly and validly issued, fully paid and nonassessable and free and clear of all
Encumbrances, except for restrictions and limitations imposed by operation of
Law, including federal and state securities laws.
4.7 ABSENCE OF CHANGES
Except as described on Schedule 4.7 and except as otherwise
contemplated in this Agreement or the Collateral Agreements, since the date of
Parent's last filing with the Securities and Exchange Commission, Parent has not
made any material change in its business or its operations or in the manner of
conducting its business or its operations, or suffered any event, violation or
other matter that would have a Material Adverse Effect on its business or
operations, and no fact or condition exists that, to Parent's present knowledge,
would reasonably be expected to cause a Material Adverse Effect in the future on
its business or operations including, without limitation, entering into any
employment contract or modifying the terms of any such existing contracts,
granting or agreeing to any bonus, incentive compensation, commission, or other
compensation benefit.
4.8 SEVERANCE ARRANGEMENTS
Except as disclosed on Schedule 4.8, this Agreement, the
Collateral Agreements and in the Public Reports, Parent has not entered into any
severance or similar arrangement with respect to any present or former officer,
agent or employee of Parent or Buyer that will result in any obligation
(absolute or contingent) of Parent or Buyer, following the Closing, to make any
payment to any present or former officer, agent or employee following
termination of employment other than payment or obligations arising as a matter
of law pursuant to any federal, state or local statute or regulation.
4.9 FULL DISCLOSURE
The representations and warranties of Parent contained in
this Agreement and the Collateral Agreements and the statements contained in
Parent's schedules, certificates, documents, exhibits and agreements referred to
herein or therein or otherwise furnished or to be
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furnished by Buyer or Parent to Seller pursuant to this Agreement and the
Collateral Agreements or in connection with the transactions contemplated hereby
or thereby do not and will not contain any untrue statement of a material fact
or omit to state any material fact necessary to make the statements herein or
therein, in light of the circumstances under which they were made, not
misleading. Additionally, Parent's Public Reports are in compliance in all
material respects with all applicable requirements of the Exchange Act, and
Parent is current in all of its required filings under the Exchange Act.
4.10 PERMITS
To Parent's knowledge, Parent is not in violation of any
applicable statute, rule, regulation, order or restriction of any domestic or
foreign government or any instrumentality or agency thereof in respect of the
conduct of its business or the ownership of its properties which violation would
materially and adversely affect the business, assets, liabilities, financial
condition or operations of Parent, taken as a whole. Parent has all franchises,
permits, licenses and any similar authority necessary for the conduct of its
business as now being conducted by it, the lack of which could materially and
adversely affect the business, properties or financial condition of Parent,
taken as a whole. Parent is not in default in any material respect under any of
such franchises, permits, licenses or other similar authority.
4.11 BROKERS
No broker, investment banker, financial advisor or other
Person is entitled to any broker's, finder's, financial advisor's or other
similar fee or commission in connection with the transactions contemplated by
this Agreement based on arrangements made by or on behalf of Parent or an
Affiliate.
4.12 NO OTHER REPRESENTATIONS AND WARRANTIES
Except for the representations and warranties contained in
this Agreement, the Collateral Agreements and the schedules, exhibits,
instruments and documents related thereto, none of Parent, any Affiliate or any
other Person makes any other representations or warranties, and Parent hereby
disclaims any other representations or warranties, whether made by Parent or any
Affiliate, or any of their officers, directors, employees, agents or
representatives. Parent acknowledges that it is obtaining its own valuation
opinion regarding the value of the Purchased Assets and is not relying on any
representation, express or implied, as to the value of the Purchased Assets or
their future profitability. To the extent reasonably discernable from its
context, disclosure by Seller in the attached Schedules under any section number
will be deemed to be disclosed and incorporated into any other section number
under this Agreement.
4.13 ORGANIZATION AND QUALIFICATION
Buyer is a corporation duly organized, validly existing and in good
standing under the laws of the State of Washington, and Buyer has all requisite
corporate power and authority to carry on its business as currently conducted
and to own or lease and operate its
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properties. Buyer is duly qualified to do business and is in good standing as a
foreign corporation (in any jurisdiction that recognizes such concept) in each
jurisdiction where the ownership or operation of its assets or the conduct of
its business requires such qualification, except for failures to be so qualified
or in good standing, as the case may be, that could not reasonably be expected
to have a Material Adverse Effect on the Buyer's business taken as a whole.
4.14 AUTHORIZATION; BINDING EFFECT
(a) Buyer has all requisite corporate power and authority to
execute and deliver this Agreement and the Collateral Agreements and to effect
the transactions contemplated hereby and thereby and has duly authorized the
execution, delivery and performance of this Agreement and the Collateral
Agreements by all requisite corporate action.
(b) This Agreement has been duly executed and delivered by
Buyer, and this Agreement is, and the Collateral Agreements when duly executed
and delivered by Buyer will be, valid and legally binding obligations of Buyer,
enforceable against it in accordance with their terms, except to the extent that
enforcement of the rights and remedies created hereby and thereby may be
affected by bankruptcy, reorganization, moratorium, insolvency and similar Laws
of general application affecting the rights and remedies of creditors and by
general equity principles.
4.15 NO VIOLATIONS
(a) Subject to the limitations set forth in the first
paragraph of this Article 4, and assuming all required consents listed on
Schedule 4.15(b) have been obtained, the execution, delivery and performance of
this Agreement by Buyer and the Collateral Agreements by Buyer and the
consummation of the transactions contemplated hereby and thereby do not and will
not (1) result in a breach or violation of any provision of Buyer's charter or
by-laws, (2) violate or result in a breach of or constitute an occurrence of
default under any provision of, result in the acceleration or cancellation of
any obligation under, or give rise to a right by any Person to terminate or
amend its obligations under, any material mortgage, deed of trust, conveyance to
secure debt, note, loan, indenture, lien, lease, agreement, instrument, order,
judgment, decree or other material arrangement or commitment to which Buyer is a
party or by which it or its assets or properties are bound, or (3) violate any
material Laws, order, judgment, decree, rule or regulation of any court or any
Governmental Body having jurisdiction over Buyer or any of its properties.
(b) Subject to the limitations set forth in the first
paragraph of this Article 4, except as set forth on Schedule 4.15(b), no
consent, approval, order or authorization of, or registration, declaration or
filing with, any Person is required to be obtained by Buyer in connection with
the execution and delivery of this Agreement and the Collateral Agreements or
the consummation of the transactions contemplated hereby or thereby other than
such consents, approvals, orders, authorizations, registrations, declarations or
filings where failure of
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compliance would not, individually or in the aggregate, have a material adverse
effect on Buyer's ability to consummate the transactions contemplated hereby.
4.16 SEVERANCE ARRANGEMENTS
Subject to the limitations set forth in the first paragraph
of this Article 4, except as disclosed on Schedule 4.16, of this Agreement, the
Collateral Agreements and in the Public Reports, Buyer has not entered into any
severance or similar arrangement with respect to any present or former officer,
agent or employee of Parent or Buyer that will result in any obligation
(absolute or contingent) of Parent or Buyer, following the Closing, to make any
payment to any present or former officer, agent or employee following
termination of employment other than payment or obligations arising as a matter
of law pursuant to any federal, state or local statute or regulation.
4.17 FULL DISCLOSURE
Subject to the limitations set forth in the first paragraph
of this Article 4, the representations and warranties of Buyer contained in this
Agreement and the Collateral Agreements and the statements contained in the
Buyer's schedules, certificates, documents, exhibits and agreements referred to
herein or therein or otherwise furnished or to be furnished by Buyer or Parent
to Seller pursuant to this Agreement and the Collateral Agreements or in
connection with the transactions contemplated hereby or thereby do not and will
not contain any untrue statement of a material fact or omit to state any
material fact necessary to make the statements herein or therein, in light of
the circumstances under which they were made, not misleading.
4.18 PERMITS
Subject to the limitations set forth in the first paragraph
of this Article 4, to Buyer's knowledge, Buyer is not in violation of any
applicable statute, rule, regulation, order or restriction of any domestic or
foreign government or any instrumentality or agency thereof in respect of the
conduct of its business or the ownership of its properties which violation would
materially and adversely affect the business, assets, liabilities, financial
condition or operations of Buyer, taken as a whole. Buyer has all franchises,
permits, licenses and any similar authority necessary for the conduct of its
business as now being conducted by it, the lack of which could materially and
adversely affect the business, properties or financial condition of Buyer, taken
as a whole. Buyer is not in default in any material respect under any of such
franchises, permits, licenses or other similar authority.
5. CERTAIN COVENANTS
5.1 ACCESS AND INFORMATION
(a) Seller will give, and cause its Affiliates to give, to
Buyer and to its officers, employees, accountants, counsel and other
representatives reasonable access during
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Seller's or the applicable Affiliate's normal business hours throughout the
period prior to the Closing to all of Seller's or the applicable Affiliate's
properties, books, contracts, commitments, reports of examination and records
(excluding confidential portions of personnel records) directly relating to the
Business or the Purchased Assets (but excluding the Excluded Assets and Excluded
Liabilities and subject to any limitations that are reasonably required to
preserve any applicable attorney-client privilege or Third-Party confidentiality
obligation). Seller shall assist, and cause its Affiliates to assist, Buyer in
making such investigation and shall cause its counsel, accountants, engineers,
consultants and other non-employee representatives to be reasonably available to
Buyer for such purposes; it being understood that Buyer shall reimburse Seller
or the applicable Affiliate promptly for reasonable and necessary out of pocket
expenses (which do not include salaries or other compensation of employees or
agents of Seller) incurred by Seller or any Affiliate in complying with any such
request by or on behalf of Buyer.
(b) After the Closing Date, Seller and Buyer will provide,
and will cause their respective Affiliates to provide, to each other and to
their respective officers, employees, counsel and other representatives, upon
request (subject to any limitations that are reasonably required to preserve any
applicable attorney-client privilege or Third-Party confidentiality obligation),
reasonable access for inspection and copying of all Business Records,
Governmental Permits, Licenses, Contracts and any other information existing as
of the Closing Date and relating to the Purchased Assets, and will make their
respective personnel reasonably available for interviews, depositions and
testimony in any legal matter concerning transactions, operations or activities
relating to the Purchased Assets, and as otherwise may be necessary or desirable
to enable the party requesting such assistance to: (1) comply with reporting,
filing or other requirements imposed by any foreign, local, state or federal
court, agency or regulatory body; (2) assert or defend any claims or allegations
in any litigation or arbitration or in any administrative or legal proceeding
other than claims or allegations that one party to this Agreement has asserted
against the other; or (3) subject to clause (2) above, perform its obligations
under this Agreement. The party requesting such information or assistance shall
reimburse the other party for all out-of-pocket costs and expenses incurred by
such party in providing such information and in rendering such assistance. The
access to files, books and records contemplated by this Section 5.1(b) shall be
during normal business hours and upon not less than two (2) Business Days' prior
written request and shall be subject to such reasonable limitations as the party
having custody or control thereof may impose to preserve the confidentiality of
information contained therein.
(c) Buyer agrees to preserve all Business Records, Licenses
and Governmental Permits for at least seven (7) years after the Closing Date.
(d) From and after the date of this Agreement, Seller and
its Affiliates and their respective officers, directors, employees, consultants,
advisors and representatives, shall provide, free of charge, reasonable access
to Parent and Buyer and their respective officers, directors, employees,
consultants, advisors and other representatives, with respect to all know-how,
trade secrets, formulations, production processes, development processes,
business information, concepts, ideas, methods, scientific research, case
studies and other information relating the Purchased Assets, but excluding the
Excluded Assets (collectively, "Know-How").
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5.2 CONDUCT OF BUSINESS
From and after the date of this Agreement and until the
Closing Date, except as set forth on Schedule 5.2 or as otherwise contemplated
by this Agreement or the Schedules hereto or as Buyer shall otherwise consent to
in writing, Seller, with respect to the Purchased Assets:
(a) will carry on the Business in the ordinary course
consistent with past practice;
(b) will not permit, other than in the ordinary course of
business consistent with past practice or as may be required by Law or a
Governmental Body, all or any of the Purchased Assets (real or personal,
tangible or intangible) to be sold, licensed or subjected to any Encumbrance;
(c) will not acquire, sell, lease, license, transfer or
dispose of any asset that would otherwise be a Purchased Asset or adversely
affect any Purchased Asset, except in the ordinary course of business consistent
with past practice;
(d) will not terminate or materially extend or materially
modify any Material Contract, except in the ordinary course of business
consistent with past practice;
(e) will not do any other act which would cause any
representation or warranty of Seller in this Agreement or the Collateral
Agreements to be or become untrue in any material respect or intentionally omit
to take any action necessary to prevent any such representation or warranty from
being untrue in any material respect as of any time prior to the Closing;
(f) shall use all reasonable efforts to preserve intact in
all material respects Seller's present business organization and reputation and
to preserve its relationships with employees, creditors, customers and suppliers
and others having significant business relationships with Seller;
(g) will not take any action or enter into any agreement or
arrangement that would have the effect, or would be reasonably likely to have
the effect, of causing (i) a breach of this Agreement or any Collateral
Agreement or any covenant contained herein or therein, or (ii) the failure or
inability to satisfy any conditions set forth in this Agreement or the
Collateral Agreements;
(h) will not (i) dissolve or liquidate, or adopt any plan of
dissolution or liquidation, (ii) consent to or commence any suit, proceeding,
petition or other action or the filing of a petition (A) under any law relating
to bankruptcy, insolvency or reorganization or seeking reorganization,
arrangement, adjustment, winding up or other relief with respect to it, or (B)
seeking appointment of a receiver, trustee or custodian for it or all or any
substantial part of its
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assets, (iii) allow any assignment for the benefit of creditors, or (iv) permit
the admission in writing of its inability to pay its debts generally as they
become due;
(i) will not knowingly violate any Law, rule or regulation
to which it is subject and which would have a Material Adverse Effect on Seller
or the Purchased Assets; and
(j) will not enter into any agreement or commitment with
respect to any of the foregoing.
5.3 TAX REPORTING AND ALLOCATION OF CONSIDERATION
Seller and Buyer recognize their mutual obligations pursuant
to Section 1060 of the Code to timely file IRS Form 8594 (the "Asset Acquisition
Statement") with each of their respective federal income tax returns.
Accordingly, Seller and Buyer shall, no later than thirty (30) days after the
Closing Date, attempt in good faith to (1) enter into a Purchase Price
allocation agreement providing for the allocation of the Purchase Price among
the Purchased Assets consistent with the provisions of Section 1060 of the Code
and the Treasury Regulations thereunder and (2) cooperate in the preparation of
the Asset Acquisition Statement in accordance with clause (1) of this paragraph
for timely filing with each of their respective federal income tax returns. If
Seller and Buyer shall have agreed on a Purchase Price allocation and an Asset
Acquisition Statement, Seller and Buyer shall file the Asset Acquisition
Statement in the form so agreed and neither Seller nor Buyer shall take a Tax
position which inconsistent with such Purchase Price allocation.
5.4 REGULATORY COMPLIANCE
Buyer and Seller shall cooperate, and shall cause their
respective Affiliates to cooperate, with the other in making filings under any
applicable Laws, and each party shall use its reasonable commercial efforts to
resolve such objections, if any, as any Governmental Body may assert under such
Laws with respect to the transactions contemplated hereby. In the event an
action is instituted by any Person challenging the transactions contemplated
hereby as violative of any Laws, Buyer and Seller shall use, and shall cause
their respective Affiliates to use, their respective reasonable commercial
efforts to resist or resolve such action.
5.5 CONTACTS WITH SUPPLIERS AND CUSTOMERS
Prior to the Closing Date, Buyer may with the Seller's prior
written consent, which consent shall not be unreasonably withheld, contact
suppliers to, or customers of, the Business regarding the Purchased Assets.
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5.6 USE OF SELLER'S NAME
(a) Buyer and Seller agree as follows:
(1) After the Closing Date, Buyer shall not use
"Saigene," "Saigene Corporation" or other similar xxxx and any other trademark,
design or logo previously or currently used by Seller or any of its Affiliates
(the "Seller Marks") that is not part of the Licensed Intellectual Property in
invoices, letterhead, advertising and promotional materials, office forms or
business cards;
(2) Within three (3) months after the Closing Date,
Buyer shall cease using the Seller Marks that are not part of the Licensed
Intellectual Property in electronic databases, web sites, product instructions,
packaging (except as provided below) and other materials, printed or otherwise
(all such materials, together with materials described in clause (1) above,
"Marked Assets"). Notwithstanding the foregoing, Buyer shall not be restricted
in using any packaging materials that constitute Inventory as of the Closing
Date or otherwise use the Seller Marks in any required press release or public
disclosure or as otherwise required by Law;
(3) Buyer shall not be required at any time to remove
any previously authorized use of the Seller Marks that are not part of the
Licensed Intellectual Property from Inventory that is in existence as of the
Closing Date ("Existing Inventory"), nor shall Buyer be required at any time to
remove such Seller Marks from schematics, plans, manuals, drawings, machinery,
tooling including hand tools, and the like of the Business in existence as of
the Closing Date to the extent that such instrumentalities are used in the
ordinary internal conduct of the Buyer and are not generally observed by the
public (such items, "Marked Instrumentalities"). Buyer shall use reasonable
efforts to remove the Seller Marks that are not part of the Licensed
Intellectual Property from those Purchased Assets that are not Marked
Instrumentalities or Existing Inventory (such assets, "Other Marked Assets").
(4) Seller hereby grants to Buyer a limited right to
use Seller Marks with regard to the Marked Assets, Existing Inventory, Other
Marked Assets and Marked Instrumentalities during the periods, if any, specified
in clauses (1) - (3) above.
(5) Buyer acknowledges and agrees that Seller is the
owner of the Seller Marks and all goodwill attached thereto. This Agreement does
not give the Buyer any interest in the Seller Marks except the right to use the
Seller Marks in accordance with this Agreement and the Intellectual Property
Agreement. Buyer agrees not to attempt to register the Seller Marks nor to
register anywhere in the world a xxxx same as or confusingly similar to the
Seller Marks.
(b) In no event shall Buyer or any Affiliate of Buyer
advertise or hold itself out as Saigene Corporation or an Affiliate of Saigene
after the Closing Date, except as may be required by Law.
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5.7 TERMINATION OF PRIOR PURCHASE AGREEMENT
If, and only if, the Closing occurs, then upon the Closing,
the Prior Purchase Agreement will terminate and be of no further force or
effect, and no party will have any continuing rights or obligations thereunder.
5.8 BEST EFFORTS
(a) Upon the terms and subject to the conditions of this
Agreement, each of the parties hereto agrees to use its best efforts to take, or
cause to be taken, all actions, and to do, or cause to be done, all things
necessary, proper or advisable under applicable Laws and regulations to
consummate and make effective the transactions contemplated in this Agreement
and the Collateral Agreements as promptly as practicable, including (i) the
preparation and filing of any forms, registrations and notices required to be
filed to consummate the transactions contemplated in this Agreement and the
Collateral Agreements and the taking of such actions as are necessary to obtain
any requisite approvals, consents, orders, exemptions or waivers by any third
party or Governmental Body and (ii) the satisfaction of all conditions to
Closing. Each party shall promptly consult with the other with respect to,
provide any necessary information not subject to legal privilege with respect to
and, except as otherwise not permitted by Law, provide the other (or its
representatives) copies of, all filings made by such party with any Governmental
Body or any other information supplied by such party to a Governmental Body in
connection with this Agreement and the Collateral Agreements and the
transactions contemplated hereby and thereby or as otherwise reasonably
requested.
(b) Each party hereto shall promptly inform the other of any
communication from any Governmental Body regarding any of the transactions
contemplated by this Agreement. If any party or Affiliate thereof receives a
request for additional information or documentary material from any such
Governmental Body with respect to the transactions contemplated by this
Agreement, then such party will endeavor in good faith to make, or cause to be
made, as soon as reasonably practicable and after consultation with the other
party(ies), an appropriate response in compliance with such request.
(c) Notwithstanding the foregoing, nothing in this Agreement
shall be deemed to require Seller, Parent, the Buyer or any of their Affiliates
to enter into any agreement with any Governmental Body or to consent to any
order, decree, writ, judgment or Law requiring any of them to hold, separate or
divest, or to restrict the dominion or control of any of them over, any of their
respective assets, properties or businesses or to submit to the Laws and
regulations of such Governmental Body or qualify to do business or submit to
process in any other jurisdiction.
5.9 NOTIFICATION OF CERTAIN MATTERS
Each of the Seller, Buyer and their respective Affiliates
agrees that it will not take any action which would cause or constitute a
material breach, or would, if it had been taken prior to the date hereof, have
caused or constituted a material breach, of any of the representations and
warranties set forth this Agreement or in any of the Collateral Agreements.
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From the date hereof until the Closing Date, the parties hereto shall have a
continuing obligation to give detailed notice thereof to the other parties and
to update or supplement any information provided herein in the event of, or
promptly after the occurrence of, or promptly after obtaining knowledge of the
occurrence of or the impending or threatened occurrence of, any fact,
circumstance or event which would cause or constitute or be reasonably likely to
cause or constitute a Material Adverse Effect with regard to the Seller, Buyer
and their respective Affiliates, the Business or Purchased Assets or a breach of
any of the representations and warranties set forth in this Agreement or in any
of the Collateral Agreements. The breaching party shall use its best efforts to
prevent or promptly remedy such breach. A party's compliance with this Section
5.9 shall not limit or otherwise affect the remedies available hereunder to the
other parties hereto, including, but not limited to such parties' right to
terminate this Agreement notwithstanding any remedy of any breach hereunder and
rights under Section 9.3 hereunder.
6. CONFIDENTIAL NATURE OF INFORMATION
6.1 CONFIDENTIALITY AGREEMENT
The parties agree that any Proprietary Information disclosed
in connection with this Agreement, the Collateral Agreements or the transactions
contemplated hereby or thereby, shall remain the sole and exclusive property of
the disclosing party unless and until the Closing occurs, and that the receiving
party will not obtain any rights or licenses to use the disclosing party's
Proprietary Information unless the Closing occurs. This provision will apply to
(a) all documents, materials and other information that the receiving party
shall have obtained from the disclosing party regarding the disclosing party or
its Affiliates during the course of the negotiations leading to the consummation
of the transactions contemplated hereby (whether obtained before or after the
date of this Agreement), any investigations made in connection therewith and the
preparation of this Agreement and related documents and (b) all analyses,
reports, compilations, evaluations and other materials prepared by the receiving
party or its counsel, accountants or financial advisors that contain or
otherwise reflect or are based upon, in whole or in part, any of the information
provided by the disclosing party; provided, however, that subject to Section
6.2(a), these restrictions shall terminate as of the Closing and shall be of no
further force and effect thereafter with respect to information of the
disclosing party the ownership of which is transferred to the receiving party.
Notwithstanding the foregoing, the parties acknowledge and agree that all
Proprietary Information regarding the Excluded Assets will remain the sole and
exclusive property of the Seller, and that Parent and Buyer will keep such
Proprietary Information confidential and will not use or disclose such
Proprietary Information.
6.2 SELLER'S PROPRIETARY INFORMATION
(a) Except as provided in Sections 6.2(b) and 6.2(d), after
the Closing and for a period of five (5) years following the Closing Date, Buyer
agrees that it will keep confidential all of Seller's and its Affiliates'
present and future product plans, product enhancement information, customer
information (including customers' applications and environments), development
plans, or other technical and business information, that is received
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from, or made available by, Seller in the course of the transactions
contemplated hereby, except for such Proprietary Information as is conveyed to
Buyer as part of the Purchased Assets.
(b) Notwithstanding the foregoing, such Proprietary
Information shall not be deemed confidential and Buyer shall have no obligation
with respect to any such Proprietary Information that:
(1) at the time of disclosure was already known to
Buyer other than through this transaction, free of restriction as evidenced by
documentation in Buyer's possession;
(2) is or becomes publicly known through publication,
inspection of a product, or otherwise, and through no negligence or other
wrongful act of Buyer;
(3) is received by Buyer from a Third Party without
similar restriction and without knowledge of breach of any agreement;
(4) to the extent it is independently developed by
Buyer; or
(5) is, subject to Section 6.2(c), required to be
disclosed under applicable Laws or judicial process.
(c) If Buyer (or any of its Affiliates) is requested or
required (by written interrogatory, request for information or documents,
subpoena, civil investigative demand or similar process) to disclose any
Proprietary Information, Buyer will promptly notify Seller of such request or
requirement and will cooperate with Seller such that Seller may seek an
appropriate protective order or other appropriate remedy.
(d) Except to the extent that disclosure thereof is required
under accounting, stock exchange or Laws, the terms and conditions of this
Agreement and the Collateral Agreements, and all attachments and amendments
hereto and thereto shall be considered Proprietary Information protected under
this Article 6. Notwithstanding anything in this Article 6 to the contrary, in
the event that any such Proprietary Information is also subject to a limitation
on disclosure or use contained in another written agreement between Buyer and
Seller (including but not limited to, the Intellectual Property Agreement) that
is more restrictive than the limitation contained in this Article 6, then the
limitation in such agreement shall supersede this Article 6.
7. CLOSING
At the Closing, the following transactions shall take place:
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7.1 DELIVERIES BY SELLER
On the Closing Date, Seller shall deliver to Buyer and
Parent the following:
(a) the Collateral Agreements;
(b) all consents, waivers or approvals theretofore obtained
by Seller with respect to the sale of the Purchased Assets or the consummation
of the transactions contemplated by this Agreement or the Collateral Agreements;
(c) an opinion or opinions of Counsel for Seller, dated the
Closing Date, in form and substance in the form of Exhibit G;
(d) a certificate of an appropriate officer of Seller, dated
the Closing Date, certifying to the fulfillment of the conditions set forth in
Sections 8.2(a) and (b);
(e) a certificate of the secretary or other appropriate
officer of Seller, dated the Closing Date, certifying to the Certificate of
Incorporation, By Laws and resolutions of Seller and its stockholders with
respect to the transactions contemplated by this Agreement and the Collateral
Agreements;
(f) all such other bills of sale, assignments and other
instruments of assignment, transfer or conveyance as Buyer may reasonably
request or as may be otherwise necessary to evidence and effect the sale,
transfer, assignment, conveyance and delivery of the Purchased Assets to Buyer
and to put Buyer in actual possession or control of the Purchased Assets, and
such other documents, instruments and items reasonably requested by Buyer to
effectuate the transactions contemplated hereby and by the Collateral
Agreements;
(g) any cash or property as described in Section 2.3(d); and
(h) the Amendment to the Management Agreement in the form of
Exhibit F.
(i) the Non-Compete/Confidentiality Agreements executed by
each key employee and senior manager of Seller in the form of Exhibit I.
7.2 DELIVERIES BY BUYER AND PARENT
On the Closing Date, Buyer and Parent, as the case may be,
shall deliver to Seller the following:
(a) the Purchase Price as provided in Section 2.3;
(b) the Collateral Agreements;
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(c) an opinion or opinions of Counsel for Buyer, dated the
Closing Date, in form and substance in the form of Exhibit H;
(d) a certificate of an appropriate officer of Buyer, dated
the Closing Date, certifying to the fulfillment of the conditions set forth in
Sections 8.3(a) and (b);
(e) a certificate of the secretary or other appropriate
officer of Buyer, dated the Closing Date, certifying to the Certificate of
Incorporation, By Laws and resolutions of Buyer with respect to the transactions
contemplated by this Agreement and the Collateral Agreements;
(f) all such other documents and instruments as Seller may
reasonably request or as may be otherwise necessary or desirable to evidence and
effect the transactions contemplated hereby; and
(g) the Amendment to the Management Agreement in the form of
Exhibit F.
7.3 CLOSING DATE
The Closing shall take place at the offices of Seller'
counsel, 0 Xxxx Xxxxx, Xxxxx 000, Xxxxxx, Xxxxxxxxxx 00000, at 10:00 a.m. local
time within five (5) Business Days following the date on which the last of the
conditions specified in Article 8 to be satisfied or waived has been satisfied
or waived, or at such other place or time or on such other date as Seller and
Buyer may agree upon in writing (such date and time being referred to herein as
the "Closing Date").
7.4 CONTEMPORANEOUS EFFECTIVENESS
All acts and deliveries prescribed by this Article 7,
regardless of chronological sequence, will be deemed to occur contemporaneously
and simultaneously on the occurrence of the last act or delivery, and none of
such acts or deliveries will be effective until the last of the same has
occurred.
8. CONDITIONS PRECEDENT TO CLOSING
8.1 GENERAL CONDITIONS
The respective obligations of Parent, Buyer and Seller to
effect the Closing of the transactions contemplated hereby are subject to the
fulfillment, prior to or at the Closing, of each of the following conditions:
(a) No Injunctions or Litigation. No order of any court or
administrative agency shall be in effect that enjoins, restrains, conditions or
prohibits
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consummation of this Agreement or the Collateral Agreements or any of the
transactions contemplated hereby or thereby, and no claim, suit or proceeding
shall have been instituted by any Governmental Body or other Person that seeks
any of the foregoing remedies.
(b) Valuation; SEC. Buyer shall, at its sole expense, obtain
a valuation opinion with respect to the Purchased Assets satisfactory to Buyer.
Should the SEC provide comments on the Schedule 14F-1 Information Statement,
both parties shall use their best efforts to resolve any such comments.
Additionally, the ten-day waiting period in connection with such Schedule 14F-1
Information Statement shall have expired.
(c) Amendment of Preferred Stock. Parent shall have taken
all necessary action to effect an amendment to its Certificate of Designation
with respect to amending the rights and preferences of the Preferred Stock. The
amendment must reduce the dividend to zero, and all of the holders of the
Preferred Stock must agree to accept payment of all accrued dividends (and
interest thereon, if any) in common stock of Parent in lieu of cash dividends.
8.2 CONDITIONS PRECEDENT TO PARENT'S AND BUYER'S OBLIGATIONS
The obligations of Parent and Buyer to effect the Closing of
the transactions contemplated hereby are subject to the fulfillment, prior to or
at the Closing, of each of the following conditions, any of which may be waived
in writing by Parent and Buyer:
(a) Representations and Warranties of Seller True at
Closing. The representations and warranties of Seller contained in this
Agreement and the Collateral Agreements or in any schedule, certificate or
document delivered pursuant to the provisions hereof and thereof or in
connection with the transactions contemplated hereby and thereby shall be true
and correct in all material respects at and as of the Closing Date, as though
such representations and warranties were made at and as of the Closing Date,
except (1) as affected by the transactions contemplated hereby, and (2) to the
extent that such representations and warranties are made as of a specified date,
in which case such representations and warranties shall be true in all material
respects as of the specified date.
(b) Performance by Seller. Seller shall have performed in
all material respects all obligations and agreements and complied in all
material respects with all covenants and conditions required by this Agreement
and the Collateral Agreements to be performed or complied with by it prior to or
at the Closing, including, without limitation, obtaining all necessary consents,
including, without limitation, those consents pursuant to Sections 2.7, 3.3 and
3.8.
(c) No Material Adverse Change. No material adverse change
shall have occurred in the business, operations, assets, condition (financial or
otherwise) of Seller, including with respect to any of the Purchased Assets and
no other event, loss, damage, condition or state of facts of any kind shall
exist which has a Material Adverse Effect, or can reasonably be expected to have
a Material Adverse Effect, on Seller or any of the Purchased Assets.
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(d) Shareholder Consent. Seller shall have obtained the
consent of their shareholders to approve the transactions set forth in this
Agreement.
(e) Creditor Consent. Seller shall have obtained the consent
of its creditors set forth on Schedule 3.15 hereof.
(f) Purchased Assets Lien Search. Buyer shall have received,
reviewed and accepted a report of recorded liens relating to the Purchased
Assets of Seller, and shall have received from Seller sufficient information to
determine that no Encumbrances, other than as set forth in Schedule 2.4, exist
with respect to any of the Purchased Assets.
8.3 CONDITIONS PRECEDENT TO SELLER'S OBLIGATIONS
The obligations of Seller to effect the Closing of the
transactions contemplated hereby are subject to the fulfillment, prior to or at
the Closing, of each of the following conditions, any of which may be waived in
writing by Seller:
(a) Representations and Warranties of Buyer and Parent True
at Closing. The representations and warranties of Buyer and Parent contained in
this Agreement and the Collateral Agreements or in any schedule, certificate or
document delivered pursuant to the provisions hereof and thereof or in
connection with the transactions contemplated hereby and thereby shall be true
and correct in all material respects at and as of the Closing Date, as though
such representations and warranties were made at and as of the Closing Date,
except (1) as affected by the transactions contemplated hereby, and (2) to the
extent that such representations and warranties are made as of a specified date,
in which case such representations and warranties shall be true in all material
respects as of the specified date.
(b) Performance by Buyer and Parent. Buyer and Parent shall
have each performed in all material respects all of their respective obligations
and agreements and complied in all material respects with all of their
respective covenants and conditions required by this Agreement and the
Collateral Agreements to be performed or complied with by them prior to or at
the Closing, including obtaining all necessary consents.
(c) No Material Adverse Change. No material adverse change
shall have occurred in the business, operations, assets, condition (financial or
otherwise) of Buyer or Parent, and no other event, loss, damage, condition or
state of facts of any kind shall exist which has a Material Adverse Effect, or
can reasonably be expected to have a Material Adverse Effect, on Buyer or
Parent.
9. POST CLOSING
The rights and obligations of Buyer and Seller under this
Agreement shall be subject to the following additional terms and conditions:
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9.1 EFFECT OF BREACH PRIOR TO CLOSING
In the event of a material breach of any representation,
certification or warranty, or agreement or covenant of either party under this
Agreement or any Collateral Agreement that is discovered by the either party
prior to Closing and that cannot be or is not cured by the first upon prior
notice and the passage of a reasonable period of time, the other party may elect
not to proceed with the Closing hereunder, in which event, in addition to any
other remedy such non-breaching party may have, the breaching party shall be
responsible for all costs (including legal fees and expenses) incurred in
connection with the preparation, negotiation and consummation of this Agreement
and the Collateral Agreements and the transactions contemplated hereby and
thereby.
9.2 SURVIVAL
Except as otherwise provided herein, the representations and
warranties of Buyer and Seller contained in this Agreement shall survive the
Closing for twelve (12) months. Neither Seller nor Buyer shall have any
liability whatsoever with respect to any such representations or warranties
after the survival period for such representation or warranty expires, except
that any claim against either party for fraud shall survive until the expiration
of the applicable statute of limitations for such claim. The covenants,
agreements and obligations contained in Sections 2.7, 5.1, 5.3, 5.4, 5.6, 5.7,
and 5.8 and Articles 6 and 9, shall survive the Closing and, with respect to
Article 6, the termination of this Agreement for any reason.
9.3 GENERAL AGREEMENT TO INDEMNIFY
(a) Seller and Buyer shall indemnify, defend and hold
harmless the other party hereto, any Affiliate thereof, and any director,
officer, stockholder, employee, agent, representative, advisor, successor or
assign of such party or Affiliate thereof (each an "Indemnified Party") from and
against any and all claims, actions, suits, proceedings, liabilities,
obligations, losses, and damages, amounts paid in settlement, interest, costs
and expenses (including reasonable attorney's fees, court costs and other
out-of-pocket expenses incurred in investigating, preparing or defending the
foregoing) (collectively, "Losses") incurred or suffered by any Indemnified
Party to the extent that the Losses arise by reason of, or result from (1) the
failure of any representation or warranty of such party contained in this
Agreement or the Collateral Agreements to have been true in all material
respects when made and as of the Closing Date, except as expressly provided
otherwise in Sections 8.2(a) or 8.3(a), or (2) the breach by such party of any
covenant or agreement of such party contained in this Agreement or the
Collateral Agreements to the extent not waived by the other party.
(b) Amounts payable in respect of the parties'
indemnification obligations shall be treated as an adjustment to the Purchase
Price. Buyer and Seller agree to cooperate in the preparation of a supplemental
Asset Acquisition Statement as required by Section 5.3 and Treasury Reg. ss.
1.1060-1T(e) as a result of any adjustment to the Purchase Price pursuant to the
preceding sentence. Whether or not the Indemnifying Party (as defined below)
chooses to defend or prosecute any Third-Party Claim (as defined in Section
9.4(a)) both parties
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hereto shall cooperate in the defense or prosecution thereof and shall furnish
such records, information and testimony, and attend such conferences, discovery
proceedings, hearings, trials and appeals, as may be reasonably requested in
connection therewith or as provided in Section 5.1.
(c) The amount of the Indemnifying Party's liability under
this Agreement shall be determined taking into account any applicable insurance
proceeds actually received by, and other savings, including Tax savings, that
actually reduce the overall impact of the Losses upon, the Indemnified Party.
The indemnification obligations of each party hereto under this Section 9 shall
inure to the benefit of the directors, officers, stockholders, employees,
agents, representatives, advisors, successors, assigns and Affiliates of the
other party hereto on the same terms as are applicable to such other party.
(d) The Indemnifying Party's liability for all claims
including those made under Section 9.3(a) is subject to the following
limitation: the Indemnifying Party shall have no liability for such claims until
the aggregate amount of the Losses incurred shall exceed $10,000, in which case
the Indemnifying Party shall be liable for all of the Losses as if no such
limitation existed. The Indemnified Party may not make a claim for
indemnification under Section 9.3(a) for breach by the Indemnifying Party of a
particular representation or warranty after the expiration of the survival
period specified in Section 9.2.
(e) The indemnification provided in this Section 9 shall be
the sole and exclusive remedy after the Closing Date for damages available to
the parties to this Agreement for breach of any of the terms, conditions,
representations or warranties contained herein or in any of the Collateral
Agreements or any right, claim or action arising from the transactions
contemplated by this Agreement or the Collateral Agreements; provided, however,
this exclusive remedy for damages does not preclude a party from bringing an
action for specific performance or other equitable remedy to require a party to
perform its obligations under this Agreement or any Collateral Agreement.
(f) Except in connection with a claim for fraud, but
otherwise notwithstanding anything contained in this Agreement to the contrary,
no party shall be liable to the other party for indirect, special, punitive,
exemplary or consequential loss or damage (including any loss of revenue or
profit) arising out of this Agreement, provided, however, the foregoing shall
not be construed to preclude recovery by the Indemnified Party in respect of
Losses directly incurred from Third Party Claims. Both parties have a duty to
mitigate their damages.
(g) The rights to indemnification under this Section 9.3
shall not be subject to set-off for any claim by the Indemnifying Party against
any Indemnified Party, whether or not arising from the same event giving rise to
such Indemnified Party's claim for indemnification.
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9.4 GENERAL PROCEDURES FOR INDEMNIFICATION
(a) The Indemnified Party seeking indemnification under this
Agreement shall promptly notify the party against whom indemnification is sought
(the "Indemnifying Party") of the assertion of any claim, or the commencement of
any action, suit or proceeding by any Third Party, in respect of which indemnity
may be sought hereunder and will give the Indemnifying Party such information
with respect thereto as the Indemnifying Party may reasonably request, but
failure to give such notice shall not relieve the Indemnifying Party of any
liability hereunder (unless the Indemnifying Party has suffered material and
permanent prejudice by such failure). The Indemnifying Party shall have the
right, but not the obligation, exercisable by written notice to the Indemnified
Party within thirty (30) days of receipt of notice from the Indemnified Party of
the commencement of or assertion of any claim, action, suit or proceeding by a
Third Party in respect of which indemnity may be sought hereunder (a
"Third-Party Claim"), to assume the defense and control the settlement of such
Third-Party Claim that (1) involves (and continues to involve) solely money
damages, or (2) involves (and continues to involve) claims for both money
damages and equitable relief against the Indemnified Party that cannot be
severed, where the claims for money damages are the primary claims asserted by
the Third Party and the claims for equitable relief are incidental to the claims
for money damages.
(b) The Indemnifying Party or the Indemnified Party, as the
case may be, shall have the right to participate in (but not control), at its
own expense, the defense of any Third-Party Claim that the other is defending,
as provided in this Agreement.
(c) The Indemnifying Party, if it has assumed the defense of
any Third-Party Claim as provided in this Agreement, shall not consent to a
settlement of, or the entry of any judgment arising from, any such Third-Party
Claim without the Indemnified Party's prior written consent (which consent shall
not be unreasonably withheld, conditioned or delayed) unless such settlement or
judgment relates solely to monetary damages. The Indemnifying Party shall not,
without the Indemnified Party's prior written consent, enter into any compromise
or settlement that (1) commits the Indemnified Party to take, or to forbear to
take, any action, or (2) does not provide for a complete release by such Third
Party of the Indemnified Party. The Indemnified Party shall have the sole and
exclusive right to settle any Third-Party Claim, on such terms and conditions as
it deems reasonably appropriate, to the extent such Third-Party Claim involves
equitable or other non-monetary relief against the Indemnified Party, and shall
have the right to settle any Third-Party Claim involving money damages for which
the Indemnifying Party has not assumed the defense pursuant to this Section 9.4
with the written consent of the Indemnifying Party, which consent shall not be
unreasonably withheld, conditioned or delayed.
(d) If an injunction is obtained against Buyer's use of any
License or Licensed Intellectual Property or Assigned Trademark or Trade Dress
by reason of an intellectual property infringement for which Buyer is entitled
to be indemnified by Seller, Seller will, at its option and expense, either (1)
obtain the right for Buyer and its customers to continue to use such
intellectual property; or (2) replace or modify the infringing materials so that
they no longer infringe such intellectual property right, as long as the utility
or the performance of the materials are not materially impaired.
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(e) In the event an Indemnified Party shall claim a right to
payment pursuant to this Agreement, such Indemnified Party shall send written
notice of such claim to the Indemnifying Party. Such notice shall specify the
basis for such claim. As promptly as possible after the Indemnified Party has
given such notice, and subject to the limitations set forth in Section 9.3, the
Indemnified Party and the Indemnifying Party shall establish the merits and
amount of such claim by mutual agreement, or, if necessary, by arbitration in a
manner reasonably determined by mutual agreement of such parties.
9.5 AMENDMENTS TO CAPITAL OF PARENT
As soon as practical following the Closing, Parent will take
all actions necessary or reasonably expedient to amend the rights and privileges
of the Preferred Stock, subject to the reasonable satisfaction of Parent and the
holders of the Preferred Stock, which amendments shall include, without
limitation, a zero coupon, registration rights with respect to the common stock
underlying the Preferred Stock, mandatory conversion upon the stock price
reaching $8.00 per share (which dollar amount will not be adjusted for any
reverse splits, but will be adjusted for forward splits).
9.6 POOLS OF STOCK
As soon as reasonably practicable following the Closing,
Parent will reserve pools of its common stock and use Reasonable Commercial
Efforts to obtain the discharge of various obligations as set forth below:
(a) Conversion of Deferred and Accrued Compensation and
Notes Payable to Related Parties: In lieu of cash payments for deferred and
accrued compensation in the aggregate amount set forth in Schedule 9.6(a),
individuals as set forth in Schedule 9.6(a), at their respective elections, will
receive either (i) options to acquire common stock of Parent, or (ii) restricted
shares of common stock of Parent, in an amount equal to one share for each
dollar exchanged. The options shall have an exercise price equal to the closing
sales price on the Closing Date, or $0.64, whichever is less, and shall have
such other terms and conditions as are associated with options granted by the
Parent to employees in the past. The allocation of these options and common
stock shall be the sole responsibility of Parent's management. All of the shares
under this paragraph (a) will be unregistered upon grant, except to the extent
of common stock underlying options granted pursuant to Parent's option plan for
which a registration statement on Form S-8 has been filed with the Securities
and Exchange Commission. To the extent there are insufficient shares available
under Parent's option plan with respect to the shares underlying such options,
Parent hereby undertakes to amend said option plan to increase the number of
shares available thereunder as promptly as practicable, but in no event later
than the next meeting of Parent's stockholders.
(b) Conversion of Accrued Preferred Stock Dividends: 450,000
shares of common stock may be issued in exchange for accrued dividends on the
Preferred Stock as set forth in Schedule 9.6(b). Such shares will be
unregistered upon issuance. The
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parties acknowledge that this conversion will require the consent of the holders
of the Preferred Stock.
9.8 BOARD OF DIRECTORS
Effective immediately following the Closing, Parent's Board
of Directors will consist of five (5) members as follows: Xxxx X. Xxxxx, Xxxxxx
X. Xxxx, Xxxxxxx Xxxxxxxxx, Xxx X. Xxxx, and Xxxxxxx Xxxxxxxxxx. All Board
members shall be identified in the Schedule 14F-1 Information Statement. Parent
shall purchase and maintain Directors & Officers Insurance to become effective
immediately after the Closing, to the extent premiums are reasonable in relation
to the coverage sought.
9.9 CONSULTING AGREEMENTS
(a) Xxxxx Xxxxx will be engaged as a consultant to Parent
under a contract with a 60-month term and payments of $10,000 per month. The
parties agree that the first year shall be accrued and amortized over the
following four years (i.e., $2,500 per month thereafter for the remaining 48
months). The contract shall terminate (but all accrued fees shall still be
payable) upon the conversion of all outstanding Preferred Stock to common stock.
(b) Xxxx Xxxxx shall be engaged as a consultant to Parent
under a contract with a 12-month term and payments of $3,000 per month. Xx.
Xxxxx'x duties under the consulting agreement are set forth in Schedule 9.9(b).
This contract shall be extended on a month-to-month basis for up to 12
additional months or until such time as Xx. Xxxxx'x stock is registered
(whichever comes first). In addition, should Xx. Xxxxx meet certain performance
targets, to be mutually agreed upon, the contract shall be extended for an
additional 12 months.
10. MISCELLANEOUS PROVISIONS
10.1 NOTICES
All notices and other communications hereunder shall be in
writing and shall be deemed to have been duly given upon receipt if (1) mailed
by certified or registered mail, return receipt requested, (2) sent by Federal
Express or other express carrier, fee prepaid, (3) sent via facsimile with
receipt confirmed, or (4) delivered personally, addressed as follows or to such
other address or addresses of which the respective party shall have notified the
other.
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(a) If to Seller, to: Saigene Corporation
Attn: Xx. Xxxxxx X. Xxxx
000 Xxxx Xxxxxxxx Xxxxxx
Xxxxxxx, XX 00000
Facsimile: (000) 000-0000
With a copy to: Burkhalter, Michaels, Xxxxxxx &
Xxxxxx LLP
Attn: Xxxxx X. Xxxxxxxxxx, Esq.
0 Xxxx Xxxxx, Xxxxx 000
Xxxxxx, XX 00000
Facsimile: (000) 000-0000
(b) If to Buyer, to: Pacific Biometrics, Inc.
Attn: Xx. Xxxx X. Xxxxx
00000 Xxxxxx Xxxxxxx #000
Xxxxxxx Xxxxx, XX 00000
Facsimile: (000) 000-0000
With a copy to: Xxxxxxxxx Ball Xxxxxx Xxxxxx &
Xxxxxxxxxxx LLP
Attn: Xxxx X. Xxxxxxx, Esq.
000 Xxx Xxxxxxx Xxxx, 0xx Xxxxx
Xxxxxxx, XX 00000
Facsimile: (000) 000-0000
10.2 EXPENSES
Except as otherwise provided in this Agreement, each party
to this Agreement will bear all the fees, costs and expenses that are incurred
by it in connection with the transactions contemplated hereby, whether or not
such transactions are consummated.
10.3 ENTIRE AGREEMENT; MODIFICATION
The agreement of the parties, which is comprised of this
Agreement and the Collateral Agreements, the Schedules and Exhibits hereto and
thereto and the documents referred to herein and therein, sets forth the entire
agreement and understanding between the parties and supersedes any prior
agreement or understanding, written or oral, relating to the subject matter of
this Agreement. With respect to the Purchased Assets, the Business, or any other
rights or obligations to be transferred hereunder or pursuant hereto, no party
has been induced by or has relied upon any representations, warranties, or
statements, whether express or implied, made by any other party, its agents,
employees, attorneys or other representatives or by any Person representing or
purporting to represent the other party that are not expressly set forth
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in this Agreement or the Collateral Agreements (including the Schedules and
Exhibits hereto and thereto), whether or not any such representations,
warranties or statements were made in writing or orally. No amendment,
supplement, modification or waiver of this Agreement shall be binding unless
executed in writing by the party to be bound thereby, and in accordance with
Section 11.4.
10.4 ASSIGNMENT; BINDING EFFECT; SEVERABILITY
This Agreement may not be assigned by any party hereto
without the other party's written consent; provided, that after the Closing Date
a party may transfer its rights and obligations hereunder in connection with a
merger or sale of all or substantially all of its assets. This Agreement shall
be binding upon and inure to the benefit of and be enforceable by the
successors, legal representatives and permitted assigns of each party hereto.
The provisions of this Agreement are severable, and in the event that any one or
more provisions are deemed illegal or unenforceable the remaining provisions
shall remain in full force and effect unless the deletion of such provision
shall cause this Agreement to become materially adverse to either party, in
which event the parties shall use reasonable commercial efforts to arrive at an
accommodation that best preserves for the parties the benefits and obligations
of the offending provision.
10.5 GOVERNING LAW; JURISDICTION; VENUE
This Agreement will be construed, interpreted, and enforced
in accordance with, and governed by, the laws of the State of California without
regard to conflicts of laws provisions thereof. The parties agree that any
action or proceeding brought to enforce or declare rights arising out of or
relating to this Agreement must be brought exclusively in the State or Federal
Courts in Orange County, California, and the parties further consent to the
jurisdiction of said Courts and waive any claims of forum non conveniens or any
other claims relating to venue.
10.6 EXECUTION IN COUNTERPARTS; FACSIMILE SIGNATURES
This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument. This Agreement may be executed using
facsimile signatures, each of which shall be deemed an original.
10.7 PUBLIC ANNOUNCEMENT
Upon signing of this Agreement, Seller and Buyer shall
prepare a mutually agreeable release announcing the transaction contemplated
hereby. Except for such press release, neither Seller nor Buyer shall, without
the approval of the other, make any press release or other announcement
concerning the existence of this Agreement or the terms of the transactions
contemplated by this Agreement, except as and to the extent that any such party
shall be so obligated by Law, in which case the other party shall be advised and
the parties shall use their reasonable commercial efforts to cause a mutually
agreeable release or announcement to be
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issued; provided, however, that the foregoing shall not preclude communications
or disclosures necessary to comply with accounting, stock exchange or Federal
Securities Law disclosure obligations.
10.8 NO THIRD-PARTY BENEFICIARIES
Nothing in this Agreement, express or implied, is intended
to or shall (a) confer on any Person other than the parties hereto and their
respective successors or assigns any rights (including Third-Party beneficiary
rights), remedies, obligations or liabilities under or by reason of this
Agreement, or (b) constitute the parties hereto as partners or as participants
in a joint venture. This Agreement shall not provide Third Parties with any
remedy, claim, liability, reimbursement, cause of action or other right in
excess of those existing without reference to the terms of this Agreement. No
Third Party shall have any right, independent of any right that exist
irrespective of this Agreement, under or granted by this Agreement, to bring any
suit at law or equity for any matter governed by or subject to the provisions of
this Agreement.
11. TERMINATION AND WAIVER
11.1 TERMINATION
This Agreement may be terminated at any time prior to the
Closing Date by:
(a) Mutual Consent. The mutual written consent of Buyer and
Seller;
(b) Court or Administrative Order. Buyer or Seller, if there
shall be in effect a non-appealable order of a court or Government Body of
competent jurisdiction prohibiting the consummation of the transactions
contemplated hereby; or
(c) Delay. Buyer or Seller, if the Closing shall not have
occurred by December 31, 2002, provided that the terminating party is not
otherwise in material default or breach of this Agreement.
11.2 EFFECT OF TERMINATION
In the event of the termination of this Agreement in
accordance with Section 11.1, this Agreement shall become void and have no
effect, without any liability on the part of any party or its directors,
officers or stockholders, except for the obligations of the parties hereto as
provided in Article 6, Sections 9.1, 9.3, 10.2 and 10.7 and this Section 11.2.
11.3 WAIVER OF AGREEMENT
Any term or condition hereof may be waived at any time prior
to the Closing Date by the party hereto which is entitled to the benefits
thereof by action taken by its
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Board of Directors or its duly authorized officer or employee, whether before or
after the action of such party; provided, however, that such action shall be
evidenced by a written instrument duly executed on behalf of such party by its
duly authorized officer or employee. The failure of either party to enforce at
any time any provision of this Agreement shall not be construed to be a waiver
of such provision nor shall it in any way affect the validity of this Agreement
or the right of such party thereafter to enforce each and every such provision.
No waiver of any breach of this Agreement shall be held to constitute a waiver
of any other or subsequent breach.
11.4 AMENDMENT OF AGREEMENT
This Agreement may be amended with respect to any provision
contained herein at any time prior to the Closing Date by action of the parties
hereto taken by their Boards of Directors or by their duly authorized officers
or employees, whether before or after such party's action; provided, however,
that such amendment shall be evidenced by a written instrument duly executed on
behalf of each party by its duly authorized officer or employee.
[SIGNATURES APPEAR ON THE FOLLOWING PAGE]
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IN WITNESS WHEREOF, each party has caused this Agreement for the
Purchase and Sale of Assets to be duly executed on its behalf by its duly
authorized officer as of the date first written above.
SAIGENE CORPORATION,
a Delaware corporation
By:
---------------------------------
Xxxxxx X. Xxxx
Its: Chief Executive Officer
PACIFIC BIOMETRICS, INC.,
a Delaware corporation
By:
---------------------------------
Xxxx X. Xxxxx
Its: Chief Executive Officer
PACIFIC BIOMETRICS, INC.,
a Washington corporation
By:
---------------------------------
Xxxx X. Xxxxx
Its: Chief Executive Officer46
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