Exhibit 2.2
ASSET PURCHASE AGREEMENT
DATED MARCH 16, 2002
BY AND BETWEEN
ENHANCE PHARMACEUTICALS, INC., AS SELLER,
AND
XXXX LABORATORIES, INC., AS PURCHASER
Table of Contents
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ARTICLE I PURCHASE AND SALE, PURCHASE PRICE, CERTAIN PURCHASE PRICE
ADJUSTMENTS ASSUMED LIABILITIES, RETAINED ASSETS, TAX PAYMENTS,
AND ALLOCATION FOR TAX PURPOSES...................................1
1.1 Purchase and Sale of the Purchased Assets............................1
1.2 Payment of the Purchase Price........................................1
1.3 Assumed Liabilities..................................................2
1.4 Retained Assets......................................................3
1.5 Prorations...........................................................3
1.6 Transfer Tax Payments................................................3
ARTICLE II DEFINITIONS.......................................................4
2.1 General..............................................................4
2.2 Definitions..........................................................4
2.3 Interpretation......................................................11
ARTICLE III REPRESENTATIONS AND WARRANTIES OF SELLER........................11
3.1 Status of Seller; Enforceability; Conflicts; Consents...............11
3.2 Ownership of Seller.................................................12
3.3 Financial Statements................................................13
3.4 Undisclosed Liabilities.............................................13
3.5 Title to Properties.................................................13
3.6 Real Property.......................................................13
3.7 Equipment and Improvements..........................................14
3.8 No Commitments......................................................14
3.9 Continued Use of Real Property......................................14
3.10 Real Estate and Personal Property Taxes; Assessments................14
3.11 Inventory...........................................................14
3.12 Accounts Receivable.................................................14
3.13 Contracts...........................................................15
3.14 Equity Interests....................................................15
3.15 Intellectual Property...............................................15
3.16 Required Assets; Sufficiency of Assets..............................16
3.17 Suppliers...........................................................16
3.18 Personnel Identification and Compensation...........................16
3.19 Existing Employment Related Contracts...............................16
3.20 Compliance with Laws................................................16
3.21 Litigation..........................................................17
3.22 Environmental.......................................................17
3.23 Employee Benefit Plans..............................................19
3.24 Tax Matters.........................................................19
3.25 Consents............................................................20
3.26 Licenses and Permits................................................20
3.27 Occupational Safety and Health......................................21
3.28 Insurance...........................................................21
3.29 Certain Transactions................................................21
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Table of Contents
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3.30 Regulatory Compliance...............................................22
3.31 Conduct of Business Since Most Recent Balance Sheet Date............23
3.32 Broker's or Consultant's Fees.......................................24
3.33 Claims Against Insiders.............................................24
3.34 Disclosure..........................................................24
3.35 No Other Representations and Warranties.............................24
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF PURCHASER......................24
4.1 Status of Purchaser.................................................24
4.2 Authority of Purchaser..............................................24
4.3 Due Authorization...................................................25
4.4 Enforceability......................................................25
4.5 Consents............................................................25
4.6 Broker's or Consultant's Fees.......................................25
ARTICLE V PRE-CLOSING COVENANTS.............................................25
5.1 Ordinary Conduct....................................................25
5.2 Right of Inspection; Access to Books and Personnel..................27
5.3 Notification of Material Events.....................................27
5.4 Supplemental Disclosures............................................27
5.5 Exclusivity.........................................................28
5.6 Publicity...........................................................28
5.7 Preparation of Pre-Closing Estimated Purchase Price Certificate.....28
5.8 Power of Attorney; Right of Endorsement, Etc........................28
5.9 Covenants Not to Compete, Solicit or Disparage......................29
5.10 Post-Closing Confidentiality........................................30
5.11 Performance of Contracts............................................30
5.12 Employees...........................................................30
5.13 Allocation for Tax Purposes.........................................31
5.14 Mitsubishi Agreement................................................31
5.15 Administrative Agreement............................................31
5.16 Assumed Contracts...................................................31
5.17 The Population Council Agreement....................................31
ARTICLE VI CONDITIONS PRECEDENT TO PURCHASER'S OBLIGATIONS..................32
6.1 Obligations to be Satisfied on or Prior to Closing Date.............32
6.2 Procedure for Failure to Satisfy Conditions.........................33
ARTICLE VII CONDITIONS PRECEDENT TO SELLER'S OBLIGATIONS....................34
7.1 Obligations to Be Satisfied on or Prior to Closing Date.............34
7.2 Procedure for Failure to Satisfy Conditions.........................34
ARTICLE VIII CLOSING........................................................35
8.1 Time and Place......................................................35
8.2 Closing Transactions................................................35
8.3 Deliveries by Seller to Purchaser...................................35
8.4 Deliveries by Purchaser to Seller...................................36
8.5 Determination of Final Purchase Price...............................37
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Table of Contents
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(continued)
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ARTICLE IX OTHER AGREEMENTS.................................................38
9.1 Further Assurances..................................................38
9.2 Access to Records After Closing.....................................38
9.3 Collection of Receivables...........................................38
9.4 Third Party Consents................................................39
9.5 Milestone Payments..................................................39
ARTICLE X INDEMNIFICATION...................................................39
10.1 Survival of Representations, Warranties and Indemnity...............39
10.2 Indemnification by Seller...........................................39
10.3 Limits on Indemnification by Seller.................................40
10.4 Indemnification by Purchaser........................................40
10.5 Specific Breaches...................................................41
10.6 Cross-indemnification for Broker's, Consultant's or Finder's Fees...41
10.7 Procedure for Indemnification.......................................42
10.8 Payment.............................................................42
10.9 Limited Recourse against Seller and its shareholders................43
10.10 Reduction for Insurance and Taxes...................................43
10.11 Remedies Exclusive..................................................43
10.12 No Consequential Damages............................................43
10.13 Escrow..............................................................43
10.14 Bulk Sales..........................................................44
ARTICLE XI TERMINATION......................................................44
11.1 Rights to Terminate.................................................44
11.2 Effects of Termination..............................................44
ARTICLE XII MISCELLANEOUS PROVISIONS........................................45
12.1 Notices.............................................................45
12.2 Assignment..........................................................46
12.3 Benefit of the Agreement............................................46
12.4 Exhibits and Schedules..............................................46
12.5 Headings............................................................46
12.6 Entire Agreement....................................................46
12.7 Modifications and Waivers...........................................46
12.8 Counterparts........................................................47
12.9 Severability........................................................47
12.10 GOVERNING LAW.......................................................47
12.11 Expenses............................................................47
12.12 JURISDICTION; WAIVER OF JURY TRIAL; VENUE...........................47
12.13 Seller Acknowledgement..............................................48
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EXHIBITS
Exhibit A Assumption Agreement
Exhibit B Retained Assets
Exhibit C Capital Expenditures
Exhibit D Non-Competition and Non-Solicitation Agreement
Exhibit E Escrow Agreement
SCHEDULES
Schedule 2.2 Assumed Contracts
Schedule 3.1 Status of Seller
Schedule 3.2 Ownership
Schedule 3.5 Title to Properties
Schedule 3.6 Real Property
Schedule 3.13 Contracts
Schedule 3.15 Intellectual Property
Schedule 3.17 Suppliers
Schedule 3.18 Personal Identification and Compensation
Schedule 3.19 Existing Employment Related Contracts
Schedule 3.21 Litigation
Schedule 3.22 Environmental
Schedule 3.23 Employee Benefit Plans
Schedule 3.25 Consents
Schedule 3.26 Licenses and Permits
Schedule 3.27 Occupational Safety and Health
Schedule 3.28 Insurance
Schedule 3.29 Certain Transactions
Schedule 3.30 Regulatory Compliance
Schedule 3.31 Conduct of Business
Schedule 5.12 Employees
Schedule 6.1(d) Consents to Closing
Schedule 6.1(k) Individuals Subject to Non-Competition and
Non-Solicitation Agreements
Schedule 6.2 Consents
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ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT is entered into this 16th day of March,
2002, by and between Enhance Pharmaceuticals, Inc., a Delaware corporation
("Seller"), and Xxxx Laboratories, Inc., a New York corporation
("Purchaser").
RECITALS
WHEREAS, (A) Seller is engaged in the business of research and development
of silicone elastomer and other polymer-based immediate and sustained release
products that deliver one or more drug compounds through either a vaginal or
sub-dermal route of administration for application in health care (the
"Business");
(B) Seller desires to sell the Business and substantially all of its
assets to Purchaser, and Purchaser desires to purchase the Business and
substantially all of the assets of Seller; and
(C) each term defined in this Agreement shall have the meaning
ascribed to it in Article II,
NOW, THEREFORE, in consideration of the mutual agreements and covenants
contained herein, and for other good and valuable consideration, the receipt and
sufficiency of which hereby are acknowledged, Purchaser and Seller hereby agree
as follows:
ARTICLE I
PURCHASE AND SALE, PURCHASE PRICE, CERTAIN PURCHASE PRICE
ADJUSTMENTS ASSUMED LIABILITIES, RETAINED ASSETS, TAX PAYMENTS,
AND ALLOCATION FOR TAX PURPOSES
1.1 Purchase and Sale of the Purchased Assets. Subject to the terms and
conditions of this Agreement, at the Closing, Seller shall sell, assign, convey,
transfer and deliver to Purchaser and Purchaser shall purchase from Seller the
Purchased Assets, free and clear of all Liens, claims, options, charges,
encumbrances and restrictions of any kind, other than those Liens set forth on
Schedule 3.5 hereto.
1.2 Payment of the Purchase Price. Subject to the terms and conditions of
this Agreement, Purchaser shall, at the Closing, pay (or in the case of the
Assumption Agreement referred to below, execute and deliver) the purchase price
for the Purchased Assets (the "Purchase Price") consisting of:
(a) cash in the amount of Forty-Four Million Dollars ($44,000,000),
which amount shall be, subject to the provisions of Section 5.7 and Section 8.5,
increased by the amount of the Acquired Working Capital and further increased by
the amount of the Unbilled Reimbursable Expenses and decreased by the amount of
any Milestone Payments received by
Seller after the date hereof and prior to the Closing, of which Purchaser shall
remit (i) Forty-One Million Dollars ($41,000,000) (subject to adjustment for
Acquired Working Capital, Unbilled Reimbursable Expenses and Milestone Payments
as provided in the immediately preceding clause) to a bank account designated in
writing by Seller at least three days prior to the Closing and (ii) the sum of
Three Million Dollars ($3,000,000) (the "Escrow Amount") to an escrow agent to
be agreed upon at or prior to the Closing by Purchaser and Seller (the "Escrow
Agent"); and
(b) an assumption agreement in the form attached as Exhibit A hereto
(the "Assumption Agreement") pursuant to which Purchaser assumes specific
liabilities of Seller set forth in Section 1.3(a).
1.3 Assumed Liabilities.
(a) Subject to and pursuant to Section 1.5, Purchaser shall, at the
Closing, irrevocably and absolutely, assume, agree to perform, and, when due,
pay and discharge, only the obligations and liabilities of Seller relating to
the Assumed Contracts (excluding any liabilities set forth in Section 1.3(b)),
which arise after the Closing Date or are attributable to the period following
the Closing Date and only to the extent such obligations and liabilities are not
overdue or delinquent on the Closing Date without regard to any grace period and
without the incurrence of any increase in amounts due (the "Assumed
Liabilities").
(b) Purchaser shall not assume or pay and Seller shall continue to
be responsible for any debt, obligation or liability, of any kind or nature
(fixed or contingent, known or unknown) of Seller whether or not relating to the
Business, not expressly assumed by Purchaser pursuant to Section 1.3(a) (the
"Excluded Liabilities"). Without limiting the foregoing, Purchaser shall not
assume:
(i) any action, suit or proceeding pending as of the Closing
Date notwithstanding the disclosure thereof on the Most Recent Balance
Sheet, or any subsequent claim, action, suit or proceeding arising out of
or relating to such pending matters, any other similar event occurring on
or prior to the Closing Date or, resulting from the conduct of the
Business by Seller on or prior to the Closing Date;
(ii) any liability of Seller for any Taxes for any periods
prior to or subsequent to the Closing whether or not relating to the
Business and notwithstanding the disclosure thereof on the Most Recent
Balance Sheet;
(iii) any obligation or liability arising from claims,
proceedings or causes of action resulting from property damage or personal
injuries (including death) caused by products, materials or services
invoiced, sold, performed or shipped by Seller or the Business on or prior
to the Closing Date;
(iv) any obligation or liability arising from product warranty
or product liability claims, with respect to products, materials or
services invoiced, sold, performed or shipped by Seller or the Business on
or prior to the Closing Date; provided, that the
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obligation or liability does not arise from acts of commission or omission
by Purchaser subsequent to the Closing;
(v) any obligation or liability related to any actual or
alleged violation or liability arising under any Environmental Laws,
including, without limitation, any Release or threatened Release of
Hazardous Substances, as those terms are defined herein, occurring prior
to or, if as a result of Seller's activities, present, or if, not as a
result of Seller's activities, to the extent present, on the Closing Date,
regardless of whether such obligations or liabilities relate to Seller's
ownership or operation of the Purchased Assets, to any predecessor, owner,
tenant, occupant or user of the Purchased Assets, or to any other party
unrelated to the Purchased Assets, and any Environmental Claims as herein
defined, including, without limitation, any matters disclosed by Seller in
Schedule 3.22 and any matters identified in the Phase I Environmental Site
Assessments provided by Seller to Purchaser (the "Environmental Reports");
(vi) any obligation or liability of Seller arising from the
transactions contemplated by this Agreement, including those (i) relating
to the negotiation and preparation of this Agreement and the transactions
contemplated herein and (ii) incurred by Seller with respect to its legal
counsel, accounting, brokerage and investment advisors fees and expenses;
(vii) any obligation or liability arising from or related to
the Retained Assets; or
(viii) any trade payable or accrued expenses.
1.4 Retained Assets. Seller shall not sell, transfer, convey or deliver to
Purchaser, and Purchaser shall not purchase from Seller the assets, properties,
interests and rights of Seller set forth on Exhibit B hereto (the "Retained
Assets"), except as provided in Section 5.16.
1.5 Prorations. All obligations and liabilities assumed by Purchaser under
this Agreement, including payments made by Seller with respect to the promissory
notes of Seller payable to General Electric Capital Corporation set forth on
Schedule 2.2 ("GE Notes"), shall be prorated as of the close of business on the
Closing Date between Purchaser and Seller, whether or not such adjustment would
normally be made as of such time. It is the intention of the parties that Seller
should operate the Business for its own account pursuant to this Agreement until
the close of business on the day immediately prior to the Closing Date, and that
Purchaser shall operate the Business, including the Purchased Assets, for its
own account from and after the Closing Date. Any overdue or delinquent
obligations or liabilities of Seller on the close of business on the day
immediately prior to the Closing Date shall not be prorated and shall remain the
property of Seller.
1.6 Transfer Tax Payments. Purchaser shall pay any transfer, sales,
purchase, use, value added, excise or similar Tax arising out of the transfer of
any of the Purchased Assets to Purchaser.
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ARTICLE II
DEFINITIONS
2.1 General. Each term defined in the first Article of this Agreement and
in the Recitals shall have the meaning set forth below whenever used herein,
unless otherwise expressly provided or unless the context clearly requires
otherwise.
2.2 Definitions. As used herein, the following terms shall have the
meanings ascribed to them in this Section 2.2:
Administrative Services Agreement. The Administrative Services
Agreement dated as of October 26, 2001 by and among FEI Products, Inc., FEI
Enterprises, Ltd. and Seller.
Accounts Receivable. All present and future rights to payment for
goods or services rendered whether or not earned by performance, including,
without limitation, all accounts or notes receivable owned or held by Seller,
but specifically excluding any Billed Reimbursable Expenses or Unbilled
Reimbursable Expenses.
Acquired Working Capital. The sum of all deposits and prepaid
expenses of Seller as of the Closing and the pro rata portion of any payments
made by Seller as of the Closing with respect to the GE Notes, other than
prepaid insurance premiums, prepaid taxes and deposits on capital expenditures
and subject to Section 1.5.
Affiliate. As set forth in Rule 12b-2 of the general rules and
regulations under the Securities Exchange Act of 1934, as amended.
Agreement. This Asset Purchase Agreement, together with all Exhibits
and Schedules referred to herein, as amended, modified or supplemented from time
to time in accordance with the terms hereof.
Assumed Contracts. (i) Contracts listed on Schedule 2.2 hereto as
may be supplemented pursuant to Section 5.16, (ii) such Contracts entered into
by Seller after the date hereof in the Ordinary Course of Business as Purchaser
expressly agrees to assume and (iii) all Contracts entered into by Seller after
the date hereof in the Ordinary Course of Business and individually in an amount
not in excess of $10,000.00; provided, however, Seller shall have the right to
enter into Contracts (and Purchaser shall be deemed to assume such Contracts
subject to the immediately following sentence) after the date hereof in the
Ordinary Course of Business and individually in an amount in excess of
$10,000.00 if Purchaser does not object to Seller's entering into such Contracts
within three Business Days following Purchaser's receipt from Seller of the
written notification of Seller's intention to enter into such Contracts.
Notwithstanding anything in this Agreement to the contrary, it is expressly
understood and agreed by the parties hereto that Purchaser will assume Contracts
entered into by Seller after the date hereof and all purchase orders only to the
extent that the delivery of services, products or other items pursuant to such
Contracts or purchase orders is made to Purchaser after the Closing Date.
Assumed Liabilities. As defined in Section 1.3.
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Assumption Agreement. As defined in Section 1.2.
Authority. Any governmental, regulatory or administrative body,
agency or authority, any court or judicial authority, any arbitrator or any
public, private or industry regulatory authority, whether foreign, federal,
state or local.
Billed Reimbursable Expenses. As of the Closing Date, the sum of all
expenses (as calculated in accordance with past practices consistently applied)
of Seller theretofore invoiced by Seller to Schering for which Schering is
obligated to reimburse Seller pursuant to the Schering Agreement.
Business. As defined in the Recitals hereto.
Business Day. Any day other than a Saturday, Sunday or a day on
which banks in New York are not open for business.
CERCLA. Comprehensive Environmental Response, Compensation and
Liability Act, 42 U.S.C. Section 9601, et seq., as amended.
Closing. The actual sale, conveyance, transfer, assignment and
delivery of the Purchased Assets to Purchaser.
Closing Date. The date which is the later of: (a) thirty (30) days
following the execution of this Agreement or (b) three (3) Business Days
following the date on which all closing conditions have been satisfied or
waived, or such other date as Seller and Purchaser may mutually agree in
writing, and upon which the Closing shall occur.
Code. Internal Revenue Code of 1986, as it may be amended from time
to time.
Contracts. All contracts, leases, subleases, arrangements,
commitments and other agreements of Seller relating to the Business or Purchased
Assets, including, without limitation, all customer agreements, vendor
agreements, purchase orders, installation and maintenance agreements, computer
software licenses, hardware lease or rental agreements.
Disclosing Party. As defined in Section 5.10.
Disputed Items Notice. As defined in Section 8.5.
Employees. As defined in Section 5.12.
Employee Benefit Plan. Any employee benefit plan within the meaning
of Section 3(3) of ERISA which (a) is maintained for employees of Seller or any
of its ERISA Affiliates or (b) has at any time within the preceding six (6)
years been maintained for employees of Seller or any current or former ERISA
Affiliates, and any bonus or other incentive compensation, deferred
compensation, salary continuation, sick or disability pay, severance, stock
award, stock option, stock purchase, tuition assistance, vacation, vacation pay
or other benefit plan or arrangement, and each employment, termination or other
compensation
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arrangement or agreement, in each case with respect to current or former
employees or consultants of or to Seller or any ERISA Affiliate, and under which
Seller or any ERISA Affiliate could reasonably be expected to have any
liability.
Employment Agreement. As defined in Section 6.1.
Environmental Claims. As defined in Section 3.22.
Environmental Laws. As defined in Section 3.22.
Environmental Reports. As defined in Section 1.3.
Equipment and Improvements. All facilities and structures,
buildings, installations, fixtures, improvements, betterments, additions, spare
parts, stores, supplies, fuel and lubes, machinery, equipment, cranes,
forklifts, platforms, vehicles, trucks, chassis, generators, containers, spare
tires and parts, tools, appliances, furniture, office furniture, fixtures,
office supplies and office equipment, computers, computer terminals and
printers, computer software, telephone systems, telecopiers and photocopiers,
and other tangible personal property of every kind and description, which are
owned or leased by Seller, or are utilized in connection with Seller's operation
other than such assets located at 000 Xxxxxxxxxxxxx Xxxxx, Xxxxxxxxxxxxx, Xxx
Xxxx.
ERISA. The Employee Retirement Income Security Act of 1974, as it
may be amended from time to time, and the regulations promulgated thereunder.
ERISA Affiliate. Any corporation, partnership or trade or business
which is a member of a group that includes Seller and is treated as a single
employer within the meaning of Section 414(b), (c), (m) or (o) of the Code.
Escrow Agent. As defined in Section 1.2.
Escrow Agreement. As defined in Section 10.13.
Escrow Amount. As defined in Section 1.2(a).
Estimated Purchase Price Certificate. As defined in Section 5.7.
Excluded Liabilities. As defined in Section 1.3.
FDA. The Federal Food and Drug Administration.
Final Purchase Price. Forty-Four Million Dollars ($44,000,000)
subject to adjustment as provided for in Section 1.2(a) as determined in
accordance with Section 8.5.
Final Purchase Price Certificate. As defined in Section 8.5.
Financial Statements. The financial statements of Seller for the
fiscal years ended on September 30, 1999, 2000, and 2001, together with the
notes thereto, which are
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included in the consolidated financial statements of FEI Enterprises, Ltd., in
the case of the fiscal years ended on September 30, 1999 and 2000, and in the
consolidated financial statements of FEI Shares, Inc., in the case of the fiscal
year ended September 30, 2001, each audited by Ernst & Young LLP, independent
certified public accountants, and accompanied by the opinion of such accountants
relating to such statements.
Food and Drug Laws. The Federal Food, Drug, and Cosmetic Act of
1938, as amended, and all similar state, local, and foreign laws or ordinances.
GAAP. Generally accepted accounting principles.
Xxxxx Agreement. The Subsublease Agreement dated January 7, 1996
between Seller and Xxxxx Advisors L.L.C.
Hazardous Substance. As defined in Section 3.22.
Indemnified Party. As defined in Section 10.7.
Indemnifying Party. As defined in Section 10.7.
Indemnity Basket. As defined in Section 10.3.
Indemnity Cap. As defined in Section 10.3.
Inventories. All of Seller's raw materials, packaging, service
parts, supplies, work-in-process and finished goods and any and all other
inventories of Seller, plus any replacements for or additions to such
inventories acquired on or before the Closing Date, and minus any items of
inventory consumed, sold or otherwise disposed of in the Ordinary Course of
Business by Seller on or before the Closing Date.
IRS. Internal Revenue Service.
Law. Any law, statute, regulation, rule, ordinance, requirement,
announcement or other binding action or requirement of an Authority.
Leased Real Property. The parcels of land more fully described on
Schedule 3.6 under the heading "Leased Real Property," together with all rights
and privileges under such leases (hereinafter referred to collectively as the
"Real Property Leases") to the real property subject to such leases.
Legal Provisions. As defined in Section 3.1.
Lien. Any lien (statutory or other), mortgage, pledge,
hypothecation, assignment, deposit arrangement, encumbrance or preference,
priority or security agreement or preferential arrangement of any kind or nature
whatsoever (including, without limitation, the interest of a vendor or lessor
under any conditional sale, capitalized lease or other title retention
agreement).
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Milestone Payments. As provided for in Article 6.2.1 of the Schering
Agreement.
Mitsubishi-Tokyo Agreement. The Material Transfer Agreement dated as
of November 20, 2000 by and between Mitsubishi-Tokyo Pharmaceuticals, Inc. and
Seller.
Most Recent Balance Sheet. The balance sheet of Seller dated
December 31, 2001.
Most Recent Balance Sheet Date. December 31, 2001.
Multiemployer Plan. A "multiemployer plan" as defined in Section
4001(a)(3) of ERISA to which Seller or any ERISA Affiliate is making, or is
accruing an obligation to make, contributions or has made, or been obligated to
make, contributions within the preceding six (6) years.
Non-Competition Agreement. As defined in Section 6.1.
Nonconsenting Third Party. As defined in Section 5.17.
Order. Any decree, order, judgment, writ, award, injunction,
stipulation or consent of or by an Authority.
Ordinary Course of Business. The ordinary course of business of
Seller, in accordance with past custom and practice (including, without
limitation, with respect to quantity and frequency).
PBGC. The Pension Benefit Guaranty Corporation.
Pending Claims. As defined in Section 10.13.
Pension Plan. At any time an employee pension benefit plan that is
covered by Title IV of ERISA or subject to the minimum funding standards under
Section 412 of the Code and is maintained either: (i) by Seller or any ERISA
Affiliate or (ii) pursuant to a collective bargaining agreement or any other
arrangement under which more than one employer makes contributions and, with
respect to either (i) or (ii), Seller or any ERISA Affiliate is then making or
accruing an obligation to make contributions or has within the preceding six (6)
plan years made contributions.
Permits. As defined in Section 3.26.
Person. Any natural person, corporation, limited liability company,
partnership, firm, joint venture, joint-stock company, trust, association,
unincorporated entity or organization of any kind, Authority or other entity of
any kind.
Population. Population Council, Inc., a New York not-for-profit
corporation.
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Population Council Agreement. The Joint Development and Supply
Agreement dated as of October 31, 1994 among The Population Council, Inc., FEI
Enterprises, Ltd., FEI Products, Inc. and FEI Technologies, Inc. (n/k/a Enhance
Pharmaceuticals, Inc.)
Purchase Price. As defined in Section 1.2.
Purchased Assets. The Business and all assets, rights and properties
owned by Seller on the Closing Date, whether or not carried and reflected on the
books of Seller (excluding the Retained Assets), including, but not limited to,
the following:
(a) all Accounts Receivable;
(b) all Unbilled Reimbursable Expenses;
(c) all deposits (including, without limitation, deposits on capital
expenditures) and prepaid expenses, other than prepaid insurance premiums
and prepaid taxes;
(d) the Inventories;
(e) the Equipment and Improvements;
(f) the Real Property Leases;
(g) the Assumed Contracts;
(h) all of the following intellectual property: all trade names
(including the name "Enhance" and any similar names used by Seller),
trademarks, trademark registrations, trademark applications, service
marks, service xxxx registrations, service xxxx applications; all
copyrights, copyright registrations, copyright applications; all patent
rights (including, without limitation, issued patents, applications,
divisions, continuations and continuations-in-part, reissues, patents of
addition, utility models and inventors' certificates); all licenses with
respect to any of the foregoing; all trade secrets, proprietary
manufacturing information and know-how; all inventions, inventors' notes,
drawings and designs; and, all customer and vendor lists and the goodwill
associated with any of the foregoing;
(i) any Permits and licenses of Seller to the extent any of the same
are transferable or assignable to Purchaser;
(j) choses in action, claims and causes of action or rights of
recovery or set-off of every kind and character, in each case only to the
extent related to the Purchased Assets or the Assumed Liabilities;
(k) all of Seller's files, papers, documents and records relating to
the Business, and all other miscellaneous assets of Seller relating to the
Business wherever located, including, without limitation, credit, sales
and accounting records, price sheets, catalogues and sales literature,
books, processes, formulae, manufacturing data,
9
advertising material, stationery, office supplies, forms, catalogues,
manuals, correspondence, production records, employment records and any
other information reduced to writing relating to the Business of Seller;
and
(l) the Business of Seller as a going concern.
Anything to the contrary notwithstanding, neither the term "Purchased Assets"
nor any of the defined asset groups nominally comprising "Purchased Assets"
shall include any asset specifically referred to in Section 1.4 above; provided,
however, that for purposes of this Agreement, the term "Purchased Assets" shall
mean all of the goodwill, assets, properties and rights of every nature, kind
and description, whether tangible or intangible, real, personal or mixed,
wherever located and whether or not carried or reflected on the books and
records of the Seller, which are used in, or which were acquired in connection
with, the operation of the Business, excepting only the Retained Assets and any
of the above which relate exclusively to the Retained Assets.
Purchaser. As defined in the heading hereto.
Purchaser Losses. As defined in Section 10.2.
Real Property. The Leased Real Property.
Real Property Leases. As defined in the definition of Leased Real
Property.
Release. As defined in Section 3.22.
Resolved Claims. As defined in Section 10.13.
Retained Assets. As defined in Section 1.4.
Schering. Schering Aktiengesellschaft, a German corporation.
Schering Agreement. The Product Development and Product License
Agreement between Seller and Schering dated as of June 5, 2001.
Seller. As defined in the heading hereto.
Seller Parties. As defined in Section 5.9.
Subsidiary. A Subsidiary of any Person means (i) a corporation more
than 50% of the combined voting power of the outstanding stock of which is
owned, directly or indirectly, by such Person or by one or more other
Subsidiaries of such Person or by such Person and one or more Subsidiaries
thereof, or (ii) any other Person (other than a corporation) in which such
Person, or one or more other Subsidiaries of such Person or such Person and one
or more other Subsidiaries thereof, directly or indirectly, has the power to
direct the policies, management and affairs thereof.
Tail Insurance. As defined in Section 6.1.
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Taxes. As defined in Section 3.24.
Third-Party Claim. As defined in Section 10.7.
Third-Party Notice. As defined in Section 10.7.
Time Covenant. As defined in Section 5.9.
Unbilled Reimbursable Expenses. As of the Closing Date, the sum of
all expenses (as calculated in accordance with past practices consistently
applied) of Seller not then invoiced by Seller to Schering for which Schering is
obligated to reimburse Seller pursuant to the Schering Agreement.
Uncontested Claims. As defined in Section 10.13.
2.3 Interpretation. Unless otherwise expressly provided or unless the
context requires otherwise, (a) all references in this Agreement to Articles,
Sections, Schedules and Exhibits shall mean and refer to Articles, Sections,
Schedules and Exhibits of this Agreement; (b) all references to statutes and
related regulations shall include all amendments of the same and any successor
or replacement statutes and regulations; (c) words using the singular or plural
number also shall include the plural and singular number, respectively; (d)
references to "hereof," "herein," "hereby" and similar terms shall refer to this
entire Agreement (including the Schedules and Exhibits hereto); and (e)
references to any Person shall be deemed to mean and include the successors and
permitted assigns of such Person (or, in the case of an Authority, Persons
succeeding to the relevant functions of such Person).
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER
As an inducement to Purchaser to enter into and perform this Agreement,
and in consideration of the covenants of Purchaser contained herein, Seller
represents and warrants to Purchaser (which representations and warranties shall
survive the Closing (subject to Section 10.1) regardless of any examinations,
inspections, audits and other investigations Purchaser has heretofore made, or
may hereafter make, with respect to such representations and warranties) as
follows:
3.1 Status of Seller; Enforceability; Conflicts; Consents.
(a) Seller is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware. Seller has full corporate
power and authority and possesses all governmental franchises, licenses,
permits, authorizations and approvals necessary to enable it to use its name and
to own, lease or otherwise hold its properties and assets and to carry on its
business as presently conducted, except where the failure to possess any such
franchise, license, permit, authorization or approval would not have a material
adverse effect on Seller or the Business. Seller is duly qualified and in good
standing to do business in each jurisdiction in which the nature of its business
or the ownership, leasing or holding of its
11
properties makes such qualification necessary, except where the failure to be so
duly qualified and in good standing would not have a material adverse effect on
Seller or the Business. Seller has no Subsidiaries.
(b) Seller has the requisite power and authority to execute and
deliver this Agreement and to perform its obligations hereunder. The execution
and delivery by Seller of this Agreement, and the performance by Seller of its
obligations hereunder, have been duly and validly authorized and approved by all
necessary action on the part of Seller.
(c) This Agreement is binding upon, and enforceable against, Seller
in accordance with its terms, subject, as to enforcement, to bankruptcy,
insolvency, reorganization and other laws affecting creditors' rights generally
and by general principles of equity (whether in a proceeding at law or in
equity).
(d) Except as set forth on Schedule 3.1, neither the execution or
delivery of this Agreement by Seller nor the performance by Seller of its
obligations under this Agreement will (assuming the receipt of all consents and
approvals referred to in Section 3.25), conflict with or result in a breach of
any of the terms or provisions of, or constitute a default under, any contract,
lease, license, franchise, permit, indenture, mortgage, deed of trust, note
agreement or other agreement or instrument to which Seller is a party or is
bound or any judgment, order or decree, statute, law, ordinance, rule or
regulation applicable to Seller or the property or assets of Seller (including,
without limitation, the Purchased Assets) or the certificate of incorporation or
by-laws of Seller, or any applicable Law or Order (collectively, "Legal
Provisions"), except for conflicts, breaches or defaults which would not have a
material adverse effect on Seller or the Business.
(e) No consent, approval, license, Permit, Order or authorization
of, or registration, declaration or filing with, any court, administrative
agency or commission or other governmental authority or instrumentality,
domestic or foreign, is required to be obtained or made by or with respect to
Seller in connection with (i) the execution and delivery of this Agreement or
the consummation of the transactions contemplated hereby, or (ii) the conduct by
Seller of its business following the Closing as conducted on the date hereof
other than (A) the consents and approvals referred to in Section 3.25, (B) those
that may be required solely by reason of Purchaser's (as opposed to any other
third party's) participation in the transactions contemplated hereby, and (C)
such other consents or approvals the failure of which to obtain would not have a
material adverse effect on Purchaser or the ability of any party to consummate
the transactions contemplated hereby.
(f) Seller has delivered to Purchaser true and complete copies of
its certificate of incorporation and by-laws, as amended to date.
3.2 Ownership of Seller.
(a) The sole shareholders of Seller are the Persons set forth on
Schedule 3.2 and each such shareholder is the registered and beneficial owner of
the number of shares set forth opposite such Person's name free and clear of all
Liens of any nature whatsoever; and each such shareholder has the sole right to
vote and to sell the shares owned by such shareholder.
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(b) There are no outstanding warrants, options, agreements,
convertible or exchangeable securities, phantom stock or other commitments
pursuant to which Seller is or may become obligated to issue, sell, purchase,
return or redeem any shares of capital stock or other securities of Seller and
no equity securities of Seller are reserved for issuance for any purpose.
3.3 Financial Statements. The Financial Statements have been prepared in
accordance with GAAP, consistently applied during the periods covered thereby,
fairly present in all material respects the financial condition and the results
of operations for the periods covered thereby, and are in accordance with the
books and records of Seller. Seller has provided Purchaser with the Financial
Statements and the Most Recent Balance Sheet.
3.4 Undisclosed Liabilities. On the Most Recent Balance Sheet Date, Seller
had no debts, liabilities, Liens, claims, encumbrances or other obligations of
any nature (whether accrued, absolute, contingent or otherwise) of the type
which should be reflected in balance sheets (including the notes thereto)
prepared in accordance with GAAP consistently applied in accordance with the
prior Financial Statements of Seller, which were not disclosed, reflected or
reserved against on the Financial Statements or the Most Recent Balance Sheet;
and, except for liabilities which have been incurred since the Most Recent
Balance Sheet Date in the Ordinary Course of Business, since the Most Recent
Balance Sheet Date Seller has not incurred any liability of any nature (whether
accrued, absolute, contingent or otherwise) of the type which should be
reflected on the Most Recent Balance Sheet prepared in accordance with GAAP
consistently applied in accordance with the Financial Statements.
3.5 Title to Properties. Except as set forth on Schedule 3.5, Seller has
good and marketable title to all of the assets and properties reflected on the
Most Recent Balance Sheet or used in the Business constituting Purchased Assets
free and clear of all Liens of any nature.
3.6 Real Property.
(a) Schedule 3.6 contains accurate descriptions of each parcel of
Real Property leased or occupied under Permit by Seller. No other Real Property
is used in the Business or occupied by Seller. The Seller owns no real property.
All of the Real Property Leases are valid and in full force and effect, and
there does not exist any default or event that with notice or lapse of time, or
both, would constitute a default by Seller under any of the Real Property
Leases, and to the knowledge of Seller, there does not exist any default or
event that with notice or lapse of time, or both, would constitute a default by
any other party under any of the Real Property Leases.
(b) All the buildings, fixtures and leasehold improvements used by
Seller in the Business are located on the Real Property and, to Seller's
knowledge, none of such buildings, fixtures or improvements encroach on any
adjoining property owned by others or public rights of way. Each parcel of Real
Property abuts on at least one side a public street or road in a manner so as to
permit reasonable, customary and adequate vehicular and pedestrian ingress,
egress and access to such parcel, or has adequate easements across intervening
property to permit reasonable, customary and adequate vehicular and pedestrian
ingress, egress and access to such parcel from a public street or road. There
are no restrictions on entrance to or exit from the Real
13
Property to adjacent public streets and, to Seller's knowledge, no conditions
which will result in the termination of the present access from the Real
Property to existing highways or roads.
(c) Seller has good and marketable leasehold interests in the Leased
Real Property, free and clear of all Liens, except for Liens for taxes not yet
due and payable and any Liens on the underlying fee interest in the Leased Real
Property. Subject to the Real Property Leases, Seller has enjoyed the continuous
and uninterrupted quiet possession, use and operation of the Real Property
without any material complaint or objection by any Person.
3.7 Equipment and Improvements. The Equipment and Improvements located on
the Real Property are in compliance with all applicable Laws and Orders, and are
in reasonable and serviceable condition and repair, normal wear and tear
excepted, except for any such non-compliance which would not have a material
adverse effect on Seller or the Business. Neither the Real Property nor the use
or occupancy thereof by Seller violates in any way any applicable Laws, Orders,
Permits, covenants, conditions and restrictions, whether federal, state, local
or, to Seller's knowledge, private, except for any such violation which would
not have a material adverse effect on Seller or the Business.
3.8 No Commitments. There are no outstanding, defaulted or unsatisfied
contracts, commitments, agreements or understandings which have been made to,
with or for the benefit of any utility companies, school districts, water
districts, improvement districts or other Authorities which could reasonably be
expected to impose any obligation, liability or condition on Seller or, to the
knowledge of Seller, the owner of any Leased Real Property to grant any
easements or to make any payments, contributions or dedications of money or land
or to construct, install or maintain or to contribute to the construction,
installation or maintenance of any improvements of a public or private nature,
whether on or off the Real Property.
3.9 Continued Use of Real Property. There are no claims, governmental
investigations, litigation or proceedings which are pending against Seller, or,
to the knowledge of Seller, threatened against Seller, or, to the knowledge of
Seller, pending or threatened against the owner of any Leased Real Property
which could reasonably be expected to affect the continued use of the Real
Property in substantially the same manner as presently used by Seller.
3.10 Real Estate and Personal Property Taxes; Assessments.
(a) All obligations of Seller with respect to real estate taxes and
personal property taxes and assessments which may be due and payable with
respect to the Purchased Assets have been paid.
(b) Seller has not received any notice of any special tax assessment
affecting any property owned or leased by it, and, to Seller's knowledge, no
such assessments are pending or threatened.
3.11 Inventory. Seller owns no Inventory.
3.12 Accounts Receivable. The Accounts Receivable reflected on the Most
Recent Balance Sheet: (a) were acquired by Seller in the Ordinary Course of
Business and represent
14
fully completed bona fide transactions that require no further act on the part
of Seller to make such Accounts Receivable payable by the account debtors; (b)
except as reserved against on the Most Recent Balance Sheet, are not subject to
any claim, counterclaim, set-off or deduction and are fully collectible at the
face amounts thereof; (c) represent valid obligations owing to Seller by account
debtors that are not Affiliates of Seller, which are enforceable in accordance
with their respective terms; and (d) are owned by Seller free and clear of all
Liens.
3.13 Contracts. (a) Schedule 3.13 to this Agreement contains a complete
list of all material Contracts (including, without limitation, all Assumed
Contracts) entered into or agreed to by Seller or by which Seller is currently
bound and true and complete copies of such written Contracts have been provided
to Purchaser or its counsel. Identified with an asterisk on Schedule 3.13 are
those Contracts which contain a prohibition on assignment. All such Contracts
are valid and binding upon Seller, and to Seller's knowledge, the other parties
thereto except as limited by bankruptcy and insolvency laws and by other laws
affecting the rights of creditors generally. There is no default or event that
with notice or lapse of time, or both, would constitute a default by Seller
under any of such Contracts, and to the knowledge of Seller, there is no default
or event that with notice or lapse of time, or both, would constitute a default
by any other party under any of such Contracts. Seller has not received notice
that any party to any of such Contracts intends to cancel or terminate any of
such agreements or to exercise or not exercise any options under any of such
agreements. True, correct and complete copies (or, if oral, written summaries)
of each Contract have been delivered to Purchaser, except for purchase orders a
complete and accurate list of which is set forth on Schedule 3.13.
(b) The Assumed Contracts are adequate and appropriate for the
continued conduct of the Business as conducted in the Ordinary Course of
Business since January 1, 2001. The purchase commitments and other agreements
for the provision of raw materials for use in the manufacture of Business
products to be assumed by Purchaser will provide Purchaser with a supply of each
raw material necessary in such manufacture which is not materially excessive or
materially inadequate for the continued manufacture of such products in the
Ordinary Course of Business in the quantities in which they have been produced
since January 1, 2001.
3.14 Equity Interests. Seller does not directly or indirectly own any
capital stock of, or other equity interests in, any corporation, partnership,
joint venture or other entity.
3.15 Intellectual Property. Schedule 3.15 contains a true and complete
list and brief description of all patents, trademarks, service marks, trade
names, and copyrights (whether or not such trademarks, trade names, service
marks and copyrights are registered), and all pending applications therefor, if
any, owned by Seller or in which Seller has any rights or licenses. No other
patents, trademarks, trade names, service marks or copyrights are reasonably
necessary for the conduct of the Business in substantially the same manner as
presently operated by Seller. To Seller's knowledge, there is no infringement or
alleged infringement by any Person of any such trademark, service xxxx, trade
name, copyright or patent. Seller has not received any notice from any Person
alleging Seller is infringing upon, and, to Seller's knowledge, Seller has not
infringed and is not now infringing on, any trademark, service xxxx, trade name,
copyright or patent belonging to any other Person. Schedule 3.15 also contains a
true and complete list of all agreements between each employee of Seller and
Seller relating to confidential information of
15
Seller, including but not limited to patents, trademarks, service marks, trade
names, and copyrights, and the ownership of any intellectual property developed
by such employee under the scope of his employment.
3.16 Required Assets; Sufficiency of Assets. There are no significant
assets used or required by Seller in the conduct of the Business as presently
conducted by Seller that are not either owned by it or licensed or leased to it
and, in each case conveyed to Purchaser under this Agreement other than
insurance, working capital and those assets required to provide accounting
services for the Business. The Purchased Assets constitute all of the assets,
goodwill, properties and rights of every nature, kind and description, whether
tangible or intangible, real, personal or mixed, necessary to conduct the
Business in substantially the same manner as presently conducted by Seller other
than insurance, working capital and those assets required to provide accounting
services for the Business.
3.17 Suppliers. Schedule 3.17 sets forth the lists of all suppliers whose
supplies to Seller and the Business as presently conducted exceeded $25,000
during the most recent calendar year of Seller through and including February
28, 2002. During the period from January 1, 2001 through the date hereof, none
of such suppliers has canceled or substantially modified its agreement or
commitment with Seller to supply products or services (or threatened in writing
to do any of the foregoing). To the knowledge of Seller, the relationship of
Seller with each of such suppliers of Seller is a good commercial working
relationship. Seller has no knowledge that any such supplier intends to cancel
or otherwise substantially modify its relationship with Seller or limit
materially its services, supplies or materials to Seller either as a result of
the transactions contemplated hereby or otherwise, or has any pending or
threatened controversy with any Authority with respect to its relationship with
Seller, except for such controversy that would not have a material adverse
effect on Seller.
3.18 Personnel Identification and Compensation. Schedule 3.18 contains a
true and complete list of the names, titles and compensation of all current
officers, directors and employees of Seller whose compensation from Seller
exceeded $40,000.00 during the most recent calendar year of Seller.
3.19 Existing Employment Related Contracts. Schedule 3.19 contains a list
of all written and oral (with a short description thereof) arrangements or
contracts relating to employment, compensation, bonuses, severance, pension and
other related issues and collective bargaining agreements to which Seller is a
party or by which Seller is bound. All these contracts and arrangements are in
full force and effect, and neither Seller nor, to Seller's knowledge, any other
Person is in default under any such contract or arrangement. There have been no
claims of default and there are no facts or conditions which, with the passage
of time or upon notice, will result in a default by Seller, or to the knowledge
of Seller, any other Person, under these contracts or arrangements. There is no
pending or, to Seller's knowledge, threatened labor dispute, strike, or work
stoppage affecting Seller or the Business.
3.20 Compliance with Laws. Except as set forth in Schedule 3.21 and
subject to the provisions of Sections 3.22, 3.26, 3.27 and 3.30, Seller, all of
the products manufactured, tested, and/or distributed by the Seller, and the
Purchased Assets have complied with all, and are not in
16
violation of any, applicable Laws, Permits and Orders (including, without
limitation, any applicable building, zoning, environmental protection, water
use, Food and Drug Laws and related regulations, occupational health and safety,
employment, disability rights or food service facilities law, ordinance, or
regulation) affecting Seller's properties, the operation of the Business, or the
Purchased Assets, except for any such non-compliance or violation which would
not have a material adverse effect on Seller or the Business. No material
capital expenditures are required for compliance with Laws by Seller in order to
conduct the Business as presently conducted by Seller.
3.21 Litigation. Except as set forth in Schedule 3.21, there are no suits,
actions, arbitrations, and legal, administrative and other proceedings and
governmental investigations, pending or, to Seller's knowledge, threatened,
against or, to Seller's knowledge, affecting Seller or the Business, involving
$25,000.00 or more in dispute or, if determined adversely to Seller, could
result in the expenditure or recovery of $25,000.00 or more by Seller in
connection therewith. None of the matters set forth in Schedule 3.21, if decided
adversely to Seller would result in a material adverse change, taken
individually or in the aggregate, to the Business or Seller. Seller is not
presently engaged in any legal action to recover moneys due to it or damages
sustained by it.
3.22 Environmental.
(a) Definitions. For purposes of this Agreement, the following terms
shall have the following meanings:
(i) The term "Environmental Law(s)" means each and every Law,
Order, Permit, or similar requirement of each and every Authority and
common law, pertaining to (A) the protection of human health, safety, the
environment, natural resources and wildlife or (B) the management,
manufacture, possession, presence, use, generation, transportation,
treatment, storage, disposal, Release, threatened Release, abatement,
removal, remediation or handling of, or exposure to, any Hazardous
Substance or (C) pollution, including without limitation, as amended,
CERCLA, the Solid Waste Disposal Act, 42 U.S.C.Section 6901 et seq., the
Clean Air Act, 42 U.S.C.Section 7401 et seq. and the Federal Water
Pollution Control Act, 33 U.S.C.Section 1251, et seq.
(ii) The term "Hazardous Substance" means any substance which
is (A) defined as a hazardous substance, hazardous material, hazardous
waste, pollutant or contaminant under any Environmental Laws, (B) a
petroleum hydrocarbon, including crude oil or any fraction thereof, (C)
hazardous, toxic, corrosive, flammable, explosive, infectious, radioactive
or carcinogenic or (D) regulated pursuant to any Environmental Laws.
(iii) The term "Release" means any spilling, leaking, pumping,
pouring, emitting, emptying, discharging, injecting, escaping, leaching,
dumping, or disposing into the environment (including without limitation
the abandonment or discarding of barrels, containers, and other
receptacles containing any Hazardous Substance).
17
(b) Compliance with Environmental Laws. Seller, the use by Seller of
the Real Property, and the Business have been and are in compliance in all
material respects with all applicable Environmental Laws, and there has been and
is no liability against Seller under any applicable Environmental Laws. The use
by Seller of any real property formerly owned or leased by Seller or otherwise
related to the Business was in compliance in all material respects with all
applicable Environmental Laws during Seller's period of ownership or operation.
Seller has no knowledge of any facts or circumstances concerning any alleged
violation or liability arising under any Environmental Law with respect to the
Real Property, the Business or any formerly owned or operated real property or
any use or condition thereof.
(c) No Release of Hazardous Substances. Except in accordance with
applicable Environmental Laws, there has been no Release or threatened Release
by Seller, or to Seller's knowledge, by any other Person of any Hazardous
Substance existing on, beneath or from the surface, subsurface, ground water,
sediment, rivers or other bodies of water associated with the Real Property, nor
is there or has there been any Release or threatened Release by Seller, or, to
the knowledge of Seller, by any other Person, of any Hazardous Substances on,
beneath from or in the vicinity of the Real Property currently occurring or, to
the knowledge of Seller, occurring at any time in the past.
(d) Permits. All Permits required by or issued pursuant to any
Environmental Law for the ownership, use or operation of the Real Property by
Seller or the Business have been obtained in a timely manner and are presently
maintained in full force and effect. Schedule 3.22 contains a true and complete
listing of all such Permits. The Real Property and the operations of Seller are
in material compliance with all terms and conditions of such Permits. Seller has
not received any notice or other communication and has no knowledge of any facts
or circumstances concerning any alleged violation of any such Permits.
(e) No Proceedings. There exists no Order, notice of violation, nor
any suit, claim, proceeding, citation, directive, summons, investigation,
information request or other notice pending or, to the knowledge of Seller,
threatened pursuant to any Environmental Law relating to (i) Seller's ownership,
lease, occupation or use of the Real Property, or any real property formerly
owned, leased, occupied or used by Seller or, to Seller's knowledge, any other
present or former owner, tenant, occupant or user of the Real Property, (ii) any
alleged violation of, or liability under, any Environmental Law by Seller, or
(iii) to Seller's knowledge, the suspected presence, Release or threatened
Release of any Hazardous Substance on, under, in or from the surface,
subsurface, groundwater, sediment, rivers or other bodies of water associated
with the Real Property, or any formerly owned, leased, occupied or used real
property nor does there exist any valid basis for any such Order, suit, claim,
proceeding, citation, directive, summons investigation, information request,
notice of violation, or other notice (collectively, the "Environmental Claims").
(f) No Tanks, Asbestos or PCB's. To Seller's knowledge, there are
and were no aboveground or underground storage tanks currently or formerly
located on the Real Property used or formerly used for the purpose of storing
any Hazardous Substance. There is no asbestos-containing building material on
the Real Property, and, to Seller's knowledge, no asbestos abatement or
remediation work has been performed on the Real Property. To Seller's
18
knowledge, there is no PCB-containing equipment or PCB-containing material
located on the Real Property.
(g) Documents. Seller has provided Purchaser with all environmental
assessment reports in its possession with respect to the Leased Real Property
and with copies of all Permits required to conduct the Business as presently
conducted by Seller.
3.23 Employee Benefit Plans.
(a) Schedule 3.23 contains a true and complete list of all Employee
Benefit Plans. There are no Multiemployer Plans. -------------
(b) All obligations of any nature under any Employee Benefit Plan
will constitute a Retained Liability, and Purchaser shall have no obligation or
duty with respect thereto.
3.24 Tax Matters.
(a) The term "Taxes" means all net income, capital gains, gross
income, gross receipts, sales, use, transfer, ad valorem, franchise, profits,
license, capital, withholding, payroll, employment, excise, goods and services,
severance, stamp, occupation, premium, property, assessments, or other
governmental charges of any kind whatsoever, together with any interest, fines
and any penalties, additions to tax or additional amounts incurred or accrued
under applicable federal, state, local or foreign tax law or assessed, charged
or imposed by any Authority, domestic or foreign; provided that any interest,
penalties, additions to tax or additional amounts that relate to Taxes for any
taxable period (including any portion of any taxable period ending on or before
the Closing Date) shall be deemed to be Taxes for such period, regardless of
when such items are incurred, accrued, assessed or charged. For the purposes of
this Section 3.24, Seller shall be deemed to include any predecessor to Seller,
or any Person from which Seller incurs a liability for Taxes as a result of
transferee liability, joint and several liability, or otherwise.
(b) Seller has duly and timely filed (and prior to the Closing Date
will duly and timely file) true, correct and complete tax returns, reports or
estimates, all prepared in accordance with applicable Laws, for all years and
periods (and portions thereof), for all jurisdictions (whether federal, state,
local or foreign) in which any such returns, reports or estimates were due, and
for all such returns, reports and estimates which are required to be filed by
any applicable Law on or prior to the Closing Date. All Taxes shown as due and
payable on such returns, reports and estimates have been paid (or will be paid
prior to the Closing), and there is no current liability for any Taxes due and
payable in connection with any such returns. Any charges, accruals and reserves
for Taxes provided for on the Financial Statements are adequate. There are no
existing Liens for Taxes upon any of the Purchased Assets. Seller has provided
to Purchaser copies of all federal, state and foreign tax returns filed by
Seller for the past three (3) years. All applicable sales and transfer taxes
with respect to the Purchased Assets, to the extent due, were paid when the
Purchased Assets were acquired by Seller.
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(c) Seller has: (i) withheld all required amounts from its
employees, agents, contractors and nonresidents and remitted such amounts to the
proper Authorities; (ii) paid all employer contributions and premiums required
to be remitted to proper Authorities; and (iii) filed all federal, state, local
and foreign returns and reports with respect to withholding taxes, and social
security and unemployment Taxes and premiums, all in compliance in all material
respects with the withholding provisions of the Code, or any prior provision of
the Code and other applicable Laws.
(d) None of the Purchased Assets is tax exempt use property under
Code Section 168(h). None of the Purchased Assets is property that Seller is
required to treat as being owned by any other Person pursuant to the safe harbor
lease provision of former Code Section 168(f)(8).
(e) No portion of the cost of any Purchased Assets was financed
directly or indirectly from the proceeds of any tax exempt state or local
government obligation described in Code Section 103(a).
(f) Seller has no (and has not previously had any) permanent
establishment in any foreign country and Seller does not engage (and has not
previously engaged) in a trade or business within the meaning of the Code
relating to the creation of a permanent establishment in any foreign country.
(g) Seller is not a foreign person within the meaning of Code
Section 1445. Neither the Code nor any other provision of Law requires Purchaser
to withhold any portion of the Purchase Price.
(h) Seller is not a partner in a partnership or joint venture that
could be treated as a partnership for federal income tax purposes.
(i) Except for consolidated group which includes or has included FEI
Enterprises, Ltd., FEI Shares, Inc., FEI Products, Inc. and Seller, Seller has
never been a member of any consolidated, combined or unitary group for federal,
state, local or foreign Tax purposes.
(j) The tax returns of Seller have not been audited for any tax
period ending after September 30, 1995 and there are no current proceedings by
or discussions with any Authority relating to any Taxes.
(k) Seller has not consented to the application of Code section
341(f).
3.25 Consents. Except as disclosed on Schedule 3.25, no consent, approval,
order or authorization of, or registration, declaration or filing with, any
Authority or any other Person is required to be obtained or made by Seller in
connection with the execution and delivery of this Agreement or the performance
by Seller of its obligations hereunder other than consents which have been
obtained and disclosed on Schedule 3.25.
3.26 Licenses and Permits. Subject to the provisions of Section 3.22 and
Section 3.30, Schedule 3.26 lists and describes all qualifications,
registrations, filings, privileges, franchises,
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immunities, licenses, permits, authorizations and approvals of Authorities which
are used or required in order for Seller to own and/or operate the Business,
including, without limitation, all certificates of occupancy and certificates,
licenses and permits relating to building, safety, Environmental Laws, Food and
Drug Laws, fire and health (collectively, the "Permits"), other than any such
qualification, registration, filing, privilege, franchise, immunity, license,
permit, authorization and approval of Authority where the failure of Seller to
so possess such qualification, registration, filing, privilege, franchise,
immunity, license, permit, authorization and approval of Authority would not
have a material adverse effect on Seller or the Business. Except as set forth in
Schedule 3.26, each Permit is in good standing, valid and subsisting, and in
full force and effect in accordance with its terms.
3.27 Occupational Safety and Health. Except as set forth on Schedule 3.27,
Seller has not received any notice, citation, claim, assessment or proposed
assessment as to, or alleging, any violation of any federal, state or local
occupational safety and health laws by it, nor has Seller, to Seller's
knowledge, been subject to any investigation relating to the Business by any
federal, state or local occupational safety and health agency within the three
(3) years preceding the date hereof, and no such violation exists, other than
any such violation which would not have a material adverse effect on Seller or
the Business. Seller is not a party to any pending dispute with respect to
compliance with any federal, state or local occupational safety and health law.
3.28 Insurance. Schedule 3.28 contains a list of the insurance policies,
other than those related to employee benefits, that Seller currently maintains
with respect to the Business and its assets and properties and employees as of
the date hereof, each of which is in full force and effect and a complete and
correct copy of each has been delivered to Purchaser. All insurance premiums
currently due with respect to such policies have been paid and Seller is not
otherwise in default with respect to any such policy, nor has Seller failed to
give any notice or present any claim under any such policy in a due and timely
manner. Seller has not received notice of cancellation or non-renewal of any
such policy. Such policies are sufficient for compliance with all requirements
of law and all agreements to which Seller is a party. All obligations and claims
of any nature pertaining to insurance policies, including Employment Practices
Liability, Fiduciary and Directors' and Officers' Liability, relating to actions
prior to the Closing Date, will constitute a retained liability of Seller, and
Purchaser shall have no obligation or duty with respect thereto.
3.29 Certain Transactions. All purchases and sales or other transactions,
if any, between Seller, on the one hand, and any officer, director or employee
thereof or Affiliate thereof, on the other hand, within the three (3) years
immediately preceding the date hereof have been made on the basis of prevailing
market rates and terms such that, from the perspective of Seller, all such
transactions have been made on terms no less favorable than those which would
have been available from unrelated third parties. Except as set forth on
Schedule 3.29, neither any officer, director nor employee of Seller, nor any
spouse, child or other relative of any of such persons, owns, or has any
interest, directly or indirectly, in any of the real or personal property owned
by or leased to Seller or any copyrights, patents, trademarks, trade names or
trade secrets owned or licensed by Seller.
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3.30 Regulatory Compliance.
(a) Seller has not received any major adverse written notice within
the past two years from the FDA or any other Authority (i) regarding the
approvability or approval of a Permit concerning, or the labeling of, any
products of Seller or (ii) alleging any violation of any Legal Provision by
Seller which, in the case of either clause (i) or (ii), individually or in the
aggregate has had or would have a material adverse effect on Seller or the
Purchased Assets. Schedule 3.30 sets forth (i) all of Seller's regulatory
correspondence relating to the Food and Drug Laws received from the FDA or any
other similar Authority over the last five years and (ii) all of the Permits
issued to Seller by the FDA or any other similar Authority.
(b) Except as described in Schedule 3.30, no Permit, permission for
clinical testing, or product of Seller has been denied, placed on hold,
withdrawn, suspended or discontinued as a result of any action by the FDA or any
other similar Authority, by Seller or, to the knowledge of Seller, by any
licensee or customer of any product of Seller, in the United States or outside
the United States (whether voluntarily or otherwise), in each case within the
past five years. No proceedings in the United States or outside of the United
States of which Seller has knowledge (whether completed or pending) seeking the
withdrawal, suspension or seizure of any Permit, or product of Seller are
pending against Seller, Seller's products, or, to the knowledge of Seller, any
licensee or customer of any product of Seller, nor have any such proceedings
been pending at any prior time, in each case which has had or would have a
material adverse effect on Seller or the Purchased Assets.
(c) For products that Seller is currently manufacturing, testing, or
subjecting to clinical evaluation, each of Seller's applicable Permits under the
Food and Drug Laws is complete, accurate, and up to date in all material
respects, and the subject of each such Permit can be effectively, efficiently,
and legally manufactured, tested, and clinically evaluated in material
compliance with the current version of each applicable Permit.
(d) Except for instances that have not had and would not have a
material adverse effect on Seller, (i) to the knowledge of Seller, during the
last five years no officer, employee or agent of Seller, has made an untrue
statement of a material fact or fraudulent statement to the FDA or any other
Authority, failed to disclose a material fact required to be disclosed to the
FDA or any other Authority, or committed an act, made a statement, or failed to
make a statement that, at the time such disclosure was made, could reasonably be
expected to provide a basis for the FDA or any other Authority to invoke with
respect to Seller its policy respecting "Fraud, Untrue Statements of Material
Facts, Bribery, and Illegal Gratuities", set forth in 56 Fed. Reg. 46191
(September 10, 1991) or any similar policy, and (ii) nor has, to the knowledge
of Seller, any officer, Employee or agent of Seller, has been convicted of any
crime or engaged in any conduct for which debarment is mandated by 21 U.S.C.
Section 335a(a) or any similar Legal Provision or permitted by 21 U.S.C. Section
335a(b) or any similar Legal Provision.
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(e) Seller has not received any written notice within the past two
years that the FDA or any other Authority has commenced, or overtly threatened
to initiate, any action to enjoin production or clinical evaluation of any
product included within the Purchased Assets.
3.31 Conduct of Business Since Most Recent Balance Sheet Date. Except as
set forth on Schedule 3.31, since the Most Recent Balance Sheet Date:
(a) the business of Seller has been conducted only in the Ordinary
Course of Business;
(b) Seller has neither declared any dividends or distributions nor
issued or redeemed any equity securities nor made any payments to any of
its shareholders or any Affiliate thereof (other than compensation and
expense reimbursement payments made in the Ordinary Course of Business
consistent with past practices);
(c) except for supplies purchased, sold or otherwise disposed of in
the Ordinary Course of the Business, Seller has not purchased, sold,
leased, mortgaged, pledged or otherwise acquired or disposed of any
properties or assets;
(d) Seller has not changed the terms of any receivables or cancelled
any debts owed to Seller or entered into, changed, modified, cancelled or
terminated any agreement or contract involving the payment by (or to)
Seller of more than $25,000 in any twelve- month period other than in the
Ordinary Course of Business;
(e) Seller has not sustained or incurred any loss or damage (whether
or not insured against) on account of fire, flood, accident or other
calamity;
(f) Seller has not increased the compensation of any employee,
officer, director or consultant other than in the Ordinary Course of
Business consistent with past practice and has not granted any unusual or
extraordinary bonuses, benefits or other forms of direct or indirect
compensation to any employee, officer, director or consultant;
(g) Seller has not adopted, increased, terminated, amended or
otherwise modified any plan for the benefit of any employees other than in
the Ordinary Course of Business consistent with past practice.
(h) there has been no material adverse change in or with respect to
the condition (financial or otherwise), operations, business, prospects,
rights, properties, assets or liabilities of Seller;
(i) Seller has not changed any accounting methods or practices
(including, without limitation, any change in depreciation or amortization
policies or rates); and
(j) Seller has not agreed to take any of the actions described in
paragraphs (b), (c), (d), (f), (g) or (i) above and Seller has not taken
any other action proscribed by Section 5.1.
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3.32 Broker's or Consultant's Fees. Seller has not dealt with any broker,
finder or similar consultant other than Xxxxxxx & Company and Context Capital
Group in connection with any of the transactions contemplated by this Agreement
and no other Person is entitled to any commission or finder's fee in connection
with the sale of the Purchased Assets to Purchaser. Seller shall pay any
compensation and expenses owing to Xxxxxxx & Company and Context Capital Group
arising out of the transactions contemplated hereby.
3.33 Claims Against Insiders. To the knowledge of Seller, Seller does not
have any claim against, debt owing by, or cause of action against, any
shareholder, officer or director of Seller.
3.34 Disclosure. None of the representations and warranties made by Seller
in this Agreement contains or will contain any untrue statement of a material
fact, or omits to state any material fact necessary to make the statements
contained in this Agreement not misleading. There is no fact known to Seller
which (so far as Seller reasonably foresees) materially adversely affects, or in
the future may materially adversely affect, individually or in the aggregate,
the condition (financial or otherwise), assets, liabilities, business,
operations or prospects of Seller or the ability of Seller to consummate the
transactions contemplated hereby that has not been set forth herein or
heretofore communicated to Purchaser in writing pursuant hereto.
3.35 No Other Representations and Warranties. Except for the
representations and warranties contained in this agreement, Seller makes no
other representation and warranty as to any fact or matter, and no party shall
be entitled to rely upon any such other representation or warranty.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PURCHASER
As an inducement to Seller to enter into and perform this Agreement, and
in consideration of the covenants of Seller contained herein, Purchaser
represents and warrants to Seller (which representations and warranties shall
survive the Closing (subject to Section 10.1) regardless of any examinations,
inspections, audits and other investigations Seller have heretofore made, or may
hereafter make, with respect to such representations and warranties) as follows:
4.1 Status of Purchaser. Purchaser is a corporation duly organized,
validly existing and in good standing under the laws of the State of New York
and, at or prior to the Closing, will be duly qualified to do business in each
state where Seller is now qualified to do business. Purchaser has full corporate
power and authority and possesses all governmental franchises, licenses,
permits, authorizations and approvals necessary to enable it to use its name and
to own, lease or otherwise hold its properties and assets and to carry on its
business as presently conducted, except where the failure to possess any such
franchise, license, permit, authorization or approval would not have a material
adverse effect on Purchaser.
4.2 Authority of Purchaser. Purchaser has the requisite power and
authority to execute and deliver this Agreement and to perform its obligations
hereunder. Neither the
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execution or delivery of this Agreement by Purchaser nor the performance by
Purchaser of its obligations under this Agreement will conflict with or result
in a breach of any of the terms or provisions of, or constitute a default under,
any contract, lease, license, franchise, permit, indenture, mortgage, deed of
trust, note agreement or other agreement or instrument to which Purchaser is a
party or is bound, its certificate of incorporation or by-laws or any applicable
Law or Order.
4.3 Due Authorization. The execution and delivery by Purchaser of this
Agreement, and the performance by Purchaser of its obligations hereunder, have
been duly and validly authorized and approved by all necessary action on the
part of Purchaser.
4.4 Enforceability. This Agreement is binding upon, and enforceable
against, Purchaser in accordance with its terms, subject, as to enforcement, to
bankruptcy, insolvency, reorganization and other laws affecting creditors'
rights generally and by principles of equity (whether in a proceeding at law or
in equity).
4.5 Consents. No consent, approval, order or authorization of, or
registration, declaration or filing with, any Authority or any other Person is
required to be obtained or made by Purchaser in connection with its execution
and delivery of this Agreement or the performance by it of its obligations
hereunder.
4.6 Broker's or Consultant's Fees. Purchaser has not dealt with any
broker, finder or consultant other than Banc of America Securities LLC in
connection with any of the transactions contemplated by this Agreement, and no
other Person is entitled to any commission or finder's fee in connection with
the sale of the Purchased Assets to Purchaser. Purchaser shall pay any
compensation and expenses owing to Banc of America Securities LLC arising out of
the transactions contemplated hereby.
ARTICLE V
PRE-CLOSING COVENANTS
Seller and Purchaser covenant and agree that from the date hereof through
and including the Closing Date:
5.1 Ordinary Conduct. (a) From the date hereof to the Closing, Seller
shall conduct the Business in the Ordinary Course of Business. Seller shall use
all commercially reasonable efforts to preserve and protect its goodwill,
rights, properties, assets and business, to keep available to itself and
Purchaser the services of its employees, and to preserve and protect its
relationships with its employees, officers, advertisers, suppliers, customers,
creditors and others having business relationships with it. In addition, from
the date hereof to the Closing, Seller shall not do any of the following without
the prior written consent of Purchaser, such consent not to be unreasonably
withheld or unreasonably delayed:
(i) fail to continue to conduct the Business of Seller in conformity
with the representations and warranties set forth in Section 3.31;
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(ii) amend its certificate of incorporation or by-laws;
(iii) incur any liabilities, obligations or indebtedness for
borrowed money or guarantee any such liabilities, obligations or
indebtedness, or increase (other than increases resulting from the
calculation of reserves in the Ordinary Course of Business), or experience
any change in any assumptions underlying or methods of calculating, any
bad debt, contingency or other reserves;
(iv) permit, allow or suffer any of its assets, including, without
limitation, the Purchased Assets, to be subjected to any mortgage, pledge,
Lien, encumbrance, restriction or charge of any kind which is not
disclosed in this Agreement;
(v) pay, discharge or satisfy any claims, encumbrances, liabilities
or obligations (whether absolute, accrued, contingent or otherwise and
whether due or to become due) other than the payment when due in the
Ordinary Course of Business of liabilities and obligations reflected or
reserved against in the Most Recent Balance Sheet or incurred in the
Ordinary Course of Business since the date thereof;
(vi) pay, lend or advance any amount to, or sell, transfer or lease
any of the Purchased Assets to, or enter into any agreement or arrangement
with, any of the officers, directors or equity owners of Seller or any of
its Affiliates;
(vii) acquire or agree to acquire by merging or consolidating with,
or by purchasing a substantial portion of the assets of, or by any other
manner, any business or any corporation, partnership, association or other
business organization or division thereof or otherwise acquire or agree to
acquire any assets (other than Inventory or other assets acquired in the
Ordinary Course of Business);
(viii) enter into any Contract, except for Contracts entered into in
the Ordinary Course of Business and individually in an amount not in
excess of $10,000.00 (other than any confidentiality, non-disclosure,
non-competition or similar Contract); provided, however, that Seller shall
have the right to enter into Contracts in the Ordinary Course of Business
and individually in an amount in excess of $10,000.00 (other than any
confidentiality, non-disclosure, non-competition or similar Contract) only
if Purchaser does not object to Seller's entering into such Contracts
within three Business Days following Purchaser's receipt from Seller of
the written notification of Seller's intention to enter into such
Contracts;
(ix) make, or commit to make, any capital expenditures other than
those set forth on Exhibit C hereto and not in excess of the amounts set
forth on such Exhibit;
(x) fail to pay any account payable when due in accordance with its
terms unless contested by Seller in good faith;
(xi) make any other material change in the Business or the operation
of Seller; or
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(xii) agree, whether in writing or otherwise, to do any of the
foregoing.
(b) From the date hereof to the Closing, Seller shall not enter into
any licensing or similar arrangement with respect to or affecting the Business
or the Purchased Assets.
(c) From the date hereof to the Closing, subject to the terms and
conditions of this Agreement, Seller shall use its reasonable efforts (i) to
preserve the Purchased Assets and the Business intact, (ii) to keep available to
Purchaser the services of the employees of the Business, and (iii) to preserve
the goodwill of customers and others having business relations with Seller to
the extent such business relations relate to the Purchased Assets.
5.2 Right of Inspection; Access to Books and Personnel. Seller shall and
shall cause each of Seller's officers, directors, employees, auditors and agents
to afford to Purchaser and Purchaser's officers, directors, employees, auditors,
agents and lenders the right at any time prior to the Closing, on reasonable
notice during normal business hours, access to Seller's employees, auditors,
agents, facilities, books and records as Purchaser reasonably shall deem
necessary or desirable and subject to such reasonable restrictions as Seller may
request to maintain the confidentiality of this Agreement and the transactions
contemplated hereby and shall furnish such financial and operating data and
other information with respect to Seller as Purchaser may reasonably require.
Except as otherwise set forth herein, no such access, examination or review
shall in any way affect, diminish or terminate any of the representations,
warranties or covenants of Seller set forth herein.
5.3 Notification of Material Events.
(a) Seller shall promptly notify Purchaser in writing of any event
following the date hereof of which Seller is or becomes aware that will or may
reasonably be expected to have a material effect, including but not limited to a
material adverse effect, on the condition (financial or otherwise), rights,
properties, assets or prospects of Seller or the Business or the performance by
Seller of its obligations under this Agreement.
(b) Each of the parties to this Agreement shall promptly notify the
other party to this Agreement of (a) the occurrence or non-occurrence of any
fact or event (regardless of the time of the occurrence or non-occurrence of
such fact or event) which would be reasonably likely (i) to cause any
representation or warranty contained in this Agreement to be untrue or
inaccurate in any material respect at any time from the date hereof to the
Closing Date or (ii) to cause any material covenant, condition or agreement
hereunder not to be complied with or satisfied in all material respects and (b)
any failure of any party to this Agreement to comply with or satisfy any
covenant, condition or agreement to be complied with or satisfied by it
hereunder in any material respect.
5.4 Supplemental Disclosures. Seller shall have the continuing obligation
to supplement promptly and amend the Schedules as necessary or appropriate with
respect to any matter hereafter arising or discovered which, if existing or
known at the date of this Agreement, would have been required to be set forth or
described in the Schedules; provided, however, that for the purpose of the
rights and obligations of the parties hereunder, any such supplemental or
27
amended disclosure shall not, except as Purchaser may otherwise agree in
writing, be deemed to have cured any breach of any representation or warranty
made in this Agreement. Notwithstanding the foregoing, if Purchaser elects to
proceed with the Closing, Purchaser shall be deemed to have waived the right
thereafter to assert any claim pursuant to Article X hereunder with respect to
any matter specifically and accurately disclosed by Seller in such supplemental
or amended disclosure.
5.5 Exclusivity. Until the earlier to occur of (i) the termination of this
Agreement in accordance with Article XI or (ii) the Closing, (a) Seller shall
not, and shall not permit or authorize, as the case may be, any of Seller's
Affiliates, directors, officers, employees, agents or advisors to, initiate,
pursue or encourage (by way of furnishing information or otherwise) any
inquiries or proposals, or enter into any discussions, negotiations or
agreements (whether preliminary or definitive) with any Person, contemplating or
providing for any merger, acquisition, purchase or sale of stock or all or
substantially all of the assets or any business combination or change in control
of Seller or the Business, and (b) Seller shall deal exclusively with Purchaser
with respect to the sale of the Purchased Assets or the Business or assets and
properties of Seller.
5.6 Publicity. Seller and Purchaser agree that no public release or
announcement concerning the transactions contemplated hereby shall be issued by
either party without the prior consent (which consent shall not be unreasonably
withheld) of the other party, except as such release or announcement may be
required by Law or the rules or regulations of any Authority, in which case the
party required to make the release or announcement shall allow the other party
reasonable time to comment on such release or announcement in advance of such
issuance.
5.7 Preparation of Pre-Closing Estimated Purchase Price Certificate. At
least two (2) Business Days prior to the Closing, Seller shall furnish to
Purchaser a certificate setting forth Seller's estimated calculation of the
Final Purchase Price (the "Estimated Purchase Price Certificate"), such
calculations to include an itemization of the components of the Acquired Working
Capital and Unbilled Reimbursable Expenses as of the Closing Date and a list of
those Contracts entered into since the date hereof and which Seller requests
Purchaser to assume in each case to be satisfactory to Purchaser.
5.8 Power of Attorney; Right of Endorsement, Etc. Effective as of the
Closing, Seller hereby constitutes and appoints Purchaser and its successors and
assigns the true and lawful attorney of Seller with full power of substitution,
in the name of Purchaser or the name of Seller, on behalf of and for the benefit
of Purchaser, (a) to collect all Purchased Assets, (b) to endorse, without
recourse, checks, notes and other instruments attributable to the Purchased
Assets, (c) to defend and compromise all actions, suits or proceedings with
respect to any of the Purchased Assets (subject to Section 10.7) and (d) to do
all such reasonable acts and things with respect to the Purchased Assets as
Purchaser may deem advisable. Seller agrees that the foregoing powers are
coupled with an interest and shall be irrevocable by Seller directly or
indirectly by the dissolution of Seller or in any other manner. Purchaser shall
retain for its own account any amounts lawfully collected pursuant to the
foregoing powers and Seller shall promptly pay to Purchaser any amounts received
by Seller after the Closing with respect to the Purchased Assets.
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5.9 Covenants Not to Compete, Solicit or Disparage.
(a) For the period of three years after the Closing Date (the "Time
Covenant"), Seller covenants that neither it, FEI Enterprises, Ltd. nor FEI
Shares, Inc. (collectively, for purposes of this Section 5.9 only, "Seller
Parties") shall, either individually or as a partner, joint venturer,
consultant, shareholder, member or representative of another Person or
otherwise, directly or indirectly, participate in, engage in, or have a
financial or management interest in, or assist any other Person in any business
operation or any enterprise if such business operation or enterprise engages, or
would engage, in the Business anywhere in the world, provided, however, that the
foregoing shall not prohibit a Seller Party from owning up to five percent (5%)
of a publicly traded company.
(b) During the Time Covenant, each of Seller Parties shall not,
directly or indirectly, whether for its own account or for the account of any
Person (other than Purchaser) that is in competition with Purchaser (A) solicit,
recruit, hire, engage in any activity that would cause any Person who is as of
the Closing Date, or was during the 12 months prior to the Closing Date,
employed by Seller to violate any agreement with Purchaser, endeavor to entice
away any such Person from Purchaser, interfere with the relationship of
Purchaser with such Person or induce any such Person to reject any employment
offer by Purchaser or (B) solicit, entice or induce any Person who is, or was a
Customer or Supplier to (i) become a Customer or Supplier of any other Person
engaged in any business activity that competes with the Business, (ii) cease
doing business with Purchaser or (iii) otherwise interfere with the relationship
of Purchaser with any such person, team, Customer or Supplier. For purposes of
this Section 5.9, a "Customer" means any Person which has been during the
12-month period prior to the Closing Date a customer, distributor or agent of
Seller or shall have been contacted by Seller in the six-month period prior to
the Closing for the purpose of soliciting it to become a customer, distributor
or agent of Seller; and a "Supplier" means any Person which has been during the
12-month period prior to the Closing Date a supplier, vendor, manufacturer or
developer of Seller for any product or service or significant component used in
any product or service. Seller covenants that it will not, directly or
indirectly, in any capacity whatsoever, make any statement, written or oral, or
perform any other act or omission that is intended to be materially detrimental
to the goodwill of the business of Seller, except as compelled by judicial or
administrative process.
(c) If, during the Time Covenant, Seller Parties subject to the
aforementioned restrictions are not in compliance with such restrictions, then
Purchaser shall be entitled, among other remedies, to compliance by the
breaching Seller Party with the terms of such provisions for an additional
number of days that equals the number of days during which such noncompliance
occurred.
(d) The parties hereby agree that all restrictions and agreements
contained in this Section 5.9, including, without limitation, those relating to
the Time Covenant, are necessary and fundamental to the protection of the
Business and any objections or reservations to such restrictions or agreements
are hereby waived. Seller Parties hereby agree that the remedy at law for any
breach of this Agreement will be inadequate, and that the damages flowing from
such breach are not readily susceptible to being measured in monetary terms.
Accordingly, the parties agree that upon any Seller Party's breach of this
Section 5.9, Purchaser shall be entitled to
29
immediate injunctive relief and may obtain a temporary order restraining any
threatened further breach. Nothing in this Agreement shall be deemed to limit
Purchaser's remedies at law or in equity for any breach by any Seller Party of
any of the provisions of this Agreement that may be pursued by or made available
to Purchaser.
(e) Each of the foregoing agreements and covenants is in addition to
any other similar agreement and covenant contained in any other document entered
into in connection herewith and is not intended in any way, form or fashion to
limit the applicability of such other agreement or covenant.
5.10 Post-Closing Confidentiality. From and after the Closing, Seller
will, and will cause each of its Affiliates which it controls to, hold in strict
confidence and not use to the detriment of Purchaser or any of its Affiliates,
all information with respect to the Business and the Purchased Assets. Without
limiting the generality of the foregoing, Seller agrees, covenants and
acknowledges that, from and after the Closing Date, Seller will not, and will
cause its Affiliates which it controls not to, disclose, give, sell, use, or
otherwise divulge any confidential or secret information (including but not
limited to any technology, process, trade secrets, know-how, other intellectual
property rights, strategies, financial statements or other financial information
not otherwise publicly available, forecasts, operations, business plans, prices,
discounts, products, product specifications, designs, plans, data or ideas).
Notwithstanding the foregoing, Seller may disclose such information (i) if
compelled to disclose the same by judicial or administrative process or by other
requirements of applicable Law or of any national securities exchange (but
subject to the following provisions of this Section 5.10), (ii) if the same
currently is, or hereafter is, in the public domain through no fault of Seller,
or (iii) if the same is later acquired by Seller from another source and Seller
is not aware that such source is under an obligation to another Person to keep
such information confidential. If Seller or any of its Affiliates (the
"Disclosing Party") is requested or required (by oral questions,
interrogatories, requests for information or documents in legal proceedings,
subpoena, civil investigative demand or other similar process) to disclose any
such information, the Disclosing Party shall provide Purchaser with prompt
written notice of any such request or requirement so that Purchaser may seek, at
its expense, a protective order or other appropriate remedy and/or waive
compliance with the provisions of this Section 5.10. If, in the absence of a
protective order or other remedy or the receipt of a waiver by Purchaser, the
Disclosing Party nonetheless, based on the advice of counsel, is required to
disclose such information to any tribunal, the Disclosing Party, without
liability hereunder, may disclose that portion of such information which such
counsel advises the Disclosing Party it is legally required to disclose.
5.11 Performance of Contracts. With respect to each Contract, Seller shall
duly perform and comply with all covenants, agreements and conditions required
thereby to be performed or complied with by it prior to or on the Closing Date.
5.12 Employees. Upon the Closing, Seller shall terminate the employment of
each employee who is listed on Schedule 5.12 hereto (the "Employees"). The
Purchaser shall offer employment to all the Employees on such terms as
Purchaser, in its sole discretion, shall determine; provided, however, that
Purchaser shall provide all such Employees who accept such employment with group
health insurance immediately upon such employment.
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5.13 Allocation for Tax Purposes. The parties shall cooperate in good
faith to agree on the allocation of the Purchase Price prior to the Closing and,
subsequent to the Closing, shall file all federal, state and local tax returns
consistent with such allocation. The parties shall complete and separately file
Form 8594 with their federal income tax years for the tax year in which the
Closing occurs in accordance with such allocation, and no party hereto shall
have any liability to the other arising out of any challenge to such tax
allocation by any federal or state taxing authority so long as the party does
not take a position inconsistent with such allocation in any tax filing or
administrative or judicial proceeding.
5.14 Mitsubishi Agreement. The parties shall use their reasonable best
efforts to enter into an agreement with respect to the custody and
confidentiality of the results of the feasibility study developed by Seller
pursuant to the Mitsubishi-Tokyo Agreement.
5.15 Administrative Agreement. The parties shall use their reasonable best
efforts to cooperate in order for Purchaser to enter into an agreement to obtain
services similar to those provided pursuant to the Administrative Services
Agreement.
5.16 Assumed Contracts. If after the date hereof and prior to the Closing
Date, Purchaser determines that a Contract not listed on Schedule 2.2 (other
than the Administrative Services Agreement, the Mitsubishi-Tokyo Agreement, the
Population Council Agreement, Seller's insurance Contracts, Seller's Contracts
relating to employee benefits and the Confidential Non Disclosure Agreement,
dated as November 8, 1999, between Seloc France, on one part, and Seller and
Interchem Corporation, on the other part) shall constitute an Assumed Contract,
Purchaser shall have the right, in its sole and absolute discretion, to assume
such Contract and to treat such Contract as an Assumed Contract without any
adjustment of the Purchase Price or the Final Purchase Price. Seller shall use
its reasonable best efforts to obtain any necessary consent for the assignment
of such Contract to Purchaser.
5.17 The Population Council Agreement. Seller shall use its reasonable
best efforts to terminate the Population Council Agreement prior to the Closing.
The parties agree that, if Seller determines in its reasonable judgment that
monetary compensation to Population will be required in order to obtain
Population's agreement to terminate of the Population Council Agreement, Seller
shall be authorized and required to offer Population an amount up to $1,000,000
to compensate Population for its agreement to terminate the Population Council
Agreement. In addition, if Seller determines in its reasonable judgment that it
is necessary in order to obtain Population's agreement to terminate of the
Population Council Agreement, Seller shall be authorized to offer Population in
consideration of the termination of the Population Council Agreement a
non-exclusive royalty-free license to Seller's intellectual property rights in
the technology to be acquired by Purchaser under this Agreement, such license to
be explicitly limited to uses contemplated in Section 4.2 and Section 7.1 of the
Population Council Agreement and further limited to territories outside Europe,
North America and South America. Purchaser shall reimburse Seller for fifty
(50%) percent of any amounts paid by Seller to Population in connection with the
termination of the Population Council Agreement, up to a maximum reimbursement
of $500,000.
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ARTICLE VI
CONDITIONS PRECEDENT TO PURCHASER'S OBLIGATIONS
6.1 Obligations to be Satisfied on or Prior to Closing Date. The
obligation of Purchaser to purchase the Purchased Assets under this Agreement is
subject to the satisfaction (or waiver by Purchaser), on or prior to the Closing
Date, of the following conditions:
(a) Accuracy of Representations and Warranties. Each of the
representations and warranties made by Seller in this Agreement that is
qualified as to materiality shall be true, correct and complete in all respects
and those that are not so qualified shall be true, correct and complete in all
material respects as of the date hereof and on the Closing Date as though made
on such date.
(b) Compliance with Agreement. Seller shall have performed or
complied in all material respects with the covenants, agreements and obligations
required by this Agreement to be performed or complied with by Seller on or
prior to the Closing Date.
(c) Investigation. Each of Purchaser and Purchaser's agents shall
have been afforded access to Seller's books and records, officers, employees,
agents, facilities and personnel, as provided in Section 5.2.
(d) Consents. All consents, approvals, orders, authorizations,
registrations, declarations, agreements and filings of any Person and
Authorities set forth on Schedule 6.1(d) shall have been obtained or made by
Seller in a form reasonably satisfactory to Purchaser and delivered to Purchaser
and shall be in full force and effect as of the Closing Date, and no such
authorizations, agreements and consents shall impose any burdensome or, in
Purchaser's reasonable determination, unsatisfactory conditions or requirements
on Purchaser.
(e) No Adverse Proceedings. No Law shall have been enacted or
promulgated, and no investigation, action, suit or proceeding shall have been
threatened or instituted against Seller or Purchaser as of the Closing Date,
which, in any such case, in the reasonable judgment of Purchaser, challenges, or
might result in a challenge to, the consummation of the transactions
contemplated hereby, or which claims, or might give rise to a claim for, damages
against Purchaser as a result of the consummation of such transactions.
(f) No Material Adverse Change. There shall have occurred no
material adverse change in or with respect to the condition (financial or
otherwise), business, rights, prospects, properties or assets or supplier,
customer or employee relationships of Seller or the Business since the Most
Recent Balance Sheet Date.
(g) Schedules. All amendments or supplements to the Schedules made
by Seller pursuant to Section 5.4 shall be reasonably acceptable to Purchaser.
(h) Closing Documents. Seller shall have delivered all reports,
agreements, certificates, instruments, opinions and other documents required to
be delivered by Seller on the Closing Date pursuant to Section 8.3, and the form
and substance of all such reports, agreements,
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certificates, instruments, opinions and other documents shall be reasonably
satisfactory to Purchaser.
(i) UCC, Tax Lien and Judgment Search Results. Purchaser shall have
obtained, at Seller's sole cost and expense, a report, in form and substance
satisfactory to Purchaser, as to the results of an examination of financing
statements filed under the Uniform Commercial Code, and tax lien and judgment
records, in each office in each such jurisdiction as Purchaser shall require,
and such report shall indicate no material security interests, tax liens,
judgments or other Liens not previously disclosed in writing to Purchaser.
(j) Environmental Matters. Purchaser shall have completed such
environmental audits and investigations, at Purchaser's sole cost and expense,
as Purchaser may require with respect to the properties and operations of
Seller, and such audits and investigations shall not have uncovered any
condition or conditions which could have a material adverse effect on the
Business or properties of Seller.
(k) Non-Competition. Each Person listed in Schedule 6.1(k) shall
have executed and delivered to Purchaser a non-competition and non-solicitation
agreement in the form of Exhibit D (the "Non-Competition Agreement").
(l) Employment Agreement. Xx. Xxxxx X. Xxxxxxxxxxx shall have
executed and delivered to Purchaser an employment agreement with Purchaser on
terms and conditions substantially similar to those terms and conditions set
forth in that certain offer letter of Purchaser to Xx. Xxxxx X. Xxxxxxxxxxx
dated as of March 13, 2002 (the "Employment Agreement").
(m) Additional Insurance. Seller shall have acquired and delivered
to Purchaser a five year "tail" insurance policy with a minimum acceptable limit
of liability equal to $5,000,000 (the "Tail Insurance").
(n) Termination of Certain Agreements. Seller shall have delivered
to Purchaser evidence reasonably satisfactory to Purchaser of the termination of
the Population Council Agreement and the Xxxxx Agreement.
(o) Intellectual Property. Seller shall have delivered to Purchaser
evidence reasonably satisfactory to Purchaser of the assignment to Purchaser of
certain intellectual property rights of Seller.
6.2 Procedure for Failure to Satisfy Conditions. In the event that any of
the conditions precedent set forth above in Section 6.1 have not been satisfied,
Purchaser shall notify Seller in writing indicating its election to (a) waive
such condition precedent, (b) terminate this Agreement pursuant to Section 11.1,
or (c) close the transactions contemplated by this Agreement, reserving its
rights and remedies, without waiving such conditions precedent. In lieu of the
foregoing, Purchaser and Seller may agree to consummate the transactions
contemplated by this Agreement on such additional terms as are agreed to by
Purchaser and Seller in writing. If, despite Seller's commercially reasonable
best efforts, a third party that is not an Affiliate of Seller (the
"Nonconsenting Third Party") refuses to grant any consent necessary for
Purchaser to
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assume Seller's rights and obligations under a Contract listed on Schedule 6.2
hereof, Seller shall promptly notify Purchaser of its inability to obtain such
consent and shall designate Purchaser as its agent for purposes of obtaining
such consent. Purchaser shall reimburse Seller for any consideration that
Purchaser, in its capacity as Seller's agent, obligates Seller to pay the
Nonconsenting Third Party to obtain such consent. If Purchaser elects to close
the transactions contemplated under this Agreement in the absence of such
consent, then Purchaser shall indemnify Seller for any liability of Seller to
the Nonconsenting Third Party under that Contract that arises after the Closing
Date or is attributable to the period following the Closing Date or from
Purchaser's decision to close in the absence of such consent.
ARTICLE VII
CONDITIONS PRECEDENT TO SELLER'S OBLIGATIONS
7.1 Obligations to Be Satisfied on or Prior to Closing Date. The
obligations of Seller to sell the Purchased Assets under this Agreement are
subject to the satisfaction (or waiver by Seller), on or prior to the Closing
Date, of the following conditions:
(a) Accuracy of Representations and Warranties. Each of the
representations and warranties made by Purchaser in this Agreement that is
qualified as to materiality shall be true, correct and complete in all respects
and those that are not so qualified shall be true, correct and complete in all
material respects as of the date hereof and on the Closing Date as though made
on such date.
(b) Compliance with Agreement. Purchaser shall have performed or
complied in all material respects with the covenants, agreements and obligations
required by this Agreement to be performed or complied with by it on or prior to
the Closing Date.
(c) No Adverse Proceedings. No Law shall have been enacted or
promulgated, and no investigation, action, suit or proceeding shall have been
threatened or instituted against Seller or Purchaser as of the Closing Date,
which, in any such case, in the reasonable judgment of Seller, challenges, or
might result in a challenge to, the consummation of the transactions
contemplated hereby, or which claims, or might give rise to a claim for, damages
against Seller as a result of the consummation of such transactions.
(d) Closing Documents. Purchaser shall have delivered all reports,
agreements, certificates, instruments, opinions and other documents required to
be delivered by it on the Closing Date pursuant to Section 8.4, and the form and
substance of all such certificates, instruments, opinions and other documents
shall be reasonably satisfactory to Seller.
(e) Termination of the Population Council Agreement. Seller shall
have obtained the termination of the Population Council Agreement.
7.2 Procedure for Failure to Satisfy Conditions. In the event that any of
the conditions precedent set forth above in Section 7.1 have not been satisfied,
Seller shall notify Purchaser in writing indicating its election to (a) waive
such condition precedent, (b) terminate this Agreement pursuant to Section 11.1
or (c) close the transactions contemplated by this
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Agreement, reserving their rights and remedies, without waiving such condition
precedent. In lieu of the foregoing, Purchaser and Seller may agree to
consummate the transactions contemplated by this Agreement on such additional
terms as are agreed to by Purchaser and Seller in writing.
ARTICLE VIII
CLOSING
8.1 Time and Place. The Closing shall take place at 10:00 a.m. on the
Closing Date at the offices of Winston & Xxxxxx, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000 or at such other time and place as Seller and Purchaser may mutually
agree.
8.2 Closing Transactions. All documents and other instruments required to
be delivered at the Closing shall be regarded as having been delivered
simultaneously, and no document or other instrument shall be regarded as having
been delivered until all have been delivered.
8.3 Deliveries by Seller to Purchaser. At the Closing, Seller shall
deliver or cause to be delivered to Purchaser (except insofar as the conditions
related to such delivery have been waived by Purchaser):
(a) all such certificates, assignments and other documents and
instruments of sale, assignment, conveyance and transfer, as Purchaser or its
counsel may reasonably deem necessary or desirable to effect the transfer of the
Purchased Assets to Purchaser;
(b) the certificate of incorporation of Seller, as amended,
certified as of a date not earlier than twenty (20) days prior to the Closing
Date by the Secretary of State of the State of Delaware;
(c) a certificate of the Secretary or an Assistant Secretary of
Seller certifying to: (i) the by-laws, as amended, of Seller; (ii) resolutions
of the board of directors of Seller authorizing and approving the execution,
delivery and performance by Seller of this Agreement and any agreements,
instruments, certificates or other documents executed by Seller pursuant to this
Agreement; and (iii) incumbency and signatures of the officers of Seller;
(d) certificates of good standing, dated as of a recent date, for
Seller from any state where Seller is required to be qualified to do business
and bring down certificates of good standing in each of such jurisdictions dated
the Closing Date;
(e) a certificate executed by Seller dated as of the Closing Date,
certifying that all representations and warranties of Seller herein contained
that are qualified as to materiality were true, correct and complete in all
respects when made and are true, correct and complete in all respects as of the
Closing Date as if made thereon (and to the extent that any representation or
warranty herein contained refers to "the date hereof," such date shall be deemed
to be the Closing Date) and those not so qualified were true, correct and
complete in all material respects when made and are true, correct and complete
in all material respects as of the
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Closing Date as if made thereon (and to the extent that any representation or
warranty herein contained refers to "the date hereof," such date shall be deemed
to be the Closing Date), and that Seller has performed or complied in all
material respects with all of the covenants and obligations required by this
Agreement to be performed or complied with by Seller on or prior to the Closing
Date;
(f) an executed original of each consent required to be obtained
pursuant to Section 6.1(d);
(g) all amendments or supplements to the schedules made by Seller
pursuant to Section 5.4;
(h) the Non-Competition Agreements;
(i) the Employment Agreement;
(j) the Tail Insurance;
(k) a certificate executed by the Chief Executive Officer of Seller
certifying that Seller has not received, or, if received, the amount of, the
Milestone Payments;
(l) an instrument or document evidencing the termination of the
Population Council Agreement; and
(m) such other instruments and documents as are required by any
other provisions of this Agreement to be delivered on the Closing Date by Seller
to Purchaser.
The foregoing shall not be construed to require Seller to use other than
commercially reasonable best efforts to deliver or cause to be delivered the
documents and instruments set forth in Section 8.3(f), Section 8.3(h), Section
8.3(i), Section 8.3(j) and Section 8.3(l); provided, however, that
notwithstanding the foregoing, the obligations of Purchaser to purchase the
Purchased Assets is subject to the delivery of each of the documents and
instruments set forth in this Section 8.3.
8.4 Deliveries by Purchaser to Seller. At the Closing, Purchaser shall
deliver or cause to be delivered to Seller (except insofar as the conditions
related to such delivery have been waived by Seller):
(a) the cash portion of the Purchase Price in accordance with
Section 1.2(a);
(b) a certificate executed by an officer of Purchaser, dated as of
the Closing Date, certifying that all representations and warranties of
Purchaser herein contained that are qualified as to materiality were true,
correct and complete in all respects when made and are true, correct and
complete in all respects as of the Closing Date as if made thereon and those not
so qualified were true, correct and complete in all material respects when made
and are true, correct and complete in all material respect as of the Closing
Date as if made thereon, and that Purchaser has performed or complied in all
material respects with all of the covenants and obligations
36
required by this Agreement to be performed or complied with by Purchaser on or
prior to the Closing Date;
(c) the Non-Competition Agreements;
(d) the Employment Agreement; and
(e) such other instruments and documents as are required by any
other provisions of this Agreement to be delivered on the Closing Date by
Purchaser to Seller.
The foregoing shall not be construed to require Purchaser to use other
than commercially reasonable best efforts to deliver or cause to be delivered
the documents and instruments set forth in Section 8.4(c) and Section 8.4(d);
provided, however, that notwithstanding the foregoing, the obligations of Seller
to sell the Purchased Assets are subject to the delivery of each of the
documents and instruments set forth in this Section 8.4.
8.5 Determination of Final Purchase Price.
(a) Within 75 days after the Closing Date, Purchaser shall deliver
to Seller a certificate (the "Final Purchase Price Certificate"), executed by
Purchaser setting forth the calculation of the Final Purchase Price, including
Acquired Working Capital and the Unbilled Reimbursable Expenses.
(b) If Seller delivers written notice (the "Disputed Items Notice")
to Purchaser within 15 days after receipt by Seller of the Final Purchase Price
Certificate, stating that Seller objects to any items on the Final Purchase
Price Certificate, specifying the basis for such objection and setting forth
Seller's proposed modification to the Final Purchase Price, Seller and Purchaser
shall attempt to resolve and finally determine and agree upon the Final Purchase
Price as promptly as practicable.
(c) If Seller and Purchaser are unable to agree upon the Final
Purchase Price within 15 days after delivery of the Disputed Items Notice,
Seller and Purchaser will select an independent accounting firm to resolve the
disputed items and make a determination of the Final Purchase Price. Such
determination will be made within 30 days after such selection and will be
binding upon the parties. The fees, costs and expenses of the accounting firm so
selected will be borne by the party whose positions generally did not prevail in
such determination, or if the accounting firm determines that neither party
could be fairly found to be the prevailing party, then such fees, costs and
expenses will be borne 50% by Seller and 50% by Purchaser.
(d) If Seller does not deliver the Disputed Items Notice to
Purchaser within 15 days after receipt by Seller of the Final Purchase Price
Certificate, the Final Purchase Price specified in the Final Purchase Price
Certificate will be conclusively presumed to be true and correct in all respects
and will be binding upon the parties.
(e) At such time as the Final Purchase Price is finally determined,
either (i) Purchaser shall pay Seller in cash, an aggregate amount equal to the
Final Purchase Price less the amount paid at Closing under Section 1.2(a) or
(ii) Seller shall pay Purchaser in cash an
37
aggregate amount equal to the excess of the amount paid at Closing under Section
1.2(a) over the Final Purchase Price.
ARTICLE IX
OTHER AGREEMENTS
9.1 Further Assurances. At any time and from time to time from and after
the Closing, Seller and Purchaser shall, at the request of the other, execute,
acknowledge and deliver, or cause to be executed, acknowledged and delivered,
such instruments and other documents and perform or cause to be performed such
acts and provide such information, as may reasonably be required to evidence or
effectuate the sale, conveyance, transfer, assignment and delivery to Purchaser
of the Purchased Assets or for the performance by Seller or Purchaser of any of
their other respective obligations under this Agreement.
9.2 Access to Records After Closing. From and after the Closing Date, each
party hereto and its representatives shall have reasonable access to inspect and
copy all books and records relating to Seller or the Business that the other
parties hereto or their respective Affiliates may retain after the Closing Date.
Such access shall be afforded by the party maintaining such records upon receipt
of reasonable advance notice and during normal business hours. Nothing contained
in this Section 9.2 shall require Purchaser or Seller to retain any books or
records longer than such books or records would otherwise have been retained in
the Ordinary Course of Business but for the transactions contemplated by this
Agreement; provided, however, that if the party maintaining such records shall
desire to dispose of any of such books and records, such party shall, prior to
such disposition, give the other party hereto a reasonable opportunity, at such
other party's expense, to segregate and remove such books and records as such
other party may select.
9.3 Collection of Receivables. From and after the Closing, Purchaser shall
have the right and authority to collect for its own account all Accounts
Receivable and other items that are included in the Purchased Assets and to
endorse with the name of Seller, as applicable, any checks or drafts received
with respect to any such Accounts Receivable or other items and Seller agrees
promptly to deliver to Purchaser any cash or other property received directly or
indirectly by it with respect to such Account Receivables and other items,
including any amounts payable as interest. If any Accounts Receivable included
in the Purchased Assets shall not have been collected by Purchaser within 120
days after the Closing Date, Purchaser shall have the option so to advise Seller
and to assign any or all such Accounts Receivable to Seller without recourse.
Promptly after any such assignment, Seller shall pay to Purchaser an amount
equal to the aggregate uncollected amount of such assigned Accounts Receivable
by wire transfer to an account to be specified by Purchaser. From and after the
Closing, Purchaser agrees that if it receives any payments with respect to any
Billed Reimbursable Expenses, Purchaser shall promptly, and in any event within
fourteen (14) days after receipt thereof by Purchaser, remit such amounts to
Seller. From and after the Closing, Seller agrees that if it receives any
payments with respect to any Unbilled Reimbursable Expenses, Seller shall
promptly, and in any case within fourteen (14) days after receipt thereof by
Seller, remit such amounts to Purchaser.
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9.4 Third Party Consents. To the extent that Seller's rights under any
Assumed Contract may not be assigned without the consent of another Person which
has not been obtained as of the Closing Date, this Agreement shall not
constitute an agreement to assign the same if an attempted assignment would
constitute a breach thereof or be unlawful. If any such consent shall not be
obtained or if any attempted assignment would be ineffective or would impair
Purchaser's rights under the Purchased Assets such that Purchaser would not in
effect acquire the benefit of all such rights, then, Seller, to the maximum
extent permitted by law and the Purchased Assets, shall act after the Closing
Date as Purchaser's agent in order to obtain for it the benefits thereunder and
shall cooperate with Purchaser in any other arrangement designated to provide
such benefits to Purchaser.
9.5 Milestone Payments. From and after the Closing, Purchaser shall have
the right and authority to collect for its own account all Milestone Payments
and to endorse with the name of Seller any checks or drafts received with
respect to any such Milestone Payments, and Seller agrees promptly, but not
later than fourteen (14) days after receipt thereof by Seller, to notify
Purchaser of such Milestone Payments and to remit to Purchaser any cash or other
property received directly or indirectly by Seller with respect to such
Milestone Payments, including any amounts payable as interest.
ARTICLE X
INDEMNIFICATION
10.1 Survival of Representations, Warranties and Indemnity. The
representations and warranties of the parties hereto contained in Articles III
and IV and the indemnification obligations contained in this Article X shall
survive the Closing and expire two years following the Closing Date; provided,
however, that Purchaser's indemnification obligations pursuant to Section
10.4(a)(ii) and Section 10.4(b) shall not expire and shall survive the Closing
indefinitely; and provided, further, that any claims which involve fraud or
intentional misrepresentation shall survive the Closing indefinitely; and
provided, further, that if at the stated expiration of any indemnification
obligation there shall be pending any indemnification claim by a Person pursuant
to which notice has been given pursuant to Section 10.7, such Person shall
continue to have the right to seek such indemnification with respect to such
claim notwithstanding such expiration.
10.2 Indemnification by Seller. Seller shall indemnify, defend and hold
harmless Purchaser, its members, officers, directors, employees and agents after
the Closing Date from and against any loss, liability, obligation, Lien, damage,
cost and expense (including reasonable legal and accounting fees incurred in
defending or prosecuting any claim for any such liability, loss or damage)
("Purchaser Losses") arising out of or resulting from:
(a) the untruth or inaccuracy as of the date hereof or on the
Closing Date of any representation or warranty of Seller contained in this
Agreement or the Schedules hereto (or in any document, writing, or certificate
delivered by Seller under Article VIII of this Agreement);
39
(b) any Excluded Liability;
(c) whether or not disclosed by Seller in this Agreement or on
Schedule 3.22, any obligation or liability of Seller related to any actual or
alleged violation or liability arising under any Environmental Laws, including,
without limitation, any Release or threatened Release of Hazardous Substances
occurring prior to, or if as a result of Seller's activities, present, or if,
not as a result of Seller's activities, to the extent present on, the Closing
Date, and any Environmental Claims arising out of events or circumstances
occurring prior to or continuing on the Closing Date;
(d) any obligation or liability arising from claims, proceedings or
causes of action arising from product warranty or product liability claims with
respect to products, materials or services produced, invoiced, sold, performed
or shipped by Seller on or prior to the Closing Date;
(e) any action, suit or proceeding pending on the Closing Date,
notwithstanding disclosure thereof in this Agreement or on the Most Recent
Balance Sheet or any subsequent claim, action, suit or proceeding arising out of
or relating to such pending matters;
(f) the failure by Seller to perform any of its covenants or
obligations hereunder; or
(g) the failure of Schering to fully reimburse Purchaser for any
Unbilled Reimbursable Expenses.
10.3 Limits on Indemnification by Seller. The amount of liability of
Seller for the Purchaser Losses shall be subject to the following limitations:
(a) Indemnity Basket. Except as otherwise provided in Section
10.3(c), Seller shall have no liability under Section 10.2(a), (c), (d) or (e)
until the aggregate amount of all Purchaser Losses for which Seller would, but
for this Section 10.3(a), be liable exceeds $250,000 (the "Indemnity Basket"),
in which event Seller shall, subject to Section 10.3(b), be liable for the total
amount of all Purchaser Losses to the extent such Purchaser Losses exceed
$250,000.
(b) Limit of Liability. Except as provided in Section 10.3(c), the
aggregate liability of Seller under Section 10.2 (after giving effect to the
application of Section 10.3(a)), shall not exceed the amount of the Escrow
Account (the "Indemnity Cap").
(c) The Indemnity Basket shall not be applicable to Purchaser Losses
(i) arising or resulting from the untruth or inaccuracy of the representations
made in Sections 3.1 3.2, 3.22 or 3.24, (ii) arising or relating to any breach
or violation of any agreement or covenant contained in this Agreement or other
documents contemplated hereby, or (iii) arising or resulting from Seller's
violation of bulk sales laws.
10.4 Indemnification by Purchaser. (a) Purchaser shall indemnify, defend
and hold harmless Seller, its directors, officers, employees and agents after
the Closing Date from and
40
against any liability, obligation, loss, Lien, cost, damage and expense
(including reasonable legal and accounting fees incurred in defending or
prosecuting any claim for any such liability, loss or damage) arising out of or
resulting from:
(i) the untruth or inaccuracy as of the date hereof or on the
Closing Date of any representation or warranty of Purchaser contained in this
Agreement (or in any document, writing or certificate delivered by Purchaser
under this Agreement), or the failure by Purchaser to perform any of its
covenants or obligations hereunder;
(ii) any liability of Seller assumed by Purchaser hereunder
and/or pursuant to the Assumption Agreement; or
(iii) the operation of Purchaser and conduct of Purchaser's
business following the Closing, including, without limitation, any loss,
liability, obligation, Lien, damage, cost or expense arising from products
produced or processed by Purchaser after the Closing.
(b) Purchaser shall indemnify, defend and hold harmless Seller
Parties after the Closing Date from and against any liability, obligation, loss,
Lien, cost, damage and expense (including reasonable legal fees incurred in
defending or prosecuting any claim for any such liability, loss or damage)
arising out of or resulting from the use or operation by Purchaser of the
Purchased Assets from the Closing Date until October 25, 2005 which use or
operation of the Purchased Assets directly causes any liability of the Seller
Parties by reason of Seller's obligations described in Section 2 of that certain
Non-Competition, Non-Solicitation and Non-Disclosure Agreement dated as of
October 26, 2000 by and between Seller and FEI Acquisition Corp.
10.5 Specific Breaches. The breach of a specific representation, warranty,
or agreement by Seller or Purchaser, as applicable, shall be determined
independently of any other representation, warranty or agreement made by Seller
or Purchaser, as applicable, whether or not, apart from such specific
representation, warranty or agreement, the transactions provided for in this
Agreement prove to be more favorable to Purchaser or Seller, as applicable, and
whether or not the facts and circumstances covered by any one or more of the
other representations, warranties or agreements made by Seller or Purchaser, as
applicable, prove to be more favorable than so represented and warranted.
10.6 Cross-indemnification for Broker's, Consultant's or Finder's Fees.
Subject to the provisions of Section 3.31 and Section 4.6, Purchaser and Seller
each agree to indemnify and hold harmless the other from and against any and all
losses, liabilities, obligations, Liens, damages, costs and expenses of any kind
or character arising from any claims for broker's, consultant's or finder's fees
or commissions or other similar fees in connection with the transactions covered
by this Agreement, insofar as such claims shall be based upon alleged
arrangements or agreements made by such party or on its behalf, which indemnity
expressly shall survive any termination of this Agreement or any Closing
hereunder.
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10.7 Procedure for Indemnification.
(a) If any Person shall claim indemnification (the "Indemnified
Party") hereunder for any claim other than a third party claim, the Indemnified
Party shall promptly give written notice to the other party from whom
indemnification is sought (the "Indemnifying Party") of the nature of the claim
in detail and amount of the claim. If an Indemnified Party shall claim
indemnification hereunder arising from any claim or demand of a third party (a
"Third-Party Claim"), the Indemnified Party shall promptly give written notice
(a "Third-Party Notice") to the Indemnifying Party of the basis for such claim
or demand, setting forth the nature of the claim or demand in detail and the
amount of the claim.
(b) In the event that an Indemnifying Party which receives notice of
an indemnification claim contests its liability for such indemnification claim,
such party shall send written notice to the Indemnified Party of its dispute of
indemnification within 15 days thereof. If the parties are unable to resolve
such dispute of indemnification within 60 days after the date of the notice of
dispute, the Indemnified Party may bring an action against the Indemnifying
Party to enforce such indemnification claim.
(c) The Indemnifying Party shall have the right to compromise or, if
appropriate, defend at its own cost and through counsel of its own choosing, any
claim or demand giving rise to any such claim for indemnification. In the event
the Indemnifying Party undertakes to compromise or defend any such claim or
demand, it shall promptly (and in any event, no later than fifteen (15) days
after receipt of a Third-Party Notice) notify the Indemnified Party in writing
of its intention to do so. The Indemnified Party shall fully cooperate with the
Indemnifying Party and its counsel in the defense or compromise of such claim or
demand. After the assumption of the defense by the Indemnifying Party, the
Indemnified Party shall not be liable for any legal or other expenses
subsequently incurred by the Indemnifying Party, in connection with such defense
(unless the Indemnifying Party disputes its liability for such indemnification
claim and an arbitration pursuant to Section 12.12 determines that the
Indemnifying Party is not liable to indemnify the Indemnified Party), but the
Indemnified Party may participate in such defense at its own expense. No
settlement of a Third-Party Claim defended by the Indemnifying Party shall be
made without the written consent of the Indemnified Party, such consent not to
be unreasonably withheld. The Indemnifying Party shall not, except with the
written consent of the Indemnified Party, consent to the entry of a judgment or
settlement of a Third-Party Claim which does not include as an unconditional
term thereof, the giving by the claimant or plaintiff to the Indemnified Party
of an unconditional release from all liability in respect of such Third-Party
Claim.
10.8 Payment. Except for Third-Party Claims being defended in good faith
by the Indemnifying Party in accordance with Section 10.7, the Indemnifying
Party shall satisfy its obligations hereunder within fifteen (15) days after
receipt of notice of a claim, unless the Indemnifying Party has contested its
liability for indemnification pursuant to Section 10.7(b) in which case no
payment shall be due from the Indemnifying Party unless its liability therefor
is established by final nonappealable court order or judgment and fifteen (15)
days have passed since the entry of such order or judgment. Any amount not paid
to the Indemnified Party by such date shall bear interest at a rate equal to the
prime as announced by Bank of America, N.A.,
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or, if Bank of America, N.A. ceases to exist, any other major New York bank
reasonably selected by the Indemnified Party.
10.9 Limited Recourse against Seller and its shareholders. Any claims for
indemnification or damages against Seller which arise after the Closing shall be
satisfied solely from funds contained in the escrow provided for in Section
10.13; provided, however, there shall be no limitations and the Seller and its
Affiliates shall remain liable for any claims involving fraud or willful
misrepresentation.
10.10 Reduction for Insurance and Taxes. The amount of any payment to any
Indemnified Party pursuant to this Article X shall be reduced by the amount of
any insurance proceeds actually received by or on behalf of the Indemnified
Party in reduction of the related indemnifiable loss. An Indemnified Party which
subsequently receives insurance proceeds in respect of the related indemnifiable
loss shall pay to the Indemnifying Party the amount of such actually received
insurance proceeds. Where any tax benefit is available to the Indemnified Party
with respect to an indemnifiable event, the amount of any payment with respect
to such indemnifiable loss shall be reduced dollar for dollar by the amount of
such tax benefit actually received.
10.11 Remedies Exclusive. The remedies provided in this Article X shall be
the exclusive remedies of the parties hereto after the Closing in connection
with any breach of a representation or warranty, non-performance, partial or
total, of any covenant or agreement contained herein or any other matter
relating to the transactions contemplated hereby. Purchaser agrees to pursue all
claims for Purchaser Losses solely against Seller as provided in this Agreement.
Nothing contained herein, however, shall preclude a party from seeking
injunctive relief or specific performance, under circumstances where such relief
might be appropriate, provided that the moving party shall not be entitled to
ancillary relief in the nature of damages or fee awards unless specifically so
provided for herein.
10.12 No Consequential Damages. The Indemnifying Party shall not be liable
to the Indemnified Party for consequential, enhanced, punitive or special
damages or the like unless such damages are included in a Third-Party Claim and
the Indemnified Party is liable to the third party claimant for such damages.
10.13 Escrow.
(a) As provided for in Section 1.2, on the Closing Date, the
Purchaser shall pay the Escrow Amount to the Escrow Agent. The Escrow Agent
shall retain, invest and disburse such funds pursuant to the escrow agreement
attached as Exhibit E hereto (the "Escrow Agreement"). Any interest or earnings
on such funds shall be for the account of Seller.
(b) The Escrow Agreement shall provide that the funds retained
pursuant thereto shall be applied, subject to the conditions provided for in
Article X, to pay claims for Purchaser Losses that have not been contested as
provided for in Section 10.7(b) ("Uncontested Claims") and claims for Purchaser
Losses that have been resolved in favor of Purchaser (to the extent so resolved)
pursuant to a final nonappealable court judgment or by agreement of Seller and
Purchaser ("Resolved Claims") and to secure claims for the Purchaser Losses as
to which
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Purchaser shall have notified Seller (pursuant to Section 10.7(a)) and the
Escrow Agent and which are neither Uncontested Claims nor Resolved Claims
("Pending Claims"). Upon the expiration of two (2) years following the Closing
Date, Escrow Agent shall release to Seller an amount equal to all of the funds
then held in the escrow account, less the aggregate amount of the then Pending
Claims and shall continue thereafter to retain funds equal to the amount of the
Pending Claims until directed otherwise by agreement of Purchaser and Seller or
by court order.
10.14 Bulk Sales. Notwithstanding anything herein to the contrary, Seller
will indemnify and hold harmless Purchaser and the other Purchaser Indemnities
from and against any and all Losses resulting from or arising out of any
noncompliance or alleged noncompliance by Purchaser or Seller with bulk sales
laws.
ARTICLE XI
TERMINATION
11.1 Rights to Terminate. This Agreement may be terminated at any time
prior to the Closing only as follows:
(a) by mutual written consent of Seller and Purchaser;
(b) by Seller if Purchaser is in material breach of any
representation, warranty or covenant under this Agreement (and Seller is not
then in material breach of any representation, warranty or covenant);
(c) by Purchaser if Seller is in material breach of any
representation, warranty or covenant under this Agreement (and Purchaser is not
then in material breach of any representation, warranty or covenant);
(d) by Seller or by Purchaser if, at or before the Closing Date, any
condition set forth herein for the benefit of Seller or Purchaser, respectively,
shall not have been timely met and cannot be met on or before the Closing Date
and has not been waived; or
(e) by Purchaser or Seller if the Closing shall not have occurred on
or before June 30, 2002.
Each party's right of termination hereunder is in addition to any of the
rights it may have hereunder.
11.2 Effects of Termination. Notwithstanding any other provision of this
Agreement, no termination of this Agreement shall release any party of any
liabilities or obligations arising hereunder for any pre-termination breaches
hereof or misrepresentations made herein.
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ARTICLE XII
MISCELLANEOUS PROVISIONS
12.1 Notices. All notices or other communications required or permitted by
this Agreement shall be in writing and shall be deemed to have been duly
received (a) if given by telecopier, when transmitted and the appropriate
telephonic confirmation received if transmitted on a business day and during
normal business hours of the recipient, and otherwise on the next Business Day
following transmission, (b) if given by certified or registered mail, return
receipt requested, postage prepaid, three Business Days after being deposited in
the U.S. mails and (c) if given by courier or other means, when received or
personally delivered, and, in any such case, addressed as follows:
(i) if to Purchaser:
Xxxx Laboratories, Inc.
0 Xxxxxx Xxxx
X.X. Xxx 0000
Xxxxxx, Xxx Xxxx 00000-0000
Attention: General Counsel
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
and
Winston & Xxxxxx
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
(ii) if to Seller:
c/o FEI Enterprises, Ltd.
000 Xxxxxxxxxxxxx Xxxxx
Xxxxx 000
Xxxxxxxxxxxxx, Xxx Xxxx 00000
Attention: President
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
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with a copy to:
Phillips, Lytle, Xxxxxxxxx, Xxxxxx & Xxxxx LLP
0000 XXXX Xxxxxx
Xxxxxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
or to such other addresses as may be specified by any such Persons to the other
Persons, pursuant to notice given by such Person in accordance with the
provisions of this Section 12.1.
12.2 Assignment. No party may assign or transfer any or all of its rights
or obligations under this Agreement without the prior written approval of the
other party; provided, however, that Purchaser may assign or transfer all (but
not less than all) of its rights and obligations under this Agreement (a) to any
Person that is wholly-owned, directly or indirectly, by Purchaser or is an
Affiliate of Purchaser or (b) after the Closing, to any Person to whom Purchaser
sells all or substantially all the Purchased Assets, provided further, that at
any time Purchaser may collaterally assign its rights hereunder to any Person or
Persons providing financing to Purchaser in connection with the transactions
contemplated hereby.
12.3 Benefit of the Agreement. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
permitted assigns. Except as set forth in Article X with respect to
indemnification of indemnified parties hereunder, nothing in this Agreement
shall confer any rights upon any Person other than the parties hereto and their
respective successors and assigns.
12.4 Exhibits and Schedules. The Exhibits and Schedules hereto shall be
construed with and as an integral part of this Agreement to the same effect as
if the contents thereof had been set forth verbatim herein. References in this
Agreement and in the Schedules are made for convenient reference only, and all
matters disclosed in any Schedule shall be deemed to be disclosed in each
Schedule.
12.5 Headings. The headings used in this Agreement are for convenience of
reference only and shall not be deemed to limit, characterize or in any way
affect the interpretation of any provision of this Agreement.
12.6 Entire Agreement. This Agreement contains the entire agreement and
understanding of the parties with respect to the subject matter hereof, and no
other representations, promises, agreements or understandings regarding the
subject matter hereof shall be of any force or effect unless in writing,
executed by the party to be bound thereby and dated on or after the date hereof.
12.7 Modifications and Waivers. No change, modification or waiver of any
provision of this Agreement shall be valid or binding unless it is in writing,
dated subsequent to the date hereof and signed by Purchaser and Seller. No
waiver of any breach, term or condition of this
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Agreement by any party shall constitute a subsequent waiver of the same or any
other breach, term or condition.
12.8 Counterparts. This Agreement may be executed in counterparts
(including by facsimile transmission), each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument.
12.9 Severability. In case any one or more of the provisions contained
herein for any reason shall be held to be invalid, illegal or unenforceable in
any respect, such invalidity, illegality or unenforceability shall not affect
any other provision of this Agreement, but this Agreement shall be construed as
if such invalid, illegal or unenforceable provision or provisions had never been
contained herein.
12.10 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK (EXCLUSIVE OF THE
CONFLICT OF LAW PROVISIONS THEREOF).
12.11 Expenses. Other than as specifically provided in this Agreement,
each party hereto shall pay all of its own costs and expenses incurred or to be
incurred in negotiating and preparing this Agreement and in closing and carrying
out the transactions contemplated by this Agreement.
12.12 JURISDICTION; WAIVER OF JURY TRIAL; VENUE.
(a) EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY AND
UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE NONEXCLUSIVE
JURISDICTION OF ANY NEW YORK STATE COURT OR FEDERAL COURT OF THE UNITED STATES
OF AMERICA SITTING IN NEW YORK COUNTY, NEW YORK, AND ANY APPELLATE COURT FROM
ANY THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE
PARTIES HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN
RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH
NEW YORK STATE COURT OR, TO THE EXTENT PERMITTED BY LAW, IN SUCH FEDERAL COURT.
EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR
PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY
SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. NOTHING IN THIS
AGREEMENT SHALL AFFECT ANY RIGHT THAT ANY PARTY MAY OTHERWISE HAVE TO BRING ANY
ACTION OR PROCEEDING RELATING TO THIS AGREEMENT IN THE COURTS OF ANY OTHER
JURISDICTION.
(b) EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES ALL RIGHT TO TRIAL
BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT,
TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT.
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(c) EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY
WAIVES, TO THE FULLEST EXTENT IT MAY LEGALLY AND EFFECTIVELY DO SO, ANY
OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUIT,
ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT IN ANY NEW
YORK STATE OR FEDERAL COURT SITTING IN NEW YORK COUNTY, NEW YORK. EACH OF THE
PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
LAW, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR
PROCEEDING IN ANY SUCH COURT.
12.13 Seller Acknowledgement. Seller acknowledges that the representations
and warranties contained in this Agreement and in any document or instrument
delivered to Purchaser pursuant hereto or in connection herewith shall not be
deemed waived or otherwise affected by any investigation by Purchaser, its
officers, directors, employees, counsel, accountants, advisors, representatives
and agents.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties hereto have executed this Asset Purchase
Agreement the date first written above.
ENHANCE PHARMACEUTICALS, INC.
By: -----------------------------------
Title: --------------------------------
XXXX LABORATORIES, INC.
By: -----------------------------------
Title: --------------------------------
