Exhibit 2.1
PURCHASE AND SALE AGREEMENT
dated as of June 22, 1998
by and among
GENZYME CORPORATION
RESEARCH AND DIAGNOSTIC SYSTEMS, INC.
and
TECHNE CORPORATION
TABLE OF CONTENTS
PURCHASE AND SALE AGREEMENT
Page
1. THE ACQUISITION.......................................................1
1.1 Director Approval..................................................1
1.2 Transfer of Assets.................................................2
1.3 Consideration for Transfer.........................................4
1.4 The Closing........................................................4
1.5 Assumption of Liabilities..........................................5
1.6 Allocation of Purchase Price.......................................5
1.7 Sales, Transfer and Use Taxes......................................5
1.8 Instruments of Conveyance and Transfer.............................6
1.9 Physical Transfer of the Assets....................................6
1.10 Schedules..........................................................6
1.11 Definitions........................................................6
2. REPRESENTATIONS AND WARRANTIES OF GENZYME.............................6
2.1 Organization, Authority, Approval and Enforceability...............7
2.2 Title to Assets....................................................7
2.3 Schedules Complete.................................................8
2.4 Condition of Assets................................................8
2.5 Equipment and Inventory............................................8
2.6 No Product Liability Claims........................................8
2.7 Customers..........................................................8
2.8 Products...........................................................8
2.9 Warranty Policies..................................................8
2.10 No Violation of Agreements.........................................8
2.11 Taxes..............................................................9
2.12 Insurance..........................................................9
2.13 Compliance with Applicable Law.....................................9
2.14 Financial Information..............................................9
2.15 No Material Adverse Change.........................................9
2.16 Product Recalls....................................................9
2.17 Litigation........................................................10
2.18 No Brokers........................................................10
2.19 Warranty..........................................................10
2.20 Disclosure........................................................10
3. REPRESENTATIONS AND WARRANTIES OF R&D AND TECHNE.....................10
3.1 Organization and Standing.........................................10
3.2 Authority, Approval and Enforceability............................11
3.3 Capitalization....................................................12
3.4 No Violation of Agreements........................................12
3.5 Techne Commission Filings; Financial Statements...................12
3.6 Conduct of Business in the Ordinary Course; Absence of
Certain Changes and Events........................................13
3.7 Litigation........................................................14
3.8 Governmental and Other Consents...................................14
3.9 Offering..........................................................14
3.11 Subsidiaries......................................................15
3.12 Tax Matters.......................................................15
3.13 Insurance.........................................................15
3.14 Environmental and Safety Laws.....................................15
3.15 No Brokers........................................................15
4. COVENANTS OF GENZYME PRIOR TO CLOSING DATE...........................15
4.1 Access and Investigation..........................................15
4.2 Operation of the Business.........................................16
4.3 Negative Covenant.................................................16
4.4 Required Approvals................................................16
4.5 Notification......................................................16
4.6 No Negotiation....................................................17
4.7 Best Efforts......................................................17
5. COVENANTS OF TECHNE AND R&D..........................................17
5.1 Approvals of Governmental Bodies..................................17
5.2 Access and Investigation..........................................17
5.3 Notification......................................................17
5.4 No Negotiation....................................................18
5.5 Best Efforts......................................................18
6. CONDITIONS PRECEDENT TO OBLIGATIONS OF TECHNE AND R&D................18
6.1 Conveyance and Assignment.........................................18
6.2 Consents..........................................................18
6.3 Accuracy of Representations and Warranties........................18
6.4 Performance of Agreements.........................................19
6.5 Actions or Proceedings............................................19
6.6 Stockholder's Rights Agreement....................................19
6.7 No Adverse Change.................................................19
6.8 Court Orders......................................................19
6.9 Opinion of Counsel for Genzyme....................................19
6.10 Additional Documents..............................................19
6.11 HSR Act...........................................................19
6.12 Minimum Average Market Price......................................19
7. CONDITIONS PRECEDENT TO OBLIGATIONS OF GENZYME.......................20
7.1 Purchase Price....................................................20
7.2 Accuracy of Representations and Warranties........................20
7.3 Performance of Agreements.........................................20
7.4 Actions or Proceedings............................................20
7.5 Opinion of Counsel for R&D and Techne.............................20
7.6 Stockholder's Rights Agreement....................................20
7.7 No Adverse Change.................................................20
7.8 Court Orders......................................................21
7.9 HSR Act...........................................................21
8. ROYALTIES............................................................21
8.1 Royalty Payment...................................................21
8.2 Manner of Payment.................................................21
8.3 Audit and Inspection Rights.......................................21
9. MANUFACTURING TECHNICAL ASSISTANCE BY GENZYME........................22
10. TRANSITION SALES AND MANUFACTURING OBLIGATION........................22
10.1 Sales of Inventory................................................22
10.2 Products and Pricing..............................................22
10.3 Sales Support.....................................................23
10.4 Warranty..........................................................23
10.5 Force Majeure.....................................................23
11. NONUSE AND NONDISCLOSURE.............................................24
11.1 Protection of Confidential Information............................24
11.2 Nonuse............................................................24
11.3 Exceptions........................................................25
11.4 Partial Disclosures...............................................25
11.5 Disclosure to R&D and Techne Employees............................25
11.6 Disclosure to Genzyme Employees...................................26
12. INTELLECTUAL PROPERTY INDEMNITY, LIABILITIES AND LIMITATIONS.........26
12.1 Genzyme Intellectual Property Disclaimer..........................26
12.2 Infringement Indemnity by R&D.....................................26
12.3 Infringement Indemnity by Genzyme.................................26
12.4 Discovering and Reporting Infringements...........................26
12.5 No Trademark Rights...............................................26
13. TRADEMARK LICENSE....................................................27
13.1 Grant of License..................................................27
13.2 Quality Control...................................................27
13.3 Term of License...................................................27
13.4 Termination of License............................................28
13.5 Additional Trademark..............................................28
14. INDEMNIFICATION......................................................28
14.1 Indemnification by Genzyme........................................28
14.2 Indemnification by R&D and Techne.................................29
15. ADDITIONAL AGREEMENTS................................................30
15.1 Incorporation of Schedules and Exhibits...........................30
15.2 Governmental Documents and Financial Information..................30
15.3 Cooperation.......................................................31
15.4 Contract Assignment...............................................31
15.5 Assistance with Audits............................................31
15.6 Maintenance of Records............................................31
15.7 Product Claims and Returns........................................31
15.8 Adjustments.......................................................32
15.9 Taxes.............................................................32
15.10 Cooperation in Litigation.........................................32
15.11 Discount on Sales of R&D Products to Genzyme......................32
16. MISCELLANEOUS........................................................33
16.1 Expenses..........................................................33
16.2 Public Announcements..............................................33
16.3 Term and Termination..............................................33
16.4 Entire Agreement; Modifications; Waiver...........................34
16.5 Survival of Representations and Warranties........................35
16.6 Further Assurances................................................35
16.7 Captions..........................................................35
16.8 Counterparts......................................................35
16.9 Successors and Assigns............................................35
16.10 Parties in Interest...............................................35
16.11 Notices...........................................................36
16.12 Law Governing.....................................................37
EXHIBITS AND SCHEDULES
Schedule 1.2(b) Inventory
Schedule 1.2(c)(A) Technology
Schedule 1.2(c)(B) Technology Rights Retained
Schedule 1.2(d) Customer, Supplier and Other Mailing Lists
Schedule 1.2(e) Trademarks and Trademark Applications
Schedule 1.2(f) Dealer and Distributor Agreements
Schedule 1.2(g) 800 Phone Numbers
Schedule 1.2(i) Agreements with Vendors
Schedule 1.2(j) Standard Cost of Genzyme Products
Schedule 1.2(k) Licenses
Schedule 1.2(l) Marketing Studies and Plans
Schedule 1.2(o) Products in Development
Schedule 1.2(p) Equipment
Schedule 1.2(q) Open Purchase Orders
Schedule 1.2(r) Websites
Schedule 1.4 Closing Agenda
Schedule 1.5A Assumed Liabilities
Schedule 1.5B Additional Assumed Liabilities
Schedule 1.9 Schedule for Transfer
Schedule 1.11 Definitions
Schedule 2.2A Liens
Schedule 2.2B Continuing Liens
Schedule 2.6 Product Liability Claims and Threats
Schedule 2.8 Product List
Schedule 2.9 Warranty Policies
Schedule 2.14 Financial Information
Schedule 2.15 Material Adverse Changes
Schedule 2.16 Product Recalls
Schedule 2.19 Product Specifications
Schedule 3.3 Techne Capitalization
Schedule 3.7 Techne Litigation
Exhibit 6.6 Stockholder's Rights Agreement
Exhibit 6.9 Opinion of Counsel for Genzyme
Exhibit 7.5 Opinion of Counsel for Techne and R&D
Section 8.1 Royalty
Exhibit 11.5 R&D's Confidentiality Agreement
Exhibit 11.6 Genzyme's Confidentiality Agreement
Schedule 13.1 Licensed Trademarks
Schedule 13.5 Territory for Extended Trademark License
PURCHASE AND SALE AGREEMENT
PURCHASE AND SALE AGREEMENT ("Agreement") dated this 22nd day of June,
1998, by and among Genzyme Corporation, a Massachusetts corporation having its
principal place of business at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ("Genzyme"), Research and Diagnostic Systems, Inc., a Minnesota
corporation having its principal place of business at ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ ("R&D") and Techne Corporation, a Minnesota
corporation and the sole stockholder of R&D having its principal place of
business at ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ ("Techne").
RECITALS
WHEREAS, Genzyme, through its Diagnostics business unit, is engaged in the
business of developing, manufacturing and selling a line of cytokines, growth
factors, antibodies, proteins, cytokine and apoptosis ELISA systems, and other
research products used in the areas of immunology and cellular biology
(collectively, the "Business");
WHEREAS, the parties intend that R&D shall purchase from Genzyme and
Genzyme shall sell to R&D, certain specified tangible and intangible assets of
that portion of the business of Genzyme that principally relates to the Business
on the terms and subject to the conditions more fully set forth in this
Agreement (the "Acquisition");
WHEREAS, Genzyme desires to grant to R&D certain rights with respect to
certain intellectual property and proprietary materials related to the Business
(the "Technology Rights"; the Acquisition and the grant of the Technology Rights
are sometimes referred to collectively herein as the "Transaction");
WHEREAS, a portion of the consideration for the Acquisition will consist of
shares of Common Stock of Techne and Techne is covenanting to register the sale
of such shares to the public; and
WHEREAS, Genzyme, Techne and R&D desire to make certain representations,
warranties and agreements in connection with the Acquisition and also desire to
prescribe various conditions precedent to the Acquisition.
NOW, THEREFORE, in consideration of the promises and the mutual agreements
contained herein, the parties hereto, intending to be legally bound, do hereby
agree as follows:
1. THE ACQUISITION
1.1 Director Approval. The respective Boards of Directors of R&D, Techne
and Genzyme have duly approved the execution and delivery of this Agreement in
accordance with the applicable provisions of the Massachusetts Business
Corporation Law ("MBCL") and the Minnesota Business Corporation Act ("MBCA"), as
applicable, and their respective charter documents.
1.2 Transfer of Assets. Subject to the terms and conditions set forth in
this Agreement, at the Closing (defined below) Genzyme will, or will cause its
subsidiaries to, sell, convey, transfer, assign, and deliver to R&D, and R&D
will purchase from Genzyme the following assets and properties of Genzyme
principally relating to the Business, wherever located (collectively referred to
in this Agreement as the "Assets"):
(a) the goodwill pertaining to the Business;
(b) all inventories associated with the Business of the types listed on
Schedule 1.2(b) in the possession or control of Genzyme or its subsidiaries at
the time of Closing including: finished goods, raw materials and
work-in-progress; packaging materials (vials, caps, labels, plates, cartons,
boxes and inserts); marketing and promotional materials, including all
literature, catalogs, posters, and videotapes (including all copyright therein);
promotional gifts; and exhibit booths (the "Inventory");
(c) technology owned or licensed by Genzyme associated with the Business
listed on Schedule 1.2(c)(A) (collectively, the "Technology"), which Schedule
includes:
(i) to the extent transferable, clones (including nucleic acid
constructs); cell lines (including bacterial, eukaryotic, hybridoma, yeast,
and nucleic acid host cell lines and expression hosts); vectors (including
vector systems and vector constructs); cDNA libraries and other nucleic
acid libraries; nucleic acid primers, probes and markers; expression
systems; nucleic acid sequence information; gene mapping information; serum
pools; genetically engineered or antibody-producing animals; and title to
any such materials which are deposited with any third party, including any
deposits made with the ATCC or other internationally recognized depository;
(ii) Good Manufacturing Practice, manufacturing and Quality
Assurance/Quality Control protocols and procedures, including Standard
Operating Procedures and test results, including the specifications for
each product included in the Inventory (the "Specifications for Products"
or "Specifications");
(iii) product development histories including documentation and
validation data; and
(iv) all know-how, proprietary techniques and any other confidential
information reasonably necessary to enable a reasonably skilled scientist
to carry on the current commercial activities of the Business or to make
meaningful use of the technology referred to in section 1.2(c)(i)-(iii),
including copies of laboratory notebooks, computer files and other
documents or portions thereof reflecting such information;
provided that Genzyme shall retain rights in a portion of the Technology as
described in Schedule 1.2(c)(B);
(d) customer, supplier and other mailing lists listed on Schedule 1.2(d);
(e) registered and unregistered trademarks and trademark applications
listed on Schedule 1.2(e);
(f) to the extent transferable, Genzyme's rights under the dealer and
distributor agreements listed on Schedule 1.2(g);
(g) 800 phone number(s) for Order Entry, Customer Service and Technical
Services listed on Schedule 1.2(g);
(h) copies of sales history data by customer, by product and by country
for past 3 years, including product standard cost (manufactured) and purchase
price (bought in) information for each product, and sales volume histories
by customer; provided, however, if any of such data is unavailable, then the
parties shall reasonably agree to the provision of alternative data;
(i) to the extent transferable, Genzyme's rights under the agreements
with vendors listed on Schedule 1.2(i) and information on purchases of
bought-in product;
(j) copies of accounting information on products to be acquired by R&D
including: product costing/standard costs, purchase price variances, bills of
material, etc.; provided, however, if any of such information is unavailable,
then the parties shall reasonably agree to the provision of alternative
information;
(k) to the extent transferable or sublicensable, Genzyme's rights under
the license and sublicense agreements listed on Schedule 1.2(k), which includes
licenses to all software currently used by Genzyme in conducting the Business,
other than licenses to third-party, non-custom software;
(l) copies of marketing studies and/or plans listed on Schedule 1.2(l);
(m) copies of current fiscal year sales projections;
(n) copies of commission/compensation data on such Genzyme sales and
marketing personnel who would be potentially employed by R&D, as reasonably
requested by R&D;
(o) research products in development listed on Schedule 1.2(o) and all
pre-release validation data relating to such products;
(p) equipment listed on Schedule 1.2(p) and, to the extent reasonably
available, information on its location, date acquired, acquisition costs,
depreciation and current book value;
(q) Genzyme's rights under the open purchase orders and/or commitments
to purchase materials, components, inventories, packaging materials listed on
Schedule 1.2(q); and
(r) to the extent transferable or sublicensable, information relating to
the Business contained in the web site(s)/links listed on Schedule 1.2(r),
including all copyright therein.
Notwithstanding the foregoing, Genzyme will not sell, convey, transfer,
assign or deliver to R&D any Assets of Genzyme S.R.L., which business Genzyme
will continue to operate following the Closing.
1.3 Consideration for Transfer. Subject to the terms and conditions of this
Agreement, at the Closing, R&D and Techne, as the case may be, shall pay the
consideration ("Purchase Price") to Genzyme for the transfer of the Assets and
the grant of the Technology Rights, consisting of:
(a) $24,760,000 in cash by wire transfer in same day funds at the time of
Closing pursuant to instructions of Genzyme;
(b) such number of shares of Common Stock of Techne as is determined by
dividing the Average Market Price into $17,000,000, subject to the right of
Techne to limit the number of shares which it issues to one million and, in lieu
of issuing any shares in excess of one million, to pay an additional amount by
wire transfer equal to the difference between the aggregate Average Market Price
of one million shares and $17,000,000 (the shares so issued are referred to
herein as the "Shares"); and
(c) a royalty payable by R&D to Genzyme in accordance with Section 8 of
this Agreement.
1.4 The Closing.
(a) The Closing shall be held at the principal offices of Techne at 10:00
a.m. CDT on July 1, 1998, or such other place, time and date as R&D and Genzyme
may mutually select (the "Closing").
(b) At the Closing, in addition to any and all other documents specifically
required by this Agreement to be delivered, the parties shall have delivered the
documents specified on the Closing Agenda contained in Schedule 1.4.
1.5 Assumption of Liabilities. Subject to and upon the terms and conditions
herein set forth, R&D shall assume and become liable for, from and after the
Closing, the following liabilities of Genzyme and its subsidiaries
(collectively, the "Assumed Liabilities") and no other liabilities:
(a) the liabilities of Genzyme or its subsidiaries incurred in connection
with the Business specifically listed in Schedule 1.5A, to the extent such
liabilities have not been paid or discharged before the Closing;
(b) all liabilities and obligations of Genzyme and its subsidiaries under
the contracts, agreements, commitments, undertakings and promises of Genzyme and
its subsidiaries specifically transferred or assigned to R&D pursuant to Section
1.2 and/or set forth in Schedule 1.5B to the extent accruing (or, in the case of
obligations, required by the applicable contract to be performed) after the
Closing; provided however, that R&D shall not assume or become liable for any
such liabilities or obligations to the extent arising from any breach of
contract, breach of warranty, tort, infringement or violation of law occurring
before the Closing or to the extent arising out of any charge, complaint,
action, suit, proceeding, hearing, investigation, claim or demand based upon
acts, sales of product, events or conduct occurring before the Closing; and
(c) all liabilities and obligations of Genzyme and its subsidiaries not
incurred in the Ordinary Course of Business during the period beginning on the
date hereof and ending upon the Closing, as mutually agreed in writing by the
parties.
Other than R&D's liability for the Assumed Liabilities, neither R&D nor Techne
shall have liability or responsibility for any liability of Genzyme.
1.6 Allocation of Purchase Price. The consideration paid by R&D to Genzyme
for the transfer of the Assets, as determined pursuant to Section 1.3, shall be
allocated by R&D and Genzyme to the Assets in accordance with the provisions of
Section 1060 of the Internal Revenue Code of 1986, as amended, and the
regulations thereunder. R&D and Genzyme agree that the fair market value of the
Assets for federal, state and other tax purposes will be the value of the Assets
as determined by the following procedure: (a) within 90 days of the Closing, R&D
shall deliver to Genzyme two copies of an agreement in the form attached hereto
as Exhibit 1.6 executed by R&D setting forth the fair market value of the Assets
with a completed Internal Revenue Service Form 8594 entitled "Asset Acquisition
Statement under Section 1060" attached; and (b) Genzyme shall consent in writing
to such fair market values of the Assets, such consent not to be unreasonably
withheld, by executing a copy of such agreement and returning it to R&D within
ten business days. Notwithstanding the foregoing, Techne agrees that the fair
market value of the foreign Assets transferred shall be equal to the net book
value of such Assets. The value of intangibles will be determined by a
post-Closing appraisal.
1.7 Sales, Transfer and Use Taxes. R&D shall pay all sales, transfer and
use taxes arising out of the transfer of the Assets and shall assume all cost
and expense for import/export licenses and customs duties pursuant to such
transfer of Assets.
1.8 Instruments of Conveyance and Transfer. On the date of the Closing,
subject to the terms and conditions of this Agreement, (a) Genzyme hereby agrees
that it shall deliver or cause to be delivered to R&D or R&D's authorized
designee all of the following (the "Conveyance Documents"): such bills of sale,
assignments, consents or requests for consents, endorsements and other
recordable instruments of assignment, transfer and conveyance, in form and
substance reasonably satisfactory to R&D and its counsel, as shall be effective
to vest in R&D all of the right, title and interest of Genzyme in and to the
Assets, free and clear of all liens, charges, easements, mortgages, pledges,
claims of ownership, security interests, levies, attachments, restrictions and
other encumbrances in favor of any third party (collectively referred to in this
Agreement as a "Lien") other than the Assumed Liabilities, and (b) R&D hereby
agrees that it shall execute and deliver such agreements assuming the Assumed
Liabilities in form and substance reasonably satisfactory to Genzyme and its
counsel.
1.9 Physical Transfer of the Assets. R&D and Techne agree that the physical
transfer of the Assets shall occur in accordance with Schedule 1.9 hereto.
Within 5 business days of both the date of Closing and the date of physical
transfer of the Inventory to R&D in accordance with Schedule 1.9, Genzyme will
provide R&D a report containing costed, detailed perpetual Inventory listings
for raw materials, work-in-process and finished goods as of the date of Closing
and the date of physical transfer of the Inventory, as the case may be.
1.10 Schedules. Schedules attached to this Agreement at the time it is
executed shall be complete with the exception of Schedule 1.2(d), which at the
time of execution will be summary in nature and will not identify customers or
persons on mailing lists by name, and Schedules 1.2(b) and 1.2(q), which will
reflect the Inventory and open purchase orders and/or other commitments as of
the date hereof. At the Closing, the initial version of Schedule 1.2(d)
containing summary information will be replaced by a revised Schedule 1.2(d)
containing specific, complete, detailed information, and Schedules 1.2(b) and
1.2(q) will be updated as of the date of Closing. The final Schedules will be
initialed by Genzyme and R&D.
1.11 Definitions. Certain capitalized terms used in this Agreement and not
otherwise defined herein shall have the definitions specified in the attached
Schedule 1.11.
2. REPRESENTATIONS AND WARRANTIES OF GENZYME
Subject to the qualification that representations and warranties as to
particular Schedules are limited at the time of execution of this Agreement by
the summary nature of required information permitted by Section 1.10 until such
Schedules are replaced prior to the Closing, Genzyme represents and warrants to
Techne and R&D that:
2.1 Organization, Authority, Approval and Enforceability.
(a) Genzyme is a corporation duly organized, validly existing and in good
standing under the laws of the Commonwealth of Massachusetts, has all requisite
corporate power and authority to own, operate and lease its properties and carry
on its business as now conducted, and is duly qualified to do business and is in
good standing as a foreign corporation in each jurisdiction in which the failure
to so qualify could have a Material Adverse Effect.
(b) Genzyme has full corporate power and authority to execute, deliver and
perform its obligations under this Agreement, the Stockholder's Rights Agreement
and all documents to be executed by Genzyme in connection with the transactions
contemplated hereby and thereby and all corporate action of Genzyme necessary
for such execution, delivery and performance has been duly taken.
(c) No approval of this Agreement, the Stockholder's Rights Agreement or
the transactions contemplated hereby or thereby is required by the stockholders
of Genzyme under the Articles of Organization or Bylaws of Genzyme, the MBCL, or
otherwise.
(d) This Agreement, the Stockholder's Rights Agreement and all documents to
be executed by Genzyme in connection with the transactions contemplated hereby
and thereby each is, and upon due execution and delivery by the parties thereto
will be, a legal, valid and binding obligation of Genzyme, enforceable against
Genzyme in accordance with its respective terms, subject, as to enforcement, to
bankruptcy, insolvency, reorganization and other laws of general applicability
relating to or affecting creditors rights and to general equity principles.
(e) The execution and delivery by Genzyme of this Agreement and the
Stockholder's Rights Agreement, and the execution and delivery of all documents
to be executed by Genzyme in connection with the transactions contemplated
hereby and thereby do not, and the performance and consummation by Genzyme of
the transactions contemplated by this Agreement and the Stockholder's Rights
Agreement will not, result in any conflict with, breach or violation of or
default, termination, forfeiture or lien under (or upon the failure to give
notice or the lapse of time, or both, result in any conflict with, breach or
violation of or default, termination, forfeiture or lien under) any terms or
provisions of the Articles of Organization or Bylaws of Genzyme, as amended, or
any statute, rule, regulation, judicial or governmental decree, order or
judgment to which Genzyme is a party or to which it or its assets are subject
that has or is likely to have a Material Adverse Effect.
2.2 Title to Assets. Genzyme has good and marketable title to the Assets,
free and clear of any and all Liens except as set forth in Schedule 2.2A. Upon
delivery by Genzyme to R&D of the Assets at Closing and pursuant to the terms of
this Agreement, R&D will acquire good and marketable title to the Assets, free
and clear of any and all Liens except as set forth on Schedule 2.2.B.
2.3 Schedules Complete. The assets and properties listed in the various
Schedules to Section 1.2 of this Agreement constitute all material assets and
properties used by Genzyme in its conduct of the Business as of the date of this
Agreement.
2.4 Condition of Assets. All Assets are and shall be in satisfactory
operating condition and free from any material defects, except for normal wear
and tear.
2.5 Equipment and Inventory.
(a) All items of tangible personal property, including equipment and
supplies included in the Assets and currently used by Genzyme in the Business
are in good operating condition, normal wear and tear excepted, and are adequate
and suitable for the purposes for which they are presently being used;
(b) Schedule 1.2(b) is a substantially correct and complete list as of the
date of this Agreement of all material inventories of raw materials,
work-in-process, parts, supplies and finished products included in the Assets,
identified by category and location; and
(c) Except as specifically requested by R&D in writing pursuant to Section
10 of this Agreement, the Inventory has been and will be through the date of
Closing maintained at levels consistent with the practices of Genzyme prior to
April 1, 1998 and at levels sufficient to meet the reasonably anticipated
purchase orders of its customers subject to normal scheduling of manufacturing
of items produced by Genzyme and of purchasing items manufactured by others.
2.6 No Product Liability Claims. Except as identified in Schedule 2.6, no
product liability claims or claims of intellectual property infringement have
been asserted or, to Genzyme's knowledge, overtly threatened against Genzyme
with respect to the Business.
2.7 Customers. Schedule 1.2(d) includes a complete and current schedule of
all the Business' customers.
2.8 Products. A list of all of the products currently sold and available
from Genzyme in connection with the Business is set forth in Schedule 2.8.
2.9 Warranty Policies. Schedule 2.9 sets forth all of the product warranty,
repair and replacement policies and obligations of the Business.
2.10 No Violation of Agreements. Neither the execution and delivery of this
Agreement nor the consummation of the transactions contemplated hereunder by
Genzyme will violate or conflict with any agreement, contract, note, debt
instrument, security agreement or mortgage, or any other commitment binding upon
Genzyme that has or is likely to have a Material Adverse Effect.
2.11 Taxes. Genzyme has accurately prepared and timely filed all income tax
returns and other tax returns required to be filed, and has paid, or made
provision for the payment of, all taxes which have or may have become due
pursuant to said returns or pursuant to any assessment which has been received
by it, and with respect to which the failure to prepare, file pay or make
provision for would result in a lien on any of the Assets.
2.12 Insurance. The policies of product liability insurance in effect with
respect to the Business are, through the date of this Agreement, valid,
outstanding and enforceable policies. Genzyme has consistently carried
$1,000,000 or more of product liability insurance coverage without lapse, which
coverage shall apply to all products sold through the Business through the date
of Closing.
2.13 Compliance with Applicable Law. With respect to the Business, Genzyme
has duly complied in respect of products, operations, machinery and equipment
and all other property, practices and aspects of the Business, and the Business
and the Assets transferred hereunder to R&D comply with all applicable Laws,
orders, ordinances, judgments and decrees of all governmental authorities
(foreign, federal, state, local or otherwise) where the failure to comply would
have a Material Adverse Effect.
2.14 Financial Information. Attached as Schedule 2.14 are: (a) unaudited
statements of revenues, cost of sales, gross profit and direct expenses of the
Business for the years ended December 31, 1995, 1996 and 1997; and (b) unaudited
statements of revenues, cost of sales, gross profit and direct expenses of the
Business for the six months ended June 30, 1996 and 1997 and the three months
ended March 31, 1998 (such financial information being collectively referred to
as the "Financial Information"). Since December 31, 1997, Genzyme has conducted
the Business and kept records for the Business in a consistent manner without
material change of policy or procedure.
2.15 No Material Adverse Change. Except as set forth in Schedule 2.15,
since June 30, 1997, there has not been any Material Adverse Change in the
business, operations, properties, prospects, assets or condition of the
Business, and no event has occurred or circumstance exists that can reasonably
be foreseen to result in such a Material Adverse Change.
2.16 Product Recalls. Except as set forth in Schedule 2.16, Genzyme has not
experienced any seizure, recall or market withdrawal of any product with respect
to the Business nor has it been requested to conduct a recall or market
withdrawal with respect to the Business by any governmental agency within the
last five (5) years. There is no action or proceeding, pending or, to the best
of Genzyme's knowledge, threatened, by any governmental agency against Genzyme
of which Genzyme is aware relating to the safety of any of Genzyme's products
related to the Business.
2.17 Litigation. Except as disclosed in Schedule 2.17, no action, suit,
proceeding or investigation is pending or, to the best knowledge of Genzyme,
threatened against Genzyme nor, to the best knowledge of Genzyme, is there any
basis therefor, which action, suit, proceeding and investigation questions the
validity of this Agreement or the right of Genzyme to enter into it or to take
any action in connection with it, or which can reasonably be foreseen to result,
either individually or in the aggregate, in a Material Adverse Effect.
2.18 No Brokers. Genzyme has not entered into any agreement that could give
rise to any liability on the part of Techne or R&D for brokerage, finder's or
agent's fees or commissions in connection with this Agreement or any transaction
contemplated hereby.
2.19 Warranty. Genzyme warrants that the inventory of finished goods listed
on Schedule 1.2(b) will be in accordance with the Specifications for Products as
set forth in Schedule 2.19 attached hereto. In the event that an inventory item
does not conform with its Specifications for Products, upon written notice from
R&D specifying such non-conformity, and as confirmed by Genzyme, Genzyme shall
at its own cost without unreasonable delay deliver new product for the
replacement of the defective quantity or R&D shall be credited against the next
Royalty payment due pursuant to Section 8 the cost of the defective item, based
on the standard cost therefor identified in Schedule 1.2(j). Upon Genzyme's
direction, R&D shall either return such defective quantity at Genzyme's cost or
destroy it. Genzyme's obligations under the second and third sentences of this
Section 2.19 shall terminate, in the case of finished goods, upon the expiration
date of such goods on a product-by-product basis, and in the case of
work-in-process and raw materials, six months from the date of Closing.
2.20 Disclosure. No representation or warranty of Genzyme contained in this
Agreement contains any untrue statement of a material fact and, when taken as a
whole, such statements do not omit to state a material fact necessary in order
to make the statements therein not misleading.
3. REPRESENTATIONS AND WARRANTIES OF R&D AND TECHNE
R&D and Techne jointly and severally represent and warrant to Genzyme that:
3.1 Organization and Standing.
(a) Each of R&D and Techne is a corporation duly organized, validly
existing and in good standing under the laws of the State of Minnesota, has all
requisite corporate power and authority to own, operate and lease its properties
and carry on its business as now conducted, and is duly qualified to do business
and is in good standing as a foreign corporation in each jurisdiction in which
the failure to so qualify could have a Material Adverse Effect.
(b) Each of R&D and Techne has delivered to Genzyme complete and accurate
copies of its Articles of Incorporation and Bylaws, each as amended to date.
3.2 Authority, Approval and Enforceability.
(a) Each of R&D and Techne has full corporate power and authority to
execute, deliver and perform its obligations under this Agreement, the
Stockholder's Rights Agreement and all documents to be executed by it in
connection with the transactions contemplated hereby and thereby, and to issue
the Shares, and all corporate action of R&D and Techne necessary for such
execution, delivery, performance and issuance has been duly taken.
(b) No approval of this Agreement or the Stockholder's Rights Agreement or
the transactions contemplated hereby or thereby is required by the stockholders
of R&D or Techne, under their respective Articles of Incorporation or Bylaws,
the MBCA or otherwise.
(c) The execution and delivery by R&D and Techne of this Agreement and by
Techne of the Stockholder's Rights Agreement, and the issuance by Techne of the
Shares and the execution and delivery of all documents to be executed by R&D
and/or Techne in connection with the transactions contemplated hereby and
thereby do not, and the performance and consummation by R&D and Techne of the
transactions contemplated by this Agreement and the Stockholder's Rights
Agreement will not, result in any conflict with, breach or violation of or
default, termination, forfeiture or lien under (or upon the failure to give
notice or the lapse of time, or both, result in any conflict with, breach or
violation of or default, termination, forfeiture or lien under) any terms or
provisions of the Articles of Incorporation or Bylaws of either R&D or Techne,
or any statute, rule, regulation, judicial or governmental decree, order or
judgment, agreement, lease or other instrument to which either R&D or Techne is
a party or to which it or its assets are subject that has or is likely to have a
Material Adverse Effect.
(d) This Agreement, the Stockholder's Rights Agreement and all documents to
be executed by R&D and/or Techne in connection with the transactions
contemplated hereby and thereby each is, and upon due execution and delivery by
the parties thereto will be, a legal, valid and binding obligation of the
executing party, whether R&D or Techne or both, enforceable against the
executing party, whether R&D or Techne or both, in accordance with their
respective terms, subject, as to enforcement, to bankruptcy, insolvency,
reorganization and other laws of general applicability relating to or affecting
creditors rights and to general equity principles.
(e) All corporate action on the part of Techne, its directors and
stockholders necessary for the issuance of the Shares and the performance of
Techne's obligations under this Agreement and under any other agreement referred
to herein has been taken. The Shares, when issued in compliance with the
provisions of this Agreement, will be validly issued and will be fully paid and
nonassessable and will be free of any liens or encumbrances; provided, however,
that the Shares are subject to restrictions on transfer under state and/or
federal securities laws. The issuances by Techne of the Shares are not subject
to any preemptive rights or rights of first refusal which have not been waived
or terminated prior to the Closing.
3.3 Capitalization.
(a) The authorized capital stock of Techne consists of 50,000,000 shares of
Common Stock (the "Common Stock") and 5,000,000 shares of undesignated capital
stock, none of which are issued and outstanding. Schedule 3.3 sets forth the
number of shares of Common Stock of Techne issued and outstanding as of the date
of this Agreement. All such issued and outstanding shares have been duly
authorized and validly issued and are fully paid and nonassessable.
(b) Options representing in the aggregate the right to purchase 1,245,058
shares of Common Stock pursuant to Techne's 1987 Incentive Stock Option Plan,
1997 Incentive Stock Option Plan and 1988 Nonqualified Stock Option Plan are
outstanding as of the date hereof.
(c) Except as set forth in paragraphs (a) and (b) of this Section 3.3 or as
a result of the exercise of outstanding options, there are not, as of the date
hereof, any other shares of Techne capital stock authorized or outstanding or
any subscriptions, options, conversion or exchange rights, warrants, repurchase
or redemption agreements, or other agreements or commitments, obligating Techne
to issue, transfer, sell, repurchase or redeem any shares of its capital stock
or other securities of Techne. There are no written stockholder agreements,
voting trusts, proxies or other agreements, instruments or understandings with
respect to the voting of the capital stock of Techne.
3.4 No Violation of Agreements. Neither the execution and delivery of this
Agreement nor the consummation of the transactions contemplated hereunder by R&D
or Techne will violate or conflict with any law, contract, note, debt
instrument, security agreement or mortgage, or any other commitment binding upon
R&D or Techne that has or is likely to have a Material Adverse Effect.
3.5 Techne Commission Filings; Financial Statements. Techne has previously
delivered to Genzyme its (a) Annual Report on Form 10-K for the year ended June
30, 1997 as filed with the Commission; (b) all proxy statements relating to
meetings of Techne stockholders held or currently scheduled to be held since
June 30, 1997; and (c) all other reports filed by Techne with the Commission
under the Exchange Act since June 30, 1997. As of the respective dates of their
filing with the Commission, all reports, statements, registration statements and
other filings (including all notes, exhibits and schedules thereto and documents
incorporated by reference therein) filed by Techne with the Commission since
June 30, 1997 (such reports, statements, registration statements and other
filings, together with any amendments thereto, being sometimes collectively
referred to as the "Techne Commission Filings") complied in all material
respects with the requirements of the Securities Exchange Act and did not
contain, at the time of the filing thereof, any untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements made therein, in light of the circumstances under which
they were made, not misleading. Each of Techne's audited consolidated financial
statements dated June 30, 1997 and unaudited consolidated financial statements
dated September 30, 1997, December 31, 1997 and March 31, 1998 (including any
related notes or schedules) included in the Techne Commission Filings was
prepared in accordance with generally accepted accounting principles applied on
a consistent basis (except as may be indicated therein or in the notes or
schedules thereto) and fairly presents the financial position of Techne and its
consolidated Subsidiaries (as defined below) as at the dates thereof and the
results of their operations and changes in financial position for the periods
then ended, subject, in the case of unaudited interim financial statements, to
normal year end adjustments which are not materially adverse. Techne has timely
filed with the Commission all reports required to be filed under Section 13, 14
or 15 of the Exchange Act since June 30, 1997.
3.6 Conduct of Business in the Ordinary Course; Absence of Certain Changes
and Events. Except as disclosed in Techne Commission Filings filed as of the
date hereof, Techne's unaudited consolidated financial statements for the fiscal
period ended March 31, 1998 previously delivered to Genzyme, or Schedule 3.6,
since June 30, 1997, there has not been, occurred or arisen, whether or not in
the ordinary course of business:
(i) any damage or destruction in the nature of a casualty loss
(including, without limitation, any occurrence affecting the soil or
groundwater condition of any real property presently or formerly owned,
operated or leased by Techne or its Subsidiaries), whether covered by
insurance or not, having a Material Adverse Effect; or
(ii) any declaration, setting aside or payment of a dividend (whether
in cash, stock, or property) in respect of, or repurchase or redemption of,
the capital stock of Techne or any of its Subsidiaries (other than a wholly
owned Subsidiary); or
(iii) any actual or, to the knowledge of Techne, threatened strike
(whether asserted or unasserted) or other labor trouble or dispute
involving employees of Techne or any of its Subsidiaries which has had or
is having a Material Adverse Effect; or
(iv) any borrowing or lending of money or guarantee of any obligation
by Techne nor any of its Subsidiaries, except in the ordinary course of
business; or
(v) any application, amendment, termination, renewal based on false
and misleading disclosures or failure to renew with respect to, any
agreement or insurance policy which has a Material Adverse Effect; or
(vi) any disposition of any material properties or assets used in the
business of Techne or its Subsidiaries except sales from inventory made in
the ordinary course of business; or
(vii) any violation of or conflict with any applicable laws, statutes,
orders, rules and regulations promulgated or judgment entered by any
federal, state, county, local or foreign court or governmental authority
which, individually or in the aggregate, has had or is having a Material
Adverse Effect (or insofar as Techne knows, can reasonably be foreseen to
have a Material Adverse Effect); or
(viii) any notice or any violation or investigation by any
governmental authority that has had or is having a Material Adverse Effect
(or, insofar as Techne knows, can reasonably be foreseen to have a Material
Adverse Effect);
(ix) any other Material Adverse Change.
3.7 Litigation. Except as disclosed in the Techne Commission Filings or
Schedule 3.7, no action, suit, proceeding or investigation is pending or, to the
best knowledge of the officers of R&D and Techne, threatened against R&D or
Techne nor, to the best knowledge of the officers of R&D and Techne, is there
any basis therefor; provided, however, that the foregoing includes only any
actions, suits, proceedings and investigations, pending or threatened, which
questions the validity of this Agreement or the right of R&D or Techne to enter
into it or to take any action in connection with it, or which can reasonably be
foreseen to result, either individually or in the aggregate, in a Material
Adverse Effect.
3.8 Governmental and Other Consents. No consent, approval or authorization
of, or designation, declaration or filing with, any governmental authority or
any securities exchange or market on the part of R&D or Techne is required in
connection with the valid execution and delivery of this Agreement, or the
offer, sale, or issuance of the Shares, except the qualification, if required,
of the Shares under applicable state securities laws, which qualification has
been affected, and other routine post-closing filings under applicable state
securities laws, which filings will be completed on a timely basis.
3.9 Offering. Relying in part on the accuracy of the representations made
by Genzyme in the Stockholder's Rights Agreement, the offer, sale and issuance
of the Shares in conformity with the terms of this Agreement constitute
transactions exempt from the registration requirements of Section 5 of the
Securities Act of 1933, as amended.
3.10 No Conflicting Agreements. To the best of R&D's and Techne's
knowledge, no employee of R&D or Techne is, or will be in connection with the
operations or proposed operations of R&D and Techne, in violation of any term of
any employment contract, proprietary information and inventions agreement, or
any other contract or agreement relating to the relationship of any such
employee with R&D or Techne or any previous employer.
3.11 Subsidiaries. Except as set forth on Schedule 3.11 (the entities set
forth therein being referred to as the "Subsidiaries"), neither R&D nor Techne
presently owns or controls, directly or indirectly, or has any stock or other
material interest as owner or principal in, any other corporation or
partnership, joint venture, association or other business venture or entity.
3.12 Tax Matters. Each of R&D and Techne have accurately prepared and
timely filed all income tax returns and other tax returns required to be filed
by them and has paid, or made provision for the payment of, all taxes which have
or may have become due pursuant to said returns or pursuant to any assessment
which has been received by either of them, and with respect to which the failure
to prepare, file, pay or make provision for would have a Material Adverse Effect
on either R&D or Techne.
3.13 Insurance. The policies of fire, liability, workmen's compensation and
other forms of insurance in effect with respect to R&D and Techne are valid,
outstanding and enforceable policies and, except with respect to product
liability, provide continuous and adequate insurance coverage for the property,
assets and operations of R&D, without lapse, on an occurrence basis. R&D and
Techne have not been refused any insurance nor has its coverage been limited by
any insurance carrier to which it has applied for insurance during the last
three (3) years. With respect to product liability insurance, R&D and Techne are
self-insured.
3.14 Environmental and Safety Laws. To the best of their knowledge, (a)
neither R&D nor Techne is in violation of an applicable statute, law or
regulation relating to the environment or occupational health and safety, and
(b) no material expenditures which would have a Material Adverse Effect are or
will be required in order to comply with any such existing statute, law or
regulation.
3.15 No Brokers. Neither R&D nor Techne has incurred any liability for
brokerage, finder's or agent's fees or commissions in connection with this
Agreement or any transaction contemplated hereunder.
4. COVENANTS OF GENZYME PRIOR TO CLOSING DATE
4.1 Access and Investigation. Between the date of this Agreement and the
Closing Date, Genzyme will:
(a) afford R&D reasonable access to the personnel, properties, contracts,
books and records, and other documents and data of Genzyme associated with the
Business;
(b) furnish R&D with copies of all such contracts, books and records, and
other existing documents and data as R&D may reasonably request; and
(c) furnish R&D with such additional financial, operating, and other data
and information as R&D may reasonably request.
Notwithstanding the foregoing, R&D will not be entitled access to the
customer and mailing lists referenced in Schedule 1.2(d) until the Closing.
4.2 Operation of the Business. Between the date of this Agreement and the
Closing Date, Genzyme will:
(a) conduct the Business only in the Ordinary Course of Business;
(b) use its Best Efforts to preserve intact the current business
organization of the Business, keep available the services of current sales and
service employees, and maintain the relations and good will with suppliers,
customers, employees, agents, and others having business relationships with the
Business;
(c) confer with R&D concerning operational matters of a material nature;
and
(d) otherwise report periodically to R&D concerning the status of the
business and operations of the Business.
4.3 Negative Covenant. Except as otherwise expressly permitted by this
Agreement, between the date of this Agreement and the Closing Date, Genzyme will
not, without the prior consent of R&D, take any affirmative action, or fail to
take any reasonable action within its control, as a result of which a Material
Adverse Change is likely to occur.
4.4 Required Approvals. To the extent it has not already done so, as
promptly as practicable after the date of this Agreement, Genzyme will make all
filings required by Legal Requirements to be made by it in order to consummate
the Transaction (including all filings under the HSR Act). Between the date of
this Agreement and the Closing Date, Genzyme will:
(a) reasonably cooperate with R&D with respect to all filings that R&D or
Techne elects to make or is required by Legal Requirements to make in connection
with the Transaction; and
(b) reasonably cooperate with R&D in obtaining all consents identified in
Section 6.2.
4.5 Notification. Between the date of this Agreement and the Closing Date,
Genzyme will promptly notify Techne and R&D in writing if Genzyme becomes aware
of any fact or condition that causes or constitutes a Breach of any of Genzyme's
representations and warranties as of the date of this Agreement, or if Genzyme
becomes aware of the occurrence after the date of this Agreement of any fact or
condition that would (except as expressly contemplated by this Agreement) cause
or constitute a Breach of any such representation or warranty had such
representation or warranty been made as of the time of occurrence or discovery
of such fact or condition.
4.6 No Negotiation. Until such time, if any, as this Agreement is
terminated pursuant to Section 16.3, Genzyme will not directly or indirectly
solicit, initiate, or encourage any inquiries or proposals from, discuss or
negotiate with, provide any non-public information to, or consider the merits of
any unsolicited inquiries or proposals from, any person (other than Techne and
R&D) relating to any transaction involving the sale of the Business or assets
(other than in the Ordinary Course of Business) of the Business, or any merger,
consolidation, business combination, or similar transaction involving the
Business.
4.7 Best Efforts. Between the date of this Agreement and the Closing,
Genzyme will use its Best Efforts to cause the conditions in Sections 6 and 7 to
be satisfied.
5. COVENANTS OF TECHNE AND R&D
5.1 Approvals of Governmental Bodies. To the extent it has not already done
so, as promptly as practicable after the date of this Agreement, Techne and R&D
will make all filings required by Legal Requirements to be made by them to
consummate the Transaction (including all filings under the HSR Act). Between
the date of this Agreement and the Closing, Techne and R&D will reasonably
cooperate with Genzyme with respect to all filings that Genzyme is required by
Legal Requirements to make in connection with the Transaction, and reasonably
cooperate with Genzyme in obtaining all consents identified in Section 6.2;
provided that this Agreement will not require Techne or R&D to dispose of or
make any change in any portion of their business or to incur any other burden to
obtain a Governmental Authorization.
5.2 Access and Investigation. Between the date of this Agreement and the
Closing, R&D and Techne will allow Genzyme, through its employees and
representatives, to have access to the contracts, books, records, documents,
personnel, assets, properties, business, operations and other information of R&D
and Techne as Genzyme may reasonably request in connection with its examination
of R&D and Techne with respect to the Transaction.
5.3 Notification. Between the date of this Agreement and the Closing Date,
R&D and/or Techne will promptly notify Genzyme in writing if R&D or Techne
becomes aware of any fact or condition that causes or constitutes a Breach of
any of R&D's or Techne's representations and warranties as of the date of this
Agreement, or if R&D or Techne becomes aware of the occurrence after the date of
this Agreement of any fact or condition that would (except as expressly
contemplated by this Agreement) cause or constitute a Breach of any such
representation or warranty had such representation or warranty been made as of
the time or occurrence or discovery of such fact or condition.
5.4 No Negotiation. Until such time as this Agreement is terminated
pursuant to Section 16.3, R&D and Techne will not directly or indirectly
solicit, initiate or encourage any inquiries or proposals from, discuss or
negotiate with, provide any non-public information to, or consider the merits of
any unsolicited inquiries or proposals from, any person (other than Genzyme)
relating to any transaction involving the purchase of a business or assets
substantially similar to the Business and Assets to be purchased pursuant to
this Agreement (other than in the ordinary course of business), or any merger,
consolidation, business combination or similar transaction involving a business
or assets substantially similar to the Business and Assets to be purchased
pursuant to this Agreement.
5.5 Best Efforts. Between the date of this Agreement and the Closing,
Techne and R&D will use their Best Efforts to cause the conditions in Sections 6
and 7 to be satisfied.
6. CONDITIONS PRECEDENT TO OBLIGATIONS OF TECHNE AND R&D
The obligations of Techne and R&D to consummate the transactions
contemplated by this Agreement shall be subject, at their option, to the
fulfillment at or prior to Closing of each of the following conditions:
6.1 Conveyance and Assignment. Genzyme shall have duly executed and
delivered to R&D each of the Conveyance Documents, to the reasonable
satisfaction of R&D and its counsel, required by Section 1.8 hereof, above, to
sell, convey, assign, grant and otherwise transfer to R&D all right, title and
interest in and to the Assets.
6.2 Consents. R&D shall have received evidence, in form and substance
reasonably satisfactory to R&D and its counsel, that such licenses, permits,
consents, approvals, waivers, authorizations, qualifications and orders of
governmental authorities and parties to contracts with Genzyme as are necessary
for the consummation of the transaction have been diligently requested or
obtained.
6.3 Accuracy of Representations and Warranties. The representations and
warranties of Genzyme contained in this Agreement shall be accurate and complete
in all material respects on and as of the date of Closing with the same effect
as though such representations and warranties had been made on and as of such
date and Genzyme shall have delivered to R&D a certificate to that effect
executed by Genzyme and dated as of the date of Closing.
6.4 Performance of Agreements. Each and all of the conditions precedent and
agreements of Genzyme subject to satisfaction on or before the date of Closing
pursuant to the terms of this Agreement shall have been performed or satisfied
in all material respects and Genzyme shall have delivered to R&D a certificate
to such effect executed by Genzyme and dated as of the date of Closing.
6.5 Actions or Proceedings. No action, suit or other proceeding before a
court, tribunal or other governmental agency or body not disclosed on the
Schedules hereto shall have been instituted or threatened to restrain or
prohibit the consummation of the transactions contemplated by this Agreement, or
seeking to obtain substantial damages in respect thereof, or involving a claim
that consummation thereof would result in the violation of any law, decree or
regulation of any governmental authority having appropriate jurisdiction that
would otherwise have a Material Adverse Effect.
6.6 Stockholder's Rights Agreement. Genzyme shall have executed the
Stockholder's Rights Agreement in the form attached hereto as Exhibit 6.6 (the
"Stockholder's Rights Agreement").
6.7 No Adverse Change. There shall have been no event since the date hereof
which has occurred or which has been disclosed to R&D which has had or could be
reasonably expected to have a Material Adverse Effect.
6.8 Court Orders. No preliminary or permanent injunction or other order,
decree or ruling issued by a court of competent jurisdiction or by a government,
regulatory or administrative agency or commission nor any statute, rule,
regulation or executive order promulgated or enacted by any governmental
authority shall be in effect which would make the acquisition or holding by R&D
of the Assets illegal or impose material limitations on its ability to exercise
full rights of ownership with respect to such Assets.
6.9 Opinion of Counsel for Genzyme. On the date of the Closing counsel for
Genzyme shall have delivered to R&D and Techne an opinion, dated as of the date
of Closing, in substantially the form of Exhibit 6.9.
6.10 Additional Documents. Genzyme shall have delivered to R&D such
documents and instruments as R&D may reasonably request in connection with this
Agreement and the consummation of the transactions contemplated hereby,
including the documents and certificates listed on the Closing Agenda to be
furnished by Genzyme to R&D.
6.11 HSR Act. As of the date of Closing, all waiting periods applicable to
the consummation of the Acquisition under the HSR Act shall have expired or been
terminated.
6.12 Minimum Average Market Price. The Average Market Price shall be not
less than $16.00 per share.
7. CONDITIONS PRECEDENT TO OBLIGATIONS OF GENZYME
The obligations of Genzyme to consummate the transactions contemplated by
this Agreement shall be subject, at Genzyme's option, to the fulfillment at or
prior to Closing of each of the following conditions:
7.1 Purchase Price. Techne shall have delivered the Purchase Price at the
Closing as provided in Section 1.3.
7.2 Accuracy of Representations and Warranties. The representations and
warranties of R&D and Techne contained in this Agreement shall be accurate and
complete on and as of the date of Closing with the same effect as through such
representations and warranties had been made on or as of such date and R&D and
Techne shall have delivered to Genzyme a certificate to that effect signed by an
officer of R&D and an officer of Techne, and dated as of the date of Closing.
7.3 Performance of Agreements. Each and all of the conditions precedent and
agreements of R&D and of Techne subject to satisfaction on or before the date of
Closing pursuant to the terms of this Agreement shall have been performed or
satisfied and R&D and Techne shall have delivered to Genzyme a certificate to
that effect signed by an officer of R&D and an officer of Techne, and dated as
of the date of Closing.
7.4 Actions or Proceedings. No action, suit or other proceeding before a
court, tribunal or other governmental agency or body shall have been instituted
or threatened to restrain or prohibit the consummation of the transactions
contemplated by this Agreement, or seeking to obtain substantial damages in
respect thereof, or involving a claim that consummation thereof would result in
the violation of any law, decree or regulation of any governmental authority
having appropriate jurisdiction, or in connection with any material claim
against R&D not disclosed on the Schedules hereto.
7.5 Opinion of Counsel for R&D and Techne. On the date of the Closing
counsel for R&D and Techne shall have delivered to Genzyme an opinion, dated as
of the date of Closing, in the form of Exhibit 7.5.
7.6 Stockholder's Rights Agreement. Techne shall have executed and
delivered the Stockholder's Rights Agreement in the form attached hereto as
Exhibit 6.6.
7.7 No Adverse Change. There shall have been no event since the date hereof
which has occurred or which has been disclosed to Genzyme which has had or could
be reasonably expected to have a Material Adverse Effect.
7.8 Court Orders. No preliminary or permanent injunction or other order,
decree or ruling issued by a court of competent jurisdiction or by a government,
regulatory or administrative agency or commission nor any statute, rule,
regulation or executive order promulgated or enacted by any governmental
authority shall be in effect which would make the acquisition or holding by R&D
of the Assets illegal or impose material limitations on its ability to exercise
full rights of ownership with respect to such Assets.
7.9 HSR Act. As of the date of Closing, all waiting periods applicable to
the consummation of the Acquisition under the HSR Act shall have expired or been
terminated.
8. ROYALTIES
8.1 Royalty Payment. In consideration of the transfer of the Assets by
Genzyme to R&D, R&D shall pay to Genzyme the "Royalty," as described in Schedule
8.1 in the manner indicated in Section 8.2.
8.2 Manner of Payment.
(a) The Royalty shall be paid in U.S. dollars by R&D to Genzyme quarterly
by the forty-fifth (45th) day following the end of each calendar quarter (i.e.,
on May 15, August 14, November 15 and February 14) of each year. In the event
that any sum of money owed to Genzyme as Royalties hereunder is not paid either
(i) with respect to any basic Royalty amount, when due, or (ii) with respect to
any corrected Royalty amount, within twenty (20) days after correction to the
statement accompanying each Royalty payment based on a correction found to be
necessary by Genzyme, R&D or an audit under Section 8.3, then the unpaid amount
shall bear interest from the date originally due, compounded monthly, at an
annual rate of two (2) percentage points above the published prime rate of
BankBoston, N.A. on the day such payment was due, or at the highest annual rate
permitted by law, whichever is lower, until paid.
(b) Royalty payments shall be accompanied by a written statement showing in
reasonable detail royalty bearing sales occurring during the period and a
computation of the relevant Royalty payment. This written statement and
attachments thereto shall be treated by Genzyme as Techne Confidential
Information pursuant to Section 11.
(c) R&D shall provide to Genzyme upon reasonable request an annual report,
not later than the sixtieth (60th) day following the end of the fiscal year, on
all royalty-bearing sales occurring during such fiscal year.
8.3 Audit and Inspection Rights. R&D shall keep books and records in
sufficient detail to enable the Royalty to be determined and shall retain such
records for each calendar quarter for a minimum of three years from the end of
such calendar quarter. Upon reasonable notice and during regular business hours,
R&D shall make available such records for audit by an independent agent selected
by Genzyme, subject to the independent agent's execution of a reasonable
confidentiality agreement, to verify the accuracy of the reports provided to
Genzyme. Any such audit shall be performed at Genzyme's expense, except if such
audit reveals underpayments by R&D of more than the lesser of five percent (5%)
of the correct amount of Royalties due hereunder or $25,000, whichever is less,
during any quarter then such audit shall be at the sole expense of R&D.
9. MANUFACTURING AND TECHNICAL ASSISTANCE BY GENZYME
Promptly after the Closing, Genzyme shall provide R&D with the originals
and all but one copy (retained solely for archival purposes) of the tangible
manifestations of the Technology, including but not limited to all documents,
pictures, writings and cell cultures embodying any of the Technology, to the
extent that Genzyme owns or can transfer such tangible manifestations. Genzyme
also agrees to provide to R&D such further Technology which is not tangibly
manifested, including its expertise and know-how, as is reasonably necessary or
useful to enable R&D to carry on the current commercial activities of the
Business or to make meaningful use of the Technology. In connection with the
transfer of such Technology, Genzyme shall make available to R&D at Genzyme's
Cambridge, Massachusetts facility, for up to 30 hours per week not to exceed 300
hours in the aggregate during the three months following the Closing, the
services of competent and knowledgeable manufacturing and technical personnel to
confer with R&D personnel concerning the Technology. Any services provided by
Genzyme personnel pursuant to this Section 9 in excess of 300 hours or after
three months following the Closing shall be reimbursed by Techne at Genzyme's
fully-burdened cost.
10. TRANSITION SALES AND MANUFACTURING OBLIGATION
10.1 Sales of Inventory. For not more than 31 days after the Closing but
prior to physical transfer of the Inventory in accordance with Schedule 1.9,
Genzyme shall continue to accept purchase orders for the Genzyme Products,
including purchase orders placed by R&D for shipment to third parties and
purchase orders placed directly with Genzyme by third parties, and to fill such
purchase orders from the Inventory ("Inventory Sales"). Genzyme shall not be
obligated to accept or fill any orders that cannot be satisfied from the
Inventory or from production manufactured at the request of R&D pursuant to
Section 10.2. Genzyme shall issue invoices for such Inventory sales and shall
collect payment of such invoices. The amounts of all such invoices shall be
credited against the next Royalty payment due under Section 8.1. Within 10 days
of the end of such period, Genzyme shall provide to R&D a written statement
showing in reasonable detail the amount of such invoices. Genzyme shall keep
books and records in sufficient detail to enable R&D to verify the accuracy of
the report it provided to R&D and shall retain such records for three years from
the end of such period. Upon reasonable notice and during regular business
hours, Genzyme shall make available such records for audit by an independent
agent selected by R&D to verify the accuracy of the report provided by it to
R&D.
10.2 Products and Pricing. For three months from the Closing (the
"Transition Period"), Genzyme agrees to sell to R&D and R&D agrees to buy those
Genzyme Products of the type that Genzyme manufactured prior to Closing (as
opposed to those Genzyme Products purchased by Genzyme from a third party
manufacturer for resale) in the quantities indicated in a purchase order to be
provided by R&D to Genzyme within one (1) week following the Closing. Such sales
of Genzyme Products shall be at Genzyme's Actual Cost of Production therefor
plus 25%, but not to exceed two times the standard cost identified under Section
1.2(j). For the purposes of conducting such manufacture during the Transition
Period, R&D grants to Genzyme a license to make or have made for R&D such
products consistent with the Technology rights of the Business held by R&D.
10.3 Sales Support. Prior to physical transfer of the Inventory in
accordance with Schedule 1.9 and transfer of the 800 phone number contained in
Schedule 1.2(g), Genzyme shall provide technical support and sales support
("Support Services") to third party purchasers of Genzyme Products, whether such
Genzyme Products were sold by Genzyme prior to the Closing or are sold for the
account of R&D after the Closing. Following the transfer of Inventory, R&D shall
provide the Support Services (a) to all third party purchasers of such Genzyme
Products and (b) to all purchasers of products sold by R&D in connection with
any use of the "Genzyme" name or trademark or tradename acquired hereunder. Each
party shall provide such Support Services at a level of quality characterized by
the Support Services currently provided by Genzyme to its customers.
10.4 Warranty. Genzyme warrants that the products purchased by R&D from
Genzyme under Section 10.2 will be in accordance with the Specifications for
Products as set forth in Schedule 2.9 attached hereto. In the event that an
inventory item does not conform with its Specifications for Products, upon
written notice from R&D specifying such non-conformity, Genzyme shall at its own
cost without unreasonable delay deliver new product for the replacement of the
defective quantity or R&D shall be credited against the next Royalty payment due
pursuant to Section 8.1 the cost of the defective item. Upon Genzyme's
direction, R&D shall either return such defective quantity at Genzyme's cost or
destroy it. Genzyme's obligations under the second and third sentences of this
Section 10.4 shall terminate, in the case of finished goods, upon the expiration
date of such goods on a product-by-product basis, and in the case of
work-in-process and raw materials, six months from the date of Closing.
10.5 Force Majeure. With respect to this Section 10, neither of the parties
shall be liable in any manner for failure or delay in the fulfillment of all or
any part of this Agreement directly or indirectly owing to Acts of God,
governmental orders or restrictions, war, threat of war, war-like conditions,
hostilities, sanctions, mobilization, blockade, embargo, detention, revolution,
riot, looting, strike, lockout, plague, fire, flood, earthquake or any other
cause or other circumstances beyond the affected party's control. Each of the
parties shall take all reasonable steps to minimize the effect of force majeure
upon it and performance under this Agreement shall continue promptly after any
such effect of force majeure has abated. Notice of any occurrence of force
majeure affecting either party shall be given to the other party as soon as
possible together with evidence thereof and the expected duration of the period
for which performance hereunder shall be delayed.
11. NONUSE AND NONDISCLOSURE
11.1 Protection of Confidential Information.
(a) R&D and Techne understand and agree that confidentiality with respect
to the subject matter and performance of this Agreement is of extreme
importance, and any breach or violation of an obligation of confidentiality
hereunder by R&D or Techne may result in material and irreparable harm to
Genzyme. R&D and Techne will hold in confidence and use their Best Efforts to
have all of their respective employees, agents, representatives and affiliated
companies hold in confidence all Genzyme Confidential Information which is
disclosed by Genzyme or its agents to R&D or Techne in connection with the
transactions contemplated by this Agreement (including, but not limited to,
customer lists and intellectual property rights), and not disclose, publish, use
or permit others to use the same. R&D and Techne acknowledge that Genzyme shall
be entitled, in addition to all other available remedies, to injunctive and
other equitable relief to prevent or remedy any breach of this Agreement and to
secure performance under this Agreement.
(b) Genzyme understands and agrees that confidentiality with respect to the
subject matter and performance of this Agreement is of extreme importance, and
any breach or violation of an obligation of confidentiality hereunder by Genzyme
may result in material and irreparable harm to R&D or Techne. Genzyme will hold
in confidence and use its Best Efforts to have all of its respective employees,
agents, representatives and affiliated companies hold in confidence all Techne
Confidential Information which is disclosed by R&D or Techne or their agents to
Genzyme in connection with the transactions contemplated by this Agreement
(including, but not limited to, customer lists and intellectual property
rights), and not disclose, publish, use or permit others to use the same.
Genzyme acknowledges that R&D and Techne shall be entitled, in addition to all
other available remedies, to injunctive and other equitable relief to prevent or
remedy any breach of this Agreement and to secure performance under this
Agreement.
(c) Prior to the Closing, Genzyme will hold in confidence and use its Best
Efforts to have all of its respective employees, agents, representatives and
affiliated companies hold in confidence all Transferred Information and not
disclose, publish, use or permit others to use the same. Immediately following
the Closing, Genzyme will notify its employees, agents, representatives and
affiliated companies that it has transferred all rights in and to the
Transferred Information and shall notify them of the obligation under this
Section 11 to maintain such Transferred Information in confidence.
11.2 Nonuse.
(a) R&D and Techne will use Genzyme Confidential Information only in
connection with their evaluation of the transaction contemplated by this
Agreement and the performance of their obligations hereunder. Such use of
Genzyme Confidential Information shall be made only until this Agreement expires
or otherwise terminates. Other than as is contemplated by this Agreement,
neither R&D nor Techne will in any way use any Genzyme Confidential Information
for its own benefit or the benefit of any third party.
(b) Genzyme will use Techne Confidential Information only in connection
with its evaluation of the transaction contemplated by this Agreement and the
performance of its obligations hereunder. Such use of Techne Confidential
Information shall be made only until this Agreement expires or otherwise
terminates. Other than as is contemplated by this Agreement, Genzyme will not in
any way use any Techne Confidential Information for its own benefit or the
benefit of any third party.
11.3 Exceptions. The provisions contained in Section 11.1, 11.2, 11.5 and
11.6 will not apply to any specific Confidential Information which:
(a) at the time of disclosure to the receiving party is part of, or without
violation of this Agreement or fault of the receiving party has become part of,
the public knowledge or literature and readily accessible to a third party,
provided that any combination of features shall not be deemed within this
exception merely because individual features are part of the public knowledge or
literature and readily accessible to such third party, but only if the
combination itself and its principle of operation are part of the public
knowledge or literature and readily accessible to such third party;
(b) is lawfully obtained by the receiving party from a third party without
breach of an obligation of confidence;
(c) the receiving party can show by reliable documentation was in its
possession, free of any obligation of confidentiality, at the time of disclosure
to it by the other party; or
(d) is required by law or court order to be disclosed.
11.4 Partial Disclosures. In the event that any Confidential Information
shall be in any way disclosed to any party other than as is contemplated by this
Agreement, or is any way released into the public domain, all Confidential
Information that is not so disclosed or released shall nevertheless remain
subject to the provisions of this Section 11.
11.5 Disclosure to R&D and Techne Employees. All of R&D's and Techne's
employees to whom any of the Genzyme Confidential Information has been disclosed
or is to be disclosed (and any third party who is to have access to the Genzyme
Confidential Information) shall have executed R&D's standard form of
confidentiality agreement, attached hereto as Exhibit 11.5. At the request of
Genzyme, or upon any termination of this Agreement, R&D will promptly return to
Genzyme all items of Genzyme Confidential Information, except that one copy may
be retained for archival purposes.
11.6 Disclosure to Genzyme Employees. All of Genzyme's employees to whom
any of the Techne Confidential Information has been disclosed or is to be
disclosed (and any third party who is to have access to the Techne Confidential
Information) shall have executed Genzyme's standard form of confidentiality
agreement, attached hereto as Exhibit 11.6. At the request of Techne, or upon
any termination of this Agreement, Genzyme will promptly return to Techne all
items of Techne Confidential Information, except that one copy may be retained
for archival purposes.
12. INTELLECTUAL PROPERTY INDEMNITY, LIABILITIES AND LIMITATIONS
12.1 Genzyme Intellectual Property Disclaimer. Genzyme does not warrant (i)
the validity or scope of any patent right which is an Asset, or (ii) that
anything derived or substantially derived from the Technology or Genzyme
Products provided hereunder is or will be free from infringement of patents or
intellectual property of third persons. However, Genzyme does represent and
warrant that, except as disclosed to R&D and Techne in writing prior to the
Closing, to the best of its knowledge after reasonable inquiry that no Genzyme
Product infringes any patents or intellectual property rights of any third
person.
12.2 Infringement Indemnity by R&D. R&D will defend Genzyme against and
indemnify Genzyme for any damages finally awarded or settlement amounts paid in
respect of a claim made against Genzyme that R&D's use of the Technology or sale
of Genzyme Products after the Closing infringes any third party's intellectual
property rights, provided that Genzyme notifies R&D in writing within twenty
(20) days of any such claim. R&D shall have full control over the defense and
settlement of any such claim.
12.3 Infringement Indemnity by Genzyme. Genzyme will defend R&D against and
indemnify R&D for any damages finally awarded or settlement amounts paid in
respect of a claim made against R&D or its Affiliates that Genzyme's use of the
Technology or sale of Genzyme Products after the Closing and during the
Transition Period infringes any third party's intellectual property rights,
provided that R&D notifies Genzyme in writing within twenty (20) days of any
such claim. Genzyme shall have full control over the defense and settlement of
any such claim.
12.4 Discovering and Reporting Infringements. Subsequent to closing,
Genzyme shall promptly report to R&D any third party infringement of R&D's
rights in and any patents related to the Technology or the Genzyme Products.
12.5 No Trademark Rights. Except as provided in Sections 1.2 and 13, no
party is hereby acquiring any right in or to any other party's name, any
abbreviation thereof, name acronym, its logotype, or other trademarks or any
trade name of another party.
13. TRADEMARK LICENSE
13.1 Grant of License. The Assets sold hereunder include all rights, title
and interest in and to those trademarks, trade names and service marks
identified in Schedule 1.2(e). Genzyme uses other trademarks, trade names and
services marks in connection with the Business, all of which are identified in
Schedule 13.1 (collectively, the "Licensed Trademarks"). Genzyme grants to R&D
and Techne and their Affiliates a nonexclusive, worldwide, royalty-free license
(without right of sublicense) to use the Licensed Trademarks in connection with
sales of Genzyme Products, including any substantial equivalents thereof and any
enhancements or other modifications thereof made in the ordinary course of the
business. R&D, Techne and their respective Affiliates admit the validity of, and
agree not to challenge, the Licensed Trademarks. All use of the Licensed
Trademarks by Techne, R&D and their Affiliates shall inure to the benefit of
Genzyme.
13.2 Quality Control. R&D, Techne and their Affiliates shall use the
Licensed Trademarks in conformance with Genzyme's standards and such use shall
be under Genzyme's sole control. However, Genzyme acknowledges that use of the
Licensed Trademarks shall be in compliance with Genzyme's standards so long as
the products sold thereunder are manufactured in a facility which is certified
by the United States Food and Drug Administration as meeting its GMP standards
or which is certified as meeting standards for CE certification for sales in
Europe and the services sold thereunder are provided at a level of quality
appropriate for and characterized by the services currently offered by Genzyme
under the relevant ▇▇▇▇. Upon request by Genzyme, R&D shall supply Genzyme with
specimens demonstrating how the Licensed Trademarks are used hereunder, and such
other information as may be reasonably requested, and to permit reasonable,
periodic inspection of the operations of R&D and/or its Affiliates, at
reasonable times and with reasonable notice in order to determine control and
quality level of products sold under the Licensed Trademarks.
13.3 Term of License. Unless terminated earlier under the provisions of
Section 13.4, the license granted in Section 13.1 shall terminate on the earlier
of the date two years from the date of Closing, the latest expiration date of
the Genzyme Products included in the Inventory or the date on which R&D ceases
to sell Genzyme Products included in the Inventory or manufactured by Genzyme
for R&D pursuant to Section 10.2; written notice of which shall be promptly
provided to Genzyme. At termination, R&D shall cease all use of the Licensed
Trademarks, rights to which shall revert to Genzyme.
13.4 Termination of License. If R&D or Techne shall breach any of the terms
of Sections 13.1 or 13.2 with respect to any particular Licensed Trademark(s),
Genzyme shall have the right to terminate the license granted thereunder to use
the particular Licensed Trademark(s) by giving R&D and Techne 30 days' notice in
writing, particularly specifying the breach. Such notice of termination shall
not be effective if the specified breach is cured within said 30-day period or,
in the case of breaches not reasonably curable within said 30-day period, if
cure thereof is commenced within said 30-day period and diligently thereafter
prosecuted. R&D and Techne may terminate the trademark license granted under
Section 13.1 at any time upon written notice.
13.5 Additional Trademark. After the Closing, Genzyme shall cooperate with
Techne in the application for registration as a trademark of "Genzyme/Techne"
and any reasonable variations thereof as may be agreed upon by the parties.
Techne shall have exclusive, royalty-free rights to use such trademark in
connection with sale of all Genzyme Products and scientifically equivalent R&D
products in the territories listed on Schedule 13.5, from the date of Closing
until the date two years from the date the termination pursuant to Section 13.3
of the license granted pursuant to Section 13.1, but in no event later than four
(4) years following the Closing. Further, solely in the territories of Japan and
Italy, Techne shall have exclusive, royalty-free rights to use the
Genzyme/Techne trademark and any reasonable variation thereof agreed upon by the
parties, on Qualified Products (as defined in Schedule 8.1) until the date four
(4) years following the Closing subject to the following: (i) Techne grants
Genzyme S.R.L. rights co-exclusive with Techne's current Italian distributor
(which rights shall be transferable) to market any products bearing the
Genzyme/Techne trademark and (ii) Techne will provide Genzyme's current
distributors in Japan reasonable access to market any products bearing the
Genzyme/Techne trademark. All Genzyme Products and corresponding R&D products
sold under the Genzyme/Techne trademark shall be of the same quality standards
as set forth in Section 13.2. Upon expiration of this right to use the
Genzyme/Techne trademark, Techne shall promptly cease use of such trademark but
retain the right to prohibit and prevent use thereof by any other person or
party.
14. INDEMNIFICATION
14.1 Indemnification by Genzyme.
(a) Genzyme hereby indemnifies R&D and Techne and agrees to hold harmless
and, at R&D's or Techne's request, defend R&D, Techne and R&D's subsidiaries,
and the affiliates, directors, officers, employees, agents and independent
contractors of each, against and in respect of any and all damages, losses,
deficiencies, liabilities, orders, claims, fines, judgments, costs, fees and
expenses, including, without limitation, reasonable legal, accounting and other
fees and expenses (collectively, "Damages"), incurred or suffered by R&D or
Techne as a result of: (i) any breach by Genzyme of any representation or
warranty made by it contained in this Agreement or in any other document
delivered pursuant hereto; (ii) any other breach or violation by Genzyme of any
covenant, agreement, term or condition of this Agreement or the Stockholder's
Rights Agreement or in any other document delivered pursuant hereto; (iii) any
employment-related lawsuit, action, charge or complaint overtly threatened,
brought or filed against Genzyme prior to the date of Closing; (iv) any grossly
negligent act or omission or willful misconduct of Genzyme or Genzyme's
employees, agents or independent contractors, including but not limited to any
act or omission that contributes to (A) any personal injury, sickness, disease
or death, (B) any damage to or destruction of any property of R&D or any loss of
use resulting therefrom or (C) any violation of any statute, ordinance or
regulation; (v) any sales or use of the Genzyme Products or Technology by
Genzyme prior to the Closing (including any claim of infringement for sales
prior to the Closing); (vi) the termination or transfer of any employee of the
Business (other than employees in the United Kingdom, France and Germany) in
connection with the Transaction; (vii) any claims arising from the termination
by Genzyme of any of its suppliers, independent contractors, dealers or
distributors of the Business in connection with the Transaction, including
claims of tortious interference with contractual or business relations or a
substantially similar cause of action; or (viii) any actions, suits,
proceedings, demands, assessments or judgments incident to any of the foregoing.
(b) Techne and R&D shall be paid or reimbursed the amount which would be
required to put them in the position that they would have been in had such
representation or warranty been true and correct as of the date made or had such
covenant, agreement, term or condition been performed, complied with or
fulfilled, or had such failure not occurred.
14.2 Indemnification by R&D and Techne.
(a) R&D and Techne hereby jointly and severally indemnify Genzyme and agree
to hold harmless and, at Genzyme's request, defend Genzyme and Genzyme's
subsidiaries, and the affiliates, directors, officers, employees, agents and
independent contractors of each, against and in respect of any and all Damages
incurred or suffered by Genzyme as a result of: (i) any breach by R&D or Techne
of any representation or warranty made by either of them contained in this
Agreement or the Stockholder's Rights Agreement or in any other document
delivered pursuant hereto; (ii) any other breach or violation by R&D or Techne
of any covenant, agreement, term or condition of this Agreement, the
Stockholder's Rights Agreement or any other document delivered pursuant hereto;
(iii) any act or omission occurring after the Closing with respect to the
Business, including without limitation any sale or use of any of the products or
inventories related to the Business, including without limitation the obligation
to assume and discharge the Assumed Liabilities; (iv) any grossly negligent act
or omission or willful misconduct of R&D or R&D, employees, agents or
independent contractors, including but not limited to any act or omission that
contributes to (A) any personal injury, sickness, disease or death, (B) any
damage to or destruction of any property of Genzyme or any loss of use resulting
therefrom or (C) any violation of any statute, ordinance or regulation; (v) any
sales or use of the Genzyme Products or Technology subsequent to the Closing
(including any claim of infringement for sales subsequent to the Closing),
provided that this subsection (v) shall not be interpreted to prevent R&D or
Techne from asserting a claim relating to a breach by Genzyme of any other
provision of this Agreement; (vi) the termination or transfer of any U.K.,
French or German employee of the Business in connection with the Transaction;
and (vii) any actions, suits, proceedings, demands, assessments or judgments
incident to any of the foregoing.
(b) Genzyme shall be paid or reimbursed the amount which would be required
to put Genzyme in the position that it would have been in had such
representation or warranty been true and correct as of the date made or had such
covenant, agreement, term or condition been performed, complied with or
fulfilled, or had such act or omission not occurred.
15. ADDITIONAL AGREEMENTS
15.1 Incorporation of Schedules and Exhibits. All schedules, exhibits and
other documents and written information required to be delivered pursuant to
this Agreement are incorporated into this Agreement by this reference and are
warranted by the party or parties which deliver the same to be accurate and
complete in all material respects. In the event that any material changes shall
occur with respect to any information disclosed in any schedule furnished by
either party hereunder following the date of the delivery thereof and prior to
the date of Closing, such party shall promptly notify the other party thereof in
writing.
15.2 Governmental Documents and Financial Information. If, after the date
of Closing, in order properly to prepare its tax returns or other documents or
reports required to be filed with governmental authorities or its financial
statements, it is necessary that a party to this Agreement be furnished with
additional information relating to the Assets and the Business and such
information is in possession of the other party or any related party and can
reasonably be furnished to the party in need of such information, then the other
party will, promptly upon request, furnish such information to the party in need
of such information. In furtherance of this Section 15.2, Genzyme agrees to
provide to R&D, within forty-five (45) days of Closing: (a) an audited statement
of net assets transferred as of December 31, 1996 and 1997; (b) unaudited
statements of net assets transferred as of the most recent quarter end prior to
the Closing if the Closing occurs on other than a quarter end; (c) audited
statements of revenues, cost of sales, gross profit and direct expenses of the
Business for the years ended December 31, 1995, 1996 and 1997; (d) unaudited
statement of revenues, cost of sales, gross profit and direct expenses for the
six months ended June 30, 1998 and for the period from July 1, 1998 to the end
of the quarter (if any) preceding the date of Closing and the comparable prior
year period if the Closing occurs on or after June 30, 1998 but before December
31, 1998; and (e) such other financial information required by the Commission
for Techne's Current Report of Form 8-K to be filed in connection with the
transactions contemplated by this Agreement (the "8-K"). If the audited
statement of revenues of the Business for the year ended December 31, 1997
reports revenues that are more than ten percent (10%) lower than the
corresponding figure reported in the unaudited statement of revenues for the
year ended December 31, 1997 delivered to R&D pursuant to Section 2.14, then R&D
shall have the right to offset the next Royalty payment due to Genzyme pursuant
to Section 8.1 by an amount equal to the product obtained by multiplying (i)
four dollars ($4.00) and (ii) the difference between the revenues reported in
the unaudited statement of revenues of the Business for the year ended December
31, 1997 and the corresponding figure reported in the audited statement of
revenues for the year ended December 31, 1997. Genzyme further agrees that
Techne may use the financial information included in the 8-K in future filings
of registration statements and other reports as required by the rules and
regulations of the Commission. Genzyme will use its Best Efforts to cause
Coopers & ▇▇▇▇▇▇▇ L.L.P. to provide any required consents to such filings and
reports at a reasonable cost to Techne.
15.3 Cooperation. Each party will take all reasonable actions necessary to
comply promptly with all legal requirements which may be imposed on it with
respect to the consummation of the transactions contemplated by this Agreement
and will promptly cooperate with and furnish information to the other party in
connection with any such requirements imposed upon either of them in connection
with the consummation of the transactions contemplated by this Agreement. Each
party will take all reasonable actions necessary to obtain (and will cooperate
with the other party in obtaining) any consent, approval, order or authorization
of, or any registration, declaration or filing with, any governmental entity,
domestic or foreign, or other person, required to be obtained or made by such
party (or by the other party) in connection with the taking of any action
contemplated by this Agreement.
15.4 Contract Assignment. Genzyme agrees to use its Best Efforts to obtain,
prior to the date of Closing, all such governmental and other consents and
approvals as may be necessary and appropriate in order to enable it to perform
its obligations hereunder and to accomplish the transfers to R&D contemplated
hereby so that R&D may enjoy after the date of Closing, (a) all the rights and
benefits, including, without limitation, the economic benefits, presently
enjoyed by Genzyme in and to the Business and (b) all of Genzyme's right, title
and interest in and to each of the Assets. Genzyme shall keep R&D apprised of
the status of all discussions with third parties in connection with obtaining
such consents. If any consent is not obtained, or if an attempted assignment
thereof would be ineffective or would affect the rights of Genzyme thereunder so
that R&D would not in fact receive all such rights, Genzyme will cooperate with
R&D in any arrangement intended to provide for R&D the benefits under any such
contract, license, lease, franchise, sales order, purchase order, or other
agreement, commitment or arrangement, including enforcement for the benefit of
R&D of any and all rights of Genzyme under and in any of the foregoing against a
third party thereto arising out of the breach or cancellation by such third
party or otherwise. Nothing in this Agreement shall be construed to limit Techne
and R&D's right not to close this transaction as set forth in Section 6.2.
15.5 Assistance with Audits. Each party agrees, if requested by the other
party at any time after Closing, to give the requesting party and its
independent accountants reasonable access to (and to cause reasonable access to
be given by its independent public accountants) the workpapers of the party of
whom the request was made pertaining to the Assets and/or the Business in
connection with the preparation of any financial statements, internal reports or
audits of the requesting party, and to use its Best Efforts to assist the
requesting party and its independent accountants in understanding such
workpapers.
15.6 Maintenance of Records. The parties each agree to cooperate fully in
order to allow the maintenance of records necessary to conduct their respective
businesses and agree to provide such reports and information to one another as
are reasonably requested and reasonably related to the business of the
requesting party or the performance of this Agreement.
15.7 Product Claims and Returns. Genzyme shall, for a period of six months
following the Closing, continue to be responsible for customer claims relating
to services rendered by Genzyme prior to the date of Closing, and customer
claims relating to, or returns of, products of Genzyme sold and shipped by
Genzyme prior to the date of Closing. If a customer makes a claim or seeks a
return after such six month period and, in the reasonable judgment of R&D the
claim or return is proper, R&D may replace or repair, as the case may be, the
services rendered or product purchased at R&D, at then generally prevailing
prices and labor rates. Provided that R&D has obtained the prior consent of
Genzyme, which consent shall not be unreasonably withheld, Genzyme shall
reimburse R&D for the cost of such repairs or returns.
15.8 Adjustments. To the extent not otherwise adjusted pursuant to this
Agreement, all items and all payments received by Genzyme or by R&D which cover
a period both prior and subsequent to the date of Closing shall be equitably
prorated as of such date.
15.9 Taxes. The Royalties do not include amounts for taxes that may be
based upon the Technology. If Genzyme is required to pay sales, use, property,
transfer, value-added, or other federal, state or local taxes based on the
rights granted pursuant to this Agreement, the services provided under this
Agreement, or on R&D's use of the Technology or the Core Products then such
taxes shall be billed to and paid (or promptly reimbursed) by R&D. This
provision shall not apply to taxes based on Genzyme's income.
15.10 Cooperation in Litigation. From and after the date of the Closing,
each party shall fully cooperate with the other in the defense or prosecution of
any litigation or proceeding already instituted or which may be instituted
hereafter against or by such other party relating to or arising out of the
conduct of the Business prior to or after the Closing Date (other than
litigation arising out of the transactions contemplated by this Agreement). The
party requesting such cooperation shall pay the reasonable out-of-pocket
expenses incurred in providing such cooperation (including legal fees and
disbursements if the requesting party has given prior written consent to the use
by the other party of separate legal counsel, which consent shall not be
unreasonably withheld) by the party providing such cooperation and by its
officers, directors, employees and agents, but shall not be responsible for
reimbursing such party or its officers, directors, employees and agents for
their time spent in such cooperation.
15.11 Discount on Sales of R&D Products to Genzyme. For a period of one
year following the date of Closing, R&D shall provide to Genzyme all of
Genzyme's requirements of Qualified Products (as defined in Schedule 8.1) at a
twenty-five percent (25%) discount to the then-current list price for such
products.
15.12 Belgian Employees. Genzyme will promptly reimburse Techne and its
Affiliates for any costs incurred by any of them relating to or arising out of
the termination or transfer of any Belgian employee of the Business (including
but not limited to any payments in lieu of notice of the Transaction and any
severance, termination or non-competition obligations arising under such
employee's employment contract or applicable law) following receipt by Genzyme
of a detailed, written report setting forth the costs for which Techne is
seeking reimbursement.
16. MISCELLANEOUS
16.1 Expenses. Each party shall bear and pay its own expenses incurred in
connection with the transactions referred to in this Agreement. The party
responsible under applicable law shall bear and pay in their entirety all other
registration and transfer fees, if any, payable by reason of the sale and
conveyance of the Assets. Each party will cooperate to the extent practicable in
minimizing all taxes and fees levied by reason of the sale or assignment of the
Assets.
16.2 Public Announcements. Each party will be responsible for the issuance
of press releases or trade releases, and the making of such other public
statements with respect to this Agreement and the transactions contemplated
hereby as may, in such party's reasonable judgment, be necessary or appropriate;
provided, however, that any such release or statement which contains the name of
the other party shall be subject to the reasonable approval of such other party.
In carrying out this responsibility, a party proposing to issue such a release
or make such a statement shall provide the other party with at least forty-eight
(48) hours notice by telefax of any proposed press release, trade release or
public statement. Notwithstanding the foregoing, the parties agree to the
issuance of a joint press release announcing the execution of this Agreement,
such press release to be in such form and issued at such time as the parties may
mutually agree.
16.3 Term and Termination.
(a) This Agreement may be terminated before the Closing as follows:
(i) at the election of Genzyme upon written notice to Techne and R&D
if, on or after August 31, 1998, any one or more of the conditions to the
obligation of Genzyme to close has not been fulfilled;
(ii) at the election of Techne and R&D upon written notice to Genzyme
if, on or after August 31, 1998, any one or more of the conditions to the
obligation of Techne and R&D to close has not been fulfilled;
(iii) at the election of Genzyme upon written notice to Techne and R&D
if Techne or R&D has breached any representation, warranty, covenant or
agreement contained in this Agreement and has not, within ten (10) business
days after receipt by Techne or R&D, as the case may be, of written notice
of such breach of representation, warranty, covenant or agreement, cured
such breach;
(iv) at the election of Techne and R&D upon written notice to Genzyme
if Genzyme has breached any representation, warranty, covenant or agreement
contained in this Agreement and has not, within ten (10) business days
after receipt by Genzyme of written notice of such breach of
representation, warranty, covenant or agreement, cured such breach; or
(v) by mutual written agreement of Genzyme, Techne and R&D.
(b) This Agreement is subject to termination after the Closing as follows:
(i) Either Genzyme or R&D shall have the right to terminate Article 10
of this Agreement, without prejudice to any other right or available remedy
or relief, immediately upon written notice to the other at any time if the
other party: (i) becomes insolvent; (ii) fails to pay its debts or perform
its obligations in the ordinary course of business as they mature; (iii)
admits in writing its insolvency or inability to pay its debts or perform
its obligations as they mature; (iv) makes and assignment for the benefit
of creditors; or (v) commences or has commenced against it a bankruptcy or
similar proceeding; or
(ii) This Agreement shall terminate if and as specified by mutual
written agreement of the Parties.
(c) If this Agreement is terminated:
(i) before the Closing pursuant to Section 16.3(a), and the
transactions contemplated hereby are not consummated as provided above,
each and every representation and warranty contained in this Agreement or
any Schedule hereto, or any certificate, document or other instrument
delivered by the parties in connection therewith, shall expire and none of
the parties hereto shall be under any liability whatsoever with respect to
any such representation or warranty; provided, however, that
notwithstanding the foregoing, each party shall be and remain liable to the
other in the event that the failure to close hereunder shall occur as a
consequence of the failure of a party to fully perform its covenants and
agreements hereunder or the material breach by a party of its
representations or warranties contained herein;
(ii) after the Closing pursuant to Section 16.3(b), except as
otherwise agreed, all provisions, terms and conditions shall survive
termination other than the provisions of Articles 9 and 10; and
(iii) in either case, the provisions of Article 11 shall continue to
apply for a period of three (3) years from the date of termination.
16.4 Entire Agreement; Modifications; Waiver. This Agreement, together with
the related agreements, Schedules referenced herein and Exhibits hereto,
constitutes the final, exclusive and complete understanding of the parties with
respect to the subject matter hereof and supersedes any and all prior
agreements, understandings and discussions with respect thereto. No variation or
modification of this Agreement and no waiver of any provision or condition
hereof, or granting of any consent contemplated hereby, shall be valid unless in
writing and signed by the party against whom enforcement of any such variation,
modification, waiver or consent is sought.
16.5 Survival of Representations and Warranties. All representations and
warranties made by any party to this Agreement or pursuant hereto shall survive
the closing of the transactions hereunder; provided, however, that except with
respect to warranties of title to the Assets or to the absence of encumbrances
on the Assets, notice of any claim based on a breach of a representation or
warranty must be given within one (1) year from the date of Closing or, in the
case of representations or warranties dealing with tax matters, within one (1)
year plus sixty (60) days after the expiration of the applicable tax statute of
limitations. The representations and warranties hereunder shall not be affected
or diminished by any investigation at any time by or on behalf of the party for
whose benefit such representations and warranties were made. All statements
contained herein or in any schedule, exhibit, certificate, list or other
document delivered pursuant hereto or in connection with the transactions
contemplated hereby shall be deemed to be representations and warranties.
16.6 Further Assurances. The parties hereto shall use their best efforts,
and shall cooperate with one another, to secure all necessary consents,
approvals, authorizations, exemptions and waivers from third parties as shall be
required in order to consummate the transactions contemplated hereby, and shall
otherwise use their best efforts to cause such transactions to be consummated in
accordance with the terms and conditions hereof. At any time or from time to
time after the Closing, each party hereto shall, at the request of the other
party, execute and deliver any further instruments or documents and take all
such further action as the requesting party may reasonably request in order to
consummate and document the transactions contemplated hereby.
16.7 Captions. The captions in this Agreement are for convenience only and
shall not be considered a part of or affect the constructing or interpretation
of any provision of this Agreement.
16.8 Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed shall constitute an original copy
hereof, but all of which together shall constitute one agreement.
16.9 Successors and Assigns. This Agreement shall be binding upon and inure
to the benefit of the parties to this Agreement and their successors and
assigns, provided that, except as otherwise provided herein, the rights and
obligations of any party to this Agreement may not be assigned without the
written consent of the other party, which consent will not be unreasonably
withheld. Any party, however, may assign its rights and obligations to an entity
succeeding to substantially all of its assets and business.
16.10 Parties in Interest. Nothing in this Agreement, whether express or
implied, is intended to confer any rights or remedies under or by reason of this
Agreement on any persons other than the parties to it and their respective
successors and assigns, nor is anything in this Agreement intended to relieve or
discharge the obligation or liability of any third persons to any party to this
Agreement, nor shall any provision give any third persons any right of
subrogation or action over against any party to this Agreement.
16.11 Notices. All notices, requests, demands and other communications
hereunder ("Notices") shall be in writing and shall be deemed to have been duly
given if delivered by hand or by registered or certified mail, postage prepaid,
return receipt requested, but only upon receipt of such return receipt, as
follows:
if to Genzyme,
Genzyme Corporation
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Chief Legal Officer
Tel: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
with a copy to,
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇ & Dodge LLP
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
if to R&D,
Research and Diagnostic Systems, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to,
▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, P.A.
1100 International Centre
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
if to Techne,
Techne Corporation
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: President
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to,
▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇
1100 International Centre
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
or to such other address as any party may have furnished to the others in
writing in accordance herewith, except that notices of change of address shall
only be effective upon receipt. All Notices shall be deemed received on the date
of delivery or, if mailed, on the date appearing on the return receipt therefor.
16.12 Law Governing. This Agreement shall be governed by, and construed and
enforced in accordance with the laws of the State of Minnesota, without regard
to its choice-of-laws or conflicts-of-law rules.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed, all as of the day and year first above written.
GENZYME: GENZYME CORPORATION
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Group Senior Vice President
R&D: RESEARCH AND DIAGNOSTIC SYSTEMS, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, President
TECHNE: TECHNE CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, President