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EXHIBIT 1
ASSET PURCHASE AGREEMENT
BY AND BETWEEN
BIOSEPRA INC.
AND
LIFE TECHNOLOGIES, INC.
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TABLE OF CONTENTS
PAGE
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INDEX OF EXHIBITS........................................... A-iv
INDEX OF SCHEDULES.......................................... A-v
1. SALE AND DELIVERY OF THE ASSETS.......................... A-1
1.1 Delivery of the Assets................................ A-1
1.2 Further Assurances.................................... A-2
1.3 Purchase Price........................................ A-2
1.4 Escrow Amount......................................... A-4
1.5 Assumption of Liabilities; Etc........................ A-4
1.6 Allocation of Purchase Price.......................... A-5
1.7 The Closing........................................... A-6
2. REPRESENTATIONS OF THE SELLER............................ A-6
2.1 Organization.......................................... A-6
2.2 Capitalization of the Seller, BSA and BSG............. A-6
2.3 Authorization......................................... A-7
2.4 Ownership and Condition of the Assets................. A-7
2.5 Reports and Financial Statements...................... A-8
2.6 Absence of Undisclosed Liabilities.................... A-9
2.7 Litigation............................................ A-9
2.8 Intentionally Deleted................................. A-9
2.9 Inventory............................................. A-9
2.10 Fixed Assets......................................... A-9
2.11 Leases............................................... A-10
2.12 Change in Financial Condition and Assets............. A-10
2.13 Tax Matters.......................................... A-11
2.14 Accounts Receivable.................................. A-12
2.15 Books and Records.................................... A-12
2.16 Contracts and Commitments............................ A-13
2.17 Compliance with Agreements and Laws.................. A-14
2.18 Employee Relations and Benefit Plans................. A-14
2.19 Customers............................................ A-15
2.20 Suppliers............................................ A-16
2.21 Prepayments.......................................... A-16
2.22 Trade Names and Other Intangible Property............ A-16
2.23 Real Estate.......................................... A-17
2.24 Regulatory Approvals................................. A-17
2.25 Powers of Attorney and Suretyships................... A-17
2.26 Brokers.............................................. A-17
2.27 No Illegal or Improper Transactions.................. A-17
2.28 Environmental Matters................................ A-17
2.29 Year 2000 Compliance................................. A-18
2.30 No Product Liabilities; Product Warranties........... A-18
2.31 Disclosure........................................... A-18
2.32 Bankruptcy........................................... A-18
2.33 Insurance............................................ A-18
2.34 Biopass S.A.......................................... A-19
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3. REPRESENTATIONS OF THE BUYER............................. A-19
3.1 Organization and Authority............................ A-19
3.2 Authorization......................................... A-19
3.3 Brokers............................................... A-20
4. ACCESS TO INFORMATION; CONFIDENTIALITY; PUBLIC
ANNOUNCEMENTS............................................. A-20
4.1 Access to Management, Properties and Records.......... A-20
4.2 Confidentiality....................................... A-20
4.3 Public Announcements.................................. A-20
5. PRE-CLOSING COVENANTS OF THE SELLER...................... A-20
5.1 Conduct of Business................................... A-20
5.2 Absence of Material Changes........................... A-21
5.3 Taxes................................................. A-21
5.4 Communication with Customers and Suppliers............ A-21
5.5 Compliance with Laws.................................. A-21
5.6 Continuing Obligation to Inform....................... A-21
5.7 No Solicitations...................................... A-22
6. BEST EFFORTS TO OBTAIN SATISFACTION OF CONDITIONS........ A-22
7. CONDITIONS TO OBLIGATIONS OF THE BUYER................... A-23
7.1Continued Truth of Representations and Warranties of
the Seller; Compliance with Covenants and
Obligations............................................ A-23
7.2 Corporate Proceedings................................. A-23
7.3 Governmental Approvals................................ A-23
7.4 Consents of Lenders, Lessors and Other Third
Parties................................................ A-23
7.5 Adverse Proceedings................................... A-23
7.6 Update................................................ A-24
7.7 Employment Matters.................................... A-24
7.8 Closing Deliveries.................................... A-24
7.9 Cross-License Agreement............................... A-25
7.10 Non-Competition Agreement............................ A-25
7.11 Stockholder Approval................................. A-25
7.12 Name Change.......................................... A-25
7.13 Closing Balance Sheet................................ A-25
7.14 ▇▇▇▇▇▇▇▇▇ Senior Management Retention Agreement...... A-25
7.15 Release of Security Interests........................ A-25
8. CONDITIONS TO OBLIGATIONS OF THE SELLER.................. A-25
8.1Continued Truth of Representations and Warranties of
the Buyer; Compliance with Covenants and Obligations... A-25
8.2 Corporate Proceedings................................. A-26
8.3 Governmental Approvals................................ A-26
8.4 Adverse Proceedings................................... A-26
8.5 Closing Deliveries.................................... A-26
8.6 Cross-License Agreement............................... A-26
8.7 Supply Agreement...................................... A-26
8.8 Stockholder Approval.................................. A-26
8.9 Sale of Name.......................................... A-26
9. TERMINATION OF REPRESENTATIONS AND COVENANTS............. A-27
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10. POST-CLOSING AGREEMENTS................................. A-27
10.1 Proprietary Information.............................. A-27
10.2 No Solicitation or Hiring of Former Employees........ A-27
10.3 Non-Competition Agreement............................ A-27
10.4 Use of Name.......................................... A-28
10.5 Cooperation in Litigation............................ A-28
10.6 Access to Books and Records.......................... A-28
10.7 Intangible Property Cooperation...................... A-28
10.8 Retention Bonus Agreements........................... A-28
10.9 Biosphere Agreement.................................. A-28
10.10 ▇▇▇▇▇▇▇ Agreements.................................. A-28
10.11 BSA Account Receivable.............................. A-29
10.12 ▇▇▇▇▇▇▇▇▇ Supplementary Benefits Agreement.......... A-29
10.13 Services Agreement.................................. A-29
10.14 Consulting Agreement................................ A-29
11. TERMINATION OF AGREEMENT................................ A-29
11.1 Termination by Lapse of Time......................... A-29
11.2 Termination by Agreement of the Parties.............. A-29
11.3 Termination by the Seller............................ A-29
11.4 Termination by the Buyer............................. A-29
11.5 Termination by Buyer or Seller by Reason of Breach... A-29
11.6 Effect of Termination................................ A-30
12. FEES AND EXPENSES....................................... A-30
13. INDEMNIFICATION......................................... A-30
13.1 Survival of Representations and Warranties........... A-30
13.2 Indemnification Provisions for Benefit of Buyer...... A-31
13.3 Indemnification Provisions for Benefit of Seller..... A-32
13.4 Matters Involving Third Parties...................... A-32
13.5 Adjustments to Indemnification Payments.............. A-33
13.6 Escrow Fund.......................................... A-33
14. TRANSFER AND SALES TAX.................................. A-33
15. NOTICES................................................. A-33
16. SUCCESSORS AND ASSIGNS.................................. A-34
17. ENTIRE AGREEMENT; AMENDMENTS; ATTACHMENTS............... A-34
18. GOVERNING LAW........................................... A-34
19. SECTION HEADING......................................... A-34
20. SEVERABILITY............................................ A-34
21. COUNTERPARTS............................................ A-34
22. NO THIRD PARTY BENEFICIARIES............................ A-34
23. EFFECT OF DUE DILIGENCE................................. A-35
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INDEX OF EXHIBITS
Exhibit A.......................................................Escrow Agreement
Exhibit B...............................................Instrument of Assumption
Exhibit C..................................................Current Balance Sheet
Exhibit D..........................BSA Assets to Be Transferred Prior to Closing
Exhibit E...........................................................▇▇▇▇ of Sale
Exhibit F..................................Form of Opinions of Counsel to Seller
Exhibit G................................................Cross-License Agreement
Exhibit H.............................▇▇▇▇-▇▇▇▇▇ ▇▇▇▇▇ Non-Competition Agreement
Exhibit I....................................Form of Opinion of Counsel to Buyer
Exhibit J.......................................................Supply Agreement
Exhibit K......................Employees Eligible for Retention Bonus Agreements
Exhibit K-1......................................Retention Bonus Agreement (LTI)
Exhibit K-2......................................Retention Bonus Agreement (BSA)
Exhibit L....................................................▇▇▇▇▇▇▇ Obligations
Exhibit M......................▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Supplementary Benefits Agreement
Exhibit N..................................................Services Arrangements
Exhibit O..................................▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Consulting Agreement
The Exhibits listed above will be supplied upon request by the Commission.
▇-▇▇
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INDEX OF SCHEDULES
SCHEDULE 1.1 (b)(ii).............................................Excluded Assets
SCHEDULE 1.1 (b)(iii)............Excluded BioSepra Contracts and Contract Rights
SCHEDULE 1.5 (a)(i)...Assumed Liabilities/Accounts Payable, Notes and Notes
Payable
SCHEDULE 1.5 (a)(ii)...............................Assumed Liabilities/Contracts
SCHEDULE 1.5 (a)(iii).....Assumed Liabilities /Other Liabilities and Obligations
SCHEDULE 1.6........................................Allocation of Purchase Price
SCHEDULE 2.1....................................................BSA Jurisdiction
SCHEDULE 2.2........................................BSG Contracts or Commitments
SCHEDULE 2.3..............................................Consents and Approvals
SCHEDULE 2.4(i)...............Ownership and Condition of the Assets/Encumbrances
SCHEDULE 2.4(ii)..................Ownership of the Assets/Permitted Encumbrances
SCHEDULE 2.6..................................Absence of Undisclosed Liabilities
SCHEDULE 2.7..........................................................Litigation
SCHEDULE 2.9...........................................................Inventory
SCHEDULE 2.10.......................................................Fixed Assets
SCHEDULE 2.11.............................................................Leases
SCHEDULE 2.12...........................Change in Financial Condition and Assets
SCHEDULE 2.13........................................................Tax Matters
SCHEDULE 2.14................................................Accounts Receivable
SCHEDULE 2.16..........................................Contracts and Commitments
SCHEDULE 2.17................................Compliance with Agreements and Laws
SCHEDULE 2.18.................................................Employee Relations
SCHEDULE 2.19..........................................................Customers
SCHEDULE 2.20..........................................................Suppliers
SCHEDULE 2.21........................................................Prepayments
SCHEDULE 2.22(a).............................................Intangible Property
SCHEDULE 2.22(b).......................................Other Intangible Property
SCHEDULE 2.22(c).....................................................Trade Names
SCHEDULE 2.24...............................................Regulatory Approvals
SCHEDULE 2.25.................................Powers of Attorney and Suretyships
SCHEDULE 2.30.........................................................Warranties
SCHEDULE 2.33.................................................Insurance Policies
SCHEDULE 3.2..............................................Consents and Approvals
The Schedules listed above will be supplied upon request by the Commission.
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ASSET PURCHASE AGREEMENT
Asset Purchase Agreement (this "Agreement") made as of the 14th day of
April, 1999 by and between BioSepra Inc., a Delaware corporation with its
principal office at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇.▇.▇.
(the "Seller"), and Life Technologies, Inc., a Delaware corporation with its
principal office at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (the
"Buyer").
PRELIMINARY STATEMENT
The Buyer desires to purchase, and the Seller desires to sell,
substantially all of the assets and business of the Seller (including any
business conducted through subsidiaries) other than such assets and business of
the Seller and its subsidiaries relating to intracorporeal and "on line"
extracorporeal therapies or any autologous treatment (collectively, the
"Business"), for the consideration set forth below and the assumption of certain
of the Seller's liabilities set forth below, subject to the terms and conditions
of this Agreement.
NOW, THEREFORE, in consideration of the mutual promises hereinafter set
forth and for other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereby agree as follows:
1. Sale and Delivery of the Assets
1.1 Delivery of the Assets.
(a) Subject to and upon the terms and conditions of this Agreement, at the
closing of the transactions contemplated by this Agreement (the "Closing"), the
Seller shall sell, transfer, convey, assign and deliver to the Buyer, and the
Buyer shall purchase from the Seller, the following properties, assets and other
claims, rights and interests which relate to or are used or held for use in
connection with the Business:
(i) all inventories of raw materials, work in process, finished goods,
office supplies, maintenance supplies, packaging materials, spare parts and
similar items (collectively, the "Inventory") of the Seller which exist on
the Closing Date (as defined below);
(ii) all accounts, accounts receivable, notes and notes receivable
existing on the Closing Date (collectively, the "Accounts Receivable") of
Seller;
(iii) all prepaid expenses, advance payments and security deposits of
the Seller existing on the Closing Date;
(iv) all rights and benefits under the Contracts (as defined below)
set forth on Schedule 2.16 attached hereto (collectively, the "Contract
Rights") of the Seller;
(v) all operating data and records, including without limitation,
books (other than corporate minute and stock record books), records and
accounts, correspondence, research and development files, drug master
files, production records, technical, accounting, manufacturing, quality
control and procedural manuals, customer lists, customer complaint files,
sales and marketing literature, purchase orders and invoices and employment
records of the Seller;
(vi) all rights, claims, warranty rights and other similar rights of
the Seller under express or implied warranties from suppliers;
(vii) all machinery, equipment, tools, computers, computer hardware
and software, motor vehicles, production reels and spools, tooling, dies,
production fixtures, maintenance machinery and equipment, furniture and
fixtures, leasehold improvements, construction in progress and other
tangible assets, whether or not reflected as capital assets in accounting
records (collectively, the "Fixed Assets") of the Seller;
(viii) all right, title and interest in and to all of the outstanding
shares of capital stock, with any dividends pertaining to the 1998 fiscal
year and all subsequent fiscal years attached, of BioSepra, S.A. (the "BSA
Shares"), a subsidiary of the Seller ("BSA");
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(ix) all right, title and interest in and to (including without
limitation the right to ▇▇▇ for and obtain remedies against past
infringement and rights of priority and protection of interests therein)
all intangible property rights, including but not limited to inventions,
discoveries, trade secrets, processes, formulas, know-how, patents, patent
applications, any patent application constituting an equivalent,
counterpart, reissue, extension or continuation (including, without
limitation, continuations-in-part, divisions, and renewals, all letters
patent granted thereon, all reissues, reexaminations) of any applications,
trade names, trademarks and service marks, trademark and service ▇▇▇▇
registrations, applications for trademark and service marks registrations,
the goodwill of the Business symbolized by the trade names, trademarks and
service marks, trademark and service ▇▇▇▇ registrations and applications
for trademark and service ▇▇▇▇ registrations, copyrights, copyright
registrations, owned, or, where not owned, used and all right, title and
interest in and to all licenses and other agreements relating to any of the
foregoing kinds of property or rights to any "know-how" or disclosure or
use of ideas, in the United States and worldwide, including but not limited
to the intangible property which is listed on Schedule 2.22 attached hereto
(collectively, the "Intangible Property") of the Seller;
(x) all Permits (as herein defined) of the Seller, including without
limitation those listed on Schedule 2.17, other than those Permits which by
law are not transferable as so indicated as not transferable on Schedule
2.17;
(xi) all non-competition agreements in favor of the Seller;
(xii) the name and all goodwill associated with the name "BioSepra";
(xiii) all toll-free telephone numbers of the Seller;
(xiv) all rights to the Seller's Internet website address
▇▇▇▇://▇▇▇.▇▇▇▇▇▇▇▇.▇▇▇; and
(xv) except as specifically provided in Section 1.1(b) hereof, all
other assets, properties, claims, rights and interests of the Seller which
exist on the Closing Date, of every kind and nature and description,
whether tangible or intangible, real, personal or mixed, wherever located,
which relate to or are used or held for use in connection with the
Business.
(b) Notwithstanding the provisions of paragraph (a) above, the assets to be
transferred to the Buyer under this Agreement shall not include (i) those assets
and business of the Seller relating to intracorporeal and "on line"
extracorporeal therapies or any autologous treatment; (ii) those assets of the
Seller listed on Schedule 1.1(b)(ii) attached hereto; or (iii) those contracts
or contract liabilities of the Seller listed on Schedule 1.1(b)(iii) ((i), (ii)
and (iii) together, the "Excluded Assets").
(c) The Inventory, Accounts Receivable, Contract Rights, Fixed Assets, BSA
Shares, Intangible Property and other properties, assets and business of the
Seller described in paragraph (a) above, other than the Excluded Assets, shall
be referred to collectively as the "Assets."
1.2 Further Assurances. At any time and from time to time after the
Closing, at the Buyer's request and without further consideration, the Seller
promptly shall execute and deliver such instruments of sale, transfer,
conveyance, assignment and confirmation, and take such other action, as the
Buyer may reasonably request to more effectively transfer, convey and assign to
the Buyer, and to confirm the Buyer's title to, all of the Assets, to put the
Buyer in actual possession and operating control thereof, to assist the Buyer in
exercising all rights with respect thereto and to carry out the purpose and
intent of this Agreement. Without limiting the generality of the foregoing, the
Seller shall execute such applications to governmental authorities, consents and
other documents and take such other action as Buyer may reasonably request in
order to enable the Buyer to use and register, as the Buyer may desire, the name
"BioSepra" and any variation thereof.
1.3 Purchase Price. (a) The purchase price for the Assets shall be Twelve
Million Dollars ($12,000,000) plus the amount of the Assumed Liabilities (as
defined herein), as determined and adjusted pursuant to this Agreement (the
"Purchase Price"). At the Closing, the Buyer shall deliver to the Seller the
aggregate sum of Twelve Million Dollars ($12,000,000), (i) less the amount of
any downward adjustments made pursuant to Section 1.3(b), (ii) plus the amount
of any upward adjustments made pursuant to
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Section 1.3(b), and (iii) less the Escrow Amount (as herein defined), payable in
such form as shall be requested by the Seller to an account designated by the
Seller.
(b) On the Closing Date, the Seller shall deliver to the Buyer the most
recently available month-end combined balance sheet of the Seller relating to
the Business and of BSA and BSG certified by the Chief Financial Officer of the
Seller (the "Closing Balance Sheet"). The Closing Balance Sheet shall be
prepared in accordance with generally accepted accounting principles applied on
a basis consistent with that of the Financial Statements (as defined in Section
2.5 below), and, to the extent it relates to BSA or BSG, shall be consistent
with the accounting methods and procedures historically used to prepare the BSA
Accounts (as herein defined) and the BSG accounts.
(i) If current assets as set forth on the Closing Balance Sheet
("Closing Current Assets") excluding the Biosphere Receivable (as defined
in Section 10.11 below) are less than $5,250,000, (the "Current Assets
Target Amount"), the amount of the Purchase Price to be paid to the Seller
in cash at the Closing will be reduced on a dollar-for-dollar basis by the
amount of such deficiency, and if the Closing Current Assets are more than
the Current Assets Target Amount, the amount of the Purchase Price to be
paid to the Seller in cash at the Closing will be increased on a
dollar-for-dollar basis by the amount of such excess.
(ii) If total liabilities as set forth on the Closing Balance Sheet
("Closing Total Liabilities") are greater than $850,000 (the "Total
Liabilities Target Amount"), the amount of the Purchase Price to be paid to
the Seller in cash at the Closing will be reduced on a dollar-for-dollar
basis by the amount of such excess, and if the Closing Total Liabilities
are less than the Total Liabilities Target Amount, the amount of the
Purchase Price to be paid to the Seller in cash at the Closing will be
increased on a dollar-for-dollar basis by the amount of such deficiency.
(c) No later than 30 days after the Closing Date, the Seller shall deliver
to the Buyer (i) a combined balance sheet of the Seller relating to the Business
and of BSA and BSG certified by the Chief Financial Officer of the Seller to be
true, correct and complete (the "Closing Date Balance Sheet") and (ii) a true,
correct and complete list and amount, as of the Closing Date, of each item
referenced in paragraphs (a) through (g) of Section 7.6 hereof. The Closing Date
Balance Sheet shall be prepared in accordance with generally accepted accounting
principles applied on a basis consistent with that of the Financial Statements
and the Current Balance Sheet and, to the extent it relates to BSA or BSG, shall
be consistent with the accounting methods and procedures historically used to
prepare the BSA Accounts and the BSG accounts.
(d) No later than 60 days after delivery of the Closing Date Balance Sheet,
the Buyer shall complete a review and audit of the Closing Date Balance Sheet
and shall inform the Seller in writing that the Closing Date Balance Sheet is
acceptable or object to the Closing Date Balance Sheet in writing setting forth
a specific description of the Buyer's objections. If the Buyer objects to the
Closing Date Balance Sheet and the Seller does not agree with the Buyer's
objections or such objections are not resolved on a mutually agreeable basis
within 30 days of the Seller's receipt of Buyer's objections, any such
disagreement shall be promptly submitted to a mutually acceptable "big five"
accounting firm that is unaffiliated with either party or that is acceptable to
Buyer and Seller (the "Unaffiliated Firm"). The Unaffiliated Firm shall resolve
such dispute within 30 days after said Unaffiliated Firm's engagement by the
parties. The decision of such Unaffiliated Firm shall be final and binding upon
the Seller and the Buyer and its fees, costs and expenses shall be borne by the
party against whom the Unaffiliated Firm shall rule.
(e) If current assets as set forth on the Closing Date Balance Sheet as
finally determined pursuant to the preceding paragraph (the "Revised Closing
Date Balance Sheet") are more or less than the Current Assets Target Amount, the
Purchase Price will be increased or decreased, respectively, and the Buyer or
the Seller, as the case may be, will pay to the other cash in an amount equal to
such excess or deficiency, taking into account any adjustments previously made
pursuant to subparagraph (b)(i) above. Likewise, if total liabilities as set
forth on the Revised Closing Date Balance Sheet are greater or less than the
Total Liabilities Target Amount, the Purchase Price will be reduced or
increased, respectively, and the Seller or the Buyer, as the case may be, will
pay to the other cash in an amount equal to such excess or deficiency, taking
into account any adjustments previously made pursuant to subparagraph (b)(ii)
above. Any payments pursuant to this paragraph shall be
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made within 10 business days of determination by wire transfer of immediately
available funds to an account specified by the Buyer or the Seller, as the case
may be.
1.4 Escrow Amount. In connection with the Closing, the Buyer, the Seller
and a mutually agreeable escrow agent (the "Escrow Agent") shall execute an
Escrow Agreement, in substantially the form attached hereto as Exhibit A (the
"Escrow Agreement"). On the Closing Date, the Buyer shall deliver One Million
Dollars ($1,000,000) of the Purchase Price to the Escrow Agent, to be held in
escrow in accordance with the terms of the Escrow Agreement.
1.5 Assumption of Liabilities; Etc.
(a) At the Closing, on the terms and subject to the conditions of this
Agreement, the Buyer shall execute and deliver an Instrument of Assumption of
Liabilities (the "Instrument of Assumption") substantially in the form attached
hereto as Exhibit B, pursuant to which it shall assume and agree to perform, pay
and discharge in accordance with their terms only the following liabilities,
obligations and commitments of the Seller which relate to the Business:
(i) Those accounts, accounts payable, accrued expenses and notes and
notes payable of Seller which are set forth on Schedule 1.5(a)(i) attached
hereto;
(ii) All obligations of the Seller continuing after the Closing under
the Contracts which are set forth on Schedule 1.5(a)(ii) attached hereto
which become due and payable or are required to be performed after the
Closing Date; and
(iii) Those other liabilities and obligations of the Seller which
relate to the Business which are specifically set forth in Schedule
1.5(a)(iii) attached hereto. The foregoing liabilities and obligations are
collectively referred to as the "Assumed Liabilities."
(b) Other than as set forth in Section 1.5(a) hereof, the Seller shall
retain, and Buyer shall not assume, and nothing contained in this Agreement
shall be construed as an assumption by Buyer of, any liabilities, obligations or
commitments of the Seller of any nature whatsoever, whether fixed or contingent,
known or unknown, due or to become due, unliquidated or otherwise. The Seller
shall be responsible for and satisfy any and all of the liabilities, obligations
and commitments of the Seller not assumed by Buyer pursuant to Section 1.5(a)
hereof (the "Excluded Liabilities"). Without limiting the foregoing, Buyer shall
not assume, pay or discharge, and shall not be liable for any liability,
commitment or expense of Seller as a result of or arising from any of the
following:
(i) Seller's obligations and liabilities arising under this Agreement;
(ii) any liability of the Seller for Taxes (as defined in Section
2.13) arising from the operation of the Business on or prior to the Closing
Date or arising out of the sale by the Seller of the Assets pursuant to
this Agreement other than with respect to taxes or charges as set forth in
Section 14 below;
(iii) all accounting, consulting, finders, investment banking, legal
and similar fees and expenses incurred by the Seller in connection with the
negotiation of this Agreement and the consummation of the transactions
contemplated hereby;
(iv) any liability or obligation, including, without limitation, any
liability for the Seller's attorney's fees or expenses, resulting from
litigation, if any, which is disclosed in Schedule 2.7;
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(v) any liability or obligation to any employee or former employee of
the Seller or to any third party, under any pension, insurance, bonus,
profit-sharing or other employee benefit plan or arrangement or any
obligation relating to salaries, bonuses, vacation or severance pay, or any
obligation under any statute, rule or regulation, including without
limitation ERISA;
(vi) any liability, contract, commitment or other obligation of
Seller, known or unknown, fixed or contingent, the existence of which
constitutes or will constitute a breach of any representation or warranty
of the Seller contained in or made pursuant to this Agreement or which
Buyer is not assuming hereunder;
(vii) any liabilities or obligations of Seller under any contracts,
commitments, arrangements or agreements relating to the Excluded Assets;
(viii) any infringement or alleged infringement of any patent,
trademark, tradename, copyright or other property right of any other person
or entity arising out of any action of Seller on or prior to the Closing
Date or any misappropriation or misuse of any trade secret or confidential
or proprietary invention, discovery, process, formula, know-how, technology
or information or any other right of another person or entity arising out
of any action of Seller on or prior to the Closing Date;
(ix) any product liability or similar claim for injury to person or
property, regardless of when made or asserted, which arises out of or is
based upon any express or implied representation, warranty, agreement or
guarantee made by the Seller, or alleged to have been made by the Seller,
or which is imposed or asserted to be imposed by operation of law, in
connection with any service performed or product sold, licensed or leased
by or on behalf of the Seller on or prior to the Closing Date, including
without limitation any claim relating to any product delivered in
connection with the performance of such service and any claim seeking
recovery for consequential damages, lost revenue or lost profit as a result
of the foregoing claims;
(x) any liabilities or obligations under any Contracts which were
originally entered into by the Seller but were subsequently assigned to an
Affiliate of the Seller (other than BSA or BSG) (For purposes of this
Agreement, "Affiliate" shall mean any corporation, firm, partnership or
other entity which directly or indirectly is controlled by or is under
common control with a party to this Agreement. As used herein, "control"
means ownership, directly or through one or more Affiliates, of fifty
percent (50%) or more of the shares of stock entitled to vote for the
election of directors, in the case of a corporation, fifty percent (50%) or
more of the equity interests in the case of any other type of legal entity,
status as a general partner in any partnership, or any other arrangement
whereby a party controls or has the right to control the Board of Directors
or equivalent governing body of a corporation or other entity.
Notwithstanding the foregoing, an "Affiliate" of BSA shall not include The
Dexter Corporation and its subsidiaries other than Buyer and Buyer's
subsidiaries. Notwithstanding the foregoing, an "Affiliate" of Seller shall
not include Sepracor Inc. or its subsidiaries other than Seller and
Seller's subsidiaries.);
(xi) any liability or obligation arising out of the conduct by Seller
of the Business on or prior to the Closing Date, including without
limitation arising under Environmental Laws (as herein defined) and
liabilities and obligations arising out of transactions entered into prior
to the Closing Date (including without limitation liabilities or
obligations arising out of any breach by Seller of any provision of any
Contract included in the Assets or out of Seller's failure to perform any
Contract in accordance with its terms prior to the Closing), and any other
liability or obligation of Seller arising out of any action or inaction of
Seller prior to the Closing Date or any state of facts existing prior to
the Closing Date (regardless of when asserted) not expressly assumed by
Buyer pursuant to this Agreement; and
(xii) any liability of the Seller under any bulk transfer law of any
jurisdiction, or any liability of the Buyer under any common law doctrine
of de facto merger or successor liability, or otherwise by operation of
law.
1.6 Allocation of Purchase Price. The aggregate amount of the Purchase
Price shall be allocated among the Assets for all purposes (including Tax and
financial accounting purposes) as set forth on Schedule 1.6 attached hereto, as
such Schedule may be adjusted by mutual agreement of the parties on the
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Closing Date and subsequent thereto based on any adjustments in the Purchase
Price resulting from Section 1.3 hereof or otherwise. The parties shall file all
Tax Returns (as defined in Section 2.13(a) hereof) in a manner consistent with
such allocation; provided, however, that if any taxing authority makes or
proposes an allocation with respect to the Assets which differs materially from
such allocation, each of the Buyer and the Seller shall have the right, at its
election and expense, to contest such taxing authority's determination. In the
event of such a contest, the other party agrees to cooperate reasonably with the
contesting party and shall have the right to file such protective claims or
returns as may be reasonably required to protect its interest. Each party shall
provide the other party with all notices and information reports filed with
taxing authorities and agencies with respect to the allocation of the Purchase
Price.
1.7 The Closing. The Closing shall take place at the offices of Fulbright
& ▇▇▇▇▇▇▇▇ L.L.P., ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇.▇. at 10:00
a.m., Eastern Standard Time, on May 17, 1999 or at such other place, time or
date as may be mutually agreed upon by the parties hereto. The transfer of the
Assets by the Seller to the Buyer shall be deemed to occur at the close of
business, Washington, DC time, on the date of the Closing (the "Closing Date").
2. Representations of the Seller
The Seller represents and warrants to the Buyer as follows, except as set
forth on the respective Schedules attached hereto (which Schedules set forth the
exceptions to the representations and warranties under captions referencing the
Sections to which such exceptions apply):
2.1 Organization. The Seller is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware, and has
all requisite power and authority (corporate and other) to own its properties,
to carry on its business, including the Business, as now being conducted, to
execute and deliver this Agreement and the agreements contemplated herein, and
to consummate the transactions contemplated hereby and thereby. BSA is a French
societe anonyme duly organized, validly existing, and duly registered with the
"Registre de Commerce et des Societes de Nanterre" under the number B331502641
and has all requisite power and authority to own its properties and to carry on
its business as now being conducted. BioSepra GmbH ("BSG") is a German
corporation duly organized, validly existing and duly registered with the
Commercial Register of the Local Court (Amtsgericht), Frankfurt am Main, under
No. HRB 39846. The Seller, BSA and BSG are each duly qualified to do business
and in good standing in all jurisdictions in which their ownership or leasing of
property or the character of their business requires such qualification, all of
which jurisdictions for BSA and BSG are set forth on Schedule 2.1. Copies of the
Certificate of Incorporation and Bylaws of the Seller, and copies of the bylaws,
share transfer register ("registre des mouvements de titres"), shareholder
accounts ("comptes d'actionnaires") and "extrait K-bis" of BSA and copies of the
Articles of Incorporation of BSG, each as amended to date, have been previously
delivered to the Buyer, are complete and correct, and no amendments have been
made thereto or have been authorized since the date thereof.
2.2 Capitalization of the Seller, BSA and BSG. The Seller's authorized
capital stock consists of 12,000,000 shares of Common Stock, $.01 par value, of
which 8,456,059 shares are issued and outstanding as of December 31, 1998, and
1,000,000 shares of Preferred Stock, $.01 par value, none of which shares are
issued and outstanding as of December 31, 1998. All of such shares have been
duly and validly issued and are fully paid and nonassessable. BSA has a share
capital of FF 21,300,000 divided into 213,000 shares of FF 100 each. All of such
shares have been duly and validly issued, are fully paid and nonassessable and
are held of record and beneficially by the Seller, except that six shares are
held of record by minority shareholders in accordance with requirements of
French law and will be transferred to the Seller prior to the Closing. BSG has a
share capital of DM350,000 (the "BSG Shares"). All of such BSG Shares have been
duly and validly issued, are fully paid and nonassessable. The Seller owns the
BSA Shares owned by it on the date hereof and will, at the Closing, own all of
the BSA Shares, free and clear of all Encumbrances (as herein defined). BSA owns
the BSG Shares on the date hereof and will, at the Closing, own the BSG Shares,
free and clear of all Encumbrances. The BSA Shares and the BSG Shares were
issued in compliance with all applicable securities laws. The BSA Shares and the
BSG Shares were not issued in violation of any preemptive rights, rights of
first refusal or similar rights. There are no outstanding options, warrants,
convertible securities, calls, rights, commitments, preemptive rights,
agreements, instruments or understandings of any character to which the
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Seller, BSA or BSG is a party or by which the Seller, BSA or BSG is bound,
obligating BSA or BSG to issue, deliver or sell, or cause to be issued,
delivered or sold, contingently or otherwise, additional shares of its capital
stock or any securities or obligations convertible into or exchangeable for such
shares or to grant, extend or enter into any such option, warrant, convertible
security, call, right, commitment, preemptive right or agreement. There are no
outstanding obligations, contingent or otherwise, to which the Seller, BSA or
BSG is a party or by which the Seller, BSA or BSG is bound, obligating BSA or
BSG to purchase, redeem or otherwise acquire any of its capital stock, including
in the case of BSA, the BSA Shares and in the case of BSG, the BSG Shares. None
of the Seller, BSA or BSG is a party to any voting trust agreement or other
contract, agreement, arrangement, commitment, plan or understanding restricting
transfer or otherwise relating to voting, dividend or other rights with respect
to the capital stock of BSA or BSG, including the BSA Shares and the BSG Shares.
BSA does not have, directly or indirectly, any legal or beneficial interest in
any subsidiary, partnership, joint venture or other entity, other than BSG. BSG
has not (i) entered into any agreements, contracts, guarantees, understandings
or other commitments (written or oral), (ii) engaged in any commercial
operations, or (iii) incurred any liabilities or become subject to any
obligations of any nature (matured or unmatured, fixed or contingent), other
than as set forth on Schedule 2.2.
2.3 Authorization. The execution and delivery of this Agreement by the
Seller, and the agreements provided for herein, and the consummation by the
Seller of all transactions contemplated hereby and thereby, have been duly
authorized by all requisite corporate action and has been approved by written
consent of Sepracor Inc. Prior to the Closing, all other requisite shareholder
action of Seller regarding this Agreement, the agreements provided herein and
the consummation by the Seller of all transactions contemplated hereby and
thereby will have been obtained. This Agreement has been, and each other
agreement contemplated hereby to which the Seller is a party will be, duly
executed and delivered by the Seller. This Agreement and all such other
agreements and obligations entered into and undertaken in connection with the
transactions contemplated hereby to which the Seller is a party constitute or
will, when executed and delivered, constitute the valid and legally binding
obligations of the Seller, enforceable against the Seller in accordance with
their respective terms. The execution, delivery and performance by the Seller of
this Agreement and the agreements provided for herein will not, with or without
the giving of notice or the passage of time or both, (a) violate the provisions
of any law, rule or regulation applicable to the Seller or BSA or BSG; (b)
violate or conflict with the provisions of the charter or bylaws of the Seller
or the organizational documents of BSA or BSG; (c) violate any judgment, decree,
order or award of any court, governmental body or arbitrator to which the Seller
or BSA or BSG is a party or to which any of their respective property is
subject; (d) conflict with or result in the breach or termination of any term or
provision of, or constitute a default under, or cause any acceleration under, or
cause the creation of any Encumbrance upon (i) the properties or assets of BSA
or BSG pursuant to any indenture, mortgage or agreement (including without
limitation the Contracts) to which BSA or BSG is a party or by which BSA or BSG
or any of its properties is or may be bound or (ii) the properties or assets of
the Seller pursuant to any indenture, mortgage or agreement (including without
limitation the Contracts), to which the Seller is a party or by which the Seller
or any of its properties is or may be bound, except in the case of (d)(ii),
where such violation, conflict, breach, termination, default, acceleration,
lien, charge or encumbrance would not reasonably be deemed to have a material
adverse effect on the results of operations, financial condition, assets,
properties or business of the Business (a "Material Adverse Effect") or on the
consummation of the transactions contemplated by this Agreement; or (e) result
in any suspension, revocation, impairment, forfeiture or nonrenewal of any
Permit (as herein defined). Schedule 2.3 attached hereto sets forth a true,
correct and complete list of all authorizations, consents, approvals or waivers
from, notifications to, or filings with any third party (including without
limitation any governmental body or authority) that are required in connection
with the consummation by the Seller of the transactions contemplated by this
Agreement.
2.4 Ownership and Condition of the Assets. Schedule 2.4(i) attached
hereto sets forth a true, correct and complete list of all claims, liabilities,
liens, mortgages, security interests, restrictions, pledges, charges,
encumbrances and equities of any kind (collectively, the "Encumbrances")
affecting the Assets or the Business. The Seller or BSA or BSG is, and at the
Closing will be, the true and lawful owner of or will have valid and subsisting
leasehold interests in or valid licenses to use, all of the Assets and all other
assets used or held for use in connection with the Business, and upon payment
therefor by Buyer, Buyer will have good, clear,
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record and marketable title thereto, or valid and subsisting leasehold interests
in or valid licenses to use such assets free and clear of all Encumbrances of
any kind, except as set forth on Schedule 2.4(ii) attached hereto (the
"Permitted Encumbrances"). The delivery to the Buyer of the instruments of
transfer of ownership contemplated by this Agreement will vest good and
marketable title to the Assets in the Buyer, free and clear of all Encumbrances
of any kind or nature whatsoever, except for the Permitted Encumbrances. The
Assets and the assets of BSA and BSG, taken as a whole, constitute all the
properties and assets relating to or used or held for use in connection with the
Business during the past 12 months (except inventory sold, cash used in the
Business, accounts receivable collected, prepaid expenses realized, contracts
fully performed, properties or assets replaced by equivalent or superior
properties or assets, in each case in the ordinary course of the Business, and
the Excluded Assets). Except for the Excluded Assets, there are no assets or
properties used in the conduct of the Business and owned by any person or entity
other than the Seller or BSA or BSG that will not be leased or licensed to the
Buyer under valid, current leases or licenses following the Closing. The Assets
and all assets of BSA and BSG are in all respects adequate for the purposes for
which they are currently used or held for use. To the best knowledge of the
Seller, there are no facts or conditions affecting the Assets which could,
individually or in the aggregate, reasonably be expected to interfere in any
material respect with the use, occupancy or operation thereof as currently used,
occupied or operated, or their adequacy for such use, occupancy or operation.
2.5 Reports and Financial Statements. (a) The Seller has previously
furnished or made available to the Buyer true, complete and accurate copies, as
amended or supplemented, of its (a) Annual Reports on Form 10-K for the fiscal
years ended December 31, 1996, 1997 and 1998 as filed with the Securities and
Exchange Commission (the "SEC"), (b) proxy statements relating to all meetings
of its stockholders (whether annual or special) since January 1, 1995 and (c)
all other reports or registration statements, other than Registration Statements
on Form S-8, filed by the Seller with the SEC since January 1, 1995 (such annual
and quarterly reports, proxy statements, registration statements and other
filings, together with any amendments or supplements thereto, are collectively
referred to herein as the "Company Reports"). As of their respective dates, the
Company Reports complied in all material respects with applicable SEC
requirements and did not contain 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 therein, in light of the circumstances under which they were made,
not misleading. The audited financial statements and unaudited interim financial
statements of the Seller included in the Company Reports (together, the
"Financial Statements"), as of the date of filing thereof, (i) complied as to
form in all material respects with applicable accounting requirements and the
published rules and regulations of the SEC with respect thereto, (ii) were
prepared in accordance with United States generally accepted accounting
principles ("GAAP") applied on a consistent basis throughout the periods covered
thereby (except as may be indicated therein or in the notes thereto, (iii)
presented fairly the consolidated financial position of the Seller and its
consolidated subsidiaries as of the dates thereof and their consolidated results
of operations and cash flows for the periods then ended and (iv) were consistent
with the books and records of the Company.
(b) The Seller has made available to the Buyer true, correct and complete
copies of the audited accounts of BSA relating to the financial years ended
December 31, 1996, 1997 and 1998, together with the Annexes thereto (the "BSA
Accounts"). The BSA Accounts have been prepared on the basis of a going concern
and conform to the French "Plan Comptable"; they give a true and fair view of
BSA's financial position and of its results for the relevant date and financial
year; in particular, as at December 31, 1998 there were no assets necessary for
the running of the business of BSA or any off-balance sheet liabilities which
are not revealed or reflected in the BSA Accounts or disclosed on Schedule 2.6.
The BSA Accounts make appropriate provision for bad or doubtful debts and for
the depreciation of Inventory. Neither the Seller nor BSA has received notice in
writing or a written warning from an official body or from its auditors
concerning a failure to observe legal requirements relating to the preparation
of the BSA Accounts. BSA owned, at each date to which the BSA Accounts referred,
without any dispute, limit or reservation of whatever nature, all of the
tangible assets which appear in the relevant BSA Accounts, and will own such
assets at Closing. The preparation of the BSA Accounts has not been subject to
any significant change as to the accounting methods, principles or practices
used by the BSA and/or Seller, or to a specific accounting practice (in
particular, without limitation, in respect of the accounting principles, the
notes to the accounts relating to reserves, to depreciation and to rates
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used), which would otherwise give a misleading comparison between the accounts
for one period and the next. The BSA Accounts for the financial year ended
December 31, 1998 have been prepared on a basis consistent with the BSA Accounts
for the financial years ended December 31, 1996 and 1997 and present fairly
BSA's financial position and its results at the date and for the period
concerned.
2.6 Absence of Undisclosed Liabilities. Attached hereto as Exhibit C is a
true, correct and complete copy of the unaudited combined balance sheet of
Seller relating to the Business and of BSA and BSG as of December 31, 1998 (the
"Current Balance Sheet"). The Current Balance Sheet is in accordance with the
books and records of the Seller, BSA and BSG and was prepared in accordance with
GAAP applied on a basis consistent with that of the Financial Statements. Seller
does not have any liability or obligation, secured or unsecured, whether
accrued, absolute, contingent, unasserted or otherwise, affecting the Assets or
the Business, and BSA and BSG do not have any liability or obligation, secured
or unsecured, whether accrued, absolute, contingent, unasserted or otherwise,
including without limitation documentary or standby letters of credit, bid or
performance bonds, or customer or third party guarantees, and, to the Seller's
knowledge, no condition, situation or set of circumstances exist that is
reasonably likely to result in such a liability, except as and to the extent
with respect to any of the foregoing (a) reflected and reserved against in the
Current Balance Sheet, (b) set forth on Schedule 2.6 attached hereto, or (c)
incurred in the ordinary course of the Business after the date of the Current
Balance Sheet (none of which is a liability for breach of contract, breach of
warranty, tort, infringement claim or lawsuit, or could, individually or in the
aggregate, reasonably be expected to result in a Material Adverse Effect on the
Business). Except as required by French law and except as disclosed on Schedule
2.6, none of the employees of the Business is now, or will by passage of time
hereafter become, entitled to receive any vacation time, vacation pay or
severance pay attributable to services rendered prior to December 31, 1998
except as disclosed on the Current Balance Sheet.
2.7 Litigation. Except as set forth on Schedule 2.7 attached hereto, none
of the Seller, BSA or BSG nor any of their respective officers or directors (in
their capacity as such and only to the extent related to the Business), is a
party to, nor to the Seller's best knowledge threatened with, and none of the
Assets or any of the assets or properties of BSA or BSG is subject to, any
litigation, suit, action, investigation, proceeding or controversy before any
court, administrative agency or other governmental authority, whether at common
law, civil law or in equity, nor to the best of Seller's knowledge is there any
basis in fact therefor.
2.8 Intentionally Deleted.
2.9 Inventory. Schedule 2.9 attached hereto sets forth a true, correct
and complete list of the Inventory of the Business as of December 31, 1998 (the
"Balance Sheet Date"), including a description and the book value thereof.
Schedule 2.9, as updated pursuant to Sections 7.6 and 1.3(c) hereof, shall set
forth a true, correct and complete list in accordance with GAAP, of the
Inventory of the Business as of the date of the Closing Balance Sheet (the
"Interim Date") and as of the Closing Date, respectively, including a
description and valuation thereof. The Inventory listed on Schedule 2.9
comprises all of the Inventory of the Business on the Balance Sheet Date and all
of the Inventory reflected on the Current Balance Sheet, and the Inventory
listed on Schedule 2.9 as updated pursuant to Sections 7.6 and 1.3(c) will
comprise all of the Inventory of the Business as of the Interim Date and as of
the Closing Date, respectively, and all of the Inventory reflected on the
Closing Balance Sheet and on the Closing Date Balance Sheet. All of such
Inventory was acquired and has been maintained in the ordinary course of the
Business; consists of a quality, quantity and condition usable, leasable or
saleable in the ordinary course of the Business in accordance with GAAP; is
valued at the lower of cost or market in accordance with GAAP and consistent
with the Financial Statements and the BSA Accounts and is not subject to any
write-down or write-off. Neither the Seller nor BSA is under any obligation or
has any liability with respect to the return of the Inventory of the Business in
the possession of wholesalers or retailers or any Inventory previously sold to
other customers except in a manner consistent with past practice.
2.10 Fixed Assets. Schedule 2.10 attached hereto sets forth a true,
correct and complete list, of all Fixed Assets of the Business as of the Balance
Sheet Date, including a description thereof. Schedule 2.10, as updated pursuant
to Sections 7.6 and 1.3(c) hereof, shall set forth a true, correct and complete
list, of all Fixed Assets of the Business as of the Interim Date and as of the
Closing Date, respectively, including a
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description thereof. The Fixed Assets listed on Schedule 2.10 comprise all of
the Fixed Assets of the Business on the Balance Sheet Date and all of the Fixed
Assets reflected on the Current Balance Sheet, and the Fixed Assets listed on
Schedule 2.10 as updated pursuant to Sections 7.6 and 1.3(c) will comprise all
of the Fixed Assets of the Business as of the Interim Date and as of the Closing
Date, respectively, and all of the Fixed Assets reflected on the Closing Balance
Sheet and on the Closing Date Balance Sheet, respectively. All of the Fixed
Assets of the Business are in good operating condition and repair, normal wear
and tear excepted, are usable in the regular and ordinary course of the Business
as conducted by the Seller, BSA and BSG prior to the Closing Date and conform in
all material respects to all applicable statutes, rules, regulations and
ordinances of every governmental authority having jurisdiction over any of them.
There are no ongoing material repairs to any of the Fixed Assets of the Business
being made by or on behalf of the Seller, BSA or BSG, and no such Fixed Asset
currently requires repair or replacement which has knowingly been deferred.
2.11 Leases. Schedule 2.11 attached hereto sets forth a true, correct and
complete list as of the date hereof of all leases of real property, identifying
separately each ground lease, to which BSA is a party (the "Leases") and any and
all capital expenditures made or committed or agreed to be made under any of the
Leases. True, correct and complete copies of the Leases, and all amendments,
modifications and supplemental agreements thereto, have previously been
delivered by the Seller to the Buyer. BSA enjoys peaceful and undisturbed
possession under all such Leases. The Leases are in full force and effect, are
binding and enforceable against BSA and, to the Seller's knowledge, each of the
other parties thereto, in accordance with their respective terms and, except as
set forth on Schedule 2.11, have not been modified or amended since the date of
delivery to the Buyer. No party to any Lease has sent written notice to the
other claiming that such party is in default thereunder, which default remains
uncured. Except as set forth on Schedule 2.11 attached hereto, there has not
occurred any event which would constitute a breach of or default in the
performance of any covenant, agreement or condition contained in any Lease, nor
has there occurred any event which with the passage of time or the giving of
notice or both would constitute such a breach or default. Neither the Seller nor
BSA has received notice of any violation of any applicable zoning ordinance,
building code, use or occupancy restriction or any condemnation action or
proceeding with respect to any of the premises under the Leases.
2.12 Change in Financial Condition and Assets. Except as set forth on
Schedule 2.12 attached hereto, since the Balance Sheet Date, there has been no
material adverse change in any of the Assets or any assets of BSA or BSG used in
the Business or in the condition, financial or otherwise, of the Business.
Without limiting the foregoing, except as set forth on Schedule 2.12, since
the Balance Sheet Date, (a) neither BSA nor BSG has: (i) borrowed any amount or
incurred or become subject to any liability (absolute, accrued or contingent),
except current liabilities, liabilities under contracts entered into and
borrowings under banking facilities disclosed in the Schedules hereto, all of
which were in the ordinary course of business and consistent with past practice;
(ii) discharged or satisfied any Encumbrance or paid any obligation or liability
(absolute, accrued or contingent) other than current liabilities shown on the
Current Balance Sheet (including regularly scheduled payments (but not
prepayments) of long-term debt) and current liabilities incurred since the
Balance Sheet Date in the ordinary course of the Business and consistent with
past practice; (iii) failed to pay or discharge when due its liabilities or
obligations; (iv) mortgaged, pledged or subjected to an Encumbrance any of its
assets, tangible or intangible; (v) sold, assigned or transferred any of its
tangible assets except for the sale of inventory in the ordinary course of the
Business consistent with past practice, canceled any debt or claim, or waived
any right of substantial value whether or not in the ordinary course of the
Business; (vi) sold, assigned, transferred or granted any license with respect
to any Intangible Property; (vii) suffered any material damage or destruction
whether or not covered by insurance; (viii) made commitments or agreements for
capital expenditures or capital additions or betterments exceeding in the
aggregate $25,000; (ix) received notice or had knowledge of any actual or
threatened labor trouble or strike or union organizing effort; (x) suffered any
loss or received written notice of any threatened loss of any of its customers
or suppliers disclosed pursuant to Sections 2.19 and 2.20; (xi) granted any
severance or termination pay or increased any compensation or benefits payable
to or entered into or modified any employment, deferred compensation or other
similar plan, agreement or arrangement with any of its directors, officers,
employees, independent contractors or consultants; (xii) made any material
change in the manner of its business or operations, including without limitation
any change in the manner or rate of
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▇▇▇▇▇▇▇▇ or collections; (xiii) made any material change in any method of
accounting or accounting practice; (xiv) declared, set aside or paid any
dividend or made any distribution on any shares of its capital stock (whether in
cash or in kind), or issued, sold, redeemed, purchased or acquired any shares
(including any options, warrants or other rights with respect thereto) of its
capital stock; (xv) entered into any transaction except in the ordinary course
of the Business and consistent with past practice or as otherwise contemplated
hereby; or (xvi) entered into any commitment (contingent or otherwise) to do any
of the foregoing; and
(b) the Seller has not taken any of the foregoing actions or suffered any
of the foregoing events, in each case with respect to the Business, except as
otherwise contemplated hereby.
2.13 Tax Matters. (a) Each of the Seller, BSA and BSG has filed all
federal state, local and foreign Tax Returns (as hereinafter defined) that it
has been required to file (taking into account all extensions) through and
including the date hereof. All such Tax Returns reflect all liabilities for
Taxes for the periods covered by such Tax Returns. All Taxes owed by Seller, BSA
and BSG (whether or not shown on any Tax Return) have been fully and timely paid
when due or provided for in the Financial Statements. Except as disclosed on
Schedule 2.13, none of the Seller, BSA or BSG is currently the beneficiary of
any extension of time within which to file any Tax Return. No claim has ever
been made by a governmental authority in a jurisdiction where Seller, BSA or BSG
does not file Tax Returns that it is or may be subject to taxation by that
jurisdiction. There are no liens on any of the Assets or the assets of BSA or
BSG that arose in connection with any failure (or alleged failure) to pay any
Tax, other than any Tax which is not yet due and payable or which is being
contested in good faith through appropriate proceedings and for which adequate
reserves exist on the Seller's or BSA's or BSG's books. For purposes of this
Agreement, "Tax" shall mean any federal, state, local or foreign income, gross
receipts, license, payroll, employment, excise, severance, stamp, occupation,
premium, windfall profits, gains, environmental (including taxes under Section
59A of the Internal Revenue Code of 1986, as amended (the "Code")), customs
duties, capital stock, franchise, profits, withholding, social security (or
similar), unemployment, disability, real property, personal property, sales,
use, transfer, registration, value added, alternative or add-on minimum,
estimated, or other tax of any kind whatsoever, including any interest, penalty
or addition thereto, whether disputed or not, and "Tax Return" shall mean any
return, declaration, report, claim for refund or information return or statement
relating to Taxes, including any schedule or attachment thereto and any
amendment thereof.
(b) Each of the Seller, BSA and BSG has withheld and paid all Taxes
required to have been withheld and paid in connection with amounts paid by it or
owing by it to any employee, independent contractor, creditor, stockholder or
other third party.
(c) None of the Seller, BSA, BSG or any director or officer (or employee
responsible for Tax matters) thereof currently has any reason to believe that
any authority intends to assess any additional Taxes against the Seller, BSA or
BSG with respect to any period for which Tax Returns have been filed. None of
BSA, Seller or BSG nor any director or officer thereof has received written
notice from any authority of such authority's intent to assess any additional
Taxes against BSA, BSG or Seller with respect to any period for which Tax
Returns have been filed. There is no dispute or claim concerning any Tax
liability of BSA, BSG or Seller either (i) claimed or raised by any governmental
authority in writing, or (ii) as to which BSA, BSG or Seller has actual
knowledge after reasonable investigation except as set forth on Schedule 2.13.
Schedule 2.13 lists all federal, local and foreign income Tax Returns filed with
respect to BSA and BSG for taxable periods ended on or after December 31, 1994,
indicates those Tax Returns that have been audited by a taxing authority, and
indicates those Tax Returns that currently are the subject of audit by a taxing
authority. The Seller has made available to the Buyer correct and complete
copies of all BSA's, BSG's and Seller's income Tax Returns, examination reports,
and statements of deficiencies assessed against or agreed to by BSA or BSG since
January 1, 1994.
(d) None of Seller, BSA or BSG has waived any statute of limitations in
respect of the assessment and collection of Taxes or agreed to any extension of
time with respect to a Tax assessment or deficiency.
(e) None of the Assumed Liabilities is an obligation to make a payment that
will not be deductible under Section 280G of the Code. None of the Seller, BSA
or BSG has been a United States real property holding corporation within the
meaning of Section 897(c)(2) of the Code during the applicable period
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specified in Section 897(c)(1)(A)(ii) of the Code. Neither BSA nor BSG is a
party to any Tax allocation or sharing agreement. Neither BSA nor BSG (i) has
been a member of an affiliated group (within the meaning of Section 1504 of the
Code) filing a consolidated U.S. federal income Tax Return (other than a group
of which the Seller was the common parent), and (ii) is liable for the Taxes of
any other person under Treas. Reg. sec.1.1502-6 (or any similar provision of
state, local or foreign law), as a transferee or successor, by contract or
otherwise.
(f) All material elections and consents with respect to any Tax (or the
computation thereof) affecting BSA or BSG as of the date hereof are indicated on
the Tax Returns if and to the extent required to be indicated thereon or are set
forth on Schedule 2.13. After the date hereof, no election or consent with
respect to any Tax (or the computation thereof) affecting BSA or BSG will be
made without the written consent of the Buyer (which consent shall not be
unreasonably withheld or delayed).
(g) The unpaid Taxes of BSA and BSG have not (i) exceeded, as of the
Balance Sheet Date, the reserve for Tax liability (rather than any reserve for
deferred Taxes established to reflect timing differences between book and Tax
income) set forth on the face of the Current Balance Sheet (rather than in any
notes thereto), or (ii) exceeded that reserve as adjusted for the passage of
time through the Closing Date in accordance with the past custom and practice of
BSA and BSG in filing its Tax Returns.
(h) BSA is not a party to any "acte anormal de gestion", being defined as a
transaction or arrangement under which it may be required to pay for any asset
or any services or facilities an amount which is in excess of the market value
of such asset, services or facilities, or will receive any payment for an asset,
services or facilities that it has supplied or provided, or is liable to supply
or provide, which is less than the market value of such asset, services or
facilities.
(i) BSA does not benefit from any advantageous tax regime or social
security regime granted by law or by a specific ruling from any French
governmental or local authority that may be challenged, either in part or in
whole, as a result of the sale of the BSA Shares.
(j) As of December 31, 1998, BSA had net operating loss carryovers of
approximately $10,514,000, of which approximately $6,009,000 of these net
operating loss carryovers expire in the year 2000, and the remainder may be used
indefinitely provided that there is no substantial change in the business of
BSA.
2.14 Accounts Receivable. Schedule 2.14 attached hereto sets forth a
true, correct and complete list, of all Accounts Receivable of the Business,
including an aging thereof, as of the Balance Sheet Date. Schedule 2.14, as
updated pursuant to Sections 7.6 and 1.3(c) hereof, shall set forth a true,
correct and complete list of the Accounts Receivable of the Business as of the
Interim Date and as of the Closing Date, respectively, including an aging
thereof. The Accounts Receivable listed on Schedule 2.14 comprise all of the
Accounts Receivable of the Business as of the Balance Sheet Date and all of the
Accounts Receivable reflected on the Current Balance Sheet, and the Accounts
Receivable listed on Schedule 2.14 as updated pursuant to Sections 7.6 and
1.3(c) will comprise all of the Accounts Receivable of the Business as of the
Interim Date and as of the Closing Date, respectively, and all of the Accounts
Receivable reflected on the Closing Balance Sheet and on the Closing Date
Balance Sheet, respectively. All of the Accounts Receivable of the Business are
valid and genuine; have arisen solely out of bona fide sales and deliveries of
goods, performance of services and other business transactions in the ordinary
course of the Business consistent with past practice; are not subject to valid
defenses, set-offs or counterclaims; and are collectible at the full recorded
amount thereof over the period of usual trade terms (by use of normal collection
methods without resort to litigation or reference to a collection agency). The
Seller, BSA and BSG have fully performed all obligations with respect thereto
which they were obligated to perform prior to the date of the Current Balance
Sheet, the Closing Balance Sheet or the Closing Date Balance Sheet, as
applicable.
2.15 Books and Records. The general ledgers and books of account of the
Seller, BSA and BSG, all federal, state, local and foreign income, franchise,
property and other tax returns filed by the Seller with respect to the Assets
and the Business, and all other books and records of BSA, BSG and of the Seller
(other than the corporate minute and stock record books of the Seller) which
relate to the Assets and the Business
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are complete and correct and have been maintained in accordance with good
business practice and in accordance with all applicable procedures required by
laws and regulations.
2.16 Contracts and Commitments.
(a) Schedule 2.16 attached hereto contains a true, complete and correct
list and description of the following contracts, arrangements, commitments and
agreements, whether written or oral (other than an excluded contract or excluded
contract liability as set forth in Schedule 1.1(b)(iii)) (x) by which any of the
Assets are bound or affected, (y) to which Seller is a party or by which it is
bound in connection with the Business or any of the Assets and (z) to which BSA
or BSG is a party or by which any of their assets or properties are bound or
affected (collectively, the "Contracts"):
(i) all loan agreements, indentures, mortgages and guaranties;
(ii) all contracts, agreements, commitments, purchase orders or other
understandings or arrangements which involve payments or receipts of more
than $10,000 in the case of any single contract, agreement, commitment,
understanding or arrangement under which full performance (including
payment) has not been rendered by all parties thereto;
(iii) all agency, distributor, sales representative and similar
agreements;
(iv) all contracts, agreements or other understandings or arrangements
with any stockholder or Affiliate of the Seller, BSA or BSG;
(v) all leases, whether operating, capital or otherwise, which involve
payments of more than $10,000 individually or in the aggregate per year;
(vi) contracts, agreements or commitments containing any covenant not
to compete obligating Seller, BSA or BSG with respect to the Business or
containing any covenant to indemnify any person or entity; or
(vii) any other material agreement or contract.
(b) Except as set forth on Schedule 2.16 attached hereto:
(i) each Contract is in full force and effect and is a valid and
binding agreement of the Seller, BSA or BSG, as the case may be,
enforceable against the Seller, BSA or BSG, as the case may be, in
accordance with its terms, and the Seller does not have any knowledge that
any Contract is not a valid and binding agreement of the other parties
thereto;
(ii) none of the Seller, BSA or BSG is in breach of or default under
any Contract, and no event has occurred which with the passage of time or
giving of notice or both would constitute such a breach or default, result
in a loss of rights or an acceleration of an obligation or result in the
creation of any Encumbrance, thereunder or pursuant thereto; and
(iii) to the knowledge of the Seller, there is no existing breach or
default by any other party to any Contract and no event has occurred which
with the passage of time or giving of notice or both would constitute a
default by such other party, result in a loss of rights or an acceleration
of an obligation or result in the creation of any Encumbrance thereunder or
pursuant thereto;
(c) Except as set forth on Schedule 2.3 or Schedule 2.16, the continuation,
validity, enforceability and effectiveness of each Contract will not be affected
by the consummation of the transactions contemplated by this Agreement.
(d) True, correct and complete copies of all written Contracts and true,
correct and complete summaries of all oral Contracts have previously been made
available by the Seller to the Buyer.
(e) No party to any Contract has repudiated any provision thereof and
communicated such repudiation to the Seller, and there are no negotiations
pending or in progress to revise any material terms of any Contract.
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(f) Except as set forth on Schedule 2.16, (i) no Contracts which are
purchase contracts continue for a period of more than 12 months or are for
quantities or amounts in excess of the normal, ordinary, usual and current
requirements of the Business; (ii) no Contracts (including any bids or proposals
with respect to the Business) continue for a period of more than 12 months or
quote prices which will not result in profits consistent with past experience;
and (iii) none of the Contracts as set forth on Schedule 2.16 or as set forth on
Schedule 2.2 obligates the Seller, BSA or BSG to sell products or to render
services to third parties at a price which the Seller knows or has reason to
believe would result in a net loss on the sale of such products or the rendering
of such services or pursuant to terms or conditions the Seller, BSA or BSG
cannot reasonably expect to satisfy or fulfill in their entirety.
2.17 Compliance with Agreements and Laws. The Seller, BSA and BSG have
all requisite licenses, permits, certificates, authorizations and approvals
including environmental, health and safety and employee health and safety
permits, from foreign, federal, state and local authorities necessary to conduct
the Business as currently conducted (collectively, the "Permits"), all of which
Permits are set forth on Schedule 2.17. All of the Permits identified in
Schedule 2.17 are in full force and effect, and no party thereto is in default
under any of such Permits and no event has occurred and no condition exists
which, with the giving of notice, the passage of time, or both, would constitute
a default thereunder. No action or claim is pending or, to Seller's knowledge,
threatened to revoke or terminate any Permit identified in Schedule 2.17. None
of the Seller, BSA or BSG is or has been in violation of any law, rule,
regulation, ordinance or court or administrative order (including, without
limitation, those relating to building, zoning, environmental, disposal of
hazardous substances, land use, health and safety and employee health and safety
matters). Except as set forth on Schedule 2.17 attached hereto, none of the
Seller, BSA or BSG has received any notice or communication from any foreign,
federal, state or local governmental or regulatory authority or otherwise of any
such violation and, to the best of Seller's knowledge, no such notice or
communication is threatened. BSA is ISO 9001 certified, and the Seller believes
that it has designed its new plant to be compliant. The Seller believes that its
production and documentation procedures are consistent with Good Manufacturing
Practices as prescribed by the United States Food and Drug Administration as
applicable to a supplier to the pharmaceutical industry and that it has designed
its new plant to be compliant with such practices.
2.18 Employee Relations and Benefit Plans.
(a) Schedule 2.18 attached hereto sets forth a true, correct and complete
list of the names, the rate of compensation (and the portions thereof
attributable to salary and bonuses, respectively) and location of all current
officers, employees and independent contractors of and consultants to BSA (the
"BSA Employees") and of all current officers, employees and independent
contractors of and consultants to Seller who devote substantially all of their
time to the Business and to whom Buyer shall make an offer of employment as of
the Closing Date in accordance with Section 7.7 (the "Affected Employees"). BSG
does not employ any employees, independent contractors or consultants.
(b) Each of the Seller and BSA is in compliance with all federal, state,
foreign, municipal and French laws respecting employment, employee benefit plans
and employment practices, terms and conditions of employment, and wages and
hours, and is not engaged in any unfair labor practice, and there are no arrears
in the payment of wages or social security taxes.
(c) Except as set forth on Schedule 2.18 attached hereto;
(i) none of the BSA employees is currently represented by any labor
union;
(ii) there is no unfair labor practice complaint against BSA pending
before the French Labour Inspectorate or any federal, state, local or
foreign agency;
(iii) there is no pending labor strike or other labor trouble or
grievance affecting the BSA Employees (including, without limitation, any
organizational drive targeted directly or indirectly at the BSA Employees);
(iv) neither the Seller nor, except as may be required by French law,
BSA, has any liability for salary, commissions, bonuses, vacation, sick
leave, maternity leave or other compensation, fringe benefits
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or termination or severance benefits due to the BSA Employees except as
listed on Schedule 2.18, whether accrued, contingent or otherwise, except
as set forth or reserved for on the Closing Balance Sheet and the Closing
Date Balance Sheet;
(d) No employment contract of any of the BSA Employees contains provisions
for compensation in the event of redundancy or retirement which are more
favorable than those under the law governing the said contract or the applicable
collective bargaining agreement.
(e) Neither BSA nor the Seller has given any written undertakings to any of
the BSA Employees, including, but without limitation, to increase salaries, pay
any bonus, grant any profit share or supplementary pension or other individual
advantage, which has not been duly provided for in the BSA Accounts.
(f) No employment contract of any BSA Employee provides for payment of
damages, interest or compensation, which exceeds that stipulated by applicable
law or by the applicable collective bargaining agreement.
(g) No BSA Employee with the status of "cadre" (executive) has given notice
to resign, or has received a redundancy notice. No sums are owing to former BSA
Employees as a result of any redundancy, dismissal or resignation that is not
reflected in the BSA Accounts. No BSA Employee having received a redundancy
notice has, on the date hereof, requested preferential treatment for
re-employment.
(h) Except as provided for by law or in any applicable collective
bargaining agreement, there are no schemes, agreements or arrangements in
existence which grant special benefits to any BSA Employees, including, in
particular, with respect to supplementary pension and retirement rights. As
such, there are no superannuation, pension, life assurance, death benefit,
sickness or accident benefit schemes or arrangements in existence which grant to
any BSA Employees supplementary benefits other than those required by law.
(i) With respect to the BSA Employees, BSA and the Seller have complied in
all respects with all applicable French labor, social security, health and
safety at work regulations, including, without limitation, in relation to
redundancy, employees' representation and social security contributions. In
particular, the elections of personnel representatives have been duly held
within the correct time limits and any necessary consultation with personnel
representatives, works councils and trade union representatives has been carried
out in accordance with all applicable laws and regulations.
(j) There are no current disputes between BSA or the Seller and any trade
union or similar organization with respect to the BSA Employees.
(k) Neither BSA nor the Seller is in breach of its statutory obligations
concerning the health and safety at work of the BSA Employees, nor has it
received written notice of any claim against it by any employee or third party
relating to an accident.
(l) Except as provided for by law or in any applicable collective
bargaining agreement, none of the BSA Employees are subject to any obligation
under any subscription program, share-option or profit-sharing schemes reserved
to its employees.
(m) The only collective bargaining agreement applicable to BSA Employees is
disclosed in Schedule 2.18.
(n) Each of the BSA Employees is employed exclusively in the business of
BSA and no BSA Employee is currently on secondment ("detache ") to the Seller,
any affiliate of the Seller or any third party.
2.19 Customers. Schedule 2.19 attached hereto sets forth a true, correct
and complete list of the names and addresses of all customers of the Seller or
BSA which accounted for more than 5% of the total sales, of the Business, in the
fiscal year ended December 31, 1998. The Seller has not received written notice
from any of the customers listed on Schedule 2.19 that such customer intends to
cease purchasing from the Seller, BSA or BSG. The Seller is not aware that any
such customer intends to alter in any respect the amount of such purchases with
the Seller, BSA or BSG. The Seller is not aware that any customer will cancel
outstanding purchase orders placed with the Seller, BSA or BSG or will alter any
written order forecast, except as listed on Schedule 2.19.
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2.20 Suppliers. Schedule 2.20 attached hereto sets forth a true, correct
and complete list of the names and addresses of all suppliers of the Seller, BSA
and BSG which individually accounted for more than 5% of purchases of the
Business, for the fiscal year ended December 31, 1998. The Seller has not
received written notice from any of the suppliers listed on Schedule 2.20 that
such supplier intends to cease selling to the Seller, BSA or BSG. The Seller is
not aware that any such supplier intends to alter in any respect the amount of
such sales with the Seller, BSA or BSG. The Seller is not aware that any
supplier will not be able to fulfill outstanding or currently anticipated
purchase orders placed by the Seller, BSA or BSG.
2.21 Prepayments. Schedule 2.21 attached hereto sets forth all
prepayments from customers for products to be shipped, or services to be
performed, which Seller reasonably expects will be shipped or performed more
than 60 days after the date hereof and which have been received by the Seller,
BSA or BSG as of the date hereof.
2.22 Trade Names and Other Intangible Property. (a) Schedule 2.22(a)
attached hereto sets forth a true, correct and complete list of all trademarks,
patents, patent applications, invention records, lab notebooks, procedures
("SOPs") and research and development activity reports of the Seller which
relate to or are used or held for use in connection with the Business and all
trademarks, patents, patent applications, invention records, lab notebooks, SOPs
and research and development activity reports of BSA. True, correct and complete
copies of all licenses and other agreements relating to the Intangible Property
of the Seller and of BSA have been previously made available by the Seller to
the Buyer and are listed on Schedule 2.16(a). All such licenses and agreements
are in full force and effect and neither the Seller or BSA nor, to the best of
the Seller's knowledge, any of the other parties to such licenses or agreements
is in breach of any provision of, or in default under any of the terms of, such
licenses or agreements and, to the best of the Seller's knowledge, no condition
exists which, with the passage of time, the giving of notice, or both, would
result in such a breach or default. The consummation of the transactions
contemplated by this Agreement neither constitutes a breach of nor causes a
termination of any such license or agreement.
(b) Schedule 2.22(b) attached hereto sets forth a true, correct and
complete list, and where appropriate, a description of all Intangible Property
set forth in Schedule 2.22(a) to which neither Seller nor BSA's rights are
exclusive. Except as otherwise disclosed in Schedule 2.22(b) attached hereto,
the Seller or BSA exclusively owns or has the exclusive right to use all
Intangible Property listed on Schedule 2.22(a) and all designs, permits, labels
and packages used on or in connection therewith relating to the Business. Seller
has not knowingly misappropriated the trade secrets of any third party. The
Intangible Property set forth in Schedule 2.22(a) is sufficient to enable the
Seller and BSA to conduct the Business as presently conducted by the Seller and
BSA.
(c) Except as disclosed in Schedule 2.22(b), neither the Seller nor BSA has
received any notice of, and there is no basis for, a claim against it that any
of its operations, activities, products or publications infringes any patent.
Except as disclosed in Schedule 2.22(b), neither the Seller nor BSA has received
any notice of, and to the best of Seller's knowledge, there is no basis for, a
claim against it that any of its operations, activities, products or
publications infringes any trademark, trade name, copyright or other property
right of any third party. Except as disclosed in Schedule 2.22(b), neither the
Seller nor BSA has received any notice of, and, to the best of Seller's
knowledge, there is no basis for, a claim that it is illegally or otherwise
using any trade secret, or any confidential or proprietary invention, discovery,
process, formula, know-how, technology or information of another. To the best of
the Seller's knowledge, no person or entity which is not a party to this
Agreement is infringing upon, is in violation of, or is misappropriating or
misusing any of the Intangible Property of the Seller or BSA. To the best of the
Seller's knowledge, and except as set forth in Schedule 2.22(b) subsequent to
the Closing, no other party, including but not limited to, any current or former
director, officer, stockholder, employee or consultant of the Seller or BSA will
own, have an interest in or have the right to use any Intangible Property which
is being, or was at any time since January 1, 1994, utilized in the Business.
Except as disclosed in Schedule 2.22(b), there is no pending or, to the best of
the Seller's knowledge, threatened claim or litigation against the Seller or BSA
and, to the best of the Seller's knowledge, no basis for any potential claim or
litigation against the Seller or BSA contesting its right to use any Intangible
Property. Except as disclosed in Schedule 2.22(b), there is no pending or, to
the best of the Seller's knowledge, threatened claim or litigation against the
Seller or BSA and, to the best of the Seller's knowledge,
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there is no basis for any potential claim or litigation against the Seller or
BSA asserting the misappropriation or misuse of any trade secret or any
confidential or proprietary invention, discovery, process, formula, know-how,
technology or information of another. Except as disclosed in Schedule 2.22(b),
there is no pending or, to the best of the Seller's knowledge, threatened claim
or litigation against the Seller or BSA and there is no basis for any potential
claim or litigation against the Seller or BSA asserting that the Seller or BSA
has violated or infringed any patent. Except as disclosed in Schedule 2.22(b),
there is no pending or, to the best of the Seller's knowledge, threatened claim
or litigation against the Seller or BSA, and, to the best of the Seller's
knowledge, there is no basis for any potential claim or litigation against the
Seller or BSA, asserting that the Seller or BSA has violated or infringed any
trademark, trade name, copyright or other property right of another. This
Agreement and the consummation of the transactions contemplated hereby will not
affect the continuation, validity and effectiveness of any right in the
Intangible Property being transferred to Buyer or owned by BSA. Since January 1,
1994, the Seller and BSA have not conducted business under any corporate, trade
or fictitious name other than the names listed on Schedule 2.22(c) hereto.
2.23 Real Estate. Neither the Seller nor BSA owns any real property.
2.24 Regulatory Approvals. All consents, approvals, authorizations,
filings, notifications and other requirements prescribed by any law, rule or
regulation which must be made, given, obtained or satisfied by the Seller or BSA
and which are necessary for the execution and delivery by the Seller or BSA of
this Agreement and the documents to be executed and delivered by the Seller or
BSA in connection herewith and the consummation of the transactions contemplated
hereby and thereby are set forth on Schedule 2.24 attached hereto and have been,
or will be prior to the Closing Date, made, given, obtained or satisfied.
2.25 Powers of Attorney and Suretyships. Except as set forth on Schedule
2.25 attached hereto, none of the Seller, BSA or BSG has any general or special
powers of attorney outstanding (whether as grantor or grantee thereof) and has
no obligation or liability (whether actual, accrued, accruing, contingent or
otherwise) as guarantor, surety, co-▇▇▇▇▇▇, endorser, co-maker, indemnitor or
otherwise in respect of the obligation of any person, corporation, partnership,
joint venture, association, organization or other entity, except as endorser or
maker of checks or letters of credit, respectively, endorsed or made in the
ordinary course of business.
2.26 Brokers. The Seller represents and warrants that none of the Seller,
BSA or BSG has engaged any broker or finder or incurred any liability for
brokerage fees, commissions or finder's fees in connection with the transactions
contemplated by this Agreement.
2.27 No Illegal or Improper Transactions. None of the Seller, BSA or BSG,
or to the Seller's knowledge, any officer, director, employee, agent or
Affiliate of any of them has offered, paid or agreed to pay to any person or
entity (including any governmental official) or solicited, received or agreed to
receive from any person or entity, directly or indirectly, any money or thing of
value for the purpose or with the intent of (a) obtaining or maintaining
business for the Seller, BSA or BSG, (b) facilitating the purchase or sale of
any product or service, or (c) avoiding the imposition of any fine or penalty,
in any such case in any manner which is in violation of any applicable
ordinance, regulation or law.
2.28 Environmental Matters. (a) The Seller, BSA and BSG have complied in
all respects with all Environmental Laws. There is no pending or, to the
Seller's knowledge, threatened civil or criminal litigation, written notice of
violation, formal administrative proceeding or investigation, inquiry or
information request by any person or entity relating to any Environmental Law
involving the Seller, BSA and BSG. For purposes of this Agreement,
"Environmental Law" means any federal, state, local or foreign law, statute,
code, rule, regulation, ordinance, program, permit, guidance, order or consent
decree relating to pollution, hazardous substances or waste, natural resources,
the environment or occupational health and safety, including, without
limitation, the Resource Conservation and Recovery Act (42 U.S.C. sec.6901, et
seq., as amended), the Comprehensive Environmental Response, Compensation and
Liability Act (42 U.S.C. sec.9601, et seq., as amended), the Toxic Substance Act
(15 U.S.C. sec.2601 et seq., as amended), the Clean Water Act (33 U.S.C.
sec.466, et seq., as amended), the Clean Air Act (42 U.S.C. sec.7401, et seq.,
as amended) and federal and state environmental cleanup programs.
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(b) BSA has obtained all environmental permits relating to the business of
BSA and such permits are in full force and effect. The environmental permits do
not materially limit or affect the processes, methods, capacity or operating
hours of the persons carrying on the business of BSA as currently carried on. No
material capital expenditure is currently required for BSA in relation to
environmental matters in order to comply with, extend, renew or obtain any
environmental permit or comply with Environmental Laws. To the Seller's
knowledge, the transfer of the BSA Shares under this Agreement will not result
in (i) the variation, limitation or revocation of any environmental permit or
(ii) any environmental permit not being extended, renewed or granted. To the
Seller's knowledge, none of the real properties on which BSA carries on its
business is contaminated, and no pollution or contamination has migrated to or
otherwise affected any other property. All environmental audits and other
assessments, reviews and reports in the possession or control of the Seller or
BSA have been disclosed to the Buyer.
2.29 Year 2000 Compliance. The Seller is in the process of reviewing its
operations and the operations of all third parties with which the Seller has a
material relationship to evaluate the extent to which the business or operations
of the Seller will be affected by Year 2000 issues. The Seller represents and
warrants that the disclosure in its Annual Report on Form 10-K for the fiscal
year ended December 31, 1998 as filed with the SEC relating to Year 2000 issues
is accurate and complies as to form in all material respects with the rules and
regulations of the Securities Act of 1933, as amended. "Year 2000 issues" as
used herein means Year 2000 issues described in or contemplated by the SEC's
Interpretation: Disclosure of Year 2000 Issues and Consequences by Public
Companies, Investment Advisors, Investment Companies, and Municipal Securities
Issuers (Release No. 33-7558). The Seller anticipates that the costs associated
with upgrading certain of BSA's hardware and software to become year 2000
compliant will not exceed $25,000.
2.30 No Product Liabilities; Product Warranties. (a) The Seller, BSA and
BSG have not incurred, nor does the Seller know of or have any reason to believe
there is any basis for alleging, any liability, damage, loss, cost or expense as
a result of any defect or other deficiency (whether of design, materials,
labeling, instructions or otherwise) ("Product Liability") with respect to any
product sold or service rendered by the Seller in the conduct of the Business or
by BSA and BSG, whether such Product Liability is incurred by reason of any
express or implied warranty (including, without limitation, any warranty of
merchantability or fitness), any doctrine of common law (tort, contract or
other), any doctrine of civil law, any statutory provision or otherwise and
irrespective of whether such Product Liability is covered by insurance.
(b) The Seller has furnished the Buyer with all forms of warranties or
guarantees of products and services that are in effect or proposed to be used by
the Seller in the conduct of the Business or by BSA or BSG. There are no pending
or, to the best knowledge of the Seller, threatened claims against the Seller,
BSA or BSG under any warranty or guaranty. Schedule 2.30 lists all payments or
settlements made in respect of any such warranty or guaranty since January 1,
1994, indicating the name of each customer, the amount of each payment and a
brief description of the facts relating thereto.
2.31 Disclosure. No information furnished by or on behalf of the Seller
to the Buyer under this Agreement (including the Schedules hereto) contains any
untrue statement of a material fact or omits to state a material fact necessary
to make such information, in the light of the circumstances under which it was
furnished, not misleading.
2.32 Bankruptcy. BSA is able to pay its debts as they fall due, is not in
an "Etat de cessation de paiement", is not the subject of any procedure for its
judicial receivership ("redressement judiciaire") or any similar or equivalent
procedure or liquidation ("liquidation judiciaire"), and no judicial
administrator ("administrateur judiciaire") or liquidator has been appointed in
respect of it. Neither BSA nor the Seller has commenced negotiations with one or
more of its creditors with a view to the general readjustment or rescheduling of
its indebtedness, nor has it made a general assignment for the benefit of its
creditors. No receiver or arbitrator ("conciliateur") has been appointed in the
context of amicable receivership ("reglement amiable" or "mandataire ad hoc")
proceedings in respect of BSA.
2.33 Insurance. (a) Schedule 2.33 sets forth all insurance agreements and
policies maintained by the Seller, BSA or BSG or under which the Seller, BSA or
BSG is listed as a beneficiary or additional insured (including any
self-insurance arrangements) and the type and amounts of coverage thereunder.
During the
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past three years, none of the Seller, BSA or BSG has been refused insurance, nor
has its coverage been limited, nor has any claim been made in respect of any
such insurance. All of such policies, agreements and arrangements are in full
force and effect, none of the Seller, BSA or BSG is delinquent with respect to
any premium payments thereon, no notice of cancellation has been received, and
there is no existing default or event which, with the giving of notice or lapse
of time or both, would constitute a default thereunder. The Seller, BSA or BSG
maintain the type and amount of insurance which is adequate to protect them and
their financial condition against the risks involved in the conduct of the
Business.
(b) The Seller has maintained, and will until the Closing maintain and pay,
all premiums associated with, those insurance policies of Seller described in
Schedule 2.33 hereof. Such insurance policies cover potential claims against or
affecting BSA which relate to, or are based upon, the conduct of the Business on
or prior to the Closing, without any requirement on the part of the Seller
subsequent to the Closing to maintain in effect or to pay premiums associated
with those policies of Seller described in Schedule 2.33.
2.34 Biopass S.A. BSA does not own any right, title or interest in the
shares of the French company Biopass S.A., BSA has no liabilities and no basis
for incurring in the future any liabilities in respect of Biopass S.A.
3. Representations of the Buyer.
The Buyer represents and warrants to the Seller as follows, except as set
forth on the respective Schedules attached hereto (which Schedules set forth the
exceptions to the representation and warranties under captions referencing the
Sections to which such Schedules relate):
3.1 Organization and Authority. The Buyer is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware, and has requisite power and authority (corporate and other) to own its
properties and to carry on its business as now being conducted. The Buyer has
full power to execute and deliver this Agreement and the Instrument of
Assumption of Liabilities and to consummate the transactions contemplated hereby
and thereby.
3.2 Authorization. The execution and delivery of this Agreement by the
Buyer, and the agreements provided for herein, and the consummation by the Buyer
of all transactions contemplated hereby and thereby, have been duly authorized
by all requisite corporate action. This Agreement and all such other agreements
and written obligations entered into and undertaken in connection with the
transactions contemplated hereby to which the Buyer is a party constitute or
will, when executed and delivered, constitute the valid and legally binding
obligations of the Buyer, enforceable against the Buyer in accordance with their
respective terms. This Agreement has been, and each other agreement contemplated
hereby to which the Buyer is a party will be, duly executed and delivered by the
Buyer. The execution, delivery and performance by the Buyer of this Agreement
and the agreements provided for herein, and the consummation by the Buyer of the
transactions contemplated hereby and thereby, will not, with or without the
giving of notice or the passage of time or both, (a) violate or conflict with
the provisions of any law, rule or regulation applicable to the Buyer; (b)
violate or conflict with the provisions of the Buyer's Certificate of
Incorporation or Bylaws; (c) violate any judgment, decree, order or award of any
court, governmental body or arbitrator to which the Buyer is a party or to which
any of Buyer's property is subject; or (d) conflict with or result in the breach
or termination of any term or provision of, or constitute a default under, or
cause any acceleration under, or cause the creation of any Encumbrance upon the
properties or assets of the Buyer pursuant to, any indenture, mortgage, deed of
trust or other agreement or instrument to which it is a party or by which the
Buyer or any of Buyer's property is or may be bound, except in each instance
where such violation, conflict, breach, termination, default, acceleration, or
Encumbrance would not reasonably be expected to have a material adverse effect
on the consummation of the transactions contemplated by this Agreement. Schedule
3.2 attached hereto sets forth a true, correct and complete list of all
authorizations, consents, approvals or waivers from, notifications to, or
filings with any third party (including without limitation any governmental body
or authority) that are required in connection with the consummation by the Buyer
of the transactions contemplated by this Agreement.
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3.3 Brokers. The Buyer represents and warrants that it has not engaged
any broker or finder or incurred any liability for brokerage fees, commissions
or finder's fees in connection with the transactions contemplated by this
Agreement.
4. Access to Information; Confidentiality; Public Announcements.
4.1 Access to Management, Properties and Records.
(a) From the date of this Agreement until the Closing Date, the Seller
shall afford the officers, attorneys, accountants and other authorized
representatives of the Buyer free and full access upon reasonable notice and
during normal business hours to all management personnel, offices, properties,
books and records (including without limitation tax reports, returns and related
materials) of BSA and of the Seller relating to the Business, so that the Buyer
may have full opportunity to make such investigation as it shall desire to make
of the management, business, properties and affairs of BSA and of the Seller
relating to the Business, and the Buyer shall be permitted to make abstracts
from, or copies of, all such books and records. The Seller shall furnish to the
Buyer such financial and operating data and other information as to the Assets
and the Business as the Buyer shall reasonably request.
(b) The Seller shall authorize the release to the Buyer of all files
pertaining to the Seller, BSA, the Assets or the Business held by any federal,
state, county, local or foreign authorities, agencies or instrumentalities.
4.2 Confidentiality. All information not previously disclosed to the
public or generally known to persons engaged in the respective businesses of the
Seller or the Buyer which shall have been furnished by the Buyer or the Seller
to the other party in connection with the transactions contemplated hereby or as
provided pursuant to this Section 4 shall not be disclosed to any person other
than their respective employees, directors, attorneys, accountants or financial
advisors or other than as contemplated herein or as required by law. In the
event that the transactions contemplated by this Agreement shall not be
consummated, all such information which shall be in writing shall be returned to
the party furnishing the same, including, to the extent reasonably practicable,
all copies or reproductions thereof which may have been prepared, and neither
party shall at any time thereafter disclose to third parties (except as required
by law) or use, directly or indirectly, for its own benefit, any such
information, written or oral, about the business of the other party hereto
(until such information is disclosed to the public or becomes generally known in
the industry other than as a result of a breach of this Section 4.2).
4.3 Public Announcements. The parties agree that prior to the Closing
Date, except as otherwise required by law, any and all public announcements
concerning this Agreement and the purchase of the Business by the Buyer shall be
subject to the approval of both parties, which approval shall not be
unreasonably withheld.
In the event that either party is required to issue a press release or make
a public announcement or filing by law, it will notify the other party prior to
the release of any such public announcement or filing and will provide to the
other a copy of any such public announcement or filing. Buyer acknowledges that
Seller intends to make a public announcement upon the execution of this
Agreement.
5. Pre-Closing Covenants of the Seller.
The Seller covenants that from and after the date hereof and until the
Closing Date:
5.1 Conduct of Business. The Seller, BSA and BSG shall carry on the
Business diligently and in the ordinary course and shall not make or institute
any unusual or new methods of manufacture, purchase, sale, shipment or delivery,
lease, management, accounting, computation of Taxes or operation, and shall not
ship or deliver any quantity of chromatographic media products or any other
products relating to the Business in excess of normal shipment or delivery
levels, except as agreed to in writing by the Buyer. All of the property of the
Seller, BSA and BSG which relates to the Business shall be used and maintained
in a normal business manner consistent with past practice. Each of the Seller,
BSA and BSG shall (a) in a manner consistent with past practice, maintain,
preserve and protect its properties and assets and the Business, including
without
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limitation, its relationships with its employees, independent contractors,
suppliers and customers and its goodwill, and (b) comply with all laws,
ordinances, rules, regulations and orders applicable to the Business.
5.2 Absence of Material Changes. Without the prior written consent of the
Buyer, the Seller shall not, with respect to the Business, and BSA shall not, in
any case:
(a) Merge or consolidate or take any action to enable BSA to merge or
consolidate with or into any corporation or other entity;
(b) Make any election or give any consent under the Code or the tax
statutes of any state or other jurisdiction or make any termination, revocation
or cancellation of any such election or any consent or compromise or settle any
claim for past or present Tax due;
(c) Fail to operate the Business and maintain its books, accounts and
records with respect to the Business in the customary manner and in the ordinary
or regular course of business; provided, however, that Seller and BSA shall be
entitled to take any and all actions they deem necessary in connection with (i)
the transfer of the APHP/BSA Patent (as defined in Schedule 2.22(a) Part B) and
the Contrat de Copropriete by and between BSA and L'Assistance Publique-Hopitaux
de Paris ("APHP"), in the event that BSA receives the approval of APHP to assign
to Biosphere Medical, S.A., a French societe anonyme("Biosphere") (or to the
Seller or other Affiliate of the Seller) all of BSA's right, title and interest
in and to the APHP/BSA Patent, and (ii) the termination of the draft Contrat de
License de Fabrication et de Commercialisation by and between Guerbet Biomedical
S.A. ("Guerbet") by and among BSA, APHP and Guerbet dated as of November 26,
1993 and the subsequent execution of a Termination Agreement ("Protocol
D'Accord") by and among BSA, APHP and Guerbet relating thereto; and, provided,
further that Seller may cause BSA to transfer to Biosphere those assets of BSA
identified on Exhibit D;
(d) Enter into any leases, contracts, agreements or understandings other
than (i) purchase orders for the sale of products produced by the Business and
(ii) those leases, contracts, agreements or understandings entered into in the
ordinary course of business calling for payments which do not exceed $10,000 per
year for each such lease, contract, agreement or understanding, provided,
however, that Seller and BSA may take any and all actions necessary, and incur
expenses as is necessary, to maintain, prosecute and protect Intangible
Property; or
(e) Take any action or omit to take any action which would result in the
inaccuracy of any of the Seller's representations and warranties set forth
herein if such representations or warranties were to be made immediately after
the occurrence of such act or omission;
(f) Knowingly cause or permit to occur any of the events or occurrences
described in Section 2.12; or
(g) Commit or agree to do any of the foregoing in the future.
5.3 Taxes. The Seller, BSA or BSG shall, on a timely basis, prepare in
compliance with all applicable regulations and file all Tax Returns for and pay
any and all Taxes which shall become due on account of the operation of the
Business or the ownership of the Assets on or prior to the Closing Date,
provided that the Seller shall furnish the Buyer with a copy of any Tax Return
of BSA or BSG at least 10 days prior to its filing date and the Buyer shall have
the opportunity to review any such Tax Return and supporting workpapers and
schedules and must consent to the filing of any such Tax Return.
5.4 Communication with Customers and Suppliers. The Seller, BSA and the
Buyer will cooperate in communicating with suppliers and customers of the
Business regarding the transfer of the Assets to the Buyer.
5.5 Compliance with Laws. The Seller, BSA or BSG will comply with all
laws and regulations which are applicable to either Seller's ownership of the
Assets or to the conduct of the Business and will perform and comply with all
Contracts, commitments and obligations by which they are bound and which, in the
case of the Seller, relate to the Business.
5.6 Continuing Obligation to Inform. From time to time prior to the
Closing, the Seller will deliver or cause to be delivered to the Buyer
supplemental information concerning events subsequent to the date hereof which
would render any statement, representation or warranty in this Agreement or any
information contained
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in any Schedule inaccurate or incomplete at any time after the date hereof until
the Closing Date. No such supplemental information shall be deemed to cure any
breach of, affect or otherwise diminish any representation or warranty made in
this Agreement unless the Buyer specifically agrees thereto in writing. In
addition, the Seller shall file all reports required to be filed by it with the
SEC between the date hereof and the Closing Date and shall deliver to the Buyer
copies of all such reports promptly after filing.
5.7 No Solicitations. The Seller will not take, nor will it permit BSA,
any Affiliate of the Seller or Sepracor, Inc. (or authorize or permit any
investment banker, financial advisor, attorney, accountant or other person
retained by or acting for or on behalf of the Seller, BSA, any such Affiliate or
Sepracor, Inc.) to take, directly or indirectly, any action to solicit,
encourage, negotiate, assist or otherwise facilitate (including by furnishing
confidential information with respect to the Business or permitting access to
the Assets or books and records of BSA or of Seller relating to the Business)
any Acquisition Proposal (as hereinafter defined); provided, however, that if,
at any time prior to the closing of the sale and purchase of the Assets
contemplated by this Agreement, the Seller's Board of Directors determines in
reasonable good faith, with the advice of outside counsel, that it would be a
violation of its fiduciary duties to the Seller's stockholders under applicable
law not to do so, the Seller may, in response to a Superior Proposal (as
hereinafter defined), furnish information to and participate in negotiations
with the third party making such Superior Proposal.
For purposes of this Agreement, "Acquisition Proposal" means any inquiry,
proposal, offer, discussions or negotiations looking toward (i) an acquisition
of more than 50% of the outstanding capital stock entitled to vote in the
election of directors of the Seller or BSA or any sale of all or substantially
all of the assets of Seller related to the Business, or all or substantially all
the assets of BSA, (ii) a merger, consolidation, share exchange or other
business combination transaction with or involving the Seller or BSA in which
the Seller or BSA, as the case may be, would not be the surviving entity, or
(iii) an option or right to effect any transaction within the scope of the
foregoing clauses (i) or (ii).
For purposes of this Agreement, a "Superior Proposal" means a bona fide
Acquisition Proposal from a third party to acquire, directly or indirectly (by
means of a tender or exchange offer, merger, consolidation, share exchange
reorganization, stock or asset purchase or other business combination
transaction, recapitalization, liquidation, dissolution, or similar transaction,
or otherwise) 50% or more of the stock or assets of the Seller or BSA or all or
substantially all of the assets of the Seller relating to the Business in one
transaction or a series of transactions, on terms which the Seller's Board of
Directors determines in its reasonable good faith judgment (after consultation
with an independent investment banking adviser of nationally recognized
reputation) to be more favorable from a financial point of view to the Seller's
stockholders than the transaction contemplated by this Agreement and for which
financing, to the extent required, is then committed or reasonably capable of
being obtained by such third party.
The Seller shall notify the Buyer no later than 24 hours after receipt by
the Seller (or its advisors) of any Acquisition Proposal or any request for
nonpublic information in connection with an Acquisition Proposal or for access
to the properties, books or records of the Seller or BSA by any person or entity
that informs such party that it is considering making, or has made, an
Acquisition Proposal (the "Competing Offeror"). Such notice to the Buyer shall
be made orally and in writing and shall indicate in reasonable detail the
identity of the Competing Offeror and the terms and conditions of such proposal,
inquiry or contact. The Seller shall notify the Buyer of the occurrence and
substance of any discussions held with any such Competing Offeror within 24
hours of the occurrence of such discussions. The Seller shall notify the Buyer
at least 48 hours prior to accepting or agreeing to a Superior Proposal or
making any public announcement of its intention to do so or to recommend a
Superior Proposal to its stockholders or to withdraw its recommendation for
approval of this Agreement and the transactions contemplated hereby or to engage
in a Superior Proposal.
6. Best Efforts to Obtain Satisfaction of Conditions.
The Seller and the Buyer covenant and agree to use their reasonable best
efforts and the Seller covenants to cause BSA to use its reasonable best efforts
to obtain the satisfaction of the conditions to closing specified in this
Agreement. In particular, the Seller shall, and shall cause BSA to, seek and use
reasonable best efforts to obtain all consents and approvals set forth on
Schedules 2.3 and 2.24.
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As promptly as practicable after the execution and delivery of this
Agreement, Seller shall prepare and file with the SEC the information statement
relating to the written consent of the stockholders approving this Agreement and
the transactions contemplated hereby (the "Information Statement"). Seller shall
use all reasonable efforts to obtain the approval of the SEC to circulate the
Information Statement as soon after such filing as reasonably practicable. If at
any time prior to the Closing Date any event relating to Seller or any of its
Affiliates, officers or directors should be discovered by Seller which should be
set forth in a supplement to the Information Statement, Seller shall promptly
inform the Buyer and shall prepare and provide such supplement to its
stockholders.
7. Conditions to Obligations of the Buyer.
The obligations of the Buyer under this Agreement are subject to the
fulfillment, at the Closing Date, of the following conditions precedent, each of
which may be waived in writing in the sole discretion of the Buyer:
7.1 Continued Truth of Representations and Warranties of the Seller;
Compliance with Covenants and Obligations. The representations and warranties
of the Seller contained in this Agreement (including the Schedules hereto) and
all certificates delivered to Buyer by Seller on or prior to the Closing Date
pursuant to this Agreement shall be true on and as of the Closing Date as though
such representations and warranties were made and such certificates were
delivered on and as of such date, except for any representation, warranty or
certificate which speaks as of a specified date, in which case such
representation, warranty or certificate shall be true as if made on or delivered
as of such specified date. The Seller and BSA shall have performed and complied
with all terms, conditions, covenants, obligations, agreements and restrictions
required by this Agreement to be performed or complied with by them prior to or
at the Closing Date.
7.2 Corporate Proceedings. All corporate and other proceedings required
to be taken on the part of the Seller to authorize or carry out this Agreement
and to convey, assign, transfer and deliver the Assets shall have been taken and
shall be reasonably satisfactory to Buyer and its counsel.
7.3 Governmental Approvals. All governmental agencies, departments,
bureaus, commissions and similar bodies, with which a filing or notification
must be made or given or whose consent, authorization or approval is necessary
under any applicable law, rule, order or regulation for the consummation by the
Seller of the transactions contemplated by this Agreement and the operation of
the Business by the Buyer shall have consented to, authorized, permitted or
approved such transactions, including without limitation those set forth on
Schedule 2.24, and such consents, authorizations, approvals, filings or
notifications shall be reasonably satisfactory to the Buyer and its counsel, and
copies thereof shall be delivered to the Buyer at or prior to the Closing.
7.4 Consents of Lenders, Lessors and Other Third Parties. The Seller
shall have received all requisite consents and approvals of all lenders, lessors
and other third parties whose consent or approval is required in order for the
Seller to consummate the transactions contemplated by this Agreement, including,
without limitation, those set forth on Schedule 2.3 attached hereto, and such
consents and approvals shall be reasonably satisfactory to the Buyer and its
counsel, and copies thereof shall be delivered to the Buyer at or prior to the
Closing.
7.5 Adverse Proceedings. No injunction or order shall be in effect
prohibiting consummation of the transactions contemplated hereby, and no action
or proceeding by or before any court or other governmental body shall have been
instituted or threatened by any governmental body or person whatsoever which
shall seek to restrain, prohibit or invalidate the transactions contemplated by
this Agreement. No federal, state, local or foreign statute, rule or regulation
shall have been enacted the effect of which would be to prohibit, restrict,
impair or delay the consummation of the transactions contemplated hereby or
restrict or impair the ability of the Buyer to purchase or own the Assets or
conduct the Business.
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7.6 Update. The Seller shall have provided the Buyer with a true, correct
and complete list and amount, as of the Interim Date and for each of Seller, BSA
and BSG, of:
(a) the Inventory of the Business;
(b) the Fixed Assets of the Business;
(c) the Accounts Receivable of the Business, including an aging thereof;
(d) the accounts, accounts payable, accrued expenses, notes and notes
payable and other liabilities and obligations of BSA;
(e) all long-term debt of BSA;
(f) all unfilled customer orders of the Business, and
(g) all cash and cash equivalents of BSA.
7.7 Employment Matters. Prior to the Closing Date, the Seller shall give
written notice to each individual who performs services for the Seller which
relate to the operation of the Business of such individual's termination, which
termination will become effective on or prior to the Closing Date. The Buyer
agrees to offer employment to each of the individuals listed on Schedule 2.18
(d) on such terms, including geographic location, as the Buyer may propose,
which employment shall be effective as of the Closing Date. It is understood and
agreed, however, that the Buyer shall have no obligation with respect to any
such individuals who do not accept the Buyer's offer of employment. The Buyer is
not assuming any liability for salary, commissions, bonuses, vacation, sick
leave, maternity leave or other compensation, fringe benefits or termination or
severance benefits due to such individuals, whether accrued, contingent or
otherwise.
7.8 Closing Deliveries. The Buyer shall have received at or prior to the
Closing each of the following documents:
(a) a ▇▇▇▇ of sale substantially in the form attached hereto as Exhibit E;
(b) such instruments of conveyance, assignment and transfer, in form and
substance reasonably satisfactory to the Buyer as the Buyer shall reasonably
request, including without limitation patent, trademark and copyright
assignments;
(c) copies of the general ledgers and books of account of the Seller, and
all federal, state and local income, franchise, property and other tax returns
filed by the Seller with respect to the Assets;
(d) such certificates of the Seller's officers and such other documents
evidencing satisfaction of the conditions specified in Section 7 as the Buyer
shall reasonably request;
(e) a certificate of the Secretary of State of Delaware as to the legal
existence and good standing (including tax) of the Seller in Delaware;
(f) a certificate of the Secretary of the Seller attesting to the
incumbency of the Seller's officers, the authenticity of the resolutions
authorizing the transactions contemplated by the Agreement, and the authenticity
and continuing validity of the charter documents delivered pursuant to Section
2.1;
(g) estoppel certificates from each lessor from whom the Seller or BSA
leases real or personal property consenting to the assumption of such lease by
the Buyer;
(h) the schedules listed in Section 7.6;
(i) cross receipt executed by the Buyer and the Seller;
(j) opinions of counsel to the Seller and BSA in the forms attached hereto
as Exhibit F;
(k) a certified copy of the share transfer register ("registre des
mouvement de titres") and of the shareholders accounts ("comptes
d'actionnaires") evidencing that at Closing the Seller is the sole owner of all
of the BSA Shares;
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(l) a share transfer form ("ordre de mouvement de titres") relating to the
BSA Shares duly executed by the Seller in favor of the Buyer;
(m) evidence that those assets of BSA identified on Exhibit D have been
duly transferred prior to Closing;
(n) resignations of the officers and directors of BSA and BSG;
(o) copies of the by-laws and "extrait K-bis" of BSA dated no earlier than
8 days before the date of the Closing, certified by the Seller as true, correct
and complete;
(p) the executed Escrow Agreement;
(q) a certified copy of the minutes (reproduced on the official register)
of the meeting of the Board of Directors of BSA approving (i) the transfer of
the BSA Shares and (ii) the Buyer as a new shareholder of BSA; and
(r) such other documents, instruments or certificates as the Buyer may
reasonably request.
7.9 Cross-License Agreement. The Buyer and the Seller shall have entered
into a Cross License Agreement in substantially the form of Exhibit G attached
hereto.
7.10 Non-Competition Agreement. ▇▇▇▇-▇▇▇▇▇ ▇▇▇▇▇ shall have entered into
a Non-Competition Agreement with the Buyer in substantially the form of Exhibit
H hereto.
7.11 Stockholder Approval. The stockholders of the Seller shall have
authorized and approved the transactions contemplated by this Agreement.
7.12 Name Change. The Buyer shall have received evidence reasonably
satisfactory to it and its counsel that the Seller and each of its Affiliates
(other than BSA) has amended its organizational documents to remove the word
"BioSepra" from its legal name.
7.13 Closing Balance Sheet. The Buyer shall have received the Closing
Balance Sheet certified by the Seller's Chief Financial Officer, and the
Inventory as reflected thereon shall not be less than $2,800,000 if the Closing
occurs, as provided in Section 1.7 hereof, on May 17, 1999. If the Closing takes
place at a later date, the Inventory may be less than $2,800,000 by an amount no
greater than that which is consistent with the obligation of the Seller, as
provided in Section 5.1 hereof, to conduct the Business in the ordinary course,
provided that in no event will the Inventory be less than $2,300,000.
7.14 ▇▇▇▇▇▇▇▇▇ Senior Management Retention Agreement. The Senior
Management Retention Agreement between the Seller and ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ dated
October 22, 1997 shall have been terminated in a form satisfactory to the Buyer
and its counsel and the Buyer shall have received evidence of such termination.
7.15 Release of Security Interests. On or prior to the Closing, Fleet
National Bank shall have taken all actions necessary to release any Assets and
any assets of BSA and BSG (including, without limitation, Intangible Property),
held as security by it to secure payment for any loans or commitments pursuant
to any agreement with Seller or BSA, including the filing of Forms UCC-3s and
any other filings which are required by the U.S. Patent and Trademark Office.
8. Conditions to Obligations of the Seller
The obligations of the Seller under this Agreement are subject to the
fulfillment, at the Closing Date, of the following conditions precedent, each of
which may be waived in writing at the sole discretion of the Seller:
8.1 Continued Truth of Representations and Warranties of the Buyer;
Compliance with Covenants and Obligations. The representations and warranties
of the Buyer contained in this Agreement (including the Schedules hereto), and
all certificates delivered to the Seller by the Buyer on or prior to the Closing
Date pursuant to this Agreement shall be true on and as of the Closing Date as
though such representations and warranties were made and such certificates were
delivered on and as of such date, except for any representation, warranty or
certificate which speaks as of a specified date, in which case such
representation,
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warranty or certificate shall be true as if made on or delivered as of such
specified date. The Buyer shall have performed and complied with all terms,
conditions, obligations, agreements and restrictions required by this Agreement
to be performed or complied with by it prior to or at the Closing Date.
8.2 Corporate Proceedings. All corporate and other proceedings required
to be taken on the part of the Buyer to authorize or carry out this Agreement
shall have been taken.
8.3 Governmental Approvals. All governmental agencies, departments,
bureaus, commissions and similar bodies, with which a filing or notification
must be made or given or whose consent, authorization or approval is necessary
under any applicable law, rule, order or regulation for the consummation by the
Buyer of the transactions contemplated by this Agreement shall have consented
to, authorized, permitted or approved such transactions, and such consents,
authorizations, approvals, filings or notifications shall be reasonably
satisfactory to the Buyer and its counsel, and copies thereof shall be delivered
to the Buyer at or prior to the Closing.
8.4 Adverse Proceedings. No injunction or order shall be in effect
prohibiting consummation of the transactions contemplated hereby, and no action
or proceeding by or before any court or other governmental body shall have been
instituted or threatened by any governmental body or person whatsoever which
shall seek to restrain, prohibit or invalidate the transactions contemplated by
this Agreement or which might affect the right of the Seller to transfer the
Assets. No federal, state, local or foreign statute, rule or regulation shall
have been enacted the effect of which would be to prohibit, restrict, impair or
delay the consummation of the transactions contemplated hereby.
8.5 Closing Deliveries. The Seller shall have received at or prior to the
Closing each of the following documents:
(a) such certificates of the Buyer's officers and such other documents
evidencing satisfaction of the conditions specified in this Section 8 as the
Seller shall reasonably request;
(b) a certificate of the Secretary of State of the State of Delaware as to
the legal existence and good standing (including tax) of the Buyer in Delaware;
(c) a certificate of the Secretary of the Buyer attesting to the incumbency
of the Buyer's officers, the authenticity of the resolutions authorizing the
transactions contemplated by this Agreement, and the authenticity and continuing
validity of the charter documents delivered pursuant to Section 3.1;
(d) Instrument of Assumption of Liabilities executed by the Buyer;
(e) payment of the Purchase Price, as adjusted in accordance with the terms
of this Agreement;
(f) cross receipt executed by the Buyer and the Seller; and
(g) an opinion of counsel to the Buyer in the form attached hereto as
Exhibit I;
(h) the executed Escrow Agreement; and
(i) such other documents, instruments or certificates as the Seller may
reasonably request.
8.6 Cross-License Agreement. The Buyer and Seller shall have entered into
a Cross-License Agreement in substantially the form of Exhibit G attached
hereto.
8.7 Supply Agreement. The Buyer and Seller shall have entered into a
Supply Agreement in substantially the form of Exhibit J attached hereto.
8.8 Stockholder Approval. The stockholders of the Seller shall have
authorized and approved the transactions contemplated by this Agreement.
8.9 Sale of Name. On the Closing Date, the Seller shall assign the name
"BioSepra" to the Buyer, provided, however, that the Seller shall be entitled to
use the name following the Closing Date solely to the extent that the name
appears on business and financial reports of the Seller printed prior to the
Closing Date, including without limitation the Company Reports. Notwithstanding
the foregoing, following the Closing
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Date, Seller shall not initiate any new business relationships of any form under
the name. The Seller shall execute such applications to governmental
authorities, consents and other documents and take such other action as Buyer
may reasonably request in order to enable the Buyer to use and register, as the
Buyer may desire, such name and any variation thereof.
9. Termination of Representations and Covenants
All representations and warranties made by the parties herein, in the
Schedules hereto or in any instrument or document furnished pursuant to this
Agreement shall survive the Closing in accordance with Section 13 below. All
covenants made by the parties herein, in the Schedules hereto or in any
instrument or document furnished pursuant to this Agreement shall survive the
Closing.
10. Post-Closing Agreements
10.1 Proprietary Information. The Seller agrees that from and after the
Closing Date:
(a) The Seller shall hold in confidence, and shall cause its officers,
directors and personnel to hold in confidence, all knowledge and information of
a secret or confidential nature with respect to the Business and shall not
disclose, publish or make use of the same without the consent of the Buyer,
except to the extent that such information shall have become public knowledge
other than by breach of this Agreement by the Seller.
(b) The Seller agrees that the remedy at law for any breach of this
Subsection 10.1 would be inadequate and that the Buyer shall be entitled to
injunctive relief in addition to any other remedy it may have upon breach of any
provision of this Subsection 10.1.
10.2 No Solicitation or Hiring of Former Employees. Except with respect
to employees of Buyer or BSA who, following the closing, may be terminated by
Buyer or BSA for reasons other than serious default ("faute lourde"), or a
period of five years after the Closing Date, the Seller shall not solicit any
person who was an employee of either the Seller or BSA on the date hereof or on
the Closing Date, other than ▇▇▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, to terminate his or her
employment with the Buyer or BSA or any of their affiliates or to become an
employee of either the Seller or any of its affiliates or hire or recommend that
any other employer hire any person who was such an employee on the date hereof
or on the Closing Date.
10.3 Non-Competition Agreement.
(a) For a period of five years after the Closing Date, neither the Seller
nor any Affiliate thereof shall, directly or indirectly, as owner, partner,
joint venturer, stockholder, or in any capacity whatsoever engage in, become
financially interested in, render any consultation or business advice with
respect to, or have any connection with any business competitive with the
Business as conducted on the date hereof or on the Closing Date, in the United
States or any other country in which the Seller or any Affiliate thereof
conducted the Business during the two years prior to the Closing Date. In
addition, neither the Seller nor any of its Affiliates shall, directly or
indirectly, during such five-year period, request or cause any suppliers or
customers of the Business to cancel or terminate any such business relationship
with the Buyer, BSA or BSG.
(b) The parties hereto agree that the duration and geographic scope of the
non-competition provision set forth in this Subsection 10.3 are reasonable. The
Seller hereby waives, to the extent permitted by law, any and all right to
contest the validity of this Section 10.3 on the ground of the breadth of its
geographic or product and service coverage or length of term. In the event that
any court determines that the duration or the geographic scope, or both, are
unreasonable and that such provision is to that extent unenforceable, the
parties hereto agree that the provision shall remain in full force and effect
for the greatest time period and in the greatest area that would not render it
unenforceable. The Seller agrees that damages are an inadequate remedy for any
breach of this provision and that the Buyer shall, whether or not it is pursuing
any potential remedies at law, be entitled to equitable relief in the form of
preliminary and permanent injunctions without bond or other security upon any
actual or threatened breach of this non-competition provision.
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10.4 Use of Name. Except for the limited use provided for in Section 8.9
hereof, the Seller agrees not to use, and to cause its Affiliates not to use,
the name "BioSepra" or any derivation thereof or any name which is confusingly
similar thereto after the Closing Date in connection with any business
whatsoever.
10.5 Cooperation in Litigation. Each party hereto will 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 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
out-of-pocket expenses (including legal fees and disbursements) of the party
providing such cooperation and of its officers, directors, employees and agents
reasonably incurred in connection with providing such cooperation, but shall not
be responsible to reimburse the party providing such cooperation for such
party's time spent in such cooperation or the salaries or costs of fringe
benefits or similar expenses paid by the party providing such cooperation to its
officers, directors, employees and agents while assisting in the defense or
prosecution of any such litigation or proceeding.
10.6 Access to Books and Records. The Seller shall have the right for a
period of six years following the Closing Date to have reasonable access to,
where there is a legitimate purpose, upon prior written notice specifying the
need therefor, such books, records and accounts, including financial and tax
information, correspondence, production records, employment records and other
records that are transferred to the Buyer pursuant to the terms of this
Agreement. The Buyer shall not destroy any such books, records or accounts
retained by it without first providing the Seller with the opportunity to obtain
or copy such books, records or accounts.
10.7 Intangible Property Cooperation. The Seller covenants and agrees
that, at any time upon the request of the Buyer, and at the Buyer's expense, the
Seller will communicate to the Buyer all information known to the Seller
relating to the Intangible Property used in connection with the Business,
including without limitation all inventions, patents, patent applications,
trademarks, service marks, trademark applications, service ▇▇▇▇ applications,
trademark registrations, service ▇▇▇▇ registrations, trade secrets, works of
authorship, designs, copyrights and licenses in the United States and worldwide,
and that the Seller will execute and deliver any papers, make all rightful
oaths, testify in any legal proceedings and perform all other lawful acts deemed
necessary or desirable by the Buyer to obtain, register, patent, perfect title,
enforce or defend the Intangible Property used in connection with the Business
or to assist the Buyer in defending against claims related to such Intangible
Property in the United States and worldwide.
10.8 Retention Bonus Agreements. The Buyer agrees that it or BSA will,
after the consummation of the Closing, offer to enter into retention agreements
in substantially the forms attached as Exhibits K-1 and K-2 hereto with all
individuals named on Exhibit K who perform services for BSA and individuals
named in Exhibit K who perform services for the Seller with respect to the
Business and who accept the Buyer's offer of employment.
10.9 Biosphere Agreement. Buyer covenants and agrees from and after the
Closing Date to cause BSA to perform all of its obligations under the Contrat de
Licence de Fabrication et de Commercialisation, by and between BSA and Biosphere
dated as of February 24, 1999 and the Contrat de Copropriete by and between BSA
and APHP. Buyer further covenants and agrees that from and after the Closing
Date, in the event that BSA receives the approval of APHP to assign to Biosphere
all of BSA's right, title and interest in and to the APHP/BSA Patent (as defined
in Schedule 2.22(a) Part B), Buyer shall, at Seller's cost and request, cause
BSA to promptly execute and deliver any and all instruments, documents,
agreements or understandings and perform all other lawful acts deemed reasonably
necessary or desirable by Seller in connection with the transfer of BSA's
interest to Biosphere, including paying any and all Taxes relating to or arising
in connection with such transfer.
10.10 ▇▇▇▇▇▇▇ Agreements. Buyer acknowledges that Seller is party to
certain agreements by and between Seller and ▇▇▇▇▇▇▇ Instruments, Inc.
("▇▇▇▇▇▇▇"), as set forth in Exhibit L hereto. Buyer covenants and agrees from
and after the Closing Date to make available to Seller or ▇▇▇▇▇▇▇, as the case
may be, on the terms set forth in Exhibit L, such quantities of the Products (as
such term is defined in such Exhibit) as may be requested by Seller or ▇▇▇▇▇▇▇
from time to time following the Closing.
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10.11 BSA Account Receivable. The Buyer acknowledges that, as of the
Closing Date, BSA will have an account receivable from Biosphere in the amount
of FF 800,000 (the "Biosphere Receivable"). Such receivable consists of the
purchase price paid by Biosphere for certain assets not related to the Business
which were transferred to Biosphere prior to the Closing. The Buyer agrees that
the indebtedness represented by the Biosphere Receivable will be forgiven, and
the Biosphere Receivable will be terminated, within 30 days following the
Closing. In connection with the foregoing, the Seller represents and warrants
that the sale of the assets by BSA to Biosphere as disclosed herein will be
conducted in accordance with applicable provisions of French law and with
business practices in France which are necessary and appropriate for
transactions of such nature and that any tax liability incurred by BSA following
the Closing relating to this transaction, other than as set forth herein, shall
be considered as "Taxes" for purposes of this Agreement for which Seller shall
be liable in accordance with the terms hereof. The parties hereto agree that any
tax liability incurred by BSA in connection with such forgiveness of debt will
be borne by the Seller to the extent that the amount giving rise to such tax
liability exceeds FF 800,000, and in such case, the liability of the Seller
shall apply to the tax on the excess amount.
10.12 ▇▇▇▇▇▇▇▇▇ Supplementary Benefits Agreement. The Buyer agrees that,
after the consummation of the Closing, Buyer will cause BSA to offer to enter
into a supplementary benefits agreement in substantially the form attached as
Exhibit M hereto with ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇.
10.13 Services Agreement. Following the Closing Date, Buyer shall cause
BSA to comply with the arrangements set forth in Exhibit N with respect to
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇▇▇▇▇.
10.14 Consulting Agreement. The Buyer agrees that, after the consummation
of the Closing, Seller may offer to enter into a consulting agreement in
substantially the form attached as Exhibit O hereto with ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇.
11. Termination of Agreement.
11.1 Termination by Lapse of Time. This Agreement may be terminated by
either the Buyer or the Seller, if the transactions contemplated hereby have not
been consummated by June 30, 1999, unless such date is extended by the written
consent of the parties hereto (provided that the right to terminate this
Agreement under this Section 11.1 shall not be available to any party whose
failure to fulfill any obligation under this Agreement has been the cause of or
resulted in the failure of the conditions precedent to the transactions
contemplated by this Agreement to occur on or before such date and such failure
constitutes a breach of this Agreement).
11.2 Termination by Agreement of the Parties. This Agreement may be
terminated by the mutual written agreement of the parties hereto.
11.3 Termination by the Seller. This Agreement may be terminated by the
Seller at any time prior to the Closing if the Seller shall have accepted,
approved or resolved to accept or approve a Superior Proposal in compliance with
the terms of Section 5.7.
11.4 Termination by the Buyer. This Agreement may be terminated by the
Buyer at any time prior to the Closing if (a) the Board of Directors of the
Seller shall have withdrawn or modified its recommendation of this Agreement or
the transactions contemplated hereby in a manner adverse to the Buyer or shall
have resolved or publicly announced or disclosed its intention to do so; or (b)
the Board of Directors of the Seller shall have recommended a Superior Proposal
to the stockholders of the Seller or shall have resolved or publicly announced
its intention to recommend or accept a Superior Proposal; or (c) a tender offer
or exchange offer which if completed would result in the ownership by any person
and such persons affiliates of fifty percent (50%) or more of the outstanding
shares of the Seller's Common Stock shall have been commenced and the Board of
Directors of the Seller shall have filed a Statement on Form 14D-9 recommending
acceptance of such tender or exchange offer or shall have resolved or publicly
announced its intention to recommend acceptance of such tender or exchange
offer.
11.5 Termination by Buyer or Seller By Reason of Breach. This Agreement
may be terminated by the Seller, if at any time prior to the Closing there shall
occur a material breach of any of the representations,
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warranties or covenants of the Buyer or the failure by the Buyer to perform any
material condition or obligation hereunder, and may be terminated by the Buyer,
if at any time prior to the Closing there shall occur a material breach of any
of the representations, warranties or covenants of the Seller or the failure of
the Seller to perform any material condition or obligation hereunder; provided
that in either case the party alleged to be in material breach shall have
received written notice of such material breach or material non-performance and
such material breach or material non-performance has remained uncured for a
period of ten (10) days after such notice has been received.
11.6 Effect of Termination. In the event of termination of this Agreement
as provided herein, this Agreement shall immediately become void and there shall
be no liability or obligation on the part of either the Seller or the Buyer, or
their subsidiaries and their respective officers, directors, stockholders or
Affiliates, except as set forth in Section 12 and except to the extent that such
termination results from the willful breach by a party of any of its
representations, warranties or covenants set forth in this Agreement; provided
that the provisions of Section 12 of this Agreement shall remain in full force
and effect and survive any termination of this Agreement.
12. Fees and Expenses.
(a) Except as set forth in this Section 12, the Buyer and the Seller shall
each pay their own expenses in connection with this Agreement and the
transactions contemplated hereby.
(b) The Seller shall pay the Buyer up to $300,000 as reimbursement for
reasonable and documented legal and accounting fees and expenses actually
incurred by the Buyer relating to the transaction contemplated by this Agreement
upon a termination of this Agreement by the Buyer pursuant to Section 11.5.
(c) The Buyer shall pay the Seller up to $300,000 as reimbursement for
reasonable and documented legal and accounting expenses actually incurred by the
Seller relating to the transaction contemplated by this Agreement upon a
termination of this agreement by the Seller pursuant to Section 11.5.
(d) The Seller shall pay to the Buyer a termination fee of $300,000 upon a
termination of this Agreement by the Seller pursuant to Section 11.3 or by the
Buyer pursuant to Section 11.4 and, in the event that, there is consummated
within 12 months after the date of such termination a transaction resulting from
an Acquisition Proposal, an additional fee of $500,000. In no event shall Buyer
be entitled to fees and expenses both under this clause (d) and under any other
clause of this Section 12.
(e) The Buyer shall pay all expenses related to the relocation after
Closing of fixed assets and inventory transferred to Buyer under this Agreement.
13. Indemnification.
13.1 Survival of Representations and Warranties. All of the
representations and warranties contained in this Agreement shall survive the
Closing hereunder and continue in full force and effect for a period of eighteen
(18) months thereafter, regardless of any investigation made by Buyer or Seller
or on their behalf; provided, however, (i) that the representations and
warranties relating to Taxes, compliance with Environmental Laws, product
liability matters and matters relating to the infringement or misappropriation
of intellectual property of others on or prior to the Closing shall survive and
remain in full force and effect for the period equal to the applicable statute
of limitations relating thereto; and (ii) the representations and warranties set
forth in Sections 2.2, 2.4 and 2.22(b), insofar as they relate to the ownership
of the BSA Shares and the BSG Shares (including the lack of Encumbrances
thereon), the outstanding capitalization of BSA and BSG, the ownership of (or
valid rights to use) the Assets and all assets of BSA and BSG (including the
lack of Encumbrances, other than Permitted Encumbrances thereon) and the
ownership of or right to use the Intangible Property, shall survive and remain
in full force and effect forever; and provided further that any representation
or warranty with respect to which a bona fide written claim shall have been made
or an action at law or in equity shall have commenced before such date, shall
survive (but only with respect to, and to the extent of, such claim) until the
final resolution of such claim or action, including all applicable periods for
appeal.
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13.2 Indemnification Provisions for Benefit of Buyer. (a) In the event
Seller breaches (or in the event any third party alleges facts that, if true,
would mean Seller has breached) any of its representations, warranties and
covenants contained herein, and, if there is an applicable survival period
pursuant to Section 13.1 above, provided that Buyer makes a written claim for
indemnification against Seller within such survival period, then Seller agrees
to indemnify Buyer and its affiliates and their respective officers, directors
and stockholders (each, a "Buyer Indemnified Party") from and against the
entirety of any Adverse Consequences (as hereinafter defined) they may suffer
through and after the date of the claim for indemnification (including any after
the end of any applicable survival period) resulting from, arising out of,
relating to, in the nature of or caused by the breach (or the alleged breach);
provided, however, that Seller shall not have any obligation to indemnify any
Buyer Indemnified Party from and against any Adverse Consequences resulting
from, arising out of, relating to, in the nature of or caused by the breach (or
alleged breach) of any representation or warranty of Seller until the Buyer
Indemnified Parties have, in the aggregate, suffered Adverse Consequences by
reason of all such breaches (or alleged breaches) in excess of a $120,000 (the
"Basket Amount") aggregate threshold (at which point Seller will be obligated to
indemnify the Buyer Indemnified Parties from and against all Adverse
Consequences in excess of the threshold amount) and provided further that
Seller's maximum liability arising out of the transactions contemplated by this
Agreement shall not exceed the Purchase Price (the "Seller's Liability
Limitation"). Notwithstanding anything herein to the contrary, neither the
Basket Amount nor the Seller's Liability Limitation shall apply to any Adverse
Consequences suffered by any Buyer Indemnified Party relating to (i) Seller's
obligation to refund any amount of the Purchase Price, as determined and
adjusted in accordance with Section 1.3, (ii) the representations and warranties
referred to in Sections 13.1 (i) above and 13.1(ii) above (but only insofar as
13.1(ii) relates to ownership of BSA Shares and the BSG Shares (including the
lack of Encumbrances thereon) and the outstanding capitalization of BSA and
BSG), (iii) for fraud, or (iv) Buyer's compliance with the obligations set forth
in Sections 10.9 and 10.11 hereof. "Adverse Consequences" means all actions,
suits, proceedings, hearings, investigations, charges, complaints, claims,
demands, injunctions, judgments, orders, decrees, rulings, damages, dues,
penalties, fines, costs, amounts paid in settlement (with the approval of the
other party if required pursuant to the provisions of this Section 13),
liabilities, obligations, Taxes (including, without limitation, any decrease in
the amount of net operating loss carryovers of BSA, multiplied by BSA's
statutory tax rate in France, resulting from any audit adjustment for periods
prior to the Closing Date), liens, losses, expenses and fees, including court
costs and reasonable attorneys' fees and expenses incurred in investigation or
defense of any of the same or asserting its rights hereunder.
(b) Seller agrees to indemnify the Buyer Indemnified Parties from and
against the entirety of any Adverse Consequences they may suffer resulting from,
arising out of, relating to, in the nature of or caused by any liability of
Seller which is not an Assumed Liability.
(c) Seller agrees to indemnify the Buyer Indemnified Parties from and
against the entirety of any Adverse Consequences they may suffer resulting from,
arising out of, relating to, in the nature of or caused by (i) any liability of
BSA or BSG for Taxes arising from the operation of the Business on or prior to
the Closing Date (including, without limitation, Taxes relating to the matters
described on Schedule 2.13 and in Sections 10.9 and 10.11, except to the extent
set forth therein), other than with respect to Taxes or charges, if any, as set
forth in Section 14 below; (ii) any liability or obligation of BSA or BSG
arising out of the conduct of the Business on or prior to the Closing Date under
Environmental Laws; (iii) any product liability or similar claim for injury to
person or property, regardless of when made or asserted, which arises out of or
is based upon any express or implied representation, warranty, agreement or
guaranty made by BSA or BSG, or alleged to have been made by BSA or BSG, or
which is imposed or asserted to be imposed by operation of law, in connection
with any service performed or product sold, licensed or leased by or on behalf
of BSA or BSG on or prior to the Closing Date, including without limitation any
claim relating to any product delivered in connection with the performance of
such service and any claim seeking recovery for consequential damages, lost
revenue or lost profit; and (iv) any infringement or alleged infringement of any
patent, trademark, tradename, copyright or other property right of any other
person or entity arising out of any action of BSA or BSG on or prior to the
Closing Date, or any misappropriation or misuse of any trade secret or
confidential or proprietary invention, discovery, process, formula, know-how,
technology or information or other similar right of another arising out of any
action of BSA or BSG on or prior to the Closing Date.
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13.3 Indemnification Provisions for Benefit of Seller. (a) In the event
Buyer breaches (or in the event any third party alleges facts that, if true,
would mean Buyer has breached) any of its representations, warranties and
covenants contained herein, and, if there is an applicable survival period
pursuant to Section 13.1 above, provided that Seller makes a written claim for
indemnification against Buyer within such survival period, then Buyer agrees to
indemnify Seller and its affiliates and their respective officers, directors and
stockholders (each, a "Seller Indemnified Party") from and against the entirety
of any Adverse Consequences they may suffer through and after the date of the
claim for indemnification (including any Adverse Consequences after the end of
any applicable survival period) resulting from, arising out of, relating to, in
the nature of or caused by the breach (or the alleged breach); provided,
however, that Buyer shall not have any obligation to indemnify any Seller
Indemnified Party from and against any Adverse Consequences resulting from,
arising out of, relating to, in the nature of or caused by the breach (or
alleged breach) of any representation or warranty of Buyer until the Seller
Indemnified Parties have, in the aggregate, suffered Adverse Consequences by
reason of all such breaches (or alleged breaches) in excess of a the Basket
Amount (at which point Buyer will be obligated to indemnify the Seller
Indemnified Parties from and against all Adverse Consequences in excess of the
threshold amount), and provided further that Buyer's maximum liability arising
out of the transactions contemplated by this Agreement shall not exceed the
Purchase Price, except for fraud.
(b) Buyer agrees to indemnify the Seller Indemnified Parties from and
against the entirety of any Adverse Consequences they may suffer resulting from,
arising out of, relating to, in the nature of or caused by any Assumed
Liability.
13.4 Matters Involving Third Parties. (a) If any third party shall notify
any Buyer Indemnified Party or any Seller Indemnified Party (the "Indemnified
Party") with respect to any matter (a "Third Party Claim") which may give rise
to a claim for indemnification against any other party (the "Indemnifying
Party") under this Section 13, then the Indemnified Party shall promptly notify
the Indemnifying Party thereof in writing; provided, however, that no delay on
the part of the Indemnified Party in notifying the Indemnifying Party shall
relieve the Indemnifying Party from any obligation hereunder unless (and then
solely to the extent) the Indemnifying Party thereby is prejudiced.
(b) Any Indemnifying Party will have the right to defend the Indemnified
Party against the Third Party Claim with counsel of its choice reasonably
satisfactory to the Indemnified Party so long as (i) the Indemnifying Party
notifies the Indemnified Party in writing within fifteen (15) days after the
Indemnified Party has given notice of the Third Party Claim that the
Indemnifying Party will indemnify the Indemnified Party from and against the
entirety of any Adverse Consequences the Indemnified Party may suffer resulting
from, arising out of, relating to, in the nature of or caused by the Third Party
Claim, (ii) the Indemnifying Party provides the Indemnified Party with evidence
reasonably acceptable to the Indemnified Party that the Indemnifying Party will
have the financial resources to defend against the Third Party Claim and fulfill
its indemnification obligations hereunder, (iii) the Third Party Claim involves
only money damages and does not seek an injunction or other equitable relief,
(iv) settlement of, or an adverse judgment with respect to, the Third Party
Claim is not, in the good faith judgment of the Indemnified Party, likely to
establish a precedential custom or practice adverse to the continuing business
interests of the Indemnified Party, and (v) the Indemnifying Party conducts the
defense of the Third Party Claim actively and diligently.
(c) So long as the Indemnifying Party is conducting the defense of the
Third Party Claim in accordance with Section 13.4(b) above, (i) the Indemnified
Party may retain separate co-counsel at its sole cost and expense and
participate in the defense of the Third Party Claim, (ii) the Indemnified Party
will not consent to the entry of any judgment or enter into any settlement with
respect to the Third Party Claim without the prior written consent of the
Indemnifying Party (not to be withheld, delayed or conditioned unreasonably),
and (iii) the Indemnifying Party will not consent to the entry of any judgment
or enter into any settlement with respect to the Third Party Claim without the
prior written consent of the Indemnified Party (not to be withheld, delayed or
conditioned unreasonably).
(d) In the event any of the conditions in Section 13.4(b) above is or
becomes unsatisfied, however, (i) the Indemnified Party may defend against, and
consent to the entry of any judgment or enter into any
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settlement with respect to, the Third Party Claim in any manner it reasonably
may deem appropriate (and the Indemnified Party need not consult with, or obtain
any consent from, any Indemnifying Party in connection therewith), (ii) the
Indemnifying Party will reimburse the Indemnified Party promptly and
periodically for the costs of defending against the Third Party Claim (including
reasonable attorneys' fees and expenses), and (iii) the Indemnifying Party will
remain responsible for any Adverse Consequences the Indemnified Party may suffer
resulting from, arising out of, relating to, in the nature of, or caused by the
Third Party Claim to the fullest extent provided in this Section 13.
13.5 Adjustments to Indemnification Payments. Any payment made by one
party to another party pursuant to this Section 13 in respect of any claim shall
be net of any insurance proceeds realized by and paid to the Indemnified Party
in respect of such claim.
13.6 Escrow Fund. At the Closing, $1,000,000 of the Purchase Price shall
be deposited by Buyer with the Escrow Agent to secure Seller's indemnification
obligations under this Section 13 pursuant to the Escrow Agreement. Such escrow
shall not limit or preclude a Buyer Indemnified Party from asserting any other
rights or seeking any other remedies against Seller pursuant to this Section 13.
14. Transfer and Sales Tax
Each of the Seller, BSA and the Buyer, as the case may be, shall be
responsible for and shall pay (a) all sales, use and transfer Taxes, and (b) all
governmental charges, if any, upon the sale or transfer of any of the Assets
hereunder, in each case, to the extent such party is required by local law or
custom to pay such Taxes or charges. In furtherance of the foregoing, and not by
way of limitation thereof, Buyer shall pay any transfer Taxes under French law
relating to or arising out of the Buyer's purchase of the BSA Shares. If the
Buyer or the Seller, as the case may be, shall fail to pay such amounts on a
timely basis, the other party may pay such amounts to the appropriate
governmental authority or authorities, and the Buyer or the Seller, as the case
may be, shall promptly reimburse such other party for any amounts so paid.
15. Notices
Any notices or other communications required or permitted hereunder shall
be sufficiently given if delivered personally or sent by federal express or
comparable courier service, registered or certified mail, postage prepaid,
addressed as follows or to such other address of which the parties may have
given notice:
To the Seller BioSepra Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: President
With a copy to: Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
To the Buyer: Life Technologies, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
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Attn: Director, Corporate Development
With copies to: Life Technologies, Inc.
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Attn: General Counsel
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and Fulbright & ▇▇▇▇▇▇▇▇ L.L.P.
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Attn: ▇▇▇▇ ▇▇▇▇▇▇, Esq.
Unless otherwise specified herein, such notices or other communications shall be
deemed received (a) on the date delivered, if delivered personally; (b) three
business days after being sent, if sent by registered or certified mail or (c)
two business days after being sent by federal express or comparable courier
service.
16. Successors and Assigns
This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns, except that the
Buyer and the Seller may not assign their respective obligations hereunder
without the prior written consent of the other party; provided, however, that
the Buyer may assign this Agreement, and its rights and obligations hereunder,
to a subsidiary or affiliate of Buyer. Any assignment in contravention of this
provision shall be void. No assignment shall release the Buyer from any
obligation or liability under this Agreement.
17. Entire Agreement; Amendments; Attachments
(a) This Agreement, all Schedules and Exhibits hereto, and all agreements
and instruments to be delivered by the parties pursuant hereto represent the
entire understanding and agreement between the parties hereto with respect to
the subject matter hereof and supersede all prior oral and written and all
contemporaneous oral negotiations, commitments and understandings between such
parties. The Buyer and the Seller, by the consent of their respective Boards of
Directors, or officers authorized by such Boards, may amend or modify this
Agreement, in such manner as may be agreed upon, by a written instrument
executed by the Buyer and the Seller.
(b) The Exhibits and Schedules attached hereto or to be attached hereafter
are hereby incorporated as integral parts of this Agreement.
18. Governing Law
This Agreement shall be governed by and construed in accordance with the
laws of the State of Delaware.
19. Section Heading
The section headings are for the convenience of the parties and in no way
alter, modify, amend, limit, or restrict the contractual obligations of the
parties.
20. Severability
The invalidity or unenforceability of any provision of this Agreement shall
not affect the validity or enforceability of any other provision of this
Agreement.
21. Counterparts
This Agreement may be executed in two counterparts, each of which shall be
deemed to be an original, but both of which shall be one and the same document.
22. No Third Party Beneficiaries
Except as set forth in Section 13, nothing herein expressed or implied is
intended or shall be construed to confer upon or give to any person other than
the parties hereto and their successors or assigns any rights or remedies under
or by reason of this Agreement.
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▇▇. Effect of Due Diligence
No investigation by or on behalf of the Buyer into the business,
operations, prospects, assets or condition (financial or otherwise) of the
Seller, BSA or the Business shall diminish in any way the effect of the
representations and warranties made by the Seller in this Agreement or shall
relieve the Seller of any of its obligations under this Agreement.
IN WITNESS WHEREOF, this Agreement has been duly executed by the parties
hereto as of and on the date first above written.
BUYER:
LIFE TECHNOLOGIES, INC.
By: /s/ C. ▇▇▇▇ ▇▇▇▇▇▇
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Name: C. ▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President Finance and
Chief Financial Officer
SELLER:
BIOSEPRA INC.
By: /s/ ▇▇▇▇-▇▇▇▇▇ ▇▇▇▇▇
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President and Chief Executive
Officer
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