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Exhibit 10.153
ASSET PURCHASE AND LICENSE AGREEMENT
This Asset Purchase and License Agreement ("Agreement") is made as of
this 15th day of February, 2000, by and between Mycogen Corporation, a
California corporation ("Seller"), and Ecogen Inc., a Delaware corporation
("Buyer") (with Seller and Buyer each being referred to separately as a "Party"
and together as the "Parties").
WHEREAS, Seller has made a determination to exit the business of
registering and marketing Microbial Biopesticides (as defined herein);
WHEREAS, Seller desires to license to Buyer certain technology and Data
(as defined herein), sell to Buyer certain assets, and assign to Buyer certain
rights and obligations relating to such business, and Buyer desires to accept a
license in such technology and Data, to purchase such assets and to assume such
rights and obligations from Seller; and
WHEREAS, the Parties and/or certain of their Affiliates (as defined
herein) are entering, or shall enter, into separate agreements under which,
subject to the consummation of the transactions contemplated by this Agreement,
(i) Seller or one of its Affiliates is agreeing to sell certain Microbial
Biopesticides to Buyer during a limited period, and (ii) Buyer is agreeing to
supply Seller and/or its Affiliates with certain Formulated Products for
distribution in specified areas during a limited period.
NOW, THEREFORE, in consideration of the above recitals and the mutual
agreements set forth below, the Parties agree as follows:
ARTICLE 1 - DEFINITIONS
Except as otherwise indicated in this Agreement, defined terms used in
this Agreement designated by an initial uppercase letter shall have the
following meanings set forth in this Article and may be used in the Agreement in
the singular or plural context:
"Affiliate" means, with respect to Buyer, an entity which directly or
indirectly controls, is controlled by, or is under common control with Buyer,
where for Buyer "control" (including the terms "controls," "controlled by" and
"under common control with") means the possession, direct or indirect, of
greater than fifty percent of the outstanding equity of the Buyer; with respect
to Seller an entity which directly or indirectly controls, is controlled by, or
is under common control with Seller, where for Seller "control" (including the
terms "controls", "controlled by" and "under common control with") means the
possession, direct or indirect, of forty percent (40%) of the outstanding equity
of the Seller, or the possession, direct or indirect, of the power to direct or
cause the direction of the management and policies of an entity, whether through
the ownership of voting securities, by contract, or otherwise.
"Assumed Liabilities" means, from and after the Closing Date, and
except as may be otherwise provided in the Purchase and Sale Agreement, all
liabilities and obligations arising out
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of or related in any manner to the Purchased Assets or the licenses, including,
without limitation, any and all:
(a) liabilities and obligations of Seller for transfer, sales, use and
other taxes (other than income taxes) arising in connection with the
consummation of the transactions contemplated by this Agreement;
(b) liabilities and obligations for obtention, maintenance and support
of any Registrations, including the cost of any and all data required by
governmental authorities to be generated or otherwise obtained to support said
Registrations, except as provided for pursuant to the Data Citation Rights
granted herein;
(c) liabilities and obligations of Seller under the Contracts for the
period from and after the Closing;
(d) liabilities and obligations for registration and maintenance of the
Trademarks;
(e) liabilities and obligations arising out of the sale or use of any
Purchased Assets or Products after the Closing Date, including, without
limitation, product liability involving claims (other than claims arising out of
or related to DAS's breach of its obligations pursuant to the Purchase and Sale
Agreement) for personal injury, property damage, economic loss or otherwise,
whether sounding in tort, breach of warranty or any other theory, arising out of
occurrences involving any such Purchased Asset or Product;
(f) liabilities and obligations for any Purchased Assets arising out of
any modifications or improvements to the Purchased Assets made by or on behalf
of Buyer; and
(g) liabilities and obligations arising out of any condition of or
defect in the Purchased Assets of which Buyer has knowledge at the time of the
occurrences giving rise to such liabilities or obligations.
"Audited Financial Statements" has the meaning set forth in Section
7.4(a) hereof.
"Balance Sheet" means the audited October 31, 1998 balance sheet of
Buyer.
"Balance Sheet Date" means October 31, 1998.
"▇▇▇▇ of Sale" has the meaning set forth in Article 2.
"Bt Toxins" means the Bacillus thuringiensis toxins identified in
Schedule 1
"Business" means the business conducted by Seller for the manufacture,
processing, formulation, marketing, sale and distribution of the Products, but
not including Excluded Assets.
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"Business Day" means any day of the week except Saturday, Sunday and
any legal holiday observed by a national banking association or one of the
parties.
"Buyer" has the meaning set forth in the Preamble.
"Buyer's Registrations" has the meaning set forth in the definition of
Data Citation Rights.
"CellCap Technology" means Seller's technology related to encapsulating
proteins, such as but not limited to those produced from Bacillus thuringiensis,
into cells such as Pseudomonas or other bacterial strains, where such technology
includes but is not limited to US Patent Nos. 4,695,462 and 4,695,455, and trade
secrets and know-how related to the use of such for the production of Products.
"Claim Notice" has the meaning set forth in Article 11.
"Closing" has the meaning set forth in Section 5.1.
"Closing Date" has the meaning set forth in Section 5.1.
"Closing Value" means the average of the last reported sale price of
Buyer's Common Stock on the NASDAQ National Market on each of the Business Days
during the thirty (30) calendar days immediately preceding the date hereof;
provided, however, the Closing Value shall not be less than the price per share
which would result in Seller obtaining more than 19.99% of the outstanding
shares of Buyer as of the close of business on the date hereof.
"Commission" means the Securities and Exchange Commission, or any other
federal agency at the time administering the Securities Act.
"Common Stock" means the common stock, $.01 par value, of Buyer.
"Confidentiality Agreement" means that certain confidentiality
agreement entered into as of September 23, 1999, by and between Buyer and
Seller.
"Contracts" means all rights and obligations of Seller arising during
the period from and after the Closing under the contracts and agreements between
Seller and Third Parties relating to the Business which are set forth in
Schedule 2.
"DAS" means Dow AgroSciences LLC, a Delaware limited liability company,
which is an Affiliate of Seller.
"DAS Distribution Agreements" means three (3) separate agreements by
and between Ecogen and DAS, under which Ecogen will agree to sell, and DAS, will
agree to purchase, the Formulated Products for distribution in the identified
geographies.
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"Data" means the data listed in Schedule 3.
"Data Compensation" has the meaning assigned in Section 4.2.
"Data Citation Rights" means the right to rely upon and cite the Data
for the sole purpose of the obtention, maintenance and support of (a)
Registrations; (b) registrations of Microbial Biopesticides in the Territory
owned by Buyer on the Effective Date of this Agreement ("Buyer's
Registrations"); and (c) registrations of Microbial Biopesticides in the
Territory issued to Buyer after the Effective Date of this Agreement ("New Buyer
Registrations"), so long as Buyer provides Seller with a right of first refusal
to supply the Microbial Biopesticides sold under the Buyer's Registrations and
New Buyer Registrations under terms and conditions essentially similar to those
offered by any third party supplier of such Microbial Biopesticides.
"Direct Claim" has the meaning set forth in Section 11.4(a).
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
or any similar Federal statute, and the rules and regulations of the Commission
issued under such Act, as they each may, from time to time, be in effect.
"Excluded Assets" means the following assets of Seller:
(a) the Plant;
(b) any and all billed and unbilled accounts receivable, notes
receivable and all other claims or rights against Third Parties (other than
rights under the Contracts for products sold or services performed after the
Closing Date), and all proceeds of any of the foregoing;
(c) any and all cash, bank accounts and deposits, marketable
securities, investments and cash equivalents of any type;
(d) any and all inter-company accounts of Seller and claims or rights
of any type against Affiliates of Seller;
(e) all properties and assets of every kind, nature and description,
whether real, personal or mixed, whether tangible or intangible, and wherever
situated, used by Seller or any Affiliate of Seller in connection with, or
otherwise related or historically allocable to, any manufacture, processing, or
formulation of the Products;
(f) all properties and assets of every kind, nature and description,
whether real, personal or mixed, whether tangible or intangible, and wherever
situated, used by Seller or any Affiliate of Seller in connection with, or
otherwise related or historically allocable to, any business or operations other
than the Business;
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(g) all corporate and charter documents, qualifications to conduct
business as a foreign corporation, arrangements with registered agents relating
to foreign qualifications, taxpayer and other identification numbers, seals,
minute books, stock transfer books, blank stock certificates, and other
documents relating to the organization, maintenance, and existence of Seller as
a company;
(h) all Excluded Technology;
(i) all data supporting Registrations and related tolerances, including
but not limited to the Data; and
(j) any of the rights of Seller under this Agreement, the Purchase and
Sale Agreement, the Distribution Agreements, the Confidentiality Agreement or
any related agreement between Seller and Buyer or any of their respective
Affiliates which is entered into on or after the date of this Agreement.
"Excluded Technology" means CellCap Technology and any manufacturing or
fermentation processes and know-how related to Products.
"Field Development Test Studies" means those study reports listed in
Schedule 4.
"Financial Statements" has the meaning set forth in Section 7.4(b)
hereof.
"Formulated Products" means the Seller's end use Microbial Biopesticide
formulations known as MVP, MVP II, Mattch, M-Trac and M-Peril, in each case
meeting the applicable Product Specifications.
"Future Data" has the meaning set forth in Section 3.3 hereof.
"Indemnified Party" has the meaning set forth in Section 11.4.
"Indemnifying Party" has the meaning set forth in Section 11.4.
"Inventories" means any and all Seller-owned inventories of Formulated
Products on hand as of the Closing Date, excluding any and all inventories of
M-Peril.
"Knowledge of Seller" and "Seller's knowledge" mean the actual
knowledge, without independent investigation.
"Licensed Technology" means (1) US Patent Nos. 5,128,130, 5,527,883,
5,840,554, 5,188,960, 5,932,209, and 5,246,852 and (2) all rights that are owned
by Seller in the delta endotoxin contained in Bacillus thuringiensis serovar
japonensis strain buibui Ferm BP-3465 solely for use as a Microbial
Biopesticide.
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"Liens" means all liens, mortgages, charges, security interests,
options to purchase or other encumbrances.
"Losses" means all claims, demands, injunctions, judgments, orders,
decrees, rulings, damages, dues, penalties, fines, costs, reasonable amounts
paid in settlement, liabilities, obligations, taxes, liens, losses, expenses and
fees, including court costs and reasonable attorneys' fees and expenses.
"Microbial Biopesticide" means a topically applied Pesticide that
contains a Bt Toxin as an active ingredient; provided, however, Microbial
Biopesticide shall not include (1) Plant Biopesticides or (2) the use of nucleic
acids or fragments thereof that encode Bacillus thuringiensis proteins,
regardless of whether such nucleic acids or fragments thereof are formulated or
applied to a plant or its environment.
"New Buyer Registrations" has the meaning set forth in the definition
of Data Citation Rights.
"Paid-Up Royalty" has the meaning set forth in Section 4.1.
"Party" has the meaning set forth in the Preamble.
"Person" means an individual, a corporation, a limited liability
company, a partnership, an association, a joint stock company, a trust, a joint
venture, an unincorporated organization, or a government or political
subdivision or any agency or instrumentality of a government or political
subdivision.
"Pesticide" has the meaning presently specified in 7 U.S.C. Section
136(u).
"Plant" means the manufacturing facility operated on Seller's behalf in
connection with the operation of the Business, and located at ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇.
"Plant Biopesticide" means any Pesticide produced by plants from
nucleic acids or fragments thereof that have been incorporated into or expressed
by a plant.
"Proceeding" means any action, suit, demand, claim or legal,
administrative, arbitration or other alternative dispute resolution proceeding,
hearing or investigation.
"Products" means the Formulated Products and the Bt Toxins utilized as
the active ingredient in Microbial Biopesticides.
"Product Specifications" means the specifications that control the
quality and composition of the Products as set forth in Schedule 5.
"Promissory Note" has the meaning set forth in Section 5.24.
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"Purchase and Sale Agreement" means that certain Purchase and Sale
Agreement substantially in the form attached hereto as Exhibit C, to be entered
into at Closing by and between DAS and Buyer and under which DAS will agree to
sell, and Buyer will agree to purchase, MVP, MVP II, M-Trac and Mattch.
"Purchase Price" has the meaning set forth in Section 4.3.
"Purchased Assets" means all of the right, title and interest that
Seller possesses and has the right to transfer in and to the following assets
used by Seller exclusively in the operation of the Business:
(a) the Trademarks;
(b) the Contracts;
(c) the Inventories;
(d) the Records; and
(e) the Registrations.
where Purchased Assets does not include Excluded Assets.
"Records" means any and all customer lists relating to the Business and
the Field Development Test Studies.
"Registrations" means the Microbial Biopesticide registrations listed
in Schedule 6.
"Restricted Payments" means dividends or other distributions in respect
of the stock of Buyer or any Subsidiary (except intercorporate dividends and
dividends payable solely in stock of Buyer) and purchases, redemptions and other
acquisitions, direct or indirect, of stock of Buyer or any Subsidiary.
"Required Registrations" has the meaning set forth in Section 3.3
hereof.
"SEC Documents" has the meaning set forth in Section 7.4 hereof.
"Securities Act" means the Securities Act of 1933, as amended, or any
similar Federal statute, and the rules and regulations of the Commission issued
under such Act, as they each may, from time to time, be in effect.
"Seller" has the meaning set forth in the Preamble.
"Stockholders' Agreement" means that certain Stockholders' Agreement
between Buyer
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and Seller and dated the date hereof, in substantially the form attached hereto
as Exhibit A.
"Subsidiary" means a subsidiary more than 50 percent of whose
outstanding securities representing the right, other than as affected by events
of default, to vote for the election of directors, is owned by the applicable
party and/or one or more of such party's other majority-owned Subsidiaries.
Subsidiaries of Ecogen shall also include the entities set forth in Schedule 7
hereto.
"Tax" or "Taxes" means any federal, state, local, foreign or other
taxes (including, without limitation, income (net or gross), gross receipts,
profits, alternative or add-on minimum, franchise, license, capital, capital
stock, intangible, services, premium, mining, transfer, sales, use, ad valorem,
payroll, wage, severance, employment, occupation, property (real or personal),
windfall profits, import, excise, custom, stamp, withholding or governmental
charges of any kind whatsoever (including interest penalties, additions to tax
or additional amounts with respect to such items).
"Territory" means the aggregate of all geographies of the world, except
for those areas now included within the country of Japan.
"Third Party" means a person or entity that is neither a Party nor an
Affiliate of a Party.
"Third Party Claim" has the meaning set forth in Section 11.4(a).
"Trademarks" means the trademarks, whether registered or unregistered,
which are owned by Seller and set forth in Schedule 8.
"Unaudited Balance Sheet" has the meaning set forth in Section 7.4(d)
hereof.
"Unaudited Financial Statements" has the meaning set forth in Section
7.4(b) hereof.
"U.S.A." means the United States of America.
ARTICLE 2 - PURCHASE AND SALE OF ASSETS
On and subject to the terms and conditions of this Agreement, Buyer agrees to
purchase from Seller, and Seller agrees to sell, transfer, assign and deliver to
Buyer, all of the Purchased Assets at the Closing. Such sale, transfer and
assignment shall be effected by delivery at the Closing by Seller of (i) a duly
executed ▇▇▇▇ of sale in the form of Exhibit B (the "▇▇▇▇ of Sale") and (ii)
such other good and sufficient instruments of sale, transfer and assignment as
shall reasonably be necessary to vest in Buyer, subject to the provisions of
this Agreement, all of the right, title and interest of Seller in and to the
Inventories, and Records. Seller also shall transfer the Trademarks,
Registrations and Contracts to Buyer after the Closing pursuant to Sections 8.5,
8.6 and 8.7. Notwithstanding anything in this Agreement that may be to the
contrary, Seller is not
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selling to Buyer, and Buyer is not purchasing from Seller, any of the Excluded
Assets.
ARTICLE 3 - LICENSES
3.1 License of Technology. On and subject to the terms and conditions of this
Agreement, Seller grants to Buyer and Buyer accepts from Seller a limited,
exclusive, fully paid-up royalty (except for royalties that may be payable by
Buyer as provided in Section 3.7), non-sublicensable right under Licensed
Technology to make, have made, use, sell and have sold Bt Toxins solely as
Microbial Biopesticides in the Territory. The Seller does not grant, explicitly
or implicitly, any rights to Excluded Technology. Seller acknowledges and agrees
that in connection with the payment by Buyer of the Purchase Price, Buyer is
deemed to have paid in full all amounts past due, now due or hereafter due to
the Seller pursuant to that certain Settlement Agreement dated as of March 12,
1998 between Seller and Buyer (the "Settlement Agreement"); provided, however,
that notwithstanding the foregoing the Settlement Agreement shall remain in full
force and effect. Except as provided for in Section 3.7 and other than the
payment of the Purchase Price, Buyer shall have no further payment obligations
to Seller with respect to the license granted pursuant to this Section 3.1.
3.2 Data Citation Rights. Seller grants Buyer Data Citation Rights as that term
is defined in Article 1. Seller does not grant Buyer any right to receive hard
copies of the Data, except for Data that Seller determines in its sole
discretion contains no confidential business information relating to the
Excluded Technology. Seller does not grant Buyer the right to receive
compensation from DAS or any third party for rights to the Data. Seller has no
right to authorize others to rely upon or cite the Data. Seller agrees not to
voluntarily grant Data Citation Rights to any third party.
3.3 Future Data Requirements. Except as otherwise provided herein, Buyer shall
be responsible to generate and pay for all studies that are required after
Closing by any regulatory authority within the Territory to obtain, maintain or
support Registrations or New Buyer Registrations ("Future Data"). To the extent
that Buyer's need for Future Data requires access to information or data of
Seller or its Affiliates relating to the manufacturing process of the Products
("Required Information"), Seller shall provide access to the Required
Information of Seller as follows. At Seller's sole discretion, Seller shall
either complete the Future Data studies or contract with an independent, third
party laboratory chosen by Seller to perform the Future Data study(ies). Such
independent, third party laboratory shall, pursuant to execution of a
confidentiality agreement reasonably acceptable to Seller and its Affiliates,
have access to the Required Information held by Seller or its Affiliates. Buyer
shall pay all costs associated with the generation of the Future Data study(ies)
by the laboratory or Seller. However, to the extent that Future Data
incorporates or reveals Required Information, such Future Data shall be owned by
Seller. If such Future Data incorporates or otherwise reveals Required
Information, the Future Data, Buyer shall have Data Citation Rights to such
Future Data pursuant to the terms of Section 3.2.
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3.4 Letters of Authorization. To the extent that any regulatory authority
requires a letter of authorization from Seller for Buyer to rely upon or cite
the Data prior to issuing a New Buyer Registration, and to the extent that Buyer
provides in writing to Seller the names of the Microbial Biopesticides to be
registered in a jurisdiction and the name and address of the appropriate
regulatory authority, Seller will, at no cost to Buyer, provide letters of
authorization to rely upon or cite the Data in order to receive New Buyer
Registrations in the Territory. Seller agrees that, within forty-five (45) days
of receipt of such written request from Buyer, the letters of authorization will
be provided.
3.5 Insect Resistance Management. In order to ensure that resistance management
is properly coordinated between Buyer's Microbial Biopesticides and Seller's
Plant Biopesticides, Buyer shall promptly update Seller on any discussions Buyer
may have with any regulatory authority regarding resistance management of Bt
Toxins as Microbial Biopesticides in the Territory. Such update shall include a
summary of the points discussed with any such regulatory authority and the
outcome of such discussions.
3.6 Distribution Registrations. The Parties recognize that Buyer may be
prohibited from owning registrations with respect to the Formulated Products in
some jurisdictions due to restrictions imposed by local laws and regulations
regarding registration ownership rights. Therefore, Buyer may assign to a Third
Party the rights granted Buyer under Sections 3.2 and 3.4 for the sole purpose
of obtaining and maintaining registrations for Microbial Biopesticides in such
jurisdictions. However, prior to any assignment under this Section 3.6, Buyer
must provide written notice to Seller of its intent to assign, disclose to
Seller the identities of the jurisdiction and the proposed assignee, and obtain
the prior written approval of Seller to such assignment. Such approval shall not
be unreasonably withheld, provided that Buyer and the Third Party assignee
agrees in writing (i) not to transfer any resulting registrations except to
Buyer, and (ii) to take immediate action as necessary to cancel any resulting
registration upon the request of Buyer. Further, at Seller's request, Buyer
shall require a Third Party assignee to cancel such registration if Seller, in
its sole discretion, deems it necessary to protect Seller's ownership interest
in the Data.
3.7 Additional Royalty Payment. If for any reason it is deemed by Seller in its
good faith judgement that royalties are due to Kubota Corporation, pursuant to a
contract in existence at the time of Closing between Seller and Kubota
Corporation, based upon Buyer's sales of a Product that contains a buibui Bt
Toxin as described in Schedule 1, then Seller will notify Buyer of such
royalties. Within 30 days after Seller so notifies Buyer, Buyer shall pay Seller
any and all royalties due to Kubota Corporation based upon Buyer's sales of
Product containing a buibui Bt Toxin. Any such Royalties shall not exceed 5% of
Buyer's net sales of such Product.
ARTICLE 4 - CONSIDERATION
Buyer shall compensate Seller for the rights conveyed hereunder as follows:
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4.1 Paid-Up Royalty. The paid-up royalty for the rights granted hereunder to the
Licensed Technology is Five Hundred Thousand Dollars ($500,000) (the "Paid-Up
Royalty").
4.2 Data Compensation. The sole compensation for the Data Citation Rights is Two
Hundred and Fifty Thousand Dollars ($250,000) (the "Data Compensation").
4.3 Purchase Price. The purchase price for the Purchased Assets (the "Purchase
Price") shall be Two Million Two Hundred and Fifty Thousand Dollars
($2,250,000).*
4.4 Payment. The aggregate consideration to be paid in connection with Sections
4.1, 4.2, and 4.3 shall be paid at Closing in certificates registered in the
name of Seller evidencing shares of Common Stock of Buyer having an aggregate
Closing Value of Three Million Dollars ($3,000,000.00) as provided in Section
5.2.
ARTICLE 5 - CLOSING
5.1 The Closing. The closing of the transactions contemplated by this Agreement
(the "Closing") shall take place via facsimile at the offices of Paul, Hastings,
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ on February
15, 2000, or such other date as the Parties may mutually determine (the "Closing
Date").
5.2 Deliveries at the Closing. At the Closing, (i) Seller will execute,
acknowledge (if appropriate) and deliver to Buyer the ▇▇▇▇ of Sale and any other
instruments required as provided in Section 2.1, (ii) Seller will deliver to
Buyer the certificate referred to in Section 9.1, (iii) Buyer will deliver to
Seller the certificate referred to in Section 9.2, (iv) Buyer and Seller will
execute and deliver the Stockholders' Agreement, and (v) Buyer and Seller will
execute the Purchase and Sale Agreement in the form of Exhibit D, and (vi) Buyer
will deliver to Seller certificates registered in the name of Seller evidencing
shares of Common Stock of Buyer having an aggregate Closing Value of Three
Million Dollars ($3,000,000.00); provided, however, that Buyer shall not, while
its Common Stock is listed for trading on the NASDAQ National Market or the
NASDAQ Small Cap Market, issue to Seller an aggregate number of shares that
equals or exceeds 20% of the number of shares of Common Stock issued and
outstanding immediately
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* The purchase price for the Purchased Assets is allocated among the individual
assets composing the Purchased Assets as follows: Trademarks, Fifty Thousand
Dollars ($50,000); Contracts, Fifty Thousand Dollars ($50,000); Records, Fifty
Thousand Dollars ($50,000); Registrations, One Million Five Hundred Thousand
Dollars ($1,500,000). Seller estimates that the allocated purchase price of the
Inventory is Six Hundred Thousand Dollars ($600,000), priced at the following
per gallon prices: * The purchase price for the Inventory is subject to
adjustment following a physical count of the Inventory by Seller on the Closing
Date. Seller shall promptly advise Buyer of the result of the physical count.
Within thirty (30) days following receipt of the result of the physical count of
the Inventory, (i) if the final purchase price for the Inventory exceeds
$600,000 Buyer shall remit to Seller a check in the amount of such excess; or
(ii) if the final purchase price for the Inventory is less than $600,000, Seller
shall grant Buyer a dollar for dollar credit on subsequent purchases of
Formulated Products under the Purchase and Sale Agreement.
* This information is subject to request for confidentiality.
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prior to the Closing (the "Issuable Maximum") unless, prior to Closing, Buyer
shall have (a) obtained the approval of shareholders of Buyer entitled to vote
thereon ("Shareholder Approval"), if any, as may be required by the rules and
regulations of the NASDAQ Stock Market (or successor thereto) applicable to
approve the issuance of shares in excess of the Issuable Maximum, or (b)
obtained an exemption from any applicable requirement for Shareholder Approval
from the NASDAQ Stock Market. In the event that such Shareholder Approval or the
exemption from any requirement from the NASDAQ Stock Market is not received by
Buyer prior to Closing, Buyer shall issue a promissory note (the "Promissory
Note") to Mycogen (i) having a principal amount equal to the aggregate market
value of those shares Buyer is not able to issue due to the Shareholder Approval
requirement of the NASDAQ Stock Market (or its successor), (ii) maturing on the
first anniversary of the Closing, and (iii) with interest payable on the last
business day of each calendar quarter at the prime rate in effect at Citibank,
N.A., New York, on the last business day of the preceding calendar quarter.
5.3 Assumption of Liabilities. On and subject to the terms and conditions of
this Agreement, Buyer agrees to assume and become responsible for all of the
Assumed Liabilities at the Closing.
ARTICLE 6 - REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Buyer as follows:
6.1 Organization of the Seller. Seller is duly organized, validly existing and
in good standing under the laws of California, U.S.A., and has all necessary
corporate power and authority to carry on its business as now conducted and as
proposed to be conducted and to own or lease and operate its properties.
6.2 Noncontravention. Neither the execution and the delivery of this Agreement,
the Stockholders' Agreement, the Purchase and Sale Agreement and the
Distribution Agreement, nor the consummation of the transactions contemplated
hereby or thereby will (i) violate any constitution, statute, regulation, rule,
injunction, judgment, order, decree, ruling or other restriction of any
government, governmental agency or court to which Seller is subject or any
provision of the charter or bylaws of Seller or (ii) conflict with, result in a
breach of or constitute a default under any contract to which Seller is a party
or by which it is bound or to which any of its assets is subject, except where
the violation, conflict, breach or default would not have a material adverse
effect on the ability of the Parties to consummate the transactions contemplated
by this Agreement. Seller does not need to give any notice to, make any filing
with, or obtain any authorization, consent or approval of any government or
governmental agency in order for the Parties to consummate the transactions
contemplated by this Agreement, the Stockholders' Agreement, the Purchase and
Sale Agreement and the DAS Distribution Agreements.
6.3 Brokers' Fees. Seller has no liability or obligation to pay any fees or
commissions to any broker, finder or agent with respect to the transactions
contemplated by this Agreement, the
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Stockholders' Agreement, the Purchase and Sale Agreement and the Distribution
Agreement for which Buyer could become liable or obligated.
6.4 Title to Purchased Assets. Seller has good and marketable title to the
Purchased Assets, free and clear of all Liens, except (i) Liens which will be
removed at or prior to the Closing, (ii) Liens created by Buyer or any Person
acting on behalf of, under or through Buyer, (iii) Liens for taxes not yet due
and payable or for taxes that the taxpayer is contesting in good faith through
appropriate proceedings, (iv) purchase money Liens and Liens securing rental
payments under leases, (v) other Liens arising in the ordinary course of
business and not incurred in connection with the borrowing of money, and (vi)
imperfections of title and Liens which in the aggregate do not materially
detract from the value of the Purchased Assets, taken as a whole.
6.5 Inventory. The Inventory is in good condition, is not obsolete, is useable
or saleable in the ordinary course of business and, such Inventory was produced
in compliance with the applicable quality control procedures of Seller and
comply with all rules, regulations, laws and the like applicable thereto.
6.6 Trademarks. As of the Closing Date, all Trademarks owned or used by the
Seller which constitute a part of the Purchased Assets are listed, where
applicable, in Schedule 5. To the Knowledge of Seller, Seller owns or has the
right to use, free and clear of all Liens, claims and restrictions, the
Trademarks. The Seller has not been informed that it is infringing upon or
otherwise acting adversely to the right or claimed right of any Person under or
with respect to any Trademark. To the Knowledge of Seller, the Seller is not
obligated or under any liability whatsoever to make any payments by way of
royalties, fees or otherwise to any owner or licensee of, or other claimant to,
any Trademark which constitute a part of the Purchased Assets.
6.7 Right to Grant Licenses. Seller warrants that it has the right to grant the
rights in Article 3 under this Agreement. However, nothing in this Agreement
shall be construed as:
(i) a warranty as to the validity or scope of any patent(s);
(ii) a warranty or representation that anything made, used, sold or
otherwise disposed of under the patent licenses granted in
this Agreement will or will not infringe patents of Third
Parties;
(iii) an obligation to bring or prosecute actions or suits against
Third Parties for infringement of patent(s); and
(iv) A warranty or representation that the Data is, standing alone,
sufficient to support the obtention or maintenance of a
Registration or related tolerance.
6.8 Contracts. To the Knowledge of Seller, (i) each Contract is a valid and
binding
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agreement of Seller and is in full force and effect in all material respects,
and (ii) there exists no material default under any Contract.
6.9 Litigation. Except as described in Schedule 9, there is no action, suit,
investigation, arbitration or proceeding (whether criminal or civil) pending or,
to the best Knowledge of Seller threatened against or affecting Seller or any of
the Purchased Assets or the Licensed Technology, whether or not by or before any
governmental authority, or any basis in fact therefor known to Seller, against
or involving Seller or any of its officers, directors or employees (in their
capacity as such), assets or business, whether at law, in equity or otherwise,
or any other facts or circumstances of which Seller has knowledge that has
reasonable business likelihood of resulting in any claims against, or
liabilities of, Seller. Neither Seller nor any director, officer or employee
thereof is operating under and neither Seller nor the Purchased Assets or the
Licensed Technology is subject to any orders, writs, judgments, injunctions or
decrees of any governmental authority.
6.10 Tax Matters. Seller has timely paid (or will have paid prior to the Closing
Date) all Taxes, and all interest and penalties due thereon and payable by it
prior to the Closing Date, the nonpayment of which would result in a Lien on any
Purchased Asset or the Licensed Technology, and has filed (or will have filed
prior to the Closing Date) all Tax returns with respect to the Business that are
due prior to the Closing Date.
6.11 Investment Representation.
(i) Seller understands and agrees that the Common Stock it will be
acquiring has not been registered under the Securities Act, and that accordingly
it will not be fully transferable except as permitted under various exemptions
contained in or promulgated by the Commission under the Securities Act, or upon
satisfaction of the registration and prospectus delivery requirements of the
Securities Act. Seller acknowledges that it must bear the economic risk of its
investment in the Common Stock for an indefinite period of time since they have
not been registered under the Securities Act and therefore cannot be sold unless
they are subsequently registered or an exemption from registration is available.
(ii) Seller hereby represents and warrants to Buyer that it is
acquiring the Common Stock for investment purposes only, for its own account,
and not as nominee or agent for any other Person, and not with the view to, or
for resale in connection with, any distribution thereof within the meaning of
the Securities Act.
(iii) Absent an effective registration statement under the Securities
Act covering the disposition of the Common Stock, Seller will not sell,
transfer, assign, pledge, hypothecate or otherwise dispose of any or all of the
Common Stock without first providing Buyer with an opinion of counsel (which may
be counsel for Buyer) to the effect that such sale, transfer, assignment,
pledge, hypothecation or other disposition will be exempt from the registration
and the prospectus delivery requirements of the Securities Act and the
registration or qualification requirements of any applicable state securities
laws, except that no such registration or opinion
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shall be required with respect to (i) a transfer not involving a change in
beneficial ownership, or (ii) a sale to be effected in accordance with Rule 144
of the Commission under the Securities Act (or any comparable exemption).
6.12 Disclaimer of Warranty of Assets. EXCEPT AS PROVIDED IN THIS ARTICLE 6,
SELLER IS SELLING AND TRANSFERRING THE PURCHASED ASSETS "AS IS" AND "WHERE IS",
AND ALL OTHER REPRESENTATIONS AND WARRANTIES, EXPRESS AND IMPLIED, INCLUDING ANY
WARRANTY OR MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, ARE EXPRESSLY
DISCLAIMED.
6.13 Disclaimer of Warranty of Licensed Technology and Data and Bt Toxins.
SELLER MAKES NO REPRESENTATIONS NOR EXTENDS ANY WARRANTIES OF ANY KIND, EITHER
EXPRESS OR IMPLIED, INCLUDING WARRANTIES FOR MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE, NOR ASSUMES ANY RESPONSIBILITIES WHATSOEVER WITH RESPECT TO
ANY BT TOXINS OR DATA OR PRODUCTS PRODUCED OR RELATED TO THIS AGREEMENT OR TO
THE USE, SALE, OR OTHER DISPOSITION OF THOSE PRODUCTS.
ARTICLE 7 - REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Seller as follows:
7.1 Organization of Buyer. Buyer is duly organized, validly existing and in good
standing under the laws of the State of Delaware, U.S.A., and has all necessary
corporate power and authority to carry on its business as now conducted and as
proposed to be conducted and to own or lease and operate its properties.
7.2 Authorization of Transaction. Buyer has full power and authority (including
full corporate power and authority) to execute and deliver, and to perform its
obligations under this Agreement, the Stockholders' Agreement, the Purchase and
Sale Agreement and the Distribution Agreement. The execution and delivery of
this Agreement and the performance by Buyer of its obligations hereunder, have
been duly authorized by proper corporate action on the part of Buyer. Upon
execution by the Parties, this Agreement, the Stockholders' Agreement, the
Purchase and Sale Agreement and the Distribution Agreement shall constitute the
valid and legally binding obligation of Buyer, enforceable against Buyer in
accordance with their terms, subject to applicable bankruptcy, insolvency and
similar laws affecting creditors' rights generally.
7.3 Noncontravention. Neither the execution and the delivery of this Agreement,
the Stockholders' Agreement, the Purchase and Sale Agreement and the
Distribution Agreement, nor the consummation of the transactions contemplated
hereby or thereby will (i) violate any constitution, statute, regulation, rule,
injunction, judgment, order, decree, ruling or other restriction of any
government, governmental agency or court to which Buyer is subject or any
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provision of its charter or bylaws or (ii) conflict with, result in a breach of
or constitute a default under any contract to which Buyer is a party or by which
it is bound or to which any of its assets is subject, except where the
violation, conflict, breach or default would not have a material adverse effect
on the ability of the Parties to consummate the transactions contemplated by
this Agreement. Buyer does not need to give any notice to, make any filing with,
or obtain any authorization, consent or approval of any government or
governmental agency in order for the Parties to consummate the transactions
contemplated by this Agreement, the Stockholders' Agreement, the Purchase and
Sale Agreement and the Distribution Agreement.
7.4 Consolidated Financial Statements: Other Information. Buyer has previously
delivered to Seller true, accurate and complete copies of the following
documents, including, the exhibits and schedules thereto:
(a) Annual Report on Form 10-K for the period ended October 31, 1998,
as filed with the Commission, which contains the audited consolidated balance
sheets of Buyer as of October 31, 1997, and October 31, 1998, and audited
consolidated statements of operations, cash flows and stockholders' equity for
the years ended October 31, 1996, October 31, 1997 and October 31, 1998
certified by KPMG LLP and heretofore furnished to Seller (together the "Audited
Financial Statements");
(b) Quarterly Reports on Form 10-Q for the three months ended January
31, 1999, April 30, 1999 and July 31, 1999, as filed with the Commission (the
"Unaudited Financial Statements" and, together with the Audited Financial
Statements, the "Financial Statements"); and
(c) Proxy statement in definitive form for its 1999 annual meeting of
stockholders as filed with the Commission (the "Annual Proxy Statement"); and
Since November 1, 1998, Buyer has filed all reports, schedules, forms,
statements and other documents required to be filed by it with the Commission
pursuant to the requirements of the Exchange Act and the Securities Act,
including, without limitation, all of the documents listed in paragraphs (a),
(b), (c) and (d) above (all of the foregoing filed prior to the date hereof
being hereinafter referred to as the "SEC Documents"). As of their respective
dates, the SEC Documents (as the same may have been amended) complied in all
material respects with the requirements of the Exchange Act and the Securities
Act and the rules and regulations of the Commission promulgated thereunder
applicable to such SEC Documents, and, as of their respective dates, none of the
SEC Documents (when read together with all exhibits included therein and
financial statement schedules thereto and documents incorporated by reference)
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. The Financial Statements were prepared in accordance with generally
accepted accounting principles consistently applied throughout the periods
involved except as may be otherwise indicated in such financial statements or
the notes thereto, and fairly present in all material respects the consolidated
financial condition of Buyer and its Subsidiaries, as of those dates and the
results of their operations for the periods then
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ended.
7.5 Capitalization. The authorized capital stock of Buyer consists of (i)
42,000,000 shares of common stock, par value $.01 per share, of which 10,509,263
shares were issued and outstanding at January 31, 2000, and no additional shares
have subsequently been issued except upon exercise of options, warrants or
convertible securities outstanding as of October 31, 1999 and (ii) 7,500,000
shares of preferred stock, par value $.01 per share, issuable in series, of
which 50,000 shares have been designated Series 1998-C convertible preferred
stock and 32,354 shares of which are issued and outstanding at January 31, 2000,
and of which 39,000 shares have been designated Series 1999-A Convertible
Preferred Stock, and 9500 shares of which are issued and outstanding as of
January 31, 2000. The issued and outstanding shares of Buyer have been duly and
validly issued and are fully paid and nonassessable, and the Purchased Shares,
when issued, will be duly and validly issued and fully paid and nonassessable.
Buyer holds no shares of its common stock or preferred stock in its treasury.
Except as disclosed in Schedule 10, there are no outstanding options, warrants
or other rights in existence to acquire from Buyer any of its shares of capital
stock. Since the Balance Sheet Date there have been no dividends, Restricted
Payments or other distributions declared or paid in respect of the shares of
capital stock of Buyer, except for non-cash preferred stock dividends.
7.6 Absence of Changes. Since the Balance Sheet Date, except as disclosed in the
SEC Documents, the Unaudited Balance or as specified in Schedule 11 hereto,
Buyer and its Subsidiaries have not:
(a) undergone any changes in its condition, properties, assets,
liabilities, business or operations which are in the aggregate materially
adverse;
(b) declared, set aside, made or paid any Restricted Payment;
(c) incurred any indebtedness or issued or sold any debt securities
except for indebtedness incurred in connection with the purchase or lease of
property in the ordinary course of business which in the aggregate is not
materially adverse to Buyer;
(d) mortgaged, pledged, licensed, sublicensed or subjected to any lien,
lease, security interest or other charge or encumbrance any of its properties or
assets, tangible or intangible which in the aggregate materially adversely
affect the financial condition, property, assets, business, or operations of
Buyer and its Subsidiaries taken as a whole;
(e) acquired or disposed of any assets or properties (except for common
stock of Buyer) in any transaction with any officer or director or with any
shareholder owning more than 5% of the outstanding common stock except for
transactions that have a value of less than $60,000;
(f) forgiven or canceled any debts or claims, or waived any rights
having a value of more than $60,000 except in the ordinary course of business
which in the aggregate is not
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materially adverse to Buyer;
(g) suffered any damage, destruction or loss (whether or not covered by
insurance) which in the aggregate materially adversely affects the financial
condition, properties, assets, business or operations of Buyer and its
Subsidiaries; or
(h) incurred other than in the ordinary course of business any
liability or obligation (whether absolute, accrued, contingent or otherwise),
exceeding $1,000,000.
7.7 Brokers' Fees. Buyer has no liability or obligation to pay any fees or
commissions to any broker, finder or agent with respect to the transactions
contemplated by this Agreement for which Seller could become liable or
obligated.
7.8 Disclosure. Neither this Agreement nor any exhibit or schedule hereto, nor
any statement, list or certificate delivered to Seller pursuant to this
Agreement contains any untrue statement of a material fact or omits to state a
material fact necessary in order to make the statements contained herein and
therein in the context in which they were made not misleading.
ARTICLE 8 - POST-CLOSING COVENANTS
The Parties agree as follows with respect to the period following the
Closing.
8.1 General. In case at any time after the Closing any further action is
necessary to carry out the purposes of this Agreement, each of the Parties will
take such further action (including the execution and delivery of such further
instruments and documents) as the other Party reasonably may request, at the
sole cost and expense of the requesting Party (unless the requesting Party is
entitled to indemnification under Article 11).
8.2 Notices and Consents. Each of the Parties will give any notices to, make any
filings with, and use its reasonable efforts to obtain any authorizations,
consents, novations and approvals of governments and governmental agencies in
connection with the matters referred to in Section 6.2 and Section 7.3.
8.3 Export Controls. Notwithstanding anything to the contrary that may be
contained in any provision of this Agreement, neither Buyer nor any of its
Affiliates, or any of its or their respective officers, employees, agents or
representatives, shall import, export or transfer any technical data or the
products of such technical data in violation of any applicable laws or
regulations covering the transfer or disclosure of such technical data or
products.
8.4 Distribution Agreements. As soon as practicable but no later than 60 days
following the Closing, Seller and Buyer will enter into the DAS Distribution
Agreements.
8.5 Transfer of Registration. As soon as practicable but no later than 30 days
following the
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Closing, Seller and Buyer will transfer the Registrations to Ecogen.
8.6 Assignment of Trademarks. As soon as practicable but no later than 30 days
following the Closing, Seller shall assign the Trademarks to Ecogen Bio Inc., a
Delaware Corporation.
8.7 Assignment of Contracts. As soon as practicable but no later than 30 days
following the Closing, Seller shall assign the Contracts to Buyer.
8.8 Authorization of Transaction. Within 45 days following the Closing, Seller
shall utilize its best efforts to obtain and provide Buyer a certificate
executed by the secretary of Seller to the effect that (1) Seller has full power
and authority (including full corporate power and authority) to execute and
deliver, and to perform its obligations under this Agreement, the Stockholders'
Agreement, the Purchase and Sale Agreement and the Distribution Agreement; (2)
the execution and delivery of this Agreement and the performance by Seller of
its obligations hereunder, have been duly authorized by proper corporate action
on the part of Seller; and (3) this Agreement, the Stockholders' Agreement, the
Purchase and Sale Agreement and the DAS Distribution Agreement constitute the
valid and legally binding obligation of Seller, enforceable against Seller in
accordance with their terms, subject to applicable bankruptcy, insolvency and
similar laws affecting creditors' rights generally.
8.9 Consolidated Balance Sheet. Within 30 days following Closing, Buyer shall
provide seller with Buyer's 1999 Balance Sheet.
ARTICLE 9 - CONDITIONS TO OBLIGATION TO CLOSE
9.1 Conditions to Obligation of Buyer. The obligation of Buyer to consummate the
transactions to be performed by it in connection with the Closing is subject to
satisfaction of the following conditions:
(a) the representations and warranties of Seller in Article 6 shall be
true and correct in all material respects at and as of the Closing Date;
(b) Seller shall have performed and complied in all material respects
with all agreements and covenants required to be performed and complied with by
Seller under this Agreement at or prior to the Closing;
(c) no law, statute, order, rule, regulation, executive order,
injunction, stay, judgment, decree or ruling shall have been enacted, entered,
promulgated or enforced by any court of competent jurisdiction or any
governmental or regulatory authority or instrumentality that prohibits the
consummation of any of the transactions contemplated by this Agreement;
(d) No lawsuit shall be pending or threatened seeking to enjoin or
delay the consummation of the transactions contemplated hereby; and
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(e) Buyer shall have received from Seller a certificate in form
reasonably acceptable to Buyer and signed by an appropriate officer of Seller as
to Seller's compliance with the conditions set forth in paragraphs (a) and (b)
of this Section 9.1.
Buyer may waive any condition specified in this Section 9.1 if it
executes a writing so stating at or prior to the Closing.
9.2 Conditions to Obligation of Seller. The obligation of Seller to consummate
the transactions to be performed by it in connection with the Closing is subject
to satisfaction of the following conditions:
(a) the representations and warranties of Buyer in Article 7 shall be
true and correct in all material respects at and as of the Closing Date;
(b) Buyer shall have performed and complied in all material respects
with all agreements and covenants required to be performed and complied with by
Buyer under this Agreement at or prior to the Closing;
(c) no law, statute, order, rule, regulation, executive order,
injunction, stay, judgment, decree or ruling shall have been enacted, entered,
promulgated or enforced by any court of competent jurisdiction or any
governmental or regulatory authority or instrumentality that prohibits the
consummation of any of the transactions contemplated by this Agreement;
(d) No lawsuit shall be pending or threatened seeking to enjoin or
delay the consummation of the transactions contemplated hereby; and
(e) Seller shall have received from Buyer a certificate in form
reasonably acceptable to Seller and signed by an appropriate officer of Buyer as
to Buyer's compliance with the conditions set forth in paragraphs (a) and (b) of
this Section 9.2.
Seller may waive any condition specified in this Section 9.2 if it
executes a writing so stating at or prior to the Closing.
ARTICLE 10 - TERMINATION
10.1 Termination This Agreement may be terminated and the transactions
contemplated by this Agreement may be abandoned at any time prior to the
Closing:
(a) by the mutual written agreement of both Buyer and Seller;
(b) by either Buyer or Seller by giving written notice of such
termination to the other Party, if the Closing shall not have occurred by
February 15, 2000;
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(c) by either Buyer or Seller if there shall be any law that makes the
consummation of the transactions contemplated by this Agreement illegal or
otherwise prohibited or if consummation of the transactions contemplated by this
Agreement, the Stockholders' Agreement, the Purchase and Sale Agreement and the
DAS Distribution Agreement. would violate any nonappealable final judgment of
any court or governmental body having competent jurisdiction; or
(d) by Seller, on the one hand, or Buyer, on the other hand, upon a
material breach by the other Party of any of its obligations under this
Agreement that is not cured within thirty (30) calendar days after receipt by
such other Party of written notice of such breach.
10.2 Effect of Termination. If this Agreement is terminated as permitted under
Section 10.1, such termination shall be without liability to any Party to this
Agreement and, following such termination, no Party shall have any liability
under this Agreement or relating to the transactions contemplated by this
Agreement to any other Party; provided, however, that no such termination shall
relieve any Party that has breached any provision of this Agreement from
liability for such breach and any such breaching Party shall remain fully liable
for (i) any and all Losses incurred or suffered by another Party to this
Agreement as a result of such breach and (ii) any other relief a court deems
appropriate. Sections 10.2, 13.3, 13.4, 13.10 and 13.11 and the provisions of
the Confidentiality Agreement shall survive any termination of this Agreement
pursuant to this Article 10.
10.3 Termination of License Rights. Seller may terminate the rights granted
under this Agreement in Article 3 in the event of (i) a material breach of the
provisions of Article 3 which remains uncorrected sixty (60) days after written
notice from the Seller specifying that such a breach has occurred and describing
it, or (ii) consummation of an action before a court of competent jurisdiction
alleging infringement of third party patents claiming the Bt Toxins or a use of
such Bt Toxins.
10.4 Bankruptcy. Seller may terminate the rights granted under this Agreement
with immediate effect in the event the Buyer is adjudged a bankrupt, makes a
general or other assignment for the benefit of creditors, or if a trustee or
receiver should be appointed on account of the insolvency or other financial
condition of Buyer.
10.5 Rights Upon Termination. In the event of termination of the rights in
Article 3, the Buyer shall certify the destruction of Products within sixty (60)
days of notice of such termination, shall immediately notify registration
authorities that letters of authorization for Data Citation Rights are no longer
valid, and shall immediately cancel Registrations relying upon or citing the
Data.
ARTICLE 11 - INDEMNIFICATION
11.1 Indemnification by Seller. From and after the Closing Date and subject to
the provisions of this Article 11 (including the limitations set forth in
Section 11.5), Seller agrees to indemnify,
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hold harmless and defend Buyer from and against any and all Losses arising out
of or relating:
(a) any inaccuracy or material breach of any representation or warranty
of Seller contained in this Agreement;
(b) any breach of any covenant or agreement of Seller contained in this
Agreement;
(c) any liability of Seller relating to the Business which is not an
Assumed Liability; or
(d) product liability claims relating to Formulated Products
distributed during all periods prior to the Closing
provided, however, that Seller shall have an obligation to indemnify Buyer for
Losses pursuant to this Section 11.1 only to the extent that such Losses are in
excess of (i) any amounts recoverable by Buyer pursuant to any contract to which
Buyer is a party or has assumed pursuant to this Agreement or (ii) any amounts
recoverable by counterclaim or otherwise from any Third Party based on any
claims Buyer has against any such Third Party that reduces the Losses that would
otherwise be sustained (in each case net of the costs of recovery of the
Losses); and, provided further, that all Losses shall be reduced by the amount
of any related net income tax benefits to Buyer.
From and after the Closing Date, the right to indemnification provided
for in this Section 11.1 shall be the exclusive remedy of Buyer with respect to
the transactions contemplated by this Agreement.
11.2 Indemnification by Buyer. From and after the Closing Date and subject to
the provisions of this Article 11, Buyer agrees to indemnify, hold harmless and
defend Seller from and against any and all Losses arising out of or relating to:
(a) any material inaccuracy or material breach of any representation or
warranty of Buyer contained in this Agreement;
(b) any material breach of any covenant or agreement of Buyer contained
in this Agreement; or
(c) any liability or obligation of Seller which is an Assumed Liability
or any other liability or obligation associated with the Purchased Assets or
attributable in any way to Buyer's use of the Purchased Assets after the Closing
Date;
provided, however, that Buyer shall have an obligation to indemnify Seller for
Losses pursuant to this Section 11.2 only to the extent that such Losses are in
excess of (i) any amounts recoverable by Seller pursuant to any contract to
which Seller is a party or (ii) any amounts recoverable by counterclaim or
otherwise from any Third Party based on any claims Seller has against any such
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Third Party that reduce the Losses that would otherwise be sustained (in each
case net of the costs of recovery of the Losses); and provided further, that all
Losses shall be reduced by the amount of any related net income tax benefits to
Seller.
From and after the Closing Date, the right to indemnification provided
for in this Section 11.2 shall be the exclusive remedy of Seller with respect to
Purchased Assets.
11.3 Product Liability. From and after Closing, Buyer shall assume all
liabilities related to Losses arising out of the death of or injury to any
person or persons or out of any damage to property and against any other claim,
proceeding, demand, expense and liability of any kind whatsoever, including
indemnifying Seller, Seller's officers, employees and agents, where claims
result from Buyer's manufacture, use or sale (directly or indirectly) of
Product(s) or Bt Toxins, except where gross negligence or willful misconduct on
the part of Seller is the sole cause of the claim or the claim arises out of or
relates to DAS's breach of its obligations pursuant to the Purchase and Sale
Agreement.
11.4 Indemnification Process. The Party or Parties making a claim for
indemnification under this Article 10 shall be, for the purposes of this
Agreement, referred to as the "Indemnified Party" and the Party or Parties
against whom such claims are asserted under this Article 10 shall be, for the
purposes of this Agreement, referred to as the "Indemnifying Party." All claims
by any Indemnified Party, unless otherwise noted, under this Article 11 shall be
asserted and resolved as follows:
(a) In the event that (i) any claim or Proceeding is asserted or
instituted by any Person other than the Parties to this Agreement or their
respective Affiliates which could give rise to Losses for which an Indemnifying
Party could be liable to an Indemnified Party under this Agreement (such claim
or Proceeding being referred to as a "Third Party Claim") or (ii) any
Indemnified Party under this Agreement shall have a claim to be indemnified by
any Indemnifying Party under this Agreement which does not involve a Third Party
Claim (such claim being referred to as a "Direct Claim"), the Indemnified Party
shall with reasonable promptness send to the Indemnifying Party a written notice
specifying the nature of such claim or Proceeding and the amount or estimated
amount of such claim or Proceeding (which amount or estimated amount shall not
be conclusive of the final amount, if any, of such claim or Proceeding) (a
"Claim Notice"), provided that a delay in notifying the Indemnifying Party shall
not relieve the Indemnifying Party of its obligations under this Agreement
except to the extent that (and only to the extent that) such failure shall have
caused the Losses for which the Indemnifying Party is obligated to be greater
than such Losses would have been had the Indemnified Party given the
Indemnifying Party proper notice.
(b) In the event of a Third Party Claim, the Indemnifying Party shall
control the defense of, and shall be entitled to appoint counsel of the
Indemnifying Party's choice at the expense of the Indemnifying Party to
represent the Indemnified Party and any others the Indemnifying Party may
reasonably designate in connection with, such claim or Proceeding (in which case
the Indemnifying Party shall not thereafter be responsible for the fees and
expenses of
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any separate counsel retained by any Indemnified Party). If requested by the
Indemnifying Party, the Indemnified Party agrees to cooperate with the
Indemnifying Party and its counsel in contesting any claim or Proceeding which
the Indemnifying Party defends or, if appropriate and related to the claim or
Proceeding in question, in making any counterclaim against the Person asserting
the Third Party Claim or any cross-complaint against any Person. No Third Party
Claim may be settled or compromised (i) by the Indemnified Party without the
prior written consent of the Indemnifying Party or (ii) to the extent the
Indemnified Party would not be entitled to indemnification with respect to such
Third Party Claim under this Article 11, by the Indemnifying Party without the
prior written consent of the Indemnified Party.
(c) In the event of a Direct Claim, the Indemnifying Party shall notify
the Indemnified Party within thirty (30) calendar days of receipt of a Claim
Notice whether or not the Indemnifying Party disputes such claim.
(d) Notwithstanding the forgoing specified in this Section 11.4,
including sections (a) through (c), all Third Party Claims related to patent
infringement shall be governed by the provisions in Article 12 of this
Agreement.
11.5 Limitations on Indemnity Payments this Article 11. No claim for
indemnification under this Article 11 may be made by either Party, and no
payment in respect of a claim for indemnification shall be required from either
Party, unless the aggregate amount of Losses against which a Party is entitled
to be indemnified exceeds Fifty Thousand United States dollars (U.S.
$50,000.00), and then only for the amount of such excess. The maximum aggregate
amount of Losses against which a Party shall be entitled to be indemnified by
the other Party under this Article 11 with respect to all claims thereunder
shall be One Million United States dollars (U.S. $1,000,000.00).
11.6 Survival. The representations and warranties of Seller and Buyer contained
in this Agreement shall survive the Closing for the applicable period set forth
in this Section 11.6. Any and all claims and causes of action for
indemnification under this Article 11 arising out of the inaccuracy or breach of
any representation or warranty of Seller or Buyer must be made prior to the
termination of the applicable survival period. All of the representations and
warranties of Seller and Buyer contained in this Agreement and any and all
claims and causes of action for indemnification under this Article 11, Sections
11.1 and 11.2 with respect thereto shall terminate eighteen (18) months after
the Closing Date; it being understood that in the event notice of any claim for
indemnification under Section 11.1(a) or Section 11.2(a) shall have been given
within the applicable survival period, the representations and warranties that
are the subject of such indemnification claim shall survive until such time as
such claim is finally resolved. Notwithstanding the forgoing, the obligations of
indemnification under Section 11.3 shall survive termination of this Agreement
and shall NOT terminate one year after the Closing Date.
ARTICLE 12 - INFRINGEMENT OF LICENSED PATENT(S)
12.1 Third Party Infringement of Licensed Technology. It shall be in Seller's
sole discretion as
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to whether or not to bring an action to ▇▇▇▇▇ an alleged infringement by a Third
Party of Licensed Technology, such action shall be in Seller's sole control and
at Seller's sole expense. Seller may request Buyer to provide reasonable
assistance and Seller shall reimburse Buyer for any out of pocket expenses
incurred by Buyer with respect to such assistance. If Buyer's rights as granted
herein are affected by such alleged Third Party infringement, Buyer may request
in writing that Seller ▇▇▇▇▇ such infringement. If Seller does not take some
reasonable business steps to ▇▇▇▇▇ the alleged infringement within ninety (90)
days, Seller shall reimburse Buyer fifty percent of the royalty defined in
Section 4.1 of this Agreement. Any settlement by Seller shall require the
approval of Buyer; however, Buyer shall not unreasonably withhold its consent.
The Seller shall be entitled to recover all costs including attorneys' fees
associated with bringing such action. After the Seller has recovered all such
costs then Buyer shall be entitled to any remaining compensatory damages, if
any, recovered from such infringement suit. After the Seller has recovered all
such costs and fees, the Parties shall split any punitive damages equally.
12.2 Third Party Suit. In the event that Buyer is sued by a Third Party for
infringement of a Third Party's patent(s) to Bacillus thuringiensis toxins or
genes related to the manufacture, marketing, distribution or sale of Products,
Buyer may request from Seller reasonable assistance in defending such
infringement allegations. Buyer will reimburse Seller for any out-of-pocket
expenses incurred by Seller with respect to such assistance, provided that such
suit is not due to a breach of the Warranties by Seller provided in Section 6
hereof, or is due to gross negligence by Seller or its representatives. The
indemnification provided in this Section 12.2 shall survive termination or
expiration of this Agreement, and is not governed by the indemnification
provisions of Article 11 of this Agreement.
ARTICLE 13 - GENERAL PROVISIONS
13.1 Press Releases and Public Announcements. No Party shall issue any press
release or make any public announcement relating to the subject matter of this
Agreement without the prior written approval of the other Party.
13.2 No Third-Party Beneficiaries. This Agreement shall not confer any rights or
remedies upon any Person other than the Parties and their respective successors
and permitted assigns.
13.3 Taxes. Except as may be otherwise provided in this Agreement, each Party
shall be responsible for its own tax liability and other governmental charges or
assessments, if any, which may result in any applicable jurisdiction from the
transactions contemplated by this Agreement.
13.4 Expenses. Except as may be otherwise provided in this Agreement, each Party
shall be responsible for all expenses incurred by it in connection with the
execution and performance of this Agreement.
13.5 Entire Agreement. This Agreement (including the documents referred to in
this Agreement), the Stockholders Agreement, the Purchase and Sale Agreement,
the DAS
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Distribution Agreements the Confidentiality Agreement and the agreements
contemplated hereby and therein constitute the entire agreement between the
Parties and their respective Affiliates relating to their respective subject
matter and supersede any prior understandings, agreements, or representations by
or between the Parties and such Affiliates, written or oral, to the extent they
related in any way to such subject matter.
13.6 Succession and Assignment. This Agreement shall be binding upon and inure
to the benefit of the Parties and their respective successors and permitted
assigns. Buyer may not assign this Agreement or any of its rights, interests, or
obligations hereunder without the prior written approval of the Seller. Each of
Seller and Buyer may assign this Agreement or any of its rights, interests or
obligations hereunder to one or more of its Affiliates.
13.7 Counterparts. This Agreement may be executed in any number of counterparts,
including by facsimile signature with the same effect as if each of the Parties
had signed the same document. All counterparts shall be construed together and
shall constitute one and the same instrument.
13.8 Construction. The headings in this Agreement are inserted for convenience
and identification only and are not intended to aid in the interpretation of
this Agreement. The Parties have participated jointly in the negotiation and
drafting of this Agreement, and no presumption shall arise favoring or
disfavoring any Party by virtue of the authorship of any of the provisions of
this Agreement. Unless the context requires otherwise, (i) the singular includes
the plural and vice versa, (ii) all exhibits and schedules to this Agreement
form a part of this Agreement, (iii) any reference in this Agreement or to any
particular Article, Section, Exhibit or Schedule shall be deemed to refer to an
Article or Section of this Agreement, or to an Exhibit or Schedule to this
Agreement, as the case may be, (iv) where a term is defined, another part of
speech or grammatical form of that term shall have a corresponding meaning, (v)
the words "include", "includes" and "including" mean include, includes and
including without limitation, and (vi) any reference to any federal, state,
local, or foreign statute or law shall be deemed also to refer to all rules and
regulations promulgated under such statute or law.
13.9 Notices.
(a) Any notice, request, approval or consent provided for or permitted
under this Agreement shall be in writing and shall be given by (i) registered or
certified mail or responsible courier, postage or courier charges prepaid, with
acknowledgment of receipt requested, and addressed as provided below, or
delivering the same by hand to the other Party's address specified below.
(b) Notice addresses are as follows:
(i) Mycogen Corporation
c/o Dow AgroSciences LLC
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇
▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
(ii) Ecogen Inc.,
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Chief Executive Officer
(c) Any notice sent in the manner described above shall be deemed to
have been received by the other Party on the date specified in the
acknowledgment of receipt returned to the sender, or as evidenced by the
recipient's acknowledgment of receipt or on the date receipt is acknowledged in
any other manner. Either Party may change its notice address by written notice
to the other Party in accordance with this provision.
13.10 Governing Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of Indiana, without regard to its
provisions concerning conflicts of law.
13.11 Forum for Disputes. The Parties agree that any suit, action or other
proceeding arising out of or relating to this Agreement shall be instituted only
in the United States District Court for the Southern District of Indiana,
Indianapolis Division, or, if that Court does not have jurisdiction, the ▇▇▇▇▇▇
County Circuit or Superior Courts located in the City of Indianapolis, Indiana,
or, if none of such courts has jurisdiction, in any other court sitting in
Indiana having jurisdiction. Both Parties irrevocably and unconditionally
consent and submit to the jurisdiction and venue of such courts. The Parties
also agree (i) to accept service of process outside of the State of Indiana in
any matter to be submitted to any such court under this provision, (ii) to waive
any objection to the laying of venue in such court, and (iii) not to claim that
any such suit, action or other proceeding has been brought in an inconvenient
forum.
13.12 Amendments and Waivers. No amendment of any provision of this Agreement
shall be valid unless the same shall be in writing and signed by the Buyer and
the Seller. No waiver by any Party of any default, misrepresentation, or breach
of warranty or covenant hereunder, whether intentional or not, shall be deemed
to extend to any prior or subsequent default, misrepresentation, or breach of
warranty or covenant hereunder or affect in any way any rights arising by virtue
of any prior or subsequent such occurrence.
13.13 Severability. Any term or provision of this Agreement that is invalid or
unenforceable in any situation in any jurisdiction shall not affect the validity
or enforceability of the remaining terms and provisions hereof or the validity
or enforceability of the offending term or provision in any other situation or
in any other jurisdiction.
13.14 Bulk Transfer Laws. Buyer acknowledges that Seller will not comply with
the provisions of any bulk transfer laws of any jurisdiction in connection with
the transactions contemplated by
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this Agreement.
13.15 Terms and Conditions. The terms and conditions of this Agreement and the
Exhibits attached hereto are confidential and shall not be disclosed to a Third
Party without the written consent of the other Party.
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the
date first written above.
MYCOGEN CORPORATION ECOGEN INC.
By: __________________ By: __________________
A.C. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
President Chairman and Chief Executive Officer
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