EXHIBIT 10.6
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ASSET PURCHASE AGREEMENT
dated as of September 30, 2005
by and between
▇▇▇▇▇▇ LABORATORIES
("Seller")
and
IMARX THERAPEUTICS, INC.
("Buyer")
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TABLE OF CONTENTS
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ARTICLE 1 DEFINITIONS................................................ 1
1.1 Definitions............................................. 1
ARTICLE 2 PURCHASE AND SALE.......................................... 5
2.1 Agreements to Purchase and Sell......................... 5
2.2 Excluded Assets......................................... 6
2.3 Assumed Liabilities..................................... 7
2.4 Excluded Liabilities.................................... 8
2.5 Procedures for Purchased Assets not Transferable........ 9
ARTICLE 3 PURCHASE PRICE; CONSISTENT TREATMENT....................... 9
3.1 Purchase Price.......................................... 9
3.2 Payment of Purchase Price............................... 9
3.3 Purchase Price Allocation............................... 9
3.4 Prorations.............................................. 9
ARTICLE 4 CLOSING.................................................... 10
4.1 Closing Date............................................ 10
4.2 Transactions at Closing................................. 10
ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF SELLER................... 10
5.1 Organization............................................ 10
5.2 Due Authorization....................................... 11
5.3 Title................................................... 11
5.4 Intellectual Property................................... 11
5.5 Compliance with Laws.................................... 13
5.6 Equipment............................................... 13
5.7 Litigation.............................................. 13
5.8 Consents................................................ 13
5.9 Brokers, Etc............................................ 13
5.10 Financial Information................................... 13
5.11 Absence of Undisclosed Liabilities...................... 13
5.12 Absence of Unusual Changes and Unusual Transactions..... 13
5.13 Governmental Authorizations............................. 14
5.14 Contracts............................................... 14
5.15 Tax Matters............................................. 14
5.16 Full Disclosure......................................... 15
5.17 Disclaimer.............................................. 15
5.18 Independent Investigation............................... 15
5.19 Investment by the Seller................................ 15
5.20 Raw Material Viability.................................. 15
ARTICLE 6 REPRESENTATIONS AND WARRANTIES OF BUYER.................... 15
6.1 Organization............................................ 15
6.2 Due Authorization....................................... 16
6.3 Capital Stock........................................... 16
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TABLE OF CONTENTS
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6.4 Subsidiaries............................................ 16
6.5 Title................................................... 16
6.6 Buyer's Intellectual Property........................... 17
6.7 Litigation.............................................. 17
6.8 Consents................................................ 17
6.9 Brokers, Etc............................................ 17
6.10 Financial Information................................... 17
6.11 Absence of Undisclosed Liabilities...................... 17
6.12 Absence of Unusual Changes and Unusual Transactions..... 17
6.13 Tax Matters............................................. 18
6.14 Full Disclosure......................................... 18
6.15 Transactions with Affiliates............................ 18
6.16 Compliance with Laws.................................... 18
6.17 Independent Investigation............................... 18
ARTICLE 7 PRE-CLOSING COVENANTS OF SELLER AND BUYER.................. 19
7.1 Corporate and Other Actions............................. 19
7.2 Consents and Approvals.................................. 19
7.3 Competition Law Filings................................. 19
7.4 Access to Information................................... 19
7.5 Ordinary Course of Business............................. 19
7.6 Exclusivity............................................. 20
ARTICLE 8 CONDITIONS................................................. 20
8.1 Conditions to Obligations of Seller..................... 20
8.2 Conditions to Obligations of Buyer...................... 21
ARTICLE 9 POST-CLOSING COVENANTS; OTHER AGREEMENTS................... 22
9.1 Availability of Records................................. 22
9.2 Use of Trade or Service Marks........................... 23
9.3 Tax Matters............................................. 23
9.4 Non-competition by Seller............................... 23
9.5 Financial Statements.................................... 23
9.6 Compliance with Laws.................................... 24
9.7 Post-Closing Delivery................................... 24
ARTICLE 10 INDEMNIFICATION AND SURVIVAL.............................. 24
10.1 Indemnification by Seller............................... 24
10.2 Indemnification by Buyer................................ 25
10.3 Survival................................................ 26
10.4 Exclusive Remedy........................................ 26
10.5 Net Losses and Subrogation.............................. 27
10.6 Insurance............................................... 27
ARTICLE 11 TERMINATION............................................... 27
11.1 Termination of Agreement................................ 27
11.2 Automatic Termination................................... 27
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TABLE OF CONTENTS
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ARTICLE 12 MISCELLANEOUS............................................. 28
12.1 Assignment.............................................. 28
12.2 No Press Release Without Consent........................ 28
12.3 Confidentiality......................................... 28
12.4 Expenses................................................ 29
12.5 Severability............................................ 29
12.6 Entire Agreement........................................ 29
12.7 No Third Party Beneficiaries............................ 29
12.8 Waiver.................................................. 29
12.9 Governing Law........................................... 29
12.10 Headings................................................ 29
12.11 Counterparts............................................ 29
12.12 Further Documents....................................... 29
12.13 Notices................................................. 29
12.14 Schedules............................................... 30
12.15 Construction............................................ 31
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EXHIBITS AND SCHEDULES
EXHIBITS
Exhibit A - Assignment and Assumption Agreement
Exhibit B - Intellectual Property Transfer Agreement
Exhibit C - Patent License Agreement
Exhibit D - Promissory Note
Exhibit E - Certificate of Designation
Exhibit F - Inventory Testing Procedures
Exhibit G - Security Agreement
Exhibit H - Series E Preferred Stock Purchase Agreement
SCHEDULES
Schedule 1.1 - Knowledge Persons
Schedule 2.1(a)(i) - Inventory
Schedule 2.1(a)(ii) - Equipment
Schedule 2.1(b) - Transferred Intellectual Property
Schedule 2.1(c) - Contracts
Schedule 2.1(d) - Governmental Authorizations
Schedule 2.1(f) - Product Applications
Schedule 2.1(h) - Raw Materials
Schedule 2.3 - Assumed Liabilities
Schedule 5.3 - Title
Schedule 5.4 - Intellectual Property
Schedule 5.7 - Litigation
Schedule 5.8 - Seller Consents
Schedule 5.13 - Governmental Authorization
Schedule 6.4 - Subsidiaries
Schedule 6.5 - Title
Schedule 6.6 - Buyer's Intellectual Property
Schedule 6.8 - Consents
Schedule 6.15 - Transactions with Affiliates
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ASSET PURCHASE AGREEMENT
THIS AGREEMENT, dated as of September 30, 2005, is entered into by and
between ▇▇▇▇▇▇ LABORATORIES, an Illinois corporation ("Seller"), and ImaRx
Therapeutics, Inc., a Delaware corporation ("Buyer").
WHEREAS, Seller wishes to sell to Buyer the Purchased Assets and Assumed
Liabilities (each as defined below), and Buyer wishes to purchase such assets
from Seller and to assume such liabilities.
NOW, THEREFORE, in consideration of the premises and mutual covenants,
agreements and provisions herein contained, the parties hereto agree as follows:
ARTICLE 1
Definitions.
1.1 Definitions. The following terms have the following meanings when used
herein:
"$" means United States dollars.
"Affiliate" means, with respect to any Person, any other Person directly
or indirectly controlling or controlled by, or under direct or indirect common
control with, such Person. For purposes of this definition, a Person shall be
deemed to control another Person if it owns or controls more than fifty percent
(50%) of the voting equity of the other Person (or other comparable ownership if
the Person is not a corporation).
"Agreement" means this Asset Purchase Agreement, including all Schedules
and Exhibits hereto, as it may be amended from time to time in accordance with
its terms.
"Allocation Schedule" has the meaning set forth in Section 3.3.
"Assignment and Assumption Agreement" means the ▇▇▇▇ of Sale, Conveyance
and Assignment in substantially the form attached hereto as Exhibit A.
"Assumed Liabilities" has the meaning set forth in Section 2.3.
"Certificate of Designation" means the Certificate of Designation of
Rights, Preferences and Privileges of Series E Preferred Stock, in substantially
the form attached hereto as Exhibit E.
"Closing" means the closing of the purchase and sale of the Purchased
Assets and assumption of the Assumed Liabilities contemplated by this Agreement.
"Closing Date" means September 30, 2005, or such other date as may be
mutually agreed upon by the Buyer and Seller.
"Code" means the United States Internal Revenue Code of 1986, as amended.
"Confidentiality Agreement" has the meaning set forth in Section 12.3.
"Controlled Group" means all members of a controlled group of corporations
and all trades or businesses (whether or not incorporated) under common control
which, together with Buyer, are treated as a single employer under Section 414
of the Code.
"Contracts" has the meaning set forth in Section 2.1(c).
"Encumbrance" means any encumbrance, lien, charge, pledge, mortgage, title
retention agreement, security interest of any nature, adverse claim, exception,
reservation, easement, right of occupation, any matter capable of registration
against title, option, right of pre-emption or privilege or any agreement or
other commitment, whether written or oral, to create any of the foregoing.
"Equipment" means that equipment designated as "Equipment" on Schedule
2.1(a)(ii).
"Excluded Assets" has the meaning set forth in Section 2.2.
"Excluded Liabilities" has the meaning set forth in Section 2.4.
"Field" means the business of manufacturing, marketing and selling
thrombolytic pharmaceutical therapy products, which shall mean serine proteases
that converts plasminogen to plasmin to break down the fibrinogen and fibrin to
dissolve a thrombus in an artery, vein or in-dwelling catheter, or any proteases
or protease activators which catalyze proteolytic breakdown of fibrinogen or
fibrin for the same purpose.
"GAAP" means United States generally accepted accounting principles
consistently applied from period to period and throughout any period in
accordance with the past practices of Seller or Buyer, as the case may be.
"Governmental Authorizations" has the meaning set forth in Section 2.1(d).
"HSR Act" means the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976,
as amended.
"Indebtedness" shall mean, with respect to any Person, any amount payable
by such Person pursuant to an agreement or instrument involving, relating to or
evidencing money borrowed or received, the advance of credit, a conditional sale
or a transfer with recourse or with an obligation to repurchase, or pursuant to
a capital lease to which such Person is a party as debtor, borrower or
guarantor, all obligations of such Person to purchase securities (or other
property) which arise out of or in connection with the sale of the same or
substantially similar securities or property, all non-contingent obligations of
such Person to reimburse any bank or other Person in respect of amounts paid
under a letter of credit or similar instrument, all obligations to advance funds
including keep ▇▇▇▇▇, comfort letters and similar arrangements and all
liabilities under interest rate cap agreements, interest rate swap agreements,
foreign currency exchange agreements and other hedging agreements or
arrangements.
"Indemnified Person" has the meaning set forth in Section 10.5(a).
"Indemnifying Person" has the meaning set forth in Section 10.5(a).
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"Intellectual Property Rights" means all intellectual property, industrial
and other proprietary rights, protected or protectable, under the laws of the
United States or any other country, or any political subdivision thereof,
including, without limitation, (i) all trade names, trade dress, trademarks,
service marks, logos, brand names and other identifiers; (ii) copyrights, moral
rights (including rights of attribution and rights of integrity); (iii) all
trade secrets, inventions, discoveries, devices, processes, designs, techniques,
trade secrets, ideas, know-how and other confidential or proprietary
information, whether or not reduced to practice; (iv) all domestic and foreign
patents and the registrations, applications, renewals, divisionals, reissues,
reexaminations, supplemental patent certificates, extensions and continuations
(in whole or in part) thereof; and (v) all goodwill associated therewith and all
rights and causes of action for infringement, misappropriation, misuse, dilution
or unfair trade practices associated with (i) through (iv) above.
"Intellectual Property Transfer Agreement" means the Intellectual Property
Transfer Agreement attached hereto as Exhibit B.
"Inventory" means clinical trial finished drug product and bulk drug
substance and existing intermediates related to the Products as set forth on
Schedule 2.1(a)(i).
"Inventory Testing Procedures" means the procedures set forth on Exhibit F
hereto.
"Investment Assets" means all debentures, notes and other evidences of
indebtedness, stocks, securities (including rights to purchase and securities
convertible into or exchangeable for other securities), interests in joint
ventures and general and limited partnerships, mortgage loans and other
investment or portfolio assets owned of record or beneficially by the Buyer.
"Investment Documents" means the Promissory Note, the Security Agreement,
the Series E Preferred Stock Purchase Agreement and the Certificate of
Designation.
"Knowledge" means, with respect to either Buyer or Seller, the actual
knowledge of the persons listed on Schedule 1.1 after reasonable inquiry.
"Losses" has the meaning set forth in Section 10.1(a).
"Multiemployer Plan" means a multiemployer plan as described in Section
4064(a) of ERISA.
"Option" with respect to any Person means any security, right,
subscription, warrant, option, "phantom" stock right or other contract or
agreement that gives the right to (i) purchase or otherwise receive or be issued
any shares of capital stock of such Person or other equity interests of such
Person or any security of any kind convertible into or exchangeable or
exercisable for any shares of capital stock or other equity interests of such
Person or (ii) receive any benefits or rights similar to any rights enjoyed by
or accruing to the holder of shares of capital stock or other equity interests
of such Person, including without limitation, any rights to participate in the
equity, income or election of directors or officers of such Person.
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"Other Agreements" means, collectively, the Assignment and Assumption
Agreement, the Intellectual Property Transfer Agreement, the Patent License
Agreement, and the Investment Documents.
"Patent License Agreement" means a Patent License Agreement in
substantially the form attached hereto as Exhibit C.
"Permitted Encumbrances" shall mean Repligen's rights to license US Patent
No. 5,665,578 and US Patent No. 5,741,682.
"Person" means any individual, corporation, partnership, limited
partnership, joint venture, limited liability company, trust or unincorporated
organization or government or any agency or political subdivision thereof.
"Plan" means any employee pension benefit plan covered by Title IV of
ERISA or subject to the minimum funding standards under Section 412 of the Code
that either (a) is maintained by a member of the Controlled Group for employees
or a member of the Controlled Group or (b) is maintained pursuant to a
collective bargaining agreement or any other arrangement under which more than
one employer makes contributions and to which a member of the Controlled Group
is then making or accruing an obligation to make contributions or has within the
preceding five plan years made contributions, and includes any Pension Plan.
"Preferred Stock" means 1,000,000 shares of the Series E Preferred Stock
of the Buyer having the terms set forth in the Certificate of Designation,
substantially in the form of Exhibit E attached hereto.
"Product" or "Products" means all of Seller's rights in its proprietary
recombinant urokinase, rUK, as well as its development stage next generation
lytic, recombinant pro-urokinase, proUK.
"Promissory Note" means the promissory note in the principal amount of $15
million from Buyer to Seller, substantially in the form attached hereto as
Exhibit D.
"Purchase Price" has the meaning set forth in Section 3.1.
"Purchased Assets" has the meaning set forth in Section 2.1.
"Raw Materials" means those raw materials set forth on Schedule 2.1(h).
"Security Agreement" means the Security Agreement relating to the
Promissory Note, substantially in the form of Exhibit G hereto.
"Series E Preferred Stock Purchase Agreement" means the Series E Preferred
Stock Purchase Agreement, substantially in the form of Exhibit H hereto.
"Seller" has the meaning set forth in the recitals hereof.
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"Subsidiary" means any Person in which the Buyer, directly or indirectly,
beneficially owns at least fifty percent (50%) of either the equity interest in,
or the voting control of, such Person, whether or not existing on the date
hereof.
"Taxes" shall mean all taxes, charges, fees, duties, levies or other
assessments, including, without limitation, income, gross receipts, net
proceeds, ad valorem, turnover, real and personal property (tangible and
intangible), sales, use, franchise, excise, value added, goods and services,
license, payroll, unemployment, environmental, customs duties, capital stock,
disability, stamp, leasing, lease, user, transfer, fuel, excess profits,
occupational and interest equalization, windfall profits, severance and
employees' income withholding and social security and similar employment taxes
imposed by the United States or any foreign country or by any state,
municipality, subdivision or instrumentality of the United States or of any
other foreign country or by any other tax authority, including all applicable
penalties and interest, and such term shall include any interest, penalties or
additions to tax attributable to such taxes.
"Tax Indemnification" has the meaning set forth in Section 10.3.
"Thrombolytic Therapy Product" means serine proteases that converts
plasminogen to plasmin to break down the fibrinogen and fibrin to dissolve a
thrombus in an artery, vein or in-dwelling catheter, or any proteases or
protease activators which catalyze proteolytic breakdown of fibrinogen or fibrin
for the same purpose.
"Transferred Intellectual Property" has the meaning set forth in Section
2.1(b).
"United States" means the United States of America.
ARTICLE 2
Purchase and Sale.
2.1 Agreements to Purchase and Sell. Subject to the terms and conditions
contained herein, at the Closing Seller shall sell, transfer, convey, assign and
deliver to Buyer, and Buyer shall purchase and accept from Seller, all right,
title, and interest of Seller in and to the following assets of Seller
(collectively, the "Purchased Assets"):
(a) all of the rights to fixed and other tangible personal property,
whether owned or leased, to the extent primarily used by Seller to manufacture
and assemble the Products as set forth on Schedules 2.1(a)(i) and 2.1(a)(ii),
including the Inventory designated on Schedule 2.1(a)(i) and certain equipment
designated on Schedule 2.1(a)(ii) (the "Equipment");
(b) the following Intellectual Property Rights owned by Seller to the
extent they primarily relate to the Products: (i) the trademarks, patents and
patent applications set forth on Schedule 2.1(b), (ii) the package designs,
labels, logos and associated artwork exclusively related to the Products, (iii)
master and working cell banks, references and standards, methodologies,
processes, protocols, specifications, techniques, trade secrets and know how,
databases and formulas and (iv) studies and other work in progress,
manufacturing processes and technical information, to the extent they primarily
relate to the Products (collectively, the
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"Transferred Intellectual Property"); provided, however that Transferred
Intellectual Property does not include any Intellectual Property Rights licensed
to Seller;
(c) all rights and interest of Seller to active contracts to the
extent they primarily relate to the Products, including supply, licenses,
clinical trial, research and development agreements, which are set forth on
Schedule 2.1(c) (the "Contracts");
(d) all regulatory applications, licenses, approvals, certificates,
permits, franchises, or other evidence of authority submitted by or on behalf
of, or issued to, Seller or Seller's Affiliates by a federal, state, local or
foreign governmental agency or authority, regardless of jurisdiction, to the
extent they primarily relate to the Products, in each case to the extent
assignable, including without limitation the matters set forth on Schedule
2.1(d), (the "Governmental Authorizations");
(e) all records, reports, research materials, Product information
files (including Product development and regulatory history files), marketing
information files and inactive contracts of Seller and Seller's Affiliates, in
each case to the extent they primarily relate to the Products;
(f) all current and pending investigational new drug applications for
the Products as set forth on Schedule 2.1(f);
(g) all goodwill relating primarily to the trademarks that are part of
the Transferred Intellectual Property; and
(h) all raw materials listed on Schedule 2.1(h) (the "Raw Materials").
2.2 Excluded Assets. Notwithstanding anything to the contrary in this
Agreement, Seller shall not sell, transfer or assign, and Buyer shall not
purchase or otherwise acquire, the following assets of Seller (such assets being
collectively referred to hereinafter as the "Excluded Assets"):
(a) all rights of Seller and Seller's Affiliates arising under this
Agreement, the Other Agreements or from the consummation of the transactions
contemplated hereby or thereby;
(b) all of Seller's rights in assets to the extent related primarily
to Seller's tissue culture based urokinase product currently marketed under the
brand Abbokinase(R);
(c) all accounts receivable, notes receivable, cash, bank deposits,
marketable securities and intercompany receivable balances owed to Seller or
Seller's Affiliates with respect to the Products existing at the Closing Date;
(d) all rights of Seller and Seller's Affiliates arising under any
active contract or agreement not set forth in Schedule 2.1(c);
(e) all corporate minute books, stock records and Tax returns
(including all workpapers relating to such Tax returns) of Seller and Seller's
Affiliates and such other similar
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corporate and financial books and records of Seller and Seller's Affiliates as
may exist on the Closing Date;
(f) all real property, buildings, structures and improvements thereon,
whether owned or leased by Seller or Seller's Affiliates, and all fixtures and
fittings attached thereto, including those in the buildings designated by Seller
as the M3, M3B, M6 and M10 buildings in its North Chicago, Illinois location;
(g) all Intellectual Property of Seller or Seller's Affiliates of any
kind not listed on Schedule 2.1(b) or referred to in clause (ii) of Section
2.1(b), specifically including the trademarks or trade names "▇▇▇▇▇▇," "▇▇▇▇▇▇
Laboratories" and any variants thereof, the stylized symbol "A," the
ABBOKINASE(R) trademark, and any Intellectual Property to the extent related
primarily to Seller's tissue culture based urokinase product currently marketed
under the brand Abbokinase(R); and US Patent No. 5,665,578 and US Patent No.
5,741,682 (which will be licensed to Buyer pursuant to the Patent License
Agreement).
(h) all rights to refunds of Taxes paid by or on behalf of Seller or
Seller's Affiliates;
(i) all insurance policies and claims thereunder existing at the
Closing Date;
(j) all Seller and Seller Affiliate intercompany payable balances
owing with respect to the Products;
(k) all equipment related to manufacturing and assembling Products not
set forth on Schedule 2.1(a)(ii);
(l) all raw materials (including supplies inventory), whether or not
relating to the Products, not set forth on Schedule 2.1(h);
(m) the services of any employee of Seller or Seller's Affiliates;
(n) all assets of any employee benefit plan, arrangement, or program
maintained or contributed to by Seller or any of its Affiliates;
(o) all assets, tangible or intangible, wherever situated, not
expressly included in the Purchased Assets;
(p) all computer software and licenses thereto; and
(q) with respect to assets described in Section 2.1(e) above that
relate both to the Products and to other products or projects of Seller, all
such assets to the extent they relate to such other products or projects of
Seller.
2.3 Assumed Liabilities.
(a) On the Closing Date subject to the provisions of Section 2.4,
Buyer shall assume, or shall cause Buyer's Affiliates to assume, all of the
liabilities of Seller and Seller's
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Affiliates relating exclusively to the Purchased Assets existing on the Closing
Date and listed on Schedule 2.3 except for the Excluded Liabilities
(collectively, together with all other obligations and liabilities of Seller and
Seller's Affiliates assumed by Buyer or Buyer's Affiliates pursuant to this
Agreement and the Schedules hereto, the "Assumed Liabilities").
(b) From and after the Closing Date, Buyer shall assume, or cause
Buyer's Affiliates to assume, the following post-Closing liabilities, including
without limitation:
i. all liabilities and obligations arising after Closing under the
Contracts, Transferred Intellectual Property and Governmental Authorizations
being transferred from Seller to Buyer hereunder;
ii. Taxes that are the responsibility of Buyer pursuant to Section
3.4, Section 9.3(a) and Section 12.4 of this Agreement and all Taxes related to
the Products and Purchased Assets attributable to any period or partial period
ending after the Closing; and
iii. all liabilities related to the research, development,
marketing, manufacture, distribution, testing, sale or trials of the Products
following Closing.
2.4 Excluded Liabilities. Neither Buyer nor Buyer's Affiliates assume nor
will they become responsible for any of the following liabilities and
obligations of Seller or Seller's Affiliates (collectively, the "Excluded
Liabilities"):
(a) all liabilities related to the research, development, marketing,
manufacture, distribution, testing or trials of the Products prior to the
Closing;
(b) all liabilities and obligations of Seller and Seller's Affiliates
arising under this Agreement, the Other Agreements or from the consummation of
the transactions contemplated hereby or thereby;
(c) all intercompany payable balances owing by Seller or Seller's
Affiliates;
(d) all liabilities and obligations of Seller and Seller's Affiliates
arising under any contract or agreement not set forth on Schedule 2.1(c);
(e) all liabilities and obligations arising under any of the Contracts
which relate to any act or failure to act of Seller or Seller's Affiliates prior
to the Closing;
(f) all obligations related to employees of Seller or Seller's
Affiliates;
(g) any and all claims, causes of action or litigation to the extent
relating to the development, production, distribution, trial, testing, sale or
use of Products prior to the Closing, including such matters as set forth on
Schedule 5.7; and
(h) other current liabilities (except Assumed Liabilities) of Seller
or Seller's Affiliates incurred in the ordinary course of business and existing
at the Closing Date.
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2.5 Procedures for Purchased Assets not Transferable. If any of the
Contracts or any other property or rights included in the Purchased Assets are
not assignable or transferable either by virtue of the provisions thereof or
under applicable law without the consent of some party or parties, Seller shall
use its reasonable best efforts to obtain such consents after the execution of
this Agreement, but prior to the Closing, and Buyer shall use its commercially
reasonable efforts to assist in that endeavor. If any such consent cannot be
obtained prior to the Closing and the Closing occurs, this Agreement and the
related instruments of transfer shall not constitute an assignment or transfer
thereof and Buyer shall not assume Seller's obligations with respect thereto,
but Seller shall use its commercially reasonable efforts to obtain such consent
as soon as reasonably possible after the Closing or otherwise obtain for Buyer
the practical benefit of such property or rights and Buyer shall use its
commercially reasonable efforts to assist in that endeavor. For purposes of this
Section 2.5, commercially reasonable efforts shall not include any requirement
of either party to expend money, commence any litigation or offer or grant any
accommodation (financial or otherwise) to any third party. In the case of any
Contracts for which a necessary consent has not been obtained, Buyer shall
provide all goods and services and bear all costs necessary to complete such
Contracts at no cost to Seller, and Seller shall hold for Buyer's account and
promptly remit to Buyer all amounts received with respect to such Contracts.
ARTICLE 3
Purchase Price; Consistent Treatment.
3.1 Purchase Price. The total purchase price for the Purchased Assets
shall be: (i) $5 million in cash, plus (ii) the Promissory Note, plus (iii) the
Preferred Stock, plus (iv) the assumption of the Assumed Liabilities (the
"Purchase Price").
3.2 Payment of Purchase Price. The Purchase Price shall be paid in
accordance with Section 4.2(b).
3.3 Purchase Price Allocation. The Purchase Price shall be allocated among
the Purchased Assets as set forth in a Schedule (the "Allocation Schedule") that
Buyer will prepare and deliver to Seller on or before the Closing Date, which
allocation shall be subject to the reasonable approval of Seller prior to
Closing. Each of Seller and Buyer shall sign and submit all necessary forms to
report this transaction for federal, state and foreign income tax purposes in
accordance with the Allocation Schedule, and shall not take a position for Tax
purposes inconsistent therewith. Any adjustment to the Purchase Price shall be
allocated as provided by Treasury Regulation Section 1.1060-1.
3.4 Prorations. Seller and Buyer agree that all of the items listed below
relating to the Purchased Assets will be prorated as of the Closing Date, with
Seller liable to the extent such items relate to any time period up to and
including the Closing Date and Buyer liable to the extent such items relate to
periods subsequent to the Closing Date: (a) personal property Taxes, if any,
attributable to the Purchased Assets; (b) Taxes payable by Seller under any
contract to be assigned to or assumed by Buyer hereunder or for which Buyer is
entitled to enjoy the practical benefits pursuant to Section 2.5; (c) the amount
of any license or registration fees with respect to any licenses or
registrations which are being assigned or transferred hereunder; and (d) all
other
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items which are normally prorated in connection with similar transactions.
Seller agrees to furnish Buyer with such documents and other records as Buyer
reasonably requests in order to confirm all adjustment and proration
calculations made pursuant to this Section 3.4.
ARTICLE 4
Closing.
4.1 Closing Date. The Closing shall take place at the office of ▇▇▇▇▇▇▇▇ &
▇▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, at 10:00 a.m.
Chicago time, on the Closing Date subject to the satisfaction or waiver of each
of the conditions set forth in Article 8 or at such other place, time or date as
Seller and Buyer may agree.
4.2 Transactions at Closing. At the Closing, subject to the terms and
conditions hereof:
(a) Transfer of Purchased Assets and Seller Closing Deliveries. Seller
shall transfer and convey or cause to be transferred and conveyed to Buyer all
of the Purchased Assets and Seller shall execute and deliver to Buyer the
Assignment and Assumption Agreement, each of the Other Agreements and such other
good and sufficient instruments of transfer and conveyance as shall be necessary
to vest in Buyer title to all of the Purchased Assets. In addition, Seller shall
deliver to Buyer the certificate required by Section 8.2(b) and all other
documents required to be delivered by Seller at Closing pursuant hereto.
(b) Payment of Purchase Price, Assumption of Assumed Liabilities and
Buyer's Closing Deliveries. In consideration for the transfer of the Purchased
Assets, Buyer shall: (i) pay to Seller on the Closing Date five million dollars
($5,000,000) of the Purchase Price in United States dollars by electronic bank
transfer in immediately available funds directly to Seller's Account No.
▇▇▇▇▇▇▇▇ at Citibank, N.A. of New York, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇, ABA
#▇▇▇▇▇▇▇▇▇; (ii) execute and deliver to Seller the Promissory Note; (iii) issue
and deliver to Seller a stock certificate evidencing the Preferred Stock
registered in the Seller's name; (iv) execute and deliver to Seller the
Assignment and Assumption Agreement, whereby Buyer assumes the Assumed
Liabilities; and (v) execute and deliver to Seller each of the Other Agreements.
In addition, Buyer shall deliver to Seller the certificate required by Section
8.1(b) and all other documents required to be delivered by Buyer at Closing
pursuant hereto.
ARTICLE 5
Representations and Warranties of Seller.
Except as set forth in the Disclosure Schedules, Seller represents and
warrants to Buyer as of the date of this Agreement as follows:
5.1 Organization. Seller is a corporation duly incorporated and validly
existing in good standing under the laws of the State of Illinois, duly
qualified to transact business as a foreign corporation in such jurisdictions
where the nature of the Purchased Assets makes such qualification necessary,
except as to jurisdictions where the failure to qualify would not reasonably be
expected to have a material adverse effect on the Purchased Assets, and with all
10
requisite corporate power and authority to own, lease and operate its properties
and to carry on its business as now being conducted.
5.2 Due Authorization. Seller has full corporate power and authority to
execute, deliver and perform its obligations under this Agreement and the Other
Agreements, and the execution and delivery of this Agreement and the Other
Agreements and the performance of all of its obligations hereunder and
thereunder have been duly authorized by Seller. The signing, delivery and
performance of this Agreement and the Other Agreements by Seller are not
prohibited or limited by, and will not result in the breach of or a default
under, or conflict with any obligation of Seller with respect to the Purchased
Assets under (i) any provision of the Articles of Incorporation or By-Laws of
Seller, (ii) any material agreement or instrument to which Seller is a party or
by which it or its properties are bound, (iii) any judgment, order, award, writ,
injunction or decree of any court, governmental body or instrumentality, or
arbitrator, (iv) any Governmental Authorizations, or (v) any applicable law,
statute, ordinance, regulation or rule, and, to Seller's Knowledge, will not
result in the creation or imposition of any Encumbrance on any of the Purchased
Assets, except to the extent that any such prohibition, limitation, breach,
default or conflict would not reasonably be expected to have a material adverse
effect on Seller. This Agreement has been, and on the Closing Date the Other
Agreements will have been, duly executed and delivered by Seller and
constitutes, or, in the case of the Other Agreements, will constitute, the
legal, valid and binding obligation of Seller, enforceable against Seller in
accordance with their respective terms, except as enforceability may be limited
or affected by applicable bankruptcy, insolvency, moratorium, reorganization or
other laws of general application relating to or affecting creditors' rights
generally.
5.3 Title. Except as provided on Schedule 5.3, the Purchased Assets are
owned beneficially by Seller with good and marketable title thereto, free and
clear of all Encumbrances (except for Permitted Encumbrances). At the Closing,
Buyer will receive legal and beneficial title to all of the Purchased Assets
(except for Contracts or any other property or rights included in the Purchased
Assets for which a necessary consent has not been obtained and for the
Transferred Intellectual Property, the title of which is addressed exclusively
in Section 5.4 hereof), free and clear of all Encumbrances (except for liens for
Taxes not yet due and payable), except the Assumed Liabilities and except as set
forth on Schedule 5.3 and subject to obtaining any consents of Persons listed on
Schedule 5.6.
5.4 Intellectual Property
(a) Schedule 5.4 lists all trademarks that directly relate to the
Products, and all patents and patent applications owned by Seller to the extent
that they directly relate to the Products or that include any claims which the
production, manufacture, sale or use of the Products would infringe as of the
Closing. Seller owns and has good title to the Transferred Intellectual
Property. Except as set forth on Schedule 5.4, no Person other than Seller has
any right, claim or interest in or with respect to any Transferred Intellectual
Property. Except as set forth on Schedule 5.4, there is no unauthorized use,
unauthorized disclosure, or misappropriation of any Transferred Intellectual
Property by an employee of Seller, former employee of Seller or by any other
third party.
11
(b) Seller has at all times taken commercially reasonably efforts to
maintain the trade secrets related primarily to the Products (the "Trade
Secrets") in confidence and has not disclosed or otherwise dealt with the Trade
Secrets in such a manner as to cause the loss of such Trade Secrets by release
into the public domain, including without limitation, the use of confidentiality
agreements with all of its employees and consultants having access to the Trade
Secrets and the use of licenses with all individuals or entities provided access
to the Trade Secrets containing provisions restricting unauthorized use and
copying and prohibiting decompiling or disassembly of the Trade Secrets.
(c) Schedule 5.4 contains an accurate list, as of the Closing Date, of
all licenses, sublicenses and other agreements (to the extent they relate
directly to the Products or that include any Intellectual Property Rights which
the production, manufacture, sale or use of the Products would infringe as of
the Closing) to which Seller is a party and that authorize Seller to use any
Intellectual Property Rights owned by a third party in connection with the
Products.
(d) Except as set forth on Schedule 5.4, Seller has not entered into
any agreement to indemnify any other person or entity against charges of
infringement of any of the Transferred Intellectual Property. There are no
royalties, fees or other payments payable by Seller to any Person by reason of
the ownership, use, sale or disposition of the Transferred Intellectual
Property, except as set forth on Schedule 5.4. To Seller's Knowledge, except as
set forth on Schedule 5.4, the Transferred Intellectual Property does not
materially infringe on any Intellectual Property Rights of any third party.
(e) Seller is not in material breach of any license, sublicense or
other agreement relating to the Transferred Intellectual Property. Except as set
forth on Schedule 5.4, neither the execution, delivery nor performance of this
Agreement nor the consummation of the Transaction contravenes or conflicts with
Buyer's right to own or use any Transferred Intellectual Property.
(f) All patents and registered trademarks owned by Seller and included
in the Transferred Intellectual Property are valid and subsisting, except as set
forth on Schedule 5.4. All maintenance and annual fees have been fully paid and
all fees paid during prosecution and after issuance of any patent comprising or
relating to such patents have been paid in the correct entity status amounts. To
Seller's Knowledge, (1) the use of the Products has not infringed,
misappropriated or made unlawful use of, or (2) the manufacture, sale, or use of
the Products following Closing, as currently proposed by Buyer and disclosed to
Seller prior to Closing, will not infringe, misappropriate, or make unlawful use
of, the Intellectual Property Rights of any third party. Seller has not brought
a proceeding alleging infringement of the Transferred Intellectual Property
Rights or breach of any license or agreement involving the Transferred
Intellectual Property against any third party.
(g) Except as set forth on Schedule 5.4, Seller is not subject to any
proceeding or outstanding decree, order, judgment, or stipulation restricting in
any manner the use, transfer, or licensing of the Transferred Intellectual
Property by Seller, or which may affect the validity, use or enforceability of
such Transferred Intellectual Property by Buyer. Except as set forth on Schedule
5.4, Seller is not subject to any agreement that restricts in any material
respect the use, transfer, or licensing by Seller of the Transferred
Intellectual Property.
12
5.5 Compliance with Laws. Seller is in material compliance with the
requirements of all federal, state and local laws, rules and regulations
applicable to or pertaining to the Products or the Purchased Assets (including,
without limitation, the Occupational Safety and Health Act of 1970, the
Americans with Disabilities Act of 1990, and laws and regulations establishing
quality criteria standards for air, water, land and toxic or hazardous wastes
and substances, as well as all laws, rules, and regulations governing the sale,
manufacture and distribution of pharmaceutical, healthcare or therapeutic
products, and the conduct of businesses engaged in the sale, manufacture and
distribution of pharmaceutical, healthcare or therapeutic products), where any
such non-compliance, individually or in the aggregate, could reasonably be
expected to have a material adverse effect on the Purchased Assets.
5.6 Equipment. The equipment included in the Purchased Assets is in good
condition and has been used, stored and maintained in accordance with good
industry practices.
5.7 Litigation. Except as set forth on Schedule 5.7, there is no
litigation, proceeding, claim or governmental investigation pending or, to
Seller's Knowledge, threatened with respect to the Products, the Purchased
Assets.
5.8 Consents
(a) Except as set forth on Schedule 5.8, no notice to, filing with,
authorization of, exemption by, or consent of any Person is required for Seller
to consummate the transactions contemplated hereby.
(b) Seller is transferring substantially all of its assets in
accordance with Section 15 of the Settlement Agreement between Genentech, Inc.
and ▇▇▇▇▇▇ Laboratories, dated August 10, 1990. Therefore, such agreement is
assignable to Buyer without the consent of Genentech, Inc.
5.9 Brokers, Etc. No broker or investment banker acting on behalf of
Seller or under the authority of Seller is or will be entitled to any broker's
or finder's fee or any other commission or similar fee directly or indirectly
from Seller or Buyer in connection with any of the transactions contemplated
herein, other than any fee that is the sole responsibility of Seller.
5.10 Financial Information. The estimate of the costed ▇▇▇▇ of materials
for the Products for 2004 was (i) prepared in a manner consistent with Seller's
financial policies and (ii) fairly reflects the cost to manufacture the Products
in Seller's facilities according to the volume and budget in place at the time
the costs were established.
5.11 Absence of Undisclosed Liabilities. To Seller's Knowledge, Seller has
not incurred any material liabilities or obligations (whether accrued, absolute,
contingent or otherwise) with respect to the Purchased Assets, which continue to
be outstanding, except as incurred in the ordinary course of business or as
reflected in the financial information described in Section 5.10.
5.12 Absence of Unusual Changes and Unusual Transactions. To Seller's
Knowledge, since June 20, 2003, except as would not reasonably be expected to
have a material adverse
13
effect on the Purchased Assets, there has not been any material damage,
destruction, or loss with respect to the Inventory.
5.13 Governmental Authorizations. Schedule 5.13 sets forth a complete list
of the material Governmental Authorizations. The Governmental Authorizations
listed in Schedule 5.13 are all the authorizations required to be in material
compliance with all laws applicable to the Purchased Assets. The Governmental
Authorizations are in full force and effect in accordance with their terms, and
there have been no material violations of such Governmental Authorizations, no
proceedings are pending or, to the knowledge of the Seller, threatened, which
could result in their revocation or limitation and all steps have been taken and
filings made on a timely basis with respect to each Governmental Authorization
and its renewal; in each case, except as would not reasonably be expected to
have a material adverse effect on the Purchased Assets.
5.14 Contracts. All current and complete copies of all Contracts have been
delivered to or made available to the Buyer. There are no material agreements
relating primarily to the Products, or primarily to both the Products and
Seller's tissue culture based urokinase product currently marketed under the
brand Abbokinase(R), to which Seller is a party which are not included in the
Contracts. The Contracts are all in full force and effect, and, to Seller's
Knowledge, there are no outstanding defaults or violations under such Contracts
on the part of the Seller or, to the Knowledge of the Seller, on the part of any
other party to such Contracts and there are no current or pending negotiations
with respect to the renewal, repudiation or amendment of any Contract.
5.15 Tax Matters. In each case except as would not reasonably be expected
to have a material adverse effect on the Purchased Assets:
(a) To Seller's Knowledge, no failure, if any, of the Seller to duly
and timely pay all Taxes, including all installments on account of Taxes for the
current year, that are due and payable by it will result in an Encumbrance on
the Purchased Assets;
(b) To Seller's Knowledge, there are no proceedings, investigations,
audits or claims now pending or threatened against the Seller in respect of any
Taxes, and there are no matters under discussion, audit or appeal with any
governmental authority relating to Taxes, which will result in an Encumbrance on
the Purchased Assets;
(c) To Seller's Knowledge, the Seller has duly and timely withheld all
Taxes and other amounts required by law to be withheld by it relating to the
Purchased Assets (including Taxes and other amounts relating to the Purchased
Assets required to be withheld by it in respect of any amount paid or credited
or deemed to be paid or credited by it to or for the account or benefit of any
Person, including any employees, officers or directors and any non-resident
Person), and has duly and timely remitted to the appropriate Governmental
Authority such Taxes and other amounts required by law to be remitted by it; and
(d) To Seller's Knowledge, the Seller or Seller's Affiliates has duly
and timely collected all amounts on account of any sales or transfer taxes,
including goods and services, harmonized sales and provincial or territorial
sales taxes with respect to the Purchased Assets,
14
required by law to be collected by it and has duly and timely remitted to the
appropriate Governmental Authority any such amounts required by law to be
remitted by it.
5.16 Full Disclosure. The statements and information furnished by or on
behalf of Seller to Buyer in connection with the negotiation of this Agreement
and the Other Agreements do not contain any untrue statement of a material fact
or omit a material fact necessary to make the material statements contained
herein or therein not misleading.
5.17 Disclaimer. EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN THIS ARTICLE 5,
SELLER IS MAKING NO REPRESENTATION OR WARRANTY AS TO THE PURCHASED ASSETS AND
BUYER ACKNOWLEDGES AND AGREES THAT, EXCEPT AS OTHERWISE PROVIDED HEREIN, SELLER
IS SELLING AND CONVEYING THE PURCHASED ASSETS ON AN "AS IS, WHERE IS" BASIS.
EXCEPT TO THE EXTENT OF THE EXPRESS REPRESENTATIONS, WARRANTIES, AGREEMENTS AND
COVENANTS CONTAINED IN THIS AGREEMENT, BUYER IS ACQUIRING THE PURCHASED ASSETS
IN RELIANCE ON ITS OWN INVESTIGATION AND ON AN "AS IS, WHERE IS" BASIS AND
WITHOUT RECOURSE AND WITHOUT ANY REPRESENTATION OR WARRANTY OF MERCHANTABILITY,
FITNESS FOR ANY PARTICULAR PURPOSE, NON INFRINGEMENT OR ANY OTHER IMPLIED OR
EXPRESS WARRANTIES WHATSOEVER. For greater certainty, nothing in this Section
5.17 shall in any way limit Seller's indemnification obligations as set forth in
Article 10.
5.18 Independent Investigation. In making the decision to enter into this
Agreement and the Other Agreements and to consummate the transactions
contemplated hereby and thereby, other than reliance on the representations,
warranties, covenants and obligations of Buyer set forth in this Agreement and
in the Other Agreements, Seller has relied solely on its own independent
investigation, analysis and evaluation of the Buyer. Seller confirms to Buyer
that Seller is sophisticated and knowledgeable with respect to the business of
Buyer and is capable of evaluating the matters set forth above. However, nothing
in this Section 5.18 shall limit in any way the ability of Seller to rely upon
the representations and warranties of Buyer set forth in this Agreement.
5.19 Investment by the Seller. The Seller hereby represents that the
Preferred Stock will be acquired for investment for Seller's own account, not
with a view to the sale or distribution of any part thereof. The Seller has no
present intention of selling, granting any participation in, or otherwise
distributing the Preferred Stock.
5.20 Raw Material Viability. The genetic material included in the
Inventory shall be in viable condition as of the Closing.
ARTICLE 6
Representations and Warranties of Buyer.
Buyer represents and warrants to Seller as follows:
6.1 Organization. Buyer is a corporation duly incorporated and validly
existing in good standing under the laws of Delaware, duly qualified to transact
business as a foreign
15
corporation in all jurisdictions except where the failure to be so qualified
would not reasonably be expected to have a material adverse effect on Buyer, and
with all requisite corporate power and authority to own, lease and operate its
properties and to carry on its business as now being conducted.
6.2 Due Authorization. Buyer has full corporate power and authority to
execute, deliver and perform its obligations under this Agreement (including the
issuance of the Preferred Stock) and the Other Agreements and the execution and
delivery of this Agreement and the Other Agreements and the performance of all
of its obligations hereunder and thereunder have been duly authorized by Buyer.
The signing, delivery and performance of this Agreement and the Other Agreements
by Buyer are not prohibited or limited by, and will not result in the breach of
or a default under, any provision of the Certificate of Incorporation or By-Laws
of Buyer or of any order, writ, injunction or decree of any court or
governmental instrumentality. This Agreement has been, and on the Closing Date
the Other Agreements will have been, duly executed and delivered by Buyer and
constitutes, or, in the case of the Other Agreements will constitute, the legal,
valid and binding obligations of Buyer, enforceable against Buyer in accordance
with their respective terms, except as enforceability may be limited or affected
by applicable bankruptcy, insolvency, moratorium, reorganization or other laws
of general application relating to or affecting creditors' rights generally.
6.3 Capital Stock. As of the date of this Agreement and as of immediately
prior to the Closing, the capitalization of the Buyer shall be as set forth in
Section 3.3 of the Series E Preferred Stock Purchase Agreement.
6.4 Subsidiaries. Except as set forth on Schedule 6.4, the Buyer has no
Subsidiaries. Each Subsidiary is a corporation or limited liability company duly
organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation and has full power and authority to conduct its
business. Each Subsidiary is duly qualified, licensed or admitted to do business
as a foreign corporation and is in good standing in each jurisdiction where the
failure to be so qualified and in good standing would reasonably be expected to
have a material adverse effect on the condition (financial or otherwise) or
business prospects of Buyer or such Subsidiary. Schedule 6.4 lists for each
Subsidiary the amount of its authorized and outstanding equity interests. Except
as disclosed in Schedule 6.4, all of the outstanding equity interests of each
Subsidiary have been duly authorized and validly issued, are fully paid and
nonassessable, and are owned, beneficially and of record, by the Buyer or
Subsidiaries wholly owned, directly or indirectly, by the Buyer free and clear
of all Encumbrances. There are no outstanding Options with respect to any
Subsidiary or agreements, arrangements or understandings to issue Options with
respect to any Subsidiary and there are no preemptive rights or agreements,
arrangements or understandings to issue preemptive rights with respect to the
issuance or sale of any Subsidiary's equity interests. Except for the
Subsidiaries listed on Schedule 6.4, neither the Buyer nor any Subsidiary holds
any equity, partnership, joint venture or other interest in any Person.
6.5 Title. Except as set forth on Schedule 6.5, Buyer has good and
defensible title to (or valid leasehold interests in or other rights to use) its
assets as reflected on the most recent consolidated balance sheet which Buyer
has furnished to Seller free and clear of any Encumbrance (except for tax liens
for Taxes not yet due and payable) and, except as set forth on
16
Schedule 6.5, no effective financing statement or other document similar in
effect covering all or any part of the assets of Buyer is on file in any
recording office.
6.6 Buyer's Intellectual Property. Except as set forth on Schedule 6.6, to
Buyer's Knowledge, Buyer's material Intellectual Property Rights as currently
used in the operation of its business ("Buyer's Intellectual Property") are
owned free and clear of all Encumbrances or have been duly licensed for use by
Buyer. Except as set forth on Schedule 6.6, to Buyer's Knowledge, Buyer's
Intellectual Property has not been and is not the subject of any pending adverse
claim or any threatened litigation or claim of infringement. To Buyer's
Knowledge, except as set forth on Schedule 6.6, Buyer's Intellectual Property
does not materially infringe on any Intellectual Property Rights of any third
party.
6.7 Litigation. There is no litigation or governmental or arbitration
proceeding or labor controversy pending, nor to the Knowledge of Buyer
threatened, against Buyer or any of its property that, if adversely determined,
individually or in the aggregate, could reasonably be expected to have a
material adverse effect on the condition (financial or otherwise) or business
prospects of Buyer.
6.8 Consents. Except as set forth on Schedule 6.8, no notice to, filing
with, authorization of, exemption by, or consent of, any Person is required for
Buyer to consummate the transactions contemplated by this Agreement or the Other
Agreements.
6.9 Brokers, Etc. No broker or investment banker acting on behalf of Buyer
or Buyer's Affiliates is or will be entitled to any broker's or finder's fee or
any other commission or similar fee directly or indirectly in connection with
any of the transactions contemplated hereby.
6.10 Financial Information. The audited balance sheets and statements of
net income and cash flows for the Buyer for the years ended December 31, 2003
and December 31, 2004 and unaudited balance sheet and statements of net income
and cash flows for the Buyer for the six-month period ended June 30, 2005 (the
"Buyer Financial Statements") were (i) prepared in accordance with GAAP (with
respect to year-end information) or in accordance with past practices (with
respect to June 30, 2005 information) and (ii) present fairly in all material
respects the financial condition of Buyer.
6.11 Absence of Undisclosed Liabilities. Except for liabilities incurred
in connection with the transactions contemplated by this Agreement and as
provided on Schedule 6.11, to Buyer's Knowledge, Buyer has not incurred any
material liabilities or obligations (whether accrued, absolute, contingent or
otherwise), which continue to be outstanding, except as disclosed in the Buyer
Financial Statements, or except as incurred in the ordinary course of business.
6.12 Absence of Unusual Changes and Unusual Transactions. Since June 30,
2005, except as would not reasonably be expected to have a material adverse
effect on the condition (financial or otherwise) or business prospects of Buyer:
(a) there has not been any material change in the financial condition,
methods of operation, working capital, assets, employment policies or practices
or prospects of Buyer other than changes in the ordinary course of business; and
17
(b) there has not been any material damage, destruction, loss, labor
dispute, organizing drive, application for certification or other event,
development or condition of any character (whether or not covered by insurance).
6.13 Tax Matters. All federal and other material tax returns required to
be filed by Buyer in any jurisdiction have, in fact, been filed, and all
material Taxes, assessments, fees, and other governmental charges upon Buyer or
upon any of its property, income or franchises, which are shown to be due and
payable in such returns, have been paid, except such Taxes, assessments, fees
and governmental charges, if any, as are being contested in good faith and by
appropriate proceedings which prevent enforcement of the matter under contest
and as to which adequate reserves have been established in accordance with GAAP
and reflected on the most recent consolidated balance sheet which Buyer has
furnished to Seller. To Buyer's Knowledge, there are no proposed additional
material Tax assessments against it for which adequate provisions in accordance
with GAAP have not been made and which are not reflected on the most recent
consolidated balance sheet which Buyer has furnished to Seller. Buyer has made
adequate provisions for Taxes in accordance with GAAP on its books for all open
years, and for its current fiscal period.
6.14 Full Disclosure. The statements and information furnished by or on
behalf of Buyer to Seller in connection with the negotiation of this Agreement
and the Other Agreements do not contain any untrue statement of a material fact
or omit a material fact necessary to make the material statements contained
herein or therein not misleading.
6.15 Transactions with Affiliates. Except as set forth on Schedule 6.15,
(i) there are no liabilities between the Buyer on the one hand, and any
Subsidiary, shareholder or current or former officer, director, shareholder or
Affiliate of the Buyer on the other, (ii) the Buyer does not provide or cause to
be provided any assets, services or facilities to any such Subsidiary, current
or former shareholder, officer, director, shareholder or Affiliate, (iii) no
Person described in clause (i) provides or causes to be provided any assets,
services or facilities to the Buyer and (iv) the Buyer does not beneficially
own, directly or indirectly, any Investment Assets of any Person.
6.16 Compliance with Laws. Buyer is in material compliance with the
requirements of all federal, state and local laws, rules and regulations
applicable to or pertaining to its property or business operations (including,
without limitation, the Occupational Safety and Health Act of 1970, the
Americans with Disabilities Act of 1990, and laws and regulations establishing
quality criteria standards for air, water, land and toxic or hazardous wastes
and substances, as well as all laws, rules, and regulations governing the sale,
manufacture and distribution of pharmaceutical, healthcare or therapeutic
products, and the conduct of businesses engaged in the sale, manufacture and
distribution of pharmaceutical, healthcare or therapeutic products), where any
such non-compliance, individually or in the aggregate, could reasonably be
expected to have a material adverse effect on the condition (financial or
otherwise) or business prospects of Buyer.
6.17 Independent Investigation. In making the decision to enter into this
Agreement and the Other Agreements and to consummate the transactions
contemplated hereby and thereby, other than reliance on the representations,
warranties, covenants and obligations of Seller set forth in this Agreement and
in the Other Agreements, Buyer has relied solely on its own
18
independent investigation, analysis and evaluation of the Purchased Assets and
Assumed Liabilities (including Buyer's own estimate and appraisal of the value
of the financial condition, assets, operations and prospects thereof). Buyer
confirms to Seller that Buyer is sophisticated and knowledgeable in the business
in which Buyer intends to use the Purchased Assets and is capable of evaluating
the matters set forth above. However, nothing in this Section 6.17 shall limit
in any way the ability of Buyer to rely upon the representations and warranties
of Seller set forth in this Agreement.
ARTICLE 7
Pre-Closing Covenants of Seller and Buyer.
7.1 Corporate and Other Actions. Each of Seller and Buyer shall take, or
shall cause its respective Affiliates to take, all necessary corporate action
required to fulfill its obligations under this Agreement and the Other
Agreements and the transactions contemplated hereby and thereby.
7.2 Consents and Approvals. Each of Seller and Buyer shall use its
reasonable best efforts to obtain all necessary consents and approvals to the
performance of its obligations under this Agreement and the Other Agreements and
the transactions contemplated hereby and thereby. Each of Seller and Buyer shall
make all filings, applications, statements, notices and reports to all federal,
state, local or foreign government agencies or entities which are required to be
made or given prior to the Closing Date by or on behalf of Seller or Buyer
pursuant to any applicable law, statute, ordinance, regulation or rule in
connection with this Agreement and the Other Agreements and the transactions
contemplated hereby and thereby.
7.3 Competition Law Filings. Each of Buyer and Seller shall promptly
prepare and file any notification and report form required under the HSR Act and
any notification or other form required to be filed under any law or regulation
of any foreign national or supra-national competition authority, and regulations
promulgated thereunder, if applicable, and any further filing pursuant thereto
as may be necessary.
7.4 Access to Information. (a) Seller will permit representatives of Buyer
from and after the date hereof up to the Closing Date to have access at all
reasonable times to the books, accounts, records, properties, operations and
facilities of every kind to the extent pertaining to the Purchased Assets, and
will furnish Buyer with such financial and operating data concerning the
Purchased Assets as Buyer shall from time to time reasonably request, subject to
any confidentiality agreements entered into by Seller; provided that under no
circumstances will Seller permit Buyer or any of its representatives to have
access to Tax returns, including related workpapers, filed by Seller or Seller's
Affiliates. Notwithstanding the foregoing, Seller does not have any obligation
hereunder to permit Buyer or any of its representatives to access any of
Seller's Tax returns, including any related workpapers, filed by Seller or its
Affiliates.
7.5 Ordinary Course of Business. Subsequent to the date hereof and prior
to the Closing Date, Seller will use reasonable efforts to continue to operate
and/or use the Purchased Assets in the usual and normal course and to maintain
the Purchased Assets in substantially the same manner as heretofore maintained.
Notwithstanding the foregoing, nothing in this
19
Agreement shall be construed as placing any limitation on the Seller's ability
to sell its tissue culture based urokinase product marketed under the brand
Abbokinase(R).
7.6 Exclusivity. The Seller agrees that, from the date hereof through the
earlier of (i) the Closing Date and (ii) September 30, 2005, neither the Seller
nor any of its representatives, directors, officers, employees or Affiliates
will (i) pursue, solicit, initiate or encourage the submission of any proposal
or offer from any Person relating to the sale, license or assignment of any of
the Purchased Assets or the Product with any Person (other than the Buyer) or
provide any information to any such other Person in connection therewith, or
(ii) participate in any discussions or negotiations regarding, furnish any
information with respect to, assist or participate in, or facilitate in any
other manner any effort or attempt by any Person (other than the Buyer) to do or
seek the sale, license or assignment of the Product. The Seller will notify the
Buyer immediately if any Person makes any proposal, offer, inquiry, or contact
with respect to any sale, license or assignment of the Product. Notwithstanding
the foregoing, nothing in this Agreement shall be construed as placing any
limitations on the Seller's ability to sell assets related primarily to its
tissue culture based urokinase product marketed under the brand Abbokinase(R).
ARTICLE 8
Conditions.
8.1 Conditions to Obligations of Seller. The obligations of Seller to
consummate the transactions contemplated by this Agreement shall be subject to
fulfillment at or prior to the Closing of the following conditions (any one or
more of which may be waived in whole or in part by Seller):
(a) Performance of Agreements and Conditions. All agreements and
conditions to be performed and satisfied by Buyer hereunder on or prior to the
Closing Date shall have been duly performed and satisfied by Buyer in all
material respects.
(b) Representations and Warranties True. The representations and
warranties of Buyer contained in this Agreement that are qualified as to
materiality shall be true and correct, and all other representations and
warranties of Buyer contained in this Agreement shall be true and correct except
for breaches of, or inaccuracies in, such representations and warranties that,
in the aggregate, would not have a material adverse effect on the expected
benefits to Seller of the transactions contemplated by this Agreement taken as a
whole, in each such case on and as of the Closing Date, with the same effect as
though made on and as of the Closing Date, and there shall be delivered to
Seller on the Closing Date a certificate, in form and substance reasonably
satisfactory to Seller and its counsel duly signed by the President or Vice
President of Buyer, to that effect.
(c) Payment of Purchase Price. Buyer shall have paid the Purchase
Price as provided in Section 4.2(b).
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(d) HSR Waiting Period. Any applicable waiting period under the HSR
Act shall have expired without action by the Justice Department or the Federal
Trade Commission to prevent consummation of this Agreement or shall have been
terminated earlier.
(e) Foreign Competition Laws. Any necessary approvals shall have been
received or any applicable period for action shall have expired under the
applicable laws or regulations of the foreign national or supra-national
competition authorities.
(f) No Action or Proceeding. No legal or regulatory action or
proceeding shall be pending or threatened by any Person to enjoin, restrict or
prohibit the purchase and sale of the Purchased Assets or the transactions
contemplated hereby. No order, judgment or decree by any court or regulatory
body shall have been entered in any action or proceeding instituted by any party
that enjoins, restricts, or prohibits this Agreement or the complete
consummation of the transactions as contemplated by this Agreement.
(g) Other Agreements. Buyer shall have delivered to Seller a duly
executed copy of each of the Other Agreements.
(h) Good Standing Certificates. The Buyer shall have delivered to
Seller, (a) a copy of the Certificate of Designation certified by the Secretary
of State of Delaware, (b) a certificate from the Secretary of State of Delaware
to the effect that the Buyer is in good standing in Delaware, and (c)
certificates from the secretary of state or other appropriate government
official in each jurisdiction in which the Buyer is qualified or admitted to do
business to the effect that the Company is duly qualified or admitted and in
good standing in such jurisdiction.
(i) Securities Law Compliance. The Buyer shall have made all filings
under all applicable federal and state securities laws necessary to consummate
the transactions contemplated hereby (including the issuance of the Preferred
Stock and Promissory Note) in compliance with such laws.
8.2 Conditions to Obligations of Buyer. The obligations of Buyer to
consummate the transactions contemplated by this Agreement shall be subject to
fulfillment at or prior to the Closing of the following conditions (any one or
more of which may be waived in whole or in part by Buyer):
(a) Performance of Agreements and Covenants. All agreements and
conditions to be performed and satisfied by Seller hereunder on or prior to the
Closing Date shall have been duly performed and satisfied by Seller in all
material respects.
(b) Representations and Warranties True. The representations and
warranties of Seller contained in this Agreement that are qualified as to
materiality shall be true and correct, and all other representations and
warranties of Seller contained in this Agreement shall be true and correct
except for breaches of, or inaccuracies in, such representations and warranties
that, in the aggregate, would not have a material adverse effect on the
Purchased Assets taken as a whole, in each such case on and as of the Closing
Date with the same effect as though made on and as of the Closing Date, and
there shall be delivered by Seller on the Closing Date a certificate, in form
and substance reasonably satisfactory to Buyer and its counsel, duly signed by
an officer of Seller, to that effect.
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(c) Raw Material Viability. The genetic material included in the
Inventory shall have been certified as being in viable condition in accordance
with the procedures set forth in the Inventory Testing Procedures.
(d) HSR Waiting Period. Any applicable waiting period under the HSR
Act shall have expired without action by the Justice Department or the Federal
Trade Commission to prevent consummation of this Agreement or shall have been
terminated earlier.
(e) Foreign Competition Laws. Any necessary approvals shall have
been received or any applicable period for action shall have expired under the
applicable laws or regulations of the foreign national or supra-national
competition authorities set forth on Schedule 6.24.
(f) No Action or Proceeding. No legal or regulatory action or
proceeding shall be pending or threatened by any Person to enjoin, restrict or
prohibit the purchase and sale of the Purchased Assets contemplated hereby. No
order, judgment or decree by any court or regulatory body shall have been
entered in any action or proceeding instituted by any party that enjoins,
restricts, or prohibits this Agreement or the complete consummation of the
transactions as contemplated by this Agreement.
(g) Other Agreements. Seller shall have delivered to Buyer a duly
executed copy of each of the Other Agreements.
(h) Board Approval. The Buyer shall have obtained the approval of
its board of directors and its preferred stockholders.
ARTICLE 9
Post-Closing Covenants; Other Agreements.
9.1 Availability of Records. After the Closing, Buyer shall make available
to Seller as reasonably requested by Seller, its agents and representatives, or
as requested by any taxing authority or any governmental authority, all
information, records and documents relating to the Purchased Assets for all
periods prior to Closing and shall preserve all such information, records and
documents until the later of: (a) six (6) years after the Closing; (b) the
expiration of all statutes of limitations for Taxes for periods prior to the
Closing, or extensions thereof applicable to Seller for Tax information, records
or documents; or (c) the required retention period for all government contract
information, records or documents. Buyer shall also make available to Seller, as
reasonably requested by Seller, personnel responsible for preparing or
maintaining information, records and documents, in connection with tax matters,
governmental contracts, litigation or potential litigation, including without
limitation, product liability, general insurance liability and automobile
insurance liability. Prior to destroying any records related to Seller for the
period prior to the Closing, Buyer shall notify Seller ninety (90) days in
advance of any such proposed destruction of its intent to destroy such records,
and Buyer will permit Seller to retain any such records. With respect to any
litigation and claims that are Excluded Liabilities, Buyer shall render all
reasonable assistance that Seller may request in defending such litigation or
22
claim and shall make available to Seller personnel who are most knowledgeable
about the matter in question.
9.2 Use of Trade or Service Marks. Neither Buyer nor any of Buyer's
Affiliates shall use or permit its distributors to use the name "▇▇▇▇▇▇
Laboratories" or any other corporate, trade or service marks or names owned or
used by Seller or Seller's Affiliates, unless such marks or names are
specifically included in the Purchased Assets.
9.3 Tax Matters.
(a) Bifurcation of Taxes. Subject to Section 3.4, Seller and its
Affiliates shall be solely liable for all Taxes imposed upon Seller attributable
to the Purchased Assets for all taxable periods ending on or before the Closing
Date. Buyer and its Affiliates shall be solely liable for any Taxes imposed upon
Buyer attributable to the Purchased Assets for any taxable year or taxable
period commencing after the Closing Date.
(b) Transfer Taxes. Buyer shall be liable for all sales, use,
transfer and documentary taxes and recording and filing fees applicable to the
transfer of the Purchased Assets. If the Purchased Assets are exempt from
taxation, Seller agrees not to collect sales tax with respect to such Purchased
Assets.
(c) Cooperation and Records. After the Closing Date, Buyer and
Seller shall cooperate in the filing of any Tax returns or other Tax-related
forms or reports, to the extent any such filing requires providing each other
with necessary relevant records and documents relating to the Purchased Assets.
Seller and Buyer shall cooperate in the same manner in defending or resolving
any tax audit, examination or tax-related litigation. Buyer and Seller shall
cooperate in the same manner to minimize any transfer, sales and use Taxes.
Nothing in this Section shall give Buyer or Seller any right to review the
other's Tax returns or Tax related forms or reports.
(d) Bulk Sales Laws. Seller and Buyer waive compliance with bulk
sales laws for tax purposes.
9.4 Non-competition by Seller. Seller covenants and agrees that neither it
nor any of its Affiliates or related parties will, directly or indirectly, on
behalf of itself or any other party, sell, market, promote or distribute,
license, research or develop any Thrombolytic Therapy Product for a period of
three (3) years commencing on the Closing Date, or invest in, participate in or
assist any other entity with respect to any of the foregoing. Notwithstanding
the foregoing, nothing in this Section 9.6 shall prevent Seller from (i)
engaging in or consummating any transaction relating to Seller's tissue culture
based urokinase product marketed under the brand name Abbokinase(R); (ii)
acquiring a third party that derives 10% or less of its annual net sales from
the development, sale, marketing, promotion or distribution of any Thrombolytic
Therapy Product; or (iii) engaging in research, developing, selling, marketing,
promoting and/or distributing any product that may be used on an off-label basis
as a Thrombolytic Therapy Product, provided that any such research, development,
promoting and marketing is not intended for use of the product as a Thrombolytic
Therapy Product.
9.5 Financial Statements. For so long as Seller holds the Preferred Stock
and until the closing of a public offering of the Buyer's equity securities
pursuant to an effective registration
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statement under the Securities Act of 1933, the Buyer shall deliver within 30
days after the end of each quarterly accounting period in each fiscal year,
unaudited statements of income and cash flows of the Buyer and its Subsidiaries
for such quarterly period, and balance sheets of the Buyer and its Subsidiaries
as of the end of such quarterly period. All such statements shall be prepared in
accordance with GAAP, consistently applied, and shall be certified by the chief
financial officer of the Buyer.
9.6 Compliance with Laws. Buyer shall comply in all respects with the
requirements of all federal, state, and local laws, rules, regulations,
ordinances and orders applicable to or pertaining to its property or business
operations, where any such non-compliance, individually or in the aggregate
could reasonably be expected to have a material adverse effect on the condition
(financial or otherwise) or business prospects of Buyer or result in an
Encumbrance upon any of its property.
9.7 Post-Closing Delivery. Seller agrees to store the tangible Purchased
Assets in its facilities for the benefit of Buyer for 60 days after Closing.
Buyer agrees to arrange for physical delivery to Buyer of the tangible Purchased
Assets in Seller's possession within such 60 day period. Buyer and Seller
acknowledge that title and risk of loss with respect to all Purchased Assets
shall pass to Buyer at Closing. Seller agrees to use commercially reasonable
efforts to preserve and maintain the tangible Purchased Assets in good working
condition and to protect such Purchased Assets against spoilage, deterioration
and other wasting.
ARTICLE 10
Indemnification and Survival.
10.1 Indemnification by Seller.
(a) Seller's Indemnity. To the extent set forth in this Section
10.1, Seller agrees to indemnify and hold harmless Buyer and its Affiliates at
all times against and in respect of all losses, liabilities, costs and expenses
(including, without limitation, reasonable attorneys' fees) (collectively,
"Losses") which Buyer or its Affiliates may suffer or incur to the extent
arising out of or based upon (i) any breach of any of the representations and
warranties of Seller set forth in this Agreement, (ii) any breach of any of the
covenants and agreements of Seller set forth in this Agreement, (iii) the
production, development, trial, research, marketing use, or distribution of the
Products prior to the Closing Date, or (iv) any Excluded Liability.
(b) Limitations on Seller's Indemnity.
(i) Seller shall not be liable for any Loss described in
Section 10.1(a)(i) until the aggregate of all such Losses for which
Seller is liable are in excess of $250,000. Notwithstanding the
foregoing, Seller shall not indemnify or hold Buyer or its
Affiliates harmless against any such individual Loss unless such
Loss exceeds Fifty Thousand Dollars ($50,000) and no such individual
Loss of less than Fifty Thousand Dollars ($50,000) (exclusive of
attorneys' fees) shall be considered in determining whether the
aggregate Losses exceed the deductible set forth in the preceding
sentence.
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(ii) Seller's aggregate liability for the Losses described in
Section 10.1(a)(i) shall not exceed Five Million Dollars
($5,000,000); provided, however, that upon Buyer's satisfaction of
all of its Obligations (as defined in the Promissory Note) under the
Promissory Note, Seller's liability for the Losses described in
Section 10.1(a)(i) shall not exceed an aggregate of Twenty Million
Dollars ($20,000,000).
(iii) Neither Seller nor Seller's Affiliates shall have
liability to Buyer or Buyer's Affiliates for any consequential,
incidental or punitive damages, and Losses indemnifiable hereunder
shall not include such damages.
(c) Notice of Claims. Buyer shall promptly notify Seller in writing
of all matters which may give rise to the right to indemnification hereunder, it
being understood that if Seller does not receive notice of any matter known to
Buyer and as to which Buyer or its Affiliates are entitled to indemnification
hereunder in time to contest the determination of any such liability which is
susceptible to being successfully contested, Seller shall not be obligated to
indemnify Buyer or its Affiliates with respect thereto. Buyer shall not admit
any liability with respect to, or settle, compromise or discharge, any such
matter covered by this Section 10.1 without Seller's prior written consent
(which shall not be unreasonably withheld or delayed). Seller shall have the
right, with the consent of Buyer (which shall not be unreasonably withheld or
delayed), to settle all indemnifiable matters related to claims by third parties
which are susceptible to being settled, and to defend (without the consent of
Buyer) through counsel of its own choosing, at its own expense, any action which
may be brought by a third party in connection therewith; provided, however, that
Buyer shall have the right to have its counsel participate fully in such defense
at its own expense. Buyer and Seller shall keep each other informed of all
settlement negotiations with third parties and of the progress of any litigation
with third parties. Buyer and Seller shall permit each other reasonable access
to books and records and otherwise cooperate with all reasonable requests of
each other in connection with any indemnifiable matter resulting from a claim by
a third party.
10.2 Indemnification by Buyer.
(a) Buyer agrees to indemnify and hold harmless Seller and Seller's
Affiliates at all times against and in respect of Losses which Seller or its
Affiliates may suffer or incur to the extent arising out of or based upon: (i)
any breach of any of the representations, warranties, covenants and agreements
of Buyer set forth in this Agreement or any of the Other Agreements; (ii) any
Assumed Liability; or (iii) the manufacture, sale or use of Products or
Purchased Assets after the Closing Date.
(b) Limitations on Buyer's Indemnity.
(i) Buyer shall not be liable for any Loss described in
Section 10.2(a)(i) until the aggregate of all such Losses for which
Buyer is liable are in excess of $250,000. Notwithstanding the
foregoing, Buyer shall not indemnify or hold Seller or its
Affiliates harmless against any such individual Loss unless such
Loss exceeds Fifty Thousand Dollars ($50,000) and no such individual
Loss of less than Fifty Thousand Dollars ($50,000) (exclusive of
25
attorneys' fees) shall be considered in determining whether the
aggregate Losses exceed the deductible set forth in the preceding
sentence.
(ii) Buyer's aggregate liability for the Losses described in
Section 10.1(a)(i) shall not exceed Five Million Dollars
($5,000,000); provided, however, that upon Buyer's satisfaction of
all of its Obligations (as defined in the Promissory Note) under the
Promissory Note, Buyer's liability for the Losses described in
Section 10.2(a)(i) shall not exceed an aggregate of Twenty Million
Dollars ($20,000,000)
(iii) Neither Buyer nor Buyer's Affiliates shall have
liability to Seller or Seller's Affiliates for any consequential,
incidental or punitive damages, and Losses indemnifiable hereunder
shall not include such damages.
(c) Notice of Claims. Seller shall promptly notify Buyer in writing
of all matters which may give rise to the right to indemnification hereunder, it
being understood that if Buyer does not receive notice of any matter known to
Seller and as to which Seller or its Affiliates are entitled to indemnification
hereunder in time to contest the determination of any such liability which is
susceptible to being successfully contested, Buyer shall not be obligated to
indemnify Seller or its Affiliates with respect thereto. Seller shall not admit
any liability with respect to, or settle, compromise or discharge any such
matter covered by this Section 10.2 without Buyer's prior written consent (which
shall not be unreasonably withheld or delayed). Buyer shall have the right, with
the consent of Seller (which shall not be unreasonably withheld or delayed), to
settle all indemnifiable matters related to claims by third parties which are
susceptible to being settled, and to defend (without the consent of Seller)
through counsel of its own choosing, at its own expense, any action which may be
brought by a third party in connection therewith; provided, however, that Seller
shall have the right to have its counsel participate fully in such defense at
its own expense. Buyer and Seller shall keep each other informed of all
settlement negotiations with third parties and of the progress of any litigation
with third parties. Buyer and Seller shall permit each other reasonable access
to books and records and otherwise cooperate with all reasonable requests of
each other in connection with any indemnifiable matter resulting from a claim by
a third party.
10.3 Survival. Except as otherwise expressly provided for herein, the
representations and warranties of the parties contained herein shall survive the
Closing for a period of two (2) years at which time they shall expire; provided,
however, that claims previously made in writing with respect to breaches of such
representations and warranties shall be indemnifiable in accordance with this
Article 10. No claim may be made based upon an alleged breach of any of such
representations or warranties whether for indemnification in respect thereof or
otherwise, unless written notice of such claim, in reasonable detail, is given
to Buyer or to Seller, as the case may be, within said two year period following
the Closing. The indemnification obligations of Seller for Excluded Liabilities
shall survive the Closing indefinitely.
10.4 Exclusive Remedy. From and after the Closing, the rights and remedies
set forth in this Article 10 shall constitute the sole and exclusive rights and
remedies of Buyer and its Affiliates and Seller and its Affiliates with respect
to this Agreement, the events giving rise to this Agreement and the transactions
contemplated hereby.
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10.5 Net Losses and Subrogation.
(a) Notwithstanding anything contained herein to the contrary, the
amount of any Losses incurred or suffered by a Person entitled to
indemnification hereunder (an "Indemnified Person") shall be calculated after
giving effect to: (i) any insurance proceeds received by the Indemnified Person
(or any of its Affiliates) with respect to such Losses; (ii) any Tax benefit
actually realized by the Indemnified Person (or any of its Affiliates) arising
from the facts or circumstances giving rise to such Losses; and (iii) any
recoveries obtained by the Indemnified Person (or any of its Affiliates) from
any other third party. Each Indemnified Person shall exercise its reasonable
best efforts to obtain such proceeds, benefits and recoveries. If any such
proceeds, benefits or recoveries are received by an Indemnified Person (or any
of its Affiliates) with respect to any Losses after the Indemnified Person (or
any Affiliate) has received the benefit of any indemnification hereunder with
respect thereto, the Indemnified Person (or such Affiliate) shall pay to the
Person providing the indemnification (the "Indemnifying Person") the amount of
such proceeds, benefits or recoveries (up to the amount of the Indemnifying
Person's payment).
(b) Upon making any payment to an Indemnified Person in respect of
any Losses, the Indemnifying Person will, to the extent of such payment, be
subrogated to all rights of the Indemnified Person (and its Affiliates) against
any third party in respect of the Losses to which such payment relates. Such
Indemnified Person (and its Affiliates) and Indemnifying Person will execute
upon request all instruments reasonably necessary to evidence or further perfect
such subrogation rights.
10.6 Insurance. Buyer shall obtain and keep in force during the term of
its indemnity obligations to Seller under this Agreement and the Other
Agreements insurance policies from an insurance company with an A.M. Best rating
of A++ or A+ (superior) providing the following minimum levels of coverage:
general comprehensive liability, including product liability, insurance covering
each occurrence of bodily injury and property damage in an amount of not less
than Five Million Dollars ($5,000,000) per occurrence and not less than Ten
Million Dollars ($10,000,000) in the aggregate. Buyer shall (a) cause the
insurer to endorse the insurance policy to provide for written notification to
Seller by the insurer not less than thirty (30) days prior to cancellation,
expiration or modification and (b) name Seller as an additional insured on the
insurance policy. Buyer shall furnish Seller with a certificate of insurance
evidencing compliance with this Section 10.6 and referencing this Agreement
within ten (10) days of the Closing Date or, in the event of insurance renewal,
within ten (10) days of such renewal.
ARTICLE 11
Termination.
11.1 Termination of Agreement. This Agreement may be terminated at any
time prior to the Closing Date with the mutual written consent of Buyer and
Seller.
11.2 Automatic Termination. This Agreement shall terminate automatically
if the Closing Date shall not have occurred on or before the 30th day after the
date of this Agreement, or such later date as shall have been agreed to by the
parties hereto.
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ARTICLE 12
Miscellaneous.
12.1 Assignment. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns;
provided, however, that no assignment shall be made by either party without the
prior express written consent of the other party. Notwithstanding the foregoing,
either party may assign its rights and obligations under this Agreement without
such consent to an Affiliate or in connection with a sale, merger or other
transaction involving substantially all of its assets of the business relating
to the Purchased Assets.
12.2 No Press Release Without Consent. No press release related to this
Agreement or the transactions contemplated herein, or other announcement to the
customers or suppliers of Seller will be issued without the joint approval of
Seller and Buyer, except: (a) any public disclosure which Seller or Buyer in its
good faith judgment believes is required by law or by any stock exchange or
interdealer quotation system on which its securities are listed or quoted (in
which case the party making the disclosure will use its reasonable best efforts
to consult with the other party prior to making any such disclosure) and (b)
that Seller may make an announcement related to this Agreement and the
transactions contemplated hereby to its employees.
12.3 Confidentiality. Except as required by applicable law, all
information related to the Products supplied to Buyer by Seller shall be
maintained in strict confidence by Buyer and its employees, advisors, directors,
officers and agents, and all information supplied to Seller by Buyer in
connection with this Agreement shall be maintained in strict confidence by
Seller and its employees, advisors, directors, officers and agents, in each case
in accordance with the Confidentiality Agreement dated as of May 6, 2005 between
Buyer and Seller (the "Confidentiality Agreement"), and in the event that this
Agreement is terminated, all written materials relating thereto shall be
returned to Seller or Buyer, as the case may be, or destroyed as provided in the
Confidentiality Agreement and Buyer and Seller shall each deliver an officer's
certificate to the other certifying as to such return or destruction. In such
event, Buyer and Seller and their employees, advisors and agents shall make no
further use of such information whatsoever. Notwithstanding the foregoing, as
necessary, Buyer may disclose any information regarding the Products to its
existing and prospective lenders, investors, partners and agents; provided,
however, that upon completion of the Transfer of Manufacturing Technology, the
only disclosure that Buyer may provide regarding Seller is that it has acquired
the Products from Seller (except as additional disclosure may be required by
applicable law). Notwithstanding anything to the contrary in this Agreement, the
Other Agreements or the Confidentiality Agreement, Buyer agrees that Seller
shall be permitted to disclose information regarding Buyer and the transactions
contemplated hereby to the extent necessary to assign an undivided one-half
interest in US Patent No. 5,260,872 to a third party, in connection with any
sale of Seller's tissue culture based urokinase product marketed under the brand
name Abbokinase(R). After the Closing, Seller will treat all confidential
information relating to the Purchased Assets as confidential information of
Buyer subject to the restrictions contained in the Confidentiality Agreement.
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12.4 Expenses. Subject to Section 9.3(b), each party shall bear its own
expenses with respect to the transactions contemplated by this Agreement.
12.5 Severability. Each of the provisions contained in this Agreement
shall be severable, and the unenforceability of one shall not affect the
enforceability of any others or of the remainder of this Agreement.
12.6 Entire Agreement. This Agreement may not be amended, supplemented or
otherwise modified except by an instrument in writing signed by all of the
parties hereto. This Agreement, the Other Agreements and the Confidentiality
Agreement contain the entire agreement of the parties hereto with respect to the
transactions covered hereby, superseding all negotiations, prior discussions and
preliminary agreements made prior to the date hereof.
12.7 No Third Party Beneficiaries. This Agreement is for the sole benefit
of the parties hereto and their permitted assigns and nothing herein, express or
implied (including Article 10), shall give or be construed to give to any
Person, other than the parties hereto and such permitted assigns, any legal or
equitable rights hereunder.
12.8 Waiver. The failure of any party to enforce any condition or part of
this Agreement at any time shall not be construed as a waiver of that condition
or part, nor shall it forfeit any rights to future enforcement thereof. The
provisions hereof may be waived by either party only by express written consent
of such party.
12.9 Governing Law. This Agreement shall be construed and enforced in
accordance with and governed by the laws of the State of Delaware without regard
to the conflicts of laws provisions thereof.
12.10 Headings. The headings of the sections and subsections of this
Agreement are inserted for convenience only and shall not be deemed to
constitute a part hereof.
12.11 Counterparts. The parties may execute this Agreement in one or more
counterparts, and each fully executed counterpart shall be deemed an original.
12.12 Further Documents. Each of Buyer and Seller will, and will cause its
respective Affiliates to, at the request of another party, execute and deliver
to such other party all such further instruments, assignments, assurances and
other documents as such other party may reasonably request in connection with
the carrying out of this Agreement and the transactions contemplated hereby.
12.13 Notices. All communications, notices and consents provided for
herein shall be in writing and be given in person or by means of telex,
facsimile or other means of wire transmission (with request for assurance of
receipt in a manner typical with respect to communications of that type), by
overnight courier or by mail, and shall become effective: (a) on delivery if
given in person; (b) on the date of transmission if sent by telex, facsimile or
other means of wire transmission; (c) one (1) business day after delivery to the
overnight service; or (d) four (4) business days after being mailed, with proper
postage and documentation, for first-class registered or certified mail,
prepaid.
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Notices shall be addressed as follows:
If to Buyer, to: ImaRx Therapeutics
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇
Facsimile Number: ▇▇▇-▇▇▇-▇▇▇▇
with copies to: DLA ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇ ▇. Steel
Facsimile Number: ▇▇▇-▇▇▇-▇▇▇▇
If to Seller, to: ▇▇▇▇▇▇ Laboratories
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇, Department 364
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: General Counsel
Facsimile Number: (▇▇▇) ▇▇▇-▇▇▇▇
with copies to: ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: R. ▇▇▇▇▇ ▇▇▇▇, P.C.
▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
Facsimile Number: (▇▇▇) ▇▇▇-▇▇▇▇
provided, however, at the time of mailing or within three business days
thereafter there is or occurs a labor dispute or other event that might
reasonably be expected to disrupt the delivery of documents by mail, any
communication, notice or consent provided for herein shall be given in person or
by means of telex, facsimile or other means of wire transmission or by overnight
courier, and further provided that if any party shall have designated a
different address by notice to the others, then to the last address so
designated.
12.14 Schedules. Buyer and Seller agree that any disclosure in any
Schedule attached hereto shall (a) constitute a disclosure under each other
applicable Schedule referred to herein for all purposes of this Agreement,
whether or not such disclosure is specifically referenced within such other
Schedule, if it is reasonably apparent on the face of the disclosure that it is
applicable to any particular Schedule, and (b) not establish any threshold of
materiality. Seller or Buyer may, from time to time prior to or at the Closing,
by notice in accordance with the terms of this Agreement, supplement or amend
any Schedule, including one or more supplements or amendments to correct any
matter which would constitute a breach of any representation, warranty, covenant
or obligation contained herein. No such supplemental or amended Schedule shall
be deemed to cure any breach for purposes of Section 8.1(b) or
30
Section 8.2(b). If, however, the Closing occurs, any such supplement and
amendment will be effective to cure and correct for all other purposes any
breach of any representation, warranty, covenant or obligation which would have
existed if Seller or Buyer had not made such supplement or amendment, and all
references to any Schedule hereto which is supplemented or amended as provided
in this Section 12.14 shall for all purposes at and after the Closing be deemed
to be a reference to such Schedule as so supplemented or amended.
12.15 Construction. The language in all parts of this Agreement shall be
construed, in all cases, according to its fair meaning. The parties acknowledge
that each party and its counsel have reviewed and revised this Agreement and
that any rule of construction to the effect that any ambiguities are to be
resolved against the drafting party shall not be employed in the interpretation
of this Agreement. Words in the singular shall be deemed to include the plural
and vice versa and words of one gender shall be deemed to include the other
gender as the context requires. The terms "hereof," "herein," and "herewith" and
words of similar import shall, unless otherwise stated, be construed to refer to
this Agreement as a whole (including all of the Schedules and Exhibits hereto)
and not to any particular provision of this Agreement. Article, Section, Exhibit
and Schedule references are to the Articles, Sections, Exhibits, and Schedules
to this Agreement unless otherwise specified. Unless otherwise stated, all
references to any agreement shall be deemed to include the exhibits, schedules
and annexes to such agreement. The word "including" and words of similar import
when used in this Agreement shall mean "including, without limitation," unless
the context otherwise requires or unless otherwise specified. The word "or"
shall not be exclusive. Unless otherwise specified in a particular case, the
word "days" refers to calendar days. References herein to this Agreement or any
Other Agreement shall be deemed to refer to this Agreement or such Other
Agreement as of the date of such agreement and as it may be amended thereafter,
unless otherwise specified.
* * * * * * * * * * *
31
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective duly authorized officers as of the date first above
written.
IMARX THERAPEUTICS, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇
---------------------------
Name: ▇▇▇▇ ▇▇▇▇▇
Title: President and CEO
▇▇▇▇▇▇ LABORATORIES
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President, Global
Licensing/New Business Development
SCHEDULE 1.1 - KNOWLEDGE PERSONS
SELLER
1. ▇▇▇ ▇▇▇▇
2. ▇▇▇▇ ▇▇▇▇▇▇▇▇
3. ▇▇▇▇ ▇▇▇▇▇▇
4. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
5. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
6. ▇▇▇ ▇▇▇▇▇▇▇▇▇▇
7. ▇▇▇▇▇▇ ▇▇▇▇▇▇
8. ▇▇▇▇ ▇▇▇▇▇
9. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
BUYER
1. ▇▇▇▇ ▇▇▇▇▇
2. ▇▇▇▇▇ ▇▇▇▇▇▇
3. ▇▇▇▇ ▇▇▇▇▇
4. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
5. ▇▇▇▇▇ ▇▇▇▇▇▇
6. ▇▇▇▇ ▇▇▇▇
SCHEDULE 2.1(a)(i) - INVENTORY
1. Recombinant Prourokinase and Recombinant Urokinase drug substance and drug
product inventory. Note: All inventory is beyond established expiration dating.
CODE DESCRIPTION NO. OF LOTS AMOUNT
----------- --------------- ----------- ---------------------
36718 Recombinant 25 163 Liters @
Prourokinase ~ 932,000 IU/mL
Bulk Drug Substance
RU 10 Finished rproUK 1 2,367 vials (1.65 x
Lot#442753A 10(6) IU/vial)
30493 Recombinant 4 716.5 x10(6)IU
Urokinase Bulk Drug Substance
RU 18 Recombinant 1 12,500 IU/vial,
Urokinase ~11,000 vials
Formulated Drug
Product
SCHEDULE 2.1(a)(ii) - EQUIPMENT
1. Clot Lysis Timer - Analytical Potency Instrument
SCHEDULE 2.1(b) - TRANSFERRED INTELLECTUAL PROPERTY
PATENTS
U.S. PATENT No. 5,260,872
Inventors: ▇▇▇▇▇▇▇▇ et al.
Title: Automated Testing System
Issue Date: November 9, 1993
Expiration Date: November 9, 2010
No foreign corresponding patent(s) have been filed.
Seller will assign an undivided one-half interest in this patent to Buyer.
TRADEMARKS
Trademark Country
-------------- -------
Open-Cath-R(R) USA
PROLYSE(R)* USA
* Seller will transfer any rights that it may have in this trademark, but makes
no representation as to its ownership of or rights to this trademark.
SCHEDULE 2.1(c) - CONTRACTS
1. Settlement Agreement between Genentech, Inc. and ▇▇▇▇▇▇ Laboratories,
dated August 10, 1990.
2. License Agreement among Celltech Limited, ▇▇▇▇▇▇ Laboratories and ▇▇▇▇▇▇
International, Ltd., dated August 12, 1994.
3. Agreement between Repligen and ▇▇▇▇▇▇ Laboratories dated May 14, 1992.
2.1(d) - GOVERNMENTAL AUTHORIZATIONS
None.
SCHEDULE 2.1(f) - PRODUCT APPLICATIONS
1. Investigational New Drug Application 4024.
2. Investigational New Drug Application 4345.
3. Investigational New Drug Application 5344.
IND
NUMBER DATE IND FILED SUPPLEMENT DESCRIPTION
------ ----------------- -----------------------------
4024 June 12, 1991 Recombinant Urokinase for
Peripheral Arterial Occlusion
4345 December 27, 1991 Recombinant Urokinase Open-
Cath for Catheter Clearance
5344 November 29, 1993 Recombinant Pro-Urokinase for
Stroke
4. The following supplements to IND 4024 have been submitted to the Food and
Drug Administration (the "FDA").
DATE
SUPPLEMENT SUPPLEMENT TYPE OF SUPPLEMENT
NUMBER SUBMITTED SUPPLEMENT DESCRIPTION
---------- ------------- ------------- --------------------
78 September 8, Annual Report Clinical Report
2000
81 June 19, 2002 Annual Report Manufacturing Report
83 June 20, 2003 Letter IND Inactivation
5. The following supplements to IND 4345 have been submitted to the Food and
Drug Administration (the "FDA").
DATE
SUPPLEMENT SUPPLEMENT TYPE OF SUPPLEMENT
NUMBER SUBMITTED SUPPLEMENT DESCRIPTION
---------- -------------- ------------- ---------------------
38 April 25, 2001 Annual Report 2 Volume - Clinical &
Manufacturing Report
54 April 26, 2002 Annual Report Clinical Report M99-
134
SCHEDULE 2.1(f) - PRODUCT APPLICATIONS (CONT.)
6. The following supplements to IND 5344 have been submitted to the Food and
Drug Administration (the "FDA").
DATE
SUPPLEMENT SUPPLEMENT TYPE OF SUPPLEMENT
NUMBER SUBMITTED SUPPLEMENT DESCRIPTION
---------- ------------- ------------- --------------------
63 February 18, Annual Report Clinical Report
2000
70 January 30, Annual Report Clinical Investigator
2001 Brochure
75 June 20, 2003 Letter IND Inactivation
SCHEDULE 2.1(h) - RAW MATERIALS
1. SDU 4.1-9 Master Cell Bank & Working Cell Banks
CODE DESCRIPTION NO. OF LOTS AMOUNT
----- ---------------- ----------- ----------
22453 Recombinant 1 183 vials
Urokinase Master
Cell Bank
21320 Recombinant 1 38 vials
Urokinase
Working Cell
Bank - A
24921 Recombinant 1 94 ampules
Urokinase
Working Cell
Bank - B
2. WHO urokinase reference standards
CODE DESCRIPTION INVENTORY
----- ---------------- -----------
87594 High Molecular 9 vials
Weight Urokinase
90642 Low Molecular 9 vials
Weight Urokinase
3. Plasminogen used for analytical assay and rUK conversion
CODE DESCRIPTION INVENTORY
----- ---------------- -----------
96-361KH00 Assay Conversion 1200 vials
29901 RproUK 527 grams
Lot# 04-216- Conversion
MI
SCHEDULE 2.3 -- ASSUMED LIABILITIES
Those liabilities related to the Contracts on Schedule 2.1(c)
SCHEDULE 5.3 - TITLE
None.
SCHEDULE 5.4 - INTELLECTUAL PROPERTY
(a)
TRADEMARKS
Trademark Country
------------- --------
Open-Cath-R(R) USA
PROLYSE(R)* USA
* Seller is providing no representations or warranties to this trademark.
PATENTS
Patent Inventors Title
-------------- ------------- -------------------------------
U.S. Patent No. Gillies et al. Vector and Method for Achieving
5,665,578 High Level of Expression in
Eukaryotic Cells
U.S. Patent No. Lo et al. Expression Induction Method
5,741,682
U.S. Patent No. ▇▇▇▇▇▇▇▇ et Automated Testing System
5,260,872** al.
** Seller assigns an undivided one-half interest in this patent to Buyer
Seller has or will be transferring the remaining one-half interest in U.S.
Patent No. 5,260,872 to a third party.
(c) See Settlement Agreement between Genentech, Inc. and ▇▇▇▇▇▇ Laboratories,
dated August 10,1990.
See License Agreement among Celltech Limited, ▇▇▇▇▇▇ Laboratories and
Abbot International, Ltd., dated August 12, 1994.
(d) None.
(e) None.
(f) None.
(g) Seller has or will be transferring the remaining one-half interest in U.S.
Patent No. 5,260,872 to a third party.
SCHEDULE 5.7 - LITIGATION
None.
SCHEDULE 5.8 - SELLER CONSENTS
1. License Agreement among Celltech Limited, Seller and ▇▇▇▇▇▇ International,
Ltd., dated August 12, 1994.
SCHEDULE 5.13 - GOVERNMENTAL AUTHORIZATIONS
None.
SCHEDULE 6.4 - SUBSIDIARIES
ImaRx Oncology, Ltd.
ImaRx Europe Limited
SCHEDULE 6.5 - TITLE
Buyer will file a UCC-1 Financing Statement encompassing substantially all of
the assets of the Buyer in connection with the $4 million Secured Promissory
Notes issued on September 29, 2005.
SCHEDULE 6.6 - BUYER'S INTELLECTUAL PROPERTY
None.
SCHEDULE 6.8 - CONSENT
Approval by the Buyer's Board of Directors of the Asset Purchase Agreement,
Issuance of 1 million shares of Series E Preferred Stock, and Issuance of the
$15 million Secured Promissory Note.
Consent and Waiver of various rights by holders of 50 % of the Series B
Preferred Stock, holders of 50 % of the Series C Preferred Stock, and holders of
75 % of the Series A Preferred Stock and Series D Preferred Stock voting
together as a single class.
SCHEDULE 6.15 - TRANSACTIONS WITH AFFILIATE
The Company leases a 6,200 square feet facility located at ▇▇▇▇ ▇. ▇▇▇▇ ▇▇.,
▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, as the headquarters and lab facility that is subject to a
six-year lease at approximately $58,000 per year. This facility is owned by a
partnership which includes certain employees and stockholders, including ▇▇▇▇
▇▇▇▇▇, President and CEO; ▇▇▇▇ ▇▇▇▇▇, Director; ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Vice President
Development; and ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Vice President Research. The Company believes
the terms of this lease which provide for a rental rate of $9.43 per square foot
per year, triple-net, are fair and equivalent to those that might be obtained
from a disinterested third party on an arm's length basis. The lease has a six
year term which expires in October 2008.
EXHIBIT A
▇▇▇▇ OF SALE, CONVEYANCE AND ASSIGNMENT
THIS ▇▇▇▇ OF SALE, CONVEYANCE AND ASSIGNMENT (this "Instrument") dated as
of September 30, 2005, is made by and between ▇▇▇▇▇▇ Laboratories, a corporation
organized and existing under the laws of the State of Illinois and having a
principal place of business at ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (herein referred to
as "Seller") and ImaRx Therapeutics, Inc., a corporation organized and existing
under the laws of Delaware and having a principal place of business at ▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇ (herein referred to as "Buyer") and is delivered pursuant to, and
subject to the terms of, that certain Asset Purchase Agreement, dated as of
September 30, 2005 (the "Asset Purchase Agreement"), by and between Seller and
Buyer.
The terms of the Asset Purchase Agreement are incorporated herein by
reference, and capitalized terms not otherwise defined in this Instrument shall
have the meanings given to such terms in the Asset Purchase Agreement.
NOW, THEREFORE, subject to the terms and conditions of the Asset Purchase
Agreement and for the consideration set forth therein, Buyer and Seller each
hereby agrees as follows:
1. Seller does hereby sell, convey, transfer, assign and deliver to Buyer,
all of its right, title and interest in the Purchased Assets.
2. Notwithstanding anything to the contrary in this Instrument, the Asset
Purchase Agreement or in any other document delivered in connection herewith or
therewith, the Purchased Assets subject to this Instrument shall expressly
exclude the Excluded Assets.
3. From time to time, as and when reasonably requested by Buyer, Seller
shall execute and deliver all such documents and instruments and shall take, or
cause to be taken, all such further or other actions as Buyer may reasonably
deem necessary or desirable to more effectively sell, transfer, convey and
assign to Buyer all of Seller's right, title and interest in the Purchased
Assets subject to this Instrument.
4. This Instrument shall be governed by and construed in accordance with
the internal laws of the State of Illinois applicable to agreements made and to
be performed entirely within such State, without regard to the conflicts of laws
principles of such State.
5. To the extent that any provision of this Instrument is inconsistent or
conflicts with the Asset Purchase Agreement, the provisions of the Asset
Purchase Agreement shall control.
* * * * * * * * * * * * * * *
IN WITNESS WHEREOF, this Instrument is duly executed and delivered as of
the date and year first above written.
▇▇▇▇▇▇ LABORATORIES
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------------------
Printed Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President, Global Licensing/New Business
Development
IMARX THERAPEUTICS, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇
-------------------------------------------------
Printed Name: ▇▇▇▇ ▇▇▇▇▇
Title: President and CEO
2
EXHIBIT B
INTELLECTUAL PROPERTY TRANSFER AGREEMENT
This INTELLECTUAL PROPERTY TRANSFER AGREEMENT dated as of September
30, 2005 made by ▇▇▇▇▇▇ Laboratories, a corporation organized and existing under
the laws of the State of Illinois and having a principal place of business at
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (herein referred to as "Assignor") in favor of ImaRx
Therapeutics, Inc., a corporation organized and existing under the laws of
Delaware and having a principal place of business at ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
(herein referred to as "Assignee").
WHEREAS, Assignor owns the patent applications and issued patents
listed on Schedule 1 attached hereto (the "Patents");
WHEREAS, Assignor owns the trademark and trademark registration
listed on Schedule ▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ (▇▇▇ "▇▇▇▇"), and is willing to convey any
rights it may have to the other trademark listed on Schedule 2B hereto (the
"Quitclaim ▇▇▇▇");
WHEREAS, Assignee desires to acquire the Patents, the ▇▇▇▇, any
rights the Assignor may have to the Quitclaim ▇▇▇▇, and any and all goodwill
associated with the ▇▇▇▇ and the Quitclaim ▇▇▇▇;
1) For good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, Assignor hereby transfers, assigns, and otherwise
conveys to Assignee, all of Assignor's right, title, and interest in, to,
and under the following, subject to the limitations described below:
(a) the Patents, including, without limitation, any
continuations, divisions, continuations-in-part, reissues,
reexaminations, extensions or foreign equivalents thereof, and
including the subject matter of all claims that may be obtained
therefrom, and all other corresponding rights that are or may be
secured under the laws of the United States, now or hereafter in
effect;
(b) each of the ▇▇▇▇ and the Quitclaim ▇▇▇▇, including,
without limitation, any renewals and extensions thereof, and all
other corresponding rights that are or may be secured under the laws
of the United States, now or hereafter in effect;
(c) the goodwill of the business symbolized by and associated
with the ▇▇▇▇ and the Quitclaim ▇▇▇▇; and
(d) all proceeds of the assets transferred pursuant to
paragraph (1), (2), and (3), (collectively, the "Transferred IP",
including, without limitation, the right to ▇▇▇ for, and collect on,
(i) any claim by Assignor against third parties for past, present,
or future infringement of the Patents, and (ii) , any claim by
Assignor against third parties for past, present, or future
infringement, dilution, disparagement or other unauthorized use of
the ▇▇▇▇ or the Quitclaim ▇▇▇▇, and (iii) any income, royalties or
payments due or payable and related exclusively to the Transferred
IP as of the date of this assignment or thereafter.
2) Notwithstanding the foregoing, Assignee acknowledges that Assignee will
become a co-owner of the Patents and will not have exclusive ownership
rights of the Patents. Assignee expressly acknowledges that Assignor has
granted, or will have the right to grant, co-ownership rights to the
Patents to a third party. Assignor and Assignee hereby agree to the
following covenants with respect to the Patents, and Assignor and Assignee
hereby agree that each of them shall require that any assignee or
successor in interest of Assignor's or Assignee's interest in the Patents
be bound by such covenants.
a) Maintenance of the Patents. Each of the co-owners of the Patents
(the "Co-Owners") shall act cooperatively to maintain the Patents
and shall pay one-half of all maintenance fees and other costs
required to keep the Patents in full force and effect.
b) Infringement by Third Parties. The Co-Owners shall consult with each
other prior to filing any action alleging that a third party has
infringed or misappropriated the right of the Co-Owners under the
Patents. The Co-Owners may agree to jointly pay for the suit or
otherwise share such costs and any resulting liability or monetary
judgment. Except as provided below, if no agreement is reached
within sixty (60) days, the Co-Owner wishing to file such action may
do so, but shall pay the entire costs of such action and shall
indemnify and hold harmless the other Co-Owner from any claim, suit
or proceeding (including, but not limited to, counterclaims) against
such Co-Owner arising from the action brought by the other Co-Owner.
If only one Co-Owner decides to proceed with an action and it
prevails, that Co-Owner shall be entitled to retain the entire
amount of any monetary award arising out of that action. To be
eligible for the indemnity under this section, a Co-Owner must give
prompt written notice of any claim, suit or proceeding filed or
threatened against it and let the indemnifying Co-Owner control the
defense. If only one Co-Owner files an action as provided in this
section, the other Co-Owner agrees to provide reasonable assistance
in such action so long as the suing party pays its out-of-pocket
expenses.
c) Declaratory Judgment Actions. In the event that a declaratory
judgment action alleging invalidity of any of the Patents, or that
use or practice of any of the claims in the Patents infringes the
patent, copyright or trade secrets of others, shall be brought
against either or both of the Co-Owners, the Co-Owners shall
cooperate in good faith to determine how best to defend such action.
If the Co-Owners cannot agree on how to defend any such action,
either Co-Owner may on its own defend any action brought against it,
provided that no settlement, consent judgment or other voluntary
final disposition may be entered into without the consent of the
other Co-Owner, which consent shall not be unreasonably withheld.
3) Assignor hereby permits the Commissioner of Patents and Trademarks to
record Assignee as the assignee and owner of the Patents and of the ▇▇▇▇
and Assignor hereby consents to such recordation.
Assignor shall upon the request of Assignee execute such documents
and take such other actions as Assignee may reasonably request to evidence and
perfect the rights of Assignee in the property conveyed to it pursuant to this
Agreement. The Assignor and Assignee have caused this Intellectual Property
Transfer Agreement to be duly executed and authorized as of the date hereof.
▇▇▇▇▇▇ LABORATORIES
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President, Global Licensing/New
Business Development
IMARX THERAPEUTICS, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇
Title: President and CEO
SCHEDULE 1
PATENTS
U.S. Patent No. 5,260,872, issued November 8, 1993, entitled Automated Testing
System.
SCHEDULE 2A
▇▇▇▇
Open-Cath-R(R)- registered in the United States of America on June 28, 2005,
Reg. No. 2964295.
SCHEDULE 2B
QUITCLAIM ▇▇▇▇
Prolyse (to the extent the Assignor has any rights to such ▇▇▇▇)- registered in
the United States of America on August 25, 1998, Reg. No. 2184286 and cancelled
on May 28, 2005.
Exhibit C
Previous Filed as Exhibit No. 10.8
Exhibit D
Previously Filed as Exhibit No. 10.9 to Registration Statement on Form S-1 filed
on May 19, 2006
EXHIBIT E
CERTIFICATE OF DESIGNATION OF
RIGHTS, PREFERENCES AND PRIVILEGES OF
SERIES E PREFERRED STOCK
OF IMARX THERAPEUTICS, INC.
Pursuant to Section 151(g) of the Delaware General Corporation Law, the
undersigned Secretary of ImaRx Therapeutics, Inc., a Delaware corporation (the
"Corporation") does hereby certify that, pursuant to authority conferred upon
the Board of Directors of the Corporation (the "Board") by the Certificate of
Incorporation of the Corporation, the Board on September 30, 2005 adopted the
following resolutions creating a series of shares of Preferred Stock designated
as "Series E Preferred Stock":
"NOW, THEREFORE BE IT RESOLVED, that pursuant to the authority vested in
the Board by the Certificate of Incorporation, the Board does hereby provide for
the issuance of a series of Preferred Stock of the Corporation, to be designated
"Series E Preferred Stock," and to the extent that the designations, preferences
and relative participating, optional or other special rights, and the
qualifications, limitations and restrictions of the Series E Preferred Stock are
not stated and expressed in the Corporation's Certificate of Incorporation, the
Board does hereby fix and herein state and express such voting powers and the
designations, powers, preferences and relative and other special rights and the
qualifications, limitations and restrictions thereof, as follows (all terms used
herein which are defined in the Certificate of Incorporation shall be deemed to
have the meanings provided therein):
1. Establishment and Designation of Series. There is hereby established a
series of Preferred Stock designated "Series E Preferred Stock" (the "Series E
Preferred Stock"), to consist of an aggregate of one million (1,000,000) shares,
with U.S.$.0001 par value, and to have the preferences, limitations and relative
rights, including voting rights, as set forth herein.
2. Dividends. The holders of the Series E Preferred Stock will be entitled
to participate equally in all dividends payable with respect to the Common
Stock, as, if and when declared by the Board, subject to the dividend preference
of any series of Preferred Stock, on an as-if converted to Common Stock basis.
The provisions of this Section 2 shall not, however, apply to a dividend payable
in Common Stock.
3. Voting Rights.
(a) Except as otherwise required by law or as set forth in
subparagraph (b) below, the Series E Preferred Stock will vote equally with the
shares of Common Stock and not as a separate class, at any annual or special
meeting of stockholders of the Corporation, and may act by written consent in
the same manner as the Common Stock, in either case upon the following basis:
Each holder of shares of Series E Preferred Stock will be entitled to such
number of votes as shall be equal to the whole number of shares of Common Stock
into which such holder's aggregate number of shares of Series E Preferred Stock
are convertible (pursuant to Section 5 hereof) immediately after the close of
business on the record date fixed for such meeting or the effective date of such
written consent.
1
EXHIBIT E
(b) Subject to the rights of any series of Preferred Stock that may
from time to time come into existence, so long as any shares of Series E
Preferred Stock are outstanding, the Corporation shall not, without first
obtaining the approval (by vote or written consent) of the holders of at least
66 2/3% of the outstanding shares of Series E Preferred Stock (voting together
as a separate class on an as-if-converted to Common Stock basis):
(i) alter or change the rights, preferences, or privileges of
the Series E Preferred Stock in a manner that adversely affects the Series E
Preferred Stock;
(ii) increase the authorized number of shares of Common Stock
above 70,000,000 shares or the authorized number of shares of Preferred Stock
above 30,000,000, or decrease the number of authorized shares of Series E
Preferred Stock; or
(iii) amend or waive any provision of the Certificate of
Incorporation or Bylaws of the Corporation in a manner that adversely affects
the Series E Preferred Stock.
4. Liquidation Rights. Upon any liquidation, dissolution, or winding up of
the Corporation, whether voluntary or involuntary, subject to the liquidation
preferences of all other series of preferred stock, the holders of the Series E
Preferred Stock will participate equally with the holders of the Common Stock on
an as-if converted to Common Stock basis with respect to the remaining assets of
the Corporation available for distribution to the shareholders.
5. Conversion. The Holders of the Series E Preferred Stock will have the
following conversion rights with respect to the conversion of the Preferred
Stock into shares of Common Stock (the "Conversion Rights"):
(a) Optional Conversion. Subject to and in compliance with the
provisions of this Section 5, any shares of Series E Preferred Stock may, at the
option of the holder, be converted at any time into fully-paid and nonassessable
shares of Common Stock. The number of shares of Common Stock to which a holder
of Series E Preferred Stock will be entitled upon conversion shall be the
product obtained by multiplying the then effective "Series E Preferred Stock
Conversion Rate" (determined as provided in Section 5(b)), by the number of
shares of Series E Preferred Stock being converted.
(b) Series E Preferred Stock Conversion Rate. The "Original Issue
Price" of each share of Series E Preferred Stock will be $4.00 (as adjusted for
any stock dividends, combinations, splits, recapitalizations and the like with
respect to such shares). The conversion rate in effect at any time for
conversion of the Series E Preferred Stock (the "Series E Preferred Stock
Conversion Rate") shall be the quotient obtained by dividing the Original Issue
Price of the Series E Preferred Stock by the then effective "Series E Preferred
Stock Conversion Price", calculated as provided in Section 5(c).
(c) Series E Preferred Stock Conversion Price. The conversion price
for the Series E Preferred Stock will initially be $4.00 (the "Series E
Preferred Stock Conversion Price"). Such initial Series E Preferred Stock
Conversion Price will be adjusted from time to time in accordance with this
Section 5.
2
EXHIBIT E
(d) Mechanics of Conversion. Each holder of Series E Preferred Stock
who desires to convert the same into shares of Common Stock pursuant to this
Section 5 shall surrender the certificate or certificates therefor, duly
endorsed, at the office of the Corporation or of any transfer agent for the
Series E Preferred Stock, and shall give written notice to the Corporation at
such office that such holder elects to convert the same. Such notice shall state
the number of shares of Series E Preferred Stock being converted. Thereupon, the
Corporation shall promptly issue and deliver at such office to such holder a
certificate or certificates for the number of shares of Common Stock to which
such holder is entitled and shall promptly pay (i) in cash (at the Common
Stock's fair market value determined by the Board in good faith as of the date
of conversion) the value of any fractional share of Common Stock otherwise
issuable to any holder of Series E Preferred Stock. Such conversion shall be
deemed to have been made at the close of business on the date of such surrender
of the certificates representing the shares of Series E Preferred Stock to be
converted, and the person entitled to receive the shares of Common Stock
issuable upon such conversion shall be treated for all purposes as the record
holder or holders of such shares of Common Stock on such date.
(e) Adjustment for Stock Splits and Combinations. If the Corporation
shall at any time or from time to time after the date that the first share of
Series E Preferred Stock is issued (the "Series E Original Issue Date") effect a
subdivision of the outstanding Common Stock without a corresponding subdivision
of the Series E Preferred Stock, the Series E Preferred Stock Conversion Price
in effect immediately before that subdivision shall be proportionately
decreased. Conversely, if the Corporation shall at any time or from time to time
after the Series E Original Issue Date combine the outstanding shares of Common
Stock into a smaller number of shares without a corresponding combination of the
Series E Preferred Stock, the Series E Preferred Stock Conversion Price in
effect immediately before the combination will be proportionately increased. Any
adjustment under this Section 5(e) shall become effective at the close of
business on the date the subdivision or combination becomes effective.
(f) Adjustment for Common Stock Dividends and Distributions. If the
Corporation at any time or from time to time after the Series E Original Issue
Date makes, or fixes a record date for the determination of holders of Common
Stock entitled to receive, a dividend or other distribution payable in
additional shares of Common Stock, in each such event the Series E Preferred
Stock Conversion Price that is then in effect shall be decreased as of the time
of such issuance or, in the event such record date is fixed, as of the close of
business on such record date, by multiplying the Series E Preferred Stock
Conversion Price then in effect by a fraction (i) the numerator of which is the
total number of shares of Common Stock issued and outstanding immediately prior
to the time of such issuance or the close of business on such record date, and
(ii) the denominator of which is the total number of shares of Common Stock
issued and outstanding immediately prior to the time of such issuance or the
close of business on such record date plus the number of shares of Common Stock
issuable in payment of such dividend or distribution; provided, however, that if
such record date is fixed and such dividend is not fully paid or if such
distribution is not fully made on the date fixed therefor, the Series E
Preferred Stock Conversion Price shall be recomputed accordingly as of the close
of business on such record date and thereafter the Series E Preferred Stock
Conversion Price shall be adjusted pursuant to this Section 5(f) to reflect the
actual payment of such dividend or distribution.
3
EXHIBIT E
(g) Adjustment for Reclassification, Exchange and Substitution. If
at any time or from time to time after the Series E Original Issue Date, the
Common Stock issuable upon the conversion of the Series E Preferred Stock is
changed into the same or different number of shares of any class or classes of
stock, whether by recapitalization, reclassification or otherwise (other than an
Acquisition (as defined below) or Asset Transfer (as defined below) or a
subdivision or combination of shares or stock dividend or a reorganization,
merger, consolidation or sale of assets provided for elsewhere in this Section
5), in any such event each holder of Series E Preferred Stock shall have the
right thereafter to convert such stock into the kind and amount of stock and
other securities and property that would have been receivable upon such
recapitalization, reclassification or other change by holders of the maximum
number of shares of Common Stock into which such shares of Series E Preferred
Stock could have been converted immediately prior to such recapitalization,
reclassification or change, all subject to further adjustment as provided herein
or with respect to such other securities or property by the terms thereof. An
"Acquisition" means any consolidation or merger of the Corporation with or into
any other corporation or other entity or person, or any other corporate
reorganization, in which the stockholders of the Corporation immediately prior
to such consolidation, merger or reorganization, own less than 50% of the
Corporation's voting power immediately after such consolidation, merger or
reorganization, or any transaction or series of related transactions to which
the Corporation is a party in which in excess of fifty percent (50%) of the
Corporation's voting power is transferred, excluding any consolidation or merger
effected exclusively to change the domicile of the Corporation. An "Asset
Transfer" means a sale, lease or other disposition of all or substantially all
of the assets of the Corporation.
(h) Reorganizations, Mergers or Consolidations. If at any time or
from time to time after the Series E Original Issue Date, there is a capital
reorganization of the Common Stock or the merger or consolidation of the
Corporation with or into another corporation or another entity or person (other
than an Acquisition or Asset Transfer or a recapitalization, subdivision,
combination, reclassification, exchange or substitution of shares provided for
elsewhere in this Section 5), as a part of such capital reorganization,
provision shall be made so that the holders of the Series E Preferred Stock
shall thereafter be entitled to receive upon conversion of the Series E
Preferred Stock the number of shares of stock or other securities or property of
the Corporation to which a holder of the number of shares of Common Stock
deliverable upon conversion would have been entitled on such capital
reorganization, subject to adjustment in respect of such stock or securities by
the terms thereof. In any such case, appropriate adjustment shall be made in the
application of the provisions of this Section 5 with respect to the rights of
the holders of Series E Preferred Stock after the capital reorganization to the
end that the provisions of this Section 5 (including adjustment of the Series E
Preferred Stock Conversion Price then in effect and the number of shares
issuable upon conversion of the Series E Preferred Stock) shall be applicable
after that event and be as nearly equivalent as practicable.
(i) Sale of Shares Below $4.00 and Series E Preferred Stock
Conversion Price.
(A) If at any time or from time to time after the Series E
Original Issue Date the Corporation issues or sells, or is deemed by the express
provisions of this subsection 5(i) to have issued or sold, Additional Shares of
Common Stock (as defined in subsection 5(i)(D) below), other than as provided in
Sections 5(e), (f), (g) and (h) above, for an
4
EXHIBIT E
Effective Price (as defined in subsection 5(i)(D) below) below both $4.00 and
the then effective Series E Preferred Stock Conversion Price, then the then
existing Series E Preferred Stock Conversion Price shall be reduced, as of the
opening of business on the date of such issue or sale, to a price determined by
multiplying the then effective Series E Preferred Stock Conversion Price by a
fraction (I) the numerator of which shall be (1) the number of shares of Common
Stock deemed outstanding (as defined below) immediately prior to such issue or
sale, plus (2) the number of shares of Common Stock which the aggregate
consideration received (as defined in subsection 5(i)(B)) by the Corporation for
the total number of Additional Shares of Common Stock so issued would purchase
at such Series E Preferred Stock Conversion Price and (II) the denominator of
which shall be the number of shares of Common Stock deemed outstanding (as
defined below) immediately prior to such issue or sale plus the total number of
Additional Shares of Common Stock so issued. For the purposes of the preceding
sentence, the number of shares of Common Stock deemed to be outstanding as of a
given date shall be the sum of (x) the number of shares of Common Stock actually
outstanding, (y) the number of shares of Common Stock into which the then
outstanding shares of Preferred Stock could be converted if fully converted on
the day immediately preceding the given date, and (z) the number of shares of
Common Stock which could be obtained through the exercise or conversion of all
other rights, options and convertible securities outstanding on the day
immediately preceding the given date.
(B) For the purpose of making any adjustment required under
this Section 5(h), the consideration received by the Corporation for any issue
or sale of securities shall (I) to the extent it consists of cash, be computed
at the aggregate amount of cash received by the Corporation, (II) to the extent
it consists of property other than cash, be computed at the fair value of that
property as determined in good faith by the Board, and (III) if Additional
Shares of Common Stock, Convertible Securities (as defined in subsection 5(C)),
or rights or options to purchase either Additional Shares of Common Stock or
Convertible Securities are issued or sold together with other stock or
securities or other assets of the Corporation for a consideration which covers
both, be computed as the portion of the consideration so received that may be
reasonably determined in good faith by the Board to be allocable to such
Additional Shares of Common Stock, Convertible Securities or rights or options.
(C) For the purpose of the adjustment required under this
Section 5(h), if the Corporation issues or sells (I) stock or other securities
convertible into Additional Shares of Common Stock (such convertible stock or
securities being herein referred to as "Convertible Securities") or (II) rights
or options for the purchase of Additional Shares of Common Stock or Convertible
Securities and if the Effective Price of such Additional Shares of Common Stock
is less than the then effective Series E Preferred Stock Conversion Price, the
Corporation shall be deemed to have issued at the time of the issuance of such
rights or options or Convertible Securities the maximum number of Additional
Shares of Common Stock issuable upon exercise or conversion thereof and to have
received as consideration for the issuance of such shares an amount equal to the
total amount of consideration, if any, received by the Corporation for the
issuance of such rights or options or Convertible Securities, plus, in the case
of such rights or options, the minimum amounts of consideration, if any, payable
to the Corporation upon the exercise of such rights or options, plus, in the
case of Convertible Securities, the minimum amounts of consideration, if any
payable to the Corporation (including, without duplication, cancellation of
liabilities or obligations evidenced by such Convertible Securities) upon the
conversion thereof; provided, that if in the case of Convertible Securities the
5
EXHIBIT E
minimum amounts of such consideration cannot be ascertained, but are a function
of antidilution or similar protective clauses, the Corporation shall be deemed
to have received the minimum amount of consideration without reference to such
clauses; provided further, that if the minimum amount of consideration payable
to the Corporation upon the exercise or conversion of rights, options or
Convertible Securities is reduced over time or on the occurrence or
non-occurrence of specified events other than by reason of antidilution
adjustments, the Effective Price shall be recalculated using the figure to which
such minimum amount of consideration is reduced; provided further, that if the
minimum amount of consideration payable to the Corporation upon the exercise or
conversion of such rights, options or Convertible Securities is subsequently
increased, the Effective Price shall be again recalculated using the increased
minimum amount of reconsideration payable to the Corporation upon the exercise
or conversion of such rights, options or Convertible Securities. No further
adjustment of the Series E Preferred Stock Conversion Price as adjusted upon the
issuance of such rights, options or Convertible Securities, shall be made as a
result of the actual issuance of Additional Shares of Common Stock on the
exercise of any such rights or options or the conversion of any such Convertible
Securities. If any such rights or options or the conversion privilege
represented by any such Convertible Securities shall expire without having been
exercised, the Series E Preferred Stock Conversion Price as adjusted upon the
issuance of such rights, options or Convertible Securities shall be readjusted
to the Series E Preferred Stock Conversion Price which would have been in effect
had an adjustment been made on the basis that the only Additional Shares of
Common Stock so issued were the Additional Shares of Common Stock, if any,
actually issued or sold on the exercise of such rights or options or rights of
conversion of such Convertible Securities, and such Additional Shares of Common
Stock, if any, were issued or sold for the consideration actually received by
the Corporation upon such exercise, plus the consideration, if any, actually
received by the Corporation for the granting of all such rights or options,
whether or not exercised, plus the consideration received for issuing or selling
the Convertible Securities actually converted, plus the consideration, if any,
actually received by the Corporation (including, without duplication,
cancellation of liabilities or obligations evidenced by such Convertible
Securities) on the conversion of such Convertible Securities, provided, that
such readjustment shall not apply to prior conversions of Series E Preferred
Stock.
(D) "Additional Shares of Common Stock" shall mean all shares
of Common Stock issued by the Corporation or deemed to be issued pursuant to
this Section 5(h), other than (I) shares of Common Stock issued upon conversion
of Preferred Stock, (II) shares of Common Stock and/or options, warrants or
other Common Stock purchase rights, and the Common Stock issued pursuant to such
options, warrants or other rights (as adjusted for any stock dividends,
combinations, splits, recapitalizations and the like, and net of any repurchases
of such shares or cancellations or exemptions of such options, warrants or other
rights) before or after the Series E Original Issue Date to employees, officers
or directors of, or consultants, advisors, strategic partners, lenders or
creditors to the Corporation or any subsidiary pursuant to stock purchase or
stock option plans or other arrangements that are approved by the Board; and
(III) shares of Common Stock issued to third parties in connection with license
arrangements or other strategic transactions unanimously approved by the Board
of Directors. References to Common Stock in this clause (D) shall mean all
shares of Common Stock issued by the Corporation or deemed to be issued pursuant
to this Section 5(h). The "Effective Price" of Additional Shares of Common Stock
shall mean the quotient determined by dividing the total number of Additional
Shares of Common Stock issued or sold, or deemed to have been issued or
6
EXHIBIT E
sold by the Corporation under this Section 5(h), into the aggregate
consideration received, or deemed to have been received by the Corporation for
such issue under this Section 5(h), for such Additional Shares of Common Stock.
(ii) Certificate of Adjustment. In each case of an adjustment or
readjustment of the Series E Preferred Stock Conversion Price or the number of
shares of Common Stock or other securities issuable upon conversion of the
Series E Preferred Stock, if the Series E Preferred Stock is then convertible
pursuant to this Section 5, the Corporation, at its expense, shall compute such
adjustment or readjustment in accordance with the provisions hereof and prepare
a certificate showing such adjustment or readjustment, and shall mail such
certificate, by first class mail, postage prepaid, to each registered holder of
Series E Preferred Stock at the holder's address as shown in the Corporation's
books. The certificate shall set forth such adjustment or readjustment, showing
in detail the facts upon which such adjustment or readjustment is based,
including a statement of (A) the consideration received or deemed to be received
by the Corporation for any Additional Shares of Common Stock issued or sold or
deemed to have been issued or sold, (B) the Series E Preferred Stock Conversion
Price at the time in effect, (C) the number of Additional Shares of Common Stock
and (D) the type and amount, if any, of other property which at the time would
be received upon conversion of the Series E Preferred Stock.
(iii) Notices of Record Date. Upon (A) any taking by the Corporation
of a record of the holders of any class of securities for the purpose of
determining the holders thereof who are entitled to receive any dividend or
other distribution, or (B) any Acquisition or other capital reorganization of
the Corporation, any reclassification or recapitalization of the capital stock
of the Corporation, any merger or consolidation of the Corporation with or into
any other corporation, or any Asset Transfer, or any voluntary or involuntary
dissolution, liquidation or winding up of the Corporation, the Corporation shall
mail to each holder of Series E Preferred Stock at least ten (10) days prior to
the record date specified therein (or such shorter period approved by a vote or
written consent of a majority of the outstanding Series E Preferred Stock a
notice specifying (I) the date on which any such record is to be taken for the
purpose of such dividend or distribution and a description of such dividend or
distribution, (II) the date on which any such Acquisition, reorganization,
reclassification, transfer, consolidation, merger, Asset Transfer, dissolution,
liquidation or winding up is expected to become effective, and (III) the date,
if any, that is to be fixed as to when the holders of record of Common Stock (or
other securities) shall be entitled to exchange their shares of Common Stock (or
other securities) for securities or other property deliverable upon such
Acquisition, reorganization, reclassification, transfer, consolidation, merger,
Asset Transfer, dissolution, liquidation or winding up.
(iv) Automatic Conversion.
(A) Each share of Series E Preferred Stock shall automatically
be converted into shares of Common Stock, based on the then-effective Series E
Preferred Stock Conversion Price (I) at any time upon the affirmative vote or
written consent of the holders of at least fifty percent (50%) of the
outstanding shares of the Series E Preferred Stock, (II) in the event that there
shall occur a merger or consolidation of the Corporation with or into another
entity as a consequence of which the holder of the Series E Preferred Stock
shall own 50% or less of the equity (on a fully diluted basis) of the surviving
entity of such merger or consolidation
7
EXHIBIT E
than the holders of the Series E Preferred Stock did of the Corporation prior
thereto, or (III) immediately upon the closing of an initial public offering of
the Corporation's Common Stock (an "IPO").
(B) Upon the occurrence of any of the events specified in
Section 5(iv)(A) above, the outstanding shares of Series E Preferred Stock shall
be converted automatically without any further action by the holders of such
shares and whether or not the certificates representing such shares are
surrendered to the Corporation or its transfer agent; provided, however, that
the Corporation shall not be obligated to issue certificates evidencing the
shares of Common Stock issuable upon such conversion unless the certificates
evidencing such shares of Series E Preferred Stock are either delivered to the
Corporation or its transfer agent as provided below, or the holder notifies the
Corporation or its transfer agent that such certificates have been lost, stolen
or destroyed and executes an agreement satisfactory to the Corporation to
indemnify the Corporation from any loss incurred by it in connection with such
certificates. Upon the occurrence of such automatic conversion of the Series E
Preferred Stock, the holders of Series E Preferred Stock shall surrender the
certificates representing such shares at the office of the Corporation or any
transfer agent for the Series E Preferred Stock. Thereupon, there shall be
issued and delivered to such holder promptly at such office and in its name as
shown on such surrendered certificate or certificates, a certificate or
certificates for the number of shares of Common Stock into which the shares of
Series E Preferred Stock surrendered were convertible on the date on which such
automatic conversion occurred, and any declared and unpaid dividends shall be
paid in accordance with the provisions of Section 5(d).
(j) No Fractional Shares and Certificate as to Adjustments. No
fractional shares shall be issued upon the conversion of any share or shares of
Series E Preferred Stock, and the number of shares of Common Stock to be issued
on conversion shall be rounded to the nearest whole share. Whether or not
fractional shares are issuable upon such conversion shall be determined on the
basis of the aggregate number of shares of Series E Preferred Stock each holder
is at the time converting into Common Stock, and the aggregate number of shares
of Common Stock issuable to each such holder upon such conversion.
(k) Reservation of Stock Issuable Upon Conversion. The Corporation
shall at all times reserve and keep available out of its authorized but unissued
shares of Common Stock, solely for the purpose of effecting the conversion of
the shares of Series E Preferred Stock, such number of its shares of Common
Stock that shall from time to time be sufficient to effect the conversion of all
outstanding shares of the Series E Preferred Stock; and if at any time the
number of authorized but unissued shares of Common Stock not otherwise reserved
for issuance shall not be sufficient to effect the conversion of all then
outstanding shares of the Series E Preferred Stock, the Corporation will take
such corporate action that may, in the opinion of its counsel, be necessary to
increase its authorized but unissued shares of Common Stock to such number of
shares as shall be sufficient for such purposes, including without limitation,
engaging in best efforts to obtain the requisite shareholder approval of any
necessary amendment to its Certificate of Incorporation.
(l) Notices. Any notice required by the provisions of this
Certificate of Incorporation shall be in writing and shall be deemed effectively
given: (i) upon personal delivery to the party to be notified, (ii) when sent by
confirmed electronic mail or facsimile if
8
EXHIBIT E
sent during normal business hours of the recipient; if not, then on the next
business day, (iii) five (5) days after having been sent by registered or
certified mail, return receipt requested, postage prepaid, or (iv) one (1) day
after deposit with a nationally recognized overnight courier, specifying next
day delivery, with verification of receipt. All notices shall be addressed to
each holder of record at the address of such holder appearing on the books of
the Corporation.
(m) Payment of Taxes. The Corporation will pay all taxes (other than
taxes based upon income) and other governmental changes that may be imposed with
respect to the issue or delivery of shares of Common Stock upon conversion of
shares of Series E Preferred Stock, excluding any tax or other charge imposed in
connection with any transfer involved in the issue and delivery of shares of
Common Stock in a name other than that in which the shares of Series E Preferred
Stock so converted were registered.
(n) Stock Fully Paid. All shares of Common Stock that may be issued
upon conversion of the Series E Preferred Stock will, upon issue, be fully paid
and nonassessable, and free from all taxes, liens and charges with respect to
the issue thereof (other than restrictions under federal and state securities
laws).
(o) Waiver of Antidilution Adjustment. The antidilution adjustment
provisions of any of Section 5(i) may be waived with respect to any issuance by
the Corporation of its common Stock, or options, warrants or other rights to
purchase its Common Stock, upon the vote or written consent of the Corporation
and the holders of at least fifty percent (50%) of the outstanding Series E
Preferred Stock.
6. Redemption.
(a) Series E Preferred Stock. The Corporation shall be obligated to
redeem the Series E Preferred Stock as follows:
(i) The holders of at least a majority of the then outstanding
shares of Series E Preferred Stock may require the Corporation, to the extent it
may lawfully do so, to redeem all, but not less than all, of the outstanding
shares of Series E Preferred Stock if within two (2) years after the Series E
Original Issue Date, the Corporation (x) has not become subject to the public
reporting requirements of Section 12(g) or Section 15(d) of the Securities
Exchange Act of 1934, as amended, and (y) sells all or substantially all of the
assets of the Corporation purchased from the original holders of the Series E
Preferred Stock under the terms of that certain "Asset Purchase Agreement" dated
September __, 2005 (the "Redemption Sale"). The Corporation shall effect the
redemption by paying in cash in exchange for the shares of Series E Preferred
Stock a sum equal to $10 per share of Series E Preferred Stock. The total amount
to be paid for the Series E Preferred Stock is hereafter referred to as the
"Redemption Price."
(ii) At least ten (10) business days but no more than sixty
(60) business days prior to the anticipated closing of the Redemption Sale, the
Corporation shall send a notice in accordance with Section 5(k) (a "Redemption
Notice") to all holders of Series E Preferred Stock notifying them of the
proposed Redemption Sale (including its basis terms and anticipated closing
date) and of their right to require redemption of their Shares under this
Section 6. If the anticipated closing date of the Redemption Sale shall be
delayed, the Corporation shall promptly
9
EXHIBIT E
notify all holders of Series E Preferred Stock of the new anticipated closing
date. If holders of at least a majority of the then outstanding shares of Series
E Preferred Stock deliver to the Corporation, no later than three (3) business
days prior to closing of the Redemption Sale, a written notice election to
require redemption of all of the outstanding shares of Series E Preferred Stock
Hereunder, then the Corporation shall, promptly after closing of the Redemption
Sale, send notice to all such holders setting forth the date on which the
Corporation intends to effect the redemption of the shares of Series E Preferred
Stock (which shall not be more than thirty (30) business days after the closing
of the Redemption Sale (the "Redemption Date"), and information as to the place
at which such holders may obtain payment of the Redemption Price upon surrender
of their share certificates. The redemption shall proceed unless, at least five
(5) business days prior to the Redemption Date, the holders of at least a
majority of the then outstanding shares of Series E Preferred Stock provide
notice in writing to the Corporation that the redemption will not occur.
(iii) On or after the Redemption Date, each holder of shares
of Series E Preferred Stock shall surrender such holder's certificates
representing such shares to the Corporation at the place designated in the
Redemption Notice, and thereupon the Redemption Price of such shares shall be
payable to the order of the person whose name appears on such certificate or
certificates as the owner thereof, and each surrendered certificate shall be
cancelled. If the Corporation does not have sufficient funds legally available
to redeem all shares to be redeemed at the Redemption Date, then it shall redeem
such shares pro rata (based on the portion of the aggregate Redemption Price
payable to each holder) to the extent possible and shall redeem the remaining
shares to be redeemed as soon as sufficient funds are legally available. From
and after such Redemption Date, unless there shall have been a default in
payment of the Redemption Price or the Corporation is unable to pay the
Redemption Price due to not having sufficient legally available funds, all
rights of the holder of such shares as a holder of Series E Preferred Stock
(except the right to receive the Redemption Price without interest upon
surrender of the holder's certificates) shall cease and terminate with respect
to such shares; provided that in the event that shares of Series E Preferred
Stock are not redeemed due to default in payment by the Corporation or because
the Corporation does not have sufficient legally available funds, such shares of
Series E Preferred Stock shall remain outstanding to the extent not paid for,
and shall be entitled to all of the rights and preferences provided herein.
7. Other Distributions. In the event the Corporation shall declare a
distribution payable in securities of other persons, evidences of indebtedness
issued by the Corporation or other persons, assets, cash (excluding cash
dividends declared out of retained earnings) or options or rights not referred
to in Section 5, then, in each such case for the purpose of this Section 7, the
holders of Series E Preferred Stock shall be entitled to a proportionate share
of any such distribution as though they were the holders of the number of shares
of Common Stock of the Corporation into which their shares of Preferred Stock
would be convertible as of the record date fixed for the determination of the
holders of Common Stock of the Corporation entitled to receive such
distribution.
8. Recapitalization. If at any time or from time to time there shall be a
recapitalization of the Common Stock (other than a subdivision, combination or
merger or sale of assets provided for in Section 5 hereof or in connection with
an Acquisition or Asset Transfer as defined in Section 4(b)), provision shall be
made so that the holders shall thereafter be entitled
10
EXHIBIT E
to receive upon conversion of the Series E Preferred Stock the number of shares
of stock or other securities or property of the Corporation or otherwise, to
which a holder of Common Stock deliverable upon conversion would have been
entitled on such recapitalization. In any such case, appropriate adjustment
shall be made in the application of the provisions of Section 5 with respect to
the rights of the holders after the recapitalization to the end that the
provisions of Section 5 (including adjustment of the applicable Series E
Preferred Stock Conversion Price then in effect and the number of shares
purchasable upon conversion of the Series E Preferred Stock) shall be applicable
after that event as nearly equivalent as may be practicable.
9. No Impairment. The Corporation will not, by amendment of its
Certificate of Incorporation or through any reorganization, recapitalization,
transfer of assets, consolidation, merger, dissolution, issuance or sale of
securities or any other voluntary action, avoid or seek to avoid the observance
or performance of any of the terms to be observed or performed hereunder by the
Corporation, but will at all times in good faith assist in the carrying out of
all the provisions hereof and in the taking of all such action as may be
necessary or appropriate in order to protect the applicable Conversion Rights
and redemption rights of the holders against impairment. If the Corporation is
unable or shall fail to discharge its obligations under Section 5 or Section 6
(an "Obligation"), such Obligation shall be discharged as soon as the
Corporation is able to discharge such Obligation.
FURTHER RESOLVED, that the Secretary of the Corporation is hereby
authorized and directed to prepare and file a Certificate of Designation of
Rights, Preferences and Privileges in accordance with the following resolution
and the provisions of the Delaware General Corporation Law and to take such
actions as he deems necessary or appropriate to carry out the intent of the
foregoing resolution."
11
EXHIBIT E
IN WITNESS WHEREOF, I have executed and subscribed this Certificate and do
affirm the foregoing as true under the penalties of perjury this 30 day of
September, 2005.
IMARX THERAPEUTICS, INC.
By /s/ ▇▇▇▇ ▇▇▇▇▇
------------------------------------
12
EXHIBIT F
***CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE
COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO THE CONFIDENTIALITY
REQUEST. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
PROTOCOL TO DETERMINE THE VIABILITY AND GROWTH OF [* * *] CELLS FOLLOWING
RECOVERY OF CELLS FROM [* * *]
1. Remove 2 ampules [* * *] from the Master Cell Bank (MCB) originally
located in Building M6 and [* * *] from the MCB originally located in
building M3B.
2. Remove 2 ampules [* * *] located in building MCB.
3. [* * *]
4. [* * *]
5. [* * *]
6. [* * *]
7. [* * *]
8. [* * *]
9. [* * *]
10. [* * *]
11. [* * *]
12. [* * *]
13. [* * *]
EXHIBIT F
***CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE
COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO THE CONFIDENTIALITY
REQUEST. A COMPLETE VERSION OF THIS EXHIBIT HAS BEE FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
[* * *]
Exhibit G
Previously Filed as Exhibit No. 10.7 to Registration Statement on Form S-1
filed on May 19, 2006
EXHIBIT H
IMARX THERAPEUTICS, INC.
SERIES E PREFERRED STOCK PURCHASE AGREEMENT
This Series E Preferred Stock Purchase Agreement (this "Agreement") is
entered into as of the date set forth below between ImaRx Therapeutics, Inc., a
Delaware corporation (the "Company") and ▇▇▇▇▇▇ Laboratories, an Illinois
corporation (the "Purchaser"). The parties hereby agree as follows:
SECTION 1
AUTHORIZATION AND SALE OF SECURITIES
1.1 AUTHORIZATION. The Company has, or before the Closing (as defined in
Section 2.1) will have, duly authorized the sale and issuance pursuant to the
terms and conditions hereof of shares of its Series E Preferred Stock (the
"Shares") having the rights, restrictions, privileges and preferences set forth
in the Certificate of Designation of Rights, Preferences and Privileges of
Series E Preferred Stock to be filed with the Delaware Secretary of State in
substantially the form attached hereto as Exhibit A (the "Designations").
1.2 SALE OF SECURITIES. Subject to the terms and conditions hereof, at the
Closing, the Company will issue and sell to the Purchaser, and the Purchaser
agrees to purchase from the Company, One Million (1,000,000) Shares as partial
consideration for the Company's purchase of certain assets from Purchaser
pursuant to that certain Asset Purchase Agreement between the parties dated
September 30, 2005 (the "Asset Purchase Agreement").
SECTION 2
CLOSING; DELIVERY
2.1 CLOSING. The closing of the purchase by the Purchaser and the sale by
the Company of the Shares (the "Closing") shall be held at the offices of DLA
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ US LLP, counsel to the Company, at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, on the date of closing of the transactions
contemplated by the Asset Purchase Agreement (the "Closing Date").
2.2 DELIVERY. At the Closing, the Company will issue to the Purchaser a
certificate in the Purchaser's name representing the Shares purchased by the
Purchaser.
1
SECTION 3
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to the Purchaser as follows:
3.1 ORGANIZATION AND STANDING. The Company is a corporation duly organized
and existing under the laws of the State of Delaware. The Company has the
requisite corporate power to own and operate its properties and assets.
3.2 CORPORATE POWER. The Company has all requisite corporate power to
enter into this Agreement, to sell the Shares hereunder and to carry out and
perform its other obligations under the terms of this Agreement.
3.3 CAPITALIZATION. As of the date of this Agreement, the capitalization
of the Company consists of the following:
(a) Common Stock. A total of 20,000,000 authorized shares of Common
Stock, of which 8,943,532 shares were issued and outstanding. All of the
outstanding shares of Common Stock have been duly authorized, fully paid and are
nonassessable.
(b) Preferred Stock. A total of 15,000,000 authorized shares of
Preferred Stock, consisting of 2,400,000 shares designated Series A Preferred
Stock, 2,291,144 of which were issued and outstanding; 800,000 shares designated
Series B Preferred Stock, 593,226 of which were issued and outstanding;
1,700,000 shares designated Series C Preferred Stock, 285,714 of which were
issued and outstanding; 545,500 shares designated Series D Preferred Stock,
438,232 of which were issued and outstanding; and 1,000,000 shares designated
Series E Preferred Stock, none of which are issued and outstanding. All of the
outstanding shares of Preferred Stock have been duly authorized, fully paid and
nonassessable and issued in compliance with all applicable federal and state
securities laws.
(c) Proposed Increase in Authorized Capital. The Company plans to
seek stockholder approval of a substantial increase in the number of authorized
shares of its Common Stock and Preferred Stock in order to ensure the
availability of an adequate number of shares to cover: (i) the conversion of the
Secured Convertible Promissory Notes in the aggregate principal amount of
$4,000,000 and the exercise of the related Warrants issued pursuant to that
certain Secured Note and Warrant Purchase Agreement dated September [29], 2005,
(ii) the reservation of an adequate number of shares of Common Stock for
issuance upon conversion of the Shares, (iii) an increase the number of shares
available for issuance pursuant to the Company's 2000 Stock Plan by 2,000,000
shares, to an aggregate of 5,000,000 shares, (iv) the possible exercise by the
Company and the placement agent in the Company's current Common Stock offering
of the right to exercise a 25% over-subscription option to offer an additional
625,000 shares in such offering, and (v) possible future strategic transactions
and future equity financings. The exact number of authorized shares for which
the Company will seek stockholder approval has not yet been determined.
3.4 OTHER SECURITIES. The Company has reserved 3,000,000 shares of its
Common Stock for issuance to service providers of the Company, of which
2,603,200 shares are subject to
2
options that are currently outstanding. In addition, there are outstanding
warrants to purchase 1,211,404 shares of Common Stock and 10,909 shares of
Series A Preferred Stock. The Company has or will issue Secured Convertible
Promissory Notes in the aggregate principal amount of $4,000,000 and warrants to
purchase up to 100,000 shares of Common Stock in connection with a bridge
financing to close immediately prior to the closing of the transactions pursuant
to the Asset Purchase Agreement. There are currently 2,395,686 shares of Common
Stock issuable upon conversion of outstanding shares of Series A Preferred
Stock, 1,035,073 shares of Common Stock issuable upon conversion of outstanding
shares of Series B Preferred Stock, 295,858 shares of Common Stock issuable upon
conversion of outstanding shares of Series C Preferred Stock, and 602,570 shares
of Common Stock issuable upon conversion of outstanding shares of Series D
Preferred Stock. The Company is currently offering for sale up to an aggregate
of 2,500,000 shares of Common Stock, and will issue a warrant to purchase up to
250,000 shares of Common Stock to the placement agent in such offering if the
maximum amount is sold in the offering. An additional 625,000 shares of Common
Stock might be issued in the Company's current Common Stock offering, and the
placement agent may receive a warrant to purchase up to an additional 62,500
shares of Common Stock, if the Company and the placement agent exercise an
over-subscription option. Except as set forth in this Section 3.4, the Company
has no obligation (contingent or otherwise) to (i) issue any subscription,
warrant, option, convertible security or other such right or to issue or
distribute to holders of any shares of its capital stock any evidences of
indebtedness of the Company or (ii) purchase, redeem or otherwise acquire any
shares of its capital stock or any interest therein or to pay any dividend or
make any other distribution in respect thereof.
3.5 AUTHORIZATION.
(a) All corporate action on the part of the Company necessary for
the authorization, execution, delivery and performance of this Agreement, and
the authorization, sale, issuance and delivery of the Shares and the performance
of the Company's obligations hereunder has been taken or will be taken prior to
the Closing.
(b) This Agreement, when executed and delivered by the Company,
constitutes a valid and binding obligation of the Company enforceable in
accordance with its terms, subject to (i) laws of general application relating
to specific performance, injunctive relief or other equitable remedies, and (ii)
applicable bankruptcy, insolvency, reorganization or other laws of general
application relating to or affecting the enforcement of creditors' rights
generally.
(c) When issued, sold and delivered in accordance with the terms of
this Agreement for the consideration provided for herein, the Shares will be
duly authorized, validly issued, fully paid and non-assessable, and free of any
liens or encumbrances other than restrictions on transfer under this Agreement
and applicable state and federal securities laws. The shares of Common Stock
issuable upon conversion of the Shares (the "Conversion Shares"), upon issuance
in accordance with the terms of the Designations, will be duly authorized,
validly issued, fully paid and non-assessable, and free of any liens or
encumbrances other than restrictions on transfer under this Agreement and under
applicable state and federal securities laws.
3
3.6 DISCLOSURE. The Company has fully provided the Purchaser with all
information which the Purchaser has requested for deciding whether to purchase
the Shares and all information which the Company believes is reasonably
necessary to enable the Purchaser to make such a decision. Neither this
Agreement nor any other statement or certificate made or delivered in connection
with the Agreement and the transactions contemplated hereby contains any untrue
statement of a material fact or omits to state a material fact necessary not to
make the statements herein untrue or misleading.
3.7 SECURITIES LAW EXEMPTION. Based in part on the accuracy of the
representations and warranties of the Purchaser contained in Section 4 hereof,
the offer, sale and issuance of the Shares is and will be exempt from the
registration requirements of the Securities Act of 1933, as amended, and the
registration, permit or qualification requirements of any applicable state
securities laws. The Company has not taken any action that would preclude
reliance upon such exemption, including any general solicitation. The Purchaser
acknowledges that, in making the foregoing representation, the Company has
relied upon the Purchaser's representations and warranties set forth in this
Agreement to qualify for such exemptions from registration.
SECTION 4
REPRESENTATIONS AND WARRANTIES OF PURCHASER
The Purchaser hereby represents and warrants as follows:
4.1 AUTHORIZATION.
(a) All corporate actions on the part of the Purchaser necessary for
the authorization, execution, delivery and performance of this Agreement, has
been taken or will be taken prior to the Closing.
(b) This Agreement, when executed and delivered by the Purchaser,
constitutes a valid and binding obligation of the Purchaser enforceable in
accordance with its terms, subject to (i) laws of general application relating
to specific performance, injunctive relief or other equitable remedies, and (ii)
applicable bankruptcy, insolvency, reorganization or other laws of general
application relating to or affecting the enforcement of creditors' rights
generally.
4.2 INVESTMENT. The Purchaser is acquiring the Shares and the Conversion
Shares (collectively, the "Securities") for investment for the Purchaser's own
account and not with the view to the public resale or distribution thereof
within the meaning of the Securities Act, and the Purchaser has no present
intention of selling, granting any participation in, or otherwise distributing
the Securities. No other person has a direct or indirect beneficial interest, in
whole or in part, in such Securities. The Purchaser understands that the
Securities have not been registered under the Securities Act by reason of a
specific exemption thereunder, which depends upon, among other things, the bona
fide nature of the Purchaser's investment intent as expressed herein.
4.3 RESTRICTIONS ON TRANSFER. The Purchaser acknowledges that the
Securities must be held indefinitely unless subsequently registered under the
Securities Act or the Company receives an opinion of counsel satisfactory to the
Company that such registration is not required.
4
The Purchaser is aware of the provisions of Rule 144 promulgated under the
Securities Act which permit limited resale of stock purchased in a private
placement subject to the satisfaction of certain conditions, including, among
other things, the existence of a public market for the stock, the availability
of certain current public information about the Company, the resale occurring
not less than one year after a party has purchased and paid for the stock to be
sold, the sale being through a "broker's transaction" or a transaction directly
with a "market maker" and the number of shares of the stock being sold during
any three-month period not exceeding specified limitations. The Purchaser
further acknowledges and understands that the Company may not be able to satisfy
the current public information requirement of Rule 144 at the time the Purchaser
wishes to sell the Securities and, if so, the Purchaser would be precluded from
selling the Securities under Rule 144 even if the one year minimum holding
period has been satisfied. There is no assurance that any exemption from
registration under the Securities Act will be available or, if available, will
allow such person to dispose of, or otherwise transfer, all or any portion of
the Securities.
SECTION 5
CONDITIONS TO PURCHASER'S OBLIGATIONS AT CLOSING
The obligations of the Purchaser under this Agreement are subject to the
fulfillment or waiver, on or before the Closing, of each of the following
conditions:
5.1 REPRESENTATIONS AND WARRANTIES TRUE. Each of the representations and
warranties of the Company contained in Section 3 shall be true and correct in
all material respects when made, and as of the Closing Date with the same effect
as though such representations and warranties had been made on and as of the
Closing Date.
5.2 PERFORMANCE OF OBLIGATIONS; CONSENTS AND WAIVERS. The Company shall
have performed and complied in all material respects with all agreements,
obligations and conditions contained in this Agreement and the Asset Purchase
Agreement that are required to be performed or complied with by it on or before
the Closing Date and shall have obtained all approvals, consents and
qualifications necessary to complete the purchase and sale described herein.
5.3 DESIGNATIONS EFFECTIVE. The Designations shall have been duly adopted
by the Company by all necessary corporate action of its Board of Directors, and
shall have been duly filed with and accepted by the Secretary of State of the
State of Delaware.
5.4 SECURITIES EXEMPTIONS. The offer and sale of the Securities to the
Purchaser pursuant to this Agreement shall be exempt from the registration
requirements of the Securities Act, and the registration and/or qualification
requirements of all applicable state securities laws.
5.5 CLOSING OF ASSET PURCHASE AGREEMENT. The parties will have consummated
and closed the transactions contemplated by the Asset Purchase Agreement.
5
SECTION 6
CONDITIONS TO COMPANY'S OBLIGATIONS AT CLOSING
The Company's obligation to sell and issue the Shares at the Closing is
subject to the fulfillment of the following conditions, any of which may be
waived by the Company:
6.1 REPRESENTATIONS AND WARRANTIES. The representations and warranties
made by each Purchaser in Section 4 hereof shall have been true and correct when
made and shall be true and correct on the Closing Date as if made on and as of
such Closing Date.
6.2 PERFORMANCE OF OBLIGATIONS; CONSENTS AND WAIVERS. The Purchaser shall
have performed and complied in all material respects with all agreements,
obligations and conditions contained in this Agreement and the Asset Purchase
Agreement that are required to be performed or complied with by it on or before
the Closing Date and shall have obtained all approvals, consents and
qualifications necessary to complete the purchase and sale described in the
Asset Purchase Agreement.
6.3 CONSENTS AND WAIVERS. The Company shall have obtained any and all
consents and waivers necessary or appropriate for consummation of the
transactions contemplated by this Agreement.
6.4 DESIGNATIONS EFFECTIVE. The Designations shall have been duly adopted
by the Company by all necessary corporate action of its Board of Directors and,
and shall have been duly filed with and accepted by the Secretary of State of
the State of Delaware.
6.5 SECURITIES EXEMPTIONS. The offer and sale of the Shares to the
Purchaser pursuant to this Agreement shall be exempt from the registration
requirements of the Securities Act, and the registration and/or qualification
requirements of all applicable state securities laws.
6.6 CLOSING OF ASSET PURCHASE AGREEMENT. The parties will have consummated
and closed the transactions contemplated by the Asset Purchase Agreement.
SECTION 7
RESTRICTIONS ON TRANSFERABILITY OF SECURITIES
7.1 RESTRICTIONS ON TRANSFERABILITY. The Securities shall not be
transferable except upon the conditions specified in this Section 7. The
Purchaser will cause any proposed transferee of the Securities held by the
Purchaser to agree to take and hold such Securities subject to the provisions
and upon the conditions specified in this Section 7.
7.2 RESTRICTIVE LEGENDS. Each certificate representing the Securities, and
any other securities issued in respect of the Securities upon any stock split,
stock dividend, recapitalization, merger, consolidation or similar event (except
as otherwise permitted by the provisions of this Section 7), shall be stamped or
otherwise imprinted with legends in substantially the following form:
6
(a) THIS SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR
APPLICABLE STATE LAW, AND NO INTEREST THEREIN MAY BE SOLD, DISTRIBUTED,
ASSIGNED, OFFERED, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT AS OTHERWISE SET
FORTH HEREIN AND UNLESS (A) THERE IS AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE ACT AND APPLICABLE STATE SECURITIES LAWS COVERING ANY SUCH TRANSACTION, (B)
THE COMPANY RECEIVES AN OPINION OF LEGAL COUNSEL FOR THE HOLDER SATISFACTORY TO
THE COMPANY STATING THAT SUCH TRANSACTION IS EXEMPT FROM REGISTRATION OR (C) THE
COMPANY OTHERWISE SATISFIES ITSELF THAT SUCH TRANSACTION IS EXEMPT FROM
REGISTRATION.
(b) Any other legends required by applicable state securities laws.
The Company need not register a transfer of legended Securities and may
also instruct its transfer agent not to register the transfer of the Securities,
unless the conditions specified in each of the foregoing legends are satisfied.
7.3 REMOVAL OF LEGEND AND TRANSFER RESTRICTIONS. Any legend endorsed on a
certificate pursuant to subsection 7.2(a) and the stop transfer instructions
with respect to such legended Securities shall be removed, and the Company shall
issue a certificate without such legend to the holder of such Securities, if
such Securities are registered under the Securities Act and a prospectus meeting
the requirements of Section 10 of the Securities Act is available or if such
holder satisfies the requirements of Rule 144(k).
SECTION 8
MISCELLANEOUS
8.1 ENTIRE AGREEMENT; AMENDMENT. This Agreement and the exhibits to this
Agreement and the agreements reference herein constitute the full and entire
understanding and agreement between the parties with regard to the subjects
hereof and thereof, and any and all other written or oral agreements relating to
the subject matter hereof existing between the parties hereto are expressly
superseded hereby. Any term of this Agreement may be amended and the observance
of any term of this Agreement may be waived (either generally or in a particular
instance and either retroactively or prospectively) only with the written
consent of the party against whom enforcement of any such amendment or waiver is
sought. Any amendment or waiver effected in accordance with this Section 8.1
shall be binding upon the Company and the Purchaser and each future holder of
the securities purchased hereunder.
8.2 GOVERNING LAW. This Agreement shall be governed in all respects by the
internal laws of the State of Delaware, without reference to principles of
choice of law.
8.3 SURVIVAL. Unless otherwise set forth in this Agreement, the
representations, warranties covenants and agreements made herein shall survive
the execution and delivery of this Agreement and the Closing for a period of one
(1) year following the Closing.
7
8.4 SUCCESSORS AND ASSIGNS. Except as otherwise provided herein, the
provisions hereof shall inure to the benefit of, and be binding upon, the
successors, assigns, heirs, executors and administrators of the parties hereto.
Nothing in this Agreement, express or implied, is intended to confer upon any
party other than the parties hereto or their respective successors and assigns
any rights, remedies, obligations or liabilities under or by reason of this
Agreement, except as expressly provided in this Agreement.
8.5 NOTICES, ETC. All notices and other communications required or
permitted hereunder shall be in writing and shall be deemed effectively given
(i) upon actual delivery to the party to be notified, (ii) 24 hours after
confirmed facsimile transmission, or (iii) one business day after deposit with a
recognized overnight courier, addressed (a) if to the Purchaser, at the
Purchaser's address set forth on the signature page hereto, or at such other
address as the Purchaser shall have furnished to the Company in writing upon 10
days' notice, (b) if to any other holder of any Securities, at such address as
such holder shall have furnished the Company in writing upon 10 days' notice or,
until any such holder so furnishes an address to the Company, to and at the
address of the last holder of such Securities who has so furnished an address to
the Company or (c) if to the Company, at the following address:
ImaRx Therapeutics, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
▇▇▇▇ ▇▇▇▇▇
DLA ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ US LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
or at such other address as the Company shall have furnished to the Purchaser
upon 10 days' notice.
8.6 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be enforceable against the parties actually
executing such counterparts, and all of which together shall constitute one
instrument.
8.7 TITLES AND SUBTITLES; REFERENCES. The titles and subtitles used in
this Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement. All references in this Agreement to
sections, paragraphs, exhibits and schedules shall, unless otherwise provided,
refer to sections and paragraphs hereof and exhibits and schedules attached
hereto, all of which exhibits and schedules are incorporated herein by this
reference.
8
8.8 SEVERABILITY. If one or more provisions of this Agreement are held to
be unenforceable under applicable law, the parties agree to renegotiate such
provision in good faith. In the event that the parties cannot reach a mutually
agreeable and enforceable replacement for such provision, then such provision(s)
shall be excluded from this Agreement and the balance of the Agreement shall be
interpreted as if such provision(s) were so excluded and shall be enforceable in
accordance with its terms.
8.9 EXPENSES. The Company and the Purchaser shall each bear their
respective expenses and legal fees incurred in connection with the negotiation
and consummation of this Agreement.
8.10 DELAYS OR OMISSIONS. No delay or omission to exercise any right,
power or remedy accruing to any Purchaser, upon any breach or default of the
Company under this Agreement, shall impair any such right, power, or remedy, nor
shall it be construed to be a waiver of any such breach or default, or any
acquiescence therein, or of or in any similar breach or default thereafter
occurring; nor shall any waiver of any single breach or default be deemed a
waiver of any other breach or default theretofore or thereafter occurring. It is
further agreed that any waiver, permit, consent or approval of any kind of
character on a Purchaser's part of any breach or default under this Agreement,
or any waiver on a Purchaser's part of any provisions or conditions of this
Agreement must be in writing and shall be effective only to the extent
specifically set forth in such writing and that all remedies, either under this
Agreement, or by law or otherwise afforded to a Purchaser, shall be cumulative
and not alternative.
8.11 ATTORNEY FEES. Notwithstanding any other provision herein, if any
action at law or in equity is necessary to enforce or interpret the terms of
this Agreement or the exhibits hereto, the prevailing party shall be entitled to
reasonable attorneys' fees, costs and disbursements in addition to any other
relief to which such party may be entitled.
[REST OF THIS PAGE INTENTIONALLY LEFT BLANK]
9
IN WITNESS WHEREOF, the parties hereto have executed this Series E
Preferred Stock Purchase Agreement as of September 30, 2005.
IMARX THERAPEUTICS, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇
----------------------
Name: ▇▇▇▇ ▇▇▇▇▇
Title: President and CEO
▇▇▇▇▇▇ LABORATORIES
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President, Global Licensing/New
Business Development
EXHIBITS
Exhibit A - Certificate Of Designation Of Rights, Preferences And Privileges Of
Series E Preferred Stock