FORM 10-K ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-KSB/A
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT
OF 1934 for the fiscal year ended DECEMBER 31, 1998.
OR
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 for the transition period from __________________to________________.
Commission File Number 0-9860
BIOSEARCH MEDICAL PRODUCTS, INC.
-------------------------------------------------------------
(Exact name of registrant as specified in its charter)
NEW JERSEY 22-2090421
- -------------------------------- ------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
35 INDUSTRIAL PARKWAY, SOMERVILLE, NEW JERSEY 08876-1276
- --------------------------------------------- ----------------
(Address of principal executive offices) (Zip Code + 4)
Registrant's telephone number, including area code: (908) 722-5000
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of exchange on which registered
------------------- ------------------------------------
NONE NONE
Securities registered pursuant to Section 12(g) of the Act:
COMMON STOCK, WITHOUT PAR VALUE
-------------------------------
(Title of class)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
[X] YES [ ] No
Indicate by check mark if the disclosure of delinquent filers pursuant to
item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of the registrants knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this form 10-K or any
amendment to this form 10-K. [ ]
THE AGGREGATE MARKET VALUE ON MARCH 28, 1999 OF VOTING STOCK HELD BY
NON-AFFILIATE OF THE REGISTRANT IS ESTIMATED TO BE $250,000.
THE NUMBER OF SHARES OUTSTANDING OF THE REGISTRANTS COMMON STOCK, NO PAR
VALUE, AT MARCH 28, 1999 WAS 2,202,878.
List hereunder the documents, all or portions of which are incorporated by
reference herein, and the Part of the Form 10-K into which the document is
incorporated: Proxy Statement to be filed with respect to the 1998 Annual
Meeting of the Shareholders, Form 8-K and Form 8 filed prior to this 10-K --
Part III.
<PAGE>
THE FOLLOWING EXHIBITS ARE INCORPORATED BY THE RESPECTIVE REFERENCE SYMBOL TO
THE ANNUAL REPORT ON FORM 10-K SB FOR THE FISCAL YEAR ENDED DECEMBER 31, 1993:
10(qqqq) Product distribution and license agreements between Biosearch
Medical Products, Inc. and N. V. Verenigde Bedrijven Nutricia, dated
April 8, 1993.
10(rrrr) Product distribution and license agreements between Biosearch
Medical Products, Inc. and C. R. Bard, dated January 1, 1994.
THE FOLLOWING EXHIBITS ARE INCORPORATED BY THE RESPECTIVE REFERENCE SYMBOL TO
THE ANNUAL REPORT ON FORM 10-K SB FOR THE FISCAL YEAR ENDED DECEMBER 31, 1994:
10(ssss) Asset Purchase Agreement Pee Wee Tube product line between Biosearch
Medical Products, Inc. and C. R. Bard, dated April 4, 1994.
10(tttt) Asset Purchase Agreement including product supply patent license
J-Tube Supply and Escrow Agreements between Biosearch Medical
Products, Inc. and Sherwood Medical Products (subsidiary American
Home Products), dated May 19, 1994.
THE FOLLOWING EXHIBITS ARE INCORPORATED BY THE RESPECTIVE REFERENCE SYMBOL TO
THE ANNUAL REPORT ON FORM 10-K SB FOR THE FISCAL YEAR ENDED DECEMBER 31, 1996:
10(uuuu) Amendment to Supply Agreement with Sherwood Medical passing minimum
purchase dated March 19, 1996.
THE FOLLOWING EXHIBITS ARE INCORPORATED BY THE RESPECTIVE REFERENCE SYMBOL TO
THE ANNUAL REPORT ON FORM 10-K SB FOR THE FISCAL YEAR ENDED DECEMBER 31, 1997:
10(vvvv) Contract of sale of between Biosearch and Rebtex for sale of
Company's building dated November 24, 1997 and terminated in April,
1998.
THE FOLLOWING EXHIBITS ARE INCORPORATED BY THE RESPECTIVE REFERENCE SYMBOL TO
THE ANNUAL REPORT ON FORM 10-K SB FOR THE FISCAL YEAR ENDED DECEMBER 31,1998:
10(wwww) Contract of sale between Biosearch and Hydromer for the sale of the
building dated March, 1998, closed June 12, 1998
10(xxxx) Three year lease of Company's headquarters from Hydromer on June 12,
1998, prepaid at $346,500.
10(yyyy) Standstill Agreement between C.R.Bard and Biosearch dated August 14,
1998 preventing the Company from offering the urinary catheter
business to others, extended on October 30, 1998 at a total
consideration of $200,000.
THE FOLLOWING EXHIBITS ARE INCORPORATED BY THE RESPECTIVE REFERENCE SYMBOL TO
THE ANNUAL REPORT ON FORM 10-K SB FOR THE FISCAL YEAR ENDED DECEMBER 31, 1999:
10(zzzz) Asset sale between the Company and C.R. Bard dated February 25, 1999
selling a coating machine and all technology to manufacture
intermittent urinary catheters for $650,000 ($200,000 already paid).
<PAGE>
22 - Subsidiary of the Company
EXHIBIT 22
SUBSIDIARY OF THE COMPANY
The following table sets forth certain information as of December 31, 1992
concerning the subsidiaries of the Company.
PERCENTAGE
PLACE OF OWNED BY
INCORPORATION THE COMPANY
------------- -----------
Pouch Laboratories, Inc. New Jersey 100%
During August, 1993 a resolution was passed by the Company's Board Of
Directors to dissolve Pouch Laboratories, Inc. having no reason to maintain
the existence of this subsidiary. (See note 4, "Discontinued Operations" -
1993 10-K SB)
25 - Power of Attorney (see "Power of Attorney" in the Annual Report on
Form 10-K SB)
<PAGE>
POWER OF ATTORNEY
The Company and each person whose signature appears below hereby appoint
Manfred F. Dyck and Robert C. Keller as attorneys-in-fact with full power of
substitution, severally, to execute in the name and on behalf of the registrant
and each such person, individually and in each capacity stated below, one or
more amendments to the annual report; which amendments may make such changes in
the report as the attorney-in-fact acting deems appropriate and to file any such
amendment to the report with the Securities and Exchange Commission.
SIGNATURES
Pursuant to the requirements of Section 13 or 15 (d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
Dated: March 30, 1999
BIOSEARCH MEDICAL PRODUCTS INC.
By: /s/ MANFRED F. DYCK
----------------------------
Manfred F. Dyck
Chief Executive Officer
Chairman Board of Directors
Pursuant to the requirements of the Securities and Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
Dated: March 30, 1999
By: /s/ MANFRED F. DYCK
----------------------------
Manfred F. Dyck
Chief Executive Officer
Chairman Board of Directors
Dated: March 30, 1999
By: /s/ ROBERT C. KELLER
----------------------------
Robert C. Keller
Chief Accounting Officer and
Treasurer
<PAGE>
SIGNATURES (cont)
Dated: March 30, 1999
By: /s/ MARTIN C. DYCK
----------------------------
Martin C. Dyck
Director
Dated: March 30, 1999
By: /s/ DAVID M. SCHRECK, M.D.
----------------------------
David M. Schreck, M.D.
Director
Dated: March 30, 1999
By: /s/ KLAUS J.H. MECKELER, M.D.
----------------------------
Klaus J.H. Meckeler, M.D.
Director
Dated: March 30, 1999
By: /s/ FREDERICK L. PERL, M.D.
----------------------------
Frederick L. Perl, M.D.
Director
AMENDMENT TO SUPPLY AGREEMENT
AND SUBSEQUENT AGREEMENT ON SPECIFICATIONS AND PRICES
WHEREAS, the parties have entered into a Supply Agreement dated May 19, 1994
("the AGREEMENT") whereby, Biosearch Medical Products, Inc. will supply Sherwood
Medical Company with certain enteral feeding access devices until May 19, 1996
and,
WHEREAS, the parties wish to add to the devices set forth in the AGREEMENT to
include devices suitable for sale in an international market ("INTERNATIONAL
PRODUCTS") and,
WHEREAS, in consideration for such change, Sherwood will increase its second
year minimum purchase from $2,500,000 to $2,700,000 therefor;
IT IS AGREED:
1. Section 2(b) of the AGREEMENT is deleted in its entirety and replaced with:
"2(b) (i) Except as otherwise set forth below, and provided that Biosearch
supplies Sherwood's orders for the Products in a timely manner with Products
meeting the Specifications, Sherwood shall order its total requirements of the
Products from Biosearch and will order for delivery during the first twelve (12)
month period of the term of this Agreement at least Two Million Five Hundred
Thousand Dollars ($2,500,000) worth of the Products and will order for delivery
during the second twelve (12) month period of the term
<PAGE>
AMENDMENT NUMBER 1 TO SUPPLY AGREEMENT PAGE-2
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of this Agreement at least Two Million Seven Hundred Thousand Dollars
<PAGE>
AMENDMENT NUMBER 1 TO SUPPLY AGREEMENT PAGE-3
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($2,700,000) worth of the Products and/or International Products each year, to
include any Products purchased by Sherwood pursuant to the J-Tube Supply
Agreement between Sherwood and Biosearch of even date herewith. Quantities of
Products not delivered by Biosearch in a timely manner or failing to meet the
Specifications will be deducted from Sherwood's minimum purchase commitment;
(ii) the parties agree that a breach (after written notice of such breach and
reasonable opportunity to cure) of Sherwood's obligation in the first twelve
month period of the term of this Agreement to order for delivery at least Two
Million Five Hundred Thousand Dollars ($2,500,000) worth of the Products and in
the second twelve month period of the term of this Agreement to order for
delivery at least Two Million Seven Hundred Thousand Dollars ($2,700,000) worth
of the Products and/or International Products each year, to include any Products
purchased by Sherwood pursuant to the J-Tube Supply Agreement between Sherwood
and Biosearch of even date herewith, as detailed in Subsection (i) above shall
also be considered a breach of the Asset Purchase Agreement; (iii) in the event
Sherwood shall order for delivery Three Million Dollars ($3,000,000) or more of
Products in the second twelve month period of the term of this Agreement,
Sherwood shall have no obligation to order 75% of its requirements of Products
from Biosearch for the second twelve month period; (iv) Subject to the
provisions of Subsection (iii) above and the payment obligations set forth in
(v) below, in the second twelve (12) months of the term of this Agreement,
Sherwood shall have the right to manufacture at Sherwood facilities up to
twenty-five percent (25%) of its requirements (as defined below) of the
Products, provided that such self-manufacture of the Products shall not reduce
Sherwood's minimum purchase commitments set forth herein. Twenty-five
<PAGE>
AMENDMENT NUMBER 1 TO SUPPLY AGREEMENT PAGE-4
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percent (25%) of requirements shall mean 25% of the total aggregate dollar
amount of Products manufactured by both Sherwood and Biosearch. Such total
aggregate dollar amount shall be calculated based on the Product Purchase
Prices; (v) in the event that, during the second twelve month term of this
Agreement, and if the provisions of Subsection (iii) above do not apply,
Sherwood shall self-manufacture an amount greater than 25% of the Products,
Sherwood shall, within 30 days of written notice delivered to Sherwood by
Biosearch, pay to Biosearch an amount equal to the product of the aggregate
Product Purchase Prices in excess of 25% of the Products manufactured in the
second twelve month term, multiplied by 9.09% and (vi) Sherwood's obligation to
purchase its requirements of the Products from Biosearch shall not include the
Silicone Replacement G-Tube Products, provided that, with regard to such
G-Tubes, Sherwood purchases from Biosearch its entire inventory of finished
goods and work in process in existence as of the date of this Agreement, and
G-Tubes or components thereof that Biosearch is committed to purchase from its
vendors as of the date of this Agreement."
2. Exhibit A of the AGREEMENT is hereby amended by the addition of EXHIBIT A1
attached hereto containing the names and order numbers of INTERNATIONAL
PRODUCTS.
3. The parties agree that not all of the Product specifications for the
INTERNATIONAL PRODUCTS are final as of the date of this AMENDMENT. Upon the
receipt of International Product specifications from Sherwood (blueprints and
specifications
<PAGE>
AMENDMENT NUMBER 1 TO SUPPLY AGREEMENT PAGE-5
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commonly known as SCR's) Biosearch shall price such INTERNATIONAL PRODUCTS at
Biosearch's standard manufacturing cost plus ten percent (10%) pursuant to
Section 4 of the AGREEMENT. Biosearch shall promptly notify Sherwood of such
prices which will then be incorporated into Exhibit A.
4. Sherwood agrees to provide:
a. any SCR's, blueprints, special molds and/or parts needed to produce
parts for the INTERNATIONAL PRODUCTS with sufficient lead time to enable
Biosearch to fulfill the delivery requirements of any Sherwood firm
purchase order.
b. sufficient labels to apply to the INTERNATIONAL PRODUCTS (with the
exception of box labels which will be supplied by Sherwood on a computer
diskette) with sufficient lead time to enable Biosearch to fulfill the
delivery requirements of any Sherwood firm purchase order.
c. the final firm purchase orders which in aggregate with prior firm
purchase orders will comply with Sherwood's obligation under amended
section 2(b) by March 19, 1996, time being of the essence.
5. Sherwood Purchase Orders Nos. 6324 and 5A067 are hereby cancelled. On the
date that this amendment is executed by both parties or shortly thereafter,
Biosearch shall promptly stop work on said Purchase Orders and on March 22, 1996
will provide Sherwood
<PAGE>
AMENDMENT NUMBER 1 TO SUPPLY AGREEMENT PAGE-6
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with an accounting of finished goods, work-in-process and raw materials
purchased by Biosearch specifically for said Purchase Orders and not otherwise
usable by Biosearch. Said finished goods, work-in-process and raw materials
shall be converted to International Products pursuant to new purchase orders to
be issued by Sherwood on or before before March 19, 1996, time being of the
essence. Any remaining finished goods, work-in-process and raw materials shall
be purchased by Sherwood at Biosearch's cost plus ten percent (10%), such
purchases to be included in determining Sherwood's purchases pursuant to Section
2(b)(i) hereof.
IN WITNESS WHEREOF, the parties hereto have caused this AMENDMENT to be executed
by their authorized representatives.
BIOSEARCH MEDICAL PRODUCTS, INC. SHERWOOD MEDICAL COMPANY
By:____________________________ By:_____________________________________
Manfred F. Dyck
President ________________________________________
________________________________________
Date:__________________________ Date:___________________________________
<PAGE>
AMENDMENT NUMBER 1 TO SUPPLY AGREEMENT PAGE-7
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EXHIBIT A1 Addendum to AGREEMENT EXHIBIT A
Use exhibit A1 attached to Garber's letter of 1/17/96.
BIOSEARCH MEDICAL PRODUCTS, INC.
TO
T.B.M. Associated, L.L.C.
CONTRACT FOR THE SALE OF THE PREMISES COMMONLY KNOWN AS 35
INDUSTRIAL PARKWAY, SOMERVILLE, N.J. 08876
November 24, 1997
<PAGE>
Table of Contents:
Page
SALE OF 35 INDUSTRIAL PARKWAY, SOMERVILLE, NJ................................ 1
1. AGREEMENT TO SELL:.................................................. 1
2. PURCHASE PRICE:..................................................... 1
3. TITLE:.............................................................. 2
4. ESCROW AGENT AND DEPOSIT:........................................... 3
5. TERMINATION OF AGREEMENT:........................................... 4
6. PURCHASER'S INTENDED USE:........................................... 4
7. PURCHASER'S CONTINGENCIES:.......................................... 4
8. CLOSING AND DELIVERY OF DOCUMENTS:.................................. 6
9. ADJUSTMENTS AT CLOSING:............................................. 7
10. ASSIGNMENT:........................................................ 7
10A. REPRESENTATIONS, WARRANTIES AND COVENANTS OF SELLER............... 7
10B. PRE-CLOSING COVENANTS OF SELLER. ................................ 9
11. POSSESSION AND PRECLOSING ENTRY:................................... 9
12. ASSESSMENTS:....................................................... 10
13. REAL ESTATE BROKERAGE COMMISSION:.................................. 10
14. RISK OF LOSS:...................................................... 10
15. CONDEMNATION:...................................................... 10
16. FLOOD HAZARD AREA:................................................. 11
17. BOUNDARY LINES:.................................................... 11
18. NOTICES:........................................................... 11
19. ENTIRE AGREEMENT:.................................................. 11
20. BINDING EFFECT:.................................................... 11
21. GOVERNING LAW:..................................................... 11
22. HEADINGS:.......................................................... 11
23. SURVIVAL:.......................................................... 11
24. RECORDING OF AGREEMENT:............................................ 11
25. LIENS AGAINST THE PREMISES:........................................ 12
26. LOAN OF DOCUMENTS:................................................. 12
27. CALCULATION OF TIME PERIODS:....................................... 12
28. DEFAULT BY PURCHASER/LIQUIDATED DAMAGES:........................... 12
29. COUNTERPARTS:...................................................... 12
LEGAL DESCRIPTION:..................................................... 14
Lease........................................................................ 15
Escrow Agreement............................................................. 22
<PAGE>
SALE OF 35 INDUSTRIAL PARKWAY, SOMERVILLE, NJ
This Agreement of Sale made this 24th day of November, 1997, by and
between Biosearch Medical Products, Inc. a New Jersey Corporation, with its
principle place of business at 35 Industrial Parkway, Somerville, N.J. 08876
("Seller") and T.B.M. Associated, L.L.C. a New Jersey Corporation, with its
principle place of business at 40 Industrial Parkway, North Branch, N.J. 08876
("Purchaser")
WITNESSETH:
WHEREAS, The Seller is the owner of certain real property premises located
in the municipality of Branchburg, County of Somerset, and State of New Jersey;
and
WHEREAS, Purchaser desires to purchase said premises from Seller; and
WHEREAS, the parties hereto desire to set forth their mutual
understandings and agreements with respect to the sale and purchase of said
premises.
NOW, THEREFORE, in consideration of the mutual promises and covenants
herein contained, the parties hereto agree as follows:
1. AGREEMENT TO SELL: Seller hereby agrees to sell and Purchaser hereby
agrees to purchase those real property premises consisting of approximately 6.2
acres situated in the Township of Branchburg, County of Somerset and State of
New Jersey. The premises are commonly known as 35 Industrial Parkway,
Somerville, New Jersey and are also known as Lot 3D, Block 13, as shown on the
current tax map of the Township of Branchburg. The premises are more
specifically described on Schedule A attached hereto and made a part hereof. All
machinery and trade fixtures are not included in the sale.
2. PURCHASE PRICE: The purchase price for the premises shall be Nine
Hundred Thousand Dollars ($900,000) and a 3 year lease back of approx 17,000 sq
ft. from Purchaser to Seller beginning on the date of closing said terms of
lease are set forth on Schedule B1 attached hereto, subject to adjustments as
hereinafter provided in Paragraph 8, payable as follows:
(a) Upon execution hereof,
the receipt of which is hereby
acknowledged, to be held in escrow by
escrow agent pending closing and
pursuant to the provisions of Paragraph 4 $ 100,000
(b) Balance to be paid at
closing of title by certified, bank,
cashier's, or attorneys' trust account
check or pursuant to Seller's wire
<PAGE>
SALE OF 35 INDUSTRIAL PARKWAY Page-2
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instructions $ 800,000
(c) A three year fully paid
lease of approx. 17,000 square feet,
which the parties value at $357,000.
$ 357,000
Total Purchase Price $1,257,000
3. TITLE:
(a) Title to the premises shall be good, marketable, with title
valid of record, and insurable by a title insurance company of Purchaser's
choice authorized to do business in the State of New Jersey, subject to the
following exceptions which shall be deemed "Permitted Exceptions":
Subject to a mortgage given by purchaser to the New Jersey Economic Development
Authority which purchaser will satisfy with part of the Purchase Price.
Subject to all other exceptions of record.
(i) Laws, regulations or ordinances of federal, state, county
or local entities or agencies having jurisdiction over the premises, provided
same do not prohibit the use and enjoyment of the premises for Purchaser's
Intended Use, as described in Paragraph 6(a)(i) below.
(ii) Easements, covenants, and restrictions of record,
provided the same have not been violated, would not render title to the premises
unmarketable, nor would materially interfere with the Purchaser's Intended Use
of the premises.
(iii) Such state of facts as would be shown on an accurate
survey of the premises, provided such facts do not render title to the premises
unmarketable, would not materially interfere with Purchaser's Intended Use of
the premises, nor would reveal encroachments onto the premises from adjoining
properties or from the premises onto adjoining properties.
The existence of mortgages on the premises shall not constitute a
non-Permitted Exception, provided the outstanding principal balance and accrued
interest due and owing thereon is less than the balance of the purchase price
described in Paragraph 2(b). In the event the amounts due under such mortgages
are less than the balance of the purchase price described in Paragraph 2(c),
then the Purchaser shall be permitted to use a portion of the closing proceeds
to satisfy such amounts.
(b) Within sixty (60) days from the date hereof, Purchaser shall
procure a
<PAGE>
SALE OF 35 INDUSTRIAL PARKWAY Page-3
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preliminary certificate of title from a title insurance company of Purchaser's
choice licensed to do business in the State of New Jersey. Purchaser shall
promptly notify Seller, in writing, of any title exceptions set forth in such
preliminary certificate or in any amendments thereto which are not Permitted
Exceptions. Seller shall then have a thirty (30) day period after such notice to
clear or remove the non-Permitted Exceptions to the satisfaction of Purchaser
and Purchaser's title company.
(c) In the event Seller is unable, after due diligence, to remove
the non-Permitted Exceptions and deliver title as required in Paragraph 3(a)
above, Purchaser shall have the right either to accept such title as Seller is
able to convey, without abatement of the purchase price, or to terminate this
Agreement.
4. ESCROW AGENT AND DEPOSIT:
(a) The escrow agent referred to in Paragraph 2 above shall be
Smith, Stratton, Wise, Herher & Brennan, attorneys at Law, (600 College
Road-East, Princeton, N.J. 08540) (hereinafter referred to as "Escrow Agent").
The Escrow Agent shall hold the deposit and interest accrued thereon
(hereinafter "escrow funds") pursuant to an ESCROW AGREEMENT, the form being
attached to this AGREEMENT as Schedule C.
(b) Upon closing of title, the Escrow Agent shall deliver the escrow
funds to Seller. Purchaser shall be entitled to a credit against the purchase
price for the deposit but not the interest.
(c) In the event that pursuant to this Agreement or by mutual
consent of Seller and Purchaser this Agreement is terminated, the Escrow Agent
shall deliver the deposit and all interest earned thereon to the Purchaser. In
that event, the Purchaser herein agrees to execute any and all documents
necessary to confirm that Purchaser shall be liable to any taxing authority for
taxes with respect to such interest. The Purchaser's obligation herein shall
survive the termination of this Agreement.
(d) In the event that there is no closing, nor a termination of this
Agreement in accordance with its terms or by mutual consent of Seller and
Purchaser, and/or one party shall allege default or breach by the other party as
the cause, the Escrow Agent shall continue to hold said escrow funds pending an
order from a court of competent jurisdiction or mutual consent of Seller and
Purchaser.
(e) Notwithstanding the terms of subparagraphs (c) and (d) above,
the parties hereto agree that the question of which party is entitled to the
deposit and when shall be governed by other paragraphs of this Agreement other
than this Paragraph 4, and that this Paragraph 4 shall determine the procedures
by which the Escrow Agent shall make disbursements. If Seller claims at any time
that it is entitled to the escrow funds on account of any default by Purchaser,
Seller shall notify Escrow Agent, in writing, requesting payment to Seller. If
within ten (10) days of Escrow Agent's receipt of such notice Purchaser has not
objected to the payment thereof to Seller, Escrow Agent shall pay same
<PAGE>
SALE OF 35 INDUSTRIAL PARKWAY Page-4
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to Seller. If Purchaser objects, then subparagraph (d) above shall apply. If on
the date set for closing Purchaser does not object, in writing, to the payment
of the escrow funds to Seller in accordance with Paragraph 4(b), then Escrow
Agent shall pay to Seller such sums. If Purchaser objects, in writing, to such
payment, then subparagraph 4(d) above shall apply. If Purchaser claims at any
time that it is entitled to the return of the escrow funds in accordance with
this Agreement, Purchaser shall notify the Escrow Agent, in writing, of its
claim for same. If within ten (10) days of Escrow Agent's receipt of such notice
Seller has not objected to the payment thereof to Purchaser, Escrow Agent shall
pay same to Purchaser. If Seller objects, then the provisions of subparagraph
4(d) shall apply. Both Seller and Purchaser agree that in connection with any
written notification to be given to the Escrow Agent, a copy of such written
notification shall be served upon the other party and the party giving such
notice shall have the unconditional obligation to provide Escrow Agent with
evidence satisfactory to Escrow Agent that a copy of the written demand has been
delivered to the other party. Each party undertakes the obligation to provide
such notice and provide evidence of such notice to Escrow Agent. Until such
obligation has been satisfied, any time period described in this subparagraph
(e) shall not commence to run.
(f) The Seller and Purchaser acknowledge that the Escrow Agent is
one of the attorneys for the Seller but such fact shall not disqualify Escrow
Agent from representing the Seller in any dispute between the parties hereto.
(g) Seller and Purchaser agree that upon Escrow Agent's disbursement
of the escrow funds to Seller or to Purchaser, in accordance with the terms set
forth hereinabove or upon deposit thereof with a court of competent
jurisdiction, the Escrow Agent shall have no further obligation under this
Agreement or with respect of the escrow funds.
5. TERMINATION OF AGREEMENT: If, pursuant to the terms of this Agreement,
this Agreement shall be terminated or canceled then subject to Paragraph 4
hereof, Escrow Agent shall return the escrow funds to Purchaser and neither
Seller nor Purchaser shall have any further liability to the other.
6. PURCHASER'S INTENDED USE: Seller and Purchaser agree that Purchaser is
purchasing the premises for the purpose of utilizing the premises for
warehousing of fabric subject to all federal state and municipal laws and
regulations. Seller represents that to Seller's best knowledge, the premises can
be so used in a lawful manner.
7. PURCHASER'S CONTINGENCIES: It is understood and agreed that the
obligation of Purchaser to purchase the premises is expressly contingent upon
the achievement or satisfaction of all of the following conditions, any or all
of which the Purchaser shall have the right to waive, in whole or in part. The
Purchaser shall not have the right to extend any time periods referred to herein
unless such extension is agreed to in writing signed by both Seller and
Purchaser. Said conditions are as follows:
<PAGE>
SALE OF 35 INDUSTRIAL PARKWAY Page-5
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(a) Purchaser obtaining a commitment (the "Commitment") from United
National Bank ("the Lender") for a mortgage loan (the "Loan") in the amount of
$900,000 with interest at the prevailing rates for a prevailing year term.
Purchaser agrees to make immediate application for such Loan and promptly comply
with all of such Lender's reasonable requirements in connection with such Loan.
Purchaser shall proceed with due diligence to obtain such commitment. In the
event Purchaser has not obtained the Commitment from the Lender within sixty
(60) days of the date on which Seller and Purchaser have both duly executed this
Agreement and each has received a fully executed counterpart thereof (the
"Execution Date"), either party may terminate this Agreement by written notice
sent before the 63rd day or this contingency is waived.
(b) Environmental Contingency. The delivery by Seller within ninety (90)
days after the Execution Date or as soon afterwards as received from the state
of New Jersey, of a reasonably satisfactory letter of nonapplicability or
negative declaration (as appropriate) regarding the premises pursuant to the
Industrial Site Recovery Act (N.J.S.A. 13:1K-6 et seq.) (hereinafter, ISRA). If
at any time any seepage, presence of or exposure to any hazardous substance or
chemical, toxic or other waste (collectively "Hazardous Substances") occurs or
exists on the, then Purchaser may terminate this Agreement.
(c) Feasibility Study
(i) The Purchaser shall have a period of sixty (60) days from the
Execution Date ("Feasibility Period") in which to make such zoning, legal,
title, engineering, soil, environmental, geological and other technical studies,
tests, investigations and inquiries as shall deem necessary and appropriate, all
at the Purchaser's sole cost and expense, in order to determine whether the
premises is suitable for Purchaser's use as the warehousing of fabric.
(ii) In the event that the Purchaser determines, that as a result of
the tests, studies and investigations, that it is unwilling to proceed with the
acquisition of the premises because the premises is not suitable for the
warehousing of fabric, the Purchaser shall have the right, upon written notice
to the Seller delivered on or before the 60th day of the Feasibility Period, to
cancel this Agreement in which event the Deposit heretofore paid by the
Purchaser shall be returned and there shall be no further liability or
obligation on the part of either party hereto. If such notice is not delivered
on the 60th day this condition is waived.
(iii) From and after the date hereof, the Purchaser shall have the
right to enter upon the premises for the purpose of making, at its sole cost and
expense, the various tests, studies and investigations, authorized herein.
Additionally, the Purchaser agrees to indemnify, defend and hold harmless the
Seller herein from and against any claims, damage or losses caused by the
Purchaser's entry upon the premises. This indemnification and hold harmless
agreement extends to any loss occasioned to the premises. This indemnification
and hold harmless agreement extends
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to any loss occasioned to the premises. This indemnification and hold harmless
agreement extends to any loss occasioned to the premises or the Seller resulting
from the conduct or access of the Purchaser's representative as well as by its
contractors, subcontractors, business invitees and/or licensees.
(iv) The Purchaser agrees to restore the premises promptly following
the completion of the tests herein permitted to the condition of said premises
immediately prior to the Purchaser's entry thereon.
If the contingencies set forth in this Paragraph 7 are not satisfied
within the applicable contingency period and the Agreement is terminated in
accordance with the terms hereof, the Escrow Agent shall refund the Deposit to
Purchaser and neither party shall have any further liability to the other
hereunder."
Purchaser agrees to use reasonable diligence and act in good faith in
pursuit of the satisfaction of all contingencies.
In connection with the satisfaction of contingencies, Seller, without
charge to Purchaser but without assuming any financial obligation, agrees to
fully cooperate with Purchaser and execute all applications, confirmations and
other documents necessary to permit Purchaser to satisfy contingencies. In
connection with any contingency, Purchaser shall advise Seller, in writing, by
the date when Purchaser shall have the right to terminate this Agreement for
non-satisfaction of the contingency or shall have satisfied the contingency
whether or not Purchaser (a) has satisfied the contingency, or (b) is
terminating this Agreement for non-satisfaction. If by such date Purchaser has
not so advised Seller, then at any time commencing on the next day thereafter,
Seller shall have the right to terminate this Agreement by written notice to
Purchaser thereof. If neither Seller nor Purchaser has terminated this Agreement
by reason of non-satisfaction of a contingency, nor Purchaser has advised Seller
that such contingency has been satisfied, then the time period within which such
contingency can be satisfied shall continue until the earlier of (i) Seller's
written notification to Purchaser that this Agreement has been terminated for
non-satisfaction of contingency, (ii) Purchaser's written notification to Seller
that this Agreement has been terminated for non-satisfaction of contingency, or
(iii) Purchaser's notification to Seller that the contingency has been satisfied
or waived. It is the intention of this paragraph to provide that this Agreement
shall not automatically terminate nor will any contingency be deemed
automatically satisfied on any contingency period termination date unless and
until Seller and/or Purchaser, as applicable, shall have affirmatively advised
the other party as to the status of the matter.
8. CLOSING AND DELIVERY OF DOCUMENTS: Closing of title shall take place on
or about February 24, 1998 or within thirty (30) days of the waiver or
satisfaction of all of Purchaser's Contingencies, whichever date shall first
occur, at such time as is convenient for and agreed to by the parties. Seller
acknowledges agrees that since the Purchaser may be obtaining mortgage
financing, the closing will take place at the offices of Purchasers' attorneys,
or such other location as is designated by Purchaser's lender. At the closing,
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Seller shall deliver a Deed of Bargain and Sale with Covenant against Grantors
Acts, an affidavit of title, a corporate resolution authorizing the sale, an
affidavit that the Seller is not a foreign person as defined in Section 1445 of
the Internal Revenue Code ("FIRPTA Affidavit") and shall deliver and/or execute
such other documents as Purchaser's title insurance company and/or mortgage
lender may reasonably request or require. Seller agrees that it shall not convey
title pursuant to a power of attorney. In the event Purchaser obtains a survey
of the premises from a surveyor licensed in the State of New Jersey, Seller
agrees to use a legal description in accordance with such survey, provided such
survey is certified to Seller, a copy of which shall be provided to Seller by
Purchaser in advance of closing. Seller and Purchaser agree to exchange copies
of the closing documents not less than five (5) days prior to closing.
9. ADJUSTMENTS AT CLOSING: At the time of closing and delivery of deed,
taxes, water and sewer charges, if applicable, shall be adjusted between Seller
and Purchaser as of the closing date with charges for the day of closing
attributable to the Seller. Seller shall bear the expense of payment of the
realty transfer fee. Real estate taxes shall be apportioned on the basis of the
calendar year for which assessed, except that if the closing date shall occur
before the final tax rate is fixed, the apportionment of taxes shall be
tentative, based upon the parties' best knowledge of the current year's
assessments. At such time as the full year's taxes are known, the parties shall
thereafter adjust as of the date of closing based upon the full year's taxes.
Seller shall pay all roll-back taxes relating to farmland assessment whenever
such assessment may be imposed by the taxing authority. The obligations of this
paragraph with regard to any adjustments or payments subsequent to closing for
real property taxes shall survive closing.
10. ASSIGNMENT: Purchaser shall be entitled to assign this Agreement, to
an entity in which it is a majority owner as long as it remains liable pursuant
to the terms of this Agreement. All other assignments are prohibited.
10A. REPRESENTATIONS, WARRANTIES AND COVENANTS OF SELLER
Seller is the owner of the premises and has the authority to enter into this
transaction.
Seller is a corporation, duly organized, validly existing and in good standing
in the State of New Jersey. Seller has full power and authority to consummate
the sale of the premises as set forth herein, and all requisite actions required
by law to authorize the execution, delivery and performance of this Agreement
have been taken.
Seller has not received any notice of any violation of any federal, state or
municipal laws, ordinances, orders, rules, regulations or requirements affecting
any portion of the premises. In the event of the issuance of any written notice
of violations after the date hereof, but prior to the Closing, Seller agrees to
correct such violations or to allow Purchaser a credit at Closing to make such
corrections.
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Seller has received no notice and has no knowledge of any pending improvements,
liens or special assessments to be made against the premises by any governmental
authority.
No portion of the premises is, and the Seller has not received any notice and
has no knowledge that any portion of the premises will be, subject to or
affected by any condemnation of similar proceeding.
The Seller has no knowledge of any existing action, suit or proceeding affecting
the premises or any portion thereof or relating to, or arising out of the
ownership, management or operation of the premises, in any court or before or by
any federal, state, county or municipal department, commission, board, bureau or
agency or other governmental instrumentality.
No person, firm or other entity has any right of first refusal, option or any
other right of any nature to acquire the premises or any portion thereof or any
interest therein.
Neither the execution and delivery of this Agreement nor the consummation of the
sale provided for herein will constitute a violation or breach by Seller of any
provision of any agreement or other instrument to which Seller is a party or to
which Seller may be subject although not a party, or will result in or
constitute a violation or breach of any judgement, order, writ, injunction or
decree issued against Seller.
There are no tenants or occupants, leases, mortgages or other liens or
encumbrances, or other agreements affecting the operation of the premises except
as set forth in this Agreement with the exception of a Use and Occupancy Permit
that Seller has with its affiliate, Hydromer, Inc., which is terminable on
thirty (30) days notice. At the option of the Purchaser, Seller will assign such
Permit to Purchaser.
Seller represents that there are no existing contracts for advertising,
janitorial services, maintenance contracts, or purchase contracts or for other
services which would be binding on the Purchaser after Closing or affect the
premises being conveyed. All valid bills and claims for labor performed and
materials furnished to or for the benefit of the premises for all periods prior
to the Closing Date will be paid in full by Seller.
All public utilities required for the operation of the premises either enter the
premises through adjoining public streets, or if they pass through adjoining
private land, do so in accordance with valid irrevocable easements which run to
the benefit of the owner of the premises.
Seller has maintained and will maintain through the Closing Date such insurance
coverage as is adequate to insure the premises at full replacement cost.
To the best of Seller's knowledge, the premises are in full compliance with all
New Jersey and Federal environmental laws, including, without limitation, ISRA,
the New Jersey Spill Compensation and Control Act, N.J.S.A. 58:10-23, et seq.,
and the regulations promulgated thereunder, and all other rules and regulations
of the New Jersey Department
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of Environmental Protection and Energy ("DEPE") and its various divisions.
Seller has not dumped or disposed of, suffered or permitted dumping and
disposal or, nor cleaned up any "Hazardous Substances", as such term is defined
in N.J.S.A. 13:1K- 8(d) on or upon any portion of the premises. To the best of
Seller's knowledge, the premises has not been used for any of the aforementioned
purposes, or subjected to any such occurrences. Prior to the Closing Date,
Seller shall prevent the dumping or disposal of any Hazardous Substances on or
upon any portion of the premises. Seller hereby agrees to defend, indemnify, and
hold Buyer harmless from and against any and all claims, losses, judgments,
liabilities, damages and expenses (including with limitation cleanup costs and
attorneys' fees arising by reason of any of the aforesaid or an action against
the Seller under this indemnity) arising directly or indirectly from, out of, or
by reason of any breach of this Section or the release of any Hazardous
Substances prior to Closing. If any of the aforesaid representations are not
true at the time of Closing, the Purchaser shall be permitted to terminate the
Agreement and receive the return of the Deposit together with all accumulated
interest.
SURVIVAL. The representation, warranties and covenants of the Seller listed
above are true and complete as of the Execution Date and Seller will reaffirm
their truth and completeness as of the Closing Date. All such representations,
warranties and covenants shall survive the Closing.
10B. PRE-CLOSING COVENANTS OF SELLER.
Seller covenants and agrees that subsequent to the Execution Date
and until the Closing:
Seller shall deliver the premises at the Closing Date in the same
condition as it is on the Execution Date subject to ordinary wear and tear.
Without the prior written consent of Purchaser in each instance, the
Seller shall not enter into, renew, amend or extend any lease or enter into any
new tenancy of any nature.
Seller shall not suffer, cause or permit any change in the condition
of the premises including, without limitation, the duping of any garbage,
Hazardous Substances (as defined in N.J.S.A. 58:10-23.11b(k), or of any fill or
other materials, or the removal of any fill, soil or vegetation from the
premises. Seller shall not suffer, cause or permit any use or the occupancy of
the premises pending the Closing.
In the event the Seller receives written notice from any
governmental agency of any violation of any governmental rule, statute,
ordinance or regulation affecting any portion of the premises, Seller shall
promptly cure such violation, at its sole cost and expense, prior to the
Closing. Seller shall provide Purchaser with copies of all such notices and any
responses thereto.
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The risk of loss or damage to the premises by or as a result of any
cause until the Closing Date is assumed by and shall be the responsibility of
Seller.
Certificate of Occupancy or other Governmental Approval. In the event that
the Township of Branchburg requires the obtaining of Certificate of Occupancy,
Certificate of Continuing Occupancy or any other type of governmental approval
as a prerequisite for Closing, it shall be the obligation of the Seller to
obtain same at its sole cost and expense. Seller shall make any repairs required
to the premises for the issuance of said certificates or approvals, provided
however, Seller has no duty to repair or modify the premises if said repair or
modification is related to the activity or proposed activity of Purchaser.
11. POSSESSION AND PRECLOSING ENTRY: Purchaser may enter into and upon the
said lands and premises upon delivery of deed and from thence take the rents,
issues and profits for its own use; provided, however, that Purchaser shall have
the right, from time to time, to enter upon the premises prior to the date of
closing hereunder for the purpose of conducting inspections, surveys and tests
related to Purchaser's Intended Use and for satisfying of the Purchaser's
Contingencies. Purchaser shall indemnity and hold Seller harmless from any and
all liability for damage to persons or property arising from such entry prior to
the closing date.
12. ASSESSMENTS: If at the time for the delivery of the deed the premises,
or any part thereof, shall be or shall have been affected by a special
governmental assessment or assessments which are or may become payable in annual
installments of which the first installment is then due or has been paid, then
for the purpose of this Agreement, all of the unpaid installments of any such
assessment, including those which are to become due and payable after the
delivery of the deed, shall be deemed to be due and payable and to be liens upon
the premises affected thereby and shall be paid and discharged by Seller upon
delivery of the deed. Unconfirmed improvements or assessments, if any, shall be
paid and allowed by Seller on account of the purchase price if the improvement
or work has been commenced on or before the date hereof. Seller represents to
the best of its knowledge that there are no unconfirmed improvements or
assessments for improvements contemplated for the premises.
13. REAL ESTATE BROKERAGE COMMISSION: Seller and Purchaser mutually
represent and warrant to each other that there are no real estate brokers that
either have dealt in connection with the negotiation of this Agreement.
The parties hereto agree to save each other harmless and indemnify each
other from any losses, damages, judgments and costs, including legal fees, which
a party may suffer if the other party breaches its obligations hereunder or if
the representation of the other party contained herein proves untrue.
14. RISK OF LOSS: Risk of loss, by reason of fire or other casualty, shall
remain with Seller until the time of closing. In the event of fire or other
casualty to the premises,
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Seller shall advise Purchaser within ten (10) days thereof If all or a material
part of the premises is destroyed by fire or other casualty, Purchaser shall
have the right to terminate this Agreement. For purposes hereof, a material
damage shall be damage, the restoration or repair cost of which shall, as
estimated by Seller's insurance company, exceed $200,000. In connection with any
non-material casualty, Seller shall cause all repairs to be made on or before
closing. In connection with any material casualty which does not result in
Purchaser's termination of this Agreement, Purchaser shall have the right to
require Seller to repair the premises, in which case the time for closing shall
be extended as required to allow for such repair, or to purchase the premises in
accordance herewith, without abatement of purchase price, and receive an
assignment of proceeds of such insurance.
15. CONDEMNATION: In the event condemnation or eminent domain proceedings
shall be commenced by any governmental or quasi-governmental authority having
jurisdiction therefor against all or any part of the premises, Seller shall
promptly notify Purchaser and provide Purchaser with all information concerning
such proceedings. Purchaser may, at its option, by giving written notice to
Seller within forty-five (45) days after its receipt of the notice of such
proceedings, terminate this Agreement.
In the event Purchaser does not elect to terminate this Agreement, then
any award in condemnation and/or unpaid claims and rights in connection with
such condemnation shall be assigned to Purchaser at closing, or if paid to
Seller prior thereof, shall be credited against the unpaid balance of the
purchase price due at closing. If Purchaser determines not to terminate this
Agreement, Seller shall not adjust or settle any condemnation awards without the
prior written approval of Purchaser and shall allow Purchaser to participate in
all proceedings.
16. FLOOD HAZARD AREA: If the premises are within a flood hazard area,
Purchaser shall have the right to terminate this Agreement. Purchaser agrees to
obtain a flood hazard certification within 60 days from the date hereof.
17. BOUNDARY LINES: Seller represents that there are no encroachments from
the premises onto adjoining properties or from adjoining properties onto the
premises.
18. NOTICES: All notices, demands or communications hereunder shall be
sent by registered or certified mail, postage prepaid, return receipt requested,
to the following addresses first appearing.
19. ENTIRE AGREEMENT: This Agreement constitutes the entire agreement
between the parties hereto. No amendment or modification hereof shall have any
force or effect unless in writing and executed by all parties.
20. BINDING EFFECT: This Agreement shall be binding upon and inure to the
benefit of the parties hereto, their respective legal representatives, their
heirs,
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executors, administrators, successors and assigns.
21. GOVERNING LAW: This Agreement shall be construed in accordance with
the laws of the State of New Jersey.
22. HEADINGS: The article headings contained in this Agreement are for
reference only for the convenience of the parties. They shall not be deemed to
constitute a part of this Agreement nor shall they alter or supersede the
contents of the paragraphs themselves.
23. SURVIVAL: Whenever the context of this Agreement allows, expressly
provides, or reasonably implies a continuing obligation, such continuing
obligation shall survive the closing of title and delivery of the deed and shall
not merge therein.
24. RECORDING OF AGREEMENT: Seller and Purchaser agree that this Agreement
will not be recorded.
25. LIENS AGAINST THE PREMISES: All sums paid by Purchaser pursuant to the
terms of this Agreement shall be returned to Purchaser upon Purchaser's
termination of this Agreement and the same shall constitute liens against the
premises.
26. LOAN OF DOCUMENTS: Purchaser agrees that it has received copies of its
title insurance policy, present deed, proposed deed, 1994 ISRA submission and
Resolution by the Board of Directors of Seller, authorizing the sale. Seller
shall also make available to Purchaser plans and specifications utilized by
Seller in connection with any applications made by Seller for any governmental
approvals or in connection with the construction of any improvements on the
premises.
27. CALCULATION OF TIME PERIODS: With respect to any time periods set
forth herein which are calculated from the date of this Agreement, it is
understood and agreed that such time period commences from the date of final
execution of this Agreement by all parties hereto, including execution of any
riders or amendments hereto. The date of this Agreement shall be the date the
last signatory executes this Agreement and any such riders or amendments.
28. DEFAULT BY PURCHASER/LIQUIDATED DAMAGES: The parties hereto agree that
in the event Purchaser shall default under this Agreement, the actual damages
which Seller would suffer would be mathematically difficult to calculate. The
parties hereto agree in good faith to estimate the amount of such damages which
would reasonably compensate the Seller for such a default. Such amount is equal
to $100,000. Accordingly, in the event of any default by Purchaser, Seller shall
be entitled to liquidated damages in the sum of $100,000. The balance of the
deposit, if any, together with interest, shall be returned to Purchaser.
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29. COUNTERPARTS: This Agreement will be signed in any number of
counterparts with the same effect as if the signatures thereto and hereto were
upon the same instrument.
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IN WITNESS WHEREOF, the undersigned have set their hands and seals the day
and year first above written.
Biosearch Medical Products, Inc.
_________________________ Seller
Manfred F. Dyck, President
T.B.M. Associated, L.L.C.
______________________ Purchaser
Title: _________________________
Date: __________________________
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Schedule A
LEGAL DESCRIPTION:
BEGINNING at the most northerly corner of Lot 3D, as shown on "Plan of Major
Subdivision-Final Plat: Industrial Property of Herbert Vollers-Readington Road,
situated in Branchburg Twp., Somerset County" dated September 1965, revised
April 1967, which map was filed in the Somerset County Clerks's Office as Map
No. 1139 and from said Beginning point running; (1) South 66 degrees, 06
minutes, 44 seconds East, 531.87 feet along the southerly property line of the
Central Railroad Company of New Jersey to a point and corner of Lot 3A as shown
on the map herein referred to; thence (2) South 24 degrees, 15 minutes West,
493.73 feet along Lot 3A to the center line of Industrial Parkway; thence (3)
North 65 degrees, 45 minutes West, 658.13 feet along the center line of
Industrial Parkway; thence (4) North 38 degrees, 41 minutes, 12 seconds East,
506.36 feet to the point and place of BEGINNING. Containing 6.2 aces more or
less.
The above description includes all of Lot 3D as shown on "Plan of Major
Subdivision-Final Plat: Industrial Property of Herbert Vollers-Readington Road,
situated in Branchburg Twp., Somerset County" dated September 1965, revised
April 1967, which map is filed in the Somerset County Clerk's Office as Map No.
1139.
Being the same premises conveyed to Fabri-Kal Corporation by deed of Herbert D.
Vollers and Nancy V. Vollers, his wife, dated July 16, 1970, and recorded in the
Somerset County Clerk's Office in Deed Book 1229 at page 848.
Together with all rights of Fabri-Kal Corporation under deed dated December 29,
1972, to the Township of Branchburg and recorded in the Somerset County Clerk's
Office in Deed Book 1274 at page 591.
Also being the same premises conveyed to Biosearch Medical Products, Inc. by
deed of Fabri-Kal Corporation, dated September 9, 1980, and recorded in the
Somerset County Clerk's Office in Deed Book 1427 at page 620.
Further being made subject to agreements, covenants, easements and restrictions
of record and such facts as an inspection and accurate survey would disclose.
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Schedule B1
LEASE
THIS LEASE is made as of the _____ day of _____, 1998, between T.B.M.
Associated, L.L.C. (hereinafter referred to as "Landlord") and Biosearch Medical
Products, Inc. (hereinafter referred to as "Tenant").
SECTION 1
DEMISE AND BASIC RENT
Landlord hereby rents to Tenant and Tenant hereby rents from Landlord,
approx. 17,000 sq. ft. in the east side of the building, commonly known as 35
Industrial Parkway, Somerville, NJ, the east side being identified as Schedule
B2 attached hereto, (hereinafter referred to as the "Premises"), in its "As Is"
condition, for the term of beginning on the day of that the real estate
containing the premises is conveyed by Tenant to Landlord and ending on 36
months later, at seven Dollars ($7.00) per sq. ft. per year, the amount of three
hundred and fifty seven thousand dollars ($357,000) being acknowledged as
received by Landlord from Tenant as part of the sale of the real estate in which
the Premises is part and parcel therein (herein the "Basic Rent").
SECTION 2
ADDITIONAL RENT, TAXES, ASSESSMENTS, ETC.
In addition to the Basic Rent provided in Section I hereof, Tenant will
pay 68% of any increase in real estate taxes over the year 1997 ("Additional
Rent"). Tenant will pay all utility bills that are metered and enter the
Premises. All other costs of operation (such as but not limited to taxes,
building insurance, grounds upkeep, snow removal and other like costs) are to be
paid by Landlord.
SECTION 3
AFFIRMATIVE COVENANTS OF TENANT
Tenant, jointly and severally if more than one, hereby covenants with
Landlord as follows:
(A) to pay any Additional Rent as aforesaid;
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(B) to keep the Premises in good order; and
(C) to surrender the peaceful and quiet possession of the Premises
at the end of the term or any short period, broom clean and in as good condition
as when received (normal wear and tear and damage from insured events excepted).
SECTION 3A
ADDITIONAL TERMS
1. Landlord shall pay for the cost of construction of interior demising walls
which shall be finished on both sides together with the doors to be located
therein. All other interior modifications shall be the responsibility of the
Tenant.
2. Landlord will reimburse Tenant for any electricity or utilities used by
Landlord on Tenant's meters.
3. Landlord will grant Tenant access to the loading dock to load trucks.
4. Landlord recognizes there is a security system covering the entire premises
and Tenant will disconnect the sensors in the non-leasehold from the system.
5. Tenant has the right to park up to 3 trailers and 2 refuse containers in the
rear parking lot for storage, provided no municipal ordinances are violated. At
the end of the lease these trailers and containers shall promptly removed.
SECTION 4
NEGATIVE COVENANTS OF TENANT
Tenant hereby covenants that Tenant will not do, suffer or permit any of
the following:
(A) anything to be done in or about the Premises which will
contravene any policy of insurance against loss by fire;
(B) violate the Certificate of Occupancy for the Premises or use, or
permit to be used, the Premises for the purposes other than those of a Medical
Device manufacturing; or
(C) assign, mortgage or pledge this Lease, in whole or in part, or
permit the assignment by operation of law or otherwise, or sublet the Premises
or any portion thereof, without the consent in writing of Landlord.
SECTION 5
QUIET ENJOYMENT
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The Landlord covenants that he shall do nothing to affect the Tenant's
right to peaceably and quietly have, hold and enjoy the Premises for the term
herein mentioned, subject to the provisions of this Lease and to any mortgage or
deed of trust to which this Lease shall be subordinate.
SECTION 6
ALTERATIONS
Tenant shall not make any alterations or additions to the Premises without
the prior written consent of Landlord. Any alterations, additions or repairs the
Tenant shall be permitted to make shall be done at Tenant's own expense.
Landlord shall make all alteration to secure the Premises from the other
parts of the building, including installing separate meters to insure Tenant
does not pay for any part of the non-leasehold.
SECTION 7
TERMINATION
After a period of 10 months, Tenant may terminate this lease with a two
month notice to Landlord. Landlord shall refund any unused rent at the rate of:
1. if termination is effective in months 13-24, $6,000 per month times
the remaining months payable within 9 months.
2. if termination is effective in months 25-36, $8,000 per month times
the remaining months payable within 3 months.
Tenant's responsibility to vacate the premises at the termination of the
Lease subject to a two month extension, shall be deemed to be "of the essence"
of this Lease. Tenant shall have one option to extend the lease for two one
month periods at a rate of $8,750 per month. In the event that tenant does not
vacate the premises at the time of termination of this lease extension, landlord
shall be entitled to make an immediate application to a court of appropriate
jurisdiction and ask that the tenant be removed from the premises. The losing
party shall be responsible for payment of all attorneys' fees and cost of suit.
Upon termination of this Lease Tenant shall deliver as soon afterwards as
a received from the state of New Jersey, an approval of a negative declaration
regarding the premises pursuant to the Industrial Site Recovery Act (N.J.S.A.
13:1K-6 et seq.) (hereinafter, ISRA).
SECTION 8
EFFECT OF DESTRUCTION
If the Premises shall be destroyed or rendered untenantable by fire or
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unavoidable accident, or if the building in which the Premises are located is so
damaged that Landlord shall elect to demolish it or rebuild it, the tenancy
hereby created shall be thereby terminated, and Landlord shall refund the unused
portion of the Rent at:
1. if termination is effective in months 13-24, $6,000 per month times
the remaining months payable within 9 months.
2. if termination is effective in months 25-36, $8,000 per month times
the remaining months payable within 3 months.
SECTION 9
INSURANCE
Tenant shall provide and keep in force during the term of this Lease
general liability insurance for injury or damage to persons or property in or
upon the Premises during the term of this Lease. The said policy shall be with
limits not less than one million Dollars ($1,000,000) in respect of any one
person, in respect of any one accident and in respect of property damage and
shall also contain an endorsement protecting the Landlord for water damage and
sprinkler damage liability with respect to property other than the Landlord's.
Landlord shall insure the building including the premises as Landlord
deems fit. Tenant shall have the right to purchase any additional insurance to
cover losses of Tenant.
Tenant shall also furnish insurance for such other hazards and in such
amounts as Landlord may reasonably require. Landlord reserves the right at any
time and from time to time to require the limits for any of the insurance under
this Section to be increased to limits which Landlord deems reasonable.
SECTION 10
REPAIRS
Tenant shall keep the Premises in good condition and repair and shall
redecorate, paint and renovate the Premises as may be necessary to keep them in
good condition and repair and good appearance. Tenant will keep the sidewalks
forming part of the Premises clean and free of obstructions, snow and ice.
SECTION 11
CONDEMNATION
If the whole or any part of the Premises shall be acquired or condemned by
eminent domain for any public or quasi-public purpose or use, then this Lease
and the term and estate hereby granted shall forthwith cease and terminate as of
the date of
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SALE OF 35 INDUSTRIAL PARKWAY Page-20
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vesting of title and Landlord shall refund any and all unused Rent at the rate:
1. if termination is effective in months 13-24, $6,000 per month times
the remaining months payable within 9 months.
2. if termination is effective in months 25-36, $8,000 per month times
the remaining months payable within 3 months.
SECTION 12
SUBORDINATION
This Lease is and shall be subject and subordinate to all present and
future mortgages, deeds of trust or underlying leases affecting the Premises.
Tenant shall execute any instrument which may be deemed necessary or desirable
by Landlord to further effect or to evidence the subordination of this Lease to
any such mortgage, deed of trust or underlying lease.
SECTION 13
INDEMNIFICATION
Tenant agrees to indemnity and hold harmless the Landlord, each mortgagee,
ground or underlying lessor of the Premises from and against any and all
liabilities, damages, claims, losses, judgments, causes of action, costs and
expenses (including reasonable counsel fees and legal expenses) which may be
incurred by Landlord or any such mortgagee or underlying lessor relating to or
arising out of any breach by Tenant of (i) its obligations to be performed under
this Lease, or (ii) the carelessness, negligence or improper conduct of Tenant,
its agents, contractors, employees, invitees or licensees, or (iii) arising out
of the use and occupancy of the Premises or any work or thing whatsoever done or
any condition created in or about the Premises during the term of this Lease. In
case any action or proceeding be brought against Landlord by reason of any such
claim, Tenant, upon notice from Landlord, shall resist and defend such action or
proceeding.
SECTION 14
EXCULPATION
The term "Landlord" as used in this Lease means only the holder, for the
time being, of the Landlord's interest under this Lease so that in the event of
any transfer of title to the Premises, the Landlord shall be and hereby is
entirely free and relieved of all obligations of Landlord hereunder accruing
after such transfer. Tenant acknowledges that there is absolutely no personal
liability on the part of the Landlord, its successor or assigns with respect to
any of the terms, covenants and conditions of this Lease, and that Tenant shall
look solely to the equity of Landlord in the Building for the satisfaction of
each and every remedy of Tenant in the event of any breach by Landlord of any of
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SALE OF 35 INDUSTRIAL PARKWAY Page-21
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the terms, covenants and conditions of this Lease to be performed by Landlord.
SECTION 15
BINDING EFFECT
This Lease shall be binding upon and shall inure to the benefit of the
parties hereto and their personal representatives, successors and assigns,
subject to the limitations set forth in Section 15 hereof.
SECTION 16
APPLICABLE LAW
The Lease shall be interpreted and construed in accordance with the laws
of the State of New Jersey (excluding New Jersey conflict of laws) and by the
state courts of New Jersey.
SECTION 17
CAPTIONS
The captions appearing in this Lease are inserted only as a matter of
convenience and do not define, limit, construe or describe the scope or intent
of the Sections of this Lease nor in any way affect this Lease.
WITNESS the hands and seals of the parties hereto as of the day and year
first above written.
ATTEST/WITNESS: LANDLORD
___________________________________ BY: _________________________ (Seal)
ATTEST/WITNESS: TENANT
___________________________________ BY: _________________________ (Seal)
<PAGE>
SALE OF 35 INDUSTRIAL PARKWAY Page-22
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Schedule B2
Partition of premises into 17,000 sq ft leasehold.
******INSERT DRAWING HERE*****
<PAGE>
SALE OF 35 INDUSTRIAL PARKWAY Page-23
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Schedule C
Escrow Agreement Between
Smith, Stratton, Wise, Herher & Brennan
Biosearch Medical Products
T.B.M. Associated, L.L.C.
<PAGE>
SALE OF 35 INDUSTRIAL PARKWAY Page-24
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ESCROW AGREEMENT
In connection with a contract for the sale of real estate dated
___________, 1997 ("Agreement") entered into by and between BioSearch Medical
Products, Inc. of 35 Industrial Parkway, Somerville, New Jersey 08876, ("BMP")
and T.B.M. Associated, L.L.C., of 40 Industrial Parkway, Somerville, New Jersey
08876("Buyer"); BMP, Buyer (hereafter also referred to as the "Parties") and
Smith Stratton, Wise, Herher & Brennan, 600 College Road East, Princeton, New
Jersey 08540 (the "Escrow Agent") agree as follows:
1. DEPOSIT
Simultaneously with the execution of the Escrow Agreement, Buyer has
deposited one hundred thousand dollars ($100,000) with the Escrow Agent Escrow
Fund pursuant to Section 2a of the Agreement.
2. TERM
This Escrow Agreement shall take effect on the date hereof, and remain in
effect until the closing or cancellation of the Agreement, and for such
additional time as may be required to resolve any dispute between Buyer and BMP
with the purpose of this Escrow Agreement. This Escrow Agreement shall terminate
upon the earlier or i) termination or cancellation of the Agreement without
dispute contemplated by this Escrow Agreement, or ii) delivery of the escrow
fund pursuant to the Agreement, the written direction of Buyer and BMP or a
court order, and the Escrow Agent shall thereupon be released from any further
obligation hereunder.
3. PURPOSE OF ESCROW
The Escrow Agent holds the Escrow Fund solely for the purpose described in
Section 4 of the Agreement.
4. MISCELLANEOUS
(a) Escrow Agent shall not be under any duty to give the escrowed Escrow
Fund any greater degree of care than it gives other similar property held in a
fiduciary capacity, and shall not be required to invest the funds in an interest
bearing account or in any other manner.
(b) Escrow Agent may act in reliance upon any instrument or signature
believed to be genuine and may assume that any person purporting to give any
writing, notice, advice or instruction in connection with the provisions hereof
or of the Agreement has been duly authorized to do so.
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SALE OF 35 INDUSTRIAL PARKWAY Page-25
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(c) Escrow Agent may act relative hereto upon advice of counsel in
reference to any matter connected herewith, and shall be indemnified and held
harmless by the Parties and for any mistake of fact or error of judgment, or for
any acts or omissions, unless caused by its wilful misconduct or gross
negligence.
(d) This Agreement sets forth exclusively Escrow Agent's duties with
respect to the Escrow Fund and no implied duties or obligations shall be read
into this Agreement against it.
(e) Escrow Agent makes no representation as to the validity, value, or
genuineness, sufficiency, completeness or collectibility of the Escrow Fund
delivered to it.
(f) Escrow Agent does not have and will not have any interest in the
Escrow Fund but is serving only as Escrow Agent and will have only possession
thereof. The Parties agree to indemnify it and hold it harmless from and against
all damages, losses, costs and expenses in connection with or arising out of its
duties as Escrow Agent hereunder.
(g) In the event of any disagreement between any of the Parties resulting
in adverse claims or demands being made in connection with the subject matter of
this Agreement, or in the event that Escrow Agent should, in good faith, be in
doubt as to what action it should take hereunder, it may, at its option, refuse
to comply with any claims or demands on it, or refuse to take any other action
hereunder, so long as such disagreement continues or such doubt exists, and in
any such event, it shall not be or become liable in any way or to any person for
its failure or refusal to act, and it shall be entitled to continue so to
refrain from acting until the rights of the Parties shall have been fully and
finally adjudicated by a court of competent jurisdiction or all differences
shall have been fully and finally adjudicated by a court of competent
jurisdiction or all differences shall have been adjusted and all doubt resolved
by agreement among all of the interested persons.
(h) This Escrow Agreement shall survive the release of the Escrow Fund
from escrow contemplated hereby.
(i) This Agreement and the rights and obligations herein contained shall
be binding upon and inure to the benefit of the Parties, the Escrow Agent, and
their respective successors and assigns.
5. LIABILITY
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SALE OF 35 INDUSTRIAL PARKWAY Page-26
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The Escrow Agent shall not, by reason of its execution of this Escrow
Agreement, assume any responsibility or liability for any transaction between
Buyer and BMP with respect to the Escrow Fund held by it in accordance with this
Escrow Agreement. The Escrow Agent shall not be responsible for any claims,
liabilities, losses, or damages of any party which may result from the Escrow
Agent's good faith performance hereunder, unless the Escrow Agent's performance
has been found to constitute gross negligence or willful misconduct.
6. CONSENT TO REPRESENTATION
Buyer understands and acknowledges the Escrow Agent provides and has
provided legal representation and counsel to BMP, Manfred F. Dyck, President and
Chairman of BMP, Ursula M. Dyck, Director of BMP, and Hydromer, Inc. and
affiliate of BMP, and that service as Escrow Agent hereunder does not constitute
legal representation of, or counsel to Buyer. Service as Escrow Agent hereunder
will not bar Escrow Agent from continuing its representation of such persons and
entities, including but not limited to representation in connection with the
Agreement, or otherwise in connection with this Escrow Agreement. Buyer hereby
consents to such representation.
7. SUBSTITUTION OF ESCROW AGENT
Any Escrow Agent serving hereunder may resign at any time upon 60 days'
prior notice to the Parties, whereupon the Parties shall appoint a successor. If
the Parties fail to appoint a successor Escrow Agent within thirty (30) days of
the date of resignation of the resigning Escrow Agent, the resigning Escrow
Agent shall appoint a new Escrow Agent. Upon delivery of the Escrow Fund in its
possession to the new Escrow Agent the former Escrow Agent shall have no further
obligation hereunder.
8. AMENDMENTS
This Escrow Agreement may be amended by written agreement of the Parties
and the Escrow Agent.
9. ADDRESS
All notices or other communications required or contemplated herein shall
be in writing, sent by certified or express mail, addressed as indicated in this
Escrow Agreement or as the same may be changed from time to time by notice
similarly given.
10. ASSIGNMENT
Except as provided in Section 7 above, neither this Escrow Agreement, nor
any
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SALE OF 35 INDUSTRIAL PARKWAY Page-27
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rights, liabilities, or obligations hereunder may be assigned by the Escrow
Agent without the prior written consent of the Parties.
11. CHOICE OF LAW.
This Escrow Agreement shall be governed by and constructed in accordance
with the laws of the State of New Jersey.
<PAGE>
SALE OF 35 INDUSTRIAL PARKWAY Page-28
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AGREED:
BIOSEARCH MEDICAL T.B.M. Associated, L.L.C.
PRODUCTS, INC.
By:__________________________________ By:_____________________________________
Title________________________________ Title:__________________________________
SMITH, STRATTON,
WISE, HERHER & BRENNAN
By:__________________________________
Title________________________________
**END**
BIOSEARCH MEDICAL PRODUCTS, INC.
TO
Hydromer, Inc.
CONTRACT FOR THE SALE OF THE PREMISES COMMONLY KNOWN AS 35
INDUSTRIAL PARKWAY, SOMERVILLE, N.J. 08876
March 15, 1998
<PAGE>
Table of Contents:
Page
SALE OF 35 INDUSTRIAL PARKWAY, SOMERVILLE, NJ................................ 1
1. AGREEMENT TO SELL:.................................................. 1
2. PURCHASE PRICE:..................................................... 1
3. TITLE:.............................................................. 2
4. ESCROW AGENT AND DEPOSIT:........................................... 3
5. TERMINATION OF AGREEMENT:........................................... 4
6. PURCHASER'S INTENDED USE:........................................... 4
7. PURCHASER'S CONTINGENCIES:.......................................... 4
8. CLOSING AND DELIVERY OF DOCUMENTS:.................................. 6
9. ADJUSTMENTS AT CLOSING:............................................. 7
10. REPRESENTATIONS, WARRANTIES AND COVENANTS OF SELLER................ 7
10A. PRE-CLOSING COVENANTS OF SELLER. ................................ 9
11. POSSESSION AND PRECLOSING ENTRY:................................... 10
12. ASSESSMENTS:....................................................... 10
13. REAL ESTATE BROKERAGE COMMISSION:.................................. 10
14. RISK OF LOSS:...................................................... 10
15. CONDEMNATION:...................................................... 11
16. FLOOD HAZARD AREA:................................................. 11
17. BOUNDARY LINES:.................................................... 11
18. NOTICES:........................................................... 11
19. ENTIRE AGREEMENT:.................................................. 11
20. BINDING EFFECT:.................................................... 11
21. GOVERNING LAW:..................................................... 11
22. HEADINGS:.......................................................... 11
23. SURVIVAL:.......................................................... 11
24. RECORDING OF AGREEMENT:............................................ 12
25. LIENS AGAINST THE PREMISES:........................................ 12
26. LOAN OF DOCUMENTS:................................................. 12
27. CALCULATION OF TIME PERIODS:....................................... 12
28. DEFAULT BY PURCHASER/LIQUIDATED DAMAGES:........................... 12
29. COUNTERPARTS:...................................................... 12
LEGAL DESCRIPTION:..................................................... 14
Lease........................................................................ 15
Escrow Agreement............................................................. 22
<PAGE>
SALE OF 35 INDUSTRIAL PARKWAY, SOMERVILLE, NJ
This Agreement of Sale made this 15th day of March, 1998, by and between
Biosearch Medical Products, Inc. a New Jersey Corporation, with its principle
place of business at 35 Industrial Parkway, Somerville, N.J. 08876 ("Seller")
and Hydromer, Inc. a New Jersey Corporation, with its principle place of
business at 35 Columbia Road, North Branch, N.J. 08876 ("Purchaser")
WITNESSETH:
WHEREAS, The Seller is the owner of certain real property premises located
in the municipality of Branchburg, County of Somerset, and State of New Jersey;
and
WHEREAS, Purchaser desires to purchase said premises from Seller; and
WHEREAS, the parties hereto desire to set forth their mutual
understandings and agreements with respect to the sale and purchase of said
premises.
NOW, THEREFORE, in consideration of the mutual promises and covenants
herein contained, the parties hereto agree as follows:
1. AGREEMENT TO SELL: Seller hereby agrees to sell and Purchaser hereby
agrees to purchase those real property premises consisting of approximately 6.2
acres situated in the Township of Branchburg, County of Somerset and State of
New Jersey. The premises are commonly known as 35 Industrial Parkway,
Somerville, New Jersey and are also known as Lot 3D, Block 13, as shown on the
current tax map of the Township of Branchburg. The premises are more
specifically described on Schedule A attached hereto and made a part hereof. All
machinery and trade fixtures are not included in the sale.
2. PURCHASE PRICE: The purchase price for the premises shall be Eight
Hundred Thousand Dollars ($800,000) and a 3 year lease back of approx 17,000 sq
ft. from Purchaser to Seller beginning on the date of closing said terms of
lease are set forth on Schedule B1 attached hereto, subject to adjustments as
hereinafter provided in Paragraph 8, payable as follows:
(a) Upon execution hereof,
the receipt of which is hereby
acknowledged, to be held in escrow by
escrow agent pending closing and
pursuant to the provisions of Paragraph 4 $ 50,000
(b) Balance to be paid at
closing of title by certified, bank,
cashier's, or attorneys' trust account
check or pursuant to Seller's wire
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SALE OF 35 INDUSTRIAL PARKWAY Page-2
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instructions $ 750,000
(c) A three year fully paid
lease of approx. 17,000 square feet,
which the parties value at $357,000.
$ 357,000
Total Purchase Price $1,157,000
3. TITLE:
(a) Title to the premises shall be good, marketable, with title
valid of record, and insurable by a title insurance company of Purchaser's
choice authorized to do business in the State of New Jersey, subject to the
following exceptions which shall be deemed "Permitted Exceptions":
Subject to a mortgage given by purchaser to the New Jersey Economic Development
Authority which purchaser will satisfy with part of the Purchase Price.
Subject to all other exceptions of record.
(i) Laws, regulations or ordinances of federal, state, county
or local entities or agencies having jurisdiction over the premises, provided
same do not prohibit the use and enjoyment of the premises for Purchaser's
Intended Use, as described in Paragraph 6(a)(i) below.
(ii) Easements, covenants, and restrictions of record,
provided the same have not been violated, would not render title to the premises
unmarketable, nor would materially interfere with the Purchaser's Intended Use
of the premises.
(iii) Such state of facts as would be shown on an accurate
survey of the premises, provided such facts do not render title to the premises
unmarketable, would not materially interfere with Purchaser's Intended Use of
the premises, nor would reveal encroachments onto the premises from adjoining
properties or from the premises onto adjoining properties.
The existence of mortgages on the premises shall not constitute a
non-Permitted Exception, provided the outstanding principal balance and accrued
interest due and owing thereon is less than the balance of the purchase price
described in Paragraph 2(b). In the event the amounts due under such mortgages
are less than the balance of the purchase price described in Paragraph 2(c),
then the Purchaser shall be permitted to use a portion of the closing proceeds
to satisfy such amounts.
(b) Within thirty (30) days from the date hereof, Purchaser shall
procure a
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SALE OF 35 INDUSTRIAL PARKWAY Page-3
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preliminary certificate of title from a title insurance company of Purchaser's
choice licensed to do business in the State of New Jersey. Purchaser shall
promptly notify Seller, in writing, of any title exceptions set forth in such
preliminary certificate or in any amendments thereto which are not Permitted
Exceptions. Seller shall then have a thirty (30) day period after such notice to
clear or remove the non-Permitted Exceptions to the satisfaction of Purchaser
and Purchaser's title company.
(c) In the event Seller is unable, after due diligence, to remove
the non-Permitted Exceptions and deliver title as required in Paragraph 3(a)
above, Purchaser shall have the right either to accept such title as Seller is
able to convey, without abatement of the purchase price, or to terminate this
Agreement.
4. ESCROW AGENT AND DEPOSIT:
(a) The escrow agent referred to in Paragraph 2 above shall be
Smith, Stratton, Wise, Herher & Brennan, attorneys at Law, (600 College
Road-East, Princeton, N.J. 08540) (hereinafter referred to as "Escrow Agent").
The Escrow Agent shall hold the deposit and interest accrued thereon
(hereinafter "escrow funds") pursuant to an ESCROW AGREEMENT, the form being
attached to this AGREEMENT as Schedule C.
(b) Upon closing of title, the Escrow Agent shall deliver the escrow
funds to Seller. Purchaser shall be entitled to a credit against the purchase
price for the deposit but not the interest.
(c) In the event that pursuant to this Agreement or by mutual
consent of Seller and Purchaser this Agreement is terminated, the Escrow Agent
shall deliver the deposit and all interest earned thereon to the Purchaser. In
that event, the Purchaser herein agrees to execute any and all documents
necessary to confirm that Purchaser shall be liable to any taxing authority for
taxes with respect to such interest. The Purchaser's obligation herein shall
survive the termination of this Agreement.
(d) In the event that there is no closing, nor a termination of this
Agreement in accordance with its terms or by mutual consent of Seller and
Purchaser, and/or one party shall allege default or breach by the other party as
the cause, the Escrow Agent shall continue to hold said escrow funds pending an
order from a court of competent jurisdiction or mutual consent of Seller and
Purchaser.
(e) Notwithstanding the terms of subparagraphs (c) and (d) above,
the parties hereto agree that the question of which party is entitled to the
deposit and when shall be governed by other paragraphs of this Agreement other
than this Paragraph 4, and that this Paragraph 4 shall determine the procedures
by which the Escrow Agent shall make disbursements. If Seller claims at any time
that it is entitled to the escrow funds on account of any default by Purchaser,
Seller shall notify Escrow Agent, in writing, requesting payment to Seller. If
within ten (10) days of Escrow Agent's receipt of such notice Purchaser has not
objected to the payment thereof to Seller, Escrow Agent shall pay same
<PAGE>
SALE OF 35 INDUSTRIAL PARKWAY Page-4
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to Seller. If Purchaser objects, then subparagraph (d) above shall apply. If on
the date set for closing Purchaser does not object, in writing, to the payment
of the escrow funds to Seller in accordance with Paragraph 4(b), then Escrow
Agent shall pay to Seller such sums. If Purchaser objects, in writing, to such
payment, then subparagraph 4(d) above shall apply. If Purchaser claims at any
time that it is entitled to the return of the escrow funds in accordance with
this Agreement, Purchaser shall notify the Escrow Agent, in writing, of its
claim for same. If within ten (10) days of Escrow Agent's receipt of such notice
Seller has not objected to the payment thereof to Purchaser, Escrow Agent shall
pay same to Purchaser. If Seller objects, then the provisions of subparagraph
4(d) shall apply. Both Seller and Purchaser agree that in connection with any
written notification to be given to the Escrow Agent, a copy of such written
notification shall be served upon the other party and the party giving such
notice shall have the unconditional obligation to provide Escrow Agent with
evidence satisfactory to Escrow Agent that a copy of the written demand has been
delivered to the other party. Each party undertakes the obligation to provide
such notice and provide evidence of such notice to Escrow Agent. Until such
obligation has been satisfied, any time period described in this subparagraph
(e) shall not commence to run.
(f) The Seller and Purchaser acknowledge that the Escrow Agent is
one of the attorneys for the Buyer but such fact shall not disqualify Escrow
Agent from representing the Seller in any dispute between the parties hereto.
(g) Seller and Purchaser agree that upon Escrow Agent's disbursement
of the escrow funds to Seller or to Purchaser, in accordance with the terms set
forth hereinabove or upon deposit thereof with a court of competent
jurisdiction, the Escrow Agent shall have no further obligation under this
Agreement or with respect of the escrow funds.
5. TERMINATION OF AGREEMENT: If, pursuant to the terms of this Agreement,
this Agreement shall be terminated or canceled then subject to Paragraph 4
hereof, Escrow Agent shall return the escrow funds to Purchaser and neither
Seller nor Purchaser shall have any further liability to the other.
6. PURCHASER'S INTENDED USE: Seller and Purchaser agree that Purchaser is
purchasing the premises for the purpose of utilizing the premises for the mixing
of chemicals used for, and the coating of medical/industrial devices devices
subject to all federal state and municipal laws and regulations. Seller
represents that to Seller's best knowledge, the premises can be so used in a
lawful manner.
7. PURCHASER'S CONTINGENCIES: It is understood and agreed that the
obligation of Purchaser to purchase the premises is expressly contingent upon
the achievement or satisfaction of all of the following conditions, any or all
of which the Purchaser shall have the right to waive, in whole or in part. The
Purchaser shall not have the right to extend any time periods referred to herein
unless such extension is agreed to in writing signed by both Seller and
Purchaser. Said conditions are as follows:
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SALE OF 35 INDUSTRIAL PARKWAY Page-5
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(a) Purchaser obtaining a commitment (the "Commitment") from any bank
("the Lender") for a mortgage loan (the "Loan") in the amount of $600,000 with
interest at the prevailing rates for a prevailing year term. Purchaser agrees to
make immediate application for such Loan and promptly comply with all of such
Lender's reasonable requirements in connection with such Loan. Purchaser shall
proceed with due diligence to obtain such commitment. In the event Purchaser has
not obtained the Commitment from the Lender within thirty (30) days of the date
on which Seller and Purchaser have both duly executed this Agreement and each
has received a fully executed counterpart thereof (the "Execution Date"), either
party may terminate this Agreement by written notice sent before the 33rd day or
this contingency is waived.
(b) Environmental. Seller has delivered an approval of a negative
declaration issued by the NJ DEP dated January 12, 1998 pursuant to the
Industrial Site Recovery Act (N.J.S.A. 13:1K-6 et seq.). Seller has reviewed and
accepted this document, subject to a representation by Seller at closing that
there are no material changes.
If at any time any seepage, presence of or exposure to any hazardous
substance or chemical, toxic or other waste (collectively "Hazardous
Substances") occurs or exists on the premisis, then Purchaser may terminate this
Agreement.
(c) Feasibility Study
(i) The Purchaser shall have a period of thirty (30) days from the
Execution Date ("Feasibility Period") in which to make such zoning, legal,
title, engineering, soil, environmental, geological and other technical studies,
tests, investigations and inquiries as shall deem necessary and appropriate, all
at the Purchaser's sole cost and expense, in order to determine whether the
premises is suitable for Purchaser's use as the warehousing of fabric.
(ii) In the event that the Purchaser determines, that as a result of
the tests, studies and investigations, that it is unwilling to proceed with the
acquisition of the premises because the premises is not suitable for the
warehousing of fabric, the Purchaser shall have the right, upon written notice
to the Seller delivered on or before the 30th day of the Feasibility Period, to
cancel this Agreement in which event the Deposit heretofore paid by the
Purchaser shall be returned and there shall be no further liability or
obligation on the part of either party hereto. If such notice is not delivered
on the 30th day this condition is waived.
(iii) From and after the date hereof, the Purchaser shall have the
right to enter upon the premises for the purpose of making, at its sole cost and
expense, the various tests, studies and investigations, authorized herein.
Additionally, the Purchaser agrees to indemnify, defend and hold harmless the
Seller herein from and against any claims, damage or losses caused by the
Purchaser's entry upon the premises. This indemnification and hold harmless
agreement extends to any loss occasioned to the premises. This indemnification
and hold harmless agreement extends to any loss occasioned to the premises. This
indemnification and hold harmless agreement extends to any loss
<PAGE>
SALE OF 35 INDUSTRIAL PARKWAY Page-6
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occasioned to the premises or the Seller resulting from the conduct or access of
the Purchaser's representative as well as by its contractors, subcontractors,
business invitees and/or licensees.
(iv) The Purchaser agrees to restore the premises promptly following
the completion of the tests herein permitted to the condition of said premises
immediately prior to the Purchaser's entry thereon.
If the contingencies set forth in this Paragraph 7 are not satisfied
within the applicable contingency period and the Agreement is terminated in
accordance with the terms hereof, the Escrow Agent shall refund the Deposit to
Purchaser and neither party shall have any further liability to the other
hereunder."
Purchaser agrees to use reasonable diligence and act in good faith in
pursuit of the satisfaction of all contingencies.
In connection with the satisfaction of contingencies, Seller, without
charge to Purchaser but without assuming any financial obligation, agrees to
fully cooperate with Purchaser and execute all applications, confirmations and
other documents necessary to permit Purchaser to satisfy contingencies. In
connection with any contingency, Purchaser shall advise Seller, in writing, by
the date when Purchaser shall have the right to terminate this Agreement for
non-satisfaction of the contingency or shall have satisfied the contingency
whether or not Purchaser (a) has satisfied the contingency, or (b) is
terminating this Agreement for non-satisfaction. If by such date Purchaser has
not so advised Seller, then at any time commencing on the next day thereafter,
Seller shall have the right to terminate this Agreement by written notice to
Purchaser thereof. If neither Seller nor Purchaser has terminated this Agreement
by reason of non-satisfaction of a contingency, nor Purchaser has advised Seller
that such contingency has been satisfied, then the time period within which such
contingency can be satisfied shall continue until the earlier of (i) Seller's
written notification to Purchaser that this Agreement has been terminated for
non-satisfaction of contingency, (ii) Purchaser's written notification to Seller
that this Agreement has been terminated for non-satisfaction of contingency, or
(iii) Purchaser's notification to Seller that the contingency has been satisfied
or waived. It is the intention of this paragraph to provide that this Agreement
shall not automatically terminate nor will any contingency be deemed
automatically satisfied on any contingency period termination date unless and
until Seller and/or Purchaser, as applicable, shall have affirmatively advised
the other party as to the status of the matter.
8. CLOSING AND DELIVERY OF DOCUMENTS: Closing of title shall take place on
or about May 15, 1998 or within thirty (30) days of the waiver or satisfaction
of all of Purchaser's Contingencies, whichever date shall first occur, at such
time as is convenient for and agreed to by the parties. Seller acknowledges
agrees that since the Purchaser may be obtaining mortgage financing, the closing
will take place at the offices of Purchasers'
<PAGE>
SALE OF 35 INDUSTRIAL PARKWAY Page-7
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attorneys, or such other location as is designated by Purchaser's lender. At the
closing, Seller shall deliver a Deed of Bargain and Sale with Covenant against
Grantors Acts, an affidavit of title, a corporate resolution authorizing the
sale, an affidavit that the Seller is not a foreign person as defined in Section
1445 of the Internal Revenue Code ("FIRPTA Affidavit") and shall deliver and/or
execute such other documents as Purchaser's title insurance company and/or
mortgage lender may reasonably request or require. Seller agrees that it shall
not convey title pursuant to a power of attorney. In the event Purchaser obtains
a survey of the premises from a surveyor licensed in the State of New Jersey,
Seller agrees to use a legal description in accordance with such survey,
provided such survey is certified to Seller, a copy of which shall be provided
to Seller by Purchaser in advance of closing. Seller and Purchaser agree to
exchange copies of the closing documents not less than five (5) days prior to
closing.
9. ADJUSTMENTS AT CLOSING: At the time of closing and delivery of deed,
taxes, water and sewer charges, if applicable, shall be adjusted between Seller
and Purchaser as of the closing date with charges for the day of closing
attributable to the Seller. Seller shall bear the expense of payment of the
realty transfer fee. Real estate taxes shall be apportioned on the basis of the
calendar year for which assessed, except that if the closing date shall occur
before the final tax rate is fixed, the apportionment of taxes shall be
tentative, based upon the parties' best knowledge of the current year's
assessments. At such time as the full year's taxes are known, the parties shall
thereafter adjust as of the date of closing based upon the full year's taxes.
Seller shall pay all roll-back taxes relating to farmland assessment whenever
such assessment may be imposed by the taxing authority. The obligations of this
paragraph with regard to any adjustments or payments subsequent to closing for
real property taxes shall survive closing.
10. REPRESENTATIONS, WARRANTIES AND COVENANTS OF SELLER
Seller is the owner of the premises and has the authority to enter into this
transaction.
Seller is a corporation, duly organized, validly existing and in good standing
in the State of New Jersey. Seller has full power and authority to consummate
the sale of the premises as set forth herein, and all requisite actions required
by law to authorize the execution, delivery and performance of this Agreement
have been taken.
Seller has not received any notice of any violation of any federal, state or
municipal laws, ordinances, orders, rules, regulations or requirements affecting
any portion of the premises. In the event of the issuance of any written notice
of violations after the date hereof, but prior to the Closing, Seller agrees to
correct such violations or to allow Purchaser a credit at Closing to make such
corrections.
Seller has received no notice and has no knowledge of any pending improvements,
liens or special assessments to be made against the premises by any governmental
authority.
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No portion of the premises is, and the Seller has not received any notice and
has no knowledge that any portion of the premises will be, subject to or
affected by any condemnation of similar proceeding.
The Seller has no knowledge of any existing action, suit or proceeding affecting
the premises or any portion thereof or relating to, or arising out of the
ownership, management or operation of the premises, in any court or before or by
any federal, state, county or municipal department, commission, board, bureau or
agency or other governmental instrumentality other then a suit by the present
Mortgagee, Summit Bank, NA in forclosure. (Summit Bank v Biosearch Medical
Products, Inc. docket BER-L-10086-97 Bergan County, suit on contract; Summit
Bank v Biosearch Medical Products, Inc. docket F-18439-97 suit on Forclosue)
No person, firm or other entity has any right of first refusal, option or any
other right of any nature to acquire the premises or any portion thereof or any
interest therein.
Neither the execution and delivery of this Agreement nor the consummation of the
sale provided for herein will constitute a violation or breach by Seller of any
provision of any agreement or other instrument to which Seller is a party or to
which Seller may be subject although not a party, or will result in or
constitute a violation or breach of any judgement, order, writ, injunction or
decree issued against Seller.
There are no tenants or occupants, leases, mortgages or other liens or
encumbrances, or other agreements affecting the operation of the premises except
as set forth in this Agreement with the exception of a Use and Occupancy Permit
that Seller has with its affiliate, Hydromer, Inc., which is terminable on
thirty (30) days notice. At the option of the Purchaser, Seller will assign such
Permit to Purchaser.
Seller represents that there are no existing contracts for advertising,
janitorial services, maintenance contracts, or purchase contracts or for other
services which would be binding on the Purchaser after Closing or affect the
premises being conveyed. All valid bills and claims for labor performed and
materials furnished to or for the benefit of the premises for all periods prior
to the Closing Date will be paid in full by Seller.
All public utilities required for the operation of the premises either enter the
premises through adjoining public streets, or if they pass through adjoining
private land, do so in accordance with valid irrevocable easements which run to
the benefit of the owner of the premises.
Seller has maintained and will maintain through the Closing Date such insurance
coverage as is adequate to insure the premises at full replacement cost.
To the best of Seller's knowledge, the premises are in full compliance with all
New Jersey and Federal environmental laws, including, without limitation, ISRA,
the New Jersey Spill Compensation and Control Act, N.J.S.A. 58:10-23, et seq.,
and the regulations
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promulgated thereunder, and all other rules and regulations of the New Jersey
Department of Environmental Protection and Energy ("DEPE") and its various
divisions. Seller has not dumped or disposed of, suffered or permitted dumping
and disposal or, nor cleaned up any "Hazardous Substances", as such term is
defined in N.J.S.A. 13:1K-8(d) on or upon any portion of the premises. To the
best of Seller's knowledge, the premises has not been used for any of the
aforementioned purposes, or subjected to any such occurrences. Prior to the
Closing Date, Seller shall prevent the dumping or disposal of any Hazardous
Substances on or upon any portion of the premises. Seller hereby agrees to
defend, indemnify, and hold Buyer harmless from and against any and all claims,
losses, judgments, liabilities, damages and expenses (including with limitation
cleanup costs and attorneys' fees arising by reason of any of the aforesaid or
an action against the Seller under this indemnity) arising directly or
indirectly from, out of, or by reason of any breach of this Section or the
release of any Hazardous Substances prior to Closing. If any of the aforesaid
representations are not true at the time of Closing, the Purchaser shall be
permitted to terminate the Agreement and receive the return of the Deposit
together with all accumulated interest.
SURVIVAL. The representation, warranties and covenants of the Seller listed
above are true and complete as of the Execution Date and Seller will reaffirm
their truth and completeness as of the Closing Date. All such representations,
warranties and covenants shall survive the Closing.
10A. PRE-CLOSING COVENANTS OF SELLER.
Seller covenants and agrees that subsequent to the Execution Date
and until the Closing:
Seller shall deliver the premises at the Closing Date in the same
condition as it is on the Execution Date subject to ordinary wear and tear.
Without the prior written consent of Purchaser in each instance, the
Seller shall not enter into, renew, amend or extend any lease or enter into any
new tenancy of any nature.
Seller shall not suffer, cause or permit any change in the condition
of the premises including, without limitation, the duping of any garbage,
Hazardous Substances (as defined in N.J.S.A. 58:10-23.11b(k), or of any fill or
other materials, or the removal of any fill, soil or vegetation from the
premises. Seller shall not suffer, cause or permit any use or the occupancy of
the premises pending the Closing.
In the event the Seller receives written notice from any
governmental agency of any violation of any governmental rule, statute,
ordinance or regulation affecting any portion of the premises, Seller shall
promptly cure such violation, at its sole cost and
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SALE OF 35 INDUSTRIAL PARKWAY Page-10
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expense, prior to the Closing. Seller shall provide Purchaser with copies of all
such notices and any responses thereto.
The risk of loss or damage to the premises by or as a result of any
cause until the Closing Date is assumed by and shall be the responsibility of
Seller.
Certificate of Occupancy or other Governmental Approval. In the event that
the Township of Branchburg requires the obtaining of Certificate of Occupancy,
Certificate of Continuing Occupancy or any other type of governmental approval
as a prerequisite for Closing, it shall be the obligation of the Seller to
obtain same at its sole cost and expense. Seller shall make any repairs required
to the premises for the issuance of said certificates or approvals, provided
however, Seller has no duty to repair or modify the premises if said repair or
modification is related to the activity or proposed activity of Purchaser.
11. POSSESSION AND PRECLOSING ENTRY: Purchaser may enter into and upon the
said lands and premises upon delivery of deed and from thence take the rents,
issues and profits for its own use; provided, however, that Purchaser shall have
the right, from time to time, to enter upon the premises prior to the date of
closing hereunder for the purpose of conducting inspections, surveys and tests
related to Purchaser's Intended Use and for satisfying of the Purchaser's
Contingencies. Purchaser shall indemnity and hold Seller harmless from any and
all liability for damage to persons or property arising from such entry prior to
the closing date.
12. ASSESSMENTS: If at the time for the delivery of the deed the premises,
or any part thereof, shall be or shall have been affected by a special
governmental assessment or assessments which are or may become payable in annual
installments of which the first installment is then due or has been paid, then
for the purpose of this Agreement, all of the unpaid installments of any such
assessment, including those which are to become due and payable after the
delivery of the deed, shall be deemed to be due and payable and to be liens upon
the premises affected thereby and shall be paid and discharged by Seller upon
delivery of the deed. Unconfirmed improvements or assessments, if any, shall be
paid and allowed by Seller on account of the purchase price if the improvement
or work has been commenced on or before the date hereof. Seller represents to
the best of its knowledge that there are no unconfirmed improvements or
assessments for improvements contemplated for the premises.
13. REAL ESTATE BROKERAGE COMMISSION: Seller and Purchaser mutually
represent and warrant to each other that there are no real estate brokers that
either have dealt in connection with the negotiation of this Agreement.
The parties hereto agree to save each other harmless and indemnify each
other from any losses, damages, judgments and costs, including legal fees, which
a party may suffer if the other party breaches its obligations hereunder or if
the representation of the other party contained herein proves untrue.
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14. RISK OF LOSS: Risk of loss, by reason of fire or other casualty, shall
remain with Seller until the time of closing. In the event of fire or other
casualty to the premises, Seller shall advise Purchaser within ten (10) days
thereof If all or a material part of the premises is destroyed by fire or other
casualty, Purchaser shall have the right to terminate this Agreement. For
purposes hereof, a material damage shall be damage, the restoration or repair
cost of which shall, as estimated by Seller's insurance company, exceed
$200,000. In connection with any non-material casualty, Seller shall cause all
repairs to be made on or before closing. In connection with any material
casualty which does not result in Purchaser's termination of this Agreement,
Purchaser shall have the right to require Seller to repair the premises, in
which case the time for closing shall be extended as required to allow for such
repair, or to purchase the premises in accordance herewith, without abatement of
purchase price, and receive an assignment of proceeds of such insurance.
15. CONDEMNATION: In the event condemnation or eminent domain proceedings
shall be commenced by any governmental or quasi-governmental authority having
jurisdiction therefor against all or any part of the premises, Seller shall
promptly notify Purchaser and provide Purchaser with all information concerning
such proceedings. Purchaser may, at its option, by giving written notice to
Seller within forty-five (45) days after its receipt of the notice of such
proceedings, terminate this Agreement.
In the event Purchaser does not elect to terminate this Agreement, then
any award in condemnation and/or unpaid claims and rights in connection with
such condemnation shall be assigned to Purchaser at closing, or if paid to
Seller prior thereof, shall be credited against the unpaid balance of the
purchase price due at closing. If Purchaser determines not to terminate this
Agreement, Seller shall not adjust or settle any condemnation awards without the
prior written approval of Purchaser and shall allow Purchaser to participate in
all proceedings.
16. FLOOD HAZARD AREA: If the premises are within a flood hazard area,
Purchaser shall have the right to terminate this Agreement. Purchaser agrees to
obtain a flood hazard certification within 30 days from the date hereof.
17. BOUNDARY LINES: Seller represents that there are no encroachments from
the premises onto adjoining properties or from adjoining properties onto the
premises.
18. NOTICES: All notices, demands or communications hereunder shall be
sent by registered or certified mail, postage prepaid, return receipt requested,
to the following addresses first appearing.
19. ENTIRE AGREEMENT: This Agreement constitutes the entire agreement
between the parties hereto. No amendment or modification hereof shall have any
force or effect unless in writing and executed by all parties.
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20. BINDING EFFECT: This Agreement shall be binding upon and inure to the
benefit of the parties hereto, their respective legal representatives, their
heirs, executors, administrators, successors and assigns.
21. GOVERNING LAW: This Agreement shall be construed in accordance with
the laws of the State of New Jersey.
22. HEADINGS: The article headings contained in this Agreement are for
reference only for the convenience of the parties. They shall not be deemed to
constitute a part of this Agreement nor shall they alter or supersede the
contents of the paragraphs themselves.
23. SURVIVAL: Whenever the context of this Agreement allows, expressly
provides, or reasonably implies a continuing obligation, such continuing
obligation shall survive the closing of title and delivery of the deed and shall
not merge therein.
24. RECORDING OF AGREEMENT: Seller and Purchaser agree that this Agreement
will not be recorded.
25. LIENS AGAINST THE PREMISES: All sums paid by Purchaser pursuant to the
terms of this Agreement shall be returned to Purchaser upon Purchaser's
termination of this Agreement and the same shall constitute liens against the
premises.
26. LOAN OF DOCUMENTS: Purchaser agrees that it has received copies of its
title insurance policy, present deed, proposed deed, 1994 ISRA submission and
Resolution by the Board of Directors of Seller, authorizing the sale. Seller
shall also make available to Purchaser plans and specifications utilized by
Seller in connection with any applications made by Seller for any governmental
approvals or in connection with the construction of any improvements on the
premises.
27. CALCULATION OF TIME PERIODS: With respect to any time periods set
forth herein which are calculated from the date of this Agreement, it is
understood and agreed that such time period commences from the date of final
execution of this Agreement by all parties hereto, including execution of any
riders or amendments hereto. The date of this Agreement shall be the date the
last signatory executes this Agreement and any such riders or amendments.
28. DEFAULT BY PURCHASER/LIQUIDATED DAMAGES: The parties hereto agree that
in the event Purchaser shall default under this Agreement, the actual damages
which Seller would suffer would be mathematically difficult to calculate. The
parties hereto agree in good faith to estimate the amount of such damages which
would reasonably compensate the Seller for such a default. Such amount is equal
to $50,000. Accordingly, in the event of any default by Purchaser, Seller shall
be entitled to
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SALE OF 35 INDUSTRIAL PARKWAY Page-13
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liquidated damages in the sum of $50,000. The balance of the deposit, if any,
together with interest, shall be returned to Purchaser.
29. COUNTERPARTS: This Agreement will be signed in any number of
counterparts with the same effect as if the signatures thereto and hereto were
upon the same instrument.
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IN WITNESS WHEREOF, the undersigned have set their hands and seals the day
and year first above written.
Biosearch Medical Products, Inc.
_________________________ Seller
Robert Keller, Vice President
Hydromer, Inc.
______________________ Purchaser
Ken Brice, Vice President
Date:___________________________
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SALE OF 35 INDUSTRIAL PARKWAY Page-15
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Schedule A
LEGAL DESCRIPTION:
BEGINNING at the most northerly corner of Lot 3D, as shown on "Plan of Major
Subdivision-Final Plat: Industrial Property of Herbert Vollers-Readington Road,
situated in Branchburg Twp., Somerset County" dated September 1965, revised
April 1967, which map was filed in the Somerset County Clerks's Office as Map
No. 1139 and from said Beginning point running; (1) South 66 degrees, 06
minutes, 44 seconds East, 531.87 feet along the southerly property line of the
Central Railroad Company of New Jersey to a point and corner of Lot 3A as shown
on the map herein referred to; thence (2) South 24 degrees, 15 minutes West,
493.73 feet along Lot 3A to the center line of Industrial Parkway; thence (3)
North 65 degrees, 45 minutes West, 658.13 feet along the center line of
Industrial Parkway; thence (4) North 38 degrees, 41 minutes, 12 seconds East,
506.36 feet to the point and place of BEGINNING. Containing 6.2 aces more or
less.
The above description includes all of Lot 3D as shown on "Plan of Major
Subdivision-Final Plat: Industrial Property of Herbert Vollers-Readington Road,
situated in Branchburg Twp., Somerset County" dated September 1965, revised
April 1967, which map is filed in the Somerset County Clerk's Office as Map No.
1139.
Being the same premises conveyed to Fabri-Kal Corporation by deed of Herbert D.
Vollers and Nancy V. Vollers, his wife, dated July 16, 1970, and recorded in the
Somerset County Clerk's Office in Deed Book 1229 at page 848.
Together with all rights of Fabri-Kal Corporation under deed dated December 29,
1972, to the Township of Branchburg and recorded in the Somerset County Clerk's
Office in Deed Book 1274 at page 591.
Also being the same premises conveyed to Biosearch Medical Products, Inc. by
deed of Fabri-Kal Corporation, dated September 9, 1980, and recorded in the
Somerset County Clerk's Office in Deed Book 1427 at page 620.
Further being made subject to agreements, covenants, easements and restrictions
of record and such facts as an inspection and accurate survey would disclose.
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SALE OF 35 INDUSTRIAL PARKWAY Page-16
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Schedule B1
LEASE
THIS LEASE is made as of the _____ day of _____, 1998, between Hydromer,
Inc. (hereinafter referred to as "Landlord") and Biosearch Medical Products,
Inc. (hereinafter referred to as "Tenant").
SECTION 1
DEMISE AND BASIC RENT
Landlord hereby rents to Tenant and Tenant hereby rents from Landlord,
approx. 17,000 sq. ft. in the east side of the building, commonly known as 35
Industrial Parkway, Somerville, NJ, the east side being identified as Schedule
B2 attached hereto, (hereinafter referred to as the "Premises"), in its "As Is"
condition, for the term of beginning on the day of that the real estate
containing the premises is conveyed by Tenant to Landlord and ending on 36
months later, at seven Dollars ($7.00) per sq. ft. per year, the amount of three
hundred and fifty seven thousand dollars ($357,000) being acknowledged as
received by Landlord from Tenant as part of the sale of the real estate in which
the Premises is part and parcel therein (herein the "Basic Rent").
SECTION 2
ADDITIONAL RENT, TAXES, ASSESSMENTS, ETC.
In addition to the Basic Rent provided in Section I hereof, Tenant will
pay 68% of any increase in real estate taxes over the year 1998 ("Additional
Rent"). Tenant will pay all utility bills that are metered and enter the
Premises. All other costs of operation (such as but not limited to taxes,
building insurance, grounds upkeep, snow removal and other like costs) are to be
paid by Landlord.
SECTION 3
AFFIRMATIVE COVENANTS OF TENANT
Tenant, jointly and severally if more than one, hereby covenants with
Landlord as follows:
(A) to pay any Additional Rent as aforesaid;
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SALE OF 35 INDUSTRIAL PARKWAY Page-17
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(B) to keep the Premises in good order; and
(C) to surrender the peaceful and quiet possession of the
Premises at the end of the term or any short period, broom clean and in as good
condition as when received (normal wear and tear and damage from insured events
excepted).
SECTION 3A
ADDITIONAL TERMS
1. Landlord shall pay for the cost of construction of interior demising walls
which shall be finished on both sides together with the doors to be located
therein. All other interior modifications shall be the responsibility of the
Tenant.
2. Landlord will reimburse Tenant for any electricity or utilities used by
Landlord on Tenant's meters.
3. Landlord will grant Tenant access to the loading dock to load trucks.
4. Landlord recognizes there is a security system covering the entire premises
and Tenant will disconnect the sensors in the non-leasehold from the system.
5. Tenant has the right to park up to 3 trailers and 2 refuse containers in the
rear parking lot for storage, provided no municipal ordinances are violated. At
the end of the lease these trailers and containers shall promptly removed.
SECTION 4
NEGATIVE COVENANTS OF TENANT
Tenant hereby covenants that Tenant will not do, suffer or permit any of
the following:
(A) anything to be done in or about the Premises which will
contravene any policy of insurance against loss by fire;
(B) violate the Certificate of Occupancy for the Premises or use, or
permit to be used, the Premises for the purposes other than those of a Medical
Device manufacturing; or
(C) assign, mortgage or pledge this Lease, in whole or in part, or
permit the assignment by operation of law or otherwise, or sublet the Premises
or any portion thereof, without the consent in writing of Landlord.
SECTION 5
QUIET ENJOYMENT
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SALE OF 35 INDUSTRIAL PARKWAY Page-18
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The Landlord covenants that he shall do nothing to affect the Tenant's
right to peaceably and quietly have, hold and enjoy the Premises for the term
herein mentioned, subject to the provisions of this Lease and to any mortgage or
deed of trust to which this Lease shall be subordinate.
SECTION 6
ALTERATIONS
Tenant shall not make any alterations or additions to the Premises without
the prior written consent of Landlord. Any alterations, additions or repairs the
Tenant shall be permitted to make shall be done at Tenant's own expense.
Landlord shall make all alteration to secure the Premises from the other
parts of the building, including installing separate meters to insure Tenant
does not pay for any part of the non-leasehold.
SECTION 7
TERMINATION
After a period of 10 months, Tenant may terminate this lease with a two
month notice to Landlord. Landlord shall refund any unused rent at the rate of:
1. if termination is effective in months 13-24, $6,000 per month times
the remaining months payable within 9 months.
2. if termination is effective in months 25-36, $8,000 per month times
the remaining months payable within 3 months.
Tenant's responsibility to vacate the premises at the termination of the
Lease subject to a two month extension, shall be deemed to be "of the essence"
of this Lease. Tenant shall have one option to extend the lease for two one
month periods at a rate of $8,750 per month. In the event that tenant does not
vacate the premises at the time of termination of this lease extension, landlord
shall be entitled to make an immediate application to a court of appropriate
jurisdiction and ask that the tenant be removed from the premises. The losing
party shall be responsible for payment of all attorneys' fees and cost of suit.
Upon termination of this Lease Tenant shall deliver as soon afterwards as
a received from the state of New Jersey, an approval of a negative declaration
regarding the premises pursuant to the Industrial Site Recovery Act (N.J.S.A.
13:1K-6 et seq.) (hereinafter, ISRA).
SECTION 8
EFFECT OF DESTRUCTION
If the Premises shall be destroyed or rendered untenantable by fire or
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SALE OF 35 INDUSTRIAL PARKWAY Page-19
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unavoidable accident, or if the building in which the Premises are located is so
damaged that Landlord shall elect to demolish it or rebuild it, the tenancy
hereby created shall be thereby terminated, and Landlord shall refund the unused
portion of the Rent at:
1. if termination is effective in months 13-24, $6,000 per month times
the remaining months payable within 9 months.
2. if termination is effective in months 25-36, $8,000 per month times
the remaining months payable within 3 months.
SECTION 9
INSURANCE
Tenant shall provide and keep in force during the term of this Lease
general liability insurance for injury or damage to persons or property in or
upon the Premises during the term of this Lease. The said policy shall be with
limits not less than one million Dollars ($1,000,000) in respect of any one
person, in respect of any one accident and in respect of property damage and
shall also contain an endorsement protecting the Landlord for water damage and
sprinkler damage liability with respect to property other than the Landlord's.
Landlord shall insure the building including the premises as Landlord
deems fit. Tenant shall have the right to purchase any additional insurance to
cover losses of Tenant.
Tenant shall also furnish insurance for such other hazards and in such
amounts as Landlord may reasonably require. Landlord reserves the right at any
time and from time to time to require the limits for any of the insurance under
this Section to be increased to limits which Landlord deems reasonable.
SECTION 10
REPAIRS
Tenant shall keep the Premises in good condition and repair and shall
redecorate, paint and renovate the Premises as may be necessary to keep them in
good condition and repair and good appearance. Tenant will keep the sidewalks
forming part of the Premises clean and free of obstructions, snow and ice.
SECTION 11
CONDEMNATION
If the whole or any part of the Premises shall be acquired or condemned by
eminent domain for any public or quasi-public purpose or use, then this Lease
and the term and estate hereby granted shall forthwith cease and terminate as of
the date of
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SALE OF 35 INDUSTRIAL PARKWAY Page-20
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vesting of title and Landlord shall refund any and all unused Rent at the rate:
1. if termination is effective in months 13-24, $6,000 per month times
the remaining months payable within 9 months.
2. if termination is effective in months 25-36, $8,000 per month times
the remaining months payable within 3 months.
SECTION 12
SUBORDINATION
This Lease is and shall be subject and subordinate to all present and
future mortgages, deeds of trust or underlying leases affecting the Premises.
Tenant shall execute any instrument which may be deemed necessary or desirable
by Landlord to further effect or to evidence the subordination of this Lease to
any such mortgage, deed of trust or underlying lease.
SECTION 13
INDEMNIFICATION
Tenant agrees to indemnity and hold harmless the Landlord, each mortgagee,
ground or underlying lessor of the Premises from and against any and all
liabilities, damages, claims, losses, judgments, causes of action, costs and
expenses (including reasonable counsel fees and legal expenses) which may be
incurred by Landlord or any such mortgagee or underlying lessor relating to or
arising out of any breach by Tenant of (i) its obligations to be performed under
this Lease, or (ii) the carelessness, negligence or improper conduct of Tenant,
its agents, contractors, employees, invitees or licensees, or (iii) arising out
of the use and occupancy of the Premises or any work or thing whatsoever done or
any condition created in or about the Premises during the term of this Lease. In
case any action or proceeding be brought against Landlord by reason of any such
claim, Tenant, upon notice from Landlord, shall resist and defend such action or
proceeding.
SECTION 14
EXCULPATION
The term "Landlord" as used in this Lease means only the holder, for the
time being, of the Landlord's interest under this Lease so that in the event of
any transfer of title to the Premises, the Landlord shall be and hereby is
entirely free and relieved of all obligations of Landlord hereunder accruing
after such transfer. Tenant acknowledges that there is absolutely no personal
liability on the part of the Landlord, its successor or assigns with respect to
any of the terms, covenants and conditions of this Lease, and that Tenant shall
look solely to the equity of Landlord in the Building for the satisfaction of
each and every remedy of Tenant in the event of any breach by Landlord of any of
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SALE OF 35 INDUSTRIAL PARKWAY Page-21
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the terms, covenants and conditions of this Lease to be performed by Landlord.
SECTION 15
BINDING EFFECT
This Lease shall be binding upon and shall inure to the benefit of the
parties hereto and their personal representatives, successors and assigns,
subject to the limitations set forth in Section 15 hereof.
SECTION 16
APPLICABLE LAW
The Lease shall be interpreted and construed in accordance with the laws
of the State of New Jersey (excluding New Jersey conflict of laws) and by the
state courts of New Jersey.
SECTION 17
CAPTIONS
The captions appearing in this Lease are inserted only as a matter of
convenience and do not define, limit, construe or describe the scope or intent
of the Sections of this Lease nor in any way affect this Lease.
WITNESS the hands and seals of the parties hereto as of the day and year
first above written.
ATTEST/WITNESS: LANDLORD
___________________________________ BY: _____________________________ (Seal)
ATTEST/WITNESS: TENANT
___________________________________ BY: _____________________________ (Seal)
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SALE OF 35 INDUSTRIAL PARKWAY Page-22
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Schedule B2
Partition of premises into 17,000 sq ft leasehold.
******INSERT DRAWING HERE*****
<PAGE>
SALE OF 35 INDUSTRIAL PARKWAY Page-23
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Schedule C
Escrow Agreement Between
Smith, Stratton, Wise, Herher & Brennan
Biosearch Medical Products
Hydromer, Inc.
<PAGE>
SALE OF 35 INDUSTRIAL PARKWAY Page-24
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ESCROW AGREEMENT
In connection with a contract for the sale of real estate dated
___________, 1997 ("Agreement") entered into by and between BioSearch Medical
Products, Inc. of 35 Industrial Parkway, Somerville, New Jersey 08876, ("BMP")
and Hydromer, Inc., of 40 Industrial Parkway, Somerville, New Jersey
08876("Buyer"); BMP, Buyer (hereafter also referred to as the "Parties") and
Smith Stratton, Wise, Herher & Brennan, 600 College Road East, Princeton, New
Jersey 08540 (the "Escrow Agent") agree as follows:
1. DEPOSIT
Simultaneously with the execution of the Escrow Agreement, Buyer has
deposited fifty thousand dollars ($50,000) with the Escrow Agent Escrow Fund
pursuant to Section 2a of the Agreement.
2. TERM
This Escrow Agreement shall take effect on the date hereof, and remain in
effect until the closing or cancellation of the Agreement, and for such
additional time as may be required to resolve any dispute between Buyer and BMP
with the purpose of this Escrow Agreement. This Escrow Agreement shall terminate
upon the earlier or i) termination or cancellation of the Agreement without
dispute contemplated by this Escrow Agreement, or ii) delivery of the escrow
fund pursuant to the Agreement, the written direction of Buyer and BMP or a
court order, and the Escrow Agent shall thereupon be released from any further
obligation hereunder.
3. PURPOSE OF ESCROW
The Escrow Agent holds the Escrow Fund solely for the purpose described in
Section 4 of the Agreement.
4. MISCELLANEOUS
(a) Escrow Agent shall not be under any duty to give the escrowed Escrow
Fund any greater degree of care than it gives other similar property held in a
fiduciary capacity, and shall not be required to invest the funds in an interest
bearing account or in any other manner.
(b) Escrow Agent may act in reliance upon any instrument or signature
believed to be genuine and may assume that any person purporting to give any
writing, notice, advice or instruction in connection with the provisions hereof
or of the Agreement has been duly authorized to do so.
<PAGE>
SALE OF 35 INDUSTRIAL PARKWAY Page-25
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(c) Escrow Agent may act relative hereto upon advice of counsel in
reference to any matter connected herewith, and shall be indemnified and held
harmless by the Parties and for any mistake of fact or error of judgment, or for
any acts or omissions, unless caused by its wilful misconduct or gross
negligence.
(d) This Agreement sets forth exclusively Escrow Agent's duties with
respect to the Escrow Fund and no implied duties or obligations shall be read
into this Agreement against it.
(e) Escrow Agent makes no representation as to the validity, value, or
genuineness, sufficiency, completeness or collectibility of the Escrow Fund
delivered to it.
(f) Escrow Agent does not have and will not have any interest in the
Escrow Fund but is serving only as Escrow Agent and will have only possession
thereof. The Parties agree to indemnify it and hold it harmless from and against
all damages, losses, costs and expenses in connection with or arising out of its
duties as Escrow Agent hereunder.
(g) In the event of any disagreement between any of the Parties resulting
in adverse claims or demands being made in connection with the subject matter of
this Agreement, or in the event that Escrow Agent should, in good faith, be in
doubt as to what action it should take hereunder, it may, at its option, refuse
to comply with any claims or demands on it, or refuse to take any other action
hereunder, so long as such disagreement continues or such doubt exists, and in
any such event, it shall not be or become liable in any way or to any person for
its failure or refusal to act, and it shall be entitled to continue so to
refrain from acting until the rights of the Parties shall have been fully and
finally adjudicated by a court of competent jurisdiction or all differences
shall have been fully and finally adjudicated by a court of competent
jurisdiction or all differences shall have been adjusted and all doubt resolved
by agreement among all of the interested persons.
(h) This Escrow Agreement shall survive the release of the Escrow Fund
from escrow contemplated hereby.
(i) This Agreement and the rights and obligations herein contained shall
be binding upon and inure to the benefit of the Parties, the Escrow Agent, and
their respective successors and assigns.
5. LIABILITY
<PAGE>
SALE OF 35 INDUSTRIAL PARKWAY Page-26
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The Escrow Agent shall not, by reason of its execution of this Escrow
Agreement, assume any responsibility or liability for any transaction between
Buyer and BMP with respect to the Escrow Fund held by it in accordance with this
Escrow Agreement. The Escrow Agent shall not be responsible for any claims,
liabilities, losses, or damages of any party which may result from the Escrow
Agent's good faith performance hereunder, unless the Escrow Agent's performance
has been found to constitute gross negligence or willful misconduct.
6. CONSENT TO REPRESENTATION
Buyer understands and acknowledges the Escrow Agent provides and has
provided legal representation and counsel to BMP, Manfred F. Dyck, President and
Chairman of BMP, Ursula M. Dyck, Director of BMP, and Hydromer, Inc. and
affiliate of BMP, and that service as Escrow Agent hereunder does not constitute
legal representation of, or counsel to Buyer. Service as Escrow Agent hereunder
will not bar Escrow Agent from continuing its representation of such persons and
entities, including but not limited to representation in connection with the
Agreement, or otherwise in connection with this Escrow Agreement. Buyer hereby
consents to such representation.
7. SUBSTITUTION OF ESCROW AGENT
Any Escrow Agent serving hereunder may resign at any time upon 30 days'
prior notice to the Parties, whereupon the Parties shall appoint a successor. If
the Parties fail to appoint a successor Escrow Agent within thirty (30) days of
the date of resignation of the resigning Escrow Agent, the resigning Escrow
Agent shall appoint a new Escrow Agent. Upon delivery of the Escrow Fund in its
possession to the new Escrow Agent the former Escrow Agent shall have no further
obligation hereunder.
8. AMENDMENTS
This Escrow Agreement may be amended by written agreement of the Parties
and the Escrow Agent.
9. ADDRESS
All notices or other communications required or contemplated herein shall
be in writing, sent by certified or express mail, addressed as indicated in this
Escrow Agreement or as the same may be changed from time to time by notice
similarly given.
10. ASSIGNMENT
Except as provided in Section 7 above, neither this Escrow Agreement, nor
any
<PAGE>
SALE OF 35 INDUSTRIAL PARKWAY Page-27
- --------------------------------------------------------------------------------
rights, liabilities, or obligations hereunder may be assigned by the Escrow
Agent without the prior written consent of the Parties.
11. CHOICE OF LAW.
This Escrow Agreement shall be governed by and constructed in accordance
with the laws of the State of New Jersey.
<PAGE>
SALE OF 35 INDUSTRIAL PARKWAY Page-28
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AGREED:
BIOSEARCH MEDICAL Hydromer, Inc.
PRODUCTS, INC.
By:_______________________ By:________________________
Robert Keller, V.P. Ken Brice, V.P.
SMITH, STRATTON,
WISE, HERHER & BRENNAN
By:_______________________
Robert D. Frawley
**END**
LEASE
THIS LEASE is made as of the _____ day of _____, 1998, between Hydromer,
Inc. (hereinafter referred to as "Landlord") and Biosearch Medical Products,
Inc. (hereinafter referred to as "Tenant").
SECTION 1
DEMISE AND BASIC RENT
Landlord hereby rents to Tenant and Tenant hereby rents from Landlord,
approx. 17,000 sq. ft. in the east side of the building, commonly known as 35
Industrial Parkway, Somerville, NJ, the east side being identified as Schedule
B2 attached hereto, (hereinafter referred to as the "Premises"), in its "As Is"
condition, for the term of beginning on the day of that the real estate
containing the premises is conveyed by Tenant to Landlord and ending on 36
months later, at seven Dollars ($7.00) per sq. ft. per year, the amount of three
hundred and fifty seven thousand dollars ($357,000) being acknowledged as
received by Landlord from Tenant as part of the sale of the real estate in which
the Premises is part and parcel therein (herein the "Basic Rent").
SECTION 2
ADDITIONAL RENT, TAXES, ASSESSMENTS, ETC.
In addition to the Basic Rent provided in Section I hereof, Tenant will
pay 68% of any increase in real estate taxes over the year 1998 ("Additional
Rent"). Tenant will pay all utility bills that are metered and enter the
Premises. All other costs of operation (such as but not limited to taxes,
building insurance, grounds upkeep, snow removal and other like costs) are to be
paid by Landlord.
SECTION 3
AFFIRMATIVE COVENANTS OF TENANT
Tenant, jointly and severally if more than one, hereby covenants with
Landlord as follows:
(A) to pay any Additional Rent as aforesaid;
(B) to keep the Premises in good order; and
(C) to surrender the peaceful and quiet possession of the Premises
at the end of the term or any short period, broom clean and in as good condition
as when received (normal wear and tear and damage from insured events excepted).
SECTION 3A
ADDITIONAL TERMS
<PAGE>
1. Landlord shall pay for the cost of construction of interior demising walls
which shall be finished on both sides together with the doors to be located
therein. All other interior modifications shall be the responsibility of the
Tenant.
2. Landlord will reimburse Tenant for any electricity or utilities used by
Landlord on Tenant's meters.
3. Landlord will grant Tenant access to the loading dock to load trucks.
4. Landlord recognizes there is a security system covering the entire premises
and Tenant will disconnect the sensors in the non-leasehold from the system.
5. Tenant has the right to park up to 3 trailers and 2 refuse containers in the
rear parking lot for storage, provided no municipal ordinances are violated. At
the end of the lease these trailers and containers shall promptly removed.
SECTION 4
NEGATIVE COVENANTS OF TENANT
Tenant hereby covenants that Tenant will not do, suffer or permit any of
the following:
(A) anything to be done in or about the Premises which will
contravene any policy of insurance against loss by fire;
(B) violate the Certificate of Occupancy for the Premises or use, or
permit to be used, the Premises for the purposes other than those of a Medical
Device manufacturing; or
(C) assign, mortgage or pledge this Lease, in whole or in part, or
permit the assignment by operation of law or otherwise, or sublet the Premises
or any portion thereof, without the consent in writing of Landlord.
SECTION 5
QUIET ENJOYMENT
The Landlord covenants that he shall do nothing to affect the Tenant's
right to peaceably and quietly have, hold and enjoy the Premises for the term
herein mentioned, subject to the provisions of this Lease and to any mortgage or
deed of trust to which this Lease shall be subordinate.
SECTION 6
ALTERATIONS
Tenant shall not make any alterations or additions to the Premises without
the prior written consent of Landlord. Any alterations, additions or repairs the
Tenant shall be permitted
<PAGE>
to make shall be done at Tenant's own expense.
Landlord shall make all alteration to secure the Premises from the other
parts of the building, including installing separate meters to insure Tenant
does not pay for any part of the non-leasehold.
SECTION 7
TERMINATION
After a period of 10 months, Tenant may terminate this lease with a two
month notice to Landlord. Landlord shall refund any unused rent at the rate of:
1. if termination is effective in months 13-24, $6,000 per month times
the remaining months payable within 9 months.
2. if termination is effective in months 25-36, $8,000 per month times
the remaining months payable within 3 months.
Tenant's responsibility to vacate the premises at the termination of the
Lease subject to a two month extension, shall be deemed to be "of the essence"
of this Lease. Tenant shall have one option to extend the lease for two one
month periods at a rate of $8,750 per month. In the event that tenant does not
vacate the premises at the time of termination of this lease extension, landlord
shall be entitled to make an immediate application to a court of appropriate
jurisdiction and ask that the tenant be removed from the premises. The losing
party shall be responsible for payment of all attorneys' fees and cost of suit.
Upon termination of this Lease Tenant shall deliver as soon afterwards as
a received from the state of New Jersey, an approval of a negative declaration
regarding the premises pursuant to the Industrial Site Recovery Act (N.J.S.A.
13:1K-6 et seq.) (hereinafter, ISRA).
SECTION 8
EFFECT OF DESTRUCTION
If the Premises shall be destroyed or rendered untenantable by fire or
unavoidable accident, or if the building in which the Premises are located is so
damaged that Landlord shall elect to demolish it or rebuild it, the tenancy
hereby created shall be thereby terminated, and Landlord shall refund the unused
portion of the Rent at:
1. if termination is effective in months 13-24, $6,000 per month times
the remaining months payable within 9 months.
2. if termination is effective in months 25-36, $8,000 per month times
the remaining months payable within 3
<PAGE>
months.
SECTION 9
INSURANCE
Tenant shall provide and keep in force during the term of this Lease
general liability insurance for injury or damage to persons or property in or
upon the Premises during the term of this Lease. The said policy shall be with
limits not less than one million Dollars ($1,000,000) in respect of any one
person, in respect of any one accident and in respect of property damage and
shall also contain an endorsement protecting the Landlord for water damage and
sprinkler damage liability with respect to property other than the Landlord's.
Landlord shall insure the building including the premises as Landlord
deems fit. Tenant shall have the right to purchase any additional insurance to
cover losses of Tenant.
Tenant shall also furnish insurance for such other hazards and in such
amounts as Landlord may reasonably require. Landlord reserves the right at any
time and from time to time to require the limits for any of the insurance under
this Section to be increased to limits which Landlord deems reasonable.
SECTION 10
REPAIRS
Tenant shall keep the Premises in good condition and repair and shall
redecorate, paint and renovate the Premises as may be necessary to keep them in
good condition and repair and good appearance. Tenant will keep the sidewalks
forming part of the Premises clean and free of obstructions, snow and ice.
SECTION 11
CONDEMNATION
If the whole or any part of the Premises shall be acquired or condemned by
eminent domain for any public or quasi-public purpose or use, then this Lease
and the term and estate hereby granted shall forthwith cease and terminate as of
the date of vesting of title and Landlord shall refund any and all unused Rent
at the rate:
1. if termination is effective in months 13-24, $6,000 per month times
the remaining months payable within 9 months.
2. if termination is effective in months 25-36, $8,000 per month times
the remaining months payable within 3 months.
SECTION 12
<PAGE>
SUBORDINATION
This Lease is and shall be subject and subordinate to all present and
future mortgages, deeds of trust or underlying leases affecting the Premises.
Tenant shall execute any instrument which may be deemed necessary or desirable
by Landlord to further effect or to evidence the subordination of this Lease to
any such mortgage, deed of trust or underlying lease.
SECTION 13
INDEMNIFICATION
Tenant agrees to indemnity and hold harmless the Landlord, each mortgagee,
ground or underlying lessor of the Premises from and against any and all
liabilities, damages, claims, losses, judgments, causes of action, costs and
expenses (including reasonable counsel fees and legal expenses) which may be
incurred by Landlord or any such mortgagee or underlying lessor relating to or
arising out of any breach by Tenant of (i) its obligations to be performed under
this Lease, or (ii) the carelessness, negligence or improper conduct of Tenant,
its agents, contractors, employees, invitees or licensees, or (iii) arising out
of the use and occupancy of the Premises or any work or thing whatsoever done or
any condition created in or about the Premises during the term of this Lease. In
case any action or proceeding be brought against Landlord by reason of any such
claim, Tenant, upon notice from Landlord, shall resist and defend such action or
proceeding.
SECTION 14
EXCULPATION
The term "Landlord" as used in this Lease means only the holder, for the
time being, of the Landlord's interest under this Lease so that in the event of
any transfer of title to the Premises, the Landlord shall be and hereby is
entirely free and relieved of all obligations of Landlord hereunder accruing
after such transfer. Tenant acknowledges that there is absolutely no personal
liability on the part of the Landlord, its successor or assigns with respect to
any of the terms, covenants and conditions of this Lease, and that Tenant shall
look solely to the equity of Landlord in the Building for the satisfaction of
each and every remedy of Tenant in the event of any breach by Landlord of any of
the terms, covenants and conditions of this Lease to be performed by Landlord.
SECTION 15
BINDING EFFECT
This Lease shall be binding upon and shall inure to the benefit of the
parties hereto and their personal representatives, successors and assigns,
subject to the limitations set forth in Section 15 hereof.
<PAGE>
SECTION 16
APPLICABLE LAW
The Lease shall be interpreted and construed in accordance with the laws
of the State of New Jersey (excluding New Jersey conflict of laws) and by the
state courts of New Jersey.
SECTION 17
CAPTIONS
The captions appearing in this Lease are inserted only as a matter of
convenience and do not define, limit, construe or describe the scope or intent
of the Sections of this Lease nor in any way affect this Lease.
WITNESS the hands and seals of the parties hereto as of the day and year
first above written.
ATTEST/WITNESS: LANDLORD
___________________________________ BY: ____________________________________
(Seal)
ATTEST/WITNESS: TENANT
___________________________________ BY: ____________________________________
(Seal)
BARD MEDICAL DIVISION
C. P. Bard, Inc.
8195 Industrial Blvd.
Covington, GA 30209-2695 BARD[LOGO]
August 14, 1998
VIA TELECOPIER
AND OVERNIGHT DELIVERY
Biosearch Medical Products, Inc.
35 Industrial Parkway
Branchburg, NJ 08876-1276
Attn: Mr. Manfred F. Dyck
Chairman
RE: Proposed Standstill Agreement between
Biosearch Medical Products, Inc. and
C. R. Bard, Inc.
Dear Mr. Dyck:
Further to our conference call this morning, this letter is to confirm the
continuing interest of C. R. Bard, Inc. ("BARD") in negotiating a definitive
agreement with Biosearch Medical Products, Inc. ("BIOSEARCH") relative to the
rights described below.
In order to permit time to negotiate a definitive agreement covering some or all
of the rights described below and in order to prepare a draft agreement, BARD
and BIOSEARCH agree as follows:
1. In consideration of BARD's agreement to pay BIOSEARCH the sum of
$100,000.00 (the "Standstill Payment"), BIOSEARCH agrees, from the date
hereof through the close of business on September 14, 1998 or during such
longer period as may be agreed upon in writing by BIOSEARCH and BARD, (the
"Standstill Period") to refrain from: (a) disclosing to any third party:
(i) any information relating to BIOSEARCH's non-patented technology
relating to method(s) for applying hydrophilic coatings to intermittent
urological catheters which technology is identified in BIOSEARCH'S
internal File No. MOD 3276 (the "Methods"), (ii) disclosing to any third
party any information relating to BIOSEARCH's hydrophilic coating which is
identified in BIOSEARCH's internal File No. SIL 98.tsi and which has
utility for use on silicone indwelling and intermittent urological
catheters (the "Silicone Coating"), (iii) disclosing to any third party
any information relating to BIOSEARCH's polyurethane catheter which is
identified in BIOSEARCH's internal File No. TPU Foley (the "Polyurethane
Catheter"), (b) transferring or agreeing to transfer to any third party:
(i) substantially all of the stock or assets of BIOSEARCH, (ii) any rights
relating to the Methods, Silicone Coating, Polyurethane Catheter or any
machinery and equipment
<PAGE>
Biosearch Medical Products, Inc.
August 14, 1998
Page 2
owned by BIOSEARCH which is used in connection with the Methods (the
"M&E"), (c) negotiating with any third party concerning the potential: (i)
sale of substantially all of the stock or assets of BIOSEARCH, (ii) sale,
license or other transfer of any rights relating to the Methods, Silicone
coating, Polyurethane Catheter or M&E.
2. During the Standstill Period, BIOSEARCH and BARD agree to negotiate, in
good faith, the terms of a definitive agreement pursuant to which
BIOSEARCH: (i) in consideration of a one time payment of $400,000 to be
paid by BARD to BIOSEARCH upon execution of the definitive agreement,
would sell to BARD BIOSEARCH's entire right, title and interest in and to
the Methods, (ii) would grant to BARD an exclusive worldwide right and
license, under BIOSEARCH's proprietary rights, to manufacture, have
manufactured, use, sell, offer for sale and import the Silicone coating
for use on intermittent and indwelling urinary catheters (the "Field of
Use"), (iii) would, at BARD's option, manufacture and supply to BARD its
requirements of the Silicone Coating at a price to be negotiated and set
forth in the definitive agreement, (iv) would sell to BARD BIOSEARCH's
entire right, title and interest and to the Po1yurethane Catheter and M&E,
at prices to be negotiated and set forth in the definitive agreement, (v)
would, at BARD's option, manufacture and sell to BARD its requirements of
the Polyurethane Catheter at a price to be negotiated and set forth in the
definitive agreement.
3. BIOSEARCH hereby represents to BARD that it is the sole and exclusive
owner of the M&E and all proprietary rights relating to the Methods,
Silicone Coating and Polyurethane Catheter, free and clear of all liens
and encumbrances and hereby agrees to indemnify BARD from a breach of the
foregoing representation.
4. During the Standstill Period, BIOSEARCH agrees: (i) to permit
representatives of BARD to review, from time to time, at BIOSEARCH's
facility, during normal business hours and upon reasonable advanced notice
to BIOSEARCH, all information and data relating to the Methods, Silicone
Catheter, Polyurethane Catheter and M&E, (ii) to fully cooperate with BARD
in its review of such information and data and to respond to all
reasonable inquiries of BARD concerning the same.
5. BARD agrees to wire transfer the Standstill Payment to BIOSEARCH, in
accordance with instructions previously received from BIOSEARCH, on the
date of BIOSEARCH's acceptance of this letter agreement.
<PAGE>
Biosearch Medical Products, Inc.
August 14, 1998
Page 3
6. In the event the parties, during the Standstill Period, execute a
definitive agreement relating to the Methods, Silicone Coating,
Polyurethane Catheter and/or M&E, BARD shall be entitled to take, as a
first credit against monies payable by BARD to BIOSEARCH under the
definitive agreement, an amount equivalent to the Standstill Payment.
7. Subject to the respective obligations of the parties to negotiate, in good
faith, the terms of a definitive agreement, nothing contained herein shall
be deemed or construed as requiring either party to execute a definitive
agreement relating to Methods, Silicone Coating, Polyurethane Catheter
and/or M&E. In the event the parties fail to execute any such definitive
agreement during the Standstill Period, BIOSEARCH hereby agrees to remit
to BARD, within five (5) business days of the expiration of the Standstill
Period, the sum of twenty five thousand dollars ($25,000). In the last
mentioned events, following BIOSEARCH's remittance of the last mentioned
sum, subject to BIOSEARCH's indemnification obligation under Paragraph 3,
neither party shall have any further obligation to the other hereunder.
If the above meets with your approval, please sign where indicated below and fax
a copy of this letter to me at: (770) 784-6340.
Very truly yours,
BARD MEDICAL DIVISION,
C.R. BARD, INC.
/s/ William G. Midgette
--------------------------------------
William G. Midgette,
President
ACCEPTED AND AGREED TO:
Biosearch Medical Products, Inc.
By: /s/ Manfred F. Dyck 8/14/98
-----------------------------
Manfred F. Dyck
Chairman
<PAGE>
BARD MEDICAL DIVISION
C. P. Bard, Inc.
8195 Industrial Blvd.
Covington, GA 30209-2695 BARD[LOGO]
September 22, 1998
VIA TELECOPIER
AND OVERNIGHT DELIVERY
Biosearch Medical Products, Inc.
35 Industrial Parkway
Branchburg, NJ 08876-1276
Attn: Mr. Manfred F. Dyck
Chairman
RE: Standstill Agreement dated August 14, 1998 between
Biosearch Medical Products, Inc. ("Biosearch") and
C. R. Bard, Inc. ("Bard")
Dear Manfred:
Reference is made to the above referenced Agreement between Biosearch and Bard
(the "Standstill Agreement"). Capitalized terms used but not defined in this
letter agreement shall have the same meaning as set forth in the Standstill
Agreement, except to the extent as amended by this letter agreement. This letter
is to confirm our recent discussions relative to an extension of the Standstill
Period. Biosearch and Bard hereby agree to the entry of amendments to the
Standstill Agreement as follows:
1. The Standstill Period is hereby extended retroactively from the close of
business on September 14, 1998 through the close of business on October
30, 1998.
2. In consideration of Biosearch's agreement to extend the Standstill Period
in accordance with Paragraph 1 of this letter agreement, Bard agrees to
wire transfer the sum of one hundred thousand dollars ($100,000.00) (the
"Extension Standstill Payment") to Biosearch, in accordance with
instructions previously received from Biosearch, within one (1) business
day of Biosearch's acceptance of this letter agreement.
3. Paragraph 6 of the Standstill Agreement is hereby amended by adding the
following at the end thereof: "plus the Extension Standstill Payment".
4. In the second sentence of Paragraph 7 of the Standstill Agreement, the
words "twenty five thousand dollars ($25,000.00) are hereby deleted and
the words "fifty thousand dollars ($50,000.00)" are hereby substituted in
their stead.
<PAGE>
Biosearch Medical Products, Inc.
September 22, 1998
Page 2
5. Bard hereby agrees to issue to Biosearch, contemporaneously with its
execution of this letter agreement, a non-cancelable purchase order for
four hundred thousand (400,000) intermittent urinary catheters at a
purchase price of $0.45 per unit, F.O.B. Biosearch's Branchburg, New
Jersey facility. Except as otherwise provided herein, terms of purchase
shall be governed by the purchase order issued by Bard. Within one (1)
business day of Biosearch's acceptance of this letter agreement, Bard
shall wire transfer to Biosearch, in accordance with wire transfer
instructions previously received from Biosearch, the sum of forty five
thousand dollars ($45,000.00), which sum shall be deemed an advance
against the purchase price of catheters ordered by Bard pursuant to said
purchase order. Notwithstanding the provisions of Paragraph 7 of the
Standstill Agreement, Bard's obligation to pay for catheters delivered
pursuant to said purchase order, Bard's entitlement to credit the advance
referred to in this Paragraph 5 against the purchase price of said
catheters and Biosearch's obligation to manufacture and deliver against
said purchase order shall apply regardless of whether the parties execute
a definitive agreement referred to in Paragraph 7 of the Standstill
Agreement.
If the above meets with your approval, please sign where indicated below and fax
a copy of this letter to John R. Myers at (908) 277-8025.
Very truly yours,
BARD MEDICAL DIVISION,
C.R. BARD, INC.
/s/ William G. Midgette
--------------------------------------
William G. Midgette,
President
ACCEPTED AND AGREED TO:
Biosearch Medical Products, Inc.
By: /s/ Manfred F. Dyck 9/21/98
-----------------------------
Manfred F. Dyck
Chairman
Dated: September 22, 1998
<PAGE>
BARD MEDICAL DIVISION
C. P. Bard, Inc.
8195 Industrial Blvd.
Covington, GA 30209-2695 BARD[LOGO]
October 30, 1998
VIA TELECOPIER
AND HAND DELIVERY
Biosearch Medical Products, Inc.
35 Industrial Parkway
Branchburg, NJ 08876-1276
Attn: Mr. Manfred F. Dyck
Chairman
RE: Standstill Agreement dated August 14, 1998 between
Biosearch Medical Products, Inc. ("Biosearch") and
C. R. Bard, Inc. ("Bard"), as amended by letter agreement
dated September 22, 1998 (the "Standstill Agreement")
Dear Manfred:
Reference is made to the Standstill Agreement. Capitalized terms used herein
shall have the same meaning as set forth in the Standstill Agreement, except to
the extent as amended by this letter agreement.
This letter is to confirm our telephone conversation yesterday relative to an
extension of the Standstill Period. In consideration of the payment by Bard to
Biosearch of the sum of ten dollars ($10.00) the receipt and legal sufficiency
of which is hereby acknowledged by the execution and delivery of this letter
agreement, Biosearch and Bard hereby agree to the entry of an amendment to the
Standstill Agreement as follows:
1. The Standstill Period is hereby extended through the close of business on
November 6, 1998.
<PAGE>
Biosearch Medical Products, Inc.
October 30, 1998
Page 2
If the above meets with your approval, please sign where indicated below and fax
a copy of this letter to John R. Myers at (908) 277-8025.
Very truly yours,
BARD MEDICAL DIVISION,
C.R. BARD, INC.
/s/ William G. Midgette
--------------------------------------
William G. Midgette,
President
ACCEPTED AND AGREED TO:
Biosearch Medical Products, Inc.
By: /s/ Manfred F. Dyck, President
------------------------------
Manfred F. Dyck
Chairman
Dated: October 30, 1998
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Bard Medical Division
C. P. Bard, Inc.
8195 Industrial Blvd.
Covington, GA 30209-2695 BARD[LOGO]
November 6, 1998
VIA TELECOPIER
AND HAND DELIVERY
Biosearch Medical Products, Inc.
35 Industrial Parkway
Branchburg, NJ 08876-1276
Attn: Mr. Manfred F. Dyck
Chairman
RE: Standstill Agreement dated August 14, 1998 between
Biosearch Medical Products, Inc. ("Biosearch") and
C. R. Bard, Inc. ("Bard"), as amended by letter agreements
dated September 22, 1998 and October 30, 1998
(the "Standstill Agreement")
Dear Manfred:
Reference is made to the Standstill Agreement. Capitalized terms used herein
shall have the same meaning as set forth in the Standstill Agreement, except to
the extent as amended by this letter agreement.
This letter is to confirm our most recent telephone conversation relative to an
extension of the Standstill Period. In consideration of the payment by Bard to
Biosearch of the sum of ten dollars ($10.00) the receipt and legal sufficiency
of which is hereby acknowledged by the execution and delivery of this letter
agreement, Biosearch and Bard hereby agree to the entry of an amendment to the
Standstill Agreement as follows:
1. The Standstill Period is hereby extended through the close of business on
November 13, 1998.
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Biosearch Medical Products, Inc.
November 6, 1998
Page 2
If the above meets with your approval, please sign where indicated below and fax
a copy of this letter to John R. Myers at (908) 277-8025.
Very truly yours,
BARD MEDICAL DIVISION,
C.R. BARD, INC.
William G. Midgette,
President
ACCEPTED AND AGREED TO:
Biosearch Medical Products, Inc.
By: /s/ Manfred F. Dyck
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Manfred F. Dyck
Chairman
Dated: November 6, 1998
ASSET PURCHASE AGREEMENT
between
BIOSEARCH MEDICAL PRODUCTS, INC., Seller,
and
C.R. BARD, INC., Purchaser
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Dated: February 25, 1999
--------------------------------
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TABLE OF CONTENTS
Page
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ARTICLE I
PURCHASE AND SALE ......................................................... 1
1.1 Purchased Assets .............................................. 1
1.2 No Assumed Liabilities ........................................ 2
1.3 Purchase Price ................................................ 2
1.4 Payment of Purchase Price ..................................... 2
1.5 Allocation of Purchase Price .................................. 3
1.6 The Closing ................................................... 3
1.7 Sales and Transfer Taxes and Fees ............................. 4
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF SELLER .................................. 4
2.1 Due Organization; Good Standing ............................... 4
2.2 Corporate Authorization; Binding Effect ....................... 5
2.3 Absence of Default; Non-Contravention; No Liens ............... 6
2.4 Fixed Assets .................................................. 7
2.5 Real Property Lease ........................................... 7
2.6 Litigation .................................................... 8
2.7 Compliance with Laws .......................................... 8
2.8 Environmental Matters ......................................... 9
2.9 Third Party and Governmental Consents ......................... 9
2.10 Trademarks, Copyrights, etc. .................................. 10
2.11 Product Liability ............................................. 11
2.12 Disclosure .................................................... 12
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF PURCHASER ............................... 13
3.1 Due Organization; Good Standing ............................... 13
3.2 Corporate Authorization; Binding Effect ....................... 14
3.3 No Breach ..................................................... 15
ARTICLE IV
COVENANTS AND OTHER AGREEMENTS ............................................ 15
4.1 Risk of Loss; Casualty ........................................ 15
4.2 Covenants of Seller ........................................... 16
4.3 Access to Property and Records ................................ 18
4.4 Material Events ............................................... 18
4.6 Public Announcements .......................................... 18
4.7 Indemnification ............................................... 20
4.8 Other Rights and Remedies Not Affected ........................ 24
4.9 Survival of Representations and Warranties .................... 25
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TABLE OF CONTENTS
Page
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4.10 Termination ................................................... 25
4.11 Confidentiality ............................................... 26
4.12 Other Negotiations ............................................ 27
ARTICLE V
CONDITIONS PRECEDENT TO CLOSING ........................................... 27
5.1 Conditions Precedent to Purchaser's Obligations ............... 27
5.2 Conditions Precedent to Seller's Obligations .................. 30
ARTICLE VI
MISCELLANEOUS ............................................................. 33
6.1 Entire Understanding; Amendment ............................... 33
6.2 Confidentiality ............................................... 33
6.3 Further Assurances ............................................ 33
6.4 Binding Effect ................................................ 34
6.5 Assignment .................................................... 34
6.6 Waiver ........................................................ 34
6.7 Counterparts .................................................. 34
6.8 Section Headings; Exhibits; Schedules ......................... 34
6.9 Governing Law ................................................. 35
6.10 Notices ....................................................... 35
6.11 Expenses ...................................................... 36
6.12 Certificates as Representations ............................... 36
6.13 Interpretation ................................................ 36
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ASSET PURCHASE AGREEMENT
AGREEMENT made this 25th day of February, 1999 between BIOSEARCH MEDICAL
PRODUCTS, INC., a New Jersey corporation, having its principal place of business
at 35A Industrial Parkway, Somerville, New Jersey 08876-1276 ("Seller"), and
C.R. BARD, INC., a New Jersey corporation, having its principal place of
business at 730 Central Avenue, Murray Hill, New Jersey 07974 ("Purchaser")
WHEREAS, Seller, among other things, is engaged in the business of
manufacturing coatings, manufacturing and coating medical products, and
providing other related services with respect to coatings and medical products;
and
WHEREAS, Seller is the owner of certain technology, know-how and equipment
having utility for dipping intermittent urological catheters in hydrophilic
coating; and
WHEREAS, Seller desires to sell and Purchaser desires to purchase such
technology, know-how and equipment of Seller, upon the terms and subject to the
conditions herein.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein; the parties agree as follows:
ARTICLE I
PURCHASE AND SALE
1.1 Purchased Assets. Subject to the terms and conditions set forth in
this Agreement, Seller hereby agrees to sell, assign, transfer and deliver to
Purchaser, and Purchaser hereby agrees to purchase from Seller, on the Closing
Date, the following assets,
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rights and interests of Seller (collectively, the "Purchased Assets"), free and
clear of all liens and encumbrances:
(a) The equipment and other fixed assets listed in Schedule 1.1(a),
which is attached hereto and incorporated herein (collectively, the "Fixed
Assets");
(b) All technology, trade secrets, patent applications, issued
patents, know-how, manufacturing processes and procedures, formulae, quality
control procedures, test procedures, specifications, protocols, drawings,
designs and other proprietary information relating to Seller's methods of
applying hydrophilic coatings to intermittent urological catheters in existence
on the date hereof or hereafter invented or acquired by Seller (collectively,
the "Methods").
1.2 No Assumed Liabilities. Purchaser shall assume no obligations or
liabilities of Seller whatsoever, whether known or unknown, matured or
unmatured, absolute or contingent, whether relating to the Purchased Assets or
otherwise.
1.3 Purchase Price. In consideration of the transfer of the Purchased
Assets as provided herein, Purchaser shall pay to Seller a purchase price equal
to Six Hundred Fifty Thousand Dollars ($650,000) (the "Purchase Price").
1.4 Payment of Purchase Price. The Purchase Price shall be paid by
Purchaser to Seller as follows: (a) $200,000, which has been paid and the
receipt of which is hereby acknowledged by Seller pursuant to the Standstill
Letter Agreement between the parties dated August 14, 1998, as amended; and (b)
$450,000 to be paid at
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Closing by Purchaser to Seller by wire transfer of immediately available funds
to a bank designated in writing by Seller.
1.5 Allocation of Purchase Price. The Purchase Price for the Purchased
Assets shall be allocated to the Purchased Assets (the "Purchase Price
Allocation") as follows: (a) Methods: $400,000; (b) Fixed Assets: $250,000.
Seller and Purchaser each agree to timely file or cause to be filed Internal
Revenue Service Form 8594 with the Internal Revenue Service for the taxable year
that includes the Closing Date, in accordance with the requirements of Section
1060 of the Internal Revenue Code of 1986, as amended (the "Code"), and the
regulations thereunder. Seller and Purchaser shall allocate the Purchase Price
on Form 8594 consistently with the Purchase Price Allocation.
1.6 The Closing. The closing of the transactions contemplated hereby (the
"Closing") shall take place at 12:00 p.m. on the 25th day of February, 1999,
unless mutually agreed to otherwise by the parties, at the offices of Shanley &
Fisher, P.C., 131 Madison Avenue, Morristown, New Jersey 07962. The time and
date of the Closing is referred to in this Agreement as the "Closing Date". The
transfer, assignment and delivery of the Purchased Assets shall be effected by a
bill of sale and assignment substantially in the form attached hereto as Exhibit
A, which is attached hereto and incorporated herein (the "Bill of Sale and
Assignment") and such other assignments and instruments of transfer, in form and
substance reasonably acceptable to Purchaser
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and its counsel, sufficient to transfer the Purchased Assets to Purchaser.
1.7 Sales and Transfer Taxes. All applicable sales, transfer, use and
similar taxes that may be due or payable as a result of the assignment, transfer
or delivery of the Purchased Assets to Purchaser shall be borne solely by
Purchaser. Purchaser shall pay all such taxes, if any, in a prompt and timely
manner and shall provide Seller with written notice of such payment(s), if any,
promptly after said payments are made.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Purchaser, knowing and intending that
Purchaser is relying thereon in entering into the transactions contemplated
hereby, as follows:
2.1 Due Organization; Good Standing. Seller is a corporation duly
organized, validly existing and in good standing under the laws of the State of
New Jersey and has the power and authority to carry on its business as now
conducted, to own and operate the properties and assets now owned and operated
by it and to enter into and perform this Agreement. Seller is duly qualified to
do business and is in good standing in all jurisdictions where such
qualification is required.
2.2 Corporate Authorization; Binding Effect.
(a) The execution, delivery and performance of this Agreement by
Seller, and the transfers, assignments, deliveries and execution, delivery and
performance of all other agreements to be
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executed by Seller pursuant hereto or in connection herewith, have been duly
authorized by the Board of Directors of Seller, and no other corporate
proceedings and no further action is necessary on the part of Seller to execute,
deliver and perform this Agreement or any other agreement, document or
instrument to be executed by Seller pursuant hereto or in connection herewith.
(b) This Agreement is a valid and legally binding obligation of
Seller, enforceable against Seller in accordance with its terms, and each
agreement, document and instrument contemplated by this Agreement, when executed
and delivered by Seller in accordance with the provisions of this Agreement,
will be duly authorized, executed and delivered by Seller and will be valid and
legally binding obligations of Seller, enforceable against Seller in accordance
with their respective terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting the enforcement of creditors rights generally or by the
application of general principles of equity.
2.3 Absence of Default; Non-Contravention; No Liens.
(a) Seller: (i) is not in default under or in violation of any
provision of its Articles of Incorporation or By-Laws, (ii) is not in default
under or in violation of any agreement material to the Purchased Assets or the
Facility (as hereinafter defined), and (iii) has not received any notice that it
is in violation of any law, ordinance, rule, regulation or directive pertaining
or relating to any of the Purchased Assets or the Facility.
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(b) Neither the execution nor delivery of this Agreement or any
other agreement, document or instrument to be executed and delivered by Seller
pursuant hereto or in connection herewith, nor the fulfillment of nor the
compliance with the terms and provisions hereof or thereof, nor the consummation
of the transactions contemplated hereby or thereby, will: (i) result in a breach
of any term, condition or provision of, or constitute a default under, or result
in a violation or termination of, or conflict with or give any third party the
right to accelerate the performance provided by the terms of, (a) the Articles
of Incorporation or By-Laws of Seller, or (b) any contract or agreement related
to any of the Purchased Assets or the Facility to which Seller is a party or by
which it or any of the Purchased Assets or the Facility is bound, (ii) violate
any provision of any law, rule, regulation, order, judgment or decree to which
any of the Purchased Assets or the Facility are subject or bound, or (iii)
result in the creation or imposition of any lien, charge, restriction, security
interest or encumbrance of any nature whatsoever on any of the Purchased Assets
or the Facility.
2.4 Fixed Assets. The Fixed Assets, including all of their components and
parts, are in good operating condition, subject to ordinary wear and tear, and
perform in accordance with their applicable specifications. Except for the liens
described in Schedule 2.4 which is attached hereto and incorporated herein, each
of which will be released on or prior to the Closing Date, Seller has good and
marketable title to all of the Purchased Assets, free
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and clear of all liens, charges, claims and encumbrances. All of the Fixed
Assets are located at the Seller's leased facility located at 35A Industrial
Parkway, Somerville, New Jersey (the "Facility").
2.5 Real Property Lease. Seller leases the Facility from Hydromer, Inc., a
New Jersey corporation, having its principal place of business at 35 Industrial
Parkway, Branchburg, New Jersey 08876 ("Hydromer") pursuant to a Lease dated
June 12, 1998 (the "Real Property Lease"). Neither Seller nor Hydromer is in
default under or in breach of any provision of the Real Property Lease. There
exists no condition or event which, after notice or lapse of time or both, would
constitute a default by Seller or Hydromer under the Real Property Lease. Seller
has not received any notice of violation of any applicable building, zoning or
planning regulation, ordinance or other law, order, regulation or requirement
relating to the Fixed Assets or the Facility. Seller has no knowledge of any
defect or defects with respect to the Facility which would interfere with the
continued use of the Facility for the purpose of operating the Fixed Assets
under the equipment lease, which is attached hereto and incorporated herein as
Exhibit B (the "Equipment Lease") in the manner operated heretofore by Seller.
Seller's interest in the Real Property Lease is free and clear of all liens,
charges, claims and encumbrances. Seller has supplied Purchaser with a true and
correct copy of the Real Property Lease.
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2.6 Litigation. Except as set forth in Schedule 2.6 which is attached
hereto and incorporated herein, there are no claims, actions, suits, proceedings
or investigations pending or, to the best knowledge of Seller, threatened
against or affecting Seller or any of the Purchased Assets or the Facility, at
law or in equity, before or by any Federal, State, municipal or other court,
governmental department, commission, board, agency or instrumentality, and
Seller does not know of any basis for any of the foregoing. There is no order,
writ, injunction or decree of any court or any Federal, State, municipal or
local agency or instrumentality affecting Seller or any of the Purchased Assets
or the Facility to which Seller is subject or by which any of the Purchased
Assets or the Facility is subject or bound.
2.7 Compliance with Laws. Seller has, and on the Closing Date will have,
complied in all material respects with all laws, ordinances, rules, regulations
and directives of any and all Federal, State, county, city and other
governments, governmental departments, bureaus, agencies and other bodies, and
any and all public authorities whatsoever pertaining or relating to the
Purchased Assets and the Facility.
2.8 Environmental Matters. No governmental agency has asserted any claim
or, to the best knowledge of Seller, threatened to assert any claim against
Seller in respect of any of the Purchased Assets or the Facility arising out of
any Federal, state or local law, rule, regulation or directive pertaining to the
environment ("Environmental Claim"). To the best knowledge of
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Seller, after due inquiry, there are no past or present actions, activities,
circumstances, conditions, offenses, or incidences, including, without
limitation, the release, emission, discharge or disposal of hazardous materials,
that could form the basis of any Environmental Claim against Seller related to
any of the Purchased Assets or the Facility.
2.9 Third Party and Governmental Consents. Except as described in Schedule
2.9, which is attached hereto and incorporated herein, no consent,
authorization, approval, order, license, certificate or permit of or from, or
registration, declaration or filing with, any governmental authority or any
court or other tribunal or any other person, firm or entity, nor under any
contract, indenture, mortgage, lease, (including the Real Property Lease),
license or other agreement or instrument to which Seller is a party or by which
Seller or any of its assets or properties is subject or bound, is required by or
with respect to Seller in connection with the execution, delivery or performance
of this Agreement or of any other agreement, document or instrument to be
executed and delivered by Seller pursuant hereto or in connection herewith or
the consummation of the transactions contemplated hereby.
2.10 Trademarks, Copyrights, etc. Seller does not use or hold for use with
any of the Purchased Assets any patents, patent applications, copyrights,
copyright registrations or applications therefor, trademarks, trademark
registrations or applications therefor, tradenames, service marks, logos or
other identifying
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symbols, names or marks. All Methods in existence on the date hereof are
contained in Seller's internal file No. MOD 3276 which is incorporated herein by
reference. All of the technology, trade secrets, know-how, manufacturing
processes and procedures, formulae, quality control procedures, test procedures,
specifications, protocols, drawings, designs and other intellectual property
used or held for use by Seller in connection with any of the Purchased Assets
have been reduced to writing or other tangible form and are complete and include
all information and rights necessary for the use and operation of the Methods
and Fixed Assets in the manner operated heretofore by Seller. Other than filing
for patent protection, Seller has protected to the fullest extent permitted by
law all of the Methods. No proceedings are pending and no claim has been made
or, to the best knowledge of Seller, threatened which challenges the rights of
Seller in respect of any of the Methods or Seller's right to use the same. None
of the Methods infringe upon or otherwise violate the rights of others, is being
infringed by others, or is subject to any outstanding order, decree, judgment or
stipulation.
2.11 Product Liability. Except to the extent disclosed on Schedule
2.11(a), which is attached hereto and incorporated herein, (a) there have been
no claims or complaints, and there are no claims or complaints existing or, to
the best knowledge of Seller, threatened against Seller or other parties for
product liability in respect of any product developed, manufactured, sold or
distributed at any time by Seller or any predecessor of Seller or predecessor
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owner of any of the Purchased Assets, including any claim on account of any
express or implied warranty, except for normal returns and allowances, and
Seller does not know and has no reasonable grounds to know of any basis for
assertion against Seller or other parties of any such claim or complaint. Seller
has had no recalls of any of its products, whether voluntary or ordered by
governmental authorities, and does not know and has no reasonable grounds to
know of any basis for any such recall. Seller has promptly and adequately
notified its insurance carriers of any and all claims or complaints with respect
to its products for which Seller is insured.
(b) Schedule 2.11(b), which is attached hereto and incorporated
herein, lists each policy of insurance covering product liability maintained by
Seller, including the identity of each underwriter, the amount of coverage and
the term and limits of the liability thereunder. All of such policies are in
full force and effect and provide adequate coverage for Seller's benefit and
against all risks relating to product liability claims usually insured against
by persons owning or operating properties or businesses similar to those of
Seller. Seller shall provide copies of such policies to Purchaser promptly upon
Purchaser's written request.
2.12 No Broker. Neither Seller nor any agent on Seller's behalf has
employed any broker or finder in connection with this Agreement or any of the
transactions contemplated hereby including any agreement set forth on any
Exhibit hereto.
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2.13 Disclosure. No representation or warranty of Seller contained in this
Agreement or any other agreement, document or instrument to be executed and
delivered by Seller pursuant hereto or in connection herewith is untrue or omits
to state a material fact necessary in order to make the statements herein or
therein, in light of the circumstances under which they were made, not
misleading. Except for changes in the ordinary course of business and those
contemplated by this Agreement, the representations, warranties and covenants of
Seller contained in this Agreement shall be deemed made again at Closing and as
of the Closing Date. All documents provided to Purchaser by Seller are true and
correct copies of the documents which they purport to represent.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser hereby warrants and represents to Seller, knowing and intending
that Seller is relying thereon in entering into the transactions contemplated
hereby, as follows:
3.1 Due Organization; Good Standing. Purchaser is a corporation duly
organized, validly existing and in good standing under the laws of the State of
New Jersey and has the corporate power and authority to carry on its business as
now conducted, to own and operate the properties and assets now owned and
operated by it and to enter into and perform this Agreement.
3.2 Corporate Authorization; Binding Effect.
(a) The execution, delivery and performance of this Agreement by
Purchaser, and the execution, delivery and performance
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of all other agreements to be executed by Purchaser pursuant thereto or in
connection therewith have been duly authorized by all necessary corporate action
on the part of Purchaser and no other corporate proceedings and no further
action is necessary on the part of Purchaser to authorize this Agreement or any
other agreement, document or instrument to be executed by Purchaser pursuant
hereto. No consent or approval of any other person to the consummation of any of
the transactions contemplated hereby by Purchaser is required.
(b) This Agreement is a valid and legally binding obligation of
Purchaser, enforceable against Purchaser in accordance with its terms, and each
agreement, document and instrument contemplated by this Agreement, when executed
and delivered by Purchaser in accordance with the provisions of this Agreement,
will be duly authorized, executed and delivered by Purchaser and will be a valid
and legally binding obligation of Purchaser, enforceable against Purchaser in
accordance with its respective terms, except as such enforceability may. be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
other similar laws affecting the enforcement of creditors rights generally or by
the application of general principles of equity.
3.3 No Breach. The execution, delivery and performance by Purchaser of
this Agreement will not conflict with or result in a breach of any of the terms,
conditions or provisions of Purchaser's Certificate of Incorporation or By-Laws
or any contract or agreement to which Purchaser is a party and by which it is
bound,
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and does not contravene any law, rule, regulation or order applicable to
Purchaser.
3.4 No Broker. Neither Purchaser nor any agent on Purchaser's behalf has
employed any broker or finder in connection with this Agreement or any of the
transactions contemplated hereby including any agreement set forth on any
Exhibit hereto.
ARTICLE IV
COVENANTS AND OTHER AGREEMENTS
4.1 Risk of Loss; Casualty. Until the Closing Date, the risk of loss or
damage to any of the Purchased Assets by fire or other casualty or any cause
whatsoever shall be upon Seller. In the event of damage or destruction or loss
to the extent of more than twenty percent (20%) of the aggregate fair market
value of the Purchased Assets, computed as of the Closing Date, as a result of
fire or other elements, or other casualty or any cause whatsoever, whether or
not beyond any party's control, Purchaser shall have the right to terminate this
Agreement by serving upon Seller, on or before the Closing Date, written notice
of its election to terminate. Seller agrees to give Purchaser written notice of
any damage or destruction to any of the Purchased Assets with full details of
the nature and extent thereof, and Purchaser shall have an opportunity to review
the extent of such damage and destruction. If Purchaser shall not elect in a
writing delivered to Seller to terminate this Agreement or in the event of any
destruction or damage or loss not giving rise to any right in Purchaser to
terminate this Agreement, this Agreement shall remain in full force
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and effect and all insurance proceeds payable with respect to any damaged or
destroyed or lost property, which property would have been purchased by
Purchaser hereunder on the Closing Date, shall be payable to Purchaser on the
later of the Closing Date or when received from the insurance carrier by Seller.
4.2 Covenants of Seller. During the period commencing on the date hereof
and continuing until the Closing, Seller covenants and agrees (except to the
extent that Purchaser shall otherwise expressly consent in writing) that:
(a) Seller will carry on its business at the Facility only in the
ordinary course in substantially the same manner as heretofore conducted.
(b) Seller will comply promptly with all requirements of Federal,
State or local law with respect to the transactions contemplated hereby and will
cooperate with and furnish information to Purchaser in connection with any such
requirements imposed upon Purchaser in connection with the transactions
contemplated hereby.
(c) Seller will obtain (and cooperate with Purchaser in obtaining)
any consent, authorization or approval of, or any exemption by, any governmental
authority or agency, or other third party, required to be obtained or made in
connection with the transactions contemplated hereby provided, however, that
Seller shall not be deemed in breach of its covenant under this Section 4.2(c)
with respect to any required consent or authorization required under the
Industrial Site Recovery Act, N.J.S.A. 13:1K-6 et seq., as amended, and its
attendant regulations ("ISPA") if
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Seller uses its best efforts to obtain such ISRA consent or authorization but,
despite such best efforts, fails to obtain the same on or prior to the Closing
Date.
(d) Seller will not lease, mortgage, pledge or encumber in any way
whatsoever any of the Purchased Assets or its interest as the lessee under the
Real Property Lease.
(e) Seller will not sell, assign, license, transfer or otherwise
dispose of any of the Purchased Assets.
(f) Seller will not terminate or amend the Real Property Lease.
(g) Seller will promptly advise Purchaser orally and in writing of
any change in its business which is or may reasonably be expected to be adverse
to any of the Purchased Assets or the Facility.
(h) Seller will not take, agree to take, or knowingly permit to be
taken any action or do or knowingly permit to be done anything in the conduct of
its business which would be contrary to or in breach of any of the terms or
provisions of this Agreement or the Real Property Lease, or which would cause
any of the representations of Seller contained herein to be or become untrue in
any material respect.
(i) If any action, suit, proceeding or investigation of the nature
specified in Section 5.1(f) hereof is commenced, Seller agrees to cooperate with
Purchaser and to use its best efforts to defend against and respond thereto.
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4.3 Access to Property and Records. At all times prior to the Closing,
Seller shall afford the officers and authorized representatives of Purchaser,
during normal business hours and upon reasonable notice, full access to the
Purchased Assets and the Facility and to such of the books and records of Seller
related to the Purchased Assets and the Facility as Purchaser shall reasonably
request. Purchaser hereby acknowledges and agrees that all information and data
disclosed to or observed by Purchaser as a result of such access shall be
subject to the provisions of Section 6.2 hereof.
4.4 Material Events. At all times prior to the Closing, Seller shall
promptly notify Purchaser in writing of the occurrence of any event which will
or may result in the failure to satisfy the conditions specified in Section 5.1
hereof.
4.5 Public Announcements. Neither Seller nor Purchaser shall issue or
permit to be issued any press release, public announcement or other information
with respect to this Agreement or the transactions contemplated hereby, without
the express prior written consent of the other party, except as may be required
by applicable securities or other laws. In the event any such disclosure is
required by applicable law, the disclosing party shall provide the
non-disclosing party with a copy of the proposed release not less than two (2)
business days prior to its proposed release and shall provide the non-disclosing
party with the opportunity to comment on the substance thereof.
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4.6 Indemnification.
(a) Seller hereby agrees to defend (utilizing counsel selected by
Seller that is reasonably acceptable to Purchaser), indemnify and hold
Purchaser, its officers, directors, and employees harmless from and against any
and all liabilities, losses, damages, costs or expenses (including, without
limitation, reasonable attorneys' and accountants' fees and expenses, court
costs and all other out-of-pocket expenses) directly or indirectly incurred by
such persons or entities arising out of or in connection with: (i) the breach of
any warranty or the inaccuracy of any representation by Seller contained in this
Agreement or in any Exhibit or Schedule hereto or in any agreement, instrument,
certificate or other document executed by or on behalf of Seller in connection
herewith, and (ii) any failure by Seller to perform any of the covenants,
agreements or obligations under this Agreement or any other agreement or
instrument executed and delivered by or on behalf of Seller pursuant hereto or
in connection herewith, and (iii) the assertion against Purchaser or any of its
officers, directors, or employees of any claim, liability or obligation relating
to or arising out of the business, operations or assets of Seller, whether
incurred before or after the Closing Date. The indemnification obligations of
Seller herein shall survive the Closing.
(b) Purchaser hereby agrees to defend (utilizing counsel selected by
Purchaser that is reasonably acceptable to Seller), indemnify and hold Seller
and its officers, directors, and
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employees harmless, from and against any and all liabilities, losses, damages,
costs or expenses (including, without limitation, reasonable attorneys' fees and
expenses, court costs and all other out-of-pocket expenses) directly or
indirectly incurred by such persons or entities arising out of or in connection
with: (i) the breach of any warranty or the inaccuracy of any representation by
Purchaser contained in this Agreement or in any Exhibit or Schedule hereto or in
any agreement, instrument, certificate or other document executed by or on
behalf of Purchaser in connection herewith, and (ii) any failure by Purchaser to
perform any of the covenants, agreements or obligations under this Agreement or
any other agreement or instrument executed and delivered by or on behalf of
Purchaser pursuant hereto or in connection herewith. The indemnification
obligations of Purchaser herein shall survive the Closing.
(c) Within thirty (30) days after Purchaser or Seller, as the case
may be (hereinafter the "Indemnified Party"), has received notice of or has
acquired knowledge of any claim by any person or entity not a party to this
Agreement of the commencement or threatened commencement of any action or
proceeding by any person or entity not a party to this Agreement ("third party
claim") or has acquired knowledge of any other claim hereunder against the other
party hereto ("first party claim) the Indemnified Party shall, if such claim is
indemnifiable by the other party pursuant hereto (hereinafter the "Indemnifying
Party"), give the Indemnifying Party written notice of such claim and the
19
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commencement or threatened commencement of such action or proceeding, if
any. Such notice shall state the nature and basis of such claim and, if
ascertainable, the amount thereof. Notwithstanding the foregoing, the failure of
the Indemnified Party to give such notice shall not excuse the Indemnifying
Party's obligation to indemnify and, in the case of a third party claim, defend
the Indemnified Party, except to the extent the Indemnifying Party has suffered
damage or prejudice by reason of the Indemnified Party's failure to give or
delay in giving such notice. Within ten (10) business days of receipt of any
notice issued by the Indemnified Party pursuant to this Section 4.6(c), the
Indemnifying Party shall notify the Indemnified Party whether the Indemnifying
Party acknowledges its indemnification obligation and, in the case of a third
party claim, its defense obligation with respect to the claim which was the
subject of the Indemnified Party's notice or whether it disclaims such
obligation(s). In the event the Indemnifying Party disclaims or fails to timely
acknowledge its obligations with respect to any claim by the Indemnified Party
relating to any third party claim, the Indemnified Party shall have the right to
defend such claim, with counsel of its own selection, and compromise such claim
without prejudice to its right to indemnification hereunder. In the event the
Indemnifying Party timely acknowledges its obligations hereunder with respect to
any third party claim, the Indemnifying Party shall defend the same with counsel
in accordance with the foregoing provisions of this Section 4.6. Where the
Indemnifying Party shall have acknowledged
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in writing its obligations hereunder with respect to any third party claim, the
Indemnified Party may, at its expense, participate in the defense of such third
party claim and no such third party claim shall be settled by the Indemnified
Party without the prior written consent of the Indemnifying Party. At any time
after the Indemnifying Party acknowledges its obligations hereunder with respect
to any third party claim, the Indemnifying Party may request the Indemnified
Party to agree in writing to the payment or compromise of such third party claim
(provided such payment or compromise has been previously approved in writing by
the third party claimant), whereupon such action shall be deemed agreed to by
the Indemnified Party and shall be agreed to in writing by the Indemnified Party
unless such settlement would involve a remedy or remedies other than the payment
of money damages by the Indemnifying Party.
(d) In the event either party makes a claim against the other party
under Section 4.6 hereof and further in the event the party receiving notice of
such claim fails to timely acknowledge its obligations hereunder with respect to
such claim or disclaims such obligations, the parties, within sixty (60) days of
the date of issuance of notice by the party making such claim, shall meet and
attempt to resolve in good faith the dispute between the parties with respect to
such claim. If the parties fail to resolve such dispute within seventy-five (75)
days of the date of issuance of notice by the party making such claim, the party
making such claim may thereafter commence litigation against the other party in
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a court of competent jurisdiction for determination of its claim. Upon
resolution of any claim pursuant to this Section 4.6, whether by agreement
between the parties or the rendering of a final judgment from which no appeal
lies in any litigation, the appropriate party under an agreement or the party
against which judgment is rendered in litigation shall, within ten (10) days of
such resolution, pay over and deliver to the other party funds in the amount of
any claim as resolved, and any fees, including attorneys' fees, incurred by such
other party with respect to any such litigation.
(e) Notwithstanding the foregoing, any limitation on the respective
obligations of Seller or Purchaser under this Section 4.6 which are set forth in
the agreement attached hereto as Exhibit B or in the agreement attached hereto
as Exhibit C shall modify the respective obligations of the parties under this
Section 4.6.
(f) In the event Seller becomes aware of any infringement of the Methods
by a third party, Seller shall promptly notify Purchaser in writing of such fact
and the name of the third party. Thereafter, Purchaser shall have the right, but
not the obligation, to prosecute any actual or alleged infringement. Seller
shall cooperate with Purchaser and shall take, at Purchaser's expense, any
actions requested by Purchaser in connection therewith.
4.7 Other Rights and Remedies Not Affected. The indemnification rights of
any Indemnified Party under this Agreement are independent of and in addition to
such rights and remedies as any such party may have at law or in equity or
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otherwise for any misrepresentation, breach of warranty or failure to fulfill
any agreement or covenant hereunder on the part of any other party, including,
without limitation, the right to seek specific performance, rescission or
restitution, none of which rights or remedies shall be affected or diminished
hereby.
4.8 Survival of Representations and Warranties. The respective
representations and warranties made by Seller or Purchaser in or pursuant to
this Agreement shall survive the Closing and any investigation at any time made
by or on behalf of the other party. All representations and warranties shall
terminate three (3) year from the Closing Date.
4.9 Termination.
(a) Manner of Termination. This Agreement may be terminated and the
sale and transfer provided for by this Agreement may be abandoned on or before
the Closing Date:
(1) By mutual agreement of Seller and Purchaser;
(2) By Purchaser, if Purchaser is not then in default under
this Agreement and any of the conditions provided for in Section 5.1 of this
Agreement have not been met on the Closing Date and have not been waived by
Purchaser in writing;
(3) By Seller, if Seller is not then in default under this
Agreement and any of the conditions provided for in Sections 5.2 of this
Agreement have not been met on the Closing Date and have not been waived in
writing; or
(4) By Purchaser, pursuant to Section 4.1 hereof.
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(5) By Seller or Purchaser if the Closing does not take place
by February 26, 1999.
(b) Election to Terminate. Any election to terminate this Agreement
under this Section 4.9 shall be exercised in writing by a duly authorized
officer of Purchaser and/or Seller, as the case may be.
(c) Effect of Termination. In the event of the termination and
abandonment of this Agreement pursuant to the provisions of this Section 4.9,
this Agreement shall terminate, except that the provisions of Section 6.2 hereof
shall survive the termination hereof.
4.10 Confidentiality. Seller covenants and agrees that, from and after the
Closing Date: (i) it will not disclose and will use its best efforts to prevent
any third party who previously had or has access to the same, from disclosing
any of the Methods; and (ii) it will not use or permit any third party to use
any of the Methods except to the extent specifically authorized by Purchaser in
writing. Seller agrees that any remedy at law for any breach of this Section
4.10 will be inadequate by reason of irreparable harm sustained by Purchaser in
the event of any such breach and that Purchaser shall be entitled injunctive
relief and/or specific performance with respect to such breach. Such remedies
shall not be exclusive and shall be in addition to any other remedy which
Purchaser may have.
4.11 Other Negotiations. In order to evidence Seller's commitment to the
consummation of the transactions contemplated
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<PAGE>
hereby, Seller agrees that, between the date hereof and the Closing, it will
not, collectively or individually, directly or indirectly through any officer,
director, shareholder or employee of Seller or through any third party, begin or
continue any discussions with or consider any proposal from any person or entity
other than Purchaser which relates to the sale, licensing or other transfer of
any of the Purchased Assets.
ARTICLE V
CONDITIONS PRECEDENT TO CLOSING
5.1 Conditions Precedent to Purchaser's Obligations. The obligations of
Purchaser to purchase the Purchased Assets and to consummate the transactions
contemplated hereby are subject to and conditioned upon the performance prior to
or on the Closing Date of each of the following (unless waived in writing by
Purchaser):
(a) All the terms and conditions of this Agreement to be complied
with and performed by Seller on or before the Closing Date shall have been
complied with and performed.
(b) All representations and warranties by Seller which are contained
in this Agreement or in any written document required to be executed and
delivered by Seller pursuant hereto or in connection herewith shall be true and
correct in all material respects when made and at and as of the Closing Date as
though such representations and warranties were made at and as of the Closing
Date.
(c) WAIVED.
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(d) Purchaser shall have received the Bill of Sale and Assignment
and such other assignments and instruments of transfer and conveyance for the
Purchased Assets, in form and substance reasonably satisfactory to Purchaser and
its counsel, sufficient to transfer to Purchaser the Purchased Assets as
contemplated by this Agreement and Seller shall have delivered a copy of the
Methods to Purchaser.
(e) Purchaser shall have received the resolutions of the Board of
Directors of Seller, certified by the Secretary or an Assistant Secretary of
Seller, authorizing the execution, delivery and performance by Seller of this
Agreement, all agreements, documents and instruments to be executed and
delivered by Seller pursuant hereto or in connection herewith and the
consummation of the transactions contemplated hereby.
(f) There shall be no suits, actions, litigation or other legal,
administrative, arbitration or other proceedings or governmental investigations
pending or, to the knowledge of Purchaser or its counsel, threatened to which
Purchaser is or may become a party which seek to delay, enjoin or otherwise
affect the consummation of the transactions contemplated hereby.
(g) All items described in Section 2.9 hereof which are set forth on
Schedule 2.9 hereto (other than any ISRA consent or authorization) shall have
been obtained by Seller in writing to the satisfaction of Purchaser before the
Closing Date and delivered to Purchaser on or before the Closing Date.
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(h) The liens set forth on Schedule 2.4 hereto shall have been
released on or prior to the Closing Date.
(i) Seller shall have executed and delivered to Purchaser such
certificates and other documents as Purchaser or Purchaser's counsel may
reasonably request.
(j) The form and substance of all certificates, instruments of
transfer and other documents delivered pursuant hereto or in connection herewith
shall be satisfactory in all reasonable respects to Purchaser and its counsel.
(k) Seller shall have executed and delivered the Equipment Lease to
Purchaser.
(l) Seller shall have executed and delivered to Purchaser a License
and Supply Agreement in form and substance as set forth on Exhibit C which is
attached hereto and incorporated herein.
(m) Purchaser shall have received an opinion of Robert J. Moravsik,
General Counsel of Seller, in form and substance as set forth on Exhibit D,
which is attached hereto and incorporated herein.
(n) Hydromer and Purchaser shall have executed, on Closing Date, a
Stock Purchase Agreement pursuant to which Purchaser, among other things,
purchased Two Hundred Twenty Thousand (220,000) shares of common stock of
Hydromer.
(o) Purchaser shall have received from Seller an Incumbency
Certificate, dated the Closing Date, executed by the secretary of Seller or by
an assistant secretary of Seller which
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shall identify the name and title and bear the signature of each officer of
Seller individually authorized to execute and deliver this Agreement and all
other documents required to be delivered by Seller pursuant thereto.
5.2 Conditions Precedent to Seller's Obligations. The obligations of
Seller to sell the Purchased Assets and to consummate the transactions
contemplated hereby are subject to and conditioned upon the performance prior to
or at the Closing Date of each of the following (unless waived in writing by
Seller):
(a) All terms and conditions of this Agreement to be complied with
and performed by Purchaser on or before the Closing Date shall have been
materially complied with and materially performed.
(b) All representations and warranties by Purchaser which are
contained in this Agreement or in any written document executed and delivered by
Purchaser pursuant hereto or in connection herewith shall be true and correct in
all material respects when made and at and as of the Closing Date as though such
representations and warranties were made at and as of the Closing Date.
(c) WAIVED.
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(d) There shall be no suits, actions, litigation or other legal,
administrative, arbitration or other proceedings or governmental investigations
pending or, to the knowledge of Seller or Seller's counsel, threatened to which
Seller is or may become a party which seek to delay, enjoin or otherwise affect
the consummation of the transactions contemplated hereby.
(e) Purchaser shall have executed and delivered to Seller such
certificates and other documents as Seller or Seller's counsel may reasonable
request.
(f) The form and substance of all certificates and other documents
delivered pursuant hereto or in connection herewith shall be satisfactory in all
reasonable respects to Seller and its counsel.
(g) Purchaser shall have executed the Equipment Lease.
(h) Purchaser shall have executed a License and Supply Agreement in
form and substance as set forth on Exhibit C hereto.
(i) Seller shall have received from Purchaser an Incumbency
Certificate, dated the Closing Date, executed by the secretary of Purchaser or
by an assistant secretary of Purchaser which shall identify the name and title
and bear the signature of each officer of Purchaser individually authorized to
execute and deliver this Agreement and all other documents required to be
delivered by Purchaser pursuant thereto.
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ARTICLE VI
MISCELLANEOUS
6.1 Entire Understanding; Amendment. This Agreement, including all
Exhibits and Schedules hereto, and the agreements and instruments referenced
herein, represent the entire understanding of the parties hereto with respect to
the subject matter hereof and supersede all prior and contemporaneous
negotiations, understandings and agreements, written or oral, between the
parties hereto with respect to the subject matter hereof, all of which prior
agreements and understandings are hereby rendered null and void. This Agreement
may not be amended or modified except by a writing executed by the parties
hereto.
6.2 Confidentiality. Each party and its representatives will hold in
strict confidence and not disclose any data and information with respect to the
other party and its business. If the transactions contemplated hereby are not
consummated, Purchaser will return to Seller all such data and information and
any copies thereof and will not use such data and information except as is
otherwise lawfully known or otherwise becomes lawfully known to Purchaser. This
provision shall survive termination of this Agreement for a period of six (6)
years.
6.3 Further Assurances. Purchaser and Seller each agrees that it shall, at
any time and from time to time after the Closing Date, upon request of the other
party, do, execute, acknowledge and deliver or cause to be done, executed,
acknowledged and delivered, such further acts, assignments, transfers, and
assurances as may be
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reasonably necessary to further effectuate the terms of this Agreement.
6.4 Binding Effect. This Agreement shall be binding upon and shall inure
to the benefit of the parties hereto, and their respective successors and
permitted assigns.
6.5 Assignment. No party hereto shall assign this Agreement to any other
person, corporation, partnership or other entity without the prior written
consent of the other party.
6.6 Waiver. Subject to the provisions of Sections 5.1 and 5.2 allowing
waiver by one party, no waiver of any provision hereof shall be effective unless
set forth by a written instrument signed by the parties hereto.
6.7 Counterparts. This Agreement may be signed in counterparts, each of
which shall be considered an original and together they shall constitute one
agreement.
6.8 Section Headings; Exhibits; Schedules. Section headings contained in
this Agreement are for convenience or reference only and shall not be deemed a
part of this Agreement. Any reference to Exhibits or Schedules shall signify
that such Exhibits or Schedules are incorporated herein by reference.
6.9 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New Jersey.
6.10 Notices. All notices, requests, demands and other communications
hereunder shall be in writing and shall be given to the parties at their
respective addresses set forth below and shall be sent by: (a) hand delivery, or
(b) certified mail, return
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receipt requested, postage prepaid, or (c) a recognized overnight delivery
service, or (d) telecopy or other means of facsimile. Notices sent by hand
delivery shall be deemed received when delivered to the address and/or person
set forth below; notices sent by certified mail shall be deemed received when
accepted; notices sent by overnight delivery service shall be deemed received
when delivered; and notices sent by telecopy shall be deemed received upon
receipt of confirmation of dispatch.
(a) If to Seller, to:
Biosearch Medical Products
35A Industrial Parkway
Somerville, New Jersey 08876
Attention: General Counsel
Telecopy No. (908) 722-5024
(b) If to Purchaser, to:
C.R. Bard, Inc.
730 Central Avenue
Murray Hill, New Jersey 07974
Attention: General Counsel
Telecopy No. (908) 277-8025
or to such other address or telecopy number as any party may designate by
written notice in the aforesaid manner.
6.11 Expenses. Seller and Purchaser shall each pay its respective
expenses, fees and costs incident to the preparation, execution and delivery of
this Agreement and of all documents required to be delivered by or on behalf of
such party hereunder, whether or not the transactions contemplated hereunder are
consummated.
6.12 Certificates as Representations. All statements as to factual matters
contained in any certificate or other instrument
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delivered by or on behalf of any party pursuant hereto or in connection with the
transactions contemplated hereby shall be deemed to be representations and
warranties by the party hereunder as of the date of such certificate or
instrument or as of such later or earlier date as specified in such certificate
or instrument.
6.13 Interpretation. No provision of this Agreement or any agreement
ancillary hereto shall be interpreted or construed against any party because
that party or his or its legal representative drafted such provision. Any
pronoun used in this Agreement shall be deemed to include singular and plural
and masculine, feminine and neuter gender, as the case may be.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have signed this Agreement as of
the date first above written.
SELLER:
BIOSEARCH MEDICAL PRODUCTS, INC.
By: /s/ Robert V. Morrison
-----------------------------------
Name: Robert V. Morrison
---------------------------------
Title: Vice President
--------------------------------
PURCHASER:
C.R. BARD, INC.
By: /s/ John H. Weiland
-----------------------------------
Name: JOHN H. WEILAND
---------------------------------
Title: GROUP PRESIDENT
--------------------------------
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Exhibits
Exhibit A Bill of Sale and Assignment
Exhibit B Equipment Lease
Exhibit C License and Supply Agreement
Exhibit D Opinion of General Counsel of Seller
Schedules
Schedule 1.1(a) Fixed Assets
Schedule 2.4 Liens
Schedule 2.6 Pending or Threatened Litigation
Schedule 2.9 Third Party Consents
Schedule 2.11(a) Product Liability
Schedule 2.11(b) Insurance
<PAGE>
EXHIBIT A
BILL OF SALE AND ASSIGNMENT
Pursuant to the Asset Purchase Agreement (the "Agreement") dated the 25th
day of February, 1999 by and between BIOSEARCH CHEMICAL PRODUCTS, INC., a New
Jersey corporation ("Seller"), and C.R. BARD, INC., a New Jersey corporation
("Purchaser"), Seller does hereby sell, assign and transfer to Purchaser, and
Purchaser does hereby purchase and acquire from Seller, all of Seller's right,
title and interest on the Closing Date in and to the following assets, rights
and interests of Seller (collectively, the "Purchased Assets"):
(a) All equipment and other fixed assets listed in Schedule 1.1(a)
to the Agreement; and
(b) All technology, trade secrets, patent applications, issued
patents, and any continuations and divisionals thereof, know-how, manufacturing
processes and procedures, formulae, quality control procedures, test procedures,
specifications, protocols, drawings, designs and other proprietary information
relating to Seller's methods of applying hydrophilic coatings to intermittent
urological catheters in existence on or before the date of the Agreement or
thereafter invented or acquired by Seller.
Capitalized terms which are used herein but which are not otherwise
defined herein shall have the respective meanings ascribed to them in the
Agreement.
Seller hereby covenants that, from time to time, after delivery of this
instrument, at Purchaser's request and without further consideration, it will
do, execute, acknowledge and deliver, or cause to be done, executed,
acknowledged and delivered, all such further acts, deeds, transfers,
assignments, powers of attorney and assurances as may be reasonably required to
more effectively transfer to or vest in Purchaser, and to put Purchaser in
possession of any of, the Purchased Assets transferred or assigned hereunder.
This Bill of Sale and Assignment shall be governed by and construed and
enforced in accordance with the laws of the State of New Jersey without regard
to its conflict of laws rules.
This Bill of Sale and Assignment shall inure to the benefit of and be
binding upon Seller and Purchaser and their respective successors and assigns.
IN WITNESS WHEREOF, Seller and Purchaser have caused this Bill of Sale and
Assignment to be duly executed February, 1999.
BIOSEARCH MEDICAL PRODUCTS, INC.
By: ________________________________
<PAGE>
EXHIBIT B
EQUIPMENT LEASE AGREEMENT
This Equipment Lease Agreement, dated as of the 25th day of
February, 1999, between C.R. BARD, INC., a New Jersey corporation ("Lessor"),
having its principal place of business at 730 Central Avenue, Murray Hill, New
Jersey 07974 and BIOSEARCH MEDICAL PRODUCTS, INC., a New Jersey corporation
("Lessee"), having its principal place of business at 35A Industrial Parkway,
Somerville, New Jersey 08876.
W I T N E S S E T H:
WHEREAS, concurrently with the execution and delivery hereof,
pursuant to the Asset Purchase Agreement dated the date hereof (the "Asset
Purchase Agreement") between Lessor and Lessee, Lessor has purchased from
Lessee, among other things, certain equipment used in applying hydrophilic
coatings to intermittent urological catheters; and
WHEREAS, Lessee desires to lease said equipment from Lessor, and
Lessor is willing to provide said equipment to Lessee pursuant to the terms
hereof.
NOW, THEREFORE, in consideration of the premises and the mutual
promises hereinafter set forth, the parties hereto hereby agree as follows:
SECTION 1. Lease. Lessor hereby leases to Lessee, and Lessee hereby
leases and hires from Lessor, the equipment described in Schedule A attached
hereto and made a part hereof, together with all substitutions and replacements,
replacement parts, additions, repairs and accessories from time to time
incorporated therein or
<PAGE>
annexed thereto (collectively, the "Equipment"), upon the terms and subject to
the conditions hereinafter set forth.
SECTION 2. Term. Subject to any earlier termination pursuant to an
Event of Default (as defined herein), the term of this Lease shall begin as of
the date and year first above written and shall continue until the expiration of
the License and Supply Agreement executed concurrently herewith between Lessor
and Lessee in form and substance as set forth on Exhibit A, which is attached
hereto and incorporated herein (the "Supply Agreement"). Notwithstanding the
foregoing, Lessor hereby expressly agrees that Lessee shall have the right to
terminate this Lease at any time, without cause, upon not less than ten (10)
days notice to Lessor provided, at the time of such notice, no purchase order
issued by Lessor under the Supply Agreement remains unfilled.
SECTION 3. Rent. In consideration of the leasing of the Equipment
under this Lease, Lessee shall pay to Lessor basic rent for the Equipment during
the term of this Lease of Ten and 00/100 ($10.00) Dollars per month, payable
monthly in advance on or before the first day of each month.
SECTION 4. Title of Lessor. Lessor shall and hereby does retain full
legal title to the Equipment, notwithstanding the possession and use thereof by
Lessee, and no right, title or interest in the Equipment shall pass the Lessee.
This Lease shall constitute an agreement of lease only, and nothing herein shall
be
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construed as conveying to Lessee any right, title or interest in the Equipment
other than as a lessee thereof.
SECTION 5. The Equipment as Personal Property. No part of the
Equipment shall at any time become a fixture or part of any real property
notwithstanding the fact that such Equipment may become nailed, screwed, bolted,
or otherwise attached or affixed to such real property. Lessee agrees to
indemnify and hold Lessor harmless from any claim asserted on the basis of any
Equipment being deemed to be a fixture or part of any real property as a result
of any acts of Lessee in connection with dealings with persons not parties to
this Lease during the term of this Lease. Lessee shall affix to the Equipment
any markings or labels requested by Lessor evidencing Lessor's interest in the
Equipment and shall cause such markings or labels to be continually affixed to
the Equipment until the Equipment is returned to Lessor.
SECTION 6. Use of Equipment. Lessee shall use the Equipment in its
business in a careful and proper manner and only for the uses for which the
Equipment is intended and only to supply Lessor with products pursuant to the
Supply Agreement. Lessee shall operate and maintain the Equipment strictly in
accordance with the provisions of this Lease and the instructions provided by
the manufacturers thereof and/or Lessor.
SECTION 7. Laws, Regulations and Rules. Lessee shall comply with all
applicable Federal, State and local laws, regulations, rules, building codes,
ordinances and orders and with
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all requirements of insurance policies maintained in force hereunder with
respect to the possession, use, maintenance and operation of the Equipment.
SECTION 8. Maintenance, Replacement and Additions of Parts. Lessor
shall keep the Equipment in good repair and in a condition equivalent in all
respects to the condition existing on the date and year first above written,
ordinary wear and tear excepted. Lessee shall perform or cause to be performed,
at its sole cost and expense, all routine maintenance required to be performed
on the Equipment in accordance with the manufacturer's recommendations. In the
event any non-routine maintenance or repair to the Equipment is required,
Lessee shall promptly notify Lessor of the required maintenance and/or repairs
together with the estimated cost thereof. Promptly after receipt by Lessee of
written authorization from Lessor to proceed with any non-routine maintenance
or repair of the Equipment, which authorization shall not be unreasonably
delayed or withheld, Lessee shall cause such work to be promptly performed and
Lessor shall, within thirty (30) days of receipt invoice from Lessee, reimburse
Lessee for the costs of such maintenance or repair as estimated by Lessee or as
otherwise agreed upon by Lessor and Lessee in writing. Notwithstanding the
foregoing, if any non routine maintenance or repair to the Equipment is required
as a result of Lessee's negligent or willful acts or omissions, such maintenance
or repair shall be performed by Lessee at its expense. Any and all parts,
4
<PAGE>
mechanisms, devices and labor required for such purpose shall become part of the
Equipment and the property of Lessor. Lessee shall make no alterations,
additions or improvements to or modifications of the Equipment whatsoever
without the express prior written consent of Lessor.
SECTION 9. Insurance. During the term of this Lease, Lessee shall
carry and maintain on the Equipment, at its own cost and expense, insurance with
carriers acceptable to Lessor in an amount not less than the full replacement
value thereof, less depreciation (subject to normal deductible provisions and
policies covering loss or damage) against: (a) loss or damage by fire, and (b)
such other risks and in such other amounts customarily covered with respect to
equipment similar to the Equipment, as may reasonably be deemed necessary by
Lessor. All such insurance shall name Lessor as an insured party as its interest
may appear. Lessee shall, at Lessor's request, provide Lessor with a certificate
of insurance evidencing its compliance with this Section 9, which certificate
shall provide that such insurance shall not be amended or terminated without ten
(10) days prior written notice to Lessor.
SECTION 10. No Warranties.
(a) LESSOR MAKES NO REPRESENTATION OR WARRANTY OF ANY KIND, EXPRESS
OR IMPLIED, WITH RESPECT TO THE EQUIPMENT, INCLUDING, WITHOUT LIMITATION, ANY
REPRESENTATION OR WARRANTY OF CONDITION OF THE EQUIPMENT, ITS QUALITY,
DURABILITY, MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, OR WITH RESPECT
TO INFRINGEMENT OR THE
5
<PAGE>
LIKE. Lessor shall not be liable to Lessee or any other person for any damages
or loss whatsoever with respect to the Equipment, whether based on strict or
absolute tort liability, negligence or contract, including, but not limited to,
any defect in design, manufacture, materials or workmanship with respect to the
Equipment, or any special, incidental or consequential damages of Lessee as a
result of Lessee's leasing or operation of the Equipment.
(b) Lessee assumes all responsibility for the safe operation of the
Equipment, and Lessor shall not be responsible for any property damage resulting
from the operation of the Equipment or any personal injury to any person,
whether or not an employee or agent of Lessee, resulting from the operation of
the Equipment.
SECTION 11. Events of Default and Remedies.
(a) The occurrence of any of the following events shall, at the
option of Lessor, be a default (each, an "Event of Default") under this Lease:
(i) The nonpayment by Lessee of any sum required under this Lease to be
paid by Lessee for a period of ten (10) days after the due date thereof; or
(ii) the failure by Lessee to perform or observe any other term, covenant,
agreement or condition of this Lease which is not cured within fifteen (15) days
after written notice thereof from Lessor; or
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(iii) any misrepresentation or breach of warranty made by Lessee in this
Lease or in any document furnished by Lessee in connection with this Lease; or
(iv) the subjection of any of Lessee's property to any levy, seizure,
assignment, application or sale for the benefit of or by any creditor or
governmental agency, or the insolvency of Lessee, or the appointment of a
trustee or receiver for Lessee or for a substantial part of its assets, or the
institution by or against Lessee of any bankruptcy, reorganization or insolvency
proceedings.
(b) Upon the occurrence of an Event of Default and at any time
thereafter, Lessor may, in its sole discretion, do one or more of the following:
(i) upon written notice to Lessee, terminate this Lease; (ii) declare the total
amount of unpaid rent and other applicable amounts due and to become due
hereunder for the term of this Lease immediately due and payable; (iii) demand
the return of the Equipment in accordance with Section 13 hereof; (iv) without
demand or legal process, enter the premises where the Equipment is located and
take immediate possession of and remove the same, without liability to Lessor or
its agents for such entry or for damage to property or otherwise; (v) sell any
or all of the Equipment at public or private sale, or otherwise dispose of,
lease to others or keep idle the Equipment, all free and clear of any rights of
Lessee to the Equipment; and/or (vi) exercise any other right or remedy
available to Lessor under applicable law or proceed
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by court action to enforce the terms of this Lease or to recover damages or
expenses resulting from the breach of this Lease. Lessee shall be liable for and
shall pay to Lessor all legal expenses and other costs incurred by Lessor in
exercising Lessor's remedies. No remedy referred to in this Lease is intended to
be exclusive, but each shall be in addition to any other remedy referred to or
otherwise available to Lessor at law or in equity. No express or implied waiver
by Lessor of any Event of Default shall constitute a waiver of any other Event
of Default or a waiver of any of Lessor's rights and no delay by Lessor in
enforcing any right or requiring performance of any provision of this Lease by
Lessee shall be a waiver of such right or affect the right of Lessor to enforce
such provision. To the extent permitted by applicable law, Lessee hereby waives
any rights now or hereafter conferred by statute or otherwise which may require
Lessor to sell, lease or otherwise use any Equipment in mitigation of Lessor's
damages as set forth in this section or which may otherwise limit or modify any
of Lessor's rights or remedies under this section.
SECTION 12. Location of Equipment, Right of Inspection.
(a) The Equipment shall be located at Lessee's address hereinabove set forth and
shall not be removed from such location without the express prior written
consent of Lessor.
(b) Lessor shall at all times during Lessee's normal business hours
have the right to enter Lessee's premises where the
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Equipment is located for the purpose of inspecting the Equipment and observing
its use.
SECTION 13. Return of Equipment. Upon termination of this Lease,
whether at the expiration of the term hereof or otherwise, Lessee, at Lessor's
sole cost and expense, will promptly dismantle, crate and place at Lessee's
shipping dock the Equipment, and thereupon, immediately return the Equipment to
Lessor in the same operating condition existing on the date and year first above
written, ordinary wear and tear resulting from the proper use of the Equipment
excepted. Lessee further agrees to render, at the rate of $800.00 per day,
consulting services to Lessor as an independent contractor and not as an
employee, with respect of the proper reassembly, reinstallation, startup and
operation of the Equipment at such plant as Lessor shall specify by notice given
to Lessee. Lessee shall perform such consulting services at such times (up to a
maximum of 10 man days in the aggregate) as Lessor shall reasonably request.
Lessor shall reimburse Lessee for the reasonable and necessary out-of-pocket
expenses for travel and lodging incurred by Lessee in performing the consulting
services for Lessor promptly upon the submission to Lessor of vouchers or
expense statements reasonably evidencing such expenses.
SECTION 14. Additional Documents; Financing Statements. During the
term of this Lease, Lessee shall provide Lessor such documents as Lessor shall
request to protect its interest in this Lease and the Equipment, including,
without limitation,
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precautionary financing statements to provide notice to interested parties.
SECTION 15. Representations and Warranties of Lessee. Lessee
represents and warrants to Lessor as follows:
(a) Lessee has the corporate power and authority to enter into and
perform this Lease, and the execution, delivery and performance of this Lease
has been authorized by all necessary action of Lessee. This Lease is a valid and
binding obligation of Lessee, enforceable against Lessee in accordance with its
terms except as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting the
enforcement of creditors rights generally or by the application of general
principles of equity.
(b) Lessee has obtained all necessary consents and approvals under
applicable laws, rules, regulations, ordinances and orders or otherwise relating
to the possession, use and maintenance of the Equipment.
SECTION 16. Representations and Warranties of Lessor. Lessor
represents and warrants to Lessee that it has the corporate power and authority
to enter into and perform this Lease, and the execution, delivery and
performance of this Lease has been authorized by all necessary corporate action
of Lessor. This Lease is a valid and binding obligation of Lessor, enforceable
against Lessor in accordance with its terms except as such enforceability may be
limited by applicable bankruptcy, insolvency,
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reorganization, moratorium or other similar laws affecting the enforcement of
creditors rights generally or by the application of general principles of
equity.
SECTION 17. Indemnification. Lessee hereby indemnifies and agrees to
hold Lessor harmless from and against any and all losses, liabilities, damages,
claims, costs and expenses (including reasonable attorneys' and expert fees)
arising out of or in connection with (a) any breach by Lessee of any of its
representations, warranties and agreements contained in this Lease and (b) the
use, leasing and return of the Equipment. The provisions of this Section 17
shall survive the termination of this Lease.
SECTION 18. Notices. All notices required or permitted to be given
by either party hereto to the other shall be deemed to have been given when
deposited in the United States certified mail, return receipt requested, postage
prepaid, addressed as follows:
If to Lessor: 730 Central Avenue
Murray Hill, New Jersey 07974
Attention: General Counsel
If to Lessee: 35A Industrial Boulevard
Somerville, New Jersey 08876
Attention: President
or addressed to either party at such other address as such party shall hereafter
furnish to the other party in writing.
SECTION 19. Severability of Provisions. Any provision of this Lease
which is prohibited or unenforceable in any
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jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof or thereof, and any such prohibition or unenforceability in
any jurisdiction shall not invalidate or render unenforceable such provision in
any other jurisdiction.
SECTION 20. Prohibition of Parol Changes. No term or provision of
this Lease may be amended, waived, discharged or terminated orally, but only by
an instrument in writing signed by the party against whom the enforcement of the
amendment, waiver, discharge or termination is sought.
SECTION 21. No Assignment. This Lease and the rights and obligations
hereunder may not be assigned by Lessee without the express prior written
consent of Lessor. Any purported assignment by Lessee not otherwise permitted
hereby shall be deemed void and shall constitute a material breach hereof.
SECTION 22. Governing Law. This Lease shall be governed by, and
construed in accordance with, the laws of the State of New Jersey.
SECTION 23. Entire Agreement; Benefits. This Lease and the Schedule
and Exhibit thereto, together with Asset Purchase Agreement and the Supply
Agreement (a) constitute the entire agreement between the parties hereto and
supercede all other prior agreements and undertakings, both written and oral,
between the parties with respect to the subject matter hereof and
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thereof; (b) shall not confer upon any other person any other rights or remedies
hereunder; and (c) shall inure to the benefit of all parties hereto and their
respective successors and permitted assigns.
SECTION 24. Execution in Counterparts. This Lease may be executed in
two or more counterparts, each of which when so executed shall be deemed to be
an original, and in each case such counterparts together shall constitute one
and the same instrument.
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SECTION 25. Captions. The captions in this Lease are for convenience
of reference only and shall not define or limit any of the terms or provisions
hereof.
C.R. BARD, INC.
By:
--------------------------------
Title:
BIOSEARCH MEDICAL PRODUCTS, INC.
By:
--------------------------------
Title:
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EXHIBIT C
LICENSE AND SUPPLY AGREEMENT
THIS AGREEMENT made this 25th day of February, 1999 by and between
BIOSEARCH MEDICAL PRODUCTS, INC., a New Jersey corporation, having its principal
place of business at 35A Industrial Parkway, Somerville, New Jersey 08876
("BIOSEARCH") and C. R. BARD, INC., a New Jersey corporation having its
principal place of business at 730 Central Avenue, Murray Hill, New Jersey 07974
("BARD").
WHEREAS, on the date hereof, BARD and BIOSEARCH entered into a
certain "ASSET PURCHASE AGREEMENT" (hereinafter defined) pursuant to which
BIOSEARCH, among other things, sold to BARD and BARD purchased from BIOSEARCH
the "METHODS" (hereinafter defined), and
WHEREAS, BARD desires to license the METHODS back to BIOSEARCH for
the sole and exclusive purpose of coating "CATHETERS" (hereinafter defined) with
"SUPERSLIP COATING" (hereinafter defined) manufactured by "HYDROMER"
(hereinafter defined), by BARD or by a third party, for subsequent sale
exclusively to BARD or an "AFFILIATE" (hereinafter defined), and
WHEREAS, BIOSEARCH is desirous of accepting such license and is
desirous of manufacturing CATHETERS as ordered by BARD and any AFFILIATE and
coating the same with SUPERSLIP COATING supplied to BIOSEARCH by BARD.
NOW, THEREFORE, in consideration of the terms and provisions of this
Agreement, and for other good and valuable consideration, the receipt and
sufficiency of which is
<PAGE>
acknowledged by the execution and delivery thereof, BIOSEARCH and BARD agree
as follows:
1. Definitions.
1.1 AFFILIATE - means any person or entity which controls, is
controlled by, or is under common control with BARD. For purposes of this
definition, the term "control", including the correlative meanings of the terms
"controlled by" and "under common control with" shall mean the possession,
directly or indirectly, of the power to direct or cause the direction of
management or policies of such person or entity.
1.2 ASSET PURCHASE AGREEMENT - means that asset purchase
agreement which is attached hereto and incorporated herein as Exhibit A.
1.3 CATHETERS - means intermittent urological catheters of any
size specified in the SPECIFICATIONS as ordered by BARD or any AFFILIATE in
accordance with this Agreement.
1.4 HYDROMER - means Hydromer, Inc., a New Jersey corporation,
having its principal place of business at 35 Industrial Parkway, Branchburg, New
Jersey 08876.
1.5 METHODS - mean the methods, as defined in Section 1.1(b)
of the ASSET PURCHASE AGREEMENT, as the same exist on the date of execution of
this Agreement, as may be amended by mutual written agreement of the parties
hereto.
1.6 SPECIFICATIONS - means the specifications relating to the
manufacture of uncoated CATHETERS and the specifications relating to the coating
of CATHETERS with
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SUPERSLIP COATING in accordance with the METHODS as set forth on Exhibit B,
which is attached hereto and incorporated herein.
1.7 SUPERSLIP COATING - means a lubricious coating as
described on Exhibit C which is attached hereto and incorporated herein.
1.8 TESTING CRITERIA - means the incoming quality assurance
testing criteria for CATHETERS coated by BIOSEARCH with SUPERSLIP COATING, as
set forth on Exhibit D, which is attached hereto and incorporated herein.
2. Limited License.
2.1 BARD hereby grants to BIOSEARCH a limited, non-exclusive,
royalty free license to use the METHODS for the sole and limited purpose of
coating CATHETERS ordered hereunder by BARD or an AFFILIATE with SUPERSLIP
COATING exclusively for sale hereunder on the terms and conditions set forth
herein.
2.2 Any improvements, enhancements, discoveries, inventions
and ideas related to any process, machine, device, manufacture, composition of
matter, plan or design, related to the METHODS to the extent applicable to
CATHETERS, whether patentable or not, made, conceived, developed or acquired by
BIOSEARCH during the term hereof, whether alone or with others, shall be deemed
to be and become the exclusive property of BARD at the time the same is so made,
conceived, developed or acquired without need for further assignment thereof by
BIOSEARCH to BARD; provided, however, that in the event BARD requests any
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other instruments of assignment BIOSEARCH shall, at BARD's expense, promptly
execute and deliver to the same to BARD.
2.3. BIOSEARCH shall have no right to further sublicense any
of the rights licensed to it pursuant to this Agreement or to assign any of its
rights hereunder without the prior written consent of BARD. Any sublicense or
assignment of any rights licensed to BIOSEARCH pursuant to this Agreement shall
be null and void and without force and effect.
3. Manufacture of CATHETERS
3.1 During the term of this Agreement, BIOSEARCH shall
manufacture CATHETERS in accordance with the SPECIFICATIONS and shall coat the
same with SUPERSLIP COATING, all in accordance with the SPECIFICATIONS, as
ordered by BARD or any AFFILIATE of BARD in accordance with this Agreement.
SUPERSLIP COATING shall be provided to BIOSEARCH by BARD, at its expense, in
quantities sufficient to coat CATHETERS ordered hereunder. BIOSEARCH shall
manufacture and deliver all CATHETERS coated with SUPERSLIP COATING in bulk,
non-sterile form and without funnel.
3.2 If BIOSEARCH at any time deems it necessary to change any
of the SPECIFICATIONS, BIOSEARCH shall notify BARD in writing of such proposed
change prior to its implementation. Any such change may only be implemented upon
BARD's prior written consent thereto. At the time of shipment of any CATHETERS
hereunder, BIOSEARCH shall furnish BARD with a Certificate of Analysis, signed
by an authorized representative
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of BIOSEARCH, certifying that all CATHETERS included in such shipment have been
manufactured and coated in conformity with applicable SPECIFICATIONS and conform
with applicable SPECIFICATIONS at the time of tender by BIOSEARCH to the
selected carrier.
4. Purchase and Sale of CATHETERS.
4.1 All purchases and sales of CATHETERS under this Agreement
will be initiated by issuance and delivery to BIOSEARCH by BARD or an AFFILIATE
of a purchase order. The only terms and conditions of any purchase order issued
by BARD or any AFFILIATE pursuant to this Agreement that will be binding on
BIOSEARCH shall be those establishing the quantity of CATHETERS to be coated
with SUPERSLIP COATING and purchased, the required delivery date(s) therefor and
the designated shipping destination.
5. Warranties; Acceptance; Remedies.
5.1 BIOSEARCH warrants to BARD that each CATHETER sold and delivered
hereunder: (a) will be free from defects in material, design and workmanship
(other than by virtue of a defect in SUPERSLIP COATING existing at the time of
receipt thereof by BIOSEARCH); and (b) will be manufactured and coated in
accordance with the SPECIFICATIONS, including Quality System Requirements under
the Federal Food, Drug and Cosmetics Act of 1938, as amended and regulations
promulgated thereunder.
5.2 Within thirty (30) days of receipt by BARD or an AFFILIATE at
its facility of any CATHETERS supplied by BIOSEARCH,
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BARD or its AFFILIATE shall test the same against the TESTING CRITERIA. If,
within said thirty (30) day period, BARD or an AFFILIATE determines that any
such CATHETERS fail to meet the TESTING CRITERIA and determines that such
failure was not caused by damage in transit, BARD or the AFFILIATE, shall notify
BIOSEARCH and shall include with its notice the basis for such determination.
Within fifteen (15) days of receipt of such notice, BIOSEARCH shall notify the
entity which issued such notice whether it agrees with its determination. In the
event BIOSEARCH notifies such entity that it agrees with its determination or
fails to timely notify such entity that it disagrees with such determination,
such entity may, at any time within the six (6) month period following its
receipt at its facility of the CATHETERS which were the subject of its
determination ("Rejected Product") return all Rejected Product to BIOSEARCH at
BIOSEARCH's risk and expense. If BARD or an AFFILIATE returns Rejected Product
to BIOSEARCH and notifies BIOSEARCH that replacement is required, BIOSEARCH
shall replace the same, without charge, as promptly as possible and shall
reimburse BARD or its AFFILIATE for freight charges incurred incident to the
return. If BARD or an AFFILIATE returns Rejected Product to BIOSEARCH and
notifies BIOSEARCH that replacement is not required, BIOSEARCH, within thirty
(30) days of receipt of such notice, shall reimburse BARD or its AFFILIATE for
freight charges incurred incident to the return of Rejected Product and shall
refund the payment made thereon, if any. If no payment has
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been made by BARD or any AFFILIATE with respect to Rejected Product at the time
of return, none shall be payable. In the event BIOSEARCH timely notifies BARD or
its AFFILIATE that it disagrees with such determination, within forty-five (45)
days of issuance of such notice by BIOSEARCH, the parties shall submit
representative samples of the CATHETERS at issue to an independent third party
testing laboratory accepted to both parties for a determination of whether or
not the CATHETERS fail to meet the TESTING CRITERIA. Any determination by the
selected testing laboratory shall be final and binding on the parties. If the
testing laboratory determines the samples submitted meet the TESTING CRITERIA,
the same shall be deemed acceptable by BARD or its AFFILIATE, and BARD shall be
responsible for the costs of the testing laboratory. If the testing laboratory
determines the samples submitted do not meet the TESTING CRITERIA, BIOSEARCH
shall be responsible for the costs of the testing laboratory, the CATHETERS
previously at issue shall be deemed Rejected Product and BARD or its AFFILIATE
shall return the same to BIOSEARCH and shall have the same rights and remedies
as if BIOSEARCH had agreed with the determination by BARD or its AFFILIATE.
Except as provided in Section 12 hereof, replacement or refund shall be the sole
remedy available to BARD and its AFFILIATES with respect to CATHETERS delivered
hereunder failing to meet BIOSEARCH's warranties hereunder.
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6. Prices and Payment Terms.
6.1 BIOSEARCH agrees to sell BARD and its AFFILIATES CATHETERS
coated with SUPERSLIP COATING, as ordered pursuant to this Agreement, at the
following selling prices:
Units Per Purchase Order Price
------------------------ -----
500,000 to 2,000,000 $0.42/unit
2,000,001 to 3,000,000 $0.37/unit
3,000,001 or more $0.30/unit
6.2 There shall be no price increase through December 31,
1999. As of January 1, 2000, and annually thereafter during the term of this
Agreement, BIOSEARCH may increase prices annually by fifty percent (50%) of the
actual documented increase in the cost of CATHETER raw materials to BIOSEARCH
during the prior year.
6.3 BIOSEARCH shall invoice BARD or its ordering AFFILIATE
upon shipment. Payment terms are net thirty (30) days from date of receipt of
shipment at the shipping destination designated in the purchase order to which
the shipment corresponds.
6.4 BARD will, not less than once each quarter, provide
BIOSEARCH with a rolling forecast of anticipated orders, if any, by BARD and its
AFFILIATES from BIOSEARCH for the next two succeeding calendar quarters. Such
forecasts shall be in writing but shall be non-binding.
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7. Purchase Orders.
7.1 BARD or its AFFILIATE will provide BIOSEARCH with no less
than ninety (90) days lead time for each purchase order submitted by BARD
hereunder. Each purchase order, if any, shall be for a minimum of 500,000 units
and shall be non-cancelable. The delivery date(s) set forth in any purchase
order issued hereunder shall set forth a delivery date of not more than one year
from date of issuance.
IT IS EXPRESSLY UNDERSTOOD AND AGREED BY BIOSEARCH THAT
NEITHER BARD NOR ANY AFFILIATE WILL BE OBLIGATED TO PLACE ANY PURCHASE ORDER
HEREUNDER AND MAY ELECT NOT TO PLACE ANY PURCHASE ORDER HEREUNDER.
8. Shipping Terms.
8.1 All CATHETERS ordered hereunder will be delivered to BARD
or its ordering AFFILIATE, as applicable, by tender to its selected carrier,
F.O.B. BIOSEARCH's Somerville, New Jersey facility, on the delivery date set
forth in the corresponding purchase order. Title and risk of loss shall pass
upon acceptance of tender by such carrier.
9. Term.
9.1 The term of this Agreement will commence on the date first
set forth above and will terminate on the one year anniversary of the date of
this Agreement, unless sooner terminated as provided in Section 10 below;
provided, however, that the term of this Agreement may be renewed, at BARD's
sole option, for up to four (4) additional successive one (1) year
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renewal terms. In the event BARD intends to effect any such renewal, BARD shall
give BIOSEARCH written notice of such intention to renew not less than ninety
(90) days prior to the expiration of the then current term.
10. Termination.
10.1 Either party may terminate this Agreement by written
notice to the other party if the other party: (a) suspends payment of its debts
or enters into or becomes subject to insolvency, liquidation, dissolution or
bankruptcy proceedings; (b) makes an assignment for the benefit of its
creditors; (c) has a receiver or trustee appointed for all or a substantial
portion of its assets; (d) seeks relief under any law for debtors' relief; (e)
attempts to assign this Agreement or delegate its duties hereunder unless
authorized under this Agreement; (f) fails to perform its obligations under this
Agreement for a period of thirty (30) days (either consecutively or in the
aggregate) during any one-year term due to Force Majeure (as hereinafter
defined); or (g) fails to comply with the terms and conditions of this
Agreement in any material respect; provided, however, that in such event, with
respect to the events or circumstances set forth in subsection (g) above, the
party failing to comply with the terms and conditions of this Agreement in such
material respect shall be provided at least thirty (30) days' prior written
notice during which it may cure the failure and, in the event it does so, this
Agreement shall remain in full force and effect. This Agreement shall also
terminate automatically upon any termination of the equipment lease
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agreement of even date between the parties hereto, which is incorporated herein
by reference.
10.2 Except as expressly set forth in this Agreement,
termination of this Agreement:
(a) will not affect or impair the rights, liabilities and
obligations of any party under any purchase order issued prior to the effective
date of termination; and
(b) will not relieve any party of any obligation or liability
incurred under this Agreement prior to the effective date of termination.
10.3 Upon any termination of this Agreement, BIOSEARCH will,
if requested in writing by BARD, promptly ship to BARD all raw materials,
work-in-process and finished goods inventories used or usable in connection with
the manufacture of CATHETERS including shipping and packing supplies. BIOSEARCH
shall invoice BARD at its cost for any such requested inventories upon shipment.
11. FORCE MAJEURE.
11.1 Failure by BIOSEARCH to make or by BARD to take or
require any delivery hereunder (or portions thereof) when due shall not subject
the non-performing party to any liability to the other party if the
non-performing party declares in writing to the other party that performance
cannot be made due to: (a) an act of God or the public enemy, fire, explosion,
perils of the sea, flood, drought, war, riot, sabotage, accident or embargo; (b)
without limiting the foregoing circumstances, any circumstances of
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like or different character beyond the reasonable control of the party so
failing; (c) interruption of or delay in transportation beyond the reasonable
control of the party so failing; (d) inadequacy or shortage or failure of normal
sources of supply of materials, energy or equipment beyond the reasonable
control of the party so failing; (e) equipment breakdowns beyond the reasonable
control of the party so failing; (f) labor trouble from whatever cause arising
and whether or not the demands of the employees involved are reasonable and
within said party's power to concede; or (g) compliance by BIOSEARCH or BARD
with any order, action, direction or request of any governmental officer,
department, agency, authority or committee thereof (any occurrence or condition
set forth in subsections (a) through (g) above are herein referred to as "Force
Majeure"); provided, however, that in the event Force Majeure prevents such
party from performing for thirty (30) days (either consecutively or in the
aggregate) during the term of this Agreement, the non-performing party shall be
deemed to be in default hereunder and the other party may terminate this
Agreement upon written notice without further obligation.
11.2 The party claiming an excuse hereunder shall promptly
notify the other party in writing, specifying the reasons therefor and expected
duration thereof. Such party shall take reasonable steps to ensure resumption of
full performance hereunder as soon as reasonably possible.
11.3 During the pendency of any Force Majeure situation,
should BIOSEARCH retain any manufacturing capacity,
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BIOSEARCH shall allocate a proportion of such manufacturing capacity to BARD
which is no less favorable than that granted to any other customer of BIOSEARCH.
12. Product Liability Insurance; Indemnification.
12.1 (a) During the term of this Agreement, BIOSEARCH shall
maintain, at its expense, a policy of comprehensive general liability insurance,
with products liability endorsement, in the minimum amount of $3,000,000.00 per
occurrence and in the annual aggregate. Said policy shall name BARD and its
AFFILIATES as additional insureds, as their interest may appear, only with
respect to CATHETERS sold by BIOSEARCH hereunder. BIOSEARCH shall furnish BARD
with a certificate of insurance evidencing such coverage within thirty (30) days
of the execution of this Agreement, which certificate shall provide for not less
than thirty (30) days notice to BARD prior to material change in coverage or
policy cancellation.
12.2 During the term of this Agreement, BARD shall maintain, at its
expense, a policy of comprehensive general liability insurance, with products
liability endorsement, in the minimum amount of $3,000,000.00 per occurrence and
in the annual aggregate. Said policy shall name BIOSEARCH as an additional
insured, as its interest may appear, only with respect to CATHETERS sold by
BIOSEARCH to BARD or its AFFILIATES hereunder. BARD shall furnish BIOSEARCH with
a certificate of insurance evidencing such coverage within thirty (30) days of
the execution
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of this Agreement, which certificate shall provide for not less than thirty (30)
days notice to BIOSEARCH prior to material change in coverage or policy
cancellation.
12.3 BIOSEARCH agrees to indemnify, defend (using counsel selected
by BIOSEARCH which is reasonably acceptable to BARD) and hold harmless, BARD, if
AFFILIATES and their respective officers, directors, employees and customers,
from and against any and all liabilities, losses, damages, costs or expenses
(including, without limitation, reasonable attorneys' and accountants' fees and
expenses, court costs and all other out-of-pocket expenses) directly or
indirectly incurred by such persons or entities arising out of or in connection
with: (i) any failure by BIOSEARCH to manufacture CATHETERS in accordance with
the SPECIFICATIONS or coat CATHETERS in accordance with the SPECIFICATIONS, or
(ii) any other breach by BIOSEARCH of any of the terms or conditions of this
Agreement, or (iii) any third party claim alleging that the manufacture use,
sell, offer for sale or import of any CATHETERS sold by BIOSEARCH to BARD or any
AFFILIATE hereunder infringes the proprietary rights of the third party where
the basis of the alleged infringement is (a) the CATHETERS (without regard to
SUPERSLIP COATING applied thereto) alone and not in combination with any other
item, or (b) the METHODS.
12.4 BARD hereby agrees to indemnify, defend (using counsel selected
by BARD which is reasonably acceptable to BIOSEARCH) and hold harmless,
BIOSEARCH, its officers, directors
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and employees, from and against any and all liabilities, losses, damages, costs
or expenses (including, without limitation, reasonable attorneys' and
accountants' fees and expenses, court costs and all other out-of-pocket
expenses) directly or indirectly incurred by such persons or entities arising
out of or in connection with: (i) any breach by BARD or any AFFILIATE of any of
the terms and conditions of this Agreement, (ii) the sale of any CATHETERS
purchased from BIOSEARCH by BARD or any AFFILIATE, subject to BIOSEARCH's
obligations under Section 12.3 of this Agreement and further subject to
BIOSEARCH's defense and indemnification obligations under the ASSET PURCHASE
AGREEMENT.
12.5 Within thirty (30) days after BARD or BIOSEARCH, as the case
may be (hereinafter the "Indemnified Party"), has received notice of or has
acquired knowledge of any claim by any person or entity not a party to this
Agreement of the commencement or threatened commencement of any action or
proceeding by any person or entity not a party to this Agreement ("third party
claim") or has acquired knowledge of any other claim hereunder against the other
party hereto ("first party claim") the Indemnified Party shall, if such claim is
indemnifiable by the other party pursuant hereto (hereinafter the "Indemnifying
Party"), give the Indemnifying Party written notice of such claim and the
commencement or threatened commencement of such action or proceeding, if any.
Such notice shall state the nature and basis of such claim and, if
ascertainable, the amount thereof. Notwithstanding the foregoing, the failure of
the Indemnified Party
15
<PAGE>
to give such notice shall not excuse the Indemnifying Party's obligation to
indemnify and, in the case of a third party claim, defend the Indemnified Party,
except to the extent the Indemnifying Party has suffered damage or prejudice by
reason of the Indemnified Party's failure to give or delay in giving such
notice. Within ten (10) business days of receipt of any notice issued by the
Indemnified Party pursuant to this Section 12.5, the Indemnifying Party shall
notify the Indemnified Party whether the Indemnifying Party acknowledges its
indemnification obligation and, in the case of a third party claim, its defense
obligation with respect to the claim which was the subject of the Indemnified
Party's notice or whether it disclaims such obligation(s). In the event the
Indemnifying Party disclaims or fails to timely acknowledge its obligations with
respect to any claim by the Indemnified Party relating to any third party claim,
the Indemnified Party shall have the right to defend such claim, with counsel of
its own selection, and compromise such claim without prejudice to its right to
indemnification hereunder. In the event the Indemnifying Party timely
acknowledges its obligations hereunder with respect to any third party claim,
the Indemnifying Party shall defend the same with counsel in accordance with the
foregoing provisions of this Section 12. Where the Indemnifying Party shall have
acknowledged in writing its obligations hereunder with respect to any third
party claim, the Indemnified Party may, at its expense, participate in the
defense of such third party claim and no such third party claim shall be settled
by the Indemnified Party without the prior written
16
<PAGE>
consent of the Indemnifying Party. At any time after the Indemnifying Party
acknowledges its obligations hereunder with respect to any third party claim,
the Indemnifying Party may request the Indemnified Party to agree in writing to
the payment or compromise of such third party claim (provided such payment or
compromise has been previously approved in writing by the third party claimant),
whereupon such action shall be deemed agreed to by the Indemnified Party and
shall be agreed to in writing by the Indemnified Party unless such settlement
would involve a remedy or remedies other than the payment of money damages by
the Indemnifying Party.
12.6 In the event either party makes a claim against the other party
under Section 12 hereof and further in the event the party receiving notice of
such claim fails to timely acknowledge its obligations hereunder with respect to
such claim or disclaims such obligations, the parties, within sixty (60) days of
the date of issuance of notice by the party making such claim, shall meet and
attempt to resolve in good faith the dispute between the parties with respect to
such claim. If the parties fail to resolve such dispute within seventy-five
(75) days of the date of issuance of notice by the party making such claim, the
party making such claim may thereafter commence litigation against the other
party in a court of competent jurisdiction for determination of its claim. Upon
resolution of any claim pursuant to this Section 12.6, whether by agreement
between the parties or the rendering of a final judgment from which no appeal
lies in any litigation, the
17
<PAGE>
appropriate party under an agreement or the party against which judgment is
rendered in litigation shall, within ten (10) days of such resolution, pay over
and deliver to the other party funds in the amount of any claim as resolved, and
any fees, including attorneys' fees, incurred by such other party with respect
to any such litigation.
13. Survival.
13.1 The provisions of Section 12 of this Agreement, and all
of the representations and warranties made in this Agreement, and all terms of
this Agreement intended to be observed or performed by BARD or BIOSEARCH after
the expiration or termination hereof, shall survive the expiration or the
termination of this Agreement and continue, thereafter, in full force and
effect.
14. Entire Agreement.
14.1 This Agreement and any BARD purchase orders placed in
accordance herewith shall constitute the entire agreement between BIOSEARCH and
BARD with respect to the subject matter hereof, and this Agreement may not be
changed or modified except by an instrument in writing between them which states
that it is an amendment hereto.
15. Assignability. This Agreement may not be assigned by either
party without the prior written consent of the other party except: (a) with
respect to BARD, to a successor to all or substantially all of its assets
related to urological catheters, and (b) with respect to BIOSEARCH, to a
successor to all or
18
<PAGE>
substantially all the assets of BIOSEARCH, (c) with respect to BARD or BIOSEARCH
to a purchaser of substantially all of its stock. The provisions of this
Agreement shall be binding on and inure to the benefit of the respective
successors and permitted assigns of each party.
16. Notices. All notices required or permitted to be given by either
party hereto to the other shall be deemed to have been given when deposited in
the United States certified mail, return receipt requested, postage prepaid,
addressed as follows:
If to BARD: 730 Central Avenue
Murray Hill, New Jersey 07974
Attention: General Counsel
If to the BIOSEARCH: 35A Industrial Boulevard
Somerville, New Jersey 08876
Attention: President
or addressed to either party at such other address as such party shall hereafter
furnish to the other party in writing.
17. Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New Jersey.
18. Entire Agreement; Benefits. This Agreement, including the
Exhibits hereto, any purchase order delivered pursuant hereto and all agreements
specifically incorporated herein by reference: (a) constitute the entire
agreement between the parties hereto with respect to the subject matter hereof
and supersede all other prior agreements and undertakings, both written and
oral, between the parties with respect to the subject matter hereof; (b) shall
not confer upon any other person any
19
<PAGE>
other rights or remedies hereunder, except for the extent specifically provided
herein; and (c) shall inure to the benefit of all parties hereto and their
respective successors and permitted assigns.
19. Execution in Counterparts. This Agreement may be executed in two
or more counterparts, each of which when so executed shall be deemed to be an
original, and in each case such counterparts together shall constitute one and
the same instrument.
20. Captions. The captions in this Agreement are for convenience of
reference only and shall not define or limit any of the terms or provisions
hereof.
21. Audit. BIOSEARCH hereby grants to BARD the right to audit only
those books and records of BIOSEARCH relating to its cost of CATHETER raw
materials for purposes of determining the accuracy of any selling price increase
taken by BIOSEARCH pursuant to Section 6.2. Any such audit shall be conducted by
BARD, at its expense, no more often than annually, upon reasonable advance
notice to BIOSEARCH, during BIOSEARCH's regular business hours.
20
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused their duly
authorized representations to execute this agreement in duplicate as first above
written.
BIOSEARCH MEDICAL PRODUCTS, INC.
By:_____________________________________
Title:__________________________________
Date:___________________________________
C.R. BARD, INC.
By:_____________________________________
Title:__________________________________
Date:___________________________________
21
<PAGE>
EXHIBIT D
[LOGO]
BIOSEARCH
Robert J. Moravsik
Attorney at Law
Vice President, General Counsel
and Secretary
Admitted: NJ & NY
Email: [email protected]
February 25, 1999
C.R. Bard, Inc.
730 Central Avenue
Murray Hill, NJ 07974
Dear Sir:
I am employed as Vice President and General Counsel for Biosearch Medical
Products, Inc., a New Jersey corporation ("Biosearch") and in that capacity I
have acted as counsel to Biosearch with respect to the sale of certain assets of
Biosearch relating to the manufacture of, sterilization of and packaging of
certain intermittent urinary catheters devices ("medical devices") to C.R. Bard,
Inc. ("Bard"), the sale of certain intellectual property relating to these
medical devices and a supply agreement whereby, Biosearch promises to
manufacture and supply to Bard, the medical devices for a period set forth in
the documents.
As counsel, I have examined the following:
(1) The Asset Purchase Agreement, including all Schedules and Exhibits;
(2) The Bill of Sale
(3) The Equipment Lease Agreement whereby, Bard agrees to lease back
certain of the purchased assets to Biosearch to enable Biosearch to fulfill the
terms of the Supply Agreement;
(4) A License and Supply Agreement whereby, Biosearch will manufacture and
coat urinary catheters for Bard with subsequent packaging and sterilization done
by Bard;
(5) Articles of incorporation of Biosearch and all amendments thereto to
date;
(6) By-laws of Biosearch and all amendments thereto to date;
The documents referred to in items (1) through (6) above are
- --------------------------------------------------------------------------------
BIOSEARCH MEDICAL PRODUCTS INC. 35 INDUSTRIAL PARKWAY P.O. BOX 1700
SOMERVILLE, NJ 08876-1276 (908) 722-5000 (800) 326-5976 FAX (908) 722-5024
<PAGE>
Biosearch Medical Products, Inc. to Page-2
C.R. Bard, Inc.
Counsel's Opinion
- --------------------------------------------------------------------------------
referred to herein as the "Transaction Documents."
I have also examined such other corporate records of Biosearch,
certificates of public officials and of officers of Biosearch, and agreements,
instruments and other documents as I have deemed necessary in order to render
the opinions expressed below. As to questions of fact material to such opinions,
I have, when relevant facts were not independently established by me, relied
upon certificates of officers of Biosearch. I have assumed the genuineness of
all signatures on all documents submitted to me as certified or photostatic
copies. I have also assumed the due authorization, execution and delivery of the
Transaction Documents by all parties thereto other than Biosearch.
On the basis of the foregoing, I am of the opinion that:
1. Biosearch is a corporation duly incorporated, validly existing and in good
standing under the laws of the State of New Jersey and has all corporate powers,
and authority, and all material governmental licenses, authorizations, consents
and approvals required to carry on its business as now conducted, to own and
operate its properties and assets, and to enter into and perform in accordance
with the Transaction Documents. Biosearch is duly qualified to do business as a
foreign corporation and is in good standing in each jurisdiction where Biosearch
is required to be so qualified.
2. The execution, delivery and performance by Biosearch of the Transaction
Documents and the consummation by Biosearch of the transactions contemplated
thereby are within Biosearch's corporate powers and have been duly authorized,
executed and delivered by all necessary corporate action on the part of
Biosearch, and the Transaction Documents constitute legally binding obligations
of Biosearch, enforceable against it in accordance with their respective terms,
subject to bankruptcy, insolvency, and similar laws of general applicability
relating to or affecting creditors' rights and to general equity principles. No
stockholder approval for this transaction is required under the Laws of the
State of New Jersey.
3. The consummation of the transactions contemplated by the Asset Purchase
Agreement requires Biosearch to exercise its best efforts to obtain regulatory
consent from the New Jersey Department of Environmental Protection and Energy
("DEPE") under the law commonly known as the Industrial Site Reclamation Act
"ISRA" prior to closing. The Company has retained J.M. Sorge of Branchburg, New
Jersey as its ISRA consultant and expects to file for such consent or
authorization with due speed after closing.
4. The execution, delivery and performance by Biosearch of the Transaction
Documents does not and will not (i) contravene or conflict with the certificate
of incorporation or bylaws of Biosearch, (ii) contravene or conflict with or
constitute a violation of any provision
<PAGE>
Biosearch Medical Products, Inc. to Page-3
C.R. Bard, Inc.
Counsel's Opinion
- --------------------------------------------------------------------------------
of any law, regulation, judgment, injunction, order or decree binding upon or
applicable to Biosearch, (iii) constitute a default under or give rise to any
right of termination, cancellation or acceleration of any right or obligation of
Biosearch or to a loss of any benefit to which Biosearch is entitled under any
provision of any agreement, contract or other instrument binding upon Biosearch
or by which any of the Purchased Assets is or may be bound or of any Permit or
(iv) result in the creation or imposition of any Lien on the Purchased Assets.
Furthermore:
1. To the best of my knowledge and belief: (i) Biosearch is not in violation of
its Certificate of Incorporation or its bylaws, (ii) is not in violation of any
agreement material to the Purchased Assets or to its facility, (iii) has not
received any notice that it is in violation of any law or regulation pertaining
to or relating to any such Purchased Assets or it's facility.
2. Except as set forth in the Transaction Documents or any Schedule thereto, I
am not aware of any action, suit or proceeding pending or threatened before any
court, arbitrator or governmental agency against Biosearch which is reasonably
likely to have a material adverse effect upon Biosearch or which would seek or
enjoin or prevent the consummation of the transactions contemplated by the
Transaction Documents.
3. I have reviewed the Asset Purchase Agreement and am not aware of any other
material exceptions to the representations of Biosearch set forth in the Asset
Purchase Agreement. I have relied on representations of management of Biosearch
in this regard.
4. To the best of my knowledge and belief, Biosearch has good and valid title to
all of the purchased assets, free and clear of all liens, security interests and
other encumbrances.
5. To the best of my knowledge and belief, Biosearch has complied in all
material respects with all laws, ordinances, rules and regulations of any
governmental authority pertaining to or relating to the Purchased Assets or its
facility.
Very truly yours,
/s/ Robert J. Moravsik
Robert J. Moravsik, Vice President, General Counsel and Secretary
*bard.rjm
<PAGE>
Schedule 2.9 3rd Party Consents except for DEP, ISRA
NONE
<PAGE>
Schedule 2.11(a) Third party Complaints NONE
<PAGE>
Schedule 2.11B Insurance
<PAGE>
ASSET PURCHASE AGREEMENT
Schedule 2.11(B)
MedMarc Casualty Insurance Co
4000 Legato Road, Suite 800
Fairfax, Virginia 22033
Policy Period 6/1/98 To 6/1/99 Product Liability Insurance
Limits of Insurance:
General Aggregate Limit Excluded
Products-Completed Operations Aggregate Limit $3,000,000
Personal & Advertising Injury Limit. Excluded
Each Occurance Limit $3,000,000.
Fire Damage Limit Excluded
Medical Expense Limit Excluded
<PAGE>
LICENSE AND SUPPLY
<PAGE>
Exhibit A Asset Purchase-Shanley to attach
<PAGE>
Exhibit B, C And D. This information all contained in documents in possession of
David Marshall, Oct 7, 1998
PHOTOS ATTACHED
<PAGE>
Equipment Lease -- Schedule A
<PAGE>
ASSET PURCHASE
SCHEDULE 1.1(A)
<PAGE>
[LOGO]
BIOSEARCH(R)
MEDICAL PRODUCTS INC.
October 13, 1998
ANDY SAAT via fax
Business Development Director ========================
BARD MEDICAL DIVISION FAX 1-770-385-4755
C.R.BARD, Inc. pages -> 1
8195 Industrial Blvd. Phone 1-770-784-6479
Covington, GA. 30014 ========================
RE: LIST OF ITEMS PER PHOTOS OF INTERMITTENT CATHETER
COATING MACHINE
Dear Andy,
Listed below are is the written list of items shown in the digitized photographs
sent to you previously. I hope that this will meet the needs of your financial
department.
Photo No.
Ref No. Units Description
- ------- ----- -------------------------------------------------
A 1 Intermittent Catheter Coating Machine, (Complete)
(Includes Loading, Dipping and Curing)
B 1 Tube Holder Return System
C 17 Tube Holders (aka, Tube Racks)
D 1 Coating Solution Pump & Filter System (Complete)
E 1 Coating Solution Dip Tank with fitments
F 2 Blotting Pad Holder Tray
G 1 Coating Machine wall mounted Control Panel
H 1 5 Zone Temperature Monitor, wall mounted
I 1 Dot matrix printer for "H"
Sincerely,
[GRAPHIC OMITTED]
Martin Dyck, President,
{e-mail: [email protected]}
- --------------------------------------------------------------------------------
BIOSEARCH MEDICAL PRODUCTS, INC. P.O. BOX 1700 SOMERVILLE, NJ. 08876-1276
(USA) TEL: 908-722-5000 FAX: 908-722-5024 [GRAPHIC OMITTED] ISO 9001
<PAGE>
ASSET PURCHASE
SCHEDULE 1.1(A)
<PAGE>
[LOGO]
BIOSEARCH(R)
MEDICAL PRODUCTS INC.
October 13, 1998
ANDY SAAT via fax
Business Development Director ========================
BARD MEDICAL DIVISION FAX 1-770-385-4755
C.R.BARD, Inc. pages -> 1
8195 Industrial Blvd. Phone 1-770-784-6479
Covington, GA. 30014 ========================
RE: LIST OF ITEMS PER PHOTOS OF INTERMITTENT CATHETER
COATING MACHINE
Dear Andy,
Listed below are is the written list of items shown in the digitized photographs
sent to you previously. I hope that this will meet the needs of your financial
department.
Photo No.
Ref No. Units Description
- ------- ----- -------------------------------------------------
A 1 Intermittent Catheter Coating Machine, (Complete)
(Includes Loading, Dipping And Curing)
B 1 Tube Holder Return System
C 17 Tube Holders (aka, Tube Racks)
D 1 Coating Solution Pump & Filter System (Complete)
E 1 Coating Solution Dip Tank with fitments
F 2 Blotting Pad Holder Tray
G 1 Coating Machine wall mounted Control Panel
H 1 5 Zone Temperature Monitor, wall mounted
I 1 Dot matrix printer for "H"
SINCERELY,
[GRAPHIC OMITTED]
Martin Dyck, President,
{e-mail: [email protected]}
- --------------------------------------------------------------------------------
BIOSEARCH MEDICAL PRODUCTS, INC. P.O. BOX 1700 SOMERVILLE, NJ. 08876-1276
(USA) TEL: 908-722-5000 FAX: 908-722-5024 [GRAPHIC OMITTED] ISO 9001
<PAGE>
Schedule 1.1 B Hydromer BMP Lease
<PAGE>
LEASE
HYDROMER, INC. TO BIOSEARCH MEDICAL PRODUCTS, INC.
PREMISES-35 INDUSTRIAL PARKWAY, SOMERVILLE, NJ
36 MONTHS
COPY OF LEASE SIGNED ON JUNE 12, 1998
<PAGE>
Schedule 2.4 Liens
NONE
<PAGE>
Schedule 2.6 Litigation - NONE
