<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): August 2, 1995
ONCOGENE SCIENCE, INC.
----------------------
(Exact Name of Registrant as Specified in Charter)
<TABLE>
<S> <C>
Delaware 0-15190 13-3159796
--------------------------------------------------------------------------------------------------------
(State or Other Jurisdiction (Commission File Number) (I.R.S. Employer
of Incorporation) Identification No.)
106 Charles Lindbergh Blvd., Uniondale, NY 11553
--------------------------------------------------------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
</TABLE>
Registrant's telephone number, including area code: (516) 222-0023
--------------
<PAGE> 2
ITEM 2. DISPOSITION OF ASSETS
On August 2, 1995, pursuant to an Asset Purchase Agreement dated June
26, 1995, Oncogene Science, Inc. (the "Company") closed the sale of its
Research Products business to Calbiochem-Novabiochem Corporation (the "Buyer"),
a wholly owned subsidiary of Calbiochem-Novabiochem International, Inc., for $6
million in cash and certain other consideration. The Company retained the
trade accounts receivable of the Research Products business, net of the trade
accounts payable and accrued expenses thereof. The Company did not sell any
rights with respect to its diagnostics business, and it retained the right to
sell research products in the clinical research market. Pursuant to an
agreement entered into on the closing date, the sale was given effect as of
11:59 p.m. Eastern Daylight Time on July 31, 1995.
Pursuant to this transaction, the Buyer subleased a portion of the
Company's leased facilities located in Cambridge, Massachusetts, and the Buyer
will make certain rent payments under this sublease. The rent payable by the
Buyer is intended to reimburse the Company for the Buyer's use of the subleased
premises, and does not include an element of profit or mark-up relative to the
Company's obligations under its lease.
The Buyer will have the right through July 31, 2000 to license from
the Company the rights to make, use and sell new research products developed by
the Company in its cancer diagnostics business. The Buyer will make certain
royalty payments to the Company with respect to sales of research products so
licensed, if any.
In connection with the sale of the Research Products business, the
Company retained Cowen & Company ("Cowen") to assist it in locating a buyer.
Cowen prepared a confidential Information Memorandum regarding the Research
Products business and delivered it to various entities that Cowen expected
might have an interest in the Research Products business. Certain of these
entities responded to Cowen's inquiries and entered into discussions and
negotiations with the Company. The purchase price was determined pursuant to
negotiations between the Company and the Buyer based largely on the sales
volume of the Research Products business.
The assets sold by the Company in this transaction included:
1. various contracts related to the Company's Research
Products business, including license agreements, distributorship
agreements, equipment leases, purchase orders, sales orders and other
contracts;
2. cell lines, sibling cell lines, strains, cultures and
other biological or biochemical source stocks used the by the Company
in the Research Products business;
3. equipment and machinery related to the Research
Products business;
-2-
<PAGE> 3
4. intangible personal property rights relating
exclusively to the Research Products business, including, among other
things, goodwill, software and software systems, etc.;
5. certain intellectual property, including trademarks
associated with various research products, know-how relating to the
manufacture and development of research products, copyrights and
certain patent rights; and
6. inventory, prepaid expenses and other assets.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) PRO FORMA FINANCIAL INFORMATION.
SELECTED PRO FORMA CONSOLIDATED FINANCIAL INFORMATION
(UNAUDITED)
The following unaudited pro forma consolidated financial statements give effect
to the sale on August 2, 1995 of certain assets comprising the Company's
Research Products business to Calbiochem-Novabiochem Corporation, a wholly
owned subsidiary of Calbiochem-Novabiochem International, Inc., for $6 million
in cash and certain other consideration.
The pro forma consolidated statements of operations for the year ended
September 30, 1994 and the nine months ended June 30, 1995 assume the sale was
consummated as of October 1, 1993 and October 1, 1994, respectively. The pro
forma consolidated balance sheet assumes that such sale was consummated as of
June 30, 1995.
The pro forma consolidated financial statements do not purport to represent the
Company's actual financial condition or results of operations had such sale
actually been made on the dates indicated, nor do they project the Company's
financial position or results of operations for any future dates or periods.
The pro forma consolidated financial statements should be read in conjunction
with the notes thereto and historical financial statements of the Company as of
and for the periods ended September 30, 1994 and June 30, 1995.
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<PAGE> 4
PRO FORMA CONSOLIDATED BALANCE SHEET
(UNAUDITED)
JUNE 30, 1995
<TABLE>
<CAPTION>
LESS
ONCOGENE RESEARCH PRO FORMA
SCIENCE, INC. PRODUCTS ADJUSTMENTS PRO FORMA
------------- -------- ----------- ---------
<S> <C> <C> <C> <C>
ASSETS
Cash and cash equivalents $ 1,752,700 $ -- $ -- $ 1,752,700
Short term investments 19,124,900 -- 6,000,000 25,124,900
Accounts receivable, net 1,731,800 -- -- 1,731,800
Grants receivable 204,150 -- -- 204,150
Accrued interest receivable 164,843 -- -- 164,843
Inventory 1,619,824 1,619,824 -- --
Prepaid expenses 566,558 135,444 -- 431,114
--------- ---------- ------------- ------------
Total current assets 25,164,775 1,755,268 6,000,000 29,409,507
Fixed assets, net 6,186,101 200,720 -- 5,985,381
Other receivables 573,180 -- -- 573,180
Loans to officers & employees 75,466 -- -- 75,466
Other assets 109,036 -- -- 109,036
Intangible assets 9,360,598 367,128 -- 8,993,471
--------- --------- ------------- -----------
$41,469,156 $2,323,116 $6,000,000 $45,146,040
========== ========= ========= ==========
</TABLE>
<TABLE>
<CAPTION>
LIABILITIES AND STOCKHOLDERS' EQUITY
<S> <C> <C> <C> <C>
Accounts payable and accrued
expenses $1,333,464 $-- $850,000 $2,183,464
Unearned revenue 370,042 -- -- 370,042
---------- ----------- ------------ -----------
Total current liabilities 1,703,506 2,553,506
Long term portion of unearned
revenue 180,158 -- -- 180,158
Post-retirement benefits
other than pension 292,509 -- -- 292,509
------- ------------ ------------ -------
Total liabilities 2,176,173 -- 850,000 3,026,173
Stockholders' Equity:
Common stock, $.01 par value 174,797 -- -- 174,797
Additional paid in capital 66,203,427 -- -- 66,203,427
Retained earnings (deficit) (26,663,415) 2,323,116 -- (23,836,531)
Unrealized holding loss (193,000) -- -- (193,000)
Cumulative translation adjust. (86,267) -- -- (86,267)
------------ ------------ ------------ --------------
39,435,542 2,323,110 5,150,000 42,262,426
Less: treasury stock (142,559) -- -- (142,559)
Total stockholders' equity 39,292,983 2,323,116 5,150,000 42,119,867
Total liabilities & equity $41,469,156 $2,323,116 $6,000,000 $45,146,040
========== ========= ========= ==========
</TABLE>
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<PAGE> 5
NOTE TO PRO FORMA CONSOLIDATED BALANCE SHEET
(UNAUDITED)
The foregoing pro forma adjustments assume the sale of the Research
Products business was consummated as of June 30, 1995. The Asset Purchase
Agreement included all tangible and intangible assets of the Research Products
business, except for trade accounts receivable (approximately $894,000 at June
30, 1995), net of trade accounts payable and accrued expenses (approximately
$128,000 at June 30, 1995).
Costs incurred in connection with the sale of the Research Products
business, consisting of professional fees, employee severance and other costs
related to the sale estimated at $850,000, have been reflected as accrued
expenses in the accompanying pro forma consolidated balance sheet.
-5-
<PAGE> 6
PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
YEAR ENDED SEPTEMBER 30, 1994
<TABLE>
<CAPTION>
LESS
ONCOGENE RESEARCH PRO FORMA
SCIENCE, INC. PRODUCTS ADJUSTMENTS PRO FORMA
------------- -------- ----------- ---------
<S> <C> <C> <C> <C>
Collaborative program
revenues $9,089,295 $ -- $ -- $9,089,295
Sales 4,937,917 4,937,917 -- --
Other research revenue 2,272,277 -- -- 2,272,277
----------- ---------- ------------ -----------
16,299,489 4,937,917 -- 11,361,572
----------- ---------- ------------ -----------
Research & development 12,125,210 231,399 -- 11,893,811
Production 1,427,981 1,427,981 -- -0-
Selling, general &
administrative 7,487,090 3,175,476 -- 4,311,614
Amortization of intangibles 1,745,163 293,540 -- 1,451,623
----------- ---------- ------------ -----------
22,785,444 5,128,396 -- 17,657,048
----------- ---------- ------------ -----------
Loss from operations (6,485,955) (190,479) -- (6,295,476)
Interest income 858,904 206,000 1,064,904
Other income (expenses) (96,873) 26,649 -- (123,522)
----------- --------- ------------ -----------
Net income (loss) $(5,723,924) $(163,830) $206,000 $(5,354,094)
=========== ========= ======= ===========
Weighted average number
of shares of common
stock outstanding 16,335,000 16,335,000
Net loss per weighted
share of common
stock outstanding $(0.35) $(0.33)
========= =========
</TABLE>
-6-
<PAGE> 7
PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
NINE MONTHS ENDED JUNE 30, 1995
<TABLE>
<CAPTION>
LESS
ONCOGENE RESEARCH PRO FORMA
SCIENCE, INC. PRODUCTS ADJUSTMENTS PRO FORMA
------------- -------- ----------- ---------
<S> <C> <C> <C> <C>
Collaborative program revenues $7,102,909 $ -- $ -- $7,102,909
Sales 3,849,229 3,849,229 -- --
Other research revenue 1,359,076 -- -- 1,359,076
----------- ---------- ----------
12,311,214 3,849,229 -- 8,461,985
----------- ---------- ---------- ----------
Research & development 9,812,630 178,814 -- 9,633,816
Production 1,179,674 1,179,674 -- --
Selling, general &
administrative 5,472,808 2,112,338 -- 3,360,470
Amortization of intangibles 1,309,261 220,155 -- 1,089,106
----------- ---------- ---------- -----------
17,774,373 3,690,981 -- 14,083,392
----------- ---------- ---------- -----------
Income (loss) from
operations (5,463,159) 158,248 -- (5,621,407)
Interest income 695,564 -- 193,125 888,689
Other income (expenses) (25,149) 27,113 -- (52,262)
----------- ---------- ---------- -----------
Net income (loss) $ (4,792,744) $185,361 $193,125 $ (4,784,980)
=========== ======= ======= ===========
Weighted average number of
shares of common stock
outstanding 16,560,456 16,560,456
Net loss per weighted share
of of common stock
outstanding $(0.29) $(0.29)
========= =========
</TABLE>
-7-
<PAGE> 8
NOTE TO PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
The following proforma adjustments to the consolidated statements of
operations for the year ended September 30, 1994 and the nine months ended June
30, 1995 assume the sale of the Research Products business was consummated as
of October 1, 1993 and October 1, 1994, respectively.
<TABLE>
<CAPTION>
Nine Months
Year Ended Ended
September 30, 1994 June 30, 1995
------------------ -------------
<S> <C> <C>
Increase in interest income to
reflect the investment of the
net proceeds of $5.15
million based on the effective
rates of return on the
Company's short-term
investments (4% for the
year ended September 30, 1994
and 5% for the nine months
ended June 30, 1995) $206,000 $193,125
======= =======
</TABLE>
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<PAGE> 9
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS (CONTINUED)
(b) EXHIBITS.
10.1 Asset Purchase Agreement dated June
26, 1995 among Oncogene Science,
Inc., Calbiochem- Novabiochem
International, Inc. and
Calbiochem-Novabiochem Corporation.
10.2 Sublease dated August 2, 1995
between Oncogene Science, Inc.and
Calbiochem-Novabiochem Corporation.
10.3 New Product License Right of First
Refusal Agreement dated August 2,
1995 between Oncogene Science, Inc.
and Calbiochem-Novabiochem
Corporation.
-9-
<PAGE> 10
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
ONCOGENE SCIENCE, INC.
By: /s/ Robert L. Van Nostrand
-------------------------------------------
Robert L. Van Nostrand,
Vice President, Finance and Administration
Dated: August 17, 1995
-10-
<PAGE> 11
EXHIBIT INDEX
Exhibit No. Description Page
10.1 Asset Purchase Agreement dated June 26, 1995
among Oncogene Science, Inc.,
Calbiochem-Novabiochem International, Inc. and
Calbiochem-Novabiochem Corporation
10.2 Sublease dated August 2, 1995 among Oncogene
Science, Inc. and Calbiochem-Novabiochem
Corporation
10.3 New Product License Right of First Refusal
Agreement dated August 2, 1995 between Oncogene
Science, Inc. and Calbiochem-Novabiochem
Corporation
<PAGE> 1
EXHIBIT 10.1
================================================================================
CALBIOCHEM-NOVABIOCHEM CORPORATION
CALBIOCHEM-NOVABIOCHEM INTERNATIONAL, INC..
AND
ONCOGENE SCIENCE, INC.
------------------------
ASSET PURCHASE AGREEMENT
------------------------
---------------------------
Dated as of June 26, 1995
---------------------------
================================================================================
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
SECTION 1. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 2. PURCHASE AND SALE OF THE PURCHASED PROPERTY . . . . . . . . . . . . . . . 8
SECTION 2.1. Transfer of Assets . . . . . . . . . . . . . . . . . . . . . . 8
SECTION 2.2. Sale at Closing Date . . . . . . . . . . . . . . . . . . . . . 8
SECTION 2.3. Subsequent Documentation . . . . . . . . . . . . . . . . . . . 8
SECTION 2.4. Assumption of Assumed Contracts;
Exclusion of Excluded Liabilities . . . . . . . . 8
SECTION 3. PURCHASE PRICE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 3.1. Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 3.2. Payment of Purchase Price . . . . . . . . . . . . . . . . . . 9
SECTION 3.3. Post-Closing Adjustment to Purchase
Price . . . . . . . . . . . . . . . . . . . . . 10
SECTION 3.4 Allocation of Purchase Price . . . . . . . . . . . . . . . . 10
SECTION 4. CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 5. REPRESENTATIONS AND WARRANTIES OF THE SELLER . . . . . . . . . . . . . 11
SECTION 5.1. Corporate Organization . . . . . . . . . . . . . . . . . . . 11
SECTION 5.2. Qualification to Do Business . . . . . . . . . . . . . . . . 12
SECTION 5.3. Authorization and Validity of Agreement . . . . . . . . . . 12
SECTION 5.4. No Conflict or Violation . . . . . . . . . . . . . . . . . . 12
SECTION 5.5. Consents and Approvals . . . . . . . . . . . . . . . . . . . 12
SECTION 5.6. Good Title; Necessary Assets and Rights . . . . . . . . . . 13
SECTION 5.7. Financial Information . . . . . . . . . . . . . . . . . . . 13
SECTION 5.8. Absence of Certain Changes or Events . . . . . . . . . . . . 13
SECTION 5.9. Tax Matters . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 5.10. Warranties . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 5.11. Cambridge Lease . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 5.12. Equipment and Machinery . . . . . . . . . . . . . . . . . . 16
SECTION 5.13. Intellectual Property; Intangible Assets . . . . . . . . . . 16
SECTION 5.14. Licenses and Permits . . . . . . . . . . . . . . . . . . . . 17
SECTION 5.15. Compliance with Law . . . . . . . . . . . . . . . . . . . . 18
SECTION 5.16. Litigation . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 5.17. Assumed Contracts . . . . . . . . . . . . . . . . . . . . . 19
SECTION 5.18. Prepaid Expenses . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 5.19. Inventories . . . . . . . . . . . . . . . . . . . . . . . . 19
</TABLE>
i
<PAGE> 3
<TABLE>
<CAPTION>
Page
----
<S> <C>
SECTION 5.20. Cell Lines; Biological Materials . . . . . . . . . . . . . . 20
SECTION 5.21. Employee Plans . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 5.22 Compensation . . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 5.23. Customers, Suppliers and Distributors . . . . . . . . . . . 21
SECTION 5.24. Insurance . . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 5.25. Labor Matters; Employment Agreements . . . . . . . . . . . . 22
SECTION 5.26. Products Liability . . . . . . . . . . . . . . . . . . . . . 22
SECTION 5.27. Environmental Matters . . . . . . . . . . . . . . . . . . . 23
SECTION 5.28. Accuracy of Information . . . . . . . . . . . . . . . . . . 24
SECTION 6. REPRESENTATIONS AND WARRANTIES OF THE BUYER . . . . . . . . . . . . . . 25
SECTION 6.1. Corporate Organization . . . . . . . . . . . . . . . . . . . 25
SECTION 6.2. Qualification to Do Business . . . . . . . . . . . . . . . . 25
SECTION 6.3. Authorization and Validity of Agreement . . . . . . . . . . 25
SECTION 6.4. No Conflict or Violation . . . . . . . . . . . . . . . . . . 25
SECTION 6.5. Consents and Approvals . . . . . . . . . . . . . . . . . . . 26
SECTION 7. COVENANTS OF THE SELLER . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 7.1. Conduct of Business Before the
Closing Date . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 7.2. Consents and Approvals . . . . . . . . . . . . . . . . . . . 28
SECTION 7.3. Notice of Breach . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 7.4. Access to Properties and Records . . . . . . . . . . . . . . 28
SECTION 7.5. Negotiations . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 7.6. Best Efforts . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 7.7. Covenant Not To Compete . . . . . . . . . . . . . . . . . . 29
SECTION 7.8. Non-Solicitation of Employees . . . . . . . . . . . . . . . 30
Section 7.9 Cooperation Regarding Receivables . . . . . . . . . . . . . 30
Section 7.10. Diagnostic Business Inventory Build . . . . . . . . . . . . 30
Section 7.11. Preparation of Financial Statements . . . . . . . . . . . . 31
Section 7.12. Accounts Payable . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 8. COVENANTS OF THE PARENT AND BUYER . . . . . . . . . . . . . . . . . . . 31
SECTION 8.1. Actions Before Closing Date . . . . . . . . . . . . . . . . 31
SECTION 8.2. Consents and Approvals . . . . . . . . . . . . . . . . . . . 31
SECTION 8.3. Best Efforts . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 8.4 Non-Solicitation of Employees . . . . . . . . . . . . . . . 32
Section 8.5 Cooperation Regarding Receivables . . . . . . . . . . . . . 32
Section 8.6 Guarantee of Obligations of The Buyer . . . . . . . . . . . 32
SECTION 9. EMPLOYEES AND EMPLOYEE PLANS . . . . . . . . . . . . . . . . . . . . . 32
SECTION 9.1. Offer of Employment . . . . . . . . . . . . . . . . . . . . 32
SECTION 9.2 Seller Savings Plan . . . . . . . . . . . . . . . . . . . . 33
SECTION 9.3 Flexible Spending Accounts . . . . . . . . . . . . . . . . . 33
</TABLE>
ii
<PAGE> 4
<TABLE>
<CAPTION>
Page
----
<S> <C>
SECTION 10. BULK SALES LAW . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
SECTION 11. INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
SECTION 11.1. Indemnification by the Seller . . . . . . . . . . . . . . . 33
SECTION 11.2. Indemnification by the Buyer . . . . . . . . . . . . . . . 34
SECTION 11.3. Procedures for Indemnification by the
Buyer . . . . . . . . . . . . . . . . . . . . 35
SECTION 11.4 Limitations . . . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 11.5 Environmental Liability After Closing . . . . . . . . . . . 36
SECTION 12. CONDITIONS PRECEDENT TO PERFORMANCE BY THE
SELLER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 12.1. Representations and Warranties of the Buyer . . . . . . . . 37
SECTION 12.2. Performance of the Obligations of the Buyer . . . . . . . . 37
SECTION 12.3. Consents and Approvals . . . . . . . . . . . . . . . . . . 37
SECTION 12.4. No Violation of Orders. . . . . . . . . . . . . . . . . . . 37
SECTION 12.5. Delivery of Ancillary Agreements . . . . . . . . . . . . . 38
SECTION 12.6. Opinion of Buyer's Counsel . . . . . . . . . . . . . . . . 38
SECTION 12.7. Other Closing Documents . . . . . . . . . . . . . . . . . . 39
SECTION 12.8. Legal Matters . . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 13. CONDITIONS PRECEDENT TO PERFORMANCE BY THE
BUYER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 13.1. Representations and Warranties of the Seller . . . . . . . 39
SECTION 13.2. Performance of the Obligations of the Seller . . . . . . . 40
SECTION 13.3. Consents and Approvals . . . . . . . . . . . . . . . . . . 40
SECTION 13.4. No Violation of Orders . . . . . . . . . . . . . . . . . . 40
SECTION 13.5. Delivery of Ancillary Agreements . . . . . . . . . . . . . 40
SECTION 13.6. No Material Adverse Change . . . . . . . . . . . . . . . . 40
SECTION 13.7. Opinion of Counsel . . . . . . . . . . . . . . . . . . . . 40
SECTION 13.8. Other Closing Documents . . . . . . . . . . . . . . . . . . 42
SECTION 13.9. Legal Matters . . . . . . . . . . . . . . . . . . . . . . . 42
SECTION 14. TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 14.1. Conditions of Termination . . . . . . . . . . . . . . . . . 43
SECTION 14.2. Effect of Termination . . . . . . . . . . . . . . . . . . . 43
SECTION 15. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 15.1. Successors and Assigns . . . . . . . . . . . . . . . . . . 43
</TABLE>
iii
<PAGE> 5
<TABLE>
<CAPTION>
Page
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<S> <C>
SECTION 15.2. Governing Law, Jurisdiction . . . . . . . . . . . . . . . . 43
SECTION 15.3. Expenses . . . . . . . . . . . . . . . . . . . . . . . . . 44
SECTION 15.4. Broker's and Finder's Fees . . . . . . . . . . . . . . . . 44
SECTION 15.5 Access to Records . . . . . . . . . . . . . . . . . . . . . 44
SECTION 15.6. Force Majeure . . . . . . . . . . . . . . . . . . . . . . . 45
SECTION 15.7 Survival . . . . . . . . . . . . . . . . . . . . . . . . . 45
SECTION 15.8. Severability . . . . . . . . . . . . . . . . . . . . . . . 45
SECTION 15.9. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . 45
SECTION 15.10. Amendments; Waivers . . . . . . . . . . . . . . . . . . . . 46
SECTION 15.11. Public Announcements . . . . . . . . . . . . . . . . . . . 47
SECTION 15.12. Entire Agreement . . . . . . . . . . . . . . . . . . . . . 47
SECTION 15.13. Parties in Interest . . . . . . . . . . . . . . . . . . . . 47
SECTION 15.14. Section and Paragraph Headings . . . . . . . . . . . . . . 47
SECTION 15.15. Counterparts . . . . . . . . . . . . . . . . . . . . . . . 47
</TABLE>
iv
<PAGE> 6
<TABLE>
<CAPTION>
INDEX OF EXHIBITS
<S> <C>
A Cambridge Sublease
B New Products License Agreement
C Oncogene Science Tradename License Agreement
D Shared Services Agreement
E Shared Intellectual Property License
F Transition Services Agreement
<CAPTION>
INDEX TO SCHEDULES
<S> <C>
1.0 Research Products under Development
5.5 Consents, Waivers, Authorizations and Approvals
5.7 Financial Data
5.8 Material Changes or Events
5.10 Warranties on Products
5.11 Cambridge Lease Exceptions
5.12 Equipment and Machinery
5.13 Intellectual Property
5.14 Licenses and Permits
5.16 Litigation
5.17 Principal Assumed Contracts
5.18 Prepaid Expense
5.19 Inventory
5.21 Seller Plans
5.23 Principal Customers, Suppliers, Distributors and
Sales Agents
5.27 Environmental Matters
7.10 Diagnostic Inventory Production Quantities
9.1 Prospective Transferred Employees
</TABLE>
v
<PAGE> 7
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT, dated as of June 26, 1995 by
and among ONCOGENE SCIENCE, INC., a Delaware corporation (the "Seller"),
CALBIOCHEM-NOVABIOCHEM CORPORATION, a California corporation (the "Buyer") and
CALBIOCHEM-NOVABIOCHEM INTERNATIONAL, INC., a Delaware corporation (the
"Parent").
W I T N E S S E T H:
WHEREAS, the Seller is a biopharmaceutical company which is
engaged in its Cambridge, Massachusetts facility in both a diagnostics business
and a research products business;
WHEREAS, the research products business markets research
reagents, kits and other research tools to the academic research market,
clinical research market and industrial research market;
WHEREAS, the Seller has decided to sell its research products
business, while retaining the right in connection with its diagnostics business
to manufacture and sell research products to the clinical research market;
WHEREAS, the Buyer desires to purchase the research products
business and to conduct such business in the academic research market, clinical
research market and industrial research market, recognizing that the Seller
will continue to have the right to manufacture and sell products to the
clinical research market and diagnostic products to the diagnostic market; and
WHEREAS, the Buyer desires to purchase certain assets of such
research products business from the Seller, and the Seller desires to sell such
assets to the Buyer, in each case upon the terms and subject to the conditions
set forth in this Agreement;
NOW, THEREFORE, in consideration of the foregoing and the
respective covenants and agreements hereinafter contained, the parties hereby
agree as follows:
SECTION 1. DEFINITIONS
As used in this Agreement, the following terms shall have the
following meanings:
<PAGE> 8
"Affiliate" shall mean, with respect to any Person, any Person
which directly or indirectly through stock ownership or through other
arrangements, either controls, is controlled by or is under common control with
such Person;
"Allocation Statement" -- See Section 3.4;
"Ancillary Agreements" shall refer collectively to the
Cambridge Sublease, the New Products License Agreement, the Oncogene Science
Tradename License Agreement, the Shared Services Agreement, the Shared
Intellectual Property License and the Transition Services Agreement.
"Assumed Contracts" shall mean, collectively, the
Distributorship Agreements, Equipment Leases, License Agreements, Purchase
Orders, Sales Orders, and such other contracts to which the Seller is a party
relating to the Business as are described in Section 5.17 hereto;
"Business" shall mean the research, development, manufacture,
worldwide distribution and sale of research reagent products, for sale into the
academic, clinical and industrial research markets, including without
limitation such products as monoclonal and polyclonal antibodies, DNA probes,
transcription factors, growth factors, growth factor receptors, and lymphoid
cell surface markers, as such business is currently being conducted by Seller;
"Business Day" shall mean days other than Saturdays, Sundays
and days on which banks in New York are authorized or obligated by law to be
closed;
"Buyer's FSAs" shall mean the flexible spending accounts
relating to the Health Care Reimbursement Accounts and Dependent Care
Reimbursement Accounts maintained by the Buyer under the Calbiochem-Novabiochem
Corporation Flexible Benefit Plan.
"Cambridge Lease" -- See Section 5.11;
"Cambridge Sublease" shall mean the sublease to be entered
into by the Buyer and the Seller relating to a portion of the Seller's facility
at 80-84 Rogers Street, Cambridge, Massachusetts, the principal terms of which
are set forth on Exhibit A;
"Cell Lines" shall mean all cell lines, sibling cell lines,
strains, cultures and other biological or biochemical source stocks used by the
Seller in the Business;
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<PAGE> 9
"Closing" -- See Section 4;
"Closing Date" -- See Section 4;
"COBRA" shall mean the provisions of the Code, ERISA and the
Public Health Service Act enacted by Sections 10001 through 10003 of the
Consolidated Omnibus Budget Reconciliation Act of 1985 (P.L.99-272), including
any subsequent amendments to such provisions.
"Code" shall mean the Internal Revenue Code of 1986, as
amended;
"Diagnostic Business" shall mean Seller's ongoing business,
including but not limited to its collaboration with Becton, Dickinson and
Company, to develop, manufacture and sell certain research products to the
clinical research market and to develop, make, use and sell clinical products
for the clinical diagnostic and therapeutic markets, which includes furnishing
certain research reagents to clinical researchers.
"Distributorship Agreements" shall mean the distributorship
agreements of the Seller relating to the sale and distribution of the Products
(other than the agreement with its distributor in Belgium, France, and Israel);
"Environmental Laws" -- See Section 5.27;
"Equipment and Machinery" shall mean (i) all the equipment,
machinery, furniture, tooling, spare parts, and supplies that are (x) owned by
the Seller, (y) located at the Premises and (z) utilized by Seller in
connection with the manufacturing, administrative, sales and marketing
functions of the Business; (ii) all the replacements for any of the foregoing
owned by the Seller, (iii) any rights of the Seller to the warranties (to the
extent assignable) and licenses received from manufacturers and sellers of the
aforesaid items and (iv) any related claims, credits, rights of recovery and
set-off with respect thereto;
"Equipment Leases" shall mean those lease agreements to which
the Seller is a party relating to the Leased Equipment and Machinery.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended;
"Excluded Liabilities" -- See Section 2.4;
3
<PAGE> 10
"Files and Records" shall mean all files and records, whether
in hard copy or magnetic format, of the Seller relating to the Business or the
Purchased Property, including, without limitation, the following types of files
and records relating to the Business: customer and supplier lists; customer
correspondence, including complaint files and customer specifications; copies
of financial schedules, records, spread sheets, purchase orders, check
registers and similar financial records pertaining to the Business;
correspondence with licensors and other members of the academic, clinical and
scientific community relating to research products; product manufacturing data,
including batch manufacturing records and quality control records; product
catalogue data bases; equipment maintenance records, equipment warranty
information, laboratory plans, specifications and drawings, and equipment
drawings; all files relating to those employees of the Business to be employed
by the Buyer following the Closing; correspondence with national, state and
local governmental agencies relating to the operation of the Business and
related files and records of the Seller;
"Financial Data" -- See Section 5.7;
"Hazardous Substance" -- See Section 5.27;
"Independent Accounting Firm" -- See Section 3.4;
"Intangible Assets" shall mean all intangible personal
property rights (other than the Intellectual Property) owned or held by the
Seller and relating exclusively to the Business, including, without limitation,
all goodwill of the Seller relating to the Business, all software, software
systems, databases and all other information systems (including Market Force)
used in the Business, the current toll free "800" telephone numbers utilized by
the Seller in connection with the Business, and all rights on the part of the
Seller to proceeds of any insurance policies and all claims on the part of the
Seller for recoupment, reimbursement and coverage under any insurance policies,
in each case in connection with the Business;
"Intellectual Property" shall mean (i) those letters patent
and patent applications, owned by Seller and utilized exclusively in the
Business, and (ii) the trademarks, service marks, trade names, (in each case
other than the mark or name "Oncogene Science" or a derivative thereof),
copyrights, know-how relating to the manufacture or development of Products,
trade secrets and licenses and rights with respect to the foregoing that the
Seller owns or possesses the rights to use relating to the Purchased Property
or the operations of the Business, including, without limitation, the
copyrights to all product
4
<PAGE> 11
catalogues of the Business, new product guides and other supplements published
in connection with the Business, the "Oncogene Science Guide to Literature
Citations", advertising copy used in connection with the Business, art-work
related to the Business (including the Oncogene Science Wall Chart), the
trademarks "Discovery Tools," and "Transcript" and those other items listed in
Schedule 5.13;
"Inventory" shall mean (i) all the finished goods, raw
materials, work in progress and inventoriable supplies owned by the Seller on
the Closing Date and held for use in the operations of the Business and (ii)
any and all rights of the Seller to the warranties received from its suppliers
with respect to such inventory (to the extent assignable) and related claims,
credits, rights of recovery and set-off with respect thereto;
"Inventory Value" -- See Section 3.3;
"knowledge of Seller" as used in this Agreement shall mean the
conscious knowledge of executive officers of Seller and general management
personnel of the Business;
"Leased Equipment and Machinery" all equipment, machinery and
furniture utilized by Seller in the Business that are held by Seller under one
or more equipment leases and that, if owned, would constitute Equipment and
Machinery as defined above.
"License Agreements" shall mean those license agreements to
which the Seller is a party which provide the Seller with rights to technology
or products used or useful in the conduct of the business, including without
limitation, software licenses and those license agreements relating to the
manufacture, use and sale of any of the Products.
"Licenses and Permits" -- See Section 5.14;
"Lien" shall mean any mortgage, pledge, security interest,
encumbrance, lien (statutory or other) or conditional sale agreement.
"New Products License Agreement" shall mean the agreement to
be entered into by the Buyer and the Seller relating to the license by the
Seller of the research reagents and products that are derived from the Seller's
cancer diagnostic development program, the principal terms of which are set
forth on Exhibit B;
5
<PAGE> 12
"Oncogene Science Tradename License Agreement" shall mean the
agreement to be entered into by the Buyer and the Seller relating to the
granting of the right to use the Oncogene Science name in connection with the
sale of Products to the research market, the principal terms of which are set
forth on Exhibit C;
"Person" shall mean any individual, corporation, partnership,
joint venture, association, joint-stock company, trust, unincorporated
organization or government;
"Plans" -- See Section 5.21(a);
"Premises" shall mean the premises occupied by Seller at 80-84
Rogers Street, Cambridge, Massachusetts, all as more particularly described in
the lease agreement, as amended between Seller, as successor by assignment from
Applied bioTechnology Inc. and Trustees of The Cambridge East Trust, dated
November 1991, a copy of which has previously been furnished by Seller to
Buyer;
"Products" shall mean (i) the products manufactured and sold
(including, but not limited to, the Seller's complete line of research products
contained in the Seller's 1995 product catalogue, but excluding TransProbe-1(R)
and TransProbe Light(TM)) in connection with the Business as of the Closing
Date (including, but not limited to, any product necessary and useful for the
performance of any Assumed Contract) and (ii) those products which are in the
process of development for manufacturing by the Seller listed on Schedule 1.0
hereto;
"Purchase Orders" shall mean all the Seller's outstanding
purchase orders, contracts or other commitments to suppliers of goods and
services for materials, supplies or other items used in the Business;
"Purchase Price" -- See Section 3.1;
"Purchased Property" shall mean the Assumed Contracts, Cell
Lines, Equipment and Machinery, Files and Records, Intangible Assets,
Intellectual Property, Inventory, any prepaid expenses and other assets
relating exclusively to the operations of the Business on the Closing Date;
"Sales Orders" shall mean all the Seller's sales orders,
contracts or other commitments to purchasers of goods and services of the
Business;
"Seller Plans" -- See Section 5.21;
6
<PAGE> 13
"Seller Savings Plan" shall mean the Oncogene Science, Inc.
Savings and Investment Plan;
"Seller's FSAs" shall mean the flexible spending accounts
relating to the Health Care Reimbursement Accounts and Dependent Care
Reimbursement Accounts maintained by the Seller under the Oncogene Science
Flexible Spending Plan.
"Shared Services Agreement" shall mean the agreement to be
entered into by the Buyer and the Seller relating to the sharing of facilities
and services at the Premises, the principal terms of which are set forth on
Exhibit D;
"Shared Intellectual Property License" shall mean the license
agreement to be entered into by the Buyer and the Seller relating to the
license to Buyer of rights under patents of Seller and technology disclosed in
patent applications of Seller, that are used and useful in the manufacture, use
and sale of the Products, but which have other uses in Seller's other
businesses, the principal terms of which are set forth on Exhibit E;
"Taxes" shall mean for all purposes of this Agreement all
taxes however denominated, including any interest, penalties or additions to
tax that may become payable in respect thereof, imposed by any governmental
body, which taxes shall include, without limiting the generality of the
foregoing, all income taxes, payroll and employee withholding taxes,
unemployment insurance, social security, sales and use taxes, excise taxes,
franchise taxes, gross receipts taxes, occupation taxes, real and personal
property taxes, stamp taxes, transfer taxes, workmen's compensation taxes and
other obligations of the same or a similar nature, whether arising before, on
or after the Closing; and "Tax" shall mean any one of them;
"Tax Returns" shall mean any return, report, information
return or other document (including any related or supporting information)
filed or required to be filed with any governmental body in connection with the
determination, assessment, collection or administration of any Taxes;
"Transferred Employees" -- See Section 9.1;
"Transition Services Agreement" shall mean the agreement to be
entered into by the Buyer and the Seller relating to the provision by the
Seller to the Buyer of certain services, including without limitation,
administrative and management information systems and financial reporting
services, the principal terms of which are set forth on Exhibit F;
7
<PAGE> 14
"W.A.R.N." shall mean the Worker Adjustment and Retraining
Notification Act, as codified at 29 U.S.C, oo 2101-2109, and the regulations
promulgated thereunder.
SECTION 2. PURCHASE AND SALE OF THE PURCHASED PROPERTY.
SECTION 2.1. Transfer of Assets. Subject to the terms and
upon the conditions herein set forth, the Seller shall sell, convey, transfer,
assign and deliver to the Buyer, and the Buyer shall purchase and accept from
the Seller, on the Closing Date, all right, title and interest of the Seller in
and to the Purchased Property, free and clear of any Lien.
SECTION 2.2. Sale at Closing Date. The sale, transfer,
assignment and delivery by the Seller of the Purchased Property to the Buyer,
as herein provided, shall be effected on the Closing Date by bills of sale,
endorsements, assignments and other instruments of transfer and conveyance
reasonably satisfactory in form and substance to counsel for the Buyer.
SECTION 2.3. Subsequent Documentation. The Seller shall, at
any time and from time to time after the Closing Date, upon the request of the
Buyer, execute, acknowledge and deliver, or cause to be done, executed,
acknowledged and delivered, all such further assignments, transfers and
conveyances as may be required for the better assigning, transferring,
granting, conveying and confirming to the Buyer or its successors and assigns,
or for aiding and assisting in collecting and reducing to possession, any or
all of the Purchased Property.
SECTION 2.4. Assumption of Assumed Contracts; Exclusion of
Excluded Liabilities. On the Closing, the Buyer shall assume and agree to pay,
perform and discharge when due all of the obligations, debts and liabilities of
Seller under the Assumed Contracts. Such assumption shall be pursuant to an
assignment and assumption agreement in form and substance reasonably
satisfactory to counsel for the Buyer and the Seller. The Buyer shall not
assume or pay, perform or discharge, nor shall the Buyer be responsible,
directly or indirectly, for any other debts, obligations, contracts, or
liabilities of the Seller, including without limitation any liabilities for
accounts payable, long or short term indebtedness, Taxes or product liability
actions arising from the sale of any Products prior to the Closing Date, all
such liabilities and obligations of the Seller being herein referred to as the
"Excluded Liabilities."
8
<PAGE> 15
To the extent that the assignment of any Assumed Contract
shall require the consent of the other party thereto, this Agreement shall not
constitute an agreement to assign the same if an attempted assignment would
constitute a breach thereof. The Seller will use its best efforts to obtain
the consent of the other parties to such contracts for the assignment thereof
to the Buyer. If such consent is not obtained in respect of any such Assumed
Contract, the Seller will cooperate with the Buyer in any reasonable
arrangement requested by the Buyer, including subcontracting or subleasing, to
provide for the Buyer the benefits under any such Assumed Contract, including
enforcement at the cost of and for the benefit of the Buyer, of any and all
rights of the Seller against the other party thereto with respect to such
Assumed Contract.
SECTION 3. PURCHASE PRICE.
SECTION 3.1. Purchase Price. The purchase price for the sale
and transfer of the Purchased Property shall be $6,000,000 in cash (the
"Purchase Price"), which price shall be payable and deliverable in accordance
with Section 3.2 and shall be subject to adjustment as provided in Section 3.3.
SECTION 3.2. Payment of Purchase Price. In payment for the
Purchased Property, the Buyer will pay to the Seller (i) on the Closing Date,
$3,000,000, and (ii) on each of the first, second and third anniversaries of
the Closing Date, $1,000,000 plus accrued and unpaid interest (at a rate per
annum equal to the rate publicly announced by Chemical Bank in New York, New
York, as its prime rate in effect from time to time) (the "Deferred Payments"),
in each case by wire transfer of immediately available funds to the account of
the Seller at European American Bank, Account No. 064075799 or such other
account as the Seller shall notify the Buyer in writing at least two Business
Days before such payment is due. On the Closing Date, the Buyer shall, in
addition, deliver to the Seller an irrevocable letter of credit issued by a
bank reasonably acceptable to the Seller in an amount equal to the Deferred
Payments (the "LC") to secure the payment of the Deferred Payments. The Seller
shall have the right to draw upon such LC by delivering a sight draft and a
certificate of an executive officer of the Seller to the effect that a Deferred
Payment has not been paid when due. The amount of the LC shall be decreased by
an appropriate amount upon the payment of the initial Deferred Payment and
shall be further reduced upon the payment of the second Deferred Payment. The
LC shall be transferable and shall expire 60 days after the third anniversary
of the Closing Date. The Buyer shall have the right to deliver $6,000,000 to
the
9
<PAGE> 16
Seller on the Closing Date in lieu of the payments of $3,000,000 plus the
Deferred Payments and the delivery of the LC.
SECTION 3.3. Post-Closing Adjustment to Purchase Price. The
Purchase Price shall be subject to adjustment after the Closing as follows:
Inventory. Commencing on the Closing Date representatives of
the Buyer and the Seller shall take a physical count of the Inventory as of the
Closing Date. Upon completion of each portion of such physical count, such
representatives shall immediately consult and seek in good faith to reach
agreement on the count of the number of merchantable (as to finished goods) and
useable (as to raw material and supply) units of each type of Inventory. In
connection with the preparation of the balance sheet as of the Closing Date
called for under Section 7.11, KPMG Peat Marwick L.L.P. ("Peat") shall observe
such physical count, and shall conduct such tests of the viability and quality
of the inventory as Peat shall deem appropriate and as shall be consistent with
its past practices, and the standard costing methodology previously used by the
Seller in connection with the preparation of its annual audited financial
statements. If the balance sheet presented shows Inventory valued at less than
$1,575,000, then within 10 Business Days of the delivery of such balance sheet,
the Seller shall pay to the Buyer in cash the amount by which $1,575,000
exceeds the Inventory value.
SECTION 3.4 Allocation of Purchase Price. The Buyer shall, as
promptly as practicable after the Closing Date, submit to the Seller a
statement of the Buyer's allocation of the Purchase Price to the different
items of Purchased Property (the "Allocation Statement"). The Allocation
Statement shall be, subject to further adjustment on the basis of the Purchase
Price adjustment pursuant to Section 3.3, binding and conclusive upon the
parties hereto, unless the Seller objects in writing to any item or items shown
on the Allocation Statement within ten Business Days after delivery thereof to
the Seller. If the Buyer and the Seller shall be unable to resolve any dispute
with regard to the Allocation Statement within ten Business Days after delivery
of the Seller's written objections, the matter or matters in dispute shall be
submitted to an independent certified public accountant that does not render
services to either the Buyer or the Seller (the "Independent Accounting Firm")
who shall be authorized by the parties to select either the purchase price
allocation proposed by the Buyer or that proposed by the Seller, whichever the
Independent Accounting Firm deems to be most reasonable. The expenses of the
Independent Accounting Firm shall be borne by the party whose allocation is not
so chosen.
10
<PAGE> 17
The decision of the Independent Accounting Firm shall be conclusive and binding
upon the Buyer and the Seller.
Promptly after the Closing Date (but not before a resolution
of all disputes, if any, with regard to the Allocation Statement), the Buyer's
firm of independent certified public accountants shall prepare, in consultation
with the Seller or the Independent Accounting Firm, those statements or forms
required by Section 1060 of the Code and the regulations promulgated thereunder
with respect to the allocation of the Purchase Price. Such statements or forms
shall be prepared consistently with the allocation of the Purchase Price. Such
statements or forms shall be filed by the parties on their respective federal
income tax returns as required by Section 1060 of the Code and the regulations
promulgated thereunder and each party shall provide the other party with a copy
of such statement or form as filed.
SECTION 4. CLOSING.
The closing hereunder (the "Closing") shall take place at the
offices of Willkie Farr & Gallagher at One Citicorp Center, 153 East 53rd
Street, New York, New York 10022 at 10:00 a.m. on the third Business Day after
the Minimum Threshhold Conditions shall have been met or at such other place
and time as may be mutually agreed to by the parties hereto (the "Closing
Date"). For the purposes of this Section, the "Minimum Threshhold Conditions"
shall mean the closing conditions set forth in Sections 12 and 13 of this
Agreement, qualified as to the receipt of consents, approvals, licenses and
permits as follows: (a) the Buyer shall have obtained licenses and permits
comparable to the Licenses and Permits as to all subject matters material to
Buyer's ability to legally commence operations at the Premises as owner of the
Business; (b) the Seller shall have obtained the consent of the landlord under
the Cambridge Lease to the Cambridge Sublease; and (c) Seller shall have
obtained the consent to the assignment to the Buyer of those product license
agreements referred to in Schedule 5.13 covering products that, in the
aggregate, represented not less than 80% of the sales of licensed products
during the eight months ended May 31, 1995.
SECTION 5. REPRESENTATIONS AND WARRANTIES OF THE SELLER.
The Seller hereby represents and warrants to the Buyer as follows:
SECTION 5.1. Corporate Organization. The Seller is a
corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware, and has all requisite
11
<PAGE> 18
corporate power and authority to own its properties and assets and to conduct
its businesses as now conducted. Copies of the Certificate of Incorporation
and By-laws of the Seller, with all amendments thereto to the date hereof, have
been furnished to the Buyer or its representatives, and such copies are
accurate and complete as of the date hereof.
SECTION 5.2. Qualification to Do Business. The Seller is
duly qualified to do business as a foreign corporation and is in good standing
in the Commonwealth of Massachusetts and the State of New York and in every
other jurisdiction where the character of the properties owned or leased by it
or the nature of the business conducted by it makes such qualification
necessary and in which the absence of such qualification could have a material
adverse effect on the business of the Seller.
SECTION 5.3. Authorization and Validity of Agreement. The
Seller has all requisite corporate power and authority to enter into this
Agreement and to carry out its obligations hereunder. The execution and
delivery of this Agreement and the performance of the Seller's obligations
hereunder have been duly authorized by all necessary corporate action by the
Board of Directors of the Seller, and no other corporate proceedings on the
part of the Seller are necessary to authorize such execution, delivery and
performance. This Agreement has been duly executed by the Seller and
constitutes its valid and binding obligation, enforceable against it in
accordance with its terms.
SECTION 5.4. No Conflict or Violation. The execution,
delivery and performance by the Seller of this Agreement do not and will not
violate or conflict with any provision of the Certificate of Incorporation or
By-laws of the Seller and do not and will not violate any provision of law, or
any order, judgment or decree of any court or other governmental or regulatory
authority, nor violate nor will result in a breach of or constitute (with due
notice or lapse of time or both) a default under any contract, lease, loan
agreement, mortgage, security agreement, trust indenture or other agreement or
instrument to which the Seller is a party or by which it is bound or to which
any of its properties or assets is subject, nor will result in the creation or
imposition of any Lien upon any of the Purchased Property, nor will result in
the cancellation, modification, revocation or suspension of any of the Licenses
and Permits.
SECTION 5.5. Consents and Approvals. Schedule 5.5 sets
forth a true and complete list of each consent, waiver, authorization or
approval of any governmental or regulatory authority, domestic or foreign, or
of any other person, firm or corporation, and each declaration to or filing or
registration
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<PAGE> 19
with any such governmental or regulatory authority, that is required in
connection with the execution and delivery of this Agreement by the Seller or
the performance by the Seller of its obligations hereunder.
SECTION 5.6 Good Title; Necessary Assets and Rights. The
Seller has, and on the Closing Date will have, good title in and to the
Purchased Property free and clear of any Liens. The Purchased Property,
together with the premises covered by the Cambridge Sublease and the
intellectual property covered by the Shared Intellectual Property License,
constitute substantially all the assets, properties and rights, including
without limitation contract rights, necessary and used to conduct the Business
as currently conducted.
SECTION 5.7. Financial Information. The Seller has heretofore
furnished to the Buyer a Pro-Forma Statement of Operations of the Business for
each of the four years in the period ended September 30, 1994 and for the eight
months ended May 31, 1995 (the "Financial Data"), copies of which are set forth
in Schedule 5.7. The Financial Data (i) have been prepared from the books and
records of the Seller, which books and records are used to prepare financial
statements which are in accordance with U.S. generally accepted accounting
principles ("GAAP"), (ii) have been prepared on a consistent basis over the
four years and eight months shown, (iii) reflect the adjustments set forth on
Schedule 5.7, (iv) fairly present revenues and direct expenses of the Business,
which revenues and expenses, after giving effect to such adjustments, can be
legitimately reconciled with the financial statements and the financial records
maintained and the accounting methods applied by the Seller for its financial
reporting purposes and (iv) contain allocation estimates for all allocated
items not individually accounted for in connection with the Business as
described in Schedule 5.7 which estimates the Seller believes to be reasonable.
SECTION 5.8. Absence of Certain Changes or Events.
(a) Except as set forth in Schedule 5.8, since September 30,
1994, there has not been:
(i) any material adverse change in the business, operations,
properties, assets or condition (financial or other) of the Business,
or any event that has had a material adverse effect on the foregoing,
and, to the best knowledge of Seller, no factor or condition exists
and no event has occurred that would be likely to result in any such
change;
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<PAGE> 20
(ii) any material loss, damage, destruction or other casualty
to the Purchased Property;
(iii) any change in any method of accounting or accounting
practice of the Business or the Seller relating to the Business; or
(iv) any loss of the employment, services or benefits of any
key employee of the Business.
(b) Since September 30, 1994, the Seller has operated the
Business in the ordinary course of its business consistent with past practice
and, except as set forth in Schedule 5.8 hereto, has not:
(i) incurred any material obligation or liability (whether
absolute, accrued, contingent or otherwise) relating to the operations
of the Business except in the ordinary course of business consistent
with past practice;
(ii) failed to discharge or satisfy any Lien or pay or satisfy
any obligation or liability (whether absolute, accrued, contingent or
otherwise) arising from the operation of the Business, other than
liabilities being contested in good faith and for which adequate
reserves have been provided;
(iii) mortgaged, pledged or subjected to any Lien any of the
Purchased Property;
(iv) sold or transferred any of the assets of the Business
material to the Business or canceled any debts or claims or waived any
rights material to the Business relating to the operations of the
Business, except in the ordinary course of business consistent with
past practice;
(v) disposed of any patents, trademarks or copyrights or any
patent, trademark, or copyright applications used in the operations of
the Business;
(vi) defaulted on any material obligation relating to the
operations of the Business;
(vii) entered into any transaction material to the Business or
relating to the Business, except in the ordinary course of business
consistent with past practice;
(viii) written down the value of any inventory or written off
as uncollectible any accounts receivable specifically
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<PAGE> 21
relating to the Business or any portion thereof other than in the
ordinary course of business consistent with past practice;
(ix) granted any increase in the compensation or benefits of
employees of the Business other than increases in accordance with past
practice not exceeding 10% or entered into any employment or severance
agreement or arrangement with any of them;
(x) made any capital expenditure in excess of $10,000, or
additions to property, plant and equipment used in the operations of
the Business other than ordinary repairs and maintenance;
(xi) discontinued the manufacture or sale of any Products
except in the ordinary course of business; or
(xii) entered into any agreement or made any commitment to do
any of the foregoing.
SECTION 5.9. Tax Matters. All Tax Returns required to be
filed before the Closing Date in respect of the Seller have been (or will have
been by the Closing Date) filed, and the Seller has (or will have by the
Closing Date) paid, accrued or otherwise adequately reserved for the payment of
all Taxes required to be paid in respect of the periods covered by such returns
and has (or will have by the Closing Date) adequately reserved for the payment
of all Taxes with respect to periods ended on or before the Closing Date for
which tax returns have not yet been filed.
SECTION 5.10. Warranties. Schedule 5.10 sets forth the
warranties given by the Seller in connection with the sale of Products.
SECTION 5.11. Cambridge Lease.
(a) The Seller has previously delivered to the Buyer a true
and correct copy of the lease of the Premises, including all amendments thereto
through the date hereof (the "Cambridge Lease").
(b) Except as set forth in Schedule 5.11, the landlord under
the Cambridge Lease has not given the Seller written notice of or made a claim
with respect to any breach or default the consequences of which, individually
or in the aggregate, would have a material adverse effect on the business,
operations,
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properties, assets or condition (financial or other) of the Business.
(c) Except as set forth in Schedule 5.11, the Cambridge Lease
is not subject to any sublease, license or other agreement granting to any
person or entity any right to the use, occupancy or enjoyment of such property
or any portion thereof.
(d) The plumbing, electrical, heating, water, air conditioning,
ventilating and all other mechanical or structural systems of the
Premises are in good working order and condition, and the roof, basement and
foundation walls of the Premise are in good condition and free of leaks and
other material defects.
SECTION 5.12. Equipment and Machinery. Schedule 5.12 sets
forth a complete and correct list and brief description of each item of
Equipment and Machinery or of Leased Equipment and Machinery having an original
purchase cost or aggregate lease cost exceeding $2,000. Except as set forth in
Schedule 5.12, as of the date hereof, the Seller has good title, free and clear
of all title defects and objections, Liens (other than the Lien of current
property taxes and assessments not in default, if any) to the Equipment and
Machinery owned by it. None of the title defects, objections or Liens (if any)
listed in Schedule 5.12 adversely affects the value of any of the items of
Equipment and Machinery or interferes with their use in the conduct of the
Business. Except as set forth in Schedule 5.12, the Seller holds good and
transferable leaseholds in all of the Leased Equipment and Machinery, in each
case under valid and enforceable leases. The Seller is not in default with
respect to any item of Leased Equipment and Machinery, and no event has
occurred that constitutes or with due notice or lapse of time or both may
constitute a default under any lease thereof. The Equipment and Machinery and
the Leased Equipment and Machinery are sufficient and adequate to carry on the
Business as presently conducted by the Seller, and all items thereof are in
good operating condition and repair, ordinary wear and tear excepted.
SECTION 5.13. Intellectual Property; Intangible Assets.
(a) Schedule 5.13 sets forth a complete and correct listing of
the Intellectual Property. Except as described in Schedule 5.13, all
Intellectual Property listed therein is owned by the Seller, free and clear of
all Liens and is not known to be the subject of any challenge. As of the date
hereof, except as described in Schedule 5.13, there are no unresolved claims
made and there has not been communicated to the Seller the threat of any claim
that the holder of such Intellectual Property is in
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violation or infringement of any service mark, patent, trademark, trade name,
trademark or trade name registration, copyright or copyright registration of
any other Person. The Seller is the owner of, or has a valid license to use,
the patents, patent licenses, trade names, trademarks, service marks, brand
marks, brand names, copyrights, know-how, formula and other proprietary and
trade rights necessary for the conduct of the Business as now conducted,
without any known conflict with the rights of others, and the Seller has not
knowingly forfeited or otherwise relinquished any such patent, patent license,
trade name, trademark, service mark, brand mark, brand name, copyright,
know-how, formula or other proprietary right necessary for the conduct of the
Business as conducted on the date hereof. Except as set forth in Schedule
5.13, the Seller is not under any obligation to pay any royalties or similar
payments in connection with any license to any of its Affiliates.
(b) Schedule 5.13 sets forth a true and complete list of all
of the Intangible Assets and a summary description of each such item. There is
no restriction affecting the use of any of the Intangible Assets, and no
license has been granted with respect thereto. None of the Intangible Assets
is currently being challenged, is involved in any pending or threatened
administrative or judicial proceeding, or, to the knowledge of Seller conflicts
with any rights of any other person, firm or corporation. The Seller owns or
has the right to use all computer software, software systems and databases and
all other information systems included in the Purchased Property. The Seller's
rights in and to the Intangible Assets and Intellectual Property are sufficient
and adequate in all material respects to permit the conduct of the Business as
now conducted, and, to the knowledge of Seller, none of the Products or
operations of the Business involves any infringement of any proprietary right
of any other Person.
SECTION 5.14. Licenses and Permits. Schedule 5.14 sets forth
a true and complete list of all licenses, permits, franchises, authorizations
and approvals issued or granted to the Seller with respect to the Business by
the federal government, any state or local government, any foreign national or
local government, or any department, agency, board, commission, bureau or
instrumentality of any of the foregoing (the "Licenses and Permits"), and all
pending applications therefor. Such list contains a summary description of
each such item and, where applicable, specifies the date issued, granted or
applied for, the expiration date and the current status thereof. Each License
and Permit has been duly obtained, is valid and in full force and effect, and
is not subject to any pending or threatened administrative or judicial
proceeding to revoke, cancel, suspend
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or declare such License and Permit invalid in any respect. To the knowledge of
Seller, the Licenses and Permits are sufficient and adequate in all material
respects to permit the continued lawful conduct of the Business in the manner
now conducted by the Seller, and none of the operations of the Business are
being conducted in a manner that violates in any material respect any of the
terms or conditions under which any License and Permit was granted. Except as
set forth in Schedule 5.14, no such License and Permit will in any way be
affected by, or terminate or lapse by reason of, the transactions contemplated
by this Agreement.
SECTION 5.15. Compliance with Law. The operations of the
Business have been conducted in all material respects in accordance with all
applicable laws, regulations, orders and other requirements of all courts and
other governmental or regulatory authorities having jurisdiction over the
Seller and its assets, properties and operations. The Seller has not received
notice of any violation of any such law, regulation, order or other legal
requirement, and is not in default with respect to any order, writ, judgment,
award, injunction or decree of any national, state or local court or
governmental or regulatory authority or arbitrator, domestic or foreign,
applicable to the Business or any of the assets, properties or operations with
respect thereto. The Seller does not have knowledge of any proposed change in
any such laws, rules or regulations (other than laws of general applicability
and evolving regulations of the Food and Drug Administration of products for
the clinical research market) that would materially and adversely affect the
transactions contemplated by this Agreement or all or a material part of the
Business or the Purchased Property.
SECTION 5.16. Litigation. Except as set forth in Schedule
5.16, there are no claims, actions, suits, proceedings, labor disputes or
investigations pending or, to the knowledge of the Seller, threatened, before
any national, state or local court or governmental or regulatory authority,
domestic or foreign, or before any arbitrator of any nature, brought by or
against the Seller or any of its officers, directors, employees, agents or
Affiliates involving, affecting or relating to the Business, the Purchased
Property or the transactions contemplated by this Agreement, nor is any basis
known to the Seller or any of its directors or officers for any such action,
suit, proceeding or investigation. Neither the Business nor the Purchased
Property is subject to any order, writ, judgment, award, injunction or decree
of any national, state or local court or governmental or regulatory authority
or arbitrator, domestic or foreign, that affects or might affect the Business
or the Purchased Property,
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or that would or might interfere with the transactions contemplated by this
Agreement.
SECTION 5.17. Assumed Contracts.
(a) Schedule 5.17 sets forth a complete and correct list and a
summary description of all Assumed Contracts (as in effect on the date hereof)
other than individual Purchase Orders or Sales Orders for amounts less than
$5,000.
(b) Each Assumed Contract is valid, binding and enforceable
against the parties thereto in accordance with its terms, and is in full force
and effect on the date hereof. The Seller has performed in all material
respects the obligations required to be performed by it to date under, and is
not in default or delinquent in the performance (claimed or actual) in
connection with, any Assumed Contract, and no event has occurred which, with
due notice or lapse of time or both, would constitute such a default. To the
knowledge of the Seller, no other party to any Assumed Contract is in default
in respect thereof, and no event has occurred which, with due notice or lapse
of time or both, would constitute such a default. The Seller has delivered to
the Buyer or its representatives true and complete copies of the Assumed
Contracts listed on Schedule 5.17.
(c) Except as set forth on Schedule 5.17, the Seller is not a
party to any partnership or joint venture agreements, license agreements,
service contracts, commission and consulting agreements, suretyship contracts,
reimbursement agreements, sales agency agreements or distribution agreements,
in each such case relating to the Business or the Purchased Property, or any
contracts or commitments limiting or restraining the Seller with respect to the
Business from engaging or competing in any lines of business or with any
Person, or any documents granting the power of attorney with respect to the
conduct of the Business, or any options to purchase any assets or property
rights of the Business.
SECTION 5.18. Prepaid Expenses. Schedule 5.18 sets forth a
true and complete listing of the prepaid expenses of the Business as of May 31,
1995.
SECTION 5.19. Inventories. Schedule 5.19 sets forth a true
and complete inventory listing and valuation as of May 31, 1995 (the "May 31
Inventory Schedule"). The inventories of the Business are carried at not more
than the lower of standard cost (approximating average costs) or net realizable
value, and such inventories as are reflected on the May 31 Inventory Schedule
are of a type, quantity and quality useable and saleable in the
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ordinary course of the conduct of the Business. The reserve for excess bulk
inventory reflected on the May 31 Inventory Schedule has been calculated on a
basis consistent with that used in the Seller's financial statements from which
the Financial Data are derived.
SECTION 5.20 Cell Lines; Biological Materials. The Cell
Lines, taken as a whole, are biologically active and provide the source
material necessary to generate the biological materials included in the
Products. Such Cell Lines have been properly maintained by Seller so as to
retain their viability, minimize deterioration and avoid contamination, and
Seller has established and maintained duplicate back-up stocks of the most
significant of such Cell Lines (from the point of view of volume of sales of
the Products they generate) to enable the Business to continue in the event of
the expiration or contamination of the primary stocks of such Cell Lines.
Seller has (i) manufactured or prepared the other biological materials included
in the Inventory in accordance with what, to the knowledge of Seller constitute
good standards generally utilized by its competitors in the research reagent
industry, (ii) maintained accurate quality control records by production lot of
all such biological materials and (iii) has maintained such materials in a
manner reasonably designed to preserve their viability and to avoid
contamination and deterioration.
SECTION 5.21. Employee Plans.
(a) Except as set forth on Schedule 5.21, neither the Seller
nor any Affiliate of Seller maintains, contributes to, or is a party to, any
"employee benefit plan," as defined in Section 3(3) of ERISA, or any other
written, unwritten, formal or informal plan or agreement involving direct or
indirect compensation other than workers' compensation, unemployment
compensation and other government programs, under which the Seller or any
affiliate thereof has any present or future obligation or liability with
respect to the current employees of the Business ("Seller Plans").
(b) Each Seller Plan has been maintained in substantial compliance
with its terms and the requirements prescribed by any and all statutes, orders,
rules and regulations which are applicable to it. The Seller Savings Plan is
qualified and tax-exempt under Sections 401(a) and 501(a) of the Code,
respectively, and meets the requirements of a "qualified cash or deferred
arrangement" under Section 401(k) of the Code.
(c) The Seller has or has caused to be provided, or will have caused
to be provided, to current and former employees
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of the Business entitled thereto all required notices within the applicable
time period and coverage pursuant to COBRA with respect to any "qualifying
event" (as defined in COBRA) occurring prior to and including the Closing Date.
(d) All contributions (including all employer contributions and
employee salary reduction contributions) required to have been made under any
of the Seller Plans have been made by the due date thereof (including any valid
extension), and all contributions for any period ending on or before the
Closing Date which are not yet due will have been paid or accrued on or prior
to the Closing Date.
(e) True, correct and complete copies of the Seller Plans, and
related trust documents and summary plan descriptions, have been delivered to
the Buyer by the Seller, to the extent requested by the Buyer. Additionally,
the Seller has delivered to the Buyer descriptions of each of the Seller Plans
in a form and with a level of detail reasonably satisfactory to the Buyer.
(f) There are no pending actions, claims or lawsuits which have been
asserted or instituted against any party regarding the Seller Plans or, to the
knowledge of the Seller, against any fiduciary of such plans with respect to
their operation (other than routine benefit claims), and there are no other
circumstances regarding any of the Seller Plans, which could result in any
liability to the Buyer, or any lien on the Purchased Property, on or after the
Closing Date.
(g) The Seller has taken all actions, and given all notices,
required under W.A.R.N. prior to and including the Closing Date with respect to
the employees of the Business. There has been no "mass layoff" or "plant
closing," as defined in W.A.R.N., with respect to the employees of the
Business.
SECTION 5.22 Compensation. The Seller has previously delivered to
the Buyer a schedule setting forth the current base salary of each of the
employees of the Business listed on Schedule 9.1 as well as the aggregate bonus
paid to each such employee in respect of the most recently completed bonus
measuring period for such employee. Except for the Seller Plans, the Seller
has not, by reason of past practices with respect to such employees,
established any rights on the part of such employees to additional compensation
with respect to any period after the Closing Date.
SECTION 5.23. Customers, Suppliers and Distributors.
Schedule 5.23 sets forth a complete and correct list of (a) all customers whose
purchases exceeded 5% of the aggregate net sales
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of the Business during the eight months ended May 31, 1995, setting forth with
respect to each such customer the aggregate volume of purchases made during
such period; (b) all suppliers from whom the Business purchased in excess of 5%
of its raw materials and supplies during the eight months ended May 31, 1995,
setting forth with respect to each such supplier the aggregate dollar volume of
purchases (broken down by principal categories) by the Business from such
supplier for such period; (c) all distributors of any Products; and (d) all
sales agents or representatives of the Business or of the Seller with respect
to the Business. Except as set forth in Schedule 5.23, none of such customers,
suppliers, distributors or representatives has or, to the knowledge of the
Seller, intends to terminate or change significantly its relationship with the
Business.
SECTION 5.24. Insurance. The Business, the Premises and the
Purchased Property are covered by the Seller's comprehensive blanket insurance
policies. The Seller will continue in full force and effect through the
Closing Date all of such policies of insurance. To the knowledge of Seller,
the Seller has not been refused any insurance by any insurance carrier to which
it has applied for insurance with respect to the Premises, the Purchased
Property or the Business at any time since January 1, 1993.
SECTION 5.25. Labor Matters; Employment Agreements. The
Seller is not a party to any union or collective bargaining agreements covering
any of the employees of the Business, nor does the Seller know of any
activities or proceedings of any labor union to organize any such employees,
nor does the Seller have any employment agreements with any of such employees
which are not terminable at will at the election of the Seller. The Seller is
in compliance in all material respects with all applicable laws relating to
employment and employment practices, wages, hours, and terms and conditions of
employment in each case relating to the Business, and there are no charges with
respect to or relating to the Business pending before the Equal Employment
Opportunity Commission or any state, local or foreign agency responsible for
the prevention of unlawful employment practices.
SECTION 5.26. Products Liability. There is no notice,
demand, claim, action, suit, inquiry, hearing, proceeding, notice of violation
or investigation of a civil, criminal or administrative nature before any court
or governmental or other regulatory or administrative agency, commission or
authority, domestic or foreign, against or involving any Product or any
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product distributed by or on behalf of the Business, or class of claims or
lawsuits involving the same or similar Product or any product distributed by or
on behalf of the Business which is pending or threatened, resulting from an
alleged defect in design, manufacture, materials or workmanship of any Product
or any product distributed or sold by or on behalf of the Business, or any
alleged failure to warn, or from any breach of implied warranties or
representations (collectively, "Product Liability Lawsuits"); and (ii) there
has not been any Occurrence. For purposes of this Section 5.26, the term
"Occurrence" shall mean any accident, happening or event which takes place at
any time which is caused or allegedly caused by any alleged hazard or alleged
defect in manufacture, design, materials or workmanship including, without
limitation, any alleged failure to warn or any breach of express or implied
warranties or representations with respect to, or any such accident, happening
or event otherwise involving any Product or any product distributed by or on
behalf of the Business, that is likely to result in a claim or loss.
SECTION 5.27. Environmental Matters.
(a) Except as set forth in Schedule 5.27, (i) the Seller and
the Business are in material compliance with all Environmental Laws (as defined
below); (ii) the Seller and the Business have obtained all applicable
Environmental Permits (as defined below); (iii) all such permits are in full
force and effect; (iv) the Seller and the Business are in material compliance
with all Environmental Permits. As used herein, "Environmental Laws" shall
mean all applicable federal, state, and local laws, ordinances, rules,
regulations, judgments, orders, or decrees relating to the protection or
regulation of human health, safety, or the environment, including, without
limitation, the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, as amended ("CERCLA") (42 U.S.C. Section Section 9601 et
seq.), the Resource Conservation and Recovery Act ("RCRA") (42 U.S.C. Section
Section 6901 et seq.), the Clean Water Act (33 U.S.C. Section Section 1251 et
seq.), the Atomic Energy Act (42 U.S.C. Section 2201 et seq.), and similar
state and local laws. "Environmental Permits" shall mean all applicable
licenses and permits or other approvals required under applicable Environmental
Law in connection with the ownership, operation, and/or use of the Business.
(b) To the knowledge of Seller, the Seller and the Business
have not violated, done or suffered any act which could reasonably be expected
to give rise to liability that would materially affect the operations of the
Business under any Environmental Law.
(c) Except as set forth in Schedule 5.27, (i) there is no
pending or threatened claim, litigation, or administrative
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proceeding, or known prior claim, litigation or administrative proceeding
arising under any Environmental Law involving the Business or any property
formerly owned, leased, operated or occupied by the Business; (ii) there are no
ongoing negotiations with or agreements with any governmental authority
relating to any Remedial Action (as defined in CERCLA Section 101(24), 42
U.S.C. Section 9601(24)) or other environmentally-related claim involving the
Business; and (iii) neither the Seller nor the Business have received any
request for information from any governmental or private entity with respect
to any liability or alleged liability under any Environmental Law related to
the Business.
(d) To the Seller's knowledge, the Premises (i) have never
been used for the treatment or disposal of hazardous materials, hazardous
substances or hazardous waste (as those terms are defined under any
Environmental Law) nor as a landfill or other waste disposal site; (ii) is not
now nor ever has been subject to investigation by any governmental authority
evaluating the need to undertake any environmental remedial action.
(e) Except as set forth on Schedule 5.27, (i) there are and
never have been any underground storage tanks present on the Premises; (ii)
there is no asbestos present on the Premises; and (iii) there are no PCBs
present on the Premises.
(f) To the Seller's knowledge, neither the Seller nor the
Business has disposed of any hazardous wastes (as defined under any
Environmental Law) at any location which is currently identified or proposed
for inclusion on (A) the National Priorities List, 40 CFR Part 300 Appendix B,
(B) the Comprehensive Environmental Response, Compensation and Liability
Inventory List, or (C) any analogous state list.
(g) Seller and the Business have provided to Buyer copies of
all environmental reports or investigations regarding the Premises in the
control or possession of Seller or the Business.
SECTION 5.28. Accuracy of Information. None of the Seller's
representations, warranties or statements contained in this Agreement, or in
the schedules or exhibits hereto, contains any untrue statement of a material
fact or omits to state any material fact necessary in order to make any of such
representations, warranties or statements in light of the circumstances under
which they were made not misleading.
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SECTION 6. REPRESENTATIONS AND WARRANTIES OF THE BUYER.
The Buyer and Parent hereby jointly and severally represent
and warrant to the Seller as follows:
SECTION 6.1. Corporate Organization. The Parent is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware, the Buyer is a corporation duly organized, validly existing
and in good standing under the laws of the State of California and each of the
Parent and Buyer has all requisite corporate power and authority to own its
properties and assets and to conduct its businesses as now conducted.
SECTION 6.2. Qualification to Do Business. The Buyer is duly
qualified to do business as a foreign corporation in and is in good standing in
every jurisdiction in which the character of the properties owned or leased by
it or the nature of the business conducted by it makes such qualification
necessary and in which the absence of such qualification could have a material
adverse effect on the business of the Buyer. On or prior to the Closing Date,
the Buyer will be qualified to do business in the Commonwealth of
Massachusetts.
SECTION 6.3. Authorization and Validity of Agreement. Each
of the Parent and the Buyer has all requisite corporate power and authority to
enter into this Agreement and to carry out its obligations hereunder. The
execution and delivery of this Agreement and the performance of the Buyer's
obligations hereunder have been duly authorized by all necessary corporate
action by their respective Boards of Directors, and no other corporate
proceedings on the part of the either the Buyer or the Parent are necessary to
authorize such execution, delivery and performance. This Agreement has been
duly executed by each of the Parent and the Buyer and constitutes its valid and
binding obligation, enforceable against it in accordance with its terms.
SECTION 6.4. No Conflict or Violation. The execution,
delivery and performance by the Parent and the Buyer of this Agreement do not
and will not violate or conflict with any provision of their respective
Certificates of Incorporation or By-laws and do not and will not violate any
provision of law, or any order, judgment or decree of any court or other
governmental or regulatory authority, nor violate nor will result in a breach
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of or constitute (with due notice or lapse of time or both) a default under any
contract, lease, loan agreement, mortgage, security agreement, trust indenture
or other agreement or instrument to which the Parent or the Buyer is a party or
by which either is bound or to which any of their properties or assets is
subject.
SECTION 6.5. Consents and Approvals. The execution, delivery
and performance of this Agreement on behalf of the Parent and the Buyer does
not require the consent or approval of, or filing with, any government,
governmental body or agency or other entity or person except: (i) as may be
required to transfer any Licenses and Permits; (ii) as may be required in
connection with the assignment and assumption of the Assumed Contracts and
(iii) such consents, approvals and filings, of which the failure to obtain or
make would not, individually or in the aggregate, have a material adverse
effect on the ability of the Buyer to consummate the transactions contemplated
hereby.
SECTION 7. COVENANTS OF THE SELLER.
SECTION 7.1. Conduct of Business Before the Closing Date.
(a) Without the prior written consent of the Buyer, between the date hereof and
the Closing Date, the Seller shall not, except as required or expressly
permitted pursuant to the terms hereof:
(i) make any material change in the conduct of the Business or
enter into any transaction other than in the ordinary course of
business consistent with past practices;
(ii) make any sale, assignment, transfer, abandonment or other
conveyance of the Purchased Property or any part thereof, except
transactions pursuant to the existing Assumed Contracts hereto and
dispositions of Inventory or of worn-out or obsolete equipment for
fair or reasonable value in the ordinary course of business consistent
with past practice;
(iii) subject any of the Purchased Property, or any part
thereof, to any Lien or suffer such to exist other than such Liens as
may arise in the ordinary course of business consistent with past
practice by operation of law and that will not, individually or in
the aggregate, have a material adverse effect on the Business;
(iv) acquire any assets, raw materials or properties related
to the Business, or enter into any other transaction
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related to the Business, other than in the ordinary course of business
consistent with past practice;
(v) enter into any new (or amend any existing) employee
benefit plan, program or arrangement affecting the employees of the
Business or any new (or amend any existing) employment, severance or
consulting agreement relating to any employee of the Business, grant
any general increase in the compensation of any such employees
(including any such increase pursuant to any bonus, pension,
profit-sharing or other plan or commitment) or grant any increase in
the compensation payable or to become payable to any such employee,
except in accordance with pre-existing contractual provisions or
consistent with past practice;
(vi) commit to make any capital expenditure related to the
Business in excess of $10,000;
(vii) sell, transfer or lease any properties or assets related
to the Business to any of its Affiliates;
(viii) fail to keep in full force and effect insurance
comparable in amount and scope to coverage maintained in respect of
the Business;
(ix) take any other action that would cause any of the
representations and warranties made by the Seller in this Agreement
not to remain true and correct;
(x) settle, release or forgive any claim or litigation or
waive any right thereto;
(xi) make, enter into, modify, amend in any material respect
or terminate any contract related to the Business, where such contract
is for (A) a contract entailing payments in excess of $5,000 or (B) a
contract having a term in excess of twelve months; or
(xii) commit to do any of the foregoing.
(b) From and after the date hereof and until the Closing Date,
the Seller shall:
(i) continue to maintain, in all material respects, the
Purchased Property in accordance with present practice in a condition
suitable for its current use;
(ii) file, when due or required, national, state, foreign and
other tax returns and other reports required to
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be filed and pay when due all taxes, assessments, fees and other
charges lawfully levied or assessed against it, unless the validity
thereof is contested in good faith and by appropriate proceedings
diligently conducted;
(iii) continue to conduct the Business in the ordinary course
consistent with past practice;
(iv) keep its books of account, Files and Records in the
ordinary course and in accordance with existing practice; and
(v) continue to maintain existing business relationships with
suppliers and customers other than relationships not economically
beneficial to the Business.
SECTION 7.2. Consents and Approvals. The Seller (a) shall
use its best efforts to obtain all necessary consents, waivers, authorizations
and approvals of all governmental and regulatory authorities, domestic and
foreign, and of all other persons, firms or corporations required in connection
with the execution, delivery and performance by it of this Agreement, and (b)
shall diligently assist and cooperate with the Buyer in preparing and filing
all documents required to be submitted by the Buyer to any governmental or
regulatory authority, domestic or foreign, in connection with such transactions
and in obtaining any governmental consents, waivers, authorizations or
approvals (including without limitation licenses and permits for the Buyer
comparable to the Licenses and Permits) which may be required to be obtained by
the Buyer in connection with such transactions (which assistance and
cooperation shall include, without limitation, timely furnishing to the Buyer
all information concerning the Seller that counsel to the Buyer determines is
required to be included in such documents or would be helpful in obtaining any
such required consent, waiver, authorization or approval).
SECTION 7.3. Notice of Breach. Through the Closing Date, the
Seller shall promptly give the Buyer written notice with particularity upon
having knowledge of any matter that may constitute a breach of any
representation, warranty, agreement or covenant contained in this Agreement.
SECTION 7.4. Access to Properties and Records. The Seller
shall afford to the Buyer, and to the accountants, counsel and representatives
of the Buyer, reasonable access during normal business hours throughout the
period prior to the Closing Date (or the earlier termination of this Agreement
pursuant to Section 14) to all properties, books, contracts, commitments and
Files
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and Records of the Seller relating to the Business and, during such period,
shall furnish promptly to the Buyer all other information concerning the
Business, properties and personnel as the Buyer may reasonably request,
provided that no investigation or receipt of information pursuant to this
Section 7.4 shall qualify any representation or warranty of the Seller or the
conditions to the obligations of the Buyer. The Seller shall also afford the
Buyer reasonable access to the Business, all operations of the Business and to
all Purchased Property throughout the period prior to the Closing Date.
SECTION 7.5. Negotiations. From and after the date hereof,
neither the Seller, nor its officers or directors nor anyone acting on behalf
of the Seller or such persons shall, directly or indirectly, encourage,
solicit, engage in discussions or negotiations with, or provide any information
to, any person, firm, or other entity or group (other than the Buyer or its
representatives) concerning the sale of all or a substantial portion of the
assets of the Business or similar transaction involving the Seller or the
Business or any other transaction inconsistent with the transactions
contemplated hereby.
SECTION 7.6. Best Efforts. Upon the terms and subject to the
conditions of this Agreement, the Seller will use its best efforts to take, or
cause to be taken, all action, and to do, or cause to be done, all things
necessary, proper or advisable consistent with applicable law to consummate and
make effective in the most expeditious manner practicable the transactions
contemplated hereby. Seller will negotiate in good faith the preparation of
definitive forms of those Ancillary Agreements the principal terms of which are
set forth in the Exhibits hereto.
SECTION 7.7. Covenant Not To Compete.
(a) For a period of three years after the Closing Date, Seller
shall not engage or participate, directly or indirectly, in the Business in any
geographical area where such Business is being conducted as of the Closing
Date, except that the Seller shall continue to have the right to sell research
products into the clinical research market in connection with its Diagnostic
Business.
(b) The Seller agrees that a monetary remedy for a breach of
the agreement set forth in Section 7.7(a) hereof will be inadequate and
impracticable and further agrees that such a breach would cause the Buyer
irreparable harm, and that the Buyer shall be entitled to temporary and
permanent injunctive relief without the necessity of proving actual damages.
In the event of such a breach, the Seller agrees that the Buyer shall be
entitled
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to such injunctive relief, including temporary restraining orders, preliminary
injunctions and permanent injunctions as a court of competent jurisdiction
shall determine.
(c) If any provision of this Section 7.7 is invalid in part,
it shall be curtailed, both as to time and location, to the minimum extent
required for its validity under the laws of any State within the United States
and shall be binding and enforceable with respect to the Seller as so
curtailed.
SECTION 7.8. Non-Solicitation of Employees. For the two-year
period commencing on the Closing Date, the Seller shall not make, offer,
solicit or induce to enter into, any written or oral arrangement, agreement or
understanding regarding employment or retention as a consultant with any person
identified on Schedule 9.1, in each case without the written consent of the
Buyer.
Section 7.9 Cooperation Regarding Receivables. For a
reasonable period of time after the Closing Date, the Seller shall cooperate
with and assist the Buyer in the collection of accounts receivable arising from
sales of Products after the Closing Date ("Buyer Receivables"). After the
Closing Date, the Buyer shall have the right and authority to collect, for its
own account, all Buyer Receivables and to endorse with the name of the Seller
any checks received by Buyer on account of any such Buyer Receivables. The
Seller shall promptly transfer or deliver to the Buyer any cash or other
property received by the Seller after the Closing in respect of any Buyer
Receivables. In the event that the Seller receives payments from a debtor
which, by invoice number or otherwise, specifies that such payment is to be
applied to a Buyer Receivable (even if such debtor owes money in respect of
Seller Receivables), the Seller shall pay over to the Buyer the amount of such
Buyer Receivable and the Seller shall retain only the balance, if any, in
respect of the Seller Receivable.
Section 7.10. Diagnostic Business Inventory Build. Between
the date hereof and the Closing Date, Seller intends to manufacture certain
Products in the quantities set forth on Schedule 7.10. Such production will
yield Products that can be used both for the Business and the Seller's
Diagnostic Business. Seller shall have the right to retain the quantities for
each such Product in the amounts specified in such Schedule, and such
quantities shall not be included in the Inventory. To the extent that such
production has not been completed by the Closing Date, the Buyer shall continue
to produce Products in accordance with such plan and shall transfer to the
Seller those quantities of products designated on such schedule as being for
the Diagnostic
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Business. Such transfers shall be made at no cost to the Seller other than
such incremental material costs, which shall be fully reimbursed, and
incremental labor costs which shall be reimbursed in accordance with the
Transition Services Agreement. Seller shall not, in connection with the sale
of Products for the Diagnostic Business prior to the Closing Date or the build
up of its inventory for the Diagnostic Business in accordance with such
production, deplete either the quantities or product mix of Products to be
included in the Inventory in such a way as to adversely affect the Business
prior to or after the Closing Date.
Section 7.11 Preparation of Financial Statements. The Seller
shall engage Peat to audit and certify a balance sheet of the Business as of
the Closing Date and results of operations of the Business, and related
statements of cash flows, for the year ended September 30, 1994 and the period
from October 1, 1994 through the Closing Date. The Buyer shall reimburse the
Seller for amounts charged by Peat in connection with the certification of
these financial statements to the extent that such fees are in excess of the
amount normally charged by Peat in connection with its engagement as the
auditors for the Seller.
Section 7.12 Accounts Payable. The Seller shall promptly pay
and discharge in accordance with their respective due dates all accounts
payable of the Seller arising from the acquisition of products or services used
by the Seller in the conduct of the Business prior to the Closing Date.
SECTION 8. COVENANTS OF THE PARENT AND BUYER.
SECTION 8.1. Actions Before Closing Date. The Buyer shall
not take any action which shall cause it to be in breach of any of its
representations, warranties, covenants or agreements contained in this
Agreement.
SECTION 8.2. Consents and Approvals. The Buyer shall use its
best efforts to obtain all consents and approvals of third parties, if any,
required to be obtained by the Buyer to effect the transactions contemplated by
this Agreement.
SECTION 8.3. Best Efforts. Upon the terms and subject to the
conditions of this Agreement, the Buyer will use its best efforts to take, or
cause to be taken, all action, and to do, or cause to be done, all things
necessary, proper or advisable consistent with applicable law to consummate and
make effective in the most expeditious manner practicable the transactions
contemplated hereby. Buyer will negotiate in good faith the preparation of
definitive forms of those Ancillary Agreements the principal terms of which are
set forth in the Exhibits hereto.
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Section 8.4 Non-Solicitation of Employees. For the two-year
period commencing on the Closing Date, the Buyer shall not make, offer, solicit
or induce to enter into, any written or oral arrangement, agreement or
understanding regarding employment or retention as a consultant with any
employee of the Seller (other than those identified on Schedule 9.1), in each
case without the prior written consent of the Seller.
Section 8.5 Cooperation Regarding Receivables. For a
reasonable period of time after the Closing Date, the Buyer shall cooperate
with and assist the Seller in the collection of accounts receivable arising
from sales of Products prior to the Closing Date ("Seller Receivables").
Promptly after the Closing Date, the Seller shall deliver to the Buyer a
schedule of the Seller Receivables and shall provide a monthly update
thereafter until such time at the Seller Receivables have been collected or
written off. The Buyer shall promptly transfer or deliver to the Seller any
cash or other property received by the Buyer after the Closing in respect of
any Seller Receivables. In the event that the Buyer receives payment from a
debtor which does not specify, by invoice number or otherwise, whether such
payment is to be applied to a Seller Receivable or a Buyer Receivable (and such
debtor owes money in respect of both Buyer Receivables and Seller Receivables),
the Buyer shall pay over to the Seller the amount of the Seller Receivable and
the Buyer shall retain only the balance, if any, in respect of the Buyer
Receivable.
Section 8.6 Guarantee of Obligations of the Buyer. Parent
hereby guaranties the full and faithful performance of the obligations, duties
and liabilities of the Buyer under this Agreement.
SECTION 9. EMPLOYEES AND EMPLOYEE PLANS.
SECTION 9.1. Offer of Employment. The Buyer shall offer
employment to those employees of the Business as are listed on Schedule 9.1,
effective as of the Closing at their respective current base salary levels.
Those employees who accept such offers of employment are referred to herein as
"Transferred Employees." Transferred Employees shall be employed under terms
and conditions determined in the sole discretion of the Buyer, and the Buyer
shall not be obligated to provide any particular type or level of compensation
or benefits to such persons other than as required hereunder. The Buyer shall
not be responsible for any compensation, benefits or other liabilities
attributable to (i) Transferred Employees, to the extent arising under any
Seller Plan or otherwise prior to or as of the Closing, or (ii) any other
employee of the Business, irrespective of when or under what circumstances
arising.
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SECTION 9.2 Seller Savings Plan. The Seller shall cause each
Transferred Employee's "Matching Contribution Account" under the Seller Savings
Plan to become fully vested and nonforfeitable as of the Closing Date. The
Seller shall take any actions necessary to allow lump sum distributions to be
made to Transferred Employees from the Seller Savings Plan in accordance with
Section 401(k)(10) of the Code on account of the purchase of the Business by
the Buyer. Transferred Employees shall be allowed to elect such distributions
during the period beginning no later than the close of the calendar quarter
which follows, or begins on, the Closing Date, and ending on the latest date
allowed under Section 401(k)(10) of the Code.
SECTION 9.3 Flexible Spending Accounts. As soon as
practicable following the Closing, the unused balances of Transferred Employees
in Seller's FSAs shall be transferred to Buyer's FSAs by way of bookkeeping
entries. Any elections made by Transferred Employees under Seller's FSAs for
1995 shall be continued under Buyer's FSAs, to the extent allowable under
Buyer's FSAs. If such elections are not so allowable, they may be adjusted by
the Buyer in a manner which is both allowable under Buyer's FSAs and consistent
to the extent possible with such elections. The Seller shall transfer to the
Buyer any claims under Seller's FSAs pending as of the Closing Date, and such
claims shall be paid to the extent allowable under Buyer's FSAs. If the
aggregate claims paid to Transferred Employees during 1995 prior to the Closing
Date under Seller's FSAs exceed the aggregate amount of payroll withholding
relating to Seller's FSA's for such period for such persons, the Buyer shall
transfer to the Seller, in cash, such excess as soon as practicable following
the Closing. If the aggregate claims paid to Transferred Employees during 1995
prior to the Closing Date under Seller's FSAs is less than the aggregate amount
of payroll withholding relating to Seller's FSA's for such period for such
persons, the Seller shall transfer to the Buyer, in cash, such difference as
soon as practicable following the Closing.
SECTION 10. BULK SALES LAW.
Buyer hereby waives compliance by Seller with the Bulk
Transfer provisions of the Uniform Commercial Code as in effect in the
Commonwealth of Massachusetts.
SECTION 11. INDEMNIFICATION.
SECTION 11.1. Indemnification by the Seller. The Seller shall
indemnify and fully defend, save and hold the Buyer, any Affiliate of the Buyer
and their respective directors, officers and employees (the "Buyer
Indemnitees"), harmless from
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and against any damage, liability, loss, judgment, cost, expense (including all
reasonable attorneys' fees), deficiency, interest, penalty, impositions,
assessments or fines (collectively, "Losses") arising out of or resulting from:
(a) the breach of any representation or warranty made by
Seller in this Agreement or in any of the Ancillary Agreements;
(b) any failure of the Seller duly to perform or observe any
term, provision, covenant, agreement or condition on the part of the Seller to
be performed or observed hereunder or under the Ancillary Agreements;
(c) any failure of the Seller to pay and discharge when due
any Excluded Liabilities, or any claim or cause of action by any party against
any Buyer Indemnitee, with respect to the Excluded Liabilities;
(d) the failure of the Seller to comply with any applicable
provisions of the Bulk Transfer provisions of the Uniform Commercial Code of
the Commonwealth of Massachusetts, notwithstanding Buyer's waiver of compliance
with such provisions; or
(e) any liability under any Environmental Law or under common
law for the Release (as defined in CERCLA Section 101(22), 42 U.S.C. Section
9601(22)) or threat of Release or for exposure or potential exposure to
hazardous or toxic substances, arising from events occurring prior to the
Closing Date.
SECTION 11.2. Indemnification by the Buyer. The Buyer shall
indemnify and agree to fully defend, save and hold the Seller, any Affiliate of
the Seller, and their respective directors, officers and employees (the "Seller
Indemnitees"), harmless from and against any Losses arising out of or resulting
from:
(a) the breach of any representation or warranty made by
Buyer in this Agreement or in any of the Ancillary Agreements;
(b) any failure of the Buyer duly to perform or observe any
term, provision, covenant, agreement or condition on the part of the Buyer to
be performed or observed hereunder or under the Ancillary Agreements;
(c) any failure of the Buyer to pay and discharge when due
any of its obligations or liabilities under the Assumed Contracts.
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SECTION 11.3. Procedures for Indemnification by the Buyer.
(a) Promptly after the receipt by any party hereto of notice
under this Section 11 of (A) any claim or (B) the commencement of any action or
proceeding, such party (the "Aggrieved Party") will, if a claim with respect
thereto is to be made against any party obligated to provide indemnification
(the "Indemnifying Party") pursuant to this Section 11, give such Indemnifying
Party (or parties) written notice of such claim or the commencement of such
action or proceeding and shall permit the Indemnifying Party to assume the
defense of any such claim or any litigation resulting from such claim, and,
upon such assumption, shall cooperate fully with the Indemnifying Party in the
conduct of such defense. Failure by the Indemnifying Party to notify the
Aggrieved Party of its election to defend any such action within a reasonable
time, but in no event more than fifteen days after notice thereof shall have
been given to the Indemnifying Party, shall be deemed a waiver by the
Indemnifying Party of its right to defend such action. If the Indemnifying
Party assumes the defense of any such claim or litigation resulting therefrom,
the obligations of the Indemnifying Party as to such claim shall be limited to
taking all steps necessary in the defense or settlement of such claim or
litigation resulting therefrom and to holding the Aggrieved Party harmless from
and against any and all losses, damages and liabilities caused by or arising
out of any settlement approved by the Indemnifying Party or any judgment in
connection with such claim or litigation resulting therefrom. The Aggrieved
Party may participate, at its expense, in the defense of such claim or
litigation provided that the Indemnifying Party shall direct and control the
defense of such claim or litigation. The Indemnifying Party shall not, in the
defense of such claim or any litigation resulting therefrom, consent to entry
of any judgment, except with the written consent of the Aggrieved Party, or
enter into any settlement, except with the written consent of the Aggrieved
Party, which does not include as an unconditional term thereof the giving by
the claimant or the plaintiff to the Aggrieved Party of a release from all
liability in respect of such claim or litigation. All awards and costs payable
by a third party to the Indemnified Party or the Indemnifying Party shall
belong to the Indemnifying Party.
(B) If the Indemnifying Party shall not assume the defense
of any such claim or litigation resulting therefrom, the Aggrieved Party may
defend against such claim or litigation in such manner as it may deem
appropriate and, unless the Indemnifying Party shall deposit with the Aggrieved
Party a sum equivalent to the total amount demanded in such claim or
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litigation, or shall deliver to the Aggrieved Party a surety bond in form and
substance reasonably satisfactory to the Aggrieved Party, the Aggrieved Party
may settle such claim or litigation on such terms as it may deem appropriate,
and the Indemnifying Party shall promptly reimburse the Aggrieved Party for the
amount of all expenses, legal or otherwise, incurred by the Aggrieved Party in
connection with the defense against or settlement of such claims or litigation.
If no settlement of such claim or litigation is made, the Indemnifying Party
shall promptly reimburse the Aggrieved Party for the amount of any judgment
rendered with respect to such claim or in such litigation and of all expenses,
legal or otherwise, incurred by the Aggrieved Party in the defense against such
claim or litigation.
SECTION 11.4 Limitations. An Aggrieved Party shall not be
entitled to recover any Losses in respect of a breach of a representation or
warranty of the other party until the aggregate amount of Losses suffered by
the Aggrieved Party shall exceed $75,000 (the "Minimum Loss"), at which time
the indemnification provided under this Section 11 shall apply to all Losses in
excess of such Minimum Loss.
SECTION 11.5 Environmental Liability After Closing. As to
any liability under any Environmental Law or common law for the Release (as
defined in CERCLA Section 101(22), 42 U.S.C. Section 9601(22)) or threat of
Release or for exposure or potential exposure to hazardous substances,
hazardous materials, or hazardous wastes (as defined in any Environmental Law)
arising from events occurring after the Closing Date, the parties agree as
follows:
(a) The party whose act or omission caused, or which
controlled the instrumentality giving rise to such liability shall defend,
indemnify, and hold harmless the other party for such liability.
(b) In the event the parties do not agree which party is
liable pursuant to subsection (a), the parties shall submit the dispute to a
neutral third party arbitrator, mutually agreeable to both parties, for binding
arbitration. Either party may initiate such arbitration by giving written
notice to the other party 10 days prior to initiation of arbitration
proceedings. Such arbitration shall be conducted in accordance with the rules
of the American Arbitration Association ("AAA"). If the parties do not agree
on an arbitrator, one shall be selected in accordance with the rules of the
AAA. The arbitrator may determine that one or the other party is solely
responsible for the liability, or may apportion liability between the parties.
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(c) In the event the arbitrator is unable to make a
liability determination, the parties agree to share equally any such liability.
(d) In the event a Response Action (as defined in CERCLA
Section 101(25), 42 U.S.C. Section 9601(25)) is necessary as a result of such
liability, the Response Action selected shall be the most cost-effective
response action which complies with applicable laws, regulations, or orders,
and which interferes with the use of the Premises to the least extent
practicable. If the parties do not agree on the appropriate Response Action,
then the parties shall resolve the dispute in accordance with subsection (b).
SECTION 12. CONDITIONS PRECEDENT TO PERFORMANCE BY THE SELLER.
The obligations of the Seller to consummate the transactions
contemplated by this Agreement are subject to the fulfillment, at or before the
Closing Date, of the following conditions, any one or more of which may be
waived by the Seller in its sole discretion:
SECTION 12.1. Representations and Warranties of the Buyer.
All representations and warranties made by the Buyer in this Agreement shall be
true and correct in all material respects (and in all respects in the case of
each representation and warranty that is qualified as to materiality) on and as
of the Closing Date as if again made by the Buyer on and as of such date, and
the Seller shall have received a certificate dated the Closing Date and signed
by the President or any Vice President of the Buyer to that effect.
SECTION 12.2. Performance of the Obligations of the Buyer.
The Buyer shall have performed in all material respects all obligations
required under this Agreement to be performed by the Buyer on or before the
Closing Date, and the Seller shall have received a certificate dated the
Closing Date and signed by the President or any Vice President of the Buyer to
that effect.
SECTION 12.3. Consents and Approvals. All consents, waivers,
authorizations and approvals of any governmental or regulatory authority,
domestic or foreign, and of any other person, firm or corporation, required in
connection with the execution, delivery and performance of this Agreement,
shall have been duly obtained and shall be in full force and effect on the
Closing Date.
SECTION 12.4. No Violation of Orders. No preliminary or
permanent injunction or other order issued by any court or
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other governmental or regulatory authority, domestic or foreign, nor any
statute, rule, regulation, decree or executive order promulgated or enacted by
any government or governmental or regulatory authority, domestic or foreign,
that declares this Agreement invalid or unenforceable in any respect or which
prevents the consummation of the transactions contemplated hereby shall be in
effect.
SECTION 12.5. Delivery of Ancillary Agreements. The Buyer
shall have executed and delivered to the Seller each of the Ancillary
Agreements.
SECTION 12.6 Opinion of Buyer's Counsel The Seller shall
have received an opinion, dated the Closing Date, from counsel to the Buyer, in
form and substance reasonably satisfactory to the Seller and its counsel, that:
(a) The Parent is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware,
the Buyer is a corporation duly organized, validly existing and in
good standing under the laws of the State of California, and each of
the Parent and the Buyer has all requisite corporate power and
authority to own its properties and assets and to conduct its business
as now conducted.
(b) Each of the Parent and the Buyer has the corporate power
to enter into this Agreement and the Ancillary Agreements and to carry
out its obligations hereunder and thereunder. The execution and
delivery of this Agreement and the Ancillary Agreements and the
performance of the obligations of the Parent and the Buyer hereunder
and thereunder have been duly authorized by their respective Boards of
Directors, and no other corporate proceedings on the part of the
Parent or the Buyer are necessary to authorize such execution,
delivery and performance. This Agreement and the Ancillary Agreements
have been duly executed by the Parent and the Buyer and constitute the
legal, valid and binding obligation of the Parent and the Buyer,
respectively, enforceable against the Parent and the Buyer in
accordance with its terms, except as the same may be limited by
bankruptcy, insolvency, reorganization or other laws relating to or
affecting the enforceability of creditors' rights generally and except
that the remedy of specific performance or similar equitable relief
may be subject to equitable defenses and to the discretion of the
court before which enforcement is sought.
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(c) The execution, delivery or performance by the Parent and
the Buyer of this Agreement and the Ancillary Agreements do not and
will not violate or conflict with any provision of their respective
Certificates of Incorporation or By-laws and do not and will not
violate any provision of law, or any order, judgment or decree of any
court or other governmental or regulatory authority, nor violate nor
will result in a breach of or constitute (with due notice or lapse of
time or both) a default under any contract, lease, loan agreement,
mortgage, security agreement, trust indenture or other agreement or
instrument known to such counsel (after inquiry of appropriate
officers of the Parent and the Buyer) to which the Parent or the Buyer
is a party or by which it is bound or to which its properties or
assets is subject.
Seller acknowledges that the Buyer's counsel is not admitted
to practice law in California. Accordingly, as to the laws of California, such
counsel may rely on an opinion of California counsel or may otherwise qualify
its opinion in a manner reasonably acceptable to counsel for the Seller.
SECTION 12.7. Other Closing Documents. The Seller shall have
received such other certificates, instruments and documents in confirmation of
the representations and warranties of the Buyer or in furtherance of the
transactions contemplated by this Agreement as the Seller or its counsel may
reasonably request.
SECTION 12.8. Legal Matters. All certificates, instruments,
opinions and other documents required to be executed or delivered by or on
behalf of the Buyer under the provisions of this Agreement, and all other
actions and proceedings required to be taken by or on behalf of the Buyer in
furtherance of the transactions contemplated hereby, shall be reasonably
satisfactory in form and substance to counsel for the Seller.
SECTION 13. CONDITIONS PRECEDENT TO PERFORMANCE BY THE BUYER.
The obligations of the Buyer to consummate the transactions
contemplated by this Agreement are subject to the fulfillment, at or before the
Closing Date, of the following conditions, any one or more of which may be
waived by the Buyer in its sole discretion:
SECTION 13.1. Representations and Warranties of the Seller.
All representations and warranties made by the Seller in this Agreement shall
be true and correct in all material respects
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(and in all respects in the case of each representation and warranty that is
qualified as to materiality) on and as of the Closing Date as if again made by
the Seller on and as of such date, and the Buyer shall have received a
certificate dated the Closing Date and signed by the President or any Vice
President of the Seller to that effect.
SECTION 13.2. Performance of the Obligations of the Seller.
The Seller shall have performed in all material respects all obligations
required under this Agreement to be performed by the Seller on or before the
Closing Date, and the Buyer shall have received a certificate dated the Closing
Date and signed by the President or any Vice President of the Seller to that
effect.
SECTION 13.3. Consents and Approvals. All consents, waivers,
authorizations and approvals of any governmental or regulatory authority,
domestic or foreign, including licenses and permits comparable to the Licenses
and Permits, and of any other person, firm or corporation, required in
connection with the execution, delivery and performance of this Agreement shall
have been duly obtained and shall be in full force and effect on the Closing
Date.
SECTION 13.4. No Violation of Orders. No preliminary or
permanent injunction or other order issued by any court or governmental or
regulatory authority, domestic or foreign, nor any statute, rule, regulation,
decree or executive order promulgated or enacted by any government or
governmental or regulatory authority, which declares this Agreement invalid in
any respect or prevents the consummation of the transactions contemplated
hereby, or which materially and adversely affects the assets, properties,
operations, prospects, net income or financial condition of the Business shall
be in effect.
SECTION 13.5. Delivery of Ancillary Agreements. The Seller
shall have executed and delivered to the Buyer each of the Ancillary
Agreements.
SECTION 13.6. No Material Adverse Change. During the period
from May 31, 1995 to the Closing Date, there shall not have been any material
adverse change in the assets, properties, business, operations, prospects of
the Business.
SECTION 13.7. Opinion of Counsel. The Buyer shall have
received an opinion, dated the Closing Date, from counsel to the Seller, in
form and substance reasonably satisfactory to the Buyer and its counsel, that:
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(a) The Seller is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware,
and the Seller has all requisite corporate power and authority to own
its properties and assets and to conduct its business as now
conducted. The Seller is duly qualified to do business as a foreign
corporation and is in good standing in the Commonwealth of
Massachusetts, the State of New York and in every jurisdiction where
the character of the properties owned or leased by it or the nature of
the business conducted by it makes such qualification necessary and in
which the absence of such qualification could have a material adverse
effect on the business of the Seller.
(b) The Seller has the corporate power to enter into this
Agreement and the Ancillary Agreements and to carry out its
obligations hereunder and thereunder. The execution and delivery of
this Agreement, the Ancillary Agreements and the instruments of
conveyance executed by the Seller in connection with the sale of the
Purchased Property and the performance of the obligations of the
Seller hereunder and thereunder have been duly authorized by the Board
of Directors of the Seller, and no other corporate proceedings on the
part of the Seller are necessary to authorize such execution, delivery
and performance. This Agreement, the Ancillary Agreements and the
instruments of conveyance executed by the Seller in connection with
the sale of the Purchased Property have been duly executed by the
Seller and constitute the legal, valid and binding obligation of the
Seller, enforceable against the Seller in accordance with its terms,
except as the same may be limited by bankruptcy, insolvency,
reorganization or other laws relating to or affecting the
enforceability of creditors' rights generally and except that the
remedy of specific performance or similar equitable relief may be
subject to equitable defenses and to the discretion of the court
before which enforcement is sought.
(c) The execution, delivery or performance by the Seller of
this Agreement, the Ancillary Agreements and the instruments of
conveyance executed by the Seller in connection with the sale of the
Purchased Property do not and will not violate or conflict with any
provision of the Certificate of Incorporation or By-laws of the Seller
and do not and will not violate any provision of law, or any order,
judgment or decree of any court or other governmental or regulatory
authority, nor violate nor will result in a breach of or constitute
(with due notice or lapse of time or both) a default under any
contract, lease, loan agreement,
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mortgage, security agreement, trust indenture or other agreement or
instrument known to such counsel (after inquiry of appropriate
officers of the Seller) to which the Seller is a party or by which it
is bound or to which its properties or assets is subject, nor will
result in the creation or imposition of any Lien upon any of the
properties or assets of the Seller, nor will result in the
cancellation, modification, revocation or suspension of any of the
licenses, franchises, permits, authorizations or approvals referred to
in Section 5.14.
(d) To the best of such counsel's knowledge after inquiry of
appropriate officers of the Seller, except as set forth in Schedule
5.16, there are no claims, actions, suits, proceedings, labor disputes
or investigations of any nature pending or threatened before any
national, state or local court or governmental or regulatory
authority, domestic or foreign, or before any arbitrator, brought by
or against the Seller, any of its officers, directors, employees,
agents or Affiliates involving, affecting or relating to the Purchased
Property, the Business or the transactions contemplated by this
Agreement. To the best of such counsel's knowledge after inquiry of
appropriate officers of the Seller, neither the Seller, nor any of its
assets or properties is subject to any order, writ, judgment, award,
injunction or decree of any national, state or local court or
governmental or regulatory authority or arbitrator, that could have a
material adverse effect on the Purchased Property, the Business or
that would or might interfere with the transactions contemplated by
this Agreement.
SECTION 13.8. Other Closing Documents. The Buyer shall have
received such other certificates, instruments and documents in confirmation of
the representations and warranties of the Seller or in furtherance of the
transactions contemplated by this Agreement as the Buyer or its counsel may
reasonably request.
SECTION 13.9. Legal Matters. All certificates, instruments,
opinions and other documents required to be executed or delivered by or on
behalf of the Seller under the provisions of this Agreement, and all other
actions and proceedings required to be taken by or on behalf of the Seller in
furtherance of the transactions contemplated hereby, shall be reasonably
satisfactory in form and substance to counsel for the Buyer.
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<PAGE> 49
SECTION 14. TERMINATION.
SECTION 14.1. Conditions of Termination. Notwithstanding
anything to the contrary contained herein, this Agreement may be terminated at
any time before the Closing:
(a) By mutual consent of the Seller and the Buyer;
(b) By the Seller if, as of September 1, 1995, any of the
conditions set forth in Section 12 shall not have been met; or
(c) By the Buyer if, as of September 1, 1995, any of the
conditions set forth in Section 13 shall not have been met.
SECTION 14.2. Effect of Termination. In the event of
termination pursuant to Section 14.1, this Agreement shall become null and void
and have no effect, with no liability on the part of the Seller, the Buyer or
the Parent, or their directors, officers, agents or stockholders, with respect
to this Agreement, except for the (i) liability of a party for expenses
pursuant to Section 15.3 and (ii) liability for breach of this Agreement.
SECTION 15. MISCELLANEOUS.
SECTION 15.1. Successors and Assigns. Except as otherwise
provided in this Agreement, no party hereto shall assign this Agreement or any
rights or obligations hereunder without the prior written consent of the other
party hereto and any such attempted assignment without such prior written
consent shall be void and of no force and effect, provided, that the Buyer may
assign its rights hereunder to an Affiliate and to any party providing
financing in connection with the transactions contemplated hereby, provided
further, that no such assignment shall reduce or otherwise vitiate any of the
obligations of the Buyer hereunder. This Agreement shall inure to the benefit
of and shall be binding upon the successors and permitted assigns of the
parties hereto.
SECTION 15.2. Governing Law, Jurisdiction. This Agreement
shall be construed, performed and enforced in accordance with, and governed by,
the laws of the State of New York, without giving effect to the principles of
conflicts of laws thereof. The parties hereto irrevocably elect as the sole
judicial forum for the adjudication of any matters arising under or in
connection with this Agreement, and consent to the jurisdiction of, the courts
of the County of New York, State of New York or the United States of America
for the Southern District of New York.
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<PAGE> 50
SECTION 15.3. Expenses. Except as otherwise provided herein,
each of the parties hereto shall pay its own expenses in connection with this
Agreement and the transactions contemplated hereby, including, without
limitation, any legal and accounting fees, whether or not the transactions
contemplated hereby are consummated. The Seller shall pay all state and local
sales, transfer, excise, value-added or other similar taxes, and all recording
and filing fees that may be imposed by reason of the sale, transfer, assignment
and delivery of the Purchased Property.
SECTION 15.4. Broker's and Finder's Fees. Each of the
parties represents and warrants that it has dealt with no broker or finder in
connection with any of the transactions contemplated by this Agreement other
than Cowen & Company, whose fees and expenses shall, as between the parties
hereto, be the responsibility of the Seller, and, insofar as it knows, no other
broker or other person is entitled to any commission or finder's fee in
connection with any of these transactions.
SECTION 15.5 Access to Records. (a) For a period of six
years after the date hereof (or the earlier termination of this Agreement),
Seller shall have reasonable access to all of the books and records of the
Business with respect to periods prior to the Closing Date that are held by the
Buyer to the extent that such access may reasonably be required by the Seller
in connection with matters relating to or affected by the operations of the
Business prior to the Closing Date. The Buyer shall afford such access upon
receipt of reasonable advance notice and during normal business hours, the
Seller shall be solely responsible for any costs or expenses incurred by it
pursuant to this Section 15.5. If the Buyer shall desire to dispose of any of
such books and records prior to the expiration of such six-year period, the
Buyer shall, prior to such disposition, give the Seller a reasonable
opportunity, at the Seller's expense, to segregate and remove such books and
records as the Seller may elect.
(b) For a period of six years after the date hereof, the
Buyer shall have reasonable access to all of the books and records relating to
the Business which the Seller may retain after the Closing Date. Such access
shall be afforded by the Seller upon receipt of reasonable advance notice and
during normal business hours. The Buyer shall be solely responsible for any
costs and expenses incurred by it pursuant to this Section 15.5. If the Seller
shall desire to dispose of any of such books and records prior to the
expiration of such six-year period, the Seller shall, prior to such
disposition, give the Buyer a
44
<PAGE> 51
reasonable opportunity, at the Buyer's expense, to segregate and remove such
books and records as the Buyer may elect.
SECTION 15.6. Force Majeure. Neither party shall be liable
for any failure of or delay in the performance of this Agreement for the period
that such failure or delay is due to acts of God, public enemy, civil war,
strikes or labor disputes, or any other cause beyond the parties' reasonable
control. Each party agrees to notify the other party promptly of the
occurrence of any such cause and to carry out this Agreement as promptly as
practicable after such cause is terminated.
SECTION 15.7 Survival. All statements contained in any
certificate or other instrument executed and delivered by the Seller or the
Buyer pursuant to this Agreement or in connection with the transactions
contemplated hereby shall be deemed representations and warranties by the
Seller or the Buyer, respectively, hereunder. All representations and
warranties and agreements made by the parties hereto in this Agreement or
pursuant hereto shall survive the Closing hereunder and any investigation at
any time made by or on behalf of the Buyer or Seller, provided, however, that
the Buyer shall not commence any action against the Seller in respect of any
provision of this Agreement at any time more than 24 months after the Closing
Date except with respect to a breach of the warranty contained in Section 5.27,
with respect to Seller's indemnification obligations for Excluded Liabilities
under Section 11.1(c) or with respect to Seller's indemnification obligations
for environmental liabilities under Section 11.1(e), as to which the only
limitations shall be those provided by applicable statutes of limitation.
SECTION 15.8. Severability. In the event that any part of
this Agreement is declared by any court or other judicial or administrative
body to be null, void or unenforceable, said provision shall survive to the
extent it is not so declared, and all of the other provisions of this Agreement
shall remain in full force and effect.
SECTION 15.9. Notices. All notices, requests, demands and
other communications under this Agreement shall be in writing and shall be
deemed to have been duly given (i) on the date of service if served personally
on the party to whom notice is to be given; (ii) on the day of transmission if
sent via facsimile transmission to the facsimile number given below, and
telephonic confirmation of receipt is obtained promptly after completion of
transmission; (iii) on the day after delivery to Federal Express or similar
overnight courier or the Express Mail service maintained by the United States
Postal Service; or (iv) on the
45
<PAGE> 52
fifth day after mailing, if mailed to the party to whom notice is to be given,
by first class mail, registered or certified, postage prepaid and properly
addressed, to the party as follows:
If to the Seller:
Oncogene Science, Inc.
106 Charles Lindbergh Blvd.
Uniondale, New York 11553
Attention: Steven M. Peltzman
Facsimile: (516) 222-0114
Copy to:
Saul, Ewing, Remick & Saul
3800 Centre Square West
Philadelphia, Pennsylvania 19102
Attention: Spencer W. Franck, Jr. Esq.
Facsimile: (215) 972-7725
If to the Parent or the Buyer:
Calbiochem-Novabiochem
International, Inc.
10394 Pacific Center Court
San Diego, California 92121
Attention: Stelios B. Papadopoulos
Facsimile: (619) 450-5522
Copy to:
Willkie Farr & Gallagher
One Citicorp Center
153 East 53rd Street
New York, New York 10022
Attention: Peter H. Jakes, Esq.
Facsimile: (212) 821-8111
Any party may change its address for the purpose of this
Section by giving the other party written notice of its new address in the
manner set forth above.
SECTION 15.10. Amendments; Waivers. This Agreement may be
amended or modified, and any of the terms, covenants, representations,
warranties or conditions hereof may be waived, only by a written instrument
executed by the parties hereto, or in the case of a waiver, by the party
waiving compliance. Any waiver by any party of any condition, or of the breach
of any
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<PAGE> 53
provision, term, covenant, representation or warranty contained in this
Agreement, in any one or more instances, shall not be deemed to be nor
construed as further or continuing waiver of any such condition, or of the
breach of any other provision, term, covenant, representation or warranty of
this Agreement.
SECTION 15.11. Public Announcements. The parties agree that
after the signing of this Agreement, neither party shall make any press release
or public announcement concerning this transaction without the prior written
approval of the other party unless a press release or public announcement is
required by law. If any such announcement or other disclosure is required by
law, the disclosing party agrees to give the nondisclosing party prior notice
and an opportunity to comment on the proposed disclosure.
SECTION 15.12. Entire Agreement. This Agreement and the
Ancillary Agreements contain the entire understanding between the parties
hereto with respect to the transactions contemplated hereby and supersedes and
replaces all prior and contemporaneous agreements and understandings, oral or
written, with regard to such transactions. All schedules hereto and any
documents and instruments delivered pursuant to any provision hereof are
expressly made a part of this Agreement as fully as though completely set forth
herein.
SECTION 15.13. Parties in Interest. Nothing in this
Agreement is intended to confer any rights or remedies under or by reason of
this Agreement on any persons other than the Seller, and the Buyer and their
respective successors and permitted assigns. Nothing in this Agreement is
intended to relieve or discharge the obligations or liability of any third
persons to the Seller or the Buyer. No provision of this Agreement shall give
any third persons any right of subrogation or action over or against the Seller
or the Buyer.
SECTION 15.14. Section and Paragraph Headings. The section
and paragraph headings in this Agreement are for reference purposes only and
shall not affect the meaning or interpretation of this Agreement.
SECTION 15.15. Counterparts. This Agreement may be executed
in counterparts, each of which shall be deemed an original, but both of which
shall constitute the same instrument.
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<PAGE> 54
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective officers thereunto duly authorized
as of the date first above written.
ONCOGENE SCIENCE, INC.
By: /s/ Steven M. Peltzman
-----------------------------------
Name: Steven M. Peltzman
Title: President and Chief
Operating Officer
CALBIOCHEM-NOVABIOCHEM CORPORATION
By: /s/ Stelios B. Papadopoulos
-----------------------------------
Name: Stelios B. Papadopoulos
Title: Chairman and Chief
Executive Officer
CALBIOCHEM-NOVABIOCHEM INTERNATIONAL, INC.
By: /s/ Stelios B. Papadopoulos
-----------------------------------
Name: Stelios B. Papadopoulos
Title: Chairman and Chief
Executive Officer
<PAGE> 1
EXHIBIT 10.2
SUBLEASE
THIS SUBLEASE is made as of this 2nd day of August, 1995, by and
between ONCOGENE SCIENCE, INC., a Delaware corporation (successor to Applied
bioTechnology Inc., formerly named AbT Acquisition Corp.) having an office at
80 Rogers Street, Cambridge, Massachusetts 02142 ("Sublessor"), and
CALBIOCHEM-NOVABIOCHEM CORPORATION, a California corporation having an office
at 10394 Pacific Center Court, San Diego, California 92121 ("Sublessee").
W I T N E S S E T H:
WHEREAS, by lease, dated as of October 1991, between the Trustees of
the East Cambridge Trust ("Landlord"), as landlord, and AbT Acquisition Corp.,
predecessor in interest to Sublessor, as tenant (said lease, as the same has
been amended by First Amendment dated as of April 2, 1993 and by Second
Amendment executed in connection with the execution and delivery of this
Sublease, and as the same may be hereafter amended from time to time, being
referred to herein as the "Lease"), Landlord leased to Sublessor the buildings
known as 80 Rogers Street and 129 Binney Street and a portion of the building
known as 84 Rogers Street, Cambridge, Massachusetts (the "Leased Premises");
and
WHEREAS, Sublessor desires to sublet to Sublessee and Sublessee
desires to sublet and hire from Sublessor that portion of the Leased Premises
located at 80 and 84 Rogers Street more particularly shown on the floor plan
attached hereto and made a part hereof as Exhibit A (the "Sublet Premises") and
all of Sublessor's right, title and interest therein and/or appurtenant
thereto, all on the terms, covenants and conditions set forth herein;
NOW, THEREFORE, the Sublessor and Sublessee hereby agree to the
foregoing and as follows:
1. Term.
a. Sublessor hereby leases to Sublessee and Sublessee
hereby leases and hires from Sublessor the Sublet Premises upon and subject to
all of
<PAGE> 2
the terms, covenants and conditions provided for in this Sublease. The term of
this Sublease shall commence on the date hereof (the "Commencement Date"), and,
subject to Section 1(b) below, shall expire on the date which is one day prior
to the third anniversary of the Commencement Date (the "Expiration Date"),
unless such term shall expire, be cancelled or terminate on an earlier date
pursuant to the terms of this Sublease or the Lease, in which event such
earlier date shall be deemed to be the Expiration Date. The period from and
including the Commencement Date to and including the Expiration Date is herein
called the "Term."
b. Sublessee shall have the option to extend the Term
of this Sublease for one year from the scheduled Expiration Date, and
thereafter to further extend the Term of this Sublease for additional periods
of one year each (except that in no event shall any such extension period
extend beyond the day before the expiration of the term of the Lease), provided
that in connection with each such extension: (i) Sublessee shall have given
Sublessor not less than nine (9) months' prior written notice thereof; (ii)
this Sublease shall not have been previously terminated; and (iii) at the time
of its giving of such notice and on the Expiration Date of the then current
Term, no default under this Sublease by Sublessee shall have occurred and be
continuing beyond all applicable notice and cure periods. Any renewal option
may be exercised with respect to the entire Sublet Premises only.
2. Rent.
a. Sublessee shall pay to Sublessor annual rent
(hereinafter "Fixed Rent") in amounts equal to 50% of the aggregate Annual
Fixed Rent described in Section 1 of the Lease (including, without limitation,
the CPI increases described therein).
b. All Fixed Rent shall be paid in lawful money of
the United
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<PAGE> 3
States at the office of Sublessor set forth above, or at such other place as
Sublessor may designate in writing, without any notice, demand, set-off or
deduction whatsoever, and shall be payable in advance on the first day of each
and every month during the Term. Sublessee shall pay the first monthly
installment of Fixed Rent in full upon the execution hereof.
c. If the Commencement Date is on other than the
first day of a calendar month, the second installment of Fixed Rent shall be
adjusted appropriately to reflect payment of Fixed Rent for the number of days
then remaining in said first month from and including the Commencement Date.
d. In addition to Fixed Rent, Sublessee shall pay to
Sublessor as additional rent, Sublessee's Proportionate Share (as defined
herein) of the amounts payable by Sublessor in respect of "Real Estate Taxes"
and "Operating Expenses" pursuant to Section 6.2 of the Lease on account of
periods occurring during the Term. "Sublessee's Proportionate Share" shall
mean fifty (50%) percent or, if the Leased Premises are increased or decreased,
the percentage equal to a fraction, the numerator of which is 50% of the
rentable square feet of the Leased Premises as the same are presently
constituted and the denominator of which is the then number of square feet of
rentable area of the Leased Premises as the same may be constituted following
such increase or decrease.
e. Upon receipt by Sublessor of any refund,
adjustment or credit attributable to escalations under Section 6.2 of the
Lease, Sublessee shall be entitled to receive from Sublessor Sublessee's
Proportionate Share of such refund, adjustment or credit, based on the portion
of, and in no event to exceed, such escalations attributable to any payment
made by Sublessee under this Article, but net of Sublessor's reasonable,
out-of-pocket expenses, if any, incurred in obtaining the same.
f. Sublessee shall pay to Sublessor 50% of the
expenses
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<PAGE> 4
incurred by Sublessor with respect to the following items relating to the
Leased Premises: (i) property management; (ii) electricity; (iii) gas; (iv)
facility maintenance; (v) trash removal; (vi) office cleaning and laundry;
(vii) water and sewer charges; (viii) security/fire system; (ix) pest control;
(x) building permits; and (xi) amortization of leasehold improvements;
provided, however, that with respect to each such item, such 50% shall be
subject to periodic review and equitable adjustment based on the then current
utilization of such item by each of the parties. Each party shall have the
right to install, at its own cost and expense, one or more meters to segregate
the measurement of that party's utilities usage and pay the charges incurred in
connection therewith directly to the utility provider and remove the cost
thereof from the list of shared expenses set forth above. It is understood and
agreed that Sublessor has no control over the supply of electrical energy or
the quality, quantity or character of electrical energy supplied to the Sublet
Premises. Unless caused by the negligence or willful misconduct of Sublessor
(or any party for whom Sublessor is legally responsible), Sublessor shall not
be liable or responsible to Sublessee for any loss, damage or expense that
Sublessee may sustain or incur due to any diminution or abatement in the
quantity of electrical energy or any change in the quality or character of such
electrical energy or if such service is no longer available or suitable for
Sublessee's requirements.
g. All sums payable under Sections 2(d) and (f)
hereof shall be hereinafter referred to collectively as "Additional Rent". All
payments of Additional Rent under the terms of this Sublease shall be paid by
Sublessee in lawful money of the United States at the office of Sublessor set
forth above, or at such other place as Sublessor may designate in writing,
without any notice, demand, setoff or deduction whatsoever. Sublessor shall
provide Sublessee, from time to time, with statements specifying the amount and
payment
- 4 -
<PAGE> 5
dates for the installments of Additional Rent due hereunder, accompanied by
copies of any related statements delivered to Sublessor by Landlord under the
Lease and such other evidence of such expenses as Sublessee may reasonably
request, and Sublessee shall pay such Additional Rent in the amounts and on the
dates so specified. Sublessor's failure to render such statement with respect
to any Additional Rent shall not prejudice Sublessor's right to thereafter
render such statement with respect to such Additional Rent or with respect to
any subsequent Additional Rent.
h. If any item of Fixed Rent or Additional Rent is
not paid within five (5) days of the due date of such payment, Sublessee shall
pay to Sublessor a late charge of a sum equal to two (2%) percent per annum
above the then current prime rate charged by Citibank, N.A. or its successor of
the amount unpaid computed from and including the date such payment was due up
to but not including the date of payment. Such late charge shall be paid as
liquidated damages and not as interest or a penalty payment. In addition, such
charge shall be construed as Additional Rent and shall be due and payable with
the next monthly installment of Fixed Rent. The payment of such charge on the
part of the Sublessee or the acceptance thereof by Sublessor shall not be
deemed a waiver of any other remedies available to Sublessor in connection
therewith under the provisions of this Sublease.
i. All amounts payable by Sublessee to Sublessor
pursuant to this Sublease, including, without limitation, Fixed Rent and
Additional Rent, shall be deemed to be and shall constitute rent for all
purposes hereunder and, in the event of any non-payment thereof, Sublessor
shall have all of the rights and remedies provided herein, at law or in equity
for non-payment of rent.
j. The provisions of this Article 2 shall survive the
expiration or earlier termination of this Sublease, but only to the extent that
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<PAGE> 6
such provisions apply to the period beginning on the Commencement Date and
ending on the date of such expiration or earlier termination.
k. The parties shall prepare and deliver to Landlord
at the end of each year of Sublessee's occupancy pursuant to this Sublease a
statement setting forth in line item detail all amounts paid by Sublessee to
Sublessor pursuant to this Sublease. The purpose of such statements shall be
to enable Landlord to determine if Landlord is entitled to receive any portion
of such payments pursuant to Section 8.9 of the Lease. By consenting to this
Sublease, Landlord has acknowledged that payments of Sublessor's amortization
of leasehold improvements pursuant to Section 2(f) (xi) hereof do not
constitute profit to Sublessor.
3. Subordination
a. A true and correct copy of the Lease is attached
hereto and made a part hereof as Exhibit B. Sublessee acknowledges that this
Sublease is subject and subordinate to, and Sublessee accepts this Sublease
subject to all of the terms, covenants and provisions of, the Lease and, to the
extent that the Lease is also subject and subordinate to such instruments, this
Sublease shall be subject and subordinate to all ground and underlying leases
and all mortgages which might now or hereafter affect such leases, the
leasehold estate or estates thereby created or the real property of which the
Sublet Premises forms a part, and to any and all renewals, modifications,
consolidations, replacements and extensions of the Lease and such ground or
underlying leases and mortgages. The provisions of this Section shall be
self-operative and no further instrument of subordination shall be required to
effect such subordination. Sublessor's execution of any certificate or other
instrument of subordination which may be requested to confirm or further effect
such subordination shall also be sufficient to confirm the same subordination
of this Sublease. Notwithstanding
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<PAGE> 7
the foregoing, Sublessee shall promptly execute any certificate or other
instrument of subordination which may be requested to confirm or further effect
such subordination.
b. It is hereby agreed that Sublessor leases the
Sublet Premises to Sublessee upon all of the terms and conditions of the Lease
with respect to the Sublet Premises. Sublessee acknowledges that prior to
executing this Sublease it has received a copy of and read the Lease and is
familiar with the contents thereof. Sublessee covenants and agrees (i) to
perform and observe all of the terms, covenants, agreements and conditions of
the Lease on the part of the tenant thereunder to be performed and observed
with respect to the Sublet Premises to the extent the same are not modified or
amended by this Sublease, (ii) that Sublessee will not do or cause to be done
or suffer or permit any act or thing to be done which is not permitted
hereunder and would or might cause the Lease or the rights of Sublessor, as
tenant thereunder, to be cancelled, terminated or forfeited or which would make
Sublessor liable for any damages, claim or penalty and (iii) to indemnify and
hold Sublessor harmless from and against any and all actions, claims, demands,
damages, liabilities and expenses (including, without limitation, reasonable
attorneys' fees and disbursements and expenses of defense) asserted against,
imposed upon or incurred by Sublessor by reason of (a) any violation caused,
suffered or permitted by Sublessee, its agents, servants, employees or
invitees, of any of the terms, covenants and conditions of the Lease or this
Sublease or (b) any damage or injury to persons or property occurring upon or
in connection with Sublessee's use or occupancy of the Sublet Premises and/or
the buildings in which the Leased Premises are located (the "Buildings"),
except to the extent any of the same may be caused by any act or omission of
Sublessor, its agents or representatives.
c. All of the terms, covenants, conditions and
agreements of
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<PAGE> 8
the Lease are incorporated herein as if Sublessor were the "Landlord"
thereunder (except that where applicable, such references shall also be deemed
include a reference to Landlord), Sublessee were the "Tenant" thereunder and
the Sublet Premises were the "Premises" thereunder, except to the extent the
terms of the Lease are inconsistent herewith or are otherwise inapplicable and
except that the following provisions of the Sublease shall not be binding on
Sublessor and Sublessee: Article 1 (Reference Data) (except to the extent the
same describes "Permitted Uses"), Section 2.1 (Premises), Section 3.1
(Condition and Delivery of the Premises), Section 3.4 (regarding CPI Increases,
as described in the First Amendment) [by this deletion it is intended only that
the Fixed Rent payable by Sublessee pursuant to Section 2(a) hereof (which
includes a calculation incorporating the CPI Increase) shall not be further
increased by the CPI Increase], Section 6.1 (Annual Fixed Rent), Section 6.4
(Security Deposit), Section 7.1 (Landlord's Duties), Section 7.3 (Tenant to Pay
for All Utilities), Section 8.9 (Assignment and Subletting), Section 8.12
(Tenant's Financial Statements), the first sentence of Section 10.1 (Repair and
Restoration of Casualty Loss), the second sentence of Section 10.3 (Termination
for Major Damage or if Damage at End of Term), the second sentence of Section
10.4 (Eminent Domain), Section 14.1 (Notices), Section 14.3 (Limitation of
Landlord's Liability), Section 14.8 (No Broker), Sections 14.12 and 14.13
(regarding Therion Biologics Corporation), Exhibit 1 (Premises), Exhibit 3
(Tenant's Work) and Exhibit 4 (Tenant's Property), Exhibit A to the First
Amendment (Premises) and Exhibit B to the First Amendment (Tenant's Work). In
addition, the following provisions of the Sublease shall be changed as follows:
Section 6.2 (Additional Rent; Taxes and Operating Expenses) shall be modified
as described in Article 2 hereof; the second sentence in Section 10.1 shall
only apply to improvements made by Sublessee; references in Article 10 to
Landlord's
- 8 -
<PAGE> 9
obligation to repair or restore the Premises shall be deemed only to refer to
Landlord, and not to Sublessor; Sublessor shall have no obligation to pay for
any of Sublessee's moving expenses pursuant to Sections 14.15 or 14.16; rather,
Sublessee shall only be entitled to receive Sublessee's Proportionate Share of
any such amounts received by Sublessor from Landlord. Any lengths of time set
forth in the Lease for the doing of acts (as opposed to the payment of any
monies) are changed for the purposes of this Sublease so that the time of
Sublessor is three (3) days more than the time of Landlord and the time of
Sublessee is three (3) days less than the time of Sublessor, as landlord and
tenant, respectively, under the Lease, but in no event shall any such time
period be shortened to less than three (3) days.
d. Sublessee agrees that notwithstanding anything
contained in this Sublease to the contrary, except in connection with any
negligent or intentional act or omission by Sublessor or its agents or
representatives, Sublessor shall not be obligated to perform any service of any
nature whatsoever (including, without limitation, the furnishing of heat,
electrical energy, air conditioning, elevator service, cleaning, window washing
or rubbish removal services), nor shall Sublessor be obligated to make any
repairs, alterations or improvements in, on or about the Sublet Premises or to
comply with any violations of law with respect thereto, nor shall Sublessor be
required to restore the Sublet Premises following the occurrence of a fire or
other casualty, nor shall Sublessor be liable to Sublessee under any
representation or warranty made by the Landlord in the Lease, it being
understood, and Sublessee hereby so agrees, that subject to the provisions of
this Article 3, Sublessee shall look solely to the Landlord for the performance
of any and all such services, the making of all repairs, alterations or
improvements, the compliance with violations of law, the restoration of the
Sublet Premises
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<PAGE> 10
following fire or other casualty, and compliance with all such representations
and warranties, subject in each case to the terms of the Lease and this
Sublease.
e. Notwithstanding the provisions of Section 3(d)
above, if at any time during the Term the services or other obligations
required to be provided or performed by Landlord under the Lease are not
furnished or performed or are improperly furnished or performed, upon receipt
of written request from Sublessee specifying the service or obligation as to
which the Landlord is in default, Sublessor shall cooperate with Sublessee in
seeking Landlord's compliance with its obligations under the Lease with respect
to the Sublet Premises, provided that (i) the Landlord's failure to furnish the
service or to perform the obligation in question does not result from any act
of Sublessee or by reason of any other cause or event which, under the terms of
the Lease or this Sublease, would excuse the Landlord from the furnishing or
performance thereof, and (ii) Sublessor's cooperation with Sublessee will not
cause Sublessor to be in default under the Lease. It is further agreed that
Sublessor shall not be responsible if said efforts of Sublessor shall be
unsuccessful unless Landlord's failure to comply with its obligations under the
Lease results from Sublessor's being in default under the Lease or from
Sublessor's negligence or willful misconduct. Sublessee shall indemnify and
reimburse Sublessor for any and all reasonable out of pocket costs and
expenses, including without limitation reasonable attorneys' fees, incurred by
Sublessor in connection therewith. If Landlord shall default in any of its
obligations to Landlord with respect to the Sublet Premises, Sublessee shall
also be entitled to enforce Sublessor's rights with respect thereto under the
Lease directly against Landlord.
f. Whenever in the Lease it is provided that the
consent of
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<PAGE> 11
the landlord therein (Landlord herein) is required for any action on the part
of the tenant, for the purposes of this Sublease the consent of both Sublessor
and Landlord shall be required. Sublessor's refusal to consent to or approve
anything hereunder shall not be deemed unreasonable if Landlord has refused and
is required to give a corresponding consent or approval under the Lease.
g. Notwithstanding anything to the contrary contained
in this Sublease or in the Lease, (i) Sublessee shall not be deemed to have
assumed, and Sublessee shall not be obligated to perform, any of Sublessor's
obligations under the Lease which obligations are required to be performed
during any period before the Commencement Date or after the Expiration Date of
this Sublease or which are attributable to any period prior to the Commencement
Date or subsequent to the Expiration Date of this Sublease, (ii) except as
otherwise expressly provided in this Sublease, no representation or warranty
made by Sublessor as tenant under the Lease shall be deemed a representation or
warranty of Sublessee, and (iii) in no event shall Sublessee be liable for, or
be required to indemnify, defend or hold Sublessor harmless from or against any
claim, cost, expense, liability, loss or damage arising by reason of any event,
act or omission of any person other than Sublessee or any other party for whom
Sublessee is legally responsible, occurring before the Commencement Date or
after the Expiration Date of this Sublease.
h. Sublessor hereby represents and warrants that (i)
it is not and, to the best of its knowledge, the Landlord is not, in default in
the performance of any of their respective obligations under the Lease; (ii)
except as reflected in Exhibit B attached hereto, the Lease has not been
amended or modified in any respect and is in full force and effect; (iii)
Sublessor has not received any notice from the Landlord of any default by
Sublessor of any of its obligations as tenant under the Lease or from any
person of a violation with
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<PAGE> 12
respect to the Buildings or the Sublet Premises of any law or requirement of
any public authority except violations or defaults which have been cured; and
(iv) on or before the Commencement Date, Sublessor has complied with all
requirements of the Lease which are conditions precedent to this Sublease.
4. Condition of Premises; Alterations; Surrender.
a. Sublessee agrees that it enters into this Sublease
without any representations or warranties, express or implied, by Sublessor,
its agents, representatives, employees, servants, brokers or any other person,
as to the present or future condition of the Sublet Premises or the
appurtenances thereto or any improvements therein or thereon. In connection
therewith, Sublessee represents that it has made a thorough examination and
inspection of the Sublet Premises and is familiar with the conditions thereof
and accepts the Sublet Premises in its "as is" condition on the date hereof,
reasonable wear and tear excepted, and that Sublessor shall not be obligated to
make any repairs or alterations thereto in preparation for Sublessee's
occupancy.
b. Sublessee shall make no installations, alterations
or improvements without the prior written consent of Sublessor and the Landlord
or any other party whose consent is required under the Lease. Sublessor shall
not unreasonably withhold its consent thereto provided Landlord and any other
party whose consent is required shall have consented in writing to such
installation, alterations or improvements. Sublessor shall use its best
efforts to obtain Landlord's consent to any alterations, installations and
improvements proposed by Sublessee with respect to the Sublet Premises that
have been approved by Sublessor. All such installations, alterations or
improvements shall, at Sublessee's expense, be made in compliance with and
subject to Sections 4.1 and 7.6 of the Lease and shall be performed so as to
minimize interference with any other occupant of the balance of the Leased
Premises and the Buildings.
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<PAGE> 13
c. Upon the expiration or earlier termination of the
Term, Sublessee shall quit and surrender to Sublessor the Sublet Premises,
broom clean, in good order and condition, ordinary wear and tear excepted. If
Sublessee shall not quit and surrender the Sublet Premises as required hereby
by the last date of the Term, then it shall indemnify and hold Sublessor
harmless from and against all claims, liabilities, damages and costs (including
without limitation reasonable attorneys' fees but not including consequential
damages) incurred by Sublessor by reason of such failure so to quit and
surrender the Sublet Premises. In addition, Sublessee agrees that if
possession of the Sublet Premises is not surrendered to Sublessor within
twenty-four (24) hours after the date of the expiration or sooner termination
of the Term, then Sublessee shall pay to Sublessor as liquidated damages for
each month and for each portion of any month during which Sublessee holds over
in the Sublet Premises after the expiration or sooner termination of the Term,
a sum equal to 150% of the sum of (i) the Fixed Rent payable under this
Sublease during the last month of the Term and (ii) the average monthly
aggregate of Additional Rent which was payable under this Sublease during the
last six (6) months of the Term. Sublessee's obligation to observe or perform
this covenant shall survive the expiration or earlier termination of the Term.
5. Insurance
a. Sublessee shall provide at the Sublessee's sole
cost and expense, and keep in full force, at all times during the Term of this
Sublease, the insurance required under Article 9 of the Lease, naming
Sublessor, Sublessee and Landlord as insured parties, including without
limitation (i) personal liability insurance and (ii) casualty insurance, but
only with respect to the contents of the Subleased Premises. Sublessee further
covenants and agrees, at its expense, to take out and maintain at all times all
necessary workmen's
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<PAGE> 14
compensation insurance covering all persons employed by the Sublessee in and
about the Sublet Premises.
b. Sublessor shall maintain all other insurance
required under the Lease, except that Sublessor shall not be responsible for
insuring Sublessee's personalty and shall name Sublessee as an additional
insured thereunder.
c. Sublessor and Sublessee agree to use their best
efforts to obtain from their respective insurance companies insuring them
against damage by fire or other casualty to the Buildings and Sublet Premises,
as the case may be, and/or the contents thereof, appropriate endorsements on
their insurance policies pursuant to which the insurance companies waive their
rights of recovery by way of subrogation or agree that such policies shall not
be invalidated should the insured waive in writing, prior to a loss, any or all
right of recovery against any parties for losses covered by such policies, and
so long as such endorsements remain in effect on the respective insurance
policies and do not invalidate such insurance policies, Sublessor and Sublessee
hereby each waive any right of recovery against the other for any loss or
damage to its respective property or the property of others covered by such
insurance. If such waivers of recovery by way of subrogation are not available
or are only available at an additional premium, then the party benefitting
therefrom may waive such requirement, or pay any such additional premium.
d. The Sublessee shall deliver to the Sublessor upon
the execution of this Sublease, a copy of the policies of insurance required
pursuant to this Article, together with proof of payment of the annual premium
therefor. Each policy maintained by Sublessor or Sublessee pursuant to the
terms hereof shall contain an agreement whereby the insurer agrees that such
policy may not be cancelled without at least ten (10) days' prior written
notice
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<PAGE> 15
to Sublessee or Sublessor and Landlord, as appropriate. Each party shall
deliver to the other certificates evidencing the renewal of such insurance
policies (or new policies) not less than ten (10) days prior to the expiration
date of each such policy. All such insurance shall be maintained by Sublessor
or Sublessee with an insurer reasonably satisfactory to the other party.
6. Notices.
a. All notices, demands, requests and other
communications (collectively "Notices") which either party may desire or be
required to give to the other hereunder shall be in writing and shall be served
personally, by overnight mail service, or mailed by registered or certified
mail, return receipt requested, postage prepaid, addressed as follows:
To Sublessor at:
Oncogene Science, Inc.
80 Rogers Street
Cambridge, Massachusetts 02412
Attention: Steven Peltzman
with copies to:
Oncogene Science Inc.
106 Charles Lindbergh Boulevard
Uniondale, New York 11553
Attention: Robert Van Nostrand
and
Squadron, Ellenoff, Plesent & Sheinfeld, LLP
551 Fifth Avenue
New York, New York 10176
Attention: Joel I. Papernik, Esq.
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<PAGE> 16
and
The Trustees of The Cambridge East Trust
c/o Beal And Company Inc.
177 Milk Street
Boston, Massachusetts 02109
Attention: Robert L. Beal
To Sublessee at:
Calbiochem-Novabiochem Corporation
10394 Pacific Center Court
San Diego, California 92121
Attention: Stelios B. Papadopoulos
with copies to:
Willkie Farr & Gallagher
One Citicorp Center
153 East 53rd Street
New York, New York 10022
Attention: Peter H. Jakes, Esq.
and
The Trustees of The Cambridge East Trust
c/o Beal And Company Inc.
177 Milk Street
Boston, Massachusetts 02109
Attention: Robert L. Beal
Notices mailed as aforesaid shall be deemed received three
(3) days after being deposited in the United States mail. Notices personally
delivered shall be deemed received upon such delivery. Notices sent by
overnight mail service shall be deemed received the day after delivery to such
overnight mail service. Either party may change its address for the receipt of
Notices by giving Notice to the other party in the manner aforesaid. Each of
Sublessor and Sublessee shall, within two (2) days after receipt of any notice
served upon it by Landlord pursuant to the terms of the Lease, deliver a copy
of such notice to the other party.
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<PAGE> 17
7. Assignment.
a. Sublessee shall not have the right (i) to assign
or otherwise transfer this Sublease, (ii) to sublet the Sublet Premises or any
portion thereof whether by operation of law or otherwise, (iii) to mortgage,
pledge or encumber this Sublease or the Sublet Premises or any part thereof or
(iv) to advertise or authorize a broker or agent to advertise for a subtenant
or assignee without, in each instance, the prior written consent of Sublessor
(which may be withheld in the sole and absolute discretion of Sublessor) and of
Landlord. Sublessee covenants and agrees that it shall not submit any request
for any such approval to Landlord without first having received Sublessor's
prior written consent. Notwithstanding the fact that the terms and provisions
of Section 8.9 have not been incorporated into this Sublease, it is
acknowledged and agreed that each assignment or subletting under this Article
shall be subject to all of the terms, covenants, agreements and conditions of
this Sublease and the Lease. The consent by Sublessor and Landlord to an
assignment or subletting shall not be construed to relieve Sublessee from
obtaining the express written consent of Sublessor and Landlord to any further
assignment or subletting. No assignment or sublease shall release Sublessee
from primary liability under this Sublease.
b. Sublessor shall not have the right to assign or
otherwise transfer the Lease, or to sublet any portion of the Leased Premises
in which the Sublessee shall have any rights at the time of such transaction
pursuant to that certain Shared Services Agreement or that certain Transitional
Services Agreement, each dated the date hereof and each being between Sublessor
and Sublessee, whether by operation of law or otherwise, without, in each
instance, the prior written consent of Sublessee as to the identity of such
assignee or subtenant (which shall not be unreasonably withheld or delayed, and
which
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<PAGE> 18
consent may not be withheld on the basis of the creditworthiness, net worth or
other similar factors in respect of such party) and, except as otherwise
expressly provided in the Lease, of Landlord. The consent by Sublessee to such
an assignment or subletting shall not be construed to relieve Sublessor from
obtaining the express written consent of Sublessee to any further assignment or
subletting.
c. Each of the parties hereby agrees that in the
event such party (the "Offeror") wants to assign the Lease (in the case of
Sublessor) or this Sublease (in the case of Sublessee), or to sublet all or any
portion of its space in the Buildings, the Offeror shall not so assign or
sublet, or offer to any person the right to so acquire or sublease, unless and
until the Offeror shall have made a "ROFO Offer" (as hereinafter defined) to
the other party (the "Offeree") and the Offeree shall have had the opportunity
to accept such ROFO Offer as set forth below. A "ROFO Offer" is a written
offer given by the Offeror to the Offeree stating that the Offeror desires to
assign its Lease or Sublease or sublet all or a designated portion of its space
for a specified period of time. An assignment of the Lease or the Sublease
pursuant to a ROFO Offer shall be for no consideration, and a sublease of any
space pursuant to a ROFO Offer shall be at the same rent and on the same terms
as those specified herein, pro rated as appropriate. The Offeree shall then
have the right to accept the ROFO Offer by giving the Offeror written notice of
such acceptance within fifteen (15) days after its receipt of the ROFO Offer.
If the Offeree shall so accept the ROFO Offer, then the parties shall
diligently and in good faith document such transaction and seek to obtain such
consents as may be necessary. If the Offeree rejects or fails to timely
respond to the ROFO Offer, then the Offeror shall have the right to seek to so
assign or sublet, subject in all respects to the provisions of Sections 7(a)
and (b) above. If the
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<PAGE> 19
Offeror shall not complete such transaction within six (6) months from the date
of the Offeree's rejection, then the provisions of this Section shall again be
operable with respect to any such transaction. The parties acknowledge that
any assignment or sublease to Sublesee pursuant to a ROFO Offer shall be
subject to Section 8.9 of the Lease. By consenting to this Sublease, Landlord
has acknowledged that any assignment or sublease to Sublesor pursuant to a ROFO
Offer such that Sublessor is restored to possession of all or any portion of
the Sublet Premises shall not require Landlord's consent and shall not be
subject to Section 8.9 of the Lease.
8. No Waiver.
All rights and remedies of Sublessor and Sublessee
enumerated herein and in the Lease shall be cumulative, shall not exclude any
other right or remedy allowed at law or in equity, and said rights or remedies
may be exercised and enforced concurrently. No waiver by Sublessor or
Sublessee of any breach or any agreement or provision herein contained shall be
deemed a waiver of any preceding or succeeding breach thereof or of any other
agreement or provision herein contained. No extension by Sublessor of time for
performance of any obligations or acts shall be deemed an extension of time for
performance of any other obligations or acts.
9. Quiet Enjoyment.
If and so long as Sublessee is not in default beyond all
applicable notice and cure periods of any of its obligations of this Sublease
on its part to be performed, Sublessee shall quietly have and enjoy the Sublet
Premises during the Term of this Sublease without hindrance or molestation by
anyone claiming by, through or under Sublessor, subject, however, to the
exceptions, reservations and conditions hereof. Sublessor covenants and agrees
that, at all times during the Term of this Sublease, Sublessor shall fully and
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<PAGE> 20
faithfully comply with and perform the terms and conditions of the Lease on its
part to be performed. Sublessor further covenants and agrees that it shall not
do anything that would or could cause the Lease to be canceled, terminated,
forfeited, surrendered or modified so as to (a) adversely affect (i) the rights
or obligations of Sublessor thereunder or in and to the Leased Premises or (ii)
the rights or obligations of Sublessee under this Sublease or in and to the
Sublet Premises, or (b) cause an interruption in any of the services to be
provided by the Landlord pursuant to the Lease. Sublessor covenants and agrees
to indemnify and hold Sublessee harmless from and against any and all actions,
claims, demands, damages, liabilities and expenses (including, without
limitation, reasonable attorneys' fees, disbursements and expenses of defense)
asserted against, imposed upon or incurred by Sublessee by reason of (a) any
violation caused, suffered or permitted by Sublessor, its agents, servants,
employees or invitees, of any of the terms, covenants and conditions of the
Lease or this Sublease or (b) any damage or injury to persons or property
occurring upon or in connection with Sublessor's use or occupancy of the Leased
Premises and/or the Buildings, except to the extent any of the same may be
caused by any act or omission of Sublessee, its agents or representatives.
10. Successors and Assigns.
The provisions of this Sublease shall be binding upon and
inure to the benefit of the parties hereto and, subject to the restrictions
above set forth in respect of Sublessee, their respective successors and
assigns.
11. Sublessor.
The term "Sublessor" used in this Sublease shall mean only
the tenant in possession of the Lease so that in the event of any assignment or
transfer of the Lease, the party so assigning or transferring the Lease shall,
provided that its immediate successor shall have a net worth at least equal to
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<PAGE> 21
the remaining obligations of the tenant under the Lease in respect of Annual
Fixed Rent less the remaining obligations of Sublessee in respect of Fixed Rent
hereunder, be and hereby is entirely freed and relieved of all covenants and
obligations of Sublessor hereunder thereafter occurring and it shall be deemed
and construed as a covenant running with the land without further agreement
between the parties and the assigns or transferees of the Lease, that said
assignee or transferee had assumed and agreed to perform any and all covenants
and obligations of Sublessor hereunder thereafter.
12. [INTENTIONALLY OMITTED]
13. Sublessor's Right to Cure.
a. If Sublessee shall at any time fail to make any
payment or perform any act on its part required to be made or performed by the
terms hereof, or if Sublessor shall receive a notice of default from the
Landlord, which default arises out of or in connection with Sublessee's actions
or failure to act under this Sublease, then Sublessor, after five (5) days'
written notice to Sublessee and without waiving or releasing Sublessee from any
obligation of Sublessee contained in this Sublease, may (but shall be under no
obligation to) make any such payment or perform any such act on Sublessee's
part to be made or performed as in this Sublease provided or in order to cure
the default under the Lease and may enter upon the Sublet Premises for that
purpose and take all such other actions as may be necessary therefor.
b. Any and all sums so paid by Sublessor and all
costs and expenses reasonably incurred by Sublessor in connection with the
performance of any such act, including without limitation reasonable attorneys'
fee, together with interest thereon at the rate of 2% per annum above the then
current prime rate charged by Citibank, N.A. or its successor from the
respective dates of Sublessor's making of each such payment or incurring of
each such cost and
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<PAGE> 22
expense shall constitute Additional Rent payable by Sublessee under this
Sublease and shall be paid by Sublessee to Sublessor within five (5) days after
rendition of a bill or statement to Sublessee therefor.
14. Leasehold Estate.
Sublessor cannot grant or convey any greater estate, rights
or interest by virtue of this Sublease than Sublessor has received under the
terms of the Lease, and Sublessee acknowledges that it has not received and
cannot receive any greater estate, rights or interest pursuant to this Sublease
than Sublessor has received under the Lease.
15. Broker.
a. Each of Sublessor and Sublessee warrants and
represents to the other that it has not dealt with any broker or agent in
connection with this Sublease. Each party agrees to indemnify and hold the
other harmless from and against any and all claims, costs, liabilities and
expenses (including without limitation reasonable attorneys' fees) which may be
imposed upon or incurred by or asserted against such other party by any broker
or agent alleging to have dealt with the party making such indemnification in
connection with this Sublease. The provisions of this Article shall survive
the expiration or earlier termination of this Sublease.
16. Use of the Sublet Premises.
Sublessee shall use the Sublet Premises only in accordance
with the uses set forth in Article 1 of the Lease. Sublessee shall obtain, at
its sole cost and expense, all permits, licenses, consents and approvals
required for the operation of its business at the Sublet Premises.
17. Certificates.
Each Party shall, within thirty (30) days after demand,
furnish to the other a certificate, duly acknowledged, certifying (a) that this
Sublease
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<PAGE> 23
is in full force and effect, (b) that it knows of no default hereunder on the
part of the other party or, if it has reason to believe that such a default
exists, the nature thereof in reasonable detail, (c) the amount of the Fixed
Rent and Additional Rent being paid, (d) that this Sublease has not been
modified or, if it has been modified, setting forth the terms and dates of such
modifications, (e) as to the form and content of this Sublease by annexing a
copy hereof to such certificate and (f) to such other matters as may be
reasonably requested by the other party.
18. Condemnation.
If the whole or substantially all of the Sublet Premises or
the access thereto shall be taken or condemned by any competent authority for
any public or quasi-public use this Sublease shall cease and terminate on the
date of taking of possession in such proceeding. If the Lease is terminated
pursuant to Section 10.4 thereof, this Sublease shall cease and terminate on
the date the Lease terminates. Upon a partial taking, unless this Sublease is
terminated as above provided, this Sublease shall continue in force as to the
remainder of the Sublet Premises, and the Fixed Rent and Additional Rent shall
be diminished by the same proportion which rental allocable to the Sublet
Premises under the terms of this Sublease shall abate under the Lease.
19. Damage or Destruction of the Sublet Premises.
If the Lease shall be terminated by either the Landlord or
Sublessor pursuant to Section 10.3 of the Lease, this Sublease shall cease and
terminate on the effective date of the termination of the Lease. Sublessee
shall forthwith vacate and surrender the Sublet Premises on or before said date
and the Fixed Rent and Additional Rent (or the portion thereof, if any, not
abated from the date of the damage or destruction) shall be apportioned as of
said termination date. Sublessee's right to an abatement or apportionment of
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<PAGE> 24
Fixed Rent and Additional Rent or to repairs shall be dependent upon whether or
not Sublessor is entitled to the same under Section 10.3 of the Lease.
20. Operating Agreement.
Sublessor hereby represents and warrants that no portion of
the Sublet Premises constitute any of the Shared Facilities as defined in that
certain Operating Agreement, dated as of October 4, 1991 (the "Operating
Agreement") between AbT Acquisition Corp. (Sublessor's predecessor in interest)
and Therion Biologics Corporation ("Therion"), and that Therion shall have no
rights whatsoever in respect of the Sublet Premises pursuant to such Agreement
or otherwise. Notwithstanding the foregoing to the contrary, this Sublease is
subject and subordinate to the Operating Agreement.
21. Miscellaneous
a. All provisions of this Sublease and any variations
thereof shall be deemed to refer to the masculine, feminine, neuter, singular
or plural, as the identity of the person or persons may require.
b. If any of the terms and provisions of this
Sublease are in violation of or prohibited by any law, statute or ordinance, or
such terms or provisions are found to be unenforceable by any court of
competent jurisdiction, then such terms or provisions shall be of no force and
effect; provided, however, that all of the other terms and provisions of this
Sublease shall continue in full force and effect.
c. The captions or headings of each Article hereof
are inserted only as a matter of convenience and for reference and shall in no
way define, limit or describe the scope of this Sublease or of any Article or
section hereof or the intent of any provision hereof. The use of this Sublease
of such words as "hereof," "hereunder" "herein" and "hereby" are deemed to be
references to this Sublease as a whole.
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<PAGE> 25
d. This Sublease contains the entire agreement
between the parties, and any agreement hereafter made shall be ineffective to
change, modify or discharge it in whole or in part unless such agreement is in
writing and signed by the party against whom enforcement of the change,
modification or discharge is sought. This Sublease shall bind and inure to the
benefit of the parties hereto and their respective successors and, subject to
this Sublease, their respective assigns.
e. This Sublease shall be governed by and construed
in accordance with the laws of the State of Massachusetts without regard to
conflicts of law principles.
f. Sublessor and Sublessee hereby mutually waive, to
the extent permitted by law, the right to a jury trial in any action or legal
proceeding between the parties arising out of this Sublease or Sublessee's
occupancy of the Sublet Premises.
g. Wherever in this Sublease Sublessor's consent or
approval is required, if Sublessor shall delay or refuse such consent or
approval, Sublessee in no event shall be entitled to make, nor shall Sublessee
make, any claim, and Sublessee hereby waives any claim, for money damages
(including, without limitation, by set-off, counterclaim or defense) based upon
any claim or assertion by Sublessee that Sublessor unreasonably withheld or
delayed its consent or approval. Sublessee's sole remedy shall be an action or
proceeding to enforce any such provisions, for specific performance, injunction
or declaratory judgment.
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<PAGE> 26
IN WITNESS WHEREOF, Sublessor and Sublessee have executed this
Sublease as of the date and year first above written.
SUBLESSOR:
ONCOGENE SCIENCE, INC.
By:
------------------------------------
Name:
Title:
SUBLESSEE:
CALBIOCHEM-NOVABICHEM CORPORATION
By:
------------------------------------
Name:
Title:
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<PAGE> 1
EXHIBIT 10.3
NEW PRODUCT LICENSE RIGHT OF FIRST REFUSAL AGREEMENT
THIS NEW PRODUCT LICENSE RIGHT OF FIRST REFUSAL AGREEMENT entered into
on August 2, 1995, by and between ONCOGENE SCIENCE, INC., a Delaware
corporation ("Licensor"), and CALBIOCHEM-NOVABIOCHEM CORPORATION, a California
corporation ("Licensee").
WITNESSETH
WHEREAS, Licensor is a biopharmaceutical company which is engaged in
its Cambridge, Massachusetts facility in both a diagnostics business and a
research products business;
WHEREAS, the research products business markets research reagents,
kits and other research tools to the academic research, industrial research,
and clinical research markets;
WHEREAS, Licensor has entered into an Asset Purchase Agreement (the
"Purchase Agreement"), dated as of June 26, 1995, with Licensee and
Calbiochem-Novabiochem International, Inc., a Delaware corporation, pursuant to
which Licensor has agreed to sell its research products business (the
"Business"), while retaining the right in connection with its diagnostics
business to manufacture and sell research products to the clinical research
market and diagnostic products to the clinical diagnostics market;
WHEREAS, Licensee has agreed to purchase the Business and to conduct
the Business in the academic research, industrial research, and clinical
research markets, recognizing that Licensor will continue to have the right to
manufacture and sell products to the clinical research market and diagnostic
products to the diagnostic market;
WHEREAS, pursuant to the Purchase Agreement, Licensor has agreed to
grant Licensee a right of first refusal to purchase a license to make, use and
sell all research products developed by Licensor's cancer diagnostics business
where the Licensor has the right to grant such a license, and such license
shall be exclusive insofar as such rights pertain to Research other than
Clinical Research and shall be co-exclusive with Licensor insofar as such
rights pertain to Clinical Research;
NOW THEREFORE, in consideration of the mutual covenants and promises
hereinafter set forth, the parties, intending to be legally bound, hereby agree
as follows:
1. Definitions.
(a) The term "Clinical Research" shall refer to Research
engaged in by medical centers, independent reference laboratories and
comprehensive cancer centers where research is performed utilizing, for the
most part, human samples to establish clinical correlation with a diagnosis,
prognosis, or monitoring application.
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<PAGE> 2
(b) The term "Diagnostic" shall refer to diagnosis,
prognosis or other evaluation of patients where such use, if performed in the
United States, would typically require approval by the United States Food and
Drug Administration.
(c) The term "Research" shall refer to the use of
research products in life science research by research companies (including,
without limitation, pharmaceutical and biotechnology companies), institutions
(including medical centers, independent reference laboratories and
comprehensive cancer centers), and universities. The term "Research"
specifically excludes any Diagnostic use.
(d) The term "Research Products" shall refer to research
reagents, kits and other research tools developed by Licensor in its cancer
Diagnostic business.
2. Right of First Refusal.
(a) Licensor shall notify Licensee on a monthly basis of
all Research Products developed during the preceding month ("Licensable
Products"). Licensee shall have a period of thirty (30) days after delivery of
such notice to make further inquiry of Licensor regarding the Licensable
Products and to notify Licensor that it elects to purchase a license from
Licensor to make, use and sell some or all of such Licensable Products (a "New
Product License").
(b) Each time Licensee timely elects to purchase a New
Product License with respect to a Licensable Product, Licensor and Licensee
shall promptly execute and deliver a license agreement with respect to such New
Product License in the form of Exhibit "A" attached hereto (the "Form of New
Product License"), containing (i) such additional information with respect to
the Licensable Product and the intellectual property rights associated
therewith as shall be appropriate to effectuate the purposes of this Agreement
and the Purchase Agreement and (ii) such other additions or modifications as
the parties shall agree. Under each New Product License, Licensee shall pay a
one time license fee of five thousand dollars ($5,000) plus an additional five
percent (5%) royalty on gross sales (in addition to any royalties owed to third
parties) for the greater of the life of the intellectual property licensed or
ten (10) years.
(c) In connection with the notification contemplated by
Section 2(a) hereof, Licensor shall inform Licensee whether any Licensable
Product is of such a nature that Licensor will require Sections 1(a) and 3(a)
of the Form of New Product License (regarding Bulk Quantity sales) to be
included in the New Product License regarding such Licensable Product.
(d) Licensor shall have no obligation to execute and
deliver a license agreement covering any Licensable Product where such
execution and delivery would violate the terms of any agreement or license to
which Licensor is a party or any applicable law or regulation. To the extent
that any such contractual or legal restriction would permit a grant
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<PAGE> 3
of a narrower license than contemplated by this Agreement, appropriate
modifications shall be made to the New Product License Form, and Licensor and
Licensee shall execute and deliver a license agreement in the form of the New
Product License Agreement, as so modified, containing the additional
information and other additions and modifications provided for in Section 2(b).
(e) In the event that Licensee does not timely elect to
purchase a New Product License with respect to a Licensable Product, it shall
have no further right to obtain a license with respect to such Licensable
Product.
(f) Information of Licensor related to Licensable
Products reviewed by Calbiochem pursuant to Section 2(a) hereof, but with
respect to which no New Product License is entered into, shall be referred to
herein as "confidential information." Licensee shall keep confidential (a) any
and all confidential information and shall not use such information for any
purpose unrelated to its consideration of Licensable Products hereunder,
without the prior written consent of Licensor, both during the term of this
Agreement and for a period of ten (10) years following the termination of this
Agreement. Licensee shall take all reasonable steps to insure such
confidential treatment and nonuse. Notwithstanding the foregoing, such
obligations of confidential treatment and nonuse shall not apply to information
which Licensee shall sustain the burden of proving is (a) in the possession of
Licensee prior to receipt thereof from the transmitting party as shown by
Licensee's written records, (b) already available or becomes available to the
public through no fault of Licensee, (c) received by Licensee from a third
party having a right to disclose it, or (d) is required to be disclosed by
subpoena or other legal process or applicable law or regulation.
3. Product Purchases.
(a) In the event Licensee timely elects to purchase a New
Product License from Licensor with respect to a Licensable Product and Licensor
produces an initial batch of such Licensable Product, Licensee shall have the
right to purchase from Licensor, and Licensor shall be obligated to sell to
Licensee, out of such initial batch, a quantity of up to one-half of such
initial batch at a purchase price equal to one hundred seventy-five dollars
($175) per milligram, but not greater than two thousand five hundred dollars
($2,500) for one-half of the initial batch.
(b) In the event Licensee timely elects to purchase a New
Product License from Licensor with respect to a Licensable Product and Licensee
produces an initial batch of such Licensable Product, Licensor shall have the
right to purchase from Licensee, and Licensee shall be obligated to sell to
Licensor, out of such initial batch, a quantity of up to one-half of such
initial batch at a purchase price equal to one hundred seventy-five dollars
($175) per milligram, but not greater than two thousand five hundred dollars
($2,500) for one-half of the initial batch.
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<PAGE> 4
(c) The purchase price set forth in paragraphs (a) and
(b) above shall be adjusted annually, on the anniversary dates of this
Agreement, to reflect an appropriate adjustment for inflation. In the event
that the parties shall be unable to agree on an appropriate inflationary
adjustment, the purchase price shall be adjusted by the amount of increase (or
decrease) in the Consumer Price Index as promulgated by the United States
Department of Labor.
4. Term of the Agreement. This Agreement, and the right to
purchase a New Product License, shall expire five (5) years after the date of
this Agreement or at the time (and in the event) Licensor shall no longer be
engaged in the cancer Diagnostic business. Termination of this Agreement does
not terminate any New Product License, each of which shall continue or
terminate in accordance with its terms.
5. Notices. All notices, requests, demands and other
communications under this Agreement shall comply with the requirements of
Section 15.9 of the Purchase Agreement.
6. Entire Agreement. This Agreement, together with the Purchase
Agreement and the agreements, exhibits, schedules, certificates and instruments
referred to therein or delivered in connection therewith, constitutes the
entire agreement and understanding between the parties hereto with respect to
the transactions contemplated by the Purchase Agreement and supersedes all
prior oral or written agreements and understandings relating to such subject
matter.
7. Modifications and Amendments. The terms and provisions of
this Agreement may be modified or amended only by written agreement executed by
both parties hereto.
8. Waivers and Consents. The terms and provisions of this
Agreement may be waived, or consent for the departure therefrom granted, only
by written document executed by the party entitled to the benefits of such
terms or provisions. No such waiver or consent shall be deemed to be or shall
constitute a waiver or consent with respect to any other terms or provisions of
this Agreement, whether or not similar. Each such waiver or consent shall be
effective only in the specific instance and for the purpose for which it was
given, and shall not constitute a continuing waiver or consent.
9. Assignment. The rights and liabilities under this Agreement
may be assigned by Licensor, and this Agreement shall be binding on and inure
to the benefit of its successors and assigns. Licensee may assign its rights
and responsibilities only with the prior written approval of Licensor, which
Licensor may withhold in its sole discretion; provided, however, that Licensee
may assign this Agreement and its rights and obligations hereunder, without
Licensor's consent, in connection with the sale of all or substantially all of
Licensee's assets related to its research products business.
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<PAGE> 5
10. Benefit. Nothing in this Agreement shall be construed to
create any rights or obligations except between the parties hereto, and no
person or entity shall be regarded as a third-party beneficiary of this
Agreement.
11. Governing Law. This Agreement and the rights and obligations
of the parties hereunder shall be construed in accordance with and governed by
the law of the State of New York, without giving effect to the conflict of law
principles thereof.
12. Severability. If any provision of this Agreement shall be
void as contrary to applicable law, it is agreed that such provision shall be
omitted from this Agreement and that the remainder hereof shall be and remain
in full force and effect as if such omitted provision had not been included
herein.
13. Independence of Parties. Nothing contained in this Agreement
shall be construed to place Licensor and Licensee in a relationship as
partners, joint venturers, employer and employee or principal and agent, nor
shall Licensee be considered in any sense an affiliate of Licensor.
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the day and year first above written.
Licensor: Licensee:
ONCOGENE SCIENCE, INC. CALBIOCHEM-NOVABIOCHEM
CORPORATION
By: /s/ Steven J. Peltzman By: /s/ Stelios B. Papadopoulos
------------------------- ------------------------------
Steven M. Peltzman Stelios B. Papadopoulos
President and Chief Chairman and Chief
Operating Officer Executive Officer
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