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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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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): February 15, 2000
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ECOGEN INC.
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(Exact name of registrant as specified in its charter)
Delaware 1-9579 22-2487948
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(State or Other Jurisdiction of (Commission (I.R.S. Employer
Incorporation or Organization) File Number) Identification No.)
2000 Cabot Boulevard West, Langhorne, Pennsylvania 19047
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (215) 757-1590
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Item 2. Acquisition or Disposition of Assets
On February 15, 2000, Ecogen Inc. (the "Company") completed its
acquisition of certain assets of the sprayable Bt bioinsecticide business of
Mycogen Corporation ("Mycogen"), an affiliate of Dow AgroSciences LLP. The
Company issued to Mycogen 1,351,351 shares (the "Shares") of its common stock
valued at $3,000,000 upon the closing of the transaction.
The transaction included the purchase of Mycogen's Bt bioinsecticides
product registration and data citation rights, trademarks, product inventories
and a license to certain proprietary genes and strains for use in sprayable
bioinsecticides. Prior to the closing, the Company acquired approximately
$391,000 of Mycogen's inventory of sprayable Bt products, under a distribution
agreement effective January 1, 2000. Principal products acquired include: MVP(R)
for control of lepidopteran pests in vines and vegetables, MVP(R)II for control
of lepidopteran pests in trees, nuts, vines and row crops and Mattch(TM) for
control of lepidopteran pests in vegetables. The Company and Dow AgroSciences
LLC also entered into a five-year supply agreement and the companies have agreed
to enter into distribution agreements granting exclusive rights to Dow
AgroSciences to sell the acquired products in Mexico, New Zealand and Australia.
Under the terms of the agreement, Mycogen has agreed to hold the Shares
for a three-year period, except in the event of certain change in control
transactions. Mycogen was granted certain demand and piggyback registration
rights with respect to the Shares. In addition, to the extent the Company issues
additional securities at any time prior to February 15, 2003, Mycogen has the
right of first refusal to purchase securities of the Company so as to maintain
its ownership percentage in the Company. Mycogen also has been granted certain
market price protection rights at the time that Mycogen sells the Shares which
may result in the issuance of additional shares, which may not exceed 20% of the
Company's outstanding shares without stockholder approval.
The transaction will be accounted for as a purchase and, accordingly,
the total purchase price for the assets of $3,440,000 including out of pocket
expenses will be allocated based upon their fair value at the date of
acquisition. The assets acquired include inventory and identifiable intangible
assets including a license to certain genes and strains and product registration
rights. The agreement also provides that the Company has no obligation for past
or future royalties under a 1998 settlement agreement with Mycogen on a patent
infringement dispute. Under purchase accounting, part of the purchase price has
been allocated to other assets for the fully paid up royalty and any amounts
previously accrued under the settlement agreement have been eliminated in
purchase accounting.
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Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(a) Financial Statements of Businesses Acquired
The financial statements required by this item are not included as part
of this Form 8-K. The Company intends to file such financial statements as soon
as practicable, but in no event later than the date which is sixty (60) days
from the date hereof.
(b) Pro Forma Financial Information
The pro forma financial information and other financial information
required by this item are not included as part of this Form 8-K. The Company
intends to file such financial information as soon as practicable, but in no
event later than the date which is sixty (60) days from the date hereof.
(c) Exhibits
<TABLE>
<CAPTION>
Exhibit No. Description
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<S> <C>
10.153 Asset Purchase and License Agreement between Ecogen Inc. and
Mycogen Corporation dated as of February 15, 2000
10.154 Stockholders Agreement between Ecogen Inc. and Mycogen
Corporation dated as of February 15, 2000
10.155 Purchase and Sale Agreement between Ecogen Inc and Dow
AgroSciences LLC dated as of February 15, 2000*
</TABLE>
* Confidential treatment requested as to certain portions.
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SIGNATURE
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.
ECOGEN INC.
By: /s/ James P. Reilly, Jr.
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Name: James P. Reilly, Jr.
Title: Chairman and Chief Executive Officer
Date: March 1, 2000
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Exhibit 10.153
ASSET PURCHASE AND LICENSE AGREEMENT
This Asset Purchase and License Agreement ("Agreement") is made as of
this 15th day of February, 2000, by and between Mycogen Corporation, a
California corporation ("Seller"), and Ecogen Inc., a Delaware corporation
("Buyer") (with Seller and Buyer each being referred to separately as a "Party"
and together as the "Parties").
WHEREAS, Seller has made a determination to exit the business of
registering and marketing Microbial Biopesticides (as defined herein);
WHEREAS, Seller desires to license to Buyer certain technology and Data
(as defined herein), sell to Buyer certain assets, and assign to Buyer certain
rights and obligations relating to such business, and Buyer desires to accept a
license in such technology and Data, to purchase such assets and to assume such
rights and obligations from Seller; and
WHEREAS, the Parties and/or certain of their Affiliates (as defined
herein) are entering, or shall enter, into separate agreements under which,
subject to the consummation of the transactions contemplated by this Agreement,
(i) Seller or one of its Affiliates is agreeing to sell certain Microbial
Biopesticides to Buyer during a limited period, and (ii) Buyer is agreeing to
supply Seller and/or its Affiliates with certain Formulated Products for
distribution in specified areas during a limited period.
NOW, THEREFORE, in consideration of the above recitals and the mutual
agreements set forth below, the Parties agree as follows:
ARTICLE 1 - DEFINITIONS
Except as otherwise indicated in this Agreement, defined terms used in
this Agreement designated by an initial uppercase letter shall have the
following meanings set forth in this Article and may be used in the Agreement in
the singular or plural context:
"Affiliate" means, with respect to Buyer, an entity which directly or
indirectly controls, is controlled by, or is under common control with Buyer,
where for Buyer "control" (including the terms "controls," "controlled by" and
"under common control with") means the possession, direct or indirect, of
greater than fifty percent of the outstanding equity of the Buyer; with respect
to Seller an entity which directly or indirectly controls, is controlled by, or
is under common control with Seller, where for Seller "control" (including the
terms "controls", "controlled by" and "under common control with") means the
possession, direct or indirect, of forty percent (40%) of the outstanding equity
of the Seller, or the possession, direct or indirect, of the power to direct or
cause the direction of the management and policies of an entity, whether through
the ownership of voting securities, by contract, or otherwise.
"Assumed Liabilities" means, from and after the Closing Date, and
except as may be otherwise provided in the Purchase and Sale Agreement, all
liabilities and obligations arising out
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of or related in any manner to the Purchased Assets or the licenses, including,
without limitation, any and all:
(a) liabilities and obligations of Seller for transfer, sales, use and
other taxes (other than income taxes) arising in connection with the
consummation of the transactions contemplated by this Agreement;
(b) liabilities and obligations for obtention, maintenance and support
of any Registrations, including the cost of any and all data required by
governmental authorities to be generated or otherwise obtained to support said
Registrations, except as provided for pursuant to the Data Citation Rights
granted herein;
(c) liabilities and obligations of Seller under the Contracts for the
period from and after the Closing;
(d) liabilities and obligations for registration and maintenance of the
Trademarks;
(e) liabilities and obligations arising out of the sale or use of any
Purchased Assets or Products after the Closing Date, including, without
limitation, product liability involving claims (other than claims arising out of
or related to DAS's breach of its obligations pursuant to the Purchase and Sale
Agreement) for personal injury, property damage, economic loss or otherwise,
whether sounding in tort, breach of warranty or any other theory, arising out of
occurrences involving any such Purchased Asset or Product;
(f) liabilities and obligations for any Purchased Assets arising out of
any modifications or improvements to the Purchased Assets made by or on behalf
of Buyer; and
(g) liabilities and obligations arising out of any condition of or
defect in the Purchased Assets of which Buyer has knowledge at the time of the
occurrences giving rise to such liabilities or obligations.
"Audited Financial Statements" has the meaning set forth in Section
7.4(a) hereof.
"Balance Sheet" means the audited October 31, 1998 balance sheet of
Buyer.
"Balance Sheet Date" means October 31, 1998.
"Bill of Sale" has the meaning set forth in Article 2.
"Bt Toxins" means the Bacillus thuringiensis toxins identified in
Schedule 1
"Business" means the business conducted by Seller for the manufacture,
processing, formulation, marketing, sale and distribution of the Products, but
not including Excluded Assets.
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"Business Day" means any day of the week except Saturday, Sunday and
any legal holiday observed by a national banking association or one of the
parties.
"Buyer" has the meaning set forth in the Preamble.
"Buyer's Registrations" has the meaning set forth in the definition of
Data Citation Rights.
"CellCap Technology" means Seller's technology related to encapsulating
proteins, such as but not limited to those produced from Bacillus thuringiensis,
into cells such as Pseudomonas or other bacterial strains, where such technology
includes but is not limited to US Patent Nos. 4,695,462 and 4,695,455, and trade
secrets and know-how related to the use of such for the production of Products.
"Claim Notice" has the meaning set forth in Article 11.
"Closing" has the meaning set forth in Section 5.1.
"Closing Date" has the meaning set forth in Section 5.1.
"Closing Value" means the average of the last reported sale price of
Buyer's Common Stock on the NASDAQ National Market on each of the Business Days
during the thirty (30) calendar days immediately preceding the date hereof;
provided, however, the Closing Value shall not be less than the price per share
which would result in Seller obtaining more than 19.99% of the outstanding
shares of Buyer as of the close of business on the date hereof.
"Commission" means the Securities and Exchange Commission, or any other
federal agency at the time administering the Securities Act.
"Common Stock" means the common stock, $.01 par value, of Buyer.
"Confidentiality Agreement" means that certain confidentiality
agreement entered into as of September 23, 1999, by and between Buyer and
Seller.
"Contracts" means all rights and obligations of Seller arising during
the period from and after the Closing under the contracts and agreements between
Seller and Third Parties relating to the Business which are set forth in
Schedule 2.
"DAS" means Dow AgroSciences LLC, a Delaware limited liability company,
which is an Affiliate of Seller.
"DAS Distribution Agreements" means three (3) separate agreements by
and between Ecogen and DAS, under which Ecogen will agree to sell, and DAS, will
agree to purchase, the Formulated Products for distribution in the identified
geographies.
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"Data" means the data listed in Schedule 3.
"Data Compensation" has the meaning assigned in Section 4.2.
"Data Citation Rights" means the right to rely upon and cite the Data
for the sole purpose of the obtention, maintenance and support of (a)
Registrations; (b) registrations of Microbial Biopesticides in the Territory
owned by Buyer on the Effective Date of this Agreement ("Buyer's
Registrations"); and (c) registrations of Microbial Biopesticides in the
Territory issued to Buyer after the Effective Date of this Agreement ("New Buyer
Registrations"), so long as Buyer provides Seller with a right of first refusal
to supply the Microbial Biopesticides sold under the Buyer's Registrations and
New Buyer Registrations under terms and conditions essentially similar to those
offered by any third party supplier of such Microbial Biopesticides.
"Direct Claim" has the meaning set forth in Section 11.4(a).
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
or any similar Federal statute, and the rules and regulations of the Commission
issued under such Act, as they each may, from time to time, be in effect.
"Excluded Assets" means the following assets of Seller:
(a) the Plant;
(b) any and all billed and unbilled accounts receivable, notes
receivable and all other claims or rights against Third Parties (other than
rights under the Contracts for products sold or services performed after the
Closing Date), and all proceeds of any of the foregoing;
(c) any and all cash, bank accounts and deposits, marketable
securities, investments and cash equivalents of any type;
(d) any and all inter-company accounts of Seller and claims or rights
of any type against Affiliates of Seller;
(e) all properties and assets of every kind, nature and description,
whether real, personal or mixed, whether tangible or intangible, and wherever
situated, used by Seller or any Affiliate of Seller in connection with, or
otherwise related or historically allocable to, any manufacture, processing, or
formulation of the Products;
(f) all properties and assets of every kind, nature and description,
whether real, personal or mixed, whether tangible or intangible, and wherever
situated, used by Seller or any Affiliate of Seller in connection with, or
otherwise related or historically allocable to, any business or operations other
than the Business;
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(g) all corporate and charter documents, qualifications to conduct
business as a foreign corporation, arrangements with registered agents relating
to foreign qualifications, taxpayer and other identification numbers, seals,
minute books, stock transfer books, blank stock certificates, and other
documents relating to the organization, maintenance, and existence of Seller as
a company;
(h) all Excluded Technology;
(i) all data supporting Registrations and related tolerances, including
but not limited to the Data; and
(j) any of the rights of Seller under this Agreement, the Purchase and
Sale Agreement, the Distribution Agreements, the Confidentiality Agreement or
any related agreement between Seller and Buyer or any of their respective
Affiliates which is entered into on or after the date of this Agreement.
"Excluded Technology" means CellCap Technology and any manufacturing or
fermentation processes and know-how related to Products.
"Field Development Test Studies" means those study reports listed in
Schedule 4.
"Financial Statements" has the meaning set forth in Section 7.4(b)
hereof.
"Formulated Products" means the Seller's end use Microbial Biopesticide
formulations known as MVP, MVP II, Mattch, M-Trac and M-Peril, in each case
meeting the applicable Product Specifications.
"Future Data" has the meaning set forth in Section 3.3 hereof.
"Indemnified Party" has the meaning set forth in Section 11.4.
"Indemnifying Party" has the meaning set forth in Section 11.4.
"Inventories" means any and all Seller-owned inventories of Formulated
Products on hand as of the Closing Date, excluding any and all inventories of
M-Peril.
"Knowledge of Seller" and "Seller's knowledge" mean the actual
knowledge, without independent investigation.
"Licensed Technology" means (1) US Patent Nos. 5,128,130, 5,527,883,
5,840,554, 5,188,960, 5,932,209, and 5,246,852 and (2) all rights that are owned
by Seller in the delta endotoxin contained in Bacillus thuringiensis serovar
japonensis strain buibui Ferm BP-3465 solely for use as a Microbial
Biopesticide.
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"Liens" means all liens, mortgages, charges, security interests,
options to purchase or other encumbrances.
"Losses" means all claims, demands, injunctions, judgments, orders,
decrees, rulings, damages, dues, penalties, fines, costs, reasonable amounts
paid in settlement, liabilities, obligations, taxes, liens, losses, expenses and
fees, including court costs and reasonable attorneys' fees and expenses.
"Microbial Biopesticide" means a topically applied Pesticide that
contains a Bt Toxin as an active ingredient; provided, however, Microbial
Biopesticide shall not include (1) Plant Biopesticides or (2) the use of nucleic
acids or fragments thereof that encode Bacillus thuringiensis proteins,
regardless of whether such nucleic acids or fragments thereof are formulated or
applied to a plant or its environment.
"New Buyer Registrations" has the meaning set forth in the definition
of Data Citation Rights.
"Paid-Up Royalty" has the meaning set forth in Section 4.1.
"Party" has the meaning set forth in the Preamble.
"Person" means an individual, a corporation, a limited liability
company, a partnership, an association, a joint stock company, a trust, a joint
venture, an unincorporated organization, or a government or political
subdivision or any agency or instrumentality of a government or political
subdivision.
"Pesticide" has the meaning presently specified in 7 U.S.C. Section
136(u).
"Plant" means the manufacturing facility operated on Seller's behalf in
connection with the operation of the Business, and located at 2600 Kennedy
Drive, Beloit, Wisconsin.
"Plant Biopesticide" means any Pesticide produced by plants from
nucleic acids or fragments thereof that have been incorporated into or expressed
by a plant.
"Proceeding" means any action, suit, demand, claim or legal,
administrative, arbitration or other alternative dispute resolution proceeding,
hearing or investigation.
"Products" means the Formulated Products and the Bt Toxins utilized as
the active ingredient in Microbial Biopesticides.
"Product Specifications" means the specifications that control the
quality and composition of the Products as set forth in Schedule 5.
"Promissory Note" has the meaning set forth in Section 5.24.
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"Purchase and Sale Agreement" means that certain Purchase and Sale
Agreement substantially in the form attached hereto as Exhibit C, to be entered
into at Closing by and between DAS and Buyer and under which DAS will agree to
sell, and Buyer will agree to purchase, MVP, MVP II, M-Trac and Mattch.
"Purchase Price" has the meaning set forth in Section 4.3.
"Purchased Assets" means all of the right, title and interest that
Seller possesses and has the right to transfer in and to the following assets
used by Seller exclusively in the operation of the Business:
(a) the Trademarks;
(b) the Contracts;
(c) the Inventories;
(d) the Records; and
(e) the Registrations.
where Purchased Assets does not include Excluded Assets.
"Records" means any and all customer lists relating to the Business and
the Field Development Test Studies.
"Registrations" means the Microbial Biopesticide registrations listed
in Schedule 6.
"Restricted Payments" means dividends or other distributions in respect
of the stock of Buyer or any Subsidiary (except intercorporate dividends and
dividends payable solely in stock of Buyer) and purchases, redemptions and other
acquisitions, direct or indirect, of stock of Buyer or any Subsidiary.
"Required Registrations" has the meaning set forth in Section 3.3
hereof.
"SEC Documents" has the meaning set forth in Section 7.4 hereof.
"Securities Act" means the Securities Act of 1933, as amended, or any
similar Federal statute, and the rules and regulations of the Commission issued
under such Act, as they each may, from time to time, be in effect.
"Seller" has the meaning set forth in the Preamble.
"Stockholders' Agreement" means that certain Stockholders' Agreement
between Buyer
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and Seller and dated the date hereof, in substantially the form attached hereto
as Exhibit A.
"Subsidiary" means a subsidiary more than 50 percent of whose
outstanding securities representing the right, other than as affected by events
of default, to vote for the election of directors, is owned by the applicable
party and/or one or more of such party's other majority-owned Subsidiaries.
Subsidiaries of Ecogen shall also include the entities set forth in Schedule 7
hereto.
"Tax" or "Taxes" means any federal, state, local, foreign or other
taxes (including, without limitation, income (net or gross), gross receipts,
profits, alternative or add-on minimum, franchise, license, capital, capital
stock, intangible, services, premium, mining, transfer, sales, use, ad valorem,
payroll, wage, severance, employment, occupation, property (real or personal),
windfall profits, import, excise, custom, stamp, withholding or governmental
charges of any kind whatsoever (including interest penalties, additions to tax
or additional amounts with respect to such items).
"Territory" means the aggregate of all geographies of the world, except
for those areas now included within the country of Japan.
"Third Party" means a person or entity that is neither a Party nor an
Affiliate of a Party.
"Third Party Claim" has the meaning set forth in Section 11.4(a).
"Trademarks" means the trademarks, whether registered or unregistered,
which are owned by Seller and set forth in Schedule 8.
"Unaudited Balance Sheet" has the meaning set forth in Section 7.4(d)
hereof.
"Unaudited Financial Statements" has the meaning set forth in Section
7.4(b) hereof.
"U.S.A." means the United States of America.
ARTICLE 2 - PURCHASE AND SALE OF ASSETS
On and subject to the terms and conditions of this Agreement, Buyer agrees to
purchase from Seller, and Seller agrees to sell, transfer, assign and deliver to
Buyer, all of the Purchased Assets at the Closing. Such sale, transfer and
assignment shall be effected by delivery at the Closing by Seller of (i) a duly
executed bill of sale in the form of Exhibit B (the "Bill of Sale") and (ii)
such other good and sufficient instruments of sale, transfer and assignment as
shall reasonably be necessary to vest in Buyer, subject to the provisions of
this Agreement, all of the right, title and interest of Seller in and to the
Inventories, and Records. Seller also shall transfer the Trademarks,
Registrations and Contracts to Buyer after the Closing pursuant to Sections 8.5,
8.6 and 8.7. Notwithstanding anything in this Agreement that may be to the
contrary, Seller is not
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selling to Buyer, and Buyer is not purchasing from Seller, any of the Excluded
Assets.
ARTICLE 3 - LICENSES
3.1 License of Technology. On and subject to the terms and conditions of this
Agreement, Seller grants to Buyer and Buyer accepts from Seller a limited,
exclusive, fully paid-up royalty (except for royalties that may be payable by
Buyer as provided in Section 3.7), non-sublicensable right under Licensed
Technology to make, have made, use, sell and have sold Bt Toxins solely as
Microbial Biopesticides in the Territory. The Seller does not grant, explicitly
or implicitly, any rights to Excluded Technology. Seller acknowledges and agrees
that in connection with the payment by Buyer of the Purchase Price, Buyer is
deemed to have paid in full all amounts past due, now due or hereafter due to
the Seller pursuant to that certain Settlement Agreement dated as of March 12,
1998 between Seller and Buyer (the "Settlement Agreement"); provided, however,
that notwithstanding the foregoing the Settlement Agreement shall remain in full
force and effect. Except as provided for in Section 3.7 and other than the
payment of the Purchase Price, Buyer shall have no further payment obligations
to Seller with respect to the license granted pursuant to this Section 3.1.
3.2 Data Citation Rights. Seller grants Buyer Data Citation Rights as that term
is defined in Article 1. Seller does not grant Buyer any right to receive hard
copies of the Data, except for Data that Seller determines in its sole
discretion contains no confidential business information relating to the
Excluded Technology. Seller does not grant Buyer the right to receive
compensation from DAS or any third party for rights to the Data. Seller has no
right to authorize others to rely upon or cite the Data. Seller agrees not to
voluntarily grant Data Citation Rights to any third party.
3.3 Future Data Requirements. Except as otherwise provided herein, Buyer shall
be responsible to generate and pay for all studies that are required after
Closing by any regulatory authority within the Territory to obtain, maintain or
support Registrations or New Buyer Registrations ("Future Data"). To the extent
that Buyer's need for Future Data requires access to information or data of
Seller or its Affiliates relating to the manufacturing process of the Products
("Required Information"), Seller shall provide access to the Required
Information of Seller as follows. At Seller's sole discretion, Seller shall
either complete the Future Data studies or contract with an independent, third
party laboratory chosen by Seller to perform the Future Data study(ies). Such
independent, third party laboratory shall, pursuant to execution of a
confidentiality agreement reasonably acceptable to Seller and its Affiliates,
have access to the Required Information held by Seller or its Affiliates. Buyer
shall pay all costs associated with the generation of the Future Data study(ies)
by the laboratory or Seller. However, to the extent that Future Data
incorporates or reveals Required Information, such Future Data shall be owned by
Seller. If such Future Data incorporates or otherwise reveals Required
Information, the Future Data, Buyer shall have Data Citation Rights to such
Future Data pursuant to the terms of Section 3.2.
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3.4 Letters of Authorization. To the extent that any regulatory authority
requires a letter of authorization from Seller for Buyer to rely upon or cite
the Data prior to issuing a New Buyer Registration, and to the extent that Buyer
provides in writing to Seller the names of the Microbial Biopesticides to be
registered in a jurisdiction and the name and address of the appropriate
regulatory authority, Seller will, at no cost to Buyer, provide letters of
authorization to rely upon or cite the Data in order to receive New Buyer
Registrations in the Territory. Seller agrees that, within forty-five (45) days
of receipt of such written request from Buyer, the letters of authorization will
be provided.
3.5 Insect Resistance Management. In order to ensure that resistance management
is properly coordinated between Buyer's Microbial Biopesticides and Seller's
Plant Biopesticides, Buyer shall promptly update Seller on any discussions Buyer
may have with any regulatory authority regarding resistance management of Bt
Toxins as Microbial Biopesticides in the Territory. Such update shall include a
summary of the points discussed with any such regulatory authority and the
outcome of such discussions.
3.6 Distribution Registrations. The Parties recognize that Buyer may be
prohibited from owning registrations with respect to the Formulated Products in
some jurisdictions due to restrictions imposed by local laws and regulations
regarding registration ownership rights. Therefore, Buyer may assign to a Third
Party the rights granted Buyer under Sections 3.2 and 3.4 for the sole purpose
of obtaining and maintaining registrations for Microbial Biopesticides in such
jurisdictions. However, prior to any assignment under this Section 3.6, Buyer
must provide written notice to Seller of its intent to assign, disclose to
Seller the identities of the jurisdiction and the proposed assignee, and obtain
the prior written approval of Seller to such assignment. Such approval shall not
be unreasonably withheld, provided that Buyer and the Third Party assignee
agrees in writing (i) not to transfer any resulting registrations except to
Buyer, and (ii) to take immediate action as necessary to cancel any resulting
registration upon the request of Buyer. Further, at Seller's request, Buyer
shall require a Third Party assignee to cancel such registration if Seller, in
its sole discretion, deems it necessary to protect Seller's ownership interest
in the Data.
3.7 Additional Royalty Payment. If for any reason it is deemed by Seller in its
good faith judgement that royalties are due to Kubota Corporation, pursuant to a
contract in existence at the time of Closing between Seller and Kubota
Corporation, based upon Buyer's sales of a Product that contains a buibui Bt
Toxin as described in Schedule 1, then Seller will notify Buyer of such
royalties. Within 30 days after Seller so notifies Buyer, Buyer shall pay Seller
any and all royalties due to Kubota Corporation based upon Buyer's sales of
Product containing a buibui Bt Toxin. Any such Royalties shall not exceed 5% of
Buyer's net sales of such Product.
ARTICLE 4 - CONSIDERATION
Buyer shall compensate Seller for the rights conveyed hereunder as follows:
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4.1 Paid-Up Royalty. The paid-up royalty for the rights granted hereunder to the
Licensed Technology is Five Hundred Thousand Dollars ($500,000) (the "Paid-Up
Royalty").
4.2 Data Compensation. The sole compensation for the Data Citation Rights is Two
Hundred and Fifty Thousand Dollars ($250,000) (the "Data Compensation").
4.3 Purchase Price. The purchase price for the Purchased Assets (the "Purchase
Price") shall be Two Million Two Hundred and Fifty Thousand Dollars
($2,250,000).*
4.4 Payment. The aggregate consideration to be paid in connection with Sections
4.1, 4.2, and 4.3 shall be paid at Closing in certificates registered in the
name of Seller evidencing shares of Common Stock of Buyer having an aggregate
Closing Value of Three Million Dollars ($3,000,000.00) as provided in Section
5.2.
ARTICLE 5 - CLOSING
5.1 The Closing. The closing of the transactions contemplated by this Agreement
(the "Closing") shall take place via facsimile at the offices of Paul, Hastings,
Janofsky & Walker, 1055 Washington Boulevard, Stamford, Connecticut on February
15, 2000, or such other date as the Parties may mutually determine (the "Closing
Date").
5.2 Deliveries at the Closing. At the Closing, (i) Seller will execute,
acknowledge (if appropriate) and deliver to Buyer the Bill of Sale and any other
instruments required as provided in Section 2.1, (ii) Seller will deliver to
Buyer the certificate referred to in Section 9.1, (iii) Buyer will deliver to
Seller the certificate referred to in Section 9.2, (iv) Buyer and Seller will
execute and deliver the Stockholders' Agreement, and (v) Buyer and Seller will
execute the Purchase and Sale Agreement in the form of Exhibit D, and (vi) Buyer
will deliver to Seller certificates registered in the name of Seller evidencing
shares of Common Stock of Buyer having an aggregate Closing Value of Three
Million Dollars ($3,000,000.00); provided, however, that Buyer shall not, while
its Common Stock is listed for trading on the NASDAQ National Market or the
NASDAQ Small Cap Market, issue to Seller an aggregate number of shares that
equals or exceeds 20% of the number of shares of Common Stock issued and
outstanding immediately
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* The purchase price for the Purchased Assets is allocated among the individual
assets composing the Purchased Assets as follows: Trademarks, Fifty Thousand
Dollars ($50,000); Contracts, Fifty Thousand Dollars ($50,000); Records, Fifty
Thousand Dollars ($50,000); Registrations, One Million Five Hundred Thousand
Dollars ($1,500,000). Seller estimates that the allocated purchase price of the
Inventory is Six Hundred Thousand Dollars ($600,000), priced at the following
per gallon prices: * The purchase price for the Inventory is subject to
adjustment following a physical count of the Inventory by Seller on the Closing
Date. Seller shall promptly advise Buyer of the result of the physical count.
Within thirty (30) days following receipt of the result of the physical count of
the Inventory, (i) if the final purchase price for the Inventory exceeds
$600,000 Buyer shall remit to Seller a check in the amount of such excess; or
(ii) if the final purchase price for the Inventory is less than $600,000, Seller
shall grant Buyer a dollar for dollar credit on subsequent purchases of
Formulated Products under the Purchase and Sale Agreement.
* This information is subject to request for confidentiality.
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prior to the Closing (the "Issuable Maximum") unless, prior to Closing, Buyer
shall have (a) obtained the approval of shareholders of Buyer entitled to vote
thereon ("Shareholder Approval"), if any, as may be required by the rules and
regulations of the NASDAQ Stock Market (or successor thereto) applicable to
approve the issuance of shares in excess of the Issuable Maximum, or (b)
obtained an exemption from any applicable requirement for Shareholder Approval
from the NASDAQ Stock Market. In the event that such Shareholder Approval or the
exemption from any requirement from the NASDAQ Stock Market is not received by
Buyer prior to Closing, Buyer shall issue a promissory note (the "Promissory
Note") to Mycogen (i) having a principal amount equal to the aggregate market
value of those shares Buyer is not able to issue due to the Shareholder Approval
requirement of the NASDAQ Stock Market (or its successor), (ii) maturing on the
first anniversary of the Closing, and (iii) with interest payable on the last
business day of each calendar quarter at the prime rate in effect at Citibank,
N.A., New York, on the last business day of the preceding calendar quarter.
5.3 Assumption of Liabilities. On and subject to the terms and conditions of
this Agreement, Buyer agrees to assume and become responsible for all of the
Assumed Liabilities at the Closing.
ARTICLE 6 - REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Buyer as follows:
6.1 Organization of the Seller. Seller is duly organized, validly existing and
in good standing under the laws of California, U.S.A., and has all necessary
corporate power and authority to carry on its business as now conducted and as
proposed to be conducted and to own or lease and operate its properties.
6.2 Noncontravention. Neither the execution and the delivery of this Agreement,
the Stockholders' Agreement, the Purchase and Sale Agreement and the
Distribution Agreement, nor the consummation of the transactions contemplated
hereby or thereby will (i) violate any constitution, statute, regulation, rule,
injunction, judgment, order, decree, ruling or other restriction of any
government, governmental agency or court to which Seller is subject or any
provision of the charter or bylaws of Seller or (ii) conflict with, result in a
breach of or constitute a default under any contract to which Seller is a party
or by which it is bound or to which any of its assets is subject, except where
the violation, conflict, breach or default would not have a material adverse
effect on the ability of the Parties to consummate the transactions contemplated
by this Agreement. Seller does not need to give any notice to, make any filing
with, or obtain any authorization, consent or approval of any government or
governmental agency in order for the Parties to consummate the transactions
contemplated by this Agreement, the Stockholders' Agreement, the Purchase and
Sale Agreement and the DAS Distribution Agreements.
6.3 Brokers' Fees. Seller has no liability or obligation to pay any fees or
commissions to any broker, finder or agent with respect to the transactions
contemplated by this Agreement, the
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Stockholders' Agreement, the Purchase and Sale Agreement and the Distribution
Agreement for which Buyer could become liable or obligated.
6.4 Title to Purchased Assets. Seller has good and marketable title to the
Purchased Assets, free and clear of all Liens, except (i) Liens which will be
removed at or prior to the Closing, (ii) Liens created by Buyer or any Person
acting on behalf of, under or through Buyer, (iii) Liens for taxes not yet due
and payable or for taxes that the taxpayer is contesting in good faith through
appropriate proceedings, (iv) purchase money Liens and Liens securing rental
payments under leases, (v) other Liens arising in the ordinary course of
business and not incurred in connection with the borrowing of money, and (vi)
imperfections of title and Liens which in the aggregate do not materially
detract from the value of the Purchased Assets, taken as a whole.
6.5 Inventory. The Inventory is in good condition, is not obsolete, is useable
or saleable in the ordinary course of business and, such Inventory was produced
in compliance with the applicable quality control procedures of Seller and
comply with all rules, regulations, laws and the like applicable thereto.
6.6 Trademarks. As of the Closing Date, all Trademarks owned or used by the
Seller which constitute a part of the Purchased Assets are listed, where
applicable, in Schedule 5. To the Knowledge of Seller, Seller owns or has the
right to use, free and clear of all Liens, claims and restrictions, the
Trademarks. The Seller has not been informed that it is infringing upon or
otherwise acting adversely to the right or claimed right of any Person under or
with respect to any Trademark. To the Knowledge of Seller, the Seller is not
obligated or under any liability whatsoever to make any payments by way of
royalties, fees or otherwise to any owner or licensee of, or other claimant to,
any Trademark which constitute a part of the Purchased Assets.
6.7 Right to Grant Licenses. Seller warrants that it has the right to grant the
rights in Article 3 under this Agreement. However, nothing in this Agreement
shall be construed as:
(i) a warranty as to the validity or scope of any patent(s);
(ii) a warranty or representation that anything made, used, sold or
otherwise disposed of under the patent licenses granted in
this Agreement will or will not infringe patents of Third
Parties;
(iii) an obligation to bring or prosecute actions or suits against
Third Parties for infringement of patent(s); and
(iv) A warranty or representation that the Data is, standing alone,
sufficient to support the obtention or maintenance of a
Registration or related tolerance.
6.8 Contracts. To the Knowledge of Seller, (i) each Contract is a valid and
binding
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agreement of Seller and is in full force and effect in all material respects,
and (ii) there exists no material default under any Contract.
6.9 Litigation. Except as described in Schedule 9, there is no action, suit,
investigation, arbitration or proceeding (whether criminal or civil) pending or,
to the best Knowledge of Seller threatened against or affecting Seller or any of
the Purchased Assets or the Licensed Technology, whether or not by or before any
governmental authority, or any basis in fact therefor known to Seller, against
or involving Seller or any of its officers, directors or employees (in their
capacity as such), assets or business, whether at law, in equity or otherwise,
or any other facts or circumstances of which Seller has knowledge that has
reasonable business likelihood of resulting in any claims against, or
liabilities of, Seller. Neither Seller nor any director, officer or employee
thereof is operating under and neither Seller nor the Purchased Assets or the
Licensed Technology is subject to any orders, writs, judgments, injunctions or
decrees of any governmental authority.
6.10 Tax Matters. Seller has timely paid (or will have paid prior to the Closing
Date) all Taxes, and all interest and penalties due thereon and payable by it
prior to the Closing Date, the nonpayment of which would result in a Lien on any
Purchased Asset or the Licensed Technology, and has filed (or will have filed
prior to the Closing Date) all Tax returns with respect to the Business that are
due prior to the Closing Date.
6.11 Investment Representation.
(i) Seller understands and agrees that the Common Stock it will be
acquiring has not been registered under the Securities Act, and that accordingly
it will not be fully transferable except as permitted under various exemptions
contained in or promulgated by the Commission under the Securities Act, or upon
satisfaction of the registration and prospectus delivery requirements of the
Securities Act. Seller acknowledges that it must bear the economic risk of its
investment in the Common Stock for an indefinite period of time since they have
not been registered under the Securities Act and therefore cannot be sold unless
they are subsequently registered or an exemption from registration is available.
(ii) Seller hereby represents and warrants to Buyer that it is
acquiring the Common Stock for investment purposes only, for its own account,
and not as nominee or agent for any other Person, and not with the view to, or
for resale in connection with, any distribution thereof within the meaning of
the Securities Act.
(iii) Absent an effective registration statement under the Securities
Act covering the disposition of the Common Stock, Seller will not sell,
transfer, assign, pledge, hypothecate or otherwise dispose of any or all of the
Common Stock without first providing Buyer with an opinion of counsel (which may
be counsel for Buyer) to the effect that such sale, transfer, assignment,
pledge, hypothecation or other disposition will be exempt from the registration
and the prospectus delivery requirements of the Securities Act and the
registration or qualification requirements of any applicable state securities
laws, except that no such registration or opinion
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shall be required with respect to (i) a transfer not involving a change in
beneficial ownership, or (ii) a sale to be effected in accordance with Rule 144
of the Commission under the Securities Act (or any comparable exemption).
6.12 Disclaimer of Warranty of Assets. EXCEPT AS PROVIDED IN THIS ARTICLE 6,
SELLER IS SELLING AND TRANSFERRING THE PURCHASED ASSETS "AS IS" AND "WHERE IS",
AND ALL OTHER REPRESENTATIONS AND WARRANTIES, EXPRESS AND IMPLIED, INCLUDING ANY
WARRANTY OR MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, ARE EXPRESSLY
DISCLAIMED.
6.13 Disclaimer of Warranty of Licensed Technology and Data and Bt Toxins.
SELLER MAKES NO REPRESENTATIONS NOR EXTENDS ANY WARRANTIES OF ANY KIND, EITHER
EXPRESS OR IMPLIED, INCLUDING WARRANTIES FOR MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE, NOR ASSUMES ANY RESPONSIBILITIES WHATSOEVER WITH RESPECT TO
ANY BT TOXINS OR DATA OR PRODUCTS PRODUCED OR RELATED TO THIS AGREEMENT OR TO
THE USE, SALE, OR OTHER DISPOSITION OF THOSE PRODUCTS.
ARTICLE 7 - REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Seller as follows:
7.1 Organization of Buyer. Buyer is duly organized, validly existing and in good
standing under the laws of the State of Delaware, U.S.A., and has all necessary
corporate power and authority to carry on its business as now conducted and as
proposed to be conducted and to own or lease and operate its properties.
7.2 Authorization of Transaction. Buyer has full power and authority (including
full corporate power and authority) to execute and deliver, and to perform its
obligations under this Agreement, the Stockholders' Agreement, the Purchase and
Sale Agreement and the Distribution Agreement. The execution and delivery of
this Agreement and the performance by Buyer of its obligations hereunder, have
been duly authorized by proper corporate action on the part of Buyer. Upon
execution by the Parties, this Agreement, the Stockholders' Agreement, the
Purchase and Sale Agreement and the Distribution Agreement shall constitute the
valid and legally binding obligation of Buyer, enforceable against Buyer in
accordance with their terms, subject to applicable bankruptcy, insolvency and
similar laws affecting creditors' rights generally.
7.3 Noncontravention. Neither the execution and the delivery of this Agreement,
the Stockholders' Agreement, the Purchase and Sale Agreement and the
Distribution Agreement, nor the consummation of the transactions contemplated
hereby or thereby will (i) violate any constitution, statute, regulation, rule,
injunction, judgment, order, decree, ruling or other restriction of any
government, governmental agency or court to which Buyer is subject or any
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provision of its charter or bylaws or (ii) conflict with, result in a breach of
or constitute a default under any contract to which Buyer is a party or by which
it is bound or to which any of its assets is subject, except where the
violation, conflict, breach or default would not have a material adverse effect
on the ability of the Parties to consummate the transactions contemplated by
this Agreement. Buyer does not need to give any notice to, make any filing with,
or obtain any authorization, consent or approval of any government or
governmental agency in order for the Parties to consummate the transactions
contemplated by this Agreement, the Stockholders' Agreement, the Purchase and
Sale Agreement and the Distribution Agreement.
7.4 Consolidated Financial Statements: Other Information. Buyer has previously
delivered to Seller true, accurate and complete copies of the following
documents, including, the exhibits and schedules thereto:
(a) Annual Report on Form 10-K for the period ended October 31, 1998,
as filed with the Commission, which contains the audited consolidated balance
sheets of Buyer as of October 31, 1997, and October 31, 1998, and audited
consolidated statements of operations, cash flows and stockholders' equity for
the years ended October 31, 1996, October 31, 1997 and October 31, 1998
certified by KPMG LLP and heretofore furnished to Seller (together the "Audited
Financial Statements");
(b) Quarterly Reports on Form 10-Q for the three months ended January
31, 1999, April 30, 1999 and July 31, 1999, as filed with the Commission (the
"Unaudited Financial Statements" and, together with the Audited Financial
Statements, the "Financial Statements"); and
(c) Proxy statement in definitive form for its 1999 annual meeting of
stockholders as filed with the Commission (the "Annual Proxy Statement"); and
Since November 1, 1998, Buyer has filed all reports, schedules, forms,
statements and other documents required to be filed by it with the Commission
pursuant to the requirements of the Exchange Act and the Securities Act,
including, without limitation, all of the documents listed in paragraphs (a),
(b), (c) and (d) above (all of the foregoing filed prior to the date hereof
being hereinafter referred to as the "SEC Documents"). As of their respective
dates, the SEC Documents (as the same may have been amended) complied in all
material respects with the requirements of the Exchange Act and the Securities
Act and the rules and regulations of the Commission promulgated thereunder
applicable to such SEC Documents, and, as of their respective dates, none of the
SEC Documents (when read together with all exhibits included therein and
financial statement schedules thereto and documents incorporated by reference)
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. The Financial Statements were prepared in accordance with generally
accepted accounting principles consistently applied throughout the periods
involved except as may be otherwise indicated in such financial statements or
the notes thereto, and fairly present in all material respects the consolidated
financial condition of Buyer and its Subsidiaries, as of those dates and the
results of their operations for the periods then
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ended.
7.5 Capitalization. The authorized capital stock of Buyer consists of (i)
42,000,000 shares of common stock, par value $.01 per share, of which 10,509,263
shares were issued and outstanding at January 31, 2000, and no additional shares
have subsequently been issued except upon exercise of options, warrants or
convertible securities outstanding as of October 31, 1999 and (ii) 7,500,000
shares of preferred stock, par value $.01 per share, issuable in series, of
which 50,000 shares have been designated Series 1998-C convertible preferred
stock and 32,354 shares of which are issued and outstanding at January 31, 2000,
and of which 39,000 shares have been designated Series 1999-A Convertible
Preferred Stock, and 9500 shares of which are issued and outstanding as of
January 31, 2000. The issued and outstanding shares of Buyer have been duly and
validly issued and are fully paid and nonassessable, and the Purchased Shares,
when issued, will be duly and validly issued and fully paid and nonassessable.
Buyer holds no shares of its common stock or preferred stock in its treasury.
Except as disclosed in Schedule 10, there are no outstanding options, warrants
or other rights in existence to acquire from Buyer any of its shares of capital
stock. Since the Balance Sheet Date there have been no dividends, Restricted
Payments or other distributions declared or paid in respect of the shares of
capital stock of Buyer, except for non-cash preferred stock dividends.
7.6 Absence of Changes. Since the Balance Sheet Date, except as disclosed in the
SEC Documents, the Unaudited Balance or as specified in Schedule 11 hereto,
Buyer and its Subsidiaries have not:
(a) undergone any changes in its condition, properties, assets,
liabilities, business or operations which are in the aggregate materially
adverse;
(b) declared, set aside, made or paid any Restricted Payment;
(c) incurred any indebtedness or issued or sold any debt securities
except for indebtedness incurred in connection with the purchase or lease of
property in the ordinary course of business which in the aggregate is not
materially adverse to Buyer;
(d) mortgaged, pledged, licensed, sublicensed or subjected to any lien,
lease, security interest or other charge or encumbrance any of its properties or
assets, tangible or intangible which in the aggregate materially adversely
affect the financial condition, property, assets, business, or operations of
Buyer and its Subsidiaries taken as a whole;
(e) acquired or disposed of any assets or properties (except for common
stock of Buyer) in any transaction with any officer or director or with any
shareholder owning more than 5% of the outstanding common stock except for
transactions that have a value of less than $60,000;
(f) forgiven or canceled any debts or claims, or waived any rights
having a value of more than $60,000 except in the ordinary course of business
which in the aggregate is not
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materially adverse to Buyer;
(g) suffered any damage, destruction or loss (whether or not covered by
insurance) which in the aggregate materially adversely affects the financial
condition, properties, assets, business or operations of Buyer and its
Subsidiaries; or
(h) incurred other than in the ordinary course of business any
liability or obligation (whether absolute, accrued, contingent or otherwise),
exceeding $1,000,000.
7.7 Brokers' Fees. Buyer has no liability or obligation to pay any fees or
commissions to any broker, finder or agent with respect to the transactions
contemplated by this Agreement for which Seller could become liable or
obligated.
7.8 Disclosure. Neither this Agreement nor any exhibit or schedule hereto, nor
any statement, list or certificate delivered to Seller pursuant to this
Agreement contains any untrue statement of a material fact or omits to state a
material fact necessary in order to make the statements contained herein and
therein in the context in which they were made not misleading.
ARTICLE 8 - POST-CLOSING COVENANTS
The Parties agree as follows with respect to the period following the
Closing.
8.1 General. In case at any time after the Closing any further action is
necessary to carry out the purposes of this Agreement, each of the Parties will
take such further action (including the execution and delivery of such further
instruments and documents) as the other Party reasonably may request, at the
sole cost and expense of the requesting Party (unless the requesting Party is
entitled to indemnification under Article 11).
8.2 Notices and Consents. Each of the Parties will give any notices to, make any
filings with, and use its reasonable efforts to obtain any authorizations,
consents, novations and approvals of governments and governmental agencies in
connection with the matters referred to in Section 6.2 and Section 7.3.
8.3 Export Controls. Notwithstanding anything to the contrary that may be
contained in any provision of this Agreement, neither Buyer nor any of its
Affiliates, or any of its or their respective officers, employees, agents or
representatives, shall import, export or transfer any technical data or the
products of such technical data in violation of any applicable laws or
regulations covering the transfer or disclosure of such technical data or
products.
8.4 Distribution Agreements. As soon as practicable but no later than 60 days
following the Closing, Seller and Buyer will enter into the DAS Distribution
Agreements.
8.5 Transfer of Registration. As soon as practicable but no later than 30 days
following the
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Closing, Seller and Buyer will transfer the Registrations to Ecogen.
8.6 Assignment of Trademarks. As soon as practicable but no later than 30 days
following the Closing, Seller shall assign the Trademarks to Ecogen Bio Inc., a
Delaware Corporation.
8.7 Assignment of Contracts. As soon as practicable but no later than 30 days
following the Closing, Seller shall assign the Contracts to Buyer.
8.8 Authorization of Transaction. Within 45 days following the Closing, Seller
shall utilize its best efforts to obtain and provide Buyer a certificate
executed by the secretary of Seller to the effect that (1) Seller has full power
and authority (including full corporate power and authority) to execute and
deliver, and to perform its obligations under this Agreement, the Stockholders'
Agreement, the Purchase and Sale Agreement and the Distribution Agreement; (2)
the execution and delivery of this Agreement and the performance by Seller of
its obligations hereunder, have been duly authorized by proper corporate action
on the part of Seller; and (3) this Agreement, the Stockholders' Agreement, the
Purchase and Sale Agreement and the DAS Distribution Agreement constitute the
valid and legally binding obligation of Seller, enforceable against Seller in
accordance with their terms, subject to applicable bankruptcy, insolvency and
similar laws affecting creditors' rights generally.
8.9 Consolidated Balance Sheet. Within 30 days following Closing, Buyer shall
provide seller with Buyer's 1999 Balance Sheet.
ARTICLE 9 - CONDITIONS TO OBLIGATION TO CLOSE
9.1 Conditions to Obligation of Buyer. The obligation of Buyer to consummate the
transactions to be performed by it in connection with the Closing is subject to
satisfaction of the following conditions:
(a) the representations and warranties of Seller in Article 6 shall be
true and correct in all material respects at and as of the Closing Date;
(b) Seller shall have performed and complied in all material respects
with all agreements and covenants required to be performed and complied with by
Seller under this Agreement at or prior to the Closing;
(c) no law, statute, order, rule, regulation, executive order,
injunction, stay, judgment, decree or ruling shall have been enacted, entered,
promulgated or enforced by any court of competent jurisdiction or any
governmental or regulatory authority or instrumentality that prohibits the
consummation of any of the transactions contemplated by this Agreement;
(d) No lawsuit shall be pending or threatened seeking to enjoin or
delay the consummation of the transactions contemplated hereby; and
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(e) Buyer shall have received from Seller a certificate in form
reasonably acceptable to Buyer and signed by an appropriate officer of Seller as
to Seller's compliance with the conditions set forth in paragraphs (a) and (b)
of this Section 9.1.
Buyer may waive any condition specified in this Section 9.1 if it
executes a writing so stating at or prior to the Closing.
9.2 Conditions to Obligation of Seller. The obligation of Seller to consummate
the transactions to be performed by it in connection with the Closing is subject
to satisfaction of the following conditions:
(a) the representations and warranties of Buyer in Article 7 shall be
true and correct in all material respects at and as of the Closing Date;
(b) Buyer shall have performed and complied in all material respects
with all agreements and covenants required to be performed and complied with by
Buyer under this Agreement at or prior to the Closing;
(c) no law, statute, order, rule, regulation, executive order,
injunction, stay, judgment, decree or ruling shall have been enacted, entered,
promulgated or enforced by any court of competent jurisdiction or any
governmental or regulatory authority or instrumentality that prohibits the
consummation of any of the transactions contemplated by this Agreement;
(d) No lawsuit shall be pending or threatened seeking to enjoin or
delay the consummation of the transactions contemplated hereby; and
(e) Seller shall have received from Buyer a certificate in form
reasonably acceptable to Seller and signed by an appropriate officer of Buyer as
to Buyer's compliance with the conditions set forth in paragraphs (a) and (b) of
this Section 9.2.
Seller may waive any condition specified in this Section 9.2 if it
executes a writing so stating at or prior to the Closing.
ARTICLE 10 - TERMINATION
10.1 Termination This Agreement may be terminated and the transactions
contemplated by this Agreement may be abandoned at any time prior to the
Closing:
(a) by the mutual written agreement of both Buyer and Seller;
(b) by either Buyer or Seller by giving written notice of such
termination to the other Party, if the Closing shall not have occurred by
February 15, 2000;
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(c) by either Buyer or Seller if there shall be any law that makes the
consummation of the transactions contemplated by this Agreement illegal or
otherwise prohibited or if consummation of the transactions contemplated by this
Agreement, the Stockholders' Agreement, the Purchase and Sale Agreement and the
DAS Distribution Agreement. would violate any nonappealable final judgment of
any court or governmental body having competent jurisdiction; or
(d) by Seller, on the one hand, or Buyer, on the other hand, upon a
material breach by the other Party of any of its obligations under this
Agreement that is not cured within thirty (30) calendar days after receipt by
such other Party of written notice of such breach.
10.2 Effect of Termination. If this Agreement is terminated as permitted under
Section 10.1, such termination shall be without liability to any Party to this
Agreement and, following such termination, no Party shall have any liability
under this Agreement or relating to the transactions contemplated by this
Agreement to any other Party; provided, however, that no such termination shall
relieve any Party that has breached any provision of this Agreement from
liability for such breach and any such breaching Party shall remain fully liable
for (i) any and all Losses incurred or suffered by another Party to this
Agreement as a result of such breach and (ii) any other relief a court deems
appropriate. Sections 10.2, 13.3, 13.4, 13.10 and 13.11 and the provisions of
the Confidentiality Agreement shall survive any termination of this Agreement
pursuant to this Article 10.
10.3 Termination of License Rights. Seller may terminate the rights granted
under this Agreement in Article 3 in the event of (i) a material breach of the
provisions of Article 3 which remains uncorrected sixty (60) days after written
notice from the Seller specifying that such a breach has occurred and describing
it, or (ii) consummation of an action before a court of competent jurisdiction
alleging infringement of third party patents claiming the Bt Toxins or a use of
such Bt Toxins.
10.4 Bankruptcy. Seller may terminate the rights granted under this Agreement
with immediate effect in the event the Buyer is adjudged a bankrupt, makes a
general or other assignment for the benefit of creditors, or if a trustee or
receiver should be appointed on account of the insolvency or other financial
condition of Buyer.
10.5 Rights Upon Termination. In the event of termination of the rights in
Article 3, the Buyer shall certify the destruction of Products within sixty (60)
days of notice of such termination, shall immediately notify registration
authorities that letters of authorization for Data Citation Rights are no longer
valid, and shall immediately cancel Registrations relying upon or citing the
Data.
ARTICLE 11 - INDEMNIFICATION
11.1 Indemnification by Seller. From and after the Closing Date and subject to
the provisions of this Article 11 (including the limitations set forth in
Section 11.5), Seller agrees to indemnify,
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hold harmless and defend Buyer from and against any and all Losses arising out
of or relating:
(a) any inaccuracy or material breach of any representation or warranty
of Seller contained in this Agreement;
(b) any breach of any covenant or agreement of Seller contained in this
Agreement;
(c) any liability of Seller relating to the Business which is not an
Assumed Liability; or
(d) product liability claims relating to Formulated Products
distributed during all periods prior to the Closing
provided, however, that Seller shall have an obligation to indemnify Buyer for
Losses pursuant to this Section 11.1 only to the extent that such Losses are in
excess of (i) any amounts recoverable by Buyer pursuant to any contract to which
Buyer is a party or has assumed pursuant to this Agreement or (ii) any amounts
recoverable by counterclaim or otherwise from any Third Party based on any
claims Buyer has against any such Third Party that reduces the Losses that would
otherwise be sustained (in each case net of the costs of recovery of the
Losses); and, provided further, that all Losses shall be reduced by the amount
of any related net income tax benefits to Buyer.
From and after the Closing Date, the right to indemnification provided
for in this Section 11.1 shall be the exclusive remedy of Buyer with respect to
the transactions contemplated by this Agreement.
11.2 Indemnification by Buyer. From and after the Closing Date and subject to
the provisions of this Article 11, Buyer agrees to indemnify, hold harmless and
defend Seller from and against any and all Losses arising out of or relating to:
(a) any material inaccuracy or material breach of any representation or
warranty of Buyer contained in this Agreement;
(b) any material breach of any covenant or agreement of Buyer contained
in this Agreement; or
(c) any liability or obligation of Seller which is an Assumed Liability
or any other liability or obligation associated with the Purchased Assets or
attributable in any way to Buyer's use of the Purchased Assets after the Closing
Date;
provided, however, that Buyer shall have an obligation to indemnify Seller for
Losses pursuant to this Section 11.2 only to the extent that such Losses are in
excess of (i) any amounts recoverable by Seller pursuant to any contract to
which Seller is a party or (ii) any amounts recoverable by counterclaim or
otherwise from any Third Party based on any claims Seller has against any such
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Third Party that reduce the Losses that would otherwise be sustained (in each
case net of the costs of recovery of the Losses); and provided further, that all
Losses shall be reduced by the amount of any related net income tax benefits to
Seller.
From and after the Closing Date, the right to indemnification provided
for in this Section 11.2 shall be the exclusive remedy of Seller with respect to
Purchased Assets.
11.3 Product Liability. From and after Closing, Buyer shall assume all
liabilities related to Losses arising out of the death of or injury to any
person or persons or out of any damage to property and against any other claim,
proceeding, demand, expense and liability of any kind whatsoever, including
indemnifying Seller, Seller's officers, employees and agents, where claims
result from Buyer's manufacture, use or sale (directly or indirectly) of
Product(s) or Bt Toxins, except where gross negligence or willful misconduct on
the part of Seller is the sole cause of the claim or the claim arises out of or
relates to DAS's breach of its obligations pursuant to the Purchase and Sale
Agreement.
11.4 Indemnification Process. The Party or Parties making a claim for
indemnification under this Article 10 shall be, for the purposes of this
Agreement, referred to as the "Indemnified Party" and the Party or Parties
against whom such claims are asserted under this Article 10 shall be, for the
purposes of this Agreement, referred to as the "Indemnifying Party." All claims
by any Indemnified Party, unless otherwise noted, under this Article 11 shall be
asserted and resolved as follows:
(a) In the event that (i) any claim or Proceeding is asserted or
instituted by any Person other than the Parties to this Agreement or their
respective Affiliates which could give rise to Losses for which an Indemnifying
Party could be liable to an Indemnified Party under this Agreement (such claim
or Proceeding being referred to as a "Third Party Claim") or (ii) any
Indemnified Party under this Agreement shall have a claim to be indemnified by
any Indemnifying Party under this Agreement which does not involve a Third Party
Claim (such claim being referred to as a "Direct Claim"), the Indemnified Party
shall with reasonable promptness send to the Indemnifying Party a written notice
specifying the nature of such claim or Proceeding and the amount or estimated
amount of such claim or Proceeding (which amount or estimated amount shall not
be conclusive of the final amount, if any, of such claim or Proceeding) (a
"Claim Notice"), provided that a delay in notifying the Indemnifying Party shall
not relieve the Indemnifying Party of its obligations under this Agreement
except to the extent that (and only to the extent that) such failure shall have
caused the Losses for which the Indemnifying Party is obligated to be greater
than such Losses would have been had the Indemnified Party given the
Indemnifying Party proper notice.
(b) In the event of a Third Party Claim, the Indemnifying Party shall
control the defense of, and shall be entitled to appoint counsel of the
Indemnifying Party's choice at the expense of the Indemnifying Party to
represent the Indemnified Party and any others the Indemnifying Party may
reasonably designate in connection with, such claim or Proceeding (in which case
the Indemnifying Party shall not thereafter be responsible for the fees and
expenses of
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any separate counsel retained by any Indemnified Party). If requested by the
Indemnifying Party, the Indemnified Party agrees to cooperate with the
Indemnifying Party and its counsel in contesting any claim or Proceeding which
the Indemnifying Party defends or, if appropriate and related to the claim or
Proceeding in question, in making any counterclaim against the Person asserting
the Third Party Claim or any cross-complaint against any Person. No Third Party
Claim may be settled or compromised (i) by the Indemnified Party without the
prior written consent of the Indemnifying Party or (ii) to the extent the
Indemnified Party would not be entitled to indemnification with respect to such
Third Party Claim under this Article 11, by the Indemnifying Party without the
prior written consent of the Indemnified Party.
(c) In the event of a Direct Claim, the Indemnifying Party shall notify
the Indemnified Party within thirty (30) calendar days of receipt of a Claim
Notice whether or not the Indemnifying Party disputes such claim.
(d) Notwithstanding the forgoing specified in this Section 11.4,
including sections (a) through (c), all Third Party Claims related to patent
infringement shall be governed by the provisions in Article 12 of this
Agreement.
11.5 Limitations on Indemnity Payments this Article 11. No claim for
indemnification under this Article 11 may be made by either Party, and no
payment in respect of a claim for indemnification shall be required from either
Party, unless the aggregate amount of Losses against which a Party is entitled
to be indemnified exceeds Fifty Thousand United States dollars (U.S.
$50,000.00), and then only for the amount of such excess. The maximum aggregate
amount of Losses against which a Party shall be entitled to be indemnified by
the other Party under this Article 11 with respect to all claims thereunder
shall be One Million United States dollars (U.S. $1,000,000.00).
11.6 Survival. The representations and warranties of Seller and Buyer contained
in this Agreement shall survive the Closing for the applicable period set forth
in this Section 11.6. Any and all claims and causes of action for
indemnification under this Article 11 arising out of the inaccuracy or breach of
any representation or warranty of Seller or Buyer must be made prior to the
termination of the applicable survival period. All of the representations and
warranties of Seller and Buyer contained in this Agreement and any and all
claims and causes of action for indemnification under this Article 11, Sections
11.1 and 11.2 with respect thereto shall terminate eighteen (18) months after
the Closing Date; it being understood that in the event notice of any claim for
indemnification under Section 11.1(a) or Section 11.2(a) shall have been given
within the applicable survival period, the representations and warranties that
are the subject of such indemnification claim shall survive until such time as
such claim is finally resolved. Notwithstanding the forgoing, the obligations of
indemnification under Section 11.3 shall survive termination of this Agreement
and shall NOT terminate one year after the Closing Date.
ARTICLE 12 - INFRINGEMENT OF LICENSED PATENT(S)
12.1 Third Party Infringement of Licensed Technology. It shall be in Seller's
sole discretion as
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to whether or not to bring an action to abate an alleged infringement by a Third
Party of Licensed Technology, such action shall be in Seller's sole control and
at Seller's sole expense. Seller may request Buyer to provide reasonable
assistance and Seller shall reimburse Buyer for any out of pocket expenses
incurred by Buyer with respect to such assistance. If Buyer's rights as granted
herein are affected by such alleged Third Party infringement, Buyer may request
in writing that Seller abate such infringement. If Seller does not take some
reasonable business steps to abate the alleged infringement within ninety (90)
days, Seller shall reimburse Buyer fifty percent of the royalty defined in
Section 4.1 of this Agreement. Any settlement by Seller shall require the
approval of Buyer; however, Buyer shall not unreasonably withhold its consent.
The Seller shall be entitled to recover all costs including attorneys' fees
associated with bringing such action. After the Seller has recovered all such
costs then Buyer shall be entitled to any remaining compensatory damages, if
any, recovered from such infringement suit. After the Seller has recovered all
such costs and fees, the Parties shall split any punitive damages equally.
12.2 Third Party Suit. In the event that Buyer is sued by a Third Party for
infringement of a Third Party's patent(s) to Bacillus thuringiensis toxins or
genes related to the manufacture, marketing, distribution or sale of Products,
Buyer may request from Seller reasonable assistance in defending such
infringement allegations. Buyer will reimburse Seller for any out-of-pocket
expenses incurred by Seller with respect to such assistance, provided that such
suit is not due to a breach of the Warranties by Seller provided in Section 6
hereof, or is due to gross negligence by Seller or its representatives. The
indemnification provided in this Section 12.2 shall survive termination or
expiration of this Agreement, and is not governed by the indemnification
provisions of Article 11 of this Agreement.
ARTICLE 13 - GENERAL PROVISIONS
13.1 Press Releases and Public Announcements. No Party shall issue any press
release or make any public announcement relating to the subject matter of this
Agreement without the prior written approval of the other Party.
13.2 No Third-Party Beneficiaries. This Agreement shall not confer any rights or
remedies upon any Person other than the Parties and their respective successors
and permitted assigns.
13.3 Taxes. Except as may be otherwise provided in this Agreement, each Party
shall be responsible for its own tax liability and other governmental charges or
assessments, if any, which may result in any applicable jurisdiction from the
transactions contemplated by this Agreement.
13.4 Expenses. Except as may be otherwise provided in this Agreement, each Party
shall be responsible for all expenses incurred by it in connection with the
execution and performance of this Agreement.
13.5 Entire Agreement. This Agreement (including the documents referred to in
this Agreement), the Stockholders Agreement, the Purchase and Sale Agreement,
the DAS
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Distribution Agreements the Confidentiality Agreement and the agreements
contemplated hereby and therein constitute the entire agreement between the
Parties and their respective Affiliates relating to their respective subject
matter and supersede any prior understandings, agreements, or representations by
or between the Parties and such Affiliates, written or oral, to the extent they
related in any way to such subject matter.
13.6 Succession and Assignment. This Agreement shall be binding upon and inure
to the benefit of the Parties and their respective successors and permitted
assigns. Buyer may not assign this Agreement or any of its rights, interests, or
obligations hereunder without the prior written approval of the Seller. Each of
Seller and Buyer may assign this Agreement or any of its rights, interests or
obligations hereunder to one or more of its Affiliates.
13.7 Counterparts. This Agreement may be executed in any number of counterparts,
including by facsimile signature with the same effect as if each of the Parties
had signed the same document. All counterparts shall be construed together and
shall constitute one and the same instrument.
13.8 Construction. The headings in this Agreement are inserted for convenience
and identification only and are not intended to aid in the interpretation of
this Agreement. The Parties have participated jointly in the negotiation and
drafting of this Agreement, and no presumption shall arise favoring or
disfavoring any Party by virtue of the authorship of any of the provisions of
this Agreement. Unless the context requires otherwise, (i) the singular includes
the plural and vice versa, (ii) all exhibits and schedules to this Agreement
form a part of this Agreement, (iii) any reference in this Agreement or to any
particular Article, Section, Exhibit or Schedule shall be deemed to refer to an
Article or Section of this Agreement, or to an Exhibit or Schedule to this
Agreement, as the case may be, (iv) where a term is defined, another part of
speech or grammatical form of that term shall have a corresponding meaning, (v)
the words "include", "includes" and "including" mean include, includes and
including without limitation, and (vi) any reference to any federal, state,
local, or foreign statute or law shall be deemed also to refer to all rules and
regulations promulgated under such statute or law.
13.9 Notices.
(a) Any notice, request, approval or consent provided for or permitted
under this Agreement shall be in writing and shall be given by (i) registered or
certified mail or responsible courier, postage or courier charges prepaid, with
acknowledgment of receipt requested, and addressed as provided below, or
delivering the same by hand to the other Party's address specified below.
(b) Notice addresses are as follows:
(i) Mycogen Corporation
c/o Dow AgroSciences LLC
9330 Zionsville Road
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Indianapolis, Indiana 46268
Attention: General Counsel
(ii) Ecogen Inc.,
2000 Cabot Blvd West
Suite 170
Langhorne, PA 19047
Attention: Chief Executive Officer
(c) Any notice sent in the manner described above shall be deemed to
have been received by the other Party on the date specified in the
acknowledgment of receipt returned to the sender, or as evidenced by the
recipient's acknowledgment of receipt or on the date receipt is acknowledged in
any other manner. Either Party may change its notice address by written notice
to the other Party in accordance with this provision.
13.10 Governing Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of Indiana, without regard to its
provisions concerning conflicts of law.
13.11 Forum for Disputes. The Parties agree that any suit, action or other
proceeding arising out of or relating to this Agreement shall be instituted only
in the United States District Court for the Southern District of Indiana,
Indianapolis Division, or, if that Court does not have jurisdiction, the Marion
County Circuit or Superior Courts located in the City of Indianapolis, Indiana,
or, if none of such courts has jurisdiction, in any other court sitting in
Indiana having jurisdiction. Both Parties irrevocably and unconditionally
consent and submit to the jurisdiction and venue of such courts. The Parties
also agree (i) to accept service of process outside of the State of Indiana in
any matter to be submitted to any such court under this provision, (ii) to waive
any objection to the laying of venue in such court, and (iii) not to claim that
any such suit, action or other proceeding has been brought in an inconvenient
forum.
13.12 Amendments and Waivers. No amendment of any provision of this Agreement
shall be valid unless the same shall be in writing and signed by the Buyer and
the Seller. No waiver by any Party of any default, misrepresentation, or breach
of warranty or covenant hereunder, whether intentional or not, shall be deemed
to extend to any prior or subsequent default, misrepresentation, or breach of
warranty or covenant hereunder or affect in any way any rights arising by virtue
of any prior or subsequent such occurrence.
13.13 Severability. Any term or provision of this Agreement that is invalid or
unenforceable in any situation in any jurisdiction shall not affect the validity
or enforceability of the remaining terms and provisions hereof or the validity
or enforceability of the offending term or provision in any other situation or
in any other jurisdiction.
13.14 Bulk Transfer Laws. Buyer acknowledges that Seller will not comply with
the provisions of any bulk transfer laws of any jurisdiction in connection with
the transactions contemplated by
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this Agreement.
13.15 Terms and Conditions. The terms and conditions of this Agreement and the
Exhibits attached hereto are confidential and shall not be disclosed to a Third
Party without the written consent of the other Party.
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the
date first written above.
MYCOGEN CORPORATION ECOGEN INC.
By: __________________ By: __________________
A.C. Charles Fischer James P. Reilly, Jr.
President Chairman and Chief Executive Officer
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Exhibit 10.154
STOCKHOLDERS' AGREEMENT
This Stockholders' Agreement ("Agreement") is made as of the 15th day
of February, 2000 by and between MYCOGEN CORPORATION, a California corporation
("Mycogen"), and ECOGEN INC., a Delaware corporation ("Ecogen"). Ecogen and
Mycogen are collectively referred to herein as the "Parties".
RECITALS
WHEREAS, Mycogen is receiving 1,351,351 shares of the common stock, one
cent ($.01) par value, of Ecogen as part of the consideration for the sale of
certain assets of Mycogen to Ecogen pursuant to the terms and conditions of that
certain Asset Purchase and License Agreement dated as of February 15, 2000 (the
"Asset Purchase Agreement"), by and between Ecogen and Mycogen; and
WHEREAS, it is a condition precedent to the obligations of the Parties
under the Asset Purchase Agreement that the Parties shall have entered into this
agreement;
NOW THEREFORE, in consideration of the premises, mutual promises,
representations, warranties, covenants and agreements contained herein, and in
the Asset Purchase Agreement, and intending to be legally bound thereby, the
parties agree as follows:
ARTICLE I
DEFINITIONS
As used in this Agreement, the following terms shall have the meanings
specified below:
"Accredited Investors" has the meaning set forth in Rule 501 of
Regulation D under the Securities Act, as the same may be amended from time to
time.
"Affiliate" with respect to a specified Person is another Person that
directly or indirectly through one or more intermediaries, controls, or is
controlled by, or is under common control with, the specified Person. For
purposes of this definition, the term "control" (including the terms "controlled
by" and "under common control with") means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of a Person, whether through the ownership of voting securities, by
contract or otherwise.
"Agreement" means this Stockholders' Agreement, as the same may be
amended from time to time.
<PAGE> 2
"Asset Purchase Agreement" has the meaning set forth in the Recitals
hereto.
"Business Day" means any day of the week except Saturday, Sunday and
any legal holiday observed by a national banking association or one of the
parties.
"Closing" means the closing of the transactions contemplated by the
Asset Purchase Agreement.
"Closing Value" has the meaning set forth in Section 6.1 hereof.
"Commission" means the Securities and Exchange Commission, or any other
federal agency at the time administering the Securities Act.
"Common Stock" means the shares of common stock, par value $.01 of
Ecogen.
"Control Securities" means securities of Ecogen, other than Restricted
Securities, owned by a Holder at the time such Holder would be deemed to be an
Affiliate of Ecogen.
"Ecogen" means Ecogen Inc., a Delaware corporation.
"Ecogen Securities" has the meaning set forth in Section 2.1 hereof.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
or any similar Federal statute, and the rules and regulations of the Commission
issued under such Act, as they each may, from time to time, be in effect.
"Hereto," "hereunder," "herein," "hereof" and the like mean and refer
to this Agreement as a whole and not merely to the specific article, section,
paragraph or clause in which the respective word appears.
"Holder" means Mycogen and, subject to Section 4.8 hereof, any
subsequent holder of outstanding shares of the Common Stock purchased under the
terms of this Agreement.
"Issuable Maximum" has the meaning set forth in Section 6.1 hereof.
"Monsanto Agreement" means that certain Investment Agreement made as of
January 24, 1996, by and between Ecogen and Monsanto Company, a Delaware
corporation.
"Other Selling Stockholders" has the meaning set forth in Section
4.1(c) hereof.
"Person" means a corporation, association, partnership, limited
liability company, individual, trust, unincorporated organization, a government
agency or political subdivision thereof, or any other entity.
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"Preliminary Prospectus" means a preliminary prospectus as contemplated
by Rule 430 or 430A under the Securities Act included at any time in a
Registration Statement.
"Pre-Offering Percentage" has the meaning set forth in Section 2.1
hereof.
"Prospectus" means (i) a prospectus as first filed with the Commission
pursuant to Rule 424(b) under the Securities Act or, (ii) if no such filing is
required, the form of final prospectus included in a Registration Statement at
the effective date thereof or (iii) if a Term Sheet or Abbreviated Term Sheet
(as such terms are defined in Rule 434(b) and 434(c), respectively, under the
Securities Act) is filed with the Commission pursuant to Rule 424(b)(7) under
the Securities Act, the Term Sheet or Abbreviated Term Sheet and the last
Preliminary Prospectus filed with the Commission prior to the time the
Registration Statement became effective, taken together (including, in each
case, the documents incorporated by reference therein pursuant to Item 12 of
Form S-3 under the Securities Act), together with any supplement to any of the
foregoing.
"Register", "Registered" and "Registration", whether or not
capitalized, mean and refer to a registration effected by preparing and filing a
Registration Statement in compliance with the Securities Act and applicable
rules and regulations thereunder, and the declaration or ordering of the
effectiveness of such Registration Statement.
"Registration Statement" means any registration statement of Ecogen
filed under the Securities Act which covers any of the Registrable Securities
pursuant to the provisions of this Agreement, including the Prospectus relating
thereto and all amendments and supplements to such registration statement,
including post-effective amendments, all exhibits and all material incorporated
or deemed to be incorporated by reference in such registration statement.
"Registrable Securities" means the Shares and all such other securities
of Ecogen issued to Mycogen pursuant to stock splits, stock dividends, and
similar distributions in respect of the Shares, whether held by Mycogen or by
any subsequent Holder of such securities.
"Registration Expenses" means all expenses incurred by Ecogen in
compliance with Article IV, including, without limitation, all registration
fees, qualification fees, filing fees, advertising and road show expenses
(excluding advertising and road show expenses incurred by a Holder), printing
expenses, escrow fees, fees and disbursements of counsel for Ecogen, blue sky
fees and expenses, and the expense of any special audits incident to or required
by any such registration (but excluding the compensation of regular employees of
Ecogen, which shall be paid in any event by Ecogen).
"Requesting Holder" means a Holder requesting any registration pursuant
to Section 4.1 hereof.
"Restricted Securities" means the securities of Ecogen acquired by a
Holder from Ecogen or an Affiliate of Ecogen otherwise than pursuant to a public
offering.
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"Securities Act" means the Securities Act of 1933, as amended, or any
similar Federal statute, and the rules and regulations of the Commission issued
under such Act, as they each may, from time to time, be in effect.
"Selling Expenses" means all underwriting discounts and selling
commissions applicable to the sale of Registrable Securities.
"Shareholder Approval" has the meaning set forth in Article VI hereof.
"Shares" means the shares of Common Stock of Ecogen issued to Mycogen
pursuant to the Asset Purchase Agreement or this Agreement.
"13D Group" means any group of persons formed for the purpose of
acquiring, holding, voting or disposing of securities that would be required
under Section 13(d) of the Exchange Act and the related rules and regulations
(as now in effect, and based on present legal interpretations) to file a
statement on Schedule 13D or 13G with the Commission as a "person" within the
meaning of Section 13(d)(3) of the Exchange Act if the group beneficially owned
Ecogen Securities representing more than five percent (5%) of the total combined
voting power of all Ecogen Securities then issued and outstanding.
ARTICLE II
RIGHT OF FIRST REFUSAL
2.1 Right of First Refusal. If on or prior to the third (3rd)
anniversary of the Closing, Ecogen agrees to sell shares of its Common Stock or
other voting securities ("Ecogen Securities") in a private or public offering
other than (i) Ecogen Securities issued to Ecogen employees or directors
pursuant to Ecogen's stock option plans or issued in connection with any stock
options, warrants or other rights in existence as of the date of this Agreement,
(ii) upon the conversion or exchange of convertible or exchangeable securities
outstanding as of the date of this Agreement, (iii) an equity investment in
Ecogen by the other party to, or partner in, any license agreement, research and
development agreement, distribution agreement, joint-venture or other similar
corporate alliance, provided that such equity investment is made as a condition
to Ecogen's good faith agreement to enter into such license agreement, research
and development agreement, distribution agreement, joint-venture or other
similar corporate alliance, (iv) in connection with a merger or acquisition, or
(v) to any underwriter, placement agent or financial advisor in connection with
any financing or other transaction by Ecogen, and provided Mycogen still owns
all of the Shares at the time of such private or public offering, Mycogen shall
have the right, but not the obligation, to acquire upon the same terms and
conditions applicable to such private or public offering all or any portion of
such Ecogen Securities sufficient for Mycogen to maintain after the offering the
same percentage of ownership of issued and outstanding Ecogen Securities that
Mycogen possessed immediately prior to the offering (the "Pre-Offering
Percentage").
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2.2 Private Offering. With respect to a private offering, Ecogen shall
no later than five (5) Business Days after the execution of any agreement
entered into in connection with such private offering notify Mycogen in writing
of the proposed offering (a "Notice") which Notice shall include the description
of the securities proposed to be issued by Ecogen and specify the number, price
and payment and other terms, together with any letter of intent and the final
contract, if available. Mycogen shall have ten (10) Business Days from the date
of receipt of Ecogen's notice in which to advise Ecogen whether Mycogen elects
to exercise its rights under Section 2.1. If Mycogen does not respond, or if
Mycogen indicates that it will not exercise its rights, Mycogen shall be
considered irrevocably to have waived its rights under Section 2.1 with respect
to the private offering. If Mycogen timely advises Ecogen that Mycogen will
exercise its rights under Section 2.1, Mycogen shall have the right to acquire
all or any portion of the necessary amount of the Ecogen Securities to maintain
Mycogen's Pre-Offering Percentage at the price and upon the terms (other than
any registration rights which are on terms different than those granted
hereunder) specified in the Notice. Closing shall be in accordance with the
terms of the private offering agreement; provided, however, that if such
agreement provides for the payment of consideration other than cash, Mycogen
shall have the right to purchase its Pre-Offering Percentage of shares for the
cash equivalent amount of such other consideration. Mycogen shall make such
investment representations to Ecogen and shall provide Ecogen with such other
documentation at closing as is reasonably required by Ecogen to comply with
applicable securities laws. The cash equivalent amount referred to above shall
be determined by an independent third party reasonably agreed to by Mycogen and
Ecogen (the costs and expenses of which shall be paid by Ecogen).
2.3 Public Offering. With respect to a public offering, Ecogen shall
notify Mycogen no later than five (5) Business Days after Ecogen has entered
into a letter of intent with its underwriters, and shall provide Mycogen with a
copy of any letter of intent with its underwriters. Mycogen shall have ten (10)
Business Days from the date of receipt of Ecogen's notice in which to advise
Ecogen whether Mycogen elects to exercise its rights under Section 2.1. If
Mycogen does not respond or if Mycogen indicates that it will not exercise its
rights, Mycogen shall be considered irrevocably to have waived its rights under
Section 2.1 with respect to the public offering. If Mycogen timely advises
Ecogen that Mycogen desires to retain its rights under Section 2.1, then when
Ecogen files a registration statement containing a preliminary prospectus with
the Commission, Ecogen shall provide Mycogen with copies of the preliminary
prospectus and all subsequent amendments. Mycogen shall have ten (10) Business
Days from its receipt of the preliminary prospectus in which to exercise its
rights under Section 2.1 by making an offer to acquire all or any portion of the
necessary amount of Ecogen Securities to maintain Mycogen's Pre-Offering
Percentage based on the price and the other terms contained in the final
prospectus, except that the price to be paid by Mycogen shall be net of any
underwriting discount and selling commissions. No such offer to buy shall be
accepted prior to the time that the registration statement becomes effective.
The registration statement shall indicate that Mycogen has anti-dilution rights
to purchase Ecogen Securities on the terms offered to the public.
2.4 Limitations. Notwithstanding the preceding provisions of this
Article II, Ecogen shall not be required to issue any fractional shares as a
result of Mycogen's exercise of its rights under Section 2.1. Ecogen shall not
be required to transfer any Ecogen Securities to Mycogen
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under this Article II, if to do so would result in the violation of any
applicable law, rule or regulation.
ARTICLE III
LIMITATION ON TRANSFER
3.1 Limitation on Transfer. Prior to the third (3rd) anniversary of the
Closing, Mycogen shall not directly or indirectly offer for sale, or transfer,
any of the Shares. Notwithstanding the foregoing, Mycogen may sell Shares
without limitation in the following situations:
(a) sales or transfers to Affiliates of Mycogen;
(b) private placements of Shares with Accredited Investors;
(c) if any of the following events occurs:
(i) a tender or exchange offer is made by any Person or 13D
Group (other than an Affiliate of or Person acting in concert
with Mycogen) to acquire Ecogen Securities and/or other
securities of Ecogen that, if added to the Ecogen Securities
and other securities of Ecogen already owned by that Person or
13D Group, would represent more than forty percent (40%) of
the total combined voting power or profit and loss
participation of all Ecogen Securities and other securities of
Ecogen issued and outstanding;
(ii) there is public disclosure that Ecogen Securities and/or
other securities of Ecogen representing more than forty
percent (40%) of the total combined voting power or profit and
loss participation of all Ecogen Securities and other
securities of Ecogen issued and outstanding have been acquired
or are proposed to be acquired by any Person or 13D Group
(other than an Affiliate of or Person acting in concert with
Mycogen);
(iii) any Person or 13D Group (other than an Affiliate of or
Person acting in concert with Mycogen) shall beneficially own
Ecogen Securities representing more than forty percent (40%)
of the total combined voting power of all issued and
outstanding Ecogen Securities;
(iv) at any election or series of elections, persons not
proposed for nomination or nominated by the management of
Ecogen are elected as directors of Ecogen, and together
constitute fifty percent (50%) or more of Ecogen's Board of
Directors; or
(v) any Person or 13D Group (other than an Affiliate of or
Person acting in concert with Mycogen) solicits or receives
valid proxies for the election of
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Ecogen's Board of Directors representing an aggregate of forty
percent (40%) or more of the total combined voting power of
all Ecogen Securities issued and outstanding.
or;
(d) with the prior approval of Ecogen, which will not unreasonably be
withheld.
3.2 Further Condition. No sale or transfer of Shares pursuant to this Section
3.1, except for transfers pursuant to Section 3.1(c), shall be effective unless
the transferee agrees to be bound by the limitations on transfer contained in
this Section 3.1.
ARTICLE IV
REGISTRATION RIGHTS
4.1 Requested Registration.
(a) Request for Registration. Subject to Article III, Holders of
Registrable Securities shall have the right to request (with such requests in
writing and stating the number of shares of Registrable Securities to be
disposed of and the intended method of disposition of shares by such Holders) up
to three (3) registrations on Form S-3 at Ecogen's expense and an unlimited
number of additional registrations on Form S-3 at the selling Holder's expense,
provided that (i) a request for registration is made by Holders of at least
fifty percent (50%) of the aggregate Registrable Securities held on such date;
and (ii) the requests for additional registrations are made by Holders of at
least twenty percent (20%) of the Registrable Securities, and (iii) such
Registrable Securities have an aggregate offering price of at least $1,000,000
or represent all of the Registrable Securities of the Holders held on such date,
and Ecogen shall promptly comply with any such request, subject only to the
following:
(i) Ecogen shall not be required to effect a registration
pursuant to this Section 4.1 prior to the first anniversary of
the Closing unless Mycogen otherwise has a right pursuant to
Section 3.1 (c) hereunder to sell Registrable Securities
before such date.
(ii) Ecogen shall not be required to effect a registration
pursuant to this Section 4.1 within one hundred eighty (180)
days after the effective date of the last such registration
pursuant to this Section 4.1.
(iii) Ecogen shall not be required to effect a registration in
any particular jurisdiction in which Ecogen would be required
to execute a general consent to service of process in
effecting such registration, qualification or compliance,
unless Ecogen is already subject to service in such
jurisdiction and except as may be required by the Securities
Act or applicable rules or regulations thereunder.
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(iv) Ecogen shall not be required to effect a registration for
a period of not more than ninety (90) days immediately
following the delivery of a certificate signed by the
President of Ecogen to the Requesting Holders stating that, in
the good-faith judgment of the Board of Directors of Ecogen,
it would be seriously detrimental to Ecogen and its
shareholders for a Registration Statement to be filed on or
before the date filing would otherwise be required hereunder;
provided, however, that Ecogen may not utilize this right more
than once in any twelve (12) month period and Ecogen may not
exercise this right based on the fact that Ecogen has recently
registered any of its securities for the account of another
security holder or holders exercising their respective demand
registration rights.
If Ecogen cannot qualify for registration on Form S-3, then Ecogen
shall effect any registration required or requested by the Holder on Form S-1,
or such other appropriate form, in which event this Section 4.1 shall apply in
all respects as if the words "Form S-3" were replaced by the words "Form S-1" or
the appropriate designation for such other form.
(b) Notice of Inclusion. Ecogen shall give written notice to all
Holders of Registrable Securities of the receipt of a request for registration
pursuant to this Section 4.1 and shall provide a reasonable opportunity for
other Holders to participate in the registration; provided, however, that, if
the registration is for an underwritten offering, then the terms of Section
4.1(c) hereof shall apply to all participants in such offering. Subject to the
foregoing, Ecogen shall use its best efforts to effect promptly the registration
of all shares of Registrable Securities on Form S-3 to the extent requested by
the Holder or Holders thereof for purposes of disposition.
(c) Underwriting. If the Requesting Holders intend to distribute the
Registrable Securities covered by their request by means of an underwriting,
then they shall so advise Ecogen as a part of their request made pursuant to
this Section 4.1 and Ecogen shall include such information in the written notice
referred to in Section 4.1(b) hereof. The right of any Holder to registration
pursuant to this Section 4.1 shall be conditioned upon such Holder's
participation in such underwriting and the inclusion of such Holder's
Registrable Securities in the underwriting to the extent requested and to the
extent provided herein.
Ecogen shall (together with all Holders proposing to distribute their
securities through such underwriting) enter into an underwriting agreement in
customary form with the representative of the underwriter or underwriters of
recognized national standing, selected for such underwriting by a majority in
interest of the Requesting Holders and reasonably acceptable to Ecogen.
Notwithstanding any other provision of this Section 4.1, if the representative
advises the Requesting Holders in writing that marketing factors require a
limitation on the number of shares to be underwritten, then the Requesting
Holders shall so advise all Holders, and the number of shares of Registrable
Securities that may be included in the registration and underwriting shall be
allocated first among all Holders thereof in proportion, as nearly as
practicable, to the respective amounts of Registrable Securities held by such
Holders at the time of filing the Registration Statement. No Registrable
Securities excluded from the underwriting by reason of the underwriter's
marketing limitation shall be included in such registration.
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If any Holder of Registrable Securities disapproves of the terms of the
underwriting, then such person may elect to withdraw therefrom by written notice
to Ecogen, the underwriter and the Requesting Holders. The Registrable
Securities and/or other securities so withdrawn shall also be withdrawn from
registration; provided, however, that, if, by the withdrawal of such Registrable
Securities, a greater number of Registrable Securities held by other Holders may
be included in such registration (up to the maximum of any limitation imposed by
the underwriters), then Ecogen shall offer to all Holders who have included
Registrable Securities in the registration the right to include additional
Registrable Securities in the same proportion used to determine the underwriter
limitation in this Section 4.1(c).
If the underwriter has not limited the number of Registrable Securities
to be underwritten, then Ecogen and its executive officers, and such other
Persons as are determined by the Board of Directors, their successors, and their
assigns ("Other Selling Stockholders"), may include securities for their own
account in such registration if the underwriter so agrees and if the number of
Registrable Securities held by the Holders that would otherwise have been
included in such registration and underwriting will not thereby be limited for
any reason, including but not limited to the price for which the Registrable
Securities will be sold. To the extent that the underwriter wishes to limit the
number of shares to be included in the registration on behalf of Ecogen and the
Other Selling Stockholders, the shares of common stock to be registered held by
the Other Selling Stockholders shall be excluded from such offering prior to
excluding any shares held by Ecogen and those held by Ecogen shall be excluded
prior to excluding any Registrable Securities held by the Holders.
4.2 Ecogen Registration.
(a) Notice and Inclusion. Subject to Article III, if, at any time after
the Closing until the tenth (10th) anniversary of the Closing, Ecogen shall
determine to register any of its securities for its own account, other than a
registration relating solely to employee benefit plans, or a registration
relating solely to a Commission Rule 145 transaction, Ecogen shall:
(i) promptly give to each Holder written notice thereof (which
shall include a list of the jurisdictions in which Ecogen
intends to attempt to qualify such securities under the
applicable blue sky or other state securities laws); and
(ii) include in such registration (and any related
qualification under blue sky laws or other compliance), and in
any underwriting involved therein, all Registrable Securities
specified in a written request or requests, within ten (10)
Business Days after receipt of the written notice from Ecogen,
by any Holder or Holders.
(b) Underwriting. If the registration of which Ecogen gives notice is
for a registered public offering by Ecogen of its securities through an
underwriting, then Ecogen shall so advise the Holders as a part of the written
notice given pursuant to Section 4.2(a)(i) hereof. In such event, the right of
any Holder to registration pursuant to this Section 4.2 shall be conditioned
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upon such Holder's participation in such underwriting and the inclusion of such
Holder's Registrable Securities in the underwriting to the extent provided
herein. All Holders proposing to distribute their securities through such
underwriting shall (together with Ecogen, and all the Other Selling Stockholders
distributing their securities through such underwriting) enter into an
underwriting agreement in customary form with the underwriter or underwriters
selected for underwriting by Ecogen. Notwithstanding any other provision of this
Section 4.2, if the underwriter determines that marketing factors require a
limitation on the number of shares to be underwritten, then the underwriter may
exclude from such registration and underwriting some or all of the Registrable
Securities held by the Holders or the stock held by Other Selling Stockholders
in accordance with this Section 4.2(b). Ecogen shall so advise all Holders and
all Other Selling Stockholders distributing their securities through such
underwriting, and (i) as to the first registration in which Holders are entitled
to participate pursuant to this Section 4.2, the number of Registrable
Securities and other securities that may be included in the registration and
underwriting shall be allocated among all Holders thereof on the basis that
shares held by all the Other Selling Stockholders who are not Holders shall
first be excluded to the extent required and, if further exclusion is necessary,
shares held by the selling Holders shall then be excluded; provided, however,
that, as among the respective Other Selling Stockholders as a group on the one
hand and the Holders as a group on the other hand suffering such exclusion, the
exclusion shall be in proportion, as nearly as practicable, to the amount of
securities entitled to inclusion in such registration held by each of the Other
Selling Stockholders as a group and each of the Holders at the time of filing
the Registration Statement; and (ii) as to all subsequent registrations, the
number of shares of Registrable Securities and other securities that may be
included in the registration and underwriting shall be allocated among all Other
Selling Stockholders and the Holders in proportion, as nearly as practicable, to
the respective amounts of securities entitled to inclusion in such registration
held by all such Other Selling Stockholders and Holders at the time of filing
the Registration Statement. For purposes of the apportionment provisions in
clause (i) above, for any selling Holder that is a partnership or corporation,
the partners, retired partners, and shareholders of such Holder, the estate and
family members of such partners and retired partners, and any trusts for the
benefit of any of the foregoing persons shall be deemed to be a single "selling
Holder," and any pro rata reduction with respect to such selling Holder shall be
based upon the aggregate number of shares carrying registration rights owned by
all entities and individuals included in such "selling Holder," as defined in
this sentence. If any Other Selling Stockholder or Holder disapproves of the
terms of any such underwriting, he may elect to withdraw therefrom by written
notice to Ecogen and the underwriter. Any securities excluded or withdrawn from
such underwriting shall be withdrawn from such registration. Notwithstanding the
foregoing, the registration rights of the Holders pursuant to this Section 4.2
shall be subject to the registration rights of Monsanto Company and "Holders"
(as defined in the Monsanto Agreement) under Section 7.2 of the Monsanto
Agreement.
4.3 Expenses of Registration. All Registration Expenses incurred in
connection with any registration, qualification or compliance pursuant to this
Article IV shall be borne by Ecogen; provided, however, that the Registration
Expenses for the fourth and all subsequent registrations under Section 4.1(a)
hereof requested by the Holders shall be borne by the Requesting Holders pro
rata on the basis of the number of their shares so registered. All Selling
Expenses relating to the securities registered by Holders and, if applicable,
Other Selling Stockholders, and fees and
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disbursements of counsel, shall be borne by the Holders or the Other Selling
Stockholders, as the case may be, of such securities pro rata on the basis of
the number of their shares so registered.
4.4 Registration Procedures.
(a) Ecogen shall use its best efforts to register or qualify the
Registrable Securities covered by a Registration Statement under such other
securities or blue sky laws of such United States jurisdictions as Holder shall
reasonably request and do any and all acts and things which may be necessary or
desirable to enable Holder to consummate the public sale or other disposition in
such jurisdictions; provided, however, that Ecogen shall not be required in
connection therewith or as a condition thereto to qualify to do business or file
a general consent to service of process in any such jurisdictions.
(b) Ecogen represents and warrants that, on the date of its
effectiveness, the Registration Statement will comply in all material respects
with the applicable requirements of the Securities Act and the rules thereunder,
including without limitation Rule 415; on the date of its effectiveness, the
Registration Statement will not contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary in
order to make the statements made therein not misleading; provided, however,
that no representation is made by Ecogen with respect to information relative to
any Holder; and the Prospectus will not include any untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading; provided, however, that no representation is made by Ecogen with
respect to information relative to any Holder.
(c) If, at any time or times while the Registration Statement is
effective, Ecogen notifies Holder that a development has occurred or is pending
which, based upon consultation with Ecogen's legal counsel, Ecogen reasonably
believes may cause the then current Prospectus not to be in compliance with
applicable securities laws, then Holder shall refrain from delivering the
Prospectus and from making any offers or sales of Registrable Securities
requiring the delivery of the Prospectus until such time as Ecogen either
notifies Holder that the Prospectus complies with such laws or delivers an
amended Prospectus in replacement of the deficient Prospectus. Ecogen shall use
its reasonable best efforts to minimize the time during which Holder must so
refrain, and no more than one (1) such period of refrain shall be imposed during
any period of one hundred eighty (180) days.
(d) At least two (2) Business Days prior to the initial filing of the
Registration Statement or Prospectus and no fewer than two (2) Business Days
prior to the filing of any amendment or supplement thereto (including any
document that would be incorporated or deemed to be incorporated therein by
reference), Ecogen shall furnish each selling Holder, its legal counsel and the
managing underwriter, if any, copies of all such documents proposed to be filed,
which documents (other than those incorporated or deemed to be incorporated by
reference) shall be subject to review of such Holder, its legal counsel and such
underwriters, if any, and Ecogen shall cause its officers and directors and the
independent certified public accountants to Ecogen to respond to such inquiries
as shall be necessary, in the opinion of
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respective counsel to Ecogen and any such underwriters, to conduct a reasonable
investigation within the meaning of the Securities Act. Ecogen shall not file
any such Registration Statement or Prospectus or any amendments or supplements
thereto to which a selling Holder, its legal counsel, or the managing
underwriters, if any, shall reasonably object on a timely basis (i.e., within
two (2) Business Days of receipt thereof).
(e) Ecogen shall promptly notify each selling Holder when the
Registration Statement is declared effective; notify Holder of any stop-order or
similar proceeding by the Commission or any state securities authority; and
furnish such number of Prospectuses, Prospectus supplements and other documents
incident thereto as Holder from time to time may reasonably request.
(f) In the event of any breach by Ecogen of the provisions of Section
4.1, 4.2, 4.3 or 4.4, the parties agree that each Holder will suffer irreparable
harm. Accordingly, the parties agree that the provisions of Sections 4.1, 4.2,
4.3 and 4.4 are specifically enforceable by each Holder and that each Holder
shall be entitled to temporary and permanent injunctive relief against Ecogen
and the other rights and remedies to which each Holder may be entitled to at
law, in equity or under this Agreement for any such breach.
4.5 Indemnification.
(a) Indemnification by Ecogen. Ecogen shall indemnify each Holder with
respect to which registration, qualification or compliance has been effected
pursuant to this Article IV, each of its officers, directors, employees, agents
and partners, each Person controlling such Holder within the meaning of Section
15 of the Securities Act, each underwriter, if any, and each Person who controls
any underwriter within the meaning of Section 15 of the Securities Act, against
all expenses, claims, losses, damages and liabilities (or actions in respect
thereof), including any of the foregoing incurred in settlement of any
litigation, commenced or threatened, arising out of or based on any untrue
statement (or alleged untrue statement) of a material fact contained in any such
Registration Statement, Prospectus, offering circular or other document or any
amendment or supplement thereto or incident to any such registration,
qualification or compliance, or based on any omission (or alleged omission) to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, or any violation by Ecogen of the
Securities Act or any rule or regulation thereunder applicable to Ecogen and
relating to action or inaction required of Ecogen in connection with any such
registration, qualification or compliance. Ecogen shall reimburse each such
Holder, each of its officers, directors, employees, agents and partners, and
each Person controlling such Holder, each such underwriter and each Person who
controls any such underwriter for any legal and any other expenses reasonably
incurred in connection with investigating, preparing or defending any such
expense, claim, loss, damage, liability or action; provided, however, that
Ecogen shall not be liable in any such case to the extent that any such claim,
loss, damage, liability, action or expense arises out of or is based on any
untrue statement or omission or alleged untrue statement or omission made in
reliance upon and in conformity with written information furnished to Ecogen by
an instrument duly executed by such Holder or underwriter and stated to be
specifically for use therein.
(b) Indemnification by the Holders. To the extent set forth in the
second sentence of
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this Section 4.5(b), each Holder shall, if Registrable Securities or other
securities held by such Holder are included in the securities as to which such
registration, qualification or compliance is being effected, indemnify Ecogen,
each of its directors, officers, employees and agents, each underwriter, if any,
of Registrable Securities covered by such a Registration Statement, each Person
who controls Ecogen or such underwriter within the meaning of Section 15 of the
Securities Act, each other such Holder, each of such other Holder's officers,
directors, employees, agents and partners, and each Person controlling such
Holder within the meaning of Section 15 of the Securities Act against all
expenses, claims, losses, damages and liabilities (or actions in respect
thereof), including any of the foregoing incurred in settlement of any
litigation, commenced or threatened, arising out of or based on any untrue
statement (or alleged untrue statement) of a material fact made by the Holder
and contained in any such Registration Statement, Prospectus, offering circular
or other document, or any amendment or supplement thereto or incident to any
such registration, qualification or compliance or based on any omission (or
alleged omission) to state therein a material fact required to be made by the
Holder and stated therein or necessary to make the statements therein not
misleading or any violation by Ecogen of any rule or regulation promulgated
under the Securities Act applicable to Ecogen in connection with such
registration, qualification or compliance as a result of any statement (or based
on any omission to state or alleged omission) required to be made by such
Holder. Each such Holder shall reimburse Ecogen, such other Holders, directors,
officers, employees, agents, partners, Persons, underwriters and control Persons
for any legal or any other expenses reasonably incurred in connection with
investigating, preparing or defending any such expense, claim, loss, damage,
liability or action, in each case to the extent, but only to the extent, that
such untrue statement (or alleged untrue statement) or omission (or alleged
omission) is made in such Registration Statement, Prospectus, offering circular
or other document or any amendment or supplement thereto in reliance upon and in
conformity with written information furnished by the Holder to Ecogen by an
instrument duly executed by such Holder and stated to be specifically for use
therein; provided, however, that the obligations of such Holders hereunder shall
be limited to an amount equal to the proceeds to each such Holder of Registrable
Securities sold as contemplated herein in connection with the particular
registration, qualification or compliance involved.
(c) Notice. Each party entitled to indemnification under this Section
4.5 (the "Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be sought and shall
permit the Indemnifying Party to assume the defense of any such claim or any
litigation resulting therefrom; provided, however, that counsel for the
Indemnifying Party, who shall conduct the defense of such claim or any
litigation resulting therefrom, shall be approved by the Indemnified Party
(whose approval shall not unreasonably be withheld), and that the Indemnified
Party may participate in such defense at its own expense; and provided further
that the failure of any Indemnified Party to give notice as provided herein
shall not relieve the Indemnifying Party of its obligations under this Section
4.5 unless such failure is materially detrimental to the Indemnifying Party. No
Indemnifying Party, in the defense of any such claim or litigation, shall,
except with the consent of each Indemnified Party, consent to entry of any
judgment or enter into any settlement which does not include as an unconditional
term thereof the giving by the claimant or plaintiff to such Indemnified Party
of a
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release from all liability in respect to such claim or litigation.
4.6 Information by Holder. Each Holder or Holders of Registrable
Securities in any registration shall furnish to Ecogen such information
regarding such Holder or Holders and the distribution proposed by such Holder or
Holders as Ecogen may reasonably request in writing but only to the extent as
shall be required in connection with any registration, qualification or
compliance referred to in this Article IV.
4.7 Rule 144 Reporting. With a view to making available the benefits of
certain rules and regulations of the Commission which may permit the sale of the
Restricted Securities or Control Securities to the public without registration,
Ecogen agrees to:
(a) Use its best efforts to make and keep public information available
as those terms are understood and defined in Rule 144 under the Securities Act;
(b) Use its best efforts to file with the Commission in a timely manner
all reports and other documents required of Ecogen under the Securities Act and
the Exchange Act (at any time after it has become subject to such reporting
requirements);
(c) For so long as a Holder owns any Restricted Securities or Control
Securities, furnish to the Holder forthwith upon request (i) a written statement
by Ecogen as to its compliance with the reporting requirements of Rule 144 and
of the Securities Act and the Exchange Act, (ii) a copy of the most recent
annual or quarterly report of Ecogen, and (iii) such other reports and documents
so filed as such Holder may reasonably request in availing itself of any rule or
regulation of the Commission allowing a Holder to sell any such securities
without registration; and
(d) When any Holder qualifies under Rule 144 for the unrestricted right
of sale under Rule 144, Ecogen shall, upon written request of such Holder (such
request to include sufficient detail as to establish how the Holder so qualifies
under Rule 144) and an opinion of counsel satisfactory to Ecogen, promptly
remove any restrictive legend that may have been placed on any Restricted or
Control Securities and issue Ecogen Securities free of such restrictive or other
legends.
4.8 Transfer of Registration Rights. Mycogen may transfer the rights to
cause Ecogen to register the Registrable Securities under Sections 4.1 and 4.2
hereof to an aggregate of no more than eight Holders and each such Holder may
transfer or assign such rights to a transferee or assignee in connection with
the transfer or assignment of not less than all of the shares of the Registrable
Securities held by such Holder; provided, however, that Ecogen shall be entitled
to notice of any such transfer of registration rights within thirty (30) days of
the date such transfer is effected.
4.9 Limitations on Subsequent Registration Rights. No owner or
prospective owner of Ecogen Securities or other securities of Ecogen shall have
any registration rights that are inconsistent with the provisions of this
Agreement. Ecogen shall not, without the prior written
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consent of the Holders (which consent shall not be unreasonably withheld) of not
less than sixty-six and two-thirds percent (66-2/3%) of the Registrable
Securities then held by Holders, enter into any agreement with any owner or
prospective owner of any Ecogen Securities or other securities of Ecogen that
would allow such owner or prospective owner to include such securities in any
registration filed under this Article IV if such inclusion would adversely
affect the rights of any Holder.
4.10 "Market Stand-off" Agreement. Each Holder hereby agrees that, to
the extent requested by Ecogen and an underwriter of a sale of Ecogen Securities
or other securities of Ecogen for the account of Ecogen and not for the account
of a security holder or holders exercising their respective demand registration
rights, it shall not sell or otherwise transfer or dispose of (other than to
transferees who agree to be similarly bound) any Registrable Securities during
the ninety (90) day period following the effective date of a registration
statement of Ecogen filed under the Securities Act; provided, however, that all
officers and directors of Ecogen, all Other Selling Stockholders and all other
Persons with registration rights (whether or not pursuant to this Agreement)
shall enter into similar agreements. To enforce the foregoing covenant, Ecogen
may impose stop-transfer instructions with respect to the Registrable Securities
of each Holder (and the shares or securities of every other Person subject to
the foregoing restriction) until the end of such ninety (90) day period.
4.11 Termination of Registration Rights. The registration rights
granted pursuant to Section 4.1 shall terminate as to each Holder on the tenth
anniversary of the Closing.
ARTICLE V
STOCK LEGEND
5.1 Stock Legend. Subject to Section 4.7(d) hereof, certificates
representing the Purchased Shares shall bear the following legend:
"The securities represented by this certificate have not been
registered under the Securities Act of 1933, as amended, or under any state
securities law and may not be sold or offered for sale in the absence of an
effective registration statement under such act and applicable state securities
laws or an opinion of counsel satisfactory to the Company that such registration
is not required. The securities represented by this certificate are further
subject to certain resale restrictions and entitled to the benefits set forth in
a Stockholders' Agreement dated as of February __, 2000 between Ecogen Inc., a
Delaware corporation, and Mycogen Corporation, a California corporation (the
"Agreement"). A copy of the Agreement and all amendments thereto is on file in
the office of the Secretary of the Company."
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ARTICLE VI
MARKET PRICE PROTECTION
6.1 Market Price Protection. In the event Mycogen notifies Ecogen of
its intent to sell (a "Proposed Sale") Shares on or prior to the date which is
180 days after the third (3rd) anniversary of the Closing and, at the time of
delivery of notice to Ecogen of such Proposed Sale (the "Notice Date") the
Common Stock has a per share market value less than the per share price used to
determine the number of Shares received by Mycogen at Closing in accordance with
the Asset Purchase Agreement (after adjustment for all subsequent stock
dividends or similar recapitalizations) (the "Closing Value"), Ecogen shall
issue to Mycogen such additional Shares (the "Additional Shares") as shall be
necessary to increase the aggregate market value of the Shares proposed to be
sold by Mycogen to an amount equal to the Closing Value times the number of
Shares proposed to be sold; provided however, that if a Proposed Sale is not
consummated within 180 days of the Notice Date, Mycogen shall return to Ecogen
all of the Additional Shares issued to Mycogen in accordance with this sentence.
Provided, further however, that Ecogen shall not, while its Common Stock is
listed for trading on the NASDAQ National Market or the NASDAQ Small Cap Market,
issue to Mycogen an aggregate number of Additional Shares that, when added to
the number of Shares issued at the Closing, would equal or exceed 20% of the
number of shares of Common Stock issued and outstanding immediately prior to the
Closing (the "Issuable Maximum") unless Ecogen shall have (a) obtained the
approval of shareholders of Ecogen entitled to vote thereon ("Shareholder
Approval"), if any, as may be required by the rules and regulations of the
NASDAQ Stock Market (or successor thereto) applicable to approve the issuance of
shares in excess of the Issuable Maximum, or (b) obtained an exemption from any
applicable requirement for Shareholder Approval from the NASDAQ Stock Market. In
the event that such Shareholder Approval or the exemption from any requirement
from the NASDAQ Stock Market is not requested and received by Ecogen within 180
days of notice of the Proposed Sale, Ecogen shall issue a promissory note to
Mycogen (i) having a principal amount equal to the aggregate market value of
those shares Ecogen is not able to issue due to the Shareholder Approval
requirement of the NASDAQ Stock Market (or its successor), (ii) maturing on the
date which is 180 days following the 6th anniversary of the Closing, and (iii)
with interest payable on the last business day of each calendar quarter at the
prime rate in effect at Citibank, N.A., New York, on the last business day of
the preceding calendar quarter. Notwithstanding the foregoing, Ecogen shall have
no obligation to issue additional Shares to Mycogen pursuant to this Section 6.1
in connection with a proposed transfer or sale of Shares by Mycogen prior to the
third (3rd) anniversary of the Closing as permitted under Section 3.1(c).
ARTICLE VII
MISCELLANEOUS
7.1 Assignment. Except as set forth in Section 4.8, this Agreement
shall not be assigned by either party without the written consent of the other
party. Notwithstanding the
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foregoing, either party may assign this Agreement, without such consent, to the
purchaser of all its assets, or of all the assets of its business to which this
Agreement relates, and Mycogen, in addition to its rights under Section 4.8, may
assign this Agreement or its rights hereunder to any Affiliate.
7.2 Notice. All notices, communications and demands required or
permitted to be given or made hereunder or pursuant hereto shall be in writing
and shall be effective when delivered in person or transmitted by telegram or
facsimile (confirmed by mail), addressed as follows:
If to Mycogen:
Mycogen Corporation
c/o Dow AgroSciences LLC
9330 Zionsville Road
Indianapolis, Indiana 46268
Attention: General Counsel
Facsimile: (317) 337-6954
If to any other Holder, at such address and telecopy number as such
Holder shall have furnished Ecogen in writing.
If to Ecogen:
Ecogen Inc.
2000 Cabot Boulevard, Suite 170
West Langhorne, Pennsylvania 19047
Attention: President
Facsimile: (215) 757-4156
with a copy to:
Paul, Hastings, Janofsky & Walker LLP
1055 Washington Boulevard
Stamford, Connecticut 06901
Attention: Elizabeth A. Brouer, Esq.
Facsimile: (203) 359-3031
Either party may change the address designated by notice given by such
party. The parties agree to acknowledge in writing the receipt of any such
notice delivered in person.
7.3 Governing Law. This Agreement is deemed to have been entered into
in the State of Indiana, and its interpretation, construction, and the remedies
for its enforcement or breach are to be applied pursuant to and in accordance
with the laws of the State of Indiana (without regarding to the conflict of laws
principles thereof).
7.4 Validity of Agreement. If any provision of this Agreement is,
becomes, or is deemed invalid or unenforceable in any jurisdiction, such
provision shall be deemed amended to
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conform to applicable law so as to be valid, legal and enforceable in such
jurisdiction so deeming. The validity, legality and enforceability of such
provision shall not in any way be affected or impaired thereby in any other
jurisdiction. If such provision cannot be so amended without materially altering
the intention of the parties, it shall be stricken in the jurisdiction so
deeming, and the remainder of this Agreement shall remain in full force and
effect.
7.5 Waiver. No waiver of any right under this Agreement shall be deemed
effective unless contained in a writing signed by the party charged with such
waiver, and no waiver of any right arising from any breach or failure to perform
shall be deemed to be a waiver of any such future right or of any other right
arising under this Agreement.
7.6 Entire Agreement. This Agreement sets forth and constitutes the
entire agreement between the parties hereto with respect to the subject matter
hereof, and supersedes any and all prior agreements, understandings, promises
and representations made by either party to the other concerning the subject
matter hereof and the terms applicable hereto.
7.7 Headings and References; Incorporation of Schedules. The headings
contained in this Agreement are inserted for convenience of reference only and
shall not be a part, control or affect the meaning hereof. All references herein
to Articles and Sections are to the Articles and Sections of this Agreement.
7.8 Counterparts. This Agreement may be executed in counterparts, each
of which shall be deemed to be an original, but which together shall constitute
one and the same instrument.
7.9 No Presumption Against Drafter, Qualifications on Schedules. The
parties to this Agreement have jointly participated in the negotiation and
drafting of this Agreement. In the event an ambiguity or question of intent or
interpretation arises, this Agreement shall be construed as if drafted jointly
by the parties and no presumptions or burdens of proof shall arise favoring any
party by virtue of the authorship of any of the provisions of this Agreement.
IN WITNESS WHEREOF, the parties hereunto have executed this Agreement
as to be effective as of the date first written above.
MYCOGEN CORPORATION ECOGEN INC.
By: By:
----------------------------- -----------------------------------
A. Charles Fischer James P. Reilly, Jr.
President Chairman and
Chief Executive Officer
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Exhibit 10.155
PURCHASE AND SALE AGREEMENT
This PURCHASE AND SALE AGREEMENT effective February 15, 2000 (the
"Effective Date"), is between DOW AGROSCIENCES LLC, a Delaware limited liability
company ("DAS"), and ECOGEN INC., a Delaware corporation ("CUSTOMER"). In
consideration of the mutual covenants set forth in this Agreement, DAS and
CUSTOMER agree as follows:
ARTICLE 1 - DEFINITIONS
"AFFILIATE," as used in this Agreement with respect to CUSTOMER, means an entity
which directly or indirectly controls, is controlled by, or is under common
control with CUSTOMER, where for CUSTOMER "control" (including the terms
"controls", "controlled by" and "under common control with") means the
possession, direct or indirect, of greater than fifty percent of the outstanding
equity of the CUSTOMER; with respect to DAS an entity which directly or
indirectly controls, is controlled by, or is under common control with DAS,
where for DAS "control" (including the terms "controls", "controlled by" and
"under common control with") means the possession, direct or indirect, of forty
percent (40%) of the outstanding equity of DAS, or the possession, direct or
indirect, of the power to direct or cause the direction of the management and
policies of an entity, whether through the ownership of voting securities, by
contract, or otherwise.
"AGREEMENT" means this Purchase and Sale Agreement with the attached schedules.
"CALENDAR YEAR" means a twelve (12) month period commencing January 1.
"CLAIM(S)" means any legal or equitable causes of action (including but not
limited to negligence; strict liability; other tort; express or implied
warranty, indemnity or contract; contribution; or subrogation) related to or
arising out of the performance or nonperformance of this Agreement.
"EFFECTIVE DATE" means the date stated in the preamble.
"FORCE MAJEURE EVENT" means any event not within the contemplation of the
parties at the time they executed this Agreement, including but not limited to
events beyond the reasonable control of the party affected, relating to the
Product(s). A Force Majeure Event includes accidents, fire, flood, strike, labor
trouble, riot, revolt, war, drought, inability to meet governmental
environmental waste disposal standards, action of governmental authority and
laws, rules, ordinances and regulations (including, but not limited to, those
dealing with pollution, health, ecology, or environmental matters), acts of God,
or other similar types of contingencies.
"MONTH(S)" means a calendar month commencing on the first day of a month.
"PRICE" means the purchase price for the Product(s) in United States dollars as
described in
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Article 3.
"PRODUCT(S)" means MVP(TM), MVPII(TM) and MATTCH(TM) biopesticides conforming to
the Specification(s) attached as Schedule 2.
"PROPRIETARY INFORMATION" means confidential information, either in writing or
summarized in writing if not disclosed in tangible form, that is disclosed or
developed pursuant to the terms of this Agreement.
"QUARTER" means three (3) consecutive Months commencing January 1, April 1, July
1 or October 1.
"SPECIFICATION(S)" means the specifications for each Product(s) as attached as
Schedule 2.
ARTICLE 2 - PURCHASE, SUPPLY AND QUANTITY.
2.1 CUSTOMER shall purchase from DAS and DAS shall sell to CUSTOMER the lesser
of (i) CUSTOMER's requirements of Product(s), or (ii) DAS's actual Product
production capacity as described in Schedule 1. CUSTOMER's minimum order size
shall be as set out in Schedule 1.
2.2 Thirty days prior to each Quarter, CUSTOMER shall provide a written forecast
to DAS stating the amount of each Product(s) CUSTOMER intends to purchase from
DAS for each of the next eight Quarters broken out by month. On a rolling basis,
the CUSTOMER Product(s) purchase forecast shall become a firm order for the
first and second Quarters of the forecast.
ARTICLE 3 PRICE, AND PAYMENT CONDITIONS.
3.1 The Price which CUSTOMER shall pay to DAS for Product(s) shall be as set
forth in Schedule 1.
3.2 DAS shall invoice CUSTOMER for Product(s) supplied under this Agreement at
the time of delivery of the Product(s) to the initial transportation carrier.
CUSTOMER shall pay all proper invoices in United States Dollars within 30 days
of the invoice date.
3.3 Payments past due bear interest calculated on a per annum basis from the due
date to the date of actual payment at a fluctuating interest rate equal at all
times to the prime rate of interest announced publicly from time to time by
Citibank, N.A., plus two percent but in no case higher than the maximum rate
permitted by applicable law.
ARTICLE 4 - QUALITY
4.1 DAS shall test or cause to be tested each production run of Product(s)
before shipment to
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CUSTOMER or its designee for compliance with the Specification(s). DAS shall
retain a sample of each production run tested for one year from the date of
shipment. For each production run shipped, DAS shall prepare a certificate of
analysis setting forth the items tested, the Specification(s) and test results
and forward the certificates to CUSTOMER, or its designee, at the time the
Product(s) is shipped.
4.2 DAS shall provide CUSTOMER with a Material Safety Data Sheet for the
Product(s).
4.3 DAS shall label Product(s) as provided by CUSTOMER and, as such, DAS does
not warrant their accuracy or content. CUSTOMER shall update labels as necessary
to comply with all legal requirements, and promptly notify DAS of such changes.
ARTICLE 5 - DELIVERY, TITLE, TRANSPORTATION
5.1 Title to Product(s) shall transfer to CUSTOMER at the time DAS delivers the
Product to the initial transportation carrier. Risk of loss passes
simultaneously with the title.
5.2 All Product(s) shall be shipped in the packaging specified in Schedule 1 or
as otherwise agreed to by the parties. All additional costs associated with a
packaging size change requested by CUSTOMER, and agreed to by DAS, shall be paid
by CUSTOMER. Transportation arrangements will be made by DAS in line. CUSTOMER
will absorb freight. DAS will prepay all freight and add the freight and
handling costs to the invoice. Emergency response for any emergencies or other
incidents occurring during transit shall be the responsibility of CUSTOMER.
5.3 In some instances it may be necessary to obtain an export or re-export
license for Product(s). CUSTOMER shall be responsible for obtaining any
necessary certificates and/or licenses, paying related fees and/or expenses, and
retaining customs broker as necessary. CUSTOMER shall be the exporter of record.
ARTICLE 6 - INSPECTIONS, ACCEPTANCE AND NOTICE OF CLAIMS.
Promptly upon receipt of each shipment of Product(s), CUSTOMER shall inspect and
test such Product(s) for any damage, defect or shortage. ALL CLAIMS BY CUSTOMER
SHALL BE DEEMED WAIVED UNLESS MADE BY CUSTOMER IN WRITING AND RECEIVED BY DAS
WITHIN SIXTY DAYS OF THE RECEIPT OF THE PRODUCT(S); PROVIDED THAT FOR ANY CLAIM
WHICH IS NOT READILY DISCOVERABLE WITHIN SUCH SIXTY DAY PERIOD SUCH CLAIM SHALL
BE DEEMED WAIVED UNLESS MADE BY CUSTOMER IN WRITING AND RECEIVED BY DAS WITHIN
ONE HUNDRED AND EIGHTY DAYS AFTER RECEIPT OF THE PRODUCT(S) OR WITHIN THIRTY
DAYS AFTER CUSTOMER LEARNS OR SHOULD HAVE BEEN REASONABLY AWARE OF FACTS WHICH
SHOULD HAVE GIVEN RISE TO SUCH CLAIM, WHICHEVER FIRST OCCURS.
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ARTICLE 7 - WARRANTIES, DISCLAIMER OF WARRANTIES AND LIMITATIONS OF REMEDIES AND
LIABILITY.
7.1 SUBJECT TO THE LIMITATIONS OF THIS ARTICLE 7, DAS warrants that, at the time
of delivery, Product(s) supplied by DAS shall (a) conform to the
Specification(s) described in Schedule 2; and (b) be conveyed with good title,
free from any lawful security interest, lien or encumbrance. DAS shall not be
liable for misbranding which is due to any labeling, instructions or package
insert text provided to DAS by CUSTOMER.
7.2 DAS does not warrant that the supply of Product(s) to CUSTOMER shall place
CUSTOMER in conformance with any particular federal, state or local law or
regulation. DAS further does not warrant that Product(s) are effective and/or
appropriate for CUSTOMER'S intended uses. CUSTOMER shall use its independent
judgment and expertise in evaluating, applying and/or using the Product(s). DAS
does not undertake any responsibility or duty to test Product(s) in order to
evaluate the safety and/or efficacy of CUSTOMER'S intended uses.
7.3 THE WARRANTIES CONTAINED IN THIS ARTICLE 7 ARE THE SOLE WARRANTIES WITH
RESPECT TO THE PRODUCT(S) AND ARE MADE EXPRESSLY IN LIEU OF AND EXCLUDE ANY
IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE AND
ALL OTHER EXPRESS OR IMPLIED REPRESENTATIONS AND WARRANTIES PROVIDED BY COMMON
LAW OR STATUTE.
7.4 EXCEPT AS TO ARTICLE 10, CUSTOMER'S EXCLUSIVE REMEDY AND DAS'S TOTAL
LIABILITY TO CUSTOMER FOR CLAIMS IS EXPRESSLY LIMITED AS FOLLOWS: CUSTOMER HAS
THE OPTION OF REPLACEMENT OF, OR REPAYMENT OF THE PRICE PAID FOR, THE PRODUCT(S)
WITH RESPECT TO WHICH DAMAGES ARE CLAIMED. CUSTOMER WAIVES ALL OTHER CLAIMS BY
CUSTOMER AGAINST DAS.
7.5 DAS SHALL NOT BE UNDER ANY LIABILITY TO CUSTOMER FOR ANY INCIDENTAL,
CONSEQUENTIAL, SPECIAL, EXEMPLARY OR PUNITIVE DAMAGES.
7.6 The provisions of this Article 7 shall survive any termination of this
Agreement.
ARTICLE 8 - TERM AND TERMINATION.
The term of this Agreement is from the Effective Date until December 31, 2004,
and from year to year thereafter unless either party provides written notice of
its desire to terminate six (6) months prior to December 31, 2004 or six (6)
months prior to the pertinent expiration date thereafter.
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ARTICLE 9 - CONFIDENTIALITY.
9.1 Each party shall use reasonable efforts to retain the other party's
Proprietary Information in confidence and not disclose the same to any third
party nor use the same, except as expressly permitted. Excepted from these
obligations of confidence and non-use is that information which:
(a) is available, or becomes available, to the general public without fault of
the receiving party;
(b) was in the possession of the receiving party on a non-confidential basis
prior to receipt of the same from the disclosing party;
(c) is obtained by the receiving party without an obligation of confidence from
a third party who is rightfully in possession of such information and is
under no obligation of confidentiality to the disclosing party;
(d) the receiving party is legally required to disclose; or
(e) is independently developed by the receiving party.
For the purpose of this Section 9.1, a specific item of Proprietary Information
shall not be deemed to be within the foregoing exceptions merely because it is
embraced by more general information in the public domain or in the possession
of the receiving party. In addition, any combination of features shall not be
deemed to be within the foregoing exceptions merely because individual features
are in the public domain or in the possession of the receiving party, but only
if the combination itself and its principle of operation are in the public
domain or in the possession of the receiving party.
9.2 Notwithstanding the provisions of Section 9.1(d), if the receiving party
becomes legally compelled to disclose any of the disclosing party's Proprietary
Information, the receiving party shall promptly advise the disclosing party of
such Proprietary Information in order that the disclosing party may seek a
protective order or such other remedy as the disclosing party may consider
appropriate in the circumstances. The receiving party shall disclose only that
portion of the disclosing party's Proprietary Information which it is legally
required to disclose.
9.3 Upon written request at termination by the disclosing party, all Proprietary
Information in whatever form shall be returned to the disclosing party of this
Agreement, without retaining copies thereof except that one copy of all such
Proprietary Information may be retained by the other party's legal department
solely for the purpose of policing this Agreement.
9.4 The obligation of confidentiality under this Article 9 survives for 5 years
following the termination of this Agreement.
ARTICLE 10 - INDEMNITY.
10.1 DAS shall defend, indemnify and hold harmless CUSTOMER, its Affiliates,
directors, officers, employees, agents and successors from and against any and
all claims, liabilities, losses, damages, fines, penalties, costs and expenses
(including costs of defense and reasonable
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attorneys' fees) to the extent those are arising out of or caused by (1) DAS's
negligence or willful misconduct with respect to DAS's manufacture, storage,
packaging, and handling of Product(s), and (2) breach of DAS's warranties
hereunder or violations of applicable law by DAS.
10.2 CUSTOMER shall cooperate in the defense of any Claim DAS undertakes
pursuant to Section 10.1 by providing access to witnesses and evidence,
including documents, available to CUSTOMER. CUSTOMER shall have the right to
participate in the defense of any Claim to the extent that, in its judgment,
CUSTOMER may be prejudiced thereby.
10.3 In any Claim or suit in which CUSTOMER seeks indemnification by DAS,
CUSTOMER shall not settle, offer to settle or admit liability or damages in any
such Claim or suit without the express written consent of DAS.
10.4 CUSTOMER shall defend, indemnify and hold harmless DAS, its Affiliates,
directors, officers, employees, agents and successors from and against any and
all claims, liabilities, losses, damages, fines, penalties, costs and expenses
(including costs of defense and reasonable attorneys' fees) to the extent those
are arising out of or caused by (1) CUSTOMER's negligence or willful misconduct
with respect to CUSTOMER's labeling, storage, shipping, transportation,
exportation, handling and sale of Product(s), or (2) breach of CUSTOMER's
warranties hereunder or violations of applicable law by CUSTOMER.
10.5 DAS shall cooperate in the defense of any Claim CUSTOMER undertakes
pursuant to Section 10.4 by providing access to witnesses and evidence available
to DAS. DAS shall have the right to participate in the defense of any Claim to
the extent that, in its judgment, DAS may be prejudiced thereby.
10.6 In any Claim or suit in which DAS seeks indemnification by CUSTOMER, DAS
shall not settle, offer to settle or admit liability or damages in any such
Claim or suit without the express written consent of CUSTOMER.
10.7 The provisions of this Article 10 shall survive the termination of this
Agreement.
ARTICLE 11 - FORCE MAJEURE
11.1 The performance of the party impacted by a Force Majeure Event, other than
for payment for Product(s) already delivered, under this Agreement is delayed,
without liability, for the duration of a Force Majeure Event.
11.2 The party whose performance is affected by a Force Majeure Event shall give
prompt notice to the other party stating the details and expected duration of
the event. Once notice is given of a Force Majeure Event, the parties shall keep
each other apprised of the situation until the Force Majeure Event terminates or
this Agreement is terminated, whichever occurs first. Each party has full
management discretion in dealing with its own labor issues, and in
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determining how and when to perform obligations (other than payment for work
already performed) under this Agreement when the other party is involved in a
strike, work stoppage or slowdown condition.
ARTICLE 12 - EARLY TERMINATION
A party is entitled (without prejudice to its other rights and remedies under
this Agreement) to terminate this Agreement upon (a) written notice at any time
if the other party breaches a material obligation under this Agreement and such
breach has not be remedied within 30 days after the non-breaching party provides
written notice of such breach to the breaching party or (b) written notice by
the party not affected by a Force Majeure Event to the party affected by the
Force Majeure Event if a Force Majeure Event lasts for more than 180 days.
Further, either party shall be deemed to have breached this Agreement in the
event such party (a) voluntarily or involuntarily enters a bankruptcy or similar
proceeding; (b) passes a resolution for winding up its business or a court of
competent jurisdiction makes an order to that effect (otherwise than for the
purpose of amalgamation or reconstruction); or (c) a receiver is appointed in
respect of substantially all of its assets.
ARTICLE 13 - ASSIGNMENT
This Agreement is not assignable or transferable by either party without the
prior written consent of the other party (such consent not to be unreasonably
withheld), except that DAS may assign or transfer this Agreement or the
obligations in whole or part to a DAS Affiliate.
ARTICLE 14 - NOTICE
Any notice to be given under this Agreement shall be in writing and shall be
deemed given when received and may be sent by mail, express courier or facsimile
to:
If to CUSTOMER: If to DAS:
Ecogen Inc Dow AgroSciences
Attn: Chief Executive Office Attn: Law Department
2000 Cabot Blvd. West, Suite 170 9330 Zionsville Road
Langhorne, PA 19047 Indianapolis, IN 46268
(219) 757-9483(FAX) (317) 337-4849 (FAX)
Either party may change its location or facsimile number to receive notices upon
ten (10) days prior written notice.
ARTICLE 15 - EXPORT CONTROL OF TECHNICAL DATA
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The parties acknowledge their obligations to adhere to the United States export
laws and regulations, such as Export Administration Regulations, International
Traffic in Arms Regulations and regulations promulgated by the Office of Foreign
Assets Control and the parties agree to adhere to such laws and regulations. The
parties further acknowledge that these obligations shall survive the term of
this Agreement.
ARTICLE 16 - INDEPENDENT CONTRACTOR
DAS is an independent contractor, with all the attendant rights and liabilities
of an independent contractor, and not an agent or employee of CUSTOMER. Any
provision in this Agreement, or any action by CUSTOMER, which may appear to give
CUSTOMER the right to direct or control DAS in performing under this Agreement
means DAS shall follow the desires of CUSTOMER in results only.
ARTICLE 17 - SEVERABILITY
If any provision of this Agreement or the application thereof to any person or
circumstance shall, for any reason, and to any extent, be held to be invalid or
unenforceable under applicable law, such provision shall be deemed limited or
modified to the extent necessary to make the same valid and enforceable under
applicable law. Any invalid or unenforceable provision shall be replaced with
such new provision which shall allow the parties to achieve the intended
economic result in a legally valid and effective manner.
ARTICLE 18 - NON-WAIVER OF DEFAULTS
Any failure by either party at any time to enforce or require strict keeping and
performance of any of the terms or conditions of this Agreement shall not
constitute a waiver of such terms or conditions and shall not affect or impair
such terms or conditions in any way, or the right of either party at any time to
avail itself of such remedies as it may have for any breach or breaches of such
terms or conditions.
ARTICLE 19 - CREDIT
If CUSTOMER fails to pay any invoice in accordance with the terms of this
Agreement, DAS may defer shipments or alter payment terms. If CUSTOMER's
financial responsibility becomes unsatisfactory to DAS and DAS deems itself
insecure, DAS may accelerate the due date and demand immediate payment on any
outstanding invoice for Product(s), or may require cash payments or satisfactory
security for future deliveries and for payment. CUSTOMER agrees to pay all costs
and expenses, including reasonable attorney's fees, incurred by DAS in the
collection of any sum payable by CUSTOMER to DAS, or in the exercise of any
remedy.
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ARTICLE 20 - GOVERNING LAW
The interpretation, validity and performance of this Agreement shall be governed
by Michigan law, including Michigan's adaptation of the Uniform Commercial Code,
without regard to Michigan's conflict of law rules.
ARTICLE 21 - HEADINGS
The headings used in this Agreement are for the convenience of the reader and
are not intended to have any substantive meaning.
ARTICLE 22 - ENTIRE AGREEMENT
This Agreement constitutes the full understanding of the parties and is a final,
complete and exclusive statement of the terms and conditions of their agreement
regarding the subject matter of this Agreement. All representations, offers and
undertakings of the parties made prior to the Effective Date of this Agreement
are merged in this Agreement. While purchase orders, invoices, or similar
routine documents may be used to implement or administer provisions of this
Agreement, any provisions of these documents which add to, vary, modify or are
at conflict with the provisions of this Agreement shall be deemed deleted and
shall have no force or effect on either party's rights or obligations under this
Agreement. All amendments or modifications to this Agreement must be in writing,
identified as an amendment to this Agreement and signed by an authorized
representative of each party.
The parties have caused this Agreement to be executed by their duly authorized
representatives.
Dow AgroSciences LLC Ecogen Inc.
By: By:
----------------------------------- -----------------------
A. Charles Fischer James P. Reilly, Jr.
President Chairman and
Chief Executive Officer
9
