<PAGE>
_________________________________________________________________
_________________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_______________________________
Form 8-KA
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): January 1, 1997
_________________________________________________________________
Commission file number 0-17714
_________________________________________________________________
BIOPOOL INTERNATIONAL, INC.
(Exact name of Registrant as specified in its charter)
Delaware 58-1729436
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
6025 Nicolle Street
Ventura, California 93003
(Address of principal executive offices)
(805) 654-0643
(Registrant's telephone number including area code)
_________________________________________________________________
_________________________________________________________________
<PAGE>
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
(a) On January 1, 1997, Registrant (" Biopool
International, Inc." or "BII") acquired certain assets of the
Blood Group Serology ("BGS") Division of Organon Teknika
Corporation ("Organon"), located in West Chester, Pennsylvania.
There was no prior relationship between Organon or any of its
officers, directors or affiliates, and the Registrant and any of
its officers, directors or affiliates. The acquired assets
consist of two adjacent parcels of real property, each located in
West Chester, Pennsylvania, certain blood serology product lines,
including certain proprietary blood cell lines, customer
accounts, laboratory facilities and an existing employee base,
all of which are used in the BGS business. The purchase
price for BGS was $4.5 million, payable in cash. The Registrant
funded the purchase price in part from the privately placed sale
of 500,000 shares of its Common Stock to a group of accredited
investors, and in part from proceeds of a $3.5 million credit
facility extended to the Registrant by Sanwa Bank. The
Registrant believes that the acquisition of BGS expands and
broadens its product lines and provides an expanded direct
sales force for its products. The Registrant also believes
that the acquisition of BGS provides the Company with a number
of strategic advantages that will enhance its existing business.
The acquisition was accomplished as a sale of assets (and assumption
of certain liabilities) which were acquired directly by the
Registrant, and was accounted for as a purchase.
(b) The Registrant intends to continue to operate BGS
as an unincorporated division of the Registrant, from its existing
location in West Chester, Pennsylvania. All acquired assets,
including plant and equipment, will remain in tact and continue
to be utilized in essentially the same manner as such assets were
used by Organon.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND
EXHIBITS
(a) Financial Statements of Blood
Group Serology Page
__________________________________ ____
Balance Sheet, December 31, 1996 5
Statement of Income and Owner's
Deficit for the Year Ended
December 31, 1996 6
2
<PAGE>
Page
____
Statement of Cash Flows for the
Year Ended December 31, 1996 7
Notes to Financial Statements 8
Independent Auditors' Report 12
(b) Pro Forma Financial Information
_______________________________
Pro Forma Condensed Consolidated
Balance Sheet 14
Pro Forma Consolidated Statement
of Operations 15
Notes to Pro Forma Consolidated
Statements 16
(c) Exhibits
________
Sales and Purchase Agreement 18
3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
Date: March 14, 1997 BIOPOOL INTERNATIONAL, INC.
_____________________ ___________________________
(Registrant)
/s/ Michael D. Bick, Ph.D.
___________________________
Michael D. Bick, Ph.D.
Chief Executive Officer and
Chairman of the Board
4
<PAGE>
ITEM 7 (a)
<TABLE>
<CAPTION>
BALANCE SHEET
DECEMBER 31, 1996
_______________________________________________________________________
<S> <C>
ASSETS
CURRENT ASSETS:
Cash $ 2,000
Accounts receivable, net of allowance
for doubtful accounts of $71,000:
Affiliates 268,000
Non-affiliates 1,349,000
Inventories 2,075,000
Prepaid expenses and other current assets 13,000
___________
Total current assets 3,707,000
___________
PROPERTY, PLANT AND EQUIPMENT 6,801,000
Less accumulated depreciation and amortization (5,100,000)
Property, plant and equipment, net 1,701,000
___________
TOTAL ASSETS $ 5,408,000
___________
LIABILITIES AND OWNER'S DEFICIT
CURRENT LIABILITIES:
Intercompany payables $ 6,054,000
Accounts payable 212,000
Accrued expenses 134,000
___________
Total current liabilities 6,400,000
___________
COMMITMENTS AND CONTINGENCIES
OWNER'S DEFICIT (992,000)
___________
TOTAL LIABILITIES AND OWNER'S DEFICIT $ 5,408,000
___________
</TABLE>
See independent auditors' report and notes to financial
statements.
_______________________________________________________________________
5
<PAGE>
<TABLE>
<CAPTION>
STATEMENT OF INCOME AND OWNER'S DEFICIT
FOR THE YEAR ENDED DECEMBER 31, 1996
_______________________________________________________________________
<S> <C>
SALES $ 7,961,000
____________
COSTS AND EXPENSES:
Cost of sales 5,556,000
Selling, general and administrative 2,159,000
Research and development 93,000
____________
Total costs and expenses 7,808,000
____________
NET INCOME 153,000
OWNER'S DEFICIT, BEGINNING OF YEAR (1,145,000)
____________
OWNER'S DEFICIT, END OF YEAR $ (992,000)
____________
</TABLE>
See independent auditors' report and notes to financial
statements.
_______________________________________________________________________
6
<PAGE>
<TABLE>
<CAPTION>
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31, 1996
_______________________________________________________________________
<S> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 153,000
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 194,000
Changes in operating assets and liabilities:
Accounts receivable (76,000)
Inventories 8,000
Prepaid expenses and other assets (2,000)
Accounts payable and accrued expenses 137,000
___________
Net cash provided by operating activities 414,000
___________
CASH FLOWS FROM FINANCING ACTIVITIES - Net
intercompany repayments (414,000)
___________
NET CHANGE IN CASH -0-
CASH, BEGINNING OF YEAR 2,000
___________
CASH, END OF YEAR $ 2,000
___________
</TABLE>
See independent auditors' report and notes to financial
statements.
_________________________________________________________________
7
<PAGE>
NOTES TO FINANCIAL STATEMENTS
_________________________________________________________________
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Description of Business - Blood Group Serology (the
"Company") is a division of Organon Teknika Corporation
("Organon"; which in turn is a wholly-owned subsidiary of
Akzo Nobel, a Netherlands Company). The Company was
purchased by Akzo Nobel in December 1986. The Company is
currently engaged in research, development, production, and
sale of test kits used to assess and determine blood type.
Intercompany Transactions - Sales, marketing, credit and
collections are performed by Organon. Revenues and expenses
recorded by Organon are accounted for through the
Intercompany accounts. Such revenues and expenses have been
allocated to the Company based on specific identification.
Pervasiveness of Estimates - The preparation of financial
statements in conformity with generally accepted accounting
principles requires management to make estimates and
assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those
estimates.
Inventories - Inventories are stated at the lower of cost
(first-in, first-out) or market.
Property, Plant and Equipment - Property, plant and
equipment acquired after December 1986 are stated at cost.
Property and equipment acquired prior to December 1986 was
stated at its estimated fair value. Depreciation and
amortization is generally provided on a straight-line basis
over their estimated useful lives, which range from three to
twenty-five years.
Research and Development Costs - Research and development
costs are expensed when incurred and include both internal
research and development costs and payments to third parties
by the Company.
Income Taxes - The Company has a tax sharing arrangement
with Akzo Nobel. No amounts for income taxes have been
allocated to the Company for the year ended December 31,
1996.
8
<PAGE>
Concentrations of Credit Risk - Financial instruments, which
potentially subject the Company to concentrations of credit
risk, consist principally of trade receivables.
Concentrations of credit risk with respect to trade
receivables are limited due to the large number of customers
comprising the Company's customer base and their dispersion
across many different geographic areas. No customer exceeded
10% of the net balance due at December 31, 1996. Generally,
the Company does not require collateral or other security to
support customer receivables.
Fair Value of Financial Instruments - Based on borrowing
rates currently available to the Company for bank loans, the
carrying value of financial instruments potentially subject
to valuation risk (principally consisting of accounts
receivable and accounts payable) approximate fair value.
2. INVENTORIES
<TABLE>
<CAPTION>
Inventories consist of the following at December 31, 1996:
<S> <C>
Raw materials $ 597,000
Work-in-process 923,000
Finished goods 555,000
___________
Total $ 2,075,000
___________
</TABLE>
3. PROPERTY AND EQUIPMENT
<TABLE>
<CAPTION>
Property and equipment consists of the following:
<S> <C>
Land $ 463,000
Building and improvements 3,011,000
Processing and laboratory equipment 3,154,000
Furniture and fixtures 173,000
___________
Total property and equipment 6,801,000
Less accumulated depreciation and amortization (5,100,000)
___________
Property and equipment, net $ 1,701,000
___________
</TABLE>
9
<PAGE>
4. SIGNIFICANT SALES INFORMATION AND FOREIGN OPERATIONS
The Company currently operates in one industry, Blood Bank
Reagents, and sells its products worldwide. No customer
accounted for more than 10% of total sales in 1996. Export
sales by the Company to customers in foreign countries
(including affiliate sales) accounted for approximately 30%
of total sales in 1996.
Product sales to affiliates are generally priced at cost
plus 35%.
<TABLE>
<CAPTION>
Information regarding the Company's sales by geographic
locations is as follows:
<S> <C>
United States $5,529,000
Western Europe 1,181,000
Central/South America 397,000
Asia/Pacific Region 378,000
Canada 323,000
Other 153,000
__________
Total $7,961,000
__________
</TABLE>
5. EMPLOYEE BENEFIT PLANS
The Company participates in a 401(K) Plan and a Retirement
Benefit Plan sponsored by Akzo Nobel. Substantially all
employees who work at least 1000 hours and reach the age of
21 are eligible to participate. An allocated benefit
percentage is applied to each company to cover the benefit
plans.
Under the 401(K) Plan, the Company matches 50% of the
employee's contribution up to 6% of the employee's gross
wages. The Company was allocated approximately $54,000 to
cover the required employer contribution.
Under the Retirement Benefit Plan, employees qualify for
benefits upon becoming eligible to participate. Employees
become vested upon five years of service (as defined).
Benefits are calculated based on a formula that includes
earnings, years of service, covered compensation (as
defined) and Social Security. The Company was allocated
approximately $83,000 to cover the required employer
contribution.
10
<PAGE>
6. SUBSEQUENT EVENT
Effective January 1, 1997, Biopool International, Inc.
acquired certain assets (primarily inventories and property,
plant and equipment) of the Company in exchange for
approximately $4.5 million. The accounts receivable and
liabilities were retained by Organon.
_________________________________________________________________
11
<PAGE>
INDEPENDENT AUDITORS' REPORT
Blood Group Serology:
We have audited the accompanying balance sheet of Blood Group
Serology (the "Company"), a division of Organon Teknika
Corporation, as of December 31, 1996 and the related statements
of income and owner's deficit and of cash flows for the year then
ended. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that
our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements present fairly, in all
material respects, the financial position of the Company as of
December 31, 1996 and the results of its operations and its cash
flows for the year then ended in conformity with generally
accepted accounting principles.
Farber & Hass
February 19, 1997
12
<PAGE>
ITEM 7 (b)
PRO FORMA FINANCIAL INFORMATION
BIOPOOL INTERNATIONAL, INC. AND BLOOD GROUP SEROLOGY
(UNAUDITED)
_________________________________________________________________
The following unaudited pro forma consolidated balance sheet and
the unaudited pro forma consolidated statement of operations have
been prepared by Biopool International, Inc. ("BII") management
and give effect to the acquisition of certain Blood Group
Serology ("BGS") assets. The pro forma information is based on
the historical financial statements of BII and BGS giving effect
to the transaction under the purchase method of accounting and
the assumptions and adjustments in the accompanying notes to the
pro forma consolidated financial statements.
These pro forma consolidated statements may not be indicative of
the results that actually would have occurred if the combination
had been in effect on the dates indicated or which may be obtained
in the future. The pro forma consolidated financial statements
should be read in conjunction with the historical financial
statements of BGS.
13
<PAGE>
<TABLE>
BIOPOOL INTERNATIONAL, INC. AND BLOOD GROUP SEROLOGY
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
AS OF DECEMBER 31, 1996
_________________________________________________________________________
<CAPTION>
UNAUDITED
(in thousands)
Balance Sheets Pro Forma
BII BGS Adjust Consol'd
<S> <C> <C> <C> <C>
ASSETS
Current assets
Cash and equivalents $ 2,019 $ 2 $ 2,021
Accounts receivable - net 1,560 1,617 $(1,617)a 1,560
Inventories 2,027 2,075 4,102
Prepaid expense 4,789 13 (4,647)a,c 155
__________________ ________
Total current assets 10,395 3,707 7,838
Net property, plant and
equipment 1,643 1,701 972 a 4,316
Other assets 1,085 1,085
__________________ ________
TOTAL ASSETS $ 13,123 $ 5,408 $ 13,239
LIABILITIES AND STOCKHOLDERS'
EQUITY
Current liabilities
Accounts payable $ 214 $ 212 (212)a $ 214
Accrued expenses 774 134 (18)a,c 890
Intercompany payables 6,054 (6,054)a --
Bank borrowings 120 120
Current portion of long-
term debt 852 852
__________________ ________
Total current liabilities 1,960 6,400 2,076
Long-term debt, net 2,811 2,811
Stockholders' equity
Common stock 86 86
Additional paid in capital 10,737 10,737
Retained earnings (2,518) (992) 992 a (2,518)
Cumulative foreign currency
translation adjustment 47 47
_________________ ________
Total equity 8,352 (992) 8,352
TOTAL LIABILITIES AND STOCK-
HOLDERS' EQUITY $ 13,123 $ 5,408 $ 13,239
</TABLE>
14
<PAGE>
<TABLE>
BIOPOOL INTERNATIONAL, INC. AND BLOOD GROUP SEROLOGY
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1996
_________________________________________________________________________
<CAPTION>
UNAUDITED
(In thousands)
Pro Forma
BII BGS Adjust Consol'd
<S> <C> <C> <C> <C>
Sales $ 8,020 $ 7,961 $ 15,981
Costs and expenses
Cost of sales 4,091 5,556 9,647
Selling, general and
administration 2,509 2,159 $ (419)b 4,249
Research and develop-
ment 263 93 356
Other (income) expense (23) (290)b 267
_______________________ __________
Total costs and
expenses 6,840 7,808 14,519
_______________________ __________
Income before income
taxes 1,180 153 1,462
Income tax benefit
(expense) 115 -- (32)b 83
_______________________ __________
NET INCOME $ 1,295 $ 153 $ 1,545
Primary earnings per
share $ 0.16 $ 0.17
__________ __________
Average shares out-
standing 8,341,967 8,841,967
__________ __________
</TABLE>
15
<PAGE>
BIOPOOL INTERNATIONAL, INC. AND BLOOD GROUP SEROLOGY
NOTES TO PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(IN THOUSANDS)
_________________________________________________________________
<TABLE>
(a) Under purchase accounting, BGS's assets and liabilities are
required to be adjusted to their estimated fair values. The
estimated fair value adjustments have been determined by BII
based upon available information. BII cannot be sure that
such estimated fair values represent fair values that would
ultimately be determined at the acquisition date. The
following are the pro forma adjustments made to reflect
BGS's fair values as of December 31, 1996.
<CAPTION>
Net Assets
Increase (Decrease)
<S> <C>
Amounts as reported by BGS $ (992)
Fair value adjustments
Property and equipment, net 972
Assets and liabilities not acquired
Accounts receivable (1,617)
Prepaid expense (13)
Accounts payable 212
Accrued expense 134
Intercompany payables 6,054
_________
$ 4,750
</TABLE>
<TABLE>
<CAPTION>
(b) For purposes of determining the pro forma effect of the BGS
acquisition on the consolidated statement of operations, the
following pro forma adjustments have been made for the year
ended December 31, 1996.
<S> <C>
Increase in depreciation expenses due to
step-up in basis $ 79
Net decrease due to reduction of personnel
and related benefits (300)
Net decrease due to reduction of parent
company charges (198)
_________
Net decrease to selling, general and
administration expense (419)
Increase to interest expense due to
borrowed funds 290
Interest to income tax expense 32
_________
Net decrease to costs and expenses $ (97)
</TABLE>
16
<PAGE>
<TABLE>
<CAPTION>
(c) Reduction of deposits and prepaid expenses to effect the
purchase on January 1, 1997, and accrue other capitalized
costs.
<S> <C>
Deposit and prepaid expense $ 4,634
Accrued liabilities 116
_________
$ 4,750
</TABLE>
17
<PAGE>
ITEM 7 (c)
SALE AND PURCHASE AGREEMENT
This Agreement is made on this 1st day of November, 1996
(hereinafter referred to as the "Effective Date") by and between
ORGANON TEKNIKA CORPORATION, a Delaware corporation having its
principal place of business at 100 Akzo Avenue, Durham, NC 27712,
USA (hereinafter referred to as "OTC") and
ORGANON TEKNIKA B.V., a Dutch corporation having its principal
place of business at Boseind 15, Boxtel, the Netherlands
(hereinafter referred to as "Teknika B.V.") on the one hand and
BIOPOOL INTERNATIONAL, INC., a Delaware corporation having its
principal place of business at 6025 Nicolle Street, Ventura,
California 93003 (hereinafter referred to as the "Purchaser").
WITNESSETH THAT:
OTC owns a blood group serology division which is engaged in the
manufacture and sale of laboratory reagents to hospitals,
commercial reference laboratories, plasma fractionation centers
and blood centers.
The blood group serology division is composed of: (i) certain
assets and property as set forth in Paragraph 1.1 hereinafter
(hereinafter referred to as the "Assets") owned by OTC or, where
indicated, by Teknika B.V. as of the date hereof; (ii) certain
liabilities associated with the Assets as set forth in Paragraph
1.4 hereinafter (hereinafter referred to as "Liabilities"); and
(iii) certain employees identified on Schedule 4 attached hereto
(hereinafter referred to as the "Employees"), who are employed by
OTC.
The Assets, Liabilities and Employees are hereinafter
collectively referred to as the "BGS Operations."
Purchaser wishes to acquire the BGS Operations upon the terms and
conditions set forth herein.
NOW, THEREFORE, in consideration of the foregoing premises and
the mutual covenants and undertakings contained herein, the
parties do hereby agree as follows:
18
<PAGE>
Article 1. SALE AND TRANSFER.
1.1 ASSETS. OTC and Teknika B. V., where appropriate, agree
and undertake to sell and transfer, convey and assign to
Purchaser and Purchaser agrees and undertakes to buy and
receive from OTC and Teknika B.V. respectively on the
Closing Date (as defined in Paragraph 3.1 hereinafter) all
the right, title and interest in the Assets, subject to
Purchaser's assumption of the Liabilities associated
therewith except as explicitly provided otherwise herein.
The Assets consist of the following:
(a) All rights, title and interest in, to or under,
any contracts, agreements, leases, licenses,
commitments and undertakings of OTC with respect
to the BGS Operations, all of which are
collectively referred to hereunder as the
"Contracts." A list of all Contracts to be
conveyed hereunder with a value exceeding $10,000
as of the Closing Date is set forth on the
"Contracts List" attached hereto as Schedule 1.1;
provided that OTC and Teknika B.V. have the right
to amend the Contracts List prior to the Closing
Date, subject to Purchaser's right to terminate
this Agreement by written notice to OTC and
Teknika B.V. if such amendment would have a
material adverse effect on the BGS Operations and
the parties cannot find a mutually acceptable
solution.
(b) Those trademarks and registrations thereof, and
applications for any of the foregoing (the
"Teknika B.V. Trademarks") set forth on Schedule
1.2 (the "Trademark List") owned by Teknika B.V.
as well as all trademarks and registrations
thereof, and applications for the foregoing (the
"OTC Trademarks") set forth in the Trademark List
owned by OTC.
(c) All inventions, technology, know-how, discoveries,
ideas, trade secrets, research data, manufacturing
directions and records, including but not limited
to device history records, (hereinafter referred
to as "Technology"), owned by OTC and which are
used in the BGS Operations to the extent necessary
to conduct the BGS operations as currently done.
(d) The "Facility", which includes (i) fee title to
that certain real property located in the Township
19
<PAGE>
of West Goshen, County of Chester, State of
Pennsylvania, as more particularly described on
Schedule 1.3 (the "Real Estate List") attached
hereto ( the "Land"); (ii) all buildings,
improvements, structures and fixtures now or
hereafter located on or in the Land (the
"Improvements"); (iii) all apparatus, equipment
and appliances constituting real property and used
in connection with the operation or occupancy of
the Land and the Improvements (including, without
limitation, those Improvements (previously) used
by other divisions of OTC); (iv) all of the
rights, privileges and easements appurtenant to or
used in connection with the Land and the
Improvements; (v) all transferable architectural,
site, landscaping or other permits, applications,
approvals, authorizations and other entitlements
affecting the Facility other than the
Registrations (collectively, the "Permits"); and
(vi) warranties, representations and guarantees
(express or implied) made by OTC's suppliers,
manufacturers and contractors in connection with
or affecting the Facility.
(e) All of that certain tangible property including,
without limitation furniture, machinery, equipment
(including laboratory equipment), computers, and
vehicles of the BGS Operations located at the West
Chester Manufacturing Facility only (the
"Equipment"). All such items constituting fixed
assets with a net book value of one U.S. Dollar
(US $1.00) or more are listed on the "Equipment
List" attached hereto as Schedule 1.4.
(f) All inventories of finished goods, work in
process, materials (including biological
materials), components and supplies owned by OTC
and located at the Facility, as well as cell
washers and spare parts of cell washers owned by
OTC and located at OTC's facilities in Oklahoma
City, and which are exclusively related to the BGS
Operations on hand as of the Closing Date (the
"Inventory").
(g) All books, records and files, including but not
limited to customer lists, owned by OTC and
exclusively related to the BGS Operations other
than those associated with any assets or
properties not sold to Purchaser hereunder (the
"Records").
20<PAGE>
(h) Those product and facility licenses, approvals or
clearances related to products and product lines
being transferred to Purchaser hereunder issued by
the United States Food and Drug Administration
(the "FDA"), the United States Department of
Agriculture (the "USDA") and any corresponding
governmental regulatory agency in the USA and
other countries, and all pending applications
therefor (the "Registrations") as set forth on
Schedule 1.5 (the "Regulatory Approval List").
(i) The ownership of the Anti-C3 Cell Lines (the
"Anti-C3 Cell Lines") as identified in Schedule
1.6 (the "Cell Line List"), that are located at
the facilities of PerImmune, Inc. at Rockville,
Maryland.
(j) Any pre-paid expenses not included in the Excluded
Assets, including but not limited to pre-paid
taxes, attributable to and/or on the books of the
BGS Operations as of the Closing Date.
1.2 EXCLUDED ASSETS. Notwithstanding anything contained in
Section 1.1 to the contrary, Purchaser shall not acquire
any right, title or interest to any assets or property,
tangible or intangible, set forth below and where
appropriate specified in Schedule 2 (the "Excluded Assets
List") (collectively referred to as the "Excluded
Assets"):
(a) Cash, accounts receivable, including accounts
receivable with affiliated companies, and any
other moneys due to OTC from third parties whether
or not affiliated with OTC attributable to and/or
on the books of the BGS Operations as of the
Closing Date.
(b) Tax refund claims and insurance coverage claims
(including prepaid premiums) attributable to the
BGS Operations as of the Closing Date.
(c) All insurance policies maintained by OTC or Akzo
Nobel Inc. and with respect to the BGS Operations,
all insurance claims and rights, as well as all
uninsured claims and lawsuits to the extent that
they relate to damages sustained on occurrences
and events occurring prior to the Closing Date.
(d) Any rights in or to the use of the name "Organon
Teknika" or derivations thereof, or OTC's logo,
except to the extent provided in Paragraph 17.3
hereof.
21
<PAGE>
(e) Any and all rights relating to Sicklequik (as
meant in paragraph 17.2 hereinafter) including but
not limited to all know-how, manufacturing
technology, inventories, books and records and
regulatory approvals relating to Sicklequik.
1.3 NON ASSIGNABLE CONTRACTS AND RIGHTS. Anything herein to
the contrary notwithstanding, no properties, rights or
other assets, including but not limited to Contracts and
regulatory approvals, of OTC in respect of the BGS
Operations shall be deemed sold, transferred, conveyed or
assigned to Purchaser pursuant to this Agreement if the
attempted sale, transfer, conveyance or assignment of the
same to Purchaser without the consent or approval of
another party or governmental entity, including but not
limited to the FDA and other governmental regulatory
agencies, would be ineffective or would constitute a
breach thereof or would in any other way adversely affect
the rights of OTC (or Purchaser, as assignee) thereunder.
If any such consent or approval is required but not
obtained on or prior to the Closing Date, OTC covenants
and agrees that in such case the beneficial interest in or
to such properties, rights or assets shall in any event
pass as of the Closing Date to Purchaser hereunder; and
OTC covenants and agrees (a) from and after the Closing
Date to hold and declare that it holds any and all such
properties, rights and assets in trust for the benefit of
Purchaser, (b) to use reasonable efforts without payment
of any penalty or fee to obtain and secure any and all
consents and approvals that may be necessary to effect the
valid sale, transfer, conveyance or assignment of the same
to Purchaser without change in any of the material terms
or conditions thereof, including, without limitation, the
formal assignment or novation of any of the same, if so
required, (c) to make or complete such transfers as soon
as reasonably possible, and (d) to cooperate with
Purchaser in any other reasonable arrangement designed to
provide for Purchaser the benefits of and to such
properties, rights and assets.
1.4 ASSUMPTION OF LIABILITIES. The Purchaser shall assume,
fulfill and perform the following liabilities of OTC (the
"Liabilities"):
(i) all liabilities and obligations of OTC occurring
after the Closing Date with respect to the
Contracts, the Facility, the Equipment, and the
Registrations as referred to in Paragraph 1.1
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under (a), (d), (e), and (h) other than liabilities
resulting from a breach of contract occurring prior
to the Closing Date;
(ii) all liabilities and obligations of OTC to be
assumed by Purchaser pursuant to Articles 11 and 12
relating to Employees and employee benefits;
(iii) all other liabilities and obligations arising out
of or relating to damages sustained or occurrences
and events occurring with respect to the BGS
Operations after the Closing Date other than
liabilities resulting from a breach by OTC of this
Agreement or any other obligations incurred by OTC
in connection herewith.
Article 2. CONSIDERATION AND PAYMENT THEREOF.
2.1 The aggregate consideration for the transfer of Assets to
be paid by Purchaser shall be four million five hundred
thousand US Dollars (U.S. $4,500,000) (the "Purchase
Price"). Purchaser shall pay the Purchase Price to OTC
and Teknika B.V. in accordance with Paragraph 2.3 hereof.
2.2 The Purchase Price shall be allocated as follows:
(a) one million eight hundred thousand U.S. Dollars
(U.S. $1,800,000) for the Facility of which nine
hundred thousand US Dollars (US $900,000) shall be
allocated to the land and the remaining nine
hundred thousand US Dollars (US $900,000) shall be
allocated to the Improvements; (the "Facility
Purchase Price")
(b) five hundred thousand U.S. Dollars (U.S. $500,000)
for the Equipment;
(c) two million U.S. Dollars (U.S. $2,000,000) for the
Inventory;
(d) two hundred thousand U.S. Dollars (U.S. $200,000)
for the Contracts, the Trademarks, the Technology,
the Registrations and the Anti C3 Cell Lines, of
which one hundred thousand U.S. Dollars (U.S.
$100,000) shall be paid to Teknika B.V. for the
transfer of Teknika B.V. Trademarks and the
remainder to OTC for the OTC Trademarks, the
Contracts, the Technology, the Registrations and
the Anti-C3 Cell Lines.
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The Purchase Price shall not be subject to any adjustment
subsequent to the Closing Date.
2.3 The Purchase Price shall be paid by Purchaser on the
Closing Date as follows:
(a) to OTC: (i) the amount of four million four
hundred thousand U.S. Dollars (U.S. $4,400,000) in
cash by wire transfer to the Bank of New York, New
York, NY, ABA 021000018, for the account of Akzo
Nobel, Inc., account number 8090492730, under
reference to OTC-BGS.
(b) to Teknika B.V. the amount of one hundred thousand
U.S. Dollars (U.S. $100,000) in cash by wire
transfer to a bank account designated by Teknika
B.V.
Article 3. TRANSFER OF BGS OPERATIONS.
3.1 Ownership of all Assets purchased hereunder shall be
delivered by OTC to Purchaser on December 31, 1996 (the
"Closing Date") or another date as agreed upon between the
parties. The transfer of the Assets (the "Closing") shall
be deemed effective as of midnight Eastern Standard Time
on December 31, 1996, at which time title and risk of loss
with respect to the Assets will pass to Purchaser.
3.2 On the Closing Date, OTC and Teknika B.V., at their sole
cost and expense, shall deliver or cause to be delivered
to Purchaser the following documents and instruments, each
dated as of the Closing Date, and the following other
materials and items, in addition to any other items and
payments required by this Agreement to be delivered by OTC
or Teknika B.V.:
(i) all Assets hereby agreed to be sold which are
capable of transfer by delivery except as
explicitly set forth otherwise in this Agreement;
(ii) an original duly executed and acknowledged grant
deed subject to the Permitted Exceptions (as
defined in Paragraph 5.4 hereinafter) conveying
the property of Purchaser;
(iii) an assignment of intellectual property, duly
executed on behalf of Teknika B.V., for the
Teknika B.V. Trademarks and on behalf of OTC for
the OTC Trademarks as listed in the Trademark List
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(the "Trademarks") as well as for other
intellectual property relating to the BGS
Operations; and
(iv) three (3) original executed counter parts of an
assignment and assumption agreement duly executed
on behalf of OTC and/or Teknika B.V. assigning the
Contracts to Purchaser;
(v) a bill of sale by which OTC and/or Teknika B.V.
shall transfer to Purchaser, free and clear of all
liens, claims and encumbrances, all right, and
interest in and to all of the other Assets.
(vi) a Non-Foreign Affidavit duly executed on behalf of
OTC stating that OTC is not a foreign person within
the meaning of Section 1445 (f) (3) of the Internal
Revenue Code of 1986;
(vii) a statement duly executed on behalf of PerImmune,
Inc., acknowledging that Purchaser will own the
Anti-C3-Cell Lines as from the Closing Date, that
PerImmune, Inc. will hold these Anti-C3-Cell Lines
as from the Closing Date for the benefit of
Purchaser and that PerImmune, Inc. will physically
transfer the Anti-C3-Cell lines to Purchaser or a
third party designated by Purchaser upon the first
written request of Purchaser.
(viii) such other documents and instruments, signed and
properly acknowledged by OTC and/or Teknika B.V.,
if appropriate, as may be reasonably required by
Purchaser or otherwise in order to effectuate the
provisions of this Agreement and the Closing as
they relate to the acquisition of the Assets.
3.3 Delivery as contemplated in paragraph 3.2 above shall be
made against:
(i) Same day federal funds transferred by Purchaser to
OTC and Teknika B.V. in the amounts as specified
in Article 2 above;
(ii) Delivery of such instrument of assumption as OTC
may reasonably request to effectuate assumption of
liabilities and obligations of OTC by Purchaser
provided for in Paragraph 1.4 above; and
(iv) three (3) originally executed counter parts of an
assignment and assumption agreement duly executed
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on behalf of Purchaser accepting the assignment of
the Contracts to Purchaser and assuming the
performance of the obligation of the assignment
under the Contracts.
3.4 (a) Subject to the last sentence of this subparagraph
3.4(a), the following shall be prorated between
the parties with respect to the BGS Operations as
of midnight Eastern Standard Time, on the Closing
Date;
(i) real property taxes imposed with respect to
the Facility (including any current and
nondelinquent installments of assessments
which are payable in installments), and
taxes on the Equipment, whether such taxes
are existing or pending as of the Closing
Date or may hereafter arise; and taxes
(including personal property taxes on the
Equipment) and assessments levied against
the Facility;
(ii) payments under the Contracts;
(iii) all gas, electric and other utility
charges; and
(iv) any other operating expenses or other items
pertaining to the Facility which are
customarily prorated between a purchaser
and a seller in the area in which the
Facility is located.
The foregoing apportionments are dependent upon
OTC and Teknika B.V. receiving the Purchase Price
by no later than 3:00 p.m., Eastern Standard Time,
on the Closing Date. If such receipt is not
guaranteed to OTC and Teknika, OTC and Teknika
B.V. may elect to apportion as of the following
business day.
(b) Such prorations shall be made by the parties
hereto as soon as practicable, but no later than
thirty (30) days after the Closing Date. The
parties shall make all necessary adjustments by
appropriate payments between themselves within
such period.
(c) The provisions of this Paragraph 3.4 shall survive
Closing.
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3.5 As soon as practicable, but not later than thirty (30)
days after the Closing Date, OTC shall deliver to
Purchaser a detailed statement (the "Statement") setting
forth the quantity and value of all inventories of
finished goods, work in process, materials (including
biological materials), components and supplies, at the BGS
Operations, and exclusively related to the BGS Operations
on hand as of the Closing Date. Purchaser acknowledges
that the purchase price as specified in Article 2 above is
firm and not subject to any adjustments and that the
Statement shall not in any way be used to alter or affect
the amount of such purchase price.
3.6 After the Closing Date, OTC will from time to time, at
Purchaser's request and without further consideration,
execute and deliver to Purchaser such other and further
instruments of conveyance, assignment and transfer as
Purchaser may reasonably request for more effective
conveyance and transfer of any of the Assets to Purchaser,
including, without limitation, such further instruments of
conveyance, assignment and transfer as may be necessary
to permit Purchaser to record on or in any applicable
record or recording office its ownership of any of the
Assets.
Article 4. CONDITIONS PRECEDENT TO CLOSING.
4.1 EACH PARTY'S CONDITIONS PRECEDENT TO CLOSING. The
obligation of Purchaser to purchase the Assets and of OTC
and Teknika B.V. to sell the Assets in accordance with
this Agreement is subject to the following conditions
precedent (collectively, the "Joint Closing Conditions"),
which conditions may be waived, or the time for
satisfaction thereof extended, by both parties only in a
writing executed by each (provided, however, that any such
waiver shall not affect the ability of the party waiving
such condition to pursue any remedy it may have with
respect to any breach hereunder by the other):
(a) NO LEGAL PROHIBITIONS. Neither of the parties
hereto shall be subject to any order or injunction
of a court of competent jurisdiction which
prohibits the consummation of the transactions
contemplated by this Agreement. In the event any
such order or injunction shall have been issued,
each party agrees to use its reasonable efforts to
have any such injunction lifted.
(b) CONSENTS. All consents, authorizations, orders
and approvals of (or filings or registrations
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with) any governmental commission, board, other
regulatory body or third parties required in
connection with the execution, delivery and
performance of this Agreement shall have been
obtained or made, subject, however, to and except
as foreseen in Paragraph 1.3 above and except
where the failure to have obtained or made any
such consent, authorization, order, approval,
filing or registration would not have a material
adverse effect on the business, results of
operations or financial condition of Purchaser and
the BGS Operations.
4.2 PURCHASER'S CONDITIONS PRECEDENT TO CLOSING. The
obligation of Purchaser to purchase the Assets in
accordance with this Agreement is subject to the following
conditions precedent (collectively, the "Purchaser's
Closing Conditions"), which conditions may be waived, or
the time for satisfaction thereof extended, by Purchaser
only in a writing executed by Purchaser (provided,
however, that any such waiver shall not affect Purchaser's
ability to pursue any remedy it may have with respect to
any breach hereunder by OTC or Teknika B.V.):
(a) CONDITIONS. OTC and Teknika B.V. shall have
performed the agreements contained in this
Agreement required to be performed on or prior to
the Closing Date and the representations and
warranties of OTC and Teknika B.V. contained in
this Agreement shall be true and correct in all
material respects as of the Closing Date as if
made on the Closing Date and Purchaser shall have
received a certificate of the President or a Vice
President of OTC and Teknika B.V. dated the
Closing Date, certifying on behalf of OTC and
Teknika B.V. to such effect.
(b) NO MATERIAL CHANGE. From the date of this
Agreement through the Closing Date, there shall
not have occurred any change in the financial
condition, business or operations of the BGS
Operations that would have or would be reasonably
likely to have a material adverse effect on the
value of the Assets, taken as a whole.
(c) TITLE. First American Title Company or another
title insurer selected by Purchaser (the "Title
Company") shall be prepared and irrevocably
committed to issue to Purchaser an ALTA extended
coverage owner's policy of title insurance in
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favor of Purchaser in an amount equal to the
Facility Purchase Price showing title to the
Facility vested in Purchaser, subject only to the
Permitted Exceptions (as defined in Paragraph 5.4
hereinafter), with such endorsements as Purchaser
may require. The foregoing title insurance shall
include standard Pennsylvania title insurance
endorsements or coverage which may be available in
other jurisdictions, if such coverage is not now
available in Pennsylvania to the Title Company.
FAILURE OF PURCHASER'S CLOSING CONDITIONS. If any of the
Purchaser's Closing Conditions have not been fulfilled
within the applicable time periods, Purchaser may:
(i) waive the Purchaser's Closing Condition and close
in accordance with this Agreement, provided that
if such waived Closing Condition was not fulfilled
by reason of any default by OTC or Teknika B.V.,
all rights and remedies of Purchaser with respect
to such default shall be preserved and not deemed
waived; or
(ii) terminate this Agreement by written notice to OTC
and Teknika B.V., in which event OTC and Teknika
B.V. shall pay for all of the cancellation charges
of Title Company, and Purchaser shall be entitled
to pursue its rights and remedies hereunder or
under applicable law.
4.3 OTC'S AND TEKNIKA B.V.'S CONDITIONS PRECEDENT TO CLOSING.
The obligation of OTC and Teknika B.V. to sell the Assets
in accordance with this Agreement is subject to the
following conditions precedent (collectively, "OTC's
Closing Conditions"), which conditions may be waived, or
the time for satisfaction thereof extended, by OTC and
Teknika B.V. only in a writing executed by OTC and Teknika
B.V. (provided, however, that any such waiver shall not
affect OTC's and Teknika B.V.'s ability to pursue any
remedy it may have with respect to any breach hereunder by
Purchaser):
(a) CONDITIONS. Purchaser shall have performed its
agreements contained in this Agreement required to
be performed on or prior to the Closing Date, and
the representations and warranties of Purchaser
contained in this Agreement shall be true and
correct in all material respects as of the
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Transfer Date as if made on the Transfer Date, and
OTC and Teknika B.V. shall have received a
certificate of the President or a Vice President
of Purchaser, dated the Closing Date, certifying
on behalf of Purchaser to such effect.
(b) PURCHASE PRICE AVAILABLE. Purchaser shall have
the Purchase Price available for immediate
delivery pursuant to Article 3 above.
FAILURE OF OTC'S AND TEKNIKA B.V.'S CLOSING CONDITIONS.
Subject to OTC's and Teknika B.V.'s rights hereunder, if
any of the OTC's and Teknika B.V.'s closing Conditions
have not been fulfilled within the applicable time
periods, OTC and Teknika B.V. may:
(i) waive OTC's and Teknika B.V.'s Closing Conditions
and close in accordance with this Agreement,
without adjustment or abatement of the Purchase
Price, except as otherwise provided herein; in
such event, however, if such waived Closing
Condition was not fulfilled by reason of any
default by Purchaser, all rights and remedies of
OTC and Teknika B.V. with respect to such default
shall be preserved and not deemed waived; or
(ii) terminate this Agreement by written notice to
Purchaser, in which event Purchaser shall pay for
all of the cancellation charges of Title Company
and OTC and Teknika B.V. shall be entitled to
pursue its rights and remedies hereunder or under
applicable law.
Article 5. TITLE AND SURVEY
5.1 TITLE EXAMINATION: COMMITMENT FOR TITLE INSURANCE.
Purchaser shall have until the expiration of the
Inspection Period (as defined in Paragraph 6.1
hereinafter) to examine title to the Facility. During the
Inspection Period, Purchaser shall obtain from the Title
Company title commitment (the "Title Commitment") covering
the Facility, showing all matters and exceptions affecting
title to the Facility.
5.2 SURVEY. During the Inspection Period, Purchaser will
obtain at its own expense an ALTA survey of the Facility
(the "Survey") in connection with the issuance of the
Title Policy (as defined in Paragraph 5.5 hereinafter).
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5.3 TITLE OBJECTIONS; CURE OF TITLE OBJECTIONS. Purchaser
shall have until the expiration of the Inspection Period
to notify OTC, in writing, of such objections as Purchaser
may have to anything contained in the Title Commitment or
the Survey. Any item contained in the Title Commitment or
any matter shown on the Survey to which Purchaser does not
object during the Inspection Period shall be deemed
approved by Purchaser and shall be added to the list of
Permitted Exceptions (as defined in Paragraph 5.4
hereinafter). In the event Purchaser shall notify OTC of
objections to title or to matters shown on the Survey
prior to the expiration of the Inspection Period, OTC
shall have the right, but not the obligation, to cure such
objections. Within ten (10) days after receipt of
Purchaser's notice of objections, OTC shall notify
Purchaser in writing whether OTC elects to attempt to cure
such objections. If OTC elects to attempt to cure such
matters, OTC shall have until the Closing Date to attempt
to remove, satisfy or cure the same. If OTC elects not to
cure any objections specified in Purchaser's notice, or if
OTC elects to cure any objections but is unable to effect
a cure prior to the Closing, Purchaser shall have the
following options: (i) to accept a conveyance of the
Facility subject to the Permitted Exceptions (as defined
in Paragraph 5.4 hereinafter), specifically including any
matter objected to by Purchaser which OTC is unwilling or
unable to cure; or (ii) to terminate this Agreement by
sending written notice thereof to OTC and Teknika B.V.,
and upon delivery of such notice of termination, this
Agreement shall terminate and thereafter neither party
hereto shall have any further rights, obligations or
liabilities hereunder except with regard to any breach or
default existing as of that date or to the extent that any
right, obligation or liability set forth herein expressly
survives termination of this Agreement.
5.4 CONVEYANCE OF TITLE. At Closing, OTC shall convey and
transfer to Purchaser the Facility subject only to the
following matters (the "Permitted Exceptions"): (i) all
security interests, liens, claims and other encumbrances
for property taxes not yet due and payable; (ii) all
easements, covenants, rights-of-way, claims, liens,
security interests and other encumbrances disclosed or
identified in the Title Commitment; (iii) zoning, building
and other similar governmental restrictions applicable to
the Facility; (iv) matters of record approved by Purchaser
pursuant to Paragraph 5.3 above; (v) matters affecting the
condition of title created by or with the written consent
of Purchaser; and (vi) items appearing of record or shown
on the Survey and, in either case, not objected to by
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Purchaser or waived or deemed waived by Purchaser in
accordance with Paragraph 5.3 or 5.6 hereof, and (iv) all
matters relevant to title that would be revealed or
disclosed in an accurate survey of the Facility.
5.5 TITLE REPORT. It is a condition to Purchaser's
obligations at the Closing that the Title Company shall
issue to Purchaser an ALTA extended coverage Owner's
Policy of Title Insurance (the "Title Policy") covering
the Facility, in an amount reasonably required by
Purchaser subject only to the Permitted Exceptions and
insuring, Purchaser against any loss or damage it may
incur as a result of: (i) any discrepancy between the
Facility as described on Real Estate List and as shown on
the Survey; (ii) the forced removal of any Improvements by
virtue of their encroachment on or over any easements,
rights of way or property of others; (iii) mechanics'
liens for work performed or materials supplied prior to
the Closing; (iv) noncompliance with covenants, conditions
or restrictions; and (v) any other matters Purchaser
reasonably requires, and for which the Title Company is
authorized in Pennsylvania to provide endorsements.
The foregoing title insurance coverage shall be provided,
for the account of Purchaser, by means of standard
Pennsylvania title insurance endorsements, including PA
104 and PA 301, and/or a standard ALTA 9 endorsement as
filed in Pennsylvania, and other endorsements which have
already been filed with the appropriate title regulatory
authorities in Pennsylvania by the Title Company. OTC is
not obligated to procure for Purchaser, nor is the Title
Company obligated to provide, title insurance endorsements
or coverage which may be available in other jurisdictions,
if such coverage is not now available in Pennsylvania.
5.6 PRE-CLOSING "GAP" TITLE DEFECTS. Whether or not Purchaser
shall have furnished to OTC any notice of title objections
pursuant to Paragraph 5.3, Purchaser may, at or prior to
Closing, notify OTC in writing of any objections to title
first raised by the Title Company between (a) the date
which is the earlier of (i) the effective date of the
Title Commitment or (ii) the expiration of the Inspection
Period, and (b) the Closing Date. With respect to any
objections to title set forth in such notice, OTC shall
have the same option to cure, and Purchaser shall have the
same option to accept title subject to such matters or to
terminate this Agreement as if such objections had been
made by Purchaser before the expiration of the Inspection
Period.
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Article 6. INSPECTION PERIOD
6.1 DURATION. The "Inspection Period" shall begin on the date
of the Effective Date and shall end at 5:00 p.m., Eastern
Standard Time on November 29, 1996 (such date, the
"Inspection Expiration Date"). During the Inspection
Period, Purchaser shall have the right, as provided in
this Article 6, to inspect and investigate the Facility.
6.2 DILIGENCE MATERIALS. Within five (5) business days after
the Effective Date, OTC shall provide and make available
at the Facility to Purchaser, to the extent within the
possession or control of OTC or any of its employees,
representatives, contractors or agents, complete, legible
and accurate originals or copies of all operating files
maintained by OTC or the Facility manager in connection
with the maintenance and/or management of the Facility and
relevant for an examination of title of the Facility (the
"Diligence Materials").
6.3 RIGHT OF ENTRY/INSPECTION. During the Inspection Period,
OTC shall provide to Purchaser and its representatives,
contractors and agents the right to enter upon and
complete access to the Facility and to make all
inspections, inquiries and investigations of the condition
and all other aspects of the Facility which it may deem
necessary or desirable in its sole discretion and to
review the Diligence Materials and such other information
as Purchaser shall obtain with respect to the Facility.
All such inspections, investigations and examinations
shall be undertaken at Purchaser's sole cost and expense.
After completing its inspections, Purchaser shall restore
and repair any damage caused by Purchaser's inspections.
Purchaser understands and agrees that any on-site
inspections of the Facility shall be conducted upon at
least twenty-four (24) hours' prior notice to OTC and, if
requested by OTC, in the presence of OTC or its
representative. Purchaser agrees to indemnify against and
hold OTC harmless from any claim for liabilities, costs,
expenses (including reasonable attorneys' fees actually
incurred), damages or injuries arising out of or resulting
from the inspection of the Facility by Purchaser or its
agents, and notwithstanding anything to the contrary in
this Agreement, such obligation to indemnify and hold
harmless OTC shall survive Closing or any termination of
this Agreement. All inspections shall occur at reasonable
times agreed upon by OTC and Purchaser and shall be
conducted so as not to interfere unreasonably with use of
the Facility by OTC. Purchaser agrees to any inspections
and examinations permitted in this Article 6 prior to the
expiration of the Inspection Period.
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Article 7. CONDEMNATION AND RISK OF LOSS.
7.1 CONDEMNATION. In the event that OTC receives notice of
the institution of any proceedings, whether judicial,
administrative or otherwise, which shall relate to the
proposed taking of all or any portion of the Facility or
by eminent domain prior to the Closing, OTC shall promptly
notify Purchaser thereof. Purchaser shall thereafter have
the right, at its sole and absolute discretion, to
terminate this Agreement by giving OTC and Teknika B.V.
written notice to such effect within fifteen (15) days
after receipt by it of such notice from OTC or obtaining
such notice itself. Should Purchaser so terminate this
Agreement, thereafter Purchaser and OTC and Teknika B.V.
shall be released from their respective obligations and
liabilities hereunder. Should Purchaser not so terminate,
the parties shall proceed to Closing (with no abatement or
adjustment in the Purchaser Price) and OTC shall execute a
quitclaim assignment of all of its right, title and
interest in all awards in connection with such taking to
Purchaser. Purchaser shall control the negotiation and
settlement of any such proceeding.
7.2 MINOR DAMAGE. In the event of loss or damage to the
Facility or any portion thereof which is not "Major" (as
defined in Paragraph 7.3 hereinafter), this Agreement
shall remain in full force and effect and OTC shall be
obligated to promptly perform any necessary repairs to
restore the Facility to substantially the same condition
as the Facility was in prior to such damage as soon as
practicable, and all casualty insurance proceeds shall be
retained by OTC. In the event that OTC elects to perform
repairs upon the Facility and such repairs shall not be
completed prior to the Closing, Purchaser shall have the
option to reschedule the Closing Date to a date after
completion of such repair or to proceed to Closing, in
which latter event OTC shall assign to Purchaser all of
OTC's rights to all construction contracts with respect to
such repairs and to all insurance proceeds thereof and
shall pay to Purchaser the amount of any applicable
deductible under OTC's casualty insurance. If OTC assigns
a casualty claim to Purchaser, the Purchase Price shall be
reduced by an amount equal to the deductible amount under
OTC's insurance policy. Upon Closing, full risk of loss
with respect to the Facility shall pass to Purchaser.
7.3 MAJOR DAMAGE. In the event of a "Major" loss or damage,
Purchaser may terminate this Agreement by written notice
to OTC and Teknika B.V. If Purchaser does not elect to
terminate this Agreement within fifteen (15) days after
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OTC sends Purchaser written notice of the occurrence of
Major loss or damage, then Purchaser shall be deemed to
have elected to proceed with Closing, in which event OTC
shall assign to Purchaser all of OTC's right, title and
interest to any claims and proceeds OTC may have with
respect to any casualty insurance policies relating to the
Facility. If OTC assigns a casualty claim to Purchaser,
the Purchase Price shall be reduced by an amount equal to
the deductible amount under OTC's insurance policy. Upon
Closing, full risk of loss with respect to the Facility
shall pass to Purchaser.
7.4 DEFINITION OF "MAJOR" LOSS OR DAMAGE. For purposes of
Paragraphs 7.2 and 7.3, "Major" loss or damage refers to
loss or damage to the Facility or any portion thereof such
that the cost of repairing or restoring the Facility in
question to a condition substantially identical to that of
the Facility prior to the event of damage would be, in the
opinion of an architect selected by OTC and reasonably
approved by Purchaser, equal to or greater than Fifty
Thousand Dollars ($50,000). If Purchaser does not give
notice to OTC of Purchaser's reasons for disapproving an
architect within ten (10) business days after receipt of
notice of the proposed architect, Purchaser shall be
deemed to have approved the architect selected by OTC.
Article 8. REPRESENTATIONS AND WARRANTIES OF OTC AND TEKNIKA
B.V.
OTC and where indicated Teknika B.V. hereby represent and
warrant as of the date of this Agreement and as of the
Closing Date to Purchaser as an inducement to enter into
this Agreement.
8.1 STATUS. OTC is a corporation duly organized and existing
and in good standing under the laws of the State of
Delaware, which has full power and authority to own or
lease its property and assets and to carry on its business
as it has been, and is, conducted. Teknika B.V. is a
corporation duly organized and validly existing and in
good standing under the laws of the Netherlands, which has
full power and authority to own or lease its property and
assets and to carry on its business as it has been, and
is, conducted.
8.2 CORPORATE AUTHORITY. Both OTC and Teknika B.V. have full
power and authority to enter into this Agreement and to
consummate the transactions contemplated herein.
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8.3 CORPORATE ACTION. All necessary corporate action has been
duly taken by the Board of Directors and stockholders of
OTC as well as Teknika B.V. in order to authorize the
execution and consummation of this Agreement. Upon
execution hereof by the Purchaser, this Agreement shall be
the legal, valid and binding obligation of OTC and/or
Teknika B.V. enforceable in accordance with its terms.
8.4 TITLE TO PROPERTY. Except as provided in Paragraph 8.5
with respect to Trademarks and in Paragraph 8.8(b) with
respect to Facility, OTC has good and marketable title to
all of the Assets to be transferred hereunder, free and
clear of any liabilities, liens, encumbrances, security
interests, charges, imperfections of title or restrictions
of any kind or nature whatsoever and on the Closing Date
the Purchaser shall receive good and marketable title to
all of such Assets free and clear of any liabilities,
liens, encumbrances, security interests, charges,
imperfections of title or restrictions of any kind or
nature whatsoever.
8.5 TRADEMARKS. Teknika B.V., has good and marketable title
to the Teknika B.V. Trademarks and OTC possesses the right
to use the Teknika B.V. Trademarks in connection with the
conduct of its business and OTC has good and marketable
title to the OTC Trademarks, and to the best of Teknika
B.V. and OTC's knowledge there is no conflict with any
trademarks or trade names of others.
8.6 CONTRACTS. All contracts, agreements, leases, licenses,
commitments and undertakings of OTC assumed by and
assigned to Purchaser under this Agreement as set forth on
the Contract List hereto are legal, valid and binding
obligations of the parties thereto in full force and
effect in good standing with no current default by either
of the parties thereto. OTC shall use reasonable efforts
to have all such contracts, assignments, leases, licenses,
commitments and undertakings assigned to Purchaser and no
amendments or modifications other than in the ordinary
course of business have been made with respect thereto.
8.7 LITIGATION. Except as set forth elsewhere in this
Agreement or as disclosed on Schedule 3.1 attached
hereto, there are no material actions, suits or
proceedings pending or, to the knowledge of OTC or Teknika
B.V., threatened against and materially adversely
affecting the BGS Operations before any court,
administrative agency or other body. The BGS Operations
(or OTC with respect to its conduct of the BGS Operations)
has not been charged; nor to the knowledge of OTC or
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Teknika B.V., is it under investigation with respect to
any charge, concerning any material violation of any
provision of any federal, state, local or foreign law or
administrative negotiations.
8.8 REAL PROPERTY
(a) Except for certain office space at OTC's principal
offices in Durham, NC, (which is not included in
this transaction) the Facility includes all of the
real estate currently used or occupied by the BGS
Operations. Such real estate is not subject to
any restrictions which would prevent its use as
presently used in the conduct of the BGS
Operations.
(b) OTC has good and marketable fee title to the
Facility, which may be conveyed subject only to
the Permitted Exceptions.
(c) FOREIGN INVESTMENT IN FACILITY TAX ACT. OTC is
not a foreign person within the meaning of 42 USCS
Section 1445(f)(3).
(d) TITLE TO FACILITY. As of the Effective Date, OTC
is, and as of the Closing Date OTC will be the
legal and equitable owner of the Facility, and
shall convey title to the Facility to Purchaser,
free and clear of all liens and interests other
than the Permitted Exceptions.
(e) ENCROACHMENTS. Except as described in the
Permitted Exceptions, to OTC's actual knowledge,
improvements from adjoining land do not encroach
onto the Land, and the Improvements do not
encroach onto adjoining land or easements, in
either case in a manner that would materially and
adversely impair the value of the Facility or the
continued use or operation of the Facility as it
is presently being conducted.
(f) COMPLIANCE WITH LAWS AND GOVERNMENTAL APPROVALS.
OTC has not received any notice of alleged
violation of any statute, order, rule or
regulation applicable to the Facility, nor any
written communications (i) from any insurance
companies, fire underwriting boards or
governmental agencies of any conditions, defects,
or inadequacies with respect to the Facility, or
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(ii) from governmental agencies with respect to
any violations of building codes and/or zoning
ordinances or other governmental laws,
regulations, or orders with respect to the
Facility.
(g) NO LITIGATION-FACILITY. There are no actions,
lawsuits, proceedings, including, without
limitation, condemnation proceedings, pending or,
to OTC's actual knowledge, threatened, against OTC
with respect to the Facility.
(h) NO LEASES. On the Closing Date, there will be no
leases or occupancy agreements affecting the
Facility.
(i) POSSESSION. As of the Closing Date, possession of
the Facility shall be delivered to Purchaser free
and clear of all interests other than those
described in the Permitted Exceptions.
(j) DUE DILIGENCE DOCUMENTS. To OTC's actual
knowledge, all documents and other written
materials heretofore provided to Purchaser and its
agents in connection with its due diligence of the
Facility are correct, complete and (unless
otherwise patent on their face) final copies of
what they purport to be.
8.9 ENVIRONMENTAL ISSUES.
(a) The West Chester Manufacturing Facility, zoned for
light industrial, is supplied water from
Philadelphia Suburban Water, the public water
company, and is connected to the West Goshen
Township sewer authority (permit #1WP-005-95-97).
(b) The West Chester Manufacturing Facility is a RCRA
small generator (EPA #PAD174204792).
(c) Prior to the date hereof, OTC performed a Phase 1
study of the West Chester Manufacturing Facility.
True and correct copies of the study have been
delivered to Buyer. To the best of its knowledge
and belief, by disclosing the study, OTC has
disclosed the best information in its possession
or control concerning the environmental conditions
or the existence of any contamination at the West
Chester Manufacturing Facility.
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(d) To the best of its knowledge, OTC has obtained,
and is in material compliance with, all permits,
licenses and other authorizations which are
currently required to operate the West Chester
Manufacturing Facility.
(e) To the best of its knowledge, OTC is not aware of
nor has it received any notice of any non-
compliance situation or incident related to any
applicable environmental law or regulation which
would impede or prevent continued operations at
the West Chester Manufacturing Facility.
(f) OTC has not conducted any activity, use, action or
event of any type whatsoever in or about the
Facility (or off-site of the Facility that might
affect the Facility) that did or would constitute
a violation of any Environmental Law (or
hereinafter defined); to OTC's actual knowledge,
except for those substances used in connection
with BGS Operations, no Hazardous Substances have
been generated, manufactured, released, treated,
stored, handled, deposited, disposed of,
transferred, or discharged from, over, beneath, on
or about the Facility by any entity, firm, or
person or from any source whatsoever.
"Hazardous Substance" means (a) those substances included
within the definitions of "Hazardous Substances",
"Hazardous Materials," "Toxic Substances," "Hazardous
Waste," or "Solid Waste" in any Environmental Law or in
the regulations promulgated pursuant thereto; (b) those
substances listed in the United States Department of
Transportation Table (40 C.F.R. 172.101 and any amendments
thereto) or by the Environmental Protection Agency as
hazardous substances (40 C.F.R. Part 302 and amendments
thereto); and (c) oil and petroleum products, asbestos,
polychlorinated biphenyls, TCE, PCE or urea formaldehyde,
but does not include ordinary office supplies in
reasonable amounts which do not violate Environmental
Laws.
"Environmental Law" means any federal, state or local law,
statute, ordinance, regulation, order or rule pertaining
to health, industrial hygiene or environmental conditions.
8.10 CONFLICTS WITH OTHER AGREEMENTS;CONSENT OF THIRD PARTIES.
Neither the execution and delivery of this Agreement nor
the consummation of the sale and other transactions
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contemplated hereunder will (i) conflict with, or result
in a breach of, any of the terms and conditions or
provisions of any law or any regulation, order, writ,
injunction or decree of any court or government
instrumentality, (ii) conflict with the corporate Charter
or Bylaws of OTC or the Statutes of Teknika B.V., (iii)
conflict with or result in the breach of any agreement or
other instrument to which OTC or Teknika B.V. is bound;
(iv) constitute a default (or an event which with notice
or lapse of time or both become a default) or result in
any lien or encumbrance on any of the Assets being sold
hereunder; or (v) result in the violation or termination
of any permit or governmental license necessary for the
conduct of the BGS Operations. Except as foreseen in
Paragraph 1.3 above the transitions contemplated by this
Agreement do not require the consent of any third party.
8.11 NO BANKRUPTCY. No proceeding has been commenced against
or by OTC or Teknika B.V. under the federal Bankruptcy
Code or any similar state statute or to Teknika B.V., the
Dutch Bankruptcy Law.
8.12 NO ADDITIONAL WARRANTIES. EXCEPT AS EXPLICITLY STATED
ABOVE IN THIS ARTICLE 8, OTC MAKES NO REPRESENTATIONS OR
WARRANTIES WITH RESPECT TO THE ASSETS, INCLUDING NO
WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE.
8.13 SURVIVAL. The representations and warranties contained
herein shall survive the execution of this Agreement for a
period of one (1) year from the Closing Date.
8.14 MEANING OF KNOWLEDGE. For purposes of this Article 8
knowledge means the knowledge of facts or circumstances
which would indicate to a reasonable person the existence
of the fact or circumstance.
Article 9. REPRESENTATIONS AND WARRANTIES OF PURCHASER.
9.1 STATUS. Purchaser is a corporation duly organized and
existing and in good standing under the laws of the State
of Delaware.
9.2 CORPORATE AUTHORITY. Purchaser has full power and
authority to enter into this Agreement and to consummate
the transaction contemplated herein.
9.3 CORPORATE ACTION. All necessary corporate action has been
duly taken by the Board of Directors and stockholders of
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Purchaser in order to authorize the execution and
consummation of this Agreement. Upon execution hereof by
the Purchaser, this Agreement shall be the legal, valid
and binding obligation of Purchaser enforceable in
accordance with its terms.
9.4 CONSENTS. No consent, approval, authorization, order,
registration or qualification of or with any court or
governmental agency or body is required for consummation
by Purchaser of the transactions contemplated under this
Agreement, which shall include the sale by OTC and Teknika
B.V. of the Assets to Purchaser.
9.5 LITIGATION. There are no actions, suits or proceedings
pending, or to the knowledge of Purchaser, threatened
against, Purchaser before any court, administrative agency
or other body, in which any third party challenges or
seeks to prevent, alter or materially delay the
transactions contemplated under this Agreement.
9.6 CONFLICTS WITH OTHER AGREEMENTS. Neither the execution
and delivery of this Agreement nor the consummation of the
sale and other transactions contemplated hereunder will
conflict with, or result in a breach of, any of the terms
and conditions or provisions of any law or any regulation,
order, writ, injunction or decree of any court or
government instrumentality or the corporate Charter or
Bylaws of Purchaser, or of any agreement or other
instrument to which Purchaser is bound.
9.7 NO BANKRUPTCY. No proceeding has been commenced against
or by Purchaser under the Federal Bankruptcy Code or any
similar state statute.
9.8 NO BROKER. Purchaser has not dealt with or retained a
broker in connections with this transaction and no entity
or individual is entitled to receive a fee as the result
of the consummation of the transactions contemplated under
this Agreement.
9.9 SURVIVAL. The representations and warranties contained
herein shall survive the execution of this Agreement for a
period of one (1) year from the Closing Date.
9.10 MEANING OF KNOWLEDGE. For purposes of this Article 9
knowledge means the knowledge of facts or circumstances
which would indicate to a reasonable person the existence
of the fact or circumstance.
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Article 10. COVENANTS.
OTC hereby covenants with Purchaser as follows:
From the Effective Date until the Closing or earlier
termination of this Agreement, OTC shall operate and
maintain the BGS Operations in a manner generally
consistent with the manner in which OTC has operated and
maintained the BGS Operations prior to the date hereof,
and in all events in the ordinary course of business, and
shall refrain entering into any transaction inconsistent
with the transactions contemplated by this Agreement.
Article 11. EMPLOYEES/EMPLOYEE BENEFITS.
11.1 Employees of OTC dedicated to the BGS Operations and which
are identified in Schedule 4 hereto (the "Transferred
Employees") will as of midnight on the Closing Date cease
to be employed by OTC and will be offered employment by
Purchaser, provided, however, that Purchaser acknowledges
that certain employees located at OTC's principal offices
in Durham, NC, are shared with OTC in marketing, sales
(excluding field sales force which is not located at OTC's
principal offices) and customer services and technical
services for the BGS Operations. Purchaser will make a
reasonable effort in collaboration and agreement with OTC
to identify specialists in the BGS Operations among these
marketing, sales, customer services and technical services
employees and attempt to offer employment and arrange
transfer of some or all of them to the West Chester
Manufacturing Facility. These employees will then become
"Transferred Employees" as defined in this Agreement. If
suitable arrangements cannot be made with respect to those
marketing, sales, customer services and technical services
employees, they will remain the obligations of OTC.
Purchaser agrees to maintain the same base salary levels
for a two [2] year period; provided that the foregoing
shall, without prejudice to any other obligation assumed
by Purchaser hereunder with respect to Transferred
Employees, not obligate Purchaser to continue to employ
any Transferred Employee for such period following the
Closing Date. Purchaser agrees to offer to Transferred
Employees its then current fringe benefit package.
Purchaser further agrees to waive the exclusions from
coverage under group health, life and disability insurance
for "pre-existing conditions" for such Transferred
Employees.
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The amount of severance pay entitlement on the Closing
Date under the OTC's severance policy is a preserved
severance pay entitlement ("Preserved Severance Pay") for
each Transferred Employee. The amount of the Preserved
Severance Pay for each Transferred Employee is set forth
in Schedule 4 hereto. Should a Transferred Employee be
laid off by Purchaser after transfer due to a reduction in
force or position elimination, such employee will receive
from Purchaser the greater of their Preserved Severance
Pay or the amount of severance pay due under the
Purchaser's severance pay policy.
Purchaser undertakes no obligation to employ any persons
other than a Transferred Employee. An individual shall be
included as a Transferred Employee notwithstanding the
fact that the individual, on the Closing Date, is on leave
of absence, vacation or on short-term disability.
11.2 All Transferred Employees shall become participants in the
Purchaser's health and medical plans on the Closing Date.
Purchaser shall recognize for all benefit plan purposes,
all service credit which OTC would have recognized under
its comparable plans in effect on the Closing Date.
11.3 On and after the Closing Date, Purchaser shall be solely
responsible for any and all benefits and the cost of any
and all benefits to which the Transferred Employees are
entitled pursuant to the terms of the Purchaser s plans or
programs, in effect from time to time, provided, however,
that liabilities relating to the claims of Transferred
Employees for medical benefits incurred for medical
services rendered to, and purchases of prescription drugs
and other health care products made by such persons while
actively employed by OTC shall be retained by OTC, subject
to the provisions of its medical benefit plans as in
effect on such date.
The amount of medical expenses applied at the Closing Date
to satisfy the annual deductible and annual out of pocket
expenses under the OTC Medical Plan for each Transferred
Employee, will be recognized by the Purchaser as being
applied to the Purchaser's health and medical plans'
deductible and out of pocket expenses for the Purchaser's
current plan year.
11.4 OTC will be responsible for paying all accrued vacation
due to Transferred Employees up to the Closing Date. All
Transferred Employees will become eligible under
Purchaser's vacation policy and retain all service credit
that OTC would have recognized under its comparable plan
in effect on the Closing Date.
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11.5 OTC shall, on and before the Closing Date, be solely
responsible for the cost of any and all benefits to which
Transferred Employees are entitled under the terms of
OTC's retirement, health and welfare plans while employed
by OTC, and subject to the terms of the applicable plan as
in effect from time to time.
11.6 OTC and Purchaser agree to provide any information and to
take any actions reasonably required to effect the
provisions of this Article 11 and the following Article
12. OTC and Purchaser acknowledge, that it is their
intention that no group health plan maintained by
Purchaser shall constitute a successor plan to any of the
OTC's group health plans, and Purchaser is not a successor
employer with respect to OTC's group health plans, and OTC
is not a predecessor employer with respect to Purchaser's
group health plans, within the meaning of the COBRA health
continuation coverage provisions contained in Internal
Revenue Code Section 4908B(f) and the corresponding
provisions of the Employee Retirement Income Security Act
of 1974.
Article 12. PENSION AND SAVINGS PLANS
12.1 OTC shall be responsible for all Transferred Employees
benefits accrued through the Closing Date under its
Pension Plan.
12.2 All Transferred Employees shall become eligible to
participate in Purchaser's 401-K Plan. Purchaser's 401-K
Plan shall accept direct rollover contributions from the
OTC incentive savings plan from Transferred Employees.
Additionally, Purchaser's 401-K Plan will accommodate the
transfer of plan loans attributable to Transferred
Employees whose account balances are transferred to
Purchaser's 401-K Plan by a trustee to trustee transfer
within ninety (90) days of the Closing Date.
12.3 Purchaser agrees that the Purchaser's 401-K Plan shall
provide that the initial benefit of each Transferred
Employee who rolls over its account balance from OTC's
incentive savings plan to Purchaser's 401-K Plan shall at
least be equal to such employee's transferred account
balance from the OTC's incentive savings plan. As of the
Closing Date, each Transferred Employee shall be fully
vested in their transferred balance under the Purchaser's
401-K Plan.
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Article 13. INDEMNIFICATION.
13.1 BY OTC.
(a) OTC hereby agrees to indemnify and hold Purchaser
harmless for a period of one (1) year from the
Closing Date against any and all liabilities,
damages, losses, claims, costs or expenses
whatsoever arising out of or resulting from any
breach of warranty or misrepresentation made in
this Agreement by OTC or the nonperformance of any
covenant or obligation to be performed on the part
of OTC under this Agreement, or from any
misrepresentation or omission from any
certificate, instrument or paper delivered or to
be delivered by OTC to Purchaser pursuant to this
Agreement or in connection with the transactions
herein contemplated. Except as expressly
provided to the contrary elsewhere herein and
without regard to the one (1) year limitation set
forth in the prior sentence, OTC shall hold
Purchaser harmless from and defend Purchaser
against any and all obligations and liabilities,
arising out of acts or omissions of OTC with
respect to the BGS Operations prior to the Closing
Date, including but not limited to any
liabilities, damages, losses, cost or expenses
awarded against OTC to plaintiff or any other
party in the litigation as disclosed in Schedule
3.1 attached hereto.
(b) After OTC has acknowledged in writing that it is
indemnifying Purchaser with respect to litigation
involving any claim, OTC will be entitled to
assume the complete control of the defense or
settlement (but only to the extent that such
settlement includes a complete release of
Purchaser) of any such litigation, provided that
Purchaser may at its election and at its expense
(but not in derogation of OTC's right to control)
participate in any such defense to the extent that
it may reasonably believe that such litigation
will materially affect its ongoing business
relating to the BGS Operations. At OTC's
reasonable request, Purchaser will cooperate with
OTC in the preparation of any such defense, and
OTC will reimburse Purchaser for any expenses
incurred in connection with such request.
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13.2 BY PURCHASER.
(a) Purchaser hereby agrees to indemnify and hold OTC
harmless for a period of one (1) year of the
Closing Date against any and all liabilities,
damages, losses, claims, costs or expenses
whatsoever arising out of or resulting from any
breach of warranty or misrepresentation made in
this Agreement by Purchaser, or the nonperformance
of any covenant or obligation to be performed on
the part of Purchaser under this Agreement, or
from any misrepresentation or omission from any
certificate, instrument or paper delivered or to
be delivered by Purchaser to OTC pursuant to this
Agreement or in connection with the transactions
herein contemplated. Without regard to the one (1)
year limitation set forth in the prior sentence,
Purchaser shall assume at the Closing Date and
from that time henceforth hold OTC harmless from
and defend OTC against any and all obligations and
liabilities arising out of or relating to damages
sustained or occurrences and events occurring with
respect to the BGS Operations after the Closing
Date.
(b) After Purchaser has acknowledged in writing that
it is indemnifying OTC with respect to litigation
involving any claim, Purchaser will be entitled to
assume complete control of the defense or
settlement (but only to the extent that such
settlement includes a complete release of OTC) of
any such litigation, provided that OTC may at its
election and at its expense (but not in derogation
of Purchaser's right to control) participate in
any such defense to the extent that it may
reasonably believe that such litigation will
materially affect its business. At Purchaser's
reasonable request, OTC will cooperate with
Purchaser in the preparation of any such defense,
and Purchaser will reimburse OTC for any expenses
incurred in connection with such requests.
Article 14. CERTAIN SUBSTANTIVE PROVISIONS
14.1 TRANSITION. OTC and Purchaser will mutually cooperate to
(a) assist Purchaser in a smooth transition of the
ownership of the Assets; (b) for their mutual benefit take
all precautions possible to keep the negotiations of the
parties to this Agreement and future plans of the parties
confidential and not to disclose such plans to third
parties.
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14.2 ORDERS. All orders placed before the Closing Date for
delivery of BGS products after the Closing Date shall be
deemed orders accepted by OTC for the benefit and account
of Purchaser and Purchaser undertakes to accept and
deliver those orders on the terms and conditions as agreed
upon by OTC with the pertaining customer.
Article 15. TAXES
15.1 DEFINITION. For purposes of this Agreement, the term
"Taxes" shall mean all federal, state, local foreign, and
other net income, gross income, gross receipts, sales,
use, ad valorem, transfer, franchise, profits, license,
lease, service, service use, withholding, payroll,
employment, excise, severance, stamp, occupation, premium,
property, customs, duties or other taxes, fees,
assessments, or charges of any kind whatsoever, together
with any interest and any penalties, additions to tax or
additional amounts with respect thereto, and the term
"Tax" means any one of the foregoing Taxes.
15.2 INDEMNITY. OTC shall be responsible for (and shall
indemnify and hold harmless Purchaser from and against)
all Taxes imposed primarily on OTC relating to the BGS
Operations (i) with respect to all tax periods ending on
or prior to the Closing Date or (ii) with respect to any
tax periods beginning before the Closing Date and ending
after the Closing Date, but only with respect to the
portion of such period up to and including the Closing
Date. Purchaser shall be responsible for (and shall
indemnify and hold harmless OTC from and against) all
Taxes imposed primarily on Purchaser relating to the BGS
Operations (i) with respect to all tax periods beginning
after the Closing Date or (ii) with respect to all tax
periods beginning before the Closing Date and ending after
the Closing Date, but only with respect to the portion of
such period commencing after the Closing Date. With
respect to any tax period beginning before the Closing
Date and ending after the Closing Date, any Taxes for such
period shall be apportioned between the pre-Closing Date
and post-Closing Date partial periods based, in the case
of other Taxes, on the basis of actual activities, taxable
income or loss during such partial periods.
15.3 RESALE CERTIFICATE. As a condition precedent to the
consummation of the transactions contemplated by this
Agreement, Purchaser shall provide OTC with a Pennsylvania
or other applicable state resale certificate or similar
document(s) that may be required by the Pennsylvania or
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other applicable state taxing authority in order to
relieve OTC of the obligation to collect sales Tax on the
sale of any inventory described in Article 1.1(f).
15.4 TRANSFER TAXES. Purchaser shall be solely responsible for
the payment of any Taxes associated with the transfer of
title or beneficial interest to the Assets from OTC to
Purchaser, including any Pennsylvania Realty Transfer Tax
or any similar local Tax and any recordation Tax.
15.5 RETURN PREPARATION. OTC and Purchaser shall cooperate to
supply any and all information reasonably requested to
complete any returns.
15.6 COOPERATION AND RECORDS RETENTION. OTC and Purchaser
shall each provide the other with such assistance as may
reasonably be requested by any of them in connection with
the preparation of any return, audit, or other examination
by any taxing authority or judicial or administrative
proceeding relating to liability for Taxes. Purchaser
shall retain and provide OTC with any records or other
information that may be relevant to such returns, audit,
examination, proceeding, or determination and shall not
destroy or otherwise dispose of any such records without
first providing OTC with a reasonable opportunity to
review and copy the same.
15.7 AUDITS AND OTHER PROCEEDINGS. OTC, on the one hand, and
Purchaser, on the other hand, agree to give prompt notice
to each other of any proposed adjustment to Taxes (other
than federal or state income taxes) relating to the BGS
Operations for any tax period or partial period prior to
the Closing Date. OTC and Purchaser shall cooperate with
each other in the conduct of any audit or other
proceedings involving the BGS Operations for such periods
and each may participate at its own expense, provided each
party shall have the right to control the conduct of any
such audit or proceeding for which such party (i) agrees
that any resulting Tax is covered by the indemnity
provided in Paragraph 15.2 of this Agreement, and (ii)
demonstrates its ability to make such indemnity payment.
Notwithstanding the foregoing, OTC may not settle or
otherwise resolve any such claim, suit or proceeding
without the consent of Purchaser, such consent not to be
unreasonably withheld and Purchaser may not settle or
otherwise resolve any such claim, suit or proceeding
without the consent of OTC, such consent not to be
unreasonably withheld.
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Article 16. TRANSITIONAL PERIOD
16.1 TRANSITIONAL SERVICES. OTC and Purchaser agree that OTC
shall enter into, on the Closing Date, a transitional
services agreement with Purchaser whereby OTC will provide
to Purchaser for a period up to six (6) months, commencing
as of the Closing Date, certain customer services as well
as certain software and electronic data processing
services pertaining to accounts, bookkeeping, order entry,
invoicing, manufacturing and payroll and all other
administrative services provided as of the date hereof at
the principal offices of OTC in Durham, NC, relating to
the BGS Operations as set forth in and substantially in
the form of Schedule 5 hereto (the "Transitional Services
Agreement"). In Addition OTC agrees to provide Purchaser
during such period, at Purchaser's request, with the
necessary office facilities in Durham, NC, to accommodate
certain employees located in OTC's principal offices in
Durham, NC, that may be transferred to Purchaser in
accordance with Article 11 above. The aforementioned
services shall be changed on a cost pass-through basis to
Purchaser.
16.2 USE OF OTC NAME AND LOGO. Notwithstanding the provisions
of Paragraph 1.1 and 1.2 of this Agreement, Purchaser
shall be permitted to use in the conduct and operation of
the business of the BGS Operations the existing
inventories of raw materials, work-in-progress and
finished goods of the BGS Operations which bear the name
"Organon Teknika" or OTC's logo, for the period necessary
to exhaust the same, but in no event longer than six (6)
months from and after the Closing Date. In addition, to
the extent as legally permitted, OTC shall allow Purchaser
to use in the conduct and operation of the business of the
BGS Operations the permits, consents, registrations,
approvals, orders and authorizations necessary thereto
previously obtained or applied for by OTC and the name
"Organon Teknika" as applicable thereto, pending
Purchaser's receipt of any such necessary permits,
consents, approvals, etc., which Purchaser agrees to use
its best efforts to obtain as soon as possible.
Article 17. ANCILLARY AGREEMENTS.
17.1 DISTRIBUTION OF BGS PRODUCTS. The parties agree that
Teknika B.V. shall enter into, on the Closing Date, an
agreement with Purchaser whereby Teknika B.V. and/or
certain of its affiliated companies continue the sale and
distribution of BGS products outside the United States of
America under the terms and conditions as set forth in the
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Distribution Agreement as attached in Schedule 6 hereto.
Teknika B.V. and/or its relevant affiliates shall continue
such sale and distribution of BGS products on terms and
conditions allowing them a reasonable distribution margin.
Such Agreement shall be for an initial period of (2) years
and will automatically be renewed at the end of such
period for an indefinite period of time unless or until it
is terminated by either party by written notice.
17.2 SICKLEQUIK. OTC and Purchaser agree to enter into, on the
Closing Date, an agreement for the toll manufacture of
Sicklequik (as defined in the Toll Manufacturing Agreement
referred to hereinafter) by Purchaser under assignment of
OTC at the West Chester Manufacturing Facility against the
terms and conditions as set forth in the Sicklequik Toll
Manufacturing Agreement as attached in Schedule 7 hereto.
Such agreement shall be for an initial period of three (3)
years and will automatically be renewed at the end of such
period for an indefinite period of time unless or until it
is terminated by either party by written notice.
The supply of Sicklequik by Purchaser to OTC under such
agreement shall be on standard cost plus fifteen percent
(15%) basis.
17.3 VARIOUS RAW MATERIALS. Purchaser acknowledges that
various raw materials, such as but not limited to the raw
materials specified in Schedule 8 hereto (the "Raw
Materials List"), are supplied to the BGS Operations by
ICN Pharmaceuticals, Inc. of Costa Mesa, California
("ICN") who recently acquired the Cappel scientific
products division of OTC. OTC agrees, if the Purchaser
wishes to continue to purchase such raw materials from the
Cappel scientific products division, to use reasonable
efforts without payment of any penalty or fee to have ICN
continue the supply of such raw materials on terms and
conditions to be negotiated in good faith. However, ICN
shall not be obligated to continue the supply of raw
materials if it discontinues the manufacture thereof.
OTC further entered into a written agreement with ICN for
the supply by ICN of certain raw materials, including
rabbit erythrocytes, manufactured with certain production
animals acquired by ICN from OTC. Such agreement is
entered into for a period ending September 17, 1997 and
will automatically be renewed at the end of such period
for an indefinite period of time unless or until it is
terminated by either party by written notice.
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OTC will, at the option of Purchaser, partially assign
such supply agreement to the extent it relates to the
purchase of rabbit erythrocytes to Purchaser.
Article 18. MISCELLANEOUS.
18.1 NOTICES. All notices in connection with this Agreement
shall be in writing and be in the English language (as
shall all other written communications and correspondence)
and may be given by personal delivery, prepaid registered
airmail letter, courier, or telefax (with a confirmation
copy by courier), addressed to the party required or
entitled to receive same at its address set forth below,
or to such other address as it shall later designate by
like notice to the other party. The effective date of any
notice if served by telefax shall be deemed the first
business day in the city of destination following the
dispatch thereof and if given by courier or prepaid
registered airmail letter only respectively, it shall
unless earlier received, be deemed served not later than
three (3) business days or seven (7) calendar days
respectively after date of dispatch.
If to OTC:
Organon Teknika Corporation
100 Akzo Avenue
Durham, NC 27712
Fax No. 919/620-2211
Attn.: President
Copy to: General Counsel
If to Teknika B.V.:
Organon Teknika B.V.
Boseind 15
P.O. Box 84
5280 AB Boxtel
the Netherlands
Fax No. 31 411 654201
Attn.: President
cc: Organon Teknika N.V.
Veedijk 58
2300 Turnhout
Belgium
Fax No. 32 14 428204
Attn: Counsel, Organon Teknika
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If to Purchaser:
Biopool International, Inc.
6025 Nicolle Street
Ventura, California 93003
Fax No. 805/654-0681
Attn.: Michael Bick, Ph.D.
cc:
Troop, Meisinger, Steuber & Pasich, LLP
1940 Wilshire Boulevard
Los Angeles, CA 90024-3902
Fax No. 310/443-8569
Attn: Scott Alderton
18.2 EXPENSES. Each party shall be required to pay its own
expenses, including expenses of its counsel and
accountants, even in the event that the transactions which
are the subject matter hereof are not consummated for any
reason whatsoever.
18.3 ENTIRE AGREEMENT, SUCCESSORS. This Agreement, together
with the Schedules and Exhibits attached hereto and all
ancillary agreements referred to herein, constitutes the
entire agreement between the parties and there are no
representations, warranties or commitments except as
provided herein. This Agreement supersedes all prior and
contemporaneous agreements, understandings, negotiations
and discussions, whether written or oral. All of the
terms and provisions of this Agreement shall be binding
upon and inure to the benefit and be enforceable by the
respective heirs, personal representatives, successors and
permitted assigns of the parties hereto.
18.4 MULTIPLE COUNTERPARTS. This Agreement may be executed in
one or more counterparts, each of which shall be deemed an
original but all of which together shall constitute one
and the same instrument.
18.5 GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of
Delaware, excluding its principles of conflicts of laws.
18.6 NO WAIVER. No exercise or waiver, in whole or in part,
of any right or remedy provided for in this Agreement
shall operate as a waiver of any other right or remedy.
No delay on the part of any party in the exercise of any
right or remedy shall operate as a waiver thereof.
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18.7 PUBLICITY. The parties shall consult with each other
before issuing any press release or otherwise making any
public statements with respect to this Agreement, and
shall submit to the other party for prior written approval
the contents of any such release and/or publication before
release thereof, provided, however that nothing contained
herein shall prohibit either party from making any
disclosure which is required by law, including applicable
Federal Securities Laws.
18.8 INVESTIGATION. Purchaser acknowledges that it has had the
opportunity, prior to the execution of this Agreement, to
investigate the properties, assets, liabilities and
financial conditions of the BGS Operations and to have
access to all the books and records, key personnel and
facilities related to the BGS Operations.
18.9 LEGAL ADVICE. Purchaser acknowledges that it has had the
opportunity to consult with independent counsel of its
choice with regard to the transactions contemplated under
this Agreement, prior to the execution of this Agreement.
18.10 SEVERABILITY. In the event that one or more of the
provisions hereof shall be held to be void, unlawful or
unenforceable by any court, tribunal or administrative
authority under any law or regulation, the validity,
lawfulness and enforceability of the other provisions
hereof shall not be affected thereby in any way.
18.11 ASSIGNMENT. This Agreement is intended to be solely for
the benefit of the parties hereto and is not intended to
confer any benefits upon, or create any right in favor of,
any person other than the parties hereto. Accordingly
this Agreement may not be assigned by either party without
the prior written consent of the other party.
18.12 PREAMBLE AND HEADINGS. The preamble and headings
contained in this Agreement are for convenience of
reference only and are not intended to have any
substantive significance in interpreting this Agreement.
18.13 TERMINOLOGY. Any reference in this Agreement to OTC's
severance policy, OTC's health and medical plans, OTC's
vacation policy, OTC's retirement, health and welfare
plans, OTC's pension plan, OTC's incentive savings plan
and any other OTC employment policies and practices shall
be deemed to include any such plans and policies of the
Akzo Nobel, Inc. to the extent they apply on the Closing
Date to Employees dedicated to the BGS Operations.
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IN WITNESS WHEREOF, the parties hereto have executed this
Agreement effective as of the day and year first above written.
ORGANON TEKNIKA CORPORATION BIOPOOL INTERNATIONAL, INC.
By:_______________________ By:_______________________
Title:____________________ Title:____________________
By:_______________________
Title:____________________
ORGANON TEKNIKA B.V.
By:_______________________
Title:____________________
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