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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported) December 17, 1998
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CALYPTE BIOMEDICAL CORPORATION
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(Exact name of registrant as specified in its charter)
Delaware 000-20985 06-1226727
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(State or other jurisdiction of incorporation) (Commission File No.) (I.R.S. Employer Identification No.)
1440 Fourth Street
Berkeley, California 94710
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(Address of principal executive offices and zip code)
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Registrant's telephone number, including area code: (510) 749-5100
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Item 2. Acquisition or Disposition of Assets.
(a) On December 17, 1998, Calypte Biomedical Corporation completed the
acquisition of the assets relating to the Western blot product line for certain
infectious diseases from Cambridge Biotech Corporation, a Delaware corporation
and wholly-owned subsidiary of bioMerieux, Inc., pursuant to an Asset Purchase
Agreement between Calypte and Cambridge dated November 18, 1998. The acquisition
included the urine-based and serum-based HIV-1 Western blot products, as well as
rights to certain other tests not currently produced by Cambridge. The assets
acquired consisted of fixtures, equipment, materials and supplies, contracts
relating to the conduct of the business of the Western blot product line,
certain licenses and permits issued by government authorities for use in
connection with the operations of Cambridge's Rockville, Maryland manufacturing
facility, marketing authorizations and regulatory approvals relating to the
Western blot product line and certain proprietary rights.
Calypte acquired the assets from Cambridge for $500,000 in cash, 400,000
shares of Calypte Common Stock, warrants to acquire 200,000 shares of Common
Stock at an exercise price of $8.00 per share, warrants to acquire 200,000
shares of Common Stock at an exercise price of $10.00 per share, warrants to
acquire 200,000 shares of Common Stock at an exercise price of $12.00 per share
and a royalty based upon product sales. The cash purchase price was paid out of
the cash reserves of Calypte.
In connection with the acquisition, Calypte entered into two subleases with
Cambridge, pursuant to which it subleases from Cambridge the buildings used in
connection with the operation of the Rockville, Maryland manufacturing facility.
Calypte and Cambridge were parties to a Master Services Agreement dated
April 12, 1996 (the "Master Services Agreement") pursuant to which Calypte and
Cambridge agreed to develop a modification of Cambridge's serum-based HIV-1
Western blot product to confirm the results of Calypte's initial screening test
using urine samples. Except for the Master Services Agreement, there was no
material relationship between Calypte or any of its affiliates (including their
respective officers and directors and any associate of any such individual), on
the one hand, and Cambridge or any of its affiliates (including their respective
officers and directors and any associate of any such individual), on the other
hand.
(b) Prior to the acquisition, Cambridge used the assets acquired by Calypte
in the manufacture and sale of urine-based and serum-based HIV-1 Western blot
products, as well as a confirmatory test for Human T-Lymphotropic Virus. Calypte
intends to continue the operation of the assets from Cambridge's current
facilities (located in Rockville, Maryland) in substantially the same manner and
for the same purposes.
Attached hereto as Exhibit 2.1 and Exhibit 4.1, respectively, and
incorporated herein by reference are copies of the Asset Purchase Agreement and
the Form of Warrant to Purchase Common Stock. The foregoing description of the
acquisition is qualified in its entirety by reference to the attached exhibits.
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Item 7. Financial Statements and Exhibits.
(a) Financial Statements of Business Acquired.
As of the date hereof, it is impractical for Calypte to provide the
required audited financial information. Calypte will file the required audited
financial information under cover of Form 8-K/A as soon as practicable, but not
later than March 5, 1999.
(b) Pro Forma Financial Information.
As of the date hereof, it is impractical for Calypte to provide the
required pro forma financial information. Calypte will file the required pro
forma financial information under cover of Form 8-K/A as soon as practicable,
but not later than March 5, 1999.
(c) Exhibits.
2.1 Asset Purchase Agreement, dated as of November 18, 1998, between
Calypte and Cambridge.
4.1 Form of Warrant to Purchase Common Stock.
99.1 Press Release issued by Calypte on November 24, 1998.
[REST OF PAGE INTENTIONALLY LEFT BLANK]
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereto duly authorized.
CALYPTE BIOMEDICAL CORPORATION
By: /s/ John J. DiPietro
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John J. DiPietro
Chief Operating Officer,
Vice President - Finance,
Chief Financial Officer and Secretary
Date: January 4, 1999
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EXHIBIT INDEX
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Exhibit Description
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2.1 Asset Purchase Agreement, dated as of November 18, 1998, between
Calypte and Cambridge.
4.1 Form of Warrant to Purchase Common Stock.
99.1 Press Release issued by Calypte on November 24, 1998.
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EXHIBIT 2.1
ASSET PURCHASE AGREEMENT
BY AND BETWEEN
CAMBRIDGE BIOTECH CORPORATION
AND
CALYPTE BIOMEDICAL CORPORATION
DATED AS OF NOVEMBER 18, 1998
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SECTION 1. CERTAIN DEFINITIONS ...........................................................2
1.1. Terms Defined in this Section. ................................................2
1.2. Terms Defined Elsewhere in This Agreement. ....................................5
1.3. Terms Generally. ..............................................................6
SECTION 2. ACQUISITION OF ACQUIRED ASSETS AND CONSIDERATION ...............................7
2.1. Acquisition of Acquired Assets. ...............................................7
2.2. Consideration. ................................................................7
2.3. Assumption of Assumed Liabilities. ............................................7
2.4. Consents. .....................................................................7
SECTION 3. LICENSES AND OTHER AGREEMENTS;
TECHNICAL ASSISTANCE .......................................................8
3.1. Sublicense of Patent Rights. ..................................................8
3.2. Trademark Name and License. ...................................................9
3.3. Representations and Warranties. ...............................................9
3.4. Royalty. .....................................................................10
3.5. Special Indemnity. ...........................................................10
3.6. Proprietary Information. .....................................................11
3.7. Assistance. ..................................................................12
SECTION 4. REPRESENTATIONS AND WARRANTIES OF THE SELLER ..................................12
4.1. Organization, Standing, and Authority. .......................................12
4.2. Authorization and Binding Obligation. ........................................12
4.3. Absence of Conflicting Agreements; Consents. .................................13
4.4. Licenses. ....................................................................13
4.5. Leasehold Property. ..........................................................14
4.6. Tangible Personal Property. ..................................................14
4.7. Contracts. ...................................................................14
4.8. Financial Statements. ........................................................15
4.9. Personnel. ...................................................................15
4.10. Claims and Legal Actions. ...................................................16
4.11. Compliance with Laws. .......................................................17
4.12. Environmental Matters. ......................................................17
4.13. Transactions with Affiliates. ...............................................17
4.14. Proprietary Information. ....................................................18
4.15. Conduct of Business. ........................................................18
4.16. Investment Representations. .................................................18
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4.17. DISCLAIMERS OF OTHER REPRESENTATIONS
AND WARRANTIES. .............................................................19
SECTION 5. REPRESENTATIONS AND WARRANTIES
OF THE PURCHASER .........................................................20
5.1. Organization, Standing, and Authority. .......................................20
5.2. Authorization and Binding Obligation. ........................................20
5.3. Capital Structure. ...........................................................20
5.4. Absence of Conflicting Agreements. ...........................................21
5.5. SEC Documents. ...............................................................21
5.6. Claims and Legal Actions. ....................................................22
5.7. Transactions with Affiliates. ................................................22
5.8. Conduct of Business. .........................................................22
SECTION 6. SPECIAL COVENANTS AND AGREEMENTS. ..............................................22
6.1. Confidentiality. .............................................................22
6.2. Registration Rights. .........................................................23
6.3. Cooperation. .................................................................26
6.4. Access to Books and Records. .................................................26
6.5. Bulk Sales Law. ..............................................................27
6.6. Restrictions on Competitive Activities. ......................................27
6.7. No Inconsistent Action. ......................................................27
6.8. Supply of Products by the Seller for the Purchaser. ..........................27
6.9. Manufacturing by Purchaser for the Seller. ...................................28
6.10. Certain Transitional Arrangements. ..........................................28
SECTION 7. CONDITIONS TO OBLIGATIONS OF PARTIES
AT CLOSING. ...............................................................29
7.1. Conditions to Obligations of the Purchaser. ..................................29
7.2. Conditions to Obligations of the Seller. .....................................30
SECTION 8. CLOSING AND CLOSING DELIVERIES. ................................................31
8.1. Closing Date and Place. ......................................................31
8.2. Deliveries by the Seller. ....................................................31
8.3. Deliveries by the Purchaser. .................................................32
SECTION 9. TERMINATION. ..................................................................33
9.1. Termination by the Seller. ...................................................33
9.2. Termination by the Purchaser. ................................................33
9.3. Rights on Termination. .......................................................34
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9.4. Specific Performance. ........................................................34
9.5. Attorneys' Fees. .............................................................34
SECTION 10. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION; CERTAIN REMEDIES. 34
10.1. Representations and Warranties. .............................................34
10.2. Indemnification by the Seller. ..............................................34
10.3. Indemnification by the Purchaser. ...........................................35
10.4. Procedure for Indemnification. ..............................................35
10.5. Certain Limitations. ........................................................37
10.6. Remedies. ...................................................................38
SECTION 11. TAXES AND EMPLOYMENT MATTERS .................................................38
11.1. Transfer Taxes. .............................................................38
11.2. Proration of Property Taxes; Lease Payments. ................................39
11.3. Employees. ..................................................................39
11.4. Survival of Obligations. ....................................................40
11.5. Conflict. ...................................................................40
SECTION 12. MISCELLANEOUS ................................................................40
12.1. Fees and Expenses. ..........................................................40
12.2. Notices. ....................................................................41
12.3. Benefit and Binding Effect. .................................................41
12.4. Further Assurances. .........................................................42
12.5. GOVERNING LAW. ..............................................................42
12.6. Headings. ...................................................................42
12.7. Entire Agreement. ...........................................................42
12.8. Waiver of Compliance; Consents. .............................................42
12.9. Counterparts. ...............................................................43
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SCHEDULES
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Acquired Assets Schedule 1.1(a)
Permitted Liens Schedule 1.1(b)
Transferred Regulatory Approvals Schedule 1.1(c)
NIH Patents Schedule 3.1(b)
Consents Schedule 4.3
Licenses Schedule 4.4
Leasehold Property Schedule 4.5
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Tangible Personal Property Schedule 4.6
Assumed Contracts Schedule 4.7
Employment Matters Schedule 4.9
Claims and Legal Actions Schedule 4.10
Environmental Schedule 4.12
Affiliate Transactions Schedule 4.12
Conduct of Business Schedule 4.15
Capital Structure Schedule 5.3
Consents Schedule 5.4
Terminated Employees Schedule 11.3(a)
Continuing Employees Schedule 11.3(b)
EXHIBITS
Forms of Subleases Exhibits A-1 and A-2
Form of Warrant Exhibit B
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ASSET PURCHASE AGREEMENT, dated as of November 18, 1998, by
and between CAMBRIDGE BIOTECH CORPORATION, a Delaware corporation (the
"Seller"), and CALYPTE BIOMEDICAL CORPORATION, a Delaware corporation
(the "Purchaser").
W I T N E S S E T H:
WHEREAS, the Purchaser has obtained a product license and an
establishment license from the United States Food & Drug Administration (the
"FDA") to manufacture and sell, in interstate and foreign commerce, the
Purchaser's urine-based HIV-1 screening test for use in professional laboratory
settings, and intends to apply to the FDA for approval of a home urine
collection device to allow home collection and remote laboratory testing for
HIV-1 infection;
WHEREAS, pursuant to the Master Agreement dated as of April
12, 1996 by and between the Seller and the Purchaser, as amended to the date
hereof (the "Master Agreement"), the parties hereto entered into certain
arrangements, subject to the terms and conditions set forth in the Master
Agreement, to facilitate the development of a Urine Confirmation System (as
defined in the Master Agreement), which would be available as a confirmatory
test to satisfy testing protocols required by regulatory authorities in the
United States and in other countries in connection with testing for HIV-1
infection utilizing the Purchaser's Screening Test (as defined in the Master
Agreement), and agreed, subject to the terms and conditions set forth in the
Master Agreement, subsequently to enter into arrangements covering the supply
and distribution of the Urine Confirmatory System as manufactured by the Seller;
WHEREAS, the Urine Confirmatory System, in the configuration
approved by regulatory authorities in the United States, utilizes the Urine
Western Blot Product (as hereinafter defined), which is based upon the Seller's
Serum Western Blot Product (as hereinafter defined);
WHEREAS, the Serum Western Blot Product is produced by the
Seller in Rockville, Maryland, and the Seller wishes to transfer the operation
of the Rockville Facility (as hereinafter defined) to the Purchaser; and
WHEREAS, the Seller has advised the Purchaser that, except for
the arrangements contemplated hereby, it does not intend to continue the supply
of products under the Master Agreement;
WHEREAS, the Purchaser wishes to acquire the Acquired Assets
(as hereinafter defined) and enter into the other agreements provided for herein
in connection with the assumption by it of responsibility for production of the
Western Blot Products
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(as hereinafter defined), including the Serum Western Blot Product and the Urine
Western Blot Product on the terms set forth in this Agreement;
NOW, THEREFORE, in consideration of the premises and the
covenants set forth herein, the parties hereto, intending to be legally bound
hereby, agree as follows:
SECTION 1. CERTAIN DEFINITIONS
1.1. Terms Defined in this Section.
The following terms, as used in this Agreement, have the meanings set
forth in this Section:
"Acquired Assets" means all of the Seller's right, title and
interest in and to the Tangible Personal Property, the Assumed Contracts, the
Licenses, the Transferred Regulatory Approvals, the Proprietary Information and
other assets listed or described as the Acquired Assets on Schedule 1.1(a)
hereto.
"Affiliate", with respect to any Person, means any other
Person controlling, controlled by, or under common control with such Person. For
purposes of this definition, the term "control" means direct or indirect
ownership of at least a majority of the voting interest or income interest in a
corporation or entity, and the terms "controlled by" and "under common control
with" have meanings corresponding to the meaning of "control".
"Agreement" means this Asset Purchase Agreement, as it may be
amended from time to time.
"Assumed Liabilities" means (a) all liabilities under the
Assumed Contracts arising after the Closing Date, including any purchase
commitments relating to goods or services ordered prior to the Closing Date in
the ordinary course of business but received after the Closing Date and of which
the Purchaser will receive the use, benefit, or revenue upon sale; and (b) the
obligations to the Continuing Employees to the extent set forth in Section 11
below, whether or not such debts, liabilities, obligations, responsibilities or
commitments arose or accrued before, on or after the Closing Date; provided,
however, that the Assumed Liabilities shall not include (i) any liability of the
Seller for foreign, Federal, state or local taxes with respect to the Acquired
Assets for periods ending on or prior to the Closing Date, except for the
transfer taxes, if any, described in Section 11.1; and (ii) any liability or
obligation retained by the Seller pursuant to Section 11.3 in respect of any of
the Seller's employee benefit, severance or welfare plans relating to the
Continuing Employees and other employees of the Seller.
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"Business Day" means any day (other than a day which is a
Saturday or Sunday) on which banks are permitted to be open for business in the
City of New York.
"Closing" means the consummation of the acquisition of the
Acquired Assets pursuant to this Agreement, in accordance with the provisions of
Section 8.
"Closing Date" means the date on which the Closing occurs, as
determined pursuant to Section 8.
"Code" means the Internal Revenue Code of 1986, as amended,
and the rules and regulations promulgated thereunder.
"Consents" means the consents, permits, or approvals of
governmental authorities and other third parties, including consents as may be
required in connection with the Transferred Regulatory Approvals, that are
necessary to transfer the Acquired Assets to the Purchaser or the Common Stock
and Warrants to the Seller, or otherwise to consummate the transactions
contemplated by this Agreement in compliance with any provision of law or the
terms of any mortgage, indenture, lease, contract, agreement, instrument,
license, or permit to which any party to this Agreement is a party or by which
any party to this Agreement or its properties may be bound legally, regardless
whether the obtaining of such consent, permit, or approval is a condition to the
obligations of any party at the Closing under this Agreement.
"Continuing Employees" means the employees of the Seller
listed on Schedule 11.3(b) hereto and who accept employment with the Purchaser.
"Contracts" means all contracts, leases, non-governmental
licenses, and other agreements, commitments, or arrangements (including leases
for personal or real property and employment agreements), written or oral.
"Effective Time" means 12:01 a.m., Eastern time, on the
Closing Date.
"Environmental Laws" means all currently effective federal,
state, local, and foreign statutes, regulations, ordinances, all judicial and
administrative orders and determinations, and all common law concerning public
health, and pollution or protection of the environment, including all those
relating to the presence, use, production, generation, handling, transportation,
treatment, storage, disposal, distribution, labeling, testing, processing,
discharge, release, threatened release, control, or cleanup of any hazardous
materials, substances, or wastes.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended.
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"Leases" means (i) the Lease dated October 22, 1996, between
Alexandria Real Estate Equities, Inc., as successor to Aquila Biopharmaceuticals
Corporation, as Landlord, and bioMerieux, Inc. ("bioMerieux"), as Tenant, as
such Lease is assigned to the Seller pursuant to the Assignment of Lease and
Assumption Agreement dated as of October 22, 1996, and (ii) the Sublease
Agreement dated April 6, 1995, between DynCorp and the Seller.
"Licenses" means all licenses, permits, construction permits,
registrations, and other authorizations issued by any Federal, state, or local
governmental authorities to the Seller, used or held by the Seller for use in
connection with the conduct of the business or operations of the Rockville
Facility, and all applications therefor, and shall include the Transferred
Regulatory Approvals.
"Material Adverse Effect" means (a) with respect to the
Seller, a material adverse effect on the Acquired Assets or the business,
results of operations, properties, operations, financial condition, assets, or
liabilities of the Western Blot Operations, taken as a whole, and (b) with
respect to the Purchaser, a material adverse effect on the business, results of
operations, properties, operations, financial condition, assets or liabilities
of the Purchaser and its subsidiaries, taken as a whole.
"Permitted Liens" means, with respect to any Acquired Asset,
(a) liens for current taxes not yet due and payable (b) statutory liens that
were created in the ordinary course of business, and (c) easements and
restrictions that are disclosed on Schedule 1.1(b), to the extent, in the case
of clauses (a) and (b), that such liens relate to obligations that will be
discharged by the Seller.
"Person" means an individual, corporation, association,
partnership, joint venture, trust, estate, limited liability company, limited
liability partnership, governmental entity, or other entity or organization.
"Related Agreements" means the Subleases and the Warrants.
"Rockville Facility" means the premises leased by the Seller
pursuant to the Leases.
"Subleases" means the Subleases to be entered into between the
Seller, as sublessor, and the Purchaser, as sublessee, substantially in the form
attached hereto as Exhibits A-1 and A-2.
"Tangible Personal Property" means all machinery, equipment,
tools, vehicles, furniture, fixtures, leasehold improvements, office equipment,
materials and supplies, plant, inventory, video libraries and archives, spare
parts, and other tangible personal property of every kind and description and
listed on Schedule 1.1(a).
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"Transferred Regulatory Approvals" means the pending and
approved marketing authorizations relating to the Western Blot Products and
other applications for governmental regulatory approvals and approvals relating
to the Western Blot Products and all Federal, state and local device
establishment registrations and device listings, as listed on Schedule 1.1(c),
part A, all foreign equivalents of the foregoing, including , but not limited
to, those listed on Schedule 1.1(c), part B, and all documentary support for all
the foregoing authorizations, approvals, registrations and applications.
"Western Blot Operations" means operations of the Seller as
now conducted at the Rockville Facility for the production of the Western Blot
Products that are currently under production.
"Western Blot Products" means the Serum Western Blot test of
the Seller for the detection of HIV-1, Product #98002 (the "Serum Western Blot
Product"), the Urine Western Blot test of the Seller for the detection of HIV-1,
Product No. 98076 (the "Urine Western Blot Product"), the HTLV-I/II Western Blot
of the Seller, Product No. 98051; the HIV-1 AP Western Blot of Seller, Product
No. 98048; the Lyme IgG Western Blot of Seller, Product No. 98074; and Lyme IgM
Western Blot of Seller, Product No. 98075. The Purchaser acknowledges that there
are no current operations included in the Western Blot Operations for producing
the Western Blot Product for Lyme IgG Western Blot and Lyme IgM Western Blot.
1.2. Terms Defined Elsewhere in This Agreement.
For purposes of this Agreement, the following terms have the meanings
set forth in the sections indicated:
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Assumed Contracts Section 4.7
Assumed Profit Section 3.4
bioMerieux Section 1.1, definition of "Leases"
Cash Consideration Section 2.2
Common Stock Section 2.2
Common Stock Consideration Section 2.2
Consideration Section 2.2
Employees Section 4.9
Exchange Act Section 5.5
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Term Section
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FDA Recitals
Indemnifying Party Section 10.4(a)
Losses Section 10.2
Master Agreement Recitals
Proprietary Information Section 3.6
Reorganization Date Section 3.3(a)
Securities Act Section 4.14
Serum Western Blot Product Section 1.1, definition of "Western
Blot Products"
Seller Financial Statements Section 4.8
Transfer Tax(es) Section 11.1
Urine Western Blot Product Section 1.1, definition of "Western
Blot Products"
Warrant Consideration Section 2.2
Warrants Section 2.2
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1.3. Terms Generally.
The definitions in Section 1.1 and elsewhere in this Agreement shall
apply equally to both the singular and plural forms of the terms defined.
Whenever the context requires, any pronoun includes the corresponding masculine,
feminine, and neuter forms. The words "include", "includes", and "including" are
not limiting. Any reference in this Agreement to a "day" or number of "days"
(without the explicit qualification of "Business") shall be interpreted as a
reference to a calendar day or number of calendar days. If any action or notice
is to be taken or given on or by a particular calendar day, and such calendar
day is not a Business Day, then such action or notice shall be deferred until,
or may be taken or given on, the next Business Day. As used in this Agreement,
"knowledge" of the Seller or the Purchaser is limited to the actual knowledge of
the officers of the Seller or the Purchaser respectively.
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SECTION 2. ACQUISITION OF ACQUIRED ASSETS AND CONSIDERATION
2.1. Acquisition of Acquired Assets.
Subject to the terms and conditions set forth in this Agreement, the
Seller shall sell, assign, transfer, convey, and deliver to the Purchaser, by
bills of sale, assignments and other instruments of transfer in form consistent
with this Agreement, effective on the Closing Date, and the Purchaser shall on
the Closing Date acquire, the Acquired Assets, free and clear of any claims,
liabilities, liens, security interests, mortgages, pledges, encumbrances, or
restrictions, except for Permitted Liens.
2.2. Consideration.
In consideration of the sale, transfer, conveyance, assignment, and
delivery to the Purchaser of the Acquired Assets pursuant to this Agreement, the
Purchaser shall deliver to the Seller at the Closing (i) $500,000 in the form of
cash by wire transfer in immediately available funds (the "Cash Consideration"),
(ii) 400,000 shares of Common Stock, $.001 par value (the "Common Stock"), of
the Purchaser (the "Common Stock Consideration"), and (iii) warrants to acquire
600,000 shares of Common Stock for a period of three years from the Closing
Date, substantially in the form set forth in Exhibit B hereto (the "Warrant
Consideration" and, together with the Cash Consideration and the Common Stock
Consideration, the "Consideration"), consisting of 200,000 warrants with an
exercise price of $8.00, 200,000 warrants with an exercise price of $10.00, and
200,000 warrants with an exercise price of $12.00 (each of the foregoing
warrants, a "Warrant").
2.3. Assumption of Assumed Liabilities.
In addition to the payment and delivery of the Consideration, on and as
of the Closing Date the Purchaser shall assume, and shall release the Seller
from, the Assumed Liabilities. The Purchaser shall not be responsible for any
liabilities of the Seller or the Western Blot Operations other than the Assumed
Liabilities.
2.4. Consents.
Each party will use its reasonable efforts prior to and, if necessary
with respect to the Acquired Assets, after the Closing, to obtain such consents,
waivers and authorizations or approvals, if any, as may be required for the
assignment or transfer by the Seller of the Acquired Assets, or the transfer of
the Common Stock Consideration and the Warrant Consideration, as applicable
including those listed on Schedule 4.3; provided, however, that the Seller will
not be required to institute any litigation, or to pay or agree to pay any
amount or provide other consideration, in order to obtain any such consent or
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approval. In the event that it shall be alleged or established that the
assignment or other transfer of any rights to the Purchaser as contemplated
herein requires the consent of any other party or parties to any other agreement
or any other third party, including any governmental or regulatory authority,
and such consent shall not have been obtained by the Seller prior to the Closing
Date (a "Nontransferable Right"), then, notwithstanding anything in this
Agreement to the contrary (but without relieving the Seller of any obligation it
may have had pursuant to the preceding sentence to use reasonable efforts), no
assignment or other transfer of such Nontransferable Right shall be made unless
and until such consent is obtained, and the Seller shall have no liability to
the Purchaser for failing to assign, transfer or make available to the Purchaser
such Nontransferable Right or for any Losses in respect of any actual or alleged
breach of such agreement by reason of the attempted assignment or transfer
thereof to the Purchaser pursuant hereto except as provided in Section 10.6(b),
and there shall be no adjustment in the Consideration as a result thereof.
SECTION 3. LICENSES AND OTHER AGREEMENTS; TECHNICAL ASSISTANCE
3.1. Sublicense of Patent Rights.
(a) Harvard Sublicense. The parties acknowledge that the
Sublicense Agreement dated as of March 31, 1992, between the Seller and the
Purchaser, shall remain in full force and effect.
(b) NIH Sublicense. The Purchaser hereby acknowledges that it
understands that the Western Blot Operations utilize patents described in
Schedule 3.1(b) licensed to the Seller under the License Agreement effective
June 19, 1984, between the Seller, as successor to DuPont Biotech Research
Laboratories, and Public Health Service, Department of Human Services (the
"PHS"), represented by the National Institutes of Health (the "NIH") and as
successor to the National Technical Information Service (the "NTIS"), and the
License Agreement effective February 1, 1989, between the Seller, as successor
to Cambridge Bioscience Corporation, and PHS, as successor to the NTIS, as such
licenses were amended and restated pursuant to the License Amendment dated July
20, 1996, by and between PHS and the Seller (as so amended and restated, the
"NIH License"). It is understood that the Seller is making no warranty as to the
adequacy of such direct license from NIH for qualifying the Purchaser to obtain
any such right from Pasteur Sanofi Diagnostics.
3.2. Trademark Name and License.
(a) The Seller hereby grants to the Purchaser and its
Affiliates the right to use the trademark "Cambridge Biotech" (the "Trademark")
on the Serum Western Blot
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Product and in connection with the marketing, sale and distribution thereof,
which right shall be exclusive with respect to the Serum Western Blot Product
for a period of five years, and shall remain exclusive thereafter so long as the
Seller does not exercise the option referred to in paragraph (b) below. This
grant does not authorize the Purchaser to use the Trademark or any part or
simulation thereof in its corporate, business or firm name or title, nor to use
nor permit the use of the Trademark for any other purpose except as expressly
agreed to in this Agreement. The Purchaser agrees not to use, advertise or
promote the Trademark in association with any other name or mark, except for the
tradename "Calypte" or any other tradename approved by the Seller in writing.
The Purchaser furthermore agrees that it shall not engage in any improper,
deceptive and/or unreasonable practice which would reduce the value of, or
adversely affect the reputation of, the Seller, and the Purchaser shall ensure
that all the Western Blot Products are identified as Products under license by
the Seller. The Purchaser will use best efforts to insure the quality of the
products in connection with which the Trademark is utilized, and shall use the
Trademark correctly spelled and not as a verb, in the plural or in the
possessive form.
(b) From and after the fifth anniversary of the Closing Date
hereunder, the license granted pursuant to paragraph (a) shall become
nonexclusive upon the payment by Seller of an amount equal to the fair market
value as mutually agreed of the rights to be reacquired by the Seller.
3.3. Representations and Warranties.
(a) The Seller hereby represents and warrants that, except as
set forth on Schedule 3.3(a), (i) there is no pending or, to the knowledge of
Seller, threatened action, nor is Seller aware of a basis for any such action,
contesting the validity, ownership or right to use, sell, license or dispose of
any of the Western Blot Products or operation of Western Blot Operations; (ii)
the Seller has not since the consummation of the Plan of Reorganization of the
Seller on October 22, 1996 (the "Reorganization Date") received any notice
asserting that any of the Western Blot Products or the proposed use, sale,
license or disposition thereof conflicts or will conflict with the rights of any
third party and has no knowledge of the receipt of any such notice prior to the
Reorganization Date, and (iii) the making, using and selling of any Western Blot
Product or operation of Western Blot Operations by Purchaser will not violate
any license or agreement of the Seller with any third party, or to the knowledge
of the Seller, constitute a misappropriation of trade secrets of any third
party.
(b) The Purchaser hereby represents and warrants, and
acknowledges to the Seller, that it recognizes the limitation as to the Seller's
representations and warranties stated in the second sentence of Section 4.4(b)
and in Section 4.17 hereof, and acknowledges that it is receiving no rights from
the Seller in respect of the use of, or
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inventions relating to, the "p18" protein, as covered by U.S. patent No.
5,217,861, or any patent of which such patent is an improvement, or any
divisions, continuations, continuations-in-part or reissues in respect thereof,
or foreign patents or patent applications covering the same subject matter, or
any right to manufacture, use or sell products or use any processes to the
extent any such right would infringe the rights of third parties with respect to
the foregoing patent.
3.4. Royalty.
(a) In consideration of the licenses granted pursuant to
Section 3.2 above, the Purchaser shall pay to the Seller a royalty in the amount
of $.25 for every unit of Western Blot Product distributed. Such royalty shall
be payable for a ten year period from and after the first fiscal quarter of the
Purchaser in which the Purchaser shows an excess of net sales (invoiced revenue
less any customary credits, including, but not limited to, credits for damaged
goods and billing errors) over the cost of goods sold and selling, general and
administrative expenses (limited to expenses incurred to support the Rockville
Facility and specifically exclude any cost allocations from related entities or
operations).
(b) Royalties payable pursuant to this Section 3.4 shall be
paid quarterly within thirty days after the end of each fiscal quarter. The
Purchaser shall prepare for each relevant fiscal quarter a statement, certified
by an officer to be true and correct to the best of the Purchaser's knowledge,
setting forth the calculation of the royalties payable, and, prior to the
existence of an Assumed Profit, the Purchaser shall prepare such a certified
statement setting forth appropriate calculations demonstrating the lack of such
Assumed Profit. All amounts shall be payable to the Seller in U.S. dollars, and
the dollar amount of foreign sales shall be calculated on a country-by-country
basis for such purpose in a manner consistent with manner in which such
calculations were made for inclusion on the Purchaser's audited Consolidated
Statements of Operations for the fiscal year ended December 31, 1997 (or, if no
such calculations were made, based on the exchange rate at the end of the fiscal
quarter as published in The Wall Street Journal).
3.5. Special Indemnity.
The Purchaser hereby indemnifies the Seller in full for any liability
(including attorneys' fees) that the Seller may incur in connection with the
Purchaser's exploitation of the rights granted under this Section, and in
connection with the activities of the Seller on behalf of the Purchaser as
provided below in Section 6.8(b). At such time as the Urine Confirmation System
is distributed, the Purchaser shall procure and maintain policies of
comprehensive general liability insurance in amounts not less than $1,000,000
per incident and $1,000,000 annual aggregate and naming the Seller as additional
insured. Such comprehensive general liability insurance shall provide (i)
product liability coverage
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and (ii ) broad form contractual liability coverage for indemnification under
this Section. The minimum amounts of insurance coverage shall not be construed
to create a limit of the Purchaser's liability with respect to the
indemnification provided in this Section. The Purchaser shall provide the Seller
with written notice at least 90 days prior to the cancellation, non-renewal or
material change in such insurance. If the Purchaser does not obtain replacement
insurance providing comparable coverage within 90 days of such termination, the
Seller may terminate the foregoing licenses. The Purchaser shall maintain such
comprehensive general liability insurance during the period that any Western
Blot Products is being distributed or sold, and for a period of seven years
thereafter.
3.6. Proprietary Information.
(a) The Purchaser hereby grants to the Seller and its
Affiliates, a perpetual, worldwide, nonexclusive license, with the right to
sublicense only in connection with a broader licensing transaction wherein such
technology may constitute a portion of that needed in connection with a licensed
product or line of products other than Western Blot Products, in all the
unpatented proprietary rights of the Seller recognized as such under applicable
trade secret or other law, which the Seller possesses on the date hereof and
which are used on the date hereof in the manufacture, use or sale of the Western
Blot Products ("Proprietary Information"), to make, have made, use and sell any
products other than the Western Blot Products. Such license shall extend, on the
same basis, to any Proprietary Information which is subsequently patented by the
Purchaser.
(b) Confidentiality of Proprietary Information. The Seller
shall maintain the Proprietary Information in confidence, and shall not
disclose, divulge or otherwise communicate such Proprietary Information to
others, or use it for any purpose, except as provided in paragraph (a) above.
The Seller shall exercise its best efforts precautions to prevent and restrain
the unauthorized disclosure of such Proprietary Information by any of its
directors, officers, employees, consultants, subcontractors, agents and
Affiliates. The provisions of this Section shall not apply to any Proprietary
Information disclosed hereunder which:
(i) after the Closing Date is lawfully disclosed
without restriction on disclosure to the Purchaser or its Affiliates by an
independent, unaffiliated third party rightfully in possession of the
Proprietary Information; or
(ii) after the Closing Date becomes published or
generally known to the public through no fault or omission on the part of the
Seller or its Affiliates; or
(iii) is required to be disclosed by the Seller to
comply with applicable laws or to comply with governmental regulations or the
order of a court of law,
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provided that the Seller provides prior written notice of such disclosure to the
Purchaser and takes reasonable and lawful actions to avoid and/or minimize the
degree of such disclosure, which shall include, without limitation, seeking
appropriate protective orders, providing such information under seal or in
camera or similar protective devices.
3.7. Assistance.
The Seller shall, for a period of six months from and after the
Closing, provide reasonable assistance, as listed on Schedule 3.7, to the
Purchaser with respect to the transfer of operations at the Rockville Facility
from the Seller to the Purchaser. The Purchaser shall be responsible for the
reasonable out-of-pocket expenses incurred by the Seller in providing assistance
under this Section 3.7, as well as for the additional fees set forth on Schedule
3.7.
SECTION 4. REPRESENTATIONS AND WARRANTIES OF THE SELLER
Except as otherwise disclosed in or pursuant to this Agreement, the
Seller represents and warrants to the Purchaser that:
4.1. Organization, Standing, and Authority.
The Seller is a corporation duly organized, validly existing, and in
good standing under the laws of the State of Delaware, is qualified to conduct
business in the State of Maryland, and has all requisite corporate power and
authority to own, lease, and use the Acquired Assets and the Rockville Facility,
(b) to conduct the business and operations of the Western Blot Operations as now
conducted by it, and (c) to execute and deliver this Agreement and the Subleases
and the documents contemplated hereby, and to perform and comply with all of the
terms, covenants, and conditions to be performed and complied with by the Seller
hereunder and thereunder.
4.2. Authorization and Binding Obligation.
The execution, delivery, and performance of this Agreement and the
Subleases by the Seller and the performance by the Seller of its obligations
hereunder and thereunder have been duly authorized by all necessary corporate
action on the part of the Seller. Each of this Agreement and the Subleases has
been duly executed and delivered by the Seller and each such agreement
constitutes the legal, valid, and binding obligation of the Seller, enforceable
against it in accordance with its terms.
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4.3. Absence of Conflicting Agreements; Consents.
To the knowledge of the Seller, subject to obtaining the Consents
listed on Schedule 4.3, the execution, delivery and performance by the Seller of
this Agreement and the Subleases and the documents contemplated hereby, (a) do
not require the consent of any third party (including any governmental or
regulatory authority); (b) will not conflict with any provision of the
Certificate of Incorporation or By-Laws of the Seller; (c) will not violate or
result in a breach of, or contravene any law, judgment, order, ordinance,
injunction, decree, rule, regulation, or ruling of any court or governmental
instrumentality applicable to the Seller; (d) will not violate, conflict with,
or result in a material breach of any terms of, constitute grounds for
termination of, constitute a default under, or result in the acceleration of any
performance required by the terms of, any material mortgage, indenture, lease,
contract, agreement, instrument, license, or permit to which either the Seller
is a party or which is binding upon any of the Acquired Assets; and (e) does not
create any claim, liability, mortgage, lien, pledge, condition, charge,
encumbrance, or other security interest upon any of the Acquired Assets.
4.4. Licenses.
(a) Schedule 4.4 is a true and complete list as of the date of
this Agreement of all material Licenses. Each such License has been validly
issued, and the Seller is the authorized legal holder thereof. Such Licenses are
in full force and effect, and the conduct of the business and operations of the
Western Blot Operations has been and is now in accordance therewith in all
material respects. As of the date of this Agreement, there is no proceeding
pending or, to the Seller's knowledge, threatened, seeking the revocation or
limitation of any Licenses. The Seller is the holder of all Licenses necessary
or appropriate to enable it to continue to conduct the business of the Western
Blot Operations as now conducted. Except as is indicated on Schedule 4.4, the
Seller has no knowledge of any restrictions on its ability to transfer such
Licenses to the Purchaser, but Seller has made no inquiry in respect thereof.
(b) Except as set forth on Schedule 3.3(a), the Acquired
Assets are the only tangible, and, to the Seller's knowledge, all the
intangible, assets necessary in the manufacture, sale and use of the Western
Blot Products (except the HTLV-I/II Western Blot, the Lyme IgG Western Blot and
the Lyme IgM Western Blot, with respect to which Seller no such representation
is made) and operation of the Western Blot Operations. Except as provided in the
preceding sentence, the Seller expressly disclaims any representation or
warranty as to the sufficiency of the Acquired Assets for the conduct of the
Western Blot Operations.
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4.5. Leasehold Property.
Except as set forth on Schedule 4.5, the Seller has enforceable rights
to nondisturbance and quiet enjoyment to the Rockville Facility, and no third
party holds any interest in the leased premises with the right to foreclose upon
the Seller's leasehold or subleasehold interest. No other person, except as
indicated on Schedule 4.5, has any rights as lessee of such property, and the
Seller has not subleased or licensed any others to occupy or use any portion of
the Rockville Facility. The Leases are in full force and effect. Except as set
forth on Schedule 4.5, neither the Seller nor bioMerieux has received any notice
of default or knows of any default or event or circumstance which, with notice
or passage of time or both, would give rise to a default, under the Leases. The
Leases have not been amended or modified and the Purchaser has been given a
true, complete and accurate copies of the Leases. The Seller has paid all
applicable rent under the Leases through 1998. There are no and there will be no
leasing or brokers' commission due and payable in connection with execution and
delivery of and performance under the Subleases. The Seller's property taxes
with respect to the property subject to the Leases are $12,297.37 for the year
ending December 31, 1998, all of which have been paid.
4.6. Tangible Personal Property.
Schedule 4.6 lists all material items of Tangible Personal Property
used to conduct the business or operations of the Western Blot Operations as now
conducted. Except as described in Schedule 4.6 and except for Tangible Personal
Property leased pursuant to any Assumed Contract, the Seller owns and has good
and marketable title to each item of Tangible Personal Property, and none of the
Tangible Personal Property is subject to any liens, security interests,
mortgages, pledges, encumbrances, or restrictions, except for Permitted Liens.
Upon consummation of the transactions contemplated by the Agreement, the
Purchaser will own and have good and marketable title to, free and clear of any
liens, security interests or pledges (except for Permitted Liens), each and
every item of Tangible Personal Property. Except as is set forth on Schedule
4.6, each item of Tangible Personal Property listed on Schedule 4.6 is in good
working condition (ordinary wear and tear excepted) and is available for
immediate use in the business and operations of the Western Blot Operations.
4.7. Contracts.
Schedule 4.7 is a true and complete list as of the date of this
Agreement of all the contracts being transferred by the Seller to the Purchaser
relating primarily to or necessary for the conduct of the business or operations
of the Western Blot Operations (the "Assumed Contracts"). The Seller has
delivered or made available to the Purchaser true and complete copies of all
material written Assumed Contracts. Except as disclosed
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on Schedule 4.7, to the knowledge of the Seller, all of the Assumed Contracts
are in full force and effect and are valid and binding agreements of the parties
thereto, enforceable in accordance with their terms. Except as disclosed on
Schedule 4.7, neither the Seller nor, to the knowledge of the Seller, any other
party is in default in any material respect under any of the Assumed Contracts,
nor does any condition exist that with the notice or lapse of time or both would
constitute such a default. Except for the need to obtain the Consents listed on
Schedule 4.3 (however, this representation and warranty does not create any
obligation on the part of the Seller to obtain any such Consent or make the
obtaining of such Consent a condition to Closing with respect to any party
hereto except as expressly set forth elsewhere in this Agreement), the Seller
has full legal power and authority to assign its rights under the Assumed
Contracts to the Purchaser, in accordance with this Agreement, and such
assignments together will not affect the validity, enforceability, or
continuation of any of the Assumed Contracts. Except as disclosed on Schedule
4.7, as of the date of this Agreement, to the knowledge of the Seller, no party
to any Assumed Contract has informed the Seller of its intention (a) to
terminate such Assumed Contract or amend the terms thereof, (b) to refuse to
renew the Assumed Contract upon expiration of its term, or (c) to renew the
Assumed Contract upon expiration only on terms and conditions that are more
onerous than those now existing.
4.8. Financial Statements.
The Seller has furnished the Purchaser with true and complete copies of
an unaudited balance sheet and income statement of the Seller with respect to
the Seller's operations, as at and for the years ended September 30, 1998 and
1997 (the "Seller Financial Statements"). The Seller Financial Statements have
been prepared from the books and records of the Seller on a consistent basis in
accordance with the accounting principles applied by the Seller in preparing its
consolidated financial statements which, on a consolidated basis, have been
prepared in accordance with generally accepted accounting principles, and
present fairly, in all material respects, the financial condition of the
Seller's operations as at their respective dates and the results of operations
for the periods then ended.
4.9. Personnel.
(a) Employees and Compensation. Schedule 4.9 contains a true
and complete list as of the date of this Agreement of all employees of the
Seller engaged in the business and operations of the Western Blot Operations
(collectively, the "Employees") and a description of all compensation
arrangements affecting them, including all written or oral employment
agreements, all accrued vacation and other obligations that have accrued on or
prior to the Closing Date. Except as set forth in Schedule 4.9 all employees of
the Seller are employed "at will" and may be terminated without cause and with
no more than two weeks notice at any time. There is no organized
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labor strike, dispute, slowdown or stoppage, collective bargaining or unfair
labor practice claim, union representation question or arbitration or grievance
proceeding, (collectively, "Labor Matters"), pending, or to the best knowledge,
of the Seller threatened, against or affecting the Seller. Schedule 4.9 lists
each Labor Matter that involves a claim or potential claim against, or that
enjoins or compels or seeks to enjoin or to compel any activity by the Seller
with respect to the Western Blot Operations. The Seller is and has been in
material compliance with all applicable laws respecting employment and
employment practices, terms and conditions of employment and wages and hours,
including, without limitation, any such laws respecting employment
discrimination, occupational safety and health, and unfair labor practices.
There is no unfair labor practice complaint against the Seller pending or, to
the knowledge of the Seller, threatened before the National Labor Relations
Board, Office of Federal Contract Compliance Programs, or any comparable state,
local or foreign agency. The Seller has not experienced any material work
stoppage in the last 18 months. The Seller is not delinquent in payments to any
of its employees for any wages, salaries, commissions, bonuses or other
compensation for any services performed by them or amounts required to be
reimbursed to such employees. Except as set forth in Schedule 4.9, upon
termination of the employment of any of the employees of the Seller before or
after the Closing Date, neither the Seller nor the Purchaser will be liable to
such employee for severance pay. The Seller is not a party to or bound by any
collective bargaining agreements.
(b) Neither the Seller nor any entity required to be
aggregated therewith pursuant to Section 414(b) or (c) of the Code and/or
Section 4001(b) of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), has incurred or could reasonably be expected to incur any
material liability under Title IV of ERISA (other than for the payment of
Pension Benefits Guaranty Corporation premiums payable in the ordinary course
and/or the minimum funding requirements of Section 412 of the Code).
4.10. Claims and Legal Actions.
Except as disclosed on Schedule 4.10, as of the date of this Agreement,
there is no claim, legal action, counterclaim, suit, arbitration, or other
legal, administrative, or tax proceeding, nor any order, decree, or judgment, in
progress or pending, or to the Seller's knowledge threatened, against or
relating to the Seller or any of its Affiliates with respect to the Acquired
Assets or the business or operations of the Western Blot Operations, that could
be expected to have a Material Adverse Effect or impair or hinder the ability of
the Seller to perform its obligations under this Agreement.
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4.11. Compliance with Laws.
The Seller has complied with the Licenses and all Federal, state, and
local laws, rules, regulations, ordinances, judgments, orders, and decrees
applicable or relating to the business and operation of the Western Blot
Operations, except for any noncompliance that would not have a Material Adverse
Effect or impair or hinder the ability of the Seller to perform its obligations
under this Agreement.
4.12. Environmental Matters.
(a) To the knowledge of the Seller, the Seller has complied
and is in compliance with all Environmental Laws, except for such noncompliance
as would not have a Material Adverse Effect.
(b) The Seller possesses all Licenses required under
applicable Environmental Laws to conduct its current business, and each such
License is in full force and effect. There has not been from and after the
Reorganization Date, or, to the Seller's knowledge, prior to the Reorganization
Date, any disposal, spill, discharge, or release of any petroleum products,
hazardous materials, substances or wastes on, at, or under the Rockville
Facility that could reasonably be expected to require investigation, removal, or
remedial or corrective action. To the knowledge of the Seller, the Seller has
not transported or arranged for the transportation of any petroleum products,
hazardous materials, substances or wastes to any location that is listed or
proposed for listing as a contaminated, or potentially contaminated, site under
federal or state Environmental Laws. To the knowledge of the Seller, there has
not been any underground or above ground storage tanks containing petroleum
products, hazardous materials, substances, or waste at the Rockville Facility.
(c) To the knowledge of the Seller, the Seller, with respect
to the Western Blot Operations or the Acquired Assets, has not received any
written notice regarding any actual or alleged violation of Environmental Laws,
or any liabilities or potential liabilities, including any investigatory,
remedial, or corrective obligations, arising under Environmental Laws, the
subject of which would have a Material Adverse Effect.
4.13. Transactions with Affiliates.
Except as set forth on Schedule 4.13, there are no agreements relating
to the business or operations of the Western Blot Operations between the Seller
and any of its Affiliates, the Seller has not been involved in any material
business arrangement or relationship relating to the Western Blot Operations or
the Acquired Assets with any of its Affiliates, and no Affiliate of the Seller
owns any property or right, tangible or intangible, that is used in the business
or operations of the Western Blot Operations.
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4.14. Proprietary Information.
Employees of the Seller have taken all actions necessary to irrevocably
assign or otherwise transfer to Seller all of their respective right, title and
interest in and to any and all Proprietary Information.
4.15. Conduct of Business.
Since the date of the Seller Financial Statements, the Seller has not:
(a) Suffered any damage, destruction, or loss affecting any
assets used or useful in the conduct of the business of the Western Blot
Operations that has had or would have a Material Adverse Effect;
(b) Except in this Agreement, made or agreed to make any sale,
assignment, lease, or other transfer or disposition of any of the Western Blot
Operations's assets of the types described as Acquired Assets other than in the
normal and usual course of business with suitable replacements being obtained
therefor;
(c) Except as set forth on Schedule 4.15, entered into any
settlement regarding the breach or infringement of, any material license,
patent, copyright, trademark, trade name, franchise, or similar right, or
modified any existing right relating to the Western Blot Operations.
4.16. Investment Representations. The Seller understands that the
Common Stock and Warrants and the Common Stock issuable upon exercise of the
Warrants (collectively, the "Securities") have not been registered under the
Securities Act. The Seller also understands that the Securities are being
offered and sold pursuant to an exemption from registration contained in the
Securities Act of 1933, as amended (the "Securities Act"), based in part upon
the Seller's representations contained in this Agreement. The Seller hereby
represents and warrants as follows:
(i) Acquisition for Own Account. The Seller is acquiring
the Securities for the Seller's own account for
investment, and not with a view towards their
distribution.
(ii) The Seller Can Protect Its Interest. The Seller
represents that by reason of its, or of its
management's, business or financial experience, the
Seller has the capacity to protect its own interests
in connection with the acquisition of the Securities.
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(iii) Accredited Investor. The Seller represents that it is
an accredited investor within the meaning of
Regulation D under the Securities Act.
(iv) Information. The Seller has received and read the SEC
Documents and has had an opportunity to discuss the
Purchaser's business, management and financial
affairs with directors, officers and management of
the Purchaser and has had the opportunity to review
the Purchaser's operations and facilities. The Seller
has also had the opportunity to ask questions of and
receive answers from, the Purchaser and its
management regarding the terms and conditions of this
investment.
(v) Restrictions on Resale. The Seller acknowledges and
agrees that the Securities must be held indefinitely
unless they are subsequently registered under the
Securities Act or an exemption from such registration
is available.
4.17. DISCLAIMERS OF OTHER REPRESENTATIONS AND WARRANTIES.
THE SELLER SHALL NOT BE DEEMED TO HAVE MADE TO THE PURCHASER ANY
REPRESENTATION OR WARRANTY OTHER THAN AS EXPRESSLY MADE BY THE SELLER IN SECTION
4 HEREOF OR SECTION 3.3 HEREOF. WITHOUT LIMITING THE GENERALITY OF THE
FOREGOING, AND NOTWITHSTANDING ANY OTHERWISE REPRESENTATIONS AND WARRANTIES MADE
BY THE SELLER IN SECTION 4 HEREOF, THE SELLER DOES NOT MAKE ANY REPRESENTATION
OR WARRANTY TO THE PURCHASER WITH RESPECT TO ANY PROJECTIONS, ESTIMATES OR
BUDGETS HERETOFORE DELIVERED TO OR MADE AVAILABLE TO THE PURCHASER OF FUTURE
REVENUES, EXPENSES OR EXPENDITURES OR FUTURE RESULTS OF OPERATIONS WITH RESPECT
TO THE ACQUIRED ASSETS. EXCEPT AS EXPRESSLY COVERED BY A REPRESENTATION OR
WARRANTY CONTAINED IN SECTION 4 HEREOF OR SECTION 3.3, THE SELLER DOES NOT MAKE
ANY REPRESENTATION OR WARRANTY TO THE PURCHASER WITH RESPECT TO ANY OTHER
INFORMATION OR DOCUMENTS (FINANCIAL OR OTHERWISE) MADE AVAILABLE TO THE
PURCHASER OR ITS COUNSEL, ACCOUNTANTS OR ADVISORS WITH RESPECT TO THE SELLER OR
THE ACQUIRED ASSETS. EXCEPT AS EXPRESSLY SET FORTH IN THIS SECTION 4 AND SECTION
3.3, THE SELLER MAKES NO REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AT LAW
OR IN EQUITY, IN RESPECT OF ANY OF ITS ASSETS (INCLUDING,
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WITHOUT LIMITATION, THE ACQUIRED ASSETS), LIABILITIES OR OPERATIONS, INCLUDING,
WITHOUT LIMITATION, WITH RESPECT TO MERCHANTABILITY OR FITNESS FOR ANY
PARTICULAR PURPOSE, AND ANY SUCH OTHER REPRESENTATIONS OR WARRANTIES ARE HEREBY
EXPRESSLY DISCLAIMED. THE PURCHASER HEREBY ACKNOWLEDGES AND AGREES THAT, EXCEPT
TO THE EXTENT SPECIFICALLY SET FORTH IN THIS SECTION 4 AND SECTION 3.3, THE
PURCHASER IS PURCHASING THE ACQUIRED ASSETS ON AN "AS-IS, WHERE-IS" BASIS.
WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, THE SELLER MAKES NO
REPRESENTATION OR WARRANTY REGARDING ANY ASSETS OTHER THAN THE ACQUIRED ASSETS
OR ANY LIABILITIES OTHER THAN THE ASSUMED LIABILITIES, AND NONE SHALL BE IMPLIED
AT LAW OR IN EQUITY.
SECTION 5. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
The Purchaser represents and warrants to the Seller that:
5.1. Organization, Standing, and Authority.
The Purchaser is a corporation duly organized, validly existing, and in
good standing under the laws of the State of Delaware and has all requisite
corporate power and authority to execute and deliver this Agreement and the
Subleases and the documents contemplated hereby, and to perform and comply with
all of the terms, covenants, and conditions to be performed and complied with by
the Purchaser hereunder and thereunder.
5.2. Authorization and Binding Obligation.
The execution, delivery, and performance of this Agreement by the
Purchaser and the performance by the Purchaser of its obligations hereunder have
been duly authorized by all necessary actions on the part of the Purchaser. This
Agreement has been duly executed and delivered by the Purchaser and constitutes
the legal, valid, and binding obligation of the Purchaser, enforceable against
the Purchaser in accordance with its terms.
5.3. Capital Structure.
The authorized capital stock of the Purchaser consists of 30,000,000
shares of Common Stock and 5,000,000 shares of Preferred Stock. At the close of
business on the business day next preceding the date of this Agreement,
13,460,198 shares of Common Stock were outstanding and no shares of Common Stock
were held by the Purchaser in its treasury, and there were not any shares of
Preferred Stock or any bonds, debentures, notes
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or other indebtedness having the right to vote on any matters on which the
Purchaser's stockholders may vote ("Voting Debt") issued or outstanding. All
outstanding shares of such capital stock are validly issued, fully paid and
nonassessable and not subject to preemptive rights. Except set forth on Schedule
5.3, there are no options, warrants, calls, rights, commitments or agreements of
any character to which the Purchaser or any subsidiary of the Purchaser is a
party or by which it is bound obligating the Purchaser or any subsidiary of the
Purchaser to issue, deliver or sell, or cause to be issued, delivered or sold,
additional shares of capital stock or any Voting Debt of the Purchaser or of any
Subsidiary of the Purchaser or obligating the Purchaser or any Subsidiary of the
Purchaser to grant, extend or enter into any such option, warrant, call, rights,
commitment or agreement.
5.4. Absence of Conflicting Agreements.
Subject to obtaining the Consents listed on Schedule 5.4, the
execution, delivery, and performance by the Purchaser of this Agreement and the
documents contemplated hereby (with or without the giving of notice, the lapse
of time, or both): (a) do not require the consent of any third party (including
any governmental or regulatory authority); (b) will not conflict with the
Certificate of Incorporation or By-Laws of the Purchaser; (c) will not violate,
conflict with, or result in a breach of, or constitute a default under, any law,
judgment, order, injunction, decree, rule, regulation, or ruling of any court or
governmental instrumentality applicable to the Purchaser; and (d) will not
violate, conflict with, constitute grounds for termination of, result in a
breach of, constitute a default under, or accelerate or permit the acceleration
of any performance required by the terms of, any mortgage, indenture, lease,
contract, agreement, instrument, license, or permit to which the Purchaser is a
party or by which the Purchaser may be bound legally.
5.5. SEC Documents.
As of their respective dates, each report, schedule, registration
statement and definitive proxy statement filed by the Purchaser with the
Securities and Exchange Commission (the "SEC") since January 1, 1996 (the "SEC
Documents"), complied in all material respects with the requirements of the
Securities Act and the Securities Exchange Act of 1934, as amended (the
"Exchange Act") and the rules and regulations of the SEC under the Securities
Act and the Exchange Act applicable to such SEC Documents and none of the SEC
Documents contained any untrue statement of a material fact or omitted to state
a material fact required to be stated therein or necessary in order to make the
statements therein not misleading. Except to the extent information contained in
any SEC Document has been revised or superseded by a later-filed SEC Document or
by a written disclosure delivered by the Purchaser prior to the date of this
Agreement, none of the SEC Documents currently contains any untrue statement of
a material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances
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under which they are made, not misleading. The financial statements of the
Purchaser included in the SEC Documents comply as to form in all material
respects with applicable accounting requirements and the published rules and
regulations of the SEC with respect thereto, have been prepared in accordance
with generally accepted accounting principles applied on a consistent basis
during the periods involved (except as may be indicated in the notes thereto or,
in the case of the unaudited statements, as permitted by Form 10-Q of the SEC)
and fairly present (subject, in the case of the unaudited statements, to normal,
recurring audit adjustments) the consolidated financial position of the
Purchaser and its consolidated subsidiaries as at the dates thereof and the
consolidated results of their operations and changes in financial position for
the periods then ended.
5.6. Claims and Legal Actions.
Except as disclosed in the SEC Documents filed prior to the date of
this Agreement, as of the date of this Agreement, there is no claim, legal
action, counterclaim, suit, arbitration, or other legal, administrative, or tax
proceeding, nor any order, decree, or judgment, in progress or pending, or to
the Purchaser's knowledge threatened, against or relating to the Purchaser or
any of its Affiliates.
5.7. Transactions with Affiliates.
Except as disclosed in the SEC Documents filed prior to the date of
this Agreement, there are no agreements relating to the business or operations
of the Purchaser and any of its Affiliates, and no Affiliate of the Purchaser
owns any property or right, tangible or intangible, that is used in the business
or operations of the Western Blot Operations.
5.8. Conduct of Business.
Except as disclosed in the SEC Documents filed prior to the date of
this Agreement, the Purchaser has not suffered any damage, destruction, or loss
that has had or would have a Material Adverse Effect.
SECTION 6. SPECIAL COVENANTS AND AGREEMENTS.
6.1. Confidentiality.
(a) Except as and to the extent required by law or as provided
in Section 6.1(b), each party will keep confidential any information obtained
from the other party in connection with the transactions contemplated by this
Agreement. If this Agreement is terminated, each party will return to the
disclosing party or destroy all information obtained by such party from any
other party in connection with the transactions
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contemplated by this Agreement, except counsel to each party may retain one
archival copy for litigation purposes.
(b) Except as and to the extent required by law or the
regulatory body that regulates the party's trading market, and except as
provided in Section 6.1(c), no party shall publish any press release or make any
other public announcement concerning this Agreement or the transactions
contemplated hereby without the prior written consent of each other party, which
shall not be withheld unreasonably.
(c) Nothing contained in this Agreement shall prevent any
party, after notification to each other party, from making any filings with
governmental authorities, including in connection with any securities filings
with any governmental authorities or exchanges that, in its judgment, may be
required or advisable in connection with the execution and delivery of this
Agreement or the consummation of the transactions contemplated hereby, including
with the FDA and equivalent foreign regulatory authorities in connection with
the Transferred Regulatory Approvals and as otherwise may be so advisable.
6.2. Registration Rights.
(a) Requested Registration. At any time on or after the
Closing, upon the written request of the Seller requesting that the Purchaser
effect the registration under the Securities Act of 1933, as amended (the
"Act"), of all or part of the common stock issuable under this Agreement
including upon exercise of Warrants, the Purchaser shall, as expeditiously as
possible, use its best efforts to effect the registration or qualification of
all such Common Stock (or so many thereof as the Seller shall have specified in
such request) with, and give notice to or obtain approval by, any governmental
authority under any Federal or state law which may be required to permit the
sale through a dealer (or otherwise sell in connection with a transaction
requiring blue sky registration in a limited number of jurisdictions in addition
to registration under the Federal securities laws of such Common Stock held by
the Seller; provided, however, that the Purchaser shall, be obligated to
maintain the effectiveness of such registration statement only until the earlier
of (i) the seventh anniversary of the Closing Date or (ii) the public
distribution of all shares covered by such registration statement.
(b) Incidental Registration. The Purchaser will promptly give
notice to the Seller of a decision by the Board of Directors of the Purchaser to
file a registration statement under the Act in respect of a public offering on
behalf of the Purchaser or on behalf of other holders of Common Stock. Such
notice shall describe the nature, terms and conditions of the proposed public
offering and, if known, state the name of the managing underwriter(s) that has
been engaged with respect to such public offering. The Seller shall have 15 days
from the date of such notice to request to include some of or all
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the Securities in such public offering, to be purchased by the underwriters (or
otherwise) from the Seller for the same price paid by the underwriters (or
otherwise) for the securities sold by the Purchaser and/or such other selling
securityholders in the public offering. In the event that the underwriters
engaged by the Purchaser to effect a public offering of the Purchaser's common
stock determine that marketing factors require a limitation to the number of
shares of Common Stock to be underwritten, the underwriters may limit the number
of shares held by the Seller to be included in such public offering provided
that any such limitation is applied to any other holders of shares that have
requested inclusion in such offering on a pro rata basis in relation to the
respective proportionate holdings of all such holders (except that any such
holder acquiring such registration rights after the Closing Date in connection
with an equity investment in the Purchaser constituting at the time of such
investment not less than 5% of the outstanding equity of the Purchaser on a
fully diluted basis may be included one time in a public offering without being
subject to such limitation on a pro rata basis if the following conditions are
met: (i) the Seller's participation shall not have previously been reduced in
connection with any such underwritten public offering, (ii) the percentage of
any such reduction applicable to the Seller shall not exceed two times the
percentage of shares held by such investor (excluding unexercised rights to
acquire shares) that are not included by the investor in such public offering
(i.e., if such investor is selling 50% of its holdings, the Seller could have
its requested inclusion reduced by 100% to zero, and if the investor were
selling 75% of its holdings (retaining 25%), the Seller could have its requested
inclusion reduced by 50% (twice 25%)), and (iii) the limitation applicable to
the Seller shall not be greater than the limitation applicable to any holder
requesting inclusion other than such investor). The Seller agrees to enter into
reasonable market standoff agreements as deemed appropriate and necessary in
connection with such public offering.
(c) Current Information. If, at any time when a registration
statement is in effect allowing sales pursuant to the rights granted in
paragraphs (a) or (b), the prospectus included in such registration statement,
as then in effect, includes an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading in light of the circumstances then existing,
the Purchaser shall notify the Seller of the happening of such event and shall,
at the request of the Seller, prepare such supplements or amendments to such
prospectus as may be necessary to allow its use in the sale of the Securities
proposed to be sold. The Seller agrees not to sell any Securities under such
registration statement until the Purchaser has updated the registration
statement which the Purchaser shall do within ten days of request by the Seller.
(d) Indemnities. In connection with any registration statement
filed pursuant to this Section, the Seller shall provide upon request written
information relating to the Seller as a selling security-holder through an
instrument duly executed by the Seller specifically for use in registration
statement to the extent such information may be
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necessary for the preparation of the registration statement, and shall indemnify
the Purchaser (up to the maximum net proceeds actually received from the sale of
the Securities) with respect to any Losses attributable to any untrue statement
in the registration statement, or omission in the registration statement of a
material fact required to be stated therein or necessary to make the statements
therein not misleading, or, with respect to any prospectus, necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading (any such omission, an "Omission"), made in any such case
in reliance upon and in conformity with such written information. Except as
provided in the foregoing sentence, in connection with any such registration
statement, the Purchaser and any underwriter acting on its behalf shall
indemnify and hold harmless the Seller with respect to any Losses attributable
to any untrue statement or alleged untrue statement in the registration
statement or any prospectus, or Omission or alleged Omission in the registration
statement or any prospectus.
(e) Expenses. The Purchaser shall pay all expenses incurred by
it in complying with the provisions of this Section, including, without
limitation, all registration and filing fees, fees and expenses of complying
with the securities laws of all jurisdictions in which the Securities are
proposed to be offered and sold, printing expenses and fees and disbursements of
counsel representing the Purchaser.
(f) Legend on Shares. All Securities issued pursuant to this
Agreement shall have the following legend until they are transferred pursuant to
an effective Registration Statement in accordance with this Section 6.2:
"THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED. THEY MAY NOT BE SOLD IN
THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT WITH RESPECT
TO THE SECURITIES OR AN OPINION OF COUNSEL REASONABLY
SATISFACTORY TO CALYPTE BIOMEDICAL CORPORATION THAT SUCH
REGISTRATION IS NOT REQUIRED."
(g) Stop Transfer Order. An appropriate stop-transfer order
will be noted on the records of Purchaser's transfer agent with respect to the
Securities issued pursuant to this Agreement.
(h) Benefit of this Section. The registration rights provided
to the Seller in respect of the Securities shall be available to any transferee
of all of the Common Stock and Warrants held by the Seller.
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6.3. Cooperation.
The Seller and the Purchaser shall cooperate fully with each other and
their respective counsel and accountants in connection with any actions required
to be taken as part of their respective obligations under this Agreement, and
the Seller and the Purchaser shall each use commercially reasonable efforts to
take or cause to be taken all actions necessary, proper or advisable under
applicable laws and regulations to consummate and make effective the
transactions contemplated by this Agreement, including making such filings with
governmental and regulatory authorities, providing information, using
commercially reasonable efforts to obtain all necessary or appropriate waivers,
consents, and approvals, including the Transferred Regulatory Approvals, and
executing such other documents as may be necessary and desirable to the
implementation and consummation of this Agreement, and otherwise use
commercially reasonable efforts to consummate the transaction contemplated
hereby and to fulfill their obligations under this Agreement. Notwithstanding
the foregoing, and except as otherwise expressly provided in this Agreement, the
Purchaser shall have no obligation to agree to any adverse change in any License
or Assumed Contract in order to obtain a Consent required with respect thereto,
and the Seller shall not have any obligation to expend funds to obtain any of
the Consents or any estoppel certificates.
6.4. Access to Books and Records.
(a) To the extent requested for any reasonable business
purposes hereunder, and subject to the following two sentences of this Section
6.4(a), (a) the Seller shall provide the Purchaser access and the right to copy
for a period of five years from the Closing Date any books and records of the
Seller (or true and complete copies thereof) relating to the Western Blot
Operations or the Acquired Assets but not included in the Acquired Assets, and
(b) the Purchaser shall provide the Seller the right to request true and
complete copies, for a period of five years after the Closing Date, of any books
and records relating to the Western Blot Operations or the Acquired Assets with
respect to periods prior to the Closing that are included in the Acquired
Assets. Any party that is required to grant any other party access and the right
to copy any books and records (or true and complete copies thereof) pursuant to
this Section 6.4(a) may, before doing so, redact or remove therefrom any
information contained therein that does not relate to the Western Blot
Operations or the Acquired Assets. Except as and to the extent required by law
or as provided in Section 6.1(b), each party will keep confidential any
information to which it is given access pursuant to this Section 6.4(a).
(b) In addition to the access provided for in the foregoing
paragraph, the Purchaser shall provide to the Seller the right to copy during
such period the information contained in the AS/400 computer system maintained
for the benefit of the Seller in Worcester, Massachusetts, which the Purchaser
shall continue to operate or cause to be
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operated and maintained for such period pursuant to the service contract
currently in effect with respect thereto.
6.5. Bulk Sales Law.
The Purchaser hereby waives compliance by the Seller with the
provisions of any applicable bulk sales laws. The Purchaser shall not be
responsible for any liabilities of the Seller or the Western Blot Operations
other than the Assumed Liabilities.
6.6. Restrictions on Competitive Activities.
As an inducement to the Purchaser to enter into this Agreement, the
Seller agrees that for a period of three years from the Closing Date, the Seller
shall not compete with the Purchaser through sale in the United States of any
confirmatory immuno-blot transfer technologies (including Western Blot, REBA and
other immuno-blot rapid formats), except in the event that Seller makes an asset
or stock acquisition of a company (or division of a company) not primarily
engaged in the business of manufacturing tests utilizing immuno-blot transfer
technology. Notwithstanding the foregoing, the Seller agrees that it will not
market any product under the name "Cambridge Biotech Western Blot" in connection
with any such acquisition during such period.
6.7. No Inconsistent Action.
No party to this Agreement shall take any action that is inconsistent
with its obligations under this Agreement or that could reasonably be expected
to hinder or delay the consummation of the transactions contemplated by this
Agreement.
6.8. Supply of Products by the Seller for the Purchaser.
(a) From and after the Closing Date hereunder until the
earlier of such time as (a) the date six months from the Closing Date or (b)
substantially all the consents necessary to transfer the Transferred Regulatory
Approvals have been obtained or (c) the Purchaser is able to conduct the
manufacture of the Western Blot Products in its own right, the Seller shall
supply the Purchaser with reasonable quantities of the Western Blot Products for
sale by the Purchaser, pursuant to a license granted hereby specifically to
allow those activities of the Seller described in this Section 6.8. The
Purchaser shall submit to the Seller orders, including delivery dates, with
respect to such requirements, and the Purchaser shall pay to the Seller upon
tender of the Western Blot Products in the name of the Seller an amount equal to
the Seller's cost thereof. For purposes hereof, the Seller's Cost shall equal
the purchase price paid by the Seller to the Purchaser pursuant to paragraph (b)
below.
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(b) The Seller hereby engages the Purchaser to manufacture on
its behalf all requirements of the Western Blot Products necessary to satisfy
its obligations pursuant to paragraph (a). Such Products shall be supplied at
their cost.
(c) The Purchaser shall indemnify the Seller in full with
respect to its activities under this Section as provided in Section 3.5.
(d) In the event of any failure to obtain the Transferred
Regulatory Approvals, the Purchaser's sole remedy shall be as provided in
Section 10.6(b).
6.9. Manufacturing by Purchaser for the Seller.
The Purchaser agrees that, for so long as it operates the Rockville
Facility, the Purchaser shall, in the event the Seller or any of its affiliates
requests to have the Purchaser manufacture a product for sale to the Seller or
such affiliate, which product has been or reasonably can be manufactured in the
Rockville Facility as operated at the time of such request, negotiate in good
faith to accommodate the Seller's request on reasonable terms and conditions,
not less favorable in any event than terms and conditions applicable at the time
to the manufacture for the most favored customers of the Purchaser purchasing
similar products in similar amounts to the extent that such terms and conditions
result in a reasonable profit to the Purchaser.
6.10. Certain Transitional Arrangements.
(a) Except as provided in Section 3.2, the Purchaser shall
receive no rights to use the name "Cambridge" or any related abbreviations such
as "CBC", or the name of any affiliate of Cambridge. The Purchaser shall take
all steps necessary to discontinue any such usage promptly, including
immediately discontinuing the use of Cambridge letterhead and the use of the
Cambridge name by telephone operators and receptionists, and removing promptly
but within a period not longer than three months all signage relating to such
name.
(b) In the event that the Purchaser cannot after good faith
efforts satisfy FDA regulatory requirements in respect of the maintenance of the
HIV-1 cell line described in Schedule 4.15(a), then the Seller shall request
from available sources on the Purchaser's behalf (or concur in any such request
of the Purchaser) that the Purchaser receive (at Seller's expense) an additional
supply of such cell line as may be necessary to meet such requirements.
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SECTION 7. CONDITIONS TO OBLIGATIONS OF PARTIES AT CLOSING.
7.1. Conditions to Obligations of the Purchaser.
All obligations of the Purchaser at the Closing are subject at the
Purchaser's option to the fulfillment prior to or at the Closing Date of each of
the following conditions:
(a) Injunction, etc. There shall be no effective injunction,
writ, or preliminary restraining order or any order of any nature issued by a
court or governmental agency of competent jurisdiction to the effect that
transactions contemplated by this Agreement may not be consummated as herein
provided, no proceeding or lawsuit shall have been commenced and be continuing
by any federal or state governmental or regulatory agency for the purpose of
obtaining any such injunction, writ, or preliminary restraining order, and no
written notice directed to either the Seller or the Purchaser shall have been
received from any such federal or state agency indicating an intent to restrain,
prevent, materially delay, or restructure the transactions contemplated by this
Agreement; provided, however, that the Purchaser shall have used all
commercially reasonable efforts to prevent the entry of any such injunction or
other order that may be entered.
(b) Related Agreements. The Seller shall have entered into the
Related Agreements.
(c) Consents. All Consents, approvals and filings described on
Schedule 7.1(c) shall have been obtained or made.
(d) Performance. The Seller shall have performed in all
material respects all obligations that this Agreement requires it to perform on
or before the Closing Date.
(e) Representations and Warranties. Each representation and
warranty made by the Seller in Section 4 and Section 3.3 hereof shall be true
and correct in all material respects on the Closing Date as if made on and as of
such date.
(f) Regulatory Approvals. All regulatory approvals required to
consummate the transactions contemplated hereby shall have been obtained and
shall remain in full force and effect except for the Transferred Regulatory
Approvals, as to which the Seller shall have submitted all documentation
necessary on its part to be submitted requesting transfer thereof.
(g) Material Adverse Change. Since the date of this Agreement,
there shall have occurred no event or other occurrence which shall have caused
or may give rise to a Material Adverse Effect with respect to the Seller.
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(h) Estoppel Certificates. The Seller shall have obtained
estoppel certificates in favor of the Purchaser from the lessor or sublessor, as
the case may be, under the Leases.
(i) Deliveries. The Seller shall have made all the deliveries
to the Purchaser set forth in Section 8.2.
7.2. Conditions to Obligations of the Seller.
All obligations of the Seller at the Closing are subject at the
Seller's option to the fulfillment prior to or at the Closing Date of each of
the following conditions:
(a) Injunction, etc. There shall be no effective injunction,
writ, or preliminary restraining order or any order of any nature issued by a
court or governmental agency of competent jurisdiction to the effect that
transactions contemplated by this Agreement may not be consummated as herein
provided, no proceeding or lawsuit shall have been commenced and be continuing
by any federal or state governmental or regulatory agency for the purpose of
obtaining any such injunction, writ, or preliminary restraining order, and no
written notice directed to either the Seller or the Purchaser shall have been
received from any such federal or state agency indicating an intent to restrain,
prevent, materially delay, or restructure the transactions contemplated by this
Agreement; provided, however, that the Seller shall have used all commercially
reasonable efforts to prevent the entry of any such injunction or other order
that may be entered.
(b) Related Agreements. The Purchaser shall have entered into
the Related Agreements.
(c) Consents. All Consents, approvals and filings described on
Schedule 7.2(c) shall have been obtained or made.
(d) Performance. The Purchaser shall have performed in all
material respects all obligations that this Agreement requires it to perform on
or before the Closing Date.
(e) Representations and Warranties. Each representation and
warranty made by the Purchaser in Section 5 hereof shall be true and correct in
all material respects on the Closing Date as if made on and as of such date.
(f) Ortho Agreement. Ortho Diagnostic Systems, Inc. shall have
released the Seller from its obligations under the Distributorship Agreement
dated as of June 19, 1997, by and between Cambridge Biotech Corporation and
Ortho Diagnostic Systems, Inc., by way of termination, novation or other
agreement effectively discharging the Seller.
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(g) Regulatory Approvals. All regulatory approvals required to
consummate the transactions contemplated hereby shall have been obtained and
shall remain in full force and effect, except for the Transferred Regulatory
Approvals, as to which the Purchaser shall have submitted all documentation
necessary on its part to be submitted requesting transfer thereof.
(h) Material Adverse Change. Since the date of this Agreement,
there shall have occurred no event or other occurrence which shall have caused
or which may give rise to a Material Adverse Effect with respect to the
Purchaser.
(i) Deliveries. The Purchaser shall have made all the
deliveries set forth in Section 8.3.
SECTION 8. CLOSING AND CLOSING DELIVERIES.
8.1. Closing Date and Place.
The Closing shall be held at the offices of LeBoeuf, Lamb, Greene &
MacRae, L.L.P., 125 West 55th Street, New York, New York 10019-5389, at 10:00
a.m. on December 11, 1998, or as soon thereafter as practicable following the
satisfaction or waiver, if permissible, of the conditions to the Closing set
forth herein, or at such other place or time as the Purchaser and the Seller may
mutually agree. The effective time of the conveyance of the Acquired Assets and
the assumption of the Assumed Liabilities, and the transfer of the Consideration
shall be deemed to have been the Effective Time.
8.2. Deliveries by the Seller.
Prior to or on the Closing Date, the Seller shall deliver to the
Purchaser the following, in form and substance reasonably satisfactory to the
Purchaser and its counsel:
(a) Transfer Documents. Duly executed instruments of
conveyance and transfer, including bills of sale, motor vehicle titles,
assignments, and other transfer documents that are sufficient to vest good and
marketable title to the Acquired Assets in the name of the Purchaser, free and
clear of all liens, security interests, mortgages, pledges, encumbrances, or
restrictions (other than any liens, security interests, mortgages, pledges,
encumbrances, or restrictions resulting from the failure to obtain any Consent),
except for Permitted Liens.
(b) Consents. Copies of all instruments evidencing receipt of
any Consents and estoppel certificates that have been obtained prior to the
Closing (but this delivery requirement does not create any obligation on the
part of the Seller to obtain any Consent or estoppel certificate or make the
obtaining of any Consent or estoppel
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certificate a condition to any party's obligations at Closing, other than as
expressly provided elsewhere in this Agreement).
(c) Licenses, Contracts, Business Records, Etc. Copies of all
Licenses, Assumed Contracts, blueprints, schematics, working drawings, plans,
projections, engineering records, and all files and records included in the
Acquired Assets.
(d) Opinion of Counsel. An opinion of counsel for the Seller,
in form and substance reasonably satisfactory to the Purchaser.
(e) Other Documents. Such additional customary closing
documents as the Purchaser shall reasonably request, including certificates
executed by appropriate officers of the Seller certifying as to the accuracy of
the representations and warranties of Seller as of the Closing Date and
fulfillment of all of the Seller's obligations under this Agreement as of the
Closing Date.
8.3. Deliveries by the Purchaser.
Prior to or on the Closing Date, the Purchaser shall deliver to the
Seller the following, in form and substance reasonably satisfactory to the
Seller and its counsel:
(a) Consideration. The Consideration as provided in Section
2.2, including certificates representing the Common Stock and the Warrants
included in the Consideration, or other evidence of transfer sufficient to vest
the ownership of such Common Stock and Warrants in the Seller, free and clear of
all liens, security interests, mortgages, pledges, encumbrances or restrictions,
except for securities laws restrictions referred to in Section 4.16.
(b) Consents. Copies of all instruments evidencing receipt of
any Consents that have been obtained prior to the Closing (but this delivery
requirement does not create any obligation on the part of the Purchaser to
obtain any Consent or make the obtaining of any Consent a condition to any
party's obligations at Closing, other than as expressly provided elsewhere in
this Agreement).
(c) Opinion of Counsel. An opinion of counsel for the
Purchaser, in form and substance reasonably satisfactory to the Seller.
(d) Other Documents. Such additional customary closing
documents, information, and materials as the Seller shall reasonably request,
including certificates executed by appropriate officers of the Purchaser
certifying as to the accuracy of the representations and warranties of the
Purchaser as of the Closing Date and fulfillment of all of the Purchaser's
obligations under this Agreement as of the Closing Date.
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SECTION 9. TERMINATION.
9.1. Termination by the Seller.
This Agreement may be terminated by the Seller prior to the Closing if
the Seller is not then in material default, upon written notice to the
Purchaser, upon the occurrence of any of the following:
(a) Conditions. If on or after December 31, 1998, any of the
conditions precedent to the obligations of the Seller set forth in this
Agreement has not been satisfied or waived in writing by the Seller.
(b) Judgments. If there shall be in effect on the date on
which the Closing is scheduled to take place pursuant to Section 8.1 any
judgment, decree, or order that would prevent or make unlawful the Closing, and
such judgment, decree or order shall not have been vacated or removed on or
before December 31, 1998.
(c) Upset Date. If the Closing shall not have occurred on or
before March 31, 1999.
9.2. Termination by the Purchaser.
This Agreement may be terminated by the Purchaser if the Purchaser is
not then in material default, upon written notice to the Seller, upon the
occurrence of any of the following:
(a) Conditions. If on or after December 31, 1998, any of the
conditions precedent to the obligations of the Purchaser set forth in this
Agreement has not been satisfied or waived in writing by the Purchaser.
(b) Judgments. If there shall be in effect on the date on
which the Closing is scheduled to take place pursuant to Section 8.1 any
judgment, decree, or order that would prevent or make unlawful the Closing, and
such judgment, decree or order shall not have been vacated or removed on or
before December 31, 1998.
(c) Upset Date. If the Closing shall not have occurred on or
before March 31, 1999.
9.3. Rights on Termination.
Upon the termination of this Agreement, each party shall have all
rights and remedies available to it at law or equity, subject to the limitations
set forth in Section 10.5 hereof.
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<PAGE> 39
9.4. Specific Performance.
The parties recognize that if any party breaches this Agreement and
refuses to perform under the provisions of this Agreement, monetary damages
alone would not be adequate to compensate the other parties for their injury.
Each party shall therefore be entitled, in addition to any other remedies that
may be available, including money damages, to obtain specific performance
(without necessity of posting bond) of the terms of this Agreement. If any
action is brought by any party to enforce this Agreement, the other parties
shall waive the defense that there is an adequate remedy at law.
9.5. Attorneys' Fees.
In the event of a default by any party that results in a lawsuit or
other proceeding for any remedy available under this Agreement, the prevailing
party shall be entitled to reimbursement from the other party of its reasonable
legal fees and expenses (whether incurred in arbitration, at trial, or on
appeal).
SECTION 10. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION; CERTAIN
REMEDIES.
10.1. Representations and Warranties.
Without prejudice to representations and warranties in other agreements
delivered hereunder, all representations and warranties contained in this
Agreement shall be deemed continuing representations and warranties and shall
survive the Closing Date for a period of eighteen months.
10.2. Indemnification by the Seller.
After the Closing, the Seller hereby agrees to indemnify and hold
harmless the Purchaser from and against, and to reimburse the Purchaser for, any
and all losses, liabilities, and damages (including punitive and exemplary
damages and fines or penalties and any interest thereon), costs and expenses
(including reasonable fees and disbursements of counsel and expenses of
investigation and defense), claims, or other obligations of any nature
(collectively, "Losses") that result from:
(a) Any inaccuracy in or breach of any representation and
warranty, or any breach or nonfulfillment of any covenant or agreement of the
Seller contained in this Agreement or in any certificate, document, or
instrument delivered to the Purchaser under this Agreement;
(b) Any failure to comply with applicable bulk sales laws;
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<PAGE> 40
(c) The operation or ownership of the Western Blot Operations
and the Acquired Assets prior to the Closing including any liabilities arising
under the Licenses or the Assumed Contracts that relate to events occurring
prior the Closing Date, except to the extent any of the foregoing constitute
Assumed Liabilities; and
(d) Any claim relating to or arising in connection with any
employee benefit plan established or maintained by the Seller, or otherwise or
relating to employment by the Seller prior to the Closing.
10.3. Indemnification by the Purchaser.
After the Closing, the Purchaser hereby agrees to indemnify and hold
harmless the Seller from and against, and to reimburse the Seller for, any and
all Losses that result from:
(a) Any inaccuracy in or breach of any representation and
warranty, or any breach or nonfulfillment of any covenant or agreement of the
Purchaser contained in this Agreement or in any certificate, document, or
instrument delivered to the Seller under this Agreement; and
(b) The operation or ownership of the Western Blot Operations
and the Acquired Assets from and after the Closing including any liabilities
arising under the Licenses or the Assumed Contracts that relate to events
occurring from and after the Closing Date, except to the extent such Losses
result from or arise from breach of a representation or warranty made by the
Seller or a breach of a covenant of the Seller contained in this Agreement.
10.4. Procedure for Indemnification.
The procedure for indemnification shall be as follows:
(a) The party claiming indemnification (the "Claimant") shall
promptly give notice to the party from which indemnification is claimed (the
"Indemnifying Party") of any claim, whether between the parties or brought by a
third party, specifying in reasonable detail the factual basis for the claim. If
the claim relates to an action, suit, or proceeding filed by a third party
against Claimant, such notice shall be given by Claimant within ten Business
Days after written notice of such action, suit, or proceeding was given to
Claimant. The Claimant's failure to give such notice timely shall not relieve
the Indemnifying Party from any liability that it otherwise may have to the
Claimant except to the extent the Indemnifying Party is actually prejudiced by
such failure.
(b) With respect to claims solely between the parties,
following receipt of notice from the Claimant of a claim, the Indemnifying Party
shall have thirty days to
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make such investigation of the claim as the Indemnifying Party deems necessary
or desirable. For the purposes of such investigation, the Claimant agrees to
make available to the Indemnifying Party and its authorized representatives the
information relied upon by the Claimant to substantiate the claim. If the
Claimant and the Indemnifying Party agree at or prior to the expiration of the
thirty-day period (or any mutually agreed upon extension thereof) to the
validity and amount of such claim, the Indemnifying Party shall immediately pay
to the Claimant the full amount of the claim. If the Claimant and the
Indemnifying Party do not agree within the thirty-day period (or any mutually
agreed upon extension thereof), the Claimant may seek appropriate remedy at law
or equity.
(c) With respect to any claim by a third party as to which the
Claimant is entitled to indemnification under this Agreement, the Indemnifying
Party shall have the right at its own expense, to participate in or assume
control of the defense of such claim (subject to Section 10.4(c)), and the
Claimant shall cooperate fully with the Indemnifying Party, subject to
reimbursement for actual out-of-pocket expenses incurred by the Claimant as the
result of a request by the Indemnifying Party. If the Indemnifying Party elects
to assume control of the defense of any third-party claim, the Claimant shall
have the right to participate in the defense of such claim at its own expense
(except that the Claimant shall have the right to participate in the defense of
such claim at the Indemnifying Party's expense if (i) the Claimant has been
advised by its counsel that use of the same counsel to represent both the
Indemnifying Party and the Claimant would present a conflict of interest, which
shall be deemed to include any case where there may be a legal defense or claim
available to the Claimant that is inconsistent with those available to the
Indemnifying Party, or (ii) the Indemnifying Party fails vigorously to defend or
prosecute such claim within a reasonable time). If the Indemnifying Party does
not elect to assume control or otherwise participate in the defense of any
third-party claim, the Indemnifying Party shall be bound by the results obtained
by the Claimant with respect to such claim.
(d) The Indemnifying Party may not control the defense of any
claim, without the written consent of the Claimant, if (i) the Claimant has been
advised by its counsel that use of the same counsel to represent both the
Indemnifying Party and the Claimant would present a conflict of interest, or
(ii) the claim involves any material risk of the sale, forfeiture, or loss of,
or the creation of any lien (other than a judgment lien) on, any material
property of the Claimant or could entail a risk of criminal liability to the
Claimant.
10.5. Certain Limitations.
Notwithstanding anything in this Agreement to the contrary,
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<PAGE> 42
(a) no party shall indemnify or otherwise be liable to any
other party with respect to any claim for any breach of a representation, unless
notice of the claim is given within eighteen months after the Closing Date;
(b) the Seller shall not be required to indemnify or otherwise
be liable to the Purchaser for any breach of a representation or warranty,
unless the Losses of the Purchaser from all such breaches exceed in the
aggregate Twenty-Five Thousand Dollars ($25,000), in which event the Seller
shall be required to indemnify the Purchaser for all such Losses (subject to the
other limitations in this Agreement);
(c) the Purchaser shall not be required to indemnify or
otherwise be liable to the Seller for any breach of a representation or warranty
unless the Losses of the Seller from all such breaches exceed in the aggregate
Twenty-Five Thousand Dollars ($25,000), in which event the Purchaser shall be
required to indemnify the Seller for all such Losses (subject to the other
limitations in this Agreement);
(d) the Seller shall not be required to indemnify for any
breach of a representation or warranty, to the extent that the Losses of the
Purchaser from all such breaches exceed in the aggregate the Cash Consideration
paid (but not refunded) pursuant to Section 2.2 plus the aggregate royalties
paid to the date of final determination of liability (and it is understood that
such limitation does not apply to the indemnity set forth in Section 10.2(c));
(e) the Purchaser shall not be required to indemnify for any
breach of a representation or warranty to the extent that the Losses of the
Seller from all such breaches exceed in the aggregate the Cash Consideration
provided for in Section 2.2 (and it is understood that such limitation does not
apply to the indemnity set forth in Section 3.5 and Section 10.3(b));
(f) the amount of Losses for which a Claimant may be entitled
to indemnification under this Agreement (but not the amount of Losses suffered
by a Claimant for purposes of the foregoing provisions of this Section 10.5)
shall be determined on an after-tax basis, after giving effect to any tax
benefit arising from the incurring of any Loss and any tax detriment arising
from the indemnification thereof;
(g) indemnification of Losses under this Agreement shall be
net of any insurance proceeds actually paid to the Claimant with respect to the
event giving rise to such Loss, but no Claimant shall have any obligation under
this Agreement to make any claim under any insurance policy that may be
applicable to such event.
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10.6. Remedies.
(a) The remedy of indemnification under this Section 10 shall
be the exclusive remedy with respect to any misrepresentation contained in
Sections 3.3(a) or 4.
(b) In the event that the Transferred Regulatory Approvals are
not obtained from the FDA within six months of the Closing Date, the Seller's
sole liability in respect thereof, as liquidated damages, shall be the payment
to the Purchaser of an amount equal to the Cash Consideration. A default in
payment of such liquidated damages shall be subject to the provisions of Section
9.5 regarding payment of legal fees and expenses.
SECTION 11. TAXES AND EMPLOYMENT MATTERS
11.1. Transfer Taxes.
The Purchaser shall pay all Transfer Taxes (including Transfer Taxes
attributable to the Purchaser's payment pursuant to this sentence) arising out
of the transfer of the Acquired Assets to the Purchaser and any Transfer Taxes
to effect any recording or filing with respect thereto; provided, however, that
the Seller agrees to pay one-half of any state or local sales or use tax under
applicable law as a result of the transfer of the Acquired Assets, whether or
not Seller or Purchaser is required to collect or remit such sales or use tax.
At the Closing, the Purchaser shall deliver to the Seller, and the Seller is
hereby authorized to collect from the Purchaser, the portion of such Transfer
Taxes payable by the Purchaser that constitute state and local sales or use
taxes which the Seller is liable to remit under applicable law as a result of
the transfer of the Acquired Assets. The Purchaser and the Seller hereby agree
that the amount of such sales and use taxes shall be calculated assuming that no
exemption from such taxes applies unless, at the Closing, the Purchaser provides
the Seller an appropriate resale exemption certificate or other evidence
reasonably acceptable to the Seller of exemption from such taxes. The Seller
shall cooperate with the Purchaser to timely prepare and file any returns or
other filings relating to such Transfer Taxes, including any claim for exemption
or exclusion from the application or imposition of any Transfer Taxes. Except as
provided above with respect to Transfer Taxes to be collected at the Closing,
the Purchaser shall pay such Transfer Taxes and file all necessary documentation
and returns with respect to such Transfer Taxes when due, and shall promptly
following the filing thereof furnish a copy of such return or other filing and a
copy of a receipt showing payment of any such Transfer Tax to the Seller. The
Purchaser hereby agrees to indemnify and hold harmless the Seller with respect
to any additional Transfer Tax imposed in connection with any indemnity payment
pursuant to this Section. For purposes of this Section, "Transfer Tax" or
"Transfer Taxes" means any Federal, state, county, local, foreign and other
sales, use, transfer, conveyance, gross receipts, documentary transfer,
recording or other similar tax,
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fee or charge imposed upon the sale, transfer or assignment of property or any
interest therein or the recording thereof, and any penalty, addition to tax or
interest with respect thereto, but such term shall not include any tax on, based
upon or measured by, the net income, gains or profits from such sale, transfer
or assignment of the property or any interest therein.
11.2. Proration of Property Taxes; Lease Payments.
The Purchaser shall bear and pay to the Seller at the Closing a
proportionate share of payments made by the Seller prior to the Closing in
respect of real property taxes, use charges, utilities, sewer assessments and
other assessments for the year 1998 relating to the Rockville Facility, and any
rental and other payments made under the Leases prior to the Closing Date in
respect of periods commencing prior to and ending after the Closing Date, which
payments shall in each case be prorated on a daily basis as of the Closing Date.
The Purchaser shall also reimburse the Seller at the Closing the sum of any and
all prepayments applicable to the period after the Closing Date, security
deposits and other deposits made by the Seller on or prior to the Closing Date
pursuant to the Leases.
11.3. Employees.
(a) The employment by the Seller of all employees of the
Seller set forth on Schedule 11.3(a) who are employed at the Rockville Facility
on the Closing Date will be terminated by the Seller effective immediately prior
to the Effective Time. As of the Closing Date, such terminated former employees
will cease to be active under the employee benefit plans of the Seller, which
plans, except as provided in paragraph (b) below, will be responsible only for
benefits, if any, payable in accordance with the terms of such plans with
respect to events occurring or services provided before the Closing Date. The
Purchaser shall offer employment to the Continuing Employees listed on Schedule
11.3(b). The Seller shall have no responsibility for any employee benefits for
Continuing Employees or other former employees of the Seller employed by the
Purchaser with respect to events occurring or services provided on or after the
Closing Date, and the Purchaser shall assume, and indemnify and hold harmless
the Seller and its affiliates from and against, any and all Losses with respect
to such events or services, except as provided on Schedule 4.9. The Purchaser
shall have no responsibility for any liabilities for former employees of the
Seller employed at the Rockville Facility by the Purchaser with respect to
events occurring or services provided on or before the Closing Date, and the
Seller shall assume, and indemnify and hold harmless the Purchaser against, any
and all Losses with respect to all such matters. The Purchaser has no present
intention of taking any action for which the Seller would be required to give
notice to employees under the Worker Adjustment and Retraining Act of 1988.
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(b) On or prior to Closing, the Seller shall, in such manner
as shall be reasonably directed by the Purchaser, (i) cause the trustee of the
Cambridge 401(k) Plan to transfer cash equal in value to the Cambridge 401(k)
Plan account balances of the Continuing Employees to the trustee under the trust
agreement forming a part of the 401(k) plan maintained for the employees of the
Purchaser or (ii) arrange for the assumption of the sponsorship of the Cambridge
401(k) Plan by the Purchaser, with appropriate instruments of assignment,
assumption and novation as may be agreed to by the Seller, the Purchaser and the
aforementioned trustee. The Seller shall distribute cash equal in value to the
Cambridge 401(k) account balances of all employees of the Seller who are not
Continuing Employees directly to such employees or otherwise at their direction.
The Seller and the Purchaser shall cooperate to make any and all filings and
submissions to appropriate governmental authorities as may be required in
respect of the transfers contemplated in this paragraph.
11.4. Survival of Obligations.
The obligations of the parties set forth in this Section 11 shall
survive the Closing, shall be unconditional and absolute and shall remain in
effect without limitation as to time.
11.5. Conflict.
In the event of a conflict between the provisions of this Section 11
and any other provisions of this Agreement or the Related Agreements, the
provisions of this Section 11 shall govern.
SECTION 12. MISCELLANEOUS
12.1. Fees and Expenses.
Except as otherwise provided in this Agreement, each party shall pay
its own expenses incurred in connection with the authorization, preparation,
execution, and performance of this Agreement, including all fees and expenses of
counsel, accountants, agents, and representatives, and each party shall be
responsible for all fees or commissions payable to any finder, broker, advisor,
or similar Person retained by or on behalf of such party.
12.2. Notices.
All notices, demands, and requests required or permitted to be given
under the provisions of this Agreement shall be (a) in writing, (b) delivered by
personal delivery, or sent by commercial delivery service or registered or
certified mail, return receipt requested, or sent by facsimile transmission, (c)
deemed to have been given on the date of
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personal delivery or the date set forth in the records of the delivery service
or on the return receipt or by facsimile confirmation, and (d) addressed as
follows:
If to the Seller to: Cambridge Biotech Corporation
595 Anglum Drive
St. Louis, Missouri 63042-2395
Attention: President
Telecopier: (314) 731-8700
With a copy to: LeBoeuf, Lamb, Greene & MacRae, L.L.P.
125 West 55th Street
New York, New York 10019-5389
Attention: William J.T. Brown, Esq.
Telecopier: 212-424-8500
If to the Purchaser to: Calypte Biomedical Corporation
1140 Fourth Street
Berkeley, California 94710
Attention: President
Telecopier: (510) 526-5381
With a copy to: Heller Ehrman White & McAuliffe
525 University Avenue
Palo Alto, California 94301
Attention: Richard Friedman, Esq.
Telecopier: (650) 324-0638
or to any other or additional Persons and addresses as the parties may from time
to time designate in a writing delivered in accordance with this Section 12.2.
12.3. Benefit and Binding Effect.
No party may assign this Agreement without the prior written consent of
each other party hereto, except that, any party may assign any or all of its
rights under this Agreement to any Affiliate (which assignment shall not relieve
the assigning party of any obligations or liabilities under this Agreement).
This Agreement shall be binding upon and inure to the benefit of the parties and
their respective successors and permitted assigns.
12.4. Further Assurances.
The parties shall take any actions and execute any other documents that
may be necessary or desirable to the implementation and consummation of this
Agreement.
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12.5. GOVERNING LAW.
THIS AGREEMENT SHALL BE GOVERNED, CONSTRUED, AND ENFORCED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE CHOICE OF LAW
PROVISIONS THEREOF.
12.6. Headings.
The headings in this Agreement are included for ease of reference only
and shall not control or affect the meaning or construction of the provisions of
this Agreement.
12.7. Entire Agreement.
This Agreement, the schedules, hereto, and all documents, certificates,
and other documents to be delivered by the parties pursuant hereto, collectively
represent the entire understanding and agreement between the Seller and the
Purchaser with respect to the subject matter of this Agreement. This Agreement
supersedes all prior negotiations among the parties except for the Master
Agreement and the other agreements contemplated therein and cannot be amended,
supplemented, or changed except by an agreement in writing that makes specific
reference to this Agreement and that is signed by each party against which
enforcement of any such amendment, supplement, or modification is sought. This
document shall not constitute or otherwise evidence an agreement among the
parties hereto relating to the subject matter hereof unless and until it has
been executed and delivered by the parties hereto.
12.8. Waiver of Compliance; Consents.
Except as otherwise provided in this Agreement, any failure of any of
the parties to comply with any obligation, representation, warranty, covenant,
agreement, or condition herein may be waived by the party entitled to the
benefits thereof only by a written instrument signed by the party granting such
waiver, but such waiver or failure to insist upon strict compliance with such
obligation, representation, warranty, covenant, agreement, or condition shall
not operate as a waiver of, or estoppel with respect to, any subsequent or other
failure. Whenever this Agreement requires or permits consent by or on behalf of
any party hereto, such consent shall be given in writing in a manner consistent
with the requirements for a waiver of compliance as set forth in this Section
12.8.
12.9. Counterparts.
This Agreement may be signed in counterparts with the same effect as if
the signature on each counterpart were upon the same instrument.
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IN WITNESS WHEREOF, this Agreement has been executed by the parties as
of the date first written above.
CAMBRIDGE BIOTECH CORPORATION
By: /s/ PHILIPPE SANS
-------------------------------
Name: Philippe Sans
Title: President
CALYPTE BIOMEDICAL CORPORATION
By: /s/ JOHN DIPIETRO
-------------------------------
Name: John DiPietro
Title: Vice President Finance and
Chief Operating Officer
bioMerieux, Inc., a corporation organized under the laws of
Missouri ("bioMerieux"), hereby unconditionally guarantees to the Purchaser,
effective at the Closing, the prompt and full discharge by the Seller of all the
Seller's obligations pursuant to this Agreement and the Subleases and hereby
agrees that, if the Seller should fail to perform and discharge promptly all
such obligations and liabilities, bioMerieux shall forthwith, upon demand,
perform or discharge the same. The unconditional obligation of bioMerieux
hereunder will not be affected, impaired or released by any extension, waiver,
amendment or thing whatsoever which would release a guarantor (other than
performance). This Guarantee shall be governed by and construed in accordance
with the laws of the State of New York.
IN WITNESS WHEREOF, the undersigned has executed this
Guarantee as of the date first above written.
BIOMERIEUX, INC.
By: /s/ PHILIPPE SANS
-------------------------------
Name: Philippe Sans
Title: President
43
<PAGE> 1
EXHIBIT 4.1
WARRANT TO PURCHASE A MAXIMUM OF
_________ SHARES OF COMMON STOCK OF
CALYPTE BIOMEDICAL CORPORATION
(Void after December ___, 2001)
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE
ABSENCE OF A REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THE SECURITIES
UNDER SUCH ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH
REGISTRATION IS NOT REQUIRED OR UNLESS SOLD PURSUANT TO RULE 144 OF SUCH ACT.
THIS WARRANT AND THE SHARES PURCHASABLE HEREUNDER ARE SUBJECT TO RESTRICTIONS ON
TRANSFER AS SET FORTH HEREIN.
This certifies that CAMBRIDGE BIOTECH CORPORATION (the
"Holder"), or permitted assigns, for value received, is entitled to purchase
from CALYPTE BIOMEDICAL CORPORATION, a Delaware corporation (the "Company"),
subject to the terms set forth below, a maximum of __________ fully paid and
nonassessable shares (subject to adjustment as provided herein) of the Company's
Common Stock (the "Warrant Shares") for cash at a price of $____ per share (the
"Exercise Price") (subject to adjustment as provided herein) at any time or from
time to time up to and including 5:00 p.m. (Pacific Time) on December ____,
2001, unless terminated earlier in accordance with the provisions of this
Warrant (in either case, the "Expiration Date"), upon surrender to the Company
at its principal office (or at such other location as the Company may advise the
Holder in writing) of this Warrant properly endorsed with the Form of
Subscription attached hereto duly filled in and signed and upon payment in cash
or by check of the aggregate Exercise Price for the number of shares for which
this Warrant is being exercised determined in accordance with the provisions
hereof. The Exercise Price is subject to adjustment as provided in Section 3 of
this Warrant. This Warrant is issued subject to the following terms and
conditions:
1. EXERCISE, ISSUANCE OF CERTIFICATES, REDUCTION IN NUMBER OF WARRANT
SHARES. This Warrant is exercisable at the option of the Holder of record hereof
on or prior to the Expiration Date, at any time or from time to time following
its issuance, for all or any part of the Warrant Shares (but not for a fraction
of a share) which may be
<PAGE> 2
purchased hereunder, as that number may be adjusted pursuant to Section 3 of
this Warrant. The Company agrees that the Warrant Shares purchased under this
Warrant shall be and are deemed to be issued to the Holder hereof as the record
owner of such Warrant Shares as of the close of business on the date on which
this Warrant shall have been surrendered, properly endorsed, the completed and
executed Form of Subscription delivered, and payment made for such Warrant
Shares. Certificates for the Warrant Shares so purchased, together with any
other securities or property to which the Holder hereof is entitled upon such
exercise, shall be delivered to the Holder hereof by the Company at the
Company's expense as soon as practicable after the rights represented by this
Warrant have been so exercised. In case of a purchase of less than all the
Warrant Shares which may be purchased under this Warrant, the Company shall
cancel this Warrant and execute and deliver to the Holder hereof within a
reasonable time a new Warrant or Warrants of like tenor for the balance of the
Warrant Shares purchasable under the Warrant surrendered upon such purchase.
Each stock certificate so delivered shall be registered in the name of such
Holder.
2. SHARES TO BE FULLY PAID. The Company covenants and agrees that all
Warrant Shares, will, upon issuance and, if applicable, payment of the
applicable Exercise Price, be duly authorized, validly issued, fully paid and
nonassessable, and free of all liens and encumbrances, except for restrictions
on transfer provided for herein or under applicable federal and state securities
laws.
3. ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF SHARES. The Exercise
Price and the total number of Warrant Shares shall be subject to adjustment from
time to time upon the occurrence of certain events described in this Section 3.
Upon each adjustment of the Exercise Price, the Holder of this Warrant shall
thereafter be entitled to purchase, at the Exercise Price resulting from such
adjustment, the number of shares obtained by multiplying the Exercise Price in
effect immediately prior to such adjustment by the number of shares purchasable
pursuant hereto immediately prior to such adjustment, and dividing the product
thereof by the Exercise Price resulting from such adjustment.
3.1 SUBDIVISION OR COMBINATION OF STOCK. In case the Company
shall at any time subdivide its outstanding shares of Common Stock into a
greater number of shares or declare a Common Stock dividend or make a
distribution with respect to the shares of Common Stock payable in shares of
Common Stock, the Exercise Price in effect immediately prior to such subdivision
or stock dividend or stock distribution shall be proportionately reduced and the
number of Warrant Shares issuable hereunder proportionately increased, and
conversely, in case the outstanding shares of the Common Stock of the Company
shall be combined into a smaller number of shares, the Exercise Price in effect
immediately prior to such combination shall be proportionately increased and the
number of Warrant Shares issuable hereunder proportionately decreased.
2
<PAGE> 3
3.2 RECLASSIFICATION. If any reclassification of, or any
distribution with respect to, the capital stock of the Company (the
"Reclassification Event") shall be effected in such a way that holders of Common
Stock shall be entitled to receive stock, securities, or other assets or
property (other than cash, Common Stock or securities of another corporation),
then, as a condition of such Reclassification Event, lawful and adequate
provisions shall be made whereby the Holder hereof shall thereafter have the
right to purchase and receive (in lieu of or in addition to, as appropriate, the
shares of Common Stock of the Company immediately theretofore purchasable and
receivable upon the exercise of the rights represented hereby) such shares of
stock, securities, or other assets or property as may be issued or payable with
respect to or in exchange for a number of outstanding shares of such Common
Stock equal to the number of shares of such stock immediately theretofore
purchasable and receivable upon the exercise of the rights represented hereby.
In any Reclassification Event, appropriate provision shall be made with respect
to the rights and interests of the Holder of this Warrant to the end that the
provisions hereof (including, without limitation, provisions for adjustments of
the Exercise Price and of the number of Warrant Shares), shall thereafter be
applicable, as nearly as may be, in relation to any shares of stock, securities,
or assets thereafter deliverable upon the exercise hereof.
3.3 NOTICE OF ADJUSTMENT. Upon any adjustment of the Exercise
Price or any increase or decrease in the number of Warrant Shares, the Company
shall give written notice thereof, by first class mail postage prepaid,
addressed to the registered Holder of this Warrant at the address of such Holder
as shown on the books of the Company. The notice shall be prepared and signed by
the Company's Chief Financial Officer and shall state the Exercise Price
resulting from such adjustment and the increase or decrease, if any, in the
number of shares purchasable at such price upon the exercise of this Warrant,
setting forth in reasonable detail the method of calculation and the facts upon
which such calculation is based.
4. NO VOTING OR DIVIDEND RIGHTS. Nothing contained in this Warrant
shall be construed as conferring upon the holder hereof the right to vote or to
consent to receive notice as a stockholder of the Company on any other matters
or any rights whatsoever as a stockholder of the Company. No dividends or
interest shall be payable or accrued in respect of this Warrant or the interest
represented hereby or the shares purchasable hereunder until, and only to the
extent that, this Warrant shall have been exercised.
5. COMPLIANCE WITH SECURITIES ACT, TRANSFERABILITY OF WARRANT,
DISPOSITION OF SHARES OF COMMON STOCK.
5.1 COMPLIANCE WITH SECURITIES ACT. The Holder of this
Warrant, by acceptance hereof, agrees that this Warrant and the Warrant Shares
to be issued upon exercise hereof are being acquired for investment and that it
will not offer, sell, or
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otherwise dispose of this Warrant or any Warrant Shares except under
circumstances which will not result in a violation of the Act or any applicable
state securities laws. This Warrant and all Warrant Shares (unless registered
under the Act) shall be stamped or imprinted with a legend in substantially the
following form:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED. THEY MAY NOT BE SOLD IN THE ABSENCE OF A
REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THE SECURITIES OR AN
OPINION OF COUNSEL REASONABLY SATISFACTORY TO CALYPTE BIOMEDICAL
CORPORATION THAT SUCH REGISTRATION IS NOT REQUIRED.
5.2 ACCESS TO INFORMATION; PRE-EXISTING RELATIONSHIP. Holder
has had the opportunity to ask questions of, and to receive answers from,
appropriate executive officers of the Company with respect to the terms and
conditions of the transactions contemplated hereby and with respect to the
business, affairs, financial condition and results of operations of the Company.
Holder has had access to such financial and other information as is necessary in
order for Holder to make a fully informed decision as to investment in the
Company, and has had the opportunity to obtain any additional information
necessary to verify any of such information to which Holder has had access.
Holder further represents and warrants that he has either (i) a pre-existing
relationship with the Company or one or more of its officers or directors
consisting of personal or business contacts of a nature and duration which
enable him to be aware of the character, business acumen and general business
and financial circumstances of the Company or the officer or director with whom
such relationship exists or (ii) such business or financial expertise as to be
able to protect his own interests in connection with the purchase of the Shares.
5.3 WARRANT TRANSFERABLE. Subject to compliance with
applicable federal and state securities laws under which this Warrant was
purchased, this Warrant and all rights hereunder are transferable, in whole but
not in part, without charge to the Holder (except for transfer taxes), upon
surrender of this Warrant properly endorsed; provided, however, that the Holder
shall notify the Company in writing in advance of any proposed transfer and
shall not transfer this Warrant or any rights hereunder to any person or entity
which is then engaged in a business that in the reasonable judgment of the
Company is in direct competition with the Company. Notwithstanding the
foregoing, the Holder may transfer this Warrant, in whole but not in part, at
any time to an affiliate.
5.4 DISPOSITION OF WARRANT SHARES AND COMMON STOCK. With
respect to any offer, sale, or other disposition of the Warrant or any Warrant
Shares, the Holder hereof and each subsequent Holder of this Warrant agrees to
give written notice to the
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Company prior thereto, describing briefly the manner thereof, together with a
written opinion of such holder's counsel, if reasonably requested by the
Company, to the effect that such offer, sale or other disposition may be
effected without registration or qualification (under the Act as then in effect
or any federal or state law then in effect) of such Warrant or Warrant Shares,
as the case may be, and indicating whether or not under the Act certificates for
such Warrant or Warrant Shares to be sold or otherwise disposed of require any
restrictive legend as to applicable restrictions on transferability in order to
insure compliance with the Act. Promptly upon receiving such written notice and
opinion, the Company, as promptly as practicable, shall notify such Holder that
such Holder may sell or otherwise dispose of such Warrant or Warrant Shares, all
in accordance with the terms of the notice delivered to the Company. If a
determination has been made pursuant to this subparagraph 5.4 that the opinion
of the counsel for the Holder is not reasonably satisfactory to the Company, the
Company shall so notify the Holder promptly after such determination has been
made. Notwithstanding the foregoing, such Warrant or Warrant Shares may be
offered, sold or otherwise disposed of in accordance with Rule 144 under the
Act, provided that the Company shall have been furnished with such information
as the Company may request to provide reasonable assurance that the provisions
of Rule 144 have been satisfied. Each certificate representing the Warrant or
Warrant Shares thus transferred (except a transfer pursuant to Rule 144) shall
bear a legend as to the applicable restrictions on transferability in order to
insure compliance with the Act, unless in the aforesaid opinion of counsel for
the Holder, such legend is not required in order to insure compliance with the
Act. The Company may issue stop transfer instructions to its transfer agent in
connection with such restrictions.
6. MODIFICATION AND WAIVER. This Warrant and any provision hereof may
be changed, waived, discharged, or terminated only by an instrument in writing
signed by the party against which enforcement of the same is sought.
7. NOTICES. Any notice, request, or other document required or
permitted to be given or delivered to the Holder hereof or the Company shall be
delivered or shall be sent by certified mail, postage prepaid, to each such
Holder at its address as shown on the books of the Company or to the Company at
the address indicated therefor in the first paragraph of this Warrant or such
other address as either may from time to time provide to the other.
8. CERTAIN EVENTS. If at any time:
(1) the Company shall declare any cash dividend upon its
Common Stock;
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(2) the Company shall declare any dividend upon its Common
Stock or make any other distribution to the holders of its Common Stock (other
than a dividend or distribution payable solely in Common Stock);
(3) the Company shall offer for subscription pro rata to the
holders of its Common Stock any additional shares of stock of any class or other
rights;
(4) there shall be any subdivision, capital reorganization or
reclassification of the capital stock of the Company;
(5) there shall be a merger, consolidation, sale of stock,
sale of a substantial amount of assets or other transaction involving the
Company pursuant to which the stockholders of the Company immediately prior to
such merger, consolidation, stock sale, asset sale or other transaction own less
than 50% of the voting power of the surviving or acquiring entity; or
(6) there shall be a voluntary or involuntary dissolution,
liquidation, or winding-up of the Company.
then, in any one or more of said cases, the Company shall give, by first class
mail, postage prepaid, addressed to the Holder of this Warrant at the address of
such Holder as shown on the books of the Company, (a) at least 10 days' prior
written notice of the date on which the books of the Company shall close or a
record shall be taken for such dividend, distribution, or subscription rights,
and (b) in the case of any such reorganization, reclassification, consolidation,
merger, sale, dissolution, liquidation or winding-up, at least 10 days' prior
written notice of the date when the same shall take place; provided, however,
that no such notice shall be required with respect to the implementation of a
stockholder rights plan. Any notice given in accordance with the foregoing
clause (a) shall also specify, in the case of any such dividend, distribution,
or subscription rights, the date on which the holders of Common Stock shall be
entitled thereto. Any notice given in accordance with the foregoing clause (b)
shall also specify the date on which the holders of Common Stock shall be
entitled to exchange their Common Stock for securities or other property
deliverable upon such reorganization, reclassification, consolidation, merger,
sale, dissolution, liquidation, winding-up or conversion, as the case may be. If
this Warrant is not exercised prior to the occurrence of an event described in
clause (6) above, this Warrant shall expire upon the occurrence of such event.
If this Warrant is not exercised prior to the occurrence of an event described
in clause (5) above, then (i) if the consideration to the stockholders of the
Company in such transaction consists of at least 80% cash consideration, this
Warrant shall be treated in the same manner and given the same benefits afforded
to the options to purchase Common Stock under the Company's stock option plans
which receive the most
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favorable treatment or benefits, including termination, liquidation or election
among alternatives, if such options are subject to such treatment or benefits
and (ii) in any event other than as described in (i) the Company shall take
appropriate provisions so that the acquiring or surviving entity shall assume
this Warrant and upon exercise thereof, the Holder shall receive the highest
amount of assets, securities or other consideration that it would have received
in connection with such transaction if it had exercised this Warrant immediately
prior to such transaction subject to adjustments (subsequent to such
transaction) as nearly equivalent as possible to the adjustments provided for in
Section 3 hereof (provided, however, that the registration rights with respect
to the shares issuable upon exericise of this Warrant shall not be binding upon
the surviving or acquiring corporation).
9. GOVERNING LAW. This Warrant shall be construed and enforced in
accordance with, and the rights of the parties shall be governed by, the laws of
the State of Delaware.
10. LOST WARRANTS. Upon receipt of evidence reasonably satisfactory to
the Company of the loss, theft, destruction, or mutilation of this Warrant and,
in the case of any such loss, theft or destruction, upon receipt of an indemnity
reasonably satisfactory to the Company, or in the case of any such mutilation
upon surrender and cancellation of such Warrant, the Company, at its expense,
will make and deliver a new Warrant, of like tenor, in lieu of the lost, stolen,
destroyed or mutilated Warrant.
11. FRACTIONAL SHARES. No fractional shares shall be issued upon
exercise of this Warrant. The Company shall, in lieu of issuing any fractional
share, pay the Holder entitled to such fraction a sum in cash equal to such
fraction (calculated to the nearest 1/100th of a share) multiplied by the then
effective Exercise Price on the date the Form of Subscription is received by the
Company.
IN WITNESS WHEREOF, the Company has caused this Warrant to be
duly executed by its officer, thereunto duly authorized as of this ____ day of
December, 1998.
CALYPTE BIOMEDICAL CORPORATION
a Delaware corporation
By:
-------------------------------------------
Name:
-------------------------------------------
Title:
-------------------------------------------
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FORM OF SUBSCRIPTION
(To be signed only upon exercise of Warrant)
To:
The undersigned, the holder of the attached Common Stock Warrant,
hereby irrevocably elects to exercise the purchase right represented by such
Warrant for, and to purchase thereunder, (1)_____________ ((1)___________ )
shares of Common Stock of Calypte Biomedical Corporation (the "Company") and
herewith makes payment of $_________ therefor, and requests certificates for
such shares be issued in the name of, and delivered to, _____________________
whose address is
-------------------------------------------------------------.
The undersigned represents that it is acquiring such Common Stock for
its own account for investment and not with a view to or for sale in connection
with any distribution thereof.
DATED: ___________, _____
-----------------------------------------
(Signature must conform in all respects
to name of Holder as specified on the
face of the Warrant)
Name:
--------------------------------------
Title:
--------------------------------------
(1) Insert here the number of shares called for on the face of the Warrant (or,
in the case of a partial exercise, the portion thereof as to which the Warrant
is being exercised), in either case without making any adjustment for any stock
or other securities or property or cash which, pursuant to the adjustment
provisions of the Warrant, may be deliverable upon exercise.
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EXHIBIT 99.1
Calypte Biomedical Enters Into Agreement to
Acquire Assets of Cambridge Biotech Corporation
Berkeley, Calif. - November 24, 1998 -- Calypte Biomedical Corporation (NASDAQ:
CALY) today announced that it has entered into an agreement to acquire the
assets relating to the Western blot product line for certain infectious
diseases. The acquisition includes the urine-based and serum-based HIV-1 Western
blot products, as well as a confirmatory test for Lyme Disease and Human
T-Lymphotropic Virus (HTLV). Under the terms of the agreement, Calypte will
acquire the assets from Cambridge Biotech Corporation, a wholly-owned subsidiary
of bioMerieux, Inc., for $500,000 in cash, 400,000 shares of Calypte common
stock, warrants to acquire 600,000 shares of Calypte common stock at prices
ranging from $8.00 to $12.00 per share, and a royalty based upon product sales.
Calypte will assume full managerial control upon FDA's approval of the transfer
of the product licenses to Calypte.
"We are extremely pleased with this acquisition, as the addition of the
confirmatory test to our product line gives us full control over all aspects of
the urine HIV-1 testing system. In addition, we are obtaining what most people
in the industry believe to be the premier serum HIV-1 Western blot confirmatory
test in the marketplace today," stated William Boeger, Chairman and CEO of
Calypte Biomedical.
"We are very pleased that we were able to conclude the sale of the assets of
Cambridge Biotech to Calypte," stated Al Luderer, Ph.D., Executive Vice
President of Cambridge Biotech Corporation. "We are impressed with the future
potential of Calypte in the HIV market and for this reason we are glad to become
a significant shareholder in Calypte. We believe there is a large worldwide
potential for the new Calypte urine HIV-1 test system."
The Calypte urine screening test was licensed by the FDA in 1996. The companion
urine Western blot, produced by Cambridge Biotech, received FDA licensure in
June of this year.
Statements in this press release that are not historical facts are
forward-looking statements. Actual results, events, or performance may differ
materially from the above forward-looking statements due to a number of
important factors, and will be dependent upon a variety of factors, including
Calypte's ability to satisfy conditions to closing the transaction. Certain
factors which may impact Calypte's success are more fully discussed in Calypte's
most recent quarterly report on Form 10-Q.
