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EXHIBIT 10.69
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (this "Agreement") is made as of November
26, 1996, by and between EPOCH PHARMACEUTICALS, INC., a Delaware corporation,
("Seller") and Saigene Corporation, a Delaware corporation ("Purchaser").
This Agreement is entered into with reference to the following facts:
A. Seller has been engaged in the business (the "Business") of
developing diagnostic products based on biotechnology principles (the
"Technology").
B. Seller and Purchaser have negotiated for the sale and purchase of
certain of the assets of Seller related to Technology pursuant to the terms and
conditions hereof.
C. Purchaser desires to acquire from Seller, and Seller desires to sell
to Purchaser, the Assets (as defined below) under the terms and conditions set
forth herein.
NOW, THEREFORE, in consideration of the mutual covenants herein
contained and other good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, Seller and Purchaser agree as follows:
1. PURCHASE AND SALE OF ASSETS.
1.1 Sale of Assets. Subject to the provisions of this Agreement, Seller
agrees to sell to Purchaser, and Purchaser agrees to purchase from Seller, at
the Closing (as defined below), all right, title and interest of Seller in and
to the following, and only the following, assets, properties and rights of
Seller used in the Business (collectively, "Assets"):
(a) The machinery, equipment, tools, and other tangible
personal properties and assets of Seller used in the Business specifically
listed on Schedule 1.1(a) (the "Equipment");
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(b) The patents, patent applications, process specifications,
drawings, documentation relating to the Technology; all as specifically listed
on Schedule 1.1(b);
(c) All rights relating to the government grants described in
Schedule 1.1(c);
(d) All rights relating to the contracts described in Schedule
1.1(d); and
(e) All rights relating to licenses described in Schedule
1.1(e).
Except for the warranties set forth specifically herein, Seller makes
no representation or warranties as to the Technology or any of the Assets to be
transferred hereunder, and Purchaser acknowledges that the Assets will be
transferred hereunder on an "as-is" basis. SELLER DISCLAIMS ALL IMPLIED
WARRANTIES, INCLUDING WITHOUT LIMITATION ANY WARRANTY OF MERCHANTABILITY OR
FITNESS FOR ANY PARTICULAR USE.
1.2 Purchase Price and Manner of Payment; Allocation.
(a) Purchase Price. The total purchase price for the
Assets shall be $1,100,000, payable as follows:
(i) Purchaser shall deliver to Seller a cashiers check in
the amount of $50,000 (the "Initial Cash Portion").
(ii) Purchaser shall execute and deliver to Seller a
Secured Promissory Note in the principal amount of $1,050,000, in substantially
the form of Exhibit "A" hereto (the "Note").
(iii) Purchaser shall execute and deliver to Seller a
Security Agreement in substantially the form of Exhibit "C" hereto evidencing
Seller's first priority security interest
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in the Assets (the "Security Agreement"), and a UCC-1 Financing Statement
evidencing the security interest in the Assets.
The Purchase Price shall be allocated among the Assets as set forth on
Schedule 1.2(a) attached hereto. Seller and Purchaser each agree that it will
not take a position on any income tax return, before any governmental agency, or
in any judicial proceeding that is in any way inconsistent with this Section
1.2. Purchaser shall be responsible for all sales taxes, to the extent
applicable.
2. CLOSING. The Closing of the purchase and sale provided for in this Agreement
(the "Closing") shall be held at the offices of Seller in Bothell, Washington at
10:00 a.m. on November 26, 1996 (the "Closing Date"), or at such location, time,
or date as the parties shall mutually agree upon. In the event the Closing Date
is delayed notwithstanding the best efforts of the parties as a result of any
circumstance beyond the reasonable control of the parties or as a result of
legitimate business reasons, the Closing Date shall be reasonably extended, but
in no event beyond November 29, 1996.
3. REPRESENTATIONS AND WARRANTIES OF THE SELLER. Seller hereby represents and
warrants as follows:
3.1 Organization. Seller is a corporation duly organized, validly
existing, and in good standing under the laws of the state of Delaware with full
power and authority to sell the Assets.
3.2 Authority. Seller has full power and authority to enter into this
Agreement and the documents and other agreements contemplated hereby and to
carry out the transactions contemplated hereby and thereby. All necessary
corporate action has been taken by Seller to authorize the execution, delivery,
performance of this Agreement and each of the documents and other agreements
contemplated hereby to be executed by Seller, and each of this Agreement and
such documents and other agreements is the valid and binding obligation of
Seller.
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3.3 Title to Assets. Except as specifically disclosed in Schedule 3.3
attached hereto, Seller has good and marketable title, legal and equitable, to
the Assets. As of the Closing, none of the Assets shall be subject to any
mortgage, pledge, lien, litigation, conditional sales agreement, security
interest, encumbrance, tax liability or other charge.
3.4 Consents. Except as set forth on Schedule 3.4, no consents of third
parties are required for the sale, conveyance, assignment, and transfer from
Seller to Purchaser of all Seller's right, title and interest in and to any of
the Assets.
4. ADDITIONAL AGREEMENTS.
4.1 Negative Covenants. Between the date hereof and the Closing Date,
Seller will not, without the prior written consent of Purchaser:
(a) sell, assign, lease or otherwise transfer or dispose of any of
the Assets;
(b) take any action which would cause any of the representations
and warranties set forth in Section 3 to be untrue in any material respect at
the Closing Date; or
(c) subject any of Assets to any lien, charge, or encumbrance.
4.2 Access to Operations. Between the date hereof and the Closing Date,
Seller will permit Purchaser and its authorized representatives to inspect the
Assets during normal business hours as Purchaser may reasonably request.
4.3 Facilities Lease. Purchaser and Seller shall enter into a
Facilities Lease and Administrative Support Contract (the "Facilities Lease") in
substantially the form attached hereto as Exhibit "D", whereby Seller shall
grant to Purchaser a non-exclusive right to enter and use portions of Seller's
premises, for a period of thirty (30) days following an IPO by Saigene or April
1, 1997, whichever comes first, commencing on October 1, 1996, for a monthly fee
of
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$6,000 for the first three months and $9,760 thereafter (the"Facility Fee").
Purchaser agrees to accrue for the first three months $3,760 per month payable
to the Seller thirty (30) days following an IPO by Saigene or April 1, 1997
which ever comes first. There shall be a proration of the Facility Fee for the
month of September in the amount of $2,000.
4.4 Purchaser Operating Expenses. On or before December 15, 1996,
Purchaser shall reimburse Seller for operating expenses of Purchaser paid by
Seller as listed on Schedule 4.5, which, as of the date hereof, amount to
$40,088. To the extent that there are additional expenses authorized by
Purchaser beyond the amount stated herein, which have been incurred by Seller on
Purchaser's behalf, Purchaser agrees to reimburse Seller said additional amounts
on or before December 15, 1996.
4.5 Cooperation with Respect to Government Grants. Seller agrees to
reasonably cooperate with Purchaser in connection with the transfer of any and
all government grants relating to the Business and/or the Technology from Seller
to Purchaser, including the execution of such documents as may be reasonably
necessary, in the opinion of Purchaser, to effect the transfer of such grants.
4.6 Confidentiality of Information. Seller agrees to regard and
preserve as confidential all information relating or pertaining to the Business,
the Technology, all projects, products, customers, trade secrets, confidential
information (including business and financial information) or unpublished
know-how, whether patented or unpatented, and to all activities of Seller
relating to the Business and Technology, and not to publish or disclose any part
of such information to others or use the same for its own purposes or the
purposes of others. Any information of Seller relating to the Business and
Technology which is not readily available to the public shall be considered by
Seller to be confidential information and therefore within the scope of this
Agreement, unless Purchaser advises Seller otherwise in writing.
4.7 Non-Competition. Seller agrees that, for a period of three years
immediately following the Closing, Seller will not interfere with the activities
of Purchaser in connection with
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the Business and Technology in any manner. Particularly, but without limitation,
Seller agrees to refrain from the following acts, commencing with the date of
this agreement:
(a) initiating contact with any employee, consultant or other
independent contract of Purchaser for the purpose of hiring away such employee,
consultant or other independent contractor; and
(b) soliciting customers of Purchaser.
4.8 Virginia Mason. Seller agrees that it will use its reasonable
efforts, in cooperation with Purchaser, to have the rights under the certain
Subcontract Research Agreement between Seller and Virginia Mason Research
Center, a copy of which is attached hereto as Exhibit "E" assigned to Purchaser.
The foregoing shall not be construed so as to require Purchaser to make any
payment or incur more than nominal expense to assign or transfer such rights, or
to otherwise suffer any more than a nominal detriment.
5. REPRESENTATIONS AND WARRANTIES OF PURCHASER. Purchaser hereby represents and
warrants as follows:
5.1 Organization. Purchaser is a corporation duly organized, validly
existing, and in good standing under the laws of the state of Delaware, with
full power and authority to own or lease its properties and to conduct its
business in a manner and in the places where such properties are owned or leased
or such business are presently conducted by it.
5.2 Authority. Purchaser has full power and authority to enter into
this Agreement and the documents and other agreements contemplated hereby and
assume the rights and obligations of Purchaser, and to carry out the transaction
contemplated hereby and thereby. All necessary action has been taken by
Purchaser to authorize the execution, delivery, and performance of this
Agreement and the documents and other agreements contemplated hereby to
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be executed by the Purchaser, and each of the same shall be the valid and
binding obligation of the Purchaser.
5.3 Absence of Litigation. There are no claims, actions, proceedings or
investigations pending which seek to delay or prevent the consummation of the
transactions contemplated hereby or which would be reasonably likely to
adversely affect or restrict the Purchaser's ability to consummate the
transactions contemplated hereby.
6. CONDITIONS.
6.1 Conditions Precedent to Obligations of Purchaser. The obligations
of Purchaser to consummate this Agreement are subject to the fulfillment (or the
written waiver thereof by Purchaser), prior to or at the Closing, of each of the
following conditions precedent:
(a) Representations; Warranties; Covenants. Each of the
representations and warranties of the Seller contained in Section 3 shall be
true and correct in all respects, and Seller shall, on or before the Closing
Date, have performed all of its covenants and obligations hereunder which by the
terms hereof are to be performed on or before the Closing Date.
(b) Approval of Documents. All actions, proceedings, instruments
and documents required to carry out this Agreement and documents and other
agreements contemplated hereby or any undertaking incidental thereto, and all
other related legal matters shall be reasonably satisfactory in form and
substance to Purchaser and its counsel.
(c) Consents and Approvals. The consents or approvals of the
lessors of any party to any contract or agreement to which Seller is a party or
subject, as disclosed on Schedule 3.4, necessary for the consummation of the
transactions contemplated hereby in the manner herein provided, shall have been
obtained.
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6.2 Conditions Precedent to Obligations to Seller. The Seller's
obligation to consummate this Agreement is subject to the fulfillment prior to
or at the Closing of each of the following conditions precedent:
(a) Consents. All other approvals and consents of any governmental
authority and any other person which shall be necessary in order to carry out
the transactions contemplated hereby shall have been obtained.
(b) Representations; Warranties; Covenants. Each of the
representations and warranties of Purchaser contained in Section 5 shall be true
and correct as though made on and as of the Closing Date; Purchaser shall, on or
before the Closing Date, have performed all of its obligations hereunder which
by the terms hereof are to be performed on or before the Closing Date.
(c) Approval of Documents. All actions, proceedings, instruments
and documents required to carry out this Agreement and the documents and other
agreements contemplated hereby or any undertaking incidental thereto, and all
other related legal matters shall be reasonably satisfactory in substance to
Seller and its counsel.
(d) Resignation of Employees. Seller's employees listed on Schedule
6.2(d) attached hereto shall have resigned effective as of September 20, 1996,
and Seller shall have received duly executed copies of the Severance Agreements
from such employees.
7. CLOSING PROCEDURE.
7.1 Items to be Delivered by Seller at Closing. At the Closing Seller
shall deliver to Purchaser the following:
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(a) an executed instrument of transfer in the form of Exhibit B
hereto transferring to Purchaser all of Seller's right, title, and interest in
and to the Assets upon delivery to purchaser pursuant to Section 7.3 (the
"General Assignment and Bill of Sale"); and
7.2 Items to be Delivered by Purchaser at Closing. At the Closing
Purchaser shall deliver to Seller the following:
(a) the Initial Cash Portion;
(b) the Note;
(c) the Security Agreement;
(d) the Financing Statement on Form UCC-1;
7.3 Actions Upon Closing. Upon the Closing, Seller shall take all steps
as may be required to put Purchaser in actual possession and control of the
Assets, at Seller's facility in Bothell, Washington. Purchaser shall pay all
moving costs, including costs of crating and loading of the Assets.
7.4 Further Assurances. Seller from time to time after the Closing, at
Purchaser's request, will execute, acknowledge and deliver to Purchaser such
other instruments and documents and will take such other actions and execute and
deliver such other documents, certifications and further assurances as Purchaser
may reasonably require in order to vest more effectively in Purchaser, or to put
Purchaser more fully in possession of, any of the Assets. Each of the parties
hereto will cooperate with the other and execute and deliver to the other such
other instruments and documents and take such further actions as may be
reasonably requested from time to time by the other party to carry out, evidence
and confirm the intended purposes of this Agreement.
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8. TERMINATION OF AGREEMENT.
8.1 Termination. At any time prior to the Closing, this Agreement may
be terminated:
(a) by mutual consent of Seller and Purchaser;
(b) by Purchaser if there has been a material misrepresentation,
breach of warranty, or breach of covenant by Seller in its representations,
warranties, and covenants set forth herein;
(c) by Seller if there has been a material misrepresentation,
breach of warranty, or breach of covenant by Purchaser in its representation,
warranties, and covenants set forth herein;
(d) by Purchaser if any one or more of the conditions stated in
Sections 6.1 or 7.1 hereof has not been satisfied at or prior to the Closing;
(e) by Seller if any one or more of the conditions stated in
Sections 6.2 or 7.2 hereof have not been satisfied at or prior to the Closing;
or
(f) by either party if the Closing has not occurred by November 29,
1996, provided however, that such party is not in breach hereof.
9. MISCELLANEOUS.
9.1 Brokers, Commissions. Seller and Purchaser each represent that in
connection with the sale and transfer contemplated by this Agreement, neither
has retained the services of a broker. Seller and Purchaser shall each hold the
other harmless, against any and all claims for brokerage commissions, finders
fees, or the like, arising from their respective actions.
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9.2 Fees and Expenses. Each of the parties will bear its own expenses
in connection with the negotiation and the consummation of the transactions
contemplated by this Agreement. Each party shall be solely responsible for its
respective legal, accounting, and other out-of-pocket expenses in connection
with the negotiation and the consummation of the transactions contemplated by
this Agreement.
9.3 Governing Law. This Agreement shall be construed under and governed
by the laws of the state of Washington.
9.4 Assignment. The benefits and obligations of any party to this
Agreement may not be assigned, except upon the written consent of the other
party. This Agreement shall be binding upon, and shall be enforceable by and
enure to the benefit of, the parties named herein and their respective
successors and assigns.
9.5 Confidentiality. Purchaser agrees that unless and until the Closing
has been consummated, Purchaser will hold in strict confidence, and not use to
the detriment of Seller, all data and information obtained in connection with
this transaction or Agreement with respect to the business activities of Seller,
and that Purchaser will not disclose any of said information to any other party
whatsoever without written consent of Seller.
9.6 Entire Agreement. This Agreement and the documents and other
agreements referenced herein contain the entire Agreement between the parties
with respect to the subject matter hereof; all representations, promises, and
prior or contemporaneous understandings between the parties with respect to the
subject matter hereof, are merged into and expressed in this Agreement and such
documents and other agreements; and any and all prior agreements between the
parties with respect to the subject matter hereof are hereby cancelled.
9.7 Amendment. This Agreement may be amended, modified, or supplemented
only by an instrument in writing signed by the parties to this Agreement.
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9.8 Publicity and Disclosure. No press releases or any public
disclosure, or disclosures to any employees of Seller or Purchaser, either
written or oral, of the transactions contemplated by this Agreement shall be
made without the prior knowledge and written consent of Seller. Seller shall
provide any public announcement of the execution of this Agreement or the sale
and purchase of the Assets as herein described to Purchaser for review prior to
release.
9.9 Notices. All notices, requests, demands, and other communications
hereunder shall be deemed to have been duly given on the date received if
delivered personally, telecopied, or mailed by commercial express mail service:
TO SELLER: EPOCH PHARMACEUTICALS, INC.
1725 220th Street, S.E., No. 104
Bothell, Washington 98021
Attn: Sanford S. Zweifach, President and CFO
TO PURCHASER: SAIGENE CORPORATION
1725 220th Street, S.E., No. 104
Bothell, Washington 98021
Attn: Allan G. Cochrane, President and COO
or to such other address or telecopier number which either party may notify the
other party as provided above.
9.10 Headings. The headings of the Sections of this Agreement are for
the convenience of reference only, and do not form a part hereof, and in no way
modify, interpret or construe the meanings of the parties.
9.11 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original and all of which shall
constitute one Agreement.
9.12 Waiver; Severability. The failure of any of the parties to this
Agreement to require the performance of term or obligation under this Agreement
or the waiver by any of the parties to this Agreement of any breach hereunder
shall not prevent subsequent enforcement of
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such term or obligation or be deemed a waiver of any subsequent breach
hereunder. In case any one or more of the provisions of this Agreement shall for
any reason be held to be invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any other provision
of this Agreement but this Agreement shall be construed as if such invalid or
illegal or unenforceable provision or part of a provision had never been
contained herein.
9.13 Sales, Transfer and Documentary Taxes, Etc. Purchaser shall pay
all state and local taxes, documentary and other transfer taxes, if any, due as
a result of the purchase, sale, or transfer of the Assets.
9.14 Arbitration. Any controversy, claim or dispute among the parties
hereto arising out of or related to this Agreement or the breach hereto, which
cannot be settled amicably by the parties, shall be submitted for binding
arbitration in accordance with the provisions contained herein and in accordance
with the Commercial Arbitration Rules of the American Arbitration Association
("Rules") in King County, Washington. Judgment upon the award rendered by the
arbitrator may be entered in any court having jurisdiction. The arbitrator shall
determine all questions of fact and law relating to any controversy, claim or
dispute hereunder, including but not limited to whether or not any such
controversy, claim or dispute is subject to the arbitration provisions contained
herein. The award shall include the award of attorneys' fees and expenses to the
prevailing party.
IN WITNESS WHEREOF, each of the parties hereto have caused
this Agreement to be executed by its duly authorized representative as of the
date set forth above.
"SELLER"
EPOCH PHARMACEUTICALS, INC.
By: _______________________________________
Sanford S. Zweifach
Its: President and Chief Financial Officer
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"PURCHASER"
SAIGENE CORPORATION
By: _______________________________________
Allan G. Cochrane
Its: President and Chief Operating Officer
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