Exhibit 10.76
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ASSET SALE AND ASSIGNMENT AGREEMENT
This Asset Sale and Assignment Agreement ("Agreement") is entered into as of
June 1, 2001, by and between SYNBIOTICS CORPORATION, a California corporation,
with a place of business at 11011 Via Frontera, San Diego, CA 92127
("Synbiotics"), MERIAL LIMITED, a company limited by shares registered in
England and Wales (registered number 3332751) with a registered office at 27
Knightsbridge, London, SWIX 7QT, England, and domesticated in Delaware, U.S.A.
as Merial LLC ("Merial Limited"), MERIAL S.A.S., a "Societe par Actions
Simplifiee" registered in France (registered number 590 800 215) with offices at
29 avenue Tony Garnier, Lyon, France ("Merial S.A.S."), and MERIAL, INC., a
Georgia corporation with offices at 115 Transtech Drive, Athens, Georgia 30601
("Merial, Inc."). Merial Limited, Merial S.A.S., and Merial, Inc. may be
collectively referred to as "Merial".
1. Definitions.
(a) "Bio-Trends Agreement" means the Distribution Agreement between
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Synbiotics and Bio-Trends International, Inc. ("Bio-Trends") dated February 7,
1990, as amended August 22, 1996. Bio-Trend's interest in the Bio-Trends
Agreement was assigned to Intervet, Inc., a Delaware corporation ("Intervet"),
effective as of April 2000.
(b) "Effective Date" shall mean June 1, 2001.
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(c) "Merial USA Agreement" means the Agreement between Rhone Merieux, Inc.
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(n/k/a Merial, Inc.) and Synbiotics effective January 1, 1992, as amended July
27, 1993, August 22, 1996 and March 1, 1999 (effective as of July 1, 1998).
Rhone Merieux, Inc.'s interest in the Merial USA Agreement was assigned to
Merial Limited, effective as of March 1, 1999.
(d) "Merial Europe Agreement" means the Distribution Agreement between
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Rhone Merieux S.A. (n/k/a Merial S.A.S) and Synbiotics dated July 10, 1990, as
amended April 11, 1996, August 27, 1996, and February 5, 1997.
(e) "Open Purchase Orders" means purchase orders numbers 101121, 100910,
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101122, 300031, 101200, 101330, 101471, 101477, 101478 and 101479 placed by
Synbiotics with lntervet for delivery of an aggregate of 800,000 doses of bulk
FeLV Product pursuant to the Merial Europe Agreement and 4,400,000 doses of bulk
FeLV Product pursuant to the Merial USA Agreement. The term "Open Purchase
Orders" includes the contracts represented thereby.
(f) "Outstanding Payables" means all of Synbiotics' payables to
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lntervet/Bio-Trends) for FeLV Product delivered by lntervet/Bio-Trends before
the Effective Date (currently estimated to be US$409,604.13);
(g) "Product" shall mean the feline leukemia ("FeLV") vaccine sold under
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the agreements herein.
(h) "Put Option" means the RM Put Option, as described in Article 3 of the
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Stock Restriction and Rights Agreement dated July 9, 1997 (the "Stock
Agreement'), between Rhone Merieux S.A. (now known as Merial S.A.S.) and
Synbiotics.
2. Synbiotics assigns all its right, title and interest in and to the Open
Purchase Orders to Merial as of the Effective Date. Synbiotics retains, however,
its claims and the causes of action against any non-parties to this Agreement
for any breaches or damages incurred prior to the Effective Date. Merial
accepts the assignment, and assumes and agrees to honor and completely perform
all of Synbiotics' obligations under the Open Purchase Orders, except for any
debts owed or obligations incurred by Synbiotics prior to the Effective Date.
3. Synbiotics assigns to Merial all of Synbiotics' right, title and interest in
and to the Bio-Trends Agreement, including Synbiotics' rights to sell and
distribute Product in Canada, the Merial USA Agreement, and the Merial Europe
Agreement, as of the Effective Date. Synbiotics retains, however, its claims
and the causes of action against any non-parties to this Agreement for any
breaches or damages incurred prior to the Effective Date.
(a) Merial accepts the assignment and assumes and agrees to honor and
faithfully perform Synbiotics' obligations under the Bio-Trends Agreement, the
Merial USA Agreement and the Merial European Agreement, except the Outstanding
Payables and those obligations incurred by Synbiotics prior to the Effective
Date. In addition, Merial covenants to Intervet (as the third-party beneficiary
of this Agreement) to honor and faithfully perform all obligations to Intervet
(except the Outstanding Payables) which may arise in the future under the Bio-
Trends Agreement, and to continue to actively market and sell Product pursuant
to both the letter and the spirit of the Bio-Trends Agreement.
(b) Merial shall perform, and not look to Synbiotics to perform, the
obligations of Synbiotics under the Bio-Trends Agreement after the Effective
Date. Synbiotics agrees to remain fully responsible to any parties, including
but not limited to Bio-Trends, lntervet, the USDA, Synbiotics distributors, or
its end-use customers, for any actions, claims, liabilities, judgments,
settlements, costs and expenses (including attorneys' fees) that arise from
Synbiotics' actions, omissions or contractual obligations prior to the Effective
Date.
(c) For avoidance of doubt, Synbiotics represents that Intervet has been
consulted as to whether it would or would not consent to the assignment of the
BioTrends Agreement. Furthermore, Synbiotics represents to Merial and Merial
agrees that the consent of Intervet cannot be unreasonably withheld for this
assignment of the Bio-Trends Agreement, and that therefore the actual receipt of
Intervet's consent is not a condition precedent or subsequent to the
consummation of the transactions contemplated by this Asset Sale and Assignment
Agreement.
4. Synbiotics assigns to Merial all right, title and interest in and to
Synbiotics' customer lists for Synbiotics VacSYN FeLV Product, subject to the
license granted in Section 8 below. Synbiotics shall promptly transmit the list
to Merial by whatever reasonable means Merial specifies.
5. Synbiotics shall retain its accounts receivable in respect of and
inventories pertaining to VacSYN FELV Product. Upon execution of this Agreement,
Synbiotics shall supply no more FELV Product to Merial, and all open orders from
Merial to Synbiotics for FELV Product are nullified in this transaction. The
parties acknowledge, however, that the rights corresponding to open orders from
Synbiotics to Intervet under the Bio-Trends Agreement are also assigned to
Merial.
6. Promptly after the Effective Date, Synbiotics shall immediately provide
Merial with copies of all records of VacSYN customer orders, purchases, payments
and other relevant customer information.
7. Synbiotics agrees not to use its VacSYN trademark for any purpose other than
to sell its existing inventory of VacSYN Product. Upon the earlier of the
completion of Synbiotics selling of the remaining VacSYN Product or October 31,
2001, Synbiotics shall assign, without additional consideration and at its own
cost, the VacSYN trademark to Merial. Synbiotics shall take no action nor fail
to act in any way that would dilute or impair the value of the VacSYN trademark.
8. Merial grants Synbiotics a six (6) month license to use the VacSYN customer
list and associated customer information for the sole purpose of selling
Synbiotics existing inventory of VacSYN FELV Product. Synbiotics represents
that it has no more than 14,000 doses of remaining Product, and that apart from
the license granted herein, it will sell no more Product after the Effective
Date.
Synbiotics agrees to maintain complete regulatory and legal responsibility
for VacSYN Product, regardless of any right, title or interest assigned to
Merial under this Agreement. Synbiotics will indemnify and hold harmless Merial
on demand for any actions, claims, liabilities, judgments, settlements, costs
and expenses (including attorneys' fees) related to Synbiotics packaging,
labeling, marketing, advertising, distribution or sales of VacSYN.
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9. In consideration for Synbiotics' assignments and agreed-upon terms in
Sections 2 - 8 above, Merial agrees to the following:
(a) any WITNESS(R) diagnostic license fees owing from Synbiotics to Merial
for sales of WITNESS through April 30, 2001 (US$613,000), shall be due and
payable only in tenths, with one-tenth (1/10) becoming due and payable on the
15th day of each of the ten (10) months commencing July 2001 and ending April
2002. Synbiotics shall make such payments to Merial S.A.S., to the account
specified by authorized representatives of Merial S.A.S., currently account #
IBAN FR20 3000 2019 0000 0061 0407 M76, opened in the books of Credit Lyonnais
Bank in Lyon. Synbiotics agrees that it owes Six Hundred Thirteen Thousand
Dollars (US$613,000) to Merial and will pay the amount owed as per the terms of
this Agreement. Synbiotics warranties that such payments will be made free of
any claims by holders of any existing security interests; and
(b) Merial will forego its right to exercise the Put Option, provided that
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as of April 15, 2002, Synbiotics has completed all of its material obligations
and commitments to be completed by April 15, 2002 under the terms of this
Agreement. Merial will not forego its right to exercise the Put Option if, as
of April 15, 2002, there is any material failure of Synbiotics to comply with
the terms of the Agreement to be completed by April 15, 2002; and
(c) Merial shall be permitted to sell any or all of its 821,340 shares of
Synbiotics Common Stock at any time after the Effective Date, subject to any and
all limitations imposed by applicable securities laws and rules, regardless of
the restrictions contained in the Stock Agreement; and
(d) Merial agrees that Section 6.05 of the Option and License Agreement,
executed June 4, 1999 between Merial Limited and Synbiotics Corporation, is
amended to read in full: "Neither this Agreement nor any rights or obligations
hereunder may be assigned by either party hereto without the prior written
consent of the other party, which shall not be unreasonably withheld; except
that Synbiotics may assign this Agreement, and its rights and obligations
hereunder, to any party that acquires Synbiotics."
10. In consideration for Merial assuming Synbiotics' obligations under the Bio-
Trends Agreement, Synbiotics agrees:
(a) that Section I 1.3(a) of the Stock Purchase Agreement (executed July 9,
1997 between Rhone Merieux S.A. and Synbiotics Corporation) is amended as of the
Effective Date to change the words "existing or proposed product manufactured by
the Company or proposed to be" to "existing product". Sections 11.3(b) and
11.3(c) shall remain in effect between the parties.
(b) to irrevocably waive its rights, which would have arisen after the
Effective Date, under Article 1 of the Collaboration Research Agreement
(executed July 9, 1997 between Synbiotics Corporation and Rhone Merieux S.A.S.),
except the last paragraph of Article 1, which shall remain applicable to any
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technologies provided to Synbiotics by Merial under Article 1 prior to the
Effective Date. Article 1 of the Collaboration Research Agreement provides
Synbiotics with a right of first refusal for any technology which could have an
application in the Diagnostics Field (as defined in the Collaboration Research
Agreement).
(e) Additionally, Merial may consider Synbiotics as a candidate for
manufacturing of any diagnostic products developed by or licensed to Merial
after the Effective Date. For avoidance of doubt, this provision does not
oblige Merial to consider or use Synbiotics as a manufacturer for any animal
health products, including diagnostics.
11. Merial shall have no further obligation to supply vaccines to Synbiotics
under the Merial USA Agreement after the Effective Date.
12. Synbiotics warrants to Merial that it has performed all of its obligations
under the Bio-Trends Agreement, except the Outstanding Payables, and any other
agreements or rules related to its obligations for FeLV, including but not
limited to those-obligations to Merial, lntervet, Bio-Trends, regulatory
agencies, Synbiotics' customers, and the end-users of the Product, and
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further agrees to indemnify Merial on demand for any loss sustained by Merial as
a result of this warranty. Synbiotics will remain responsible for payment of any
Outstanding Payables.
13. The parties agree that any press release or publication disclosure required
by the U.S. Securities and Exchange Commission (SEC) or other regulatory
agencies may be issued, but that the disclosing party shall provide the intended
text of the publication to the other party seven (7) days before publishing the
release. The disclosing party shall cooperate with the other party to prevent
the disclosure of any proprietary or confidential information. If the receiving
party does not respond within seven (7) days of receiving the proposed text from
the disclosing party, the disclosing party may assume that the receiving party
consents to the text for publication. Except for disclosures required for the
purposes above, any other information about this Agreement or the business
relationship between the parties shall be kept confidential.
14. Except as otherwise specifically provided in this Agreement, notices,
demands or other communications pursuant to this Agreement shall be in writing,
and shall be effective when delivered personally or when sent by certified or
registered mail, return receipt requested, overnight courier service, or
facsimile transmission. Such notice, demands or other communications shall be
addressed to the party or parties to whom the notice, demand or other
communication must be provided at the address set forth below or to such other
address specified by the party from time to time by written notice to the other
parties:
Address of notices to Merial:
Vice President - Companion Animal Global Enterprise
Merial Limited
3239 Satellite Boulevard
Duluth, GA 30096 Fax 678.638.3830
and Corporate Counsel Legal Department
Merial Limited
115 Transtech Drive
Athens, GA 30601 Fax 706.548.4512
Address of notices to Synbiotics:
Paul A. Rosinack
President
Synbiotics Corporation
11011 Via Frontera
San Diego, CA 92127 Fax: 858.451.5719
and Hayden J. Trubitt, Esq.
Brobeck, Phleger & Harrison
12390 El Camino Real
San Diego, CA 92130 Fax: 858.720.2555
Failure by any party to this Agreement to enforce, at any time, any provisions
of this Agreement or to require, at any time, performance by any other party of
any of the provisions hereof shall not constitute, and shall not in any way be
construed to be, a waiver of any such provisions or of that party's right
thereafter to enforce each and every provision of this Agreement.
15. Neither this Agreement nor any rights or obligations hereunder may be
assigned by either party hereto without the prior written consent of the other
party, which shall not be unreasonably withheld; except that Synbiotics may
assign this Agreement, and its rights and obligations hereunder, to any party
that acquires all the share capital of Synbiotics. Any subsequent assignee,
purchaser, or transferee shall be bound by the terms of this Agreement.
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16. This Agreement shall be governed by and construed and enforced in accordance
with the internal laws of the State of Georgia without reference to Georgia
choice of law rules, and any action or claim related to this Agreement shall be
filed in the State of Georgia. This document constitutes the entire agreement
between the parties with respect to the subject matter hereof and supersedes all
prior or contemporaneous negotiations and agreements. This Agreement may not be
amended or waived except in express written terms as agreed between the parties.
17. If any term, condition or provision of this Agreement is held to be
unenforceable for any reason, it shall, if possible, be interpreted rather than
voided, in order to achieve the intent of the parties to this Agreement to the
extent possible. In any event, all other terms, conditions and provisions of
this Agreement shall be deemed valid and enforceable to the full extent
possible.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement by their
duly authorized representatives.
SYNBIOTICS CORPORATION MERIAL LIMITED
By: /s/ Paul A. Rosinack By: /s/ Dennis Tomaso
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Title: President & CEO Title: Vice President
Date: June 1, 2001 Date: June 1, 2001
MERIAL S.A.S. MERIAL, INC.
By: /s/ Daniel Gouffe By: /s/ Dennis Tomaso
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Title: President Title: Vice President
Date: June 7, 2001 Date: June 1, 2001
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