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EXHIBIT 2.1
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AGREEMENT AND PLAN OF MERGER
among
ONCOGENE SCIENCE, INC.,
MYCOSEARCH ACQUISITION CORP.,
MYCOSEARCH, INC.
and
EACH OF THE SHAREHOLDERS OF
MYCOSEARCH, INC.
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April 11, 1996
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AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER, dated as of April 11, 1996, among
ONCOGENE SCIENCE, INC., a Delaware corporation with its principal office located
at 106 Charles Lindbergh Boulevard, Uniondale, New York 11553 (the "Parent"),
MYCOSEARCH ACQUISITION CORP., a Delaware corporation and wholly-owned subsidiary
of the Parent ("Merger Sub"), MYCOSEARCH, INC., a North Carolina corporation
with its principal office located at Five Oaks Office Park, Suites 5 and 6, 4905
Pine Cone Drive, Durham, North Carolina 27707 (the "Company"), Barry Katz, an
individual residing at 5609 Cascade Drive, Chapel Hill, North Carolina 27514
("Katz"), Barry S. Roberts, an individual residing at 207 Stagecoach Road,
Chapel Hill, North Carolina 27514 ("Roberts"), John McLaughlin, an individual
residing at 901 Smyrna Drive, Whiteville, North Carolina 28472 ("McLaughlin"),
and Cedric Pearce, an individual residing at 102 Springhill Forest Road, Chapel
Hill, North Carolina 27516 ("Pearce" and together with Katz, Roberts and
McLaughlin, the "Shareholders").
W I T N E S S E T H:
WHEREAS, the parties wish to provide for the terms and conditions upon
which the Company will be acquired by the Parent by means of a merger of the
Company with and into Merger Sub; and
WHEREAS, it is the intention of the parties to this Agreement that for
federal income tax purposes, the merger provided for herein shall qualify as a
"reorganization" within the meaning of Sections 368(a)(1)(A) and 368(a)(2)(D) of
the Internal Revenue Code of 1986, as amended (the "Code").
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NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein and for other good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, the parties hereto hereby
agree as follows:
1. The Merger.
1.1 The Merger. Upon the terms and subject to the conditions
of this Agreement, at the Effective Time (as defined in Section 1.3 of this
Agreement), the Company shall be merged with and into Merger Sub in accordance
with the laws of the States of Delaware and North Carolina and the terms of this
Agreement (the "Merger"), whereupon the separate corporate existence of the
Company shall cease, and Merger Sub shall continue as the surviving corporation
of the Merger (Merger Sub, in such capacity hereinafter sometimes referred to as
the "Surviving Corporation"). The name of Merger Sub as the Surviving
Corporation, shall be "MYCOsearch, Inc."
1.2 Closing. Subject to the terms and conditions of this
Agreement, the closing of the Merger (the "Closing") shall take place (a) at the
offices of Wyrick, Robbins, Yates & Ponton, 4101 Lake Boone Trail, Suite 300,
Raleigh, North Carolina 27607 at 10:00 a.m. on April 11, 1996; or (b) at such
other place, time, and/or date upon which the parties hereto may otherwise
agree. The date upon which the Closing shall occur is referred to herein as the
"Closing Date."
1.3 Effective Time. Upon the Closing, the parties hereto shall
cause a Certificate of Merger ("Certificate of Merger") to be properly executed
and filed in accordance with the provisions of the Delaware General Corporation
Law (the "DGCL") and articles of merger ("Articles of Merger") to be properly
executed and filed in accordance with the provisions of the North Carolina
Business Corporation Act ("NCBCA"). The parties hereto shall also take such
further actions as may be required under the DGCL and the NCBCA in connection
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with the consummation of the Merger. The Merger shall become effective at such
time as the Certificate of Merger (substantially in the form of Exhibit A-1
attached hereto) is duly filed with the Secretary of State of the State of
Delaware in accordance with the provisions of Section 252 of the DGCL and the
Articles of Merger (substantially in the form of Exhibit A-2 attached hereto)
are duly filed with the Secretary of State of the State of North Carolina in
accordance with the provisions of Section 55-11-05 of the NCBCA or at such later
time as is specified in the Certificate of Merger (the "Effective Time"). From
and after the Effective Time, the Surviving Corporation shall possess all the
rights, privileges, powers and franchises and be subject to all of the
restrictions, disabilities, liabilities and duties of the Company and Merger
Sub, all as provided under applicable law.
1.4 Conversion of Securities. At the Effective Time, by virtue
of the Merger and without any action on the part of the Parent, Merger Sub, the
Company or the holder of any of the following securities:
(a) Conversion of Company Common Stock. At the
Effective Time, each then outstanding share of Common Stock, par value $1.00 per
share, of the Company (the "Company Common Stock"), shall be converted into and
represent the right to receive (i) 601.477 validly issued, fully paid and
non-assessable shares of Common Stock, par value $.01 per share, of the Parent
(the "Parent Common Stock") (such ratio, as determined in accordance with
Section 1.5 and adjusted as contemplated pursuant to Section 1.6, being referred
to herein as the "Stock Exchange Ratio") and (ii) $3,277.60 in cash (such
amount, as determined in accordance with Section 1.5, the "Cash Exchange Ratio"
and together with the Stock Exchange Ratio, the "Exchange Ratios".) All such
shares of the Company Common Stock shall no longer be outstanding and shall
automatically be cancelled and retired and shall cease to exist, and each holder
of a certificate representing any such shares shall cease to have any rights
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with respect thereto, except the right to receive cash and the shares of the
Parent Common Stock to be issued pursuant to this Section 1.4 with respect
thereto upon the surrender of such certificate in accordance with Section 1.7.
(b) The Company Stock Owned by the Company. All
shares of the Company Common Stock which immediately prior to the Effective Time
are held directly by the Company in its treasury, shall be cancelled and retired
and shall cease to exist, and no capital stock of the Parent or other
consideration shall be delivered with respect thereto.
(c) Merger Sub Common Stock. Each share of capital
stock of Merger Sub issued and outstanding immediately prior to the Effective
Time shall remain outstanding and shall continue as one share of capital stock
of the Surviving Corporation and each certificate evidencing ownership of any
such shares shall continue to evidence ownership of the same number and kind of
shares of the Surviving Corporation.
1.5 Determination of Exchange Ratios. The Stock Exchange Ratio
which establishes the number of shares of the Parent Common Stock (the "OSI
Shares") required to be exchanged for the Company Common Stock pursuant to
Section 1.4(a) hereof shall be determined by dividing (a) the quotient of
$2,950,000 divided by the "Current Market Price" by (b) the number of shares of
the Company Common Stock outstanding at the Effective Time. The "Current Market
Price" shall be the average of the closing price of the Parent Common Stock on
the Nasdaq National Market for the 20 trading days immediately preceding the
Closing Date as reported in The Wall Street Journal, or in the event that no
sale has taken place on any one or more of such 20 trading days, the average of
the highest reported bid and lowest reported asked quotations on the Nasdaq
National Market for such days shall be used. The value of the Parent Common
Stock calculated in accordance with the preceding sentence shall be referred to
herein as the "Closing Price." For purposes of this Agreement,
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$2,950,000 shall be deemed the "Stock Consideration." The Cash Exchange Ratio,
which determines the amount of cash which each share of the Company Common Stock
shall represent a right to receive, shall be determined by dividing $1,725,000
by the total number of shares of the Company Common Stock outstanding at the
Effective Time. The parties hereby acknowledge that the Parent has heretofore
delivered to the shareholders $25,000, which amount, together with the
$1,725,000 referred to in the previous sentence, shall be deemed the "cash
consideration"; the cash contribution and the stock consideration shall be
collectively referred to herein as the "Purchase Price."
1.6 Adjustment of Stock Exchange Ratio. In the event that,
subsequent to the date of this Agreement, but prior to the Effective Time, the
outstanding shares of the Parent Common Stock or the Company Common Stock,
respectively, shall have been changed into a different number of shares or a
different class as a result of a stock split, reverse stock split, stock
dividend, subdivision, reclassification, split, combination, exchange,
recapitalization or other similar transaction, the Stock Exchange Ratio shall be
appropriately adjusted and, with regard to any such change to the Company Common
Stock, the Cash Exchange Ratio shall also be appropriately adjusted.
1.7 Exchange of Securities.
(a) Promptly after the Effective Time, the Parent
shall, upon surrender of the stock certificates representing all of the issued
and outstanding shares of the Company Common Stock, deliver to each Shareholder
or his designee(s) (i) a certificate representing the shares of Parent Common
Stock to which such Shareholder is entitled, (ii) the amount of cash to which
such Shareholder is entitled, and (iii) a five-year warrant (each, a "Warrant"
and collectively, the "Warrants"), substantially in the form attached hereto as
Exhibit B, issuable to the Shareholder, entitling such Shareholder to purchase
the number of shares of the Parent Common Stock opposite such Shareholder's name
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on Exhibit C attached hereto. The number of OSI shares and the amount of cash to
which each Shareholder is entitled shall be determined by multiplying the number
of shares of the Company Common Stock held by such Shareholder at the Effective
Time by the Stock Exchange Ratio and the Cash Exchange Ratio, respectively. The
Warrants shall not be exercisable until the second anniversary of the Closing
Date; provided, however, that upon a "change in control" (as hereinafter
defined) of the Parent during such two-year period, the Warrants shall be
immediately exercisable. The exercise price of the Warrants shall be the Closing
Price. For purposes of this Agreement, "change of control" shall mean (i) a
transfer of shares of capital stock of the Parent to a third party, as a result
of which transfer such third party obtains the right to elect a majority of the
Board of Directors of the Parent, or (ii) a sale or other disposition (whether
effected by a merger, consolidation or otherwise) of all or substantially all of
the outstanding capital stock of the Parent or all or substantially all of the
assets of the Parent. The shares of the Company Common Stock so surrendered
shall forthwith be cancelled. No interest will be paid or accrued on the unpaid
dividends and distributions, if any, payable to the holder of shares of the
Company Common Stock.
(b) The Parent shall not be required to issue or
deliver any fractional shares of Parent Common Stock in connection with the
exchange described in Section 1.7(a) above; however, the Parent shall pay to
each Shareholder (or his designee(s)) who would otherwise be entitled to receive
a fractional share of Parent Common Stock an amount of cash (rounded up to the
nearest whole cent) equal to the product of (i) the fraction of the share of
Parent Common Stock to which such holder would otherwise be entitled, times (ii)
$9.319. For purposes of determining such fractional shares, all shares of Parent
Common Stock to be issued to a Shareholder shall be aggregated.
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2. Certain Matters Relating to the Surviving Corporation and the
OSI Shares.
2.1 Certificate of Incorporation of the Surviving Corporation.
The Certificate of Incorporation of Merger Sub, as in effect at the Effective
Time, shall be the Certificate of Incorporation of the Surviving Corporation
until thereafter amended as provided by law.
2.2 By-laws of the Surviving Corporation. The By-laws of
Merger Sub, as in effect at the Effective Time, shall be the By-laws of the
Surviving Corporation until thereafter amended as provided by law.
2.3 Directors and Officers of the Surviving Corporation. The
directors of Merger Sub immediately prior to the Effective Time shall be the
directors of the Surviving Corporation and all such directors will hold office
from the Effective Time until their respective successors are duly elected or
appointed and qualify in the manner provided in the Certificate of Incorporation
and By-laws of the Surviving Corporation, or as otherwise provided by applicable
law. The officers of Merger Sub immediately prior to the Effective Time shall be
the officers of the Surviving Corporation and all such officers will hold office
until their respective successors are duly appointed and qualify in the manner
provided in the By-laws of the Surviving Corporation, or as otherwise provided
by applicable law.
3. Representations and Warranties of the Shareholders. The
Shareholders, jointly and severally, represent and warrant to the Parent as
follows:
3.1 Due Incorporation and Qualification. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of the State of North Carolina, and has all corporate power and authority to
own, lease and operate its assets, properties and business and to carry on its
business as now conducted. The Company is duly qualified to transact business
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and is in good standing in each jurisdiction in which the nature of its business
or location of its properties requires such qualification and in which the
failure to so qualify would have a material adverse effect on the business,
operations or financial condition of the Company.
3.2 Corporate Power of the Company. The Company has full legal
right, power and authority and has taken all necessary corporate action required
to enter into, execute and deliver this Agreement and to perform its obligations
hereunder. This Agreement has been duly executed and delivered and constitutes a
legal, valid and binding obligation of the Company enforceable in accordance
with its terms, except as may be limited by bankruptcy, insolvency or other
similar laws affecting the enforcement of creditors' rights in general and
subject to general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
3.3 Authority to Execute and Perform Agreements. Each
Shareholder has full legal right and power and all authority and approval
required to enter into, execute and deliver this Agreement and to perform fully
such Shareholder's obligations hereunder. This Agreement has been duly executed
and delivered and constitutes a legal, valid and binding obligation of each
Shareholder enforceable in accordance with its terms, except as may be limited
by bankruptcy, insolvency or other similar laws affecting the enforcement of
creditors' rights in general and subject to general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law). The execution and delivery of this Agreement by each
Shareholder and the consummation of the transactions contemplated hereby by each
Shareholder in accordance with its terms and conditions will not: (i) to the
knowledge of the Shareholders, require the approval or consent of any federal or
state governmental or regulatory body or the approval or consent of any other
person; (ii) conflict with or result in any material breach or violation of any
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of the terms and conditions of, or constitute (or with notice or lapse of time
or both would constitute) a material default under the Company's Articles of
Incorporation or Bylaws, or to the knowledge of the Shareholders, any statute,
regulation, order, judgment or decree applicable to any Shareholder or to the
shares of the Company Common Stock held by any Shareholder, or any instrument,
contract or other agreement to which any Shareholder is a party or by, or to
which, any Shareholder, or the Company Common Stock held by any Shareholder, is
bound or subject; or (iii) result in the creation of any lien or other
encumbrance on the shares of the Company Common Stock held by any Shareholder.
3.4 Outstanding Capital Stock; Affiliates.
(a) The Company is authorized to issue 1,000 shares
of Class A common stock, $1.00 par value, of which 526.3 shares will be issued
and outstanding as of the Closing Date, and 100,000 shares of Class B common
stock, none of which are outstanding. The shares of the Company Common Stock
held by the Shareholders constitute all of the issued and outstanding capital
stock of the Company. The Company has no subsidiaries. The shares of Company
Common Stock held by the Shareholders have been duly and validly authorized and
issued, and are fully paid and nonassessable, with no liability attaching to the
ownership thereof. The record and beneficial owners of all of the issued and
outstanding shares of Common Stock are set forth on Exhibit C attached hereto.
(b) Schedule 3.4(b) sets forth each entity which the
Company controls, is controlled by or is under common control with
("Affiliates") and sets forth the percentage ownership by the Company of each
Affiliate or vice versa.
3.5 Other Securities. Other than the Common Stock, there are
no outstanding options, warrants, convertible securities, subscriptions or other
commitments or rights of any nature or kind whatsoever to acquire, sell, convert
or issue any securities of the Company.
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3.6 Title to Common Stock. Each Shareholder hereby severally
represents and warrants that on the date hereof he does, and on the Closing Date
will, own beneficially and of record, free and clear of any lien, claim or
encumbrance of any kind or nature whatsoever, and has full power and authority
to exchange free and clear of any lien, claim or encumbrance of any kind or
nature whatsoever, the shares set forth opposite such Shareholder's name on
Exhibit C. There are no existing agreements, subscriptions, options, warrants,
calls, commitments or other rights of any kind whatsoever to purchase or
otherwise acquire from such Shareholder at any time any of such Shareholder's
shares of the Company Common Stock or other securities of the Company.
3.7 Articles of Incorporation and Bylaws. The copies of the
Certificate of Incorporation and Bylaws of the Company, and all amendments
thereto, which have been delivered to the Parent are true, correct and complete.
No amendments, other than those delivered, have been adopted by the Company or
are contemplated.
3.8 Financial Statements. The balance sheets of the Company as
at December 31, 1995 and December 31, 1994 and the related statements of income,
retained earnings and changes in financial position for the years then ended by
Gospadarek, Lunsford & Associates, independent certified public accountants,
which have been delivered to the Parent, fairly present the financial position
of the Company as at such dates and for the periods presented and the results of
operations and the changes in retained earnings and financial position of the
Company for the years then ended in accordance with generally accepted
accounting principles consistently applied. (The foregoing financial statements
of the Company as at December 31, 1995 and for the year then ended being
sometimes herein called the "Financials," the balance sheet included in the
Financials being sometimes herein called the "Balance Sheet," and December 31,
1995 being sometimes herein called the "Balance Sheet Date"). There are no
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liabilities in excess of $10,000 (whether absolute, accrued, contingent or
otherwise) ("Liabilities") of the Company of a type required to be disclosed in
a financial statement prepared in accordance with generally accepted accounting
principles consistently applied other than: (i) Liabilities accrued or reserved
against in the Financials or disclosed in the notes thereto; (ii) Liabilities
described on any Schedule to this Agreement; and (iii) Liabilities incurred in
the ordinary course of business since the Balance Sheet Date.
3.9 Absence of Certain Changes. Since the Balance Sheet Date,
the Company has not:
(a) experienced any change in its financial
condition, operating assets, liabilities, revenues, expenses or business
prospects which would have a material adverse effect on the Company's business
or change in any accounting method, policy or practice;
(b) incurred any obligation or liability (contingent
or otherwise), except normal trade or business obligations incurred in the
ordinary course of business;
(c) become subject to an encumbrance or modified or
extended any existing encumbrance on the Company's business or its assets, other
than in the ordinary course of business;
(d) sold, committed to or agreed to sell, lease,
hypothecate or otherwise dispose of the Company's business or the material
assets thereof, other than in the ordinary course of business;
(e) waived or released any rights of substantial
value including cancellation of any substantial debt owed to, or accounts
receivable of, the Company, other than in the ordinary course of business;
(f) entered into any agreements with any Affiliate,
including any officer, director, shareholder, partner, employee, agent or
consultant of such Affiliate, nor granted or agreed to grant any increase in the
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compensation, rate or commission of any officer, director, employee or agent, or
caused any change in any existing, or the adoption of any new bonus, profit
sharing, pension, stock option, retirement or similar plan, agreement or
arrangement, or any accrual, arrangement for, or payment of, any bonus,
severance or termination pay to any present or future officer, director,
salaried employee, consultant, agent or Affiliate other than any increases,
changes, accruals, arrangements or payments as are scheduled as of the date
hereof or as are contemplated by existing agreements, plans or arrangements;
(g) permitted or suffered any amendment, cancellation
or termination of any contract, agreement, lease, license or commitment to which
the Company is a party, the cancellation of which would have a material adverse
effect on the Company's business;
(h) permitted or suffered any amendment, cancellation
or termination of any regulatory license to which the Company is a party; (i)
suffered any casualty loss or damage involving any material properties or assets
of the Company's business, whether or not the same shall have been covered by
insurance;
(j) failed to pay when due any material lease
obligation or obligation for borrowed money, or default in respect of any other
material contractual obligation to which the Company is subject;
(k) borrowed or entered into any arrangement relating
to the borrowing of funds from any person or guaranteed the payment or
performance with respect to any such arrangement, other than in the ordinary
course of business;
(l) loaned or advanced any funds to its officers,
directors, shareholders, partners, employees, consultants, agents or Affiliates;
(m) incurred or committed to make any capital
expenditure, except in the ordinary course of business and as is currently
contemplated in the Company's budgets;
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(n) amended or restated any of the Financials;
(o) transferred any amounts in payment of the
intercompany accounts of the Company or its Affiliates other than such transfers
as have customarily been made in the ordinary course of business; or
(p) permitted or suffered any other event or
condition which would have a material adverse effect on the Company's business.
3.10 Contracts. Attached as Schedule 3.10 is a true, complete
and correct list of all material contracts, agreements and understandings with
third parties including, without limitation, all license agreements,
collaboration agreements and fungus supply agreements. Each of the contracts,
agreements and understandings listed on Schedule 3.10 is in full force and
effect and is enforceable in accordance with its terms, except as may be limited
by bankruptcy, insolvency, or other similar laws affecting the enforcement of
creditors' rights in general and subject to general principles of equity
(regardless of whether such enforceability is considered in or proceeding in
equity or at law).
3.11 No Defaults Under Agreements. The Company is not in
default under any contract, commitment, agreement, lease, license, order,
judgment or decree to which it is a party or by which it or its assets or
properties are bound, nor, to the knowledge of the Shareholders, does any
condition exist which, with notice or lapse of time or both, would constitute
such a default, which default would have a material adverse effect on the
Company's business or which would give the other party a right of termination or
cancellation, and each such contract or other agreement is in full force and
effect and neither the execution of this Agreement nor the consummation of the
transactions contemplated hereby will result in any breach or acceleration of,
or constitute (or with notice or lapse of time or both would constitute) such a
default under any such contract or other agreement. To the knowledge of the
Shareholders, no
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other party is in default under any contract, commitment, agreement, lease,
license, order, judgment or decree to which the Company is a party or by which
it is bound, except for defaults which would not have a material adverse effect
on the Company's business.
3.12 Third Party Consents. All material consents, permits and
approvals from parties to contracts or other agreements with the Company, and
any other material consent, permit or approval, that to the knowledge of the
Shareholders may be required in connection with the performance by the
Shareholders of their obligations under this Agreement, or to assure the
consummation of the transactions contemplated by this Agreement, or the
continuance of such contracts or other agreements with the Company after the
Closing, are set forth on Schedule 3.12 attached hereto.
3.13 Patents, Trademarks, Trade Names, Etc. (a) Schedule
3.13(a) lists, as of the date hereof: (i) all patents and patent applications,
and all trademarks, service marks, trade names and registered copyrights, owned
by the Company or in which the Company has rights, through license or otherwise,
and all licenses and other agreements relating thereto; and (ii) all agreements
relating to third party technology, know-how and processes which the Company is
licensed or authorized to use (collectively, the "Intellectual Property"). The
Company holds free from contractual restrictions and any other restriction,
except those restrictions imposed by law or governmental regulation, or any
license or other agreement relating thereto, all Intellectual Property. As of
the date hereof, there are no unresolved claims made and there has not been
communicated to the Company the threat of any claim that the holder of such
Intellectual Property is in violation of or infringing any service mark, patent,
trademark, trade name, trademark or trade name registration, copyright or
copyright registration of any third party. The Company is the owner of, or has a
valid license to use, the patents, patent licenses, trade names, trademarks,
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service marks, brand marks, brand names, copyrights, know-how, formula and other
proprietary and trade rights necessary for the conduct of the Company's business
as now conducted, without any known conflict with the rights of others, and the
Company has not knowingly forfeited or otherwise relinquished any such patent,
patent license, trade name, trademark, service mark, brand mark, brand name,
copyright, know-how, formula or other proprietary right necessary for the
conduct of the Company's business as conducted on the date hereof. To the
knowledge of the Shareholders, no person is infringing any of the Company's
Intellectual Property.
(b) Schedule 3.13(b), attached hereto, sets forth all
license agreements, fungus supply agreements, collaboration agreements, research
agreements and any other similar agreements wherein the Company has ever granted
rights with regard to the cultures (the "Cultures") and fungal extracts
("Extracts") derived therefrom owned by the Company or agreed to supply Cultures
or Extracts to a third party (the "Collaboration and Supply Agreements"). Also
set forth on Schedule 3.13(b) is a description of all periods of exclusivity
with regard to the Cultures or Extracts granted by the Company under the
Collaboration and Supply Agreements which are in effect on the date hereof (the
"Exclusivity Periods"), including, without limitation, (i) to whom such
Exclusivity Periods have been granted, (ii) the expiration date of such
Exclusivity Periods, (iii) the Cultures or Extracts which are covered by such
Exclusivity Periods, and (iv) the payment terms with regard to the Exclusivity
Periods.
(c) Set forth on Schedule 3.13(c) is a list of all
royalty payments to which the Company is entitled under the Collaboration and
Supply Agreements, the term of such royalty payments, the license agreement or
arrangement giving rise to the royalty payment and the patents or Intellectual
Property underlying the license arrangements giving rise to the royalty payments
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obligations. Schedule 3.13(c) also sets forth any obligations which the Company
has to pay royalties or make other similar payments to third parties, including,
without limitation, the amount of such payments, the party to whom such payments
are made, the term of such payments, the license agreement or arrangement giving
rise to the royalty payments and the patents or other intellectual property
underlying the license arrangements giving rise to such payment obligations.
(d) Schedule 3.13(d) sets forth the reporting
obligations of third parties under the Collaborative and Supply Agreements.
3.14 Employee Matters.
(a) Except as set forth in Schedule 3.14, the Company
is not a party to, does not contribute to, and is not otherwise obligated under
(i) any employment agreement or any collective bargaining or other labor
agreement, or (ii) any employee benefit plan within the meaning of Section 3(3)
of the Employee Retirement Income Security Act of 1974, as amended ("ERISA") or
any program, arrangement or contract for incentive, profit sharing, retirement,
savings, thrift, deferred compensation, stock option, performance, vacation or
holiday pay, travel or other fringe benefits, life or other insurance (the
"Benefit Plans").
(b) Schedule 3.14 identifies all Benefit Plans which
are maintained by the Company with respect to its employees.
(c) Except as set forth on Schedule 3.14, each
Benefit Plan identified on Schedule 3.14 is in material compliance with the
provisions of ERISA, the Internal Revenue Code of 1986, as amended (the
"Internal Revenue Code"), and any applicable law, rule or regulation of any
jurisdiction outside the United States, and a favorable determination letter has
been issued by the Internal Revenue Service with respect to each such Benefit
Plan which is an employee pension plan within the meaning of Section 3(2) of
ERISA ("Pension Plan") and any amendment thereto. Each Benefit Plan has been
administered in
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accordance with its terms, or is in operational compliance with ERISA or any
applicable law, rule or regulation of any jurisdiction outside the United
States.
(d) No reportable event, as defined in Section 4043
of ERISA, for which notice has not been waived, or accumulated funding
deficiency, as defined in Section 302 of ERISA, nor any prohibited transaction,
as defined in Section 406 of ERISA or Section 4975 of the Internal Revenue Code,
has occurred with respect to any Pension Plan.
(e) With respect to each Benefit Plan, the Company
has delivered to the Parent true and complete copies of the following documents,
where applicable: (i) the text of each Benefit Plan and of any trust maintained
in connection therewith; (ii) the most recent annual report (Form 5500 Series),
together with schedules, as required, filed with the Internal Revenue Service,
and any financial statement and opinion required by Section 103(a)(3) of ERISA;
(iii) the most recent determination letter issued by the Internal Revenue
Service; (iv) the most recent summary plan description and all modifications;
and (v) the most recent actuarial report.
(f) Except as set forth on Schedule 3.14(f) annexed
hereto, (i) the Company is in compliance in all material respects with all
applicable laws relating to the employment practices, terms and conditions of
employment and wages and hours; (ii) there are no controversies (other than
routine grievances) pending or, to the knowledge of the Shareholders, threatened
between the Company and any of its employees or labor unions or other collective
bargaining units representing its employees; (iii) to the knowledge of the
Shareholders, no unfair labor practice complaints have been filed against the
Company with the National Labor Relations Board or other appropriate authority,
and the Company has not received any notice or communication reflecting an
intention or a threat to file any such complaint; (iv) there is no labor strike,
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dispute, slow-down or stoppage pending against the Company; and (v) no
representation petition respecting the Company's business is pending with the
National Labor Relations Board or other appropriate authority.
3.15 Litigation; Compliance with Laws. Except as set forth on
Schedule 3.15 annexed hereto, there are no material claims, actions, suits,
proceedings or governmental investigations pending or, to the knowledge of the
Shareholders, threatened, before any national, state or local court or
governmental or regulatory authority, domestic or foreign, or before any
arbitrator of any nature, or any order, injunction or decree outstanding,
against or relating to the Company that, if adversely determined, would have a
material adverse effect upon the Company's business. The Company is not in
violation of any applicable law, rule or regulation, ordinance, or any other
requirement of any governmental body or court, which violation would have a
material adverse effect upon the Company's business, and no notice has been
received by the Company alleging any such violation.
3.16 Tax Matters.
(a) "Tax(es)" shall mean all taxes, assessments and
other charges, including any interest, penalties, additions to tax or additional
amounts that may become payable in respect thereof, imposed by any foreign,
federal, state, local or other government or taxing authority, which taxes shall
include, without limitation, all income taxes, payroll and employee withholding
taxes, unemployment insurance, social security, sales and use taxes, excise
taxes, franchise taxes, gross receipts taxes, occupation taxes, real and
personal property taxes, stamp taxes, transfer taxes, workers' compensation and
other obligations of the same or of a similar nature.
(b) The Company has timely filed with the appropriate
taxing authorities all returns (including, without limitation, information
returns and other information) in respect of Taxes required to be filed through
the date
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hereof and will timely file any such returns required to be filed on or prior to
the Closing Date. The returns and other information filed are complete and
accurate in all material respects. The Company has not requested any extension
of time within which to file returns (including, without limitation, information
returns) in respect of any Taxes. The Company has delivered to the Parent
complete and accurate copies of the Company's federal, state and local tax
returns for the years 1992, 1993, 1994 and 1995.
(c) All Taxes for which the Company is or may be
liable, in respect of periods beginning before the Closing Date, have been
timely paid, and the Company does not have any liability for Taxes in excess of
the amounts so paid. To the knowledge of the Shareholders, there are no Taxes
for which the Company is or may become liable that will apply in a period or a
portion thereof beginning on or after the Closing Date and that are attributable
to income earned or activities of the Company occurring before the Closing Date.
(d) No deficiencies for Taxes, have been claimed,
proposed or assessed by any taxing or other governmental authority against the
Company, and communicated to the Company and/or the Shareholders. There are no
pending or, to the knowledge of the Shareholders, threatened audits,
investigations or claims for or relating to any liability in respect of Taxes,
and there are no matters under discussion with any taxing or governmental
authorities with respect to Taxes that in the reasonable judgement of the
Company, or its counsel, is likely to result in additional liability for Taxes.
There have been no audits of federal, state and local returns for Taxes by any
taxing or governmental authorities and the Company has not been notified that
any taxing or governmental authority intends to audit a return for any period.
No extension of a statute of limitations relating to Taxes is in effect with
respect to the Company. No power of attorney has been executed by the Company
with respect to any matters relating to Tax which is currently in force.
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(e) There are no liens for Taxes (other than for
current Taxes not yet due and payable) on the Company's assets.
(f) None of the Company's assets is property that is
required to be treated as being owned by any other person pursuant to the
so-called safe harbor lease provisions of former Section 168(f)(8) of the Code.
(g) None of the Company's assets directly or
indirectly secures any debt the interest on which is tax-exempt under Section
103(a) of the Code.
(h) None of the Company's assets is "tax-exempt use
property" within the meaning of Section 168(h) of the Code.
(i) The transaction contemplated herein is not
subject to the tax withholding provisions of Section 3406 of the Code, or of
Subchapter A of Chapter 3 of the Code or of any other provision of law.
(j) All elections with respect to Taxes affecting the
Company as of the date hereof are set forth on Schedule 3.16. The Company has
not consented at any time under Section 341(f)(1) of the Code, to have the
provisions of Section 341(f)(2) of the Code apply to any disposition of the
Company's assets. The Company has not agreed to make, nor is required to make,
any adjustments under Section 481(a) of the Code by reason of a change in the
accounting method or otherwise.
(k) There are no tax sharing agreements or similar
arrangements with respect to or involving the Company.
(l) The Company is not a party to any joint venture,
partnership or other arrangement or contract which, to the knowledge of the
Shareholders, is treated as a partnership for federal income tax purposes.
3.17 Insurance. The Company maintains insurance coverage on
its properties and assets, and with respect to its employees and operations,
covering risks which are customarily insured against by businesses similar to
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the Company's business. Schedule 3.17 annexed hereto contains a true and
complete description of all such policies or binders of insurance held by or on
behalf of the Company or any of its properties or assets in connection with the
Company's business (specifying the type of insurance, the insurer, the policy
number, the risks insured, the amount of coverage and the expiration date).
Schedule 3.17 also contains a true and complete description of all outstanding
performance bonds which have been delivered to any person in connection with the
Company's business. Except as set forth on Schedule 3.17, no notice of
cancellation or nonrenewal with respect to, or disallowance of any claim under,
any such policy, binder or performance bond has been received by the Company.
3.18 Lease.
(a) The Company has previously delivered to the
Parent a true and correct copy of the lease for the Company's premises located
at Five Oaks Office Park, 4905 Pine Cone Drive, Suites 5 and 6, Durham, North
Carolina (the "Premises"), including all amendments thereto through the date
hereof (the "Lease").
(b) Except as set forth in Schedule 3.18, the
landlord under the Lease has not given the Company written notice of or made a
claim with respect to any breach or default the consequences of which,
individually or in the aggregate, would have a material adverse effect on the
business, operations, properties, assets or condition (financial or other) of
the Company.
(c) Except as set forth in Schedule 3.18, the Lease
is not subject to any sublease, license or other agreement granting to any
person or entity any right to the use, occupancy or enjoyment of such property
or any portion thereof.
3.19 Equipment and Machinery. Schedule 3.19 sets forth a
complete and correct list and brief description of each item of equipment and
machinery owned or leased by the Company and used in the Company's business
having an
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original purchase cost or aggregate lease cost exceeding $5,000. Except as set
forth in Schedule 3.19, as of the date hereof, the Company has good title, free
and clear of all title defects and objections to or liens on the equipment and
machinery owned by it. None of the title defects, objections or liens (if any)
listed in Schedule 3.19 materially adversely affects the value of any of the
items of equipment and machinery owned by the Company or interferes with their
use in the conduct of the Company's business. Except as set forth in Schedule
3.19, the Company holds good and transferable leaseholds in all of the equipment
and machinery leased by it, in each case under valid and enforceable leases. The
Company is not in material default with respect to any item of equipment and
machinery leased by it, and no event has occurred that constitutes or with due
notice or lapse of time or both may constitute a material default under any
lease thereof. The equipment and machinery owned and leased by the Company are
sufficient and adequate to carry on the Company's business as presently
conducted by the Company.
3.20 Licenses and Permits. Schedule 3.20 sets forth a true and
complete list of all licenses, permits, franchises, authorizations and approvals
issued or granted to the Company with respect to the Company's business by the
federal government, any state or local government, any foreign national or local
government, or any department, agency, board, commission, bureau or
instrumentality of any of the foregoing (the "Licenses and Permits"), and all
pending applications therefor. Such list contains a summary description of each
such item and, where applicable, specifies the date issued, granted or applied
for, the expiration date and the current status thereof. Each License and Permit
has been duly obtained, is valid and in full force and effect, and is not
subject to any pending or, to the knowledge of the Shareholders, threatened
administrative or judicial proceeding to revoke, cancel, suspend or declare such
License and Permit invalid in any respect. To the knowledge of the
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Shareholders, the Licenses and Permits are sufficient and adequate in all
material respects to permit the continued lawful conduct of the Company's
business in the manner now conducted by the Company, and none of the operations
of the Company's business are being conducted in a manner that violates in any
material respect any of the terms or conditions under which any License and
Permit was granted. Except as set forth in Schedule 3.20, no such License and
Permit will in any way be affected by, or terminate or lapse by reason of, the
transactions contemplated by this Agreement.
3.21 Inventories. Based on the results of a study conducted by
the Parent and the Company, as of April 1, 1996, the Company's collection of
Cultures totalled in excess of 60,000 (not including duplicate Cultures). The
Shareholders are not aware of any reason why, and have no knowledge which would
give them reason to believe that, the results of such study are inaccurate.
3.22 Compensation. The Company has previously delivered to the
Parent a schedule setting forth the current base salary of each of the employees
of the Company as well as the aggregate bonus paid to each such employee in
respect of the most recently completed bonus measuring period for such employee.
Except for the Benefit Plans, the Company has not, by reason of past practices
with respect to such employees, established any rights on the part of such
employees to additional compensation with respect to any period after the
Closing Date.
3.23 Customers, Suppliers and Distributors. Schedule 3.23 sets
forth a complete and correct list of (a) all customers whose purchases exceeded
5% of the aggregate net sales of the Company during the fiscal year ended
December 31, 1995, setting forth with respect to each such customer the
aggregate volume of purchases made during such period; (b) all suppliers from
whom the Company purchased in excess of 5% of its raw materials and supplies
during the fiscal year ended December 31, 1995, setting forth with respect to
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each such supplier the aggregate dollar volume of purchases (broken down by
principal categories) by the Company from such supplier for such period; and (c)
all sales agents or representatives of the Company with respect to the Company's
business. Except as set forth in Schedule 3.23, none of such customers,
suppliers, distributors or representative's has or, to the knowledge of the
Shareholders, intends to terminate or change significantly its relationship with
the Company's business.
3.24 Products Liability. There is no notice, demand, claim,
action, suit, inquiry, hearing, proceeding, notice of violation or, to the
knowledge of the Shareholders, investigation of a civil, criminal or
administrative nature before any court or governmental or other regulatory or
administrative agency, commission or authority, domestic or foreign, against or
involving any Culture, Extract or any other product distributed by or on behalf
of the Company, or class of claims or lawsuits involving the same or similar
Culture or any product distributed by or on behalf of the Company which is
pending or, to the knowledge of the Shareholders, threatened, resulting from an
alleged defect in any Culture or any product distributed or sold by or on behalf
of the Company, or any alleged failure to warn, or from any breach of implied
warranties or representations (collectively, "Product Liability Lawsuits"); and
(ii) to the knowledge of the Shareholders, there has not been any Occurrence.
For purposes of this Section 3.24, the term "Occurrence" shall mean any
accident, happening or event which takes place at any time which is caused or
allegedly caused by any alleged hazard or alleged defect including, without
limitation, any alleged failure to warn or any breach of express or implied
warranties or representations with respect to, or any such accident, happening
or event otherwise involving any Culture or any product distributed by or on
behalf of the Company that is likely to result in a claim or loss.
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3.25 Environmental Matters.
(a) Except as set forth in Schedule 3.25, (i) the
Company and the Company's business are in material compliance with all
Environmental Laws (as defined below); (ii) the Company has obtained all
applicable Environmental Permits (as defined below); (iii) all Environmental
Permits are in all material respects in full force and effect; (iv) the Company
and the Company's business are in material compliance with all Environmental
Permits. As used herein, "Environmental Laws" shall mean all applicable federal,
state, and local laws, ordinances, rules, regulations, judgments, orders, or
decrees relating to the protection or regulation of human health, safety, or the
environment, including, without limitation, the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, as amended ("CERCLA") (42
U.S.C. Sections 9601 et seq.), the Resource Conservation and Recovery Act
("RCRA") (42 U.S.C. Sections 6901 et seq.), the Clean Water Act (33 U.S.C.
Sections 1251 et seq.), the Atomic Energy Act (42 U.S.C. Section 2201 et
seq.), and similar state and local laws. "Environmental Permits" shall mean all
applicable licenses and permits or other approvals required under applicable
Environmental Laws in connection with the ownership, operation, and/or use of
the Company's business.
(b) To the knowledge of the Shareholders, the Company
has not violated, done or suffered any act which could reasonably be expected to
give rise to liability that would materially affect the operations of the
Company's business under any Environmental Law.
(c) Except as set forth in Schedule 3.25, (i) there
is no pending or, to the knowledge of the Shareholders, threatened claim,
litigation, or administrative proceeding, or known prior claim, litigation or
administrative proceeding arising under any Environmental Law involving the
Company's business or any property formerly owned, leased, operated or occupied
by the Company's business; (ii) there are no ongoing negotiations with or
agreements with any
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governmental authority relating to any Remedial Action (as defined in CERCLA
Section 101(24), 42 U.S.C. Section 9601(24)) or other environmentally-related
claim involving the Company's business; and (iii) neither the Company nor the
Shareholders has received any request for information from any governmental or
private entity with respect to any liability or alleged liability under any
Environmental Law related to the Company's business.
(d) To the knowledge of the Shareholders, the
Premises (i) have never been used for the treatment or disposal of hazardous
materials, hazardous substances or hazardous waste (as those terms are defined
under any Environmental Law) nor as a landfill or other waste disposal site; and
(ii) is not now nor ever has been subject to investigation by any governmental
authority evaluating the need to undertake any environmental remedial action.
(e) Except as set forth on Schedule 3.25, (i) there
are not, and to the knowledge of the Shareholders, never have been any
underground storage tanks present on the Premises; (ii) to the knowledge of the
Shareholders, there is no asbestos present on the Premises; and (iii) to the
knowledge of the Shareholders, there are no PCBs present on the Premises.
(f) To the knowledge of the Shareholders, the Company
has not disposed of any hazardous wastes (as defined under any Environmental
Law) at any location which is currently identified or proposed for inclusion on
(A) the National Priorities List, 40 CFR Part 300 Appendix B1 (B) the
Comprehensive Environmental Response, Compensation and Liability Inventory List,
or (C) any analogous state list.
(g) The Company has provided to the Parent copies of
all environmental reports or investigations regarding the Premises in the
control or possession of the Company.
3.26 Full Disclosure. To the knowledge of the Shareholders,
all documents and other papers delivered by or on behalf of the Shareholders in
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connection with this Agreement and the transactions contemplated hereby and
listed on any Schedule annexed to this Agreement are true, complete and
authentic. To the knowledge of the Shareholders, the information furnished by or
on behalf of the Shareholders to the Parent in connection with this Agreement
and the transactions contemplated hereby and listed on any Schedule annexed to
this Agreement does not contain any untrue statement of a material fact and does
not omit to state a material fact required to be stated therein or necessary to
make the statements made, in the context in which made, not false or misleading
in any material respect.
3.27 Brokers. Neither the Shareholders nor the Company has
employed or utilized the services of any broker or finder in connection with
this Agreement or the transactions contemplated hereby except for Mr. Robert
Capon and Mr. Steve Winegar. The Shareholders shall indemnify and hold harmless
the Parent from any claims to the contrary.
4. Representations and Warranties of the Parent and Merger Sub.
The Parent and Merger Sub, jointly and severally, represent and warrant to the
Company and the Shareholders as follows:
4.1 Due Incorporation. Each of the Parent and Merger Sub is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware and has all corporate power and authority to own, lease
and operate its assets, properties and business and to carry on its business as
now conducted.
4.2 Corporate Power of the Parent and Merger Sub. Each of the
Parent and Merger Sub has the full legal right, power and authority and has
taken all necessary corporate action required to enter into, execute and deliver
this Agreement and to perform fully its obligations hereunder. This Agreement
has been duly executed and delivered and constitutes a legal, valid and binding
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obligation of each of the Parent and Merger Sub enforceable in accordance with
its terms.
4.3 OSI Shares. The OSI Shares to be issued to the
Shareholders pursuant to this Agreement have been duly and validly authorized,
and when issued to the Shareholders in accordance with the terms hereof, shall
be fully paid and nonassessable, with no liability attaching to the ownership
thereof, free from any liens, claims, charges, security interests and other
encumbrances of every kind and nature whatsoever.
4.4 Securities Laws Filings. The Parent has, and on the
Closing Date will have, made all filings required to be made by it under the
Securities Act of 1933, as amended (the "Securities Act") and the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and such filings and all
documents and materials that will have been, or may in the future be, delivered
to stockholders of the Parent and to the Shareholders, at the time they were or
are made, did not and will not contain any untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading. No event has occurred since the date of the last of such
filings as a result of which any such filings contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading.
4.5 Brokers. The Parent has not employed or utilized the
services of any broker or finder in connection with this Agreement or the
transactions contemplated hereby. The Parent shall indemnify and hold each of
the Shareholders harmless from any claims to the contrary.
4.6 Interim Operations of Merger Sub. Merger Sub will be
formed solely for the purpose of engaging in the transactions contemplated
hereby, and
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immediately prior to the Effective Time will have engaged in no other business
activities, will have no subsidiaries, and will have conducted its operations
only as contemplated hereby.
4.7 Litigation; Compliance with Laws. Except as set forth on
Schedule 4.7 annexed hereto, there are no claims, actions, suits, proceedings or
governmental investigations pending or, to the knowledge of the Parent,
threatened, before any national, state or local court or governmental or
regulatory authority, domestic or foreign, or before any arbitrator of any
nature, or any order, injunction or decree outstanding against or relating to
the Parent that, if adversely determined, would have a material adverse effect
upon the Parent. The Parent is not in violation of any applicable law, rule or
regulation, ordinance or any other requirement of any governmental body or
court, which violation would have a material adverse effect upon the Parent, and
no notice has been received by the Parent alleging any such violation.
4.8 Adverse Change. Since December 31, 1995, except as
disclosed in any press release or filing with the Securities and Exchange
Commission (the "SEC"), the Parent is not aware of any material adverse change
in the condition, financial or otherwise, of the Parent.
5. Covenants and Further Agreements of the Parties.
The parties covenant and agree as follows:
5.1 Prohibited Actions Pending Closing. Except as provided for
in Section 5.2 hereof or approved by the Parent in writing, from the date hereof
until the Closing Date, the Shareholders shall cause the Company not to:
(i) amend or otherwise change its Articles of
Incorporation, Bylaws or other governing documents;
(ii) issue or sell or authorize for issuance or sale,
or grant any options or make other agreements with respect to, any shares of
their capital stock or any other of their securities;
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(iii) authorize or incur any additional debt for
money borrowed other than in the ordinary course of business, or incur any
additional long-term debt maturing in whole or in part, more than one year after
the date of creation thereof;
(iv) mortgage, pledge or subject to lien or other
encumbrance any of the Company's material properties or agree to do so;
(v) enter into or agree to enter into any material
agreement, contract or commitment other than in the ordinary course of business;
(vi) declare, set aside, make or pay any dividend or
other distribution to the Shareholders, or redeem, purchase or otherwise
acquire, directly or indirectly, any of their capital stock, or authorize or
effect any split-up or any recapitalization or make any changes in their
authorized or issued capital stock;
(vii) increase or agree to increase, the compensation
of any of their officers, directors or employees by means of salary increase,
bonus or otherwise other than in the ordinary course of business consistent with
past practice;
(viii) sell or otherwise dispose of, or agree to sell
or dispose of, any of the Company's material assets or properties;
(ix) amend or terminate any lease, contract,
undertaking or other commitment listed in any Schedule to this Agreement to
which any of them is a party, or to take action or fail to take any action,
constituting any event of default thereunder;
(x) assume, guarantee or otherwise become responsible
for the obligations of any other party or agree to so do;
(xi) invest any assets of the Company, except the
reinvestment of cash or cash equivalents in U.S. Treasury Bills and/or
Certificates of Deposit;
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(xii) pay any finders or investment bankers' fees in
connection with the transactions contemplated by this Agreement; or
(xiii) take any action prior to the Closing Date
which would breach any of the representations and warranties contained in this
Agreement.
5.2 Dividends; Forgiveness of Debt; Accounts Receivable. At or
prior to the Closing, the Company may declare and pay a dividend to the
Shareholders comprising of (a) any cash on hand at the Closing Date, and (b) the
capital stock of Avid Therapeutics, Inc. owned by the Company. Also, the Company
may forgive any indebtedness of the Shareholders and BJB Holdings, Inc. to the
Company. In addition, the Parent and Merger Sub hereby acknowledge and agree
that the Shareholders shall be entitled to receive any amount collected with
regard to the account receivable set forth on Schedule 5.2 annexed hereto
regardless of when such receivable is collected.
5.3 Litigation. The Shareholders shall promptly notify the
Parent of any lawsuits, claims, proceedings or investigations of which any of
them has knowledge which after the date hereof are threatened or commenced
against the Company or against any officer, director, employee, consultant,
agent or shareholder thereof with respect to the affairs of the Company.
5.4 Reasonable Efforts. The Shareholders and the Parent shall
each use all reasonable efforts to: (a) cause the fulfillment at the earliest
practicable date of the conditions set forth in this Agreement; and (b) cause
the representations and warranties contained in this Agreement to remain true
and correct to the extent necessary to comply with Sections 6.1 and 7.1 hereof,
as the case may be.
5.5 Expenses. Whether or not the transactions contemplated
hereby are consummated, all costs and expenses incurred in connection with this
Agreement and the transactions contemplated hereby shall be paid by the party
incurring such costs and expenses; provided, however, that all expenses incurred
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by the Company, including, without limitation, all fees due to Mr. Robert Capon
and Mr. Steven Winegar pursuant to Mr. Capon's agreement with the Company dated
July 28, 1995, shall be paid out of the cash of the Company or otherwise borne
by the Shareholders.
5.6 Corporate Examinations and Investigations. Prior to the
Closing Date, the Parent shall be entitled, through its employees and
representatives and at the Parent's sole cost, to make such investigation of the
assets, properties, business and operations of the Company, and such examination
of the books, records and financial condition of the Company as the Parent may
reasonably request. Any such investigation and examination shall be conducted at
reasonable times and under reasonable circumstances and the Company and the
Shareholders shall cooperate fully therein.
5.7 Consents. Each of the Company and the Shareholders shall
use their reasonable efforts to obtain at the earliest practicable date, all
consents and approvals referred to in Schedule 3.12 annexed hereto without being
required to take any actions that the Shareholders reasonably believe could have
a material adverse effect on the Company or its business or which the Parent
reasonably believes could have a material adverse effect on the Parent;
provided, however, that the Company and the Shareholders shall not attempt to
obtain the consents set forth on Schedule 5.7 annexed hereto until the Closing
Date. Nothing in this Agreement shall be construed as an attempt to assign any
agreement or other instrument that is by its terms nonassignable without the
consent of the other party. If such consents are not obtained, the Shareholders
shall, to the extent reasonably possible, keep the agreement in effect and shall
give the Parent the benefit of the agreement to the same extent as if it had not
been excluded, and the Parent shall perform the obligations under the agreement
relating to the benefit obtained by the Parent.
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5.8 Transfer Taxes. The Shareholders shall pay any state or
local sales or like taxes payable in connection with the transactions
contemplated pursuant to this Agreement.
5.9 Employment Agreements. The Parent shall enter into
employment agreements, effective the Closing Date, with Dr. Barry Katz and Dr.
Cedric Pearce, substantially in the forms attached hereto as Exhibit D (the
"Katz Employment Agreement") and Exhibit E (the "Pearce Employment Agreement").
5.10 Future Operations of the Surviving Corporation. The
Parent hereby covenants and agrees to continue, for a period of one year from
the Closing Date, the employment of all employees of the Company as of the
Closing Date as employees of the Surviving Corporation. Schedule 5.10 sets forth
a list of such employees. In addition, for a period of three years following the
Closing Date, the Parent shall maintain the Company's current mycology and
fermentation discovery operations at the Premises or at a location substantially
similar to the Premises which is located within 20 miles from the Premises.
5.11 Future Royalties. The Parent and the Shareholders hereby
agree that the Shareholders shall be entitled, in perpetuity, to 50% of all
revenues, including, without limitation, royalty, milestone, exclusivity and any
other royalty payments received by the Surviving Corporation or any Affiliate
thereof resulting from the grant of licenses with regard to Cultures, Extracts
or other products or services supplied by the Company to third parties prior to
the Closing Date ("Shared Income"). Within 45 days following the end of each
quarter following the Closing Date, the Parent shall provide the Shareholders
with a statement setting forth the Shared Income during such quarter; provided,
however, that until such time as the amount of Shared Income in any quarter
exceeds $10,000, such reports shall be delivered to the Shareholders annually.
Payment of the portion of Shared Income payable to the Shareholders shall
accompany each statement. Notwithstanding anything in this Agreement to the
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contrary, the provisions of this Section 5.11 shall survive any termination of
this Agreement in perpetuity.
5.12 Confidentiality. The Company and the Shareholders shall
utilize reasonable efforts to insure that all confidential information which the
Company and any of its officers, directors, employees, counsel, agents,
investment bankers, or accountants, or any Shareholder or any of his counsel,
agents, investment bankers, or accountants may now possess or may hereafter
create or obtain relating to the financial condition, results of operations,
business, properties, assets, liabilities, or future prospects of the Company,
any Affiliate of the Company, or any customer or supplier of the Company shall
not be published, disclosed, or made accessible by any of them to any other
person or entity at any time or used by any of them except pending the Closing
in the business and for the benefit of the Company, in each case without the
prior written consent of the Parent; provided, however, that the restrictions of
this sentence shall not apply (a) with respect to the obligations of the Company
after the Closing Date, (b) with respect to the obligations of all such persons
and entities after this Agreement is rightfully terminated, but only to the
extent such confidential information relates to the financial condition, results
of operations, business, properties, assets, liabilities, or future prospects of
the Company or of any Affiliate of the Company or (insofar as such confidential
information was obtained directly by the Company or any Affiliate of the Company
from any customer or supplier of any of them) of any such customer or supplier,
(c) as may otherwise be required by law, (d) as may be necessary or appropriate
in connection with the enforcement of this Agreement, or (e) to the extent such
information shall have otherwise become publicly available.
5.13 Public Statements. Before the Parent, the Merger Sub, the
Company or any Shareholder shall release any information concerning the
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execution of this Agreement or the transactions contemplated by this Agreement
which is intended for or may result in public dissemination thereof, they shall
furnish drafts of all documents or proposed oral statements to the Parent for
comments, and shall not release any such information without the written consent
of the Parent. Nothing contained herein shall prevent the Company or any
Shareholder or the Parent or the Merger Sub from releasing any information to
any governmental authority if required to do so by law.
5.14 Consents Without Any Condition. The Company and the
Shareholders shall not make any agreement or reach any understanding not
approved in writing by the Parent as a condition for obtaining any consent,
authorization, approval, order, license, certificate, or permit required for the
consummation of the transactions contemplated by this Agreement.
5.15 Release by the Shareholders. Effective immediately after
the Closing, each Shareholder fully and unconditionally releases and discharges
all claims and causes of action which he or his heirs, personal representatives,
or assigns ever had, now have, or hereafter may have against the Parent and the
Company, and, when acting as such, their respective officers, directors,
employees, counsel, agents, and shareholders, in each case past, present, or as
they may exist at any time after the date of this Agreement, and each person, if
any, who controls, controlled, or will control any of them within the meaning of
Section 15 of the Securities Act or Section 20(a) of the Exchange Act, except
claims and causes of action arising out of, based upon, or in connection with
this Agreement.
5.16 License Agreement. The parties hereto agree that the
Fungus Extract Supply and Collaborative Agreement dated as of July 12, 1993
between the Company and the Parent shall terminate on the Closing Date and, upon
such termination, neither party shall have any further obligations to the other
party thereunder.
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5.17 Further Assurances. At any time and from time to time
after the Closing Date, each party hereto shall, without further consideration,
execute and deliver to the others such other instruments of transfer and
assumption, and shall take such other action as any of the others may reasonably
request to carry out the transactions contemplated by this Agreement.
6. Conditions Precedent to the Obligations of the Parent and Merger Sub
to Effect the Merger. The obligations of the Parent and Merger Sub to effect the
Merger shall be subject to the fulfillment, on or prior to the Closing Date of
the following conditions, any one or more of which may be waived by them:
6.1 Representations and Covenants. The representations and
warranties of the Shareholders contained in Section 3 of this Agreement shall be
true and correct on and as of the Closing Date with the same force and effect as
though made on and as of the Closing Date. The Shareholders shall have performed
and complied in all material respects with all covenants and agreements required
by this Agreement to be performed or complied with by them on or prior to the
Closing Date.
6.2 Shareholders' Certificates. The Parent shall have been
furnished with certificates, dated the Closing Date, executed by or on behalf of
each Shareholder, certifying to the fulfillment of the conditions specified in
Section 6.1 hereof by each such Shareholder.
6.3 Opinion of Counsel to the Company. The Parent shall have
been furnished with an opinion of Wyrick, Robbins, Yates & Ponton L.L.P.,
counsel to the Company and the Shareholders, in substantially the form of
Exhibit F attached hereto.
6.4 Litigation. No action, suit or proceeding shall have been
instituted before any court or governmental or regulatory body, or instituted or
threatened by any governmental or regulatory body, seeking to restrain or
prevent the consummation of the transactions contemplated hereby or seeking
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damages in connection with such transactions, or which has or would have, if
successful, singly or in the aggregate, a material adverse effect on the
Company's business.
6.5 Third Party Consents. Except as set forth on Schedule 6.5,
all material consents, permits and approvals from parties to contracts or other
agreements with the Company, and any other material consent, permit or approval,
that to the knowledge of the Shareholders may be required in connection with the
performance by the Shareholders of their obligations under this Agreement, or to
assure the consummation of the transactions contemplated by this Agreement, or
the continuance of such contracts or other agreements with the Company after the
Closing, including those set forth on Schedule 3.12, shall have been obtained.
6.6 Shareholder and Board Approval. The form, terms and
conditions of this Agreement shall have been approved, and the consummation of
the transactions contemplated hereby shall have been authorized by the
shareholders and Board of Directors of the Company and evidence of such approval
shall have been delivered to the Parent.
6.7 Employment Agreements. Each of Dr. Katz and Dr. Pearce
shall have executed and delivered the Katz Employment Agreement and the Pearce
Employment Agreement, respectively.
6.8 Satisfactory Completion of Due Diligence.
(a) KPMG Peat Marwick, the Parent's auditors, shall
have completed an audit of the Company to its and the Parent's satisfaction at
the Parent's sole expense.
(b) All actions, proceedings, instruments and
documents required to carry out this Agreement or incidental thereto all other
related legal matters shall be subject to the reasonable approval of Squadron,
Ellenoff, Plesent & Sheinfeld, LLP, counsel to the Parent and Merger Sub, and
the Company
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and the Shareholders shall have furnished such counsel all documents as such
counsel may have reasonably requested for the purpose of enabling them to pass
upon such matters.
(c) The Parent shall have received a written
environmental report (the "Environmental Report"), dated as of a recent date,
from a reputable environmental consulting firm, in form and substance
satisfactory to the Parent, which Environment Report shall be prepared at the
Parent's sole expense.
(d) The Parent shall have conducted and completed to
its satisfaction a viability study of the Cultures in the Company's inventory at
the Parent's sole expense.
6.9 No Damage to Business. The properties or business of the
Company shall not have been and shall not be threatened to be adversely affected
in any material respect as a result of fire, explosion, earthquake, disaster,
accident, flood, drought, embargo, riot, civil disturbance, uprising, activity
of armed forces or act of God or public enemy. There shall not be pending or
threatened any strike or any action by any governmental authority which would
have a material adverse effect on the properties or business of the Company.
6.10 Tax Matters.
(a) No new elections with respect to Taxes, or
changes in current elections with respect to Taxes, affecting the Company shall
have been made after the date of this Agreement without the prior written
consent of the Parent.
(b) The Shareholders and the Company shall have
provided the Parent with (i) all forms, certificates and/or other instruments
required to pay the transfer and recording taxes and charges arising from the
transactions contemplated by this Agreement, together with evidence satisfactory
to the Parent that such transfer taxes and charges have been paid, (ii) an
affidavit, stating, under penalty of perjury, each Shareholder's United States
taxpayer
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identification number and that the transferor is not a foreign person, pursuant
to Section 1445(b)(2) of the Code (or any similar provision of state or other
tax law), and (iii) a clearance certificate or similar document(s) which may be
required by any state taxing authority to relieve the Parent of any obligation
to withhold any portion of the payments to the Shareholders pursuant to this
Agreement.
7. Conditions Precedent to the Obligations of the Company and the
Shareholders to Effect the Merger.
The obligations of the Company and the Shareholders to effect
the Merger shall be subject to the fulfillment, on or prior to the Closing Date
of the following conditions, any one or more of which may be waived by them:
7.1 Representations and Covenants. The representations and
warranties of the Parent and Merger Sub contained in Section 4 of this Agreement
shall be true and correct on and as of the Closing Date with the same force and
effect as though made on and as of the Closing Date. The Parent and Merger Sub
shall have performed and complied in all material respects with all covenants
and agreements required by this Agreement to be performed or complied with by
them, respectively on or prior to the Closing Date.
7.2 Officer's Certificate. The Shareholders shall have been
furnished with certificates, dated the Closing Date, executed by an officer of
each of the Parent and Merger Sub, certifying to the fulfillment of the
conditions specified in Section 7.1 hereof.
7.3 Opinion of Counsel. The Shareholders shall have been
furnished with an opinion of Squadron, Ellenoff, Plesent & Sheinfeld, LLP,
counsel to the Parent and Merger Sub, in substantially the form of Exhibit G
attached hereto.
7.4 Board Approval. The form, terms and conditions of this
Agreement shall have been approved, and the consummation of the transactions
contemplated hereby shall have been authorized by the Boards of Directors of
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each of the Parent and Merger Sub and the sole stockholder of Merger Sub and
evidence of such approval shall have been delivered to the Shareholders.
7.5 Litigation. No action, suit or proceeding shall have been
instituted before any court or governmental or regulatory body, or instituted or
threatened by any governmental or regulatory body, to restrain, modify or
prevent the carrying out of the transactions contemplated hereby, or to seek
damages or a discovery order in connection with such transaction.
7.6 Listing. The Nasdaq National Market, at or prior to
Closing, shall have listed or approved the listing on official notice of
issuance of the shares of Parent Common Stock to be delivered to the
Shareholders pursuant to this Agreement.
7.7 Registration. The Shareholders shall have approved the
Parent's Registration Statement on Form S-3 with respect to the OSI Shares and
shares covered by the Warrants and such Registration Statement shall have been
filed with the SEC.
8. Documents to be Delivered at the Closing.
8.1 Documents to be Delivered by the Company to the Parent. At
the Closing, the Company shall deliver to the Parent the following:
(a) a copy of resolutions adopted by the Board of
Directors and the Shareholders of the Company authorizing the execution,
delivery and performance of this Agreement by the Company, and a certificate of
the secretary or assistant secretary of the Company, dated the Closing Date,
stating that such resolutions were duly adopted and are in full force and effect
at such date and setting forth the incumbency of each person executing this
Agreement or any document required by this Section 8.1 on behalf of the Company;
(b) the opinion referred to in Section 6.3 hereof;
(c) copies of all consents, approvals and waivers
required as a condition precedent to the Closing as set forth on Schedule 3.12
hereof;
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(d) copies of the Environmental Report referred to in
Section 6.8(c) hereof; and
(e) all forms, certificates and affidavits referred
to in Section 6.10(b) hereof.
8.2 Documents to be Delivered by the Parent and Merger Sub to
the Shareholders. At the Closing, the Parent and Merger Sub shall deliver to the
Shareholders the following:
(a) a copy of resolutions adopted by the Boards of
Directors of each of the Parent and Merger Sub and by the sole stockholder of
Merger Sub authorizing the execution, delivery and performance of this Agreement
by each of the Parent and Merger Sub, and a certificate of the secretary or
assistant secretary of each of the Parent and Merger Sub, dated the Closing
Date, stating that such resolutions were duly adopted and are in full force and
effect at such date, and setting forth the incumbency of each person executing
this Agreement, or any document required by this Section 8.2 on behalf of each
of the Parent and Merger Sub;
(b) the certificates referred to in Section 7.2
hereof;
(c) the opinion referred to in Section 7.3 hereof;
(d) share certificates representing the OSI Shares;
(e) filing of the S-3 Registration Statement and
filings with and approvals of the Commission, the National Association of
Securities Dealers, Inc. and appropriate "Blue Sky" securities authorities with
respect to the OSI Shares;
(f) the Warrants; and
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(g) evidence of wire transfers in the amount of the
cash consideration portion of the Purchase Price.
8.3 Documents to be Delivered by the Shareholders to the
Parent. At the Closing, the Shareholders shall deliver to the Parent the
following:
(a) the certificates referred to in Section 6.2
hereof; and
(b) the opinion referred to in Section 6.3 hereof.
9. Survival of Representations and Related Matters.
9.1 Survival. The representations and warranties of the
Shareholders, on the one hand, and the Parent and Merger Sub, on the other,
contained in this Agreement shall survive the Closing for a period of one (1)
year. Except as specifically set forth in this Agreement and the agreements and
documents specifically referred to herein, there are no representations or
warranties, express or implied, made by any party in connection with the
transactions contemplated by this Agreement.
9.2 Time and Manner of Claims. The Shareholders, on the one
hand, and the Parent and Merger Sub, on the other, shall be liable for damages
arising from their respective misrepresentations or breaches of their respective
representations and warranties only to the extent that notice of a claim
therefor is asserted by the other in writing and delivered prior to the
expiration of one (1) year from the Closing Date. Any notice of a claim by
reason of any of the representations and warranties contained in this Agreement
shall state specifically the representation or warranty with respect to which
the claim is made, the facts giving rise to an alleged basis for the claim, and
the amount of liability asserted against the other party by reason of the claim.
This Section 9.2 shall not apply to claims arising out of, or in connection
with, the Registration Statement.
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10. Indemnification and Related Matters.
10.1 Indemnifications by the Shareholders. The Shareholders,
jointly and severally, shall indemnify the Parent and hold it harmless against
and in respect of any and all damages, losses, liabilities, costs and expenses,
including, without limitation, attorneys' fees and expenses, resulting from any
misrepresentation or breach of any warranty set forth in Section 3 hereof or the
non-fulfillment of any covenant or agreement on the part of the Company under
this Agreement.
10.2 Indemnification by the Parent. The Parent shall indemnify
the Shareholders and hold each of them harmless against and in respect of any
and all damages, losses, liabilities, costs and expenses, including, without
limitation, attorneys' fees and expenses, resulting from any misrepresentation
or breach of any warranty set forth in Section 4 hereof or the nonfulfillment of
any covenant or agreement on the part of the Parent under this Agreement.
10.3 Tax Indemnification and Other Tax Matters.
(a) Each Shareholder shall jointly and severally
indemnify, save and hold harmless the Parent and the Surviving Corporation and
each of their respective subsidiaries, Affiliates, directors, shareholders,
officers, employees, agents, consultants, successors, transferees and assignees,
from and against a breach of the representations and warranties contained in
Section 3.16 hereof (i) with respect to all periods ending on or prior to the
Closing Date and (ii) with respect to any period beginning before the Closing
Date and ending after the Closing Date, but only with respect to the portion of
such period up to and including the Closing Date (such portion shall be referred
to herein as the "Pre-Closing Partial Period" and the portion of such period
after the Closing Date shall be referred to herein as the "Post-Closing Partial
Period").
(b) Any Taxes for a period including a Pre-Closing
Partial Period and a Post-Closing Partial Period shall be apportioned between
such Pre-
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Closing Partial Period and such Post-Closing Partial Period, based, in the case
of real and personal property Taxes, on a per diem basis and, in the case of
other Taxes, on the actual activities, taxable income or taxable loss of the
Company, including that portion of the deferred revenue shown on the Balance
Sheet which was recognized during the Pre-Closing Partial Period, and the
Surviving Corporation during such Pre-Closing Partial Period and Post-Closing
Partial Period.
(c) The Shareholders shall prepare and file all
returns for the Company in respect of Taxes, for periods ending prior to or on
the Closing Date (if the return is not filed before the Closing Date). Promptly
after the Parent or the Surviving Corporation acquires actual knowledge of an
amount of any Taxes payable by the Company with respect to any period ending on
or before the Closing Date or a Pre-Closing Partial Period, the Parent or the
Surviving Corporation, as the case may be, shall give notice thereof to the
Shareholders. The Shareholders shall, subject to the limitation on liability set
forth in Section 10.4 hereof (except for Taxes due for the Pre-Closing Partial
Period and penalties and interest on any Taxes due from such Shareholders, which
shall not be subject to such limitation on liability), pay the amount of such
Taxes to the Parent or the Surviving Corporation, as the case may be, within 30
days after the receipt of such notice. The Parent and the Surviving Corporation
shall provide the Company and the Shareholders with such assistance as may
reasonably be requested by any of them in connection with the preparation of any
returns in respect of taxes and shall retain and provide them with any records
or information that may be relevant to any such returns.
(d) The Shareholders, the Parent and the Surviving
Corporation agree to give prompt notice to each other of any proposed adjustment
to Taxes for periods ending on or prior to the Closing Date of any Pre-Closing
Partial Period. The Shareholders shall have the right at their option (i)
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either to conduct (themselves or through their advisors), or to direct the
Parent and the Surviving Corporation in conducting, any audit or proceeding with
respect to Taxes involving the Company for any period or periods ending prior to
or including the Closing Date, and (ii) to control the resolution of any such
audit or proceeding, provided, that any expense incurred by the Shareholders
exercising their rights pursuant to this Section 10.3 shall be borne by the
Shareholders, and the Parent or the Surviving Corporation's rights and
obligations with respect to payment hereunder shall not be affected by how they
choose to exercise such rights.
10.4 Limitation on Indemnity. In calculating the damages to
any Indemnitee for any misrepresentation or breach, the Indemnitor shall receive
credit for any tax benefit received, or to be received, and any increase in
assets of the Indemnitee as a result of the facts giving rise to the claim for
damages, it being the intention and understanding of the parties that the
Indemnitee should not be in a better position, after taking into account the tax
effects both of the breach and the provision for payment of damages hereunder,
than it would have been in the absence of such a breach; and provided further
that no amount shall be included as damages except for the Indemnitee's actual
out-of-pocket costs and expenses, and that the Indemnitee shall not be entitled
to punitive or consequential damages. Notwithstanding the foregoing, the
indemnification provided in this Section 10 shall apply only to the extent that
the aggregate amount of damages and losses to the Parent or the Shareholders, as
the case may be, from all such claims exceeds $200,000 and, in such event, the
Shareholders or the Parent, as the case may be, shall be required to pay the
aggregate amount of any such claims up to $2,000,000.
10.5 Period of Indemnity. The aforesaid indemnities of the
Shareholders and the Parent are subject to the provisions of Section 9.2 hereof.
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10.6 Notice to the Indemnitor. Promptly after the assertion of
any claim by a third party or occurrence of any event which may give rise to a
claim for indemnification under this Section 10, an Indemnitee shall notify the
Indemnitor in writing of such claim.
10.7 Rights of Parties to Settle or Defend. If the Indemnitor
determines not to contest such claim, the Indemnitee shall have the right, at
its own expense, to contest and defend against such claim. If the Indemnitor
determines to contest such claim, the Indemnitee shall have the right to be
represented, at its own expense, by its own counsel and accountants, its
participation to be subject to the reasonable direction of the Indemnitor. In
either case, the Indemnitee shall make available to the Indemnitor and its
attorneys and accountants, at all reasonable times during normal business hours,
all books, records, and other documents in its possession relating to such
claim. The party contesting any such claim shall be furnished all reasonable
assistance in connection therewith by the other party. If the Indemnitor fails
to undertake the defense of or settle or pay any such third party claim within
10 days after the Indemnitee has given written notice to the Indemnitor of such
claim, then the Indemnitee may take any and all necessary action to dispose of
such claim, including, without limitation, the settlement or full payment
thereof upon such terms as it shall deem appropriate, in its sole discretion,
subject to the following with respect to any proposed settlement thereof.
10.8 Settlement Proposals. In the event the Indemnitee desires
to settle any such third-party claim (whether or not contested by the
Indemnitor), the Indemnitee shall advise the Indemnitor in writing of the amount
it proposes to pay in settlement thereof (the "Proposed Settlement"). If such
Proposed Settlement is unsatisfactory to the Indemnitor, it shall have the
right, at its expense, to contest such claim by giving written notice of such
election to the Indemnitee within 10 days after the Indemnitor's receipt of the
advice of the
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Proposed Settlement. If the Indemnitor does not deliver such written notice
within 10 days after receipt of such advice, the Indemnitee may offer the
Proposed Settlement to the third party making such claim. If the Proposed
Settlement is not accepted by the party making such claim, any new Proposed
Settlement figure which the Indemnitee may wish to present to the party making
such claim shall first be presented to the Indemnitor who shall have the right,
subject to the conditions hereinabove set forth in this Section, to contest such
claim.
10.9 Reimbursement. At the time the amount of any liability on
the part of the Indemnitor under this Section 10 is determined (which in the
case of payments to third persons shall be the earlier of (i) the date of such
payments or (ii) the date that a court of competent jurisdiction shall enter a
final judgment, order or decree (after exhaustion of appeal rights) establishing
such liability), the Indemnitor shall forthwith, upon notice from the
Indemnitee, pay to the Indemnitee, the amount of the indemnity claim.
11. Miscellaneous.
11.1 Notices. Any notice or other communication required or
which may be given hereunder shall be in writing and shall be delivered
personally, telegraphed or telexed, or sent by certified, registered, or express
mail, postage prepaid, and shall be deemed given when so delivered personally,
telegraphed or telexed, or if mailed, two days after the date of mailing, as
follows:
(i) if to the Parent or Merger Sub, to:
Oncogene Science, Inc.
106 Charles Lindbergh Blvd.
Uniondale, NY 11553
Attention: Colin Goddard
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with a copy to:
Squadron, Ellenoff, Plesent
& Sheinfeld, LLP
551 Fifth Avenue
New York, NY 10176
Attention: Joel I. Papernik, Esq.
(ii) if to the Shareholders, to:
Barry Katz
c/o Mycosearch, Inc.
4905 Pine Cone Drive, Suite 5
Durham, NC 27707
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with a copy to:
Wyrick, Robbins, Yates & Ponton, L.L.P.
4101 Lake Boone Trail, Suite 300
Raleigh, NC 27607
Attention: Larry F. Robbins, Esq.
11.2 Entire Agreement. This Agreement (including the Exhibits
and Schedules hereto) contains the entire agreement among the parties with
respect to the subject matter hereof and supersedes all prior agreements,
written or oral, with respect thereto.
11.3 Waiver; Amendments; Separability. This Agreement may be
amended, modified, superseded, cancelled, renewed or extended, and the terms and
conditions hereof may be waived, only by a written instrument signed by the
parties or, in the case of a waiver, by the party waiving compliance. No delay
on the part of any party in exercising any right, power or privilege hereunder
shall operate as a waiver thereof, nor shall any waiver on the part of any party
of any right, power or privilege hereunder, nor any single or partial exercise
of any right, power or privilege hereunder, preclude any other or further
exercise thereof or the exercise of any other right, power or privilege
hereunder. The rights and remedies herein provided are cumulative and are not
exclusive of any rights or remedies which any party may otherwise have at law or
in equity. If any provision of this Agreement is held to be invalid or
unenforceable, the balance of this Agreement shall remain in effect.
11.4 Governing Law. This Agreement shall be governed and
construed in accordance with the laws of the State of New York applicable to
agreements made and to be performed entirely within such State.
11.5 No Assignment. Neither this Agreement nor any of the
rights, interests or obligations hereunder shall be assigned by any of the
parties hereto (whether by operation of law or otherwise) without the prior
written consent of the other parties. Subject to the preceding sentence, this
Agreement
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shall be binding upon and shall inure to the benefit of the parties hereto and
their respective permitted successors and assigns.
11.6 Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
11.7 Schedules and Exhibits. The Schedules and Exhibits to
this Agreement are a part of this Agreement as if set forth in full herein.
[REMAINDER OF PAGE LEFT INTENTIONALLY BLANK]
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
ONCOGENE SCIENCE, INC.
By:/s/ COLIN GODDARD
-------------------------------
Name: COLIN GODDARD
Title: VP, Pharmaceutical
Operations
MYCOSEARCH ACQUISITION CORP.
By:/s/ COLIN GODDARD
-------------------------------
Name: COLIN GODDARD
Title: President and CEO
MYCOSEARCH, INC.
By:/s/ BARRY KATZ
-------------------------------
Name: BARRY KATZ
Title: President
STOCKHOLDERS:
/s/ BARRY KATZ
----------------------------------
BARRY KATZ
/s/ BARRY ROBERTS
----------------------------------
BARRY ROBERTS
/s/ JOHN MCLAUGHLIN
----------------------------------
JOHN MCLAUGHLIN
/s/ CEDRIC PEARCE
----------------------------------
CEDRIC PEARCE
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Exhibit C
1. Shareholdings
Number of Shares
Name of Shareholders of Mycosearch, Inc. Percentage
- -------------------- ------------------- ----------
(Record and Beneficial
Owner)
Barry Katz 410 shares of common stock 77.902%
Barry Roberts 65 shares of common stock 12.350%
John McLaughlin 25 shares of common stock 4.750%
Cedric Pearce 26.3 shares of common stock 4.998%
2. Warrants
Name of Warrantholder Number of Shares of
- ----------------------------------------- Oncogene Science,
Inc.
------------------------------
Barry Katz 77,902 shares of OSI
Common Stock
Barry Roberts 12,350 shares of OSI
Common Stock
John McLaughlin 4,750 shares of OSI
Common Stock
Cedric Pearce 4,998 shares of OSI
Common Stock
- ----------------------------------------- ------------------------------
Total 100,000
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