(10) Agreement of Sale by and between ZooQuest
Technologies, LTD. and Diagnon Corporation.
AGREEMENT OF SALE
THIS AGREEMENT, entered into this the 29th day of July, 1996, by and
between ZOOQUEST TECHNOLOGIES LTD., a Maryland corporation, (hereinafter
"Seller") and DIAGNON CORPORATION, a Delaware corporation (hereinafter "Buyer").
WHEREAS, the parties hereto have reached an understanding with
respect to the sale by the Seller and the purchase by the Buyer of substantial
assets of the Seller located at 9600 Medical Center Drive, Rockville, Maryland.
NOW, THEREFORE, the parties agree as follows:
1. Sale. The Seller hereby agrees to sell, and the Buyer
hereby agrees to purchase, the following assets (the "Purchased
Assets") of the Seller:
A. All right, title and interest of the Seller in and
to the United States Department of Agriculture Licenses, the
Product License (No. 411) and the Facility license; the Patent
entitled "Purified Equine Immunoglobulins and Method of Use
Thereof", enumerated in Exhibit "A".
B. The equipment, machinery, furniture, furnishings and
fixtures enumerated in Exhibit "B" attached hereto.
C. All right, title and interest of the Seller in the
development and production of Equine Albumin product.
D. All books, records, and reports in connection with
the foregoing assets.
2. Purchase Price. The purchase price for all the assets enumerated in
Paragraph 1 hereof shall be the forgiveness of the debt owed to Buyer by Seller
(approximately One Hundred Thousand Dollars), Five Thousand Dollars
($5,000.00)in cash, and a royalty of Three percent (3%) of Net Sales of the
Equine oral and Equine intravenous (IV) IgG, and Albumin products for the first
Five Hundred Thousand Dollars ($500,000.00)of Net Sales. Diagnon also agrees to
pay ZooQuest a royalty of six percent (6%) of all Net Sales, after the Net Sales
have exceeded Five Hundred Thousand Dollars ($500,000.00) for the life of the
products. In addition, Seller shall, upon request of Buyer, assist in any way
necessary to further the transfer of the U.S.D.A. licenses.
3. Payment of Purchase Price. The purchase price shall be
payable as follows:
A. Five Thousand Dollars ($5,000.00) in cash or
certified check at closing.
B. A royalty of Three percent (3%) of Net Sales of the Equine
IgG (oral and IV) and Albumin products for the first Five Hundred Thousand
Dollars ($500,000.00). Diagnon agrees to pay ZooQuest a royalty of six percent
(6%) of all Net Sales, after the Net Sales have exceeded Five Hundred Thousand
Dollars ($500,000.00). Diagnon shall pay the royalty on a quarterly basis ninety
(90) days after the end of Diagnon's fiscal quarter. Seller will have access, at
reasonable times with reasonable notice, to Buyer's books and records to verify
sales and revenues with respect to the Equine products. In addition, Buyer shall
submit a yearly report to Seller detailing the sales and revenues of the
products as well as general business information.
4. Representations of Seller. The Seller represents as
follows:
A: That, except with respect to the U.S.D.A. licenses, the
Seller has complete and unrestricted power and the unqualified right to sell,
assign, and transfer to the Buyer, or has obtained all consents necessary to
such sale, assignment or transfer, and the Buyer is acquiring good marketable
title to the assets being sold, assigned, and transferred hereinunder, free and
clear of all liens, mortgages, security interests, and encumbrances.
B. That the instruments of sale, assignment, and transfer
being executed and delivered to the Buyer hereunder are valid and binding
obligations of the Seller, enforceable in accordance with their terms, and will
effectively vest in the Buyer good and marketable title to the assets
transferred by this Agreement.
C. That the Seller is not in material default under any
of the agreements being sold, assigned, or transferred hereunder to
the Buyer.
D. That the Seller has no notice of, and knows of no basis
for, any claim, lien, judgment, action, government investigation, or proceeding,
pending or contemplated against or relating to the Purchased Assets.
E. Seller shall permit Buyer to use Sellers name on labels,
boxes, and other sales material until December 31, 1996, or such later time as
new labeling is approved by the U.S.D.A.. Those products already produced and
labeled may carry the Sellers name to the end of the shelf life where labeling
is impossible.
5. Representation of Buyer. The Buyer represents as follows:
A. That after closing, Buyer will pay a royalty of three
percent (3%) on Net Sales of the Equine oral and IV IgG, and Albumin products
for the first Five Hundred Thousand Dollars ($500,000.00). Diagnon also agrees
to pay ZooQuest a royalty of six percent (6%) of all Net Sales, after the Net
Sales have
exceeded Five Hundred Thousand Dollars ($500,000.00) on a quarterly basis ninety
(90) days after the end of the Buyer's fiscal quarter, so long as the products
is being manufactured.
B. Buyer agrees to keep accurate and correct records of Equine
IgG Products made, used or sold appropriate to determine the amount of royalties
due Seller. Buyer shall provide Seller with quarterly and yearly reports. Such
records shall be retained for at least five (5) years following a given
reporting period. They shall be available during normal business hours for
inspection at the expense of Seller by an accountant or other designated auditor
selected by Seller for the sole purpose of verifying reports and payments
hereinunder. The accountant or auditor shall only disclose to Seller information
relating to the accuracy of reports and payments made under this Agreement. If
an inspection shows an under-reporting or underpayment in excess of ten (10)
percent for any twelve (12) month period, the Buyer shall reimburse to Seller
for the cost of the inspection at the time Buyer pays the unreported royalties.
C. Net Sales means the total gross receipts for sales of the
Equine IgG products available to others, whether invoiced or not, less returns
and allowances actually granted, freight out, taxes or excise duties imposed on
the transaction, and wholesaler and cash discounts in amounts customary in the
trade. No deductions shall be made for commissions paid to individuals whether
they be with independent sales agencies or regularly employed by Buyer, and on
their payroll, or for the cost of collections.
6. Indemnification.
A. The Seller and its successors and assigns, hereby agree
forever to indemnify, defend, and hold harmless the Buyer from and against all
demands, claims, actions, or causes of action, assessments, losses, damages,
liabilities, costs, and expenses (including, without limitation, interest,
penalties, and reasonable attorney's fees and expenses) asserted against,
resulting to, imposed upon, or incurred by the Buyer, directly or indirectly, by
reason or resulting from:
(i) liabilities and obligations of Seller existing as of the
date of closing, and claims against the Seller existing as of the date of
closing or resulting solely from facts or circumstances existing on or prior
thereto;
(ii) a breach of any representation, warranty, covenant,
or agreement of the Seller contained herein or made pursuant
thereto; or
(iii) any tax or related claim (including, without limitation,
claims for interest and penalties) asserted against Seller with respect to any
tax or related claim relating to the
operation of the Business by the Seller through the date of
closing.
B. The Buyer hereby agrees to indemnify, defend, and hold harmless the
Seller from and against all demands, claims, actions or causes of action,
assessments, losses, damages, liabilities, costs and expenses (including without
limitation, interest, penalties, and reasonable attorney's fees and expenses)
asserted against, resulting to, imposed upon, or incurred by the Seller,
directly or indirectly, by reason of or resulting from (i) Buyer's
non-performance of those obligations of Seller assumed by Buyer hereunder; and
(ii) any breach of any covenant or agreement of Buyer made pursuant hereto or
contained herein; and (iii) any sales, use or other taxes resulting from the
transaction contemplated hereby.
7. Closing. Closing shall take place as of the close of
business on May 31, 1996, at 9600 Medical Center Drive, Rockville,
Maryland, or on such other date and at such other place as Buyer
and Seller mutually agree.
8. Transfer of Licenses. Upon execution of this Agreement,
the Seller will file written request with the United States
Department of Agriculture for Transfer of the Product License No.
411 and the Facility License hereto to Buyer. Seller agrees to
cooperate with Buyer in obtaining the transfer of the Licenses.
9. Closing Costs. Each party shall bear its own expenses in
connection with the sale and purchase of the assets.
10. Deliveries at Closing. At closing, the Seller and Buyer are
required and agree to make full settlement in accordance with the terms of this
Agreement, and to deliver to each other such bills of sale, instruments of
assignment, and assumption, and other documents as may be reasonable necessary
to effectuate this transaction.
11. Termination of Production. In the event, Buyer ceases to operate,
manufacture, sell, and produce the Equine IgG, without sale to a secondary
party, then Seller shall have a sixty (60) day option to purchase, back the
U.S.D.A. licenses and the Patent described above, for Eighty Three Thousand
($83,000.00) Dollars. This option is not activated if Buyer sells the business
to a secondary party. In the event, Diagnon sold the business to a secondary
party then Diagnon must make the continuation of the royalty to ZooQuest for the
life of the product a condition of any such sale.
12. Brokerage. Each of the parties represents that there
has been no involvement of any business broker in any aspect of
this transaction, and that it will pay or discharge, and will
indemnify and hold harmless that other party from and against any
and all claims or liabilities from brokerage commissions or
finder's fees incurred by reason of any action of the indemnifying
party.
13. Confidentiality. The Buyer and Seller acknowledge that pursuant to
this Agreement either party may become privy to certain confidential information
of the other and that the communication of such confidential information to
third parties could injure either parties business. Seller and Buyer, therefore,
agree to take reasonable steps to insure that such information about either
party obtained by the other or by any of its employees, agents, or
representative shall remain confidential, and shall not be disclosed or revealed
to outside sources.
14. Possession. Possession of the assets and property as
enumerated in Exhibits A, B, and C shall be given over at the time
of closing.
15. Conduct of Business Pending Closing. Both parties shall
conduct business as they currently do until the Closing of this
Agreement.
16. Covenant Not to Compete. For a period of five years after the date
of the closing, Seller shall not directly or indirectly engage in any business
or activities involving an Equine IgG product in competition with Business as
currently conducted or utilizing or related to, the Business conveyed hereunder,
and the Seller shall not make available to any other person any data or research
relating to the Business.
17. Governing Law. This Agreement shall be interpreted and
enforced in accordance with the law of the State of Maryland.
18. Notices. All notices and correspondence shall be deemed given when
personally deliver; or within five (5) days after it has been sent by the United
States Mail, postage prepaid, properly addressed to the party to receive the
notice at the following address given to the other party in the manner above
provided:
To ZooQuest: ZooQuest Technologies Ltd.
To Diagnon: Diagnon Corporation
9600 Medical Center Drive
Rockville, Maryland 20850
19. Validity. If any provision of this Agreement is
determined to be invalid or unenforceable, the provision shall be
deemed to be severable from the remainder of this Agreement and
shall not cause the invalidity or unenforceability of the remainder
of this Agreement.
20. Right to Counsel. Each party to this Agreement
acknowledges that it was represented by counsel or had the
opportunity to be represented by counsel.
21. Release and Waiver of Claims. Seller and Buyer, for both parties,
its grantees, successors, and assigns, if any, does hereby release, acquit, and
forever discharge each party, its shareholders, members, officers, directors,
employees, and their agents, acting in their capacities as such, from any and
all claims, demands, actions, causes of action, judgements, losses, damages,
liabilities, costs and expenses (including but not limited to attorneys' fees
whether suit is instituted or not), whether known or unknown, liquidated or
contingent, matured or not matured, arising from or related to any matter, cause
or thing whatsoever (collectively, "Claims"), from the beginning of the world to
and including the date as of this Agreement is executed. This release includes
but is not limited to all claims which have accrued or may in the future accrue
to both parties or its grantees, successors and assigns. It is acknowledged and
agreed that both parties had the right to counsel, and that both parties are
relying wholly upon its own and counsel's judgment and knowledge with respect to
the question of liabilities of either party and the nature, extent and duration
of any injuries and damages suffered or to be suffered by either party, and that
no representations or statements regarding said injuries and damages or any
other matters made by either party or any person representing both parties has
influenced both parties to any extent whatsoever in making this release.
21. Full Effect. The parties hereto each agree to execute
and deliver any instrument, or perform any acts, that may be
necessary or reasonably requested in order to give full effect to
this Agreement.
22. Counterparts. This Agreement may be executed in more
than one counterpart, each of which shall be deemed to be an
original but all of which together shall be deemed single
document.
23. Entire Agreement. The parties to this contract mutually agree that
it shall be binding upon them, their respective heirs, personal representatives,
successors and assigns. This contract contains the entire agreement between the
parties and they shall no be bound by any terms, conditions, warranties or
representations not herein contained.
IN WITNESS WHEREOF, the parties have signed this Agreement on the day
and year first hereinabove written.
ATTEST: ZOOQUEST TECHNOLOGIES LTD.
/s/Raymond Shumate
Raymond Shumate, Individually
and on behalf of Frederick J.
Mueller, Marillac L. Mueller,
Philip Shumate, Lu-Anne Shumate,
Randolph Cole, Sherrie Cole and
Sandie Evans Smith, Jeffrey
Beck and Donna Beck
ATTEST: DIAGNON CORPORATION
John C. Landon, Ph.D, President
IN WITNESS WHEREOF, the parties have signed this Agreement on the day
and year first hereinabove written.
ATTEST: ZOOQUEST TECHNOLOGIES LTD.
/s/James S. Vreeland
James S. Vreeland
/s/Lawrence Allan Arch
Lawrence Allan Arch
ATTEST: DIAGNON CORPORATION
John C. Landon, Ph.D, President
IN WITNESS WHEREOF, the parties have signed this Agreement on the day
and year first hereinabove written.
ATTEST: ZOOQUEST TECHNOLOGIES LTD.
/s/Laura L. Leidhecker
/s/Michael E. Leidhecker
ATTEST: DIAGNON CORPORATION
John C. Landon, Ph.D, President
IN WITNESS WHEREOF, the parties have signed this Agreement on the day
and year first hereinabove written.
ATTEST: ZOOQUEST TECHNOLOGIES LTD.
/s/Raymond Mifflin
/s/Linda C. Mifflin
ATTEST: DIAGNON CORPORATION
John C. Landon, Ph.D, President
IN WITNESS WHEREOF, the parties have signed this Agreement on the day
and year first hereinabove written.
ATTEST: ZOOQUEST TECHNOLOGIES LTD.
ATTEST: DIAGNON CORPORATION
/s/John C. Landon
John C. Landon, Ph.D, President
PURCHASED ASSETS
EXHIBITS
EXHIBIT A
List of United States Department of Agriculture Licenses,
Patent and products.
EXHIBIT B
List of equipment, etc., that are being purchased.
EXHIBIT C
List of equipment not owned by ZooQuest.
EXHIBIT A
1. United States Department of Agriculture - United States
Veterinary Biological Product License. License No. 411 Code
3607.00 November 14, 1994
2. United States Department of Agriculture - United States
Veterinary Biologics Establishment License No. 411. Issued to
ZooQuest Technologies Ltd. on November 14, 1994.
3. Patent No. 4,911,910 - "Purified Equine Immunologlublins
and Method of Use Thereof". Issued on March 27, 1990.
4. All rights title and interest of the Seller in the
development and production of the Equine Albumin product.
EXHIBIT B
Large Column for Blood Purification- Amicon Modiline Aerglie
Model P440x600 Serial No. 4400398, and contents.
Various glassware, trays, plastic, and laboratory disposables.
All books, records, and reports in connection with the foregoing
assets.
EXHIBIT C
Lyophilizer- Virtus Millitron Model 10-324 51 SRC
Amicon 7 liter Column
Cole-Palmer High Capacity Occlusion Peristaltic Pump
Model 7586-20