Exhibit 10.2
ASSET PURCHASE OPTION AGREEMENT
BY
AND
AMONG
FRESENIUS HEMOTECHNOLOGY, INC.,
FRESENIUS AKTIENGESELLSCHAFT
(as guarantor of Fresenius Hemotechnology, Inc.)
AND
CYPRESS BIOSCIENCE, INC.
Dated as of March 26, 1999
TABLE OF CONTENTS
Page
ARTICLE 1 DEFINITIONS.
1.1 Definitions.............................................................................................. 1
1.2 Interpretation........................................................................................... 8
ARTICLE 2 GRANT OF OPTION FOR PURCHASE OF ASSETS, ASSUMPTION OF
LIABILITIES AND RELATED TRANSACTIONS.
2.1 Grant and Exercise of Option............................................................................. 8
2.2 Purchase and Sale of Assets.............................................................................. 9
2.3 Assumption of Certain Liabilities........................................................................ 11
2.4 Purchase Price and Allocation............................................................................ 12
2.5 Payment of Purchase Price................................................................................ 13
2.6 Expiration of Option..................................................................................... 13
2.7 Post Closing Adjustment.................................................................................. 13
ARTICLE 3 CLOSING.
3.1 Closing Date............................................................................................. 14
3.2 Items to be Delivered at the Closing By Seller........................................................... 14
3.3 Items to be Delivered at the Closing by Buyer............................................................ 15
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF SELLER.
4.1 Organization; Authorization.............................................................................. 16
4.2 No Conflicts............................................................................................. 16
4.3 Purchased Assets......................................................................................... 16
4.4 Financial Information.................................................................................... 17
4.5 Certain Taxes............................................................................................ 17
4.6 Assumed Contracts........................................................................................ 17
4.7 Tangible Property........................................................................................ 17
4.8 Legal Proceedings........................................................................................ 18
4.9 Insurance................................................................................................ 18
4.10 Permits.................................................................................................. 18
4.11 Regulatory Compliance.................................................................................... 19
4.12 Labor, Employment and Employee Benefit Matters........................................................... 19
4.13 No Brokers or Finders.................................................................................... 20
4.14 Environmental Compliance................................................................................. 20
4.15 Year 2000 Compliance..................................................................................... 21
ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF BUYER.
5.1 Organization and Related Matters......................................................................... 21
5.2 Authorization............................................................................................ 21
5.3 No Conflicts............................................................................................. 21
5.4 No Brokers or Finders.................................................................................... 21
ARTICLE 6 COVENANTS WITH RESPECT TO CONDUCT PRIOR TO CLOSING.
6.1 Access................................................................................................... 22
6.2 Material Adverse Changes................................................................................. 22
6.3 Conduct of Operations.................................................................................... 22
6.4 Notification of Certain Matters.......................................................................... 24
6.5 Permits and Approvals.................................................................................... 24
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TABLE OF CONTENTS
(continued)
Page
6.6 Third Party Consents..................................................................................... 24
6.7 Certain Filings.......................................................................................... 24
6.8 Environmental Due Diligence.............................................................................. 24
6.9 Management Agreement..................................................................................... 25
6.10 Amendment of Lease....................................................................................... 25
6.11 WARN Act................................................................................................. 25
ARTICLE 7 ADDITIONAL CONTINUING COVENANTS.
7.1 Employment Matters....................................................................................... 25
7.2 Proration Payments....................................................................................... 26
ARTICLE 8 CONDITIONS OF PURCHASE.
8.1 General Conditions....................................................................................... 26
8.2 Conditions to Obligations of Buyer....................................................................... 27
8.3 Conditions to Obligations of Seller...................................................................... 28
ARTICLE 9 TERMINATION OF OBLIGATIONS; SURVIVAL.
9.1 Termination of Agreement................................................................................. 28
9.2 Effect of Termination.................................................................................... 29
ARTICLE 10 INDEMNIFICATION.
10.1 Obligations of Seller.................................................................................... 29
10.2 Obligations of Buyer..................................................................................... 30
10.3 Notice of Claim.......................................................................................... 30
10.4 Direct Claims............................................................................................ 30
10.5 Third Party Claims....................................................................................... 30
10.6 Settlement of Third Party Claims......................................................................... 31
10.7 Cooperation.............................................................................................. 31
10.8 Survival................................................................................................. 31
10.9 Not Exclusive Remedy..................................................................................... 32
ARTICLE 11 GENERAL.
11.1 Modification and Amendment............................................................................... 32
11.2 Schedules; Exhibits; Integration......................................................................... 32
11.3 Arbitration.............................................................................................. 32
11.4 Governing Law............................................................................................ 33
11.5 Assignment............................................................................................... 33
11.6 Headings................................................................................................. 33
11.7 Telecopy; Counterparts................................................................................... 33
11.8 Publicity and Reports.................................................................................... 34
11.9 Confidentiality.......................................................................................... 34
11.10 Third Parties............................................................................................ 34
11.11 Notices.................................................................................................. 34
11.12 Expenses................................................................................................. 36
11.13 Waiver................................................................................................... 36
11.14 Attorneys' Fees.......................................................................................... 36
11.15 Representation By Counsel; Interpretation................................................................ 36
11.16 Severability............................................................................................. 36
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TABLE OF CONTENTS
(continued)
Page
11.17 No Consequential Damages................................................................................. 36
11.18 Further Assurances....................................................................................... 37
11.19 Official Language........................................................................................ 37
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DRAFT
EXHIBITS
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Exhibit A Bill of Sale and Assignment
Exhibit B Assignment of Leases
Exhibit C Assignment of Contracts
Exhibit D Assumption Agreement
SCHEDULES
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Schedule 1.1A Facility
Schedule 1.1B Leased Real Property
Schedule 2.2(a) Purchased Assets
Schedule 2.2(a)(v) Assumed Contracts
Schedule 2.2(b) Excluded Assets
Schedule 2.3(b)(ii) Assumed Liabilities
Schedule 4.7(a) Encumbrances
Schedule 4.7(b) Leased Real Property
Schedule 4.8 Legal Proceedings
Schedule 4.9 Insurance
Schedule 4.10 Approvals and Permits
Schedule 4.12(a) Employment Matters
Schedule 4.12(b) Employee Benefit Plans
Schedule 4.14 Environmental Matters
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ASSET PURCHASE OPTION AGREEMENT
THIS ASSET PURCHASE OPTION AGREEMENT (this "Agreement") is made and entered
into as of March 26, 1999 by and among CYPRESS BIOSCIENCE, INC., a Delaware
corporation ("Seller"), FRESENIUS HEMOTECHNOLOGY, INC., a Delaware corporation
("Buyer"), and FRESENIUS AKTIENGESELLSCHAFT, a German corporation and the parent
of Buyer ("Fresenius AG"), as guarantor of Buyer's obligations hereunder (as set
forth herein).
W I T N E S S E T H
WHEREAS, Fresenius AG, Seller and Buyer have entered into a Master
Agreement dated as of March 4, 1999 (the "Master Agreement"), which contemplates
that the parties will enter into a series of agreements in connection with
certain related transactions, as more particularly provided therein;
WHEREAS, Seller has developed a Product (as defined herein) for the
treatment of certain immune disorders through extra-corporeal filtration of
human plasma;
WHEREAS, Seller leases and operates facilities in Redmond, Washington
(collectively, the "Facility") for the manufacture of the Product; and
WHEREAS, in reliance upon the representations, warranties and covenants of
Seller set forth herein, Buyer desires to acquire an option to purchase the
Facility and the Purchased Assets (as defined herein) from Seller and, upon
exercise of such option, to assume certain liabilities, and Seller is willing to
grant such option to Buyer, all as more fully set forth herein.
NOW THEREFORE IN CONSIDERATION of the mutual promises and covenants
contained in this agreement, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties agree as
follows:
ARTICLE 1
DEFINITIONS
1.1 Definitions.
As used in this Agreement and the Exhibits and Schedules delivered
pursuant to this Agreement, the following definitions shall apply.
"Action" means any action, complaint, investigation (of which Seller has
actual knowledge), petition, suit or other proceeding, whether civil or
criminal, in law or in equity, or before any arbitrator or Governmental Entity.
"Affiliate" means a Person that directly or indirectly, through one or more
intermediaries, controls, or is controlled by, or is under common control with,
a specified Person.
"Agreement" has the meaning set forth in the Preamble hereto.
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"Approval" means any approval, authorization, consent, qualification or
registration, or any waiver of any of the foregoing, required to be obtained
from, or any notice, statement or other communication required to be filed with
or delivered to, any Governmental Entity or any other Person.
"Associate" of a Person means:
(a) a corporation or organization (other than a party to this Agreement) of
which such person is a director, an officer or partner or is, directly or
indirectly, the beneficial owner of 10% or more of any class of equity
securities;
(b) any trust or other estate in which such person has a substantial
beneficial interest or as to which such person serves as trustee or in a similar
capacity; and
(c) any relative or spouse of such person or any relative of such spouse.
"Assumed Contracts" has the meaning set forth in Section 2.2(a).
"Assumed Liabilities" has the meaning set forth in Section 2.3(b).
"Auditors" means Ernst & Young LLP, independent public accountants to
Seller.
"Basic Price" means (a) $3,300,000 plus (b) the product of $100,000 times
the number of days between the date of execution of this Agreement and March 31,
1999 divided by 31, minus (c) if the Closing Date occurs prior to December 31,
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1999 the product of the number of calendar months (including any fraction of a
calendar month) between the Closing Date and December 31, 1999 times $100,000.
The forgoing notwithstanding, if the Closing Date occurs after December 31,
1999, the Basic Price shall be $2,400,000, without adjustment.
"Buyer" has the meaning set forth in the Preamble hereto.
"Claim" has the meaning set forth in Section 10.3.
"Closing" means the consummation of the transaction contemplated by this
Agreement.
"Closing Date" means, for purposes of this Agreement, the date fixed as the
Closing Date in Buyer's notice of exercise delivered pursuant to Section 2.1
(b), or such other date as shall be fixed by the parties for the Closing.
"Code" means the Internal Revenue Code of 1986, as amended, and the
regulations thereunder.
"Company Reports" has the meaning set forth in the Securities Purchase
Agreement.
"Contract" means any arrangement, bond, commitment, franchise, indemnity,
indenture, instrument, lease (including any real estate lease), license or
understanding, whether or not in writing.
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"Cost of Goods Sold" has the meaning set forth in the License and
Distribution Agreement.
"Direct Claim" has the meaning set forth in Section 10.3.
"Dispute" has the meaning set forth in Section 11.3.
"EMF Lease" means the sublease for certain office space and storage space
at Redmond, Washington, between Seller and EMF.
"Encumbrance" means any claim, charge, lease, covenant, easement,
encumbrance, security interest, lien, option, pledge, rights of others, or
restriction (whether on voting, sale, transfer, disposition or otherwise),
whether imposed by agreement, understanding, law, equity or otherwise, except
for any restrictions on transfer generally arising under any applicable federal
or state securities law.
"Environmental Claim" means any investigation, notice, notice of violation,
claim, action, suit, proceeding, demand, abatement order or other order or
directive (conditional or otherwise), by any governmental authority or any other
Person, arising (i) pursuant to or in connection with any actual or alleged
violation of any Environmental Law, (ii) in connection with any Hazardous
Materials or any actual or alleged Hazardous Materials Activity, or (iii) in
connection with any actual or alleged damage, injury, threat or harm to health,
safety, natural resources or the environment.
"Environmental Consultant" shall have the meaning set forth in Section
6.10.
"Environmental Expenses" has the meaning set forth in Section 10.1(f).
"Environmental Laws" means all Laws relating to pollution, the protection
of safety, human health or the environment, including, but not limited to, any
requirement pertaining to the manufacture, processing, distribution, use,
treatment, storage, disposal, transportation, handling, reporting, licensing,
permitting, investigation or remediation of materials that are or may constitute
a threat to human health or the environment, including, without limitation, the
Comprehensive Environmental Response, Compensation, and Liability Act (42 U.S.C.
(S) 9601 et seq.), the Hazardous Material Transportation Act (49 U.S.C. (S)
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1801 et seq.), the Resource Conservation and Recovery Act (42 U.S.C. (S) 6901 et
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seq.), the Federal Water Pollution Control Act (33 U.S.C. (S) 1251 et seq.), the
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Clean Air Act (42 U.S.C. (S) 7401 et seq.), the Toxic Substances Control Act (15
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U.S.C. (S) 2601 et seq.), the Safe Drinking Water Act (42 U.S.C. (S) 300f et
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seq.), the Occupational Safety and Health Act (29 U.S.C. (S) 651 et seq.), and
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the Atomic Energy Act (42 U.S.C. (S) 2011 et seq.), as such laws have been
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amended or supplemented, and each similar federal, state or local statute, and
each rule and regulation promulgated under such federal, state and local laws.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and the related regulations and published interpretations.
"ERISA Controlled Group" has the meaning set forth in Section 4.15(b).
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"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Excluded Assets" has the meaning set forth in Section 2.2(a).
"Excluded Liabilities" has the meaning set forth in Section 2.3(a).
"Expiration Date" means December 31, 2000.
"Facility" has the meaning set forth in the Recitals hereto, as described
on Schedule 1.1A.
"FDA" means the United States Food and Drug Administration.
"Fresenius Parties" means Fresenius AG and Buyer.
"Furniture and Equipment" means all equipment (including movable
equipment), vehicles, furniture or furnishings that are held or used by Seller
in or ancillary to the Operations (other than Excluded Assets), including all
such equipment, vehicles, furniture or furnishings that have been fully
depreciated for accounting purposes.
"GAAP" means generally accepted accounting principles in the United States,
as in effect from time to time.
"GMP" means, (i) with respect to the United States, the code of
manufacturing practices known from time to time as Current Good Manufacturing
Practices publishing the FDA, and (ii) with respect to any jurisdiction within
the Non-U.S. Territory, any comparable manufacturing code, rule, regulations or
practices published by the Territorial Regulator for such jurisdiction.
"Governmental Entity" means any government or any agency, bureau, board,
directorate, commission, court, department, official, political subdivision,
tribunal or other instrumentality of any government, whether federal, state or
local, domestic or foreign.
"Hart-Scott-Rodino Act" means the Hart-Scott-Rodino Antitrust Improvements
Act of 1976, as amended, and the related regulations and published
interpretations.
"Hazardous Material" means (i) any chemical, material or substance at any
time defined as or included in the definition of "hazardous substances",
"hazardous wastes", "hazardous materials", "extremely hazardous waste", "acutely
hazardous waste", "radioactive waste", "biohazardous waste", "pollutant", "toxic
pollutant", "contaminant", "restricted hazardous waste", "infectious waste",
"toxic substances", or any other term or expression intended to define, list or
classify substances by reason of properties harmful to health, safety or the
indoor or outdoor environment (including harmful properties such as
ignitability, corrosivity, reactivity, carcinogenicity, toxicity, reproductive
toxicity, "TCLP toxicity" or "EP toxicity" or words of similar import under any
applicable Environmental Laws); (ii) any oil, petroleum, petroleum fraction or
petroleum derived substance; (iii) any drilling fluids, produced waters and
other wastes associated with the exploration, development or production of crude
oil, natural gas or geothermal resources; (iv) any flammable substances or
explosives; (v) any radioactive materials; (vi) any asbestos-containing
materials; (vii) urea formaldehyde foam insulation; (viii) electrical equipment
which contains any oil or dielectric fluid containing polychlorinated biphenyls;
(ix) pesticides;
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and (x) any other chemical, material or substance, exposure to which is
prohibited, limited or regulated by any governmental authority pursuant to
Environmental Laws.
"Hazardous Materials Activity" means any past, current, or threatened
activity, event or occurrence involving any Hazardous Materials, including the
use, manufacture, possession, storage, holding, presence, existence, location,
Release, threatened Release, discharge, placement, generation, transportation,
processing, construction, treatment, abatement, removal, remediation, disposal,
disposition or handling of any Hazardous Materials, and any corrective action or
response action with respect to any of the foregoing.
"Hazardous Materials Claim" has the meaning set forth in Section 10.1(f).
"Hired Employee" has the meaning set forth in Section 7.2(b).
"Historical Financial Information" has the meaning set forth in Section
4.4(a).
"Indemnifiable Claim" means any Loss for or against which any party is
entitled to indemnification under this Agreement.
"Indemnified Party" has the meaning set forth in Section 10.3.
"Indemnifying Party" has the meaning set forth in Section 10.3.
"Information Systems and Equipment" means all computer hardware, firmware
and software, as well as other information processing systems, or any equipment
containing embedded microchips, whether directly owned, licensed, leased,
operated or otherwise controlled by Seller or any of its Affiliates, including
through third-party service providers, and which, in whole or in part, are used,
operated, relied upon, or integral to, the Operations.
"Inventory" has the meaning set forth in Section 2.2(a).
"IRS" means the Internal Revenue Service or any successor entity.
"Know-How" has the meaning set forth in the License and Distribution
Agreement.
"Law" means any constitutional provision, statute or other law, rule,
regulation, or interpretation of any Governmental Entity and any Order.
"Leased Real Property" means all real property subject to a leasehold or
subleasehold estate located, held or used in or ancillary to the Operations and
described on Schedule 1.1B hereto.
"License and Distribution Agreement" means the License and Distribution
Agreement of even date herewith by and among Buyer, Seller and Fresenius AG.
"Line of Credit" means the credit extended by Fresenius AG to Seller on the
date of this Agreement and from time to time thereafter pursuant to the
promissory note in the form annexed to the Master Agreement.
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"Loss" means any demand, claim, Action, loss, damage, liability, penalty,
Tax, cost or expense.
"Master Agreement" has the meaning set forth in the Recitals hereto.
"Non-U.S. Territory" has the meaning set forth in the License and
Distribution Agreement.
"Operating Losses" has the meaning set forth in Section 2.7.
"Operations" means the operation of the Facility by Seller for the
manufacture of the Product.
"Option" means the option to acquire the Facility and the Purchased Assets
granted to Buyer by Seller pursuant to this Agreement.
"Order" means any decree, injunction, judgment, order, ruling, assessment
or writ from any Governmental Entity.
"Patents" has the meaning set forth in the License and Distribution
Agreement.
"Permit" means any license, permit, franchise, certificate of authority, or
order, or any waiver of the foregoing, required to be issued by any Governmental
Entity.
"Person" means an association, a corporation, an individual, a partnership,
a trust or any other entity or organization, including a Governmental Entity.
"Plans" has the meaning set forth in Section 4.15(a).
"Prepaid Expenses" has the meaning set forth in Section 2.2(a).
"Product" has the meaning set forth in the License and Distribution
Agreement.
"Purchase Price" has the meaning set forth in Section 2.4.
"Purchased Assets" has the meaning set forth in Section 2.2(a).
"Real Property" means all Purchased Assets consisting of real property,
appurtenances thereto, rights in connection therewith, and any interest therein,
including without limitation leasehold estates.
"Remedial Work" has the meaning set forth in Section 6.11.
"Repayment Note" means a promissory note of Seller to the order of
Fresenius AG having an initial principal amount equal to the principal amount
outstanding under the Line of Credit on the Expiration Date minus $1,000,000,
maturing on the third anniversary of the Expiration Date, payable in 12 equal
quarterly installments of principal, together with interest on the unpaid
principal balance at 8.5% per annum, and secured by the same collateral as the
Line of Credit.
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"Retirement Plans" has the meaning set forth in Section 4.15(g).
"Returns" has the meaning set forth in Section 4.6(a).
"Security Agreement" means the Security Agreement of even date herewith in
the form annexed to the Master Agreement.
"Securities Purchase Agreement" means the Securities Purchase Agreement of
even date herewith between Seller and Fresenius AG.
"Seller" has the meaning set forth in the Preamble hereto.
"Steering Committee" means the Steering Committee established pursuant to
the License and Distribution Agreement.
"Subsidiary" means, with respect to any Person, any corporation,
partnership, limited liability company, association, joint venture or other
business entity of which more than 50% of the total voting power of shares of
stock or other ownership interests entitled (without regard to the occurrence of
any contingency) to vote in the election of the Person or Persons (whether
directors, managers, trustees or other Persons performing similar functions)
having the power to direct or cause the direction of the management and policies
thereof is at the time owned or controlled, directly or indirectly, by that
Person or one or more of the other Subsidiaries of that Person or a combination
thereof.
"Tax" means any foreign, federal, state, county or local income, sales and
use, excise, franchise, real and personal property, transfer, gross receipt,
capital stock, production, business and occupation, disability, employment,
payroll, severance or withholding tax or charge imposed by any Governmental
Entity, any interest and penalties (civil or criminal) related thereto or to the
nonpayment thereof, and any Loss in connection with the determination,
settlement or litigation of any tax liability.
"Tax Return" means a report, return or other information required to be
supplied to a Governmental Entity with respect to Taxes including, where
permitted or required, combined or consolidated returns for any group of
entities.
"Termination Date" means the specific date first set forth in Section 9.1.
"Territory" has the meaning set forth in the License and Distribution
Agreement.
"Territorial Regulator" means, with respect to any jurisdiction within the
Territory, the agency or organization performing functions and having authority
comparable to the functions and authority of the FDA with respect to the
authorization of the testing and marketing of medical devices or biological
products.
"Third Party" has the meaning set forth in Section 10.3.
"Third Party Claim" has the meaning set forth in Section 10.3.
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"Trademarks" has the meaning set forth in the License and Distribution
Agreement.
"Transaction Proposal" has the meaning set forth in Section 6.12(b).
"U.S. Territory" has the meaning set forth in the License and Distribution
Agreement.
"Year 2000 Compliant" means that all Information Systems and Equipment
accurately process and will accurately process date data (including, but not
limited to, calculating, comparing and sequencing), before, during and after the
year 2000, as well as same and multi-century dates, or between the years 1999
and 2000, that when used in combination with, or interfacing with, other
Information Systems and Equipment, shall accurately accept, release and exchange
date data, and shall in all material respects continue to function in the same
manner as it performs as of the date hereof and shall not otherwise impair the
accuracy or functionality of Information Systems and Equipment or have a
material adverse effect on the conduct of the Operations.
1.2 Interpretation. For all purposes of this Agreement, except as
otherwise expressly provided,
(a) the terms defined in this Article I have the meanings assigned to them
in this Article I and include the plural as well as the singular,
(b) all accounting terms not otherwise defined herein have the meanings
assigned under United States generally accepted accounting principles,
(c) all references in this Agreement to designated "Articles," "Sections"
and other subdivisions are to the designated Articles, Sections and other
subdivisions of the body of this Agreement,
(d) pronouns of either gender or neuter shall include, as appropriate, the
other pronoun forms,
(e) the words "herein," "hereof" and "hereunder" and other words of similar
import refer to this Agreement as a whole and not to any particular Article,
Section or other subdivision, and
(f) all references to "$" or "dollars", shall refer to U.S. dollars.
ARTICLE 2
GRANT OF OPTION FOR PURCHASE OF ASSETS, ASSUMPTION OF LIABILITIES
AND RELATED TRANSACTIONS
2.1 Grant and Exercise of Option
(a) Grant and Exercise of Option. Subject to the terms and conditions of
this Agreement, Seller hereby grants to Buyer an option (the "Option") to
acquire the Purchased Assets and the Facility for the Purchase Price. The Option
shall be exercisable at any time
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commencing on the date of FDA pre-market approval for the Product for treatment
of rheumatoid arthritis and until the Expiration Date.
(b) Manner of Exercise. If Buyers wishes to exercise the Option, Buyer
shall deliver written notice to such effect to Seller in the manner provided for
the delivery of notices pursuant to this Agreement. Such notice shall specify a
Closing Date for the consummation of the purchase and sale of the Purchased
Assets, which date shall be not less than 30 days following the date on which
such notice is delivered by Buyer. Subject to the provisions of Article 8 and
Article 9, any such notice shall be irrevocable.
2.2 Purchase and Sale of Assets.
(a) Purchased Assets. Subject to the terms and conditions of this
Agreement, upon exercise of the Option by Buyer, on the Closing Date, Seller
shall sell, convey, assign, transfer and deliver to Buyer, and Buyer shall
purchase, acquire and accept from Seller, all of the assets, properties, rights,
privileges, claims and contracts of every kind and nature, real and personal,
absolute or contingent, wherever located, owned or leased by Seller at the
Closing Date and held or used in connection with the Operations (the "Purchased
Assets"), except the assets specifically identified in Section 2.2(b) (the
"Excluded Assets"). The Purchased Assets shall include, but shall not be
limited to, the items set forth on Schedule 2.2(a), attached hereto and
incorporated herein by reference, except as changed by assets acquired or
disposed of in accordance with Section 6.3 after the date hereof, and also shall
include the following:
(i) Leasehold title to the Leased Real Property;
(ii) All fixtures and improvements attached to any Real Property in
which Seller has a leasehold interest.
(iii) All Furniture and Equipment.
(iv) Buyer will purchase all inventory of usable goods relating to
the manufacture of the Product, including all merchandise, finished goods,
work-in-process, stores and supplies as of the Closing Date (the
"Inventory") as follows:
(A) Finished goods up to a quantity equal to the actual sales for the four
(4) month period ending on the last day of the month immediately preceding the
month in which the Closing Date occurs valued at Cost of Goods Sold as defined
in the License and Distribution Agreement.
(B) Finished goods in excess of four (4) month's inventory at Seller's book
value calculated in accordance with GAAP and consistent with Seller's historical
practices.
(C) Work-in-process up to a quantity equal to the forecasted net sales over
the next four (4) months (with such forecast subject to review and approval by
the Steering Committee) valued at Sellers book value.
(D) Work-in-process in excess of the four (4) month forecast valued at book
value less twenty percent (20%).
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(E) Stores, supplies and raw materials valued at the lower of cost or book
value, determined in accordance with GAAP consistent with Seller's past
practices.
(v) To the extent permitted by Law (and other than as included in
"Excluded Assets" below), all of Seller's rights and interests arising
under or in connection with Contracts to which Seller is a party and which
relate to the Operations or other documents relating to the Operations,
each as set forth on Schedule 2.2(a)(v), excluding the Strahilevitz
Agreement and the D&N Associates Agreement, as such terms are defined in
the License and Distribution Agreement (collectively, the "Assumed
Contracts").
(vi) Seller's prepaid expenses and all charges, deposits, sums and
fees made by Seller as of the date hereof, including utility deposits, each
as set forth on Schedule 2.2(a) ("Prepaid Expenses"), excluding, however,
Seller's letter of credit posted in connection with its sublease of the
Facility, together with any additions thereto and subject to any reductions
therefrom made or accrued by Seller in operating the Operations in the
ordinary course and in compliance with Section 6.3 hereof after the date
hereof through the Closing Date.
(vii) All Permits and Approvals required for the manufacture of
the Product at the Facility, each as set forth on Schedule 2.2(a), to the
extent assignable.
(viii) To the extent permitted by Law (and other than as included
in "Excluded Assets" below), all business and financial records, including
all supplier and vendor lists, personnel records, files, books and
documents relating to the Operations and all rights thereto.
(ix) Any software used at the Facility for or in connection with the
manufacture of the Product.
(x) All other assets and property of any kind used at the Facility
for or in connection with for the manufacture of the Product.
(b) Excluded Assets. The assets that constitute Excluded Assets shall
include only the items set forth on Schedule 2.2(b) and the following:
(i) The consideration delivered to Seller pursuant to this
Agreement, and all cash and cash equivalents of Seller.
(ii) Seller's accounts receivable.
(iii) Provider numbers and government payor agreements.
(iv) Corporate minute books and Tax Returns.
(v) The Patents, Trademarks and Know-How.
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(vi) All FDA pre-market approvals and applications with regard to the
Product and other Permits and Approvals related to the marketing of the
Product in the U.S. Territory.
(vii) Rights of Seller under this Agreement and any pre-Closing
causes of action relating to the operation of the Operations.
(viii) Loans, guarantees and extensions of credit, as well as
commitments to make loans, guarantees and extensions of credit, to or for
the benefit of any Affiliate, director, officer, employee, stockholder or
any of their respective Associates or Affiliates.
(ix) Investments in other Persons.
(x) Corporate and trade names of Seller.
(xi) All goodwill of Seller.
(xii) All equipment used solely for the manufacture of Seller's
product Cyplex, as set forth on Schedule 2.2(b).
2.3 Assumption of Certain Liabilities.
(a) Liabilities Not Assumed. Except for the liabilities and obligations
specifically assumed pursuant to and identified in Section 2.3(b) below, Buyer
shall not assume, shall not take subject to and shall not be liable for, any
liabilities or obligations of any kind or nature, whether absolute, contingent,
accrued, known or unknown, of Seller or any Affiliate of Seller (the "Excluded
Liabilities") including, but not limited to, the following:
(i) Any liabilities or obligations incurred arising from or out of or
in connection with Seller's operations, the condition of its assets or
places of business, its ownership of the Purchased Assets, or the issuance,
sale, repayment or repurchase of any of its securities prior to the Closing
Date.
(ii) Any liabilities or obligations incurred, arising from or out of,
in connection with or as a result of claims made by or against Seller
whether before or after the Closing Date that arise out of events prior to
the Closing Date, including any and all liabilities or obligations relating
to investigations by any Governmental Entity.
(iii) Any liabilities or obligations incurred, arising from or out
of, in connection with or as a result of any alleged or actual defect in
any Product or in connection with any alleged or actual breach of warranty
(whether expressed or implied) in relation to any Product sold or
manufactured by Seller prior to the Closing Date.
(iv) Any liabilities or obligations (whether assessed or unassessed)
of Seller for any Taxes arising from the conduct of the Operations prior to
the Closing Date.
(v) All fees and expenses of Seller in connection with the
transactions contemplated herein.
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(vi) Any liabilities or obligations to former or current officers,
directors, employees or Affiliates of Seller, including without limitation
any liabilities or obligations of Seller in connection with any employee
benefit plans or collective bargaining, labor or employment agreement or
other similar arrangement or obligations in respect of retiree health
benefits.
(vii) Any liabilities or obligations to any stockholders or former
stockholders of Seller.
(viii) Any liabilities or obligations of Seller incurred, arising
from or out of or in connection with this Agreement.
(ix) All indemnification obligations of Seller relating to acts or
omissions prior to the Closing Date.
(x) Any liabilities relating to any noncompliance with applicable
healthcare laws or regulations which relate to the Operations prior to the
Closing Date.
(xi) Any liabilities or obligations relating to Excluded Assets.
(xii) The EMF Lease and any liabilities under the EMF Lease
including, without limitation, rent, additional rent and charges or
penalties for any early termination of the EMF Lease.
(b) Assumed Liabilities. Notwithstanding Section 2.3(a), on the Closing
Date, Buyer shall assume only those liabilities and obligations (the "Assumed
Liabilities"):
(i) arising under the assigned leases for Seller's Leased Real
Property and the Assumed Contracts with respect to events, facts and
circumstances occurring on or after the Closing Date or accruing on or
after the Closing Date and all obligations to pay deposits or other
security for such leases.
(ii) relating to certain current operating expenses of the Operations
incurred in the ordinary course of Operations consistent with past practice
which are not included in Seller?s Cost of Goods Sold (as defined in the
License and Distribution Agreement) at the Closing Date, but which would be
included in Buyer's Cost of Goods Sold (as defined in the License and
Distribution Agreement) after the Closing Date, as set forth on Schedule
2.3(b)(ii).
(iii) relating to Buyer's use of the Purchased Assets and
operation of the Facility on or after the Closing Date.
2.4 Purchase Price and Allocation.
(a) Purchase Price. Subject to Section 2.4(b), the total purchase price
(the "Purchase Price") to be paid to Seller by Buyer at the Closing for the
Purchased Assets shall be the assumption of the Assumed Liabilities by Buyer,
plus an amount equal to the sum of (i) the Basic Price, (ii) Seller's Inventory
as of the Closing Date, valued in accordance with Section
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2.2(a)(iv), (iii) the aggregate amount advanced by Fresenius AG under the Line
of Credit after the date hereof for capital expenditures at the Facility, and
(iv) Seller's Prepaid Expenses. For purposes of the foregoing determination, if
Buyer and Seller do not agree on the Closing Date Inventory Value, they will
seek the input of a mutually appointed public accounting firm.
(b) Allocation. On or prior to the Closing Date, Buyer and Seller shall
agree upon and set forth in a Schedule the allocation of the Purchase Price
among the Purchased Assets at fair market value. Buyer and Seller agree that
each of them shall report the transactions contemplated by this Agreement for
income tax purposes in accordance with the Schedule described in this Section
2.4(b), pursuant to Section 1060 of the Code and the regulations thereunder, and
agree not to take, in any filing with or accompanying any Tax Return reporting
any part of the transaction undertaken herein, or in filing or books and records
for corporate or accounting purposes, a position inconsistent with such
allocations.
2.5 Payment of Purchase Price.
(a) On the Closing Date, Buyer shall pay the Purchase Price by an offset of
the Purchase Price against Seller's obligation to Fresenius AG under the Line of
Credit, and:
(i) if the Purchase Price exceeds the aggregate principal amount
outstanding on the Closing Date under the Line of Credit, Buyer shall pay
such excess to Seller by wire transfer of such amount in immediately
available funds to an account designated by Seller for such purpose; or
(ii) if the aggregate principal amount outstanding on the Closing
Date under the Line of Credit exceeds the Purchase Price, Seller shall pay
such excess to Fresenius AG (or, upon the instructions of Fresenius AG to
Buyer) by wire transfer of such amount in immediately available funds to an
account designated by Fresenius AG (or Buyer, as the case may be) for such
purpose.
(b) Notwithstanding the provisions of Section 2.5(a), Buyer may elect to
pay all or any portion of the Purchase Price to Seller in cash and the balance,
if any, through set off against Seller's obligations under the Line of Credit.
In the event Buyer elects to make any such cash payment, Seller shall
immediately pay to Fresenius AG an amount equal to the amount, if any, by which
such cash payment exceeds the amount, if any, due to Seller pursuant to Section
2.5(a)(i).
2.6 Expiration of Option. In the event that Buyer shall not have
exercised the Option on or prior to the Expiration Date, the Option and this
Agreement shall terminate except for the provisions of this Agreement which
survive such termination pursuant to the express terms hereof. Upon such
termination, Seller shall deliver to Fresenius AG, in full satisfaction of
Seller's payment obligations under the Line of Credit, the Repayment Note.
2.7 Post Closing Adjustment
(a) Seller acknowledges that Operating Losses with respect to the Facility
incurred during 1999 shall be borne by Seller. In the event that (i) the
Closing Date occurs on or
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prior to December 31, 1999 and (ii) Seller in good faith believes that the
Operating Losses required to be borne by Seller exceed the difference between
the Basic Price and $2,400,000, Seller may request that the Steering Committee
consider whether, in light of the facts and circumstances (including the amount
of the excess) and other equitable considerations, the Purchase Price should be
increased by all or any part of such excess Operating Losses. Any such request
may be submitted to the Steering Committee prior to the Closing Date for
consideration prior to the Closing Date and may be submitted to the Steering
Committee no later than the 90/th/ day after the Closing Date, whose decision
with respect to such requested Purchase Price increase shall be final.
(b) As used in this Agreement "Operating Losses" shall mean, all losses
incurred by Buyer in the operation of the Facility and the Operations between
the Closing Date and December 31, 1999.
ARTICLE 3
CLOSING
3.1 Closing Date. Upon the terms and subject to the conditions set
forth in this Agreement, the Closing of the transaction shall take place at the
offices of [O'Melveny & Myers LLP, 153 East 53rd Street, New York, New York,
10022], on the Closing Date, or at such other location or time as Seller and
Buyer may agree in writing.
3.2 Items to be Delivered at the Closing By Seller. At the Closing,
Seller shall deliver or cause to be delivered to Buyer:
(a) A Bill of Sale and Assignment, in substantially the form of Exhibit A;
(b) For each Lease with respect to the Facility, an Assignment and
Assumption of Lease, in substantially the form of Exhibit B;
(c) An Assignment of Contracts, in substantially the form of Exhibit C;
(d) An Assumption Agreement, in substantially the form of Exhibit D;
(e) Copies of resolutions duly adopted by Seller, authorizing and approving
Seller's performance of the transactions contemplated hereby and the execution
and delivery of this Agreement and the documents described herein, certified as
true and of full force and effect as of Closing, by the appropriate officers of
Seller;
(f) A certificate of Seller certifying that the conditions set forth in
Section 8.2 have been satisfied;
(g) Certificates of incumbency for the respective officers of Seller
executing this Agreement and any other agreements or instruments contemplated
herein as of the Closing Date;
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(h) Certificates of existence and good standing of Seller from its state of
organization and the state in which the Facility is located dated the most
recent practical date prior to Closing;
(i) The opinion of Seller's counsel as provided by Section 8.2 hereof;
(j) With respect to the Purchased Assets, a recent UCC lien search showing
no liens on any fixtures attached to any of the Purchased Assets except for
liens under the Security Agreement, Liens which shall be released at or prior to
Closing Liens securing capitalized lease obligations included in the Assumed
Contracts or, if Buyer elects to assume Seller's indebtedness to Silicon Valley
Bank, the Liens securing such indebtedness;
(k) Any third party consents or Approvals obtained in accordance with
Section 6.6 herein;
(l) Any amount due from Seller to Fresenius AG or Buyer pursuant to Section
2.5(a), clause (ii) and/or Section 2.5(b); and
(m) Such other instruments and documents as are reasonably necessary to
satisfy the conditions precedent to Buyer's obligations hereunder.
3.3 Items to be Delivered at the Closing by Buyer. At the Closing,
Buyer shall deliver to Seller:
(a) The promissory note evidencing the Line of Credit, marked "paid";
(b) A Bill of Sale and Assignment, in substantially the form of Exhibit A;
(c) for each Lease with respect to the Facility, an Assignment and
Assumption of Leases, in substantially the form of Exhibit B;
(d) An Assignment of Contracts, in substantially the form of Exhibit C;
(e) An Assumption Agreement, in substantially the form of Exhibit D;
(f) Copies of resolutions duly adopted by the board of directors of Buyer,
authorizing and approving Buyer's performance of the transactions contemplated
hereby and the execution and delivery of this Agreement and the documents
described herein, certified as true and in full force as of Closing by an
appropriate officer of Buyer;
(g) A certificate of Buyer certifying that the conditions set forth in
Section 8.3 have been satisfied;
(h) Certificates of incumbency for the respective officers of Buyer
executing this Agreement and any other agreements or instruments contemplated
herein dated as of the Closing Date;
15
(i) The opinion of Buyer's counsel as described in and provided by Section
8.3;
(j) All consents and Approvals, if any, Buyer must obtain to complete the
transactions contemplated herein;
(k) Any cash payment which Buyer elects to make pursuant to Section 2.5(b)
and any amount due from Buyer to Seller pursuant to Section 2.5(a), clause (i);
and
(l) Such other instruments and documents as are reasonably necessary to
effect the transactions contemplated hereby.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF SELLER
Except as set forth in the Seller Schedule of Exceptions delivered to
Buyer in connection with the execution and delivery of this Agreement or in
connection with the Closing, as the case may be, Seller represents, warrants and
agrees, as applicable, as follows:
4.1 Organization; Authorization. Seller is a corporation duly
organized, validly existing and in good standing under the laws of its state of
organization, with corporate power to own its properties and conduct its
business in the place and manner now conducted. Seller is duly authorized,
qualified to do business and in good standing in California and each
jurisdiction where the Purchased Assets are located, except for such failure to
so qualify as is not reasonably likely to have a material adverse effect on the
Operations or the Purchased Assets. Seller has full right, power, and authority
to enter into and perform its obligations under this Agreement. This Agreement
and the transactions contemplated hereby have been duly authorized by all
necessary corporate and stockholder action on the part of Seller, and this
Agreement has been duly and validly executed and delivered by Seller and
constitutes a legal and binding obligation of the Seller, enforceable against
Seller in accordance with its terms, except as limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws relating to or affecting
creditors' rights generally or by general principles of equity.
4.2 No Conflicts. The execution , delivery and performance of the
Agreement and documents described herein by Seller and the consummation by
Seller of the transactions contemplated by the Agreement and documents described
herein:
(a) will not violate, or constitute a breach or default (whether upon lapse
of time and/or the occurrence of any act or event or otherwise) under, the
constitutive documents or by-laws of Seller;
(b) except as set forth on Schedule 4.10, do not require any Approval of a
third party or material Approval or Permit of, or filing or registration with,
or other action by, any Governmental Entity to be made or sought by Seller or
any of its Affiliates; and
(c) assuming Approvals and Permits set forth on Schedule 4.10 are obtained,
will not conflict in any material respect with, or result in any violation of or
default under (with or without notice or lapse of time or both), or give rise to
a right of termination, cancellation,
16
acceleration or augmentation of any material obligation under an Assumed
Contract or to loss of a material benefit under, or result in the creation of
any material Encumbrance upon any of the Purchased Assets under (i) any material
contract, agreement or other instrument to which Seller or any of its Affiliates
is a party applicable to the Operations, the Facility or any of the Purchased
Assets or (ii) any Law applicable to any of the Purchased Assets.
4.3 Purchased Assets. Except for the Patents, Trademarks and Know-
How to be licensed to Buyer and Fresenius AG under the License and Distribution
Agreement, the Purchased Assets and the Excluded Assets constitute all assets
which are held or used by Seller or any of its Affiliates and reasonably
necessary for the conduct of the Operations and operation of the Facility in the
manner conducted as of the date of this Agreement.
4.4 Financial Information.
(a) Except as provided for in the most recent balance sheet (or the notes
thereto) included in the Company Reports, there are no material liabilities of
Seller relating to the Operations, the Facility or the Purchased Assets required
in accordance with GAAP to be disclosed in the financial statements included in
the Company Reports.
(b) Since the date of the most recent balance sheet included in the Company
Reports, there has not occurred any material casualty, loss, damage or
destruction to or affecting the Purchase Assets, or any other change in or
affecting the Operations, the Purchased Assets or the Assumed Liabilities that
has had a material adverse effect on the Operations, the Purchased Assets or the
Assumed Liabilities.
4.5 Certain Taxes.
(a) There are no liens for Taxes on any of the Purchased Assets. Proper and
accurate amounts have been withheld by Seller from compensation paid to
employees at the Facility for all periods prior to the date hereof in compliance
with the payroll Tax and other withholding provision of applicable Laws, and all
such amounts have been duly and validly remitted to the proper Governmental
Entity.
4.6 Assumed Contracts. Each Assumed Contract existing on the date of
this Agreement (other than open purchase orders, as to which Seller makes no
representation) (i) is valid and existing, and Seller has duly performed in all
material respects its obligations under each Assumed Contract to which it is a
party to the extent that such obligations to perform have accrued and (ii) no
material breach or default, alleged material breach or default, or event which
would (with the passage of time, notice or both) constitute a material breach or
default under any Assumed Contract by Seller or, to the knowledge of Seller, any
other party or obligor with respect thereto, has occurred.
4.7 Tangible Property.
(a) Except as set forth on Schedule 4.7, Seller has good and marketable
title to each of the Purchased Assets, free and clear of any Encumbrances.
Subject to any required Approvals, Seller has all rights, power and authority to
sell, convey, assign, transfer and deliver
17
the Purchased Assets to Buyer in accordance with the terms of this Agreement. At
the Closing, Seller shall deliver the Purchased Assets to Buyer, free and clear
of any Encumbrances. The Purchased Assets are in good working condition, except
for ordinary wear and tear and are not materially defective, except that no
representation is made with respect to Purchased Assets currently in storage.
(b) All leasehold interests used by Seller in the conduct of the Operations
are listed on Schedule 4.7. Seller does not use any other Real Property in the
conduct of the Operations. With respect to the leasehold interests listed on
Schedule 4.7, (i) each listed lease is unmodified and in full force and effect,
(ii) all rent and other charges therein have been paid to the extent they are
payable to the date hereof, (iii) Seller enjoys the quiet and peaceful
possession of the property demised thereby, (iv) Seller is not in default under
any of the terms thereof and there are no circumstances which, with the passage
of time or the giving of notice or both, would constitute an event of default
thereunder, (v) to the best of Seller?s knowledge, the lessor thereunder is not
in default under any of the terms or provisions thereof on the part of the
lessor to be observed or performed.
(c) Seller has received no written notice of any proposed special
assessments, nor any proposed material changes in land use laws affecting the
Real Property. Seller has accepted possession of the property demised pursuant
to each leasehold interest and is in actual possession thereof and has not
sublet, assigned or hypothecated its leasehold interest except as set forth on
Schedule 4.7. Seller has received no written notice of non-compliance with any
restriction encumbering any leased property, nor has Seller received written
notice of any zoning violations affecting any leased property. There is no
pending or, to Seller?s knowledge, threatened Action that would materially
interfere with the quiet enjoyment of any such leasehold by Seller.
4.8 Legal Proceedings. There is no Order or Action pending, or, to
the knowledge of Seller, threatened, against or affecting Seller or any of its
properties or assets that individually or when aggregated with one or more other
Orders or Actions has or might reasonably be expected to have a material adverse
effect on the Purchased Assets (or the right to use the Purchased Assets), the
Assumed Liabilities, Seller?s ability to perform this Agreement, or any aspect
of the transactions contemplated by this Agreement. Schedule 4.8 lists each
Order and each Action that involves a claim or potential claim of aggregate
liability in excess of $25,000 against, or that enjoins or seeks to enjoin any
activity by Seller related to the conduct of the Operations. Other than as set
forth on Schedule 4.8, Seller is not subject to any outstanding judgment, order
or decree with respect to the Purchased Assets.
4.9 Insurance. Schedule 4.9 lists each insurance policy maintained
by Seller with respect to the Purchased Assets and the Operations, and each such
policy is in full force and effect as of the date hereof. To Seller?s knowledge,
Seller is not in default with respect to its obligations under any insurance
policy maintained by it, and Seller has not been denied insurance coverage.
Except as set forth on Schedule 4.9, to Seller's knowledge, there is no
outstanding written requirement or recommendation by any insurance company that
issued any policy or by any board of fire underwriters or other similar body
(including any Governmental Entity) exercising similar functions which requires
or recommends any repairs or other work to be done or with respect to any of the
Purchased Assets
18
4.10 Permits.
(a) Seller holds all material Permits that are required by any Governmental
Entity to permit it to conduct the Operations and operate the Facility as
conducted and operated, and all such Permits are valid and in full force and
effect. Except as set forth on Schedule 4.10, all such Permits are Purchased
Assets. No violations of any such Permits have occurred or, to the knowledge of
Seller, have been alleged to have occurred.
(b) The Facility is in compliance with all Permits and Approvals required
by Law except where the failure to so comply would not be reasonably expected to
have a material adverse effect on the Operations, the Facility or the Purchased
Assets. There are no provisions in, or agreements relating to, any such Permits
and Approvals which preclude or limit in any material respect Seller from
operating the Operations as it is currently operated. There is not now pending
nor, to the knowledge of Seller, threatened, any action by or before any
Governmental Entity to revoke, cancel, rescind, modify or refuse to renew any of
the Permits and Approvals, and all of the material Permits and Approvals are in
good standing now and as of the Closing.
4.11 Regulatory Compliance.
(a) Seller is in compliance with all applicable statutes, rules,
regulations and requirements of Governmental Entities having jurisdiction over
the Facility, the Operations and the Purchased Assets, except where the failure
to so comply would not be reasonably expected to have a material adverse effect
on the Operations, the Facility or the Purchased Assets. The use and operation
of the Purchased Assets are in compliance in all material respects with all
Laws, and there are no material violations of any such Laws, except where the
failure to comply would not have a material adverse effect on the Purchased
Assets, Assumed Liabilities, the Operations or the Facility, from and after the
Closing. Seller has timely filed all material forms, applications, reports,
statements, data and other information relating to the Operations required to be
filed with Governmental Entities.
(b) Without limiting the generality of Section 4.11(a), Seller manufactures
the Product in conformity with Seller?s specifications and in compliance with
applicable regulatory requirements, including the maintenance of standards of
facility, materials, quality, control, production and safety testing in
compliance with GMP and other regulatory requirements.
19
4.12 Labor, Employment and Employee Benefit Matters.
(a) No changes in the basis for remuneration of employees of the Operations
have been made, promised or authorized by Seller since December 31, 1999, except
in the ordinary and usual course. Except as set forth on Schedule 4.12, Seller
has no written employment contracts, and no agreement of any nature that
provides for employment for any particular period of time or that provides any
restrictions upon Seller's right to terminate employment without any post-
termination payment obligation, with any Person whomsoever relating to the
Operations. Other than in the ordinary course of business, no binding
agreements have been made or entered into between Seller and any employee
involved in the Operations regarding changes in compensation, promotion or any
other change in status.
(b) Schedule 4.12 also contains a true and complete list of all agreements,
plans, arrangements and employees benefit plans which provide compensation or
benefits of a type which Buyer undertakes to provide to Hired Employees pursuant
to Section 7.1(b).
(c) The transactions contemplated by this Agreement will not constitute a
"mass layoff" under or require any actions to comply with the Worker Adjustment
and Retraining Notification Act of 1988 ("WARN act"), if it were closed within
60 days from the date hereof.
(d) Except as set forth on Schedule 4.12, as of the date hereof and solely
with respect to Seller's employees at the Facility, (i) there is no pending or
threatened employee strike, work stoppage or labor dispute, (ii) no union
representation question exists respecting any such employees, no demand has been
made for recognition by a labor organization by or with respect to any such
employees of Seller, no union organizing activities by or with respect to any
such employees are taking place, and none of such employees represented by any
labor union or organization, (iii) no collective bargaining agreement exists or
is currently being negotiated by Seller, (iv) there is no unfair practice claim
against Seller before the National Labor Relations Board, or any strike,
dispute, slowdown, or stoppage pending or, to the best of Seller's knowledge,
threatened against or involving the Operations and none has occurred and (v)
Seller is not engaged in any unfair labor practices.
4.13 No Brokers or Finders. No agent, broker, finder, or investment
or commercial banker, or other Person or firm engaged by or acting on behalf of
Seller or any of its Affiliates in connection with the negotiation, execution or
performance of this Agreement or the transactions contemplated by this
Agreement, is or will be entitled to any brokerage or finder's or similar fee or
other commission as a result of this Agreement or such transactions.
4.14 Environmental Compliance. Except as set forth in Schedule 4.14:
(a) Seller has materially complied and is in material compliance (with
respect to the Facility) with, and, to Seller?s knowledge, the Real Property and
all improvements on the Real Property are in material compliance with, all
Environmental Laws.
(b) Seller has no material liability for fines, damages, clean-up or other
remediation costs or other material liability under any Environmental Law with
respect to any of the Facility or the Real Property, nor is Seller responsible
for any liability of any other Person
20
under any Environmental Law with respect to the Facility or the Real Property.
There are no pending or, to Seller's knowledge, threatened actions, suits,
orders, claims, legal proceedings or other proceedings based on, and neither
Seller nor any of its Affiliates has received any formal or informal written
notice of any complaint, order, directive, citation, notice of responsibility,
notice of potential responsibility, or information request from any Governmental
Entity or any other Person or knows or suspects any fact(s) which would
reasonably be expected to form the basis for any such actions or notices.
(c) Seller has not conducted any Hazardous Materials Activities at the
Facility and, to Seller's knowledge, there are and have been no conditions,
occurrences, or Hazardous Materials Activities which could reasonably be
expected to form the basis of an Environmental Claim against Seller or any of
its Subsidiaries that, individually or in the aggregate, could reasonably be
expected to have a material adverse effect on the Operations or the transactions
contemplated herein.
(d) Seller has been duly issued, and currently has and will maintain
through the Closing Date, all material Approvals and Permits required under any
Environmental Law with respect to the Facility. A true and complete list of
such Permits, all of which are valid and in full force and effect, is set forth
in Schedule 4.14. Seller is in material compliance (with respect to each
Facility) with and the Real Property and all improvements on the Real Property
are in material compliance with, all Approvals and Permits. Except in
accordance with such Approvals and Permits, to Seller's knowledge there has been
no release of material regulated by such Approvals and Permits at, on, under, or
from the Real Property in violation of Environmental Laws.
(e) Assuming Buyer operates the Purchased Assets in a manner consistent
with Seller's past holding of the Purchased Assets, to Seller's knowledge, Buyer
will be able to operate the Purchased Assets and to use the Purchased Assets in
connection with the Operations in material compliance with any prospective
requirement adopted or promulgated prior to the date hereof under any
Environmental Law without material cost.
4.15 Year 2000 Compliance. Other than any commercially available off-
the-shelf software, all of the Information Systems and Equipment included in the
Purchased Assets are either Year 2000 Compliant, or any reprogramming or any
other corrective action, including the internal testing of all such Information
Systems and Equipment, will be completed and operational by June 30, 1999.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents, warrants and agrees, and Fresenius AG guarantees
such representations, warranties and agreements, as follows:
5.1 Organization and Related Matters. Buyer is a corporation duly
organized, validly existing and in good standing under the laws of Delaware.
Buyer has all necessary corporate power and authority to carry on its business
as now being conducted. Buyer
21
has the necessary corporate power and authority to execute, deliver and perform
this Agreement and any related agreements to which it is a party.
5.2 Authorization. The execution, delivery and performance of this
Agreement and any related agreements by Buyer has been duly and validly
authorized by the Board of Directors of Buyer and by all other necessary
corporate action on the part of Buyer. This Agreement constitutes the legal,
valid and binding obligation of Buyer, enforceable against Buyer in accordance
with its terms except as such enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium and other similar laws and equitable
principles relating to or limiting creditors' rights generally.
5.3 No Conflicts. The execution, delivery and performance of this
Agreement and any related agreements by Buyer will not violate the provisions
of, or constitute a breach or default whether upon lapse of time and/or the
occurrence of any act or event or otherwise under (a) the charter documents or
bylaws of Buyer, (b) any Law to which Buyer is subject or (c) any Contract to
which Buyer is a party that is material to the financial condition, results of
operations or conduct of the business of Buyer, provided that the appropriate
Approvals are received as contemplated by Section 8.1.
5.4 No Brokers or Finders. No agent, broker, finder or investment or
commercial banker, or other Person or firms engaged by or acting on behalf of
Buyer or its Affiliates in connection with the negotiation, execution or
performance of this Agreement or the transactions contemplated by this
Agreement, is or will be entitled to any broker's or finder's or similar fees or
other commissions as a result of this Agreement or such transactions.
ARTICLE 6
COVENANTS WITH RESPECT TO
CONDUCT PRIOR TO CLOSING
6.1 Access. Seller will authorize and permit Buyer and its
representatives (which term shall be deemed to include its independent
accountants and counsel) to have reasonable access during normal business hours,
upon reasonable notice and in such manner as will not unreasonably interfere
with the conduct of its businesses, to all of its properties, books, records,
operating instructions and procedures, and all other information with respect to
the Operations as Buyer may from time to time reasonably request, and to make
copies of such books, records and other documents and to discuss its businesses
with such third Persons, including, without limitation, Seller's directors,
officers, accountants and counsel, as Buyer considers necessary or appropriate
for the purposes of evaluating whether and at what time to exercise the Option
and obtaining any necessary Approvals of or Permits for the transactions
contemplated by this Agreement.
6.2 Material Adverse Changes. Seller will promptly notify Buyer of
any event of which Seller obtains knowledge which has had or might reasonably be
expected to have a material adverse effect on the Operations or any of the
Purchased Assets or Assumed Liabilities or which if known as of the date hereof
would have been required to be disclosed to Buyer.
22
6.3 Conduct of Operations. (a) Seller will not without the prior
consent in writing of Buyer, (which will not be unreasonably withheld or
delayed) or as expressly contemplated by this Agreement:
(i) conduct the Operations except in the ordinary course consistent
with past practices;
(ii) except as required by its terms, amend, terminate, renew (other
than on substantially equivalent terms) or renegotiate any lease for the
Facility or the equipment lease finance facility provided to Seller by
Silicon Valley Bank, or default (or take or omit to take any action that
with or without the giving of notice or passage of time or both, would
constitute a default) in any of its obligations or waive any material
default by another party under any of the foregoing;
(iii) enter into any material contract or commitment, or incur or
agree to incur any material liability which, in either case, is or will be
an Assumed Liability, except for those which are terminable without cause
or penalty within ninety (90) days following Closing;
(iv) by action or inaction, abandon, terminate, cancel, forfeit,
waive or release Seller's material rights, in whole or in part, with
respect to the Purchased Assets, or sell or dispose of the Purchased
Assets, or encumber any of the Purchased Assets; except (i) Encumbrances
pursuant to the Security Agreement, (ii) dispositions of property not
material in amount, or (iii) sales of Inventory and replacement of obsolete
or worn out property in the ordinary course of business;
(v) hold, store or otherwise retain Inventory except as would be
customary practice in the ordinary course of Operations or in connection
with increased Inventory requirements relating to commercial launch of the
Product, or as Licensee has expressly agreed to purchase pursuant to
Section 2.2(a)(iv);
(vi) fail to conduct the Operations in accordance with applicable
regulatory requirements, including the maintenance of standards of
facility, materials, quality, control, production and safety testing in
compliance with GMP and other regulatory requirements, and in compliance
with all approvals, licenses, permissions and permits necessary for the
conduct of the Operations;
(vii) settle any dispute or threatened dispute with any Governmental
Entity regarding the Purchased Assets in a manner that materially and
adversely affects Buyer (it being understood that the maintenance of record
retention programs with respect to the Purchased Assets shall be deemed not
to materially and adversely affect Buyer);
(viii) terminate or permit the cancellation or lapse of insurance
coverage on the Purchased Assets or related to the Operations;
(ix) terminate, amend or fail to renew or preserve any Permits
necessary for the conduct of the Operations;
23
(x) so long as the costs therefor are included in the Cost of Goods
Sold or Seller has access to borrowing under the Line of Credit, fail to
maintain or cause to be maintained in good repair, working order and
condition, ordinary wear and tear excepted, the Purchased Assets, adequate
spare parts (including, without limitation, injection molds and other items
of equipment used in the manufacture of the Product) and any other
properties material to and useful in the Operations (including, without
limitation, the Facility), nor fail to make all appropriate repairs,
renewals and replacements thereof; or
(xi) fail to comply with all applicable Environmental Laws and obtain
and comply in all material respects with and maintain any and all licenses,
approvals, notifications, registrations or permits required by applicable
Environmental Laws, except to the extent that failure to do so could not be
reasonably expected to have a material adverse effect on the Purchased
Assets or the conduct of the Operations;
(b) Seller will:
(i) provide Fresenius AG and Buyer 20 days' notice prior to the grant
of any general or uniform increase in the rates of pay or benefits to any
employee (or a class thereof) or agent or any material increase in salary
or benefits of any employee or agent or pay any bonus to any person (other
than consistent with past practices), or enter into any new employment,
collective bargaining or severance agreement; and
(ii) provide Fresenius AG and Buyer with 20 days' notice of any
merger or consolidation with any other Person or sale, transfer or other
disposition of any material assets or any liabilities.
6.4 Notification of Certain Matters. Seller shall give prompt notice
to Buyer, and Buyer shall give prompt notice to Seller, of (i) the occurrence,
or failure to occur, of any event that has caused any of their representations
or warranties contained in this Agreement to be untrue or inaccurate in any
material respect at any time from the date of this Agreement to the Closing Date
and (ii) any failure on its part to comply with or satisfy, in any material
respect, any covenant, condition or agreement to be complied with or satisfied
by it under this Agreement.
6.5 Permits and Approvals.
(a) Buyer and Seller shall take all reasonable steps to obtain all
Approvals and Permits of any Governmental Entities required of either party to
consummate the transactions contemplated by this Agreement.
(b) To the extent that any Approval of a third party with respect to any
Assumed Contract is required in connection with the transactions contemplated by
this Agreement, Seller shall use its reasonable best efforts to obtain such
Approval prior to the Closing Date.
6.6 Third Party Consents. To the extent that the Approval of a third
party with respect to any Material Contract is required in connection with the
transactions contemplated by this Agreement, Seller shall use its reasonable
best efforts to obtain such Approval prior to the
24
Closing Date (and Buyer shall cooperate with Seller to obtain such Approval),
and in the event that any such Approval is not obtained (but without limitation
on Buyer's rights under Section 8.2), Seller shall cooperate with Buyer to
ensure that Buyer obtains the benefits of each such Material Contract.
6.7 Certain Filings. Seller will make any and all filings required to
be made on its part under the Hart-Scott-Rodino Act. Buyer will make any and
all filings required to be made on its part under the Hart-Scott-Rodino Act.
Seller and Buyer shall furnish each other such necessary information and
reasonable assistance as the other may request in connection with its
preparation of necessary filings or submissions under the provisions of such
laws.
6.8 Environmental Due Diligence.
(a) Seller acknowledges that Buyer wishes to conduct environmental
investigations with respect to the Real Property and the Business which may
include, without limitation a Phase I Environmental Site Assessment (conforming
to the standard for such reports set out by the American Society for Testing and
Materials) with respect to the Real Property and an environmental compliance
audit with respect to the Operations. Any such investigations shall be
conducted at Buyer's expense. For the purpose of conducting such
investigations, Seller hereby grants to Environmental Consultant, Buyer and its
representatives an irrevocable license and authorization to, during normal
business hours and upon reasonable notice and in such manner as will not
unreasonably interfere with the conduct of Seller's business, enter upon and
inspect the Real Property, and perform such tests, including without limitation,
subsurface testing, soils and groundwater testing, and other tests which may
physically invade the Real Property, as Buyer, in its sole and reasonable
discretion, determines are necessary. If necessary to the work of the
Environmental Consultant, Seller shall use its reasonable efforts to obtain a
similar license from each landlord for the Real Property. The results of all
investigations and reports prepared by Buyer at Buyer's expense shall be and at
all times remain the property of Buyer and Buyer shall disclose to Seller and
make available to Seller the results or any other information obtained by them
in connection with such investigations and reports.
6.9 Management Agreement. Buyer and Seller agree that, on request of
either party, Buyer and Seller shall negotiate in good faith to enter into a
mutually acceptable Management Agreement pursuant to which Buyer or Fresenius AG
shall perform certain management services with respect to the Facility relating
to installation of a cost accounting system and scale-up of production of the
Product, on terms and conditions to be specified therein. Any management
services undertaken at the request of Buyer shall be provided at no charge to
Seller; any management services provided at Seller's request shall be charged to
Seller at Fresenius AG's customary charges for such services.
6.10 Amendment of Lease. Seller shall cooperate fully with Buyer in
negotiations with the respective landlords for amendments to the leases relating
to the Facility which will be assumed by Buyer at Closing, which amendments
shall be mutually acceptable to Buyer and Seller and shall (i) include a renewal
option enabling Buyer to extend the term of the relevant lease at its option for
a renewal term reasonably satisfactory to Buyer, (ii) delete any provision
requiring the delivery of a letter of credit as security, and (iii) include such
other terms as may be reasonably requested by Buyer and Fresenius AG.
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6.11 WARN Act. Seller shall comply with the applicable requirements
of the WARN Act in connection with the employment terminations described in
Section 7.1.
ARTICLE 7
ADDITIONAL CONTINUING COVENANTS
7.1 Employment Matters.
(a) As of the Closing Date, Seller shall terminate or cause its Affiliates
to terminate all employees of the Seller at the Facility, and Buyer shall offer
employment to substantially all of the employees of Seller and its Affiliates at
the Facility at compensation and benefit levels equivalent to the compensation
and benefit levels provided by Seller as of the Closing Date, except that Buyer
shall not be obligated to issue options to acquire any equity securities of
Buyer or any other person or to match Hired Employee retirement or deferred
compensation plan contributions with any such securities. Buyer and Seller
shall cooperate, at Buyer's sole expense, to structure, create and implement an
incentives plan for the retention of an agreed list of key employees at the
Facility. Seller shall be responsible for any and all severance benefits
payable under Seller?s employee benefit plans or otherwise in favor of any
employee to whom an offer of employment by Buyer is made, but not accepted.
(b) The term "Hired Employee" as used in this Agreement means an employee
of Seller or any of its Affiliates who accepts employment with Buyer as of the
Closing Date. All Hired Employees will be retained as employees-at-will (except
to the extent that such Employees are parties to contracts providing for other
employment terms, in which case such Hired Employees shall be retained in
accordance with the terms of such contracts) and Buyer shall provide such Hired
Employees with the same customary employee benefits as they receive from Seller
as of the Closing Date, except that Buyer shall not be obligated to issue
options to acquire any equity securities of Buyer or any other Person or to
match Hired Employee retirement or deferred compensation plan contributions with
any such securities. Buyer shall cause all Hired Employees to be added to
comparable welfare benefits plans with waivers of all limitations as to
preexisting conditions, exclusions of all waiting periods with respect to
coverage and with a credit for any co-payments and deductible paid prior to the
Closing Date by an applicable Hired Employee in satisfying any out-of-pocket
requirements under any welfare benefit plan by such Hired Employee. Buyer shall
provide credit for eligibility, benefit accrual and vesting purposes for all
such Hired Employees' periods of service with Seller (or any Affiliate of
Seller) as provided under the ERISA and non-ERISA plans of Seller and its
Affiliates for purposes of any Buyer employee benefit plan or program, including
all qualified and non-qualified retirement or savings programs, vacation, sick
leave, holiday and severance benefits; provided that, with respect to active
defined benefit plans maintained by Buyer, the existing seniority of such Hired
Employees shall only be recognized for eligibility and vesting purposes and not
for benefit accrual purposes; and provided further that such Hired Employees
shall not participate in any inactive defined benefit plans of Buyer. Any
future plans created by Buyer that provide for benefit and vesting service to
Buyer employees from their original date of hire shall (to the extent permitted
by applicable Law) include all vesting and benefit service credit as would be
included by recognizing such Hired Employees' original date of hire as
recognized by Seller or one of its Affiliates. The service credited under the
Buyer welfare and other benefit plans will include all service credited under
the welfare and other benefit plans of Seller and its Affiliates, respectively.
26
Participation shall begin as soon as administratively feasible after the Closing
Date for participating Hired Employees (and eligible dependents) and for all
other Hired Employees who, given their Seller service, have met the age and
service requirements for participation under the respective Buyer plans.
(c) As of the Closing Date, Seller will, at its expense or at the expense
of the applicable Plan, (i) terminate all Plans, if any, relating solely to
employees at the Facility, (ii) terminate the participation of all employees
employed at the Facility from all other Plans, (iii) take such actions as are
necessary to make, or cause such Plans to make, timely appropriate distributions
to such employees to the extent required or permitted by, and in accordance
with, such Plans and applicable Law, as determined by Seller and/or its counsel,
and (iv) comply with all applicable Laws in connection with the foregoing.
Seller shall indemnify and hold harmless Buyer from and against any and all
liabilities and obligations whatsoever with respect to the Plans or the acts or
omissions of Seller under this Section 7.1.
7.2 Proration Payments. If any provision hereof requires the
proration between Buyer and Seller of obligations to third parties including
employees or former employees, each party hereto agrees to pay promptly upon
demand by the other party (accompanied by a reasonably itemized statement of the
claim and basis therefor and supporting documentation from such other party) its
proportionate share of the obligations that it has assumed hereunder.
ARTICLE 8
CONDITIONS OF PURCHASE
8.1 General Conditions.
The obligations of the parties to effect the Closing shall be subject
to the following condition unless waived in writing by all parties:
(a) Approvals. To the extent required by applicable Law, all Permits and
Approvals required to be obtained from any Governmental Entity and the consents
of any required third parties, in each case as necessary for consummation of the
transactions contemplated hereby, shall have been received or obtained on or
prior to the Closing Date.
8.2 Conditions to Obligations of Buyer. The obligations of Buyer to
effect the Closing shall be subject to the following conditions except to the
extent waived in writing by Buyer:
(a) Representations and Warranties and Covenants of Seller. The
representations and warranties of Seller herein contained shall be true in all
material respects at the Closing Date with the same effect as though made at
such time except insofar as may be set forth in revised disclosure schedules
which shall be delivered by Seller to Buyer and Fresenius AG as promptly as
practicable after Buyer's delivery of its notice of exercise of the Option, and
such revised disclosure schedules shall be satisfactory to Buyer and Fresenius
AG in their sole discretion, provided, that except with respect to
--------
misrepresentations by Buyer as of the date of this Agreement or Buyer's failure
to perform its obligations hereunder set forth therein, the sole
27
remedy of Buyer and Fresenius AG with respect to such revised disclosure
schedules shall be to decline to consummate the acquisition of the Purchased
Assets.
(b) Seller shall have performed all obligations and complied with all
covenants and conditions required by this Agreement to be performed or complied
with by it at or prior to the Closing Date, and Seller shall have delivered to
Buyer certificates of Seller in form and substance satisfactory to Buyer, dated
the Closing Date and signed by the appropriate officer of Seller to such effect.
(c) Opinion of Counsel. Buyer and Fresenius AG shall receive at the
Closing from Cooley Godward LLP, counsel to Seller, an opinion dated the Closing
Date, in form and substance reasonably satisfactory to Buyer and Fresenius AG
and their counsel.
(d) Consents. Seller shall have obtained and provided to Buyer evidence of
the receipt of all required Approvals and Permits listed on Schedule 4.13, each
in form and substance reasonably satisfactory to Buyer and none of such
Approvals and Permits shall have been withdrawn prior to or on the Closing Date.
(e) FDA Approval. Seller shall have obtained any and all FDA pre-market
approvals required to manufacture, market and sell the Product in the United
States of America for use in the treatment of rheumatoid arthritis.
(f) No Action or Proceeding. No court or any other Governmental Entity
shall have issued an order restraining or prohibiting the transactions herein
contemplated; and no Governmental Entity shall have commenced or threatened in
writing to commence any action or suit before any court of competent
jurisdiction or other Governmental Entity that seeks to restrain or prohibit the
consummation of the transactions herein contemplated or otherwise seeks a remedy
which would materially and adversely affect the ability of Buyer to enjoy the
full use and enjoyment of the Purchased Assets.
8.3 Conditions to Obligations of Seller. The obligations of Seller to
effect the Closing shall be subject to the following conditions, except to the
extent waived in writing by Seller:
(a) Representations and Warranties and Covenants of Buyer. The
representations and warranties of Buyer herein contained shall be true in all
material respects at the Closing Date with the same effect as though made at
such time, Buyer shall have performed all obligations and complied with all
covenants and conditions required by this Agreement to be performed or complied
with by it at or prior to the Closing Date, and Buyer shall have delivered to
Seller certificates of Buyer in form and substance satisfactory to Seller, dated
the Closing Date and signed by the appropriate officer of Buyer, to such effect.
(b) Opinion of Counsel. Seller shall receive at the Closing from O'Melveny
& Myers LLP, counsel to Buyer an opinion dated the Closing Date, in form and
substance reasonably satisfactory to Seller and its counsel.
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ARTICLE 9
TERMINATION OF OBLIGATIONS; SURVIVAL
9.1 Termination of Agreement. Anything herein to the contrary
notwithstanding, this Agreement and the transactions contemplated by this
Agreement may be terminated at any time before the Closing as follows and in no
other manner:
(a) Mutual Consent. By mutual consent in writing of Buyer, Fresenius AG
and Seller.
(b) Breach of Seller's Representations and Warranties. By Buyer and
Fresenius AG upon written notice to Seller in the event of any action, omission
or occurrence which would constitute a breach of Seller's representations and
warranties as set forth in Article IV herein and which has a material adverse
effect on this Agreement or the transactions contemplated herein.
(c) Breach of Buyer's Representations and Warranties. By Seller upon
written notice to Buyer and Fresenius AG in the event of any action, omission or
occurrence which would constitute a breach of Buyer's representations and
warranties as set forth in Article V herein and which has a material adverse
effect on this Agreement or the transactions contemplated herein.
(d) Conditions to Buyer's Performance Not Met. By Buyer and Fresenius AG
upon written notice to Seller if any event occurs which would render impossible
the satisfaction of one or more conditions to the obligations of Buyer and
Fresenius AG to consummate the transactions contemplated by this Agreement as
set forth in Section 8.1 or 8.2.
(e) Conditions to Seller's Performance Not Met. By Seller upon written
notice to Buyer and Fresenius AG if any event occurs which would render
impossible the satisfaction of one or more conditions to the obligation of
Seller to consummate the transactions contemplated by this Agreement as set
forth in Section 8.1 or 8.3.
(f) Destruction or Condemnation. By Buyer and Fresenius AG, if any of the
Purchased Assets are damaged, destroyed or taken, and if such damage,
destruction or condemnation is beyond reasonable repair and prevents Seller from
performing its obligations under this Agreement as well as the conduct of the
Operations.
(g) Expiration Date. Automatically, if Buyer does not deliver the required
notice of its exercise of the Option prior to or on the Expiration Date or, if
earlier, automatically upon termination of the License and Distribution
Agreement.
9.2 Effect of Termination. In the event that this Agreement shall be
terminated pursuant to Section 9.1, all further obligations of the parties under
this Agreement shall terminate without further liability of any party to
another; provided, that the obligations of the parties contained in Article X
(Indemnification), Section 11.9 (Confidentiality) and Section 11.12 (Expenses)
shall survive any such termination. A termination under Section 9.1 shall not
relieve any party of any liability for a breach of, or for any misrepresentation
under this
29
Agreement, or be deemed to constitute a waiver of any available remedy
(including specific performance if available) for any such breach or
misrepresentation.
ARTICLE 10
INDEMNIFICATION
10.1 Obligations of Seller. Seller agrees to indemnify and hold
harmless Buyer, its directors, officers, employees, affiliates, agents and
assigns, from and against any and all Losses (including, without limitation,
attorneys' fees, settlement costs, arbitration costs and any reasonable legal
and other expenses for investigating or defending any action or threatened
action) asserted against or incurred by any of them, arising out of or in
connection with or resulting from any of the following (but only to the extent
that all of such Losses exceed $25,000 in the aggregate) and except in the case
of intentional or fraudulent misrepresentation, in no event shall Losses payable
under this Section 10.1 exceed the Purchase Price:
(a) any inaccuracy in or breach or nonperformance of any of the
representations, warranties, covenants or agreements made by Seller in or
pursuant to this Agreement; provided, however, that the representations and
warranties contained herein shall survive the Closing only for a period of
twelve (12) months after the Closing Date, except for the representations and
warranties contained in Section 4.15 hereof, which shall survive for the
duration of the statute of limitations with respect to any applicable
Environmental Law;
(b) any other matter as to which Seller in other provisions of this
Agreement has agreed to indemnify Buyer or any Affiliate;
(c) any liability or obligation of Seller or any of its Affiliates other
than the Assumed Liabilities;
(d) any liability or termination fees arising in connection with the
termination of the EMF Lease.
10.2 Obligations of Buyer. Buyer agrees to indemnify and hold
harmless, Seller its directors, officers, employees, affiliates, agents and
assigns, from and against any Losses of Seller, directly or indirectly, as a
result of, or based upon or arising from:
(a) any inaccuracy in or breach or nonperformance of any of the
representations, warranties, covenants or agreements made by Buyer in or
pursuant to this Agreement;
(b) any other matter as to which Buyer in other provisions of this
Agreement has agreed to indemnify Seller;
(c) any Third Party Claims in respect of the use of the Purchased Assets or
the operation of the Operations after the Closing Date (excluding the Third
Party Claims covered by Section 10.1(d)); or
(d) any failure to satisfy the Assumed Liabilities.
30
10.3 Notice of Claim. In the event that a party entitled to
indemnification hereunder (the "Indemnified Party") shall become aware of any
claim, proceeding or other matter (a "Claim") in respect of which the other
party (the "Indemnifying Party") has agreed to indemnify the Indemnified Party
pursuant to this Agreement, the Indemnified Party shall promptly give written
notice thereof to the Indemnifying Party. Such notice shall specify whether the
Claim arises as a result of a claim by a person (a "Third Party") against the
Indemnified Party (a "Third Party Claim") or whether the Claim does not so arise
(a "Direct Claim"), and shall also specify with reasonable particularity (to the
extent that the information is available) the factual basis for the Claim and
the amount of the Claim, if known. The failure promptly to give such notice or
the failure of such notice to identify the Claim with sufficient particularity
shall not relieve the Indemnifying Party of any of its indemnification
obligations contained herein if the Indemnified Party has actually given written
notice to the Indemnifying Party and has otherwise complied with the provisions
of this Article X except where, and solely to the extent that, such failure
actually prejudices the rights of such Indemnifying Party.
10.4 Direct Claims. With respect to any Direct Claim, following
receipt of notice from the Indemnified Party of the Claim, the Indemnifying
Party shall promptly make such investigation of the Claim as is considered
necessary or desirable. For the purpose of such investigation, the Indemnified
Party shall make available to the Indemnifying Party the information relied upon
by the Indemnified Party to substantiate the Claim, together with all such other
information available to the Indemnified Party as the Indemnifying Party may
reasonably request. If both parties agree at or prior to the expiration of 30
days (or any mutually agreed upon extension thereof) following such notice to
the validity and amount of such Claim, the Indemnifying Party shall immediately
pay to the Indemnified Party the full agreed upon amount of the Claim, failing
which the matter shall be referred to arbitration as provided herein.
10.5 Third Party Claims. With respect to any Third Party Claim, the
Indemnifying Party shall have the right, at its expense and with counsel of its
choice satisfactory to the Indemnified Party, acting reasonably, to defend and,
upon written request from the Indemnified Party, shall defend the Claim
(including the negotiation and settlement thereof). If the Indemnifying Party
elects or is required to assume such defense, the Indemnified Party shall have
the right to participate in the negotiation, settlement or defense of such Third
Party Claim and to retain separate counsel to act on its behalf, provided that
the fees and disbursements of such separate counsel shall be paid by the
Indemnified Party unless the Indemnifying Party consents to the payment of such
counsel or unless the named parties to any action or proceeding include both the
Indemnifying Party and the Indemnified Party and representation of both the
Indemnifying Party and the Indemnified Party by the same counsel would be
inappropriate due to the actual or potential conflicting interests between them
(such as the availability of different defenses). If the Indemnifying Party,
having assumed such control, thereafter fails to defend the Third Party Claim
within a reasonable time, the Indemnified Party shall be entitled to assume
control of such defense and the Indemnifying Party shall be bound by the results
obtained by the Indemnified Party with respect to such Third Party Claim. If
any Third Party Claim is of a nature such that the Indemnified Party is required
by applicable Law to make a payment to any Third Party with respect to the Third
Party Claim before the completion of settlement negotiations or related legal
proceedings, the Indemnified Party may make such payment after consulting with
the Indemnifying Party and the Indemnifying Party shall, forthwith after demand
by the Indemnified Party, reimburse the Indemnified Party for such payment. If
the amount of any
31
liability of the Indemnified Party under the Third Party Claim in respect of
which such payment was made, as finally determined, is less than the amount that
was paid by the Indemnifying Party to the Indemnified Party, the Indemnified
Party shall, forthwith after receipt of the difference from the Third Party, pay
the amount of such difference, with interest, to the Indemnifying Party.
10.6 Settlement of Third Party Claims. If the Indemnifying Party does
not elect to assume control of the defense of any Third Party Claim or, after
request by the Indemnified Party fails to do so, the Indemnified Party shall
have (but shall not otherwise have) the exclusive right to contest, settle or
pay the amount claimed and any Losses incurred by the Indemnified Party in
connection with such contest, settlement or payment shall be conclusive as to
the existence and amount of any liability of the Indemnifying Party to the
Indemnified Party hereunder. Whether or not the Indemnifying Party assumes
control of the negotiation, settlement or defense of any Third Party Claim, the
Indemnifying Party shall not settle any Third Party Claim, without the written
consent of the Indemnified Party, which consent shall not be unreasonably
withheld or delayed; provided, however, that (a) no Indemnified Party shall be
obligated to consent to any compromise or settlement that does not provide for a
complete release of the Claim against the Indemnified Party, and (b) the
liability of the Indemnifying Party shall be limited to the proposed settlement
amount if any such consent is not obtained for any reason other than the failure
of such settlement to conform to the requirements of the preceding clause (a).
10.7 Cooperation. The Indemnified Party and the Indemnifying Party
shall co-operate fully with each other with respect to Third Party Claims, and
shall keep each other fully advised with respect thereto (including supplying
copies of all correspondence, demands, pleadings and other relevant
documentation promptly as it becomes available). The Indemnified Party and the
Indemnifying Party shall each use all reasonable efforts to mitigate Losses
arising out of any Claim for which indemnity is sought hereunder.
10.8 Survival. This Article X shall survive any termination or
expiration of this Agreement. In addition, any matter as to which a claim has
been asserted by notice to the other party that is pending or unresolved at the
end of any applicable limitation period shall continue to be covered by this
Article X until such matter is finally terminated or otherwise resolved by the
parties under this Agreement and any amounts payable hereunder are finally
determined and paid.
32
10.9 Not Exclusive Remedy. Subject to the monetary limits of Section
10.1, this Article X shall not be deemed to preclude or otherwise limit in any
way the exercise of any other rights or pursuit of other remedies for the breach
of this Agreement or with respect to any misrepresentation.
ARTICLE 11
GENERAL
11.1 Modification and Amendment. Neither this Agreement nor any of
the terms hereof or any exhibit hereto may be terminated, amended, supplemented,
waived or modified orally, but only by an instrument in writing signed by all of
the parties hereto. No failure on the part of either party to exercise, no
delay in exercising, no partial exercise of, and no course of dealing with
respect to, any right, power or privilege under this Agreement shall operate as
a waiver thereof.
11.2 Schedules; Exhibits; Integration. Each schedule and exhibit
delivered pursuant to the terms of this Agreement shall be in writing and shall
constitute a part of this Agreement, although schedules need not be attached to
each copy of this Agreement. This Agreement, together with such schedules and
exhibits and including the guaranty of Fresenius AG set forth on the signature
page hereof, the Master Agreement and related documents contemplated therein
constitute the entire agreement among the parties pertaining to the subject
matter hereof and supersedes all prior agreements and understandings of the
parties in connection therewith, including, but not limited to, the letter of
intent dated January 20, 1999, among Buyer, Seller and Fresenius AG.
11.3 Arbitration. In the event that any dispute or controversy arises
between the parties out of or relating to this Agreement or any other related
agreement ("Dispute"), a party shall notify the other parties in writing of the
existence of the Dispute, and for a thirty-day period following such
notification the parties shall meet and negotiate in good faith to attempt to
resolve the matter and shall escalate the dispute to the Chief Executive Officer
of Licensor and the President of the I+H Division of Fresenius AG if resolution
is not made within the first fifteen days. If such efforts do not resolve the
Dispute within such thirty-day period, the Dispute shall be referred to and
finally resolved by arbitration under the rules of the American Arbitration
Association, and except for proceedings commenced to enforce an arbitration
award, each party hereby irrevocably waives its right to commence any proceeding
in any court with respect to any matter arising under this Agreement. Unless
the parties otherwise agree, the tribunal shall consist of three arbitrators,
two of whom shall be appointed by the respective parties and the third
arbitrator shall be appointed jointly by the first two. The place of
arbitration shall be New York, New York or such other location as the parties
shall agree. The language of the arbitration shall be English. The parties
shall be entitled to conduct discovery which shall be limited in both time and
scope in order to minimize expense and adverse impact on the operation of the
parties. No arbitrator shall be an Affiliate, employee, officer or director of
either party or of their respective Affiliates, nor shall any Arbitrator have
any interest that would be affected in any material respect by the outcome of
the Dispute. The decision of the sole arbitrator or of a majority of the
arbitrators, as the case may be, shall be final and binding on the parties and
their respective successors and assigns. The decision shall not be subject to
appeal or judicial review except in circumstances of fraud. The prevailing
party in any such arbitration shall be entitled to recover
33
reasonable fees of attorneys and other professionals in addition to all court
costs and arbitrator's fees which that party may incur as a result. Judgment
upon the award granted by the arbitrator(s) may be entered in any court having
jurisdiction over the relevant party, or its assets.
11.4 Governing Law. This Agreement and the legal relations between the
parties shall be governed by and construed in accordance with the laws of the
State of New York applicable to contracts made and performed in such State and
without regard to conflicts of law doctrines except to the extent that certain
matters are preempted by federal law or are governed by the law of the
jurisdiction of organization of the respective parties.
11.5 Assignment. Neither this Agreement nor any of the rights or
duties of the parties hereunder shall be Assigned, transferred or conveyed by a
party by operation of law or otherwise. Notwithstanding the foregoing, this
Agreement may be assigned by Buyer to an Affiliate of Buyer or a purchaser of
the entire business or substantially all of the assets of Fresenius AG's I+H
Division, without the prior written consent of Seller, provided that the
purchaser assumes in writing all of the obligations of Buyer hereunder. Such an
assignment shall not release Buyer from its liabilities and obligations
hereunder, nor shall it release Fresenius AG from its obligations under its
guaranty attached hereto. In addition, notwithstanding the foregoing, this
Agreement may be assigned by Seller to an Affiliate of Seller or to a purchaser
of all or substantially all of the assets of Seller relating to Product,
provided that the purchaser assumes in writing all of the obligations of Seller
hereunder and may be transferred by Seller by operation of law in connection
with a change of control of Seller through a tender offer, merger, sale of
equity securities or other similar transaction. Neither this Agreement nor any
rights of a party hereunder shall inure to the benefit of any trustee in
bankruptcy, receiver, creditor, liquidator or trustee of the business of such
party without the prior written consent of the other party, which such other
party may grant or withhold in its sole discretion. Except as provided in this
Section or as referenced herein, no party shall delegate duties of performance
or assign, in whole or in part, rights or obligations under this Agreement
without the prior written consent of the other party, and any attempted
delegation or assignment without such written consent shall be void and of no
force or effect. Subject to the restrictions contained in the preceding
sentence, this Agreement shall be binding upon the successors and assigns of the
parties.
11.6 Headings. The descriptive headings of the Articles, Sections and
Subsections of this Agreement are for reference purposes only and shall not
affect in any way the meaning or interpretation of this Agreement.
11.7 Telecopy; Counterparts. This Agreement and any amendment hereto
or any other agreement (or document) delivered pursuant hereto may be executed
by telecopy, in one or more counterparts, and by different parties in separate
counterparts. All of such counterparts shall constitute one and the same
agreement (or other document) and shall become effective (unless otherwise
provided therein) when one or more counterparts have been signed by each party
and delivered to the other party. Any execution by telecopy shall be followed
promptly by the delivery of signed original counterparts to the party or parties
receiving the telecopy.
11.8 Publicity and Reports. Seller and Buyer shall coordinate all
publicity relating to the transactions contemplated by this Agreement, and no
party shall issue any press release, publicity statement or other public notice
relating to this Agreement, or the transactions
34
contemplated by this Agreement, without obtaining the prior consent of both
Seller and Buyer except to the extent that Buyer and its legal counsel in good
faith conclude is required by applicable Law. Seller shall obtain the prior
consent of Buyer to the form and content of any application or report made to
any Governmental Entity that relates or refers to this Agreement.
11.9 Confidentiality. All information disclosed in writing and
designated in writing as confidential by any party (or its representatives)
whether before or after the date hereof, in connection with the transactions
contemplated by, or the discussions and negotiations preceding, this Agreement
to any other party (or its representatives) shall be kept confidential by such
other party and its representatives and shall not be used by any such Persons
other than as contemplated by this Agreement, except to the extent that such
information (i) was known by the recipient when received, (ii) it is or
hereafter becomes lawfully obtainable from other sources, (iii) is necessary or
appropriate to disclose to a Governmental Entity having jurisdiction over the
parties, (iv) as may otherwise be required by law or (v) to the extent such duty
as to confidentiality is waived in writing by the other party. If this
Agreement is terminated in accordance with its terms, each party shall use all
reasonable efforts to return upon written request from the other party all
documents (and reproductions thereof) received by it or its representatives from
such other party (and, in the case of reproductions, all such reproductions made
by the receiving party) that include information not within the exceptions
contained in the first sentence of this Section 11.9, unless the recipients
provide assurances reasonably satisfactory to the requesting party that such
documents have been destroyed.
11.10 Third Parties. Nothing in this Agreement, express or implied, is
intended to confer or shall confer upon any persons other than the parties
hereto any rights, benefits or remedies of any nature whatsoever under or by
reason of this Agreement, other than rights of indemnity under Article X in
favor of the persons named therein.
11.11 Notices. Any notice or other communication hereunder must be
given in writing and either (a) delivered in person, (b) transmitted by telex,
telefax or telecommunications mechanism or (c) mailed by certified or registered
mail, postage prepaid, receipt requested as follows:
If to Seller, addressed to:
Cypress Bioscience, Inc.
4350 Executive Drive, Suite 325
San Diego, CA 92121
Attn: Jay D. Kranzler, M.D.
Fax No.: (619) 452-1222
35
With copies to:
Cooley Godward LLP
4365 Executive Drive
San Diego, CA 92121-2128
Attn: Barbara Borden, Esq.
Fax No.: (619) 453-3555
If to Fresenius AG, addressed to:
Fresenius
Aktiengesellschaft
Adsorber Technology Division
Attn: Mr. Stefan Schulze
D-66606 St. Wendel
Telecopy No.: 011-49-6851-807444
With copies to:
Fresenius Aktiengesellschaft
Law Department
Attn.: Mr. Roland Kirsten
If by mail: Else-Kroner-Strasse 1
61346 Bad Homburg
Germany
If by delivery: Else-Kroner-Strasse 1
61352 Bad Homburg
Germany
Telecopy No.: 011-49-6172-608-2251
and to:
O'Melveny & Myers LLP
Citicorp Center
153 East 53rd Street
New York, New York 10022-4611
Attn: Dr. Ulrich Wagner
Telecopy No.: (212) 326-2061
If to Buyer, addressed to:
Fresenius Hemotechnology, Inc.
110 Mason Circle, Suite A
Concord, CA 94520-1238
Attn: President
36
with copies to Fresenius AG and O'Melveny & Myers LLP at their
respective addresses set forth above.
or to such other address or to such other person as either party shall
have last designated by such notice to the other party. Each such notice or
other communication shall be effective (i) if given by telecommunication, when
transmitted to the applicable number so specified in (or pursuant to) this
Section 11.11 and an appropriate answer back is received, (ii) if given by mail,
three days after such communication is deposited in the mails with first class
postage prepaid, addressed as aforesaid or (iii) if given by any other means,
when actually delivered at such address.
11.12 Expenses. Except as otherwise provided in this Section 11.12 and
Section 11.14, Seller and Buyer shall each pay their own expenses incident to
the negotiation, preparation, execution and performance of this Agreement and
the transactions contemplated hereby, including but not limited to the fees,
expenses and disbursements of their respective investment bankers, accountants,
counsel and other representatives.
11.13 Waiver. No failure on the part of any party to exercise or delay
in exercising any right hereunder shall be deemed a waiver thereof, nor shall
any single or partial exercise preclude any further or other exercise of such or
any other right.
11.14 Representation By Counsel; Interpretation. Seller and Buyer each
acknowledge that each party to this Agreement has been represented by counsel in
connection with this Agreement and the transactions contemplated by this
Agreement. Accordingly, any rule of Law or any legal decision that would
require interpretation of any claimed ambiguities in this Agreement against the
party that drafted it has no application and is expressly waived. The
provisions of this Agreement shall be interpreted in a reasonable manner to
effect the intent of Buyer and Seller.
11.15 Severability. If any provision of this Agreement is determined to
be invalid, illegal or unenforceable by any Governmental Entity, the remaining
provisions of this Agreement to the extent permitted by Law shall remain in full
force and effect provided that the essential terms and conditions of this
Agreement remain valid, binding and enforceable. In the event of any such
determination, the parties agree to negotiate in good faith to modify this
Agreement to fulfill as closely as possible the original intents and purposes
hereof. To the extent permitted by Law, the parties hereby to the same extent
waive any provision of Law that renders any provision hereof prohibited or
unenforceable in any respect.
11.16 No Consequential Damages. Notwithstanding anything to the
contrary elsewhere in this Agreement (including, without limitation, the
provisions of Article XI), no party (or its Affiliates) shall, in any event, be
liable to any/the other party (or its Affiliates) for any consequential or
punitive damages, including, but not limited to, loss of revenue or income, cost
of capital, or loss of business reputation or opportunity relating to the breach
or alleged breach of this Agreement.
11.17 Further Assurances. Each of the parties covenants and agrees
that it and its successors and permitted assigns will execute such further
reasonable documents and do and
37
perform or cause to be done and performed such further and other reasonable acts
as may be necessary or desirable from time to time in order to give full effect
to the provisions of this Agreement.
11.18 Official Language. The parties understand and agree that this
document has been prepared only in the English language and that the English
language is the official language of this Agreement. No party to this Agreement
will assert or allege that it did not understand each and every term of this
Agreement.
38
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to
be executed by its duly authorized officers as of the day and year first above
written.
CYPRESS BIOSCIENCE, INC.
By: /s/ Jay D. Kranzler
____________________________________________
Name: Jay D. Kranzler
_________________________________________
Title: Chief Executive Officer
________________________________________
FRESENIUS HEMOTECHNOLOGY, INC.
By: /s/ Dale L. Richardson
____________________________________________
Name: Dale L. Richardson
_________________________________________
Title: President and Chief Operating Officer
________________________________________
39
Guaranty
--------
In order to induce Seller to enter into this Agreement, Fresenius AG
hereby unconditionally, irrevocably and absolutely guaranties, as primary
obligor and not merely as surety, the due and punctual performance and payment
in full of all Obligations (as hereinafter defined) when the same shall be
required to be performed or become due hereunder. The term "Obligations"
includes any an all obligations of Buyer now or hereafter made, incurred or
created, whether absolute or contingent, liquidated or unliquidated, and however
arising under or in connection with this Agreement, including, without
limitation, Buyer's obligation to pay the Assumed Liabilities. Fresenius AG
waives any right to (a) require Seller to proceed against Buyer; or (b) pursue
any other remedy Seller may have whatsoever. Fresenius AG further agrees to pay
all costs and expenses, including, without limitation, attorneys? fees and
related costs, at any time paid or incurred by Seller in endeavoring to enforce
this guaranty. This guaranty is absolute and unconditional and shall not be
affected by any act or thing whatsoever, except as expressly provided herein.
This guaranty is not an accommodation, but rather a material consideration
bargained for by Seller in agreeing to enter into the transactions contemplated
by this Agreement. No modification or amendment of any provision of this
guaranty shall be effective unless in writing and subscribed by a duly
authorized officer of each of Fresenius AG and of Seller. If any provision of
this guaranty or portion of such provision, or the application thereof to any
person or circumstance, shall, to any extent, be held invalid or unenforceable,
the remainder of this guaranty or the remainder of such provision and the
application thereof to other persons or circumstances, other than those as to
which it is held invalid or unenforceable, shall not be affected thereby, and
each term and provision of this guaranty shall be valid and enforced to the
fullest extent permitted by the law. Fresenius AG waives all defenses to payment
or performance available to guarantors or sureties as by virtue of being
guarantors or sureties and that are not otherwise available to the primary
obligor.
In its performance of the foregoing guaranty, Fresenius AG shall be
subject to all of the obligations of Buyer and shall be entitled to assert any
facts or circumstances constituting a material breach of this Agreement by Buyer
or which would constitute a legal or equitable discharge of any Obligation of
Buyer hereunder. The foregoing notwithstanding, Fresenius AG shall not be
released or discharged from this Guaranty by reason of any assignment of this
Agreement by Buyer or Seller permitted by Section 11.5 and, upon any such
assignment, this Guaranty shall continue in full force and effect with respect
to the obligations of any such assignee and one or more subsequent assignees
hereunder.
FRESENIUS AKTIENGESELLSCHAFT
By_____________________________
By_____________________________
EXHIBIT A
---------
GENERAL BILL OF SALE AND ASSIGNMENT
THIS GENERAL BILL OF SALE AND ASSIGNMENT (this "Assignment"), dated as
of _______________, 1999, is entered into by CYPRESS BIOSCIENCE, INC., a
Delaware corporation ("Seller"), and FRESENIUS HEMOTECHNOLGY, INC., a Delaware
corporation ("Buyer").
W I T N E S S E T H:
WHEREAS, Buyer, Seller and Fresenius Aktiengesellschaft, have entered
into an Asset Purchase Option Agreement, dated as of March 26, 1999 (the "Option
Agreement"), pursuant to which Seller has agreed to sell, assign and transfer,
and Buyer has agreed to purchase, all of Seller's respective right, title and
interest in and to the Purchased Assets.
NOW, THEREFORE, pursuant to the Option Agreement and in consideration
of the above premises and for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
Section 1. Definitions. Capitalized terms used herein and not
-----------
otherwise defined herein shall have the meanings given to them in the Option
Agreement.
Section 2. Assignment. Seller does hereby irrevocably and
----------
unconditionally sell, convey, transfer and deliver to Buyer (collectively, the
"Assignment") all of such Seller's right, title and interest in and to the
Purchased Assets subject to the terms and conditions set forth herein.
Section 3. Further Assurances. Seller hereby agrees to take any and
------------------
all additional actions and to execute, acknowledge and deliver any and all
documents which Buyer may reasonably request in order to effect the intent and
purposes of this Assignment and the transactions contemplated hereby.
Section 4. Buyer's Remedies. Buyer's remedies with respect to any
----------------
claim arising from the breach of this Assignment shall be as set forth in the
Option Agreement.
Section 5. Amendment and Modification; Waiver. Subject to applicable
--------------------------
law, this Assignment be amended, modified and supplemented by written
instrument authorized and executed by Buyer and Seller any time with respect to
any of the terms contained herein. No waiver by any party of any of the
provisions hereof shall be effective unless explicitly set forth in writing and
executed by the party so waiving. The waiver by either party hereto of a breach
of any provisions of this Assignment shall not operate or be construed as a
waiver of any other or subsequent breach.
Section 6. No Third-Party Beneficiaries. This Assignment is for the
----------------------------
sole and exclusive benefit of the parties hereto, Fresenius AG, as guarantor of
Buyer's obligations under the Option Agreement, and their respective successors
and permitted assigns and nothing herein
A-1
is intended or shall be construed to confer upon any person other than the
parties hereto and their respective successors and permitted assigns any rights,
remedies or claims under, or by any reason of, this Assignment or any term,
covenant or condition hereof.
Section 7. Assignment. Neither this Assignment, nor any of the
----------
rights, interests or obligations hereunder, may be assigned, unless in
accordance with the assignment provisions of the Option Agreement.
Section 8. Governing Law. This assignment shall be governed by and
-------------
construed in accordance with the laws of the State of New York without giving
effect to the principles of the conflicts of laws thereof.
Section 9. Option Agreement. This Assignment is not intended to alter
----------------
the obligations of the parties to the Option Agreement. If any conflict exists
between the terms of this Assignment and the terms of the Option Agreement, then
the terms of the Option Agreement shall govern and control.
Section 10. Headings. The headings of this Assignment are for
--------
reference purposes only and shall not affect, in any way the meaning or
interpretation of this Assignment.
Section 11. Counterparts. This Assignment may be executed in one or
------------
more counterparts, each of which shall be deemed an original, but all of which
together will constitute one and the same instrument.
[Remainder of page intentionally left blank]
A-2
IN WITNESS WHEREOF, Assignor and Assignee have executed this
Assignment and Assumption of Lease as of the date first above written.
CYPRESS BIOSCIENCE, INC.
By: ____________________________
Name:
Title:
FRESENIUS HEMOTECHNOLOGY, INC.
By: ____________________________
Name:
Title:
S-1
EXHIBIT B
---------
ASSIGNMENT AND ASSUMPTION OF LEASE
THIS ASSIGNMENT AND ASSUMPTION OF LEASE is made and entered into as of
_______________, 1999, by and between CYPRESS BIOSCIENCE, INC., a Delaware
corporation ("Assignor"), and FRESENIUS HEMOTECHNOLOGY, INC., a Delaware
corporation ("Assignee").
WHEREAS, Assignor as tenant leases [description of leased
-------------------------------
property] , pursuant to a [Lease Agreement] with ________________________
- ----------------
("Lessor"), dated _______________, 19__ (as amended to date, the "Lease"); and
WHEREAS, Assignor desires to assign to Assignee the Lease and Assignee
desires to accept the assignment and assume from Assignor the Lease.
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto hereby agree as
follows:
1. Assignment. Assignor assigns and transfers to Assignee all of
----------
its right, title and interest as tenant in and to the Lease. Assignee hereby
attorns to Landlord, as landlord under the Lease.
2. Assignment and Assumption of Lease. Assignee accepts the
----------------------------------
assignment and hereby assumes the duties as tenant under the Lease and agrees to
perform all duties and obligations required of the tenant by the terms of the
Lease.
3. Governing Law. This assignment and assumption shall be governed
-------------
by and construed in accordance with the laws of the State of Washington without
giving effect to the principles of the conflicts of laws thereof.
4. Headings. The descriptive headings of this Assignment and
--------
Assumption of Lease are for reference purposes only and shall not affect in any
way the meaning or interpretation of this agreement.
5. Counterparts. This Assignment and Assumption of Lease may be
------------
executed in one or more counterparts, each of which shall be deemed an original,
but all of which together will constitute one and the same instrument.
B-1
IN WITNESS WHEREOF, Assignor and Assignee have executed this
Assignment and Assumption of Lease as of the date first above written.
CYPRESS BIOSCIENCE, INC.
By: ____________________________
Name:
Title:
FRESENIUS HEMOTECHNOLOGY, INC.
By: ____________________________
Name:
Title:
S-1
STATE OF NEW YORK
COUNTY OF ____________
Personally appeared before me, the undersigned authority, a Notary
Public in and for the aforesaid State and County, ___________________________,
with whom I am personally acquainted, and who, upon oath, acknowledged himself
or herself to be the ___________________________ of CYPRESS BIOSCIENCE, INC.,
the within named bargainor, a corporation, and that he or she as such
___________________________, executed the within instrument for the purposes
therein contained, by signing the name of the corporation by himself or herself,
as such Officer.
IN TESTIMONY WHEREOF, witness my hand and official seal at office in
the aforesaid State and County, on this the __________ day of
____________________, 1999.
______________________________________________
Notary Public
My Commission Expires:_______________________
STATE OF NEW YORK
COUNTY OF
Personally appeared before me, the undersigned authority, a Notary
Public in and for the aforesaid State and County, ____________________________,
with whom I am personally acquainted, and who, upon oath, acknowledged himself
or herself to be the ___________________________ of FRESENIUS HEMOTECHNOLOGY,
INC., the within named bargainor, a corporation, and that he or she as such
___________________________, executed the within instrument for the purposes
therein contained, by signing the name of the corporation by himself or herself,
as such Officer.
IN TESTIMONY WHEREOF, witness my hand and official seal at office in
the aforesaid State and County, on this the __________ day of
____________________, 1999.
______________________________________________
Notary Public
My Commission Expires:______________________
S-2
EXHIBIT C
---------
ASSIGNMENT OF CONTRACTS
THIS ASSIGNMENT OF CONTRACTS is entered into as of _______________,
1999 by CYPRESS BIOSCIENCE, INC., a Delaware corporation ("Seller"), in favor
and for the benefit of FRESENIUS HEMOTECHNOLOGY, INC., a Delaware corporation
("Buyer").
WHEREAS, pursuant to that certain Asset Purchase Option Agreement
dated as of March 26, 1999 (the "Option Agreement") by and among Buyer, Seller
and Fresenius Aktiengesellschaft, Seller has agreed to assign to Buyer and Buyer
has agreed to assume from Seller, for the consideration and upon the terms and
conditions set forth in the Option Agreement, certain of the executory
obligations and liabilities of Seller arising from and after the Closing
pursuant to the Assumed Contracts; and
WHEREAS, capitalized terms used but not otherwise defined herein shall
have the meanings ascribed to such terms in the Option Agreement.
NOW, THEREFORE, pursuant to the Option Agreement and in consideration
of the premises, and for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, it is hereby agreed that:
1. Assignment. Seller does hereby assign, grant, convey and
----------
transfer to Buyer, all of Seller's right, title and interest in, to and under
the Assumed Contracts.
2. Seller's Undertaking. Seller agrees to take such action and to
--------------------
execute and attest such documents, assignments, transfers or other writings or
instruments as may be necessary, proper or required by law to evidence the
assignment made herein.
3. Option Agreement. This Assignment of Contracts is not intended
----------------
to alter the obligations of the parties to the Option Agreement. If any
conflict exists between the terms of this Assignment of Contracts and the Option
Agreement, then the terms of the Option Agreement shall govern and control.
4. Governing Law. This assignment shall be governed by and
-------------
construed in accordance with the laws of the State of New York without giving
effect to the principles of the conflicts of laws thereof.
5. Headings. The descriptive headings of this Assignment of
--------
Contracts are for reference purposes only and shall not affect in any way the
meaning or interpretation of this agreement.
6. Counterparts. This Assignment of Contracts may be executed in
------------
two or more counterparts, each of which shall be deemed an original, but all of
which together will constitute one and the same instrument.
C-1
IN WITNESS WHEREOF, the parties hereto have executed this Assignment
of Contracts as of the date first above written.
CYPRESS BIOSCIENCE, INC.
By: ____________________________
Name:
Title:
FRESENIUS HEMOTECHNOLOGY, INC.
By: ____________________________
Name:
Title:
S-1
STATE OF NEW YORK
COUNTY OF __________
Personally appeared before me, the undersigned authority, a Notary
Public in and for the aforesaid State and County, ____________________________,
with whom I am personally acquainted, and who, upon oath, acknowledged himself
or herself to be the ___________________________ of CYPRESS BIOSCIENCE, INC.,
the within named bargainor, a corporation, and that he or she as such
___________________________, executed the within instrument for the purposes
therein contained, by signing the name of the corporation by himself or herself,
as such Officer.
IN TESTIMONY WHEREOF, witness my hand and official seal at office in
the aforesaid State and County, on this the __________ day of
____________________, 1999.
___________________________________________
Notary Public
My Commission Expires:________________________
STATE OF NEW YORK
COUNTY OF _________
Personally appeared before me, the undersigned authority, a Notary
Public in and for the aforesaid State and County, ____________________________,
with whom I am personally acquainted, and who, upon oath, acknowledged himself
or herself to be the ___________________________ of FRESENIUS HEMOTECHNOLOGY,
INC., the within named bargainor, a corporation, and that he or she as such
___________________________, executed the within instrument for the purposes
therein contained, by signing the name of the corporation by himself or herself,
as such Officer.
IN TESTIMONY WHEREOF, witness my hand and official seal at office in
the aforesaid State and County, on this the __________ day of
____________________, 1999.
___________________________________________
Notary Public
My Commission Expires:___________________
S-2
EXHIBIT D
---------
ASSUMPTION AGREEMENT
THIS ASSUMPTION AGREEMENT is entered into as of _______________, 1999
by and between CYPRESS BIOSCIENCE, INC., a Delaware corporation ("Seller"), and
FRESENIUS HEMOTECHNOLOGY, INC., a Delaware corporation ("Buyer").
WHEREAS, pursuant to that certain Asset Purchase Option Agreement
dated as of March 26, 1999 (the "Option Agreement") by and among Buyer, Seller
and Fresenius Aktiengesellschaft, Seller has agreed to sell to Buyer and Buyer
has agreed to purchase from Seller certain of the assets, properties, and rights
of Seller as the same are described in the Option Agreement (the "Purchased
Assets"); and
WHEREAS, pursuant to the Option Agreement, Buyer has agreed to assume
certain obligations of Seller as partial consideration for the purchase of the
Purchased Assets; and
WHEREAS, capitalized terms used but not otherwise defined herein shall
have the meanings ascribed to such terms in the Option Agreement.
NOW, THEREFORE, pursuant to the Option Agreement and in consideration
of the premises, and for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, it is hereby agreed that:
1. Buyer Undertaking. Buyer hereby assumes and agrees timely to pay
------------------
and perform all of the Assumed Liabilities. Other than as specifically stated
herein or in the Option Agreement, Buyer assumes no debt, liability or
obligation of Seller other than such Assumed Liabilities.
2. Option Agreement. Nothing contained in this Assumption Agreement
-----------------
supersedes any of the obligations, agreements, covenants or warranties of Seller
or Buyer under the Option Agreement, or shall be deemed to require Buyer to pay
or discharge any Assumed Liability so long as Buyer shall in good faith contest
or cause to be contested the amount or validity thereof. If any conflict exists
between the terms of this Assumption Agreement and the Option Agreement, then
the terms of the Option Agreement shall govern and control.
3. Governing Law. This assumption shall be governed by and
-------------
construed in accordance with the laws of the State of New York without giving
effect to the principles of the conflicts of laws thereof.
4. Headings. The descriptive headings of this Assumption Agreement
--------
are for reference purposes only and shall not affect in any way the meaning or
interpretation of this agreement.
5. Counterparts. This Assumption Agreement may be executed in two
------------
or more counterparts, each of which shall be deemed an original, but all of
which together will constitute one and the same instrument.
[Remainder of page intentionally left blank]
D-1
IN WITNESS WHEREOF, the parties hereto have executed this Assumption
Agreement as of the date first above written.
CYPRESS BIOSCIENCE, INC.
By: ____________________________
Name:
Title:
FRESENIUS HEMOTECHNOLOGY, INC.
By: ____________________________
Name:
Title:
S-1
STATE OF NEW YORK
COUNTY OF ___________
Personally appeared before me, the undersigned authority, a Notary
Public in and for the aforesaid State and County, ____________________________,
with whom I am personally acquainted, and who, upon oath, acknowledged himself
or herself to be the ___________________________ of CYPRESS BIOSCIENCE, INC.,
the within named bargainor, a corporation, and that he or she as such
___________________________, executed the within instrument for the purposes
therein contained, by signing the name of the corporation by himself or herself,
as such Officer.
IN TESTIMONY WHEREOF, witness my hand and official seal at office in
the aforesaid State and County, on this the __________ day of
____________________, 1999.
_______________________________________
Notary Public
My Commission Expires:_______________________
STATE OF NEW YORK
COUNTY OF
Personally appeared before me, the undersigned authority, a Notary
Public in and for the aforesaid State and County, ____________________________,
with whom I am personally acquainted, and who, upon oath, acknowledged himself
or herself to be the ___________________________ of FRESENIUS HEMOTECHNOLOGY,
INC., the within named bargainor, a corporation, and that he or she as such
___________________________, executed the within instrument for the purposes
therein contained, by signing the name of the corporation by himself or herself,
as such Officer.
IN TESTIMONY WHEREOF, witness my hand and official seal at office in
the aforesaid State and County, on this the __________ day of
____________________, 1999.
_______________________________________
Notary Public
My Commission Expires:_______________________
S-2