ASSET PURCHASE AGREEMENT

 

Exhibit 4.54

ASSET PURCHASE AGREEMENT

by and between

BioReliance Corporation

and

Acambis Inc.

Dated May 6, 2005

 

 

ASSET PURCHASE AGREEMENT

     This Asset Purchase Agreement (“ Agreement ”) is dated May 6, 2005 (“ Effective Date ”), by and between Acambis Inc., a Delaware corporation with offices at 38 Sidney Street, Cambridge, MA 02139 (“ Buyer ”) and BioReliance Corporation, a wholly owned subsidiary of Invitrogen Corporation, a Delaware corporation, with offices at 14920 Broschart Road, Rockville, MD 20850 (“ Seller ”).

RECITALS

     Seller desires to sell, and Buyer desires to purchase, the Assets (as hereinafter defined) of Seller for the consideration and on the terms set forth in this Agreement.

     The parties, intending to be legally bound, agree as follows:

1. DEFINITIONS

     For purposes of this Agreement, the following terms and variations thereof have the meanings specified or referred to in this Section 1:

     “ Assets ” — as defined in Section 2.1.

     “ Assignment and Assumption Agreement ” — as defined in Section 2.7(a)(ii).

     “ Assignment and Assumption of Lease ” — as defined in Section 2.7(a)(iii).

     “ Assumed Liabilities ” — as defined in Section 2.4(a).

     “ Best Efforts” — the efforts that a prudent Person desirous of achieving a result would use in similar circumstances to achieve that result as expeditiously as possible, provided , however , that a Person required to use Best Efforts under this Agreement will not be thereby required to take actions that would result in a material adverse change in the benefits to such Person of this Agreement and the Contemplated Transactions or to dispose of or make any change to its business, expend any material funds or incur any other material burden.

     “ Bill of Sale” — as defined in Section 2.7(a)(i).

     “ Breach ” — any breach of, or any inaccuracy in, any representation or warranty or any breach of, or failure to perform or comply with, any covenant or obligation, in or of any applicable contract or agreement, or any event which with the passing of time or the giving of notice, or both, would constitute such a breach, inaccuracy or failure.

     “ Business Day ”— any day other than (a) Saturday or Sunday or (b) any other day on which banks in United States are permitted or required to be closed.

     “ Buyer ” — as defined in the first paragraph of this Agreement.

 

 

     “ Buyer Indemnified Persons ”—as defined in Section 11.2.

     “ Buyer Affiliate” – a corporation, partnership, association, limited liability company or other business entity which controls, or is controlled by or is under common control with Buyer For the purpose of this definition, “control” (including the terms “controlling”, “controlled by” and “under common control with”), means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such entity, whether through the ownership of voting securities or by contract or agency or otherwise

     “ Closing ” — as defined in Section 2.6.

     “ Closing Date ” — the date on which the Closing actually takes place.

     “ Code ” — the Internal Revenue Code of 1986.

     “ Confidential Information ” — as defined in Section 12.1.

     “ Consent ” — any approval, consent, ratification, waiver or other authorization.

     “ Contemplated Transactions ” — all of the transactions contemplated by this Agreement.

     “ Damages ” — as defined in Section 11.2.

     “ Disclosing Party ” — as defined in Section 12.1.

     “ Disclosure Schedules ” — the Disclosure Schedules delivered by Seller to Buyer concurrently with the execution and delivery of this Agreement. The following Disclosure Schedules are attached to and incorporated into this Agreement:

           Schedule 2.1(b): List of Property.

           Schedule 2.1(c): Seller’s Cell Banking Operations Property.

           Schedule 2.1(d): Service Contracts.

           Schedule 2.1(f): Claims of Seller with Respect to Tangible Personal Property.

           Schedule 3.1: Seller’s Jurisdictions.

           Schedule 3.2(b): Exception to Representation re: Breach.

           Schedule 3.2(c): Exception to Representation re: Consent.

           Schedule 3.3: Description of Leased Real Property.

           Schedule 3.4: Permitted Encumbrances.

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           Schedule 3.8(a): Exception to Representation re: Proceeding.

           Schedule 3.8(b): Exception to Representation re: Order.

           Schedule 3.8(c): Exception to Representation re: Compliance with Order.

           Schedule 3.10: List of Insurance Policies.

           Schedule 3.11: List of Environmental Matters/Hazardous Materials.

     “ Effective Date ” — as defined in the introductory paragraph of this Agreement.

     “ Effective Time ” — The time at which the Closing is consummated.

     “ Encumbrance ” — any charge, claim, community or other marital property interest, condition, equitable interest, lien, option, pledge, security interest, mortgage, right of way, easement, encroachment, servitude, right of first option, right of first refusal or similar restriction, including any restriction on use, voting (in the case of any security or equity interest), transfer, receipt of income or exercise of any other attribute of ownership.

     “ Environment ” — soil, land surface or subsurface strata, surface waters (including navigable waters and ocean waters), groundwaters, drinking water supply, stream sediments, ambient air (including indoor air), plant and animal life and any other environmental medium or natural resource.

     “ Environmental Liabilities ” — any cost, damages, expense, liability, obligation or other responsibility arising from or under any Environmental Law, including those consisting of or relating to: (a) any environmental condition (including on-site or off-site contamination); (b) any fine, penalty, judgment, award, settlement, legal or administrative proceeding, damages, loss, claim, demand or response, remedial or inspection cost or expense arising under any Environmental Law; (c) financial responsibility under any Environmental Law for cleanup costs or corrective action, including any cleanup, removal, containment or other remediation or response actions (“ Cleanup ”) required by any Environmental Law (whether or not such Cleanup has been required or requested by any Governmental Body or any other Person) and for any natural resource damages; or (d) any other compliance, corrective or remedial measure required under any Environmental Law.

The terms “removal,” “remedial,” and “response action” include the types of activities covered by the United States Comprehensive Environmental Response, Compensation and Liability Act of 1980 (“ CERCLA ”).

     “ Environmental Law(s) ” — means any federal, state or local statute, law, rule, regulation, ordinance, code, in each case as amended, relating to the environment or hazardous materials, hazardous substances or hazardous wastes, including without limitation, the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, 42 U.S.C. §§ 9601 et seq .;

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the Resource Conservation and Recovery Act, 42 U.S.C. §§ 6901 et seq .; the Hazardous Materials Transportation Act, 49 U.S.C.§§ 1801 et seq .; the Clean Air Act, 42 U.S.C. §§ 7401 et seq .; and the Safe Drinking Water Act, 42 U.S.C. §§ 300f et seq.

     “ Exchange Act ” — the Securities Exchange Act of 1934, as amended.

     “ Excluded Assets ” — as defined in Section 2.2.

     “ Governmental Authorization ” — any license, registration or permit issued, granted, or given under the authority of any Governmental Body, which directly relates to the Assets.

     “ Governmental Body ” — any: (a) nation, state, county, city, town, borough, village, district or other jurisdiction; (b) federal, state, local, municipal, foreign or other government; (c) governmental or quasi-governmental authority of any nature (including any agency, branch, department, board, commission, court, tribunal or other entity exercising governmental or quasi-governmental powers); (d) multinational organization or body; (e) body exercising, or entitled or purporting to exercise, any administrative, executive, judicial, legislative, police, regulatory or taxing authority or power; or (f) official of any of the foregoing.

     “ Guaranty ” — the guaranty to be provided at or following Closing by the State of Maryland to secure all of the obligations of Buyer under the Promissory Note, in form and substance reasonably acceptable to Seller.

     “ Hazardous Material ” — any substance, material or waste which is defined as a “hazardous waste,” “hazardous material,” “hazardous substance,” “extremely hazardous waste,” “restricted hazardous waste,” “contaminant,” “toxic waste” or “toxic substance” under any provision of Environmental Law, and including petroleum, petroleum products, asbestos, and polychlorinated biphenyls; provided, however, that “Hazardous Material” shall exclude biological materials and other substances manufactured, processed, produced, utilized, or analyzed by Seller in the ordinary course of its business, which are the subject of the certification provided in the Quality Assurance Certificate, including but not limited to viruses, pathogens, microbes, cells and reagents.

     “ Improvements ” — all buildings, structures, fixtures and improvements located on the Land as of the Effective Date.

     “ Indemnified Person ” — as defined in Section 11.5.

     “ Indemnifying Person” — as defined in Section 11.5.

     “ Inventories ” — all inventories of Seller, wherever located, including all raw materials, spare parts and all other materials and supplies to be used or consumed by Seller in the performance of services for its customers.

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     “ IRS ” — the United States Internal Revenue Service and, to the extent relevant, the United States Department of the Treasury.

     “ Land ” — the land and appurtenant rights leased under the Lease, as described in the Lease.

     “ Lease ” — that certain Project Lease dated April l, 1998, by and between Alexandria Real Estate Equities LP, a Delaware limited partnership, as assignee of BPG Industrial Partners II, LLC, a Maryland limited liability company, and BioReliance Corporation, a Delaware corporation, successor by merger to Magenta Corporation, a Delaware corporation.

     “ Liability ” — with respect to any Person, any liability or obligation of such Person of any kind, character or description, whether known or unknown, absolute or contingent, accrued or unaccrued, disputed or undisputed, liquidated or unliquidated, secured or unsecured, joint or several, due or to become due, vested or unvested, executory, determined, determinable or otherwise, and whether or not the same is required to be accrued on the financial statements of such Person.

     “ Loan ” — the Loan, as so defined, in the Lease.

     “ Material Consents ” — as defined in Section 7.3.

     “ Order ” — any order, injunction, judgment, decree, ruling, assessment or arbitration award of any Governmental Body or arbitrator.

     “ Ordinary Course of Business ” — an action taken by a Person will be deemed to have been taken in the Ordinary Course of Business only if that action: (a) is consistent in nature, scope and magnitude with the past practices of such Person and is taken in the ordinary course of the normal, day-to-day operations of such Person; (b) does not require authorization by the board of directors or shareholders of such Person (or by any Person or group of Persons exercising similar authority) and does not require any other separate or special authorization of any nature; and (c) is similar in nature, scope and magnitude to actions customarily taken, without any separate or special authorization, in the ordinary course of the normal, day-to-day operations of other Persons that are in the same line of business as such Person.

     “ Permitted Encumbrances ” — as defined in Section 3.4.

     “ Person ” — an individual, partnership, corporation, business trust, limited liability company, limited liability partnership, joint stock company, trust, unincorporated association, joint venture or other entity or a Governmental Body.

     “ Phase I Report ” – The environmental site assessment report dated April 2005, prepared for Buyer by ENVIRON International Corporation.

     “ Premises ” – the Land and Improvements.

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     “ Proceeding ” — any action, arbitration, audit, hearing, investigation, litigation or suit (whether civil, criminal, administrative, judicial or investigative, whether formal or informal, whether public or private) commenced, brought, conducted or heard by or before, or otherwise involving, any Governmental Body or arbitrator.

     “ Promissory Note ” — as defined in Section 2.7(b)(ii).

     “ Purchase Price ” — as defined in Section 2.3.

     “ Quality Assurance Certificate ” — certificate executed by Seller’s QRA Director certifying that the activities represented within the Quality Assurance Package have been completed in accordance with the Seller’s approved SOPs and quality systems in place at the time of performance, and that the information in the Quality Assurance Package is complete and accurate.

      “Quality Assurance Package ” — package to be provided by Seller to Buyer at Closing, and supplemented as set forth in Section 10.2 below, containing: (i) statement summarizing use of the Premises by Seller, including a list of product types manufactured on the Premises by year, quarter and facility area, as of May 5, 2005; (ii) most recent records for each manufacturing, process development (PD) and cell banking suite in the building, as of May 4, 2005, including (a) true and exact photocopies of completed change-over records, executed per Seller SOPs (with copies of the SOPs attached), (b) true and exact photocopies of most recently completed suite cleaning records, executed per Seller SOPs (copies attached), (c) true and exact photocopies of most recently completed cleaning records for process-support areas on the Premises, executed per Seller SOPs (copies attached); and (d) list of all disinfectants and cleaners used in the facility, in both GMP areas and non-GMP areas; (iii) true and exact photocopy of Seller disinfectant effectiveness study for environmental microorganisms, including the 2 Seller EM isolates noted during Buyer’s on-site review of DES documents; (iv) photocopy of Seller’s summary meeting notes from the Type C meeting with Food and Drug Administration on July 14, 2003, redacted to preserve client confidentiality; (v) electronic copy of cleaning validation/viral inactivation study for model challenge viruses; (vi) list of environmental microbial isolates identified on the Premises, August 11, 2000 to March 31, 2005; and (vii) environmental trending graphs for viable, non-viable and surface sampling, from January 1, 2003 to March 31, 2005.

     “ Receiving Party ” — as defined in Section 12.1.

     “ Record ” — information that is inscribed on a tangible medium or that is stored in an electronic or other medium and is retrievable in perceivable form.

     “ Related Person ”— With respect to a specified Person other than an individual: (a) any Person that directly or indirectly controls, is directly or indirectly controlled by or is directly or indirectly under common control with such specified Person; (b) any Person that holds a Material Interest in such specified Person; (c) each Person that serves as a director, officer, partner, executor or trustee of such specified Person (or in a similar capacity); (d) any Person in which such

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specified Person holds a Material Interest; and (e) any Person with respect to which such specified Person serves as a general partner or a trustee (or in a similar capacity).

For purposes of this definition, (a) “control” (including “controlling,” “controlled by,” and “under common control with”) means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise, and shall be construed as such term is used in the rules promulgated under the Securities Act; and (b) “Material Interest” means direct or indirect beneficial ownership (as defined in Rule 13d-3 under the Exchange Act) of voting securities or other voting interests representing at least ten percent (10%) of the outstanding voting power of a Person or equity securities or other equity interests representing at least ten percent (10%) of the outstanding equity securities or equity interests in a Person.

     “ Release ” — any release, spill, emission, leaking, pumping, pouring, dumping, emptying, injection, deposit, disposal, discharge, dispersal, leaching or migration on or into the Environment or Premises or out of the Premises.

     “ Remedial Action ” — all actions, including any capital expenditures, required or voluntarily undertaken (a) to clean up, remove, treat or in any other way address any Hazardous Material or other substance; (b) to prevent the Release or threat of Release or to minimize the further Release of any Hazardous Material or other substance so it does not migrate on to properties adjacent to the Premises; (c) to perform pre-remedial studies and investigations or postremedial monitoring and care; or (d) to bring the Premises and the operations conducted thereon into compliance with Environmental Laws and environmental Governmental Authorizations.

     “ Representative ” — with respect to a particular Person, any director, officer, manager, employee, agent, consultant, advisor, accountant, financial advisor, legal counsel or other representative of that Person.

     “ Retained Liabilities ” — as defined in Section 2.4(b).

     “ Schedule ” — a part or section of the Disclosure Schedules.

     “ SEC ” — the United States Securities and Exchange Commission.

     “ Securities Act ” — the Securities Act of 1933, as amended.

     “ Security Agreement” — that Security Agreement securing repayment of the Promissory Note, in the form attached hereto and incorporated herein as Exhibit 1 .

     “ Seller ” — as defined in the introductory paragraph of this Agreement.

     “ Service Contract ” — those contracts for services that directly relate to the maintenance and servicing of the Assets, including any warranties associated therewith.

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     “ SOPs ” — as defined in Section 2.3(c).

     “ Sublease Agreement ” — agreement further defined in Section 2.7(a)(viii) between Buyer and Seller whereby Buyer will sublet a portion of the Improvements to Seller after the Closing on the terms and conditions set forth therein.

     “ Tangible Personal Property ” — all machinery, equipment, tools, furniture, office equipment, supplies, materials, and other items of tangible personal property (other than Inventories) of every kind owned or leased by Seller (whether or not carried on Seller’s books) and located at 9920 Medical Center Drive, Rockville, Maryland, together with any express or implied warranty by the manufacturers or sellers or lessors of any item or component part thereof and all maintenance records and other documents relating thereto.

     “ Tax ” — any income, gross receipts, license, payroll, employment, excise, severance, stamp, occupation, premium, property, environmental, windfall profit, customs, vehicle, airplane, boat, vessel or other title or registration, capital stock, franchise, employees’ income withholding, foreign or domestic withholding, social security, unemployment, disability, real property, personal property, sales, use, transfer, value added, alternative, add-on minimum and other tax, fee, assessment, levy, tariff, charge or duty of any kind whatsoever and any interest, penalty, addition or additional amount thereon imposed, assessed or collected by or under the authority of any Governmental Body or payable under any tax-sharing agreement or any other contract.

     “ Tax Return ” — any return (including any information return), report, statement, schedule, notice, form, declaration, claim for refund or other document or information filed with or submitted to, or required to be filed with or submitted to, any Governmental Body in connection with the determination, assessment, collection or payment of any Tax or in connection with the administration, implementation or enforcement of or compliance with any law relating to any Tax.

     “ Third Party ” — a Person that is not a party to this Agreement.

     “ Third-Party Claim ” — any claim against any Indemnified Person by a Third Party, whether or not involving a Proceeding.

2. SALE AND TRANSFER OF ASSETS; CLOSING

      2.1 Assets to be Sold

     Upon the terms and subject to the conditions set forth in this Agreement, at the Closing, but effective as of the Effective Time, Seller shall sell, convey, assign, transfer and deliver to Buyer, and Buyer shall purchase and acquire from Seller, free and clear of any Encumbrances other than Permitted Encumbrances, all of Seller’s right, title and interest in and to the following (collectively, the “ Assets ”):

     (a) the Lease;

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     (b) all items of property listed in Schedule 2.1(b), along with purchase records, manuals, specifications, turn-over and commissioning packages, maintenance and calibration records, equipment history files, validation studies, certification reports and spare parts, relevant to the ownership and use of the fixed Assets listed therein, to the extent such items exist on May 5, 2005, with the turnover of these records, documents and files to take place prior to June 1, 2005;

     (c) all other items of property, including Tangible Personal Property and any Inventory located at 9920 Medical Center Drive, Rockville, Maryland, but excluding those items of property relating to Seller’s cell banking operations specifically listed in Schedule 2.1(c);

     (d) all Service Contracts listed in Schedule 2.1(d);

     (e) all of the intangible rights and property of Seller in the Assets, subject to the right of Seller to retain copies of each of the SOPs as needed by Seller in the conduct of its business, pursuant to the terms of Section 2.3(c) hereof; and

     (f) all claims of Seller against third parties relating to those Assets which are Tangible Personal Property, whether choate or inchoate, known or unknown, contingent or noncontingent, including all such claims listed in Schedule 2.1(f).

     The parties acknowledge that the Schedules of the various Assets may be modified prior to Closing by their mutual agreement. With respect to the assignment of Seller’s interest in the Lease under Section 2.1(a) hereof, except as otherwise expressly set forth in this Agreement or any agreement entered into pursuant to the Contemplated Transactions, Buyer accepts the Premises under the Lease in its “As Is” and “Where Is” condition as of the date hereof; and except as otherwise expressly set forth in this Agreement or any agreement entered into pursuant to the Contemplated Transactions, Seller makes no warranty of any kind, express or implied, with respect to such Premises (without limitation, Seller make no warranty as to habitability, fitness or suitability of such Premises for a particular purpose; nor as to the compliance or non-compliance of such Premises with the provisions of the Americans with Disabilities Act of 1990, as amended; nor as to the absence of any toxic or otherwise hazardous substances). With respect to the Assets transferred under the remainder of this Section 2.1, except as otherwise expressly set forth in this Agreement or any agreement entered into pursuant to the Contemplated Transactions, Buyer accepts such Assets in their “As Is” and “Where Is” condition as of the date hereof; and except as otherwise expressly set forth in this Agreement or any agreement entered into pursuant to the Contemplated Transactions, Seller makes no warranty of any kind, express or implied, including without limitation warranties of merchantability or fitness for a particular purpose, with respect to such Assets.

     Notwithstanding the foregoing, the transfer of the Assets pursuant to this Agreement shall not include the assumption of any Liability related to the Assets unless Buyer expressly assumes that Liability pursuant to Section 2.4(a).

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      2.2 Excluded Assets

     Notwithstanding anything to the contrary contained in Section 2.1 or elsewhere in this Agreement, the following assets of Seller (collectively, the “ Excluded Assets ”) are not part of the sale and purchase contemplated hereunder, are excluded from the Assets and shall remain the property of Seller after the Closing:

     (a) All assets of Seller not expressly listed in Section 2.1, and the Schedules thereto; and

     (b) The assets of Seller listed in Schedule 2.1(c).

      2.3 Consideration

     The consideration for the Assets (the “ Purchase Price” ) is Seven Million Five Hundred Thousand dollars ($7,500,000). In accordance with Section 2.7(b), at the Closing the Purchase Price shall be delivered by Buyer to Seller as follows:

     (a) Three Million dollars ($3,000,000) by wire transfer;

     (b) Four Million Five Hundred Thousand dollars ($4,500,000) payable in the form of the Promissory Note, with payments due as set forth therein, to be secured by the Guaranty and/or the Security Agreement, as applicable; and

     (c) Upon the Closing, Buyer shall grant Seller license to retain, use and maintain copies of the Bioreliance Standard Operating Procedures Manuals (“ SOPs ”) listed on Schedule 2.1(b) , as needed by Seller in the conduct of its business.

      2.4 Liabilities

     (a)  Assumed Liabilities . On the Closing Date, but effective as of the Effective Time, Buyer shall assume and agree to discharge only the following Liabilities of Seller (the “ Assumed Liabilities ”): (i) any Liability arising after the Effective Time under the Service Contracts described in Schedule 2.1(d) (other than any Liability arising out of or relating to a Breach that occurred prior to the Effective Time), (ii) any and all Liabilities arising after the Effective Time under the Lease; and (iii) Buyer’s obligations under the Sublease.

     (b)  Retained Liabilities . The Retained Liabilities shall remain the sole responsibility of and shall be retained, paid, performed and discharged solely by Seller. “ Retained Liabilities ” shall mean every Liability of Seller as of the Effective Time other than the Assumed Liabilities.

      2.5 Allocation

     The Purchase Price shall be allocated in accordance with Exhibit 2.5. After the Closing, the parties shall make consistent use of the allocation, fair market value and useful lives specified

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in Exhibit 2.5 for all Tax purposes and in all filings, declarations and reports with the IRS in respect thereof, including the reports required to be filed under Section 1060 of the Code. In any Proceeding related to the determination of any Tax, neither Buyer nor Seller shall contend or represent that such allocation is not a correct allocation.

      2.6 Closing

     Closing of the purchase and sale provided for in this Agreement (the “ Closing ”) will occur remotely within five (5) days of Buyer and Seller having satisfied all of their respective closing conditions set forth in Sections 7 and 8 of this Agreement, unless Buyer and Seller otherwise agree.

      2.7 Closing Obligations

     In addition to any other documents to be delivered under other provisions of this Agreement, at the Closing:

     (a) Seller shall deliver to Buyer:

          (i) a bill of sale for all of the Assets that are Tangible Personal Property in the form of Exhibit 2.7(a)(i) (the “ Bill of Sale” ) executed by Seller;

          (ii) an assignment of all of the Assets that are intangible personal property in the form of Exhibit 2.7(a)(ii) , which assignment shall also contain Buyer’s undertaking and assumption of the Assumed Liabilities (the “ Assignment and Assumption Agreement ”) executed by Seller;

          (iii) for Seller’s interest in the Lease, an Assignment and Assumption of Lease in the form of Exhibit 2.7(a)(iii) executed on behalf of Seller (the “ Assignment and Assumption of Lease ”).

          (iv) such other deeds, bills of sale, assignments, certificates of title, documents and other instruments of transfer and conveyance as may reasonably be requested by Buyer in order to effect the terms hereof, each in form and substance reasonably satisfactory to Buyer and its legal counsel and executed by Seller;

          (v) a certificate executed by Seller as to the accuracy of Seller’s representations and warranties as of the date of this Agreement and as of the Closing in accordance with Section 7.1 and as to their compliance with and performance of their covenants and obligations to be performed or complied with at or before the Closing in accordance with Section 7.2;

          (vi) a certificate of the Secretary of Seller certifying, as complete and accurate as of the Closing, certifying and attaching all requisite resolutions or actions of Seller’s board of directors and shareholders approving the execution and delivery of this Agreement

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and the consummation of the Contemplated Transactions and certifying to the incumbency and signatures of the officers of Seller executing this Agreement and any other document relating to the Contemplated Transactions;

          (vii) a Quality Assurance Certificate for all portions of the Improvements other than those set forth in Section 10.2(b) and (c), which shall be provided in accordance with Section 10.2(e); and

          (viii) the Sublease Agreement executed by Seller in the form of Exhibit 2.7(a)(viii) .

     (b) Buyer shall deliver to Seller:

          (i) Three Million dollars ($3,000,000) by wire transfer to an account specified by Seller in a writing delivered to Buyer at least three (3) business days prior to the Closing Date;

          (ii) a promissory note executed by Buyer and payable to Seller in the principal amount of Four Million Five Hundred Thousand dollars ($4,500,000) in the form of Exhibit 2.7(b)(ii) (the “ Promissory Note ”);

          (iii) the Assignment and Assumption Agreement executed by Buyer;

          (iv) a certificate executed by Buyer as to the accuracy of its representations and warranties as of the date of this Agreement and as of the Closing in accordance with Section 8.1 and as to its compliance with and performance of its covenants and obligations to be performed or complied with at or before the Closing in accordance with Section 8.2;

          (v) a certificate of the Secretary of Buyer certifying, as complete and accurate as of the Closing and certifying and attaching all requisite resolutions or actions of Buyer’s board of directors approving the execution and delivery of this Agreement and the consummation of the Contemplated Transactions and certifying to the incumbency and signatures of the officers of Buyer executing this Agreement and any other document relating to the Contemplated Transactions;

          (vi)   the Sublease Agreement executed by Buyer;

          (vii)  the Assignment and Assumption of Lease executed on behalf of Buyer;

          (viii) the Guaranty executed on behalf of the State of Maryland; and

          (ix)    the Security Agreement.

      2.8 Consents

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     If there are any Material Consents that have not yet been obtained as of the Closing with respect to any Service Contract to be transferred to Buyer under Section 2.1(d) (the “ Restricted Material Contracts ”), then Buyer may waive the closing conditions as to any such Material Consent and either: (i) elect to have Seller continue its efforts to obtain the Material Consents, in which case no Restricted Material Contract shall be considered transferred to the Buyer under this or any other Agreement until such time as the appropriate Material Consent for that Restricted Material Contract is obtained; or (ii) elect to have Seller retain that Restricted Material Contract and all Liabilities arising therefrom or relating thereto.

3. REPRESENTATIONS AND WARRANTIES OF SELLER

     Seller represents and warrants to Buyer as follows:

      3.1 Organization and Good Standing

      Schedule 3.1 contains a complete and accurate list of Seller’s jurisdiction of incorporation and any other jurisdictions in which it is qualified to do business as a foreign corporation. Seller is a corporation duly organized, validly existing and in good standing under the laws of its jurisdiction of incorporation, with full corporate power and authority to conduct its business as it is now being conducted, to own or use the properties and assets that it purports to own or use, and to perform all its obligations under the Service Contracts. Seller is duly qualified to do business as a foreign corporation and is in good standing under the laws of the State of Maryland and any other jurisdiction in which the Assets are located.

      3.2 Enforceability; Authority; No Conflict

     (a) This Agreement constitutes the legal, valid and binding obligation of Seller, enforceable against Seller in accordance with its terms. Upon the execution and delivery by Seller each agreement to be executed or delivered by Seller at the Closing (collectively, the “ Seller’s Closing Documents ”), each of Seller’s Closing Documents will constitute the legal, valid and binding obligation of Seller, enforceable against Seller in accordance with its terms. Seller has the absolute and unrestricted right, power and authority to execute and deliver this Agreement and the Seller’s Closing Documents to which it is a party and to perform its obligations under this Agreement and the Seller’s Closing Documents, and such action has been duly authorized by all necessary action by Seller’s shareholders and board of directors.

     (b) Except as set forth in Schedule 3.2(b) , neither the execution and delivery of this Agreement nor the consummation or performance of any of the Contemplated Transactions will, directly or indirectly (with or without notice or lapse of time):

          (i) Breach (A) any provision of any document governing the operations of Seller or (B) any resolution adopted by the board of directors or the shareholders of Seller;

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          (ii) to Seller’s knowledge, Breach or give any Governmental Body or other Person the right to challenge any of the Contemplated Transactions or to exercise any remedy or obtain any relief under any applicable law or any Order to which Seller or any of the Assets may be subject;

          (iii) Breach any provision of, or give any Person the right to declare a default or exercise any remedy under, or to accelerate the maturity or performance of, or payment under, or to cancel, terminate or modify, any Service Contract;

          (iv) Breach any material contract to which Seller is a party; or

          (v) Result in the imposition of any Encumbrance upon the Assets.

     (c) Except as set forth in Schedule 3.2(c), Seller is not required to give any notice to or obtain any Consent from any Person in connection with the execution and delivery of this Agreement or the consummation or performance of any of the Contemplated Transactions.

      3.3 Description of Leased Real Property

      Schedule 3.3 contains a correct legal description, street address and tax parcel identification number of the Premises.

      3.4 Title to Assets; Encumbrances;

     The Lease is in full force and effect and Seller has not assigned, transferred, conveyed or pledged the Lease or its interest in the Lease to any other person or entity. Seller warrants to Buyer that, at the time of Closing, the Assets shall be free and clear of all Encumbrances other than those identified on Schedule 3.4 (the “ Permitted Encumbrances ”).

      3.5 Condition of Assets

     (a) With respect to the Asset transferred under Section 2.1(a) hereof, Seller has not received any notice in writing that the Premises are in violation of any zoning legal requirements.

     (b) The other tangible Assets transferred under the remainder of Section 2.1 are in good repair and good operating condition.

      3.6 Taxes

     There are no Encumbrances on any of the Assets (other than the Premises) that arose in connection with any failure (or alleged failure) to pay any Tax, and Seller has no knowledge of any basis for assertion of any claims attributable to Taxes which, if adversely determined, would result in any such Encumbrance.

      3.7 Governmental Authorizations

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     No Governmental Authorization is required in order for Seller to execute and deliver this Agreement or to consummate or perform of any of the Contemplated Transactions, and to Seller’s knowledge no Governmental Authorization has ever been directly applicable to the Assets.

      3.8 Legal Proceedings; Orders

     (a) Except as set forth in Schedule 3.8(a), there is no pending or, to Seller’s knowledge, threatened Proceeding:

          (i) by or against Seller or that directly relates to the Assets; or

          (ii) that challenges, or that may have the effect of preventing, delaying, making illegal or otherwise interfering with, any of the Contemplated Transactions.

To the knowledge of Seller, no event has occurred or circumstance exists that is reasonably likely to give rise to or serve as a basis for the commencement of any such Proceeding. Seller has delivered to Buyer copies of all pleadings, correspondence and other documents relating to each Proceeding listed in Schedule 3.8(a ). There are no Proceedings listed or required to be listed in Schedule 3.8(a) that would have a material adverse effect on Seller’s use or ownership of the Assets.

     (b) Except as set forth in Schedule 3.8(b ), there is no Order to which to which any of the Assets is subject.

     (c) Except as set forth in Schedule 3.8(c):

          (i) Seller is, and, at all times since inception, has been in compliance with all of the terms and requirements of each Order to which any of the Assets is or has been directly subject;

          (ii) no event has occurred or circumstance exists that is reasonably likely to constitute or result in (with or without notice or lapse of time) a violation of or failure to comply with any term or requirement of any Order to which any of the Assets is directly subject; and

          (iii) Seller has not received, at any time since inception, any notice or other communication (whether oral or written) from any Governmental Body or any other Person regarding any actual, alleged, possible or potential violation of, or failure to comply with, any term or requirement of any Order to which any of the Assets is or has been directly subject.

      3.9 Contracts; No Defaults

      Schedule 2.1(d) contains an accurate and complete list, and Seller has delivered to Buyer accurate and complete copies of, each Service Contract being transferred and assigned to Buyer

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under Section 2.1(d) hereof. Each such Service Contract and the Lease is in full force and effect and enforceable in accordance with its terms. No party to any Service Contract or the Lease is in Breach, or to Seller’s knowledge, in threat of Breach. No event has occurred or circumstance exists that (with or without notice or lapse of time) may contravene, conflict with or result in, or give Seller or other Person the right to declare a default or exercise any remedy under, or to accelerate the maturity or performance of, or payment under, or to cancel, terminate or modify, any Service Contract