Exhibit 10.40
EXECUTION COPY
ASSET PURCHASE
AGREEMENT
between:
Discovery
Partners International, INC.,
a Delaware corporation;
and
IRORI DISCOVERY,
INC.,
a California corporation
Effective as of October 7, 2005
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TABLE OF CONTENTS
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PAGE
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1.
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SALE OF ASSETS; RELATED TRANSACTIONS
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1
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1.1
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Sale of Assets
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1
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1.2
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Purchase Price
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1
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1.3
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Purchase Price Adjustment
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2
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1.4
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Sales Taxes
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3
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1.5
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Allocation
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3
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1.6
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Closing
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4
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2.
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REPRESENTATIONS AND WARRANTIES OF THE
SELLER
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4
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2.1
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Due Organization
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4
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2.2
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Title to Assets
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5
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2.3
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Receivables
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5
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2.4
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Employee And Labor Matters
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5
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2.5
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Authority; Binding Nature of
Agreements
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5
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2.6
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Non-Contravention; Consents
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5
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2.7
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Disclaimer of Representations and
Warranties
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6
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2.8
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Brokers
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6
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2.9
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Intellectual Property
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6
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2.10
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Litigation
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9
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2.11
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Taking of Necessary Action; Further
Action
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9
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2.12
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Authority; Binding Nature of
Agreements
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9
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2.13
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Financial Statements
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10
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3.
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REPRESENTATIONS AND WARRANTIES OF THE
PURCHASER
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10
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3.1
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Due Organization
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10
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3.2
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Authority; Binding Nature of
Agreements
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10
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3.3
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Non-Contravention; Consents
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10
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3.4
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Certain Proceedings
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11
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3.5
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Brokers
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11
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4.
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CERTAIN POST-CLOSING COVENANTS
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11
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4.1
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Further Actions
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11
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4.2
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Employee Matters
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11
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i
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TABLE OF CONTENTS
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(CONTINUED)
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PAGE
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4.3
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Regulatory Matters and Bulk Sales
Laws
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11
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4.4
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ARCS Technology
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12
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4.5
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Kan-Service Business
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12
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4.6
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License
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13
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4.7
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NIH Universal Store
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14
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4.8
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Compound Storage Business
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14
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4.9
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Non-Competition and Non-Solicitation
Agreement
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14
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4.10
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Novation of Assumed Contracts
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15
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4.11
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Publicity
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16
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4.12
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Business Information
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16
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4.13
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Seller's Permit
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16
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4.14
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Additional Covenants
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16
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5.
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MISCELLANEOUS PROVISIONS
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16
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5.1
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Further Assurances
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16
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5.2
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Fees and Expenses
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16
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5.3
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Attorneys' Fees
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16
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5.4
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Notices
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16
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5.5
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Captions
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17
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5.6
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Counterparts
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17
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5.7
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Governing Law
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18
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5.8
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Successors And Assigns
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18
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5.9
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Waiver
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18
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5.10
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Amendments
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18
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5.11
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Severability
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18
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5.12
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Entire Agreement
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18
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5.13
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Construction
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19
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5.14
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Arbitration
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19
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5.15
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Limitation of Liability
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20
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ii
ASSET PURCHASE
AGREEMENT
This Asset Purchase Agreement is entered into as of October 7, 2005 (the
“Effective Date”), by and between: DISCOVERY
PARTNERS INTERNATIONAL, INC., a Delaware corporation (the
“Seller”), and IRORI DISCOVERY, INC., a
California corporation (the “Purchaser”). Certain
capitalized terms used in this Agreement are defined in Exhibit
A.
Recitals
The Seller wishes to provide for the sale of certain of the
Seller's assets relating to the Seller's Discovery Systems Division
(the “Business”) to the Purchaser on the terms set
forth in this Agreement.
AGREEMENT
The parties to this Agreement, intending to be legally bound, agree
as follows:
1.
SALE OF ASSETS; RELATED TRANSACTIONS.
1.1 Sale
of Assets. The Seller shall cause to be sold, assigned,
transferred, conveyed and delivered to the Purchaser, at the
Closing (as defined below), good and valid title to the Assets (as
defined below), free of any Encumbrances, on the terms and subject
to the conditions set forth in this Agreement. For purposes of this
Agreement, “Assets” shall mean and include those assets
related to the Business identified on Exhibit B ; provided,
however, that to the extent that any assets owned by the Seller on
the Effective Date are necessary for the operation of the Business
as currently operated by the Seller are not included on Exhibit
B (the “Omitted Assets” and each an “Omitted
Asset” ), the Seller will transfer, or if such transfer is
not practicable, the parties will make good faith efforts to
license or otherwise make generally available to the Purchaser all
of such Omitted Assets, without any payment or other obligations
imposed upon the Purchaser if such payment or other obligation is
de minimis. Notwithstanding the foregoing: (i) the Omitted
Assets shall not include any cash or licenses to commercially
available software unless such software is expressly listed on
Exhibit B or is located on any computer or other equipment
transferred to the Purchaser as an Asset and (ii) the Omitted
Assets shall not include any asset of the Seller not otherwise
listed on Exhibit B if such transfer, license or
availability of such Omitted Asset would impair the operations of
the Seller.
1.2 Purchase
Price.
(a)
As
consideration for the sale of the Assets to the
Purchaser:
(i)
at the
Closing, the Purchaser shall pay to the Seller, in cash, a total of
$1,500,000 (the “Closing Purchase Price”), which amount
shall be subject to adjustment pursuant to Section 1.3;
and
(ii)
at the
Closing, the Purchaser shall assume the Assumed Liabilities by
delivering to the Seller an Assignment and Assumption Agreement in
substantially the
1
form of Exhibit C (the
“Assumption Agreement”). Purchaser shall not
assume any liabilities of Seller pursuant hereto, other than the
Assumed Liabilities.
(b)
For purposes of this Agreement “Assumed Liabilities”
shall mean only the following liabilities of the Seller (and
specifically excluding the liabilities set forth on Schedule
1.2(b) ):
(i)
all accounts payable and accrued
liabilities of the Seller relating to the Business arising after
August 31, 2005;
(ii)
all
obligations, duties and liabilities of the Seller continuing after
the Closing under the Contracts identified on Exhibit D to
this Agreement (the “Assumed Contracts”), which become
due and payable or are required to be performed after the Closing
Date, except to the extent arising from any breach or default
occurring prior to the Closing Date;
(iii) all
liabilities expressly listed or described on Schedule
1.2(b)(iii) ;
(iv)
all liabilities related to the Assets to the extent arising from or
related to any facts or circumstances occurring after the Closing
Date;
(v)
the obligations of the Seller for existing and future field service
and warranty expenses and liabilities for all Business products set
forth on Schedule 1.2(b)(v) (the “Business
Products”), including the Universal Stores sold to the Seller
and Sanofi-Aventis;
(vi)
the obligations of the Seller for non-salary marketing of Business
Products, customer sales and support expenses for the Business that
relate directly to the Assets, including, but not limited to,
commitments for trade shows;
(vii)
the obligations of the Seller set
forth on Schedule 1.2(b)(vii) for non-salary research and
development expenses for Business Products, including, but not
limited to, commitments for parts and materials, license fees, and
consulting services to be used in the Business that relate directly
to the Assets.
1.3
Purchase Price Adjustment.
(a)
Within
60 days after the Closing, the Seller shall prepare and deliver to
the Purchaser (i) a balance sheet for the Business as of June 30,
2005, August 31, 2005, and the Closing Date, (ii) a cash flow
statement for the Business for the period from September 1, 2005
through the Closing Date (collectively, the “Business
Financial Information”), and (iii) a calculation of the
Adjusted Purchase Price. In the event that the Adjusted
Purchase Price is greater than the Closing Purchase Price, the
amount of such difference shall be paid by Purchaser to
Seller. In the event that the Closing Purchase Price is
greater than the Adjusted Purchase Price, the amount of such
difference shall be paid by the Seller to Purchaser.
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(b)
If
within 15 days following delivery of the Business Financial
Information and calculation of Adjusted Purchase Price, the
Purchaser has not given the Seller written notice of its objection
to the calculation of Adjusted Purchase Price (which notice shall
state the basis of the Purchaser's objection, such notice being
referred to herein as the “Dispute Notice”), then the
calculation of Adjusted Purchase Price shall be final and binding
on the parties, and the Purchaser or Seller, as the case may be,
shall make the payment to the other party contemplated in Section
1.3(a).
(c)
If the
Purchaser delivers to the Seller the Dispute Notice, the Purchaser
and the Seller shall attempt to resolve in good faith any disputed
items during the 15-day period subsequent to the Seller's receipt
of the Dispute Notice. If, after such 15-day period, the
Seller and the Purchaser cannot resolve such dispute, the
unresolved disputed items will be referred to a
nationally-recognized firm of certified public accountants as the
Seller and the Purchaser may designate (the “Accounting
Firm”). Such referral shall be in the form of written
statements of position by the Seller and the Purchaser to the
Accounting Firm, with each party having the opportunity to respond
to such written statements and any requests for statements or
information that may be made by the Accounting Firm. The
Accounting Firm shall as promptly as practicable (and in any event
within 30 days) make a final determination of the Business
Financial Information, which determination shall be made on the
same basis and applying the same accounting principles, policies
and practices that were used in preparing the Financial Statements
(as defined in Section 2.14 below), and calculation of the Adjusted
Purchase Price which shall be final and binding on the
parties. Each of the Seller and the Purchaser shall provide
the Accounting Firm with all information and documentation that the
Accounting Firm reasonably requests in connection with its review
of the disputed items. The fees and expenses incurred by the
Accounting Firm in conducting the audit of the Business Financial
Information shall be borne (i) by the Purchaser, in the event that
the Purchase Price calculated using the Final Statement is
greater than the Purchase Price as determined using the
original Business Financial Information (the “Original
Purchase Price”) by an amount equal to or greater than five
percent (5%) of the Original Purchase Price, (ii) by the Seller, in
the event that the Purchase Price calculated using the Final
Statement is less than the Original Purchase Price by an
amount equal to or greater than five percent (5%) of the Original
Purchase Price, or (iii) in all other circumstances, fifty percent
(50%) by the Seller and fifty percent (50%) by the
Purchaser.
(d)
All
payments required to be made in accordance with this Section 1.3
shall be made within ten days after the calculation of the Adjusted
Purchase Price becomes final and binding on the parties pursuant to
this Section 1.3.
1.4
Sales Taxes. Any sales taxes, use taxes, transfer
taxes, documentary charges, recording fees or similar taxes,
charges, fees or expenses that may become payable in connection
with the sale of the Assets to the Purchaser or in connection with
any of the other Transactions shall be borne by the
Purchaser.
1.5
Allocation. The parties hereto intend that the
purchase of the Assets be treated as a taxable transaction for
federal and state income tax purposes. Within 60 days of the
Closing, the Seller shall deliver a proposed allocation of the
consideration referred to in Section 1.2, as adjusted pursuant to
Section 1.3, among the Assets (the “Allocation”), which
Allocation shall be
3
reasonably acceptable to the Purchaser and
determined in a manner consistent with Section 1060 of the Internal
Revenue Code and the Treasury Regulations thereunder. The
Allocation shall be conclusive and binding upon the Purchaser and
the Seller for all purposes, and the Purchaser and the Seller agree
that all returns and reports (including Internal Revenue Service
(“IRS”) Form 8594) and all financial statements shall
be prepared in a manner consistent with (and the parties shall not
otherwise take a position on a Tax Return that is inconsistent
with) the Allocation unless required by the IRS or any other
applicable taxing authority.
1.6
Closing.
(a)
The closing of the sale of the Assets to the Purchaser (the
“Closing”) shall take place at the offices of Cooley
Godward LLP in San Diego, California, at 10:00 a.m. on the
Effective Date. For purposes of this Agreement,
“Closing Date” shall mean the time and date as of which
the Closing takes place.
(b)
At the Closing:
(i)
the Seller shall execute and deliver to the Purchaser such bills of
sale, endorsements, assignments and other documents as the
Purchaser may reasonably request to assign, convey, transfer and
deliver to the Purchaser good and valid title to the Assets free of
any Encumbrances;
(ii)
the Purchaser shall pay to the Seller the Purchaser Price in cash
as contemplated by Section 1.2(a)(i);
(iii)
the Purchaser shall execute and deliver to the Seller the
Assumption Agreement; and
(iv)
the Chief Executive Officer of the Seller shall execute and deliver
to the Purchaser a certificate to the effect that each of the
representations and warranties specified in Section 2 are true as
of the Effective Date in all respects; and
(v)
the Purchaser and the Seller shall execute and deliver to the other
party a Transition Services Agreement in the form of Exhibit
E (the “Transition Services Agreement”).
2.
REPRESENTATIONS AND WARRANTIES OF
THE SELLER.
The Seller represents and warrants,
to and for the benefit of the Purchaser, as follows:
2.1
Due Organization.
The Seller is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware. The
Seller is in good standing as a foreign corporation in the State of
California and is duly authorized to conduct business and is in
good standing under the laws of each other jurisdiction where such
qualification is required and in which the failure to so qualify
would have a Material Adverse Effect on the Seller.
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2.2
Title to Assets.
The Seller owns, and has good and valid title to, all of the
Assets. Except as set forth in Part 2.2 of the Disclosure
Schedule, all of the Assets are owned by the Seller free and clear
of any Encumbrances. Part 2.2 of the Disclosure Schedule
identifies all of the Assets that are being leased or licensed to
the Seller.
2.3
Receivables.
Schedule B.4 to Exhibit B provides a breakdown and
aging of all accounts receivable, notes receivable and other
receivables of the Seller that are related to the Business that
have arisen after August 31, 2005.
2.4
Employee And Labor Matters. Part 2.4 of the Disclosure Schedule
accurately sets forth, with respect to each of the employees
identified on Exhibit F (each a “Transferred
Employee” and collectively referred to herein as the
“Transferred Employees”):
(a)
the name and title of such Transferred Employee and the date as of
which such Transferred Employee was originally hired by the
Seller;
(b)
such Transferred Employee's annualized compensation as of the date
of this Agreement; and
(c)
each Seller Employee Plan in which such Transferred Employee
participates or is eligible to participate.
2.5
Authority; Binding Nature of Agreements. The Seller has the right, power and
authority to enter into and to perform its obligations under each
of the Transactional Agreements to which it is or may become a
party; and the execution, delivery and performance by the Seller of
the Transactional Agreements to which it is or may become a party
have been duly authorized by all necessary action on the part of
the Seller, its board of directors and its officers. This
Agreement constitutes the legal, valid and binding obligation of
the Seller, enforceable against the Seller in accordance with its
terms. Upon the execution of each of the other Transactional
Agreements at the Closing, each of such other Transactional
Agreements to which the Seller is a party will constitute the
legal, valid and binding obligation of the Seller and will be
enforceable against the Seller in accordance with its terms, except
as such enforceability may be limited by principles of public
policy and subject to the laws of general application relating to
bankruptcy, insolvency and the relief of debtors and the rules of
law governing specific performance, injunctive relief or other
equitable remedies.
2.6
Non-Contravention; Consents. Except as set forth in Part 2.6 of the
Disclosure Schedule, neither the execution and delivery of any of
the Transactional Agreements by the Seller, nor the consummation or
performance of any of the Transactions by the Seller, will directly
or indirectly (with or without notice or lapse of time):
(a)
conflict with any provision of the Seller's charter
documents;
(b)
conflict with any resolution adopted by the board of directors or
the shareholders of the Seller;
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(c)
contravene, conflict with or result in a violation of, or give any
Governmental Body or other Person the right to challenge any of the
Transactions or to exercise any remedy or obtain any relief under,
any Legal Requirement or any Order to which the Seller, or any of
the Assets, is subject; or
(d)
contravene, conflict with or result in a violation or breach of, or
result in a default under, any provision of any material contract
or agreement to which the Seller is a party.
Except as set forth in Part 2.6 of the
Disclosure Schedule, the Seller is not required to make any filing
with or give any notice to, or to obtain any Consent from, any
Person in connection with the execution and delivery of any of the
Transactional Agreements or the consummation or performance of any
of the Transactions.
2.7
Disclaimer of Representations and Warranties.
EXCEPT WITH RESPECT TO THE
EXPRESS REPRESENTATIONS AND WARRANTIES SPECIFICALLY SET FORTH
HEREIN, THE SELLER MAKES NO, AND EXPRESSLY DISCLAIMS ANY,
REPRESENTATION OR WARRANTY OF ANY KIND OR NATURE, EXPRESS OR
IMPLIED, ORAL OR WRITTEN, WHETHER OF MERCHANTABILITY, USAGE,
SUITABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR QUALITY OF THE
ASSETS, OR ANY PART THEREOF, OR AS TO THE CONDITION, WORKMANSHIP OR
VALUE THEREOF OR THE ABSENCE OF ANY DEFECTS THEREIN, WHETHER LATENT
OR PATENT. IT IS UNDERSTOOD BY THE PARTIES THAT THE ASSETS
ARE TO BE CONVEYED HEREUNDER “AS-IS” AND
“WHERE-IS” ON THE CLOSING DATE AND IN THEIR THEN
PRESENT CONDITION, AND THE PURCHASER SHALL RELY SOLELY UPON ITS OWN
INVESTIGATION AND EXAMINATION THEREOF.
2.8
Brokers. Except
for any fees due to B.Riley & Co., the Seller has not agreed or
become obligated to pay, or has taken any action that might result
in any Person claiming to be entitled to receive, any brokerage
commission, finder's fee or similar commission or fee in connection
with any of the Transactions. Seller shall be solely
responsible for any such fees or other amounts due and shall
indemnify and hold harmless Purchaser from any fees or claims
associated therewith.
2.9
Intellectual Property.
(a)
Schedule B.3 to Exhibit B lists all Transferred Intellectual
Property owned by, filed in the name of, or applied for, by the
Seller and lists any proceedings or actions before any court or
tribunal (including the United States Patent and Trademark Office
(the “PTO”) or equivalent authority anywhere in the
world) related to any Transferred Intellectual Property.
(b)
To the Seller's knowledge, each item of Transferred Intellectual
Property is valid and subsisting, and all necessary registration,
maintenance and renewal fees in connection with such Transferred
Intellectual Property have been paid and all necessary documents
and certificates in connection with such Transferred Intellectual
Property have been filed with the relevant patent, copyright,
trademark or other authorities in the United States or foreign
jurisdictions, as the case may be, for the purposes of maintaining
such Transferred
6
Intellectual Property. To the Seller's
knowledge, in each case in which the Seller has acquired any
Transferred Intellectual Property from any Person, the Seller has
recorded the assignment of such Transferred Intellectual Property
with the relevant Governmental Body, including the PTO, the U.S.
Copyright Office, or their respective equivalents in any relevant
foreign jurisdiction, as the case may be. Except as set forth
on Part 2.9(b) of the Disclosure Schedule, to the Seller's
knowledge, the Seller has not claimed a particular status,
including “Small Business Status,” in the application
for any Transferred Intellectual Property, which claim of status
was at the time made, or which has since become, inaccurate or
false or that will no longer be true and accurate as a result of
the Closing.
(c)
The Seller has no knowledge of any facts or circumstances that
would render any Transferred Intellectual Property invalid or
unenforceable. The Seller has no knowledge of any
misrepresentation or failure to disclose, any fact or circumstances
in any application for any Transferred Intellectual Property that
would constitute fraud or a misrepresentation with respect to such
application or that would otherwise affect the validity or
enforceability of any Transferred Intellectual Property.
(d)
Each item of Transferred Intellectual Property is free and clear of
any Encumbrances (1) except as set forth in Part 2.2 of the
Disclosure Schedule and (2) except for non-exclusive licenses
granted to end-user customers in the ordinary course of
business. Except as set forth in Part 2.2 of the Disclosure
Schedule, the Seller is the exclusive owner or exclusive licensee
of all Transferred Intellectual Property. Without limiting
the foregoing, to the Seller's knowledge: (i) the Seller is
the exclusive owner of all Trademarks included in the Transferred
Intellectual Property; and (ii) the Seller owns exclusively, and
has good title to, all Copyrights that are included in the
Transferred Intellectual Property.
(e)
Except as set forth in Part 2.9(e) of the Disclosure Schedule, to
the knowledge of Seller, all Transferred Intellectual Property will
be fully transferable, alienable or licensable by Purchaser without
restriction.
(f)
To the extent that any Technology associated with the Transferred
Intellectual Property has been developed or created by a third
party for the Seller, the Seller has, to its knowledge, a written
agreement with such third party with respect thereto and the Seller
thereby either (i) has obtained ownership of, and is the exclusive
owner of, or (ii) has obtained a license (sufficient for the
conduct of the Business as currently conducted) to all such third
party's Intellectual Property Rights in such Technology by
operation of law or by valid assignment.
(g)
With exception of “shrink-wrap” or similar
widely-available commercial end-user licenses, to the Seller's
knowledge all Technology claimed or covered by the Transferred
Intellectual Property or otherwise included in the Assets was
written and created solely by either (i) employees of the Seller
acting within the scope of their employment or (ii) by third
parties who have validly and irrevocably assigned all of their
rights, including Intellectual Property Rights therein, to the
Seller.
(h)
The Seller has taken all commercially reasonable steps to protect
the Seller's rights in confidential information and trade secrets
of Seller or provided by any other Person to the Seller.
Without limiting the foregoing, the Seller has, and enforces, a
policy
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requiring each employee and consultant of the
Seller involved in the Business to execute a proprietary
information, confidentiality and assignment of inventions agreement
in favor of the Seller substantially in the form(s) attached hereto
as Exhibit G .
(i)
Except as set forth in Part 2.9(i) of the Disclosure Schedule, the
Seller has, to its knowledge, not transferred ownership of, or
granted any exclusive license of or right to use, or authorized the
retention of any exclusive rights to use or joint ownership of, any
Technology or Intellectual Property Right that is Transferred
Intellectual Property, to any other Person.
(j)
To the Seller's knowledge, Part 2.9(j) of the Disclosure Schedule
lists all contracts, licenses and agreements to which the Seller is
a party with respect to any Transferred Intellectual Property and
any Intellectual Property Rights relating to the Business.
Except as set forth in Part 2.9(j) of the Disclosure Schedule, the
Seller, to its knowledge, is not in breach of nor has the Seller
failed to perform under, any of the foregoing contracts, licenses
or agreements and, to the Seller's knowledge, no other party to any
such contract, license or agreement is in breach thereof or has
failed to perform thereunder.
(k)
Except as set forth in Part 2.9(k) of the Disclosure Schedule, to
the knowledge of the Seller, there are no contracts, licenses or
agreements between the Seller and any other person with respect to
Transferred Intellectual Property under which there is any dispute
regarding the scope of such agreement, or performance under such
agreement, including with respect to any payments to be made or
received by the Seller thereunder.
(l)
To the Seller's knowledge, the operation of the Business, including
but not limited to the design, development, use, import, branding,
advertising, promotion, marketing, manufacture and sale of the
products, technology or services (including products, technology or
services currently under development) of Seller does not infringe
or misappropriate any Intellectual Property Right of any Person,
violate any right of any Person (including any right to privacy or
publicity) or constitute unfair competition or trade practices
under the laws of any jurisdiction, and Seller has not received
notice from any Person claiming that such operation or any act,
product, technology or service (including products, technology or
services currently under development) of the Seller infringes or
misappropriates any Intellectual Property Right of any Person or
constitutes unfair competition or trade practices under the laws of
any jurisdiction (nor does the Seller have knowledge of any basis
therefor).
(m)
To the Seller's knowledge, no Person is infringing or
misappropriating any Transferred Intellectual Property.
(n)
To the Seller's knowledge, no Transferred Intellectual Property is
subject to any proceeding or outstanding decree, order, judgment or
settlement agreement or stipulation that restricts in any manner
the use, transfer or licensing thereof by the Seller or may affect
the validity, use or enforceability of such Transferred
Intellectual Property.
(o)
Except as set forth in Part 2.9(o) of the Disclosure Schedule, to
the Seller's knowledge there are no royalties, fees, honoraria or
other payments payable by the Seller to any Person by reason of the
ownership, development, use, license, sale or disposition
of
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Transferred Intellectual Property, other than
salaries and sales commissions paid to employees and sales agents
in the ordinary course of business.
2.10
Litigation. Part
2.10 of the Disclosure Schedule sets forth each instance in which
the Seller (or any of the Assets) (i) is subject to any outstanding
injunction, judgment, order, decree, ruling, or charge or (ii) is
or has been, or, to the knowledge of the Seller, is threatened to
be made a party, to any action, suit, proceeding, hearing,
arbitration, or investigation of, in, or before any court or
quasi-judicial or administrative agency of any federal, state,
local, or foreign jurisdiction or before any arbitrator.
2.11
Taking of Necessary Action; Further Action. From time to time after the Closing, at
the request of either party hereto and at the expense of such
party, the parties hereto shall execute and deliver such other
instruments of sale, transfer, conveyance, assignment and
confirmation and take such action as each such party may reasonably
determine is necessary to evidence the Transactions and to
transfer, convey and assign to Purchaser, and to confirm
Purchaser's title to or interest in the Assets, to put Purchaser in
actual possession and operating control thereof and to assist
Purchaser in exercising all rights with respect thereto (including,
without limitation, cooperating as Purchaser may reasonably request
to obtain valid and enforceable assignments with respect to the
Transferred Intellectual Property from any inventor or other Person
from whom the Seller acquired any of the Transferred Intellectual
Property). Subject to the limitations of authority described
herein, the Seller hereby constitutes and appoints the Purchaser
and its successors and assigns as its true and lawful attorney in
fact in connection with the Transactions, with full power of
substitution, in the name and stead of the Seller but on behalf of
and for the benefit of the Purchaser and its successors and
assigns, to demand and receive any and all of the Assets, and to
give receipt and release for and in respect of the same and any
part thereof, and from time to time to institute and prosecute, in
the name of the Seller or otherwise, for the benefit of the
Purchaser or its successors and assigns, proceedings at law, in
equity, or otherwise, which the Purchaser or its successors or
assigns reasonably deem proper in order to collect or reduce to
possession or endorse any of the Assets. The power of
attorney referred to in the preceding sentence will be effective
ten (10) business days following the Purchaser's request pursuant
to this Section 2.11 if the Seller unreasonably refuses to comply
with or fails to respond to such request.
2.12
Authority; Binding Nature of Agreements. The Seller has all necessary power and
authority to enter into and perform its obligations under this
Agreement, and the execution and delivery of this Agreement by the
Seller have been duly authorized by all necessary action on the
part of the Seller and its board of directors and, if applicable,
shareholders. The Seller has the absolute and unrestricted
right, power and authority to enter into and perform its
obligations under the Transactional Agreements to which it is or
may become a party, and the execution, delivery and performance of
the Transactional Agreements to which it is or may become a party
by the Seller have been duly authorized by all necessary action on
the part of the Seller and its board of directors and, if
applicable, shareholders. This Agreement constitutes the
legal, valid and binding obligation of the Seller, enforceable
against it in accordance with its terms. Upon the execution
and delivery of the Transactional Agreements to which it is or may
become a party at the Closing, such Transactional Agreements will
constitute the legal, valid and binding obligations of the Seller,
enforceable against the Seller in accordance with their terms,
except as
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such enforceability may be limited by principles
of public policy and subject to the laws of general application
relating to bankruptcy, insolvency and the relief of debtors and
rules of law governing specific performance, injunctive relief or
other equitable remedies.
2.13 Financial
Statements. The
Seller has delivered to the Purchaser the financial statements
referenced in clause “(a)” below and will deliver,
promptly following the Closing, the financial statements referenced
in clause “(b)” below (collectively, the
“Financial Statements”): (a) a balance sheet for the
Business as of June 30, 2005 and August 31, 2005; and (b) an
estimated cash flow statement for the Business for the period from
September 1, 2005 through September 30, 2005. The Financial
Statements fairly and accurately present the contents thereof and
were prepared on a consistent basis.
3.
REPRESENTATIONS AND w
ARRANTIES OF THE p
URCHASER.
The Purchaser represents and
warrants, to and for the benefit of the Seller, as
follows:
3.1 Due
Organization. The Purchaser is a corporation duly
organized, validly existing and in good standing under the laws of
the State of California and is duly authorized to conduct business
and is in good standing under the laws of each other jurisdiction
where such qualification is required and in which the failure to so
qualify would have a Material Adverse Effect on the
Purchaser.
3.2
Authority; Binding Nature of Agreements. The Purchaser
has all necessary power and authority to enter into and perform its
obligations under this Agreement, and the execution and delivery of
this Agreement by the Purchaser have been duly authorized by all
necessary action
