EXHIBIT 10.1 - ASSET PURCHASE AGREEMENTAsset Purchase Agreement |
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Exhibit
10.1
ASSET PURCHASE AGREEMENT
between:
REAGENTS APPLICATIONS, INC.,
a
Delaware corporation;
And
CLINIQA CORPORATION
a
California corporation
Dated
as of October 8, 2007
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (hereinafter, along with all
Exhibits hereto, this “Agreement”) is being entered
into as of the close of business on October 8, 2007, by and between
REAGENTS APPLICATIONS, INC .
(“Seller”) a Delaware corporation located at 8225
Mercury Court, San Diego, CA 92121 and CLINIQA
CORPORATION (“Purchaser”) a California
corporation located at 774 Twin Oaks Valley Rd. San Marcos, CA
92069 for the assets of Reagents Applications, Inc
., a wholly owned subsidiary of Hemagen Diagnostics, Inc., a
Delaware Corporation located at 9033 Red Branch Road, Columbia, MD
21045. Seller and Purchaser are referred to collectively
in this Agreement as the “Parties.”
RECITAL
The
Parties wish to provide for the purchase by Purchaser of
certain assets from Seller on the terms and subject to the
conditions and other provisions set forth in this
Agreement.
AGREEMENT
The
Parties, intending to be legally bound, agree as
follows:
1.1.
Sale and Purchase of Specified Assets.
On the terms and subject to the conditions and other provisions set
forth in this Agreement, at the Closing Seller will sell and
transfer to Purchaser, and Purchaser will purchase and receive from
Seller, all of the following, as they exist at the Closing Date
(the “Specified Assets”):
(a)
all
of Seller’s rights and interests in products that are set
forth in Exhibit A (the “Specified
Products”), which includes but is not limited to any 510k
application or 510k approval for any Specified Products; with the
exception that Hemagen shall continue to share the rights and
interest in Raichem formulations and/or 510K clearances for any
Raichem formulations that are or will be used
only in Hemagen’s Analyst®
Consumable Products.
(b)
all
of Seller’s rights and interests in, and the documentary
records reflecting, the proprietary formulas, recipes and
manufacturing procedures for the Specified Products set forth in
Exhibit B (the “Specified
Know-How”); with the exception that Hemagen shall continue to
share the rights and interest in Raichem formulations and/or 510K
clearances for any Raichem formulations that are or will be used
only in Hemagen’s Analyst®
Consumable Products
(c)
all
of Seller’s rights and interests in certain contracts and
purchase orders set forth in Exhibit C (the
“Specified Contracts”);
(d)
Seller’s
customers for the Specified Products and other customers of Seller
that are set forth in Exhibit D (the
“Specified Customers”) and Seller’s business
goodwill;
(e)
all
items of laboratory equipment owned or leased by Seller set forth
on Exhibit E (the “Specified
Laboratory Equipment”);
-2-
(f)
the
laboratory supplies relating to the Specified Products and the
Specified Contracts set forth on Exhibit F
(the “Specified Laboratory Supplies”).
(g)
$100,000
worth of inventory as further described in the Inventory Purchase
Agreement on Exhibit L
;
(h)
all
proprietary documentation, trade secrets and marketing rights
including, but not limited to, trademarks, tradenames, copyrights,
CE marks, FDA approvals, and any licenses for trade owned by
Seller. This includes any pending regulatory filings as
well as the Raichem name; with the exception that Hemagen shall
continue to share the rights and interest in Raichem formulations
and/or 510K clearances for any Raichem formulations that are or
will be used only in Hemagen’s
Analyst® Consumable Products;
(i)
With
respect to the Edwards Freeze Dryer Lyomax 170 (the
“Dryer”) Purchaser shall provide Seller with two
Lypholization runs for Seller’s Analyst
Controls. Purchaser shall provide all control materials
to be used to fill vials; and Seller shall provide bottles, caps,
stoppers and labels. Seller shall provide Purchaser with
specifications for the product and Seller shall pre-approve
material required prior to acceptance of lot. It is
anticipated that each run shall consist of approximately 5,000
vials of Level I control, and 5,000 vials of Level II
control. In addition, Purchaser agrees to remove the
Dryer from the premises by May 31, 2008 or such earlier date that
the Dryer is removed from the building, and to fix and repair the
wall and any other damage caused by such removal to the landlords
satisfaction.
1.2.
Excluded Assets. Notwithstanding
anything to the contrary contained in this Agreement, Seller will
not be required to sell or transfer to Purchaser, and the Specified
Assets will not be deemed to include any right or interest in any
of Seller’s assets not expressly set forth in Section
1.1 above. For
clarification purposes, and without limitation, the following
assets of Seller and/or Hemagen Inc. are expressly excluded from
the sale:
(a)
any
of Seller’s cash, cash equivalents, accounts receivables, all
equipment and inventory related to Hemagen’s Analyst
business, the large conference room table, all inventory with the
exclusion of $100,00 included above in 1.1(g).
(b)
Hemagen
shall continue to share the rights and interest in Raichem
formulations and/or 510K clearances for any Raichem formulations
that are or will be used only in
Hemagen’s Analyst® Consumable Products.
1.3.
Purchase Price . Purchaser will make
the following payments to Seller, which in the
aggregate,
constitutes the purchase price of the Specified Assets
(“the Purchase Price”):
(a)
On
the Closing Date, Purchaser will pay to Seller (without deduction
or setoff of any nature) the sum of three hundred and sixty
thousand U.S. dollars ($360,000.00);
(b)
Purchaser
will pay to Seller (without deduction or setoff of any nature) a
total of eight hundred and forty thousand U.S. dollars
($840,000.00) (hereinafter, along with the interest due on such
payments, the “Cash Remainder Payments”) by means of
monthly payments of principal of seventeen thousand five hundred
U.S. dollars ($17,500.00), plus accrued interest at the rate of
eight percent (8%) per year, each upon the following schedule in
accordance with
-3-
terms
of a promissory note issued to Seller (the “Promissory
Note”) as set forth in Exhibit G
, and dated the Closing Date:
1)
the
first payment shall be made not later than the ninetieth (90
th ) day
afterthe Closing Date;
Once
the Closing Date is ascertained, Seller shall provide
Purchaser with a schedule reflecting the actual dates on which
the Cash Remainder Payments are to be made; provided ,
however , any failure by Seller to provide such
schedule shall in no manner alter, waive, modify, suspend or
otherwise change Purchaser’s obligation to make any Cash
Remainder Payment. Purchaser shall pay interest on
the outstanding balance of the Cash Remainder at the annual
rate of eight percent (8%), which shall begin to accrue on the
Closing Date. Each of the Cash Remainder payments
shall also include a payment of interest at the eight percent
(8%) annual rate for the outstanding balance of the Cash
Remainder for the period prior to each payment.
(c)
Any
payment due by Purchaser under this Agreement and the Promissory
Note, including but not limited to this Section 1.3 , shall be by wire transfer of immediately
available funds pursuant to standing wire instructions provided by
Seller, which Seller may amend upon notice.
1.4.
Purchaser’s Failure To Make Any Payment Due
. If Purchaser fails to make any payment due by
Purchaser to Seller pursuant to this Agreement, the Promissory Note
and the Inventory Purchase Agreement (a “Delinquent
Amount”), within ten (10) days, Seller shall provide
Purchaser of the default specifying the total due to cure the
default and invoices or other support for the amount being claimed
and shall provide the Purchaser with twenty (20) consecutive days
from receipt of the written demand to cure the
default. The Delinquent Amount shall accrue interest
each day on said amount(s) at the higher of (i) sixteen per cent
(16%) per annum (“Delinquent Interest”) or (ii) the
maximum legal amount of interest that may be charged. If
any Delinquent Amount and/or any Delinquent Interest is outstanding
more than thirty (30) days, Seller may immediately accelerate the
date for any Cash Remainder Payments pursuant to the Promissory
Note and Purchaser shall make such payments within two Business
Days of such notice.
1.5.
Personal Guarantee . Each payment due
by Purchaser to Seller pursuant to this Agreement and the
Promissory Note shall be personally guaranteed in writing by
Purchaser’s Chief Executive Officer, Granger Haugh and his
spouse, Marjorie Haugh (the “Personal
Guarantee”). The executed Personal Guarantee shall
be set forth as Exhibit H
to this Agreement.
1.6.
Security Interest . This Agreement
shall be secured by the property set forth in the Security
Agreement that is attached hereto as Exhibit
I . The Security Agreement shall be
executed by Purchaser and delivered to Seller on or before the
Closing Date. Seller may file a financing statement
pursuant to the California Uniform Commercial Code to perfect such
security interest.
1.7.
Allocation of the Purchase Price. The
purchase price set forth in Section 1.3 shall be allocated in the manner set forth
in Exhibit J . Each of the
Parties agrees to report this
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transaction
for tax purposes in accordance with this allocation of
purchase price. The Parties agree that the
allocation is reasonable and is intended to comply with
Internal Revenue Code Section 1060 and the rules and
regulations thereunder.
1.8.
Taxes . Purchaser will bear and pay,
and will reimburse Seller for, any sales taxes, property taxes, use
taxes, transfer taxes, documentary charges, recording fees, filing
fees or similar taxes, charges, fees or expenses that may become
payable in connection with the sale of the Specified Assets or
which are assessed on the Specified Assets for any period on and
after the Closing Date.
1.9.
Bulk Sales Law . Purchaser waives
compliance by Seller with any applicable bulk sales law, and Seller
agrees to indemnify Purchaser against any liability incurred by
Purchaser thereunder by reason of such non-compliance by
Seller.
1.10.
Seller’s Audit Rights . Not more
than once each quarter, Seller shall have the right to audit
Purchaser’s books, records and accounts with respect to any
payment due, alleged by Seller to be due, or paid pursuant to this
Agreement and the Promissory Note.
1.11.
Specified
Employees . The Parties agree that Purchaser
may solicit for employment or other contractual work relationships
(“Employment”) certain employees of Seller who are
involved in the production of Specified Products and the
implementation of the Specified Contracts (the “Specified
Employees”), a List of whom is set forth on
Exhibit K . Purchaser
acknowledges and agrees that:
(a)
Purchaser
has not relied on any representation or statements by Seller as to
the suitability of any Specified Employee for Employment with
Purchaser;
(b)
Purchaser
is solely responsible for conducting its own due diligence as to
each Specified Employee to whom Purchaser may or does make an offer
of Employment;
(c)
Purchaser
is solely responsible for determining whether it is necessary or
desirable, or unnecessary or undesirable, as the case may be, for
Purchaser to offer Employment to, or to continue with any
Employment relationship that may be established with any Specified
Employee, in order for Purchaser to incorporate the Specified
Assets into Purchaser’s business;
(d)
Purchaser’s
obligations under this Agreement, including but not limited to the
payment obligations set forth in Section 1.3 , are not dependent in any manner upon: i)
any Specified Employee accepting any Employment with Purchaser; or
ii) if any Specified Employee accepts Employment, the continuation
of Employment with Purchaser or the Specified employee’s work
performance.
1.12.
Closing . The closing of the purchase
and sale of the Specified Assets (the “Closing”) will
take place at the offices of Seller located at 8225 Mercury Court,
San Diego, CA 92121, at a time and on a date to be designated by
Seller, which will be at least one business day but not more than
three business days after the satisfaction or waiver of the last
condition to be satisfied or waived of the conditions set forth in
Sections 6 and 7 (other than those conditions that by their
nature are to be satisfied at the Closing). For purposes
of this Agreement, “Closing Date” means the date on
which the Closing actually takes place.
-5-
2.
REPRESENTATIONS
AND WARRANTIES OF SELLER.
2.1.
Title to Assets . As of the Closing
Date, except as otherwise described in this Agreement, Seller will
have good and valid title to all of the personal property that
constitutes the Specified Assets free and clear of any liens or
encumbrances, except for (i) any lien for current taxes not yet due
and payable; (ii) any lien or encumbrances referred to in the
Specified Contracts; and (iii) minor liens and encumbrances that
have arisen in the ordinary course of business and that do not
materially detract from the value of the Specified Assets subject
thereto.
2.2.
Specified Products . Seller has not
knowingly granted any Person a license under any of the Specified
Products Seller has received no written claim of infringement of
any intellectual property rights of any person arising out of
Seller’s development, manufacture, use, sale, or offer for
sale of the Specified Products. Seller has supplied to
Purchaser true and correct copies of the 510k applications and
approvals for certain Specified Products.
2.3.
Specified Contracts . Seller has made
available to Purchaser true and correct copies of each Specified
Contracts identified in Exhibit C
. Seller has received no notice that Seller is in
material breach of any such executed contract, and, to
Seller’s knowledge, no other party to any such contract is in
material breach of such contract. Seller expressly makes
no representation or warranty as to: (i) the ability of Purchaser
to take an assignment of any of the Specified Contracts; or (ii)
the ability or willingness of any party to a Specified Contract to
establish or thereafter to continue a business relationship with
Purchaser.
2.4.
Regulatory Matters. Seller has
received no written notice that any recalls, field notifications or
seizures have been ordered or, to Seller’s knowledge,
threatened by any governmental body with respect to any of the
Specified Products. Seller has not received a warning
letter or other similar written notice from the U.S. Food and Drug
Administration (FDA) regarding the Specified Products or the
manufacturing facilities used to manufacture the Specified
Products. Seller is in substantial compliance with the
laws applicable to the development, manufacture, labeling, testing
and inspection of the Specified Products and the operation of
manufacturing facilities used to manufacture the Specified
Products, and with all applicable regulations, policies and
procedures promulgated by the FDA.
2.5.
Legal Proceedings. There is no lawsuit
or other legal proceeding pending or, to Seller’s knowledge,
being threatened against Seller as of the date of this Agreement
that involves the Specified Assets and which would reasonably be
expected to result in a judgment having a material
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