Exhibito 10.4
|
CONFIDENTIAL
TREATMENT REQUESTED
|
|
EXECUTION
VERSION
|
|
UNDER 17 C.F.R
§§ 200.80(b)4, AND 240.24b-2
|
|
|
STRATEGIC ALLIANCE MASTER
AGREEMENT
AMONG
IBIS BIOSCIENCES,
INC.
ISIS PHARMACEUTICALS,
INC.
AND
ABBOTT MOLECULAR
INC.
January 30,
2008
TABLE OF
CONTENTS
|
|
|
|
Page
|
|
Section 1.
|
|
Definitions
|
2
|
|
|
|
|
|
|
Section 2.
|
|
Financing Closing; Transaction
Documents
|
11
|
|
|
|
|
|
|
Section 3.
|
|
Representations And Warranties.
|
12
|
|
3.1
|
|
Representations and Warranties of Ibis and
Isis
|
12
|
|
|
|
(a)
|
Power and Authority
|
12
|
|
|
|
(b)
|
Enforceability
|
12
|
|
|
|
(c)
|
Governmental Authority; Consents
|
12
|
|
|
|
(d)
|
No
Conflicts
|
13
|
|
|
|
(e)
|
Due
Organization; Qualification
|
13
|
|
|
|
(f)
|
Subsidiaries
|
13
|
|
|
|
(g)
|
Capitalization; Voting Rights
|
14
|
|
|
|
(h)
|
Agreements; Liabilities
|
14
|
|
|
|
(i)
|
Obligations to Related Parties
|
15
|
|
|
|
(j)
|
Title to Properties and Tangible Assets; Liens,
Etc.
|
15
|
|
|
|
(k)
|
Sufficiency of Assets
|
15
|
|
|
|
(l)
|
Intellectual Property
|
16
|
|
|
|
(m)
|
Compliance with Other Instruments
|
20
|
|
|
|
(n)
|
Litigation
|
20
|
|
|
|
(o)
|
Tax
Matters
|
20
|
|
|
|
(p)
|
Employees
|
21
|
|
|
|
(q)
|
Compliance with Laws; Licenses
|
23
|
|
|
|
(r)
|
Environment, Health and Safety
|
24
|
|
|
|
(s)
|
Offering Valid
|
24
|
|
|
|
(t)
|
Financial Statements
|
25
|
|
|
|
(u)
|
Subsequent Events
|
25
|
|
|
|
(v)
|
Brokers’ Fees
|
26
|
|
|
|
(w)
|
Leased Real Property
|
27
|
|
|
|
(x)
|
Contracts
|
27
|
|
|
|
(y)
|
Insurance
|
28
|
|
|
|
(z)
|
Customers and Suppliers
|
28
|
|
|
|
(aa)
|
No
Material Adverse Effect
|
28
|
|
|
|
(bb)
|
Names and Locations
|
28
|
|
|
|
(cc)
|
Directors, Officers and Bank
Accounts
|
28
|
|
|
|
(dd)
|
Regulatory Filings
|
28
|
|
|
|
(ee)
|
Disclosure
|
29
|
|
3.2
|
|
Representations and Warranties of
AMI
|
29
|
|
|
|
(a)
|
Power and Authority
|
29
|
|
|
|
(b)
|
Enforceability
|
29
|
|
|
|
(c)
|
Governmental Authority; Consents
|
29
|
|
|
|
(d)
|
No
Conflicts
|
29
|
|
|
|
(e)
|
Due
Organization; Qualification
|
29
|
i
|
|
|
(f)
|
Investment Representations
|
29
|
|
|
|
(g)
|
Transfer Restrictions
|
30
|
|
|
|
(h)
|
Legends
|
30
|
|
|
|
|
|
|
|
Section 4.
|
|
[Reserved.]
|
31
|
|
|
|
|
|
|
Section 5.
|
|
Confidentiality; Notice of
Developments.
|
31
|
|
5.1
|
|
Disclosure and Use Restriction
|
31
|
|
5.2
|
|
Authorized Disclosure
|
31
|
|
5.3
|
|
Effect of Authorized Disclosure
|
32
|
|
5.4
|
|
Terms of Agreement
|
32
|
|
5.5
|
|
Exclusivity
|
32
|
|
5.6
|
|
Injunctive Relief
|
32
|
|
5.7
|
|
Press Release; Public Disclosure
|
33
|
|
5.8
|
|
Notice of Developments
|
33
|
|
|
|
|
|
|
|
Section 6.
|
|
[Reserved.]
|
33
|
|
|
|
|
|
|
|
Section 7.
|
|
Additional Agreements.
|
33
|
|
7.1
|
|
Survival
|
33
|
|
7.2
|
|
Indemnification
|
34
|
|
7.3
|
|
Affirmative Covenants of Ibis and
Isis
|
35
|
|
|
|
(a)
|
Due
Diligence
|
35
|
|
|
|
(b)
|
Ordinary Course
|
35
|
|
|
|
(c)
|
Consolidation of Ibis and Isis
|
36
|
|
7.4
|
|
Negative Covenants of Ibis and Isis
|
36
|
|
7.5
|
|
No
Solicitation of AMI Employees
|
38
|
|
7.6
|
|
No
Solicitation of Ibis or Isis Employees
|
38
|
|
7.7
|
|
No
Solicitation of Ibis Employees
|
39
|
|
|
|
|
|
|
Section 8.
|
|
Miscellaneous.
|
39
|
|
|
|
|
|
|
|
8.1
|
|
Governing Law; Alternative Dispute Resolution
Procedure
|
39
|
|
8.2
|
|
Successors and Assigns
|
39
|
|
8.3
|
|
Entire Agreement; Exhibits and
Schedules
|
40
|
|
8.4
|
|
No
Third Party Beneficiaries
|
40
|
|
8.5
|
|
Severability
|
40
|
|
8.6
|
|
Amendment and Waiver
|
41
|
|
8.7
|
|
Delays or Omissions
|
41
|
|
8.8
|
|
Notices
|
41
|
|
8.9
|
|
Expenses
|
42
|
|
8.10
|
|
Titles and Subtitles
|
42
|
|
8.11
|
|
Counterparts
|
43
|
|
8.12
|
|
Construction
|
43
|
|
8.13
|
|
No Other Compensation
|
43
|
ii
STRATEGIC
ALLIANCE MASTER AGREEMENT
THIS STRATEGIC ALLIANCE MASTER AGREEMENT
( this “ Master Agreement ”) is made and
entered into as of this 30th day of January, 2008, by and among
Isis Pharmaceuticals, Inc., a Delaware corporation (“
Isis ”), Ibis Biosciences, Inc., a Delaware
corporation (“ Ibis ”), Abbott Molecular
Inc. , a Delaware corporation (“ AMI ”)
and Affiliate of Abbott Laboratories, an Illinois corporation
(“ Abbott ”). Ibis, Isis and AMI are
sometimes referred to herein individually as a “ Party
,” and collectively as the “ Parties
.”
RECITALS
WHEREAS , Ibis, Isis and AMI wish to
enter into a strategic alliance related to the Business;
WHEREAS , as part of this strategic
alliance, AMI will make an investment in Ibis by purchasing the
Shares pursuant to Section 2 of this Master
Agreement;
WHEREAS , as a material inducement for
AMI to enter into this Master Agreement and the other Transaction
Documents, Ibis and Isis will grant to AMI certain additional
rights pursuant to the Investor Rights Agreement, the form of which
is attached hereto as Exhibit A (the “
Investor Rights Agreement ”);
WHEREAS , as a material inducement to
enter into this Master Agreement and the other Transaction
Documents, Isis has granted to AMI an option to, in AMI’s
sole discretion, purchase all of the Capital Stock of Ibis (other
than the Shares (and the Additional Shares if AMI elects to acquire
the Additional Shares pursuant to the Call Option Agreement and the
Stock Subscription Agreement)) pursuant to the Call Option
Agreement, in the form attached hereto as Exhibit B
(the “ Call Option Agreement ”);
WHEREAS , as a material inducement to
enter into this Master Agreement and the other Transaction
Documents, Ibis has granted to AMI a subscription right to, in
AMI’s sole discretion, subscribe for and purchase the
Additional Shares prior to the Cut-Off Date for an aggregate
purchase price of $20,000,000 pursuant to the Stock Subscription
Agreement, the form of which has been agreed to by the Parties and
is attached as an exhibit to the Call Option Agreement (the “
Stock Subscription Agreement ”); and
WHEREAS , if AMI, in its sole
discretion, exercises the Call Option, the Parties will consummate
the purchase by AMI of all of the Capital Stock of Ibis (other than
the Shares (and the Additional Shares if AMI exercises the
Subscription Right and acquires the Additional Shares pursuant to
the Call Option Agreement and the Stock Subscription Agreement))
pursuant to the Stock Purchase Agreement, the form of which has
been agreed to by the Parties and is attached as an exhibit to the
Call Option Agreement (the “ Acquisition Agreement
”).
NOW, THEREFORE, in consideration of the mutual
promises, representations, warranties, and covenants hereinafter
set forth and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the
Parties hereby agree as follows:
AGREEMENT
SECTION
1. DEFINITIONS
Capitalized terms used and not otherwise
defined herein have the meanings ascribed to such terms in this
Section 1 .
(a)
“ Abbott Transaction Team ” means the
individuals listed on Schedule 1(a) .
(b)
“ Acquisition Closing ” means the consummation
of the purchase by AMI of all of the Capital Stock of Ibis (other
than the Shares (and the Additional Shares if AMI elects to acquire
the Additional Shares pursuant to the Call Option Agreement and the
Stock Subscription Agreement)) pursuant to the Acquisition
Agreement.
(c)
“ Additional Shares ” means 114,250 shares of
Common Stock that may be acquired by AMI from Ibis in AMI’s
sole discretion prior to 5:00 p.m. (Pacific Time) on the
Cut-Off Date pursuant to the Call Option Agreement and the Stock
Subscription Agreement, as may be held from time to time by AMI and
its permitted assigns, which, together with the Shares, will
represent approximately 18.6% of the issued and outstanding Common
Stock.
(d)
“ Affiliate ” of an entity means any other
entity that, directly or indirectly, through one or more
intermediaries, controls, is controlled by, or is under common
control with such first entity. For purposes of this
definition only, “control” (and, with correlative
meanings, the terms “controlled by” and “under
common control with”) means the possession, directly or
indirectly, of the power to direct the management or policies of an
entity, whether through the ownership of voting securities or by
Contract relating to voting rights or corporate governance;
provided , that (i) with respect to AMI and Abbott, the
term “Affiliate” shall specifically exclude [***] and
(ii) with respect to Isis, the term “Affiliate”
shall specifically exclude [***]
(e)
“ Applicable Law ” or “ Law ”
means all applicable common law, laws, constitutional provisions,
ordinances, statutes, rules, regulations, administrative rulings,
executive orders and other pronouncements having the effect of law
of any federal, national, multinational, state, provincial, county,
city or other political subdivision, agency or other body, domestic
or foreign, including but not limited to any applicable rules,
regulations, guidelines, or other requirements of Governmental
Authorities that may be in effect from time to time.
(f)
“ [***] Milestone ” has the meaning ascribed to
such term in the Call Option Agreement .
(g)
“ Business ” means researching, developing,
manufacturing, selling, marketing, distributing and using a system,
process or reagents for the identification and/or quantitation of
nucleic acids or the performing of services relating to the
foregoing, as conducted by Ibis or by Isis, with respect to the
Division, on and prior to the date hereof.
(h)
“ Business Day ” means any day other than a
Saturday, Sunday, or a day on which the banks in Chicago, Illinois
are authorized or obligated by Law to close.
2
(i)
“ Call Option ” has the meaning ascribed to such
term in the Call Option Agreement.
(j)
“ Call Option Expiration Date ” has the meaning
ascribed to such term in the Call Option Agreement.
(k)
“ Call Period ” has the meaning ascribed to such
term in the Call Option Agreement.
(l)
“ Capital Stock ” means all capital stock,
equity or controlling interests and other securities in an issuer,
including, without limitation, options, warrants, depositary
receipts, stock appreciation or phantom stock rights or other
agreements or undertakings, including stock or securities
convertible or exchangeable for any shares of capital stock, equity
or controlling interests or other securities in an issuer or
containing any profit participation features or pursuant to which
such issuer is or could be bound to issue or repurchase any capital
stock, equity or controlling interests or other securities.
(m)
“ Change of Control ” means, with respect to any
Person, the occurrence of (i) any consolidation or merger of
such Person with or into any other Person, or any other corporate
reorganization or transaction (including the acquisition of Capital
Stock of such Person (or any rights to acquire, or securities
convertible into or exchangeable for, any such Capital Stock)),
whether or not such Person is a party thereto, in which the
stockholders or equity-holders of such Person or other Persons
controlling such Person immediately prior to such consolidation,
merger, reorganization or transaction, own Capital Stock either
(A) representing directly, or indirectly through one or more
entities, less than fifty percent (50%) of the economic interests
in or voting power of such Person or other surviving entity
immediately after such consolidation, merger, reorganization or
transaction or (B) that does not directly, or indirectly
through one or more entities, have the power to elect a majority of
the entire board of directors or equivalent governing body of such
Person or other surviving entity immediately after such
consolidation, merger, reorganization or transaction or (ii) a
sale, lease, license or other disposition of all or a material
portion of the assets of such Person.
(n)
“ Claim ” means any claim, lawsuit, demand,
audit, investigation, charge, suit, hearing, notice of a violation,
litigation, action, proceeding, order, judgment, grievance, or
arbitration, whether civil, criminal, administrative or otherwise,
whether at law or in equity, or any inquiry likely to result in any
of the foregoing.
(o)
“ Closing Date ” means 9:00 a.m. Pacific
Time on the date hereof.
(p)
“ Code ” means the Internal Revenue Code of
1986, as amended from time to time.
(q)
“ Common Stock ” means the Common Stock of Ibis,
par value $0.001 per share.
(r)
“ Confidential Information ” means all
information and any tangible embodiments thereof provided by or on
behalf of the Disclosing Party to the Receiving Party or to the
Receiving Party’s Representatives either in connection with
the discussions and
3
negotiations pertaining to the Transaction
Documents or in the course of performing the Transaction Documents,
including without limitation: know-how; data; knowledge; practices;
processes; research and development plans; engineering designs and
drawings; research data; manufacturing processes and techniques;
scientific, manufacturing, marketing and business plans; and
financial and personnel matters relating to the Disclosing Party or
to its present or future products, sales, suppliers, customers,
employees, consultants, independent contractors, investors or
business; regardless of whether any of the foregoing are marked
“confidential” or “proprietary” or
communicated to the other by the Disclosing Party in oral, written,
graphic or electronic form. Notwithstanding the
foregoing , information of a Party will not be deemed
Confidential Information to the extent that the Receiving Party can
show by competent proof that such information:
(i)
is or becomes generally available to the public other than as a
result of an unauthorized disclosure by the Receiving Party or its
Representatives;
(ii)
was available to the Receiving Party or its Representatives on a
non-confidential basis prior to its disclosure by the Disclosing
Party or its Representatives;
(iii)
is or becomes available to the Receiving Party or its
Representatives from a Person, other than the Disclosing Party or
its Representatives, who is not bound by a confidentiality
obligation to the Disclosing Party or its Representatives;
(iv)
is independently developed by the Receiving Party or its
Representatives without reference to or use of any Confidential
Information of the Disclosing Party.
(s)
“ Contract ” means any contract, lease, deed,
mortgage, license, instrument, note, commitment, undertaking,
understanding, indenture, joint venture, purchase order, service
order and all other agreements and arrangements, whether oral or
written.
(t)
“ Contribution Agreement ” means the
Contribution Agreement, dated July 31, 2007, by and between
Ibis and Isis.
(u)
“ Corporate Services Agreement ” means the
Corporate Services Agreement, dated July 31, 2007, by and
between Ibis and Isis.
(v)
“ Cut-Off Date ” has the meaning ascribed to
such term in the Call Option Agreement.
(w)
“ Division ” means the Ibis Biosciences division
of Isis.
(x)
“ Employee Pension Benefit Plan ” has the
meaning set forth in Section 3(2) of ERISA.
(y)
“ Employee Welfare Benefit Plan ” has the
meaning set forth in Section 3(1) of ERISA.
4
(z)
“ Encumbrance ” means any mortgage, covenant,
hypothecation, condition, Claim, easement, encroachment, right of
way, restriction, option, lien (statutory or otherwise), pledge,
charge, license, security interest or encumbrance of any nature
whatsoever.
(aa)
“ Environmental Laws ” means any federal, state,
local or foreign statutes, ordinances, codes, treaties, or other
Laws (including, without limitation, the Comprehensive
Environmental Response, Compensation, and Liability Act, the
Resource Conservation and Recovery Act, the Clean Air Act, the
Clean Water Act, the Toxic Substances Control Act, the Oil
Pollution Prevention Act, the Federal Insecticide,
Fungicide, & Rodenticide Act, the Safe Drinking Water Act,
the Hazardous Materials Transportation Act, the Solid Waste
Disposal Act, the Emergency Planning and Community Right-to-Know
Act, the Occupational Safety and Health Act), including any
regulations, rules, plans, other criteria, policies or guidelines
promulgated pursuant to such Laws, and all common law, orders,
judgments, decrees, judicial or agency interpretations now or
hereafter in effect relating to pollution, the generation,
production, installation, use, storage, treatment, transportation,
Release, threatened Release, investigation, monitoring,
remediation, cleanup, abatement, removal, or disposal of Hazardous
Materials, noise control, odor or the protection of public or
workplace health or safety, natural resources, or the
environment.
(bb)
“ ERISA ” means the Employee Retirement Income
Security Act of 1974, as amended.
(cc)
“ Escrow Agreement ” means the Escrow Agreement
to be attached as an exhibit to the Acquisition Agreement.
(dd)
“ Financing ” means the sale of the Shares by
Ibis to AMI pursuant to this Master Agreement, together with the
other transactions contemplated hereby.
(ee)
“ Financing Closing ” means the closing of the
Financing under this Master Agreement.
(ff)
“ Fundamental AMI Representations ” means those
representations and warranties of AMI set forth in
Section 3.2(a) (Power and Authority),
Section 3.2(b) (Enforceability),
Section 3.2(c) (Governmental Authority; Consents), and
Section 3.2(d) (No Conflicts).
(gg)
“ Fundamental Isis Representations ” means those
representations and warranties of Ibis and Isis set forth in
Section 3.1(a) (Power and Authority),
Section 3.1(b) (Enforceability),
Section 3.1(c) (Governmental Authority; Consents),
Section 3.1(d) (No Conflicts),
Section 3.1(e) (Due Organization; Qualification),
Section 3.1(g) (Capitalization; Voting Rights),
Section 3.1(j) (Title to Properties and Tangible
Assets; Liens, etc.), Section 3.1(k) (Sufficiency of
Assets), Section 3.1(m) (Compliance with Other
Instruments) and Section 3.1(v) (Brokers’
Fees).
(hh)
“ GAAP ” means United States generally accepted
accounting principles, applied on a consistent basis.
5
(ii)
“ Governmental Authority ” means any
governmental or quasi-governmental agency, department, bureau,
office, center, institute, court, commission or other unit of the
government of the United States of America or of any of its
respective States or local units of government thereof, or of a
foreign sovereign or of a provincial, regional or metropolitan
government thereof, including, without limitation, any Regulatory
Authority.
(jj)
“ Hazardous Materials ” means any substance,
chemical, solvent, compound, waste, residue, contaminant or other
material which is regulated by or forms the basis of liability now
or hereafter under any Environmental Law, including, without
limitation: (i) any “solid waste,”
“dangerous goods,” “hazardous waste,”
“hazardous substance,” “hazardous
material,” “extremely hazardous waste,”
“pollutant,” “contaminant,”
“hazardous constituent,” “special waste,”
“universal waste,” “toxic substance,” or
any other similar term or phrase as defined under any Environmental
Law; (ii) any petroleum, or petroleum products, byproducts or
breakdown products, including crude oil and any fraction thereof;
(iii) natural synthetic gas usable for fuel; (iv) any
asbestos, lead-based paint, polychlorinated biphenyl, mold, radon
gas, radioactive material or byproduct, isomer of dioxin, or any
material or thing containing or composed of such substance or
substances; and (v) any virus, bacteria, protozoa, parasite,
fungi, or other pathogen or any other substance, chemical, solvent,
compound, waste, residue, contaminant or other material which is
hazardous, toxic, poisonous, reactive, corrosive or otherwise may
present a threat to human health, safety, natural resources,
wildlife or the environment.
(kk)
“ Indebtedness ” means (i) all indebtedness
or other obligations of Ibis for borrowed money, whether current,
short-term or long-term, secured or unsecured, and all accrued
interest, premiums, penalties and other obligations relating
thereto, (ii) all indebtedness of Ibis for the deferred
purchase price of property or services which is not evidenced by
accounts payable incurred in the ordinary course of business,
(iii) all existing lease obligations of Ibis under leases
which are capital leases in accordance with GAAP, (iv) any
liability of Ibis under deferred compensation plans, phantom stock
plans, severance or bonus plans, or any change in control or
similar payment or increased cost which is triggered or made or
will be made payable as a result of the transactions contemplated
hereby, other than the Permitted Employee Compensation Plan,
(v) any off balance sheet financing of Ibis, (vi) any
payment obligations of Ibis in respect of banker’s
acceptances or letters of credit, (vii) any liability of Ibis
with respect to interest rate swaps, collars, caps and similar
hedging obligations, (viii) all obligations of Ibis arising
under or with respect to any conditional sale or other title
retention agreement with respect to property acquired by Ibis,
(ix) past due or deferred rent of Ibis, (x) the amount of
accounts payable owed by Ibis to any Person that have not been paid
within forty-five (45) days of the date of invoice thereof (xi) any
indebtedness referred to above of any Person which is either
guaranteed by, or secured by a security interest upon any property
owned by, Ibis and (xii) accrued and unpaid interest of, and
prepayment premiums, penalties or similar contractual charges
arising as a result of the discharge of any such foregoing
obligation.
(ll)
“ Initial Offering ” means Ibis’ first
firm commitment underwritten public offering of its Common Stock
registered under the Securities Act.
(mm)
“ Intellectual Property ” means all of the
following in any jurisdiction throughout the world:
(i) patents, patent applications and patent disclosures
and statutory
6
invention registrations, including reissues,
divisions, continuations, continuations in part, extensions and
reexaminations thereof; (ii) trademarks, service marks, trade
dress, trade names, corporate names, logos and slogans (and all
translations, adaptations, derivations and combinations of the
foregoing) and Internet domain names, any and all common law rights
and registrations and applications for the registration thereof,
and all extensions and renewals of any of the foregoing;
(iii) copyrights and copyrightable works (including Software),
registered copyrights and copyright applications, mask works, net
lists and schematics; (iv) confidential and proprietary
information including technology, know-how, trade secrets,
unpatented inventions, ideas, algorithms and processes (including,
without limitation, manufacturing and production processes and
techniques, drawings, specifications, designs, plans, proposals,
test data including pharmacological, biological, chemical,
biochemical, toxicological and clinical test data, analytical and
quality control data, stability data and customer and supplier
lists and related information); (v) other intellectual
property and proprietary information and (vi) all copies and
tangible embodiments of the foregoing, such as instruction manuals,
laboratory notebooks, prototypes, samples, specimens, studies and
summaries.
(nn)
“ Investment Documents ” means this Master
Agreement, the Call Option Agreement, the Investor Rights Agreement
and the Stock Subscription Agreement.
(oo)
“ Knowledge ” and terms of similar meaning
(including, without limitation, “is aware of”) mean
with respect to Ibis and Isis, the actual knowledge of any of the
individuals set forth on Schedule 1(oo) , after due
investigation, including, without limitation, inquiry of Persons
with subject matter knowledge, provided that (A) solely
for purposes of Sections 3.1(l)(v) , 3.1(l)(vi)
and 3.1(l)(ix) , “Knowledge” and terms of
similar meaning (including, without limitation, “is aware
of”) mean the actual knowledge of any employee of Ibis or
Isis, after due investigation, including, without limitation,
inquiry of Persons with subject matter knowledge and
(B) solely for purposes of Section 3.1(l) ,
inquiry of Persons with subject matter knowledge shall include
inquiry of the outside counsel involved in the development or
prosecution of the Business IP or who conducted ‘freedom to
operate analyses’ identified on Schedule 1(oo) .
(pp)
“ Licenses ” means all licenses, permits,
certificates of authority, variances, authorizations, approvals,
registrations, franchises, orders and similar consents issued
by any Governmental Authority or other Person, provided that
the term License shall not include any license or other right to
use any Intellectual Property.
(qq)
“ Loss ” means any loss, liability, demand,
Claim, action, cause of action, cost, damage, material diminution
in value, deficiency, Tax, penalty, fine or expense (including
interest, penalties, reasonable attorneys’ fees and expenses
and all amounts paid in investigation, defense or settlement of any
of the foregoing and the enforcement of any related rights),
whether or not arising out of third party claims.
(rr)
“ Management Presentations ” means the
Management Presentations of Ibis delivered to AMI pursuant to
Section 2(h) .
(ss)
“ Material Adverse Effect ” means any event,
circumstance or state of facts which has, or would reasonably be
expected to have, a material adverse effect on the
7
business, assets, condition (financial or
otherwise), operations, operating results, employee relations,
customer relations or supplier relations of Ibis or the
Business.
(tt)
“ Multiemployer Plan ” has the meaning set forth
in Section 3(37) of ERISA.
(uu)
“ Offering Memorandum ” means the Offering
Memorandum of Ibis, dated November 2006 as made available to
AMI.
(vv)
“ Permitted Employee Compensation Plan ” means
the compensation plan mutually agreed by the Parties regarding
[***], the terms of which are described on Exhibit C
attached hereto.
(ww)
“ Permitted Encumbrances ” means (i) liens
for current property Taxes not yet due and payable,
(ii) Encumbrances arising in connection with and solely as a
result of Permitted Indebtedness and (iii) except with respect
to Intellectual Property, other imperfections of title,
restrictions or Encumbrances, if any, which imperfections,
restrictions or Encumbrances do not, individually or in the
aggregate, impair the continued use and operation of the assets
used in the operation of the Business and do not affect the
merchantability of the title to such assets to which they
relate.
(xx)
“ Permitted Indebtedness ” means
(i) accounts payable incurred in the ordinary course of
business that are paid within forty-five (45) days of the date of
invoice thereof, (ii) Indebtedness arising from existing and
future lease obligations of Ibis under equipment leases that are
capital leases in accordance with GAAP so long as the collateral
for such capital leases is limited to the equipment acquired and
the aggregate amount of such capital leases does not exceed $[***]
and (iii) Indebtedness incurred pursuant to the Corporate
Services Agreement or the Contribution Agreement.
(yy)
“ Person ” means an individual, a partnership, a
corporation, an association, a limited liability company, a joint
stock company, a trust, a joint venture, an unincorporated
organization, or a Governmental Authority (or any department,
agency, or political subdivision thereof).
(zz)
“ Purchase Offer ” means any proposal or offer
from any Person (other than AMI and its Affiliates in connection
with the transactions contemplated hereby) or any agreement or
offer relating to any (i) reorganization, liquidation,
dissolution, share exchange, business combination or
recapitalization of Ibis, (ii) merger or consolidation
involving Ibis, (iii) purchase or sale of any assets or
Capital Stock of Ibis (other than the purchase and sale of
inventory and capital equipment in the ordinary course of
business), (iv) distribution of Ibis’ existing or future
products, (v) licensing of any Business IP from Ibis or
(vi) any other transaction or business combination involving
Ibis or its business or assets which would reasonably be expected
to interfere with, impede or materially delay the transactions
contemplated by the Transaction Documents or dilute the benefits
thereof to AMI and its Affiliates. For the avoidance of
doubt, the foregoing shall not apply to any transaction involving
Isis and which only indirectly involves assets and/or Capital Stock
of Ibis.
(aaa)
“ Real Property ” means the Leased Real
Property.
8
(bbb)
“ Regulatory Authority ” means any Governmental
Authority that has responsibility for granting any licenses or
approvals or granting pricing and/or reimbursement approvals
necessary for the marketing and sale of medical devices or
diagnostic products, including without limitation, the FDA, the
European Medicines Agency and the United States Department of
Health and Human Services.
(ccc)
“ Release ” means any spilling, leaking,
pumping, pouring, emitting, emptying, discharging, injecting,
escaping, leaching, dumping, depositing, disposing or other release
into the environment (including the abandonment or discarding of
barrels, drums, containers or other closed receptacles), including
any dispersal, migration or other movement of any substance through
or in air, soil, surface water, groundwater or property.
(ddd)
“ Representatives ” means with respect to any
Person, such Person’s employees, directors, officers,
Affiliates and authorized agents.
(eee)
“ SEC ” or “ Commission ”
means the United States Securities and Exchange Commission.
(fff)
“ Schedule ” means any of the Disclosure
Schedules delivered to AMI herewith and incorporated herein
pursuant to Section 8.3(b) hereof.
(ggg)
“ Securities Act ” means the Securities Act of
1933, as amended.
(hhh)
“ Shares ” means 114,251 shares of Common Stock
issued to AMI pursuant to this Master Agreement, as may be held
from time to time by AMI and its permitted assigns, representing
approximately 10.25% of the issued and outstanding Common
Stock.
(iii)
“ Software ” means any and all (i) computer
programs, libraries, firmware and middleware, including any and all
software implementations of algorithms, models and methodologies,
whether in source code or object code, (ii) databases and
compilations, including any and all data and collections of data,
whether machine readable or otherwise, (iii) descriptions,
flow-charts and other work product used to design, plan, organize
and develop any of the foregoing and (iv) all programmer and
user documentation, including user manuals and training materials,
relating to any of the foregoing.
(jjj)
“ Subscription Right ” has the meaning ascribed
to such term in the Call Option Agreement.
(kkk)
“ T5000 Biosensor System ” means the biosensor
platform generally known as the T5000 Biosensor System, together
with all equipment, hardware, Software, systems and other materials
required for its use, or provided or recommended by Ibis, Isis or
any of their respective Affiliates for its use, as well as all
prior versions of the T5000 Biosensor System, including such
systems known as “TIGER.”
(lll)
“ Tax ” means any federal, state, local, or
foreign income, gross receipts, license, payroll, employment,
excise, severance, stamp, occupation, premium, windfall profits,
environmental, customs and other duties, Capital Stock, franchise,
profits, withholding, social security, unemployment, disability,
real property, personal property, sales, use, transfer,
9
registration, value added, alternative or
add-on minimum, estimated, or other tax of any kind whatsoever,
including any interest, penalty, or addition thereto, whether
disputed or not, and including any obligation to indemnify or
otherwise assume or succeed to the Tax liability of any other
Person.
(mmm)
“ Tax Return ” means any return, declaration,
report, claim for refund, or information return or statement
relating to Taxes, including any schedule or attachment thereto,
and including any amendment thereof.
(nnn)
“ Transaction Documents ” means this Master
Agreement, the Investor Rights Agreement, the Stock Subscription
Agreement, the Call Option Agreement, the Transition Services
Agreement, the Escrow Agreement and the Acquisition Agreement.
(ooo)
“ Transfer ” means, with respect to Capital
Stock, any sale, pledge, hypothecation, assignment, Encumbrance or
other transfer or disposition, whether directly, indirectly,
voluntarily, involuntarily, by operation of Law, pursuant to
judicial process or otherwise and, when the context so requires,
the act of doing any of the foregoing.
(ppp)
“ Transition Services Agreement ” means the
Transition Services Agreement to be attached as an exhibit to the
Acquisition Agreement.
Section references for definitions of
defined terms defined in the body of this Master Agreement rather
than in this Section 1 .
|
Defined Term
|
|
Section
|
|
“Abbott”
|
|
Preamble
|
|
“Acquisition
Agreement”
|
|
Recitals
|
|
“ADR”
|
|
8.1
|
|
“Business
IP”
|
|
3.1(l)(i)
|
|
“AMI”
|
|
Preamble
|
|
“AMI
Group”
|
|
7.2(a)
|
|
“Call Option
Agreement”
|
|
Recitals
|
|
“Disclosing
Party”
|
|
5.1
|
|
“Disclosure
Schedules”
|
|
3.1
|
|
“ERISA
Affiliate”
|
|
3.1(p)(ii)
|
|
“ERISA
Plans”
|
|
3.1(p)(ii)
|
|
“FDA”
|
|
3.1(q)(i)
|
|
“Financial
Statements”
|
|
3.1(t)
|
|
“Government
Contracts”
|
|
3.1(l)(ii)
|
|
“Ibis”
|
|
Preamble
|
|
“Ibis
Contracts”
|
|
3.1(x)(i)
|
|
“Indemnified
Party”
|
|
7.2(c)
|
|
“Indemnifying Party”
|
|
7.2(c)
|
10
|
Defined Term
|
|
Section
|
|
“Insurance
Policies”
|
|
3.1(y)
|
|
“Investor
Rights Agreement”
|
|
Recitals
|
|
“IP
Contracts”
|
|
3.1(l)(ii)
|
|
“Isis”
|
|
Preamble
|
|
“Leased Real
Property”
|
|
3.1(w)(ii)
|
|
“Leasehold
Improvements”
|
|
3.1(w)(ii)
|
|
“Leases”
|
|
3.1(w)(ii)
|
|
“Master
Agreement”
|
|
Preamble
|
|
“Material
Licenses”
|
|
3.1(q)(ii)
|
|
“Most Recent
Balance Sheet”
|
|
3.1(t)
|
|
“Parties”
|
|
Preamble
|
|
“Party”
|
|
Preamble
|
|
“Plans”
|
|
3.1(p)(ii)
|
|
“Receiving
Party”
|
|
5.1
|
|
“Remaining
Shares”
|
|
3.1(g)(i)
|
|
“Seller
Group”
|
|
7.2(b)
|
|
“Share
Purchase Price”
|
|
2(d)
|
|
“Stock
Subscription Agreement”
|
|
Recitals
|
|
“Third Party
Claim”
|
|
7.2(c)
|
SECTION 2. FINANCING
CLOSING; TRANSACTION DOCUMENTS
Subject to and upon the terms and conditions
set forth in this Master Agreement, and in reliance upon the
respective representations and warranties made herein by each of
the Parties, at the Financing Closing:
(a) Ibis
shall issue, sell, convey, assign, transfer and deliver to AMI a
certificate representing the Shares sufficient to vest in AMI legal
and beneficial ownership of the Shares, free and clear of all
Encumbrances;
(b) Each
Party shall execute and deliver to the other Parties the Call
Option Agreement;
(c) Each
Party shall execute and deliver to the other Parties the Investor
Rights Agreement;
(d) AMI
shall purchase, acquire and accept the Call Option, the
Subscription Right and the Shares from Ibis and Isis for an
aggregate purchase price of $20,000,000 (the “ Share
Purchase Price ”), paid to Ibis via wire transfer of
immediately available funds to an account designated by Ibis in
writing;
11
(e) Ibis
and Isis shall deliver to AMI a certificate, in a form reasonably
acceptable to AMI, of an authorized officer of each certifying to
and attaching thereto (i) Ibis’ Certificate of
Incorporation as in effect on the date hereof,
(ii) Ibis’ Bylaws as in effect on the date hereof and
(iii) resolutions of the Board of Directors of Isis and Ibis
authorizing the transactions contemplated by this Master Agreement
and by the other Transaction Documents;
(f)
Isis shall deliver to AMI the consent of Silicon Valley Bank to the
Financing and the other transactions contemplated by the Investment
Documents;
(g) Isis
shall deliver to AMI one or more compact discs containing the
contents of the electronic dataroom maintained by Isis at
[***] as of January 23, 2008, together with a
certificate of an authorized officer certifying that such compact
discs contain true, accurate and complete copies of the materials
in such dataroom as of such date; and
(h) Isis
shall deliver to AMI one or more compact discs containing the
Management Presentations of Ibis previously made available to AMI
by Isis and Ibis.
SECTION 3.
REPRESENTATIONS AND WARRANTIES.
3.1 Representations
and Warranties of Ibis and Isis. As a material
inducement to AMI to enter into this Master Agreement, except as
set forth in the corresponding Section of the Disclosure
Schedules delivered to AMI herewith on the date hereof (the “
Disclosure Schedules ”), Ibis and Isis each hereby
jointly and severally represent and warrant as follows:
(a) Power and
Authority . Each of Ibis and Isis (i) has the power,
authority and the legal right to enter into this Master Agreement
and the other Transaction Documents and to perform its obligations
hereunder and thereunder, and (ii) has taken all necessary
action required to authorize the execution and delivery of this
Master Agreement and the other Transaction Documents and the
performance of its obligations hereunder and thereunder.
(b)
Enforceability . Each of this Master Agreement, the
Call Option Agreement and the Investor Rights Agreement has been
duly executed and delivered on behalf of Ibis and Isis and
constitutes a legal, valid and binding obligation of each such
Party and is enforceable against each such Party in accordance with
its terms subject to the effects of bankruptcy, insolvency or other
Laws of general application affecting the enforcement of creditor
rights. If executed and delivered on the date hereof, the
Stock Subscription Agreement and the Acquisition Agreement would
constitute legal, valid and binding obligations of each of Ibis and
Isis and would be enforceable against each in accordance with their
terms subject to the effects of bankruptcy, insolvency or other
Laws of general application affecting the enforcement of creditor
rights.
(c)
Governmental Authority; Consents . All necessary
consents, approvals and authorizations of all Governmental
Authorities and other parties required to be obtained by Ibis and
Isis in connection with the execution and delivery of this Master
Agreement and the other Investment Documents and the performance of
their obligations hereunder and thereunder have been obtained.
12
(d)
No Conflicts .
(i)
The execution and delivery of this Master Agreement, the Call
Option Agreement and the Investor Rights Agreement by each of Ibis
and Isis and the performance of each such Party’s obligations
hereunder and thereunder, with or without the passage of time or
giving of notice, (A) do not and will not conflict with or
violate any requirement of Applicable Law or any provision of the
certificate of incorporation, bylaws or any similar instrument of
such Party, as applicable (B) do not and will not require any
notice, conflict with, violate, or breach or constitute a default
or require any consent or give rise to any termination or
acceleration right or the creation of any Encumbrance on the
Shares, the Additional Shares or the Remaining Shares or any of the
properties or assets of Ibis under, any contractual obligation by
which such Party is bound or subject to and (C) do not and
will not cause the suspension, revocation, impairment, forfeiture
or nonrenewal of any License applicable to Ibis, the Business or
any of Ibis’ operations, assets or properties.
(ii)
If executed and delivered on the date hereof, the execution and
delivery of the Stock Subscription Agreement and the Acquisition
Agreement and the performance of Ibis’ and Isis’
obligations under each such agreement, with or without the passage
of time or giving of notice, (A) would not conflict with or
violate any requirement of Applicable Law or any provision of the
certificate of incorporation, bylaws or any similar instrument of
each such Party, as applicable, (B) would not require any
notice, conflict with, violate, or breach or constitute a default
or require any consent or give rise to any termination or
acceleration right or the creation of any Encumbrances on the
Shares, the Additional Shares or the Remaining Shares under, any
contractual obligation by which such Party is bound and
(C) would not cause the suspension, revocation, impairment,
forfeiture or nonrenewal of any License applicable to Ibis, the
Business or any of Ibis’ operations, assets or
properties.
(e)
Due Organization; Qualification . Each of Ibis and
Isis is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware, with full
corporate power and authority to enter into this Master Agreement
and the other Transaction Documents. Except as would not
reasonably be expected to have a Material Adverse Effect, Ibis has
obtained and currently maintains all qualifications to do business
as a foreign corporation in all jurisdictions in which the
character of the Business requires it to be so qualified.
Ibis has all requisite power and authority and all authorizations
and Licenses necessary to own, operate or conduct the Business.
(f)
Subsidiaries . Ibis does not own or control any
Capital Stock or other interest of any Person. Ibis is not a
participant in any joint venture, partnership, limited liability
company or similar arrangement. Since its inception Ibis has
not merged with, acquired all or substantially all of the assets of
(except pursuant to the Contribution Agreement) or acquired the
Capital Stock of or any interest in any Person. Ibis does not
hold the right to acquire any Capital Stock or interest in any
other Person or have any obligation to make any investment in any
Person and no such rights, Capital Stock or interests are necessary
for the operation of the Business. Isis does not control or
possess the power, directly or indirectly to control the
management, actions or policies of [***].
13
(g)
Capitalization; Voting Rights .
(i)
The authorized Capital Stock of Ibis consists of 1,228,501
shares of Common Stock, par value $0.001 per share, 1,000,000
shares of which are issued and outstanding and held by Isis (the
“ Remaining Shares ”).
(ii)
The issued and outstanding Capital Stock of Ibis as of the
Financing Closing will consist exclusively of the Shares and the
Remaining Shares. Except as set forth in the Investor Rights
Agreement, Ibis does not have any obligations to issue or redeem
any shares of Capital Stock, other than with respect to the Shares
and the Additional Shares and Ibis has not issued any Capital Stock
other than the Remaining Shares. No Capital Stock issued by
Ibis is listed on any stock exchange or unregulated market.
Other than the Investment Documents, there are no agreements with
Isis or Ibis or any other Person with respect to the voting or
Transfer of the Capital Stock.
(iii)
The Shares and the Remaining Shares are: (A) duly authorized,
validly issued, fully paid and nonassessable; (B) issued in
compliance with all applicable state and federal Laws concerning
the issuance of Capital Stock; and (C) free and clear of all
Encumbrances other than the Call Option and the rights and
obligations set forth in the Investor Rights Agreement;
provided, that the Shares may be subject to restrictions on
Transfer set forth in the Investor Rights Agreement and under state
and/or federal securities Laws as set forth herein or as otherwise
required by such Laws at the time a Transfer is proposed.
(iv)
If AMI exercised the Subscription Right and acquired the Additional
Shares on the date hereof, the Additional Shares would be:
(A) duly authorized, validly issued, fully paid and
nonassessable; (B) issued in compliance with all applicable
state and federal Laws concerning the issuance of Capital Stock;
and (C) free and clear of all Encumbrances other than the
rights and obligations set forth in the Investor Rights Agreement;
provided, that the Additional Shares may be subject to
restrictions on Transfer set forth in the Investor Rights Agreement
and under state and/or federal securities Laws as set forth in the
Stock Subscription Agreement or as otherwise required by such Laws
at the time a Transfer is proposed.
(v)
Neither the sale of the Shares to AMI hereunder, nor the sale of
the Additional Shares to AMI under the Stock Subscription
Agreement, nor the sale of the Remaining Shares to AMI under the
Acquisition Agreement is subject to any preemptive rights, rights
of first refusal or similar rights.
(h)
Agreements; Liabilities .
(i)
There are no judgments, orders, writs or decrees to which Ibis or
Isis is a party currently pending or, to Isis’ or Ibis’
Knowledge, threatened which would prevent Ibis or Isis from
entering into the Transaction Documents or issuing or Transferring
the Shares, the Additional Shares or the Remaining Shares pursuant
to the terms of the Transaction Documents.
14
(ii)
Ibis has not (A) accrued, declared or paid any dividends, or
authorized or made any distribution upon or with respect to any
class or series of its Capital Stock, (B) incurred or
guaranteed any Indebtedness (other than Permitted Indebtedness),
(C) made any loans or advances to any Person, other than
advances for reasonable travel expenses to Ibis employees in the
ordinary course of business, or (D) sold, exchanged, licensed
or otherwise disposed of any of its tangible assets, other than the
sale of its inventory in the ordinary course of business.
(iii)
Ibis has no material obligations or liabilities (whether accrued,
absolute, or to Isis’ or Ibis’ Knowledge contingent,
unliquidated or otherwise, whether due or to become due and
regardless of when or by whom asserted), including, without
limitation, Taxes, except (A) obligations under the Ibis
Contracts made available to AMI or under Contracts entered into in
the ordinary course of business which, because of the dollar
thresholds set forth in Sections 3.1(l) and
3.1(x) , are not required pursuant to Sections 3.1(l)
and 3.1(x) below to be described on Schedule
3.1(l) or Schedule 3.1(x) (but not
liabilities for breaches of any such Contracts),
(B) liabilities reflected on the Most Recent Balance Sheet,
(C) liabilities and obligations which have arisen after the
date of the Most Recent Balance Sheet in the ordinary course of
business (none of which is material or is a liability for breach of
contract, tort, infringement (directly, contributorily, by
inducement or otherwise), Claim or warranty (other than warranty
claims arising in the ordinary course of business in connection
with the sale of Products or under Ibis Contracts made available to
AMI, none of which warranty claims individually or in the aggregate
would reasonably be expected to have a Material Adverse Effect) and
(D) other liabilities and obligations to the extent expressly
disclosed in Schedule 3.1(h)(iii) .
(i)
Obligations to Related Parties . There are no
obligations of Ibis to Affiliates, officers, directors or employees
of Ibis or Isis other than (A) for payment of salary to
employees of Ibis for services rendered in the ordinary course of
business, (B) reimbursement to employees of Ibis for
reasonable expenses incurred in the ordinary course of business on
behalf of Ibis, (C) standard employee benefits made generally
available to all employees, pursuant to the Plans described on
Schedule 3.1(p)(ii) , (D) the Permitted Employee
Compensation Plan or (E) Ibis’ rights and obligations to
Isis under the Contribution Agreement and Corporate Services
Agreement. To Isis’ and Ibis’ Knowledge, all of
the Contracts to which Ibis is a party or by which the Business or
any of its assets is bound have been negotiated on an arms length
basis.
(j)
Title to Properties and Tangible Assets; Liens, Etc .
Ibis has good and marketable title to its properties and tangible
assets and good and valid title to its leasehold estates, in each
case subject to no Encumbrance other than (i) Permitted
Encumbrances and (ii) rights of the U.S. federal government in
certain equipment purchased using government funds, as set forth on
Schedule 3.1(j) . The tangible assets of Ibis have
been maintained in accordance with normal industry practice and are
in good operating condition and repair (except for ordinary wear
and tear).
(k)
Sufficiency of Assets (i) Except for the
services, funding and facilities provided under the Corporate
Services Agreement, Ibis has all assets, properties and rights used
in or necessary to operate or conduct the Business in all
respects.
15
(ii)
As of the date hereof, except for the services, funding and
facilities provided under the Corporate Services Agreement and
indirectly, via the Remaining Shares, Isis and its Affiliates do
not have any right, title or interest in or to any asset, property,
title or interest that is used in or necessary to operate or
conduct the Business as conducted on and prior to the date hereof
or as contemplated to be conducted by Ibis and Isis after the date
hereof as reflected in the Offering Memorandum and Management
Presentations. Pursuant to the Contribution Agreement, Isis
has transferred to Ibis all assets, properties and rights Isis
owned or which are or were used in or necessary to operate or
conduct the Business except for the services, funding and
facilities provided under the Corporate Services Agreement.
No person employed by the Division prior to the date of the
Contribution Agreement is currently employed by Isis and no former
employee of Ibis or the Division is or has been employed by
Isis.
(l)
Intellectual Property .
(i)
Schedule 3.1(l)(i) sets forth a complete and correct
list of all of the following Intellectual Property used in or
necessary to operate or conduct the Business (whether owned by Ibis
or any other Person), and indicates with respect to each item,
whether Ibis owns or licenses such Intellectual Property and the
owner of any Intellectual Property covered by such license:
(A) patented or registered Intellectual Property and pending
patent applications or other applications for registrations of
Intellectual Property (including jurisdiction, registration and
application number, as applicable, and record owner),
(B) registered and material unregistered trademarks, service
marks, trade names, and Internet domain names, (C) Software
(other than unmodified, commercially available, off-the-shelf
Software purchased or licensed for less than an individual cost of
$[***] and a total cost of $[***] in the aggregate for all such
licenses), (D) material algorithms embodied in the Products
and any other material trade secrets; and (E) all other
material Intellectual Property used in or necessary to operate or
conduct the Business (including, without limitation, all
Intellectual Property set forth or required to be set forth in the
following Schedules to the Contribution Agreement: Schedule 2.1
(Ibis Business Assets), Schedule 2.2 (Ibis Business Patents),
Schedule 2.5 (Ibis Trademarks) and Schedule 2.6 (Ibis Business
Software)) (all Intellectual Property described in the foregoing,
(A) through (E), collectively, (without regard to whether such
Intellectual Property is set forth on Schedule 3.1(l)(i) )
“ Business IP ”).
(ii)
Schedule 3.1(l)(ii) sets forth a complete and correct
list of all of the following Contracts (other than licenses for
unmodified, commercially available, off-the-shelf Software
purchased or licensed for less than an individual cost of $[***]
and a total cost of $[***] in the aggregate for all such licenses)
relating to the Business IP (collectively, the “
IP Contracts ”): (A) Contracts in which Ibis
or Isis or any of their respective Affiliates is a licensee or
sublicensee of Business IP; (B) Contracts in which Ibis or
Isis or any of their respective Affiliates is a licensor or
sublicensor of Business IP; (C) Contracts to which Ibis or
Isis or any of their respective Affiliates is a party, or by which
any of the Business IP is bound, that give any third party any
right, title or interest in or to any such Business IP;
(D) Contracts with any Governmental Authority wherein any
portion of the Business IP was developed or used (“
Government Contracts ”); and (E) Contracts that
restrict Ibis’ rights in or use or disclosure of Business
IP.
16
(iii)
Ibis owns and possesses all right, title and interest in and to,
free and clear of all Encumbrances (other than the rights of
Governmental Authorities under Government Contracts identified in
Schedule 3.1(l)(iii) to the Intellectual Property
identified in such Schedule) or has a valid and enforceable license
to use (pursuant to a written license agreement set forth and
described in Schedule 3.1(l)(ii) or a written license
for unmodified, commercially available, off-the-shelf Software
purchased or licensed for less than an individual cost of $[***]
and a total cost of $[***] in the aggregate) the Business IP.
(iv)
Neither Isis nor any of its Affiliates (other than Ibis) has any
right, title or interest in or to any of the Business IP.
(v)
To Isis’ or Ibis’ Knowledge, neither Ibis, nor with
respect to the Business, Isis, has infringed (directly,
contributorily, by inducement or otherwise), misappropriated or
otherwise conflicted with, and the operation of the Business
(including the development, manufacture and commercialization of
the T5000 Biosensor System and the assay kits specifically listed
in the [***]) does not and will not infringe (directly,
contributorily, by inducement or otherwise), misappropriate or
otherwise conflict with, the patents, trademarks, copyrights or
trade secrets of any Person, and neither Ibis nor Isis is aware of
any facts that indicate a likelihood of any of the foregoing
(including without limitation, oral or written demands or offers to
license any Intellectual Property from any Person). With
respect to whether the operation or conduct of the Business has or
will infringe (directly, contributorily, by inducement or
otherwise), misappropriate or otherwise conflict with patent,
trademark, copyright or trade secrets of any Person (other than
Ibis or Isis or their respective Affiliates), the Parties hereto
are relying upon the representations and warranties contained in
this Section 3.1(l)(v) and not the
representations and warranties contained in Sections
3.1(k)(i) , 3.1(l)(viii) or 3.1(l)(ix)
.
(vi)
All of the Business IP is valid and, to Isis’ or Ibis’
Knowledge, enforceable. Isis and Ibis have taken all
necessary actions to maintain and protect all of the Business IP,
including, without limitation, entering into confidentiality
agreements with each of its employees, consultants and independent
contractors, and customers and vendors as necessary so as not to
adversely affect the validity or enforceability thereof and have
complied with disclosure requirements as provided by any Government
Contract. Neither Ibis nor Isis has disclosed any source code
for any Software included in the Business IP to any Person in a
manner that would impair the trade secret or other Intellectual
Property protection of such source code. There are no claims,
oppositions or cancellation proceedings that either were made or
brought within the past [***] years, or are presently pending or to
Isis’ or Ibis’ Knowledge, threatened, against either
Ibis or Isis contesting the validity, use, ownership,
enforceability or registrability of any Business IP. Neither
Ibis nor Isis is aware of any basis for any such claim, opposition
or cancellation proceeding, and neither Ibis nor Isis has received
any notices regarding any of the foregoing. No loss or
expiration of any material Business IP is pending or reasonably
foreseeable or to Isis’ or Ibis’ Knowledge, threatened,
except for
17
patents expiring at the end of their statutory
terms (and not as a result of any act or omission by either Ibis or
Isis, including, without limitation, a failure to pay any required
maintenance fees) or limitations to the scope of claims of any
pending patent application made during the ordinary course of
prosecuting such pending patent applications. Complete copies
of all file histories for issued patents and pending patent
applications of the Business IP owned or held by either Ibis or
Isis have been provided to AMI.
(vii)
To Isis’ or Ibis’ Knowledge, (A) no Person has
infringed (directly, contributorily, by inducement or otherwise),
or misappropriated any of the Business IP and (B) no Person is
infringing (directly, contributorily, by inducement or otherwise)
or misappropriating any of the Business IP.
(viii)
Ibis has sufficient right, title and interest in and to the
Business IP: (A) to conduct the Business, including the
development, manufacture and commercialization of the T5000
Biosensor System and the assay kits specifically listed in the
[***] on a worldwide basis, with no payment obligation to any
Person, except pursuant to an IP Contract made available to AMI,
and (B) to make, have made, import, use , offer for
sale, or sell any product(3) currently marketed by the
Business and the assay kits specifically listed in the [***]
without infringing (directly, contributorily, by inducement or
otherwise), misappropriating or conflicting with any Intellectual
Property rights of any Person. As of the date hereof, the
Business IP is owned by or available for use by Ibis on terms and
conditions identical to those under which it was owned or used by
Ibis and the Business prior to the date hereof.
(ix)
To Isis’ or Ibis’ Knowledge, Ibis has sufficient right,
title and interest in and to the Business IP: (A) to develop,
manufacture and commercialize the [***] [***] [***] on a worldwide
basis, with no payment obligation to any Person, except pursuant to
an IP Contract made available to AMI, and (B) to make, have
made, import, use, offer for sale, or sell the [***] [***] [***]
without infringing (directly, contributorily, by inducement or
otherwise), misappropriating or conflicting with any Intellectual
Property rights of any Person.
(x)
No funding, facilities or resources of a Governmental Authority,
university, college, other educational institution or research
center or funding from third parties was used in the development of
any of the Business IP and no Governmental Authority, university,
college, other educational institution or research center has any
claim or right in or to any of the Business IP.
(xi)
Each current or former employee of each Isis Party or any of their
respective Affiliates, who was involved in, or who contributed to,
the creation or development of any Business IP, executed the
standard form of proprietary rights agreement set forth in
Schedule 3.1(l)(xi) upon commencement of his or her
employment and each such current or former employee and any
consultant or independent contractor who was involved in, or who
contributed to, the creation or development of any Business IP has
validly assigned all right, title and interest in and to such
Business IP to Ibis.
18
(xii)
None of the Transaction Documents nor the transactions contemplated
by any of the Transaction Documents would result in or reasonably
be expected to result in: (A) Ibis, AMI or any of their
respective Affiliates granting to any Person any right to or with
respect to any Intellectual Property owned by, or licensed to, any
of them as a result of any Encumbrance or Contract to which, Isis,
Ibis or any of their Affiliates is a party or bound by,
(B) other than standard non-solicitation agreements entered
into in the ordinary course of business and made available to AMI,
Ibis, AMI or any of their respective Affiliates being bound by, or
subject to, any non-compete or other material restriction on the
operation or scope of their respective businesses as a result of
any Encumbrance or Contract to which Isis, Ibis or any of their
Affiliates is a party or bound by, (C) other than as
contemplated by the Acquisition Agreement, Ibis, AMI or any of
their respective Affiliates being obligated to pay any royalties or
other material amounts, to increase or accelerate any royalty or
payment obligation, or to offer any discounts, to any Person as a
result of any Encumbrance or Contract to which Isis, Ibis or any of
their Affiliates is a party or bound by, or (D) any adverse
effect on Ibis’ right, title or interest in and to any of the
Business IP.
(xiii)
All components of the current version of the T5000 Biosensor System
perform in all material respects in accordance with their currently
advertised, displayed, distributed or published
specifications. All services that have been performed in the
conduct of the Business were performed in material conformity with
the terms and requirements of the related Contracts and all
Applicable Laws. All Software included in the Business IP is
free of any disabling codes or instructions, timer, copy protection
device, clock, counter or other limiting design or routing and any
“back door,” “time bomb,” “Trojan
horse,” “worm,” “drop dead device,”
“virus” or other similar disabling codes, Software
routines or hardware components. No open source, public
source or other Software that is licensed pursuant to a license
that purports to require the distribution of, or access to, source
code or purports to restrict one’s ability to charge for
distribution of Software (including, without limitation, any
version of any Software licensed pursuant to any GNU general public
license or limited general public license or other Software), was
used in, incorporated into, integrated or bundled with any Software
that has been used in the T5000 Biosensor System or any other
product that has been distributed or is currently
distributed. Ibis does not have any plans to include any such
Software in any such system or Product.
(xiv)
Without limiting any other representation or warranty herein, the
computer and other information technology systems and networks
owned or contracted for by Ibis have been maintained in accordance
with normal industry practice, are in good operating condition and
repair (except for ordinary wear and tear) and are sufficient for
the operation of the Business. Each of Ibis and Isis has
taken all reasonably necessary action to safeguard the computer and
other information technology systems and networks used in the
operation of the Business and there has been no unauthorized
intrusions or breaches of the security of the computer and other
information technology systems and networks used in the Business
that have materially compromised or are currently materially
compromising the security, integrity or operations of such systems
or networks.
19
(xv)
The individuals identified as the outside counsel involved in the
development or prosecution of the Business IP on Schedule
1(oo) represent the outside counsel who have provided Isis or
Ibis strategic legal and Intellectual Property advice related to
the Business IP and the Ibis Business during the three
(3) years prior to the date hereof.
(m)
Compliance with Other Instruments. Neither Ibis nor,
with respect to the Business, Isis is in violation or default of
any term of its charter documents, each as amended, or of any
provision of any Contract to which it is party or by which the
Business is bound or of any judgment, decree, order or writ.
(n)
Litigation . There is no Claim pending or, to
Isis’ or Ibis’ Knowledge, threatened against Ibis or,
with respect to the Business, Isis (or against any Ibis or Isis
employee (in their capacity as such)), at Law or in equity, or
before or by any Governmental Authority, and to Isis’ or
Ibis’ Knowledge, there is no reasonable basis for any of the
foregoing. Neither Ibis nor, with respect to the Business,
Isis is subject to any outstanding order, judgment, or decree
issued by any Governmental Authority or any arbitrator.
Neither Ibis nor any of its Affiliates has received any opinion or
memorandum or advice from legal counsel to the effect that Ibis or
the Business is or was exposed, from a legal standpoint, to any
material liability.
(o)
Tax Matters .
(i)
Prior to the date hereof, Ibis has not been required to file any
Tax Returns. All Taxes owed and due by Ibis have been
paid. No claim has ever been made by an authority in any
jurisdiction that Ibis is or may be subject to taxation by that
jurisdiction. There are no Encumbrances on any of the assets
used by Ibis that arose in connection with any failure (or alleged
failure) to pay any Tax. Schedule 3.1(o)(i)
contains a list of states, territories and jurisdictions
(whether foreign or domestic) in which Ibis is required to file Tax
Returns.
(ii)
Ibis has withheld and paid all Taxes required to have been withheld
and paid in connection with amounts paid or owing by Ibis to any
employee, independent contractor, creditor, stockholder, or other
third party, and all Forms W-2 and 1099 required with respect
thereto have been properly completed.
(iii)
There is no dispute or claim concerning any Tax liability of Ibis
either (A) claimed or raised by any Governmental Authority or
(B) as to which Isis or Ibis has Knowledge.
(iv)
Neither Ibis nor, with respect to the Business, Isis, has waived
any statute of limitations in respect of Taxes or agreed to any
extension of time with respect to a Tax assessment or
deficiency.
(v)
To Isis’ or Ibis’ Knowledge based in good faith on
advice of Deloitte & Touche LLP, (A) Ibis and Isis
are and will be members of the same consolidated group, as such
term is defined by Treasury Regulation § 1.1502-1(h), with
Isis being the common parent of such consolidated group for all
taxable years through and including the Acquisition Closing and
(B) unless the provisions of the Code
20
pertaining to filing Tax Returns as a
consolidated group are amended prior to the Acquisition Closing,
Ibis and Isis will be eligible to file a consolidated Tax Return in
lieu of separate Tax Returns with respect to income Tax imposed by
Chapter 1 of the Code for all taxable years through and including
the Acquisition Closing.
(vi)
Ibis is not and will not at the Acquisition Closing be a party to
any oral or written Tax sharing agreements or arrangements.
(p)
Employees .
(i)
Neither Ibis nor, with respect to the Business, Isis, is party to
any collective bargaining agreement. There is no labor union
organizing activity pending or, to Isis’ or Ibis’
Knowledge, threatened with respect to Ibis. Each of Ibis and,
with respect to the Business, Isis has complied with all applicable
Laws relating to the employment of labor and, within the last five
(5) years, neither Ibis nor Isis, with respect to the
Business, has experienced any strike, work stoppage, lockout,
grievance, unfair labor practice claim or other labor relation
problem, including, without limitation, any written dispute with or
Claim by former employees regarding termination and/or severance
pay. To the Knowledge of Isis or Ibis, no executive, key employee
or group of employees of Ibis has any plans to terminate employment
with Ibis. In the past three (3) years, Ibis and Isis
have complied in all respects with the notification provisions (or
paid severance in lieu thereof) of the WARN Act and applicable
similar state or local laws. No executive, key employee or
group of employees of Ibis or the Business has been terminated or
resigned their employment since January 1, 2007.
(ii)
Schedule 3.1(p)(ii) contains a true and complete
list of each employment (other than at-will offer letters with no
severance, compensation term guarantee or material benefit), bonus,
fringe benefit, deferred compensation, incentive compensation,
stock purchase, stock option, stock appreciation right or other
stock-based incentive, severance, change-in-control, or other
termination pay, hospitalization or other medical, disability, life
or other insurance, supplemental unemployment benefits,
profit-sharing, pension, or retirement plan, program or Contract
and each other employee benefit plan, program or Contract
sponsored, maintained or contributed to or required to be
contributed to by Ibis, or by any trade or business, whether or not
incorporated (an “ ERISA Affiliate ”), that
together with Ibis or Isis would be deemed a “single
employer” under Section 414(b), (c), (m) or
(o) of the Code, for the benefit of any current or former
employee or director of Ibis (the “ Plans
”). Schedule 3.1(p)(ii) identifies each
Plan that is an “employee welfare benefit plan” or
“employee pension benefit plan” as such terms are
defined in Sections 3(1) and 3(2) of ERISA (such plans
being hereinafter referred to collectively as the “ ERISA
Plans ”).
(iii)
Neither Ibis nor Isis has any formal plan or binding commitment to
create any additional Plan or modify or change any existing Plan
that would affect any current or former employee or director of
Ibis, except as required by Applicable Law or to conform such Plan
to the requirements of any Applicable Law. Except for this
Master Agreement, there are no Contracts, written or oral, or
omissions that would prevent or impair any Plan (including any Plan
covering retirees or other
21
former employees) from being amended or
terminated by Ibis or Isis prior to or at the Acquisition Closing
or, with respect to the Plans listed on Schedule 3.1(p)(xii)
if any, by Ibis or AMI (or any successor thereto) on or at any time
after the Acquisition Closing.
(iv)
Neither Isis nor Ibis has incurred and has no reason to expect that
either will incur any liability to the Pension Benefit Guaranty
Corporation (other than premium payments) or otherwise under Title
IV of ERISA (including any withdrawal liability) or under the Code
or any Applicable Law with respect to any employee pension benefit
plan that Isis or Ibis, or any other entity that together with Isis
or Ibis is treated as a single employer under Section 414 of
the Code, maintains or ever has maintained or to which it
contributes, ever has contributed, or ever has been required to
contribute.
(v)
Neither Ibis nor Isis, nor any of the ERISA Plans, nor any trust
created thereunder, nor to Isis’ or Ibis’ Knowledge,
any trustee or administrator thereof has engaged in a transaction
or has taken or failed to take any action in connection with which
Ibis could be subject to any material liability for either a civil
penalty assessed pursuant to Sections 409 or 502(i) of ERISA
or a tax imposed pursuant to Sections 4975, 4976 or 4980B of the
Code.
(vi)
Each Plan is in all material respects in compliance, and has been
administered in all material respects in accordance, with the
applicable provisions of ERISA, the Code and all other Applicable
Laws, including, but not limited to, medical continuation under
section 4980B of the Code. Neither Isis nor Ibis has
(A) engaged in any transaction prohibited by ERISA or the
Code; (B) breached any fiduciary duty owed by it with respect
to the Plans; or (C) failed to file and distribute timely and
properly all reports and information required to be filed or
distributed in accordance with ERISA or the Code.
(vii)
Other than routine claims for benefits, there are no Claims,
Internal Revenue Service or Department of Labor compliance programs
or other proceedings pending or, to Isis’ or Ibis’
Knowledge, threatened against or otherwise involving any Plan.
(viii)
Each Plan which is intended to be qualified under
Section 401(a) of the Code (A) has been amended to
reflect all requirements under the Code which are required to be
adopted prior to the end of the applicable remedial amendment
period and (B) has received from the Internal Revenue Service
a favorable determination letter which considers the terms of the
Plan as amended for such changes in Law.
(ix)
None of the Plans obligates Isis or Ibis either (A) to pay any
separation, severance, termination or similar benefit to Ibis
Employees or (B) to make an excess parachute payment within
the meaning of Code Section 280G.
(x)
No Plan provides benefits, including without limitation death or
medical benefits (whether or not insured), with respect to current
or former employees of Ibis after retirement or other termination
of service (other than
22
(A) coverage mandated by any Applicable
Law, (B) death benefits or retirement benefits under any
employee pension benefit plan or (C) benefits, the full direct
cost of which are borne by the current or former employee (or
beneficiary thereof)).
(xi)
As of the date hereof, to Isis’ or Ibis’ Knowledge,
other than as provided under the terms of the Plans, neither Ibis
nor Isis has made any representation or commitment to, or entered
into any formal or informal understanding with, any Ibis employee
with respect to compensation, benefits, or terms of employment to
be provided by AMI or Ibis or any of their respective Affiliates at
or subsequent to the Acquisition Closing.
(xii)
Except for the Permitted Employee Compensation Plan, Ibis neither
sponsors nor maintains nor has any liability for (A) any of
the Plans or (B) any other employee benefit plans or
arrangements.
(xiii)
All contributions, premiums or payments under or with respect to
each Plan which are or were due on or before the date hereof have
been paid.
(q)
Compliance with Laws; Licenses .
(i)
Ibis, the Business and, with respect to the Business, Isis are not
in material violation of any Law. Ibis, the Business, and,
with respect to the Business, Isis and Ibis’ and Isis’
Representatives have complied with, and are in material compliance
with, all Applicable Laws, including, without limitation, the
federal Food, Drug, and Cosmetic Act, as amended and regulations
promulgated thereunder, and all U.S. Food and Drug Administration
(“ FDA ”) or its foreign equivalent regulations
governing, among other things, the protection of human subjects and
regulations governing clinical investigators. Except such as
must be made after the Financing Closing (or, with respect to the
Additional Shares, the Subsequent Closing), which will be filed in
a timely manner, no governmental orders, permissions, consents,
approvals or authorizations are required to be obtained and no
registrations or declarations are required to be filed in
connection with the execution and delivery of the Investment
Documents, the issuance of the Shares or, if issued on the date
hereof, the Additional Shares or, except as contemplated by the
Acquisition Agreement, the Transfer of the Remaining Shares.
(ii)
Ibis holds all Licenses necessary for the operation or conduct of
the Business (including pursuant to Environmental Laws).
Schedule 3.1(q)(ii) sets forth a list of all Licenses
material to the Business (the “ Material Licenses
”). Ibis is and has been in compliance with all terms
and conditions of such Material Licenses and all Material Licenses
may be relied upon by Ibis for the lawful operation of the Business
as conducted on and prior to the date hereof and immediately
following the Financing Closing. Each Material License is
valid, binding and in full force and effect and Ibis and the
Business have complied in all material respects with all
requirements of and are not in default under any Material License
and have not received written or, to Isis’ or Ibis’
Knowledge, oral notice that the Business or Ibis is in violation of
any of the terms or conditions of such Material License. No
loss or suspension of any License nor any
23
proceeding or investigation which is seeking
such a loss or suspension is pending or, to Isis’ or
Ibis’ Knowledge, threatened. Neither Ibis nor Isis is
operating under any written or oral formal or informal agreement or
understanding with any licensing authority, Regulatory Authority or
any other Governmental Authority which restricts the conduct of the
Business or requires Ibis or, with respect to the Business, Isis,
to take or refrain from taking any actions.
(r)
Environment, Health and Safety . Ibis and the Business
have at all times materially complied with and are in material
compliance with all Environmental Laws, including, without
limitation, all Licenses and other authorizations that are required
pursuant to Environmental Laws for the ownership and occupation of
the assets used by Ibis and the operation of the Business. Neither
Ibis nor Isis, with respect to the Business is aware of or has
reason to be aware of or has received any notice, request for
information, report, order, directive, communication or other
information, written or oral, regarding any actual or alleged
violation of Environmental Laws, or any Claims or other liabilities
or potential liabilities (whether accrued, absolute, contingent,
unliquidated or otherwise) arising under Environmental Laws,
relating to the Business, the Real Property or Ibis, which has not
been resolved without liability to Ibis. Neither Ibis nor its
Affiliates nor any of its legal predecessors has, in violation of
Environmental Laws, treated, stored, disposed of, arranged for or
permitted the disposal of, transported, handled, or Released, or
exposed any Person to, any Hazardous Materials, or owned or
operated any property or facility (and no such property or facility
including the Real Property is contaminated by any such Hazardous
Materials) so as to give rise to any current or future liability
under Environmental Laws, including without limitation, any
liability to investigate, remediate, cleanup, monitor or take any
similar actions with respect to the environmental condition of any
property (whether owned or non-owned), facility or treatment,
storage or disposal facility. None of the following exists or
to Isis’ or Ibis’ Knowledge, has ever existed at the
Real Property: underground storage tanks, septic tanks, asbestos
containing materials, polychlorinated biphenyls, lead-based paint,
urea-formaldehyde, dumps, landfills, or waste disposal areas,
sumps, pits, lagoons, surface impoundments or wetlands, or any
contamination of any kind of the surface, subsurface, groundwater
or surface water. Ibis has not assumed or become subject to,
whether expressly or by operation of Law, any liabilities of any
other Person arising under Environmental Laws or pursuant to any
type of agreement. The consummation of the transactions
contemplated by this Master Agreement do not impose any obligation
on the Business under any Environmental Law or require notification
to or consent of any Governmental Authority or third party pursuant
to any Environmental Law. Ibis has provided to AMI copies of
all material environmental Licenses, reports, audits, assessments,
and investigations, and any other material environmental documents,
relating to Ibis or the Business to the extent the foregoing are in
the possession, custody, or control of Isis or any of its
Affiliates or Ibis.
(s)
Offering Valid . Assuming the accuracy of the
representations and warranties of AMI contained in
Section 3.2 hereof, the offer, sale and issuance of the
Shares (and the Additional Shares if AMI exercised the Subscription
Right and acquired the Additional Shares pursuant to the Stock
Subscription Agreement on the date hereof) will be exempt from the
registration requirements of the Securities Act, and will have been
registered or qualified (or are exempt from registration and
qualification) under the registration, permit or qualification
requirements of all applicable state securities Laws. Neither
Ibis nor any agent on its behalf has
24
solicited or will solicit any offers to sell or
has offered to sell or will offer to sell all or any part of the
Shares or Additional Shares to any Person or Persons so as to bring
the sale of such Shares or Additional Shares by Ibis within the
registration provisions of the Securities Act or any state
securities Laws.
(t)
Financial Statements . Schedule 3.1(t)
attached hereto contains the following financial statements
(collectively the “ Financial Statements ”):
(i) the profit and loss statement for the Division for the
fiscal year ended December 31, 2006 and (ii) the profit
and loss statement for Ibis and the related balance sheet (the
“ Most Recent Balance Sheet ”) for the nine
month period ended September 30, 2007. The Financial
Statements have been prepared in accordance with GAAP throughout
the periods covered thereby, present fairly in all material
respects the financial condition of Ibis or the Division (as the
case may be) as of such dates and the results of operations of Ibis
or the Division (as the case may be) for such periods, and are
materially correct and complete and consistent with the books and
records of Ibis (which books and records are materially correct and
complete).
(u)
Subsequent Events . Since the date of the Most Recent
Balance Sheet, there has not been any material adverse change in
the business, assets, liabilities, condition (financial or
otherwise), operations, operating results, prospects, customer
relations or supplier relations of Ibis and Ibis has and Isis has
caused Ibis to conduct the Business in the ordinary course.
Since the date of the Most Recent Balance Sheet:
(i)
Ibis has not sold, leased, transferred, or assigned any of its
assets to a third party, tangible or intangible, other than
inventory in the ordinary course of business;
(ii)
No party (including Ibis or Isis) has accelerated, terminated,
modified, or canceled any material Contract (or series of related
Contracts) to which Ibis is or was a party or by which the Business
is or was bound;
(iii)
Ibis has made capital expenditures consistent with its normal
course of operations;
(iv)
Ibis has not experienced any damage, destruction, or loss (whether
or not covered by insurance) to its property over $50,000 in the
aggregate;
(v)
Ibis has not granted any increase in the base compensation of any
employee, except in the ordinary course of business (including as
to amount) or any bonus to, any employee, other than in the
ordinary course of business;
(vi)
Ibis has not amended, modified, or terminated any Plan;
(vii)
Ibis has not entered into any transaction with any of its
directors, officers, employees or Affiliates, except for
transactions with its employees in the ordinary course of
business;
(viii)
Neither Ibis nor Isis has licensed, sublicensed, allowed any
Encumbrance to exist on, abandoned, or permitted to lapse any
Business IP or, except in
25
the
ordinary course of business, disclosed any Confidential Information
of Ibis or the Business to any Person (other than AMI and
AMI’s Representatives);
(ix)
Ibis has not made a change in its accounting methods; and
(x)
Ibis has not committed in any binding manner to any of the
foregoing.
(v)
Brokers’ Fees . There are no brokerage
commissions, finders’ fees or similar compensation due in
connection with the transactions contemplated by the Transaction
Documents based on any arrangement or agreement made by or on
behalf of Isis or Ibis. To the extent there are any brokerage
commissions, finders’ fees or similar compensation due in
connection with the transactions contemplated by the Transaction
Documents under [***] Isis shall be solely liable for any and all
such amounts.
(w)
Leased Real Property .
(i)
Ibis does not own any real property and the ownership of any real
property is not necessary for the operation of the Business.
Ibis does not lease, sublease, license or otherwise grant any
Person the right to use any real property. Neither Isis nor
any of its Affiliates leases, subleases, licenses or occupies any
real property used or occupied by, or necessary for the operation
or conduct of, the Business.
(ii)
Schedule 3.1(w)(ii) sets forth the names of the lessor
and lessee, the address of each parcel of real property used by
Ibis (collectively, the “ Leased Real Property
”), and a list of all leases, subleases, licenses and other
agreements (whether written or oral) (collectively, “
Leases ”) for each such Leased Real Property.
None of the Leases is a ground lease. Ibis and Isis have
delivered to AMI a true and complete copy of each such Lease
document, and in the case of any oral Lease, a written summary of
the material terms of such Lease. Ibis does not own any
structures, improvements or fixtures located on any Leased Real
Property (collectively, “ Leasehold Improvements
”) and no Leasehold Improvements other than those provided to
Ibis under the Corporate Services Agreement are material to the
operation of the Business.
(iii)
Each such Lease is legal, valid, binding, enforceable and in full
force and effect.
(iv)
Neither Ibis nor, to Isis’ or Ibis’ Knowledge, any
other party to a Lease is in breach or default under such Lease, no
event has occurred or circumstance exists which, with the delivery
of notice, the passage of time or both, could reasonably be
expected to constitute such a breach or default, or permit the
termination, modification or acceleration of rent under such Lease
and neither Ibis nor Isis has received notice that the Leased Real
Property is in violation of any Applicable Law. !
(v)
No security deposit or portion thereof deposited with respect to
such Lease has been applied in respect of a breach or default under
such Lease which has not been redeposited in full. Neither
Ibis nor any other Person owes any brokerage commissions,
finder’s fees, free rent or allowances with respect to such
Lease.
26
(x)
Contracts .
(i)
Schedule 3.1(x)(i) lists the following Contracts
relating to the Business or to which Ibis is a party:
(A) Contract for the employment of any officer, individual
employee, or other Person on a full-time, part-time, consulting, or
other basis or Contract relating to loans to officers, directors,
employees or Affiliates; (B) agreement or indenture relating
to borrowed money or other Indebtedness or the mortgaging,
pledging, or otherwise placing an Encumbrance on assets or Capital
Stock of Ibis; (C) lease or agreement under which Ibis is the
lessee of or holds or operates any property, real or personal,
owned by any other party, except for any lease or agreement for
real or personal property under which the aggregate annual
consideration is less than or equal to $25,000; (D) lease or
agreement under which Ibis is the lessor of or permits any Person
to hold or operate any property, real or personal, owned or
controlled by Ibis; (E) distribution or franchise agreement;
(F) agreement with a term of more than six months and
(1) which is not terminable by Ibis upon less than 90
days’ notice without penalty or (2) which involves
aggregate annual consideration in excess of $25,000;
(G) agreements relating to ownership of or investments in any
business or enterprise, including joint ventures and minority
equity investments; (H) Contract prohibiting it from freely
engaging in any business or competing anywhere in the world;
(I) except as otherwise disclosed on Schedule 3.1(x)(i)
any other Contract or group of related Contracts with the
same party or group of affiliated parties that involves aggregate
annual consideration from or to Ibis in excess of $100,000; or
(J) any Contract that is otherwise material to Ibis and/or the
Business, including, without limitation, any IP Contract or
Government Contract, whether or not entered into in the ordinary
course of business and whether or not performance thereunder has
been completed. All of the Contracts and other similar
arrangements set forth on or required to be set forth on
Schedule 3.1(x)(i) (the “ Ibis Contracts
”).
(ii)
All of the Ibis Contracts are valid, binding, enforceable and in
full force and effect, and the Financing will not cause such
Contracts to cease to be valid, binding, enforceable and in full
force and effect on identical terms following the Closing
Date. Each of Isis or Ibis, as applicable, and, to
Isis’ or Ibis’ Knowledge, each counterparty thereto has
performed all material obligations required to be performed by it
and is not in default under or in breach of or in receipt of any
claim of default or breach under any Ibis Contract. No event
has occurred which with the passage of time or the giving of notice
or both would result in a default, breach or event of noncompliance
by either Ibis or Isis or, to Isis’ or Ibis’ Knowledge,
any other party under any such Ibis Contract. Neither Isis
nor Ibis has received notice of the intention of any party to
cancel or terminate any Ibis Contract and, to Isis’ or
Ibis’ Knowledge, there has not been any breach or anticipated
breach by the other parties to any such Ibis Contract.
(iii)
Isis has provided AMI with a true and correct copy of all Ibis
Contracts in each case together with all amendments, waivers, or
other changes thereto (all of which are disclosed on Schedule
3.1(x)(i) ). Schedule 3.1(x)(i) contains an
accurate and complete description of all material terms of all oral
Contracts referred to therein.
27
(y) Insurance
. Schedule 3.1(y) attached hereto lists and
briefly describes each insurance policy maintained by Ibis or Isis
with respect to the Business (the “ Insurance Policies
”), together with a claims history for the past five
(5) years for Ibis and, with respect to the Business, Isis.
All of the Insurance Policies are in full force and effect,
and neither Ibis nor Isis with respect to the Business is in
default with respect to its obligations under any such insurance
policy and neither Ibis nor Isis, with respect to the Business has
been denied insurance coverage. Neither Ibis nor Isis, with
respect to the Business has any self-insurance or co-insurance
programs.
(z) Customers and
Suppliers . Schedule 3.1(z) accurately sets forth
a list of the Business’ top ten customers by revenue for the
fiscal year ended December 31, 2006 and the nine month period
ended September 30, 2007. Except as set forth on
Schedule 3.1(z) , neither Isis nor Ibis has received any
indication from any material customer of the Business or any
Governmental Authority to the effect that, and neither Isis nor
Ibis has any reason to believe that, such customer or Governmental
Authority will in the future stop, or materially decrease the rate
of buying products or services from the Business. Schedule
3.1(z) also accurately sets forth a list of the
Business’ top ten suppliers by dollar amount for the nine
month period ended September 30, 2007. Except as set
forth on Schedule 3.1(z) , neither Isis nor Ibis has
received any indication from any material supplier of the Business
to the effect that, and neither Isis nor Ibis has any reason to
believe that, such supplier will stop or materially decrease the
rate of providing products or services to the Business and its
customers. Neither Isis nor Ibis is involved in any material
dispute with any customer or supplier of or to the Business.
(aa)
No Material Adverse Effect . Since September 30,
2007, there has been no Material Adverse Effect.
(bb)
Names and Locations . During the five-year period
prior to the date hereof, neither Ibis nor the Business has used
any name or names under which it has invoiced account debtors or
maintained records concerning the assets used in the operation of
the Business, other than Ibis Biosciences, Inc. and all of the
assets used in the operation of the Business are located at the
Leased Real Property.
(cc)
Directors, Officers and Bank Accounts . Schedule
3.1(cc) (i) sets forth a true and correct list of the
directors and officers of Ibis and the title of each such
officer. Schedule 3.1(cc) (ii) lists all of
Ibis’ bank accounts, safety deposit boxes and lock boxes
(designating each authorized signatory with respect thereto).
(dd)
Regulatory Filings . Ibis and Isis have made
available
|