0000893220-95-000537.txt : 19950818 0000893220-95-000537.hdr.sgml : 19950818 ACCESSION NUMBER: 0000893220-95-000537 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19950802 ITEM INFORMATION: Acquisition or disposition of assets ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 19950817 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: ONCOGENE SCIENCE INC CENTRAL INDEX KEY: 0000729922 STANDARD INDUSTRIAL CLASSIFICATION: IN VITRO & IN VIVO DIAGNOSTIC SUBSTANCES [2835] IRS NUMBER: 133159796 STATE OF INCORPORATION: DE FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-15190 FILM NUMBER: 95565025 BUSINESS ADDRESS: STREET 1: 106 CHARLES LINDBERGH BLVD CITY: UNIONDALE STATE: NY ZIP: 11553 BUSINESS PHONE: 5162220023 MAIL ADDRESS: STREET 1: 106 CHARLES LINDBERGH BLVD CITY: UNIONDALE STATE: NY ZIP: 11553-3649 8-K 1 FORM 8-K, ONCOGENE SCIENCE, INC. 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported): August 2, 1995 ONCOGENE SCIENCE, INC. ---------------------- (Exact Name of Registrant as Specified in Charter) Delaware 0-15190 13-3159796 -------------------------------------------------------------------------------------------------------- (State or Other Jurisdiction (Commission File Number) (I.R.S. Employer of Incorporation) Identification No.) 106 Charles Lindbergh Blvd., Uniondale, NY 11553 -------------------------------------------------------------------------------------------------------- (Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (516) 222-0023 -------------- 2 ITEM 2. DISPOSITION OF ASSETS On August 2, 1995, pursuant to an Asset Purchase Agreement dated June 26, 1995, Oncogene Science, Inc. (the "Company") closed the sale of its Research Products business to Calbiochem-Novabiochem Corporation (the "Buyer"), a wholly owned subsidiary of Calbiochem-Novabiochem International, Inc., for $6 million in cash and certain other consideration. The Company retained the trade accounts receivable of the Research Products business, net of the trade accounts payable and accrued expenses thereof. The Company did not sell any rights with respect to its diagnostics business, and it retained the right to sell research products in the clinical research market. Pursuant to an agreement entered into on the closing date, the sale was given effect as of 11:59 p.m. Eastern Daylight Time on July 31, 1995. Pursuant to this transaction, the Buyer subleased a portion of the Company's leased facilities located in Cambridge, Massachusetts, and the Buyer will make certain rent payments under this sublease. The rent payable by the Buyer is intended to reimburse the Company for the Buyer's use of the subleased premises, and does not include an element of profit or mark-up relative to the Company's obligations under its lease. The Buyer will have the right through July 31, 2000 to license from the Company the rights to make, use and sell new research products developed by the Company in its cancer diagnostics business. The Buyer will make certain royalty payments to the Company with respect to sales of research products so licensed, if any. In connection with the sale of the Research Products business, the Company retained Cowen & Company ("Cowen") to assist it in locating a buyer. Cowen prepared a confidential Information Memorandum regarding the Research Products business and delivered it to various entities that Cowen expected might have an interest in the Research Products business. Certain of these entities responded to Cowen's inquiries and entered into discussions and negotiations with the Company. The purchase price was determined pursuant to negotiations between the Company and the Buyer based largely on the sales volume of the Research Products business. The assets sold by the Company in this transaction included: 1. various contracts related to the Company's Research Products business, including license agreements, distributorship agreements, equipment leases, purchase orders, sales orders and other contracts; 2. cell lines, sibling cell lines, strains, cultures and other biological or biochemical source stocks used the by the Company in the Research Products business; 3. equipment and machinery related to the Research Products business; -2- 3 4. intangible personal property rights relating exclusively to the Research Products business, including, among other things, goodwill, software and software systems, etc.; 5. certain intellectual property, including trademarks associated with various research products, know-how relating to the manufacture and development of research products, copyrights and certain patent rights; and 6. inventory, prepaid expenses and other assets. ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS (a) PRO FORMA FINANCIAL INFORMATION. SELECTED PRO FORMA CONSOLIDATED FINANCIAL INFORMATION (UNAUDITED) The following unaudited pro forma consolidated financial statements give effect to the sale on August 2, 1995 of certain assets comprising the Company's Research Products business to Calbiochem-Novabiochem Corporation, a wholly owned subsidiary of Calbiochem-Novabiochem International, Inc., for $6 million in cash and certain other consideration. The pro forma consolidated statements of operations for the year ended September 30, 1994 and the nine months ended June 30, 1995 assume the sale was consummated as of October 1, 1993 and October 1, 1994, respectively. The pro forma consolidated balance sheet assumes that such sale was consummated as of June 30, 1995. The pro forma consolidated financial statements do not purport to represent the Company's actual financial condition or results of operations had such sale actually been made on the dates indicated, nor do they project the Company's financial position or results of operations for any future dates or periods. The pro forma consolidated financial statements should be read in conjunction with the notes thereto and historical financial statements of the Company as of and for the periods ended September 30, 1994 and June 30, 1995. -3- 4 PRO FORMA CONSOLIDATED BALANCE SHEET (UNAUDITED) JUNE 30, 1995
LESS ONCOGENE RESEARCH PRO FORMA SCIENCE, INC. PRODUCTS ADJUSTMENTS PRO FORMA ------------- -------- ----------- --------- ASSETS Cash and cash equivalents $ 1,752,700 $ -- $ -- $ 1,752,700 Short term investments 19,124,900 -- 6,000,000 25,124,900 Accounts receivable, net 1,731,800 -- -- 1,731,800 Grants receivable 204,150 -- -- 204,150 Accrued interest receivable 164,843 -- -- 164,843 Inventory 1,619,824 1,619,824 -- -- Prepaid expenses 566,558 135,444 -- 431,114 --------- ---------- ------------- ------------ Total current assets 25,164,775 1,755,268 6,000,000 29,409,507 Fixed assets, net 6,186,101 200,720 -- 5,985,381 Other receivables 573,180 -- -- 573,180 Loans to officers & employees 75,466 -- -- 75,466 Other assets 109,036 -- -- 109,036 Intangible assets 9,360,598 367,128 -- 8,993,471 --------- --------- ------------- ----------- $41,469,156 $2,323,116 $6,000,000 $45,146,040 ========== ========= ========= ==========
LIABILITIES AND STOCKHOLDERS' EQUITY Accounts payable and accrued expenses $1,333,464 $-- $850,000 $2,183,464 Unearned revenue 370,042 -- -- 370,042 ---------- ----------- ------------ ----------- Total current liabilities 1,703,506 2,553,506 Long term portion of unearned revenue 180,158 -- -- 180,158 Post-retirement benefits other than pension 292,509 -- -- 292,509 ------- ------------ ------------ ------- Total liabilities 2,176,173 -- 850,000 3,026,173 Stockholders' Equity: Common stock, $.01 par value 174,797 -- -- 174,797 Additional paid in capital 66,203,427 -- -- 66,203,427 Retained earnings (deficit) (26,663,415) 2,323,116 -- (23,836,531) Unrealized holding loss (193,000) -- -- (193,000) Cumulative translation adjust. (86,267) -- -- (86,267) ------------ ------------ ------------ -------------- 39,435,542 2,323,110 5,150,000 42,262,426 Less: treasury stock (142,559) -- -- (142,559) Total stockholders' equity 39,292,983 2,323,116 5,150,000 42,119,867 Total liabilities & equity $41,469,156 $2,323,116 $6,000,000 $45,146,040 ========== ========= ========= ==========
-4- 5 NOTE TO PRO FORMA CONSOLIDATED BALANCE SHEET (UNAUDITED) The foregoing pro forma adjustments assume the sale of the Research Products business was consummated as of June 30, 1995. The Asset Purchase Agreement included all tangible and intangible assets of the Research Products business, except for trade accounts receivable (approximately $894,000 at June 30, 1995), net of trade accounts payable and accrued expenses (approximately $128,000 at June 30, 1995). Costs incurred in connection with the sale of the Research Products business, consisting of professional fees, employee severance and other costs related to the sale estimated at $850,000, have been reflected as accrued expenses in the accompanying pro forma consolidated balance sheet. -5- 6 PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) YEAR ENDED SEPTEMBER 30, 1994
LESS ONCOGENE RESEARCH PRO FORMA SCIENCE, INC. PRODUCTS ADJUSTMENTS PRO FORMA ------------- -------- ----------- --------- Collaborative program revenues $9,089,295 $ -- $ -- $9,089,295 Sales 4,937,917 4,937,917 -- -- Other research revenue 2,272,277 -- -- 2,272,277 ----------- ---------- ------------ ----------- 16,299,489 4,937,917 -- 11,361,572 ----------- ---------- ------------ ----------- Research & development 12,125,210 231,399 -- 11,893,811 Production 1,427,981 1,427,981 -- -0- Selling, general & administrative 7,487,090 3,175,476 -- 4,311,614 Amortization of intangibles 1,745,163 293,540 -- 1,451,623 ----------- ---------- ------------ ----------- 22,785,444 5,128,396 -- 17,657,048 ----------- ---------- ------------ ----------- Loss from operations (6,485,955) (190,479) -- (6,295,476) Interest income 858,904 206,000 1,064,904 Other income (expenses) (96,873) 26,649 -- (123,522) ----------- --------- ------------ ----------- Net income (loss) $(5,723,924) $(163,830) $206,000 $(5,354,094) =========== ========= ======= =========== Weighted average number of shares of common stock outstanding 16,335,000 16,335,000 Net loss per weighted share of common stock outstanding $(0.35) $(0.33) ========= =========
-6- 7 PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) NINE MONTHS ENDED JUNE 30, 1995
LESS ONCOGENE RESEARCH PRO FORMA SCIENCE, INC. PRODUCTS ADJUSTMENTS PRO FORMA ------------- -------- ----------- --------- Collaborative program revenues $7,102,909 $ -- $ -- $7,102,909 Sales 3,849,229 3,849,229 -- -- Other research revenue 1,359,076 -- -- 1,359,076 ----------- ---------- ---------- 12,311,214 3,849,229 -- 8,461,985 ----------- ---------- ---------- ---------- Research & development 9,812,630 178,814 -- 9,633,816 Production 1,179,674 1,179,674 -- -- Selling, general & administrative 5,472,808 2,112,338 -- 3,360,470 Amortization of intangibles 1,309,261 220,155 -- 1,089,106 ----------- ---------- ---------- ----------- 17,774,373 3,690,981 -- 14,083,392 ----------- ---------- ---------- ----------- Income (loss) from operations (5,463,159) 158,248 -- (5,621,407) Interest income 695,564 -- 193,125 888,689 Other income (expenses) (25,149) 27,113 -- (52,262) ----------- ---------- ---------- ----------- Net income (loss) $ (4,792,744) $185,361 $193,125 $ (4,784,980) =========== ======= ======= =========== Weighted average number of shares of common stock outstanding 16,560,456 16,560,456 Net loss per weighted share of of common stock outstanding $(0.29) $(0.29) ========= =========
-7- 8 NOTE TO PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) The following proforma adjustments to the consolidated statements of operations for the year ended September 30, 1994 and the nine months ended June 30, 1995 assume the sale of the Research Products business was consummated as of October 1, 1993 and October 1, 1994, respectively.
Nine Months Year Ended Ended September 30, 1994 June 30, 1995 ------------------ ------------- Increase in interest income to reflect the investment of the net proceeds of $5.15 million based on the effective rates of return on the Company's short-term investments (4% for the year ended September 30, 1994 and 5% for the nine months ended June 30, 1995) $206,000 $193,125 ======= =======
-8- 9 ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS (CONTINUED) (b) EXHIBITS. 10.1 Asset Purchase Agreement dated June 26, 1995 among Oncogene Science, Inc., Calbiochem- Novabiochem International, Inc. and Calbiochem-Novabiochem Corporation. 10.2 Sublease dated August 2, 1995 between Oncogene Science, Inc.and Calbiochem-Novabiochem Corporation. 10.3 New Product License Right of First Refusal Agreement dated August 2, 1995 between Oncogene Science, Inc. and Calbiochem-Novabiochem Corporation. -9- 10 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. ONCOGENE SCIENCE, INC. By: /s/ Robert L. Van Nostrand ------------------------------------------- Robert L. Van Nostrand, Vice President, Finance and Administration Dated: August 17, 1995 -10- 11 EXHIBIT INDEX Exhibit No. Description Page 10.1 Asset Purchase Agreement dated June 26, 1995 among Oncogene Science, Inc., Calbiochem-Novabiochem International, Inc. and Calbiochem-Novabiochem Corporation 10.2 Sublease dated August 2, 1995 among Oncogene Science, Inc. and Calbiochem-Novabiochem Corporation 10.3 New Product License Right of First Refusal Agreement dated August 2, 1995 between Oncogene Science, Inc. and Calbiochem-Novabiochem Corporation EX-10.1 2 ASSET PURCHASE AGREEMENT DATED JUNE 26, 1995 1 EXHIBIT 10.1 ================================================================================ CALBIOCHEM-NOVABIOCHEM CORPORATION CALBIOCHEM-NOVABIOCHEM INTERNATIONAL, INC.. AND ONCOGENE SCIENCE, INC. ------------------------ ASSET PURCHASE AGREEMENT ------------------------ --------------------------- Dated as of June 26, 1995 --------------------------- ================================================================================ 2 TABLE OF CONTENTS
Page ---- SECTION 1. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 SECTION 2. PURCHASE AND SALE OF THE PURCHASED PROPERTY . . . . . . . . . . . . . . . 8 SECTION 2.1. Transfer of Assets . . . . . . . . . . . . . . . . . . . . . . 8 SECTION 2.2. Sale at Closing Date . . . . . . . . . . . . . . . . . . . . . 8 SECTION 2.3. Subsequent Documentation . . . . . . . . . . . . . . . . . . . 8 SECTION 2.4. Assumption of Assumed Contracts; Exclusion of Excluded Liabilities . . . . . . . . 8 SECTION 3. PURCHASE PRICE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 SECTION 3.1. Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . 9 SECTION 3.2. Payment of Purchase Price . . . . . . . . . . . . . . . . . . 9 SECTION 3.3. Post-Closing Adjustment to Purchase Price . . . . . . . . . . . . . . . . . . . . . 10 SECTION 3.4 Allocation of Purchase Price . . . . . . . . . . . . . . . . 10 SECTION 4. CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 SECTION 5. REPRESENTATIONS AND WARRANTIES OF THE SELLER . . . . . . . . . . . . . 11 SECTION 5.1. Corporate Organization . . . . . . . . . . . . . . . . . . . 11 SECTION 5.2. Qualification to Do Business . . . . . . . . . . . . . . . . 12 SECTION 5.3. Authorization and Validity of Agreement . . . . . . . . . . 12 SECTION 5.4. No Conflict or Violation . . . . . . . . . . . . . . . . . . 12 SECTION 5.5. Consents and Approvals . . . . . . . . . . . . . . . . . . . 12 SECTION 5.6. Good Title; Necessary Assets and Rights . . . . . . . . . . 13 SECTION 5.7. Financial Information . . . . . . . . . . . . . . . . . . . 13 SECTION 5.8. Absence of Certain Changes or Events . . . . . . . . . . . . 13 SECTION 5.9. Tax Matters . . . . . . . . . . . . . . . . . . . . . . . . 15 SECTION 5.10. Warranties . . . . . . . . . . . . . . . . . . . . . . . . . 15 SECTION 5.11. Cambridge Lease . . . . . . . . . . . . . . . . . . . . . . 15 SECTION 5.12. Equipment and Machinery . . . . . . . . . . . . . . . . . . 16 SECTION 5.13. Intellectual Property; Intangible Assets . . . . . . . . . . 16 SECTION 5.14. Licenses and Permits . . . . . . . . . . . . . . . . . . . . 17 SECTION 5.15. Compliance with Law . . . . . . . . . . . . . . . . . . . . 18 SECTION 5.16. Litigation . . . . . . . . . . . . . . . . . . . . . . . . . 18 SECTION 5.17. Assumed Contracts . . . . . . . . . . . . . . . . . . . . . 19 SECTION 5.18. Prepaid Expenses . . . . . . . . . . . . . . . . . . . . . . 19 SECTION 5.19. Inventories . . . . . . . . . . . . . . . . . . . . . . . . 19
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Page ---- SECTION 5.20. Cell Lines; Biological Materials . . . . . . . . . . . . . . 20 SECTION 5.21. Employee Plans . . . . . . . . . . . . . . . . . . . . . . . 20 SECTION 5.22 Compensation . . . . . . . . . . . . . . . . . . . . . . . . 21 SECTION 5.23. Customers, Suppliers and Distributors . . . . . . . . . . . 21 SECTION 5.24. Insurance . . . . . . . . . . . . . . . . . . . . . . . . . 22 SECTION 5.25. Labor Matters; Employment Agreements . . . . . . . . . . . . 22 SECTION 5.26. Products Liability . . . . . . . . . . . . . . . . . . . . . 22 SECTION 5.27. Environmental Matters . . . . . . . . . . . . . . . . . . . 23 SECTION 5.28. Accuracy of Information . . . . . . . . . . . . . . . . . . 24 SECTION 6. REPRESENTATIONS AND WARRANTIES OF THE BUYER . . . . . . . . . . . . . . 25 SECTION 6.1. Corporate Organization . . . . . . . . . . . . . . . . . . . 25 SECTION 6.2. Qualification to Do Business . . . . . . . . . . . . . . . . 25 SECTION 6.3. Authorization and Validity of Agreement . . . . . . . . . . 25 SECTION 6.4. No Conflict or Violation . . . . . . . . . . . . . . . . . . 25 SECTION 6.5. Consents and Approvals . . . . . . . . . . . . . . . . . . . 26 SECTION 7. COVENANTS OF THE SELLER . . . . . . . . . . . . . . . . . . . . . . . . 26 SECTION 7.1. Conduct of Business Before the Closing Date . . . . . . . . . . . . . . . . . . . . . . 26 SECTION 7.2. Consents and Approvals . . . . . . . . . . . . . . . . . . . 28 SECTION 7.3. Notice of Breach . . . . . . . . . . . . . . . . . . . . . . 28 SECTION 7.4. Access to Properties and Records . . . . . . . . . . . . . . 28 SECTION 7.5. Negotiations . . . . . . . . . . . . . . . . . . . . . . . . 29 SECTION 7.6. Best Efforts . . . . . . . . . . . . . . . . . . . . . . . . 29 SECTION 7.7. Covenant Not To Compete . . . . . . . . . . . . . . . . . . 29 SECTION 7.8. Non-Solicitation of Employees . . . . . . . . . . . . . . . 30 Section 7.9 Cooperation Regarding Receivables . . . . . . . . . . . . . 30 Section 7.10. Diagnostic Business Inventory Build . . . . . . . . . . . . 30 Section 7.11. Preparation of Financial Statements . . . . . . . . . . . . 31 Section 7.12. Accounts Payable . . . . . . . . . . . . . . . . . . . . . . 31 SECTION 8. COVENANTS OF THE PARENT AND BUYER . . . . . . . . . . . . . . . . . . . 31 SECTION 8.1. Actions Before Closing Date . . . . . . . . . . . . . . . . 31 SECTION 8.2. Consents and Approvals . . . . . . . . . . . . . . . . . . . 31 SECTION 8.3. Best Efforts . . . . . . . . . . . . . . . . . . . . . . . . 31 Section 8.4 Non-Solicitation of Employees . . . . . . . . . . . . . . . 32 Section 8.5 Cooperation Regarding Receivables . . . . . . . . . . . . . 32 Section 8.6 Guarantee of Obligations of The Buyer . . . . . . . . . . . 32 SECTION 9. EMPLOYEES AND EMPLOYEE PLANS . . . . . . . . . . . . . . . . . . . . . 32 SECTION 9.1. Offer of Employment . . . . . . . . . . . . . . . . . . . . 32 SECTION 9.2 Seller Savings Plan . . . . . . . . . . . . . . . . . . . . 33 SECTION 9.3 Flexible Spending Accounts . . . . . . . . . . . . . . . . . 33
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Page ---- SECTION 10. BULK SALES LAW . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 SECTION 11. INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 SECTION 11.1. Indemnification by the Seller . . . . . . . . . . . . . . . 33 SECTION 11.2. Indemnification by the Buyer . . . . . . . . . . . . . . . 34 SECTION 11.3. Procedures for Indemnification by the Buyer . . . . . . . . . . . . . . . . . . . . 35 SECTION 11.4 Limitations . . . . . . . . . . . . . . . . . . . . . . . . 36 SECTION 11.5 Environmental Liability After Closing . . . . . . . . . . . 36 SECTION 12. CONDITIONS PRECEDENT TO PERFORMANCE BY THE SELLER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37 SECTION 12.1. Representations and Warranties of the Buyer . . . . . . . . 37 SECTION 12.2. Performance of the Obligations of the Buyer . . . . . . . . 37 SECTION 12.3. Consents and Approvals . . . . . . . . . . . . . . . . . . 37 SECTION 12.4. No Violation of Orders. . . . . . . . . . . . . . . . . . . 37 SECTION 12.5. Delivery of Ancillary Agreements . . . . . . . . . . . . . 38 SECTION 12.6. Opinion of Buyer's Counsel . . . . . . . . . . . . . . . . 38 SECTION 12.7. Other Closing Documents . . . . . . . . . . . . . . . . . . 39 SECTION 12.8. Legal Matters . . . . . . . . . . . . . . . . . . . . . . . 39 SECTION 13. CONDITIONS PRECEDENT TO PERFORMANCE BY THE BUYER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39 SECTION 13.1. Representations and Warranties of the Seller . . . . . . . 39 SECTION 13.2. Performance of the Obligations of the Seller . . . . . . . 40 SECTION 13.3. Consents and Approvals . . . . . . . . . . . . . . . . . . 40 SECTION 13.4. No Violation of Orders . . . . . . . . . . . . . . . . . . 40 SECTION 13.5. Delivery of Ancillary Agreements . . . . . . . . . . . . . 40 SECTION 13.6. No Material Adverse Change . . . . . . . . . . . . . . . . 40 SECTION 13.7. Opinion of Counsel . . . . . . . . . . . . . . . . . . . . 40 SECTION 13.8. Other Closing Documents . . . . . . . . . . . . . . . . . . 42 SECTION 13.9. Legal Matters . . . . . . . . . . . . . . . . . . . . . . . 42 SECTION 14. TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43 SECTION 14.1. Conditions of Termination . . . . . . . . . . . . . . . . . 43 SECTION 14.2. Effect of Termination . . . . . . . . . . . . . . . . . . . 43 SECTION 15. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43 SECTION 15.1. Successors and Assigns . . . . . . . . . . . . . . . . . . 43
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Page ---- SECTION 15.2. Governing Law, Jurisdiction . . . . . . . . . . . . . . . . 43 SECTION 15.3. Expenses . . . . . . . . . . . . . . . . . . . . . . . . . 44 SECTION 15.4. Broker's and Finder's Fees . . . . . . . . . . . . . . . . 44 SECTION 15.5 Access to Records . . . . . . . . . . . . . . . . . . . . . 44 SECTION 15.6. Force Majeure . . . . . . . . . . . . . . . . . . . . . . . 45 SECTION 15.7 Survival . . . . . . . . . . . . . . . . . . . . . . . . . 45 SECTION 15.8. Severability . . . . . . . . . . . . . . . . . . . . . . . 45 SECTION 15.9. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . 45 SECTION 15.10. Amendments; Waivers . . . . . . . . . . . . . . . . . . . . 46 SECTION 15.11. Public Announcements . . . . . . . . . . . . . . . . . . . 47 SECTION 15.12. Entire Agreement . . . . . . . . . . . . . . . . . . . . . 47 SECTION 15.13. Parties in Interest . . . . . . . . . . . . . . . . . . . . 47 SECTION 15.14. Section and Paragraph Headings . . . . . . . . . . . . . . 47 SECTION 15.15. Counterparts . . . . . . . . . . . . . . . . . . . . . . . 47
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INDEX OF EXHIBITS A Cambridge Sublease B New Products License Agreement C Oncogene Science Tradename License Agreement D Shared Services Agreement E Shared Intellectual Property License F Transition Services Agreement INDEX TO SCHEDULES 1.0 Research Products under Development 5.5 Consents, Waivers, Authorizations and Approvals 5.7 Financial Data 5.8 Material Changes or Events 5.10 Warranties on Products 5.11 Cambridge Lease Exceptions 5.12 Equipment and Machinery 5.13 Intellectual Property 5.14 Licenses and Permits 5.16 Litigation 5.17 Principal Assumed Contracts 5.18 Prepaid Expense 5.19 Inventory 5.21 Seller Plans 5.23 Principal Customers, Suppliers, Distributors and Sales Agents 5.27 Environmental Matters 7.10 Diagnostic Inventory Production Quantities 9.1 Prospective Transferred Employees
v 7 ASSET PURCHASE AGREEMENT THIS ASSET PURCHASE AGREEMENT, dated as of June 26, 1995 by and among ONCOGENE SCIENCE, INC., a Delaware corporation (the "Seller"), CALBIOCHEM-NOVABIOCHEM CORPORATION, a California corporation (the "Buyer") and CALBIOCHEM-NOVABIOCHEM INTERNATIONAL, INC., a Delaware corporation (the "Parent"). W I T N E S S E T H: WHEREAS, the Seller is a biopharmaceutical company which is engaged in its Cambridge, Massachusetts facility in both a diagnostics business and a research products business; WHEREAS, the research products business markets research reagents, kits and other research tools to the academic research market, clinical research market and industrial research market; WHEREAS, the Seller has decided to sell its research products business, while retaining the right in connection with its diagnostics business to manufacture and sell research products to the clinical research market; WHEREAS, the Buyer desires to purchase the research products business and to conduct such business in the academic research market, clinical research market and industrial research market, recognizing that the Seller will continue to have the right to manufacture and sell products to the clinical research market and diagnostic products to the diagnostic market; and WHEREAS, the Buyer desires to purchase certain assets of such research products business from the Seller, and the Seller desires to sell such assets to the Buyer, in each case upon the terms and subject to the conditions set forth in this Agreement; NOW, THEREFORE, in consideration of the foregoing and the respective covenants and agreements hereinafter contained, the parties hereby agree as follows: SECTION 1. DEFINITIONS As used in this Agreement, the following terms shall have the following meanings: 8 "Affiliate" shall mean, with respect to any Person, any Person which directly or indirectly through stock ownership or through other arrangements, either controls, is controlled by or is under common control with such Person; "Allocation Statement" -- See Section 3.4; "Ancillary Agreements" shall refer collectively to the Cambridge Sublease, the New Products License Agreement, the Oncogene Science Tradename License Agreement, the Shared Services Agreement, the Shared Intellectual Property License and the Transition Services Agreement. "Assumed Contracts" shall mean, collectively, the Distributorship Agreements, Equipment Leases, License Agreements, Purchase Orders, Sales Orders, and such other contracts to which the Seller is a party relating to the Business as are described in Section 5.17 hereto; "Business" shall mean the research, development, manufacture, worldwide distribution and sale of research reagent products, for sale into the academic, clinical and industrial research markets, including without limitation such products as monoclonal and polyclonal antibodies, DNA probes, transcription factors, growth factors, growth factor receptors, and lymphoid cell surface markers, as such business is currently being conducted by Seller; "Business Day" shall mean days other than Saturdays, Sundays and days on which banks in New York are authorized or obligated by law to be closed; "Buyer's FSAs" shall mean the flexible spending accounts relating to the Health Care Reimbursement Accounts and Dependent Care Reimbursement Accounts maintained by the Buyer under the Calbiochem-Novabiochem Corporation Flexible Benefit Plan. "Cambridge Lease" -- See Section 5.11; "Cambridge Sublease" shall mean the sublease to be entered into by the Buyer and the Seller relating to a portion of the Seller's facility at 80-84 Rogers Street, Cambridge, Massachusetts, the principal terms of which are set forth on Exhibit A; "Cell Lines" shall mean all cell lines, sibling cell lines, strains, cultures and other biological or biochemical source stocks used by the Seller in the Business; 2 9 "Closing" -- See Section 4; "Closing Date" -- See Section 4; "COBRA" shall mean the provisions of the Code, ERISA and the Public Health Service Act enacted by Sections 10001 through 10003 of the Consolidated Omnibus Budget Reconciliation Act of 1985 (P.L.99-272), including any subsequent amendments to such provisions. "Code" shall mean the Internal Revenue Code of 1986, as amended; "Diagnostic Business" shall mean Seller's ongoing business, including but not limited to its collaboration with Becton, Dickinson and Company, to develop, manufacture and sell certain research products to the clinical research market and to develop, make, use and sell clinical products for the clinical diagnostic and therapeutic markets, which includes furnishing certain research reagents to clinical researchers. "Distributorship Agreements" shall mean the distributorship agreements of the Seller relating to the sale and distribution of the Products (other than the agreement with its distributor in Belgium, France, and Israel); "Environmental Laws" -- See Section 5.27; "Equipment and Machinery" shall mean (i) all the equipment, machinery, furniture, tooling, spare parts, and supplies that are (x) owned by the Seller, (y) located at the Premises and (z) utilized by Seller in connection with the manufacturing, administrative, sales and marketing functions of the Business; (ii) all the replacements for any of the foregoing owned by the Seller, (iii) any rights of the Seller to the warranties (to the extent assignable) and licenses received from manufacturers and sellers of the aforesaid items and (iv) any related claims, credits, rights of recovery and set-off with respect thereto; "Equipment Leases" shall mean those lease agreements to which the Seller is a party relating to the Leased Equipment and Machinery. "ERISA" shall mean the Employee Retirement Income Security Act of 1974, as amended; "Excluded Liabilities" -- See Section 2.4; 3 10 "Files and Records" shall mean all files and records, whether in hard copy or magnetic format, of the Seller relating to the Business or the Purchased Property, including, without limitation, the following types of files and records relating to the Business: customer and supplier lists; customer correspondence, including complaint files and customer specifications; copies of financial schedules, records, spread sheets, purchase orders, check registers and similar financial records pertaining to the Business; correspondence with licensors and other members of the academic, clinical and scientific community relating to research products; product manufacturing data, including batch manufacturing records and quality control records; product catalogue data bases; equipment maintenance records, equipment warranty information, laboratory plans, specifications and drawings, and equipment drawings; all files relating to those employees of the Business to be employed by the Buyer following the Closing; correspondence with national, state and local governmental agencies relating to the operation of the Business and related files and records of the Seller; "Financial Data" -- See Section 5.7; "Hazardous Substance" -- See Section 5.27; "Independent Accounting Firm" -- See Section 3.4; "Intangible Assets" shall mean all intangible personal property rights (other than the Intellectual Property) owned or held by the Seller and relating exclusively to the Business, including, without limitation, all goodwill of the Seller relating to the Business, all software, software systems, databases and all other information systems (including Market Force) used in the Business, the current toll free "800" telephone numbers utilized by the Seller in connection with the Business, and all rights on the part of the Seller to proceeds of any insurance policies and all claims on the part of the Seller for recoupment, reimbursement and coverage under any insurance policies, in each case in connection with the Business; "Intellectual Property" shall mean (i) those letters patent and patent applications, owned by Seller and utilized exclusively in the Business, and (ii) the trademarks, service marks, trade names, (in each case other than the mark or name "Oncogene Science" or a derivative thereof), copyrights, know-how relating to the manufacture or development of Products, trade secrets and licenses and rights with respect to the foregoing that the Seller owns or possesses the rights to use relating to the Purchased Property or the operations of the Business, including, without limitation, the copyrights to all product 4 11 catalogues of the Business, new product guides and other supplements published in connection with the Business, the "Oncogene Science Guide to Literature Citations", advertising copy used in connection with the Business, art-work related to the Business (including the Oncogene Science Wall Chart), the trademarks "Discovery Tools," and "Transcript" and those other items listed in Schedule 5.13; "Inventory" shall mean (i) all the finished goods, raw materials, work in progress and inventoriable supplies owned by the Seller on the Closing Date and held for use in the operations of the Business and (ii) any and all rights of the Seller to the warranties received from its suppliers with respect to such inventory (to the extent assignable) and related claims, credits, rights of recovery and set-off with respect thereto; "Inventory Value" -- See Section 3.3; "knowledge of Seller" as used in this Agreement shall mean the conscious knowledge of executive officers of Seller and general management personnel of the Business; "Leased Equipment and Machinery" all equipment, machinery and furniture utilized by Seller in the Business that are held by Seller under one or more equipment leases and that, if owned, would constitute Equipment and Machinery as defined above. "License Agreements" shall mean those license agreements to which the Seller is a party which provide the Seller with rights to technology or products used or useful in the conduct of the business, including without limitation, software licenses and those license agreements relating to the manufacture, use and sale of any of the Products. "Licenses and Permits" -- See Section 5.14; "Lien" shall mean any mortgage, pledge, security interest, encumbrance, lien (statutory or other) or conditional sale agreement. "New Products License Agreement" shall mean the agreement to be entered into by the Buyer and the Seller relating to the license by the Seller of the research reagents and products that are derived from the Seller's cancer diagnostic development program, the principal terms of which are set forth on Exhibit B; 5 12 "Oncogene Science Tradename License Agreement" shall mean the agreement to be entered into by the Buyer and the Seller relating to the granting of the right to use the Oncogene Science name in connection with the sale of Products to the research market, the principal terms of which are set forth on Exhibit C; "Person" shall mean any individual, corporation, partnership, joint venture, association, joint-stock company, trust, unincorporated organization or government; "Plans" -- See Section 5.21(a); "Premises" shall mean the premises occupied by Seller at 80-84 Rogers Street, Cambridge, Massachusetts, all as more particularly described in the lease agreement, as amended between Seller, as successor by assignment from Applied bioTechnology Inc. and Trustees of The Cambridge East Trust, dated November 1991, a copy of which has previously been furnished by Seller to Buyer; "Products" shall mean (i) the products manufactured and sold (including, but not limited to, the Seller's complete line of research products contained in the Seller's 1995 product catalogue, but excluding TransProbe-1(R) and TransProbe Light(TM)) in connection with the Business as of the Closing Date (including, but not limited to, any product necessary and useful for the performance of any Assumed Contract) and (ii) those products which are in the process of development for manufacturing by the Seller listed on Schedule 1.0 hereto; "Purchase Orders" shall mean all the Seller's outstanding purchase orders, contracts or other commitments to suppliers of goods and services for materials, supplies or other items used in the Business; "Purchase Price" -- See Section 3.1; "Purchased Property" shall mean the Assumed Contracts, Cell Lines, Equipment and Machinery, Files and Records, Intangible Assets, Intellectual Property, Inventory, any prepaid expenses and other assets relating exclusively to the operations of the Business on the Closing Date; "Sales Orders" shall mean all the Seller's sales orders, contracts or other commitments to purchasers of goods and services of the Business; "Seller Plans" -- See Section 5.21; 6 13 "Seller Savings Plan" shall mean the Oncogene Science, Inc. Savings and Investment Plan; "Seller's FSAs" shall mean the flexible spending accounts relating to the Health Care Reimbursement Accounts and Dependent Care Reimbursement Accounts maintained by the Seller under the Oncogene Science Flexible Spending Plan. "Shared Services Agreement" shall mean the agreement to be entered into by the Buyer and the Seller relating to the sharing of facilities and services at the Premises, the principal terms of which are set forth on Exhibit D; "Shared Intellectual Property License" shall mean the license agreement to be entered into by the Buyer and the Seller relating to the license to Buyer of rights under patents of Seller and technology disclosed in patent applications of Seller, that are used and useful in the manufacture, use and sale of the Products, but which have other uses in Seller's other businesses, the principal terms of which are set forth on Exhibit E; "Taxes" shall mean for all purposes of this Agreement all taxes however denominated, including any interest, penalties or additions to tax that may become payable in respect thereof, imposed by any governmental body, which taxes shall include, without limiting the generality of the foregoing, all income taxes, payroll and employee withholding taxes, unemployment insurance, social security, sales and use taxes, excise taxes, franchise taxes, gross receipts taxes, occupation taxes, real and personal property taxes, stamp taxes, transfer taxes, workmen's compensation taxes and other obligations of the same or a similar nature, whether arising before, on or after the Closing; and "Tax" shall mean any one of them; "Tax Returns" shall mean any return, report, information return or other document (including any related or supporting information) filed or required to be filed with any governmental body in connection with the determination, assessment, collection or administration of any Taxes; "Transferred Employees" -- See Section 9.1; "Transition Services Agreement" shall mean the agreement to be entered into by the Buyer and the Seller relating to the provision by the Seller to the Buyer of certain services, including without limitation, administrative and management information systems and financial reporting services, the principal terms of which are set forth on Exhibit F; 7 14 "W.A.R.N." shall mean the Worker Adjustment and Retraining Notification Act, as codified at 29 U.S.C, oo 2101-2109, and the regulations promulgated thereunder. SECTION 2. PURCHASE AND SALE OF THE PURCHASED PROPERTY. SECTION 2.1. Transfer of Assets. Subject to the terms and upon the conditions herein set forth, the Seller shall sell, convey, transfer, assign and deliver to the Buyer, and the Buyer shall purchase and accept from the Seller, on the Closing Date, all right, title and interest of the Seller in and to the Purchased Property, free and clear of any Lien. SECTION 2.2. Sale at Closing Date. The sale, transfer, assignment and delivery by the Seller of the Purchased Property to the Buyer, as herein provided, shall be effected on the Closing Date by bills of sale, endorsements, assignments and other instruments of transfer and conveyance reasonably satisfactory in form and substance to counsel for the Buyer. SECTION 2.3. Subsequent Documentation. The Seller shall, at any time and from time to time after the Closing Date, upon the request of the Buyer, execute, acknowledge and deliver, or cause to be done, executed, acknowledged and delivered, all such further assignments, transfers and conveyances as may be required for the better assigning, transferring, granting, conveying and confirming to the Buyer or its successors and assigns, or for aiding and assisting in collecting and reducing to possession, any or all of the Purchased Property. SECTION 2.4. Assumption of Assumed Contracts; Exclusion of Excluded Liabilities. On the Closing, the Buyer shall assume and agree to pay, perform and discharge when due all of the obligations, debts and liabilities of Seller under the Assumed Contracts. Such assumption shall be pursuant to an assignment and assumption agreement in form and substance reasonably satisfactory to counsel for the Buyer and the Seller. The Buyer shall not assume or pay, perform or discharge, nor shall the Buyer be responsible, directly or indirectly, for any other debts, obligations, contracts, or liabilities of the Seller, including without limitation any liabilities for accounts payable, long or short term indebtedness, Taxes or product liability actions arising from the sale of any Products prior to the Closing Date, all such liabilities and obligations of the Seller being herein referred to as the "Excluded Liabilities." 8 15 To the extent that the assignment of any Assumed Contract shall require the consent of the other party thereto, this Agreement shall not constitute an agreement to assign the same if an attempted assignment would constitute a breach thereof. The Seller will use its best efforts to obtain the consent of the other parties to such contracts for the assignment thereof to the Buyer. If such consent is not obtained in respect of any such Assumed Contract, the Seller will cooperate with the Buyer in any reasonable arrangement requested by the Buyer, including subcontracting or subleasing, to provide for the Buyer the benefits under any such Assumed Contract, including enforcement at the cost of and for the benefit of the Buyer, of any and all rights of the Seller against the other party thereto with respect to such Assumed Contract. SECTION 3. PURCHASE PRICE. SECTION 3.1. Purchase Price. The purchase price for the sale and transfer of the Purchased Property shall be $6,000,000 in cash (the "Purchase Price"), which price shall be payable and deliverable in accordance with Section 3.2 and shall be subject to adjustment as provided in Section 3.3. SECTION 3.2. Payment of Purchase Price. In payment for the Purchased Property, the Buyer will pay to the Seller (i) on the Closing Date, $3,000,000, and (ii) on each of the first, second and third anniversaries of the Closing Date, $1,000,000 plus accrued and unpaid interest (at a rate per annum equal to the rate publicly announced by Chemical Bank in New York, New York, as its prime rate in effect from time to time) (the "Deferred Payments"), in each case by wire transfer of immediately available funds to the account of the Seller at European American Bank, Account No. 064075799 or such other account as the Seller shall notify the Buyer in writing at least two Business Days before such payment is due. On the Closing Date, the Buyer shall, in addition, deliver to the Seller an irrevocable letter of credit issued by a bank reasonably acceptable to the Seller in an amount equal to the Deferred Payments (the "LC") to secure the payment of the Deferred Payments. The Seller shall have the right to draw upon such LC by delivering a sight draft and a certificate of an executive officer of the Seller to the effect that a Deferred Payment has not been paid when due. The amount of the LC shall be decreased by an appropriate amount upon the payment of the initial Deferred Payment and shall be further reduced upon the payment of the second Deferred Payment. The LC shall be transferable and shall expire 60 days after the third anniversary of the Closing Date. The Buyer shall have the right to deliver $6,000,000 to the 9 16 Seller on the Closing Date in lieu of the payments of $3,000,000 plus the Deferred Payments and the delivery of the LC. SECTION 3.3. Post-Closing Adjustment to Purchase Price. The Purchase Price shall be subject to adjustment after the Closing as follows: Inventory. Commencing on the Closing Date representatives of the Buyer and the Seller shall take a physical count of the Inventory as of the Closing Date. Upon completion of each portion of such physical count, such representatives shall immediately consult and seek in good faith to reach agreement on the count of the number of merchantable (as to finished goods) and useable (as to raw material and supply) units of each type of Inventory. In connection with the preparation of the balance sheet as of the Closing Date called for under Section 7.11, KPMG Peat Marwick L.L.P. ("Peat") shall observe such physical count, and shall conduct such tests of the viability and quality of the inventory as Peat shall deem appropriate and as shall be consistent with its past practices, and the standard costing methodology previously used by the Seller in connection with the preparation of its annual audited financial statements. If the balance sheet presented shows Inventory valued at less than $1,575,000, then within 10 Business Days of the delivery of such balance sheet, the Seller shall pay to the Buyer in cash the amount by which $1,575,000 exceeds the Inventory value. SECTION 3.4 Allocation of Purchase Price. The Buyer shall, as promptly as practicable after the Closing Date, submit to the Seller a statement of the Buyer's allocation of the Purchase Price to the different items of Purchased Property (the "Allocation Statement"). The Allocation Statement shall be, subject to further adjustment on the basis of the Purchase Price adjustment pursuant to Section 3.3, binding and conclusive upon the parties hereto, unless the Seller objects in writing to any item or items shown on the Allocation Statement within ten Business Days after delivery thereof to the Seller. If the Buyer and the Seller shall be unable to resolve any dispute with regard to the Allocation Statement within ten Business Days after delivery of the Seller's written objections, the matter or matters in dispute shall be submitted to an independent certified public accountant that does not render services to either the Buyer or the Seller (the "Independent Accounting Firm") who shall be authorized by the parties to select either the purchase price allocation proposed by the Buyer or that proposed by the Seller, whichever the Independent Accounting Firm deems to be most reasonable. The expenses of the Independent Accounting Firm shall be borne by the party whose allocation is not so chosen. 10 17 The decision of the Independent Accounting Firm shall be conclusive and binding upon the Buyer and the Seller. Promptly after the Closing Date (but not before a resolution of all disputes, if any, with regard to the Allocation Statement), the Buyer's firm of independent certified public accountants shall prepare, in consultation with the Seller or the Independent Accounting Firm, those statements or forms required by Section 1060 of the Code and the regulations promulgated thereunder with respect to the allocation of the Purchase Price. Such statements or forms shall be prepared consistently with the allocation of the Purchase Price. Such statements or forms shall be filed by the parties on their respective federal income tax returns as required by Section 1060 of the Code and the regulations promulgated thereunder and each party shall provide the other party with a copy of such statement or form as filed. SECTION 4. CLOSING. The closing hereunder (the "Closing") shall take place at the offices of Willkie Farr & Gallagher at One Citicorp Center, 153 East 53rd Street, New York, New York 10022 at 10:00 a.m. on the third Business Day after the Minimum Threshhold Conditions shall have been met or at such other place and time as may be mutually agreed to by the parties hereto (the "Closing Date"). For the purposes of this Section, the "Minimum Threshhold Conditions" shall mean the closing conditions set forth in Sections 12 and 13 of this Agreement, qualified as to the receipt of consents, approvals, licenses and permits as follows: (a) the Buyer shall have obtained licenses and permits comparable to the Licenses and Permits as to all subject matters material to Buyer's ability to legally commence operations at the Premises as owner of the Business; (b) the Seller shall have obtained the consent of the landlord under the Cambridge Lease to the Cambridge Sublease; and (c) Seller shall have obtained the consent to the assignment to the Buyer of those product license agreements referred to in Schedule 5.13 covering products that, in the aggregate, represented not less than 80% of the sales of licensed products during the eight months ended May 31, 1995. SECTION 5. REPRESENTATIONS AND WARRANTIES OF THE SELLER. The Seller hereby represents and warrants to the Buyer as follows: SECTION 5.1. Corporate Organization. The Seller is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware, and has all requisite 11 18 corporate power and authority to own its properties and assets and to conduct its businesses as now conducted. Copies of the Certificate of Incorporation and By-laws of the Seller, with all amendments thereto to the date hereof, have been furnished to the Buyer or its representatives, and such copies are accurate and complete as of the date hereof. SECTION 5.2. Qualification to Do Business. The Seller is duly qualified to do business as a foreign corporation and is in good standing in the Commonwealth of Massachusetts and the State of New York and in every other jurisdiction where the character of the properties owned or leased by it or the nature of the business conducted by it makes such qualification necessary and in which the absence of such qualification could have a material adverse effect on the business of the Seller. SECTION 5.3. Authorization and Validity of Agreement. The Seller has all requisite corporate power and authority to enter into this Agreement and to carry out its obligations hereunder. The execution and delivery of this Agreement and the performance of the Seller's obligations hereunder have been duly authorized by all necessary corporate action by the Board of Directors of the Seller, and no other corporate proceedings on the part of the Seller are necessary to authorize such execution, delivery and performance. This Agreement has been duly executed by the Seller and constitutes its valid and binding obligation, enforceable against it in accordance with its terms. SECTION 5.4. No Conflict or Violation. The execution, delivery and performance by the Seller of this Agreement do not and will not violate or conflict with any provision of the Certificate of Incorporation or By-laws of the Seller and do not and will not violate any provision of law, or any order, judgment or decree of any court or other governmental or regulatory authority, nor violate nor will result in a breach of or constitute (with due notice or lapse of time or both) a default under any contract, lease, loan agreement, mortgage, security agreement, trust indenture or other agreement or instrument to which the Seller is a party or by which it is bound or to which any of its properties or assets is subject, nor will result in the creation or imposition of any Lien upon any of the Purchased Property, nor will result in the cancellation, modification, revocation or suspension of any of the Licenses and Permits. SECTION 5.5. Consents and Approvals. Schedule 5.5 sets forth a true and complete list of each consent, waiver, authorization or approval of any governmental or regulatory authority, domestic or foreign, or of any other person, firm or corporation, and each declaration to or filing or registration 12 19 with any such governmental or regulatory authority, that is required in connection with the execution and delivery of this Agreement by the Seller or the performance by the Seller of its obligations hereunder. SECTION 5.6 Good Title; Necessary Assets and Rights. The Seller has, and on the Closing Date will have, good title in and to the Purchased Property free and clear of any Liens. The Purchased Property, together with the premises covered by the Cambridge Sublease and the intellectual property covered by the Shared Intellectual Property License, constitute substantially all the assets, properties and rights, including without limitation contract rights, necessary and used to conduct the Business as currently conducted. SECTION 5.7. Financial Information. The Seller has heretofore furnished to the Buyer a Pro-Forma Statement of Operations of the Business for each of the four years in the period ended September 30, 1994 and for the eight months ended May 31, 1995 (the "Financial Data"), copies of which are set forth in Schedule 5.7. The Financial Data (i) have been prepared from the books and records of the Seller, which books and records are used to prepare financial statements which are in accordance with U.S. generally accepted accounting principles ("GAAP"), (ii) have been prepared on a consistent basis over the four years and eight months shown, (iii) reflect the adjustments set forth on Schedule 5.7, (iv) fairly present revenues and direct expenses of the Business, which revenues and expenses, after giving effect to such adjustments, can be legitimately reconciled with the financial statements and the financial records maintained and the accounting methods applied by the Seller for its financial reporting purposes and (iv) contain allocation estimates for all allocated items not individually accounted for in connection with the Business as described in Schedule 5.7 which estimates the Seller believes to be reasonable. SECTION 5.8. Absence of Certain Changes or Events. (a) Except as set forth in Schedule 5.8, since September 30, 1994, there has not been: (i) any material adverse change in the business, operations, properties, assets or condition (financial or other) of the Business, or any event that has had a material adverse effect on the foregoing, and, to the best knowledge of Seller, no factor or condition exists and no event has occurred that would be likely to result in any such change; 13 20 (ii) any material loss, damage, destruction or other casualty to the Purchased Property; (iii) any change in any method of accounting or accounting practice of the Business or the Seller relating to the Business; or (iv) any loss of the employment, services or benefits of any key employee of the Business. (b) Since September 30, 1994, the Seller has operated the Business in the ordinary course of its business consistent with past practice and, except as set forth in Schedule 5.8 hereto, has not: (i) incurred any material obligation or liability (whether absolute, accrued, contingent or otherwise) relating to the operations of the Business except in the ordinary course of business consistent with past practice; (ii) failed to discharge or satisfy any Lien or pay or satisfy any obligation or liability (whether absolute, accrued, contingent or otherwise) arising from the operation of the Business, other than liabilities being contested in good faith and for which adequate reserves have been provided; (iii) mortgaged, pledged or subjected to any Lien any of the Purchased Property; (iv) sold or transferred any of the assets of the Business material to the Business or canceled any debts or claims or waived any rights material to the Business relating to the operations of the Business, except in the ordinary course of business consistent with past practice; (v) disposed of any patents, trademarks or copyrights or any patent, trademark, or copyright applications used in the operations of the Business; (vi) defaulted on any material obligation relating to the operations of the Business; (vii) entered into any transaction material to the Business or relating to the Business, except in the ordinary course of business consistent with past practice; (viii) written down the value of any inventory or written off as uncollectible any accounts receivable specifically 14 21 relating to the Business or any portion thereof other than in the ordinary course of business consistent with past practice; (ix) granted any increase in the compensation or benefits of employees of the Business other than increases in accordance with past practice not exceeding 10% or entered into any employment or severance agreement or arrangement with any of them; (x) made any capital expenditure in excess of $10,000, or additions to property, plant and equipment used in the operations of the Business other than ordinary repairs and maintenance; (xi) discontinued the manufacture or sale of any Products except in the ordinary course of business; or (xii) entered into any agreement or made any commitment to do any of the foregoing. SECTION 5.9. Tax Matters. All Tax Returns required to be filed before the Closing Date in respect of the Seller have been (or will have been by the Closing Date) filed, and the Seller has (or will have by the Closing Date) paid, accrued or otherwise adequately reserved for the payment of all Taxes required to be paid in respect of the periods covered by such returns and has (or will have by the Closing Date) adequately reserved for the payment of all Taxes with respect to periods ended on or before the Closing Date for which tax returns have not yet been filed. SECTION 5.10. Warranties. Schedule 5.10 sets forth the warranties given by the Seller in connection with the sale of Products. SECTION 5.11. Cambridge Lease. (a) The Seller has previously delivered to the Buyer a true and correct copy of the lease of the Premises, including all amendments thereto through the date hereof (the "Cambridge Lease"). (b) Except as set forth in Schedule 5.11, the landlord under the Cambridge Lease has not given the Seller written notice of or made a claim with respect to any breach or default the consequences of which, individually or in the aggregate, would have a material adverse effect on the business, operations, 15 22 properties, assets or condition (financial or other) of the Business. (c) Except as set forth in Schedule 5.11, the Cambridge Lease is not subject to any sublease, license or other agreement granting to any person or entity any right to the use, occupancy or enjoyment of such property or any portion thereof. (d) The plumbing, electrical, heating, water, air conditioning, ventilating and all other mechanical or structural systems of the Premises are in good working order and condition, and the roof, basement and foundation walls of the Premise are in good condition and free of leaks and other material defects. SECTION 5.12. Equipment and Machinery. Schedule 5.12 sets forth a complete and correct list and brief description of each item of Equipment and Machinery or of Leased Equipment and Machinery having an original purchase cost or aggregate lease cost exceeding $2,000. Except as set forth in Schedule 5.12, as of the date hereof, the Seller has good title, free and clear of all title defects and objections, Liens (other than the Lien of current property taxes and assessments not in default, if any) to the Equipment and Machinery owned by it. None of the title defects, objections or Liens (if any) listed in Schedule 5.12 adversely affects the value of any of the items of Equipment and Machinery or interferes with their use in the conduct of the Business. Except as set forth in Schedule 5.12, the Seller holds good and transferable leaseholds in all of the Leased Equipment and Machinery, in each case under valid and enforceable leases. The Seller is not in default with respect to any item of Leased Equipment and Machinery, and no event has occurred that constitutes or with due notice or lapse of time or both may constitute a default under any lease thereof. The Equipment and Machinery and the Leased Equipment and Machinery are sufficient and adequate to carry on the Business as presently conducted by the Seller, and all items thereof are in good operating condition and repair, ordinary wear and tear excepted. SECTION 5.13. Intellectual Property; Intangible Assets. (a) Schedule 5.13 sets forth a complete and correct listing of the Intellectual Property. Except as described in Schedule 5.13, all Intellectual Property listed therein is owned by the Seller, free and clear of all Liens and is not known to be the subject of any challenge. As of the date hereof, except as described in Schedule 5.13, there are no unresolved claims made and there has not been communicated to the Seller the threat of any claim that the holder of such Intellectual Property is in 16 23 violation or infringement of any service mark, patent, trademark, trade name, trademark or trade name registration, copyright or copyright registration of any other Person. The Seller is the owner of, or has a valid license to use, the patents, patent licenses, trade names, trademarks, service marks, brand marks, brand names, copyrights, know-how, formula and other proprietary and trade rights necessary for the conduct of the Business as now conducted, without any known conflict with the rights of others, and the Seller has not knowingly forfeited or otherwise relinquished any such patent, patent license, trade name, trademark, service mark, brand mark, brand name, copyright, know-how, formula or other proprietary right necessary for the conduct of the Business as conducted on the date hereof. Except as set forth in Schedule 5.13, the Seller is not under any obligation to pay any royalties or similar payments in connection with any license to any of its Affiliates. (b) Schedule 5.13 sets forth a true and complete list of all of the Intangible Assets and a summary description of each such item. There is no restriction affecting the use of any of the Intangible Assets, and no license has been granted with respect thereto. None of the Intangible Assets is currently being challenged, is involved in any pending or threatened administrative or judicial proceeding, or, to the knowledge of Seller conflicts with any rights of any other person, firm or corporation. The Seller owns or has the right to use all computer software, software systems and databases and all other information systems included in the Purchased Property. The Seller's rights in and to the Intangible Assets and Intellectual Property are sufficient and adequate in all material respects to permit the conduct of the Business as now conducted, and, to the knowledge of Seller, none of the Products or operations of the Business involves any infringement of any proprietary right of any other Person. SECTION 5.14. Licenses and Permits. Schedule 5.14 sets forth a true and complete list of all licenses, permits, franchises, authorizations and approvals issued or granted to the Seller with respect to the Business by the federal government, any state or local government, any foreign national or local government, or any department, agency, board, commission, bureau or instrumentality of any of the foregoing (the "Licenses and Permits"), and all pending applications therefor. Such list contains a summary description of each such item and, where applicable, specifies the date issued, granted or applied for, the expiration date and the current status thereof. Each License and Permit has been duly obtained, is valid and in full force and effect, and is not subject to any pending or threatened administrative or judicial proceeding to revoke, cancel, suspend 17 24 or declare such License and Permit invalid in any respect. To the knowledge of Seller, the Licenses and Permits are sufficient and adequate in all material respects to permit the continued lawful conduct of the Business in the manner now conducted by the Seller, and none of the operations of the Business are being conducted in a manner that violates in any material respect any of the terms or conditions under which any License and Permit was granted. Except as set forth in Schedule 5.14, no such License and Permit will in any way be affected by, or terminate or lapse by reason of, the transactions contemplated by this Agreement. SECTION 5.15. Compliance with Law. The operations of the Business have been conducted in all material respects in accordance with all applicable laws, regulations, orders and other requirements of all courts and other governmental or regulatory authorities having jurisdiction over the Seller and its assets, properties and operations. The Seller has not received notice of any violation of any such law, regulation, order or other legal requirement, and is not in default with respect to any order, writ, judgment, award, injunction or decree of any national, state or local court or governmental or regulatory authority or arbitrator, domestic or foreign, applicable to the Business or any of the assets, properties or operations with respect thereto. The Seller does not have knowledge of any proposed change in any such laws, rules or regulations (other than laws of general applicability and evolving regulations of the Food and Drug Administration of products for the clinical research market) that would materially and adversely affect the transactions contemplated by this Agreement or all or a material part of the Business or the Purchased Property. SECTION 5.16. Litigation. Except as set forth in Schedule 5.16, there are no claims, actions, suits, proceedings, labor disputes or investigations pending or, to the knowledge of the Seller, threatened, before any national, state or local court or governmental or regulatory authority, domestic or foreign, or before any arbitrator of any nature, brought by or against the Seller or any of its officers, directors, employees, agents or Affiliates involving, affecting or relating to the Business, the Purchased Property or the transactions contemplated by this Agreement, nor is any basis known to the Seller or any of its directors or officers for any such action, suit, proceeding or investigation. Neither the Business nor the Purchased Property is subject to any order, writ, judgment, award, injunction or decree of any national, state or local court or governmental or regulatory authority or arbitrator, domestic or foreign, that affects or might affect the Business or the Purchased Property, 18 25 or that would or might interfere with the transactions contemplated by this Agreement. SECTION 5.17. Assumed Contracts. (a) Schedule 5.17 sets forth a complete and correct list and a summary description of all Assumed Contracts (as in effect on the date hereof) other than individual Purchase Orders or Sales Orders for amounts less than $5,000. (b) Each Assumed Contract is valid, binding and enforceable against the parties thereto in accordance with its terms, and is in full force and effect on the date hereof. The Seller has performed in all material respects the obligations required to be performed by it to date under, and is not in default or delinquent in the performance (claimed or actual) in connection with, any Assumed Contract, and no event has occurred which, with due notice or lapse of time or both, would constitute such a default. To the knowledge of the Seller, no other party to any Assumed Contract is in default in respect thereof, and no event has occurred which, with due notice or lapse of time or both, would constitute such a default. The Seller has delivered to the Buyer or its representatives true and complete copies of the Assumed Contracts listed on Schedule 5.17. (c) Except as set forth on Schedule 5.17, the Seller is not a party to any partnership or joint venture agreements, license agreements, service contracts, commission and consulting agreements, suretyship contracts, reimbursement agreements, sales agency agreements or distribution agreements, in each such case relating to the Business or the Purchased Property, or any contracts or commitments limiting or restraining the Seller with respect to the Business from engaging or competing in any lines of business or with any Person, or any documents granting the power of attorney with respect to the conduct of the Business, or any options to purchase any assets or property rights of the Business. SECTION 5.18. Prepaid Expenses. Schedule 5.18 sets forth a true and complete listing of the prepaid expenses of the Business as of May 31, 1995. SECTION 5.19. Inventories. Schedule 5.19 sets forth a true and complete inventory listing and valuation as of May 31, 1995 (the "May 31 Inventory Schedule"). The inventories of the Business are carried at not more than the lower of standard cost (approximating average costs) or net realizable value, and such inventories as are reflected on the May 31 Inventory Schedule are of a type, quantity and quality useable and saleable in the 19 26 ordinary course of the conduct of the Business. The reserve for excess bulk inventory reflected on the May 31 Inventory Schedule has been calculated on a basis consistent with that used in the Seller's financial statements from which the Financial Data are derived. SECTION 5.20 Cell Lines; Biological Materials. The Cell Lines, taken as a whole, are biologically active and provide the source material necessary to generate the biological materials included in the Products. Such Cell Lines have been properly maintained by Seller so as to retain their viability, minimize deterioration and avoid contamination, and Seller has established and maintained duplicate back-up stocks of the most significant of such Cell Lines (from the point of view of volume of sales of the Products they generate) to enable the Business to continue in the event of the expiration or contamination of the primary stocks of such Cell Lines. Seller has (i) manufactured or prepared the other biological materials included in the Inventory in accordance with what, to the knowledge of Seller constitute good standards generally utilized by its competitors in the research reagent industry, (ii) maintained accurate quality control records by production lot of all such biological materials and (iii) has maintained such materials in a manner reasonably designed to preserve their viability and to avoid contamination and deterioration. SECTION 5.21. Employee Plans. (a) Except as set forth on Schedule 5.21, neither the Seller nor any Affiliate of Seller maintains, contributes to, or is a party to, any "employee benefit plan," as defined in Section 3(3) of ERISA, or any other written, unwritten, formal or informal plan or agreement involving direct or indirect compensation other than workers' compensation, unemployment compensation and other government programs, under which the Seller or any affiliate thereof has any present or future obligation or liability with respect to the current employees of the Business ("Seller Plans"). (b) Each Seller Plan has been maintained in substantial compliance with its terms and the requirements prescribed by any and all statutes, orders, rules and regulations which are applicable to it. The Seller Savings Plan is qualified and tax-exempt under Sections 401(a) and 501(a) of the Code, respectively, and meets the requirements of a "qualified cash or deferred arrangement" under Section 401(k) of the Code. (c) The Seller has or has caused to be provided, or will have caused to be provided, to current and former employees 20 27 of the Business entitled thereto all required notices within the applicable time period and coverage pursuant to COBRA with respect to any "qualifying event" (as defined in COBRA) occurring prior to and including the Closing Date. (d) All contributions (including all employer contributions and employee salary reduction contributions) required to have been made under any of the Seller Plans have been made by the due date thereof (including any valid extension), and all contributions for any period ending on or before the Closing Date which are not yet due will have been paid or accrued on or prior to the Closing Date. (e) True, correct and complete copies of the Seller Plans, and related trust documents and summary plan descriptions, have been delivered to the Buyer by the Seller, to the extent requested by the Buyer. Additionally, the Seller has delivered to the Buyer descriptions of each of the Seller Plans in a form and with a level of detail reasonably satisfactory to the Buyer. (f) There are no pending actions, claims or lawsuits which have been asserted or instituted against any party regarding the Seller Plans or, to the knowledge of the Seller, against any fiduciary of such plans with respect to their operation (other than routine benefit claims), and there are no other circumstances regarding any of the Seller Plans, which could result in any liability to the Buyer, or any lien on the Purchased Property, on or after the Closing Date. (g) The Seller has taken all actions, and given all notices, required under W.A.R.N. prior to and including the Closing Date with respect to the employees of the Business. There has been no "mass layoff" or "plant closing," as defined in W.A.R.N., with respect to the employees of the Business. SECTION 5.22 Compensation. The Seller has previously delivered to the Buyer a schedule setting forth the current base salary of each of the employees of the Business listed on Schedule 9.1 as well as the aggregate bonus paid to each such employee in respect of the most recently completed bonus measuring period for such employee. Except for the Seller Plans, the Seller has not, by reason of past practices with respect to such employees, established any rights on the part of such employees to additional compensation with respect to any period after the Closing Date. SECTION 5.23. Customers, Suppliers and Distributors. Schedule 5.23 sets forth a complete and correct list of (a) all customers whose purchases exceeded 5% of the aggregate net sales 21 28 of the Business during the eight months ended May 31, 1995, setting forth with respect to each such customer the aggregate volume of purchases made during such period; (b) all suppliers from whom the Business purchased in excess of 5% of its raw materials and supplies during the eight months ended May 31, 1995, setting forth with respect to each such supplier the aggregate dollar volume of purchases (broken down by principal categories) by the Business from such supplier for such period; (c) all distributors of any Products; and (d) all sales agents or representatives of the Business or of the Seller with respect to the Business. Except as set forth in Schedule 5.23, none of such customers, suppliers, distributors or representatives has or, to the knowledge of the Seller, intends to terminate or change significantly its relationship with the Business. SECTION 5.24. Insurance. The Business, the Premises and the Purchased Property are covered by the Seller's comprehensive blanket insurance policies. The Seller will continue in full force and effect through the Closing Date all of such policies of insurance. To the knowledge of Seller, the Seller has not been refused any insurance by any insurance carrier to which it has applied for insurance with respect to the Premises, the Purchased Property or the Business at any time since January 1, 1993. SECTION 5.25. Labor Matters; Employment Agreements. The Seller is not a party to any union or collective bargaining agreements covering any of the employees of the Business, nor does the Seller know of any activities or proceedings of any labor union to organize any such employees, nor does the Seller have any employment agreements with any of such employees which are not terminable at will at the election of the Seller. The Seller is in compliance in all material respects with all applicable laws relating to employment and employment practices, wages, hours, and terms and conditions of employment in each case relating to the Business, and there are no charges with respect to or relating to the Business pending before the Equal Employment Opportunity Commission or any state, local or foreign agency responsible for the prevention of unlawful employment practices. SECTION 5.26. Products Liability. There is no notice, demand, claim, action, suit, inquiry, hearing, proceeding, notice of violation or investigation of a civil, criminal or administrative nature before any court or governmental or other regulatory or administrative agency, commission or authority, domestic or foreign, against or involving any Product or any 22 29 product distributed by or on behalf of the Business, or class of claims or lawsuits involving the same or similar Product or any product distributed by or on behalf of the Business which is pending or threatened, resulting from an alleged defect in design, manufacture, materials or workmanship of any Product or any product distributed or sold by or on behalf of the Business, or any alleged failure to warn, or from any breach of implied warranties or representations (collectively, "Product Liability Lawsuits"); and (ii) there has not been any Occurrence. For purposes of this Section 5.26, the term "Occurrence" shall mean any accident, happening or event which takes place at any time which is caused or allegedly caused by any alleged hazard or alleged defect in manufacture, design, materials or workmanship including, without limitation, any alleged failure to warn or any breach of express or implied warranties or representations with respect to, or any such accident, happening or event otherwise involving any Product or any product distributed by or on behalf of the Business, that is likely to result in a claim or loss. SECTION 5.27. Environmental Matters. (a) Except as set forth in Schedule 5.27, (i) the Seller and the Business are in material compliance with all Environmental Laws (as defined below); (ii) the Seller and the Business have obtained all applicable Environmental Permits (as defined below); (iii) all such permits are in full force and effect; (iv) the Seller and the Business are in material compliance with all Environmental Permits. As used herein, "Environmental Laws" shall mean all applicable federal, state, and local laws, ordinances, rules, regulations, judgments, orders, or decrees relating to the protection or regulation of human health, safety, or the environment, including, without limitation, the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended ("CERCLA") (42 U.S.C. Section Section 9601 et seq.), the Resource Conservation and Recovery Act ("RCRA") (42 U.S.C. Section Section 6901 et seq.), the Clean Water Act (33 U.S.C. Section Section 1251 et seq.), the Atomic Energy Act (42 U.S.C. Section 2201 et seq.), and similar state and local laws. "Environmental Permits" shall mean all applicable licenses and permits or other approvals required under applicable Environmental Law in connection with the ownership, operation, and/or use of the Business. (b) To the knowledge of Seller, the Seller and the Business have not violated, done or suffered any act which could reasonably be expected to give rise to liability that would materially affect the operations of the Business under any Environmental Law. (c) Except as set forth in Schedule 5.27, (i) there is no pending or threatened claim, litigation, or administrative 23 30 proceeding, or known prior claim, litigation or administrative proceeding arising under any Environmental Law involving the Business or any property formerly owned, leased, operated or occupied by the Business; (ii) there are no ongoing negotiations with or agreements with any governmental authority relating to any Remedial Action (as defined in CERCLA Section 101(24), 42 U.S.C. Section 9601(24)) or other environmentally-related claim involving the Business; and (iii) neither the Seller nor the Business have received any request for information from any governmental or private entity with respect to any liability or alleged liability under any Environmental Law related to the Business. (d) To the Seller's knowledge, the Premises (i) have never been used for the treatment or disposal of hazardous materials, hazardous substances or hazardous waste (as those terms are defined under any Environmental Law) nor as a landfill or other waste disposal site; (ii) is not now nor ever has been subject to investigation by any governmental authority evaluating the need to undertake any environmental remedial action. (e) Except as set forth on Schedule 5.27, (i) there are and never have been any underground storage tanks present on the Premises; (ii) there is no asbestos present on the Premises; and (iii) there are no PCBs present on the Premises. (f) To the Seller's knowledge, neither the Seller nor the Business has disposed of any hazardous wastes (as defined under any Environmental Law) at any location which is currently identified or proposed for inclusion on (A) the National Priorities List, 40 CFR Part 300 Appendix B, (B) the Comprehensive Environmental Response, Compensation and Liability Inventory List, or (C) any analogous state list. (g) Seller and the Business have provided to Buyer copies of all environmental reports or investigations regarding the Premises in the control or possession of Seller or the Business. SECTION 5.28. Accuracy of Information. None of the Seller's representations, warranties or statements contained in this Agreement, or in the schedules or exhibits hereto, contains any untrue statement of a material fact or omits to state any material fact necessary in order to make any of such representations, warranties or statements in light of the circumstances under which they were made not misleading. 24 31 SECTION 6. REPRESENTATIONS AND WARRANTIES OF THE BUYER. The Buyer and Parent hereby jointly and severally represent and warrant to the Seller as follows: SECTION 6.1. Corporate Organization. The Parent is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware, the Buyer is a corporation duly organized, validly existing and in good standing under the laws of the State of California and each of the Parent and Buyer has all requisite corporate power and authority to own its properties and assets and to conduct its businesses as now conducted. SECTION 6.2. Qualification to Do Business. The Buyer is duly qualified to do business as a foreign corporation in and is in good standing in every jurisdiction in which the character of the properties owned or leased by it or the nature of the business conducted by it makes such qualification necessary and in which the absence of such qualification could have a material adverse effect on the business of the Buyer. On or prior to the Closing Date, the Buyer will be qualified to do business in the Commonwealth of Massachusetts. SECTION 6.3. Authorization and Validity of Agreement. Each of the Parent and the Buyer has all requisite corporate power and authority to enter into this Agreement and to carry out its obligations hereunder. The execution and delivery of this Agreement and the performance of the Buyer's obligations hereunder have been duly authorized by all necessary corporate action by their respective Boards of Directors, and no other corporate proceedings on the part of the either the Buyer or the Parent are necessary to authorize such execution, delivery and performance. This Agreement has been duly executed by each of the Parent and the Buyer and constitutes its valid and binding obligation, enforceable against it in accordance with its terms. SECTION 6.4. No Conflict or Violation. The execution, delivery and performance by the Parent and the Buyer of this Agreement do not and will not violate or conflict with any provision of their respective Certificates of Incorporation or By-laws and do not and will not violate any provision of law, or any order, judgment or decree of any court or other governmental or regulatory authority, nor violate nor will result in a breach 25 32 of or constitute (with due notice or lapse of time or both) a default under any contract, lease, loan agreement, mortgage, security agreement, trust indenture or other agreement or instrument to which the Parent or the Buyer is a party or by which either is bound or to which any of their properties or assets is subject. SECTION 6.5. Consents and Approvals. The execution, delivery and performance of this Agreement on behalf of the Parent and the Buyer does not require the consent or approval of, or filing with, any government, governmental body or agency or other entity or person except: (i) as may be required to transfer any Licenses and Permits; (ii) as may be required in connection with the assignment and assumption of the Assumed Contracts and (iii) such consents, approvals and filings, of which the failure to obtain or make would not, individually or in the aggregate, have a material adverse effect on the ability of the Buyer to consummate the transactions contemplated hereby. SECTION 7. COVENANTS OF THE SELLER. SECTION 7.1. Conduct of Business Before the Closing Date. (a) Without the prior written consent of the Buyer, between the date hereof and the Closing Date, the Seller shall not, except as required or expressly permitted pursuant to the terms hereof: (i) make any material change in the conduct of the Business or enter into any transaction other than in the ordinary course of business consistent with past practices; (ii) make any sale, assignment, transfer, abandonment or other conveyance of the Purchased Property or any part thereof, except transactions pursuant to the existing Assumed Contracts hereto and dispositions of Inventory or of worn-out or obsolete equipment for fair or reasonable value in the ordinary course of business consistent with past practice; (iii) subject any of the Purchased Property, or any part thereof, to any Lien or suffer such to exist other than such Liens as may arise in the ordinary course of business consistent with past practice by operation of law and that will not, individually or in the aggregate, have a material adverse effect on the Business; (iv) acquire any assets, raw materials or properties related to the Business, or enter into any other transaction 26 33 related to the Business, other than in the ordinary course of business consistent with past practice; (v) enter into any new (or amend any existing) employee benefit plan, program or arrangement affecting the employees of the Business or any new (or amend any existing) employment, severance or consulting agreement relating to any employee of the Business, grant any general increase in the compensation of any such employees (including any such increase pursuant to any bonus, pension, profit-sharing or other plan or commitment) or grant any increase in the compensation payable or to become payable to any such employee, except in accordance with pre-existing contractual provisions or consistent with past practice; (vi) commit to make any capital expenditure related to the Business in excess of $10,000; (vii) sell, transfer or lease any properties or assets related to the Business to any of its Affiliates; (viii) fail to keep in full force and effect insurance comparable in amount and scope to coverage maintained in respect of the Business; (ix) take any other action that would cause any of the representations and warranties made by the Seller in this Agreement not to remain true and correct; (x) settle, release or forgive any claim or litigation or waive any right thereto; (xi) make, enter into, modify, amend in any material respect or terminate any contract related to the Business, where such contract is for (A) a contract entailing payments in excess of $5,000 or (B) a contract having a term in excess of twelve months; or (xii) commit to do any of the foregoing. (b) From and after the date hereof and until the Closing Date, the Seller shall: (i) continue to maintain, in all material respects, the Purchased Property in accordance with present practice in a condition suitable for its current use; (ii) file, when due or required, national, state, foreign and other tax returns and other reports required to 27 34 be filed and pay when due all taxes, assessments, fees and other charges lawfully levied or assessed against it, unless the validity thereof is contested in good faith and by appropriate proceedings diligently conducted; (iii) continue to conduct the Business in the ordinary course consistent with past practice; (iv) keep its books of account, Files and Records in the ordinary course and in accordance with existing practice; and (v) continue to maintain existing business relationships with suppliers and customers other than relationships not economically beneficial to the Business. SECTION 7.2. Consents and Approvals. The Seller (a) shall use its best efforts to obtain all necessary consents, waivers, authorizations and approvals of all governmental and regulatory authorities, domestic and foreign, and of all other persons, firms or corporations required in connection with the execution, delivery and performance by it of this Agreement, and (b) shall diligently assist and cooperate with the Buyer in preparing and filing all documents required to be submitted by the Buyer to any governmental or regulatory authority, domestic or foreign, in connection with such transactions and in obtaining any governmental consents, waivers, authorizations or approvals (including without limitation licenses and permits for the Buyer comparable to the Licenses and Permits) which may be required to be obtained by the Buyer in connection with such transactions (which assistance and cooperation shall include, without limitation, timely furnishing to the Buyer all information concerning the Seller that counsel to the Buyer determines is required to be included in such documents or would be helpful in obtaining any such required consent, waiver, authorization or approval). SECTION 7.3. Notice of Breach. Through the Closing Date, the Seller shall promptly give the Buyer written notice with particularity upon having knowledge of any matter that may constitute a breach of any representation, warranty, agreement or covenant contained in this Agreement. SECTION 7.4. Access to Properties and Records. The Seller shall afford to the Buyer, and to the accountants, counsel and representatives of the Buyer, reasonable access during normal business hours throughout the period prior to the Closing Date (or the earlier termination of this Agreement pursuant to Section 14) to all properties, books, contracts, commitments and Files 28 35 and Records of the Seller relating to the Business and, during such period, shall furnish promptly to the Buyer all other information concerning the Business, properties and personnel as the Buyer may reasonably request, provided that no investigation or receipt of information pursuant to this Section 7.4 shall qualify any representation or warranty of the Seller or the conditions to the obligations of the Buyer. The Seller shall also afford the Buyer reasonable access to the Business, all operations of the Business and to all Purchased Property throughout the period prior to the Closing Date. SECTION 7.5. Negotiations. From and after the date hereof, neither the Seller, nor its officers or directors nor anyone acting on behalf of the Seller or such persons shall, directly or indirectly, encourage, solicit, engage in discussions or negotiations with, or provide any information to, any person, firm, or other entity or group (other than the Buyer or its representatives) concerning the sale of all or a substantial portion of the assets of the Business or similar transaction involving the Seller or the Business or any other transaction inconsistent with the transactions contemplated hereby. SECTION 7.6. Best Efforts. Upon the terms and subject to the conditions of this Agreement, the Seller will use its best efforts to take, or cause to be taken, all action, and to do, or cause to be done, all things necessary, proper or advisable consistent with applicable law to consummate and make effective in the most expeditious manner practicable the transactions contemplated hereby. Seller will negotiate in good faith the preparation of definitive forms of those Ancillary Agreements the principal terms of which are set forth in the Exhibits hereto. SECTION 7.7. Covenant Not To Compete. (a) For a period of three years after the Closing Date, Seller shall not engage or participate, directly or indirectly, in the Business in any geographical area where such Business is being conducted as of the Closing Date, except that the Seller shall continue to have the right to sell research products into the clinical research market in connection with its Diagnostic Business. (b) The Seller agrees that a monetary remedy for a breach of the agreement set forth in Section 7.7(a) hereof will be inadequate and impracticable and further agrees that such a breach would cause the Buyer irreparable harm, and that the Buyer shall be entitled to temporary and permanent injunctive relief without the necessity of proving actual damages. In the event of such a breach, the Seller agrees that the Buyer shall be entitled 29 36 to such injunctive relief, including temporary restraining orders, preliminary injunctions and permanent injunctions as a court of competent jurisdiction shall determine. (c) If any provision of this Section 7.7 is invalid in part, it shall be curtailed, both as to time and location, to the minimum extent required for its validity under the laws of any State within the United States and shall be binding and enforceable with respect to the Seller as so curtailed. SECTION 7.8. Non-Solicitation of Employees. For the two-year period commencing on the Closing Date, the Seller shall not make, offer, solicit or induce to enter into, any written or oral arrangement, agreement or understanding regarding employment or retention as a consultant with any person identified on Schedule 9.1, in each case without the written consent of the Buyer. Section 7.9 Cooperation Regarding Receivables. For a reasonable period of time after the Closing Date, the Seller shall cooperate with and assist the Buyer in the collection of accounts receivable arising from sales of Products after the Closing Date ("Buyer Receivables"). After the Closing Date, the Buyer shall have the right and authority to collect, for its own account, all Buyer Receivables and to endorse with the name of the Seller any checks received by Buyer on account of any such Buyer Receivables. The Seller shall promptly transfer or deliver to the Buyer any cash or other property received by the Seller after the Closing in respect of any Buyer Receivables. In the event that the Seller receives payments from a debtor which, by invoice number or otherwise, specifies that such payment is to be applied to a Buyer Receivable (even if such debtor owes money in respect of Seller Receivables), the Seller shall pay over to the Buyer the amount of such Buyer Receivable and the Seller shall retain only the balance, if any, in respect of the Seller Receivable. Section 7.10. Diagnostic Business Inventory Build. Between the date hereof and the Closing Date, Seller intends to manufacture certain Products in the quantities set forth on Schedule 7.10. Such production will yield Products that can be used both for the Business and the Seller's Diagnostic Business. Seller shall have the right to retain the quantities for each such Product in the amounts specified in such Schedule, and such quantities shall not be included in the Inventory. To the extent that such production has not been completed by the Closing Date, the Buyer shall continue to produce Products in accordance with such plan and shall transfer to the Seller those quantities of products designated on such schedule as being for the Diagnostic 30 37 Business. Such transfers shall be made at no cost to the Seller other than such incremental material costs, which shall be fully reimbursed, and incremental labor costs which shall be reimbursed in accordance with the Transition Services Agreement. Seller shall not, in connection with the sale of Products for the Diagnostic Business prior to the Closing Date or the build up of its inventory for the Diagnostic Business in accordance with such production, deplete either the quantities or product mix of Products to be included in the Inventory in such a way as to adversely affect the Business prior to or after the Closing Date. Section 7.11 Preparation of Financial Statements. The Seller shall engage Peat to audit and certify a balance sheet of the Business as of the Closing Date and results of operations of the Business, and related statements of cash flows, for the year ended September 30, 1994 and the period from October 1, 1994 through the Closing Date. The Buyer shall reimburse the Seller for amounts charged by Peat in connection with the certification of these financial statements to the extent that such fees are in excess of the amount normally charged by Peat in connection with its engagement as the auditors for the Seller. Section 7.12 Accounts Payable. The Seller shall promptly pay and discharge in accordance with their respective due dates all accounts payable of the Seller arising from the acquisition of products or services used by the Seller in the conduct of the Business prior to the Closing Date. SECTION 8. COVENANTS OF THE PARENT AND BUYER. SECTION 8.1. Actions Before Closing Date. The Buyer shall not take any action which shall cause it to be in breach of any of its representations, warranties, covenants or agreements contained in this Agreement. SECTION 8.2. Consents and Approvals. The Buyer shall use its best efforts to obtain all consents and approvals of third parties, if any, required to be obtained by the Buyer to effect the transactions contemplated by this Agreement. SECTION 8.3. Best Efforts. Upon the terms and subject to the conditions of this Agreement, the Buyer will use its best efforts to take, or cause to be taken, all action, and to do, or cause to be done, all things necessary, proper or advisable consistent with applicable law to consummate and make effective in the most expeditious manner practicable the transactions contemplated hereby. Buyer will negotiate in good faith the preparation of definitive forms of those Ancillary Agreements the principal terms of which are set forth in the Exhibits hereto. 31 38 Section 8.4 Non-Solicitation of Employees. For the two-year period commencing on the Closing Date, the Buyer shall not make, offer, solicit or induce to enter into, any written or oral arrangement, agreement or understanding regarding employment or retention as a consultant with any employee of the Seller (other than those identified on Schedule 9.1), in each case without the prior written consent of the Seller. Section 8.5 Cooperation Regarding Receivables. For a reasonable period of time after the Closing Date, the Buyer shall cooperate with and assist the Seller in the collection of accounts receivable arising from sales of Products prior to the Closing Date ("Seller Receivables"). Promptly after the Closing Date, the Seller shall deliver to the Buyer a schedule of the Seller Receivables and shall provide a monthly update thereafter until such time at the Seller Receivables have been collected or written off. The Buyer shall promptly transfer or deliver to the Seller any cash or other property received by the Buyer after the Closing in respect of any Seller Receivables. In the event that the Buyer receives payment from a debtor which does not specify, by invoice number or otherwise, whether such payment is to be applied to a Seller Receivable or a Buyer Receivable (and such debtor owes money in respect of both Buyer Receivables and Seller Receivables), the Buyer shall pay over to the Seller the amount of the Seller Receivable and the Buyer shall retain only the balance, if any, in respect of the Buyer Receivable. Section 8.6 Guarantee of Obligations of the Buyer. Parent hereby guaranties the full and faithful performance of the obligations, duties and liabilities of the Buyer under this Agreement. SECTION 9. EMPLOYEES AND EMPLOYEE PLANS. SECTION 9.1. Offer of Employment. The Buyer shall offer employment to those employees of the Business as are listed on Schedule 9.1, effective as of the Closing at their respective current base salary levels. Those employees who accept such offers of employment are referred to herein as "Transferred Employees." Transferred Employees shall be employed under terms and conditions determined in the sole discretion of the Buyer, and the Buyer shall not be obligated to provide any particular type or level of compensation or benefits to such persons other than as required hereunder. The Buyer shall not be responsible for any compensation, benefits or other liabilities attributable to (i) Transferred Employees, to the extent arising under any Seller Plan or otherwise prior to or as of the Closing, or (ii) any other employee of the Business, irrespective of when or under what circumstances arising. 32 39 SECTION 9.2 Seller Savings Plan. The Seller shall cause each Transferred Employee's "Matching Contribution Account" under the Seller Savings Plan to become fully vested and nonforfeitable as of the Closing Date. The Seller shall take any actions necessary to allow lump sum distributions to be made to Transferred Employees from the Seller Savings Plan in accordance with Section 401(k)(10) of the Code on account of the purchase of the Business by the Buyer. Transferred Employees shall be allowed to elect such distributions during the period beginning no later than the close of the calendar quarter which follows, or begins on, the Closing Date, and ending on the latest date allowed under Section 401(k)(10) of the Code. SECTION 9.3 Flexible Spending Accounts. As soon as practicable following the Closing, the unused balances of Transferred Employees in Seller's FSAs shall be transferred to Buyer's FSAs by way of bookkeeping entries. Any elections made by Transferred Employees under Seller's FSAs for 1995 shall be continued under Buyer's FSAs, to the extent allowable under Buyer's FSAs. If such elections are not so allowable, they may be adjusted by the Buyer in a manner which is both allowable under Buyer's FSAs and consistent to the extent possible with such elections. The Seller shall transfer to the Buyer any claims under Seller's FSAs pending as of the Closing Date, and such claims shall be paid to the extent allowable under Buyer's FSAs. If the aggregate claims paid to Transferred Employees during 1995 prior to the Closing Date under Seller's FSAs exceed the aggregate amount of payroll withholding relating to Seller's FSA's for such period for such persons, the Buyer shall transfer to the Seller, in cash, such excess as soon as practicable following the Closing. If the aggregate claims paid to Transferred Employees during 1995 prior to the Closing Date under Seller's FSAs is less than the aggregate amount of payroll withholding relating to Seller's FSA's for such period for such persons, the Seller shall transfer to the Buyer, in cash, such difference as soon as practicable following the Closing. SECTION 10. BULK SALES LAW. Buyer hereby waives compliance by Seller with the Bulk Transfer provisions of the Uniform Commercial Code as in effect in the Commonwealth of Massachusetts. SECTION 11. INDEMNIFICATION. SECTION 11.1. Indemnification by the Seller. The Seller shall indemnify and fully defend, save and hold the Buyer, any Affiliate of the Buyer and their respective directors, officers and employees (the "Buyer Indemnitees"), harmless from 33 40 and against any damage, liability, loss, judgment, cost, expense (including all reasonable attorneys' fees), deficiency, interest, penalty, impositions, assessments or fines (collectively, "Losses") arising out of or resulting from: (a) the breach of any representation or warranty made by Seller in this Agreement or in any of the Ancillary Agreements; (b) any failure of the Seller duly to perform or observe any term, provision, covenant, agreement or condition on the part of the Seller to be performed or observed hereunder or under the Ancillary Agreements; (c) any failure of the Seller to pay and discharge when due any Excluded Liabilities, or any claim or cause of action by any party against any Buyer Indemnitee, with respect to the Excluded Liabilities; (d) the failure of the Seller to comply with any applicable provisions of the Bulk Transfer provisions of the Uniform Commercial Code of the Commonwealth of Massachusetts, notwithstanding Buyer's waiver of compliance with such provisions; or (e) any liability under any Environmental Law or under common law for the Release (as defined in CERCLA Section 101(22), 42 U.S.C. Section 9601(22)) or threat of Release or for exposure or potential exposure to hazardous or toxic substances, arising from events occurring prior to the Closing Date. SECTION 11.2. Indemnification by the Buyer. The Buyer shall indemnify and agree to fully defend, save and hold the Seller, any Affiliate of the Seller, and their respective directors, officers and employees (the "Seller Indemnitees"), harmless from and against any Losses arising out of or resulting from: (a) the breach of any representation or warranty made by Buyer in this Agreement or in any of the Ancillary Agreements; (b) any failure of the Buyer duly to perform or observe any term, provision, covenant, agreement or condition on the part of the Buyer to be performed or observed hereunder or under the Ancillary Agreements; (c) any failure of the Buyer to pay and discharge when due any of its obligations or liabilities under the Assumed Contracts. 34 41 SECTION 11.3. Procedures for Indemnification by the Buyer. (a) Promptly after the receipt by any party hereto of notice under this Section 11 of (A) any claim or (B) the commencement of any action or proceeding, such party (the "Aggrieved Party") will, if a claim with respect thereto is to be made against any party obligated to provide indemnification (the "Indemnifying Party") pursuant to this Section 11, give such Indemnifying Party (or parties) written notice of such claim or the commencement of such action or proceeding and shall permit the Indemnifying Party to assume the defense of any such claim or any litigation resulting from such claim, and, upon such assumption, shall cooperate fully with the Indemnifying Party in the conduct of such defense. Failure by the Indemnifying Party to notify the Aggrieved Party of its election to defend any such action within a reasonable time, but in no event more than fifteen days after notice thereof shall have been given to the Indemnifying Party, shall be deemed a waiver by the Indemnifying Party of its right to defend such action. If the Indemnifying Party assumes the defense of any such claim or litigation resulting therefrom, the obligations of the Indemnifying Party as to such claim shall be limited to taking all steps necessary in the defense or settlement of such claim or litigation resulting therefrom and to holding the Aggrieved Party harmless from and against any and all losses, damages and liabilities caused by or arising out of any settlement approved by the Indemnifying Party or any judgment in connection with such claim or litigation resulting therefrom. The Aggrieved Party may participate, at its expense, in the defense of such claim or litigation provided that the Indemnifying Party shall direct and control the defense of such claim or litigation. The Indemnifying Party shall not, in the defense of such claim or any litigation resulting therefrom, consent to entry of any judgment, except with the written consent of the Aggrieved Party, or enter into any settlement, except with the written consent of the Aggrieved Party, which does not include as an unconditional term thereof the giving by the claimant or the plaintiff to the Aggrieved Party of a release from all liability in respect of such claim or litigation. All awards and costs payable by a third party to the Indemnified Party or the Indemnifying Party shall belong to the Indemnifying Party. (B) If the Indemnifying Party shall not assume the defense of any such claim or litigation resulting therefrom, the Aggrieved Party may defend against such claim or litigation in such manner as it may deem appropriate and, unless the Indemnifying Party shall deposit with the Aggrieved Party a sum equivalent to the total amount demanded in such claim or 35 42 litigation, or shall deliver to the Aggrieved Party a surety bond in form and substance reasonably satisfactory to the Aggrieved Party, the Aggrieved Party may settle such claim or litigation on such terms as it may deem appropriate, and the Indemnifying Party shall promptly reimburse the Aggrieved Party for the amount of all expenses, legal or otherwise, incurred by the Aggrieved Party in connection with the defense against or settlement of such claims or litigation. If no settlement of such claim or litigation is made, the Indemnifying Party shall promptly reimburse the Aggrieved Party for the amount of any judgment rendered with respect to such claim or in such litigation and of all expenses, legal or otherwise, incurred by the Aggrieved Party in the defense against such claim or litigation. SECTION 11.4 Limitations. An Aggrieved Party shall not be entitled to recover any Losses in respect of a breach of a representation or warranty of the other party until the aggregate amount of Losses suffered by the Aggrieved Party shall exceed $75,000 (the "Minimum Loss"), at which time the indemnification provided under this Section 11 shall apply to all Losses in excess of such Minimum Loss. SECTION 11.5 Environmental Liability After Closing. As to any liability under any Environmental Law or common law for the Release (as defined in CERCLA Section 101(22), 42 U.S.C. Section 9601(22)) or threat of Release or for exposure or potential exposure to hazardous substances, hazardous materials, or hazardous wastes (as defined in any Environmental Law) arising from events occurring after the Closing Date, the parties agree as follows: (a) The party whose act or omission caused, or which controlled the instrumentality giving rise to such liability shall defend, indemnify, and hold harmless the other party for such liability. (b) In the event the parties do not agree which party is liable pursuant to subsection (a), the parties shall submit the dispute to a neutral third party arbitrator, mutually agreeable to both parties, for binding arbitration. Either party may initiate such arbitration by giving written notice to the other party 10 days prior to initiation of arbitration proceedings. Such arbitration shall be conducted in accordance with the rules of the American Arbitration Association ("AAA"). If the parties do not agree on an arbitrator, one shall be selected in accordance with the rules of the AAA. The arbitrator may determine that one or the other party is solely responsible for the liability, or may apportion liability between the parties. 36 43 (c) In the event the arbitrator is unable to make a liability determination, the parties agree to share equally any such liability. (d) In the event a Response Action (as defined in CERCLA Section 101(25), 42 U.S.C. Section 9601(25)) is necessary as a result of such liability, the Response Action selected shall be the most cost-effective response action which complies with applicable laws, regulations, or orders, and which interferes with the use of the Premises to the least extent practicable. If the parties do not agree on the appropriate Response Action, then the parties shall resolve the dispute in accordance with subsection (b). SECTION 12. CONDITIONS PRECEDENT TO PERFORMANCE BY THE SELLER. The obligations of the Seller to consummate the transactions contemplated by this Agreement are subject to the fulfillment, at or before the Closing Date, of the following conditions, any one or more of which may be waived by the Seller in its sole discretion: SECTION 12.1. Representations and Warranties of the Buyer. All representations and warranties made by the Buyer in this Agreement shall be true and correct in all material respects (and in all respects in the case of each representation and warranty that is qualified as to materiality) on and as of the Closing Date as if again made by the Buyer on and as of such date, and the Seller shall have received a certificate dated the Closing Date and signed by the President or any Vice President of the Buyer to that effect. SECTION 12.2. Performance of the Obligations of the Buyer. The Buyer shall have performed in all material respects all obligations required under this Agreement to be performed by the Buyer on or before the Closing Date, and the Seller shall have received a certificate dated the Closing Date and signed by the President or any Vice President of the Buyer to that effect. SECTION 12.3. Consents and Approvals. All consents, waivers, authorizations and approvals of any governmental or regulatory authority, domestic or foreign, and of any other person, firm or corporation, required in connection with the execution, delivery and performance of this Agreement, shall have been duly obtained and shall be in full force and effect on the Closing Date. SECTION 12.4. No Violation of Orders. No preliminary or permanent injunction or other order issued by any court or 37 44 other governmental or regulatory authority, domestic or foreign, nor any statute, rule, regulation, decree or executive order promulgated or enacted by any government or governmental or regulatory authority, domestic or foreign, that declares this Agreement invalid or unenforceable in any respect or which prevents the consummation of the transactions contemplated hereby shall be in effect. SECTION 12.5. Delivery of Ancillary Agreements. The Buyer shall have executed and delivered to the Seller each of the Ancillary Agreements. SECTION 12.6 Opinion of Buyer's Counsel The Seller shall have received an opinion, dated the Closing Date, from counsel to the Buyer, in form and substance reasonably satisfactory to the Seller and its counsel, that: (a) The Parent is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware, the Buyer is a corporation duly organized, validly existing and in good standing under the laws of the State of California, and each of the Parent and the Buyer has all requisite corporate power and authority to own its properties and assets and to conduct its business as now conducted. (b) Each of the Parent and the Buyer has the corporate power to enter into this Agreement and the Ancillary Agreements and to carry out its obligations hereunder and thereunder. The execution and delivery of this Agreement and the Ancillary Agreements and the performance of the obligations of the Parent and the Buyer hereunder and thereunder have been duly authorized by their respective Boards of Directors, and no other corporate proceedings on the part of the Parent or the Buyer are necessary to authorize such execution, delivery and performance. This Agreement and the Ancillary Agreements have been duly executed by the Parent and the Buyer and constitute the legal, valid and binding obligation of the Parent and the Buyer, respectively, enforceable against the Parent and the Buyer in accordance with its terms, except as the same may be limited by bankruptcy, insolvency, reorganization or other laws relating to or affecting the enforceability of creditors' rights generally and except that the remedy of specific performance or similar equitable relief may be subject to equitable defenses and to the discretion of the court before which enforcement is sought. 38 45 (c) The execution, delivery or performance by the Parent and the Buyer of this Agreement and the Ancillary Agreements do not and will not violate or conflict with any provision of their respective Certificates of Incorporation or By-laws and do not and will not violate any provision of law, or any order, judgment or decree of any court or other governmental or regulatory authority, nor violate nor will result in a breach of or constitute (with due notice or lapse of time or both) a default under any contract, lease, loan agreement, mortgage, security agreement, trust indenture or other agreement or instrument known to such counsel (after inquiry of appropriate officers of the Parent and the Buyer) to which the Parent or the Buyer is a party or by which it is bound or to which its properties or assets is subject. Seller acknowledges that the Buyer's counsel is not admitted to practice law in California. Accordingly, as to the laws of California, such counsel may rely on an opinion of California counsel or may otherwise qualify its opinion in a manner reasonably acceptable to counsel for the Seller. SECTION 12.7. Other Closing Documents. The Seller shall have received such other certificates, instruments and documents in confirmation of the representations and warranties of the Buyer or in furtherance of the transactions contemplated by this Agreement as the Seller or its counsel may reasonably request. SECTION 12.8. Legal Matters. All certificates, instruments, opinions and other documents required to be executed or delivered by or on behalf of the Buyer under the provisions of this Agreement, and all other actions and proceedings required to be taken by or on behalf of the Buyer in furtherance of the transactions contemplated hereby, shall be reasonably satisfactory in form and substance to counsel for the Seller. SECTION 13. CONDITIONS PRECEDENT TO PERFORMANCE BY THE BUYER. The obligations of the Buyer to consummate the transactions contemplated by this Agreement are subject to the fulfillment, at or before the Closing Date, of the following conditions, any one or more of which may be waived by the Buyer in its sole discretion: SECTION 13.1. Representations and Warranties of the Seller. All representations and warranties made by the Seller in this Agreement shall be true and correct in all material respects 39 46 (and in all respects in the case of each representation and warranty that is qualified as to materiality) on and as of the Closing Date as if again made by the Seller on and as of such date, and the Buyer shall have received a certificate dated the Closing Date and signed by the President or any Vice President of the Seller to that effect. SECTION 13.2. Performance of the Obligations of the Seller. The Seller shall have performed in all material respects all obligations required under this Agreement to be performed by the Seller on or before the Closing Date, and the Buyer shall have received a certificate dated the Closing Date and signed by the President or any Vice President of the Seller to that effect. SECTION 13.3. Consents and Approvals. All consents, waivers, authorizations and approvals of any governmental or regulatory authority, domestic or foreign, including licenses and permits comparable to the Licenses and Permits, and of any other person, firm or corporation, required in connection with the execution, delivery and performance of this Agreement shall have been duly obtained and shall be in full force and effect on the Closing Date. SECTION 13.4. No Violation of Orders. No preliminary or permanent injunction or other order issued by any court or governmental or regulatory authority, domestic or foreign, nor any statute, rule, regulation, decree or executive order promulgated or enacted by any government or governmental or regulatory authority, which declares this Agreement invalid in any respect or prevents the consummation of the transactions contemplated hereby, or which materially and adversely affects the assets, properties, operations, prospects, net income or financial condition of the Business shall be in effect. SECTION 13.5. Delivery of Ancillary Agreements. The Seller shall have executed and delivered to the Buyer each of the Ancillary Agreements. SECTION 13.6. No Material Adverse Change. During the period from May 31, 1995 to the Closing Date, there shall not have been any material adverse change in the assets, properties, business, operations, prospects of the Business. SECTION 13.7. Opinion of Counsel. The Buyer shall have received an opinion, dated the Closing Date, from counsel to the Seller, in form and substance reasonably satisfactory to the Buyer and its counsel, that: 40 47 (a) The Seller is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware, and the Seller has all requisite corporate power and authority to own its properties and assets and to conduct its business as now conducted. The Seller is duly qualified to do business as a foreign corporation and is in good standing in the Commonwealth of Massachusetts, the State of New York and in every jurisdiction where the character of the properties owned or leased by it or the nature of the business conducted by it makes such qualification necessary and in which the absence of such qualification could have a material adverse effect on the business of the Seller. (b) The Seller has the corporate power to enter into this Agreement and the Ancillary Agreements and to carry out its obligations hereunder and thereunder. The execution and delivery of this Agreement, the Ancillary Agreements and the instruments of conveyance executed by the Seller in connection with the sale of the Purchased Property and the performance of the obligations of the Seller hereunder and thereunder have been duly authorized by the Board of Directors of the Seller, and no other corporate proceedings on the part of the Seller are necessary to authorize such execution, delivery and performance. This Agreement, the Ancillary Agreements and the instruments of conveyance executed by the Seller in connection with the sale of the Purchased Property have been duly executed by the Seller and constitute the legal, valid and binding obligation of the Seller, enforceable against the Seller in accordance with its terms, except as the same may be limited by bankruptcy, insolvency, reorganization or other laws relating to or affecting the enforceability of creditors' rights generally and except that the remedy of specific performance or similar equitable relief may be subject to equitable defenses and to the discretion of the court before which enforcement is sought. (c) The execution, delivery or performance by the Seller of this Agreement, the Ancillary Agreements and the instruments of conveyance executed by the Seller in connection with the sale of the Purchased Property do not and will not violate or conflict with any provision of the Certificate of Incorporation or By-laws of the Seller and do not and will not violate any provision of law, or any order, judgment or decree of any court or other governmental or regulatory authority, nor violate nor will result in a breach of or constitute (with due notice or lapse of time or both) a default under any contract, lease, loan agreement, 41 48 mortgage, security agreement, trust indenture or other agreement or instrument known to such counsel (after inquiry of appropriate officers of the Seller) to which the Seller is a party or by which it is bound or to which its properties or assets is subject, nor will result in the creation or imposition of any Lien upon any of the properties or assets of the Seller, nor will result in the cancellation, modification, revocation or suspension of any of the licenses, franchises, permits, authorizations or approvals referred to in Section 5.14. (d) To the best of such counsel's knowledge after inquiry of appropriate officers of the Seller, except as set forth in Schedule 5.16, there are no claims, actions, suits, proceedings, labor disputes or investigations of any nature pending or threatened before any national, state or local court or governmental or regulatory authority, domestic or foreign, or before any arbitrator, brought by or against the Seller, any of its officers, directors, employees, agents or Affiliates involving, affecting or relating to the Purchased Property, the Business or the transactions contemplated by this Agreement. To the best of such counsel's knowledge after inquiry of appropriate officers of the Seller, neither the Seller, nor any of its assets or properties is subject to any order, writ, judgment, award, injunction or decree of any national, state or local court or governmental or regulatory authority or arbitrator, that could have a material adverse effect on the Purchased Property, the Business or that would or might interfere with the transactions contemplated by this Agreement. SECTION 13.8. Other Closing Documents. The Buyer shall have received such other certificates, instruments and documents in confirmation of the representations and warranties of the Seller or in furtherance of the transactions contemplated by this Agreement as the Buyer or its counsel may reasonably request. SECTION 13.9. Legal Matters. All certificates, instruments, opinions and other documents required to be executed or delivered by or on behalf of the Seller under the provisions of this Agreement, and all other actions and proceedings required to be taken by or on behalf of the Seller in furtherance of the transactions contemplated hereby, shall be reasonably satisfactory in form and substance to counsel for the Buyer. 42 49 SECTION 14. TERMINATION. SECTION 14.1. Conditions of Termination. Notwithstanding anything to the contrary contained herein, this Agreement may be terminated at any time before the Closing: (a) By mutual consent of the Seller and the Buyer; (b) By the Seller if, as of September 1, 1995, any of the conditions set forth in Section 12 shall not have been met; or (c) By the Buyer if, as of September 1, 1995, any of the conditions set forth in Section 13 shall not have been met. SECTION 14.2. Effect of Termination. In the event of termination pursuant to Section 14.1, this Agreement shall become null and void and have no effect, with no liability on the part of the Seller, the Buyer or the Parent, or their directors, officers, agents or stockholders, with respect to this Agreement, except for the (i) liability of a party for expenses pursuant to Section 15.3 and (ii) liability for breach of this Agreement. SECTION 15. MISCELLANEOUS. SECTION 15.1. Successors and Assigns. Except as otherwise provided in this Agreement, no party hereto shall assign this Agreement or any rights or obligations hereunder without the prior written consent of the other party hereto and any such attempted assignment without such prior written consent shall be void and of no force and effect, provided, that the Buyer may assign its rights hereunder to an Affiliate and to any party providing financing in connection with the transactions contemplated hereby, provided further, that no such assignment shall reduce or otherwise vitiate any of the obligations of the Buyer hereunder. This Agreement shall inure to the benefit of and shall be binding upon the successors and permitted assigns of the parties hereto. SECTION 15.2. Governing Law, Jurisdiction. This Agreement shall be construed, performed and enforced in accordance with, and governed by, the laws of the State of New York, without giving effect to the principles of conflicts of laws thereof. The parties hereto irrevocably elect as the sole judicial forum for the adjudication of any matters arising under or in connection with this Agreement, and consent to the jurisdiction of, the courts of the County of New York, State of New York or the United States of America for the Southern District of New York. 43 50 SECTION 15.3. Expenses. Except as otherwise provided herein, each of the parties hereto shall pay its own expenses in connection with this Agreement and the transactions contemplated hereby, including, without limitation, any legal and accounting fees, whether or not the transactions contemplated hereby are consummated. The Seller shall pay all state and local sales, transfer, excise, value-added or other similar taxes, and all recording and filing fees that may be imposed by reason of the sale, transfer, assignment and delivery of the Purchased Property. SECTION 15.4. Broker's and Finder's Fees. Each of the parties represents and warrants that it has dealt with no broker or finder in connection with any of the transactions contemplated by this Agreement other than Cowen & Company, whose fees and expenses shall, as between the parties hereto, be the responsibility of the Seller, and, insofar as it knows, no other broker or other person is entitled to any commission or finder's fee in connection with any of these transactions. SECTION 15.5 Access to Records. (a) For a period of six years after the date hereof (or the earlier termination of this Agreement), Seller shall have reasonable access to all of the books and records of the Business with respect to periods prior to the Closing Date that are held by the Buyer to the extent that such access may reasonably be required by the Seller in connection with matters relating to or affected by the operations of the Business prior to the Closing Date. The Buyer shall afford such access upon receipt of reasonable advance notice and during normal business hours, the Seller shall be solely responsible for any costs or expenses incurred by it pursuant to this Section 15.5. If the Buyer shall desire to dispose of any of such books and records prior to the expiration of such six-year period, the Buyer shall, prior to such disposition, give the Seller a reasonable opportunity, at the Seller's expense, to segregate and remove such books and records as the Seller may elect. (b) For a period of six years after the date hereof, the Buyer shall have reasonable access to all of the books and records relating to the Business which the Seller may retain after the Closing Date. Such access shall be afforded by the Seller upon receipt of reasonable advance notice and during normal business hours. The Buyer shall be solely responsible for any costs and expenses incurred by it pursuant to this Section 15.5. If the Seller shall desire to dispose of any of such books and records prior to the expiration of such six-year period, the Seller shall, prior to such disposition, give the Buyer a 44 51 reasonable opportunity, at the Buyer's expense, to segregate and remove such books and records as the Buyer may elect. SECTION 15.6. Force Majeure. Neither party shall be liable for any failure of or delay in the performance of this Agreement for the period that such failure or delay is due to acts of God, public enemy, civil war, strikes or labor disputes, or any other cause beyond the parties' reasonable control. Each party agrees to notify the other party promptly of the occurrence of any such cause and to carry out this Agreement as promptly as practicable after such cause is terminated. SECTION 15.7 Survival. All statements contained in any certificate or other instrument executed and delivered by the Seller or the Buyer pursuant to this Agreement or in connection with the transactions contemplated hereby shall be deemed representations and warranties by the Seller or the Buyer, respectively, hereunder. All representations and warranties and agreements made by the parties hereto in this Agreement or pursuant hereto shall survive the Closing hereunder and any investigation at any time made by or on behalf of the Buyer or Seller, provided, however, that the Buyer shall not commence any action against the Seller in respect of any provision of this Agreement at any time more than 24 months after the Closing Date except with respect to a breach of the warranty contained in Section 5.27, with respect to Seller's indemnification obligations for Excluded Liabilities under Section 11.1(c) or with respect to Seller's indemnification obligations for environmental liabilities under Section 11.1(e), as to which the only limitations shall be those provided by applicable statutes of limitation. SECTION 15.8. Severability. In the event that any part of this Agreement is declared by any court or other judicial or administrative body to be null, void or unenforceable, said provision shall survive to the extent it is not so declared, and all of the other provisions of this Agreement shall remain in full force and effect. SECTION 15.9. Notices. All notices, requests, demands and other communications under this Agreement shall be in writing and shall be deemed to have been duly given (i) on the date of service if served personally on the party to whom notice is to be given; (ii) on the day of transmission if sent via facsimile transmission to the facsimile number given below, and telephonic confirmation of receipt is obtained promptly after completion of transmission; (iii) on the day after delivery to Federal Express or similar overnight courier or the Express Mail service maintained by the United States Postal Service; or (iv) on the 45 52 fifth day after mailing, if mailed to the party to whom notice is to be given, by first class mail, registered or certified, postage prepaid and properly addressed, to the party as follows: If to the Seller: Oncogene Science, Inc. 106 Charles Lindbergh Blvd. Uniondale, New York 11553 Attention: Steven M. Peltzman Facsimile: (516) 222-0114 Copy to: Saul, Ewing, Remick & Saul 3800 Centre Square West Philadelphia, Pennsylvania 19102 Attention: Spencer W. Franck, Jr. Esq. Facsimile: (215) 972-7725 If to the Parent or the Buyer: Calbiochem-Novabiochem International, Inc. 10394 Pacific Center Court San Diego, California 92121 Attention: Stelios B. Papadopoulos Facsimile: (619) 450-5522 Copy to: Willkie Farr & Gallagher One Citicorp Center 153 East 53rd Street New York, New York 10022 Attention: Peter H. Jakes, Esq. Facsimile: (212) 821-8111 Any party may change its address for the purpose of this Section by giving the other party written notice of its new address in the manner set forth above. SECTION 15.10. Amendments; Waivers. This Agreement may be amended or modified, and any of the terms, covenants, representations, warranties or conditions hereof may be waived, only by a written instrument executed by the parties hereto, or in the case of a waiver, by the party waiving compliance. Any waiver by any party of any condition, or of the breach of any 46 53 provision, term, covenant, representation or warranty contained in this Agreement, in any one or more instances, shall not be deemed to be nor construed as further or continuing waiver of any such condition, or of the breach of any other provision, term, covenant, representation or warranty of this Agreement. SECTION 15.11. Public Announcements. The parties agree that after the signing of this Agreement, neither party shall make any press release or public announcement concerning this transaction without the prior written approval of the other party unless a press release or public announcement is required by law. If any such announcement or other disclosure is required by law, the disclosing party agrees to give the nondisclosing party prior notice and an opportunity to comment on the proposed disclosure. SECTION 15.12. Entire Agreement. This Agreement and the Ancillary Agreements contain the entire understanding between the parties hereto with respect to the transactions contemplated hereby and supersedes and replaces all prior and contemporaneous agreements and understandings, oral or written, with regard to such transactions. All schedules hereto and any documents and instruments delivered pursuant to any provision hereof are expressly made a part of this Agreement as fully as though completely set forth herein. SECTION 15.13. Parties in Interest. Nothing in this Agreement is intended to confer any rights or remedies under or by reason of this Agreement on any persons other than the Seller, and the Buyer and their respective successors and permitted assigns. Nothing in this Agreement is intended to relieve or discharge the obligations or liability of any third persons to the Seller or the Buyer. No provision of this Agreement shall give any third persons any right of subrogation or action over or against the Seller or the Buyer. SECTION 15.14. Section and Paragraph Headings. The section and paragraph headings in this Agreement are for reference purposes only and shall not affect the meaning or interpretation of this Agreement. SECTION 15.15. Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, but both of which shall constitute the same instrument. 47 54 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective officers thereunto duly authorized as of the date first above written. ONCOGENE SCIENCE, INC. By: /s/ Steven M. Peltzman ----------------------------------- Name: Steven M. Peltzman Title: President and Chief Operating Officer CALBIOCHEM-NOVABIOCHEM CORPORATION By: /s/ Stelios B. Papadopoulos ----------------------------------- Name: Stelios B. Papadopoulos Title: Chairman and Chief Executive Officer CALBIOCHEM-NOVABIOCHEM INTERNATIONAL, INC. By: /s/ Stelios B. Papadopoulos ----------------------------------- Name: Stelios B. Papadopoulos Title: Chairman and Chief Executive Officer EX-10.2 3 SUBLEASE DATED AUGUST 2, 1995 1 EXHIBIT 10.2 SUBLEASE THIS SUBLEASE is made as of this 2nd day of August, 1995, by and between ONCOGENE SCIENCE, INC., a Delaware corporation (successor to Applied bioTechnology Inc., formerly named AbT Acquisition Corp.) having an office at 80 Rogers Street, Cambridge, Massachusetts 02142 ("Sublessor"), and CALBIOCHEM-NOVABIOCHEM CORPORATION, a California corporation having an office at 10394 Pacific Center Court, San Diego, California 92121 ("Sublessee"). W I T N E S S E T H: WHEREAS, by lease, dated as of October 1991, between the Trustees of the East Cambridge Trust ("Landlord"), as landlord, and AbT Acquisition Corp., predecessor in interest to Sublessor, as tenant (said lease, as the same has been amended by First Amendment dated as of April 2, 1993 and by Second Amendment executed in connection with the execution and delivery of this Sublease, and as the same may be hereafter amended from time to time, being referred to herein as the "Lease"), Landlord leased to Sublessor the buildings known as 80 Rogers Street and 129 Binney Street and a portion of the building known as 84 Rogers Street, Cambridge, Massachusetts (the "Leased Premises"); and WHEREAS, Sublessor desires to sublet to Sublessee and Sublessee desires to sublet and hire from Sublessor that portion of the Leased Premises located at 80 and 84 Rogers Street more particularly shown on the floor plan attached hereto and made a part hereof as Exhibit A (the "Sublet Premises") and all of Sublessor's right, title and interest therein and/or appurtenant thereto, all on the terms, covenants and conditions set forth herein; NOW, THEREFORE, the Sublessor and Sublessee hereby agree to the foregoing and as follows: 1. Term. a. Sublessor hereby leases to Sublessee and Sublessee hereby leases and hires from Sublessor the Sublet Premises upon and subject to all of 2 the terms, covenants and conditions provided for in this Sublease. The term of this Sublease shall commence on the date hereof (the "Commencement Date"), and, subject to Section 1(b) below, shall expire on the date which is one day prior to the third anniversary of the Commencement Date (the "Expiration Date"), unless such term shall expire, be cancelled or terminate on an earlier date pursuant to the terms of this Sublease or the Lease, in which event such earlier date shall be deemed to be the Expiration Date. The period from and including the Commencement Date to and including the Expiration Date is herein called the "Term." b. Sublessee shall have the option to extend the Term of this Sublease for one year from the scheduled Expiration Date, and thereafter to further extend the Term of this Sublease for additional periods of one year each (except that in no event shall any such extension period extend beyond the day before the expiration of the term of the Lease), provided that in connection with each such extension: (i) Sublessee shall have given Sublessor not less than nine (9) months' prior written notice thereof; (ii) this Sublease shall not have been previously terminated; and (iii) at the time of its giving of such notice and on the Expiration Date of the then current Term, no default under this Sublease by Sublessee shall have occurred and be continuing beyond all applicable notice and cure periods. Any renewal option may be exercised with respect to the entire Sublet Premises only. 2. Rent. a. Sublessee shall pay to Sublessor annual rent (hereinafter "Fixed Rent") in amounts equal to 50% of the aggregate Annual Fixed Rent described in Section 1 of the Lease (including, without limitation, the CPI increases described therein). b. All Fixed Rent shall be paid in lawful money of the United - 2 - 3 States at the office of Sublessor set forth above, or at such other place as Sublessor may designate in writing, without any notice, demand, set-off or deduction whatsoever, and shall be payable in advance on the first day of each and every month during the Term. Sublessee shall pay the first monthly installment of Fixed Rent in full upon the execution hereof. c. If the Commencement Date is on other than the first day of a calendar month, the second installment of Fixed Rent shall be adjusted appropriately to reflect payment of Fixed Rent for the number of days then remaining in said first month from and including the Commencement Date. d. In addition to Fixed Rent, Sublessee shall pay to Sublessor as additional rent, Sublessee's Proportionate Share (as defined herein) of the amounts payable by Sublessor in respect of "Real Estate Taxes" and "Operating Expenses" pursuant to Section 6.2 of the Lease on account of periods occurring during the Term. "Sublessee's Proportionate Share" shall mean fifty (50%) percent or, if the Leased Premises are increased or decreased, the percentage equal to a fraction, the numerator of which is 50% of the rentable square feet of the Leased Premises as the same are presently constituted and the denominator of which is the then number of square feet of rentable area of the Leased Premises as the same may be constituted following such increase or decrease. e. Upon receipt by Sublessor of any refund, adjustment or credit attributable to escalations under Section 6.2 of the Lease, Sublessee shall be entitled to receive from Sublessor Sublessee's Proportionate Share of such refund, adjustment or credit, based on the portion of, and in no event to exceed, such escalations attributable to any payment made by Sublessee under this Article, but net of Sublessor's reasonable, out-of-pocket expenses, if any, incurred in obtaining the same. f. Sublessee shall pay to Sublessor 50% of the expenses - 3 - 4 incurred by Sublessor with respect to the following items relating to the Leased Premises: (i) property management; (ii) electricity; (iii) gas; (iv) facility maintenance; (v) trash removal; (vi) office cleaning and laundry; (vii) water and sewer charges; (viii) security/fire system; (ix) pest control; (x) building permits; and (xi) amortization of leasehold improvements; provided, however, that with respect to each such item, such 50% shall be subject to periodic review and equitable adjustment based on the then current utilization of such item by each of the parties. Each party shall have the right to install, at its own cost and expense, one or more meters to segregate the measurement of that party's utilities usage and pay the charges incurred in connection therewith directly to the utility provider and remove the cost thereof from the list of shared expenses set forth above. It is understood and agreed that Sublessor has no control over the supply of electrical energy or the quality, quantity or character of electrical energy supplied to the Sublet Premises. Unless caused by the negligence or willful misconduct of Sublessor (or any party for whom Sublessor is legally responsible), Sublessor shall not be liable or responsible to Sublessee for any loss, damage or expense that Sublessee may sustain or incur due to any diminution or abatement in the quantity of electrical energy or any change in the quality or character of such electrical energy or if such service is no longer available or suitable for Sublessee's requirements. g. All sums payable under Sections 2(d) and (f) hereof shall be hereinafter referred to collectively as "Additional Rent". All payments of Additional Rent under the terms of this Sublease shall be paid by Sublessee in lawful money of the United States at the office of Sublessor set forth above, or at such other place as Sublessor may designate in writing, without any notice, demand, setoff or deduction whatsoever. Sublessor shall provide Sublessee, from time to time, with statements specifying the amount and payment - 4 - 5 dates for the installments of Additional Rent due hereunder, accompanied by copies of any related statements delivered to Sublessor by Landlord under the Lease and such other evidence of such expenses as Sublessee may reasonably request, and Sublessee shall pay such Additional Rent in the amounts and on the dates so specified. Sublessor's failure to render such statement with respect to any Additional Rent shall not prejudice Sublessor's right to thereafter render such statement with respect to such Additional Rent or with respect to any subsequent Additional Rent. h. If any item of Fixed Rent or Additional Rent is not paid within five (5) days of the due date of such payment, Sublessee shall pay to Sublessor a late charge of a sum equal to two (2%) percent per annum above the then current prime rate charged by Citibank, N.A. or its successor of the amount unpaid computed from and including the date such payment was due up to but not including the date of payment. Such late charge shall be paid as liquidated damages and not as interest or a penalty payment. In addition, such charge shall be construed as Additional Rent and shall be due and payable with the next monthly installment of Fixed Rent. The payment of such charge on the part of the Sublessee or the acceptance thereof by Sublessor shall not be deemed a waiver of any other remedies available to Sublessor in connection therewith under the provisions of this Sublease. i. All amounts payable by Sublessee to Sublessor pursuant to this Sublease, including, without limitation, Fixed Rent and Additional Rent, shall be deemed to be and shall constitute rent for all purposes hereunder and, in the event of any non-payment thereof, Sublessor shall have all of the rights and remedies provided herein, at law or in equity for non-payment of rent. j. The provisions of this Article 2 shall survive the expiration or earlier termination of this Sublease, but only to the extent that - 5 - 6 such provisions apply to the period beginning on the Commencement Date and ending on the date of such expiration or earlier termination. k. The parties shall prepare and deliver to Landlord at the end of each year of Sublessee's occupancy pursuant to this Sublease a statement setting forth in line item detail all amounts paid by Sublessee to Sublessor pursuant to this Sublease. The purpose of such statements shall be to enable Landlord to determine if Landlord is entitled to receive any portion of such payments pursuant to Section 8.9 of the Lease. By consenting to this Sublease, Landlord has acknowledged that payments of Sublessor's amortization of leasehold improvements pursuant to Section 2(f) (xi) hereof do not constitute profit to Sublessor. 3. Subordination a. A true and correct copy of the Lease is attached hereto and made a part hereof as Exhibit B. Sublessee acknowledges that this Sublease is subject and subordinate to, and Sublessee accepts this Sublease subject to all of the terms, covenants and provisions of, the Lease and, to the extent that the Lease is also subject and subordinate to such instruments, this Sublease shall be subject and subordinate to all ground and underlying leases and all mortgages which might now or hereafter affect such leases, the leasehold estate or estates thereby created or the real property of which the Sublet Premises forms a part, and to any and all renewals, modifications, consolidations, replacements and extensions of the Lease and such ground or underlying leases and mortgages. The provisions of this Section shall be self-operative and no further instrument of subordination shall be required to effect such subordination. Sublessor's execution of any certificate or other instrument of subordination which may be requested to confirm or further effect such subordination shall also be sufficient to confirm the same subordination of this Sublease. Notwithstanding - 6 - 7 the foregoing, Sublessee shall promptly execute any certificate or other instrument of subordination which may be requested to confirm or further effect such subordination. b. It is hereby agreed that Sublessor leases the Sublet Premises to Sublessee upon all of the terms and conditions of the Lease with respect to the Sublet Premises. Sublessee acknowledges that prior to executing this Sublease it has received a copy of and read the Lease and is familiar with the contents thereof. Sublessee covenants and agrees (i) to perform and observe all of the terms, covenants, agreements and conditions of the Lease on the part of the tenant thereunder to be performed and observed with respect to the Sublet Premises to the extent the same are not modified or amended by this Sublease, (ii) that Sublessee will not do or cause to be done or suffer or permit any act or thing to be done which is not permitted hereunder and would or might cause the Lease or the rights of Sublessor, as tenant thereunder, to be cancelled, terminated or forfeited or which would make Sublessor liable for any damages, claim or penalty and (iii) to indemnify and hold Sublessor harmless from and against any and all actions, claims, demands, damages, liabilities and expenses (including, without limitation, reasonable attorneys' fees and disbursements and expenses of defense) asserted against, imposed upon or incurred by Sublessor by reason of (a) any violation caused, suffered or permitted by Sublessee, its agents, servants, employees or invitees, of any of the terms, covenants and conditions of the Lease or this Sublease or (b) any damage or injury to persons or property occurring upon or in connection with Sublessee's use or occupancy of the Sublet Premises and/or the buildings in which the Leased Premises are located (the "Buildings"), except to the extent any of the same may be caused by any act or omission of Sublessor, its agents or representatives. c. All of the terms, covenants, conditions and agreements of - 7 - 8 the Lease are incorporated herein as if Sublessor were the "Landlord" thereunder (except that where applicable, such references shall also be deemed include a reference to Landlord), Sublessee were the "Tenant" thereunder and the Sublet Premises were the "Premises" thereunder, except to the extent the terms of the Lease are inconsistent herewith or are otherwise inapplicable and except that the following provisions of the Sublease shall not be binding on Sublessor and Sublessee: Article 1 (Reference Data) (except to the extent the same describes "Permitted Uses"), Section 2.1 (Premises), Section 3.1 (Condition and Delivery of the Premises), Section 3.4 (regarding CPI Increases, as described in the First Amendment) [by this deletion it is intended only that the Fixed Rent payable by Sublessee pursuant to Section 2(a) hereof (which includes a calculation incorporating the CPI Increase) shall not be further increased by the CPI Increase], Section 6.1 (Annual Fixed Rent), Section 6.4 (Security Deposit), Section 7.1 (Landlord's Duties), Section 7.3 (Tenant to Pay for All Utilities), Section 8.9 (Assignment and Subletting), Section 8.12 (Tenant's Financial Statements), the first sentence of Section 10.1 (Repair and Restoration of Casualty Loss), the second sentence of Section 10.3 (Termination for Major Damage or if Damage at End of Term), the second sentence of Section 10.4 (Eminent Domain), Section 14.1 (Notices), Section 14.3 (Limitation of Landlord's Liability), Section 14.8 (No Broker), Sections 14.12 and 14.13 (regarding Therion Biologics Corporation), Exhibit 1 (Premises), Exhibit 3 (Tenant's Work) and Exhibit 4 (Tenant's Property), Exhibit A to the First Amendment (Premises) and Exhibit B to the First Amendment (Tenant's Work). In addition, the following provisions of the Sublease shall be changed as follows: Section 6.2 (Additional Rent; Taxes and Operating Expenses) shall be modified as described in Article 2 hereof; the second sentence in Section 10.1 shall only apply to improvements made by Sublessee; references in Article 10 to Landlord's - 8 - 9 obligation to repair or restore the Premises shall be deemed only to refer to Landlord, and not to Sublessor; Sublessor shall have no obligation to pay for any of Sublessee's moving expenses pursuant to Sections 14.15 or 14.16; rather, Sublessee shall only be entitled to receive Sublessee's Proportionate Share of any such amounts received by Sublessor from Landlord. Any lengths of time set forth in the Lease for the doing of acts (as opposed to the payment of any monies) are changed for the purposes of this Sublease so that the time of Sublessor is three (3) days more than the time of Landlord and the time of Sublessee is three (3) days less than the time of Sublessor, as landlord and tenant, respectively, under the Lease, but in no event shall any such time period be shortened to less than three (3) days. d. Sublessee agrees that notwithstanding anything contained in this Sublease to the contrary, except in connection with any negligent or intentional act or omission by Sublessor or its agents or representatives, Sublessor shall not be obligated to perform any service of any nature whatsoever (including, without limitation, the furnishing of heat, electrical energy, air conditioning, elevator service, cleaning, window washing or rubbish removal services), nor shall Sublessor be obligated to make any repairs, alterations or improvements in, on or about the Sublet Premises or to comply with any violations of law with respect thereto, nor shall Sublessor be required to restore the Sublet Premises following the occurrence of a fire or other casualty, nor shall Sublessor be liable to Sublessee under any representation or warranty made by the Landlord in the Lease, it being understood, and Sublessee hereby so agrees, that subject to the provisions of this Article 3, Sublessee shall look solely to the Landlord for the performance of any and all such services, the making of all repairs, alterations or improvements, the compliance with violations of law, the restoration of the Sublet Premises - 9 - 10 following fire or other casualty, and compliance with all such representations and warranties, subject in each case to the terms of the Lease and this Sublease. e. Notwithstanding the provisions of Section 3(d) above, if at any time during the Term the services or other obligations required to be provided or performed by Landlord under the Lease are not furnished or performed or are improperly furnished or performed, upon receipt of written request from Sublessee specifying the service or obligation as to which the Landlord is in default, Sublessor shall cooperate with Sublessee in seeking Landlord's compliance with its obligations under the Lease with respect to the Sublet Premises, provided that (i) the Landlord's failure to furnish the service or to perform the obligation in question does not result from any act of Sublessee or by reason of any other cause or event which, under the terms of the Lease or this Sublease, would excuse the Landlord from the furnishing or performance thereof, and (ii) Sublessor's cooperation with Sublessee will not cause Sublessor to be in default under the Lease. It is further agreed that Sublessor shall not be responsible if said efforts of Sublessor shall be unsuccessful unless Landlord's failure to comply with its obligations under the Lease results from Sublessor's being in default under the Lease or from Sublessor's negligence or willful misconduct. Sublessee shall indemnify and reimburse Sublessor for any and all reasonable out of pocket costs and expenses, including without limitation reasonable attorneys' fees, incurred by Sublessor in connection therewith. If Landlord shall default in any of its obligations to Landlord with respect to the Sublet Premises, Sublessee shall also be entitled to enforce Sublessor's rights with respect thereto under the Lease directly against Landlord. f. Whenever in the Lease it is provided that the consent of - 10 - 11 the landlord therein (Landlord herein) is required for any action on the part of the tenant, for the purposes of this Sublease the consent of both Sublessor and Landlord shall be required. Sublessor's refusal to consent to or approve anything hereunder shall not be deemed unreasonable if Landlord has refused and is required to give a corresponding consent or approval under the Lease. g. Notwithstanding anything to the contrary contained in this Sublease or in the Lease, (i) Sublessee shall not be deemed to have assumed, and Sublessee shall not be obligated to perform, any of Sublessor's obligations under the Lease which obligations are required to be performed during any period before the Commencement Date or after the Expiration Date of this Sublease or which are attributable to any period prior to the Commencement Date or subsequent to the Expiration Date of this Sublease, (ii) except as otherwise expressly provided in this Sublease, no representation or warranty made by Sublessor as tenant under the Lease shall be deemed a representation or warranty of Sublessee, and (iii) in no event shall Sublessee be liable for, or be required to indemnify, defend or hold Sublessor harmless from or against any claim, cost, expense, liability, loss or damage arising by reason of any event, act or omission of any person other than Sublessee or any other party for whom Sublessee is legally responsible, occurring before the Commencement Date or after the Expiration Date of this Sublease. h. Sublessor hereby represents and warrants that (i) it is not and, to the best of its knowledge, the Landlord is not, in default in the performance of any of their respective obligations under the Lease; (ii) except as reflected in Exhibit B attached hereto, the Lease has not been amended or modified in any respect and is in full force and effect; (iii) Sublessor has not received any notice from the Landlord of any default by Sublessor of any of its obligations as tenant under the Lease or from any person of a violation with - 11 - 12 respect to the Buildings or the Sublet Premises of any law or requirement of any public authority except violations or defaults which have been cured; and (iv) on or before the Commencement Date, Sublessor has complied with all requirements of the Lease which are conditions precedent to this Sublease. 4. Condition of Premises; Alterations; Surrender. a. Sublessee agrees that it enters into this Sublease without any representations or warranties, express or implied, by Sublessor, its agents, representatives, employees, servants, brokers or any other person, as to the present or future condition of the Sublet Premises or the appurtenances thereto or any improvements therein or thereon. In connection therewith, Sublessee represents that it has made a thorough examination and inspection of the Sublet Premises and is familiar with the conditions thereof and accepts the Sublet Premises in its "as is" condition on the date hereof, reasonable wear and tear excepted, and that Sublessor shall not be obligated to make any repairs or alterations thereto in preparation for Sublessee's occupancy. b. Sublessee shall make no installations, alterations or improvements without the prior written consent of Sublessor and the Landlord or any other party whose consent is required under the Lease. Sublessor shall not unreasonably withhold its consent thereto provided Landlord and any other party whose consent is required shall have consented in writing to such installation, alterations or improvements. Sublessor shall use its best efforts to obtain Landlord's consent to any alterations, installations and improvements proposed by Sublessee with respect to the Sublet Premises that have been approved by Sublessor. All such installations, alterations or improvements shall, at Sublessee's expense, be made in compliance with and subject to Sections 4.1 and 7.6 of the Lease and shall be performed so as to minimize interference with any other occupant of the balance of the Leased Premises and the Buildings. - 12 - 13 c. Upon the expiration or earlier termination of the Term, Sublessee shall quit and surrender to Sublessor the Sublet Premises, broom clean, in good order and condition, ordinary wear and tear excepted. If Sublessee shall not quit and surrender the Sublet Premises as required hereby by the last date of the Term, then it shall indemnify and hold Sublessor harmless from and against all claims, liabilities, damages and costs (including without limitation reasonable attorneys' fees but not including consequential damages) incurred by Sublessor by reason of such failure so to quit and surrender the Sublet Premises. In addition, Sublessee agrees that if possession of the Sublet Premises is not surrendered to Sublessor within twenty-four (24) hours after the date of the expiration or sooner termination of the Term, then Sublessee shall pay to Sublessor as liquidated damages for each month and for each portion of any month during which Sublessee holds over in the Sublet Premises after the expiration or sooner termination of the Term, a sum equal to 150% of the sum of (i) the Fixed Rent payable under this Sublease during the last month of the Term and (ii) the average monthly aggregate of Additional Rent which was payable under this Sublease during the last six (6) months of the Term. Sublessee's obligation to observe or perform this covenant shall survive the expiration or earlier termination of the Term. 5. Insurance a. Sublessee shall provide at the Sublessee's sole cost and expense, and keep in full force, at all times during the Term of this Sublease, the insurance required under Article 9 of the Lease, naming Sublessor, Sublessee and Landlord as insured parties, including without limitation (i) personal liability insurance and (ii) casualty insurance, but only with respect to the contents of the Subleased Premises. Sublessee further covenants and agrees, at its expense, to take out and maintain at all times all necessary workmen's - 13 - 14 compensation insurance covering all persons employed by the Sublessee in and about the Sublet Premises. b. Sublessor shall maintain all other insurance required under the Lease, except that Sublessor shall not be responsible for insuring Sublessee's personalty and shall name Sublessee as an additional insured thereunder. c. Sublessor and Sublessee agree to use their best efforts to obtain from their respective insurance companies insuring them against damage by fire or other casualty to the Buildings and Sublet Premises, as the case may be, and/or the contents thereof, appropriate endorsements on their insurance policies pursuant to which the insurance companies waive their rights of recovery by way of subrogation or agree that such policies shall not be invalidated should the insured waive in writing, prior to a loss, any or all right of recovery against any parties for losses covered by such policies, and so long as such endorsements remain in effect on the respective insurance policies and do not invalidate such insurance policies, Sublessor and Sublessee hereby each waive any right of recovery against the other for any loss or damage to its respective property or the property of others covered by such insurance. If such waivers of recovery by way of subrogation are not available or are only available at an additional premium, then the party benefitting therefrom may waive such requirement, or pay any such additional premium. d. The Sublessee shall deliver to the Sublessor upon the execution of this Sublease, a copy of the policies of insurance required pursuant to this Article, together with proof of payment of the annual premium therefor. Each policy maintained by Sublessor or Sublessee pursuant to the terms hereof shall contain an agreement whereby the insurer agrees that such policy may not be cancelled without at least ten (10) days' prior written notice - 14 - 15 to Sublessee or Sublessor and Landlord, as appropriate. Each party shall deliver to the other certificates evidencing the renewal of such insurance policies (or new policies) not less than ten (10) days prior to the expiration date of each such policy. All such insurance shall be maintained by Sublessor or Sublessee with an insurer reasonably satisfactory to the other party. 6. Notices. a. All notices, demands, requests and other communications (collectively "Notices") which either party may desire or be required to give to the other hereunder shall be in writing and shall be served personally, by overnight mail service, or mailed by registered or certified mail, return receipt requested, postage prepaid, addressed as follows: To Sublessor at: Oncogene Science, Inc. 80 Rogers Street Cambridge, Massachusetts 02412 Attention: Steven Peltzman with copies to: Oncogene Science Inc. 106 Charles Lindbergh Boulevard Uniondale, New York 11553 Attention: Robert Van Nostrand and Squadron, Ellenoff, Plesent & Sheinfeld, LLP 551 Fifth Avenue New York, New York 10176 Attention: Joel I. Papernik, Esq. - 15 - 16 and The Trustees of The Cambridge East Trust c/o Beal And Company Inc. 177 Milk Street Boston, Massachusetts 02109 Attention: Robert L. Beal To Sublessee at: Calbiochem-Novabiochem Corporation 10394 Pacific Center Court San Diego, California 92121 Attention: Stelios B. Papadopoulos with copies to: Willkie Farr & Gallagher One Citicorp Center 153 East 53rd Street New York, New York 10022 Attention: Peter H. Jakes, Esq. and The Trustees of The Cambridge East Trust c/o Beal And Company Inc. 177 Milk Street Boston, Massachusetts 02109 Attention: Robert L. Beal Notices mailed as aforesaid shall be deemed received three (3) days after being deposited in the United States mail. Notices personally delivered shall be deemed received upon such delivery. Notices sent by overnight mail service shall be deemed received the day after delivery to such overnight mail service. Either party may change its address for the receipt of Notices by giving Notice to the other party in the manner aforesaid. Each of Sublessor and Sublessee shall, within two (2) days after receipt of any notice served upon it by Landlord pursuant to the terms of the Lease, deliver a copy of such notice to the other party. - 16 - 17 7. Assignment. a. Sublessee shall not have the right (i) to assign or otherwise transfer this Sublease, (ii) to sublet the Sublet Premises or any portion thereof whether by operation of law or otherwise, (iii) to mortgage, pledge or encumber this Sublease or the Sublet Premises or any part thereof or (iv) to advertise or authorize a broker or agent to advertise for a subtenant or assignee without, in each instance, the prior written consent of Sublessor (which may be withheld in the sole and absolute discretion of Sublessor) and of Landlord. Sublessee covenants and agrees that it shall not submit any request for any such approval to Landlord without first having received Sublessor's prior written consent. Notwithstanding the fact that the terms and provisions of Section 8.9 have not been incorporated into this Sublease, it is acknowledged and agreed that each assignment or subletting under this Article shall be subject to all of the terms, covenants, agreements and conditions of this Sublease and the Lease. The consent by Sublessor and Landlord to an assignment or subletting shall not be construed to relieve Sublessee from obtaining the express written consent of Sublessor and Landlord to any further assignment or subletting. No assignment or sublease shall release Sublessee from primary liability under this Sublease. b. Sublessor shall not have the right to assign or otherwise transfer the Lease, or to sublet any portion of the Leased Premises in which the Sublessee shall have any rights at the time of such transaction pursuant to that certain Shared Services Agreement or that certain Transitional Services Agreement, each dated the date hereof and each being between Sublessor and Sublessee, whether by operation of law or otherwise, without, in each instance, the prior written consent of Sublessee as to the identity of such assignee or subtenant (which shall not be unreasonably withheld or delayed, and which - 17 - 18 consent may not be withheld on the basis of the creditworthiness, net worth or other similar factors in respect of such party) and, except as otherwise expressly provided in the Lease, of Landlord. The consent by Sublessee to such an assignment or subletting shall not be construed to relieve Sublessor from obtaining the express written consent of Sublessee to any further assignment or subletting. c. Each of the parties hereby agrees that in the event such party (the "Offeror") wants to assign the Lease (in the case of Sublessor) or this Sublease (in the case of Sublessee), or to sublet all or any portion of its space in the Buildings, the Offeror shall not so assign or sublet, or offer to any person the right to so acquire or sublease, unless and until the Offeror shall have made a "ROFO Offer" (as hereinafter defined) to the other party (the "Offeree") and the Offeree shall have had the opportunity to accept such ROFO Offer as set forth below. A "ROFO Offer" is a written offer given by the Offeror to the Offeree stating that the Offeror desires to assign its Lease or Sublease or sublet all or a designated portion of its space for a specified period of time. An assignment of the Lease or the Sublease pursuant to a ROFO Offer shall be for no consideration, and a sublease of any space pursuant to a ROFO Offer shall be at the same rent and on the same terms as those specified herein, pro rated as appropriate. The Offeree shall then have the right to accept the ROFO Offer by giving the Offeror written notice of such acceptance within fifteen (15) days after its receipt of the ROFO Offer. If the Offeree shall so accept the ROFO Offer, then the parties shall diligently and in good faith document such transaction and seek to obtain such consents as may be necessary. If the Offeree rejects or fails to timely respond to the ROFO Offer, then the Offeror shall have the right to seek to so assign or sublet, subject in all respects to the provisions of Sections 7(a) and (b) above. If the - 18 - 19 Offeror shall not complete such transaction within six (6) months from the date of the Offeree's rejection, then the provisions of this Section shall again be operable with respect to any such transaction. The parties acknowledge that any assignment or sublease to Sublesee pursuant to a ROFO Offer shall be subject to Section 8.9 of the Lease. By consenting to this Sublease, Landlord has acknowledged that any assignment or sublease to Sublesor pursuant to a ROFO Offer such that Sublessor is restored to possession of all or any portion of the Sublet Premises shall not require Landlord's consent and shall not be subject to Section 8.9 of the Lease. 8. No Waiver. All rights and remedies of Sublessor and Sublessee enumerated herein and in the Lease shall be cumulative, shall not exclude any other right or remedy allowed at law or in equity, and said rights or remedies may be exercised and enforced concurrently. No waiver by Sublessor or Sublessee of any breach or any agreement or provision herein contained shall be deemed a waiver of any preceding or succeeding breach thereof or of any other agreement or provision herein contained. No extension by Sublessor of time for performance of any obligations or acts shall be deemed an extension of time for performance of any other obligations or acts. 9. Quiet Enjoyment. If and so long as Sublessee is not in default beyond all applicable notice and cure periods of any of its obligations of this Sublease on its part to be performed, Sublessee shall quietly have and enjoy the Sublet Premises during the Term of this Sublease without hindrance or molestation by anyone claiming by, through or under Sublessor, subject, however, to the exceptions, reservations and conditions hereof. Sublessor covenants and agrees that, at all times during the Term of this Sublease, Sublessor shall fully and - 19 - 20 faithfully comply with and perform the terms and conditions of the Lease on its part to be performed. Sublessor further covenants and agrees that it shall not do anything that would or could cause the Lease to be canceled, terminated, forfeited, surrendered or modified so as to (a) adversely affect (i) the rights or obligations of Sublessor thereunder or in and to the Leased Premises or (ii) the rights or obligations of Sublessee under this Sublease or in and to the Sublet Premises, or (b) cause an interruption in any of the services to be provided by the Landlord pursuant to the Lease. Sublessor covenants and agrees to indemnify and hold Sublessee harmless from and against any and all actions, claims, demands, damages, liabilities and expenses (including, without limitation, reasonable attorneys' fees, disbursements and expenses of defense) asserted against, imposed upon or incurred by Sublessee by reason of (a) any violation caused, suffered or permitted by Sublessor, its agents, servants, employees or invitees, of any of the terms, covenants and conditions of the Lease or this Sublease or (b) any damage or injury to persons or property occurring upon or in connection with Sublessor's use or occupancy of the Leased Premises and/or the Buildings, except to the extent any of the same may be caused by any act or omission of Sublessee, its agents or representatives. 10. Successors and Assigns. The provisions of this Sublease shall be binding upon and inure to the benefit of the parties hereto and, subject to the restrictions above set forth in respect of Sublessee, their respective successors and assigns. 11. Sublessor. The term "Sublessor" used in this Sublease shall mean only the tenant in possession of the Lease so that in the event of any assignment or transfer of the Lease, the party so assigning or transferring the Lease shall, provided that its immediate successor shall have a net worth at least equal to - 20 - 21 the remaining obligations of the tenant under the Lease in respect of Annual Fixed Rent less the remaining obligations of Sublessee in respect of Fixed Rent hereunder, be and hereby is entirely freed and relieved of all covenants and obligations of Sublessor hereunder thereafter occurring and it shall be deemed and construed as a covenant running with the land without further agreement between the parties and the assigns or transferees of the Lease, that said assignee or transferee had assumed and agreed to perform any and all covenants and obligations of Sublessor hereunder thereafter. 12. [INTENTIONALLY OMITTED] 13. Sublessor's Right to Cure. a. If Sublessee shall at any time fail to make any payment or perform any act on its part required to be made or performed by the terms hereof, or if Sublessor shall receive a notice of default from the Landlord, which default arises out of or in connection with Sublessee's actions or failure to act under this Sublease, then Sublessor, after five (5) days' written notice to Sublessee and without waiving or releasing Sublessee from any obligation of Sublessee contained in this Sublease, may (but shall be under no obligation to) make any such payment or perform any such act on Sublessee's part to be made or performed as in this Sublease provided or in order to cure the default under the Lease and may enter upon the Sublet Premises for that purpose and take all such other actions as may be necessary therefor. b. Any and all sums so paid by Sublessor and all costs and expenses reasonably incurred by Sublessor in connection with the performance of any such act, including without limitation reasonable attorneys' fee, together with interest thereon at the rate of 2% per annum above the then current prime rate charged by Citibank, N.A. or its successor from the respective dates of Sublessor's making of each such payment or incurring of each such cost and - 21 - 22 expense shall constitute Additional Rent payable by Sublessee under this Sublease and shall be paid by Sublessee to Sublessor within five (5) days after rendition of a bill or statement to Sublessee therefor. 14. Leasehold Estate. Sublessor cannot grant or convey any greater estate, rights or interest by virtue of this Sublease than Sublessor has received under the terms of the Lease, and Sublessee acknowledges that it has not received and cannot receive any greater estate, rights or interest pursuant to this Sublease than Sublessor has received under the Lease. 15. Broker. a. Each of Sublessor and Sublessee warrants and represents to the other that it has not dealt with any broker or agent in connection with this Sublease. Each party agrees to indemnify and hold the other harmless from and against any and all claims, costs, liabilities and expenses (including without limitation reasonable attorneys' fees) which may be imposed upon or incurred by or asserted against such other party by any broker or agent alleging to have dealt with the party making such indemnification in connection with this Sublease. The provisions of this Article shall survive the expiration or earlier termination of this Sublease. 16. Use of the Sublet Premises. Sublessee shall use the Sublet Premises only in accordance with the uses set forth in Article 1 of the Lease. Sublessee shall obtain, at its sole cost and expense, all permits, licenses, consents and approvals required for the operation of its business at the Sublet Premises. 17. Certificates. Each Party shall, within thirty (30) days after demand, furnish to the other a certificate, duly acknowledged, certifying (a) that this Sublease - 22 - 23 is in full force and effect, (b) that it knows of no default hereunder on the part of the other party or, if it has reason to believe that such a default exists, the nature thereof in reasonable detail, (c) the amount of the Fixed Rent and Additional Rent being paid, (d) that this Sublease has not been modified or, if it has been modified, setting forth the terms and dates of such modifications, (e) as to the form and content of this Sublease by annexing a copy hereof to such certificate and (f) to such other matters as may be reasonably requested by the other party. 18. Condemnation. If the whole or substantially all of the Sublet Premises or the access thereto shall be taken or condemned by any competent authority for any public or quasi-public use this Sublease shall cease and terminate on the date of taking of possession in such proceeding. If the Lease is terminated pursuant to Section 10.4 thereof, this Sublease shall cease and terminate on the date the Lease terminates. Upon a partial taking, unless this Sublease is terminated as above provided, this Sublease shall continue in force as to the remainder of the Sublet Premises, and the Fixed Rent and Additional Rent shall be diminished by the same proportion which rental allocable to the Sublet Premises under the terms of this Sublease shall abate under the Lease. 19. Damage or Destruction of the Sublet Premises. If the Lease shall be terminated by either the Landlord or Sublessor pursuant to Section 10.3 of the Lease, this Sublease shall cease and terminate on the effective date of the termination of the Lease. Sublessee shall forthwith vacate and surrender the Sublet Premises on or before said date and the Fixed Rent and Additional Rent (or the portion thereof, if any, not abated from the date of the damage or destruction) shall be apportioned as of said termination date. Sublessee's right to an abatement or apportionment of - 23 - 24 Fixed Rent and Additional Rent or to repairs shall be dependent upon whether or not Sublessor is entitled to the same under Section 10.3 of the Lease. 20. Operating Agreement. Sublessor hereby represents and warrants that no portion of the Sublet Premises constitute any of the Shared Facilities as defined in that certain Operating Agreement, dated as of October 4, 1991 (the "Operating Agreement") between AbT Acquisition Corp. (Sublessor's predecessor in interest) and Therion Biologics Corporation ("Therion"), and that Therion shall have no rights whatsoever in respect of the Sublet Premises pursuant to such Agreement or otherwise. Notwithstanding the foregoing to the contrary, this Sublease is subject and subordinate to the Operating Agreement. 21. Miscellaneous a. All provisions of this Sublease and any variations thereof shall be deemed to refer to the masculine, feminine, neuter, singular or plural, as the identity of the person or persons may require. b. If any of the terms and provisions of this Sublease are in violation of or prohibited by any law, statute or ordinance, or such terms or provisions are found to be unenforceable by any court of competent jurisdiction, then such terms or provisions shall be of no force and effect; provided, however, that all of the other terms and provisions of this Sublease shall continue in full force and effect. c. The captions or headings of each Article hereof are inserted only as a matter of convenience and for reference and shall in no way define, limit or describe the scope of this Sublease or of any Article or section hereof or the intent of any provision hereof. The use of this Sublease of such words as "hereof," "hereunder" "herein" and "hereby" are deemed to be references to this Sublease as a whole. - 24 - 25 d. This Sublease contains the entire agreement between the parties, and any agreement hereafter made shall be ineffective to change, modify or discharge it in whole or in part unless such agreement is in writing and signed by the party against whom enforcement of the change, modification or discharge is sought. This Sublease shall bind and inure to the benefit of the parties hereto and their respective successors and, subject to this Sublease, their respective assigns. e. This Sublease shall be governed by and construed in accordance with the laws of the State of Massachusetts without regard to conflicts of law principles. f. Sublessor and Sublessee hereby mutually waive, to the extent permitted by law, the right to a jury trial in any action or legal proceeding between the parties arising out of this Sublease or Sublessee's occupancy of the Sublet Premises. g. Wherever in this Sublease Sublessor's consent or approval is required, if Sublessor shall delay or refuse such consent or approval, Sublessee in no event shall be entitled to make, nor shall Sublessee make, any claim, and Sublessee hereby waives any claim, for money damages (including, without limitation, by set-off, counterclaim or defense) based upon any claim or assertion by Sublessee that Sublessor unreasonably withheld or delayed its consent or approval. Sublessee's sole remedy shall be an action or proceeding to enforce any such provisions, for specific performance, injunction or declaratory judgment. - 25 - 26 IN WITNESS WHEREOF, Sublessor and Sublessee have executed this Sublease as of the date and year first above written. SUBLESSOR: ONCOGENE SCIENCE, INC. By: ------------------------------------ Name: Title: SUBLESSEE: CALBIOCHEM-NOVABICHEM CORPORATION By: ------------------------------------ Name: Title: - 26 - EX-10.3 4 NEW PRODUCT LICENSE RIGHT OF FIRST REFUSAL 1 EXHIBIT 10.3 NEW PRODUCT LICENSE RIGHT OF FIRST REFUSAL AGREEMENT THIS NEW PRODUCT LICENSE RIGHT OF FIRST REFUSAL AGREEMENT entered into on August 2, 1995, by and between ONCOGENE SCIENCE, INC., a Delaware corporation ("Licensor"), and CALBIOCHEM-NOVABIOCHEM CORPORATION, a California corporation ("Licensee"). WITNESSETH WHEREAS, Licensor is a biopharmaceutical company which is engaged in its Cambridge, Massachusetts facility in both a diagnostics business and a research products business; WHEREAS, the research products business markets research reagents, kits and other research tools to the academic research, industrial research, and clinical research markets; WHEREAS, Licensor has entered into an Asset Purchase Agreement (the "Purchase Agreement"), dated as of June 26, 1995, with Licensee and Calbiochem-Novabiochem International, Inc., a Delaware corporation, pursuant to which Licensor has agreed to sell its research products business (the "Business"), while retaining the right in connection with its diagnostics business to manufacture and sell research products to the clinical research market and diagnostic products to the clinical diagnostics market; WHEREAS, Licensee has agreed to purchase the Business and to conduct the Business in the academic research, industrial research, and clinical research markets, recognizing that Licensor will continue to have the right to manufacture and sell products to the clinical research market and diagnostic products to the diagnostic market; WHEREAS, pursuant to the Purchase Agreement, Licensor has agreed to grant Licensee a right of first refusal to purchase a license to make, use and sell all research products developed by Licensor's cancer diagnostics business where the Licensor has the right to grant such a license, and such license shall be exclusive insofar as such rights pertain to Research other than Clinical Research and shall be co-exclusive with Licensor insofar as such rights pertain to Clinical Research; NOW THEREFORE, in consideration of the mutual covenants and promises hereinafter set forth, the parties, intending to be legally bound, hereby agree as follows: 1. Definitions. (a) The term "Clinical Research" shall refer to Research engaged in by medical centers, independent reference laboratories and comprehensive cancer centers where research is performed utilizing, for the most part, human samples to establish clinical correlation with a diagnosis, prognosis, or monitoring application. -1- 2 (b) The term "Diagnostic" shall refer to diagnosis, prognosis or other evaluation of patients where such use, if performed in the United States, would typically require approval by the United States Food and Drug Administration. (c) The term "Research" shall refer to the use of research products in life science research by research companies (including, without limitation, pharmaceutical and biotechnology companies), institutions (including medical centers, independent reference laboratories and comprehensive cancer centers), and universities. The term "Research" specifically excludes any Diagnostic use. (d) The term "Research Products" shall refer to research reagents, kits and other research tools developed by Licensor in its cancer Diagnostic business. 2. Right of First Refusal. (a) Licensor shall notify Licensee on a monthly basis of all Research Products developed during the preceding month ("Licensable Products"). Licensee shall have a period of thirty (30) days after delivery of such notice to make further inquiry of Licensor regarding the Licensable Products and to notify Licensor that it elects to purchase a license from Licensor to make, use and sell some or all of such Licensable Products (a "New Product License"). (b) Each time Licensee timely elects to purchase a New Product License with respect to a Licensable Product, Licensor and Licensee shall promptly execute and deliver a license agreement with respect to such New Product License in the form of Exhibit "A" attached hereto (the "Form of New Product License"), containing (i) such additional information with respect to the Licensable Product and the intellectual property rights associated therewith as shall be appropriate to effectuate the purposes of this Agreement and the Purchase Agreement and (ii) such other additions or modifications as the parties shall agree. Under each New Product License, Licensee shall pay a one time license fee of five thousand dollars ($5,000) plus an additional five percent (5%) royalty on gross sales (in addition to any royalties owed to third parties) for the greater of the life of the intellectual property licensed or ten (10) years. (c) In connection with the notification contemplated by Section 2(a) hereof, Licensor shall inform Licensee whether any Licensable Product is of such a nature that Licensor will require Sections 1(a) and 3(a) of the Form of New Product License (regarding Bulk Quantity sales) to be included in the New Product License regarding such Licensable Product. (d) Licensor shall have no obligation to execute and deliver a license agreement covering any Licensable Product where such execution and delivery would violate the terms of any agreement or license to which Licensor is a party or any applicable law or regulation. To the extent that any such contractual or legal restriction would permit a grant -2- 3 of a narrower license than contemplated by this Agreement, appropriate modifications shall be made to the New Product License Form, and Licensor and Licensee shall execute and deliver a license agreement in the form of the New Product License Agreement, as so modified, containing the additional information and other additions and modifications provided for in Section 2(b). (e) In the event that Licensee does not timely elect to purchase a New Product License with respect to a Licensable Product, it shall have no further right to obtain a license with respect to such Licensable Product. (f) Information of Licensor related to Licensable Products reviewed by Calbiochem pursuant to Section 2(a) hereof, but with respect to which no New Product License is entered into, shall be referred to herein as "confidential information." Licensee shall keep confidential (a) any and all confidential information and shall not use such information for any purpose unrelated to its consideration of Licensable Products hereunder, without the prior written consent of Licensor, both during the term of this Agreement and for a period of ten (10) years following the termination of this Agreement. Licensee shall take all reasonable steps to insure such confidential treatment and nonuse. Notwithstanding the foregoing, such obligations of confidential treatment and nonuse shall not apply to information which Licensee shall sustain the burden of proving is (a) in the possession of Licensee prior to receipt thereof from the transmitting party as shown by Licensee's written records, (b) already available or becomes available to the public through no fault of Licensee, (c) received by Licensee from a third party having a right to disclose it, or (d) is required to be disclosed by subpoena or other legal process or applicable law or regulation. 3. Product Purchases. (a) In the event Licensee timely elects to purchase a New Product License from Licensor with respect to a Licensable Product and Licensor produces an initial batch of such Licensable Product, Licensee shall have the right to purchase from Licensor, and Licensor shall be obligated to sell to Licensee, out of such initial batch, a quantity of up to one-half of such initial batch at a purchase price equal to one hundred seventy-five dollars ($175) per milligram, but not greater than two thousand five hundred dollars ($2,500) for one-half of the initial batch. (b) In the event Licensee timely elects to purchase a New Product License from Licensor with respect to a Licensable Product and Licensee produces an initial batch of such Licensable Product, Licensor shall have the right to purchase from Licensee, and Licensee shall be obligated to sell to Licensor, out of such initial batch, a quantity of up to one-half of such initial batch at a purchase price equal to one hundred seventy-five dollars ($175) per milligram, but not greater than two thousand five hundred dollars ($2,500) for one-half of the initial batch. -3- 4 (c) The purchase price set forth in paragraphs (a) and (b) above shall be adjusted annually, on the anniversary dates of this Agreement, to reflect an appropriate adjustment for inflation. In the event that the parties shall be unable to agree on an appropriate inflationary adjustment, the purchase price shall be adjusted by the amount of increase (or decrease) in the Consumer Price Index as promulgated by the United States Department of Labor. 4. Term of the Agreement. This Agreement, and the right to purchase a New Product License, shall expire five (5) years after the date of this Agreement or at the time (and in the event) Licensor shall no longer be engaged in the cancer Diagnostic business. Termination of this Agreement does not terminate any New Product License, each of which shall continue or terminate in accordance with its terms. 5. Notices. All notices, requests, demands and other communications under this Agreement shall comply with the requirements of Section 15.9 of the Purchase Agreement. 6. Entire Agreement. This Agreement, together with the Purchase Agreement and the agreements, exhibits, schedules, certificates and instruments referred to therein or delivered in connection therewith, constitutes the entire agreement and understanding between the parties hereto with respect to the transactions contemplated by the Purchase Agreement and supersedes all prior oral or written agreements and understandings relating to such subject matter. 7. Modifications and Amendments. The terms and provisions of this Agreement may be modified or amended only by written agreement executed by both parties hereto. 8. Waivers and Consents. The terms and provisions of this Agreement may be waived, or consent for the departure therefrom granted, only by written document executed by the party entitled to the benefits of such terms or provisions. No such waiver or consent shall be deemed to be or shall constitute a waiver or consent with respect to any other terms or provisions of this Agreement, whether or not similar. Each such waiver or consent shall be effective only in the specific instance and for the purpose for which it was given, and shall not constitute a continuing waiver or consent. 9. Assignment. The rights and liabilities under this Agreement may be assigned by Licensor, and this Agreement shall be binding on and inure to the benefit of its successors and assigns. Licensee may assign its rights and responsibilities only with the prior written approval of Licensor, which Licensor may withhold in its sole discretion; provided, however, that Licensee may assign this Agreement and its rights and obligations hereunder, without Licensor's consent, in connection with the sale of all or substantially all of Licensee's assets related to its research products business. -4- 5 10. Benefit. Nothing in this Agreement shall be construed to create any rights or obligations except between the parties hereto, and no person or entity shall be regarded as a third-party beneficiary of this Agreement. 11. Governing Law. This Agreement and the rights and obligations of the parties hereunder shall be construed in accordance with and governed by the law of the State of New York, without giving effect to the conflict of law principles thereof. 12. Severability. If any provision of this Agreement shall be void as contrary to applicable law, it is agreed that such provision shall be omitted from this Agreement and that the remainder hereof shall be and remain in full force and effect as if such omitted provision had not been included herein. 13. Independence of Parties. Nothing contained in this Agreement shall be construed to place Licensor and Licensee in a relationship as partners, joint venturers, employer and employee or principal and agent, nor shall Licensee be considered in any sense an affiliate of Licensor. IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first above written. Licensor: Licensee: ONCOGENE SCIENCE, INC. CALBIOCHEM-NOVABIOCHEM CORPORATION By: /s/ Steven J. Peltzman By: /s/ Stelios B. Papadopoulos ------------------------- ------------------------------ Steven M. Peltzman Stelios B. Papadopoulos President and Chief Chairman and Chief Operating Officer Executive Officer -5-