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Asset Purchase Agreement

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Title:

Asset Purchase Agreement

Entities:

BioProgress plc; Dechert LLP

Date:

2004

Size:

159KB total

Price:

$57

ID:

#284209

► Purchase & Sale ► Purchase ► Asset Purchase Agreements
► Services ► Legal
► Biotech & Drugs ► Pharmaceutical Preparations

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ASSET PURCHASE AGREEMENT

by and among

BIO FILMS, LLC

AQUAFILM, LLC,

AQUAFILM USA, INC.

and

EACH OF THE STOCKHOLDERS OF AQUAFILM, LLC

Dated as of March 7, 2004

TABLE OF CONTENTS


			Page
ARTICLE I DEFINITIONS			1

	1.1.	Definitions.	1

ARTICLE II THE TRANSACTION			5

	2.1.	Sale and Purchase of Assets.	5
	2.2.	Excluded Assets.	7
	2.3.	Assumption of Certain Liabilities.	7
	2.4.	Retained Liabilities.	8
	2.5.	Consent of Third Parties.	10
	2.6.	Purchase Price.	10
	2.7.	Payments.	10
	2.8.	Closing Date, Time and Place.	11

ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE SELLERS AND THE SELLING SHAREHOLDERS			11

	3.1.	Organization and Standing.	11
	3.2.	Ownership of Shares; Capitalization.	12
	3.3.	Authorization; Binding Agreement.	12
	3.4.	Conflicts, Consents and Approvals.	13
	3.5.	Litigation.	13
	3.6.	Financial Statements.	14
	3.7.	No Brokers or Finders.	14
	3.8.	Taxes.	14
	3.9.	Absence of Undisclosed or Contingent Liabilities.	15
	3.10.	Property.	16
	3.11.	Condition of Assets.	17
	3.12.	Insurance.	18
	3.13.	Environmental Matters.	18
	3.14.	Intellectual Property.	20
	3.15.	Permits.	22
	3.16.	Compliance with Laws.	22
	3.17.	Labor Matters.	23
	3.18.	Absence of Changes.	23
	3.19.	Transactions with Affiliates.	26
	3.20.	Contracts and Commitments.	26
	3.21.	Benefit Plans.	28
	3.22.	Absence of Questionable Payments.	31
	3.23.	Inventory.	31

- i -


	3.24.	Accounts Receivable.	31
	3.25.	Bank Accounts; Officers and Directors.	32
	3.26.	Products Liability.	32
	3.27.	Customer Relationships.	32
	3.28.	Disclosure.	32

ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE BUYER			32

	4.1.	Organization.	32
	4.2.	Authorization; Binding Agreement.	32
	4.3.	Conflicts, Consents and Approvals.	33
	4.4.	No Brokers or Finders.	33

ARTICLE V CERTAIN COVENANTS			33

	5.1.	Public Announcements.	33
	5.2.	Further Assurances.	34
	5.3.	Transfer Agreements.	34
	5.4.	Release.	34
	5.5.	Consents.	34
	5.6.	Best Efforts.	34
	5.7.	Employees, Vendors and Customers.	34
	5.8.	Tax Matters.	34
	5.9.	Employee Matters.	35
	5.10.	No Employment Rights.	35
	5.11.	Employment Agreement.	35
	5.12.	Non-Competition.	35
	5.13.	Litigation Support.	37
	5.14.	Transition.	37
	5.15.	No Third Party Beneficiaries.	37
	5.16.	Exclusivity.	37
	5.17.	Capital Financing.	37
	5.18.	Intellectual Property Matters.	37
	5.19	Services.	38

ARTICLE VI CONDITIONS			39

	6.1.	Conditions Precedent to the Buyers Obligations.	39
	6.2.	Conditions Precedent to the Sellers Obligations.	41

ARTICLE VII TERMINATION AND ABANDONMENT			42

	7.1.	Termination.	42
	7.2.	Procedures and Effect of Termination.	42

ARTICLE VIII INDEMNIFICATION			43

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	8.1.	The Sellers Obligations to Indemnify.	43
	8.2.	The Buyers Obligations to Indemnify.	43
	8.3.	Notice and Opportunity to Defend.	43
	8.4.	Procedure for Claims by Parties.	45
	8.5.	Limitations on Indemnification.	45
	8.6.	Survival of Representations and Warranties.	46
	8.7.	Purchase Price Adjustment.	46
	8.8.	Right to Offset.	46

ARTICLE IX MISCELLANEOUS			46

	9.1.	Amendment and Modification.	46
	9.2.	Waiver of Compliance; Consents.	46
	9.3.	Notices.	47
	9.4.	Assignment; No Third Party Beneficiaries.	48
	9.5.	Expenses.	48
	9.6.	Governing Law.	48
	9.7.	No Contribution.	49
	9.8.	Counterparts.	49
	9.9.	Entire Agreement.	49
	9.10.	Severability.	49
	9.11.	Waiver.	49
	9.12.	Arms Length Contract.	49
	9.13.	Headings; Interpretation.	50
	9.14.	Specific Performance.	50

- iii -

EXHIBITS


Exhibit A	-	Earn-Out
Exhibit B	-	Form of Assumption Agreement
Exhibit C	-	Form of Bill of Sale
Exhibit D	-	Form of Opinion Letter of Counsel for the Seller
Exhibit E	-	Form of Release
Exhibit F	-	Form of Employment Agreement

SCHEDULES


Schedule 2.1(b)		Capital Items
Schedule 2.1(c)		Inventory
Schedule 2.1(g)		Real Property
Schedule 2.2(e)		Excluded Assets
Schedule 3.1		Certificate of Organization and Limited Liability Company Agreement
Schedule 3.2(b)		Beneficial Ownership
Schedule 3.2(e)		Rights with Respect to Securities
Schedule 3.4		Conflicts, Consents and Approvals of the Seller
Schedule 3.5		Litigation
Schedule 3.6		Financial Statements of the Seller
Schedule 3.8		Tax
Schedule 3.9		Undisclosed or Contingent Liabilities
Schedule 3.10		Real Estate
Schedule 3.11		Conditions of Assets
Schedule 3.12		Insurance
Schedule 3.13		Environmental Matters
Schedule 3.14		Intellectual Property
Schedule 3.15		Permits
Schedule 3.16		Compliance with Laws
Schedule 3.17(a)		Labor
Schedule 3.17(b)		Workers Compensation Claims
Schedule 3.18		Adverse Changes
Schedule 3.19		Transactions with Affiliates
Schedule 3.20		Contracts and Commitments
Schedule 3.21(a)		Employee Benefit Plans
Schedule 3.21(c)		Compliance with Laws
Schedule 3.23		Inventory
Schedule 3.24		Accounts Receivable
Schedule 3.25		Bank Accounts; Officers and Directors
Schedule 3.26		Products Liability
Schedule 3.27		Customers
Schedule 4.3		Conflicts, Consents and Approvals of the Buyer
Schedule 5.9		Employee List
Schedule 5.17		Capital Improvements

- iv -

ASSET PURCHASE AGREEMENT

THIS IS AN ASSET PURCHASE AGREEMENT, dated as of March 7, 2004 (this Agreement), by and among Bio Films, LLC, a Delaware limited liability company (Buyer), Aquafilm, LLC, a Florida limited liability company (Aquafilm), Aquafilm USA, Inc., a North Carolina corporation (Aquafilm USA and, together with Aquafilm, the Sellers), and each of the selling stockholders set forth on the signature pages hereto (each, a Selling Stockholder and, collectively, the Selling Stockholders).

Background

A. The Selling Stockholders own all of the issued and outstanding capital shares of Aquafilm. Aquafilm USA is a wholly-owned subsidiary of Aquafilm.

B. The Buyer is an indirect wholly-owned subsidiary of Bio-Progress plc, a company organized under the laws of England and Wales (the Parent).

At their facilities in Tampa, Florida, the Sellers are engaged in the business of the development and manufacture of edible films manufactured from water soluble and water insoluble polymers with other soluble, digestible ingredients including, but not limited to, for the purpose of packaging applications, and for food, cosmetic, pharmaceutical and consumer dosing applications (the Business).

C. The Sellers desires to sell and transfer to Buyer and Buyer desires to purchase from the Sellers substantially all of the assets of the Sellers used in the Business all upon the terms, and subject to the conditions set forth in this Agreement.

Terms

NOW, THEREFORE, in consideration of the mutual representations, warranties, covenants, and agreements contained herein, and upon the terms and subject to the conditions hereinafter set forth, and intending to be legally bound hereby, the parties do hereby agree as follows:

ARTICLE I

DEFINITIONS

1.1. Definitions. As used in this Agreement, the following terms shall have the following meanings:

Admission means the admission of the Placing Shares to trading on AIM becoming effective in accordance with the AIM Rules.

Aggregate Earn-Out Consideration equals the aggregate earn-out payments, if any, payable in accordance with Exhibit A hereto.

AIM means the Alternative Investment Market of the London Stock Exchange plc.

AIM Rules means the AIM admission rules published by the London Stock Exchange as in force at the date of this Agreement or, where the context requires, as amended or modified after the date of this Agreement.

Encumbrance means any encumbrance of any kind whatsoever and includes any security interest, mortgage, deed of trust, lien, judgment, tax lien, sewer rent, assessment, mechanics or materialmens lien, hypothecation, pledge, assignment, easement, servitude, right of way, restriction, tenancy, encroachment or burden or any other right or claim of others affecting the Purchased Assets and any restrictive covenant or other agreement, restriction or limitation on the use of the Purchased Assets.

GAAP means United States generally acceptable accounting principles.

Material Adverse Effect means, individually or together with other adverse effects, any material adverse effect (i) on the assets, liabilities, operations (including relationships with vendors, suppliers, customers and employees), business, results of operations or financial condition or prospects of the Sellers or the Business, (ii) on the ability of the Sellers to consummate the transactions contemplated hereby, or (iii) on the ability of the Sellers or the Business to continue to operate its business after the Closing in substantially the same manner as such business is conducted prior to the Closing.

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