Asset Purchase Agreement - AstraZeneca AB and NeoSan Pharmaceuticals Inc.
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ASSET PURCHASE AGREEMENT
by and between
ASTRAZENECA AB
and
NEOSAN PHARMACEUTICALS INC.
dated as of July 25, 2001
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TABLE OF CONTENTS
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ARTICLE I. DEFINITIONS.................................................1
Section 1.01 Defined Terms...............................................1
Section 1.02 Construction of Certain Terms and Phrases...................9
ARTICLE II. PURCHASE AND SALE OF ASSETS.................................9
Section 2.01 Purchase and Sale of Assets.................................9
Section 2.02 Assignability and Consents.................................10
ARTICLE III. ASSUMPTION OF LIABILITIES..................................10
Section 3.01 Assumption of Assumed Liabilities..........................10
ARTICLE IV. PURCHASE PRICE AND PAYMENT.................................11
Section 4.01 Purchase Price.............................................11
Section 4.02 Allocation of Purchase Price...............................12
Section 4.03 Payment of Sales, Use and Other Taxes......................12
ARTICLE V. CLOSING....................................................12
Section 5.01 Time and Place.............................................12
Section 5.02 Deliveries at Closing......................................12
REPRESENTATIONS AND WARRANTIES OF SELLER...........................................14
Section 6.01 Organization...............................................14
Section 6.02 Authority of Seller........................................14
Section 6.03 Consents and Approvals.....................................15
Section 6.04 Non-Contravention..........................................15
Section 6.05 Assumed Contracts..........................................16
Section 6.06 Intellectual Property Rights...............................17
Section 6.07 Litigation.................................................17
Section 6.08 Compliance with Law........................................17
Section 6.09 Inventory..................................................18
Section 6.10 Regulatory Matters.........................................18
Section 6.11 Marketing Materials........................................18
Section 6.12 Brokers....................................................19
Section 6.13 No Non-Competition Agreements or Preferential Obligations..19
Section 6.14 No Other Representations and Warranties....................19
ARTICLE VII. REPRESENTATIONS AND WARRANTIES OF BUYER....................19
Section 7.01 Corporate Organization.....................................19
Section 7.02 Authority of Buyer.........................................20
Section 7.03 Consents and Approvals.....................................20
Section 7.04 Non-Contravention..........................................20
Section 7.05 Litigation.................................................21
Section 7.06 Brokers....................................................21
Section 7.07 Financial Capability.......................................21
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ARTICLE VIII. COVENANTS OF THE PARTIES...................................21
Section 8.01 Maintenance of Business Prior to Closing...................21
Section 8.02 Reasonable Best Efforts....................................21
Section 8.03 Cooperation................................................22
Section 8.04 Access.....................................................22
Section 8.05 Public Announcements.......................................23
Section 8.06 Bulk Sales.................................................23
Section 8.07 Interim Product Supply.....................................23
Section 8.08 Non-Solicitation...........................................23
Section 8.09 Corporate Names............................................24
Section 8.10 Assistance in Collecting Certain Amounts...................24
Section 8.11 Handling of Inventory......................................24
Section 8.12 Differentiation of Products................................25
Section 8.13 Regulatory Matters.........................................25
Section 8.14 Product Returns............................................26
Section 8.15 Further Assurances.........................................26
Section 8.16 Technical Transfer for Commercial Manufacture of Products..27
Section 8.17 Transitional Distribution by Seller........................27
Section 8.18 Regulatory Transition by Seller............................27
Section 8.19 Reformulation of MVI-12 Product............................28
Section 8.20 Irrevocable Letter of Credit...............................31
ARTICLE IX. CONDITIONS TO THE OBLIGATIONS OF SELLER....................32
Section 9.01 Representations, Warranties and Covenants..................32
Section 9.02 No Actions or Proceedings..................................32
Section 9.03 Consents...................................................32
Section 9.04 Other Closing Deliveries...................................32
ARTICLE X. CONDITIONS TO THE OBLIGATIONS OF BUYER.....................33
Section 10.01 Representations, Warranties and Covenants..................33
Section 10.02 No Actions or Proceedings..................................33
Section 10.03 Consents...................................................33
Section 10.04 Other Closing Deliveries...................................33
Section 10.05 Receipt of Funds...........................................33
ARTICLE XI. INDEMNIFICATION............................................34
Section 11.01 Survival of Representations, Warranties, Etc...............34
Section 11.02 Indemnification............................................34
Section 11.03 Limitations................................................37
Section 11.04 Remedies Exclusive.........................................37
ARTICLE XII. TERMINATION AND ABANDONMENT................................38
Section 12.01 Methods of Termination.....................................38
Section 12.02 Procedure upon Termination.................................39
ARTICLE XIII. MISCELLANEOUS..............................................39
Section 13.01 Confidentiality............................................39
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Section 13.02 Notices....................................................40
Section 13.03 Entire Agreement...........................................41
Section 13.04 Waiver.....................................................41
Section 13.05 Amendment..................................................42
Section 13.06 Third Party Beneficiaries..................................42
Section 13.07 Assignment; Binding Effect.................................42
Section 13.08 Headings...................................................42
Section 13.09 Severability...............................................42
Section 13.10 Governing Law..............................................42
Section 13.11 Consent to Jurisdiction and Forum Selection................43
Section 13.12 Expenses...................................................43
Section 13.13 Counterparts...............................................43
Section 13.14 Schedules, Exhibits and Other Agreements...................43
Section 13.15 Seller and its Affiliates..................................44
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EXHIBITS
A - Interim Supply Agreement
B - Commitment Letter
C - HSR Filing Joint Public Statement
D - Closing Public Statement
E - Letter of Credit
F - Reimbursement Policy
SELLER DISCLOSURE SCHEDULE
1.01(nn) Trademarks and Servicemarks
4.02 Purchase Price Allocation
6.03(a) Seller Governmental Consents
6.03(b) Required Seller Third Party Consents
6.03(c) Other Seller Third Party Consents
6.05(a) Product Contracts
6.05(b) Multi-Product Contracts
6.05(c) Excluded Contracts
6.06(a) Registered Intellectual Property
6.08 Compliance
6.10 Regulatory Approvals
BUYER DISCLOSURE SCHEDULE
7.03 Consents and Approvals
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ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement (this "Agreement") is made and entered
into as of July 25, 2001, by and between NeoSan Pharmaceuticals Inc., a Delaware
corporation ("Buyer") and AstraZeneca AB, a corporation organized under the laws
of Sweden, on behalf of itself and its relevant Affiliates (as defined below)
("Seller").
RECITALS
WHEREAS, Seller and certain of its Affiliates (as defined below) are
engaged in the business of manufacturing (or having manufactured), marketing,
selling and distributing the Products (as defined below) in the United States
(as defined below) (the "Business").
WHEREAS, subject to the terms and conditions of this Agreement, Seller
desires to sell to Buyer, and Buyer desires to purchase from Seller,
substantially all of the assets, tangible and intangible, associated with the
Business and the Products.
AGREEMENT
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and promises contained herein, and for other good and valuable
consideration, the receipt and sufficiency of which hereby are acknowledged, the
parties agree as follows:
ARTICLE I. DEFINITIONS
SECTION 1.01 DEFINED TERMS.
As used in this Agreement, the following defined terms have the
meanings described below:
(a) "Accounts Receivable" means all trade accounts and notes
receivable and other miscellaneous receivables of the Business,
including those that are not evidenced by instruments or invoices,
existing as of the Closing.
(b) "Action or Proceeding" means any action, suit, proceeding,
arbitration, Order, inquiry, hearing, assessment with respect to fines
or penalties, or litigation (whether civil, criminal, administrative,
investigative or informal) commenced, brought, conducted or heard by or
before, or otherwise involving, any Governmental or Regulatory
Authority.
(c) "Adverse Effect" means an effect or condition that
individually or in the aggregate is materially adverse to (i) the
Purchased Assets taken as a whole; (ii) the business, results of
operations, or financial condition of the Business taken as
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a whole; (iii) the MVI-12 Product taken individually; and (iv) the
Pediatric Product taken individually.
(d) "Affiliate" means, with respect to any Person, another Person
that directly, or indirectly through one or more intermediaries,
controls, is controlled by or is under common control with such Person.
"Control" and, with correlative meanings, the terms "controlled by" and
"under common control with" means the power to direct or cause the
direction of the management or policies of a Person, whether through
the ownership of voting securities, by contract, resolution, regulation
or otherwise.
(e) "Agreement" has the meaning set forth in the Preamble hereto.
(f) "Approval Date" means the date on which the waiting period
(and any extension thereof) under the Hart-Scott-Rodino Act applicable
to the transactions contemplated hereby expires or is terminated.
(g) "Aquasol A Product" means the vitamin A pharmaceutical product
marketed and sold under the trademark "Aquasol A".
(h) "Aquasol E Product" means the vitamin E nutritional product
marketed and sold under the trademark "Aquasol E".
(i) "Assets and Properties" and "Assets or Properties" of any
Person means all assets and properties of any kind, nature, character
and description (whether real, personal or mixed, whether tangible or
intangible, whether absolute, accrued, contingent, fixed or otherwise
and wherever situated), including the goodwill related thereto,
operated, owned or leased by such Person, including cash, cash
equivalents, accounts and notes receivable, chattel paper, documents,
instruments, general intangibles, real estate, equipment, inventory,
goods and intellectual property.
(j) "Assumed Contract" means (i) any Contract to which Seller or
any of its Affiliates is a party that relates exclusively to the
manufacture, marketing, sale or distribution of any of the Products, as
well as any payments required to be made thereunder accruing after the
Closing, including those Contracts identified in Section 6.05(a) of the
Seller Disclosure Schedule; and (ii) Seller's rights and obligations
under the Multi-Product Contracts, but only to the extent that such
rights and obligations relate solely to the supply of the Products.
(k) "Assumed Liabilities" means (i) all accounts payable incurred
by Seller or an Affiliate of Seller in the Ordinary Course of Business
with respect to the Business prior to the Closing to the extent related
to goods, services or other benefits to be provided to the Business
subsequent to the Closing; (ii) all Liabilities and obligations that
Buyer has expressly assumed or agreed to assume under this Agreement or
the Interim Supply Agreement; (iii) all Liabilities and
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obligations under or pursuant to the Assumed Contracts to be performed
following the Closing, including any obligations of Seller and its
Affiliates to deliver Products following the Closing under purchase
orders of, or commitments to, Persons entered into in the Ordinary
Course of Business prior to the Closing (it being understood that if
such obligations were paid for by the Person ordering such Products
prior to the Closing, the Seller or the relevant Affiliate will deliver
to Buyer such payment following satisfaction of the delivery
obligations); (iv) Government Rebates that become payable 45 days
following the Closing or thereafter; (v) Other Rebates that are
submitted after 45 days following the Closing; (vi) all Liabilities and
obligations relating to recalls or product liability claims or
threatened claims or injuries caused by Products delivered after the
Closing; (vii) Seller's obligations under the Federal Supply Schedule
and Section 340B of the Public Health Services Act to supply the
Products at the respective prices therein; and (viii) all other
Liabilities and obligations that arise out of or are related to the
Purchased Assets (including the Regulatory Approvals), the Business or
the Products, attributable to occurrences and circumstances arising
after the Closing.
(l) "Base Purchase Price" has the meaning set forth in Section
4.01.
(m) "BOA" has the meaning set forth in Section 8.20.
(n) "Books and Records" means all files, documents, instruments,
papers, books and records (scientific or financial) of Seller or an
Affiliate of Seller to the extent relating to the Purchased Assets,
Products or Business (other than Marketing Materials), including any
pricing lists, customer lists (to the extent owned by Seller or its
Affiliates), vendor lists, financial data, regulatory information or
files (including adverse event reports and annual regulatory reports),
litigation, adverse claims or demands, investigation information or
files, trademark registration certificates, trademark renewal
certificates, and other documentation relating to the Intellectual
Property, the Products or the Regulatory Approvals, but excluding any
such items (i) to the extent that any applicable Law prohibits their
transfer, (ii) to the extent that any transfer thereof would cause
Seller or any of its Affiliates to violate confidentiality provisions
thereunder, (iii) received from third-parties in connection with their
acquisition of the Purchased Assets, the Products or Business, or (iv)
specifically prepared by Seller for the negotiation of this Agreement.
(o) "Business" has the meaning set forth in the recitals to this
Agreement.
(p) "Business Day" means a day other than Saturday, Sunday or any
day on which banks located in New York are authorized or obligated to
close.
(q) "Buyer" has the meaning set forth in the preamble to this
Agreement.
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(r) "Buyer Disclosure Schedule" has the meaning set forth in the
preamble of Article VII to this Agreement.
(s) "Buyer Governmental Consents" has the meaning set forth in
Section 7.03.
(t) "Closing" has the meaning set forth in Section 5.01.
(u) "Closing Date" means the date that the Closing actually occurs
as provided in Section 5.01.
(v) "Commitment Letter" has the meaning set forth in Section 10.5.
(w) "Contract" means any and all legally binding commitments,
contracts, purchase orders, leases, or other agreements, whether
written or oral.
(x) "Corporate Names" has the meaning set forth in Section
8.09(a).
(y) "Damages" has the meaning set forth in Section 11.02(a).
(z) "Draw Date" has the meaning set forth in Section 8.20.
(aa) "Encumbrance" means any mortgage, pledge, assessment, security
interest, deed of trust, lease, lien, adverse claim, levy, charge or
other encumbrance of any kind, or any conditional sale or title
retention agreement or other agreement to give any of the foregoing in
the future.
(bb) "Excluded Assets" means all Assets and Properties of Seller
and its Affiliates except the Purchased Assets.
(cc) "Excluded Liabilities" means all Liabilities of Seller and its
Affiliates except the Assumed Liabilities. The term "Excluded
Liabilities" includes, by example, all Liabilities of Seller and its
Affiliates for Government Rebates or Other Rebates (other than those
included in Assumed Liabilities) for Products sold prior to Closing and
becoming payable by Buyer or Seller within 45 days after the Closing
Date. The term "Excluded Liabilities" includes all Liabilities of
Seller and its Affiliates for recalls and product liability for
Products sold by Seller before the Closing Date. The Parties agree that
in the event that a Liability arises relating to a recall or product
liability claim in respect of a Product and the Party that sold such
Product cannot be determined, such Liability shall be shared between
each of Seller and Buyer in the same proportion that the total amount
of that type of Product sold by each Party during the time period in
which the Product that caused such Liability was alleged to have been
sold bears to the aggregate amount of that type of Product sold by both
Parties during such period.
(dd) "Expiration Date" means the date one year after the Closing
Date.
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(ee) "FDA" means the United States Food and Drug Administration.
(ff) "First Installment" has the meaning set forth in Section
4.01(a)(ii).
(gg) "First Return Period" has the meaning set forth in Section
8.14.
(hh) "Governmental or Regulatory Authority" means any court,
tribunal, arbitrator, authority, agency, commission, official or other
instrumentality of the United States or other country, or any
supra-national organization, state, county, city or other political
subdivision.
(ii) "Government Rebates" means all state and federal
Medicaid/Medicare rebates related to the Products.
(jj) "Indemnification Claim Notice" has the meaning set forth in
Section 11.02(c).
(kk) "Indemnified Party" has the meaning set forth in Section
11.02(c).
(ll) "Indemnitee" and "Indemnitees" have the respective meanings
set forth in Section 11.02(c).
(mm) "Injectable Multivitamin Pharmaceutical Field" has the meaning
set forth in Section 8.19.
(nn) "Intellectual Property" means any and all of the following
intellectual property rights owned by or licensed to Seller and its
Affiliates, to the extent used in connection with or pertaining to the
Purchased Assets, the Products or the Business: (i) Know-How; (ii) any
material which could be copyrighted; (iii) internet domain names in the
United States; and (iv) the trademarks and service marks listed in
Schedule 1.01(nn).
(oo) "Interim Supply Agreement" has the meaning set forth in
Section 8.07.
(pp) "Inventory" means all inventory of finished Products owned as
of the Closing by Seller or any Affiliate thereof, whether held at a
location or facility of Seller or any Affiliate (or of any other Person
on behalf of Seller or any Affiliate) or in transit to or from Seller
or any Affiliate (or any such other Person).
(qq) "Know-How" means all information and materials owned by or
licensed to Seller and its Affiliates, to the extent used in connection
with or pertaining to the Purchased Assets, the Products or the
Business, including any Product specifications, technical knowledge,
expertise, skill, practice, procedures, formulae, trade secrets,
inventions, confidential information, analytical methodology,
processes, methods, preclinical, clinical, stability and other data and
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results, market studies and all other experience and know-how, in each
case in tangible form, whether or not patentable.
(rr) "Knowledge" with respect to any Party, means the actual
knowledge of the senior executive officers (or persons performing
similar functions) of such Person, after reasonable inquiry.
(ss) "Law" means any federal, state or local law, statute or
ordinance, or any rule, regulation, or published guidelines promulgated
by any Governmental or Regulatory Authority.
(tt) "Letter of Credit" has the meaning set forth in Section 8.20.
(uu) "Liability" means any liability (whether known or unknown,
asserted or unasserted, absolute or contingent, accrued or unaccrued,
liquidated or unliquidated, and due or to become due), including any
liability for Taxes (whether arising under Treasury Regulation
ss.1.1502-6 or otherwise).
(vv) "Marketing Materials" means (i) to the extent Seller is able
to share such materials with Buyer without violation of any third-party
confidentiality agreement, all market research, marketing plans, media
plans, advertising, marketing-related clinical study results, form
letters and medical queries, sales training materials, customer lists
and information with respect to sales of Products (including doctors,
GPOs and pharmacists), promotional and marketing books and records
owned by Seller and its Affiliates and used exclusively in connection
with the marketing and promotion of the Products; and (ii) those items
of advertising and promotional materials and literature owned by Seller
and its Affiliates as of the Closing and used exclusively in connection
with the advertising and promotion of the Products that Seller, in its
sole discretion, determines to transfer to Buyer (the "Promotional
Materials"), provided that "Marketing Materials" shall exclude the
labeling of the Products, which shall be deemed part of the Regulatory
Approvals.
(ww) "Multi-Product Contracts" has the meaning set forth in Section
6.05.
(xx) "MVI-12 Product" means the vitamin-related pharmaceutical
product marketed and sold under the trademark "MVI-12" (including
MVI-12 single-dose vials, MVI-12 multi-dose vials, and MVI-12 unit-dose
vials).
(yy) "Order" means any writ, judgment, decree, injunction or
similar order of any Governmental or Regulatory Authority (in each such
case whether preliminary or final).
(zz) "Ordinary Course of Business" means such action that is
consistent with the past practices of the Business.
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(aaa) "Other Rebates" means all credits, chargeback rebates,
utilization based rebates, reimbursements, refunds, discounts,
allowances, returns and similar payments to wholesalers and other
distributors, buying groups, insurers and other institutions related to
Products.
(bbb) "Other Seller Third Party Consents" has the meaning set forth
in Section 6.03(c).
(ccc) "Party" means each of Buyer and Seller.
(ddd) "Pediatric Product" means the vitamin-related pharmaceutical
product marketed and sold under the unregistered trademark
"MVI-Pediatric".
(eee) "Permitted Encumbrance" means (i) any Encumbrance for Taxes
not yet due or delinquent or for those Taxes being contested in good
faith by appropriate proceedings for which adequate reserves have been
established and (ii) any minor imperfection of title or similar
Encumbrance that individually or in the aggregate would not have an
Adverse Effect.
(fff) "Person" means any natural person, corporation, general
partnership, limited partnership, limited liability company,
proprietorship, other business organization, trust, union, association
or Governmental or Regulatory Authority.
(ggg) "Proceeds" has the meaning set forth in Section 8.19.
(hhh) "Product" or "Products" means each or all of the following
products: (i) the MVI-12 Product; (ii) the Pediatric Product; (iii) the
Aquasol A Product; and (iv) the Aquasol E Product.
(iii) "Product Contracts" has the meaning set forth in Section
6.05(a).
(jjj) "Promotional Materials" has the meaning set forth in Section
1.01(vv).
(kkk) "Purchase Price" has the meaning set forth in Section 4.01.
(lll) "Purchased Assets" means, subject to Section 2.02: (i) the
Intellectual Property; (ii) the Assumed Contracts; (iii) the Marketing
Materials; (iv) the Books and Records; (v) the Regulatory Approvals;
(vi) all website addresses and URLs incorporating or referencing any of
the Products' names or trademarks; (vii) all rights, title and interest
in and to the Products; and (viii) the Inventory. The Purchased Assets
do not include any fixed assets.
(mmm) "Reformulation Intellectual Property" has the meaning set
forth in Section 8.19.
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(nnn) "Reformulation Intellectual Property License" has the meaning
set forth in Section 8.19.
(ooo) "Reformulation Intellectual Property Litigation" has the
meaning set forth in Section 8.19.
(ppp) "Reformulation SNDA" has the meaning set forth in Section
4.01.
(qqq) "Registered Intellectual Property" means all of the following
Intellectual Property registered or filed in the United States: (i) the
trademarks listed on Schedule 6.06(a) and (ii) internet domain names
registered with registrars accredited by the Internet Corporation for
Assigned Names and Numbers.
(rrr) "Regulatory Approvals" means, with respect to each Product,
the New Drug Application for such Product identified in Section 6.10 of
the Seller Disclosure Schedule, all supplements thereto and the
official regulatory files and data in Seller's possession or control as
of the Closing relating thereto.
(sss) "Remaining Purchase Price" has the meaning set forth in
Section 4.01(a)(v).
(ttt) "Second Contingent Installment" has the meaning set forth in
Section 4.01(a)(iv).
(uuu) "Second Installment" has the meaning set forth in Section
4.01(a)(iii).
(vvv) "Second Return Period" has the meaning set forth in Section
8.14.
(www) "Seller" has the meaning set forth in the Preamble to this
Agreement.
(xxx) "Seller Disclosure Schedule" has the meaning set forth in the
preamble to Article VI of this Agreement.
(yyy) "Seller Governmental Consents" has the meaning set forth in
Section 6.03(a).
(zzz) "Seller's Reformulation Efforts" has the meaning set forth in
Section 8.19.
(aaaa) "Seller Third Party Consents" has the meaning set forth in
Section 6.03(b).
(bbbb) "Tax" means all of the following tax in connection with the
operations of the Business or the transactions contemplated hereby: (i)
any net income, alternative or add-on minimum tax, gross income, gross
receipts, sales, use, ad valorem, transfer, franchise, profits,
license, excise, severance, stamp, occupation, premium, property,
environmental or windfall profit tax, custom, duty or other tax,
governmental fee or other like assessment imposed by an governmental,
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regulatory or administrative entity or agency responsible for the
imposition of any such tax in the United States; (ii) any Liability for
the payment of any amounts of the type described in (i) above as a
result of being a member of any affiliated, consolidated, combined,
unitary or other group for any Taxable period; and (iii) any Liability
for the payment of any amounts of the type described in (i) or (ii)
above as a result of any express or implied obligation to indemnify any
other person.
(cccc) "Third Party Claim" has the meaning set forth in Section
11.02(d).
(dddd) "United States" means the United States of America, its
territories and possessions, including Washington, D.C. and Puerto
Rico.
SECTION 1.02 CONSTRUCTION OF CERTAIN TERMS AND PHRASES.
Unless the context of this Agreement otherwise requires: (a) words of
any gender include each other gender; (b) words using the singular or plural
number also include the plural or singular number, respectively; (c) the terms
"hereof," "herein," "hereby" and derivative or similar words refer to this
entire Agreement; (d) the terms "Article" or "Section" refer to the specified
Article or Section of this Agreement; (e) the term "or" has, except where
otherwise indicated, the inclusive meaning represented by the phrase "and/or";
and (f) the term "including" or "includes" means "including without limitation"
or "includes without limitation." Whenever this Agreement refers to a number of
days, such number shall refer to calendar days unless Business Days are
specified.
ARTICLE II. PURCHASE AND SALE OF ASSETS
SECTION 2.01 PURCHASE AND SALE OF ASSETS.
(a) Subject to the terms and conditions of this Agreement, at the
Closing, Seller shall, or shall cause its relevant Affiliates to, sell,
transfer, convey, assign and deliver to Buyer, free and clear from all
Encumbrances other than Permitted Encumbrances, and Buyer shall
purchase, acquire and accept from Seller and such Affiliates of Seller,
all of Seller's and each such Affiliate's right, title and interest, as
of the Closing, in and to the Purchased Assets.
(b) Buyer acknowledges and agrees that the rights related to the
Products and the Business conveyed by Seller and its Affiliates
hereunder are restricted solely to the United States and nothing herein
shall authorize Buyer to manufacture, market, sell, distribute or
otherwise exploit the Products outside of the United States.
(c) Notwithstanding anything contained in this Agreement to the
contrary, (i) from and after the Closing Seller and its Affiliates
shall retain all of their right, title and interest in and to the
Excluded Assets; and (ii) Seller may retain an archival copy of all
Assumed Contracts, Books and Records, Marketing Materials
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and other documents or materials conveyed hereunder (but Seller and its
Affiliates shall not use any such archival copy for any other purposes
than as an archive).
SECTION 2.02 ASSIGNABILITY AND CONSENTS.
Notwithstanding anything to the contrary contained in this Agreement,
if the sale, assignment, transfer, conveyance or delivery or attempted sale,
assignment, transfer, conveyance or delivery to Buyer of any asset that would be
a Purchased Asset is (a) prohibited by any applicable Law or (b) would require
any authorizations, approvals, consents or waivers from a third Person or
Governmental or Regulatory Authority and such authorizations, approvals,
consents or waivers shall not have been obtained prior to the Closing, then in
either case the Closing shall proceed without the sale, assignment, transfer,
conveyance or delivery of such asset and this Agreement shall not constitute a
sale, assignment, transfer, conveyance or delivery of such asset; provided that
nothing in this Section 2.02 shall be deemed to waive the rights of Buyer not to
consummate the transactions contemplated by this Agreement if the conditions to
its obligations set forth in Article X have not been satisfied. Subject to
Section 8.02, in the event that the Closing proceeds without the sale,
assignment, transfer, conveyance or delivery of any such asset, then following
the Closing, the parties shall use their reasonable best efforts, and cooperate
with each other, to obtain promptly such authorizations, approvals, consents or
waivers; provided, however, that Seller shall not be required to pay any
consideration to obtain any such authorization, approval, consent or waiver.
Subject to Section 8.02, pending such authorization, approval, consent or
waiver, the parties shall cooperate with each other in any mutually agreeable,
reasonable and lawful arrangements designed to provide to Buyer the benefits of
use of such asset and to Seller the benefits, including any indemnities, that,
in each case, it would have obtained had the asset been conveyed to Buyer at the
Closing. To the extent that Buyer is provided the benefits pursuant to this
Section 2.02 of any Assumed Contract, Buyer shall (x) perform for the benefit of
the other parties thereto the obligations of Seller or any Affiliate of Seller
thereunder, including any payments to be made thereunder; and (y) shall satisfy
any related Liabilities with respect to such Assumed Contract that, but for the
lack of an authorization, approval, consent or waiver to assign such obligations
or Liabilities to Buyer, would be Assumed Liabilities. If authorization,
approval, consent or waiver for the sale, assignment, transfer, conveyance or
delivery of any such asset not sold, assigned, transferred, conveyed or
delivered at the Closing is obtained, Seller shall assign, transfer, convey and
deliver such asset to Buyer at no additional cost to Buyer.
ARTICLE III. ASSUMPTION OF LIABILITIES
SECTION 3.01 ASSUMPTION OF ASSUMED LIABILITIES.
Subject to the terms and conditions of this Agreement, as of the
Closing Date, Buyer agrees to assume, satisfy, perform, pay and discharge the
Assumed Liabilities.
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ARTICLE IV. PURCHASE PRICE AND PAYMENT
SECTION 4.01 PURCHASE PRICE.
As consideration for the Purchased Assets, Buyer shall:
(a) deliver or cause to be delivered to Seller:
(i) at the Closing, the sum of $52.5 million (the "Base
Purchase Price") in immediately available funds by
wire transfer into an account designated by Seller
two Business Days before the Closing;
(ii) subject to Section 8.14, on the first anniversary of
the Closing Date, an additional payment of $1.0
million (the "First Installment") in immediately
available funds by wire transfer into an account
designated by Seller two Business Days before such
amount is due;
(iii) subject to Section 8.14, on the second anniversary of
the Closing Date, an additional payment of $1.0
million (the "Second Installment") in immediately
available funds by wire transfer into an account
designated by Seller two Business Days before such
amount is due;
(iv) subject to the last paragraph of this Section 4.01,
on the second anniversary of the Closing Date, an
additional payment of $2.0 million (the "Second
Contingent Installment") in immediately available
funds by wire transfer into an account designated by
Seller two Business Days before such amount is due;
(v) subject to the last paragraph of this Section 4.01,
on the third anniversary of the Closing Date, an
additional $43.5 million (the "Remaining Purchase
Price") in immediately available funds by wire
transfer into an account designated by Seller two
Business Days before such amount is due;
(the Base Purchase Price, First Installment, Second Installment, Second
Contingent Installment and Remaining Purchase Price are collectively
referred to herein as the "Purchase Price"); and
(b) assume the Assumed Liabilities at the Closing.
The Remaining Purchase Price shall be paid to Seller only in the event that the
FDA has approved a supplemental New Drug Application relating to the
reformulation of the MVI-12
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Product pursuant to the Federal Register Notice published by the FDA on April
20, 2000 [Docket No. 79N-0113] (the "Reformulation SNDA") and that such
reformulation of the MVI-12 Product has a minimum shelf life of twelve months.
In the event that FDA approval of the Reformulation SNDA has not been granted by
December 31, 2002, the Remaining Purchase Price shall be reduced by $1 million
for each full month thereafter that such condition remains unsatisfied. If the
FDA approval of the Reformulation SNDA has not been granted by December 31,
2003, then the Remaining Purchase Price will equal zero. The Second Contingent
Installment shall be payable by Buyer to Seller only in the event that the FDA
has approved the Reformulation SNDA by December 31, 2002.
SECTION 4.02 ALLOCATION OF PURCHASE PRICE.
The Purchase Price shall be allocated among the Purchased Assets as set
forth on Schedule 4.02 hereto. Buyer and Seller agree (a) to report the sale and
purchase of the Purchased Assets for Tax purposes in accordance with the
allocations set forth on Schedule 4.02 hereto and (b) not to take any position
inconsistent with such allocations on any of their respective tax returns.
SECTION 4.03 PAYMENT OF SALES, USE AND OTHER TAXES.
Buyer shall be solely responsible for all sales, use, transfer, value
added and other related Taxes, if any, arising out of the sale by Seller and its
Affiliates of the Purchased Assets to Buyer pursuant to this Agreement.
ARTICLE V. CLOSING
SECTION 5.01 TIME AND PLACE.
Unless this Agreement is earlier terminated pursuant to Article XII,
the closing of the transactions contemplated by this Agreement, including the
purchase and sale of the Purchased Assets and the assumption of the Assumed
Liabilities (the "Closing"), shall take place on the first Business Day on which
the conditions set forth in Articles IX and X are satisfied or waived, which
Business Day shall be at least three Business Days after the Approval Date, at
the offices of Covington & Burling, 1201 Pennsylvania Avenue, N.W., Washington,
D.C. 20004, unless another time or place shall be agreed to by the parties.
SECTION 5.02 DELIVERIES AT CLOSING.
(a) Closing Deliveries by Seller. At the Closing, Seller shall
deliver or cause to be delivered to Buyer:
(i) physical possession of all tangible personal property
included in the Purchased Assets, including (A) the
Inventory (which shall be delivered at the respective
locations thereof at the time of the Closing); (B)
the Regulatory Approvals; (C) the Marketing
Materials; and (D) the Books and Records, and
appropriate
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documents of transfer related thereto in form and
substance reasonably acceptable to Seller and Buyer;
(ii) an original Intellectual Property assignment of the
Intellectual Property in form and substance
reasonably acceptable to Seller and Buyer;
(iii) assignment and assumption agreements, in form and
substance reasonably acceptable to Seller and Buyer,
assigning to Buyer all rights of Seller and its
Affiliates in and to the Assumed Contracts;
(iv) copies of all Seller Governmental Consents and
Required Seller Third Party Consents and all Other
Seller Third Party Consents obtained as of Closing;
(v) a duly executed counterpart of the Interim Supply
Agreement;
(vi) a certificate dated the Closing Date and executed by
a duly authorized officer of Seller stating that all
representations and warranties of Seller contained in
this Agreement are true and correct in all material
respects on and as of the Closing Date as though
given on and as of such date and Seller has performed
all agreements and covenants required by this
Agreement to be performed by it prior to or on the
Closing Date, except where the failure of any
representations and warranties to be true and
correct, individually or in the aggregate, will not
have an Adverse Effect; and
(vii) the certificates and other documents to be delivered
pursuant to Article X hereof.
(b) Closing Deliveries by Buyer. At the Closing, Buyer will
deliver or cause to be delivered to Seller:
(i) the Base Purchase Price;
(ii) such instruments of assumption and other instruments
or documents, in form and substance reasonable
acceptable to Seller and Buyer, as may be necessary
to effect Buyer's assumption of the Assumed
Liabilities;
(iii) copies of all Buyer Governmental Consents;
(iv) a duly executed counterpart of the Interim Supply
Agreement;
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(v) a certificate dated the Closing Date and executed by
a duly authorized officer of Buyer stating that all
representations and warranties of Buyer contained in
this Agreement are true and correct in all material
respects on and as of the Closing Date as though
given on and as of such date and Buyer has performed
all agreements and covenants required by this
Agreement to be performed by it prior to or on the
Closing Date; and
(vi) the certificates and other documents to be delivered
pursuant to Article IX hereof.
ARTICLE VI. REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Buyer as of the date hereof, subject
to such exceptions as are specifically disclosed in the disclosure schedule
(referencing the appropriate Sections hereof) supplied by Seller to Buyer and
dated as of the date hereof (the "Seller Disclosure Schedule"), which Seller
Disclosure Schedule shall be deemed to be representations and warranties of
Seller as if made herein, as follows:
SECTION 6.01 ORGANIZATION.
Seller is a corporation duly organized, validly existing and in good
standing under the laws of Sweden and has all requisite power and authority to
own its assets and carry on the Business as currently conducted by it. Each
Affiliate of Seller transferring any Purchased Assets is duly organized, validly
existing and in good standing under the laws of its jurisdiction of organization
and has all requisite power and authority to own its assets and carry on the
Business as currently conducted by it. Each of Seller and its Affiliates
transferring Purchased Assets is duly authorized to conduct its business and is
in good standing in each jurisdiction where such qualification is required,
except for any jurisdiction where failure to so qualify could not reasonably be
expected to have an Adverse Effect or materially impair or delay Seller's
ability to perform its obligations hereunder.
SECTION 6.02 AUTHORITY OF SELLER.
Seller has all necessary power and authority and has taken all actions
necessary to enter into this Agreement and to carry out the transactions
contemplated hereby. Seller has taken all action required by Law, its Deed of
Formation, Articles of Association or otherwise to be taken by it to authorize
the execution and delivery of this Agreement by Seller and the consummation of
the transactions contemplated hereby. This Agreement has been duly and validly
executed and delivered by Seller and, when executed and delivered by Buyer, will
constitute a legal, valid and binding obligation of Seller enforceable against
it in accordance with its terms except (a) as limited by applicable bankruptcy,
insolvency, reorganization, moratorium and other laws of general application
affecting enforcement of creditors' rights generally, and (b) as limited by laws
relating to the availability of specific performance, injunctive relief or other
equitable remedies.
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SECTION 6.03 CONSENTS AND APPROVALS.
(a) Section 6.03(a) of the Seller Disclosure Schedule sets forth a
complete and accurate list of all consents, waivers, approvals, Orders
or authorizations of, or registrations, declarations or filings with,
any Governmental or Regulatory Authority that are required by or with
respect to Seller or its Affiliates in connection with the execution
and delivery of this Agreement by Seller or the performance of its
obligations hereunder, except for such consents, waivers, approvals,
Orders or authorizations the failure to obtain which, and such
registrations, declarations or filings the failure to make which, would
not have an Adverse Effect or materially impair or delay Seller's
ability to perform its obligations hereunder (the "Seller Governmental
Consents").
(b) Section 6.03(b) of the Seller Disclosure Schedule sets forth a
complete and accurate list of all consents, waivers, approvals, or
authorizations of, or notices to, any third party (other than a
Governmental or Regulatory Authority) that are required by or with
respect to Seller or its Affiliates in connection with the execution
and delivery of this Agreement by Seller or the performance of its
obligations hereunder, except for such consents, waivers, approvals, or
authorizations the failure to obtain which, and such notices the
failure to give which, would not have an Adverse Effect or materially
impair or delay Seller's ability to perform its obligations hereunder
(the "Required Seller Third Party Consents").
(c) Section 6.03(c) of the Seller Disclosure Schedule sets forth a
complete and accurate list of other consents, waivers, approvals, or
authorizations of, or notices to, any third party (other than a
Governmental or Regulatory Authority) that are required by or with
respect to Seller or its Affiliates in connection with the execution
and delivery of this Agreement by Seller or the performance of its
obligations hereunder, which Buyer acknowledges and agrees are not
material to conduct of the Business (the "Other Seller Third Party
Consents").
SECTION 6.04 NON-CONTRAVENTION.
The execution and delivery by Seller of this Agreement does not, and
the performance by it or its relevant Affiliates of its or their obligations
under this Agreement and the consummation of the transactions contemplated
hereby will not:
(a) conflict with or result in a violation or breach of any of the
terms, conditions or provisions of the Deed of Formation, Articles of
Association or other organizational documents of Seller or its relevant
Affiliates;
(b) assuming the receipt of all consents, waivers, approvals,
Orders or authorizations of Governmental and Regulatory Authorities
required to be obtained by Seller and the making of all registrations,
declarations or filings with Governmental and Regulatory Authorities
required to be made by Seller, conflict
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with or result in a violation or breach of any term or provision of any
Law applicable to Seller, the Business, the Products or the Purchased
Assets; or
(c) assuming the receipt of all consents, waivers, approvals, or
authorizations of any third party (other than a Governmental or
Regulatory Authority) required to be obtained by Seller and the giving
of all notices to any third party (other than a Governmental or
Regulatory Authority) required to be given by Seller, conflict with or
result in a breach or default (or an event which, with notice or lapse
of time or both, would constitute a breach or default) under any
Assumed Contract, other than such conflicts, breaches or defaults as
would not have an Adverse Effect.
SECTION 6.05 ASSUMED CONTRACTS.
(a) Section 6.05(a) of the Seller Disclosure Schedule sets forth a
complete and correct list of each Contract to which Seller or any of
its Affiliates is a party with a value in excess of $75,000 and that
relates exclusively to (i) the manufacture, marketing, sale or
distribution of any of the Products; (ii) the acquisition, sale,
licensing in or out, or assignment of Intellectual Property; (iii) the
purchase or disposition of assets, or the provision of services, to or
from the Business; or (iv) sales of Products to any Governmental or
Regulatory Authority (collectively, the "Product Contracts"). Seller
has made available to Buyer complete and correct copies of all
Contracts identified in Section 6.05(a) of the Seller Disclosure
Schedule.
(b) Section 6.05(b) of the Seller Disclosure Schedule sets forth a
complete and correct list of each Contract to which Seller or any of
its Affiliates is a party and pursuant to which Seller or its
Affiliates sells one or more Products, together with other
pharmaceutical products of Seller and its Affiliates, to a third party
(the "Multi-Product Contracts"). Seller has made available to Buyer
copies of all Multi-Product Contracts; provided that such copies have
been redacted to prevent disclosure of information not related to the
Products.
(c) Except for the Contracts set forth in Section 6.05(c) of the
Seller Disclosure Schedule, the Product Contracts and the Multi-Product
Contracts are the only Contracts material to Seller's conduct of the
Business in the ordinary course of business prior to the Closing. Each
of the Product Contracts and the Multi-Product Contracts is in effect
and constitutes a legal, valid and binding agreement, enforceable in
accordance with its terms, of Seller or an Affiliate of Seller; and
Seller has performed all of its required material obligations under,
and is not in material violation or breach of or default under, any
such Contract. To the Knowledge of Seller, the other parties to the
Product Contracts and the Multi-Product Contracts are not in material
violation or breach of or default under any such Contract.
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SECTION 6.06 INTELLECTUAL PROPERTY RIGHTS.
(a) Section 6.06(a) of the Seller Disclosure Schedule sets forth a
complete and correct list of all Registered Intellectual Property.
Except as set forth in Section 6.06(a) of the Seller Disclosure
Schedule, Seller or its Affiliates own all right, title and interest in
and to, or have a license, sublicense or other permission to use, all
of the Registered Intellectual Property, free and clear of all
Encumbrances except Permitted Encumbrances. All necessary registration,
maintenance and renewal fees due in connection with such Registered
Intellectual Property have been paid and all necessary documents and
certificates in connection with such Registered Intellectual Property
have been filed with the relevant copyright, trademark or other
Governmental or Regulatory Authorities for the purposes of maintaining
such Registered Intellectual Property.
(b) To the Knowledge of Seller, Seller or its Affiliates own all
right, title and interest in and to, or have a license, sublicense or
other permission to use, all of the Intellectual Property, free and
clear of all Encumbrances except Permitted Encumbrances.
(c) Neither Seller nor any of its Affiliates has received any
written notice from any Person, or has Knowledge, that the operation of
the Business as currently conducted, or any of the Products, infringes
or misappropriates the intellectual property rights of any third party.
(d) All trademarks included in the Registered Intellectual
Property are the subject of current registrations, and have been
continuously used for the uses specified in their trademark
registrations. There are no third-party rights in Seller's current
registrations relating to the Products. Seller and its Affiliates have
no Knowledge of any prior use, infringement, piracy or counterfeiting
of such trademarks, any superior rights by any third party in such
trademarks, or any adverse claims pertaining to such trademarks.
SECTION 6.07 LITIGATION.
There are no Actions or Proceedings pending or, to the Knowledge of
Seller, threatened or reasonably anticipated against, relating to, affecting or
arising in connection with (a) the Purchased Assets or the Business; (b) this
Agreement; (c) the transactions contemplated by this Agreement; or (d) the
Products. Seller is not subject to any Order that could reasonably be expected
to materially impair or delay the ability of Seller to perform its obligations
hereunder.
SECTION 6.08 COMPLIANCE WITH LAW.
Except as described in Section 6.08 of the Seller Disclosure Schedule,
since January 1, 1999, Seller and its Affiliates have operated the Business
substantially in compliance with all applicable Laws, except where failure to so
comply could not reasonably be expected to result in an Adverse Effect and
neither Seller nor any of its Affiliates has received any written
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notice alleging any violation of such Laws except for violations which could not
reasonably be expected to result in an Adverse Effect. Notwithstanding the
foregoing, Buyer acknowledges Seller's disclosure of information concerning the
MVI analytical testing methods used for the Products, and Seller makes no
representations or warranties with respect to such analytical testing methods.
SECTION 6.09 INVENTORY.
(a) All of the finished Products included in Inventory (i) are
saleable in the Ordinary Course of Business, except for normal and
customary amounts of below-standard quality Products; and (ii) were
produced or manufactured in accordance with the specifications for such
Products as set forth in the applicable Regulatory Approval and
substantially in compliance with applicable Law. Seller or its
Affiliates at Closing will have, and Buyer will receive at Closing,
good and marketable title to the Inventory free and clear of any
Encumbrances other than Permitted Encumbrances.
(b) (i) All finished Pediatric Products included in Inventory will
have at least one month of shelf-life remaining as of the Closing; (ii)
all finished MVI-12 Product in the unit-dose vial form included in
Inventory will have at least two months of shelf-life remaining as of
the Closing; (iii) all finished MVI-12 Product in dosage forms other
than the unit-dose vial included in Inventory will have at least three
months of shelf-life remaining as of the Closing; (iv) all finished
Aquasol A Products included in Inventory will have at least three
months of shelf-life remaining as of the Closing; and (v) all finished
Aquasol E Products included in Inventory will have at least 24 months
of shelf-life remaining as of the Closing.
SECTION 6.10 REGULATORY MATTERS.
All of the Regulatory Approvals are current and in full force and
effect, have been duly and validly issued, contain no material error or
omission, and are owned exclusively by Seller or its Affiliates. Except for the
Aquasol E Product, all Products are covered by a Regulatory Approval. There is
no Action or Proceeding by any Governmental or Regulatory Authority pending or,
to the Knowledge of Seller, threatened seeking the recall of any Products or the
revocation or suspension of any Regulatory Approval. Seller has made available
to Buyer complete and correct copies of all Regulatory Approvals. There have
been no past recalls involving the Products, except for two Class II recalls in
1999 of the Pediatric Product for three lots failing stability testing due to
vitamin assays degradation. Notwithstanding the foregoing, Buyer acknowledges
Seller's disclosure of information concerning the MVI analytical testing methods
used for the Products, and Seller makes no representations or warranties with
respect to such analytical testing methods.
SECTION 6.11 MARKETING MATERIALS.
Seller or its Affiliates at Closing will have good and marketable title
to the Marketing Materials free and clear of any Encumbrances other than
Permitted Encumbrances.
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SECTION 6.12 BROKERS.
Seller has not retained any broker in connection with the transactions
contemplated hereunder. Buyer has no, and will have no, obligation to pay any
brokers, finders, investment bankers, financial advisors or similar fees in
connection with this Agreement or the transactions contemplated hereby by reason
of any action taken by or on behalf of Seller.
SECTION 6.13 NO NON-COMPETITION AGREEMENTS OR PREFERENTIAL
OBLIGATIONS.
The Purchased Assets are not subject to any non-competition agreements
with, or other agreements granting preferential rights to purchase or license
the Purchased Assets to, third parties.
SECTION 6.14 NO OTHER REPRESENTATIONS AND WARRANTIES.
EXCEPT FOR THE REPRESENTATIONS OR WARRANTIES EXPRESSLY SET FORTH IN
ARTICLE VI OF THIS AGREEMENT, SELLER DISCLAIMS ALL OTHER REPRESENTATIONS OR
WARRANTIES, WHETHER EXPRESS OR IMPLIED, ORAL OR WRITTEN, INCLUDING ANY
INFORMATION FURNISHED BY SELLER WITH REGARD TO THE PRODUCTS, THE PURCHASED
ASSETS AND THE BUSINESS, INCLUDING THE FUTURE PROFITABILITY OF THE PURCHASED
ASSETS, THE PRODUCTS OR THE BUSINESS, WARRANTIES OF MERCHANTABILITY, FITNESS FOR
A PARTICULAR PURPOSE AND NON-INFRINGEMENT OF INTELLECTUAL PROPERTY RIGHTS.
EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES EXPRESSLY SET FORTH IN THIS
ARTICLE VI, BUYER AGREES THAT SELLER SHALL NOT HAVE ANY LIABILITY TO BUYER
RESULTING FROM THE DISTRIBUTION OF OR FAILURE TO DISTRIBUTE ANY INFORMATION TO
BUYER, OR BUYER'S USE OF ANY INFORMATION, DOCUMENTS OR MATERIALS MADE AVAILABLE
TO BUYER IN ANY FORM.
ARTICLE VII. REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Seller as of the date hereof, subject
to such exceptions as are specifically disclosed in the disclosure schedule
(referencing the appropriate Sections hereof) supplied by Buyer to Seller and
dated as of the date hereof (the "Buyer Disclosure Schedule"), which Buyer
Disclosure Schedule shall be deemed to be representations and warranties of
Buyer as if made herein, as follows:
SECTION 7.01 CORPORATE ORGANIZATION.
Buyer is a corporation duly organized, validly existing and in good
standing under the laws of Delaware and has all requisite power and authority to
own its assets and carry on its business as currently conducted by it. Buyer is
duly authorized to conduct its business and is in good standing in each
jurisdiction where such qualification is required, except for any jurisdiction
where failure to so qualify could not reasonably be expected, individually or in
the
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aggregate, to have a material adverse effect on Buyer or materially impair or
delay Buyer's ability to perform its obligations hereunder.
SECTION 7.02 AUTHORITY OF BUYER.
Buyer has all necessary power and authority and has taken all actions
necessary to enter into this Agreement and to carry out the transactions
contemplated hereby. The Board of Directors of Buyer has taken all action
required by Law, its Certificate of Incorporation, Bylaws or otherwise to be
taken by it to authorize the execution and delivery of this Agreement by Buyer
and the consummation of the transactions contemplated hereby. This Agreement has
been duly and validly executed and delivered by Buyer and, when executed and
delivered by Seller, will constitute a legal, valid and binding obligation of
Buyer enforceable against it in accordance with its terms except (a) as limited
by applicable bankruptcy, insolvency, reorganization, moratorium and other laws
of general application affecting enforcement of creditors' rights generally; and
(b) as limited by laws relating to the availability of specific performance,
injunctive relief or other equitable remedies.
SECTION 7.03 CONSENTS AND APPROVALS.
Section 7.03 of the Buyer Disclosure Schedule sets forth a complete and
accurate list of all consents, waivers, approvals, Orders or authorizations of,
or registrations, declarations or filings with, any Governmental or Regulatory
Authority that is required by Buyer in connection with the execution and
delivery of this Agreement by Buyer or the performance of its obligations
hereunder (the "Buyer Governmental Consents").
SECTION 7.04 NON-CONTRAVENTION.
The execution and delivery by Buyer of this Agreement does not, and the
performance by it of its obligations under this Agreement and the consummation
of the transactions contemplated hereby will not:
(a) conflict with or result in a violation or breach of any of the
terms, conditions or provisions of the Certificate of Incorporation,
Bylaws or other organizational documents of Buyer;
(b) assuming the receipt of all consents, waivers, approvals,
Orders or authorizations of Governmental and Regulatory Authorities
required to be obtained by Buyer and the making of all registrations,
declarations or filings with Governmental and Regulatory Authorities
required to be made by Buyer, conflict with or result in a violation or
breach of any term or provision of any Law applicable to Buyer; or
(c) conflict with or result in a breach or default (or an event
which, with notice or lapse of time or both, would constitute a breach
or default) under, or result in the termination or cancellation of, or
accelerate the performance required by, or result in the creation or
imposition of any security interest, lien or any other Encumbrance upon
any Contract to which Buyer is a party or by which Buyer or any of its
assets is bound.
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SECTION 7.05 LITIGATION.
There are no Actions or Proceedings pending, or to the Knowledge of
Buyer threatened or anticipated, against, relating to, affecting or arising in
connection with (a) this Agreement or (b) the transactions contemplated by this
Agreement. Buyer is not subject to any Order that could reasonably be expected
to materially impair or delay the ability of Buyer to perform its obligations
hereunder.
SECTION 7.06 BROKERS.
Buyer has not retained any broker in connection with the transactions
contemplated hereunder. Seller has no, and will have no, obligation to pay any
brokers, finders, investment bankers, financial advisors or similar fees in
connection with this Agreement or the transactions contemplated hereby by reason
of any action taken by or on behalf of Buyer.
SECTION 7.07 FINANCIAL CAPABILITY.
Buyer has obtained the Commitment Letter in order to secure the funds
to effect the Closing.
ARTICLE VIII. COVENANTS OF THE PARTIES
SECTION 8.01 MAINTENANCE OF BUSINESS PRIOR TO CLOSING.
From the date of this Agreement to the Closing Date, Seller shall
conduct the Business in the Ordinary Course of Business and not enter into or
amend any Contracts (a) giving any third parties any rights, title or interests
in the Business, the Products (other than sales in the Ordinary Course of
Business), the Regulatory Approvals or the Purchased Assets, or (b) creating any
Encumbrances on the foregoing other than Permitted Encumbrances. Seller agrees
that after the date hereof, without Buyer's prior written consent, which will
not be unreasonably withheld, it will not take any action with respect to any
Multi-Product Contract that would (x) extend the term of such Multi-Product
Contract with respect to any Product, (y) create or agree to any additional
obligations with respect to any Product, or (z) otherwise adversely affect Buyer
(other than to terminate any such Multi-Product Contract).
SECTION 8.02 REASONABLE BEST EFFORTS.
(a) Subject to Section 8.02(b) below, each of the Parties shall
use its reasonable best efforts to take, or cause to be taken, all
action, or to do, or cause to be done, all things necessary, proper or
advisable under applicable Laws to consummate and make effective the
transactions contemplated by this Agreement and to cause the conditions
to the obligations of the other party hereto to consummate the
transactions contemplated hereby to be satisfied, including obtaining
all consents and approvals of all Persons and Governmental or
Regulatory Authorities and removing any injunctions or other
impairments or delays that are necessary, proper or advisable to the
consummation of the transactions contemplated by this Agreement. The
Parties will file the notification and report forms required to be
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filed under the Hart Scott Rodino Act within five Business Days after
the execution of this Agreement.
(b) From the date hereof until the date 60 days after Closing,
Seller shall use its reasonable best efforts to obtain all Other Seller
Third Party Consents. From and after the date that is 60 days after
Closing, Seller shall have no obligation whatsoever with respect to any
Other Seller Third Party Consent and Seller shall have no Liability to
Buyer for any failure to obtain any Other Seller Third Party Consent or
to transfer to Buyer any Contract (or portion thereof) the transfer of
which would require which Seller to obtain an Other Seller Third Party
Consent.
SECTION 8.03 COOPERATION.
Each Party shall cooperate fully with the other in preparing and filing
all notices, applications, submissions, reports and other instruments and
documents that are necessary, proper or advisable under applicable Laws to
consummate and make effective the transactions contemplated by this Agreement,
including Seller's cooperation in the efforts of Buyer to obtain any consents
and approvals of any Governmental or Regulatory Authority required for Buyer to
be able to own the Purchased Assets.
SECTION 8.04 ACCESS.
(a) From the date hereof until the Closing, Seller shall, and
shall cause its relevant Affiliates to, permit Buyer and its
representatives to have access, during regular business hours and upon
reasonable advance notice, to the assets of the Business that will be
Purchased Assets, subject to reasonable rules and regulations of Seller
and any applicable Laws. Seller shall instruct its employees, counsel
and financial advisors to cooperate with Buyer in its investigation of
the Business; it being understood that Buyer shall reimburse Seller
promptly for reasonable and necessary out of pocket expenses incurred
by Seller or any Affiliate of Seller in complying with any such request
by or on behalf of Buyer (other than the fees and costs of Seller's
attorneys).
(b) Upon the request of Seller, Buyer shall at all times following
the Closing, to the extent permitted by Law, grant to Seller and its
representatives the right, during normal business hours, to inspect and
copy the Books and Records and other documents obtained from Seller in
Buyer's possession, to the extent pertaining to the operation of the
Business prior to the Closing Date for Tax purposes and in connection
with Actions or Proceedings (except as otherwise stated in Section
8.04(c) below).
(c) Buyer agrees to keep and maintain all Books and Records and
other documents obtained from Seller in existence on the Closing Date
for a period of seven years and make personnel of Buyer or its
Affiliates available to Seller or its representatives to the extent
such access is reasonably related to any Excluded Assets or otherwise
necessary for Seller to comply with the terms of this Agreement or
comply with any applicable Law; it being understood that Seller
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shall reimburse Buyer promptly for its reasonable and necessary out of
pocket expenses incurred in complying with any such request by or on
behalf of Seller (other than the fees and costs of Buyer's attorneys)
and that Buyer and its personnel are not obligated to provide access to
any of Buyer's legally privileged information or documents hereunder.
SECTION 8.05 PUBLIC ANNOUNCEMENTS.
Each of Seller and Buyer agree that, prior and subsequent to the
Closing, it and its representatives shall keep the facts surrounding the
negotiation of this Agreement and the transactions contemplated hereby,
disclosures made herein and hereunder, and the results of investigations and
audits conducted hereunder, confidential and shall not disclose such information
to any other Person through a press release or otherwise (except as necessary to
carry out the terms of this Agreement or to the extent such information becomes
public information or generally available to the public through no fault of such
party or its Affiliates) without the prior written consent of the other party,
unless such party has been advised by (a) counsel that disclosure is required to
be made under applicable Law or the requirements of a national securities
exchange or another similar regulatory body or (b) such party's independent
accountants that disclosure is required in such party's public financial
statements or the notes thereto. Notwithstanding the foregoing, Buyer and Seller
agree to issue the joint public statement announcing the Agreement in the form
attached hereto as Exhibit C three days after the execution of this Agreement.
Seller also agrees Buyer may issue the public statement attached hereto as
Exhibit D three days after Closing announcing Buyer's acquisition of the
Products and consummation of the transaction.
SECTION 8.06 BULK SALES.
Buyer and Seller waive compliance with all bulk sales Laws applicable
to the transactions contemplated by this Agreement.
SECTION 8.07 INTERIM PRODUCT SUPPLY.
At the Closing, Buyer and Seller shall enter into an interim supply
agreement substantially in the form of Exhibit A hereto (the "Interim Supply
Agreement").
SECTION 8.08 NON-SOLICITATION.
Each Party agrees that, without the prior written consent of the other
Party, for a period commencing on the date hereof and expiring on the second
anniversary of the Closing Date, the soliciting Party will not directly or
indirectly (a) induce, encourage or solicit any officer or employee of the other
Party or any of its Affiliates to leave such employment to accept any other
position or employment with the soliciting Party, or (b) assist any Affiliate or
representative of such soliciting Party in hiring such employee; provided that
the running of newspaper advertisements, Internet postings and other means of
general distribution shall not be a violation of the foregoing.
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SECTION 8.09 CORPORATE NAMES.
(a) Except as set forth in this Section 8.09, following the
Closing, Buyer shall not have any rights by virtue of this Agreement or
any of the transactions or agreements contemplated hereby to any names,
trademarks, trade names, trade dress or logos relating to Seller or any
of the Affiliates of Seller or any of their products other than those
included in the Intellectual Property (the "Corporate Names").
(b) Buyer may use in connection with its operation of the Business
(i) for up to 12 months following the Closing (or such shorter period
as any Governmental or Regulatory Authority shall designate), items of
Inventory that bear any of the Corporate Names, it being understood
that Buyer will use its reasonable best efforts to use or sell such
items of Inventory prior to selling any other product under the
trademark or trade name of the Products; and (ii) for up to 12 months
following the Closing (or such shorter period as any Governmental or
Regulatory Authority shall designate), Promotional Materials that were
transferred to Buyer as Purchased Assets that bear any of the Corporate
Names; provided that Buyer may use such Promotional Materials only if
Buyer completely removes all Corporate Names from, or completely covers
all Corporate Names on, such materials. Buyer acknowledges and agrees
that Seller shall have no Liability arising out of or in connection
with Buyer's or its Affiliate's use of the Marketing Materials.
SECTION 8.10 ASSISTANCE IN COLLECTING CERTAIN AMOUNTS.
From and after the Closing Date, Buyer shall assist, cooperate with and
consult with Seller and its Affiliates, at Seller's request, in connection with
the collection of Accounts Receivable relating to products or goods shipped or
sold by Seller or its Affiliates before the Closing Date, and Buyer shall remit
promptly to Seller or the relevant Affiliate any payments or other sums received
by Buyer that relate to any sales, shipments or other matters occurring before
the Closing Date or that otherwise are properly for the account of Seller or its
Affiliates. Seller will pay Buyer for its out-of-pocket expenses incurred for
Buyer's efforts hereunder. Seller shall, and shall cause its Affiliates to,
remit promptly to Buyer any payments or other sums received by Seller or any
Affiliates after the Closing Date that relate to any sales or shipments made by
Buyer after the Closing Date and Seller shall, and shall cause its Affiliates
to, use reasonable efforts to transmit to Buyer all written inquiries or orders,
and to refer to Buyer all oral inquiries or orders, relating to the Business (to
the extent relating to operations thereof following the Closing) that are
received by Seller or any Affiliate following the Closing Date; provided that
Buyer promptly shall reimburse Seller for all reasonable out of pocket expenses
incurred by Seller or its Affiliates in complying with Seller's obligations
under this Section 8.10.
SECTION 8.11 HANDLING OF INVENTORY.
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From and after the Closing, Buyer shall hold, store, and ship any
Inventory in accordance with (a) all applicable Laws; (b) current Good
Manufacturing Practices; (c) the applicable Regulatory Approval; and (d)
applicable analytical methods and procedures, material specifications, master
batch records, and stability protocols.
SECTION 8.12 DIFFERENTIATION OF PRODUCTS.
From and after the Closing, and as promptly as commercially
practicable, Buyer shall institute appropriate procedures to ensure that
products and goods of the Business, the Products and the Purchased Assets
manufactured, finished or sold by, or on behalf of, Buyer can be distinguished
from products and goods of the Business manufactured, finished or sold by, or on
behalf of, Seller and its Affiliates.
SECTION 8.13 REGULATORY MATTERS.
(a) From and after the transfer by Seller to Buyer of each
Regulatory Approval pursuant to the terms hereof, but consistent with
Sections 8.18 and 8.19 hereof, Buyer, at its cost, shall be solely
responsible and liable for (i) taking all actions, paying all fees and
conducting all communication with the appropriate Governmental or
Regulatory Authority required by Law in respect of such Regulatory
Approval, including preparing and filing all reports (including adverse
drug experience reports) with the appropriate Governmental or
Regulatory Authority; (ii) taking all actions and conducting all
communication with third parties in respect of Products sold pursuant
to such Regulatory Approval (whether sold before or after transfer of
such Regulatory Approval), including responding to all complaints in
respect thereof, including complaints related to tampering or
contamination; and (iii) investigating all complaints and adverse drug
experiences in respect of Products sold pursuant to such Regulatory
Approval (whether sold before or after transfer of such Regulatory
Approval).
(b) From and after the transfer by Seller to Buyer of each
Regulatory Approval pursuant to the terms hereof, Seller promptly shall
notify Buyer if Seller receives a complaint or a report of an adverse
drug experience in respect of a Product sold pursuant to such
Regulatory Approval. In addition, Seller shall cooperate with Buyer's
reasonable requests and use commercially reasonable efforts to assist
Buyer in connection with the investigation of and response to any
complaint or adverse drug experience related to a Product sold by
Seller or its Affiliates.
(c) From and after the transfer by Seller to Buyer of each
Regulatory Approval pursuant to the terms hereof, Buyer, at its cost,
shall be solely responsible and liable for conducting all voluntary and
involuntary recalls of units of Products sold pursuant to such
Regulatory Approval (whether sold before or after transfer of such
Regulatory Approval), including recalls required by any Governmental or
Regulatory Authority and recalls of units of Products sold by Seller or
its Affiliates deemed necessary by Seller in its reasonable discretion.
Seller promptly shall notify Buyer in the event that a recall of
product sold by Seller or
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its Affiliates is necessary. Seller shall indemnify and reimburse Buyer
for all costs and Damages of such recalls with respect to Products sold
prior to the Closing.
SECTION 8.14 PRODUCT RETURNS.
Buyer shall accept any returns of Products following the Closing.
Seller shall reimburse Buyer, against reasonable documentation therefor, for all
reasonable costs and Damages of such returns with respect to Products received
before the 45 days following the Closing. Subject to the following sentence,
Buyer, at its cost, shall be solely responsible and liable for all returns of
Products received after 45 days following the Closing (whether sold before or
after transfer of such Regulatory Approval). Notwithstanding the foregoing,
Seller shall reimburse Buyer for the amount by which the reasonable costs of all
Product returned during (a) the period commencing 45 days following the Closing
and ending on the first anniversary of the Closing (the "First Return Period")
exceed $2.63 million and (b) the period commencing on the first anniversary of
the Closing and ending on the second anniversary of the Closing (the "Second
Return Period") exceed $3 million; provided, however, Seller's obligation under
this sentence to reimburse Buyer for such Product returns shall be limited to $1
million in the aggregate for the First Return Period and $1 million in the
aggregate for the Second Return Period and shall be payable to Buyer, with
respect to the First Return Period, solely by reducing the First Installment by
the applicable amount and, with respect to the Second Return Period, solely by
reducing the Second Installment by the applicable amount. For purposes of the
preceding sentence, the calculation of Buyer's reasonable costs of Products
returned shall equal the lower of (x) Buyer's actual costs of Products returned,
or (y) reimbursement costs in accordance with Seller's current reimbursement
policy, which is attached hereto as Exhibit F. Buyer shall not initiate or
encourage any action to accelerate the return of Products during the 45 days
following the Closing. Promptly after the transfer of each such Regulatory
Approval, Seller shall provide written notice to all Persons to which Products
were sold by Seller or its Affiliates during the 12 months prior to such
transfer stating that Seller and its Affiliates no longer accept returns of
Products and directing such Persons to contact Buyer in connection with returns,
complaints and all other inquiries regarding Products sold pursuant to such
Regulatory Approval.
SECTION 8.15 FURTHER ASSURANCES.
(a) On and after the Closing, Seller shall from time to time, at
the request of Buyer, execute and deliver, or cause to be executed and
delivered, such other instruments of conveyance and transfer and take
such other actions as Buyer may reasonably request, in order to more
effectively consummate the transactions contemplated hereby and to vest
in Buyer good and marketable title to the Purchased Assets (including
assistance in the collection or reduction to possession of any of the
Purchased Assets).
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(b) On and after the Closing, Buyer shall from time to time, at
the request of Seller, take such actions as Seller may reasonably
request, in order to more effectively consummate the transactions
contemplated hereby, including Buyer's assumption of the Assumed
Liabilities.
SECTION 8.16 TECHNICAL TRANSFER FOR COMMERCIAL MANUFACTURE OF
PRODUCTS.
Seller shall provide reasonable assistance to Buyer in connection with
the transfer to Buyer or its designee of the manufacturing technology with
respect to the Products, to the extent known to Seller, including manufacturing
technology, analytical methods, and any other information in the possession of
Seller or its Affiliates that is reasonably required by Buyer or its designee
for the successful completion of such technology transfer; provided, however,
that the amount of time Seller is required to spend on such transfer of
manufacturing technology shall not exceed 35 working days of Seller's designated
personnel. If Buyer desires more assistance to transfer such technology after
the 35 working days, then Buyer will reimburse Seller for its personnel's time
at $200 per hour per professional or technical employee. Except as set forth in
the previous sentence, all costs and expenses for such technical transfer will
be the responsibility of the party incurring such costs and expenses; provided,
however, that any travel expenses incurred by Seller's personnel in connection
with such transfer of manufacturing technology will be paid promptly by Buyer.
SECTION 8.17 TRANSITIONAL DISTRIBUTION BY SELLER.
During a transitional period of up to 35 days following the Closing (or
such lesser period as Buyer completes arrangements for transfer of such
distribution activities), Seller shall maintain distribution of the Products in
a manner and intensity of effort consistent with the distribution activities of
Seller and its Affiliates during the calendar year 2000, and in accordance with
all legal requirements. Buyer shall pay Seller, within ten days after Seller
ceases to provide such services, for these distribution services in an amount
equal to Seller's actual direct distribution costs (as reasonably determined by
Seller) for Products distributed following the Closing.
SECTION 8.18 REGULATORY TRANSITION BY SELLER.
During a transitional period of up to 50 days following the Closing (or
such sooner period as Buyer completes arrangements for transfer of such
regulatory activities), Seller shall assist Buyer in the maintenance of the
Regulatory Approvals of the Products and carry out the other regulatory
compliance activities required to be carried out under the Regulatory Approvals
(to the extent that such activities have not then been taken over by Buyer) in a
manner and intensity of effort consistent with the regulatory procedures of
Seller and its Affiliates during the calendar year 2000, and in accordance with
all legal requirements. At Buyer's reasonable request, additional transitional
regulatory assistance to carry out any untransferred regulatory
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compliance activities after such initial 50-day period, then for a maximum of an
additional 40 days, Seller shall continue to carry them out and Buyer shall
reimburse Seller for its personnel's time at $200 per hour per professional or
technical employee. Except as set forth in the previous sentence, all costs and
expenses for such regulatory transition services will be the responsibility of
the party incurring such costs and expenses; provided, however, that any travel
expenses incurred by Seller's personnel in connection with providing such
services will be paid promptly by Buyer. Buyer shall make all filings with, and
take all other actions required by, applicable Governmental or Regulatory
Authorities that are necessary to permit Seller to perform its obligations under
this Section 8.18.
SECTION 8.19 REFORMULATION OF MVI-12 PRODUCT.
(a) Seller shall use its commercially reasonable efforts to
reformulate the MVI-12 Product in a commercially salable drug product
pursuant to the Federal Register Notice published by the FDA on April
20, 2000 [Docket No. 79N-0113] and obtain FDA approval of the
Reformulation SNDA on behalf of Buyer ("Seller's Reformulation
Efforts"); provided that Seller has the absolute right at any time to
abandon its Reformulation Efforts after September 30, 2002 by providing
written notice to Buyer, whereupon Buyer shall then have no obligation
to pay the Remaining Purchase Price to Seller.
(b) Upon the earlier of FDA's approval of the Reformulation SNDA
or Seller's notice to Buyer that it is abandoning its efforts to obtain
such approval, Seller shall deliver to Buyer all books and records
relating to the reformulation of the MVI-12 Product and Seller shall
grant to Buyer an irrevocable, exclusive, worldwide, royalty-free,
fully paid up, perpetual license, with right to sublicense or assign,
to use, import or practice, solely in connection with the development,
manufacture, having manufactured, use, marketing and selling injectable
multivitamin pharmaceutical products ("Injectable Multivitamin
Pharmaceutical Field"), any patent or patentable invention created or
used, or Know-How developed, obtained or used, by Seller in the course
of performing the reformulation services described in the previous
sentence ("Reformulation Intellectual Property"). A license under this
Section 8.19 is a "Reformulation Intellectual Property License."
(i) Seller's Reformulation Intellectual Property License
is limited to the Injectable Multivitamin
Pharmaceutical Field and in no circumstance extends
beyond that Field. Seller retains all right to make,
use, sell and offer for sale Reformulation
Intellectual Property outside of the Injectable
Multivitamin Pharmaceutical Field, including the
right to exclude Buyer from making, using, selling
and offering for sale outside the Injectable
Multivitamin Pharmaceutical Field.
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(ii) Seller's obligation to grant Buyer a Reformulation
Intellectual Property License is limited to the
extent of its own rights to Reformulation
Intellectual Property, and in no way creates an
obligation in Seller to seek or obtain permission or
rights from any third party for granting Buyer a
Reformulation Intellectual Property License. From the
date hereof, Seller shall use its commercially
reasonable efforts to not take any action that would
limit its own rights to Reformulation Intellectual
Property, or limit Seller's ability to grant a
Reformulation Intellectual Property License to Buyer.
(iii) There is no requirement that Reformulation
Intellectual Property result from Seller's
Reformulation Efforts, and Buyer expressly recognizes
that no Reformulation Intellectual Property may
result from Seller's Reformulation Efforts. Seller
has no obligation to seek or obtain intellectual
property protection for Know-How created, used or
obtained by Seller in the course of Seller's
Reformulation Efforts (although Seller will keep all
such Know-How, to the extent relating to the
Injectable Multivitamin Pharmaceutical Field,
confidential), and Seller retains the sole right and
discretion to determine whether and how to seek,
apply for, pursue, obtain, maintain or defend
intellectual property protection for any such
Know-How and for Reformulation Intellectual Property.
Notwithstanding the foregoing, if Seller (1)
identifies potentially patentable subject matter
relating to the Injectable Multivitamin
Pharmaceutical Field and (2) determines not to seek
patent protection for such subject matter, then
Seller shall so notify Buyer within 60 days of such
identification. Buyer shall then have the right and
discretion to seek patent protection for such subject
matter at Buyer's sole cost and expense, and Buyer
shall own any subsequently issuing patents. Seller
shall have no responsibility whatsoever for the
patent prosecution or the maintenance or protection
of any subsequently issuing patent rights.
(iv) Indemnification by Buyer to Seller for Buyer's use or
practice of Reformulation Intellectual Property is
governed by Section 11.02.
(v) Seller makes no representations or warranties with
respect to Reformulation Intellectual Property,
including that any Reformulation Intellectual
Property is valid or enforceable, or that Buyer's use
or practice any Reformulation Intellectual Property
will not infringe the intellectual property rights or
any other rights of any third party, or that Seller
owns all right, title and interest in
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and to, or has a license, sublicense or other
permission to use, Reformulation Intellectual
Property.
(vi) Seller has the sole and exclusive right and
discretion to determine whether and how to enforce
Reformulation Intellectual Property, and whether to
commence, maintain or terminate, whether by
settlement or otherwise, any litigation, action or
proceeding regarding Reformulation Intellectual
Property ("Reformulation Intellectual Property
Litigation"); provided, however, that in no event
shall Seller settle Reformulation Intellectual
Property Litigation on terms which eliminate Buyer's
exclusivity under the Reformulation Intellectual
Property License. Seller shall give Buyer no less
than 20 days notice prior to settling any
Reformulation Intellectual Property Litigation
commenced pursuant to this subparagraph (vi) and the
opportunity to reasonably object to the terms of such
settlement. Seller also has the sole and exclusive
right and discretion to control and direct any
Reformulation Intellectual Property Litigation,
including any challenge to the validity,
enforceability or infringement of Reformulation
Intellectual Property; provided, however, that Seller
shall keep Buyer informed of, and consult with Buyer
regarding, Reformulation Intellectual Property
Litigation to the extent related to the Injectable
Multivitamin Pharmaceutical Field. For Reformulation
Intellectual Property Litigation exclusively directed
to activity in the Injectable Multivitamin
Pharmaceutical Field, Buyer shall assume all costs
and retain all proceeds (whether from any damage or
reasonable royalty award or the like) ("Proceeds").
For Reformulation Intellectual Property Litigation
exclusively directed to activity outside of the
Injectable Multivitamin Pharmaceutical Field, Seller
shall assume all costs and be able to retain all
Proceeds. For Reformulation Intellectual Property
Litigation directed to activity both in and outside
the Injectable Multivitamin Pharmaceutical Field, all
costs and all Proceeds shall be allocated between
Seller and Buyer on an equitable pro-rata basis.
Buyer shall reasonably cooperate in any Reformulation
Intellectual Property Litigation, including the
obligation to join any such actions as a party, and
Seller shall reimburse Buyer for all reasonable
out-of-pocket expenses for such cooperation.
(vii) Notwithstanding the foregoing, if Seller (1)
identifies activity in the Injectable Multivitamin
Pharmaceutical Field which infringes Reformulation
Intellectual Property, and (2) determines not to
enforce the Reformulation Intellectual Property
against such activity, Seller shall so notify Buyer
within 60 days of such identification, Buyer shall
then have the right and discretion to determine
whether to bring an infringement action at its sole
cost
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and expense and be able to retain all Proceeds. Buyer
shall give Seller no less than 20 days notice prior
to settling any Reformulation Intellectual Property
Litigation commenced pursuant to this subparagraph
(vii) and the opportunity to reasonably object to the
terms of such settlement. Seller shall have no
obligation whatsoever to fund or participate in any
such Reformulation Intellectual Property Litigation.
Seller shall reasonably cooperate in any
Reformulation Intellectual Property Litigation
commenced by Buyer pursuant to this subparagraph
(vii) and Buyer shall reimburse Seller for all
reasonable out-of-pocket expenses for such
cooperation. Buyer shall have no right under any
circumstances to commence Reformulation Intellectual
Property Litigation for conduct outside of the
Injectable Multivitamin Pharmaceutical Field.
(c) During Seller's Reformulation Efforts, Seller shall permit
Buyer to have representatives involved, on an observer-basis only in
such Reformulation Efforts, including in any meetings or discussions
with the FDA or third parties pertaining to the reformulation of the
MVI-12 Product, on a full, open and cooperative basis, and to provide
Buyer with copies of all correspondence, e-mails or other
communications with FDA, Seller's contractors or other third parties
with respect to the reformulation of the MVI-12 Product, and to provide
Buyer's personnel with full access to the files and documents to the
extent pertaining to such reformulation activities.
(d) Any and all costs and expenses associated with Seller's
Reformulation Efforts shall be borne by the Seller.
(e) Buyer shall make all filings with, and take all other actions
required by, applicable Governmental or Regulatory Authorities that are
necessary to permit Seller to perform its obligations under this
Section 8.19.
SECTION 8.20 IRREVOCABLE LETTER OF CREDIT.
Buyer has caused Bank of America, N.A. ("BOA") to issue an irrevocable
standby letter of credit to Seller, a copy of which is attached as Exhibit E
hereto (the "Letter of Credit") in the amount to $2,625,000. In the event that
(a) five Business Days have elapsed since the conditions set forth in Section
10.03 of the Agreement have been satisfied (or waived by Buyer) (such fifth
Business Day, the "Draw Date"); (b) all representations and warranties of Seller
contained in this Agreement are true and correct in all material respects on and
as of the Draw Date as though given on and as of such date, except where the
failure of any representations and warranties to be true and correct,
individually or in the aggregate, would not have an Adverse Effect; (c) Seller
shall have performed, on or prior to the Draw Date, all agreements and covenants
required by this Agreement to be performed by it prior to or on the
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Closing Date other than obligations required to be performed at Closing; (d) no
Actions or Proceedings that question the validity or legality of the
transactions contemplated hereby shall have been instituted or threatened and
not settled or otherwise terminated; (e) Seller is ready, willing and able to
perform its obligations under the Agreement at Closing; (f) Buyer has not paid
the Base Purchase Price pursuant to Section 4.1(a)(i) of this Agreement; and (g)
this Agreement has not been terminated in accordance with its terms; then Seller
shall be permitted to draw the full amount of the Letter of Credit. In the event
that the Closing subsequently occurs pursuant to the terms hereof, the amount
drawn under the Letter of Credit shall be credited against the Base Purchase
Price. Upon termination of this Agreement in accordance with its terms prior to
Seller's drawing of the full amount of the Letter of Credit, Seller agrees to
provide prompt written notice of such termination to BOA.
ARTICLE IX. CONDITIONS TO THE OBLIGATIONS OF SELLER
The obligation of Seller to effect the transactions contemplated hereby
is subject to the satisfaction (or waiver by Seller), at or before the Closing,
of each of the following conditions:
SECTION 9.01 REPRESENTATIONS, WARRANTIES AND COVENANTS.
All representations and warranties of Buyer contained in this Agreement
shall be true and correct in all material respects on and as of the Closing Date
as though given on and as of such date and Buyer shall have performed all
agreements and covenants required by this Agreement to be performed by it prior
to or on the Closing Date.
SECTION 9.02 NO ACTIONS OR PROCEEDINGS.
No Actions or Proceedings that question the validity or legality of the
transactions contemplated hereby shall have been instituted or threatened and
not settled or otherwise terminated.
SECTION 9.03 CONSENTS.
All Seller Governmental Consents, Required Seller Third Party Consents
and Buyer Governmental Consents shall have been obtained or made, as the case
may be, and the waiting period (and any extension thereof) under the
Hart-Scott-Rodino Act applicable to the transactions contemplated hereby shall
have expired or been terminated.
SECTION 9.04 OTHER CLOSING DELIVERIES.
Buyer shall have delivered to Seller such other certificates and
documents customary in transactions similar to those contemplated hereby that
are reasonably requested by Seller.
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ARTICLE X. CONDITIONS TO THE OBLIGATIONS OF BUYER
The obligation of Buyer to effect the transactions contemplated hereby
is subject to the satisfaction (or waiver by Buyer), at or before the Closing,
of each of the following conditions:
SECTION 10.01 REPRESENTATIONS, WARRANTIES AND COVENANTS.
All representations and warranties of Seller contained in this
Agreement shall be true and correct in all material respects on and as of the
Closing Date as though given on and as of such date, and Seller shall have
performed all agreements and covenants required by this Agreement to be
performed by it prior to or on the Closing Date, except where the failure of any
representations and warranties to be true and correct, individually or in the
aggregate, will not have an Adverse Effect.
SECTION 10.02 NO ACTIONS OR PROCEEDINGS.
No Actions or Proceedings that question the validity or legality of the
transactions contemplated hereby shall have been instituted or threatened and
not settled or otherwise terminated.
SECTION 10.03 CONSENTS.
All Seller Governmental Consents, Required Seller Third Party Consents
and Buyer Governmental Consents shall have been obtained or made, as the case
may be, and the waiting period (and any extension thereof) under the
Hart-Scott-Rodino-Act applicable to the transactions contemplated hereby shall
have expired or been terminated.
SECTION 10.04 OTHER CLOSING DELIVERIES.
Seller shall have delivered to Buyer such other certificates and
documents customary in transactions similar to those contemplated hereby that
are reasonably requested by Buyer.
SECTION 10.05 RECEIPT OF FUNDS.
Buyer shall have received an amount equal to the Base Purchase Price
pursuant to the commitment letter from Banc of America Mezzanine Capital LLC and
Banc of America Securities LLC dated July 12, 2001, attached hereto as Exhibit B
(the "Commitment Letter"); provided that this condition shall be deemed
satisfied if Buyer shall not have received such funds as a result of or in
connection with Buyer's breach of any provision of the Commitment Letter or
failure to take any action required under the Commitment Letter in order to
obtain such funds.
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ARTICLE XI. INDEMNIFICATION
SECTION 11.01 SURVIVAL OF REPRESENTATIONS, WARRANTIES, ETC.
The representations and warranties of Seller or Buyer contained in this
Agreement shall survive the Closing and remain in full force and effect until
the Expiration Date. All representations and warranties contained in this
Agreement and all claims with respect thereto shall terminate on the Expiration
Date; provided that if notice of any claim for indemnification pursuant to
Section 11.02(a)(ii) or 11.02(b)(ii) shall have been given prior to the
Expiration Date and such notice describes with reasonable specificity or
description the circumstances with respect to which such indemnification claim
relates, such indemnification claim shall survive until such time as such claim
is finally resolved.
SECTION 11.02 INDEMNIFICATION.
(a) By Seller. Subject to Section 11.03, from and after the
Closing, Seller shall indemnify, reimburse, defend and hold harmless
Buyer, its Affiliates, and their respective officers, directors,
employees, agents, successors and assigns from and against any and all
costs, losses, Liabilities, damages, lawsuits, deficiencies, claims and
expenses (including reasonable fees and disbursements of attorneys)
(collectively, the "Damages"), incurred in connection with, arising out
of, resulting from or incident to (i) any breach of any covenant or
agreement of Seller herein; (ii) the inaccuracy or breach of any
representation or warranty made by Seller in this Agreement; (iii) the
Excluded Liabilities; (iv) Government Rebates or Other Rebates arising
out of Seller's fraudulent or criminal conduct; (v) Government Rebates
or Other Rebates that are payable or submitted, respectively, outside
of the ordinary course of business within six months following the
Closing; and (vi) the conduct of the Business prior to the Closing.
(b) By Buyer. Subject to Section 11.03, from and after the
Closing, Buyer shall indemnify, defend and hold harmless Seller, its
Affiliates and their respective officers, directors, employees, agents,
successors and assigns from and against any and all Damages incurred in
connection with, arising out of, resulting from or incident to (i) any
breach of any covenant or agreement of Buyer herein; (ii) the
inaccuracy or breach of any representation or warranty made by Buyer in
this Agreement; (iii) the failure of Buyer to assume, pay, perform and
discharge any Assumed Liabilities; (iv) the use by Buyer or its
Affiliates of the Marketing Materials; (v) the use or practice by Buyer
of Reformulation Intellectual Property pursuant to Section 8.19; and
(vi) the conduct of the Business after Closing.
(c) Procedures. The indemnified Party shall give the indemnifying
Party written notice (an "Indemnification Claim Notice") within 30 days
(or such other additional reasonable period that the Indemnified Party
can establish is reasonably necessary to permit it to determine whether
to make a request for indemnification) of any Damages or discovery of
fact upon which such indemnified Party intends to base a request for
indemnification under Section
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11.02(a) or Section 11.02(b), but in no event shall the indemnifying
Party be liable for any Damages that result from failure to provide
such notice within such period. Each Indemnification Claim Notice must
contain a description of the claim and the nature and amount of such
Damages (to the extent that the nature and amount of such Damages are
known at such time). The indemnified Party shall furnish promptly to
the indemnifying Party copies of all papers and official documents
received in respect of any Damages. All indemnification claims in
respect of a Party, its Affiliates or their respective directors,
officers, employees and agents (collectively, the "Indemnitees" and
each an "Indemnitee") shall be made solely by such Party to this
Agreement (the "Indemnified Party").
(d) Third Party Claims. The obligations of an indemnifying Party
under this Section 11.02 with respect to Damages arising from claims of
any third party that are subject to indemnification as provided for in
Section 11.02(a) or Section 11.02(b) (a "Third Party Claim") shall be
governed by and be contingent upon the following additional terms and
conditions:
(i) At its option, the indemnifying Party may assume the
defense of any Third Party Claim by giving written
notice to the Indemnified Party at any time after the
indemnifying Party's receipt of an Indemnification
Claim Notice with respect to such Third Party Claim.
The assumption of the defense of a Third Party Claim
by the indemnifying Party shall be construed as an
acknowledgment that the indemnifying Party is liable
to indemnify any Indemnitee for Damages in respect of
such Third Party Claim. Upon assuming the defense of
a Third Party Claim, the indemnifying Party may
appoint as lead counsel in the defense of the Third
Party Claim any legal counsel selected by the
indemnifying Party. In the event the indemnifying
Party assumes the defense of a Third Party Claim, the
Indemnified Party shall immediately deliver to the
indemnifying Party all original notices and documents
(including court papers) received by any Indemnitee
in connection with the Third Party Claim. Should the
indemnifying Party assume the defense of a Third
Party Claim, the indemnifying Party shall not be
liable to the Indemnified Party or any other
Indemnitee for any legal expenses subsequently
incurred by such Indemnified Party or other
Indemnitee in connection with the analysis, defense
or settlement of the Third Party Claim. In the event
that it is later determined that the negligence or
willful misconduct of the Indemnified Party caused,
or was a contributing cause to, the Third Party Claim
or the Damages relating thereto, the Indemnified
Party shall reimburse the indemnifying Party for the
legal costs and all costs and expenses (including
attorneys' fees and costs of suit) and any Damages,
or its equitable proportion, as the case may be,
incurred by the indemnifying Party in its defense of
the Third Party Claim with respect to such
Indemnitee.
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(ii) Without limiting Section 11.02(d)(i), any Indemnitee
shall be entitled to participate in, but not control,
the defense of such Third Party Claim and to employ
counsel of its choice for such purpose; provided,
however, that such employment shall be at the
Indemnitee's own expense unless (A) the employment
thereof has been specifically authorized by the
indemnifying Party in writing, or (B) the
indemnifying Party has failed to assume the defense
and employ counsel in accordance with Section
11.02(d)(i) (in which case the Indemnified Party
shall control the defense).
(iii) With respect to any Damages relating solely to the
payment of money damages in connection with a Third
Party Claim and that will not result in the
Indemnitee's becoming subject to injunctive or other
relief or otherwise adversely affect the business of
the Indemnitee in any manner, and as to which the
indemnifying Party shall have acknowledged in writing
the obligation to indemnify the Indemnitee hereunder,
the indemnifying Party shall have the sole right to
consent to the entry of any judgment, enter into any
settlement or otherwise dispose of such Damages, on
such terms as the indemnifying Party, in its sole
discretion, shall deem appropriate. With respect to
all other Damages in connection with Third Party
Claims, where the indemnifying Party has assumed the
defense of the Third Party Claim in accordance with
Section 11.02(d)(i), the indemnifying Party shall
have authority to consent to the entry of any
judgment, enter into any settlement or otherwise
voluntarily dispose of such Damages; provided that it
obtains the prior written consent of the Indemnified
Party (which consent shall not be unreasonably
withheld or delayed). The indemnifying Party shall
not be liable for any settlement or other voluntary
disposition of Damages by an Indemnitee that is
reached without the written consent of the
indemnifying Party. Regardless of whether the
indemnifying Party chooses to defend or prosecute any
Third Party Claim, no Indemnitee shall admit any
liability with respect to, or settle, compromise or
discharge, any Third Party Claim without the prior
written consent of the indemnifying Party.
(iv) Regardless of whether the indemnifying Party chooses
to defend or prosecute any Third Party Claim, the
Indemnified Party shall, and shall cause each other
Indemnitee to, cooperate in the defense or
prosecution thereof and shall furnish such records,
information and testimony, provide such witnesses and
attend such conferences, discovery proceedings,
hearings, trials and appeals as may be reasonably
requested in connection therewith. Such cooperation
shall include access during normal business hours
afforded to the
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indemnifying Party to, and reasonable retention by
the Indemnified Party of, records and information
that are reasonably relevant to such Third Party
Claim, and making Indemnitees and other employees and
agents available on a mutually convenient basis to
provide additional information and explanation of any
material provided hereunder, and the indemnifying
Party shall reimburse the Indemnified Party for all
its reasonable out-of-pocket expenses in connection
therewith. To the extent the records of the
Indemnitee referenced in this Section 11.02(d)(iv)
are privileged by an attorney-client relationship,
the parties shall cooperate in a manner as to
preserve such privilege but to afford the
indemnifying Party with all information relevant to
such Third Party Claim.
SECTION 11.03 LIMITATIONS
(a) In no event shall Seller be liable for any Damages pursuant to
Section 11.02(a)(ii) unless and until the aggregate amount of all such
Damages exceeds $1,000,000, in which case Seller shall be liable for
all such Damages in excess of $1,000,000.
(b) Notwithstanding Section 11.02(a), Seller will not be required
to indemnify Buyer for Damages pursuant to Section 11.02(a)(v) that
exceed a maximum aggregate liability of $5,000,000.
(c) The amount of any Damages under Section 11.02(a) or Section
11.02(b), as the case may be, shall be reduced by (i) the net amount of
any actual Tax benefits received by the Indemnified Party within three
years from the Closing Date that result from the Liability that gave
rise to such indemnity, after upward adjustment for any additional
Taxes owed as a result of receipt of such indemnification, and (ii) the
net amount of any insurance proceeds paid to the Indemnified Party
relating to such claim, after upward adjustment for any insurance
proceeds repayment obligations owed as a result of receipt of such
indemnification.
(d) THE INDEMNIFICATION OBLIGATIONS OF THE PARTIES HERETO SHALL
NOT EXTEND TO SPECIAL, EXEMPLARY OR CONSEQUENTIAL DAMAGES, INCLUDING
BUSINESS INTERRUPTION OR LOST PROFITS, OR PUNITIVE DAMAGES; PROVIDED,
HOWEVER, THIS EXCLUSION IS NOT INTENDED TO, NOR SHALL, EXCLUDE ACTUAL
OR COMPENSATORY DAMAGES OF THE AFFECTED PARTY.
SECTION 11.04 REMEDIES EXCLUSIVE.
From and after the Closing, the remedies set forth in this Article XI
shall be exclusive and in lieu of any other remedies that may be available to
the Indemnitees pursuant to
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any statutory or common law with respect to any Losses of any kind or nature
incurred directly or indirectly resulting from or arising out of any breach of
this Agreement (including alleged breaches or inaccuracies of any
representation, warranty or covenant or for any alleged misrepresentation but
excluding any claims for actual fraud) or the transactions contemplated hereby;
provided, however, that Buyer or Seller may seek appropriate equitable relief in
a court of proper jurisdiction. Nothing herein is intended to, nor shall be
construed to, affect, have an interpretative effect on, modify or terminate any
other contract between either party hereto or its affiliates or any rights or
obligations under any such contracts.
ARTICLE XII. TERMINATION AND ABANDONMENT
SECTION 12.01 METHODS OF TERMINATION.
The transactions contemplated herein may be terminated and/or abandoned
at any time prior to the Closing:
(a) by mutual written agreement of Seller and Buyer; or
(b) by either Seller or Buyer if the Closing shall not have
occurred by September 30, 2001; provided that the terminating party is
not in material breach of its obligations hereunder;
(c) by either Seller or Buyer if the other party becomes insolvent
or seeks protection under any bankruptcy, receivership, trust deed,
creditors arrangement, composition or comparable proceeding, or if any
such proceeding is instituted against the other party which proceeding
remains undismissed for a period of 30 days;
(d) by either Seller or Buyer if there shall be in effect any Law
that prohibits the Closing or if the Closing would violate any
non-appealable Order;
(e) by either Seller or Buyer if the other party has breached any
material obligation hereunder that remains uncured for a period of 30
days after written notice and demand for cure thereof by the
non-breaching party, unless such breach is not capable of cure in which
event the non-breaching party may terminate immediately; or
(f) by Seller if (i) five Business Days have elapsed since the
conditions set forth in Section 10.03 of the Agreement have been
satisfied (or waived by Buyer); (ii) all representations and warranties
of Seller contained in this Agreement are true and correct in all
material respects on and as of the Draw Date as though given on and as
of such date, except where the failure of any representations and
warranties to be true and correct, individually or in the aggregate,
would not have an Adverse Effect; (iii) Seller shall have performed, on
or prior to the Draw Date, all agreements and covenants required by
this Agreement to be performed by it prior to or on the Closing Date
other than obligations required to be performed at
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<PAGE>
Closing; (iv) no Actions or Proceedings that question the validity or
legality of the transactions contemplated hereby shall have been
instituted or threatened and not settled or otherwise terminated; (v)
Seller is ready, willing and able to perform its obligations under the
Agreement at Closing; and (vi) Buyer has not paid the Base Purchase
Price pursuant to Section 4.1(a)(i) of this Agreement.
SECTION 12.02 PROCEDURE UPON TERMINATION.
In the event of termination and abandonment under Section
12.01 hereof, written notice thereof shall forthwith be given to the other party
and the transactions contemplated by this Agreement shall be terminated and
abandoned, without further action by the parties hereto. If the transactions
contemplated by this Agreement are terminated and/or abandoned as provided
herein:
(a) Each party, if requested in writing, will redeliver or destroy
all documents, work papers and other material of the other party and
its Affiliates relating to the transactions contemplated hereby,
whether so obtained before or after the execution hereof, to the party
furnishing the same;
(b) All confidential information received by any party hereto with
respect to the business of any other party or its Affiliates shall be
treated in accordance with that certain Confidentiality Agreement,
dated as of February 20, 2001, by and between Buyer and Seller; and
(c) No party hereto and none of their respective directors,
officers, stockholders, Affiliates or controlling Persons shall have
any further liability or obligation to any other party to this
Agreement except as stated in subparagraphs (a) and (b) of this
Section, except that (i) nothing in this Section 12.02 shall prejudice
any rights, claims, or causes of action that may have accrued hereunder
or with respect hereto prior to the date of such termination and (ii)
the provisions of Article XIII shall survive any termination of this
Agreement.
ARTICLE XIII. MISCELLANEOUS
SECTION 13.01 CONFIDENTIALITY.
(a) After the Closing, Seller shall not, without the prior written
consent of Buyer, disclose to any Person confidential information
relating to or concerning the Purchased Assets, Products or the
Business, except to Seller's employees or representatives who need to
know such information for purposes of Taxes, accounting, pending
litigation and other matters necessary in respect of the Seller's
ownership, prior to the Closing Date, of the Purchased Assets, Products
or the Business, unless Seller has used its best efforts to (i) consult
with Buyer and obtain Buyer's consent in a timely manner, but has not
been able to do so, and (ii) Seller has been advised by counsel that
disclosure is required to be made
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<PAGE>
under applicable Law or the requirements of a national securities
exchange or another similar regulatory body. In the event that Seller
is requested or required by documents subpoena, civil investigative
demand, interrogatories, requests for information, or other similar
process to disclose any information supplied to Seller in the course of
its ownership of the Purchased Assets, Seller shall provide Buyer with
prompt notice of such request or demands or other similar process so
that the Buyer may seek an appropriate protective order or, if such
request, demand or other similar process is mandatory, waive Seller's
compliance with the provisions of this Section 13.01(a) as appropriate.
(b) The term confidential information as used in this Section
13.01 does not include information which (i) becomes generally
available to the public other than as a result of disclosure by Seller,
(ii) was available on a non-confidential basis prior to its disclosure
by Seller, or (iii) becomes available to Seller on a non-confidential
basis from a source other than the Buyer, provided that such source is
not bound by a confidentiality agreement with Buyer.
SECTION 13.02 NOTICES.
All notices, requests and other communications hereunder must be in
writing and will be deemed to have been duly given only if delivered personally
against written receipt or by facsimile transmission with answer back
confirmation or mailed (postage prepaid by certified or registered mail, return
receipt requested) or by nationally recognized overnight courier that maintains
records of delivery to the parties at the following addresses or facsimile
numbers:
If to Buyer to:
NeoSan Pharmaceuticals Inc.
2320 Scientific Park Drive
Wilmington, NC 28405
Attn: Dr. Philip Tabbiner, President
Telephone: (910) 254-7000
Facsimile: (910) 815-2387
With copies to:
aaiPharma Inc.
2320 Scientific Park Drive
Wilmington, NC 28405
Attn.: General Counsel
Telephone: (910) 254-7000
Facsimile: (910) 815-2387
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<PAGE>
If to Seller to:
AstraZeneca Pharmaceuticals LP
1800 Concord Pike
P.O. Box 15437
Wilmington, DE 19850-5437
Attn: General Counsel
Telephone: (302) 886-3244
Facsimile: (302) 886-1578
With copies to:
Covington & Burling
1201 Pennsylvania Avenue, N.W.
Washington, D.C. 20004
Facsimile No: 202-662-6291
Attention: John A. Hurvitz, Esq.
All such notices, requests and other communications will (a) if delivered
personally to the address as provided in this Section, be deemed given upon
receipt, (b) if delivered by facsimile to the facsimile number as provided in
this Section, be deemed given upon receipt by the sender of the answer back
confirmation and (c) if delivered by mail in the manner described above or by
overnight courier to the address as provided in this Section, be deemed given
upon receipt (in each case regardless of whether such notice, request or other
communication is received by any other Person to whom a copy of such notice,
request or other communication is to be delivered pursuant to this Section). Any
party from time to time may change its address, facsimile number or other
information for the purpose of notices to that party by giving notice specifying
such change to the other parties hereto in accordance with the terms of this
Section.
SECTION 13.03 ENTIRE AGREEMENT.
This Agreement (and all Exhibits and Schedules attached hereto and all
other documents delivered in connection herewith) supersedes all prior
discussions and agreements among the parties with respect to the subject matter
hereof and contains the sole and entire agreement among the parties hereto with
respect to the subject matter hereof.
SECTION 13.04 WAIVER.
Any term or condition of this Agreement may be waived at any time by
the party that is entitled to the benefit thereof, but no such waiver shall be
effective unless set forth in a written instrument duly executed by or on behalf
of the party waiving such term or condition. No waiver by any party hereto of
any term or condition of this Agreement, in any one or more instances, shall be
deemed to be or construed as a waiver of the same or any other term or condition
of this Agreement on any future occasion. All remedies, either under this
Agreement or by law or otherwise afforded, will be cumulative and not
alternative.
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<PAGE>
SECTION 13.05 AMENDMENT.
This Agreement may be amended, supplemented or modified only by a
written instrument duly executed by each party hereto.
SECTION 13.06 THIRD PARTY BENEFICIARIES.
The terms and provisions of this Agreement are intended solely for the
benefit of each party hereto and their respective successors or permitted
assigns and it is not the intention of the parties to confer third-party
beneficiary rights upon any other Person.
SECTION 13.07 ASSIGNMENT; BINDING EFFECT.
Neither this Agreement nor any right, interest or obligation hereunder
may be assigned by any party hereto without the prior written consent of the
other party hereto, other than to an Affiliate or successor entity of such party
with a guarantee of performance by the assigning party, and any attempt to do
so, other than as permitted above, will be void. This Agreement is binding upon,
inures to the benefit of and is enforceable by the parties hereto and their
respective successors and permitted assigns.
SECTION 13.08 HEADINGS.
The headings used in this Agreement have been inserted for convenience
of reference only and do not define or limit the provisions hereof.
SECTION 13.09 SEVERABILITY.
If any provision of this Agreement is held to be illegal, invalid or
unenforceable under any present or future law, and if the rights or obligations
of any party hereto under this Agreement will not be materially and adversely
affected thereby, (a) such provision will be fully severable, (b) this Agreement
will be construed and enforced as if such illegal, invalid or unenforceable
provision had never compromised a part hereof, (c) the remaining provisions of
this Agreement will remain in full force and effect and will not be affected by
the illegal, invalid or unenforceable provision or by its severance herefrom,
and (d) in lieu of such illegal, invalid or unenforceable provision, there will
be added automatically as a part of this Agreement a legal, valid and
enforceable provision as similar to terms to such illegal, invalid or
unenforceable provision as may be possible and reasonably acceptable to the
parties herein.
SECTION 13.10 GOVERNING LAW.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF DELAWARE APPLICABLE TO CONTRACTS EXECUTED AND PERFORMED
IN SUCH STATE, WITHOUT GIVING EFFECT TO CONFLICTS OF LAWS PRINCIPLES.
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<PAGE>
SECTION 13.11 CONSENT TO JURISDICTION AND FORUM SELECTION.
THE PARTIES HERETO AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING IN
CONNECTION WITH THIS AGREEMENT SHALL BE INITIATED AND TRIED EXCLUSIVELY IN THE
LOCAL AND FEDERAL COURTS LOCATED IN THE STATE OF DELAWARE. THE AFOREMENTIONED
CHOICE OF VENUE IS INTENDED BY THE PARTIES TO BE MANDATORY AND NOT PERMISSIVE IN
NATURE, THEREBY PRECLUDING THE POSSIBILITY OF LITIGATION BETWEEN THE PARTIES
WITH RESPECT TO OR ARISING OUT OF THIS AGREEMENT IN ANY JURISDICTION OTHER THAN
THAT SPECIFIED IN THIS SECTION. EACH PARTY HEREBY WAIVES ANY RIGHT IT MAY HAVE
TO ASSERT THE DOCTRINE OF FORUM NON CONVENIENS OR SIMILAR DOCTRINE OR TO OBJECT
TO VENUE WITH RESPECT TO ANY PROCEEDING BROUGHT IN ACCORDANCE WITH THIS SECTION,
AND STIPULATES THAT THE LOCAL AND FEDERAL COURTS LOCATED IN THE STATE OF
DELAWARE SHALL HAVE PERSONAL JURISDICTION AND VENUE OVER EACH OF THEM FOR
PURPOSES OF LITIGATING ANY DISPUTE, CONTROVERSY OR PROCEEDING ARISING OUT OF OR
RELATED TO THIS AGREEMENT. EACH PARTY HEREBY AUTHORIZES AND AGREES TO ACCEPT
SERVICE OF PROCESS SUFFICIENT FOR PERSONAL JURISDICTION IN ANY ACTION AGAINST IT
AS CONTEMPLATED BY THIS SECTION BY REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT
REQUESTED, POSTAGE PREPAID TO ITS ADDRESS FOR THE GIVING OF NOTICES AS SET FORTH
IN THIS AGREEMENT, OR IN THE MANNER SET FORTH IN SECTION 13.02 OF THIS AGREEMENT
FOR THE GIVING OF NOTICE. ANY FINAL JUDGMENT RECEIVED AGAINST A PARTY IN ANY
ACTION OR PROCEEDING SHALL BE CONCLUSIVE AS TO THE SUBJECT OF SUCH FINAL
JUDGMENT AND MAY BE ENFORCED IN OTHER JURISDICTIONS IN ANY MANNER PROVIDED BY
LAW.
SECTION 13.12 EXPENSES.
Except as otherwise provided in this Agreement, each party hereto shall
pay its own expenses and costs incidental to the preparation of this Agreement
and to the consummation of the transactions contemplated hereby.
SECTION 13.13 COUNTERPARTS.
This Agreement may be executed in any number of counterparts and by
facsimile, each of which will be deemed an original, but all of which together
will constitute one and the same instrument.
SECTION 13.14 SCHEDULES, EXHIBITS AND OTHER AGREEMENTS.
The Exhibits, Schedules, other agreements, certificates and notices
specifically referred to herein, and delivered pursuant hereto, are an integral
part of this Agreement. Any
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<PAGE>
disclosure that is made in any of the Schedules or certificates delivered
pursuant to this Agreement shall be deemed responsive to any other applicable
disclosure obligation hereunder.
SECTION 13.15 SELLER AND ITS AFFILIATES.
Seller hereby acknowledges that any reference to Seller in this
Agreement shall be to Seller and those of its Affiliates that own or possess the
Purchased Assets. Seller also agrees that any reference to action to be taken by
Seller under this Agreement shall, without further expression, include a
covenant by Seller to cause those of its Affiliates that own or possess the
Purchased Assets to take such action, as the case may be.
[Remainder of Page Intentionally Left Blank]
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<PAGE>
IN WITNESS WHEREOF, this Agreement has been executed by the Parties
hereto all as of the date first above written.
ASTRAZENECA AB
By:
----------------------------
Name:
Title:
NEOSAN PHARMACEUTICALS INC.
By:
----------------------------
Name:
Title:
aaiPharma Inc. Guaranty
In consideration of AstraZeneca AB's entering into the foregoing Asset
Purchase Agreement (the "Agreement") with NeoSan Pharmaceuticals Inc. ("Buyer"),
a wholly-owned subsidiary of aaiPharma Inc., aaiPharma Inc. hereby guaranties
the performance by Buyer of its obligations under the Agreement, when and as
due, subject to all defenses that Buyer may lawfully raise with respect to any
claims by AstraZeneca AB, other than defenses under or relating to bankruptcy,
insolvency, reorganization, moratorium and other laws of general application
affecting enforcement of creditors' rights generally.
aaiPHARMA INC.
By:
----------------------------
Name:
Title:
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