Asset Purchase Agreement - Viatris Gmbh & Co. KG and Xcel Pharmaceuticals Inc.
JANUARY 22, 2004
ASSET PURCHASE AGREEMENT
RETIGABINE
BETWEEN
VIATRIS GMBH & CO. KG
- AND -
XCEL PHARMACEUTICALS, INC.
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Asset Purchase Agreement - Retigabine
TABLE OF CONTENTS
ASSET PURCHASE AGREEMENT........................................................ 1
RETIGABINE...................................................................... 1
TABLE OF CONTENTS............................................................ 2
RECITAL ..................................................................... 6
1. DEFINITIONS............................................................... 6
1.1 "ABANDONMENT DECISION"............................................... 6
1.2 "ABANDONMENT REVIEW EXTENSION"....................................... 6
1.3 "ACTION OR PROCEEDING"............................................... 6
1.4 "AFFILIATE".......................................................... 7
1.5 "ANCILLARY AGREEMENTS"............................................... 7
1.6 "API"................................................................ 7
1.7 "ASSETS"............................................................. 7
1.8 "ASSUMED LIABILITIES"................................................ 7
1.9 "AUDIT RECORDS"...................................................... 7
1.10 "BACK-END MILESTONE DATE"............................................ 7
1.11 "BEST OF SELLER'S KNOWLEDGE"......................................... 8
1.12 "CARCINOGENICITY STUDY REPORT"....................................... 8
1.13 "CHARGE"............................................................. 8
1.14 "CHARGED RIGHTS"..................................................... 8
1.15 "CLOSING"............................................................ 8
1.16 "CLOSING DATE"....................................................... 8
1.17 "COMBINATION PRODUCT"................................................ 8
1.18 "COMMERCIALLY REASONABLE EFFORTS".................................... 8
1.19 "COMPETITIVE PRODUCT"................................................ 8
1.20 "COMPOUND"........................................................... 9
1.21 "CONSENT"............................................................ 9
1.22 "CONTRACTS".......................................................... 9
1.23 "DAMAGES"............................................................ 9
1.24 "DATA ROOM DOCUMENTS"................................................ 9
1.25 "DISCLOSING PARTY"................................................... 9
1.26 "DOMAIN NAME"........................................................ 9
1.27 "EARN-OUT ON SALES".................................................. 9
1.28 "ENFORCEMENT EVENT".................................................. 10
1.29 "EXCLUDED LIABILITIES"............................................... 11
1.30 "FDA"................................................................ 11
1.31 "FDA APPROVAL"....................................................... 11
1.32 "FIRST BACK-END MILESTONE DATE"...................................... 11
1.33 "FIRST COMMERCIAL SALE".............................................. 11
1.34 "FIRST PHASE III TRIAL".............................................. 12
1.35 "FORCE MAJEURE EVENT"................................................ 12
1.36 "FORCE MAJEURE EXTENSION"............................................ 12
1.37 "GOVERNMENTAL OR REGULATORY AUTHORITY"............................... 12
1.38 "IND"................................................................ 12
1.39 "INDEMNIFICATION CLAIM NOTICE"....................................... 12
1.40 "INDEMNIFIED PARTY".................................................. 12
1.41 "INDEMNIFYING PARTY"................................................. 13
1.42 "INDEMNITEE"......................................................... 13
1.43 "INDEMNITEES"........................................................ 13
1.44 "INDICATION"......................................................... 13
1.45 "KNOW-HOW"........................................................... 13
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1.46 "LAW"................................................................ 13
1.47 "LIABILITY".......................................................... 13
1.48 "LICENSE AGREEMENT".................................................. 13
1.49 "LICENSEE"........................................................... 13
1.50 "MANUFACTURER"....................................................... 14
1.51 "MILESTONE PAYMENTS"................................................. 14
1.52 "NDA"................................................................ 14
1.53 "NET SALES".......................................................... 14
1.54 "[CONFIDENTIAL TREATMENT] RIGHT OF FIRST OFFER"...................... 15
1.55 "NON-DISCLOSING PARTY"............................................... 15
1.56 "ORDER".............................................................. 15
1.57 "PATENT ASSIGNMENT AGREEMENT"........................................ 15
1.58 "PATENTED INDICATIONS"............................................... 15
1.59 "PATENTS"............................................................ 15
1.60 "PERSON"............................................................. 16
1.61 "POTENTIAL ADDITIONAL CONSIDERATION"................................. 16
1.62 "PRODUCT"............................................................ 16
1.63 "PURCHASE PRICE"..................................................... 16
1.64 "PURCHASER'S REQUIRED CONSENTS"...................................... 17
1.65 "RECORDS"............................................................ 17
1.66 "REGULATORY FILINGS"................................................. 18
1.67 "RELATED COMPOUND"................................................... 18
1.68 "REST-OF-WORLD" OR "ROW"............................................. 18
1.69 "SECOND BACK-END MILESTONE DATE"..................................... 18
1.70 "SECOND PHASE III TRIAL"............................................. 18
1.71 "SECURED SUMS"....................................................... 18
1.72 "SELLER LICENSE"..................................................... 18
1.73 "SELLER'S REQUIRED CONSENTS"......................................... 18
1.74 "SELLER SUPPLY AGREEMENT"............................................ 18
1.75 "STOCK".............................................................. 19
1.76 "SUCCESSOR".......................................................... 19
1.77 "TAX"................................................................ 19
1.78 "TRANSITION, DATA TRANSFER AND SERVICES PLAN"........................ 19
1.79 "UPFRONT PAYMENTS"................................................... 19
1.80 "VALID CLAIM"........................................................ 19
1.81 "VAT"................................................................ 19
1.82 "WESTERN EUROPE"..................................................... 19
1.83 "WYETH".............................................................. 20
2. CLOSING CONDITIONS........................................................ 20
2.1 CLOSING.............................................................. 20
2.2 DELIVERIES BY PURCHASER.............................................. 20
2.3 DELIVERIES BY SELLER................................................. 21
2.4 OBLIGATIONS OF THE PARTIES........................................... 22
2.5 TERMINATION.......................................................... 22
3. SALE AND PURCHASE OF ASSETS AND RELATED TRANSACTIONS...................... 23
3.1 SALE AND PURCHASE OF ASSETS.......................................... 23
3.2 PURCHASE PRICE PAYMENTS.............................................. 23
3.2.1 Upfront Payments................................................... 24
3.2.2 Milestone Payments................................................. 24
3.2.3 Earn-Out on Sales.................................................. 25
3.3 POTENTIAL ADDITIONAL CONSIDERATION................................... 25
3.3.1 United States...................................................... 25
3.3.2 Western Europe..................................................... 26
3.3.3 Rest-of-World...................................................... 26
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3.4 POTENTIAL [CONFIDENTIAL TREATMENT] RIGHT............................. 26
3.5 INTEREST............................................................. 27
3.6 ASSUMPTION OF LIABILITIES............................................ 27
3.7 TAXES................................................................ 27
3.8 ALLOCATION OF PURCHASE PRICE......................................... 28
3.9 OPTION TO ACQUIRE ASSETS............................................. 28
3.10 CHARGE............................................................... 29
4. TRANSITION ARRANGEMENTS AND PURCHASER'S DEVELOPMENT AND REPORTING
OBLIGATIONS............................................................... 31
4.1 TRANSITION OF ASSETS................................................. 31
4.2 PURCHASER'S EFFORTS.................................................. 31
4.3 DEVELOPMENT REPORTS.................................................. 31
4.4 EARN-OUT ON SALES REPORTS, RECORDS AND AUDIT......................... 31
4.5 REGULATORY MATTERS................................................... 32
4.6 INSURANCE............................................................ 32
4.7 ACCESS............................................................... 33
5. POST-CLOSING COVENANTS OF THE PARTIES..................................... 33
5.1 COOPERATION.......................................................... 33
5.2 NON-ASSERTION OF INTELLECTUAL PROPERTY RIGHTS........................ 34
5.3 PUBLIC ANNOUNCEMENTS................................................. 34
5.4 FURTHER ASSURANCES................................................... 34
6. REPRESENTATIONS AND WARRANTIES OF SELLER.................................. 35
6.1 TITLE TO, AND CONDITION OF, ASSETS................................... 35
6.2 COMPLIANCE WITH LAWS................................................. 38
6.3 REGULATORY MATTERS AND LEGAL PROCEEDINGS............................. 38
6.4 AUTHORITY; BINDING NATURE OF AGREEMENT............................... 39
6.5 NON-CONTRAVENTION.................................................... 40
6.6 CONSENT.............................................................. 40
6.7 BROKERS.............................................................. 40
6.8 DISCLOSURE........................................................... 40
7. REPRESENTATIONS AND WARRANTIES OF PURCHASER............................... 40
7.1 AUTHORITY; BINDING NATURE OF AGREEMENT............................... 40
7.2 NON-CONTRAVENTION.................................................... 41
7.3 CONSENT.............................................................. 41
7.4 LEGAL PROCEEDINGS.................................................... 41
7.5 BROKERS.............................................................. 41
7.6 DISCLOSURE........................................................... 42
8. SURVIVAL.................................................................. 42
9. INDEMNIFICATION........................................................... 42
9.1 INDEMNIFICATION...................................................... 42
9.1.1 By Seller.......................................................... 42
9.1.2 By Purchaser....................................................... 42
9.1.3 Procedures......................................................... 43
9.1.4 Third Party Claims................................................. 43
9.1.5 Expenses........................................................... 45
9.2 INSURANCE............................................................ 45
9.3 LIMIT ON RECOVERY.................................................... 45
9.4 CURE................................................................. 45
10. MISCELLANEOUS.......................................................... 46
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10.1 TERMINATION, RESCISSION, REPUDIATION................................. 46
10.2 CONFIDENTIALITY...................................................... 46
10.3 DISPUTE RESOLUTION................................................... 47
10.4 FORCE MAJEURE........................................................ 48
10.5 HARDSHIP............................................................. 49
10.6 NOTICES.............................................................. 49
10.7 ENTIRE AGREEMENT..................................................... 50
10.8 WAIVER............................................................... 50
10.9 AMENDMENT............................................................ 50
10.10 THIRD PARTY BENEFICIARIES............................................ 50
10.11 ASSIGNMENT AND BINDING EFFECT........................................ 51
10.12 HEADINGS............................................................. 51
10.13 SEVERABILITY......................................................... 51
10.14 GOVERNING LAW........................................................ 51
10.15 DOLLAR DENOMINATION AND FOREIGN SALES................................ 51
10.16 EXPENSES............................................................. 52
10.17 COUNTERPARTS......................................................... 52
10.18 INTERPRETATION OF AGREEMENT.......................................... 52
SCHEDULES TO THE ASSET PURCHASE AGREEMENT.................................... 54
SCHEDULE 1: ASSUMED CONTRACTS................................................ 55
SCHEDULE 2: PURCHASER'S CREDITORS............................................ 58
SCHEDULE 3: REGULATORY FILINGS............................................... 59
SCHEDULE 4: PURCHASER'S REQUIRED CONSENTS.................................... 60
SCHEDULE 5: SELLER'S REQUIRED CONSENTS....................................... 61
EXHIBITS:
---------
Exhibit A: Patent Assignment Agreement (including Schedule PAA)
Exhibit B: Seller Supply Agreement (including Schedules 1-6 SSA)
Exhibit C: Transition, Data Transfer and Services Plan (including Schedules 1-6 TDTS)
Exhibit D: Patent Release Agreement (UBS)
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ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT is entered into as of January 22, 2004 (the
"EFFECTIVE DATE"), by and between VIATRIS GMBH & CO. KG, a limited partnership
(Kommanditgesellschaft) organized under the laws of the Federal Republic of
Germany ("SELLER"), and XCEL PHARMACEUTICALS, INC., a Delaware corporation
("PURCHASER"). Seller and Purchaser are referred to collectively in this
Agreement as the "PARTIES." Certain capitalized terms used in this Agreement are
defined in Section 1 below.
RECITAL
The Parties wish to provide for the purchase by Purchaser of the Assets from
Seller, and to provide for certain related transactions, all on the terms and
subject to the conditions and other provisions set forth in this Agreement and
in the Ancillary Agreements.
AGREEMENT
The Parties, intending to be legally bound, agree as follows:
1. DEFINITIONS
As used herein, the following terms shall have their respective meanings:
1.1 "ABANDONMENT DECISION"
means a determination by Purchaser (evidenced by Purchaser's written
notice to Seller) to abandon Purchaser's efforts with respect to the
entire development of the Product (including the activities contemplated
by Section 4.2 below), which determination Purchaser shall have the right
to make at any time and for any reason (in Purchaser's sole discretion).
1.2 "ABANDONMENT REVIEW EXTENSION"
means an extension of the next to occur of the Back-End Milestone Dates by
one day for each day after Purchaser has provided written notice to Seller
that Purchaser is evaluating information with respect to the development
of the Product that Purchaser believes in its reasonable estimation could
lead Purchaser to make an Abandonment Decision; provided, however, that no
Abandonment Review Extension shall extend the respective Back-End
Milestone Date by more than three (3) months without Seller's written
consent (which shall not be unreasonably withheld). For the avoidance of
doubt, subsequent Back-End Milestone Dates shall remain unaffected by any
Abandonment Review Extension (i.e., any Abandonment Review Extension shall
affect only the next to occur of the Back-End Milestone Dates).
1.3 "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,
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investigative or informal) commenced, brought, conducted or heard by or
before, or otherwise involving, any Governmental or Regulatory Authority.
1.4 "AFFILIATE"
means, with respect to any Person, any other Person which controls, is
controlled by or is under common control with such Person or entity.
Without limitation, a Person shall be regarded as in control of another
Person if it owns or controls, directly or indirectly, (i) in the case of
corporate entities at least fifty percent (50%) (or the maximum ownership
interest permitted by applicable Law) of the equity securities in the
subject entity entitled to vote in the election of directors and, (ii) in
the case of an entity that is not a corporation, at least fifty percent
(50%) (or the maximum ownership interest permitted by applicable Law) of
the equity securities or other ownership interests with the power to
direct the management and policies of such subject entity or entitled to
elect the corresponding management authority.
1.5 "ANCILLARY AGREEMENTS"
mean the following agreements: (i) the Seller Supply Agreement; and (ii)
the Patent Assignment Agreement.
1.6 "API"
means the Compound in bulk form which, if appropriately formulated and
finished, would constitute finished bulk drug substance formulated into a
final dosage form of a Product.
1.7 "ASSETS"
has the meaning set forth in Section 3.1 below.
1.8 "ASSUMED LIABILITIES"
mean the obligations and other liabilities of Seller and its Affiliates
under or relating to the Contracts, but only insofar as such obligations
or liabilities arise, and relate to events or conduct occurring, after the
Closing.
1.9 "AUDIT RECORDS"
has the meaning set forth in Section 4.4(b) below.
1.10 "BACK-END MILESTONE DATE"
means each of the First Back-End Milestone Date and the Second Back-End
Milestone Date.
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1.11 "BEST OF SELLER'S KNOWLEDGE"
means the knowledge of Seller assuming Seller has made all reasonable and
diligent enquiries before the Closing Date in respect of the subject
matter of the relevant statement.
1.12 "CARCINOGENICITY STUDY REPORT"
means the final, completed report from a two (2)-year carcinogenicity
study in rats with respect to the Compound (which is required for FDA
Approval).
1.13 "CHARGE"
has the meaning set forth in Section 3.10(a) below.
1.14 "CHARGED RIGHTS"
has the meaning set forth in Section 3.10(a) below.
1.15 "CLOSING"
has the meaning set forth in Section 2.1 below.
1.16 "CLOSING DATE"
means the date upon which the Closing occurs.
1.17 "COMBINATION PRODUCT"
means Product when sold in combination with one or more other components
or active ingredients contributing substantially to the overall efficacy
of the combination product.
1.18 "COMMERCIALLY REASONABLE EFFORTS"
mean, with respect to a Party, those efforts consistent with the exercise
of such Party's prudent scientific and business judgment as applied to
other research, development and commercialization efforts for products of
similar scientific and commercial potential within the programs and
relevant product lines of such Party, and as are common and customary in
the pharmaceutical industry for companies of like size and resources to
such Party.
1.19 "COMPETITIVE PRODUCT"
means a pharmaceutical preparation (i) containing the Compound at
therapeutically active dosages and (ii) that is owned by, or licensed
from, any Person other than (x) Purchaser, (y) any Affiliate of Purchaser
or (z) any Person acquiring its ownership or license rights, directly or
indirectly, from Purchaser or any Affiliate of Purchaser.
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1.20 "COMPOUND"
means [CONFIDENTIAL TREATMENT].
1.21 "CONSENT"
means any consent, approval or waiver.
1.22 "CONTRACTS"
mean the contracts and other instruments identified on Schedule 1 hereto.
1.23 "DAMAGES"
mean costs, Liabilities, damages, lawsuits, deficiencies, claims and
expenses (including interest, penalties and reasonable fees and
disbursements of attorneys paid in connection with the investigation,
defense or settlement of any of the foregoing).
1.24 "DATA ROOM DOCUMENTS"
mean the documents, data, records and other materials furnished or made
available by Seller to Purchaser as part of the data room established by
Seller at Seller's premises, as well as the file history documents related
to the US and European Patents and provided by Seller to Purchaser, for
use by Purchaser in conducting due diligence with respect to the Assets
prior to the Closing Date. A list of the Data Room Documents is attached
as Schedule TDTS to the Transition, Data Transfer and Services Plan.
1.25 "DISCLOSING PARTY"
has the meaning set forth in Section 10.2(a) below.
1.26 "DOMAIN NAME"
means the Internet domain name "www.retigabine.com," as well as all
registrations, goodwill and rights thereto.
1.27 "EARN-OUT ON SALES"
mean the amounts payable by Purchaser to Seller calculated in the manner
set out below:
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DOES ANY
DOES ANY VALID CLAIM COMPETITIVE
COVER THE PRODUCT? PRODUCT EXIST? AMOUNT PAYABLE TO
REGION(*) (**) (***) SELLER END OF PAYMENT DUTY
--------- -------------------- -------------- ----------------- -------------------
[CONFIDENTIAL TREATMENT]
(*) Earn-Out on Sales shall be determined [CONFIDENTIAL TREATMENT], as
applicable.
(**) A Valid Claim will be deemed to cover a Product [CONFIDENTIAL TREATMENT]
if the sale or import of such Product [CONFIDENTIAL TREATMENT] would infringe
one or more Valid Claims (ignoring, for this purpose, any exhaustion of rights
defense to infringement). Thus, for example, if no Valid Claim covers the sale
or import of a Product [CONFIDENTIAL TREATMENT], no Earn-Out on Sales shall be
due and owing as the result of any related Net Sales [CONFIDENTIAL TREATMENT].
(***) A Competitive Product will be deemed to exist [CONFIDENTIAL TREATMENT] if
a Competitive Product is being commercially sold [CONFIDENTIAL TREATMENT].
1.28 "ENFORCEMENT EVENT"
means any of the following events:
(i) Purchaser being in default of an obligation to pay one or more of
the Upfront Payments or Milestone Payments (on the terms provided in
this Agreement)
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where any such default persists following thirty (30) days' written
notice by Seller to Purchaser and each of Purchaser's creditors
identified on the list which is Schedule 2 hereto (which list may be
amended from time to time and kept update, accurate and complete by
Purchaser upon notice to Seller);
(ii) Purchaser being unable or admits inability to pay its debts
generally as they fall due, suspends making payments on its debts
generally or, by reason of actual or anticipated financial
difficulties, commences negotiations with one or more of its
creditors with a view to rescheduling its indebtedness generally;
(iii) Purchaser files any petition or action for relief under any
bankruptcy, reorganization, insolvency or moratorium law or any
other law for the relief of, or relating to, debtors, now or
hereafter in effect, or makes any assignment for the benefit of
creditors or takes any corporate action in furtherance of any of the
foregoing; or
(iv) An involuntary petition is filed against Purchaser (unless such
petition is dismissed or discharged within ninety (90) days) under
any bankruptcy statute now or hereafter in effect, or a custodian,
receiver, trustee or assignee for the benefit of creditors (or other
similar official) is appointed to take possession, custody or
control of any property of Purchaser which includes any Assets.
1.29 "EXCLUDED LIABILITIES"
mean all Liabilities of Seller and its Affiliates except the Assumed
Liabilities.
1.30 "FDA"
means the United States Food and Drug Administration (or any successor
organization).
1.31 "FDA APPROVAL"
means the date upon which Purchaser first receives final approval of the
labeling letter in the United States with respect to a Product with any
form of epilepsy as part of the Indication (e.g., following which
Purchaser may immediately commence marketing and sale of such Product in
the United States).
1.32 "FIRST BACK-END MILESTONE DATE"
has the meaning set forth in Section 3.2.2(a) below.
1.33 "FIRST COMMERCIAL SALE"
means the first sale for use by the general public of a Product in the
United States after FDA Approval.
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1.34 "FIRST PHASE III TRIAL"
means the first large-scale human clinical trial initiated after the
Closing with a protocol that is designed to provide pivotal safety and
efficacy data regarding a Product with any Indication sufficient to
support registration of such Product by the FDA.
1.35 "FORCE MAJEURE EVENT"
means any event or cause beyond the reasonable control of the affected
Party (including acts of war, acts of God, earthquake, flood, embargo,
riot, sabotage, labor shortage or dispute or the act or threatened action
of any Governmental or Regulatory Authority), including, for either Party
as the affected Party, any material failure or material breach of the
other Party under the Transition, Data Transfer and Services Plan (or any
obligations of such other Party under this Agreement with respect thereto)
and, for Purchaser as the affected Party, any failure or breach by Seller
to supply "Contractual Products" (as such term is defined, for this
purpose, in the Seller Supply Agreement) under the Seller Supply
Agreement.
1.36 "FORCE MAJEURE EXTENSION"
means, with respect to the obligations of either Party to be performed
under this Agreement or any of the Ancillary Agreements, an extension of
any date for the performance of any such obligation by one day for each
day that such Party's Commercially Reasonable Efforts to perform such
obligation are affected by any Force Majeure Event.
1.37 "GOVERNMENTAL OR REGULATORY AUTHORITY"
means any court, tribunal, arbitrator, authority, agency, commission,
official or other instrumentality of any country, or any supra-national
organization, state, county, city or other political subdivision thereof,
as well as any securities exchange or similar regulatory authority.
1.38 "IND"
means the investigational new drug application No. 53,950 filed with the
FDA for "Retigabine (GKE-941, D-23129) Capsules."
1.39 "INDEMNIFICATION CLAIM NOTICE"
has the meaning set forth in Section 9.1.3 below.
1.40 "INDEMNIFIED PARTY"
has the meaning set forth in Section 9.1.3 below.
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1.41 "INDEMNIFYING PARTY"
has the meaning set forth in Section 9.1.3 below.
1.42 "INDEMNITEE"
has the meaning set forth in Section 9.1.3 below.
1.43 "INDEMNITEES"
has the meaning set forth in Section 9.1.3 below.
1.44 "INDICATION"
means any human therapeutic indication for which a pharmaceutical
preparation containing the Compound at therapeutically active dosages is
or may be developed.
1.45 "KNOW-HOW"
means all technology, inventions, copyrights, database rights, trade
secrets, know-how, data, processes, procedures and other information, in
each case that relate to the API, the Compound, any Related Compound or
any Product as far as the same are within the possession or control of
Seller or any of Seller's Affiliates at the Closing Date.
1.46 "LAW"
means any law, statute or ordinance, or any rule, regulation, or published
guidelines promulgated by any Governmental or Regulatory Authority.
1.47 "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), excluding any liability for any Taxes.
1.48 "LICENSE AGREEMENT"
means an agreement whereby a Licensee receives a license from Purchaser or
any Affiliate of Purchaser to manufacture, distribute, promote, use, sell,
offer for sale or import any Product.
1.49 "LICENSEE"
means any Person, other than any Affiliate of Purchaser, who, pursuant to
a License Agreement, receives a license from Purchaser or any Affiliate of
Purchaser to manufacture, distribute, promote, use, sell, offer for sale
or import the Compound or any Product.
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1.50 "MANUFACTURER"
means Degussa AG.
1.51 "MILESTONE PAYMENTS"
have the meaning set forth in Section 3.2.2 below.
1.52 "NDA"
means a New Drug Application in respect of a Product (for any Indication).
1.53 "NET SALES"
mean the amount of gross sales of Products in a specified territory for a
specified period by Purchaser, any Licensee or any Affiliate of Purchaser
less the following amounts actually and reasonably incurred by Purchaser:
(i) customer directed commissions and quantity, trade and cash discounts
actually allowed or given;
(ii) discounts, replacements, credits or refunds actually allowed for the
return of rejected, outdated, damaged or returned Products;
(iii) rebates, chargebacks and price adjustments actually allowed or
given;
(iv) sales or similar taxes (including duties or other governmental
charges or assessments) levied, absorbed or otherwise imposed on the
sale of Products (including VAT or other governmental charges
measured by the billing amount, when included in such billing); and
(v) charges for freight, handling, postage, transportation, insurance
and other shipping charges;
provided, however, that:
(a) sales or transfers of Products between or among Purchaser, any
Licensee or any Affiliate of Purchaser, as well as sales or
transfers resulting directly or indirectly from any Seller License,
shall be excluded from Net Sales calculations for all purposes;
(b) Products that are made, sold or used in connection with any
pre-clinical or clinical trials, or for any testing, quality
control, evaluation or other development purposes, or distributed as
samples, shall be excluded from Net Sales calculations for all
purposes;
(c) for Combination Products, the computation of Net Sales shall be
based on the relative average net selling price of the applicable
Product in the country at issue as compared with the net selling
prices of the other components or active ingredients contributing
substantially to the overall efficacy of the Combination
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Product (as determined by identical methods, to the extent
practical) during the applicable calendar quarter (although, if the
Product or such other components or active ingredients were not
separately invoiced or priced during the applicable quarterly
period, the Net Sales computation shall be based on the relative
fair market prices which the selling party would have charged for
the Product and such other components or ingredients to a third
party in an arm's length transaction, as determined by Purchaser in
its reasonable discretion); provided, however, that in the instance
of any Combination Product where the Product is sold in combination
with a diagnostic device, the computation of Net Sales for such
Product shall be based solely on the average net selling price of
the applicable Product in the country at issue when sold as a
stand-alone product; and
(d) amounts relevant to the determination of Net Sales, and the timing
of sales, shall be determined from the books and records of
Purchaser (or, as applicable, any Licensee or any Affiliate of
Purchaser) which shall be maintained in accordance with generally
accepted accounting principles (GAAP) in the United States (or, as
applicable, such other standard accounting principles as may be in
effect in any other relevant jurisdiction).
1.54 "[CONFIDENTIAL TREATMENT] RIGHT OF FIRST OFFER"
has the meaning set forth in Section 3.4 below.
1.55 "NON-DISCLOSING PARTY"
has the meaning set forth in Section 10.2(a) below.
1.56 "ORDER"
means any writ, judgment, decree, injunction or similar order of any
Governmental or Regulatory Authority (in each such case whether
preliminary or final).
1.57 "PATENT ASSIGNMENT AGREEMENT"
means the Patent Assignment Agreement substantially in the form of Exhibit
A hereto.
1.58 "PATENTED INDICATIONS"
mean all Indications covered by any of the Patents.
1.59 "PATENTS"
mean the following:
(i) those certain patents and patent applications identified on Schedule
PAA of Exhibit A;
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(ii) any other patents and patent applications owned or controlled by
Seller or any of its Affiliates and covering the Compound, any
Related Compound or any Product or the manufacture, distribution,
promotion, use, sale, offer for sale or import of the Compound, any
Related Compound or any Product;
(iii) any patents that are or may be granted from any of the patents or
patent applications referred to in this definition, including any
extensions (including supplementary protection certificates),
continuations, continuations-in-part, divisionals, reissues,
reexaminations, renewals, additions, registrations and confirmations
thereof;
(iv) any foreign counterparts or equivalents of any of the patents or
patent applications referred to in this definition; and
(v) any patents or patent applications claiming priority of any of the
patents or patent applications referred to in this definition.
1.60 "PERSON"
means any individual, corporation, general partnership, limited
partnership, limited liability company, trust, association, firm,
organization, company, business, entity, union, society or governmental
body.
1.61 "POTENTIAL ADDITIONAL CONSIDERATION"
has the meaning set forth in Section 3.3 below.
1.62 "PRODUCT"
means a pharmaceutical preparation containing the Compound at
therapeutically active dosages (whether alone or in combination with one
or more other pharmacologically active ingredients) and suitable for human
administration for any Indication.
1.63 "PURCHASE PRICE"
means the following:
(a) the Upfront Payments;
(b) the Milestone Payments;
(c) the Earn-Out on Sales;
(d) the Potential Additional Consideration; and
(e) the [CONFIDENTIAL TREATMENT] Right Of First Offer.
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1.64 "PURCHASER'S REQUIRED CONSENTS"
has the meaning set forth in Section 7.3 below.
1.65 "RECORDS"
mean originals (or copies where originals are unavailable to Seller or its
Affiliates) of the following:
(i) all documents material to any of the Patents (including all files,
file histories and material correspondence with relevant patent
authorities as well as all docketing information), the Regulatory
Filings (including all material correspondence with relevant
regulatory authorities) or the Know-How;
(ii) all material documents provided by Wyeth to Seller or any of its
Affiliates up to the time of Closing that relate to the API, the
Compound, any Product or any Asset (and any such documents provided
by Wyeth to the Seller or any of its Affiliates following the
Closing (such documents to be promptly delivered to Purchaser
following receipt by Seller or any of its Affiliates));
(iii) all stock and other records, all database information relating to
suppliers and manufacturers and all price, technical, promotional
and advertising literature, in each case which (x) relate to the
API, the Compound, any Product or any Asset and (y) are in the
possession or control of Seller or any of Seller's Affiliates at the
Closing Date;
(iv) all toxicology data and information, all pre-clinical and clinical
data and information and all other data and information which relate
to the Compound, any Product or any Asset, in each case which are in
the possession or control of Seller or any of Seller's Affiliates at
the Closing Date;
(v) all Data Room Documents;
(vi) all documents, data and records referenced in the Transition, Data
Transfer and Services Plan or any exhibits or schedules attached
thereto; and
(vii) one or more schedules and related analyses of all costs of the
development project in relation to the Compound (including costs
incurred by Seller and Seller's Affiliates) and as prepared by
Seller or its Affiliates and covering the period commencing on
January 1, 2000 and continuing through the Closing Date insofar as
such schedules or analyses are in the possession or control of
Seller or Seller's Affiliates as at the Closing Date.
In addition to such originals (or copies, as applicable), the Records will
include electronic copies of the foregoing items where such electronic
copies are in the possession of Seller or any of Seller's Affiliates at
the Closing Date.
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1.66 "REGULATORY FILINGS"
mean all applications and registrations submitted to any Governmental or
Regulatory Authority, or owned by Seller or its Affiliates, with respect
to the Compound or any Product. The Regulatory Filings include the IND and
those filings specified on Schedule 3 hereto.
1.67 "RELATED COMPOUND"
means each chemical entity other than the Compound claimed by any of the
patents or patent applications referenced in Section 1.59 (i) above (i.e.,
those certain patents or patent applications identified on Schedule PAA of
Exhibit A).
1.68 "REST-OF-WORLD" OR "ROW"
means the territory represented by all countries in the World other than
the United States and the countries in Western Europe.
1.69 "SECOND BACK-END MILESTONE DATE"
has the meaning set forth in Section 3.2.2(c) below.
1.70 "SECOND PHASE III TRIAL"
means the second large-scale human clinical trial initiated after the
Closing with a protocol that is designed to provide pivotal safety and
efficacy data regarding a Product with any Indication sufficient to
support registration of such Product by the FDA.
1.71 "SECURED SUMS"
has the meaning set forth in Section 3.10(a) below.
1.72 "SELLER LICENSE"
means (i) any License Agreement in which Seller or any of its Affiliates
is a Licensee or (ii) any other agreement in which Seller or any of its
Affiliates receives, directly or indirectly (from Purchaser or any
Licensee or otherwise), rights to manufacture, market, distribute,
promote, use, sell, offer for sale or import the Compound or any Product.
1.73 "SELLER'S REQUIRED CONSENTS"
has the meaning set forth in Section 6.6 below.
1.74 "SELLER SUPPLY AGREEMENT"
means that certain Supply Agreement in the form attached as Exhibit B
hereto.
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1.75 "STOCK"
means the stock of batches of bulk tablets of Compound, the final blend
(tabletting mixture) and the Metabolite (as defined in Exhibit B)
identified on Schedule 1SSA of Exhibit B.
1.76 "SUCCESSOR"
means any successor-in-interest to all or substantially all of Purchaser's
assets or to any business or product to which the Assets relate.
1.77 "TAX"
means, where relating to or payable in respect of the Assets or the
transactions contemplated pursuant to this Agreement or the Ancillary
Agreements, any and all forms of taxes (irrespective of whether these
taxes are originally owed by one Party or based on a joint and several
liability assessment of one or both Parties), levies, imposts,
contributions, duties and charges in the nature of taxation and all
withholdings or deductions in respect thereof of whatever nature whenever
imposed by any Governmental or Regulatory Authority of competent
jurisdiction (including, for the avoidance of doubt, applicable
unemployment and social security contribution liabilities) and whether
directly or primarily chargeable against, recoverable from or attributable
to either Party or any other person (including all fines, penalties,
charges and interest relating to the same).
1.78 "TRANSITION, DATA TRANSFER AND SERVICES PLAN"
means the Transition, Data Transfer and Services Plan attached as Exhibit
C hereto.
1.79 "UPFRONT PAYMENTS"
have the meaning set forth in Section 3.2.1 below.
1.80 "VALID CLAIM"
means a claim of an issued and unexpired Patent which has not been (i)
revoked or held unenforceable or invalid by a Governmental or Regulatory
Authority with the legal authority to revoke or hold unenforceable or
invalid a patent or (ii) disclaimed, denied or admitted to be invalid or
unenforceable through reissue, disclaimer or otherwise.
1.81 "VAT"
means value added tax or taxes similar thereto.
1.82 "WESTERN EUROPE"
means the territory represented by the following countries: Andorra,
Austria, Belgium, Cyprus, Denmark, Finland, France, Germany, Greece,
Iceland, Ireland, Italy,
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Liechtenstein, Luxemburg, Malta, Monaco, Netherlands, Norway, Portugal,
San Marino, Spain, Sweden, Switzerland, United Kingdom and Vatican.
1.83 "WYETH"
means Wyeth Pharmaceuticals, formerly Wyeth Ayerst Research Division of
American Home Products Corporation.
2. CLOSING CONDITIONS
2.1 CLOSING
The closing of the purchase of the Assets by Purchaser (the "Closing")
will take place on January 26, 2004, or, if later, one (1) business day
following the first date upon which all of the Purchaser's Closing
Conditions (as defined below) and all of the Seller's Closing Conditions
(as defined below) are met; provided, however, that (x) the obligation of
Purchaser to participate in any Closing is conditional upon Purchaser's
receipt of the deliveries by Seller set out in Section 2.3 below (the
"Purchaser Closing Conditions") or waiver by Purchaser (in Purchaser's
sole discretion) of the same as provided in Section 2.4 below and (y) the
obligation of Seller to participate in any Closing is conditional upon
Seller's receipt of the deliveries by Purchaser set out in Section 2.2
below (the "Seller Closing Conditions") or waiver by Seller (in Seller's
sole discretion) of the same as provided in Section 2.4 below.
2.2 DELIVERIES BY PURCHASER
At the Closing, Purchaser will make the following deliveries to Seller:
(a) The first of the Upfront Payments (in the amount of [CONFIDENTIAL
TREATMENT], as referred to in Section 3.2.1(a) below.
(b) A copy of an executed Consent from each Person from whom such a
Consent is required in order for Purchaser to consummate the
transactions contemplated hereby or by any of the Ancillary
Agreements (including (i) the Consents set forth on Schedule 4
hereto and (ii) Purchaser's Required Consents).
(c) The Seller Supply Agreement executed by Purchaser.
(d) An opinion letter of Pillsbury Winthrop LLP, counsel to Purchaser,
to the effect that: (i) Purchaser is a corporation duly organized,
validly existing and in good standing under the Laws of the State of
Delaware; (ii) Purchaser has full corporate power and authority to
execute, deliver and perform this Agreement and to consummate the
transactions contemplated hereby; and (iii) the execution, delivery
and performance of this Agreement by Purchaser does not conflict
with, or constitute a default under any organizational documents of
Purchaser.
(e) A copy of resolutions adopted by the board of directors of Purchaser
authorizing the execution, delivery and performance by Purchaser of
this Agreement and the Ancillary Agreements and the consummation of
the transactions contemplated
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hereby and thereby (including the purchase of the Assets from Seller
by Purchaser).
(f) A compliance certificate, executed by Purchaser's Chief Executive
Officer and President on behalf of Purchaser and dated as of the
Closing, to the effect that (i) the representations and warranties
made by Purchaser herein are true and correct in all respects as of
the Closing with the same force and effect as if they had been made
as of the Closing and (ii) Purchaser has performed all obligations
and conditions herein required to be performed or observed by
Purchaser on or prior to the Closing.
2.3 DELIVERIES BY SELLER
At the Closing, Seller will make the following deliveries to Purchaser:
(a) A copy of an executed Consent from each Person from whom such a
Consent is required in order for Seller to consummate the
transactions contemplated hereby or by any of the Ancillary
Agreements (including (i) the Consents set forth on Schedule 5
hereto and (ii) Seller's Required Consents).
(b) The Seller Supply Agreement executed by Seller.
(c) A patent release agreement (in the form attached as Exhibit D
hereto) fully executed, to become effective upon the Closing to
assign any and all Patents previously owned by UBS AG to Seller.
(d) The Patent Assignment Agreement executed by Seller.
(e) Evidence reasonably satisfactory to Purchaser that any and all
liens, mortgages, charges or other encumbrances against any of the
Assets have been released prior to Closing (and, if requested by
Purchaser, that Seller has, and will transfer to Purchaser, title of
record to all Assets (including all Patents)).
(f) Such bills of sale, assignments and other instruments as Seller may
be required to execute (in Purchaser's reasonable discretion) in
order to evidence and effectuate the transfer of the Assets to
Purchaser.
(g) An opinion letter prepared by counsel selected by Purchaser (and
reasonably satisfactory to Seller), the fees of such counsel to be
paid by Purchaser, to the effect that: (i) Seller is a limited
partnership duly organized and validly existing under the Laws of
Germany; (ii) Seller has full power and authority to execute,
deliver and perform this Agreement and to consummate the
transactions contemplated hereby; and (iii) the execution, delivery
and performance of this Agreement by Seller does not conflict with,
or constitute a default under any organizational documents of
Seller.
If the contents of such opinion letter do not include all of the
matters set out in this Section 2.3(g), all the requirements set out
in this Section 2.3(g) will be deemed to have been satisfied if
Purchaser accepts such opinion letter.
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(h) A compliance certificate, executed by Seller's Managing Director and
Chief Executive Officer on behalf of Seller and dated as of the
Closing, to the effect that (i) the representations and warranties
made by Seller herein are true and correct in all respects as of the
Closing with the same force and effect as if they had been made as
of the Closing, (ii) Seller has performed all obligations and
conditions herein required to be performed or observed by Seller on
or prior to the Closing and (iii) no event or circumstance shall
have occurred following the Effective Date which could reasonably be
expected to represent a material and adverse change in the
condition, status or value of any of the Assets.
2.4 OBLIGATIONS OF THE PARTIES.
(a) Purchaser (i) shall use its best endeavors to ensure that the
Seller's Closing Conditions are satisfied as soon as practicable and
in any event not later than January 30, 2004, (ii) may waive all or
any of the Purchaser's Closing Conditions at any time (in
Purchaser's sole discretion), provided that such waiver is express
and is in writing, and (iii) may terminate this Agreement at any
time following January 30, 2004, if (x) Purchaser is able at such
time to satisfy all of the Seller's Closing Conditions (or such
unsatisfied Seller's Closing Conditions have been waived by Seller
as provided in this Section 2.4) and (y) Seller is not then able to
satisfy all of the Purchaser's Closing Conditions (and such
unsatisfied Purchaser's Closing Conditions have not been waived by
Purchaser as provided in this Section 2.4).
(b) Seller (i) shall use its best endeavors to ensure that the
Purchaser's Closing Conditions are satisfied as soon as practicable
and in any event not later than January 30, 2004, (ii) may waive all
or any of the Seller's Closing Conditions at any time (in Seller's
sole discretion), provided that such waiver is express and is in
writing, and (iii) may terminate this Agreement at any time
following January 30, 2004, if (x) Seller is able at such time to
satisfy all of the Purchaser's Closing Conditions (or such
unsatisfied Purchaser's Closing Conditions have been waived by
Purchaser as provided in this Section 2.4) and (y) Purchaser is not
then able to satisfy all of the Seller's Closing Conditions (and
such unsatisfied Seller's Closing Conditions have not been waived by
Seller as provided in this Section 2.4).
2.5 TERMINATION
In the event of any termination of this Agreement as contemplated by
Section 2.4 above, this Agreement shall be deemed terminated and shall
have no further effect, except that (i) Sections 10.3 (Dispute
Resolution), 10.2 (Confidentiality), 10.14 (Governing Law) and 10.16
(Expenses) shall survive any such termination and (ii) each Party shall
remain liable to the other Party for any breach of any of such Party's
obligations contained in this Agreement (including as set forth in Section
2.4 above). Except as provided in the immediately preceding clause (ii),
upon such a termination the Parties shall be released from all liabilities
and obligations hereunder.
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3. SALE AND PURCHASE OF ASSETS AND RELATED TRANSACTIONS
3.1 SALE AND PURCHASE OF ASSETS
On the terms and subject to the conditions and other provisions set forth
in this Agreement and in the Ancillary Agreements, at the Closing Seller
will sell and transfer to Purchaser, and Purchaser will purchase from
Seller, all right, title and interest throughout the World in and to the
following (collectively, the "ASSETS"):
(a) The Patents (including the right, if any, to sue or bring actions
(including collection of Damages) for past, present and future
infringement of any of the Patents, together with all claims and
rights to payment in respect thereof);
(b) The Know-How;
(c) The Regulatory Filings;
(d) All of Seller's rights as of the Closing Date under the Contracts
(e) The Stock;
(f) The Records; and
(g) The Domain Name.
3.2 PURCHASE PRICE PAYMENTS
As consideration for the sale of the Assets to Purchaser, Purchaser shall,
subject to the terms and conditions of this Agreement, make the various
payments constituting the Purchase Price (including as set forth in this
Section 3.2 and in Sections 3.3 and 3.4 below) to Seller; provided,
however, that:
(i) for the avoidance of doubt, the payments referenced in Sections
3.2.1 and 3.2.2 below (x) are one-time payments only, such that
achievement of the noted events or milestones by successive Products
will not trigger additional payment obligations for Purchaser, (y)
once paid shall be non-refundable and non-deductible and (z) except
for the Upfront Payments, shall not be payable (and any obligation
of Purchaser with respect thereto shall terminate) in the event of
an Abandonment Decision (provided that if an Abandonment Decision is
made after the occurrence of an event triggering a Milestone Payment
as set out in Section 3.2.2 but before the end of the ten (10)
business day period thereafter, Purchaser shall remain obligated to
pay the applicable Milestone Payment to Seller notwithstanding the
Abandonment Decision); and
(ii) any payments required to be paid by this Section 3.2 will be made by
wire transfer of immediately available funds to the following
beneficiary (with any bank levies or charges, other than levies and
charges of Seller's bank, payable by Purchaser): VIATRIS GmbH & Co.
KG, Degussa Bank GmbH Account: 590 032; Swift: DEGUDEFF.
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3.2.1 Upfront Payments The payments referenced in Sections 3.2.1(a) and 3.2.1(b)
below are referred to herein as the "UPFRONT PAYMENTS." For the avoidance
of doubt, Purchaser's obligation to make the Upfront Payments is not
subject to any Abandonment Review Extension or Abandonment Decision.
(a) Purchaser shall pay to Seller a payment in the amount of
[CONFIDENTIAL TREATMENT] on the Closing as contemplated by Section
2.2(a) above.
(b) Purchaser shall pay to Seller a payment in the amount of
[CONFIDENTIAL TREATMENT].
3.2.2 Milestone Payments
The payments referenced in Sections 3.2.2(a) through 3.2.2(f) below
are referred to herein as the "MILESTONE PAYMENTS."
(a) Purchaser will pay to Seller a payment in the amount of
[CONFIDENTIAL TREATMENT] within ten (10) business days after the
first dosing (with either Product or placebo) of the first patient
in the First Phase III Trial; provided, however, that such payment
shall be made to Seller in any event not later than [CONFIDENTIAL
TREATMENT] (the "FIRST BACK-END MILESTONE Date"); and provided,
further, that for the avoidance of doubt, the First Back-End
Milestone Date is subject to any Abandonment Review Extension or
Force Majeure Extension.
(b) Purchaser will pay to Seller a payment in the amount of
[CONFIDENTIAL TREATMENT] within ten (10) business days after the
first dosing (with either Product or placebo) of the first patient
in the Second Phase III Trial; provided, however, that such payment
shall be made to Seller in any event not later than the First
Back-End Milestone Date; and provided, further, that for the
avoidance of doubt, the First Back-End Milestone Date is subject to
any Abandonment Review Extension or Force Majeure Extension.
(c) Purchaser will pay to Seller a payment in the amount of
[CONFIDENTIAL TREATMENT] within ten (10) business days after the
last dosing (with either Product or placebo) of the last patient in
the Second Phase III Trial; provided, however, that such payment
shall be made to Seller in any event not later than [CONFIDENTIAL
TREATMENT] (the "SECOND BACK-END MILESTONE Date"); and provided,
further, that for the avoidance of doubt, the Second Back-End
Milestone Date is subject to any Abandonment Review Extension or
Force Majeure Extension.
(d) Purchaser will pay to Seller a payment in the amount of
[CONFIDENTIAL TREATMENT] within ten (10) business days after the
issuance of the Carcinogenicity Study Report; provided, however,
that such payment shall be made to Seller in any event not later
than the Second Back-End Milestone Date; and provided, further, that
for the avoidance of doubt, the Second Back-End Milestone Date is
subject to any Abandonment Review Extension or Force Majeure
Extension.
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(e) Purchaser will pay to Seller a payment in the amount of
[CONFIDENTIAL TREATMENT] upon acceptance for filing by the FDA of
the first NDA for the Product for the first Indication.
(f) Purchaser will pay to Seller a payment in the amount of
[CONFIDENTIAL TREATMENT] upon FDA Approval.
3.2.3 Earn-Out on Sales
(a) Purchaser will pay to Seller, within forty-five (45) days after the
end of each calendar quarter (until Earn-Out on Sales in the United
States is no longer applicable), the amount of Earn-Out on Sales in
respect of the United States for such calendar quarter.
(b) Purchaser will pay to Seller, within forty-five (45) days after the
end of each calendar quarter (until Earn-Out on Sales in Western
Europe is no longer applicable), the amount of Earn-Out on Sales in
respect of Western Europe for such calendar quarter.
(c) Purchaser will pay to Seller, within forty-five (45) days after the
end of each calendar quarter (until Earn-Out on Sales in the
Rest-of-World is no longer applicable), the amount of Earn-Out on
Sales in respect of the Rest-of-World for such calendar quarter.
3.3 POTENTIAL ADDITIONAL CONSIDERATION
In addition to the payments set forth in Section 3.2 above, Seller shall
be entitled to receive the following additional payments as noted in this
Section 3.3 as applicable (collectively the "POTENTIAL ADDITIONAL
CONSIDERATION"); provided, however, that:
(i) in no event shall Purchaser be liable to Seller for any payments
under this Section 3.3 to the extent that amounts received by
Purchaser (x) are for reimbursement of expenses incurred in
connection with any development activity (including pre-clinical or
clinical trials or any testing, quality control, evaluation or other
development activities) or any manufacturing activity or (y) result,
directly or indirectly, from any Seller License; and
(ii) any payments required to be paid by Purchaser to Seller pursuant to
this Section 3.3 will be paid within ten (10) business days of
Purchaser's actual receipt of the related payments from the Licensee
at issue and by wire transfer of immediately available funds to an
account of Seller designated to Purchaser in writing.
3.3.1 United States
In the event that Purchaser enters into a License Agreement with respect
to rights to one or more Products in the United States, then Seller shall
be entitled to receive [CONFIDENTIAL TREATMENT] of the amount (net of any
Tax required to be paid or withheld under any Laws), to the extent
attributable to rights to any Product in the United States, of the
following: (i) any upfront or milestone payments received by Purchaser
from the applicable Licensee; and, (ii) where royalty payments received by
Purchaser from the applicable Licensee are in excess of the applicable
Earn-Out on Sales payable to Seller
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pursuant to Section 3.2.3(a) above, any such "excess" in such royalty
payments; provided, however, that Seller's entitlement to receive amounts
under this Section 3.3.1 shall be limited to an aggregate of no more than
[CONFIDENTIAL TREATMENT]
3.3.2 Western Europe
In the event that Purchaser enters into a License Agreement with respect
to rights in Western Europe to a Product with an Indication for
[CONFIDENTIAL TREATMENT], then Seller shall be entitled to receive
[CONFIDENTIAL TREATMENT] of the amount (net of any Tax required to be paid
or withheld under any Laws), to the extent attributable to rights to such
Product in Western Europe, of the following: (i) any upfront or milestone
payments received by Purchaser from the applicable Licensee; and, (ii)
where royalty payments received by Purchaser from the applicable Licensee
are in excess of the applicable Earn-Out on Sales payable to Seller
pursuant to Section 3.2.3(b) above, any such "excess" in such royalty
payments; provided, however, that Seller's entitlement to receive amounts
under this Section 3.3.2 shall only apply (x) if Seller does not have any
rights to market and sell in Western Europe any Product with an Indication
for [CONFIDENTIAL TREATMENT] and (y) if (and then only to the extent that)
the aggregate amount of the upfront, milestone and excess royalty payments
referred to in the foregoing clauses (i) and (ii) is in excess of
[CONFIDENTIAL TREATMENT] (i.e., Seller's payments shall be calculated only
with respect to the amount of any such payments received by Purchaser
aggregating in excess of [CONFIDENTIAL TREATMENT]); and provided, further,
that Seller's entitlement to receive amounts under this Section 3.3.2
shall be limited to an aggregate of no more than [CONFIDENTIAL TREATMENT]
3.3.3 Rest-of-World
In the event that Purchaser enters into a License Agreement with respect
to rights to one or more Products in the Rest-of World, then Seller shall
be entitled to receive [CONFIDENTIAL TREATMENT] of the amount (net of any
Tax required to be paid or withheld under any Laws), to the extent
attributable to rights to any Product in the Rest-of-World, of the
following: (i) any upfront or milestone payments received by Purchaser
from the applicable Licensee; and, (ii) where royalty payments received by
Purchaser from the applicable Licensee are in excess of the applicable
Earn-Out on Sales payable to Seller pursuant to Section 3.2.3(c) above,
any such "excess" in such royalty payments; provided, however, that
Seller's entitlement to receive amounts under this Section 3.3.3 shall be
limited to an aggregate of no more than [CONFIDENTIAL TREATMENT].
3.4 POTENTIAL [CONFIDENTIAL TREATMENT] RIGHT
[CONFIDENTIAL TREATMENT]
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3.5 INTEREST
Subject always to any Abandonment Review Extension or Force Majeure
Extension that may apply, if any amount required to be paid under this
Agreement is not paid when it is due, then such amount shall bear interest
at the rate of [CONFIDENTIAL TREATMENT] from time to time calculated on a
daily basis for the period from the due date to the date of actual
payment.
3.6 ASSUMPTION OF LIABILITIES
Seller shall remain solely responsible for all debts and liabilities
relating to the Contracts arising in or relating to the period ending on
or before Closing and Purchaser shall be solely responsible for all
Assumed Liabilities; provided, however, that (i) Purchaser will not be
assuming any Liabilities of Seller (or any of its Affiliates) other than
the Assumed Liabilities and (ii) Seller will remain responsible for all
Liabilities of Seller (and Seller's Affiliates shall each remain
responsible for their respective Liabilities) other than the Assumed
Liabilities.
3.7 TAXES
(a) Subject to the further provisions of this Section 3.7, (i) Seller
shall remain solely responsible for all corporation, income or trade
Taxes (as imposed by any Governmental or Regulatory Authority)
relating to or payable in respect of the transactions contemplated
pursuant to this Agreement or the Ancillary Agreements, (ii) Seller
shall be solely responsible for all other Taxes payable in respect
of the Assets relating to the period on or before the Closing and
(iii) Purchaser shall be solely responsible for all other Taxes
payable in respect of the Assets relating to the period after the
Closing.
(b) If any deduction or withholding is required by applicable Law with
respect to any payment to be made between the Parties pursuant to
this Agreement or any Ancillary Agreement, then the Parties shall
act in good faith, shall afford to each other such assistance and
shall do all such things as are reasonably necessary, to enable
either Seller or Purchaser to obtain the benefit of any applicable
exemption from withholding or deduction or to claim any applicable
refund or tax credit in respect of any such withholding or deduction
in relation to any such payment. Without limiting the foregoing, (i)
any Tax required to be withheld by Purchaser under any applicable
Law for the account of Seller with respect to the remittance of any
amounts from Purchaser to Seller shall be paid by Purchaser for and
on behalf of Seller to the appropriate Governmental or Regulatory
Authority, and Purchaser shall use its Commercially Reasonable
Efforts to furnish Seller with proof of payment of such Tax together
with official or other appropriate evidence issued by the applicable
Government or Regulatory Authority, (ii) any such Tax so paid on
Seller's behalf shall be deducted from any
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payments otherwise due Seller from Purchaser and (iii) the Parties
shall exercise Commercially Reasonable Efforts, where appropriate,
to recuperate any withheld Tax (for example, so as to avoid any
double taxation to any Party).
(c) The Purchase Price is exclusive of VAT; provided, however, that with
respect to the transfer of the Assets and the other transactions
contemplated pursuant to this Agreement and the Ancillary
Agreements, and notwithstanding any other provision herein or in any
Ancillary Agreement to the contrary, (i) each Party has been advised
by its independent counsel and accountants that, as of the Effective
Date, no VAT is payable, (ii) should any Governmental or Regulatory
Authority with appropriate jurisdiction take the view that VAT is
payable, then (x) the Parties shall cooperate with each other and
shall afford each other such assistance and shall do all such things
as are reasonably necessary to enable Seller to determine the
correct liability to VAT in respect of the sale of the Assets
hereunder (which shall include, without limitation, the provision by
Purchaser of valid documentation relating to the transportation of
Assets to a place outside of Germany) and (y) Purchaser shall, upon
submission by Seller to Purchaser of a valid VAT invoice, pay such
VAT (in addition to the Purchase Price), and (iii) Seller shall act
in good faith, shall afford to Purchaser such assistance and shall
do all such things as are reasonably necessary to enable Purchaser
to obtain the benefit of any exemption from any VAT or to claim any
refund or tax credit in respect of any VAT.
3.8 ALLOCATION OF PURCHASE PRICE
The consideration for the Assets will be allocated among the Assets as of
the Closing Date in accordance with applicable Law as follows:
[CONFIDENTIAL TREATMENT]
Each of the Parties agrees (a) to report (and to cause its Affiliates to
report) the transactions contemplated by this Agreement in a manner
consistent with applicable Law and with the terms of this Agreement,
including the foregoing allocation, and (b) not to take any position
inconsistent therewith in any Tax return, in any Tax refund claim, in any
litigation or otherwise.
3.9 OPTION TO ACQUIRE ASSETS
For a period of one hundred twenty (120) days following Purchaser's notice
to Seller regarding an Abandonment Decision (the "REACQUISITION OPTION
PERIOD"), Seller shall have the option to acquire Purchaser's interest in
the Assets (the "REACQUISITION OPTION").
(a) Purchaser shall make appropriate representatives available to meet
with appropriate representatives of Seller at a mutually convenient
time to provide an update to Seller (such update to include as much
information about the
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development program(s) then being conducted for any Product as
reasonably requested by Seller and to include specifically, without
limitation, (i) details of all adverse events or adverse reactions
arising at any time during the trials and/or studies, (ii) all
financial commitments and expenses outstanding with regard to the
Product and (iii) the current status of, and ongoing activities with
respect to, the development program(s) then being conducted for the
Product), such meeting to occur at Purchaser's facility not later
than thirty (30) days after the date the notice of an Abandonment
Decision was delivered to Seller.
(b) Until the earlier of (x) the expiration of the Reacquisition Option
Period and (y) the date Purchaser receives notice from Seller that
it has elected not to exercise the Reacquisition Option, Purchaser
shall (i) to the extent permitted by Governmental or Regulatory
Authorities and to the extent consistent with good clinical and
laboratory practices, (A) continue any ongoing human clinical trials
(but Purchaser shall not be obligated to enroll any new patients in
any such ongoing human clinical trials during this period) and (B)
continue any ongoing pre-clinical studies (but Purchaser shall not
be obligated to dose any additional animals or conduct any
histopathology work in any such ongoing pre-clinical studies during
this period), and (ii) bear all costs and expenses associated with
continuing all such ongoing clinical trials and/or ongoing
pre-clinical studies. Other than continuing any such ongoing
clinical trials and/or ongoing pre-clinical studies as provided
above, Purchaser shall not be obligated to continue any portion of
its activities or other efforts with respect to the Compound or any
Product, including the manufacture of any additional clinical trial
materials (except Purchaser shall remain obligated to purchase all
orders placed and accepted by Seller under the Seller Supply
Agreement) or other chemistry, manufacturing and controls activities
and/or the initiation of any additional pre-clinical studies or
human clinical trials.
(c) In the event of an exercise of the Reacquisition Option, Seller
shall not be required to pay any consideration to Purchaser for
Purchaser's interest in the Assets (and Purchaser's interest in any
improvements related exclusively thereto, if any) and Purchaser
shall cooperate with Seller's reasonable requests regarding the
transfer of Purchaser's interest in the Assets (and Purchaser's
interest in any improvements related exclusively thereto, if any) to
Seller; provided, however, that Seller shall be required to bear all
reasonable costs and expenses associated with the activity of
transferring Purchaser's interest in the Assets back to Seller (such
costs and expenses to exclude any internal costs and expenses of the
Purchaser).
(d) In the event that Seller does not exercise the Reacquisition Option
prior to the expiration of the Reacquisition Option Period, the
Reacquisition Option shall lapse and be without further force or
effect.
3.10 CHARGE
(a) Purchaser hereby charges to Seller by way of first fixed charge (the
"CHARGE"), as security for the payment or discharge of all
Purchaser's obligations for payment (subject to the terms and
conditions of this Agreement) of the Upfront Payments and the
Milestone Payments and any interest due under Section 3.5 of this
Agreement with respect to any of the Upfront Payments and the
Milestone
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Payments (the "SECURED SUMS"), the following (collectively, the
"CHARGED RIGHTS"):
(i) Purchaser's interest in the Patents and any renewals or
extensions thereof;
(ii) Purchaser's interest in any licenses granted by Purchaser with
respect to any of the rights referenced in the foregoing
clause (i); and
(iii) As at the date of any Enforcement Event, all present and
future rights and causes of action whenever and wherever
accruing to Purchaser in respect of infringement of any of the
rights referenced in the foregoing clauses (i) and (ii).
(b) If any Enforcement Event occurs, then Seller may appoint any person
or persons to be a receiver and manager of all or any part of the
Charged Rights and thereafter exercise in respect of the Charged
Rights all of the rights and remedies of a chargee under applicable
Law.
(c) Following the earlier of (i) payment by Purchaser of the last to
occur of the Upfront Payments and the Milestone Payments or (ii)
Seller's failure to exercise the Reacquisition Option within one
hundred twenty (120) days following Purchaser's notice to Seller
regarding an Abandonment Decision, the following shall occur: (x)
Seller shall release Purchaser and all of the Charged Rights from
any obligations under the Charge and the Charge shall be considered
fully satisfied by Seller; and (y) Seller shall execute and deliver
such instruments and documents, and take such actions, as may be
reasonably necessary in order to extinguish the Charge (as well as
any related filings or notices).
(d) Purchaser represents and warrants that, assuming Seller takes all
action as and when necessary or appropriate to perfect and maintain
the Charge, then from and after the Closing and during the
subsistence of the Charge (as contemplated by this Section 3.10),
the Charge shall, as to the Charged Rights, rank ahead of any other
fixed or floating charge or security interest of any kind that is or
may be granted by Purchaser with respect to any of the Charged
Rights.
(e) Purchaser covenants with Seller that, during the subsistence of the
Charge (as contemplated by this Section 3.10), Purchaser shall not
sell, assign or transfer any of the Charged Rights except in
compliance (as applicable) with Section 10.11 below.
(f) Purchaser covenants with Seller that, during the subsistence of the
Charge (as contemplated by this Section 3.10), Purchaser shall (i)
use Commercially Reasonable Efforts with respect to those patents
and patent applications identified on Schedule PAA of the Patent
Assignment Agreement to (A) prosecute such patent applications; (B)
pay all maintenance fees for all such patents and patent
applications; and (C) defend all challenges to the validity of any
such patents; and (ii) execute all further documents, instruments
and deeds prepared by Seller and give to Seller all assistance, in
each case as reasonably requested by Seller, to register the Charge
with such authorities as may be available for the purpose (in the
United Kingdom or elsewhere) or to enable
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Seller to exercise and enforce its rights and remedies with respect
to the Charge. (this includes perfection and registration of the
charges created or purported to be created by this Charge in any
foreign jurisdiction and where the efficacy of such charges in any
jurisdiction is dependent on the execution of a different document
(provided that such document shall be on terms no more onerous than
the terms of this Charge, except where necessary to establish a
valid security interest in the United States, Western Europe, Japan
or the People's Republic of China)).
4. TRANSITION ARRANGEMENTS AND PURCHASER'S DEVELOPMENT AND REPORTING
OBLIGATIONS
4.1 TRANSITION OF ASSETS
Seller hereby agrees, contingent upon the absence of any Abandonment
Decision, that Seller will (a) timely and sufficiently perform its
obligations under the Transition, Data Transfer and Services Plan and (b)
otherwise exercise its Commercially Reasonable Efforts to utilize and
bring to bear such resources as are available to Seller to transition all
Assets, including all facets of any development programs relating to the
Compound, to Purchaser as promptly as reasonably possible.
4.2 PURCHASER'S EFFORTS
Purchaser hereby agrees, contingent upon Seller's performance of its
obligations under Section 4.1 above (including with respect to the
Transition, Data Transfer and Services Plan) as well as the absence of any
Abandonment Decision, that Purchaser will exercise its Commercially
Reasonable Efforts to seek (a) promptly to initiate efforts with respect
to development of a Product in its first indication, (b) FDA Approval of
such Product, (c) following FDA Approval, to market such Product in the
United States, (d) appropriate regulatory approval for, and following such
approval to market, such Product in those jurisdictions outside of the
United States which are determined by Purchaser (in its sole discretion)
to offer commercially attractive opportunities for such Product and (e) to
initiate development efforts in the United States with respect to a
Product with [CONFIDENTIAL TREATMENT] as the Indication no later than
[CONFIDENTIAL TREATMENT] following the Effective Date, although these
obligations shall be subject to Abandonment Review Extension (without
reference, for this purpose, to any specific Back-End Milestone Date) and,
for the avoidance of any doubt, any Force Majeure Extension.
4.3 DEVELOPMENT REPORTS
Prior to FDA Approval, Purchaser shall, upon the reasonable request of
Seller (which shall be made no more frequently than once per calendar
quarter), furnish Seller with an update as to the progress of Purchaser's
efforts as contemplated by Section 4.2 above. In addition, Purchaser shall
provide Seller with an update, promptly following occurrence of the same,
as to the achievement of any of the events that are intended to result in
a Milestone Payment. Any update contemplated by this Section 4.3 shall be
deemed to be Confidential Information for purposes of Section 10.2 below.
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4.4 EARN-OUT ON SALES REPORTS, RECORDS AND AUDIT.
(a) Purchaser shall furnish to Seller, at the same time as any payment
of Earn-Out on Sales is made by Purchaser to Seller (i.e., as
contemplated pursuant to Section 3.2.3 above), a written report
detailing the Net Sales for the calendar quarter at issue and the
payment due with respect thereto. Where applicable, such reports
shall include information on a country-by-country basis. Purchaser
shall also furnish to Seller, at the same time as any payment is
made by Purchaser to Seller as contemplated by Sections 3.3.1, 3.3.2
or 3.3.3 above in respect of any payments made by any Licensee to
Purchaser, a written report detailing such payment and the terms of
the applicable License Agreement.
(b) Purchaser shall keep, and shall cause its Affiliates and Licensees
to keep, full, complete and proper records and accounts of all sales
of Products in sufficient detail to enable payments of Earn-Out on
Sales, as well as payments contemplated by Sections 3.3.1, 3.3.2 or
3.3.3 above in respect of any payments made by any Licensee to
Purchaser, to be determined (the "AUDIT RECORDS").
(c) Seller shall have the right to appoint an independent certified
public accounting firm approved by Purchaser (which approval shall
not be unreasonably withheld) to audit the Audit Records as
necessary to verify the amount of any payments of Earn-Out on Sales
as well as payments contemplated by Sections 3.3.1, 3.3.2 or 3.3.3
above in respect of any payments made by any Licensee to Purchaser.
Purchaser shall pay to Seller an amount equal to any additional
payments to which Seller is entitled as disclosed by any such audit
(plus interest at the rate of [CONFIDENTIAL TREATMENT] from time to
time calculated on a daily basis for the period from the due date to
the date of actual payment). Any such audit shall be at Seller's
expense; provided, however, that if the audit discloses that Seller
was underpaid for any calendar quarter by at least [CONFIDENTIAL
TREATMENT] of the amount of any payment otherwise owed to Seller for
such calendar quarter, then Purchaser shall reimburse Seller for any
reasonable audit costs. Seller may exercise its right to audit under
this Section 4.4(c) not more frequently than once in any calendar
year and not more than once in respect of any calendar year or any
calendar quarter therein, and any such exercise must take place no
more than two (2) years following the end of any calendar year at
issue. The accounting firm chosen by Seller to perform any audit may
disclose to Seller only information relating to the accuracy of the
payments at issue. Purchaser and its Affiliates and Licensees shall
preserve and maintain all Audit Records for a period of at least
three (3) years after the calendar year to which the Audit Records
apply.
4.5 REGULATORY MATTERS
From and after the transfer by Seller to Purchaser of the Regulatory
Filings pursuant to the terms hereof, Purchaser, at its cost, shall be
solely responsible and liable for taking all actions, paying all fees and
conducting all communication with the appropriate Governmental or
Regulatory Authority required by applicable Law in respect of each such
Regulatory Filings, including preparing and filing all reports (including
adverse drug experience reports) with the appropriate Governmental or
Regulatory Authority. To the extent that Seller shall, after the Closing,
retain any personnel or resources with knowledge of, or relevancy to, the
Compound or the prior development work conducted
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with the Compound that may be necessary or useful to Purchaser in
completing such Regulatory Filings, Seller shall cooperate with
Purchaser's reasonable requests and make such personnel and resources
available to assist Purchaser in connection with such Regulatory Filings
(with Purchaser to bear any external costs associated therewith).
4.6 INSURANCE
At such time as any Product is being commercially distributed or sold
(other than for the purpose of obtaining regulatory approvals) by
Purchaser or its Affiliates, Purchaser shall (at its sole cost and
expense) procure and maintain comprehensive general liability insurance in
amounts not less than [CONFIDENTIAL TREATMENT] per incident. Such
comprehensive general liability insurance shall provide product liability
coverage as to Products.
4.7 ACCESS
Without limiting the provisions of Section 10.2 below, Purchaser shall,
upon the request of Seller and to the extent permitted by applicable Law,
grant to Seller and its representatives the right, during normal business
hours and upon reasonable advance notice, to inspect and copy the Records
in Purchaser's possession to the extent pertaining to the Assets prior to
the Closing Date (e.g., for tax purposes or in connection with any Actions
or Proceedings of a Governmental or Regulatory Authority).
5. POST-CLOSING COVENANTS OF THE PARTIES
5.1 COOPERATION
(a) Each Party shall cooperate fully with the other in executing and
delivering 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 and the Ancillary
Agreements (the forms of which shall be provided by Purchaser to
Seller for execution and delivery), including Seller's cooperation
in (i) executing and delivering to Purchaser any such documents
required to obtain any Consents of any Governmental or Regulatory
Authority required for Purchaser to be able to own the Assets and
(ii) furnishing to Purchaser physical possession of all tangible
personal property included in the Assets.
(b) To the extent that Seller shall, after the Closing, retain any
personnel or resources with knowledge of, or relevancy to, financial
information or reports related to any of the Assets that shall be
required to be included in any filings made by Purchaser with any
Governmental or Regulatory Authority (including any filings with the
United States Securities Exchange Commission), Seller shall
cooperate with Purchaser's reasonable requests and make such
personnel and resources available to assist Purchaser in connection
with such financial information or reports (with Purchaser to bear
any external costs associated therewith). Without limiting the
foregoing, Seller will give permission to its
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auditors to meet with Purchaser to discuss such financial
information and reports (at Purchaser's expense).
(c) Seller will use Commercially Reasonable Efforts to make workbooks
(including laboratory notebooks) in the possession of Seller or its
Affiliates, if any, available to Purchaser in connection with any
matters relating to the Patents or the Know-How (including
prosecution or enforcement of any right with respect to the Patents
or the Know-How). Seller will, at Purchaser's request, provide
Purchaser with a list of any contact information Seller or its
Affiliates may have for any inventors with respect to any of the
Patents or Know-How.
5.2 NON-ASSERTION OF INTELLECTUAL PROPERTY RIGHTS
Seller agrees that neither it nor any of its Affiliates will assert
against Purchaser or any of its Affiliates or Licensees, under any patent,
trade secret, copyright or other proprietary right owned or controlled by
Seller or any of its Affiliates (whether at the Closing Date or at any
time thereafter), a claim that the Compound or any Product infringes
rights owned or controlled by Seller or any of its Affiliates (excluding,
for this purpose, any trademark right).
5.3 PUBLIC ANNOUNCEMENTS
Neither Seller nor Purchaser shall issue any press release or make any
public announcement with respect to this Agreement and the transactions
contemplated hereby without obtaining the prior written consent of the
other Party (such consent not to be unreasonably withheld), except as may
be required by applicable Law upon the advice of counsel and only if the
disclosing Party provides the non-disclosing Party with an opportunity to
first review the release or other public announcement; provided, however,
that (i) Seller acknowledges and agrees that Purchaser may file this
Agreement (and any of the Ancillary Agreements) as an exhibit to one or
more registration statements or periodic filings under the federal
securities laws of the United States solely with advance notice to Seller
and (ii) promptly following the Closing the Parties will each have the
option to issue a press release in a form consented to by the other Party
(such consent not to be unreasonably withheld).
5.4 FURTHER ASSURANCES
(a) On and after the Closing, Seller will from time to time, at the
request of Purchaser, (i) execute and deliver, or cause to be
executed and delivered, such other reasonable instruments of
conveyance and transfer (the forms of which shall be provided by
Purchaser to Seller for execution and delivery) and take such other
actions as Purchaser may reasonably request, in order to more
effectively consummate the transactions contemplated hereby and by
the Ancillary Agreements (including (x) to vest in Purchaser full
title guarantee to the Assets and (y) assistance, as applicable, in
the collection or reduction to possession of any of the Assets), and
(ii) obtain all Consents and to resolve any and all impracticalities
of assignment or transfer necessary to convey the Assets to
Purchaser.
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(b) On and after the Closing, Purchaser 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 and by the Ancillary Agreements (including
Purchaser's assumption of the Assumed Liabilities).
6. REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Purchaser as follows:
6.1 TITLE TO, AND CONDITION OF, ASSETS
(a) Seller has good and valid title to the Assets, free and clear of any
encumbrance, lien, mortgage, charge, restriction or liability of any
kind whatsoever, whether equitable or legal (except for (i) those
created by this Agreement, (ii) in the instance of the Contracts,
the post-Closing performance obligations referred to in the
Contracts which represent Assumed Liabilities, and (iii) an implied
license granted under the Patents and Know-How to the Manufacturer
as the manufacturer of the Compound (which license is terminable on
reasonable notice at any time in the sole discretion of Seller)). As
the result of the transactions contemplated hereby, Purchaser will,
as of the Closing, be the sole and exclusive owner of all right,
title and interest in and to all of the Assets, free and clear of
any encumbrance, lien, mortgage, charge, restriction or liability of
any kind whatsoever, whether equitable or legal (except for (x)
those created by this Agreement, (y) in the instance of the
Contracts, the post-Closing performance obligations referred to in
the Contracts which represent Assumed Liabilities, and (z) an
implied license granted under the Patents and Know-How to the
Manufacturer as the manufacturer of the Compound (which license is
terminable on reasonable notice at any time in the sole discretion
of Purchaser)).
(b) Without limiting the provisions of Section 6.1(a) above, all right,
title and interest to each of the Patents is owned solely by Seller
and will, as of the Closing, be transferred to Purchaser. Seller has
delivered to Purchaser complete and accurate copies of (i) all US
and European Patents (including the patent applications included in
the Patents as listed in the Patent Assignment Agreement) and (ii)
all US and European file histories with respect to US and European
Patents (including the US and European patent applications included
in the Patents).
(c) To the Best of Seller's Knowledge, (i) there are no rights or assets
(including intellectual property rights) owned or controlled by any
party necessary to develop, make (assuming for this purpose that an
experienced third party chemical manufacturer performs the set-up
and scale-up of the API), use, sell, offer for sale, distribute,
promote or import (anywhere in the World) the Compound or any
Product for a Patented Indication or for Purchaser to perform its
obligations under this Agreement, other than the Assets (all of
which are being transferred to Purchaser pursuant to this Agreement
as of the Closing), (ii) the use of the Assets by Purchaser or any
Licensee to develop, make, use, sell, offer for sale, distribute,
promote or import (anywhere in the World) the Compound or
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any Product for a Patented Indication following the Closing will not
infringe the intellectual property rights of any Person and (iii) no
party is, or has prior to the Closing Date been, infringing the
intellectual property rights represented by any of the Assets.
(d) Neither Seller nor, to the Best of Seller's Knowledge, any Person
having had any interest at any time in any of the Assets has
received any claim of infringement (actual or potential) of any
intellectual property rights of any Person, or any request or demand
from any Person for the licensing of any intellectual property
rights of any such Person, arising out of the manufacture, use,
sale, offer for sale, distribution, promotion or import of the
Compound or any Product for a Patented Indication, and no basis
exists for any such claim, request or demand. Seller and, to the
Best of Seller's Knowledge, each Person having had any interest at
any time in any of the Assets (or associated with invention, filing
or prosecution of any Patent) has complied with any and all
obligations with respect thereto to disclose to the relevant patent
authorities, where required, any information known to any such
Person to be material to the patentability of any claims in any
pending or issued patent (including the obligation under United
States federal regulations to disclose to the United States Patent
and Trademark Office, during the pendency of any United States
patent application included in the Patents, information known by any
such Person to be material to the patentability of the pending
claims in such application).
(e) Neither Seller nor, to the Best of Seller's Knowledge, any Person
having had any interest at any time in any of the Assets has (i)
assigned, transferred, licensed, pledged or otherwise encumbered any
interest in any of the Assets (including the Patents) for any
purpose, or agreed to do so (other than (x) for assignments,
transfers, licenses, pledges or other encumbrances of rights prior
to the Effective Date, so long as Seller holds all such rights (and
transfers such rights to Purchaser) as of the Closing, and (y) as
contemplated by this Agreement), and (ii) entered into any covenant
not to compete or contract or agreement restricting the right to use
or practice any of the Assets in any market or geographic area or
with or without any Person.
(f) None of the Patents is involved in any interference or opposition
proceeding, and no such proceeding is being (or has been) threatened
with respect to any of the Patents. To the Best of Seller's
Knowledge, as of the day prior to the Closing Date, any action
required to be taken with respect to any of the Patents (including
with respect to any correspondence from, or action by, the United
States Patent and Trademark Office) for the three (3) months
following the Closing Date is set forth in the Transition, Data
Transfer and Services Plan. All docketing information with respect
to the Patents (all of which will be transferred to Purchaser as of
the Closing as part of the Records) is accurate and complete. To the
Best of Seller's Knowledge (Seller not having conducted any searches
or other enquiries other than those disclosed in the Data Room
Documents), (i) other than, with respect to each Patent, the prior
art that is of record in the file history for such Patent, no prior
art exists that could reasonably form the basis for invalidating any
claim in any of the Patents (in the instance of any patent
application included within the Patents, this representation is made
in respect of the claims as drafted at the Closing Date), and (ii)
all priority claims have been properly made as to each Patent within
the deadlines for making such claims as
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set forth in the rules and procedures of the applicable patent
authorities. As to matters other than prior art, to the Best of
Seller's Knowledge and excepting as to any Patent the information
disclosed in the file history for such Patent, no information exists
within Seller or its Affiliates which could reasonably form the
basis for invalidating or rendering unenforceable any claim in any
Patent (in the instance of any patent application included within
the Patents, this representation is made in respect of the claims as
drafted at the Closing Date). No statement or assertion has been
made to Seller (or, to the Best of Seller's Knowledge, to any Person
having had any interest at any time in (or associated with
invention, filing or prosecution of) any of the Patents) that (x)
any claim in any of the Patents (as granted) is (or may be or become
rendered) invalid or unenforceable or (y) any Person is aware of any
basis as to the future potential invalidity or unenforceability of
any claim of any of the Patents. In the instance of each patent
application included within the Patents, and excepting as to any
patent application the information disclosed in the file history for
such patent application, (A) such patent application has been
properly prepared and filed and has been diligently pursued through
the Closing Date and, (B) to the Best of Seller's Knowledge, there
are no material defects, relative to the filing and prosecution
rules and procedures of the applicable patent authority, in the
filing or prosecution of such patent application that could cause
either (1) the invalidity or unenforceability of any patent that may
issue from such patent application (this representation is made in
respect of the claims as drafted at the Closing Date) or (2) a
patent containing substantially the same claims as are set forth in
such patent application as of the Closing Date not to issue from
such application. All registration, maintenance and renewal fees in
connection with each Patent have been paid.
(g) Seller and, to the Best of Seller's Knowledge, each Person having
had any interest at any time in any of the Assets has (i) exercised
Commercially Reasonable Efforts to protect all trade secrets
included in the Know-How and (ii) disclosed such trade secrets only
to Persons that have executed written confidentiality agreements
governing the use or disclosure of such trade secrets (except to the
extent such information has been disclosed in connection with making
filings related to any Assets, the Compound or any Product for a
Patented Indication with Governmental or Regulatory Authorities).
(h) Seller and, to the Best of Seller's Knowledge, each Person having
had any interest at any time in any of the Assets has required all
employees and consultants who have provided services in connection
with the Compound, any Product for a Patented Indication, any of the
Patents or the Know-How to execute agreements under which such
employees and consultants have conveyed to Seller, directly or
indirectly (i.e., through one or more Persons having had any
interest at any time in any of the Assets), ownership of all
inventions and developments conceived or created by them in the
course of their employment with Seller or any Person having had any
interest at any time in any of the Assets, to the extent that any
such inventions or developments relate to the Compound, any Product
for a Patented Indication, any of the Patents or the Know-How, and
no obligation is owed to any such employee or consultant with
respect thereto (including any royalty payment obligation). None of
the activities of any such employee or consultant, in providing
services to Seller or, to the Best of Seller's Knowledge, any Person
having had any interest at any time in any of
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the Assets and to the extent that any such services relate to the
Compound, any Product for a Patented Indication, any of the Patents
or the Know-How, violated any agreement between any such employee or
consultant and any of their former employers.
(i) Seller has made available to Purchaser as part of the Data Room
Documents true and correct copies of each Contract. Each Contract is
valid and in full force and effect. Neither Seller nor any other
party to any Contract is in breach of any Contract.
(j) All of the Regulatory Filings are in full force and effect and have
been duly and validly issued. With respect to the Assets (including
the Regulatory Filings) and the Compound or any Product for a
Patented Indication, (i) all required reports have been made to
appropriate Governmental or Regulatory Authorities, all appropriate
actions have been taken and communications with third parties have
been made and all required investigations of adverse drug
experiences, contamination, tampering and product defects have been
made and appropriate follow-up actions have been taken and (ii)
there is no Action or Proceeding by any Governmental or Regulatory
Authority pending or threatened. Seller has made available to
Purchaser as part of the Data Room Documents complete and correct
copies of all Regulatory Filings.
(k) Other than the Assets, there are no assets owned or controlled by
Seller or its Affiliates that are necessary for Purchaser to (i)
manufacture, distribute, promote, use, sell, offer for sale or
import any Product for a Patented Indication or (ii) perform
Purchaser's obligations under this Agreement.
6.2 COMPLIANCE WITH LAWS
Seller and, to the Best of Seller's Knowledge, each Person having had any
interest at any time in any of the Assets is, and at all times has been,
in compliance with all applicable Laws relating to the Assets. Neither
Seller nor any Person having had any interest at any time in any of the
Assets has received any notice from any Governmental or Regulatory
Authority alleging any failure to comply with any applicable Law relating
to any of the Assets.
6.3 REGULATORY MATTERS AND LEGAL PROCEEDINGS.
(a) The Regulatory Filings are current and in full force and effect and
include all regulatory filings and governmental registrations (i)
made by or issued to Seller or to the Best of Seller's Knowledge any
Person having had any interest at any time in any of the Assets or
(ii) that relate to the Compound or any Product for a Patented
Indication. Seller has made available to Purchaser as part of the
Data Room Documents copies of all governmental correspondence in its
possession (including copies of official notices, citations or
decisions) relating to the Regulatory Filings. In the course of the
development of the Compound or any Product for a Patented
Indication, neither Seller nor, to the Best of Seller's Knowledge,
any Person having had any interest at any time in any of the Assets
has used any employee or consultant who (at the time such employee
or consultant provided services with respect to the Compound or any
Product for a
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Patented Indication) was debarred by the FDA (or any other
Governmental or Regulatory Authority) or the subject of pending
disbarment proceedings by the FDA (or any other Governmental or
Regulatory Authority).
(b) Without limiting the provisions of Section 6.2 above, Seller and, to
the Best of Seller's Knowledge, the Manufacturer are (and have been)
in compliance with all Laws applicable to the development,
manufacture, labeling, testing and inspection of the Compound, any
Product for a Patented Indication and the operation of manufacturing
facilities used to manufacture the Compound or any Product for a
Patented Indication, and with all applicable regulations, policies
and procedures promulgated by the FDA (and any other Governmental or
Regulatory Authority) with respect thereto. Neither Seller nor the
Manufacturer has received (i) a notice that any recalls, field
notifications or seizures have been ordered or threatened by any
Governmental or Regulatory Authority with respect to the Compound or
any Product for a Patented Indication or (ii) a warning letter or
other similar written notice from the FDA (or any other Governmental
or Regulatory Authority) regarding the Compound, any Product for a
Patented Indication or the manufacturing facilities used to
manufacture the Compound or any Product for a Patented Indication.
(c) There is no Action or Proceeding pending or, to the Best of Seller's
Knowledge, threatened that relates to, affects or arises in
connection with (i) any of the Assets, (ii) the Compound or any
Product for a Patented Indication or (iii) Seller's performance
under this Agreement or any of the Ancillary Agreements (including
performance of any of the transactions contemplated hereby and
thereby). Seller is not subject to any Order of any Governmental or
Regulatory Authority that could reasonably be expected to impair or
delay the ability of Seller to perform its obligations under this
Agreement or any of the Ancillary Agreements.
(d) Seller has made available to Purchaser all Records (including all
toxicology data, clinical studies, manufacturing process data and
other information) regarding the Compound or any Product for a
Patented Indication that either (i) are or could be material to
Purchaser's decision to purchase the Assets or (ii) would be
reportable to the FDA under any applicable Law. All such Records
(including all toxicology data, clinical studies, manufacturing
process data and other information) are accurate and complete and
are what they purport to be.
6.4 AUTHORITY; BINDING NATURE OF AGREEMENT
Seller has all necessary power and authority to execute and deliver this
Agreement and the Ancillary Agreements and to perform its obligations
under this Agreement and the Ancillary Agreements; and the execution,
delivery and performance by Seller of this Agreement and the Ancillary
Agreements have been duly authorized by all necessary action on the part
of Seller and of its partners. This Agreement constitutes, and, upon
execution thereof, each of the Ancillary Agreements will constitute, the
valid and binding obligation of Seller, enforceable against Seller in
accordance with its terms, subject to (i) laws of general application
relating to bankruptcy, insolvency and the relief of debtors and (ii)
rules of law governing specific performance, injunctive relief and other
equitable remedies.
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6.5 NON-CONTRAVENTION
The execution and delivery by Seller of this Agreement and the Ancillary
Agreements and the consummation of the transactions contemplated hereby
and thereby (including the transfer of the Assets from Seller to
Purchaser) will not: (i) contravene or result in a violation or breach of
any Law applicable to Seller, the Assets, the Compound or any Product for
a Patented Indication; or (ii) result in the imposition of any lien,
mortgage, charge or encumbrance upon any of the Assets, the Compound or
any Product for a Patented Indication.
6.6 CONSENT
Seller is not required to obtain any Consents from any Person (whether
under a Contract or otherwise) at or prior to the Closing in connection
with the execution and delivery of this Agreement or any of the Ancillary
Agreements or the consummation of the transactions contemplated hereby and
thereby (including the transfer of the Assets from Seller to Purchaser),
except for Consents that Seller shall have obtained prior to the Closing
("SELLER'S REQUIRED CONSENTS") which are set forth on Schedule 5 hereto.
6.7 BROKERS
Seller has not retained any broker in connection with the transactions
contemplated hereunder or under any of the Ancillary Agreements. Purchaser
has (and will have) no obligation to pay any brokers, finders, investment
bankers, financial advisors or similar fees in connection with this
Agreement or any of the Ancillary Agreements, or the consummation of the
transactions contemplated hereby and thereby, by reason of any action
taken by or on behalf of Seller.
6.8 DISCLOSURE
None of the representations or warranties made by Seller in this Agreement
or in any Ancillary Agreement, and none of the statements contained in any
of the Data Room Documents, contains any untrue statement of a material
fact or omits any material fact required to be stated therein or necessary
to make the statements made therein, in light of the circumstances under
which they were made, not misleading.
7. REPRESENTATIONS AND WARRANTIES OF PURCHASER.
Purchaser represents and warrants to Seller as follows:
7.1 AUTHORITY; BINDING NATURE OF AGREEMENT
Purchaser has all necessary corporate power and authority to execute and
deliver this Agreement and the Ancillary Agreements and to perform its
obligations under this Agreement and the Ancillary Agreements; and the
execution, delivery and performance by Purchaser of this Agreement and the
Ancillary Agreements have been duly authorized by all necessary action on
the part of Purchaser and its board of directors and
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stockholders. Purchaser, prior to the Closing, will have provided to
Seller a copy of the resolutions adopted by the board of directors of
Purchaser authorizing the execution, delivery and performance by Purchaser
of this Agreement and the Ancillary Agreements and the consummation of the
transactions contemplated hereby and thereby (including the purchase of
the Assets from Seller by Purchaser). This Agreement constitutes, and,
upon execution thereof, each of the Ancillary Agreements will constitute,
the valid and binding obligation of Purchaser, enforceable against
Purchaser in accordance with its terms, subject to (i) laws of general
application relating to bankruptcy, insolvency and the relief of debtors
and (ii) rules of law governing specific performance, injunctive relief
and other equitable remedies.
7.2 NON-CONTRAVENTION
The execution and delivery by Purchaser of this Agreement and the
Ancillary Agreements and the consummation of the transactions contemplated
hereby and thereby (including the transfer of the Assets from Seller to
Purchaser) will not contravene or result in a violation or breach of any
Law applicable to Purchaser, the Assets, the Compound or any Product.
7.3 CONSENT
Purchaser is not required to obtain any Consent from any Person (whether
under a Contract or otherwise) at or prior to the Closing in connection
with the execution and delivery of this Agreement or any of the Ancillary
Agreements or the consummation of the transactions contemplated hereby and
thereby (including the transfer of the Assets from Seller to Purchaser),
except for Consents that Purchaser shall have obtained prior to the
Closing ("PURCHASER'S REQUIRED CONSENTS") which are set forth on Schedule
4 hereto.
7.4 LEGAL PROCEEDINGS
There is no Action or Proceeding pending or threatened that relates to,
affects or arises in connection with Purchaser's performance under this
Agreement or any of the Ancillary Agreements (including performance of any
of the transactions contemplated hereby and thereby). Purchaser is not
subject to any Order of any Governmental or Regulatory Authority that
could reasonably be expected to impair or delay the ability of Purchaser
to perform its obligations under this Agreement or any of the Ancillary
Agreements.
7.5 BROKERS
Purchaser has not retained any broker in connection with the transactions
contemplated hereunder or under any of the Ancillary Agreements. Seller
has (and will have) no obligation to pay any brokers, finders, investment
bankers, financial advisors or similar fees in connection with this
Agreement or any of the Ancillary Agreements, or the consummation of the
transactions contemplated hereby and thereby, by reason of any action
taken by or on behalf of Purchaser.
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7.6 DISCLOSURE
None of the representations or warranties made by Purchaser in this
Agreement or in any Ancillary Agreement, and none of the statements
contained in any other materials with respect to the Assets furnished by
Purchaser to Seller, contains any untrue statement of a material fact or
omits any material fact required to be stated therein or necessary to make
the statements made therein, in light of the circumstances under which
they were made, not misleading.
8. SURVIVAL
The representations, warranties and covenants of Seller and Purchaser
contained in this Agreement and in any Ancillary Agreement shall survive
the Closing and remain in full force and effect indefinitely (including
through the date which is five (5) years from the date of FDA Approval so
as to afford the Parties the rights, if applicable, throughout the period
contemplated by Section 9.3(b) below).
9. INDEMNIFICATION
9.1 INDEMNIFICATION
9.1.1 By Seller
From and after the Closing, Seller shall indemnify, reimburse, defend and
hold harmless Purchaser and its Affiliates, and their respective officers,
directors, employees, agents, successors and assigns, from and against any
and all Damages to the extent incurred in connection with, arising out of,
resulting from or incident to any of the following: (i) any inaccuracy or
breach of any covenant, representation, warranty or other agreement of
Seller herein or in any Ancillary Agreement; (ii) any use of any of the
Assets, or any activities with respect to the Compound (including the
development, manufacturing or testing of the Compound or any Product for
the treatment of epilepsy), prior to the Closing; or (iii) the failure of
Seller to pay, perform or discharge any Excluded Liabilities.
9.1.2 By Purchaser
From and after the Closing, Purchaser shall indemnify, reimburse, defend
and hold harmless Seller and its Affiliates, and their respective
officers, directors, employees, agents, successors and assigns, from and
against any and all Damages to the extent incurred in connection with,
arising out of, resulting from or incident to any of the following: (i)
any inaccuracy or breach of any covenant, representation, warranty or
other agreement of Purchaser herein or in any Ancillary Agreement; (ii)
any use of any of the Assets, or any activities with respect to the
Compound (including the development, manufacture, testing, marketing,
distribution or sale of the Compound or any Product), following the
Closing; (iii) the failure of Purchaser to pay, perform or discharge any
Assumed Liabilities; or (iv) enforcement of the Charge following an
Enforcement Event.
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9.1.3 Procedures
The indemnified Party (the "INDEMNIFIED PARTY") shall give the
indemnifying Party (the "INDEMNIFYING PARTY") prompt written notice (an
"INDEMNIFICATION CLAIM NOTICE") of any Damages or discovery of fact upon
which such Indemnified Party intends to base a request for indemnification
under this Section 9.1, but in no event shall the Indemnifying Party be
liable for any Damages that result from any delay in providing such
notice. Each Indemnification Claim Notice must contain a reasonable
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 or 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.
9.1.4 Third Party Claims
The obligations of an Indemnifying Party with respect to Damages arising
from claims of any third party that are subject to indemnification as
provided for in this Section 9.1 (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
within thirty (30) days after the Indemnifying Party's receipt of an
Indemnification Claim Notice. The assumption of the defense of a
Third Party Claim by the Indemnifying Party shall not be construed
as an acknowledgment that the Indemnifying Party is liable to
indemnify any Indemnitee in respect of the Third Party Claim, nor
shall it constitute a waiver by the Indemnifying Party of any
defenses it may assert against any Indemnitee's claim for
indemnification. 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 that is reasonably acceptable to the Indemnified Party. In the
event the Indemnifying Party assumes the defense of a Third Party
Claim, the Indemnified Party shall promptly 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, except as provided in Section 9.1.4(ii)
below, 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 ultimately determined that the Indemnifying
Party is not obligated to indemnify, defend or hold harmless an
Indemnitee from and against the Third Party Claim, the Indemnified
Party shall reimburse the Indemnifying Party for any and all costs
and expenses (including attorneys' fees and costs of suit) and any
Damages incurred by the Indemnifying Party in its defense of the
Third Party Claim with respect to such Indemnitee.
(ii) Without limiting Section 9.1.4(i) above, 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
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employment shall be at the Indemnitee's own expense unless (x) the
employment thereof has been specifically authorized by the
Indemnifying Party in writing, (y) the Indemnifying Party has failed
to assume the defense and employ counsel in accordance with Section
9.1.4(i) above (in which case the Indemnified Party shall control
the defense) or (z) if the Indemnified Party and the Indemnifying
Party are both named parties to the proceeding and the Indemnified
Party has reasonably concluded that there may be one or more legal
defenses that are different from or in addition to those available
to the Indemnifying Party (in which case the Indemnifying Party
shall not have the right to assume the defense of such action on
behalf of the Indemnified Party and the Indemnifying Party shall be
liable for all legal expenses incurred by the Indemnified Party in
furtherance thereof).
(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 9.1.4(i) above, the Indemnifying
Party shall have authority to consent to the entry of any judgment,
enter into any settlement or otherwise dispose of such Damages;
provided, however, 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 disposition of Damages by an Indemnitee that is
reached without the written consent of the Indemnifying Party (which
consent shall not be unreasonably withheld or delayed). 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
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.
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9.1.5 Expenses
Where required as provided in this Section 9.1, the costs and expenses,
including fees and disbursements of counsel, incurred by the Indemnified
Party in connection with any claim shall be reimbursed on a quarterly
basis by the Indemnifying Party, without prejudice to the Indemnifying
Party's right to contest the Indemnified Party's right to indemnification
and subject to refund in the event the Indemnifying Party is ultimately
held not to be obligated to indemnity the Indemnified Party.
9.2 INSURANCE
The amount of any Damages under Section 9.1 above shall be reduced by the
amount of any insurance proceeds paid to the Indemnified Party relating to
the claim at issue.
9.3 LIMIT ON RECOVERY
It is agreed between the Parties that:
(a) the total amount of each Party's liability to the other in respect
of the provisions of Sections 9.1.1 and 9.1.2 above, or otherwise in
respect of a Party's breaches or non-fulfillment of any of the
covenants, representations, warranties or other agreements of such
Party herein or in any Ancillary Agreement, shall be limited to and
in no event exceed (in the aggregate) the aggregate amount received
by Seller from Purchaser as payment of the Purchase Price as of the
date the related liability is determined or admitted in writing to
be owing; and
(b) no claim may be initiated by either Party, whether in respect of the
provisions of Sections 9.1.1 and 9.1.2 above or otherwise in respect
of the other Party's breach or non-fulfillment of any of the
covenants, representations, warranties or other agreements of the
other Party herein or in any Ancillary Agreement, following the date
which is five (5) years from the date of FDA Approval; provided,
however, that this limitation shall not apply to any potential claim
which arises from circumstances identified by either Party to the
other Party in reasonable detail in a written notice delivered on or
prior to the fifth (5th) anniversary of FDA Approval.
9.4 CURE
To the extent that a Party's breach or non-fulfillment of any of the
covenants, representations, warranties or other agreements of such Party
herein or in any Ancillary Agreement is capable of cure within a ninety
(90) day period (and where (i) it is within the breaching Party's power to
cure within such period, (ii) the breaching Party promptly commences and
pursues Commercially Reasonable Efforts to cure within such period and
(iii) the non-breaching Party will not be harmed by a ninety (90) day
delay in pursuing its remedies against the breaching Party), the
non-breaching Party shall afford the breaching Party a reasonable
opportunity to cure the breach or non-fulfillment at issue during such
ninety (90) day period.
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10. MISCELLANEOUS
10.1 TERMINATION, RESCISSION, REPUDIATION
Following the execution of this Agreement by the Parties, and excepting
(i) Purchaser's rights as contemplated by Section 2.4(a) above (i.e., to
terminate this Agreement in certain circumstances prior to a Closing) and
(ii) any instance involving a fraudulent act of Seller, Purchaser shall
not be entitled to terminate, rescind or repudiate this Agreement at any
time prior to the payment to Seller of the Upfront Payments.
10.2 CONFIDENTIALITY
(a) In addition to the restrictions contained in Section 5.3 above,
after the Closing, no Party (a "DISCLOSING PARTY") shall, without
the prior written consent of the other Party (the "NON-DISCLOSING
PARTY"), disclose to any Person Confidential Information (as defined
below) of the Non-disclosing Party, except to a Disclosing Party's
employees or representatives who need to know such information for
any reason contemplated by this Agreement (and then only to the
extent that such persons are under an obligation to maintain the
confidentiality of the Confidential Information), or use any
Confidential Information of the Non-disclosing Party for any reason
other than contemplated by this Agreement unless (i) such Disclosing
Party has exercised its Commercially Reasonable Efforts to consult
with the Non-disclosing Party and obtain the Non-disclosing Party's
prior written consent in a timely manner and (ii) the Disclosing
Party has been advised by counsel that disclosure is required to be
made under applicable Law or the requirements of a Governmental or
Regulatory Authority. In the event that the Disclosing Party is
requested or required by documents subpoena, civil investigative
demand, interrogatories, requests for information or other similar
process to disclose any Confidential Information of the
Non-disclosing Party, the Disclosing Party shall provide the
Non-disclosing Party with prompt written notice of such request,
demand or other similar process so that the Non-disclosing Party may
seek an appropriate protective order or, if such request, demand or
other similar process is mandatory, waive the Disclosing Party's
compliance with the provisions of this Section 10.2 as appropriate.
(b) The term "CONFIDENTIAL INFORMATION" as used in this Section 10.2
means the following, whether disclosed prior to or after the
Effective Date: (i) as to Purchaser, all confidential information
relating to the business and operations of Purchaser and its
Affiliates (including the Assets, the Compound, any Product and the
Assumed Liabilities), and (ii) as to Seller, all confidential
information relating to the business and operations of Seller and
its Affiliates (including the Excluded Liabilities or other
obligations other than the Assumed Liabilities, but excluding the
Assets, the Compound, any Product and the Assumed Liabilities);
provided, however, that the term "Confidential Information" does not
include information which (x) becomes generally available to the
public other than as a result of disclosure by the Disclosing Party
or (y) becomes available to the Disclosing Party after the Closing
on a non-confidential basis from a source other than the
Non-disclosing Party (provided that such source is not bound by a
confidentiality agreement with the Non-disclosing Party).
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(c) This Section 10.2 supercedes and replaces in its entirety that
certain agreement relating to confidentiality dated October 21, 2002
and between Seller and Purchaser.
(d) The Parties acknowledge that Seller may, subject to the provisions
regarding confidentiality set forth in this Section 10.2, retain
copies of the Records.
10.3 DISPUTE RESOLUTION
(a) Any dispute, difference or claim arising out of or in connection
with this Agreement, including any question regarding its existence,
validity or termination, shall be referred to and settled by
arbitration.
(b) The seat of arbitration shall be England, to be conducted in London
and in the English language.
(c) The substantive issues between the parties shall be settled in
accordance with the laws of England.
(d) The arbitral tribunal shall comprise three arbitrators who shall be
appointed in the following manner:
(i) Each Party shall appoint one of the two Party-appointed
arbitrators. The third arbitrator, who shall act as the
Chairman of the arbitral tribunal, shall be appointed by the
Party-appointed arbitrators, and written notice of such
appointment shall be given to both Parties.
(ii) If a Party fails to make an appointment of an arbitrator
within 14 days of receipt of notification of the appointment
of an arbitrator by the other Party, and/or if the two
Party-appointed arbitrators fail, within 14 days of the
appointment of the second arbitrator, to agree upon the
appointment of the Chairman of the arbitral tribunal, then any
such vacancy shall, on the written request of either of the
Parties, be made by the President of the Association of
British Pharmaceutical Industry (ABPI) and both Parties shall
be notified in writing of such appointment.
(iii) Save as provided for in sub-clause (l) below, if an arbitrator
refuses to act, resigns, is incapable of acting, or dies, the
vacancy arising shall be supplied in the same manner as that
by which such arbitrator was originally appointed.
(e) Within 14 days of receipt of notice of the appointment of the
Chairman of the arbitral tribunal, the initiating Party shall
deliver to the responding Party a Statement of Case, setting out the
initiating Party's claims and submissions in support of such claims,
together with a copy of any documents the initiating Party intends
to rely on.
(f) Within 28 days of receipt of the initiating Party's Statement of
Case, the responding Party shall serve on the initiating Party an
Answer, which shall include any counterclaims, together with a copy
of any documents the responding Party intends to rely on.
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(g) If the Answer includes any counterclaims, the initiating Party
shall, within 28 days of receipt of the Answer, serve on the
responding Party a Reply, together with a copy of any further
documents which the initiating Party intends to rely on.
(h) A copy of any document served by one Party on the other shall be
sent, at the time of such service, to each of the arbitrators. All
communications passing between one Party and the arbitral tribunal
shall be copied immediately to the other Party.
(i) The arbitral tribunal shall, as soon as possible after it has been
constituted, direct the holding of a preliminary meeting in order to
establish the procedure for the arbitration. Subject to any
mandatory provisions of the laws of England, such procedure shall be
that which is agreed by the Parties or, failing such agreement, that
directed by the arbitral tribunal.
(j) Unless the Parties agree otherwise in writing, the arbitral tribunal
shall hold a hearing at which each Party may make oral submissions
with regard to the substantive issues.
(k) If either Party shall fail to comply with a procedural direction
made by the arbitral tribunal, the arbitral tribunal may
nevertheless continue with the arbitration and make its award.
(l) Any decision or award of the arbitral tribunal shall, if necessary,
be made by a majority. If no majority can be obtained, the Chairman
shall proceed as if the Chairman were a sole arbitrator. If an
arbitrator fails or refuses to take part in the arbitration at any
time after the hearing referred to in sub-clause (j) above has
commenced, the remaining arbitrators may, if they consider such
failure or refusal to be unreasonable, continue with the arbitration
and make an award. In such event, the provisions of sub-clause
(d)(iii) above shall not apply.
(m) The award of the arbitral tribunal shall be final and binding upon
the Parties.
(n) The tribunal shall have such power to order any relief on a
provisional basis which it would have power to grant on a final
award.
(o) Nothing in this Section 10.3 shall be deemed to preclude a Party
from bringing suit against the other Party in a court of competent
jurisdiction to (i) enforce, or enjoin infringement of, such Party's
intellectual property rights or (ii) pursue a claim in respect of
any breach of the provisions of Sections 5.3 or 10.2 above.
10.4 FORCE MAJEURE
Notwithstanding any other provision of this Agreement or any Ancillary
Agreement to the contrary, neither Party will be liable for any failure to
perform its obligations under this Agreement or any Ancillary Agreement to
the extent that such performance is reasonably prevented by any Force
Majeure Event. In the event that either Party believes a Force Majeure
Event has occurred which has affected the performance of its obligations
hereunder or under any Ancillary Agreement, such Party shall promptly
provide written notice thereof to the other Party.
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10.5 HARDSHIP
If, after the Closing, either Party shall provide notice to the other
Party that any provision of this Agreement has, based upon facts or
circumstances which arise after (or were otherwise unknown to such Party
as of) the Closing Date, come to represent a commercially unreasonable or
impractical hardship, then (i) the Parties agree to negotiate, in good
faith, regarding a possible amendment to this Agreement which will be
intended to address or overcome such hardship and, to the maximum extent
possible, preserve the intended benefits of this Agreement for the
non-affected Party and, (ii) only if the Parties are able to negotiate an
amendment to this Agreement which is acceptable to both Parties
(including, as to the non-affected Party, preserving the intended benefits
of this Agreement), the Parties agree to execute, and thereafter to abide
by, the provisions of such amendment.
10.6 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 internationally
recognized courier that maintains records of delivery to the Parties at
the following addresses or facsimile numbers:
If to Purchaser to: Xcel Pharmaceuticals, Inc.
6363 Greenwich Drive, Suite 100
San Diego, California 92122
United States
Attention: Corporate Secretary
Facsimile: (858) 202-2799
With copies to: Pillsbury Winthrop LLP
11682 El Camino Real, Suite 200
San Diego, California 92130
United States
Attention: Mike Hird
Facsimile: (858) 509-4010
If to Seller to: VIATRIS GmbH & Co. KG
Weismullerstra(beta)e 45
60314 Frankfurt
Germany
Attention: Business Development
Facsimile: +49-69-4001-2914
With copies to: Lovells
Atlantic House, Holborn Viaduct
London EC1A 2FG
England
Attention: Nicola Dagg
Facsimile: +44 (0) 20 7296 2001
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Asset Purchase Agreement - Retigabine
All such notices, requests and other communications will (i) if delivered
personally to the address as provided in this Section 10.6, be deemed
given upon receipt, (ii) if delivered by facsimile to the facsimile number
as provided in this Section 10.6, be deemed given upon receipt by the
sender of the answer back confirmation, and (iii) if delivered by mail in
the manner described above or by overnight courier to the address as
provided in this Section 10.6, 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 10.6). 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 10.6.
10.7 ENTIRE AGREEMENT
This Agreement, together with all Exhibits and Schedules hereto and all
other documents and instruments referenced herein or delivered in
connection herewith (including the Ancillary Agreements), constitute the
whole and only agreement between the Parties relating to the subject
matter hereof and supersede and extinguish any prior drafts, previous
agreements, undertakings, representations, warranties and arrangements of
any nature whatsoever, whether or not in writing between the Parties, in
connection with the subject matter hereof.
10.8 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 available to a Party under this Agreement will be independent,
cumulative and not alternative, and without prejudice to all other rights
available to such Party, whether as a matter of common law, statute,
custom or otherwise. Nothing in this Agreement or in any other document
referred to herein (including the Ancillary Agreements) shall be read or
construed as excluding any Liability or remedy as a result of fraud.
10.9 AMENDMENT
This Agreement may be amended, supplemented or modified only by a written
instrument duly executed by each Party hereto.
10.10 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. Except as otherwise expressly
stated herein, nothing in this Agreement confers any rights on any Person
(other than the Parties) pursuant to the Contracts (Rights of Third
Parties) Act 1999 (English Law).
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Asset Purchase Agreement - Retigabine
10.11 ASSIGNMENT AND BINDING EFFECT
Neither Party may assign any of its rights or delegate any of its
obligations under this Agreement to any other Person without the prior
written consent of the other Party; provided, however, that (i) Seller may
assign to any Person its right to receive all or any portion of any of the
cash payments to be made by Purchaser pursuant to Sections 3.2 or 3.3
above, (ii) Purchaser may assign any or all of its rights and obligations
under this Agreement to (x) any Successor or (y) any other Person,
provided that any such Successor or other Person agrees to be bound by the
provisions of this Agreement (including the provisions of Section 3.10
above) and (A) Seller consents to such assignment (such consent not to be
unreasonably withheld), (B) Purchaser remains liable for the performance
of its obligations under this Agreement, (C) the book value of such
Successor or other Person's net assets are in excess of the book value of
Purchaser's net assets as at (or immediately following) the date of the
assignment or (D) the Upfront Payments and all Milestone Payments have
been made, and (iii) Purchaser may license any or all of its rights under
this Agreement to one or more Licensees.
10.12 HEADINGS
The headings used in this Agreement have been inserted for convenience of
reference only and do not define or limit the provisions hereof.
10.13 SEVERABILITY
If any provision of this Agreement is held to be illegal, invalid or
unenforceable under any present or future applicable Law, and if the
rights or obligations of any Party 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 comprised 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 of such illegal, invalid or unenforceable
provision as may be possible and reasonably acceptable to the Parties.
10.14 GOVERNING LAW
This Agreement (together with all documents to be entered into pursuant to
it which are not expressed to be governed by another law) shall be
governed by, construed and take effect in accordance with English Law.
10.15 DOLLAR DENOMINATION AND FOREIGN SALES
Notwithstanding any provision herein to the contrary:
(a) All amounts referenced herein as "Dollars" or with a "$" symbol
shall mean, and be deemed expressed in terms of, United States
Dollars.
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Asset Purchase Agreement - Retigabine
(b) The remittance of any amounts from Purchaser to Seller with respect
to amounts received by Purchaser in a currency other than United
States Dollars (for example, as may be the case with Earn-Out on
Sales from Western Europe or the Rest-of-World) shall be payable to
Seller in United States Dollar equivalents at the official rate of
exchange of such currency as quoted in the Wall Street Journal for
the last business day of the calendar quarter as to which any such
payment relates.
(c) If the transfer, or the conversion into a United States Dollar
equivalent, of any remittance referred to in Section 10.15(b) above
is not lawful or possible, the payment of such remittance by
Purchaser to Seller shall be made by the deposit thereof, in the
currency of the country at issue, to the credit and account of
Seller or its nominee in any commercial bank or trust company of
Seller's choice located in that country, prompt written notice of
which shall be given by Purchaser to Seller.
10.16 EXPENSES
Except as otherwise expressly provided in this Agreement, each Party shall
pay its own expenses and costs incidental to the preparation of this
Agreement and to the consummation of the transactions contemplated hereby.
10.17 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.
10.18 INTERPRETATION OF AGREEMENT.
(a) Each Party acknowledges that it has participated in the drafting of
this Agreement, and any applicable rule of construction to the
effect that ambiguities are to be resolved against the drafting
party will not be applied in connection with the construction or
interpretation of this Agreement.
(b) Whenever required by the context hereof, the singular number will
include the plural, and vice versa; the masculine gender will
include the feminine and neuter genders; and the neuter gender will
include the masculine and feminine genders.
(c) As used in this Agreement, the words "include" and "including," and
variations thereof (including "for example"), will not be deemed to
be terms of limitation, and will be deemed to be followed by the
words "without limitation."
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Asset Purchase Agreement - Retigabine
(d) Unless the context otherwise requires, references in this Agreement
to "Sections," "Schedules" and "Exhibits" are intended to refer to
Sections of, and Schedules and Exhibits to, this Agreement.
IN WITNESS THEREOF the Parties have executed this Agreement on the day and year
first above mentioned.
Frankfurt, January 22, 2004 Frankfurt, January 22, 2004
VIATRIS GMBH & CO. KG XCEL PHARMACEUTICALS, INC.
Signed on behalf of Signed on behalf of
/s/ DR. HEINZ KIPPER /s/ MICHAEL T. BORER
---------------------------- ------------------------------------------
By: DR. HEINZ KIPPER By: MICHAEL T. BORER
Its: Chief Executive Officer Its: President and Chief Executive Officer
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Asset Purchase Agreement-Retigabine SCHEDULES
SCHEDULES
TO
THE ASSET PURCHASE AGREEMENT
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Asset Purchase Agreement-Retigabine SCHEDULES
SCHEDULE 1
ASSUMED CONTRACTS
CONTRACT RESEARCH ORGANISATION (CRO) / CLINICAL STUDY SERVICES:
YEAR OF AGREEMENT NAME & ADDRESS
----------------- ------------------------
[CONFIDENTIAL TREATMENT]
CONSULTANTS:
YEAR OF AGREEMENT NAME & ADDRESS
----------------- ------------------------
[CONFIDENTIAL TREATMENT]
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Asset Purchase Agreement-Retigabine SCHEDULES
INVESTIGATOR'S STATEMENTS:
YEAR OF AGREEMENT NAME & ADDRESS
----------------- ------------------------
[CONFIDENTIAL TREATMENT]
----------------- ------------------------
----------------- ------------------------
----------------- ------------------------
----------------- ------------------------
----------------- ------------------------
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Asset Purchase Agreement-Retigabine SCHEDULES
YEAR OF AGREEMENT NAME & ADDRESS
----------------- ------------------------
[CONFIDENTIAL TREATMENT]
----------------- ------------------------
----------------- ------------------------
----------------- ------------------------
----------------- ------------------------
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Asset Purchase Agreement-Retigabine SCHEDULES
SCHEDULE 2
PURCHASER'S CREDITORS
1. REGIMENT CAPITAL III, L.P.
70 Federal Street, 7th Floor
Boston, Massachusetts 02110
USA
Attention: Richard Miller
Telephone: (617) 488-1600
Facsimile: (617) 488-1660
with a copy to:
2. PAUL, HASTINGS, JANOFSKY & WALKER LLP
515 South Flower Street, 25th Floor
Los Angeles, California 90071
USA
Attention: John Hilson, Esq.
Telephone: (213) 683-6000
Facsimile: (213) 627-0705
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Asset Purchase Agreement-Retigabine SCHEDULES
SCHEDULE 3
REGULATORY FILINGS
1. IND No. 53,950 ("Retigabine (GKE-941, D-23129) Capsules") - ongoing
2. CTX No. 08336 / 0103 / A, ASTA Medica AG - expired
3. CTX No. 0011 / 0246/ A, Wyeth - expired
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Asset Purchase Agreement-Retigabine SCHEDULES
SCHEDULE 4
PURCHASER'S REQUIRED CONSENTS
1. Regiment Capital III, L.P.
2. Purchaser's Board of Directors
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Asset Purchase Agreement-Retigabine SCHEDULES
SCHEDULE 5
SELLER'S REQUIRED CONSENTS
Not applicable
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