EXHIBIT 10.12
UMBRELLA AGREEMENT
This UMBRELLA AGREEMENT (this "Agreement") dated as of
February 6, 2004, is among (a) XXXXXX PHARMACEUTICALS, INC., a Nevada
corporation ("Xxxxxx"), (b) XXXXXX DRUG CO., INC., a New York corporation,
including its subsidiaries (collectively, "Xxxxxx"), and (c) the other parties
(each an "Investor" and collectively, the "Investor Group") listed on the
signature page hereto.
PRELIMINARY STATEMENTS
1. Xxxxxx and Xxxxxx have entered into a Loan Agreement
dated as of March 29, 2000, as amended by an Amendment to Loan Agreement dated
as of March 21, 2000 and as further amended by a Second Amendment to Loan
Agreement dated as of December 20, 2002 (as so amended through such Second
Amendment, the "Loan Agreement"), pursuant to which Xxxxxx made certain term
loans to Xxxxxx in the aggregate original principal amount of $21,401,331 (the
"Loan").
2. Xxxxxx is in default of certain payment and other
obligations under the Loan Agreement and has requested that Xxxxxx agree to a
restructuring of the Loan and certain related transactions in connection with an
investment in Xxxxxx by the Investors and certain other parties (the
"Restructuring"). Xxxxxx is willing to consent to the Restructuring upon and
subject to the terms and conditions set forth in this Agreement.
3. As part of the Restructuring, on the Effective Date
(as defined below), the Investor Group has agreed to purchase the 2004
Debentures (as defined below) from Xxxxxx for the sum of up to $14,000,000.00
and Xxxxxx has agreed to issue the 2004 Debentures to the Investor Group
pursuant to the 2004 Debenture Purchase Agreement (as defined below).
4. As a further part of the Restructuring, on the
Effective Date, Xxxxxx has agreed to amend the Loan Agreement and the notes
issued in connection thereunder by entering into the Third Amendment (as defined
below) and in consideration for Xxxxxx entering into the Third Amendment, Xxxxxx
has agreed to pay $4,292,580 and to transfer the Purchased Assets to Xxxxxx.
5. As the final part of the Restructuring, on the
Effective Date, Xxxxxx has agreed to sell the Assigned Rights (as defined below)
to the Investor Group and, in consideration for the purchase of the Assigned
Rights, the Investor Group has agreed to pay $1,000,000.00.
6. On the Effective Date, (i) Xxxxxx and Xxxxxx have
agreed to terminate all pre-existing agreements between them (including without
limitation, the Supply Agreements (as defined below) and the Right of First
Negotiation Agreement (as defined below)) and, (ii) Xxxxxx has agreed to amend
the Warrant to Purchase Common Stock Agreement (as defined below).
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NOW, THEREFORE, in consideration of the premises and the
mutual agreements contained herein, and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
ARTICLE I
INTERPRETATION AND DEFINITIONS
Section 1.1 Certain Definitions. Terms defined in the Loan
Agreement and used in this Agreement shall have the meanings given to them in
the Loan Agreement, unless otherwise defined herein. The following terms shall
have the following meanings:
"2004 Debentures" means the convertible senior secured
debentures issued by Xxxxxx pursuant to the 2004 Debenture Purchase Agreement.
"2004 Debenture Purchase Agreement" means the 2004 Debenture
Purchase Agreement between Xxxxxx and the Investor Group substantially in the
form of Exhibit 1.1(a) hereto.
"Action" means any claim, action, suit, arbitration, inquiry,
proceeding or investigation by or before any Governmental Authority.
"Ancillary Documents" means the Xxxx of Sale, the Assignment
of Intellectual Property and the Hydrocodone Option Agreement.
"Assigned Agreements" means all right, title and interest of
Xxxxxx in and to the Loan Agreement, the Notes, the Xxxxxx Security Documents,
the Subordination Agreement dated as of December 20, 2002 among the Borrower,
Xxxxxx and the parties thereto, the other Loan Documents and any and all
instruments, agreements and other writings executed in connection with or
pursuant thereto.
"Assigned Loan" means all right, title and interest of Xxxxxx
in the Loan, together with all accrued and unpaid interest thereon and fees with
respect thereto.
"Assigned Proceeds" means any and all present and future
rights with respect to cash, securities, interest, dividends and other property
which may be exchanged for or distributed or collected in respect of the
Assigned Loan, the Assigned Agreements or the Assigned Security, and the
proceeds thereof, including, without limitation, distributions in respect of
principal, together with interest accrued but unpaid as of the Effective Date
and fees with respect thereto, interest after the date hereof, fees, costs and
expenses, and distributions obtained by or through redemption, consummation of a
plan of reorganization or otherwise.
"Assigned Rights" means (i) the Assigned Loan; (ii) the
Assigned Agreements; (iii) the Assigned Security; and (iv) the Assigned
Proceeds.
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"Assigned Security" means all right, title and interest in and
to any property, whether real or personal, tangible or intangible, of whatever
kind and wherever located, whether now owned or hereafter acquired or created,
in which a lien, encumbrance, security interest, mortgage, deed of trust,
pledge, claim, set-off or charge of any kind (collectively, "Liens") has been
granted or purported to have been granted pursuant to any of the Xxxxxx Security
Documents and all right, title and interest in and to any and all instruments,
agreements and other writings evidencing such a Lien.
"Assignment of Intellectual Property" means the assignment of
Intellectual Property , substantially in the form of Exhibit 1.1(b).
"Bankruptcy Code" means the Bankruptcy Reform Act of 1978, 11
U.S.C. Sections 101 et seq., as amended.
"Xxxx of Sale" means the Xxxx of Sale and Assignment to be
executed by Xxxxxx, substantially in the form of Exhibit 1.1(c).
"Claimant" means each of Essex Woodlands Health Ventures V,
L.P., Care Capital Investments, L.P., Xxxxx Partners III, L.P., Xxxxx Partners
International, L.P., and Xxxxx Employee Fund III, L.P.
"Claimant Recovery Amount" means, on any date, with respect to
each Claimant, the amount equal to the aggregate value of all property received
by such Claimant from the Loan Parties with respect to such Claimant's
Debentures on or after the Effective Date. Notwithstanding anything to the
contrary in this Agreement, equity or debt securities of the Company received by
a Claimant with respect to the Debentures (including upon conversion or exchange
thereof) shall be excluded from the calculation of the value of property deemed
to have been received by such Claimant.
"Claimant Recovery Percentage" means, on any date, the amount
determined by dividing the Claimant Recovery Amount for such Claimant by the
face value of such Claimant's Debentures.
"Contingent Purchase Amount" shall have the meaning set forth
in Section 2.3(b) hereto.
"Contingent Purchase Amount Payment Date" means any day that
is five Business Days after any day on which a Claimant receives a payment or
other property from the Loan Parties after which the Claimant Recovery
Percentage exceeds the Xxxxxx Recovery Percentage.
"Contingent Purchase Termination Date" means the first to
occur of (i) December 31, 2004, (ii) the date on which 100% of the Debentures
shall have been exchanged for or
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converted into equity securities of the Company or (iii) the date on which the
Xxxxxx Recovery Amount equals $21,401,331.
"Consents" means the Xxxxxx and Guarantor Transfer Consent and
the Secured Creditors' Transfer Consent.
"Debentures" means (i) the 2002 Debentures (as defined in the
Subordination Agreement) that were issued prior to January 1, 2004 and (ii) the
Existing Debentures (as defined in the Subordination Agreement).
"Encumbrance" means any security interest, pledge,
hypothecation, mortgage, lien (including environmental and tax liens),
violation, charge, lease, license, encumbrance, servient easement, adverse
claim, reversion, reverter, preferential arrangement, restrictive covenant,
condition or restriction of any kind, including any restriction on the use,
voting, transfer, receipt of income or other exercise of any attributes of
ownership.
"Environmental Laws" means all Laws, now or hereafter in
effect and as amended, and any judicial or administrative interpretation
thereof, including any judicial or administrative order, consent decree or
judgment, relating to the environment, health, safety, natural resources or
Hazardous Materials, including CERCLA; the Resource Conservation and Recovery
Act, 42 U.S.C. Sections 6901 et seq.; the Hazardous Materials Transportation
Act, 49 U.S.C. Sections 6901 et seq.; the Clean Water Act, 33 U.S.C. Sections
1251 et seq.; the Toxic Substances Control Act, 15 U.S.C. Sections 2601 et seq.;
the Clean Air Act, 42 U.S.C. Sections 7401 et seq.; the Safe Drinking Water Act,
42 U.S.C. Sections 300f et seq.; the Atomic Energy Act, 42 U.S.C. Sections 2011
et seq.; the Federal Insecticide, Fungicide and Rodenticide Act, 7 U.S.C.
Sections 136 et seq.; and the Federal Food, Drug and Cosmetic Act, 21 U.S.C.
Sections 301 et seq.
"Governmental Authority" means any federal, national,
supranational, state, provincial, local, or similar government, governmental,
regulatory or administrative authority, agency or commission or any court,
tribunal, or judicial or arbitral body.
"Governmental Order" means any order, writ, judgment,
injunction, decree, stipulation, determination or award entered by or with any
Governmental Authority.
"Xxxxxx/Investor Group Transaction" means the transactions
described in Section 2.1 of this Agreement.
"Xxxxxx and Guarantor Transfer Consent" means the consent of
Xxxxxx and the Guarantors to the transfer of the Assigned Rights to the Investor
in substantially the form of Exhibit 1.1(d).
"Hydrocodone Option Agreement" means the Hydrocodone Option
Agreement to be executed by Xxxxxx and Xxxxxx, substantially in the form of
Exhibit 2.2(e).
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"Indemnified Party" means a Xxxxxx Indemnified Party, an
Investor Group Indemnified Party or a Xxxxxx Indemnified Party, as the case may
be.
"Indemnifying Party" means Xxxxxx pursuant to Section 5.1, an
Investor or the Investor Group pursuant to Section 5.2 and Xxxxxx pursuant to
Section 5.3, as the case may be.
"Intellectual Property" means (i) patents, patent
applications, and statutory invention registrations, (ii) trademarks, service
marks, domain names, trade dress, logos, trade names, corporate names, and other
identifiers of source or goodwill, including registrations and applications for
registration thereof and including the goodwill of the business symbolized
thereby or associated therewith, (iii) mask works and copyrights, including
copyrights in computer software, and registrations and applications for
registration thereof, and (iv) confidential and proprietary information,
including trade secrets, know-how and invention rights.
"Investor Group Nominee" means Xxxxx.
"Investor Group Purchase Price Bank Account" means the account
of Xxxxxx at LaSalle Bank, bearing account number 5800103177.
"Investor Group /Xxxxxx Transaction" means the transactions
described in Section 2.3 of this Agreement.
"Law" means any federal, national, supranational, state,
provincial, local or similar statute, law, ordinance, regulation, rule, code,
order, requirement or rule of law (including common law).
"Liabilities" means any and all debts, liabilities and
obligations, whether accrued or fixed, absolute or contingent, matured or
unmatured or determined or determinable, including those arising under any Law
(including any Environmental Law), Action or Governmental Order and those
arising under any contract, agreement, arrangement, commitment or undertaking.
"Loan Parties" means Xxxxxx and the Guarantors.
"Parties" means collectively, Xxxxxx, Xxxxxx and the Investor
Group.
"Person" means an individual, partnership, corporation,
statutory trust, joint stock company, trust, unincorporated association, limited
liability company, joint venture, governmental authority or other entity of
whatever nature.
"Pro Rata Portion" means, with respect to each Claimant, the
percentage determined by dividing (i) the aggregate outstanding amount of the
Debentures owned by such Claimant and its Affiliates as of January 1, 2004, by
(ii) the aggregate outstanding amount of the Debentures owned by all Claimants
and their Affiliates as of January 1, 2004.
"Purchased Assets " means the assets specified in Schedule I
hereto.
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"Right of First Negotiation Agreement" means that certain
Right of First Negotiation Agreement between Xxxxxx and Xxxxxx dated March 29,
2000.
"Secured Creditors" has the meaning given to such term in the
Subordination Agreement.
"Secured Creditors' Transfer Consent" means the consent of the
Secured Creditors to the transfer of the Assigned Rights to Investor Group in
substantially the form of Exhibit 1.1(e).
"Subordination Agreement" means that certain Subordination
Agreement dated December 20, 2002 among Watson, Halsey, the Investors and
various other parties.
"Supply Agreements" means that certain Finished Goods Supply
Agreement by and between Xxxxxx and Xxxxxx dated March 29, 2000, as amended,
that certain Active Ingredient Supply Agreement by and between Xxxxxx and Xxxxxx
dated March 29, 2000 and that certain Finished Goods Supply Agreement ("Core
Products") by and between Xxxxxx and Xxxxxx dated March 29, 2000, as amended.
"Third Amendment to Loan Agreement" means the Third Amendment
to Loan Agreement between Xxxxxx and Xxxxxx, substantially in the form of
Exhibit 1.1(f) hereto.
"Transaction Documents" means this Agreement, the 2004
Debenture Purchase Agreement, the Third Amendment, the Consents and the
Ancillary Documents.
"Warrant to Purchase Common Stock Agreement" means that
certain Warrant to Purchase Common Stock, Par Value $.01 Per Share of Xxxxxx
Drug Co., Inc. dated December 20, 2002.
"Xxxxxx/Xxxxxx Transaction" means the transactions described
in Section 2.2 of this Agreement.
"Xxxxxx Loan Amendment Bank Account" means the account of
Xxxxxx at Bank of America, bearing account number 1496301300.
"Xxxxxx Loan Purchase Price Bank Account" means the account of
Xxxxxx at Bank of America, bearing account number 1496301300.
"Xxxxxx Recovery Amount" means, on any date, the amount equal
to (i) $5,658,516 (ii) plus the value of all property received by Xxxxxx from
the Claimants pursuant to Section 2.3(b)(ii) of this Agreement.
"Xxxxxx Recovery Percentage" means 26.44%
"Xxxxxx Security Documents" has the meaning specified in the
Loan Agreement.
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Section 1.2 Definitions. The following terms have the meanings
set forth in the Sections set forth below:
Definition Location
---------- --------
"Agreement"....................................... Preamble
"Closing"......................................... 3.1
"Effective Date".................................. 3.8
"Xxxxxx".......................................... Preamble
"Xxxxxx Indemnified Party"........................ 5.2(a)
"Investor"........................................ Preamble
"Investor Group Indemnified Party"................ 5.3(a)
"Investor Group Information"...................... 4.4(d)
"Investor Group Purchase Price"................... 2.1(b)
"Loan"............................................ Preliminary Statements
"Loan Agreement".................................. Preliminary Statements
"Loss"............................................ 5.1
"Restructuring"................................... Preliminary Statements
"Third Amendment" 2.2(a)
"Third Amendment Cash Amount" 2.2(b)
"Third Party Claim"............................... 5.4(b)
"Xxxxxx".......................................... Preamble
"Xxxxxx Indemnified Party"........................ 5.2(b)
"Xxxxxx Information".............................. 4.3(f)
"Xxxxxx Loan Purchase Cash Amount" 2.3 (b)(i)
Section 1.3 Interpretation and Rules of Construction. In this
Agreement, except to the extent otherwise provided or that the context otherwise
requires:
(a) when a reference is made in this Agreement to an Article,
Section, Exhibit or Schedule, such reference is to an Article or
Section of, or a Schedule or Exhibit to, this Agreement unless
otherwise indicated;
(b) the table of contents and headings for this Agreement are
for reference purposes only and do not affect in any way the meaning or
interpretation of this Agreement;
(c) whenever the words "include", "includes" or "including"
are used in this Agreement, they are deemed to be followed by the words
"without limitation";
(d) the words "hereof", "herein" and "hereunder" and words of
similar import, when used in this Agreement, refer to this Agreement as
a whole and not to any particular provision of this Agreement;
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(e) all terms defined in this Agreement have the defined
meanings when used in any certificate or other document made or
delivered pursuant hereto, unless otherwise defined therein;
(f) the definitions contained in this Agreement are applicable
to the singular as well as the plural forms of such terms;
(g) any Law defined or referred to herein or in any agreement
or instrument that is referred to herein means such Law or statute as
from time to time amended, modified or supplemented, including by
succession of comparable successor Laws;
(h) references to a Person are also to its successors and
permitted assigns; and
(i) the use of "or" is not intended to be exclusive unless
expressly indicated otherwise.
ARTICLE II
THE TRANSACTIONS
Section 2.1 The Xxxxxx/Investor Group Transaction. Subject to
the terms and conditions of this Agreement and in reliance on the agreements,
representations and warranties contained herein and made pursuant hereto and the
2004 Debenture Purchase Agreement, on the Effective Date:
(a) Issuance of 2004 Debentures to Investor. Xxxxxx and the
Investor Group hereby agree to enter into the 2004 Debenture Purchase
Agreement pursuant to which Xxxxxx will issue convertible senior
secured debentures in the principal amount of up to $14,000,000.00 (as
such amount may be increased in accordance with the terms of such
agreement) to the Investor Group and the other purchasers from time to
time party thereto, all on the terms and conditions set forth in the
2004 Debenture Purchase Agreement.
(b) Investor Group Purchase Price. Each Investor severally and
not jointly agrees to pay the purchase price for the 2004 Debentures in
the amount specified for such Investor in such agreement (collectively,
the "Investor Group Purchase Price").
Section 2.2 The Xxxxxx/Xxxxxx Transaction. Subject to the
terms and conditions of this Agreement and in reliance on the agreements,
representations and warranties contained herein and made pursuant hereto, on the
Effective Date:
(a) Third Amendment. Xxxxxx hereby agrees to enter into the
Third Amendment to the Loan Agreement pursuant to which Xxxxxx will restructure
certain of Xxxxxx'x obligations under the Loan Agreement in accordance with the
terms set forth therein (the "Third Amendment").
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(b) Third Amendment Purchase Price. In consideration for
Xxxxxx'x agreement to enter into the Third Amendment, Xxxxxx agrees, on the
Effective Date, (i) to pay or cause to be paid to Xxxxxx the purchase price as
follows: (i) payment in immediately available funds of an amount equal to
$[4,279,850] (the "Third Amendment Cash Amount") and (ii) to sell, assign,
transfer, convey and deliver, or cause to be sold, assigned, transferred,
conveyed and delivered to Xxxxxx the Purchased Assets, in each case free and
clear of any Encumbrances, and Xxxxxx hereby purchases from Xxxxxx on such date,
the Purchased Assets, in each case free and clear of any Encumbrances. Xxxxxx
shall have full ownership of and title to the Purchased Assets, free and clear
of any Encumbrances. With respect to any physical assets among the Purchased
Assets, Xxxxxx shall be responsible for any de-installation activities, costs
and expenses and Xxxxxx shall be responsible for any packing and shipping
activities, costs and expenses.
(c) Termination of Other Agreements. Xxxxxx and Xxxxxx hereby
agree to terminate all pre-existing agreements between Xxxxxx and Xxxxxx
(including without limitation, the Supply Agreements and the Right of First
Negotiation Agreement).
(d) Waiver of Dilution. Xxxxxx and Xxxxxx hereby agree that
the Warrant to Purchase Common Stock Agreement is amended in accordance with the
terms of Exhibit 2.2(d) hereto.
(e) Hydrocodone Option. Xxxxxx shall grant to Xxxxxx a
non-assignable, exclusive option (substantially in the form as set forth in
Exhibit 2.2(e) hereto), to enter into a supply agreement with Xxxxxx pursuant to
which Xxxxxx will supply, and Xxxxxx will purchase, on a non-exclusive,
preferential basis, hydrocodone bitartrate active pharmaceutical ingredient
manufactured using Xxxxxx'x proprietary hydrocodone bitartrate active
pharmaceutical ingredient process.
Section 2.3 The Investor/Xxxxxx Transaction. Subject to the
terms and conditions of this Agreement and in reliance on the agreements,
representations and warranties contained herein and made pursuant hereto, on the
Effective Date and immediately after the effectiveness of the Xxxxxx/Xxxxxx
Transaction:
(a) Transfer of Assigned Rights to Investor. Xxxxxx hereby
sells, assigns, transfers, conveys and delivers to Investor Group all
of Xxxxxx'x right, title and interest in the Assigned Rights, and
hereby delegates to Investor Group all of its obligations, duties and
liabilities under the Assigned Agreements, and Investor Group hereby
purchases, accepts and assumes from Xxxxxx from and after the Effective
Date, all of Xxxxxx'x right, title and interest in the Assigned Rights,
provided, that, nothing contained herein is intended to, or shall be
construed or deemed to constitute an assignment of any right of Xxxxxx
to assert a claim under Section 502(h) of the Bankruptcy Code due to,
or arising from, Xxxxxx'x return of money or property to the estate of
Xxxxxx or any of its subsidiaries in connection with the assertion, by
the estate or its representative of Xxxxxx or any of its subsidiaries,
of avoiding powers provided under Sections 544, 545, 547, 548, 549 and
550 of the Bankruptcy Code or analogous state law; it being understood
and
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agreed by the Parties that the right to assert any such claim under
Section 502(h) of the Bankruptcy Code be and hereby is retained by
Xxxxxx.
(b) Payment of Loan Purchase Price to Xxxxxx. As consideration
for the sale, transfer and assignment of the Assigned Rights
contemplated in Section 2.3(a): (i) on the Effective Date, the Investor
Group agrees to pay Xxxxxx in immediately available funds an amount
equal to $1,000,000.00 (the "Xxxxxx Loan Purchase Cash Amount"), and
(ii) and, until such time as the Xxxxxx Recovery Amount equals
$21,401,331.00, on each Contingent Purchase Amount Payment Date that
occurs prior to the Contingent Purchase Termination Date, each Claimant
that has triggered such Contingent Purchase Amount Payment Date shall
make a payment to Xxxxxx equal to that portion of the Claimant Recovery
Amount for such Claimant that results in the Claimant Recovery
Percentage exceeding the Xxxxxx Recovery Percentage (the "Contingent
Purchase Amount"). To the extent the relevant Claimant Recovery Amount
includes property other than immediately available funds, the Claimants
may include in any resulting Contingent Purchase Amount paid hereunder
a proportionate amount of such other property. Notwithstanding anything
to the contrary in this Agreement, no Claimant shall have any
obligation to make any payment under clause (ii) of this Section 2.3(b)
on or after the Contingent Purchase Termination Date.
ARTICLE III
CLOSING
Section 3.1 Closing. Subject to the terms and conditions of
this Agreement, the transactions contemplated by this Agreement shall take place
at a closing (the "Closing") to be held at the offices of St. Xxxx & Xxxxx,
L.L.C., Xxx Xxxx Xxxxx Xxxx, Xxxxxx, Xxx Xxxxxx 00000 at 10:00 A.M. New York
time on February 6, 2004 or such other time or place as the parties hereto may
agree.
Section 3.2 Closing Deliveries by Xxxxxx to Investor Group. At
the Closing, Xxxxxx shall deliver or cause to be delivered to the Investor Group
in connection with the Xxxxxx/Investor Group Transaction:
(i) executed counterparts of this Agreement and
the 2004 Debenture Purchase Agreement, in each case executed
by Xxxxxx, and such other instruments, in form and substance
satisfactory to the Investors, as may be requested by the
Investors to evidence the issuance of the 2004 Debentures;
(ii) notes evidencing the 2004 Debentures
registered in such names as the Investors may request in
writing at least one full Business Day before the Closing
Date;
(iii) a receipt for the Investor Group Purchase
Price;
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(iv) a true and complete copy, certified by the
Secretary or an Assistant Secretary of Xxxxxx, of the
resolutions duly and validly adopted by the board of directors
of Xxxxxx evidencing its authorization of the execution and
delivery of this Agreement and the 2004 Debenture Purchase
Agreement and the consummation of the transactions
contemplated hereby and thereby;
(v) a certificate of the Secretary or an
Assistant Secretary of Xxxxxx certifying the names and
signatures of the officers of Xxxxxx authorized to sign this
Agreement, the 2004 Debenture Purchase Agreement and the other
documents to be delivered hereunder and thereunder;
(vi) a certificate of a duly authorized officer
of Xxxxxx certifying that the representations and warranties
of Xxxxxx contained in this Agreement and the 2004 Debenture
Purchase Agreement shall be true and correct in all material
respects as of the Closing; and
(vii) any other documents as shall be required to
be delivered pursuant to the terms of the 2004 Debenture
Purchase Agreement.
Section 3.3 Closing Deliveries by Xxxxxx to Xxxxxx. At the
Closing, Xxxxxx shall deliver or cause to be delivered to Xxxxxx in connection
with the Xxxxxx/Xxxxxx Transaction:
(i) the Third Amendment Cash Amount by wire
transfer in immediately available funds to the Xxxxxx Loan
Amendment Bank Account;
(ii) a secured promissory note in the aggregate
principal amount of $5,000,000.00;
(iii) executed counterparts of this Agreement and
the Third Amendment, in each case executed by Xxxxxx;
(iv) executed counterparts of the Xxxx of Sale
and the Assignment of Intellectual Property, in each case
executed by Xxxxxx, and such other instruments, in form and
substance satisfactory to Xxxxxx, as may be requested by
Xxxxxx to transfer the Purchased Assets to Xxxxxx or evidence
such transfer on the public records;
(v) executed counterparts of each Ancillary
Document to which Xxxxxx is a party other than the Ancillary
Documents delivered pursuant to clauses (iii) and (iv) above;
(vi) a true and complete copy, certified by the
Secretary or an Assistant Secretary of Xxxxxx, of the
resolutions duly and validly adopted by the board of directors
of Xxxxxx evidencing its authorization of the execution and
delivery of
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this Agreement, the Third Amendment and the Ancillary
Documents and the consummation of the transactions
contemplated hereby and thereby;
(vii) a certificate of the Secretary or an
Assistant Secretary of Xxxxxx certifying the names and
signatures of the officers of Xxxxxx authorized to sign this
Agreement, the Third Amendment and the Ancillary Documents and
the other documents to be delivered hereunder and thereunder;
(viii) a certificate of a duly authorized officer
of Xxxxxx certifying that the representations and warranties
of Xxxxxx contained in this Agreement shall be true and
correct in all material respects as of the Closing;
(ix) a favorable opinion, dated the Effective
Date and addressed to Xxxxxx , from St. Xxxx & Xxxxx, L.L.C.,
special New York counsel for Xxxxxx, in form and substance
satisfactory to Xxxxxx;
(x) such UCC termination statements and other
documents as may be required by Xxxxxx to ensure that the
Purchased Assets are conveyed free and clear of any
Encumbrances; and
(xi) fully executed copies of the Xxxxxx and
Guarantor Transfer Consent, the Secured Creditors' Transfer
Consent and any other consents required for an effective
assignment of the Assigned Rights by Xxxxxx to Investor Group.
Section 3.4 Closing Deliveries by Investors to Xxxxxx. At the
Closing, each Investor shall deliver or cause to be delivered to Xxxxxx in
connection with the Xxxxxx/Investor Group Transaction:
(i) such Investor's portion of the Investor
Group Purchase Price by wire transfer in immediately available
funds to the Investor Group Purchase Price Bank Account;
(ii) executed counterparts of this Agreement and
the 2004 Debenture Purchase Agreement; and
(iii) all authorizations, consents, orders and
approvals of all Governmental Authorities and officials and
all third party consents and estoppel certificates, each in
form and substance satisfactory to Xxxxxx in its sole
discretion, which Xxxxxx in its sole discretion deems
necessary or desirable for the consummation of the
transactions contemplated by this Agreement and 2004 Debenture
Purchase Agreement including all third party consents required
under any contracts.
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Section 3.5 Closing Deliveries by the Investor Group to
Xxxxxx. At the Closing, the Investors shall deliver or cause to be delivered to
Xxxxxx in connection with the Investor Group/Xxxxxx Transaction:
(i) the Xxxxxx Loan Purchase Cash Amount by wire
transfer in immediately available funds to the Xxxxxx Loan
Purchase Price Bank Account; and
(ii) executed counterparts of this Agreement.
Section 3.6 Closing Deliveries by Xxxxxx to Xxxxxx. At the
Closing, Xxxxxx shall deliver or cause to be delivered to Xxxxxx in connection
with the transfer of the Purchased Assets:
(i) a receipt for the Third Amendment Cash
Amount;
(ii) executed counterparts of this Agreement, the
Third Amendment and the Ancillary Documents, in each case
executed by Xxxxxx;
(iii) a true and complete copy, certified by the
Secretary or an Assistant Secretary of Xxxxxx, of the
resolutions duly and validly adopted by the Board of Directors
of Xxxxxx evidencing its authorization of the execution and
delivery of this Agreement, the Third Amendment, the Ancillary
Documents and the consummation of the transactions
contemplated hereby and thereby;
(iv) a certificate of a duly authorized officer
of Xxxxxx certifying that the representations and warranties
of Xxxxxx contained in this Agreement shall be true and
correct in all material respects as of the Effective Date; and
(v) the promissory note dated December 20, 2002
in the principal amount of $17,500,000 issued by Xxxxxx, as
maker, to Xxxxxx, and the promissory note dated December 20,
2002 in the principal amount of $3,901,331 issued by Xxxxxx,
as maker, to Xxxxxx, each marked "cancelled".
Section 3.7 Closing Deliveries by Xxxxxx to the Investors. At
the Closing, Xxxxxx shall deliver or cause to be delivered to the Investor Group
Nominee in connection with the Investor Group/Xxxxxx Transaction:
(i) a receipt for the Xxxxxx Loan Purchase Cash
Amount; and
(ii) executed counterparts of each Transaction
Document to which Xxxxxx is a party;
(iii) the originally executed secured promissory
note in the aggregate principal amount of $5,000,000.00, duly
endorsed by Xxxxxx (without recourse
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or warranty to Xxxxxx except as set forth in this Agreement),
endorsing Xxxxxx'x interest in such note to the Investor Group
Nominee; and
(iv) all Assigned Security in the possession of
Xxxxxx.
Section 3.8 Effective Date. The effective date of the
Xxxxxx/Investor Group Transaction, Xxxxxx/Xxxxxx Transaction and the Investor
Group/Xxxxxx Transaction (the "Effective Date") shall be the date on which each
of the Parties have signed this Agreement and each of the requirements set forth
in Sections 3.2 to 3.7 of this Agreement shall have been satisfied. On the
Effective Date, the Investor Group/Xxxxxx Transaction shall become effective
immediately upon the effectiveness of the Xxxxxx/Xxxxxx Transaction.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE PARTIES.
Section 4.1 Mutual Representations and Warranties. As an
inducement to the other Parties to enter into this Agreement, each Party hereby
severally and not jointly represents and warrants to the other Parties as
follows:
(a) Organization, Authority and Qualification. Such Party is
duly organized, validly existing and in good standing under the laws of
the jurisdiction of its formation and has all necessary power and
authority to enter into this Agreement and the Transaction Documents to
which it is a party, to carry out its obligations hereunder and
thereunder and to consummate the transactions contemplated hereby and
thereby. Such Party is duly licensed or qualified to do business and is
in good standing in each jurisdiction which the properties owned or
leased by it or the operation of its business makes such licensing or
qualification necessary. The execution and delivery of this Agreement
and the Transaction Documents by such Party, the performance by such
Party of its obligations hereunder and thereunder and the consummation
by such Party of the transactions contemplated hereby and thereby have
been duly authorized by all requisite action on the part of such Party
and its stockholders. This Agreement and the Transaction Documents,
upon their execution shall have been duly executed and delivered by
such Party, and (assuming due authorization, execution and delivery by
the other Parties thereto) this Agreement and the Transaction Documents
to which it is a party, upon their execution, shall constitute, legal,
valid and binding obligations of such Party, enforceable against such
Party in accordance with their respective terms, subject, as to
enforceability, to bankruptcy, insolvency, moratorium, reorganization
and other laws of general application relating to or affecting
creditors' rights and to general equitable principles, provided,
however, that Xxxxxx makes no representation with respect to the
collectability of the Loan or any portion thereof.
(b) No Conflict. The execution, delivery and performance of
this Agreement and the Transaction Documents to which it is a party do
not and will not (a) violate, conflict
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with or result in the breach of any provision of the certificate of
incorporation or by-laws (or similar organizational documents) of such
Party, (b) conflict with or violate any Law or Governmental Order
applicable to such Party, or any of its assets, properties or
businesses, or (c) conflict with, result in any breach of, constitute a
default (or event which with the giving of notice or lapse of time, or
both, would become a default) under, require any consent under, or give
to others any rights of termination, amendment, acceleration,
suspension, revocation or cancellation of, or result in the creation of
any Encumbrance on any of the Purchased Assets or the Transaction
Documents, as the case may be, pursuant to, any note, bond, mortgage or
indenture, contract, agreement, lease, sublease, license, permit,
franchise or other instrument or arrangement to which such Party is a
party or by which any of its material assets is bound or affected.
(c) Litigation There are no pending or threatened actions,
suits or proceedings against or affecting such Party or any of its
properties by or before any court or administrative agency in respect
of this Agreement, the Transaction Documents, the Purchased Assets or
the 2004 Debentures, as the case may be, which are reasonably likely to
materially adversely affect the ability of such Party to perform its
obligations hereunder or call into question the validity of this
Agreement or the Transaction Documents or the enforceability thereof in
accordance with the respective terms thereof.
(d) Governmental Consents and Approval. Neither the execution
and delivery by such Party of this Agreement or the Transaction
Documents to which it is a party nor the consummation by such Party of
any of the transactions contemplated hereby or thereby nor the
performance by such Party of any of its obligations requires the
consent or approval of, the giving of notice to, the filing or
registration with, or the taking of any other action in respect of any
Governmental Authority.
(e) Brokers. No broker, finder or investment banker is
entitled to any brokerage, finder's or other fee or commission in
connection with the transactions contemplated by this Agreement and the
Transaction Documents based upon arrangements made by or on behalf of
such Party.
(f) Arm's Length Transactions. The transactions entered into
by and between the Parties hereto pursuant to this Agreement and the
Transaction Documents are Arm's Length transactions. For purposes
hereof, the term "Arm's Length" means a transaction or negotiation in
which each party is completely independent of each other, seeks to
obtain terms which are most favorable to it and has no economic or
other interest in making concessions to the other party.
Section 4.2 Representations and Warranties of Xxxxxx. As an
inducement to the Investor Group and Xxxxxx to enter into this Agreement, Xxxxxx
hereby represents and warrants to the Investor Group and Xxxxxx as follows as of
the Effective Date:
(a) Title. Xxxxxx has good and marketable title to all the
Purchased Assets, free and clear of all Encumbrances. Xxxxxx has the
complete and unrestricted power and
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15
unqualified right to sell, assign, transfer, convey and deliver the
Purchased Assets to Xxxxxx without penalty or other adverse
consequences. Following the consummation of the Xxxxxx/Xxxxxx
Transaction contemplated by this Agreement, the Third Amendment, and
the Ancillary Documents and the execution of the instruments of
transfer contemplated by this Agreement, the Third Amendment and the
Ancillary Documents, Xxxxxx will own, with good, valid and marketable
title, or lease, under valid and subsisting leases, or otherwise
acquire the interests of Xxxxxx in the Purchased Assets, free and clear
of any Encumbrances, and without incurring any penalty or other adverse
consequence, including any increase in rentals, royalties, or license
or other fees imposed as a result of, or arising from, the consummation
of the transactions contemplated by this Agreement.
(b) Closing Date Transactions. On the Effective Date, Xxxxxx
will have had conveyed to it the Purchased Assets, free and clear of
all Encumbrances.
(c) Insolvency. Xxxxxx has not taken any action nor have any
other steps been taken or legal proceedings commenced or threatened
against Xxxxxx for its dissolution, winding-up, bankruptcy,
examination, administration, court protection, reorganization or
appointment of a receiver, examiner, trustee or similar official with
respect to Xxxxxx or any of its assets or property or for the granting
of suspension of payments to Xxxxxx.
(d) Other Transactions. As of the Effective Date, except for
this Agreement, there are no contracts or agreements to which Xxxxxx is
a party providing for any lease, sale, disposition of title or
beneficial ownership of the Purchased Assets.
(e) Loan Documents. Xxxxxx has provided to the Investor Group
true, correct and complete copies of the Loan Agreement (including all
waivers, supplements, forbearances and amendments thereto) and all
schedules and exhibits to the Loan Agreement the other Loan Documents
specified in Schedule II. Without in any way limiting the
representations and warranties of Xxxxxx contained in this Agreement,
Investor is assuming all risk with respect to the accuracy or
sufficiency of such documents and information.
(f) Claimant Ownership. As of the Effective Date, the
Claimants and their Affiliates collectively hold Debentures in an
aggregate outstanding amount of $71,001,035 and such portion of
Debentures held by the Claimants and their Affiliates collectively
represents in excess of 79% of the aggregate outstanding amount of
Debentures.
EXCEPT AS OTHERWISE PROVIDED HEREIN, XXXXXX MAKES NO OTHER WARRANTIES,
EXPRESS OR IMPLIED, WITH RESPECT TO THE PURCHASED ASSETS, INCLUDING ANY WARRANTY
OF MERCHANTABILITY OR WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE.
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Section 4.3 Representation and Warranties of the Investors.
(A) As an inducement to Xxxxxx to enter into this Agreement, each Investor
severally and not jointly hereby represents and warrants to Xxxxxx as follows as
of the Effective Date:
(a) Insolvency. Such Investor has not taken any action nor, to
its knowledge have any other steps been taken or legal proceedings
commenced or threatened against the Investor for its dissolution,
winding-up, bankruptcy, examination, administration, court protection,
reorganization or appointment of a receiver, examiner, trustee or
similar official with respect to the Investor or any of its assets or
property or for the granting of suspension of payments to the Investor.
(b) Information. Investor is a sophisticated buyer with
respect to the Assigned Rights, has adequate information concerning the
business and financial condition of Xxxxxx to make an informed decision
regarding the Assigned Rights, and has independently, without reliance
upon Xxxxxx and based on such information as it deemed appropriate,
made its own analysis and decision to enter into this Agreement, except
that Investor has relied upon the representations, warranties and
covenants of Xxxxxx contained in this Agreement. Investor acknowledges
that Xxxxxx may possess material information with respect to Xxxxxx not
known to the Investor which may be material to a decision to buy the
Assigned Rights (the "Xxxxxx Information"), that Investor has
determined to acquire the Assigned Rights notwithstanding its lack of
knowledge of Xxxxxx Information and that Xxxxxx shall have no liability
to Investor to the extent such liability arises from, is caused by or
relates to the non-disclosure of Xxxxxx Information and Investor hereby
releases Xxxxxx therefrom with respect to such nondisclosure; provided,
however, that the foregoing limitation shall not in any way limit the
liability of Xxxxxx for a breach of its representations and warranties
contained in this Agreement.
(c) Acknowledgments. Investor acknowledges that Xxxxxx has not
made and does not make any representation or warranty, whether express
or implied, except as expressly set forth in this Agreement. Investor
acknowledges that the sale of the Assigned Rights by Xxxxxx to Investor
is irrevocable, and that Investor shall have no recourse to Xxxxxx,
except with respect to breaches of representations, warranties and
covenants expressly set forth in this Agreement, and pursuant to the
indemnities contained herein. Investor acknowledges that the
consideration paid pursuant hereto for the purchase of the Assigned
Rights may differ both in kind and amount from any payments or
distributions which may ultimately be received with respect thereto.
Investor acknowledges that it is assuming the risk of full or partial
loss which is inherent with the credit, and all collectability risks
associated therewith.
(d) Securities Act. Investor is an "accredited investor"
within the meaning of Section 2(15) of the Securities Act of 1933, as
amended, and the rules and regulations promulgated thereunder (the
"Securities Act"). Without implying characterization of the Assigned
Rights as a "security" within the meaning of any applicable securities
laws,
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Investor is not purchasing the Assigned Rights with a view to resale or
distribution in a manner that would violate applicable securities laws.
(e) No Reliance. Investor acknowledges that Xxxxxx has not
given Investor any investment advice, credit information or opinion on
whether the purchase of the Assigned Rights is prudent. Except as
otherwise provided in this Agreement, Investor has not relied and will
not rely on Xxxxxx to furnish or make available any documents or other
information regarding the credit, affairs, financial condition or
business of Xxxxxx or any obligor, or any other matter concerning
Xxxxxx or any obligor. Investor is assuming all risk with respect to
the accuracy or sufficiency of the Assigned Agreements, other than any
representations, warranties or covenants made by Xxxxxx in this
Agreement.
(f) Subordination Provisions. Investor expressly acknowledges
that it has notice of Section 11 of the Subordination Agreement.
Section 4.4 Representation and Warranties of Xxxxxx. As an
inducement to the Investors to enter into this Agreement, Xxxxxx hereby
represents and warrants to the Investors as follows as of the Effective Date:
(a) Title. (A) Xxxxxx is the sole legal and beneficial owner
and holder of the Assigned Rights and has good title to the Assigned
Rights free and clear of any lien, security interest or other adverse
claim; (B) the Assigned Agreements are the legal, valid and binding
obligations of Xxxxxx, enforceable against Xxxxxx in accordance with
their terms, subject, as to enforceability, to bankruptcy, insolvency,
moratorium, reorganization and other laws of general application
relating to or affecting creditors' rights and to general equitable
principles, provided, however, that Xxxxxx makes no representation with
respect to the collectability of the Loan or any portion thereof and
(C) Xxxxxx has not received any written notice that (i) any payment or
other transfer made to or for the account of Xxxxxx from or on account
of Xxxxxx or any of its subsidiaries under the Assigned Rights is or
may be void or avoidable as an actual or constructive fraudulent
transfer or as a preferential transfer or (ii) the Assigned Rights, or
any portion of them, are void, voidable, unenforceable or subject to
any claim, counterclaim, setoff, defense, action, demand, litigation
(including administrative proceedings or derivative actions),
encumbrance, right (including expungement, avoidance, reduction,
contractual or equitable subordination, or otherwise) or defect, other
than those created pursuant to the Loan Documents, the effect of which
is, or would be, materially and adversely to affect the Assigned Rights
in whole or in part.
(b) Insolvency. Xxxxxx has not taken any action nor, to its
knowledge have any other steps been taken or legal proceedings
commenced or threatened against Xxxxxx for its dissolution, winding-up,
bankruptcy, examination, administration, court protection,
reorganization or appointment of a receiver, examiner, trustee or
similar official with respect to Xxxxxx or any of its assets or
property or for the granting of suspension of payments to Xxxxxx.
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(c) Acknowledgments. Xxxxxx acknowledges that no Investor has
made and does not make any representation or warranty, whether express
or implied, except as expressly set forth in this Agreement. Xxxxxx
acknowledges that the sale of the Assigned Rights by Xxxxxx to the
Investor Group is irrevocable, and that Xxxxxx shall have no recourse
to the Investors, except with respect to breaches of representations,
warranties and covenants expressly set forth in this Agreement, and
pursuant to the indemnities contained herein. Xxxxxx acknowledges that
the consideration paid pursuant hereto for the purchase of the Assigned
Rights may differ both in kind and amount from any payments or
distributions which may ultimately be received with respect thereto.
(d) No Reliance. Xxxxxx acknowledges that the Investors have
not given Xxxxxx any investment advice, credit information or opinion
on whether the sale of the Assigned Rights is prudent. Except as
otherwise provided in this Agreement, Xxxxxx has not relied and will
not rely on the Investors to furnish or make available any documents or
other information regarding the credit, affairs, financial condition or
business of Xxxxxx or any obligor, or any other matter concerning
Xxxxxx or any obligor.
(e) Securities Act. Xxxxxx is an "accredited investor" within
the meaning of Section 2(15) of the Securities Act of 1933, as amended,
and the rules and regulations promulgated thereunder. Without
characterizing the Assigned Rights as a "security" within the meaning
of applicable securities laws, Xxxxxx has not made any offers to sell,
or solicitations of offers to buy, any portion of the Assigned Rights
in violation of any applicable securities laws.
(f) Information. Xxxxxx is a sophisticated seller with respect
to the Assigned Rights, has adequate information concerning the
business and financial condition of Xxxxxx to make an informed decision
regarding the sale of the Assigned Rights and has independently,
without reliance upon Investor and based on such information as Xxxxxx
has deemed appropriate, made its own analysis and decision to enter
into this Agreement, except that Xxxxxx has relied upon the
representations, warranties and covenants of Investor contained in this
Agreement. Xxxxxx acknowledges that the Investors currently may possess
and hereafter may come into possession of certain information
concerning the Assigned Rights, Xxxxxx, or its affiliates which is not
known to Xxxxxx and which may be material to a decision to sell the
Assigned Rights (the "Investor Group Information"), that Xxxxxx has
determined to sell the Assigned Rights notwithstanding its lack of
knowledge of the Investor Group Information, and that Investors shall
have no liability to Xxxxxx and Xxxxxx hereby waives and releases any
claims which it might have against Investors or any Investor
Indemnified Parties (as hereinafter defined), whether pursuant to
applicable securities laws or otherwise, with respect to the
non-disclosure of Investor Group Information; provided, however, that
the foregoing limitation shall not in any way limit the liability of an
Investor for a breach of its representations and warranties contained
in this Agreement.
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ARTICLE V
INDEMNIFICATION
Section 5.1 Indemnification by Xxxxxx. (a) Each Xxxxxx
Indemnified Party and each Investor Group Indemnified Party shall be indemnified
and held harmless by Xxxxxx for and against any and all Liabilities, losses,
diminution in value, damages, claims, costs and expenses, interest, awards,
judgments and penalties (including attorneys' and consultants' fees and
expenses) actually suffered or incurred by them (including any Action brought or
otherwise initiated by any of them) (hereinafter a "Loss") (excluding indirect
consequential or punitive damages), arising out of or resulting from:
(i) the breach of any representation, or
warranty made by Xxxxxx contained in this Agreement, the Third
Amendment and the Ancillary Documents (it being understood
that such representations and warranties shall be interpreted
without giving effect to any limitations or qualifications as
to "materiality" (including the word "material") set forth
therein);
(ii) the breach of any covenant or agreement by
Xxxxxx contained in this Agreement, the Third Amendment and
the Ancillary Documents; and
(iii) any and all Losses suffered or incurred by
Xxxxxx by reason of or in connection with any claim or cause
of action of any third party to the extent arising out
Xxxxxx'x use, manufacture, sale or distribution of the
Purchased Assets prior to the Effective Date.
(b) To the extent that Xxxxxx'x undertakings set forth in this
Section 5.1 may be unenforceable, Xxxxxx shall contribute the maximum
amount that it is permitted to contribute under applicable Law to the
payment and satisfaction of all Xxxxxx/Investor Losses incurred by the
Xxxxxx/Investor Group Indemnified Parties.
Section 5.2 Indemnification by the Investor. (a) Xxxxxx and
their Affiliates, officers, directors, employees, agents, successors and assigns
(each an "Xxxxxx Indemnified Party") shall be indemnified and held harmless by
each Investor for and against any and all Losses (excluding indirect
consequential or punitive damages), arising out of or resulting from the breach
of any representation, warranty or covenant made by such Investor contained in
this Agreement or the Transaction Documents. To the extent that an Investor's
undertakings set forth in this Section 5.2 may be unenforceable, such Investor
shall contribute the maximum amount that it is permitted to contribute under
applicable Law to the payment and satisfaction of all Losses incurred by the
Xxxxxx Indemnified Parties.
(b) Xxxxxx and its Affiliates, officers, directors,
employees, agents, successors and assigns (each a "Xxxxxx Indemnified Party")
shall be indemnified and held harmless by each Investor for and against any and
all Losses arising out of or resulting from:
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(i) the breach of any representation or warranty
made by such Investor contained in this Agreement;
(ii) the non-performance by such Investor of any
obligation of such Investor under this Agreement (to the
extent such obligations are to be performed on or after the
Effective Date);
(iii) the Assigned Rights, the Loan or the
Assigned Agreements as a result or consequence of any act or
omission by such Investor or any of its Investor Indemnified
Parties occurring on or after the Effective Date; and
(iv) the non-performance by such Investor of any
obligation assumed by Investor under this Agreement (to the
extent such obligations are to be performed on or after the
Effective Date).
(c) Each Xxxxxx Indemnified Party shall be indemnified
and held harmless by the Claimants for and against any and all Losses arising
out of or resulting from the return of the Third Amendment Cash Amount by Xxxxxx
to the estate of Xxxxxx or any of its subsidiaries or any other Losses suffered
or incurred by Xxxxxx by reason of or in connection with the assertion, by the
estate of Xxxxxx or any of its subsidiaries or any trustee or other
representative appointed for any such estate, of avoiding powers provided under
Sections 544, 545, 547, 548, 549 and 550 of the Bankruptcy Code or analogous
state law, but in each case only with respect to such assertions made regarding
the Third Amendment Cash Amount. Notwithstanding anything to the contrary in
this Agreement, (i) the aggregate liability of the Claimants under this Section
5.2(c) shall be limited to $5,000,000.00 (it being agreed by the Claimants, for
the purposes of this Section 5.2(c), that reasonable attorneys' and consultants'
fees and expenses shall be separately indemnified by the Claimants and shall not
be included in the computation of aggregate liability under this clause (i)),
(ii) no Claimant shall have any liability under this Section 5.2(c) in excess of
its Pro Rata Portion of the aggregate liability of the Claimants hereunder and
(iii) the Claimants liability hereunder shall survive until the expiration of
applicable statute of limitations (with extensions) with respect to the matters
addressed in this Section 5.2(c).
(d) To the extent that such Investor's undertakings set
forth in this Section 5.2(b) or Section 5.2(c) may be unenforceable, such
Investor shall contribute the maximum amount that it is permitted to contribute
under applicable Law to the payment and satisfaction of all Losses incurred by
the Xxxxxx Indemnified Parties.
Section 5.3 Indemnification by Xxxxxx. (a) Each Investor and
its respective Affiliates, officers, directors, employees, agents, successors
and assigns (each an "Investor Indemnified Party") shall be indemnified and held
harmless by Xxxxxx for and against any and all Losses (excluding indirect
consequential or punitive damages), arising out of or resulting from:
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(i) the breach of any of Xxxxxx'x
representations, warranties, covenants or agreements in this
Agreement; and
(ii) the non-performance by Xxxxxx of any
obligation of Xxxxxx under this Agreement (to the extent such
obligations are to be performed on or after the Effective
Date).
(b) Each Xxxxxx Indemnified Party shall be indemnified and
held harmless by Xxxxxx for and against any and all Losses suffered or
incurred by Xxxxxx by reason of or in connection with any claim or
cause of action by any third party to the extent arising out of
Xxxxxx'x use, manufacture, sale or distribution of the Purchased Assets
on or after the Effective Date.
(c) Notwithstanding anything to the contrary in this
Agreement, the liability of Xxxxxx under (i) this Section 5.3(a) shall
be limited to $1,000,000.00 and (ii) this Section 5.3(b) shall be
limited to $4,658,516. To the extent that Xxxxxx'x undertakings set
forth in this Section 5.3 may be unenforceable, Xxxxxx shall contribute
the maximum amount that it is permitted to contribute under applicable
Law to the payment and satisfaction of all Losses incurred by the
Investor Indemnified Parties or Xxxxxx Indemnified Parties as the case
may be.
Section 5.4 Notice of Loss; Third Party Claims. (a) An
Indemnified Party shall give the Indemnifying Party notice of any matter which
an Indemnified Party has determined has given or could give rise to a right of
indemnification under this Agreement, within 60 days of such determination,
stating the amount of the Loss, if known, and method of computation thereof, and
containing a reference to the provisions of this Agreement in respect of which
such right of indemnification is claimed or arises.
(b) If an Indemnified Party shall receive notice of any
Action, audit, demand or assessment (each, a "Third Party Claim")
against it or which may give rise to a claim for the Loss under this
Article V, within 30 days of the receipt of such notice, the
Indemnified Party shall give the Indemnifying Party notice of such
Third Party Claim; provided, however, that the failure to provide such
notice shall not release the Indemnifying Party from any of its
obligations under this Article V except to the extent that the
Indemnifying Party is materially prejudiced by such failure and shall
not relieve the Indemnifying Party from any other obligation or
Liability that it may have to any Indemnified Party otherwise than
under this Article V. If the Indemnifying Party acknowledges in writing
its obligation to indemnify the Indemnified Party hereunder against any
Losses that may result from such Third Party Claim, then the
Indemnifying Party shall be entitled to assume and control the defense
of such Third Party Claim at its expense and through counsel of its
choice if it gives notice of its intention to do so to the Indemnified
Party within ten days of the receipt of such notice from the
Indemnified Party; provided, however, that if there exists or is
reasonably likely to exist a conflict of interest that would make it
inappropriate in the reasonable judgment of the Indemnified
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Party for the same counsel to represent both the Indemnified Party and
the Indemnifying Party, then the Indemnified Party shall be entitled to
retain its own counsel in each jurisdiction for which the Indemnified
Party determines counsel is required, at the expense of the
Indemnifying Party. In the event that the Indemnifying Party exercises
the right to undertake any such defense against any such Third Party
Claim as provided above, the Indemnified Party shall cooperate with the
Indemnifying Party in such defense and make available to the
Indemnifying Party, at the Indemnifying Party's expense, all witnesses,
pertinent records, materials and information in the Indemnified Party's
possession or under the Indemnified Party's control relating thereto as
is reasonably required by the Indemnifying Party. Similarly, in the
event the Indemnified Party is, directly or indirectly, conducting the
defense against any such Third Party Claim, the Indemnifying Party
shall cooperate with the Indemnified Party in such defense and make
available to the Indemnified Party, at the Indemnifying Party's
expense, all such witnesses, records, materials and information in the
Indemnifying Party's possession or under the Indemnifying Party's
control relating thereto as is reasonably required by the Indemnified
Party. No such Third Party Claim may be settled by the Indemnifying
Party without the prior written consent of the Indemnified Party, which
consent shall not be unreasonably withheld.
Section 5.5 Fees and Expenses. (a) Xxxxxx shall pay and be
liable for the payment of all costs and expenses of Xxxxxx in respect of the
Assigned Rights incurred or chargeable prior to the Effective Date.
(b) Investor Group shall pay and be liable for the payment of
all costs and expenses of Investors in respect of the Assigned Rights
incurred or chargeable to any period on and after the Effective Date.
(c) If Investor Group receives any reimbursement in cash paid
by Xxxxxx for the fees and/or expenses which previously were paid by
Xxxxxx, Investor Group shall promptly deliver to Xxxxxx the portion of
the fees and/or expenses received by Investor which previously had been
paid by Xxxxxx.
ARTICLE VI
ADDITIONAL AGREEMENTS
Section 6.1 Further Assurances. (a) Each of the Parties hereby
agree to execute and deliver, or cause to be executed and delivered, such other
documents, instruments and agreements, and take such other actions, as another
Party may reasonably request in connection with the transactions contemplated by
this Agreement, including, without limitation, compliance with Section 11(b) of
the Subordination Agreement, and the delivery of any notices or other documents
or instruments which may be required in connection with the transfer of the
Purchased Assets, the 2004 Debentures and the Assigned Rights.
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Section 6.2 UCC Financing Statements. (a) Xxxxxx hereby
authorizes Investors to file one or more amendments to financing or continuation
statements, including, without limitation, one or more amendments to financing
statements indicating that Xxxxxx has assigned of record all of its power to
authorize an amendment to financing statements covering the assets or personal
property of Xxxxxx or any of its subsidiaries, in each case without the
signature of Xxxxxx. Xxxxxx ratifies its authorization for the Investor Group
acting through the Investor Group Nominee to have filed such amendments to
financing statements or continuation statements filed prior to the date hereof.
(b) Xxxxxx hereby authorizes Xxxxxx to file one or more
amendments to financing or continuation statements, including, without
limitation, one or more amendments to financing statements indicating that
Xxxxxx has assigned of record all of their power to authorize an amendment to
financing statements covering the Purchased Assets, in each case without the
signature of Xxxxxx. Xxxxxx ratifies its authorization for Xxxxxx to have filed
such amendments to financing statements or continuation statements filed prior
to the date hereof.
(c) The Investor Group hereby releases any and all
Encumbrances against the Purchased Assets and hereby authorizes each of Xxxxxx
and Xxxxxx to file one or more termination statements to any financing or
continuation statements to terminate any and all Encumbrances covering the
Purchased Assets (but only with respect to such Purchased Assets and not with
respect to any other property covered by such financing or continuation
statements), in each case without the signature of the Investor Group.
Section 6.3 Further Notices. Each Claimant hereby agrees to
provide Xxxxxx written notice of the following events within three Business Days
of their occurrence: (i) the receipt by a Claimant of any payment or other
property (other than equity or debt securities of the Company) on account of
such Claimant's Debentures, (ii) the commencement by or against any of the Loan
Parties of any bankruptcy, insolvency, arrangement, reorganization, receivership
or relief proceeding or similar case or proceeding under any federal or state
bankruptcy or similar law and (iii) any distribution of all or any of the assets
of the Loan Parties upon the dissolution, winding up, total or partial
liquidation, arrangement, reorganization, adjustment, protection, relief or
composition of such Loan Party or its debts, whether in any bankruptcy,
insolvency, arrangement, reorganization, receivership or relief proceeding or
similar case or proceeding under any federal or state bankruptcy or similar law
and (iv) any assignment for the benefit of creditors or any other marshalling of
the assets and liabilities of such Loan Parties or otherwise. The Claimants'
obligations under clause (i) of this Section 6.3 shall terminate upon the
Contingent Purchase Termination Date. The Claimants' obligations under clauses
(ii)-(iv) of this Section 6.3 shall terminate when the Claimants' obligation
under Section 5.2(c) expire.
Section 6.4 Subrogation. To the extent that any Party enforces
any claim for indemnification or other right, claim or remedy against another
Party under this Agreement and receives payment or another remedy from such
Party in respect of such right, claim or remedy, the Parties agree that to the
extent permitted by law and the Assigned Agreements, without the need for
further action on the part of any Party, the indemnifying Party shall be
subrogated to all
Umbrella Agreement
24
rights of the indemnified Party against any other entity with respect to such
right, claim or remedy to the extent that the indemnified Party receives such
payment or other remedy from the indemnifying Party (including, without
limitation, with respect to the rights reserved by Xxxxxx under Section 2.3(a)
in the event the Claimants make any payments under Section 5.2(c)).
Section 6.5 Public Announcements. Each Party agrees not to
make, or cause to be made, any press release or public announcement in respect
of this Agreement or the transactions contemplated hereby or otherwise
communicate with any news media without the prior written consent of Xxxxxx, the
Company and the Claimants, which consents shall not be unreasonably withheld,
and the Parties shall cooperate as to the timing and contents of any such press
release, public announcement or communication.
ARTICLE VII
GENERAL PROVISIONS
Section 7.1 Notices. All notices, requests, claims, demands
and other communications hereunder shall be in writing and shall be given or
made (and shall be deemed to have been duly given or made upon receipt) by
delivery in person, by an internationally recognized overnight courier service,
by facsimile or registered or certified mail (postage prepaid, return receipt
requested) to the respective parties hereto at the following addresses (or at
such other address for a party as shall be specified in a notice given in
accordance with this Section 7.1):
If to Xxxxxx, at:
Xxxxxx Drug Co., Inc.
000 Xx. Xxxxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: Chief Executive Officer
Fax: (000) 000-0000
If to Xxxxxx, at:
Xxxxxx Pharmaceuticals, Inc.,
000 Xxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxx 00000
Attention: Chief Financial Officer
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25
Fax: (000) 000-0000
cc: General Counsel
If to the Investor Group, to the Investor Group
Nominee at:
Xxxxx Partners III, L.P.
000 Xxxxx Xxxxxx, 0xx Xx.
Xxx Xxxx, Xxx Xxxx 00000
Attention: Chief Financial Officer
Fax: (000) 000-0000
Section 7.2 Expenses. Except as otherwise specified in this
Agreement or any other Transaction Document, all costs and expenses, including
fees and disbursements of counsel, financial advisors and accountants, incurred
in connection with this Agreement and the transactions contemplated by this
Agreement shall be paid by the party incurring such costs and expenses, whether
or not the Closing shall have occurred.
Section 7.3 Severability. If any term or other provision of
this Agreement is invalid, illegal or incapable of being enforced by any Law or
public policy, all other terms and provisions of this Agreement shall
nevertheless remain in full force and effect for so long as the economic or
legal substance of the transactions contemplated hereby is not affected in any
manner materially adverse to either party hereto. Upon such determination that
any term or other provision is invalid, illegal or incapable of being enforced,
the Parties shall negotiate in good faith to modify this Agreement so as to
effect the original intent of the Parties as closely as possible in an
acceptable manner in order that the transactions contemplated hereby are
consummated as originally contemplated to the greatest extent possible.
Section 7.4 Entire Agreement. This Agreement and the
Transaction Documents constitute the entire agreement of the Parties with
respect to the subject matter hereof and thereof and supersede all prior
agreements and undertakings, both written and oral, between the Parties with
respect to the subject matter hereof and thereof.
Section 7.5 Assignment. This Agreement may not be assigned by
operation of law or otherwise without the express written consent of each of the
Parties (which consent may be granted or withheld in the sole discretion of each
of the Parties); provided, however, that Xxxxxx may assign this Agreement or any
of its rights and obligations hereunder to one or more Affiliates of Xxxxxx
without the consent of the other Parties, provided further however that Xxxxxx
shall remain, upon such assignment, liable in respect of its obligations under
Section 5.3, 5.4, 6.1, 6.4 and 6.5.
Section 7.6 Amendment. This Agreement may not be amended or
modified except (a) by an instrument in writing signed by, or on behalf of, each
of the Parties or (b) by a waiver in accordance with Section 7.7.
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26
Section 7.7 Waiver. Any party to this Agreement may (a) extend
the time for the performance of any of the obligations or other acts of the
other Parties, (b) waive any inaccuracies in the representations and warranties
of the other Parties contained herein or in any document delivered by the other
Parties pursuant hereto or (c) waive compliance with any of the agreements of
the other Parties or conditions to such Party's obligations contained herein.
Any such extension or waiver shall be valid only if set forth in an instrument
in writing signed by the Party to be bound thereby. Any waiver of any term or
condition shall not be construed as a waiver of any subsequent breach or a
subsequent waiver of the same term or condition, or a waiver of any other term
or condition of this Agreement. The failure of any Party hereto to assert any of
its rights hereunder shall not constitute a waiver of any of such rights. All
rights and remedies existing under this Agreement are cumulative to, and not
exclusive of, any rights or remedies otherwise available.
Section 7.8 No Third Party Beneficiaries. Except for the
provisions of Article V relating to indemnified parties, this Agreement shall be
binding upon and inure solely to the benefit of the Parties and their respective
successors and permitted assigns and nothing herein, express or implied, is
intended to or shall confer upon any other Person.
Section 7.9 Governing Law. This Agreement shall be governed
by, and construed in accordance with, the laws of the State of New York
applicable to contracts executed in and to be performed in that State. All
Actions arising out of or relating to this Agreement shall be heard and
determined exclusively in any New York federal court sitting in the Borough of
Manhattan of The City of New York, provided, however, that if such federal court
does not have jurisdiction over such Action, such Action shall be heard and
determined exclusively in any New York state court sitting in the Borough of
Manhattan of The City of New York. Consistent with the preceding sentence, the
Parties hereto hereby (a) submit to the exclusive jurisdiction of any federal or
state court sitting in the Borough of Manhattan of The City of New York for the
purpose of any Action arising out of or relating to this Agreement brought by
any party hereto and (b) irrevocably waive, and agree not to assert by way of
motion, defense, or otherwise, in any such Action, any claim that it is not
subject personally to the jurisdiction of the above-named courts, that its
property is exempt or immune from attachment or execution, that the Action is
brought in an inconvenient forum, that the venue of the Action is improper, or
that this Agreement or the transactions contemplated by this Agreement may not
be enforced in or by any of the above-named courts.
Section 7.10 Waiver of Jury Trial. Each of the Parties hereby
waives to the fullest extent permitted by applicable law any right it may have
to a trial by jury with respect to any litigation directly or indirectly arising
out of, under or in connection with this Agreement or the transactions
contemplated by this Agreement. Each of the Parties hereby (a) certifies that no
representative, agent or attorney of the other party has represented, expressly
or otherwise, that such other party would not, in the event of litigation, seek
to enforce the foregoing waiver and (b) acknowledges that it has been induced to
enter into this Agreement and the transactions contemplated by this Agreement,
as applicable, by, among other things, the mutual waivers and certifications in
this Section 7.10.
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27
Section 7.11 Currency. Unless otherwise specified in this
Agreement, all references to currency, monetary values and dollars set forth
herein shall mean United States (U.S.) dollars and all payments hereunder shall
be made in United States dollars.
Section 7.12 Counterparts. This Agreement may be executed and
delivered (including by facsimile transmission) in one or more counterparts, and
by the different parties hereto in separate counterparts, each of which when
executed shall be deemed to be an original, but all of which taken together
shall constitute one and the same agreement.
Umbrella Agreement
28
IN WITNESS WHEREOF, the Parties have caused this Agreement to
be executed as of the date first written above by their respective officers
thereunto duly authorized.
XXXXXX DRUG CO., INC.
By:________________________________
Name:
Title:
XXXXXX PHARMACEUTICALS, INC.
By:________________________________
Name:
Title:
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29
XXXXX PARTNERS III, L.P.
By: Claudius, L.L.C., General Partner
000 Xxxxx Xxxxxx, 0xx Xx.
Xxx Xxxx, Xxx Xxxx 00000
___________________________
By: Xxxxx Xxxxxxxxxxx
Its: General Partner
XXXXX PARTNERS INTERNATIONAL, III, L.P. CARE CAPITAL INVESTMENTS II, LP
By: Claudius, L.L.C., General Partner By: Care Capital II, LLC, as general
000 Xxxxx Xxxxxx, 0xx Xxxxx partner
Xxx Xxxx, Xxx Xxxx 00000 00 Xxxxxxx Xx., Xxxxx 000
Xxxxxxxxx, XX 00000
By:_______________________________
___________________________ Name: Xxxxx X. Xxxxxx
By: Xxxxx Xxxxxxxxxxx Title: Authorized Signatory
Its: General Partner
ESSEX WOODLANDS HEALTH
XXXXX EMPLOYEE FUND III, L.P. VENTURES V, L.P.
By: Wesson Enterprises, Inc. 000 Xxxxx XxXxxxx Xxxxxx, Xxxxx 0000
000 Xxxxx Xxxxxx, 0xx Xxxxx Xxxxxxx, XX 00000
Xxx Xxxx, Xxx Xxxx 00000
___________________________ __________________________________
By: Xxxxx X. Xxxxxx By: Xxxxxxxx Xxxxxxxxx
Its: General Partner Its: Managing Director
XXXXXXX XXXXXXXX XXXXX XXXXXXXX
0000 Xxxx Xxxxx Xxxx 0000 Xxxx Xxxxx Xxxx
Xxxxxxxx, Xxxxxxxxxxxx 00000 Xxxxxxxx, Xxxxxxxxxxxx 00000
___________________________ __________________________________
XXXXXX XXXXX
000 Xxxxxx Xxxx
Xxxxxx, Xxxxxxxxxxxx 00000
___________________________
Umbrella Agreement
00
XXXXX XXXXXXXXX XXXXXX X. XXXXXXXX
XX Xxxxxx LLC 000 Xxxxx Xxxx
000 Xxxx 00xx Xxxxxx, 0xx Xxxxx Xxxxxxxxx, XX 00000
Xxx Xxxx, Xxx Xxxx 00000
___________________________ _________________________________
XXXX X. XXXXX, XX.
000 X. Xxxxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxxxx 00000
___________________________
Umbrella Agreement
31
SCHEDULE I
PURCHASED ASSETS
1. Xxxxxx'x Drug Master File for manufacturing doxycycline monohydrate
active pharmaceutical ingredient ("API") and any equivalent filings with the
governing health authorities of any other country.
2. Any and all registrations, permits, licenses, authorizations,
approvals, presentations, notifications of filings, in Xxxxxx'x possession,
which are filed with or granted by the governing health authority of any
country, and which are required to develop, make, use, sell, import or export
doxycycline monohydrate, other than the doxycycline monohydrate API Drug Master
File.
3. Xxxxxx'x Drug Master File for manufacturing doxycycline hyclate API and
any equivalent filings with the governing health authorities of any other
country.
4. Any and all registrations, permits, licenses, authorizations,
approvals, presentations, notifications of filings, in Xxxxxx'x possession,
which are filed with or granted by the governing health authority of any
country, and which are required to develop, make, use, sell, import or export
doxycycline hyclate, other than the doxycycline hyclate API Drug Master File.
5. Abbreviated New Drug Application No. 061717 for 50mg and 100mg
doxycylcine hyclate filed with the FDA by Xxxxxx or its Affiliate, and any
supplements thereto.
6. Abbreviated New Drug Application No. 089536 for 40mg, 50mg and 325mg
acetaminophen; butalbital; caffeine filed with the FDA by Xxxxxx or its
Affiliate, and any supplements thereto.
7. All doxycycline monohydrate API and doxycycline hyclate API related
equipment owned by Xxxxxx, as described on Schedule IA attached hereto.
8. The products set forth on the invoices set forth on Schedule IB hereto.
It being understood among the parties hereto that no additional consideration
shall be paid for such products, notwithstanding the prices set forth on such
invoices.
Umbrella Agreement
32
SCHEDULE IA
DOXYCYCLINE MONOHYDRATE API AND
DOXYCYCLINE HYCLATE API EQUIPMENT
GENERALIZED EQUIPMENT LIST FOR DOXYCYCLINE HYCLATE AND DOXYCYCLINE MONOHYDRATE
PRODUCTION
1/19/04
PLANT A- USED FOR THE MANUFACTURE OF DOXYCYCLINE HYCLATE
1. 600-gallon Hydrogenator (Methacycline HCl and Xxxxxxxxx'x Catalyst)
2. 500-gallon Crystallizer (Precipitation)
3. 32 sq. ft Filter Box (Filtration)
4. Atmospheric Tray Dryer*
5. 500-gallon Reactor (Neutralization)
6. 100-gallon Reactor (HCl /Ethanol absorption)
7. Sparkle Filter (Filtration)
8. 250-gallon Clarity Tank (Clarification)
9. Polishing Filter
10. 350-gallon Reactor (Holding Tank for clarified solution)
11. 10 sq ft PP Filter Box (used to obtain Doxy Hyclate wet cake)
12. Atmospheric Tray Dryer* (Drying of final product)
13. 600-gallon Reactor (Waste Tank used for neutralization prior to transfer
into tanker)
14. Fitz-Mill (Shared between both Doxy Hyclate and Doxy Mono)
15. V-blender (Shared between both Doxy Hyclate and Doxy Mono)
* The atmospheric tray dryers are powered by steam and cannot be easy relocated
PLANT B- USED FOR THE MANUFACTURE OF DOXYCYCLINE MONOHYDRATE
1. 100-gallon Dissolution Tank (Doxy Hyclate, Acetone, Water)
2. Inline Filter assembly (Clarification)
3. 300-gallon Precipitation Tank
4. 9 sq ft Filter Box (Doxy mono wet cake)
5. 2-vacuum dryers
6. 500-gallon Reactor (waste)
SCHEDULE IB
[Invoices to be attached]
SCHEDULE II
LOAN DOCUMENTS
1. Loan Agreement dated March 29, 2000
2. Amendment to Loan Agreement dated March 31, 2000
3. Second Amendment to Loan Agreement dated December 20, 2002
4. Third Amendment to Loan Agreement dated February 6, 2004
5. Secured Promissory Note for $17,500,000.00 dated March 31, 2000
6. Secured Promissory Note for $17,500,000.00 dated December 20, 2002
7. Secured Promissory Note for $3,901,331.00 dated December 20, 2002
8. Secured Promissory Note for $5,000,000.00 dated as of December 20, 2002
9. Xxxxxx Stock Pledge Agreement dated March 29, 2000
10. Xxxxxx Security Agreement dated March 29, 2000
11. Xxxxxx Guaranty dated March 29, 2000
12. Xxxxxx Guarantors Security Agreement Dated March 29, 2000
13. Real Estate Mortgage by Houba Inc., dated March 29, 2000
14. Subordination Agreement (Mortgage) dated March 29, 2000
15. Subordination Agreement dated March 29, 2000
16. Subordination Agreement dated December 20, 2002
Umbrella Agreement
1
EXHIBIT 1.1(a)
FORM OF 2004 DEBENTURE PURCHASE AGREEMENT
2
EXHIBIT 1.1(b)
FORM OF ASSIGNMENT OF INTELLECTUAL PROPERTY
This ASSIGNMENT OF INTELLECTUAL PROPERTY (this "Assignment"),
effective the 6th day of February, 2004, is made and entered into by and between
Xxxxxx Drug Co., Inc. a New York corporation ("Assignor"), and Xxxxxx
Pharmaceuticals, Inc., Inc. a Nevada corporation ("Assignee") (each a "Party,"
and collectively, the "Parties"). Capitalized terms used herein but not
otherwise defined herein shall have the meanings set forth in the Xxxxxx
Umbrella Agreement (defined below).
WHEREAS, Assignor is the owner of each of (i) the patents and
patent applications set forth on Schedule A hereto (the "Patents"); (ii) the
copyrights, copyright registrations and copyright applications set forth on
Schedule B hereto (the "Copyrights"); and (iii) the trademarks, trademark
registrations and trademark applications (including any and all goodwill
symbolized thereby) set forth on Schedule C hereto (the "Trademarks")
((i)-(iii), collectively, the "Purchased Intellectual Property");
WHEREAS, Assignor and Assignee entered into that certain
Xxxxxx Umbrella Agreement dated [____________] (the "Xxxxxx Umbrella
Agreement"), pursuant to which Assignee agreed to purchase the Purchased Assets
from Assignor, including all of Assignor's right, title and interest in and to
the Purchased Intellectual Property; and
WHEREAS, the execution and delivery of this Assignment is a
condition to Closing.
NOW THEREFORE, for the consideration set forth in the Xxxxxx
Umbrella Agreement, and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties agree as follows:
1. Assignment. Effective upon Closing, Assignor hereby assigns
to Assignee all of Assignor's right, title and interest in and to the Purchased
Intellectual Property, including all rights therein provided by international
conventions and treaties, and the right to xxx for past, present and future
infringement thereof.
2. Additional Representations and Warranties. In addition to
the representations and warranties expressly provided in the Xxxxxx Umbrella
Agreement, Assignor hereby makes the following representations and warranties
with respect to the Purchased Intellectual Property:
1. Assignor is the exclusive owner of the
entire and unencumbered right, title and
interest in and to the Purchased
Intellectual Property and has a valid right
to use the Purchased Intellectual Property.
2. To the knowledge of Assignor after due
inquiry, the Purchased Intellectual Property
is not subject to any outstanding decree,
order, injunction, judgment or ruling
restricting the use of such
3
Purchased Intellectual Property or that
would impair the validity or enforceability
of such Purchased Intellectual Property.
3. No Actions or Claims have been asserted or
are pending or, to the knowledge of Assignor
after due inquiry, threatened against the
Assignor or any subsidiary (i) based upon or
challenging or seeking to deny or restrict
the use by the Assignor or any its
subsidiary of any of the Purchased
Intellectual Property, (ii) alleging that
any services provided by, processes used by,
or products manufactured or sold by the
Assignor or any of its subsidiary infringe
or misappropriate any intellectual property
right of any third party or (iii) alleging
that the Purchased Intellectual Property is
being licensed or sublicensed in conflict
with the terms of any license or other
agreement.
4. No person is engaging in any activity that
infringes the Purchased Intellectual
Property, to the knowledge of Assignor after
due inquiry. None of the Assignor or its
subsidiary has granted any license or other
right to any third party in respect to the
Purchased Intellectual Property. The
consummation of the transactions
contemplated by this Agreement and the
Xxxxxx Umbrella Agreement will not result in
the termination or impairment of any of the
Purchased Intellectual Property.
3. Further Assurances. Assignor shall, at the cost and expense
of Assignee, timely execute and deliver any additional documents and perform
such additional acts necessary or desirable to record and perfect the interest
of Assignee in and to the Purchased Intellectual Property, and shall not enter
into any agreement in conflict with this Assignment.
4. Governing Law. This Assignment shall be governed by and
construed in accordance with the laws of New York, without regard to the
conflicts of law rules of such state.
5. Counterparts. This Assignment may be executed in one or
more counterparts, each of which shall be deemed an original, and all of which
together shall constitute one and the same agreement.
4
IN WITNESS WHEREOF, each Party has caused this Assignment to
be executed by its duly authorized representative.
XXXXXX DRUG CO., INC.
By: _______________________________
Name: Xxxxxx X. Xxxxxxx
Title: President
HOUBA, INC.
By: _______________________________
Name: Xxxxx X. Xxxxxxx
Title: Vice President
XXXXXX PHARMACEUTICALS, INC.
By: _______________________________
Name:
Title:
5
SCHEDULE A
Country Application No. Patent No. Filing Date Issue Date
------- --------------- --------- ----------- ----------
SCHEDULE B
Country Title App. No. Reg. No. Filing Date Issue Date
------- ----- -------- ------- ----------- ----------
SCHEDULE C
Country Xxxx App. No. Reg. No. Filing Date Issue Date
------- ---- -------- -------- ----------- ----------
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6
EXHIBIT 1.1(c)
FORM OF XXXX OF SALE AND ASSIGNMENT
XXXX OF SALE AND ASSIGNMENT, dated as of February 6, 2004
(this "Xxxx of Sale and Assignment"), from Xxxxxx Drug Co., Inc. a New York
corporation (the "Seller"), to Xxxxxx Pharmaceuticals, Inc., Inc. a Nevada
corporation (the "Purchaser").
WHEREAS, the Seller and the Purchaser have entered into the
Umbrella Agreement, dated as of February 6, 2004 (the "Umbrella Agreement";
unless otherwise defined herein, capitalized terms shall be used herein as
defined in the Umbrella Agreement); and
WHEREAS, the execution and delivery of this Xxxx of Sale and
Assignment by the Seller is a condition to the obligations of the Purchaser to
consummate the transactions contemplated by the Umbrella Agreement;
NOW, THEREFORE, in consideration of the promises and mutual
agreements set forth in the Umbrella Agreement, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Seller does hereby agree as follows:
1. Sale and Assignment of Purchased Assets and
Properties. The Seller hereby sells, assigns, transfers, conveys, grants,
bargains, sets over, releases, delivers, vests and confirms unto the Purchaser
and its successors and assigns, forever, the entire right, title and interest of
the Seller free and clear of all Encumbrances in and to any and all of the
Purchased Assets.
2. Obligations and Liabilities Not Assumed. Nothing
expressed or implied in this Xxxx of Sale and Assignment shall be deemed to be
an assumption by the Purchaser or its subsidiaries of any Liabilities of the
Seller. Neither the Purchaser nor its subsidiaries by this Xxxx of Sale and
Assignment, agree to assume or agree to pay, perform or discharge any
liabilities of the Seller of any nature, kind or description whatsoever.
3. Further Assurances. The Seller hereby covenants and
agrees that, at any time and from time to time after the date of this Xxxx of
Sale and Assignment, at the Purchaser's request, the Seller will do, execute,
acknowledge and deliver, or will cause to be done, executed, acknowledged and
delivered, any and all further acts, conveyances, transfers, assignments, and
assurances as necessary to grant, sell, convey, assign, transfer, set over to or
vest in the Purchaser any of the Purchased Assets.
4. Power of Attorney. The Seller hereby constitutes and
appoints the Purchaser, its successors and assigns, the true and lawful attorney
and attorneys of the Seller, with full power of substitution, in the name of the
Purchaser or in the name and stead of the Seller, but on behalf of and for the
benefit of the Purchaser, its successors and assigns (and at the expense of the
Seller):
(a) to collect, demand and receive any and all Purchased
Assets transferred hereunder and to give receipts and releases for and in
respect of the same;
(b) to institute and prosecute in the Seller's name, or
otherwise, at the expense and for the benefit of the Purchaser any and all
actions, suits or proceedings, at law, in equity or otherwise, which the
Purchaser may deem proper in order to collect, assert or enforce any claim,
right or title of any kind in or to the Purchased Assets hereby sold and
assigned to the Purchaser or intended so to be, to defend or compromise any and
all such actions, suits or proceedings in respect of any of such Purchaser
Purchased Assets, and to do all such acts and things in relation thereto as the
Purchaser shall deem advisable for the collection or reduction to possession of
any of such Purchased Assets;
(c) to take any and all other reasonable action designed
to vest more fully in the Purchaser the Purchased Assets hereby sold and
assigned to the Purchaser or intended so to be and in order to provide for the
Purchaser the benefit, use, enjoyment and possession of such Purchased Assets;
and
(d) to do all reasonable acts and things in relation to
the Purchased Assets sold and assigned hereunder.
The Seller acknowledges that the foregoing powers are coupled
with an interest and shall be irrevocable by it or upon its subsequent
dissolution or in any manner or for any reason. The Purchaser shall be entitled
to retain for its own account any amounts collected pursuant to the foregoing
powers, including any amounts payable as interest with respect thereto. The
Seller shall from time to time pay to the Purchaser, when received, any amounts
that shall be received directly or indirectly by the Seller (including amounts
received as interest) in respect of any Purchased Assets sold, assigned or
transferred to the Purchaser pursuant hereto.
5. No Third Party Beneficiaries. This Xxxx of Sale and
Assignment shall be binding upon and inure solely to the benefit of the
Purchaser and its permitted assigns and nothing herein, express or implied, is
intended to or shall confer upon any other Person, any legal or equitable right,
benefit or remedy of any nature whatsoever, under or by reason of this
Agreement.
6. Severability. If any term or other provision of this
Xxxx of Sale and Assignment is invalid, illegal or incapable of being enforced
by any Law or public policy, all other terms and provisions of this Xxxx of Sale
and Assignment shall nevertheless remain in full force and effect so long as the
economic or legal substance of the transactions contemplated hereby is not
affected in any manner materially adverse to either the Seller or the Purchaser
7. Governing Law. This Xxxx of Sale and Assignment shall
be governed by, and construed in accordance with, the laws of the State of New
York applicable to contracts executed in and to be performed in that State
(without regard to conflicts of law provisions thereof).
IN WITNESS WHEREOF, this Xxxx of Sale and Assignment has been
executed by the Seller as of the date first above written.
XXXXXX DRUG CO., INC
By: _______________________________
Name:
Title:
EXHIBIT 1.1(d)
XXXXXX AND GUARANTOR TRANSFER CONSENT
To: The Members of the
Investor Group a
Party to the Umbrella Agreement
by and among Xxxxxx Drug Co., Inc.,
Xxxxxx Pharmaceuticals, Inc. and
the Investor Group listed as signatories thereto
We refer to that certain Loan Agreement, dated as of March 29,
2000, as amended by a certain Amendment to Loan Agreement dated March 21, 2000,
as further amended by a certain Second Amendment to Loan Agreement dated
December 20, 2002, as further amended by a certain Third Amendment to Loan
Agreement dated February 6, 2004 (as so amended, the "Loan Agreement"), between
Xxxxxx Drug Co. Inc., a New York corporation (the "Xxxxxx") and Xxxxxx
Pharmaceuticals, Inc., a Nevada corporation (the "Lender"), the Xxxxxx Security
Documents and the Subordination Agreement. Capitalized terms used herein and not
otherwise defined shall have the meanings attributed to them in the Loan
Agreement.
The undersigned hereby waives any objection it may have or any
violation of the Loan Documents, in order to permit Xxxxxx to assign all of its
right, title and interest in and to the Loan and the Loan Documents to Care
Capital Investments II, LP, Essex Woodlands Health Ventures, L.P., Xxxxx
Partners III, L.P. and the other purchasers of the Loan listed as signatories to
the Umbrella Agreement dated February 6, 2004 by and among Xxxxxx, Xxxxxx and
the other signatories thereto (the "Investor Group") and to permit Investor
Group to assume the obligations of Xxxxxx in respect of the Loan and under the
Loan Documents. The undersigned also hereby agrees to cooperate with Investor in
modifying the Loan Documents in accordance with any reasonable request by
Investor Group in furtherance of the assignment and assumption contemplated
hereby.
XXXXXX DRUG CO., INC.
By:_________________________________________
Name: Xxxxxx X. Xxxxxxx
Title: President and Chief Executive Officer
AXIOM PHARMACEUTICAL CORPORATION
By:_________________________________________
Name: Xxxxx X. Xxxxxxx
Title: Vice President
HOUBA INC.
By:_________________________________________
Name: Xxxxx X. Xxxxxxx
Date: February 6, 2004 Title: Vice President
EXHIBIT 1.1(e)
SECURED CREDITORS' TRANSFER CONSENT
To: The Members of the Investor
Group a Party to the Umbrella Agreement
by and among Xxxxxx Drug Co., Inc.,
Xxxxxx Pharmaceuticals, Inc. and the
Investor Group listed as signatories thereto
We refer to that certain Subordination Agreement, dated as of
December 20, 2002 (the "Subordination Agreement"), between Xxxxxx Drug Co. Inc.,
a New York corporation (the "Xxxxxx"), Xxxxxx Pharmaceuticals, Inc., a Nevada
corporation (the "Lender") and the parties listed therein. Capitalized terms
used herein and not otherwise defined shall have the meanings attributed to them
in the Subordination Agreement.
Pursuant to Section 11(a) of the Subordination Agreement, the
undersigned hereby consents to the assignment by Xxxxxx of all of its right,
title and interest in and to the Xxxxxx Term Loans, the Xxxxxx Loan Agreement,
the Xxxxxx Company Security Documents, the Xxxxxx Guaranty and the Xxxxxx
Guarantor Security Documents to Care Capital Investments II, LP, Essex Woodlands
Health Ventures V, L.P., Xxxxx Partners III, L.P. and the other purchaser of the
Xxxxxx Term Loans listed as signatories to the Umbrella Agreement dated February
6, 2004 by and among Xxxxxx, Xxxxxx and the other signatories thereto (the
"Investor Group"), and the assumption by the Investor Group of the obligations
of Xxxxxx in respect of the Xxxxxx Term Loans, the Xxxxxx Loan Agreement, the
Xxxxxx Company Security Documents, the Xxxxxx Guaranty and the Xxxxxx Guarantor
Security Documents. The undersigned also hereby agrees to cooperate with
Investor Group in modifying the Xxxxxx Company Security Documents and the Xxxxxx
Guarantor Security Documents to comply with the terms of Section 11(b) hereto
and in accordance with any reasonable request by Investor Group in furtherance
of the assignment and assumption contemplated hereby.
[REMAINDER OF PAGE LEFT INTENTIONALLY BLANK]
XXXXX PARTNERS III, L.P. ORACLE STRATEGIC PARTNERS, L.P.
By: Claudius, L.L.C., General Partner By: Oracle Strategic Capital,
000 Xxxxx Xxxxxx, 0xx Xx. L.L.C., General Partner
Xxx Xxxx, Xxx Xxxx 00000 000 Xxxxxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxxx, Xxxxxxxxxxx 00000
___________________________ ___________________________
By: Xxxxx Xxxxxxxxxxx By: Xxxx Xxxxxxx
Its: General Partner Its: Authorized Agent
XXXXX PARTNERS INTERNATIONAL, III, L.P. CARE CAPITAL INVESTMENTS II, LP
By: Claudius, L.L.C., General Partner By: Care Capital II, LLC, as
000 Xxxxx Xxxxxx, 0xx Xxxxx general partner
Xxx Xxxx, Xxx Xxxx 00000 00 Xxxxxxx Xx., Xxxxx 000
Xxxxxxxxx, XX 00000
___________________________
By: Xxxxx Xxxxxxxxxxx By: _______________________
Its: General Partner Name: Xxxxx X. Xxxxxx
Title: Authorized Signatory
XXXXX EMPLOYEE FUND III, L.P. ESSEX WOODLANDS HEALTH
By: Wesson Enterprises, Inc. VENTURES V, L.P.
000 Xxxxx Xxxxxx, 0xx Xxxxx 000 Xxxxx XxXxxxx Xxxxxx, Xxxxx
Xxx Xxxx, Xxx Xxxx 00000 2800
Xxxxxxx, XX 00000
___________________________ ___________________________
By: Xxxxx X. Xxxxxx By: Xxxxxxxx Xxxxxxxxx
Its: General Partner Its: Managing Director
XXXX XXXXX XXXXXXX XXXXX
00 Xxxxxx Xxxxxx 000 Xxxxxx Xxxxxx Xxxx
Xxxxxxx, Xxxxx Xxxxxx 00000 Xxxxxxxx, Xxxxxxxxxxxx 00000
___________________________ ___________________________
XXXXXXX XXXXXXXX XXXXX XXXXXXXX
0000 Xxxx Xxxxx Xxxx 0000 Xxxx Xxxxx Xxxx
Xxxxxxxx, Xxxxxxxxxxxx 00000 Xxxxxxxx, Xxxxxxxxxxxx 00000
___________________________ ___________________________
XXXX XXXX XXXXXX XXXXX
0000 Xxxx Xxxxxxxx Xxxxxx 000 Xxxxxx Xxxx
Xxxxxxxx, XX 00000 Xxxxxx, Xxxxxxxxxxxx 00000
___________________________ ___________________________
XXXXXXXX XXXXXXXXX XXXXXXX XXXX
00000 Road, Route 66 000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxxx Xxxxxxxx, Xxxx 00000 Xxx Xxxx, Xxx Xxxx 00000
___________________________ ___________________________
XXXXX XXXXXXX XXXXX XXXXXX
c/x Xxxxxx Drug Co., Inc. c/o Xxx Xxxxxxxx
000 Xxxxx Xxxxxxxxxx Xx. 0000 Xxxxxxx Xxxx
Xxxxxxx Xxxxxxxx #0 Xxxxx 000
Xxxxxxxx, Xxxxxxxx 00000 Xxxxxxxx, XX 00000
___________________________ ___________________________
XXXXXX X. XXXX XXXXXX X. XXXX
00 Xxxxxxx Xxxxx 00 Xxxxxxx Xxxxx
Xxxxxx, Xxx Xxxxxx 00000 Xxxxxx, Xxx Xxxxxx 00000
___________________________ ___________________________
XXXXXX X. XXXX AS CUSTODIAN XXXXXX X. XXXX AS CUSTODIAN
FOR XXXXXX X. XXXX FOR XXXXXX X. XXXX
00 Xxxxxxx Xxxxx 00 Xxxxxxx Xxxxx
Xxxxxx, Xxx Xxxxxx 00000 Xxxxxx, Xxx Xxxxxx 00000
___________________________ ___________________________
By: Varshah X. Xxxx By: Varshah X. Xxxx
Its: Custodian Its: Custodian
XXXXXXX XXXXXXXX XXXXX XXXXXXXX
c/o Xxxxx Xxxxxxxx c/o Xxxxx Xxxxxxxx
000 Xxxxxx Xxxx 000 Xxxxxx Xxxx
Xxxxxxxxxxx, Xxx Xxxxxx 00000 Xxxxxxxxxxx, Xxx Xxxxxx 00000
___________________________ ___________________________
XXXXXXX XXXXXX, XXX ACCOUNT XXXXXXX XXXXXX
FBO XXXXXXX XXXXXX 0000 Xxxxxxxxxx Xxxxxx
0000 Xxxxxxxxxx Xxxxxx Xxxxxxxx Xxxx, Xxxxxxxx 00000
Xxxxxxxx Xxxx, Xxxxxxxx 00000
___________________________ ___________________________
By: __________________________
Its: Trustee
XXXXXXX X. XXXXXXX XXXX X. XXXXXXX
C/x Xxxxxx Drug Co., Inc. c/x Xxxxxx Drug Co., Inc.
000 Xxxxx Xxxxxxxxxx Xx. 000 Xxxxx Xxxxxxxxxx Xx.
Crimson Building #2 Crimson Building #2
Rockford, Illinois 61107 Xxxxxxxx, Xxxxxxxx 00000
___________________________ ___________________________
XXXXXXX XXXXXXX TRUST
c/x Xxxxxx Drug Co., Inc.
000 Xxxxx Xxxxxxxxxx Xx.
Xxxxxxx Xxxxxxxx #0
Xxxxxxxx, Xxxxxxxx 00000
___________________________
By: Xxxxxxx X. Xxxxxxx
Its: Trustee
EXHIBIT 1.1(f)
FORM OF THIRD AMENDMENT TO LOAN AGREEMENT
EXHIBIT 2.2(d)
AMENDMENT TO WARRANT TO PURCHASE COMMON STOCK AGREEMENT
1. Section 3(d)(v) of the Warrant to Purchase Common Stock
Agreement is amended to delete the word "or" at the end of the
paragraph.
2. Section 3(d)(vi) of the Warrant to Purchase Common Stock
Agreement is amended to delete the period at the end of the paragraph
and to substitute in its place, a semi-colon.
3. A new Section 3(d)(vii) is added to the Warrant to Purchase
Common Stock Agreement to read as follows :
"(vii) the issuance of the Company's convertible senior
secured debentures pursuant to that certain 2004 Debenture Purchase
Agreement dated February 6, 2004 between the Company and the
signatories to such agreement; or"
4. A new Section 3(d)(viii) is added to the Warrant to Purchase
Common Stock to read as follows:
"(viii) the issuance of Series A Preferred Stock, Series B
Preferred Stock, Series C-1 Preferred Stock, Series C-2 Preferred Stock
or Series C-3 Preferred Stock pursuant to that certain Debenture
Conversion Agreement dated February 6, 2004 between the Company and the
signatories to such Agreement."
EXHIBIT 2.2(e)
HYDROCODONE OPTION AGREEMENT
