Ex. 10.81
Xxxxxx Laboratories, Inc.
and
InterNutria, Inc.
and
Interneuron Pharmaceuticals, Inc.
ASSET PURCHASE AGREEMENT
November 14, 1995
TABLE OF CONTENTS
ARTICLE PAGE
1. Definitions..................................................... 1
2. Purchase and Sale of Assets..................................... 4
3. Confidentiality................................................. 5
4. Representations and Warranties of Seller;
Covenants of Seller............................................. 6
5. Representations and Warranties of Purchaser
and/or IPI; Covenants of Purchaser.............................. 11
6. Conditions Precedent to Closing................................. 12
7. Termination..................................................... 13
8. Competition..................................................... 14
9. Arbitration..................................................... 14
10. Assignment...................................................... 15
11. Payments, Notices and Other Communications...................... 16
12. Miscellaneous Provisions........................................ 17
ASSET PURCHASE AGREEMENT
This Agreement ("Agreement") is made and entered into this 14th day of
November 1995, by and between XXXXXX LABORATORIES, INC., a Delaware corporation
having an office at 000 Xxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, XX 00000 ("Seller"),
INTERNUTRIA, INC., a Delaware corporation having an office at One Ledgemont
Center, 00 Xxxxxx Xxxxxx, Xxxxx 000, Xxxxxxxxx, XX 00000 ("Purchaser"), and
INTERNEURON PHARMACEUTICALS, INC., a Delaware corporation having an office at
One Ledgemont Center, 00 Xxxxxx Xxxxxx, Xxxxx 000, Xxxxxxxxx, XX 00000 ("IPI").
W I T N E S S E T H
WHEREAS, Seller is the owner of the Assets and desires to and has the
right to sell, grant, transfer, convey, assign and deliver the Assets to
Purchaser in accordance with and subject to the conditions set forth in this
Agreement; and
WHEREAS, Purchaser desires to purchase, acquire and accept the Assets
from Seller in accordance with and subject to the conditions set forth in this
Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein, the parties hereto agree as follows:
ARTICLE I - DEFINITIONS
For purposes of this Agreement, the following words and phrases shall
have the following meanings:
1.1 "Assets" shall mean the Intellectual Property Rights and PMS
Product.
1.2 "Closing Date" shall mean the date on which all conditions
hereunder are satisfied, but no later than December 31, 1995.
1.3 "Common Stock" shall mean the common stock, par value $.001
per share, of Seller.
1.4 "Database" shall mean (i) the database of an estimated 10,000
people who participated in the seminars written and/or presented by Xx. X.
Xxxxxxx and others entitled "Emotions, Overeating and the Brain," and (ii) any
scripts, workbooks or similar documents prepared for or related to, or
subsequent materials distributed in relation to either the Emotions, Overeating
and the Brain Seminar or the seminar written and presented by Xx. X. Xxxxxxx and
others entitled the "Pre-Menstrual Syndrome Seminar."
1.5 "Disinterested Holders" shall mean holders of Common Stock of
Seller as listed in Appendix A.
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1.6 "Encumbrances" shall mean, to the extent applicable, all liens,
mortgages, security interests, charges, claims, leases, options, rights of first
refusal, easements, restrictions, rights-of-way or other similar encumbrances of
any nature whatsoever.
1.7 "Fair Market Value" shall mean the average of the closing sale
price of the Stock for the last twenty (20) trading days on which the Nasdaq
National Market is open for trading immediately prior to the date any payment of
Stock may be required pursuant to the terms of this Agreement or, if the Stock
is not traded on the Nasdaq National Market, the average of the closing bid and
asked prices as reported by Nasdaq, or if not traded on Nasdaq, as reported by
the National Quotation Bureau, Inc., for such 20 day period.
1.8 "First Installment" shall have the meaning set forth in Section
2.3 of this Agreement.
1.9 "Formula" shall mean the formulation of the PMS Product and any
and all materials, documents and supplies owned by Seller and which are
necessary and desirable to manufacture and develop the PMS Product.
1.10 "Installment" shall have the meaning set forth in Section 2.3
of this Agreement.
1.11 "Intellectual Property Rights" shall mean the Patent Rights,
Know-How, Formula and the Database.
1.12 "Know-How" shall mean any and all technical information,
expertise, knowledge and the like which relates to the PMS Product and Patent
Rights including, without limitation, all chemical, toxicological, clinical,
assay control, manufacturing data, marketing research and sales information and
any other information or designs used or useful for the development,
manufacture, packaging and/or marketing of the PMS Product.
1.13 "Xxxxx" shall mean Xxxxx Xxxxx, the former President and Chief
Executive Officer.
1.14 "Patent Rights" shall mean
(a) the United States and foreign patents and patent
applications listed in Appendix B; and
(b) the United States and foreign trademarks, service
marks, copyrights, packaging designs and tradenames,
and any registrations, applications and goodwill
pertaining thereto, of Seller relating to the PMS
Product.
1.15 "PMS Product" shall mean any product intended for use as an
over-the-counter nutritional, dietary, medicinal and/or elixorative food,
supplement or drug which is used or to be used by people afflicted with or
diagnosed as having pre-menstrual syndrome or similar symptoms or conditions
which was or is under development by Seller, including, without limitation, the
NutriFem PMS Product.
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1.16 "Purchase Price" shall have the meaning set forth in Section
2.3 of this Agreement.
1.17 "Preferred Holders" shall mean the holders of record of Preferred
Stock, as of the Closing Date, as listed in Appendix C.
1.18 "Preferred Stock" shall mean the Series A Convertible Preferred
Stock of Seller, par value $.01 per share.
1.19 "Record Date" shall mean the Closing Date.
1.20 "Registration Rights Agreement" shall mean the registration rights
agreement in the form set forth in Exhibit A, entered into on the Closing Date
by and between Seller, Purchaser and IPI.
1.21 "Sale" shall have the meaning set forth in Section 2.1 of this
Agreement.
1.22 "Second Installment" shall have the meaning set forth in
Section 2.3 of this Agreement
1.23 "Seller's Stockholders" shall mean the holders of Common Stock as
of the Record Date, as listed in Appendix D, together with the Preferred
Holders.
1.24 "Stock" shall mean the Common Stock, $.001 par value, of IPI.
1.25 "Xx. X. Xxxxxxx" shall mean Xx. Xxxxxx Xxxxxxx.
ARTICLE II - PURCHASE AND SALE OF ASSETS
2.1 Upon the terms and subject to the conditions of this Agreement and
the performance by the parties hereto of their respective obligations hereunder
Seller hereby agrees to sell, grant, transfer, convey, assign and deliver to
Purchaser, and Purchaser hereby agrees to purchase, acquire and accept from
Seller (such transactions being herein referred to as the "Sale") on the Closing
Date all of Seller's right, title and interest in and to the Assets, free and
clear of all Encumbrances.
2.2 The transfer of the Assets pursuant to Section 2.1 shall be
effected by such specific bills of sale, endorsements, assignments and other
instruments of transfer and conveyance delivered by Seller to Purchaser on the
Closing Date substantially in the form of Exhibits C and D hereto, sufficient to
vest in Purchaser good and marketable title to the Assets, free and clear of all
Encumbrances. Seller further covenants and agrees that it will, from and after
the Closing Date execute, acknowledge, and deliver such other instruments of
conveyance and transfer and take such other actions as Purchaser may reasonably
request, to sell, grant, transfer, convey, assign and deliver the Assets to
Purchaser including, without limitation, the filing of appropriate documents
transferring the assignment of the Patent Rights in form and substance
satisfactory to Seller, Purchaser and their respective counsel (the "Patent
Assignments). Seller agrees to execute a power of attorney in favor of Purchaser
with respect to the Patent Rights upon signing of this Agreement.
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2.3 (a) Upon the terms and subject to the conditions of this Agreement,
in consideration of the sale, grant, assignment, transfer, conveyance,
assignment and delivery of the Assets, Purchaser shall purchase, acquire and
accept the Assets from Seller. The aggregate purchase price is $2,400,000 (the
"Purchase Price") payable in accordance with Section 2.3(b).
(b) IPI shall pay the Purchase Price to Seller, which shall
consist of a payment to Seller (i) on the first anniversary of the Closing Date
(each payment herein referred to as an "Installment"), of such number of shares
of Stock having an aggregate Fair Market Value equal to $1,200,000 (the "First
Installment") and (ii) on the second anniversary of the Closing Date, of such
number of shares of Stock having a Fair Market Value equal to $1,200,000 (the
"Second Installment"); provided that if, at the time of payment of any
Installment, IPI has insufficient authorized Stock, then the portion of the
consideration that cannot be paid with Stock shall be paid by Purchaser in cash.
2.4 Contemporaneously with the Closing Date, Seller shall file with the
Secretary of State of the State of Delaware an amendment to its Certificate of
Incorporation, in the form attached hereto as Exhibit B (the "Certificate of
Amendment").
2.5 On the Closing Date, Seller shall deliver to Purchaser the
following:
(a) The instruments of transfer required pursuant to
Section 2.2;
(b) The Assets;
(c) Certificate dated the Closing Date of Seller
certifying that the representations and warranties of
Seller contained in this Agreement are true and
correct in all material respects at and as of the
Closing Date, except for representations and
warranties specifically relating to a time or times
other than the Closing Date, which shall be true and
correct in all material respects at such time or
times;
(d) Certificate dated the Closing Date of the Secretary
of Seller as to the resolutions of Seller's
Stockholders approving the Sale; and
(e) Certificate of the Secretary of State of the State
of Delaware certifying as to the filing of the
Certificate of Amendment.
and simultaneously with such deliveries, all such steps will be taken as may be
required to put Purchaser in actual possession and operating control of the
Assets.
2.6 On the Closing Date, IPI and Purchaser shall deliver to Seller a
certificate dated the Closing Date of Purchaser and IPI certifying that the
representations and warranties of IPI and Purchaser contained in this Agreement
are true and correct in all material respects at and as of the Closing Date.
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ARTICLE III - CONFIDENTIALITY
3.1 From and after the Closing Date each party shall keep confidential
and not disclose or use, for a period of three years from the date of this
Agreement, except in compliance with the provisions of this Agreement, any
information which is or comes into its possession and which is related to the
Assets. The foregoing obligation shall not apply to:
(a) any information which at the time of disclosure or
acquisition is part of the public knowledge or
literature, or thereafter becomes part of the public
knowledge or literature otherwise than by
unauthorized disclosure by the recipient;
(b) any disclosure of information to the United States
Food and Drug Administration or other relevant
governmental authorities for the purpose of complying
with regulatory requirements with respect to the
Assets;
(c) any information which at the time of disclosure or
acquisition was in the recipient's possession as
evidenced by its written records;
(d) any information which became available to the
recipient from another source not bound to secrecy
to the disclosing party with respect to such
information;
(e) disclosure by the recipient to third parties under
provisions of confidentiality similar to those
contained in this Agreement for the purposes of
development or marketing of the PMS Product;
(f) disclosure to investment bankers and to individuals
and organizations conducting due diligence with
respect to potential equity investments; and
(g) any disclosure of information required by applicable
law.
ARTICLE IV - REPRESENTATIONS AND WARRANTIES
OF SELLER; COVENANTS OF SELLER
4.1 Seller represents and warrants that Seller is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware and has full power and authority to carry on its business as it is now
being conducted and to own the properties and assets it now owns. The copy of
the Certificate of Incorporation of Seller dated September 18, 1992 and amended
on October 26, 1992, heretofore delivered to Purchaser (the "Certificate of
Incorporation") is a complete and correct copy of such instrument as in effect
prior to the filing of the Certificate of Amendment.
4.2 Seller represents and warrants that Seller has full corporate power
and authority to enter into this Agreement and to carry out the transactions
contemplated hereby. All corporate acts and other proceedings required to be
taken by or on the part of Seller to authorize the execution, delivery and
consummation of this Agreement have been duly and properly taken. This Agreement
has been
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duly executed and delivered by Seller and constitutes the valid and binding
obligation of Seller enforceable against it in accordance with its terms except
as may be limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws relating to creditors' rights generally or by equitable principles
(whether considered in an action at law or in equity).
4.3 Seller represents and warrants that neither the execution and
delivery of this Agreement nor the consummation of the transactions contemplated
hereby will violate any provision of the Certificate of Incorporation or By-laws
of Seller, or violate, or be in conflict with, or constitute a default (or an
event which, with notice or lapse of time or both, would constitute a default)
under, or result in the termination of, or accelerate the performance required
by, or cause the acceleration of the maturity of any debt or obligation pursuant
to, or result in the creation or imposition of any Encumbrance upon any property
or assets of Seller, including the Assets, under any indenture, note, agreement,
mortgage, lease or commitment to which Seller is a party or by which Seller is
bound, or to which the property of Seller is subject, or violate any statute or
law of any judgment, decree, order, regulation or rule of any court or
governmental authority.
4.4 Seller represents and warrants that as of or prior to the
Closing Date:
(a) Seller has solicited written consents in lieu of a
meeting of Seller's Stockholders for the purpose of
approving the Sale of the Assets;
(b) Seller's Board of Directors has recommended approval
and adoption by Seller's Stockholders of the Sale of
the Assets;
(c) Seller has obtained the requisite approval and
adoption of the Sale of the Assets by holders of:
(i) a majority of the shares of outstanding Preferred
Stock;
(ii) a majority of the shares of outstanding Common
Stock and Preferred Stock in the aggregate; and
(iii) a majority of the shares of the Disinterested
Holders of Common Stock and the holders of
Preferred Stock in the aggregate.
4.5 Seller represents and warrants that Seller has not and does not, as
of the Closing Date other than pursuant to this Agreement, or in connection with
the transactions contemplated hereby:
(a) Permitted or allowed the Assets to be subjected
to any Encumbrance;
(b) Have actual knowledge of any fact or event which
materially adversely affects the Assets;
(c) Sold, transferred, assigned, used, disposed, or
otherwise employed, or allowed any third party
other than Purchaser, IPI, and their respective
employees, agents,
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advisors and counsel to have access to, or provided
copies, with respect to Assets embodied in a tangible
medium, all or any part of the Assets;
(d) consented to the manufacture, use or sale of any of
the Assets by a third party, other than contract
manufacturing of the PMS Product used in human
trials, for which no Intellectual Property Rights
were transferred to such manufacturer; or
(e) Agreed or arranged, whether in writing or otherwise,
to take any action described in this Section.
4.6 Seller represents and warrants that there is no pending, or to the
best of its knowledge after due inquiry, threatened, action, suit, inquiry,
proceeding or investigation by or before any court or governmental or other
regulatory or administrative agency or commission against or involving Seller
relating to the Assets or this Agreement or any action taken or to be taken by
Seller pursuant to this Agreement or in connection with the transactions
contemplated hereby.
4.7 Seller represents and warrants that, as of the Closing Date:
(a) Seller owns and holds the entire right, title and
interest in to and under the Assets, free and
clear of Encumbrances;
(b) Seller is the owner of the Intellectual Property
Rights pursuant to a valid and enforceable
assignment;
(c) To Seller's knowledge, the inventors under the
Patent Rights have disclosed to the United States
Patent and Trademark office all information
"material to patentability", as such is defined
in 37 C.F.R. ss.1.56;
(d) Seller has no knowledge of any claims by a third
party that the activities of the Seller,
including the use of the Assets or the sale of
the PMS Product by Seller would infringe rights
of any third party and there is no valid basis
for any such claims; and
(e) To Seller's knowledge, Seller has maintained the
pendency of all domestic and foreign patent
applications included in the Patent Rights except
for U.S. Patent Application Serial No.
08/168,492.
4.8 Seller represents and warrants that no consent, approval or
authorization of, or declaration, filing or registration with, any governmental
or regulatory authority is required on its part for the execution, delivery and
performance of this Agreement or the consummation of the transactions
contemplated hereby by Seller other than the filing of the Certificate of
Amendment and the Patent Assignment. No consent, approval or authorization of
any third party other than Seller's Stockholders, which consent has been
obtained as described in Section 4.4, is necessary to the consummation of the
transactions contemplated hereby by Seller.
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4.9 Seller represents and warrants that Seller has not entered into any
agreement pursuant to which any person or entity is entitled to receive, either
directly or indirectly, compensation from Seller for services rendered as a
finder or broker in connection with the transactions contemplated hereby.
4.10 (a) The Settlement Agreement and Mutual Release Agreement dated as
of May 27, 1995 between Seller and Xx. X. Xxxxxxx, which includes the following
terms, remains in full force and effect and all conditions thereunder shall have
been satisfied:
(i) Xx. X. Xxxxxxx shall have returned to Seller any and all
intellectual property developed in whole or in part by Xx. X.
Xxxxxxx while a consultant or employee of Seller, except such
intellectual property as is included in the Intellectuual
Property Rights and except for any intellectual property not
related to the Assets that Xx. X. Xxxxxxx has renounced in
writing;
(ii) the return to Seller of all securities of Seller issued to and
held by Xx. X. Xxxxxxx; and
(iii) mutual releases between Seller and Xx. X. Xxxxxxx;
(b) The letter agreement dated April 24, 1995 between Seller and Xxxxx,
which includes the following terms, shall remain in full force and
effect and all conditions thereunder shall have been satisfied:
(i) Seller's employment agreement with Xxxxx and of any other
obligations by Seller to compensate Xxxxx shall have been
terminated, in exchange for which Seller shall have agreed to
pay to Xx. Xxxxx compensation not in excess of (i) $75,000
payable over a 12-month period, and (ii) as and when the Stock
is paid pursuant to this Agreement, Seller will transfer to
Xxxxx 4.15% of the Stock that comprises the applicable
installment of the Purchase Price being paid at that time (or
at Seller's option, the value of such stock payable in cash);
and
(ii) the return by Xxxxx to Seller of all stock, together with
options to purchase stock, of Seller issued to and held by
Xxxxx.
4.11 Seller has delivered to Buyer an unaudited balance sheet of Seller
as of June 30, 1995. Such balance sheet is true, complete and correct in all
material respects and presents fairly the assets and liabilities of Seller at
the balance sheet date all in accordance with GAAP. Seller has no liabilities or
obligations that were not fully reflected or reserved against in the balance
sheet, except for approximately $150,000 of debt incurred (of which $75,000 was
used to reduce other liabilities and liabilities and obligations incurred in the
ordinary course of business since the date thereof).
4.12 Seller shall, contemporaneously with Seller's receipt of each
of the First and Second Installments:
(i) Distribute 95.85% of the Stock to the
Preferred Holders on a pro rata basis; and
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(ii) Distribute 4.15% of the Stock (or a cash
payment equal to the value thereof) to
Xxxxx;
(the Preferred Holders and Xxxxx are referred to
collectively as the "Stock Distributees")
PROVIDED, HOWEVER, that (x) if at the time of any
Installment any indebtedness of Seller outstanding on
the Closing Date is then outstanding and due and
payable, Seller will cause such indebtedness to be
paid or provided for, whether by use of available
cash, refinancing or replacement proceeds, by
redirecting and reducing the percentages of the Stock
payable in accordance with (i) and (ii) above in
order to satisfy such indebtedness and (y) to the
extent that any Stock Distributee would be entitled
to a fractional share of Stock at the time of either
Installment, a cash payment equal to the value of
such fractional share shall be made by Purchaser to
such Stock Distributee in lieu of such fractional
share.
Seller may direct Purchaser and IPI to issue the Purchase Price to the
Stock Distributees in accordance with the above allocation.
The Stock Distributees shall have the rights set forth in the
Registration Rights Agreement.
4.13 From and after the Closing Date, Purchaser shall defend, indemnify
and hold harmless, Seller, its employees, agents, officers, directors,
attorneys, advisors, agents and representatives from and against any and all
claims, liabilities, losses, actions, damages, costs and expenses (including,
without limitation, reasonable attorneys' fees) directly or indirectly, in whole
or in part suffered or incurred by, or imposed upon or asserted against any of
the foregoing (individually, a "Liability", and collectively, the "Liabilities")
and arising out of, related to or in respect of any of the Assets, excluding any
Liability which arose out of the use, manufacture, promotion, sale or other
disposition, of any Asset prior to the date of this Agreement. Seller shall
defend, indemnify and hold harmless Purchaser, its employees, agents, officers,
directors, attorneys, advisors, agents, Affiliates and representatives to the
same extent as the foregoing indemnification from Purchaser, provided that such
Liability arose out of the use, manufacture, promotion, sale or other
disposition of any Asset prior to the date of this Agreement.
Without limiting the foregoing, each indemnifying party
referred to above (an "Indemnifying Party") shall defend, indemnify and hold
harmless each indemnified party referred to above (an "Indemnified Party"), as
applicable, for and against:
(1) any product liability or other claim of any kind related
to the use by a third party of an Asset that was manufactured, sold or otherwise
disposed of or used by the Indemnifying Party, its assignees, sublicensees,
vendors or other third parties;
(2) a claim by a third party that the design, composition,
formula, manufacture, use, sale or other disposition of any Asset infringes or
violates any patent, copyright, trademark or other intellectual property rights
of any third party; and
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(3) clinical trial or studies conducted by or on behalf of the
Indemnifying Party relating to the Assets, including, without limitation, any
claim by or on behalf of any human subject of any such clinical trial or study,
any claim arising from the procedures specified in any protocol used in any such
clinical trial or study, any claim of deviation, authorized or unauthorized,
from the protocols of any such clinical trial or study, and any claim resulting
from or arising out of the manufacture or quality control by a third party or
any substance administered in any clinical trial or study.
4.14 The Indemnified Party shall give reasonable written notice to the
Indemnifying Party of any claim or action giving rise to Liabilities subject to
the provisions of the foregoing Section 4.13. The Indemnifying Party shall have
the right to defend any such claim or action, at its sole cost and expense. The
Indemnifying Party shall not settle or compromise any such claim or action in a
manner that imposes any restrictions, liabilities or obligations on an
Indemnified Party without such person's prior written consent. If the
Indemnifying Party fails or declines to assume the defense of any such claim or
action within 30 days after notice thereof (or to admit, upon written request,
in writing its obligation to do so within five days of such notice), an
Indemnified Party may assume such defense at the expense of the Indemnifying
Party. The indemnification rights of an Indemnified Party contained herein are
in addition to all other rights which such Indemnified Party may have at law or
in equity or otherwise.
4.15 If requested by Purchaser or IPI in connection with a financing by
IPI or Purchaser, Seller agrees to make its financial and other records relating
to the period prior to the Closing Date available during normal business hours
upon reasonable prior notice to Purchaser's financial and accounting staff and
Purchaser's outside accountants in order to permit Purchaser's accountants to
perform an audit of Seller and to otherwise cooperate with Purchaser's and IPI's
reasonable requests in connection therewith. Such audit shall be at Purchaser's
and IPI's expense.
4.16 Seller represents that Section 5 of the employment agreement dated
August 19, 1991 between Xxxxx and Sellers has not been terminated. Seller shall
use its reasonable best efforts to enforce against Xxxxx the provisions such
Section 5.
ARTICLE V - REPRESENTATIONS AND WARRANTIES OF
PURCHASER AND/OR IPI; COVENANTS OF PURCHASER
5.1 Each of Purchaser and IPI represents and warrants that Purchaser or
IPI, as applicable, is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware and has the power and
authority to carry on its business as now being conducted and to own the
properties and assets it now owns. IPI represents that it owns the majority of
the outstanding capital stock of Purchaser.
5.2 Each of Purchaser and IPI represents and warrants that Purchaser or
IPI, as applicable, has full corporate power and authority to enter into this
Agreement and to carry out the transactions contemplated hereby. All corporate
acts and other proceedings required to be taken by or on the part of Purchaser
or IPI to authorize the execution, delivery and consummation of this Agreement
have been duly and properly taken. This Agreement has been duly executed and
delivered by Purchaser and IPI and constitutes the valid and binding obligation
of Purchaser and IPI enforceable against it in
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accordance with its terms except as may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to creditors' rights
generally or by equitable principles (whether considered in an action at law or
in equity).
5.3 Each of Purchaser and IPI represents and warrants that neither the
execution and delivery of this Agreement nor the consummation of the
transactions contemplated hereby will violate any provision of the respective
Certificate of Incorporation or By-laws of Purchaser or IPI, as applicable or
violate, or be in conflict with, or constitute a default (or an event which,
with notice or lapse of time or both, would constitute a default) under, or
result in the termination of, or accelerate the performance required by, or
cause the acceleration of the maturity of any debt or obligation pursuant to, or
result in the creation or imposition of any Encumbrance upon any property or
assets of Purchaser or IPI, including the Assets, under any indenture, note,
agreement, mortgage, lease or commitment to which Purchaser or IPI is a party or
by which Purchaser or IPI is bound, or to which the property of Purchaser or IPI
is subject, or violate any statute or law of any judgment, decree, order,
regulation or rule of any applicable court or governmental authority.
5.4 IPI represents that the Stock that constitutes the Purchase Price
hereunder, will be, as of the date of issuance, duly authorized, validly issued,
fully paid and non-assessable.
5.5 Each of Purchaser and IPI represents and warrants that neither
Purchaser nor IPI, as applicable, has entered into any agreement pursuant to
which any person or entity is entitled to receive, either directly or
indirectly, compensation from the Purchaser or IPI for services rendered as a
finder or broker in connection with the transactions contemplated hereby.
ARTICLE VI - CONDITIONS PRECEDENT TO CLOSING
6.1 Prior to or simultaneously with the execution of this Agreement,
the following events shall occur, and are conditions precedent to performance of
Purchaser's and IPI's obligations under this Agreement:
(a) the execution of the Registration Rights Agreement;
(b) Seller shall have performed and complied with all
agreements, obligations and conditions required by
this Agreement to be performed or complied with by it
on or prior to the Closing Date, including, but not
limited to the following:
(i) the representations and warranties of Seller
contained in this Agreement are true and
correct in all material respects at and as
of the Closing Date, except for
representations and warranties specifically
relating to a time or times other than the
Closing Date, which shall be true and
correct in all material respects at such
time or times;
(ii) There shall be no pending or threatened
action, suit, inquiry, proceeding or
investigation by or before any court of
governmental or other regulatory or
administrative agency or commission pending
or
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threatened against or involving Seller or
its Assets, or which questions or challenges
the validity of this Agreement or any action
taken or to be taken by Seller pursuant to
this Agreement or in connection with the
transactions contemplated hereby; nor is
there any valid basis for any such action,
proceeding or investigation. Seller is not
in violation of, or in default with respect
to, any law, rule, regulations, order,
judgement, or decree; nor is Seller required
to take any action in order to avoid such
violation or default. The Seller is not
subject to any judgment, order or decree
entered in any lawsuit or proceeding which
may have an adverse effect on its business
practices or on its ability to acquire any
property or conduct its business in any
area.
(c) Purchaser and IPI shall have received a letter from
each of the Stock Distributees, substantially in the
form of Exhibit E .
ARTICLE VII - TERMINATION
7.1 IPI may terminate the transactions contemplated herein at any time
prior to the Closing Date only if it the conditions set forth in Section 6.1 are
not satisfied in all material respects.
7.2 Without prejudice to its rights prior to the Closing Date under
Section 7.1, Seller may terminate the transactions contemplated herein at any
time prior to the Closing Date if the representations and warranties of
Purchaser and IPI contained in this Agreement were incorrect in any material
respect when made, or if all of the conditions precedent to the obligations of
Seller set forth in this Agreement are not fulfilled.
7.3 If the transactions contemplated by this Agreement are terminated
as provided herein:
(a) Nothing herein shall be construed to release either
party from any obligation that matured prior to the
effective date of such termination.
(b) To the extent not otherwise required by law, each
party will return all documents, work papers and
other material of any other party relating to the
transactions contemplated hereby, whether so obtained
before or after the execution hereof, to the party
furnishing the same, except those documents which are
in the public domain. All information received by any
party hereto with respect to the business of any
other party shall not be subject to the use
restrictions of the confidentiality provisions of
Article III hereof.
ARTICLE VIII - COMPETITION
8.1 Seller shall not, for a period of three years following the Closing
Date, develop, manufacture or market, or act as a consultant or advisor to any
company with respect to the development, manufacture or marketing, of any
product or substance, including any PMS Product, rights thereto which were not
acquired from the Purchaser (or such successor in interest in respect of
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the PMS Product, including a licensee or sublicensee), whose use is or
reasonably may be deemed competitive with the PMS Product.
ARTICLE IX - ARBITRATION
9.1 Any dispute, controversy or claim that arises under, out of, or in
connection with, or relating to this Agreement, or any breach, termination or
alleged invalidity of this Agreement, shall be resolved by binding arbitration
in New York, New York in accordance with the then existing Rules of the American
Arbitration Association. The decision of the Arbitration Tribunal in any such
arbitration shall be final and not appealable, and shall be enforceable in any
court of competent jurisdiction. No punitive damages will be recoverable by
either Party in such a proceeding. The Parties agree that the service of any
notice in the course of such arbitration proceeding at their respective
addresses as provided for in Article XI of this Agreement shall be valid and
sufficient but such method shall be a nonexclusive means of providing the
requisite notice.
9.2 The appointing authority shall be the American Arbitration
Association.
9.3 Unless agreed otherwise by the Parties, in any arbitration
proceeding hereunder, there shall be three (3) arbitrators. Each Party shall
appoint one (1) arbitrator, and the two (2) arbitrators so appointed shall, by
mutual agreement, appoint the third arbitrator, who shall be the chairman of the
Arbitration Tribunal. In the event that any party fails to appoint an arbitrator
within one (1) month after the commencement of the arbitration proceeding, such
arbitrator shall, at the written request of the party requesting the
arbitration, be appointed by the then-President or presiding officer of the
American Arbitration Association in accordance with its then-existing rules of
appointment. For the purposes of this Agreement, "commencement of the
arbitration proceeding" shall mean the date on which all of the following
actions have been undertaken: (a) a written demand for the arbitration is
received by the American Arbitration Association, (b) the appropriate fee is
paid therewith, and (c) a copy of the written demand is served on the
non-arbitration requesting party. The decision of a majority of the arbitrators
shall be final and binding on the Parties, each arbitrator having one vote.
9.4 In any arbitration proceeding, the rights of the parties shall be
determined according to the governing law set forth in Section 12.1 of this
Agreement, and the arbitrators shall apply such law without regard to the
conflicts of law principles thereof.
9.5 In the event that either Party has a substantial need for discovery
in order to prepare for the arbitration, the Parties shall attempt in good faith
to agree on a minimum plan for strictly necessary, expeditious discovery. Should
the Parties fail to reach agreement, any Party may request a joint meeting with
the Arbitration Tribunal to explain points of agreement and disagreement. The
Arbitration Tribunal shall promptly make a recommendation as to the scope of
discovery and time allowed therefore. In the event that a Party shall fail to
cooperate with discovery ordered by the Arbitration Tribunal, the Arbitration
Tribunal shall have the power to take such corrective steps as they deem
appropriate, including, without limitation, imposition of sanctions, including
striking a demand for arbitration, or specific claims or defenses.
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9.6 In the event either Party contends that there has been fraud or bad
faith by the other Party or the Arbitration Tribunal, a second arbitration shall
be held to determine whether there has been fraud or bad faith, the Arbitration
Tribunal shall vacate the decision affected by fraud or bad faith and shall
order that another arbitration be held to resolve the original dispute. The
losing party in any such arbitral proceeding shall promptly pay the costs of
such proceeding, including, without limitation, the legal fees and expenses of
the prevailing party.
ARTICLE X - ASSIGNMENT
10.1 Seller may not assign or transfer its rights and/or duties under
this Agreement, other than in connection with (a) the sale of substantially all
of its assets, (b) a merger in which it is not the surviving corporation or (c)
a merger in which it becomes a subsidiary of another corporation, without first
having obtained the written consent of Purchaser and IPI. Any such purported
assignment or transfer, without the written consent of Purchaser and IPI, shall
be null, void and of no effect. Purchaser or IPI, as applicable, may assign or
transfer its rights and/or duties under this Agreement at any time except that
IPI shall not assign or transfer its obligation to issue the Stock or to
indemnify Seller and any other indemnitees without the written consent of
Seller. Any such purported assignment or transfer, without the written consent
of Seller, shall be null, void and of no effect.
ARTICLE XI - PAYMENTS, NOTICES AND OTHER COMMUNICATIONS
11.1 Any payment, notice or other communication pursuant to this
Agreement shall be sufficiently made or given on the date of mailing if sent to
such party by certified or registered first class mail, postage prepaid, or by
recognized public courier (e.g. Federal Express) addressed to it at its address
below or as it shall designate by written notice given to the other party:
In the case of Seller:
Xxxxxx Laboratories, Inc.
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx X. Xxxxx, Esq.
with a copy to:
Xxxxxxx, Xxxxxxxx & Kotel,
a Professional Corporation
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxx X. Xxxxx, Esq.
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In the case of Purchaser:
InterNutria, Inc.
One Ledgemont Center
00 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxx, XX 00000
In the case of IPI:
Interneuron Pharmaceuticals, Inc.
One Ledgemont Center
00 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxx, XX 00000
Attn: Xxxxx X. Xxxxxx, M.D., President
with a copy to:
Bachner, Tally, Xxxxxxx & Xxxxxx LLP
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxx Xxxxx, Esq.
ARTICLE XII - MISCELLANEOUS PROVISIONS
12.1 This Agreement shall be construed, governed, interpreted and
applied in accordance with the laws of the State of New York, U.S.A. without
regard to the principles of conflicts of laws, except those questions affecting
the construction and effect of any patent shall be determined by the law of the
country in which the patent was granted.
12.2 The failure of either party to assert a right hereunder or to
insist upon compliance with any term or condition of this Agreement shall not
constitute a waiver of that right or excuse a similar subsequent failure to
perform any such term or condition by the other party.
12.3 In case any one or more of the provisions of this Agreement shall
be invalid, illegal or unenforceable in any respect, such provisions shall be
ineffective to the extent of such invalidity, illegality or unenforceability and
the validity, legality and enforceability of the remaining provisions contained
herein shall not in any way be affected thereby.
12.4 Whether or not the transactions contemplated by this Agreement
shall be consummated, Seller agrees that all fees and expenses incurred by it in
connection with this Agreement shall be borne by it provided that the fees and
expenses of Seller's attorneys shall be payable by Purchaser at Closing in an
amount not to exceed $25,000 and each of Purchaser and IPI agrees that all fees
and expenses incurred by it in connection with this Agreement shall be borne by
it, including, without limitation as to Seller or Purchaser or IPI, all fees of
counsel, actuaries and accountants. In addition Purchaser or
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IPI shall reimburse or pay all of Seller's patent fees and expenses that are
documented to be incurred with respect to the Assets. The Purchaser agrees that
it will pay all transfer or other taxes which may be payable in connection with
the transactions contemplated by this Agreement.
12.5 Subject to Article X, this Agreement and all of the provisions
hereof shall be binding upon and inure to the benefit of the parties hereto and
their respective heirs, successors, legal representatives, and assigns.
12.6 Seller shall not make or issue, or cause to be made or issued, any
announcement or written statement concerning this Agreement or the transactions
contemplated hereby for dissemination to the general public without the prior
written consent of Purchaser and IPI. This provision shall not apply, however,
to any announcement or written statement required to be made by law or the
regulations of any federal or state governmental agency or any stock exchange or
market, except that the party required to make such announcement shall, whenever
practicable, consult with the other party concerning the timing and content of
such announcement before such announcement is made.
12.7 This Agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
12.8 The parties hereby acknowledge that this Agreement, including the
Appendices, Exhibits and Schedules hereto; and the other documents and
certificates delivered pursuant to the terms hereof, set forth the entire
agreement and understanding of the parties hereto in respect of the subject
matter contained herein, and no prior agreements, promises, covenants,
arrangements, communications, representations or warranties, whether oral or
written, by any officer, employee or representative of any party hereto shall be
of any force or effect, nor shall this Agreement be subject to any change or
modification, except by the execution of a subsequent written instrument
subscribed to by the parties hereto.
12.9 Except as specifically set forth or referred to herein, nothing
herein expressed or implied is intended or shall be construed to confer upon or
give to any person or corporation other than the parties hereto and their
successors or assigns, any rights or remedies under or by reason of this
Agreement.
12.10 All representations, warranties, covenants and agreement of the
parties contained in this Agreement or in any instrument, certificate or other
writing provided for in it, shall survive the execution of this Agreement and
not be deemed waived.
12.11 Seller represents and warrants as follows:
THE ASSETS ARE BEING SOLD, GRANTED, TRANSFERRED, CONVEYED, ASSIGNED AND
DELIVERED TO PURCHASER BY SELLER ON AN "AS IS" BASIS, AND SELLER MAKES NO
REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, AS TO THE MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE OR USE EXCEPT AS
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SPECIFICALLY PROVIDED IN THIS AGREEMENT.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and their respective corporate seals to be affixed hereto, all as
of the day and year first above written.
XXXXXX LABORATORIES, INC.
By: /S/ XXXX XXXXX
Name:
Title:
INTERNUTRIA, INC.
By: /S/ XXXXX XXXXXX
Name:
Title:
INTERNEURON PHARMACEUTICALS
INC.
By: /S/ XXXXX XXXXXX
Name:
Title:
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