EX-10.27 Asset Sale Agreement
ASSET SALE AGREEMENT
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THIS ASSET SALE AGREEMENT (the "Agreement"), is made as of
the 22nd day of July, 2002, by and among Block Drug Company, Inc.,
a New Jersey corporation ("Block"), and Access Pharmaceuticals, Inc.,
a Delaware corporation formerly known as and named Chemex
Pharmaceuticals, Inc. ("Access"). Block and Access are sometimes
individually referred to herein as the "Party" and collectively as the
"Parties".
BACKGROUND
A. Block has certain right, title and interest in and to the Takeda
License Agreement (as hereinafter defined) and the Purchased Assets (as
hereinafter defined), which includes, without limitation, certain tangible
and intangible property relating to the manufacture, use, sale and
distribution of the Products (as hereinafter defined).
B. Access desires to purchase and assume, and Block desires to sell and
assign, the Purchased Assets and Inventory (as hereinafter defined), and
the Takeda License Agreement, respectively, pursuant to the terms and
conditions of this Agreement.
NOW, THEREFORE, in consideration of the promises and the mutual
covenants, agreements, guarantees and representations herein contained
and intending to be legally bound, Block and Access agree as follows:
SECTION 1
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DEFINITIONS
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1.1 Definitions
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Where used in this Agreement the following words or phrases shall have
the meanings set forth below:
(a) "Access" shall have the meaning set forth in the Preamble.
(b) "Adverse Experience(s)" means any noxious, pathological or
unintended change in anatomical, physiological or metabolic function as
indicated by physical signs, symptoms and/or laboratory changes
occurring in clinical trials, post-marketing surveillance, or clinical
practice during use of the Aphthasol Product, or published in the medical
literature, whether or not considered causally related to the Aphthasol
Product. This includes an exacerbation of a pre-existing condition,
intercurrent illness, drug interaction, significant worsening of a disease
under investigation or treatment, and significant failure of expected
pharmacological or biological action.
(c) "Affiliate", when used to indicate a relationship with any person or
entity, means (i) any corporation, firm, partnership or other entity,
whether de jure or de facto, which directly or indirectly owns, is owned
by or is under common ownership with such person or entity to the
extent of at least fifty percent (50%) of the equity (or such lesser
percentage which
is the maximum allowed to be owned by a foreign corporation in a
particular jurisdiction) having the power to vote on or direct the affairs
of the entity, or (ii) any person, firm, partnership, corporation or other
entity actually controlled by, controlling or under common control with
such person or entity;
(d) "Agency" or "Agencies" means any governmental regulatory
authority responsible for granting approvals and clearance for
manufacturing, marketing and sale of Product;
(e) "Agreement" means this Asset Sale Agreement, together with the
Schedules and Exhibits hereto, and any instrument amending this
Agreement in accordance with Section 16.6; and the expression
"Section" followed by a number refers to the specified Section of this
Agreement;
(f) "Amlexanox" means the chemical compound of the formula
2-amino-7-isopropyl-5-oxo-5H-[1]benzopyrano-[2,3-b]-pyridine-3-
carboxylic acid (also known by Takeda Code No.: AA-673);
(g) "Ancillary Agreements" means any other agreement to be executed
by Block and/or Access in connection with this Agreement, including,
without limitation, the Xxxx of Sale and Assignment Agreement, Inventory
Xxxx of Sale and Assignment Agreement, Memorandum of Consent,
Assignment and Assumption Agreement, the Product Patents
Assignment, the Aphthasol Trademarks Assignment and the Aphthasol
Supply Agreement;
(h) "Aphthasol Agreement" means the agreement dated March 5, 1998
by and between Block and Access, a copy of which is attached hereto as
Exhibit A;
(i) "Aphthasol Product" means a topical oral paste formulation
containing Amlexanox currently approved by the FDA for use in the
treatment of aphthous ulcers;
(j) "Aphthasol Registrations" means registrations required by applicable
Agencies in the U.S. relating to the manufacture, sale and distribution
of the Aphthasol Product in the U.S., including, without limitation,
NDAs relating to the Aphthasol Product;
(k) "Aphthasol Supply Agreement" means the supply agreement to be
executed at Closing by Block and Access, substantially in the form
attached hereto as Exhibit B;
(l) "Aphthasol Trade Dress" means the current trade dress of the
Aphthasol Product, including, but not limited to, product packaging
associated with the sale of the Aphthasol Product in the U.S., but
excluding the Block Trade Dress;
(m) "Aphthasol Trademarks" means those Trademarks set forth on
Schedule 1.1(m) attached hereto;
(n) "Aphthasol Trademarks Assignment" means the assignment
agreement to be executed by Block and delivered to Access at Closing,
substantially in the form of Exhibit C attached hereto;
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(o) "Assignment and Assumption Agreement" means an assumption
agreement to be executed by Access and Block on the Closing Date,
substantially in the form of Exhibit D hereto;
(p) "Assumed Liabilities" has the meaning set forth in Section 2.2(a);
(q) "Xxxx of Sale and Assignment Agreement" means the xxxx of sale to
be executed by Block and delivered to Access at Closing, substantially
in the form of Exhibit E attached hereto;
(r) "Block" shall have the meaning set forth in the Preamble.
(s) "Block/Chemex Agreement" means the Asset Purchase and Royalty
Agreement dated June 7, 1995 by and between Block and Chemex, a
copy of which is attached hereto as Exhibit F;
(t) "Block Trade Dress" means the stripes, bands and coloring used on
the Aphthasol Product packaging to the extent (i) used on other Block or
Block Affiliates' product packaging and (ii) not currently used in product
packaging of Access;
(u) "Block Trademarks" means (i) the Block name or any variations
thereof or the names of any Block Affiliates or any variations thereof
and (ii) all Trademarks, other than the Aphthasol Trademarks, currently
used by Block or its Affiliates in connection with the manufacture,
marketing, sale and distribution of their respective products;
(v) "Chemex" means Chemex Pharmaceuticals, Inc., which is currently
known as Access;
(w) "Closing" and "Closing Date" have the meaning set forth in Section
15.1;
(x) "Cumulative Net Sales" means gross revenues received by Access
and its Affiliates on the sale of a Dermatological Product, less (i) trade
discounts actually allowed; and (ii) when borne by Access or its
Affiliates in connection with the sale, transportation and handling
charges; sales, use and excise taxes; import duties, tariffs or other
governmental charges; and credits for claim or allowances, retroactive
price reductions, refunds, returns, and recalls. There shall not be any
imputed gross revenue for samples, free goods or other marketing
programs whereby the Dermatological Product is given away to induce
sales thereof. For purposes of determining Cumulative Net Sales, a sale
shall be deemed to have occurred when the sale is invoiced or when the
Dermatological Product is delivered, whichever occurs first. In the case
of the transfer or sale of the Dermatological Product by Access to an
Affiliate, or by Access or its Affiliate to their respective distributor, or
subdistributor for sale by such Affiliate, distributor or subdistributor,
Cumulative Net Sales shall be based upon the greater of the total invoice
price charged by Access to such Affiliate, distributor, subdistributor or
the total invoice price charged by such Affiliate, distributor or
subdistributor to its customers. Cumulative Net Sales for countries
outside the U.S. shall be calculated by converting to U.S. currency using
the exchange rate in effect on the last business day of each month as
published in the Wall Street Journal. Cumulative Net Sales shall also
include Licensee Net Sales;
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(y) "Dermatological Product(s)" means a topical preparation containing
Amlexanox for use in the treatment of diseases and disorders of the
mucocutaneous membrane and/or integument including, but not limited
to, therapeutic, prophylactic and immunological uses. For the purposes
of this definition, "mucocutaneous membrane" is skin and mucous
membrane, and "integument" is skin and its appendages, including hair,
hair follicles, sebaceous glands, sweat glands, nails and component and
migratory cells of the skin. Dermatological Products shall include,
without limitation, the Aphthasol Product and Mucositis Product;
(z) "Encumbrance" has the meaning set forth in Section 6.3;
(aa) "Excluded Assets" shall mean the Plant, any Block employees
related to the development, manufacture and commercialization of
Product, any equipment, computer hardware or software, telephone
numbers, internet or domain names or URL's associated with Block's
development, manufacture or commercialization of Product (excluding
the domain name "xxx.Xxxxxxxxx.xxx"), any contracts or agreements
(excluding the Takeda License Agreement) associated with the
development, manufacture or commercialization of Product, including,
without limitation, any arrangements for the commercialization of the
Aphthasol Product on "xxx.XxxxXxxxXxxxx.xxx", and any accounts
receivable associated with Block's sale of Aphthasol Product prior to the
effective date of the expiration, or earlier termination by Access (as
provided herein), of the Transition Period;
(bb) "Excluded Intellectual Property" means (i) Block Trademarks,
(ii) Block Trade Dress, and (iii) any Intellectual Property that does not
relate primarily to Product;
(cc) "FDA" means the United States Food and Drug Administration;
(dd) "Finished Goods" means the Aphthasol Product packaged in sample
and commercial sizes and ready for distribution to the ultimate customer;
(ee) "Intellectual Property" means all (i) Patents, and U.S. and other
registered designs; (ii) U.S. and other mask works and copyrights in
works of authorship of any type, including, but not limited to, computer
software and industrial designs, registrations and applications for
registration thereof; (iii) Trademarks and trade dress; (iv) trade secrets,
know-how and other confidential or proprietary technical, business and
other information, and all rights thereto in any and all jurisdictions, to
limit the use or disclosure thereof; (v) rights to obtain and file for
patents and registrations thereof; and (vi) rights to xxx and recover
damages or obtain injunctive relief for infringement, dilution,
misappropriation, violation or breach thereof;
(ff) "Inventory" means Block's inventory of Finished Goods, an
electronic accounting of which is set forth on Schedule 1.1(ff) attached
hereto. For purposes of clarity, Inventory shall not include sample
packages of the Aphthasol Product;
(gg) "Inventory Xxxx of Sale and Assignment Agreement" means the xxxx
of sale to be executed by Block and delivered to Access as provided in
Section 11.3(a), substantially in the form of Exhibit G attached hereto;
(hh) "Inventory Price" has the meaning set forth in Section 3.2;
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(ii) "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 from any Claim
or other action by a third party under any law, action or governmental
order and those arising under any contract, agreement, arrangement,
commitment or undertaking, or otherwise. For the purposes of this
definition "Claim" shall mean any action (including, without limitation,
any proceedings to establish insurance coverage), claim, suit, arbitration
or governmental, administrative, or other proceeding or investigation or
judgment or equitable relief;
(jj) "Licensee" means a licensee of, or other third party otherwise
engaged by, Access or its Affiliates for the purpose of selling or
distributing a Dermatological Product;
(kk) "Licensee Net Sales" means gross revenues received by a Licensee
on the sale of a Dermatological Product less (i) trade discounts actually
allowed; and (ii) when borne by the Licensee in connection with the
sale, transportation and handling charges; sales, use and excise taxes;
import duties, tariffs or other governmental charges; and credits for
claim or allowances, retroactive price reductions, refunds, returns, and
recalls. There shall not be any imputed gross revenue for samples, free
goods or other marketing programs whereby the Dermatological Product
is given away to induce sales thereof. For purposes of determining
Licensee Net Sales, a sale shall be deemed to have occurred when the
sale is invoiced or when the Dermatological Product is delivered,
whichever occurs first. In the case of the transfer or sale of the
Dermatological Product by the Licensee to an Affiliate, distributor or
subdistributor of the Licensee for sales by such Affiliate, distributor or
subdistributor, Licensee Net Sales shall be based upon the greater of the
total invoice price charged by the Licensee to such Affiliate, distributor
or subdistributor or the total invoice price charged by such Affiliate,
distributor or subdistributor to its customers. Licensee Net Sales for
countries outside the U.S. shall be calculated by converting to U.S.
currency using the exchange rate in effect on the last business day of
each month as published in the Wall Street Journal;
(ll) "Manufacturing Technology" means all technology, trade secrets,
research and development, formulae, know-how, inventions, discoveries,
processes, compositions, test procedures, manufacturing procedures,
techniques, developments, enhancements and modifications, confidential,
technical, or proprietary information and knowledge not generally known
to the public, whether or not patentable, commercially useful, or
reducible to writing or practice that enable Access to make, have made,
use, offer for sale, sell and import the Aphthasol Product and are owned
or controlled by Block as of the Closing Date; provided that
Manufacturing Technology shall not include any Excluded Assets;
(mm) "Marketing Materials" means those marketing materials used by
Block solely with respect to the Aphthasol Product in the United States
that are in existence as of the Closing Date, to the extent such materials
are within the possession or control of Block, as set forth on Schedule
1.1(mm);
(nn) "Material Adverse Effect" means an event, change or occurrence
which, individually or together with any other event, change or
occurrence, has a material adverse effect on the Purchased Assets and
the Takeda License Agreement taken as a whole, but shall not include
(i) any adverse effect due to changes, after the date of this Agreement,
in conditions
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generally affecting (A) the healthcare industry or (B) the worldwide,
United States or European economy as a whole, (ii) any change or
adverse effect caused by, or relating to, the announcement of this
Agreement and the transactions contemplated by this Agreement or
(iii) any adverse effect due to legal or regulatory changes effective after
the date of this Agreement;
(oo) "Memorandum of Consent" shall mean the written agreement
executed by Block, Access and Takeda, a copy of which is attached
hereto as Exhibit H, pursuant to which (i) Takeda shall consent to
Block's assignment of the Takeda License Agreement to Access, and (ii)
the Takeda Supply Agreement shall be terminated;
(pp) "Mucositis Agreement" means the agreement dated December 21,
1998, by and between Block and Access, a copy of which is attached
hereto as Exhibit I;
(qq) "Mucositis Product" means a topical formulation containing
Amlexanox which is used for the treatment of chemotherapy or
radiation-induced inflammation of the oral mucous membrane and
inflammation of the oral mucous membrane in immunocompromised
patients;
(rr) "NDA" means a New Drug Application filed with the FDA
pursuant to 21 C.F.R., Part 314, and all supplements, amendments,
revisions thereto and all correspondence between Block and FDA relative
thereto;
(ss) "Party" or "Parties" shall have the meaning set forth in the
Preamble;
(tt) "Patents" means all U.S. and other patents, patent applications and
statutory invention registrations (which, for the purposes of this
Agreement, shall be deemed to include provisional applications,
invention disclosures, certificates of invention and applications for
certificates of invention), including reissues, divisions, continuations,
continuations-in-part, supplementary protection certificates, extensions
and reexaminations thereof, all inventions disclosed therein, all rights
therein provided by international treaties and conventions, and all rights
to obtain and file for patents and registrations thereto;
(uu) "Plant" means the Block manufacturing plant known as ReedCo,
Inc. and located at Xxxxx #0, XX 00.0, Xxxxxxx, Xxxxxx Xxxx 00000;
(vv) "Product" means, collectively, the Aphthasol Product and
Mucositis Product;
(ww) "Product Intellectual Property" means all (i) Product Patents,
(ii) Aphthasol Trademarks, (iii) Manufacturing Technology,
(iv) Aphthasol Trade Dress, (v) the Marketing Materials, (vi) the domain
name "xxx.Xxxxxxxxx.xxx", and (vii) all other Intellectual Property
primarily related to the Product, but excluding (in all cases) Excluded
Intellectual Property, Excluded Assets and the "Technology and Know-
How" of Takeda, as such term is defined in Section 1.16 of the Takeda
License Agreement;
(xx) "Product Patents" means all Patents listed on Schedule 1.1(xx)
attached hereto;
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(yy) "Product Patents Assignment" means that assignment agreement to
be executed by Block and delivered to Access at Closing, substantially
in the form of Exhibit J attached hereto;
(zz) "Purchase Price" has the meaning set forth in Section 3.1;
(aaa) "Purchased Assets" has the meaning set forth in Section 2.1(a);
(bbb) "Retained Liabilities" has the meaning set forth in Section 2.2(b);
(ccc) "Scientific and Regulatory Material" means all technological,
scientific, chemical, biological, pharmacological, toxicological,
regulatory and clinical trial materials and information primarily related
to the Aphthasol Product and all rights thereto in any and all
jurisdictions to limit the use or disclosure thereof, to the extent such
materials are within the possession or control of Block;
(ddd) "Takeda" means Takeda Chemical Industries, Ltd.
(eee) "Takeda License Agreement" means the agreement dated
November 12, 1987, by and between Takeda and Chemex, predecessor
in interest to Block, a copy of which is attached hereto as Exhibit K;
(fff) "Takeda Supply Agreement" means the agreement dated November
12, 1987, by and between Takeda and Chemex, predecessor in interest
to Block, a copy of which is attached hereto as Exhibit L;
(ggg) "Tax" or "Taxes" means any domestic, foreign, national, regional
or local income, gross receipts, payroll, withholding, license,
unemployment, premium, excise, real or personal property, capital
stock, franchise, profits, environmental, unemployment disability, social
security, severance, value added, sales, use, transfer, registration,
alternative or add-on minimum, estimated or any other tax or similar
governmental charge of any kind whatsoever, including interest,
penalties, and additions to tax with respect thereto, whether disputed or
not;
(hhh) "Tax Return" means any return, declaration, report, claim for
refund, or information return or statement relating to Taxes, including
any schedule or attachment thereto, and including any amendment
thereof;
(iii) "Trademarks" means all U.S. and other trademarks, trade names,
brand names, logotypes, symbols, service marks, designs, domain
names, URLs and tradenames, including registrations and applications
for registrations thereof and all renewals, modifications and extensions
thereof;
(jjj) Transition Period" shall have the meaning set forth in Section 7.2;
(kkk) "Transition Team" shall have the meaning set forth in Section
9.2; and
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(lll) "United States" or "U.S." means the United States of America, its
territories and possessions, including without limitation the
Commonwealth of Puerto Rico and the District of Columbia.
In this Agreement, words importing the singular number shall include
the plural and vice versa, words importing a specific gender shall include
the other genders and references to persons shall include corporations
and one or more persons, their heirs, executors, administrators or
assigns as the case may be. References to "including" shall mean
"including but not limited to."
1.2 Currency. All currency amounts referred to in this Agreement are
in U.S. Dollars unless otherwise specified.
1.3 Headings, Etc. The division of this Agreement into Sections and
the insertion of headings are for convenience of reference only and shall
not affect the interpretation hereof.
SECTION 2
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PURCHASED ASSETS; LIABILITIES
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2.1 Assets to Be Sold and Purchased.
(a) Upon the terms and subject to the conditions of this Agreement,
Block agrees to sell, assign, transfer, convey and deliver to Access and
Access agrees to purchase from Block, all rights, title and interest of
Block and its Affiliates in and to the following assets, regardless of
where such assets are situated (the "Purchased Assets"), free and clear
of all Encumbrances, except as set forth on Schedule 6.3:
(i) all Product Intellectual Property;
(ii) the Aphthasol Registrations, to the extent transferrable;
(iii) the existing lists of all current trade/wholesale customers for the
Aphthasol Product and the pricing of the Aphthasol Product for such
customers; provided, however, that Block shall retain all rights of access
and ownership of such information with respect to sales of Block's and
Block's Affiliates' other products;
(iv) copies of Block's files pertaining to the Aphthasol Registrations and
correspondence with the FDA and other Agencies, in each case such as
is in existence and in the possession or control of Block, as of the
Closing Date;
(v) all Marketing Materials;
(vi) all Scientific and Regulatory Material; and
(vii) records and files that relate to the Aphthasol Product
manufacturing and manufacturing processes.
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The Parties expressly agree and acknowledge that the Purchased
Assets shall not include the Excluded Intellectual Property and the
Excluded Assets. Additionally, Access shall reimburse Block for fifty
percent (50%) of the copying and shipping/transportation costs of such
Purchased Assets from wherever such Purchased Assets are stored by
Block to the location designated by Access, which amount shall be
payable by Access within ten (10) days after Access' receipt of an
invoice from Block for such copying and shipping/transportation costs,
the total of amount of which invoice shall not be greater than one
hundred twenty five percent (125%) of the amount reflected on the
estimate described below. Prior to Block copying and
shipping/transporting any Purchased Assets as provided in this Section
2.1 or in Section 11.1(k), Block shall forward to Access a reasonably
detailed estimate of such copying and shipping/transportation costs,
which estimate shall be accepted by Access in writing to Block. The
Parties agree that neither Block nor any of its Affiliates shall be
obligated to copy, ship or otherwise transport the Purchased Assets to
Access as provided in this Section 2.1 or in Section 11.1(k) prior to
Block's receipt from Access of Access' written acceptance of the
estimate referenced herein.
(b) Upon the terms and subject to the conditions of this Agreement, and
notwithstanding anything to the contrary contained herein, Block agrees
to assign, transfer, convey and deliver to Access and Access agrees to
assume from Block, on the Closing Date, all rights, liabilities (other than
the Retained Liabilities), title and interest of Block and its Affiliates in
and to the Takeda License Agreement, free and clear of all
Encumbrances, except as set forth in Schedule 6.3. The Parties hereby
acknowledge and agree that as of the date of the Memorandum of
Consent, the Takeda Supply Agreement shall be terminated in its entirety
and neither Block nor any of its Affiliates shall have any further rights,
duties and/or obligations to Takeda or Access thereunder.
(c) Access acknowledges and agrees that Block may retain one (1) copy
of all or part of the documentation that it delivers to Access in
confidential, restricted access files, for use in the event a dispute arises
between the Parties hereunder, in connection with fulfilling its
obligations under this Agreement or the Aphthasol Supply Agreement,
or in order to comply with applicable law.
2.2 Liabilities.
(a) Access agrees to assume, be responsible for and pay, perform and
discharge when due and whenever asserted, all Liabilities (other than the
Retained Liabilities) arising in connection with the Purchased Assets, the
Takeda License Agreement, Product and any other Dermatological
Product (including, without limitation, Inventory and Finished Goods),
but only to the extent such Liabilities (i) with respect to the Purchased
Assets, arise in respect of circumstances or events occurring on or after
the Closing Date; (ii) with respect to the Takeda License Agreement,
arise in respect of circumstances or events occurring on or after the
Closing Date and, if before the Closing Date, only as provided in
Section 2.3 below; and (iii) with respect to Product and any other
Dermatological Product (including without limitation, Inventory and
Finished Goods), arise in respect of circumstances or events occurring
on or after the effective date of the expiration, or earlier termination by
Access (as provided herein), of the Transition Period (including, without
limitation, any third party liability claims relating in whole or in part to
Aphthasol Product sold on or after the effective date of the expiration,
or earlier termination
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by Access (as provided herein), of the Transition Period) (collectively,
the "Assumed Liabilities"). Notwithstanding the foregoing, Access shall
assume, be responsible for and pay, perform and discharge, when due
and whenever asserted, all costs, expenses, exchanges and rebates related
to customer returns of any Aphthasol Product, including, without
limitation, Finished Goods, which occur or arise after the effective date
of the expiration, or earlier termination by Access (as provided herein),
of the Transition Period, even if such costs, expenses, exchanges and
rebates are related to customer returns of Aphthasol Product sold by
Block prior to the effective date of the expiration, or earlier termination
by Access (as provided herein), of the Transition Period. The foregoing
costs, expenses, exchanges and rebates related to customer returns of
Aphthasol Product shall be included within the definition of Assumed
Liabilities. Access shall not assume any Liabilities relating to a breach
contract, breach of warranty, tort, infringement or violation of law by
Block, its Affiliates and/or its or their respective directors, officers,
employees and agents occurring prior to the Closing Date and arising out
of any charge, complaint, action, suit, proceeding, hearing,
investigation, claim or demand.
(b) Block agrees to retain, be responsible for and pay, perform and
discharge when due and whenever asserted, all Liabilities (other than the
Assumed Liabilities) arising in connection with the Purchased Assets, the
Takeda License Agreement, Product and any other Dermatological
Product (including, without limitation, Inventory and Finished Goods)
but only to the extent such Liabilities (i) with respect to the Purchased
Assets, arise in respect of circumstances or events occurring prior to the
Closing Date; (ii) with respect to the Takeda License Agreement, arise
in respect of circumstances or events occurring prior to the Closing
Date; and (iii) with respect to the Product and any other Dermatological
Product (including, without limitation, Inventory and Finished Goods),
arise in respect of circumstances or events occurring prior to the
effective date of the expiration, or earlier termination by Access (as
provided herein), of the Transition Period (including, without limitation,
any third party liability claims relating in whole or in part to Aphthasol
Product sold in the United States prior to the effective date of the
expiration, or earlier termination by Access (as provided herein), of the
Transition Period) (collectively, the "Retained Liabilities").
Notwithstanding the foregoing, Block shall not be responsible for any
costs, expenses, exchanges and rebates relating to customer returns of
Aphthasol Product, including, without limitation, Finished Goods,
occurring after the effective date of the expiration, or earlier termination
by Access (as provided herein), of the Transition Period, even if such
costs, expenses, exchanges and rebates relating to customer returns are
related to Aphthasol Product sold by Block prior to the effective date of
the expiration, or earlier termination by Access (as provided herein), of
the Transition Period. Block shall not retain any Liabilities relating to
a breach of contract, breach of warranty, tort, infringement or violation
of law by Access, its Affiliates and/or its or their respective directors,
officers, employees, agents or Licensees, occurring as of and after the
Closing Date and arising out of any charge, complaint, action, suit,
proceeding, hearing, investigation, claim or demand.
(c) Subject to the provisions of Section 10 below, Access shall be
responsible for all Liabilities whatsoever other than the Retained
Liabilities.
(d) Subject to the provisions of Section 10 below, Block shall be
responsible for all Liabilities whatsoever other than the Assumed
Liabilities.
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2.3 Proration.
Block and Access agree to prorate as of the Closing Date any amounts
under the Takeda License Agreement which become due and payable
after the Closing Date to the extent the benefit is attributable to the
period prior to the Closing Date, and any amounts under the Takeda
License Agreement which are paid prior to the Closing Date to the
extent the benefit is attributable to the period subsequent to the Closing
Date. Notwithstanding the foregoing, Access assumes no Liabilities
under the Takeda License Agreement which occurred prior to the
Closing Date, except for expenses thereunder incurred by Block in the
ordinary course of business; and, Access assumes no Liabilities under
the Takeda License Agreement relating to a breach of contract, breach
of warranty, tort, infringement or violation of law occurring prior to the
Closing Date and arising out of any charge, complaint, action, suit,
proceeding, hearing, investigation, claim or demand. Further, Block
shall not retain any Liabilities under the Takeda License Agreement
which relate to a breach of contract, breach of warranty, tort,
infringement or violation of law occurring after the Closing Date and
arising out of any charge, complaint, action, suit, proceeding, hearing,
investigation, claim or demand.
2.4 Ancillary Agreements. Block and Access acknowledge that this
Agreement does not act as a conveyance, transfer or assignment of any
property but that all of the Purchased Assets, the Takeda License
Agreement and Inventory are conveyed, transferred or assigned by way
of the Xxxx of Sale and Assignment Agreement, Inventory Xxxx of Sale and
Assignment Agreement, Assignment and Assumption Agreement,
Product Patents Assignment, Aphthasol Trademarks Assignment and
other documents delivered pursuant to the terms of this Agreement.
SECTION 3
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PURCHASE PRICE AND OTHER PAYMENTS
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3.1 Purchase Price. The Purchase Price payable in consideration for
the acquisition of the Purchased Assets shall be One Million Two
Hundred Fifty Thousand U.S. Dollars (US$1,250,000) (the "Purchase
Price"). Such Purchase Price shall be paid by Access to Block as
follows:
(a) Seven Hundred Fifty Thousand U.S. Dollars (US$750,000)
delivered to Block by Access at the Closing;
(b) Two Hundred Fifty Thousand U.S. Dollars (US$250,000) delivered
to Block by Access no later than six (6) months after the Closing Date;
and
(c) Two Hundred Fifty Thousand U.S. Dollars (US$250,000) delivered
to Block by Access no later than twelve (12) months after the Closing
Date.
3.2 Inventory Price. Access shall purchase all Inventory held by Block
as of the earlier of the expiration or termination of the Transition Period,
which shall be determined based on an actual physical count of such
Inventory, for a price equal to * U.S. Dollars (US$ * ) per dozen
of 5 gram tubes of Finished Goods (the "Inventory Price"). The
aggregate Inventory Price shall be delivered to Block by Access in full
within ten (10) days of the expiration or termination of the Transition
Period. In addition to Access' payment to Block of the aggregate
* - Confidential portions have been omitted and are on file separately
with the Commission.
11
Inventory Price, Access shall reimburse Block for fifty percent (50%) of
the shipping/transportation costs of such Inventory, including, without
limitation, insurance, freight and duties, from the Plant or wherever such
Inventory is stored by Block to the location designated by Access, which
amount shall be payable by Access within ten (10) days after Access'
receipt of an invoice from Block for such shipping/transportation costs,
the total of amount of which invoice shall not be greater than one
hundred twenty five percent (125%) of the amount reflected on the
estimate described below. Prior to Block shipping/transporting any
Inventory as provided in this Section 3.2 or in Section 11.3(a), Block
shall forward to Access a reasonably detailed estimate of such
shipping/transportation costs, which estimate shall be accepted by Access
in writing to Block. The Parties agree that neither Block nor any of its
Affiliates shall be obligated to ship or otherwise transport the Inventory
to Access as provided in this Section 3.2 or in Section 11.3(a) prior to
Block's receipt from Access of Access' written acceptance of the
estimate referenced herein.
3.3 Milestone Payments. In further consideration for the
transactions contemplated under this Agreement and in addition to the
Purchase Price and Inventory Price, Access shall pay to Block the
following non-refundable milestone payments in the form and manner
described below:
(a) Dermatological Product Milestone Payments:
(i) Two Hundred Fifty Thousand * U.S.
Dollars (US$ * 250,000) upon the achievement of an aggregate of
Cumulative Net Sales in the United States for all Dermatological
Products by Access, its Affiliates and its and their respective Licensees,
after the Closing Date, of *Five Million U.S. Dollars (US$ *
5,000,000) in any one calendar year. Such milestone payment shall be
paid by Access to Block no later than ninety (90) days after the end of
the calendar year in which the milestone is achieved; and
(ii) * Seven Hundred Fifty Thousand U.S.
Dollars (US$ * 750,000) upon the achievement of an aggregate of
worldwide (including, without limitation the U.S.) Cumulative Net Sales
for all Dermatological Products by Access, its Affiliates and its and their
respective Licensees after the Closing Date, of * Twenty Million
U.S. Dollars (US$ * 20,000,000). Such milestone payment shall be
paid by Access to Block no later than the last day of the calendar quarter
immediately succeeding the calendar quarter in which the milestone is
achieved.
(b) Mucositis Product Milestone Payments:
(i) Within five (5) business days after Access
signs a license agreement or agreements (with a third party) regarding
the Mucositis Product for all the major European markets of Germany,
France, the United Kingdom, Italy and Spain, Access shall pay Block the
sum of * Two Hundred Fifty Thousand U.S. Dollars (US$ * 250,000);
(ii) Within five (5) business days after Access
signs a license agreement (with a third party) regarding the Mucositis
Product for the United States market, Access shall pay Block the sum of
* Three Hundred Fifty Thousand U.S. Dollars (US$ * 350,000);
* - Confidential portions have been omitted and are on file separately
with the Commission.
12
(iii) Within five (5) business days of the filing
by Access of an NDA for the Mucositis Product with the FDA, Access
shall pay Block the sum of * Two Hundred Fifty Thousand U.S.
Dollars (US$ * 250,000);
(iv) Within five (5) business days of Access
receiving a written approval of an NDA for the Mucositis Product,
Access shall pay Block the sum of * Five Hundred Thousand U.S.
Dollars (US$ * 500,000); and
(v) Access shall pay to Block the following
payments based upon the achievement of the following worldwide
(including, without limitation, the U.S.) Cumulative Net Sales of the
Mucositis Product by Access, its Affiliates and its and their respective
Licensees after the Closing Date:
PAYMENT MILESTONE
--------------
US$ * On achievement of worldwide Cumulative Net Sales
for the Mucositis Product of US$ *
US$ * On achievement of worldwide Cumulative Net Sales
for the Mucositis Product of US$ *
US$ * On achievement of worldwide Cumulative Net Sales
for the Mucositis Product of US$ *
US$ * On achievement of worldwide Cumulative Net Sales
the Mucositis Product of US$ *
US$ * On achievement of worldwide Cumulative Net Sales
for the Mucositis Product of US$ *
US$ * On achievement of worldwide Cumulative Net Sales
for the Mucositis Product of US$ *
For the avoidance of doubt, only one (1) payment is required under each
of the subsections of this Section 3.3, excluding 3.3(b)(v),
notwithstanding whether more than one (1) Mucositis Product is
developed or more than one (1) NDA for the Mucositis Product is filed
and whether or not there are any improvements.
(c) Within sixty (60) days after the end of each calendar quarter,
commencing with the first full calendar quarter following the Closing
Date, Access shall submit to Block a written report setting forth the
worldwide Cumulative Net Sales of the Aphthasol Product, Mucositis
Product, and any other Dermatological Product, respectively, for such
quarter; provided, however, that the first such quarterly report shall
include worldwide Cumulative Net Sales for the Aphthasol Product,
Mucositis Product and any other Dermatological Product from
* - Confidential portions have been omitted and are on file separately
with the Commission.
13
the Closing Date to the end of the first full calendar quarter
following the Closing Date. In the event that a Licensee sells or
distributes the Product, the sales report provided to Block by Access
or its Affiliates pursuant to this Section 3.3(c) shall also include a
copy of the sales report from such Licensees for such calendar
quarter. Access shall permit, and shall cause its Affiliates and its and
their respective Licensees to permit, an independent certified public
accounting firm of nationally recognized standing selected by Block
and reasonably acceptable to Access, at Block's expense, to have
access upon reasonable notice during normal business hours to the
records of Access and/or its Affiliates and its or their respective
Licensees as may be reasonably necessary to verify the accuracy of
the worldwide Cumulative Net Sales reported by Access pursuant to
this Section 3.3(c). When, in any quarterly report, one (1) of the
worldwide Cumulative Net Sales milestones set forth in Section
3.3(b)(v) have been achieved, Access shall make the corresponding
milestone payment to Block within forty-five (45) business days after
the end of the calendar quarter in which the milestone is achieved.
3.4 Allocation of Purchase Price. The Purchase Price and
Inventory Price and all other amounts constituting consideration
hereunder shall be allocated among the Purchased Assets, and
otherwise as the Parties shall have agreed, in the manner set forth on
Exhibit M. Except as otherwise required by applicable law, each of
the Parties agrees to report (and to cause its Affiliates to report) the
transactions contemplated by this Agreement in a manner consistent
with the terms of this Agreement, including the allocation set forth on
Exhibit M, and agree not to take any position inconsistent therewith in
any Tax Return, in any refund claim, in any litigation or otherwise.
Any subsequent adjustment to the Purchase Price or Inventory Price
shall be reflected in the allocation statement as revised by the Parties
hereunder in a manner consistent with the allocation statement as
originally prepared, except as otherwise required by applicable law.
Exhibit M shall be amended to reflect any agreed upon changes to the
allocation statement.
3.5 Transfer Taxes; Withholding Taxes. All transfer,
sales, value added, stamp duty and similar Taxes payable in
connection with the transactions contemplated hereby shall be borne
equally by Block and Access. Block shall pay all Taxes payable on
any income or gain resulting from the sale of the Purchased Assets
and Inventory to Access.
SECTION 4
-------------
PAYMENT TERMS
-------------
4.1 Payment. Access shall pay the Purchase Price, in the
installments set forth in Section 3.1(a)-(c), the Inventory Price, and
any and all milestone payments as set forth in Section 3.3, in cash by
wire transfer of immediately available funds to a bank account or
bank accounts to be designated by Block or its Affiliate.
SECTION 5
---------
TERMINATION OF PRIOR AGREEMENTS; RELEASES
-----------------------------------------
5.1 Termination of Prior Agreements. The Parties agree,
and shall cause their respective Affiliates to agree, that effective as of
the Closing Date, the Block/Chemex
14
Agreement, the Aphthasol
Agreement and the Mucositis Agreement shall be terminated in their
entirety and neither Party shall have any further duties and/or
obligations to the other thereunder.
5.2 Release of Access. Access does hereby release Block,
its Affiliates, and its and their respective officers, directors,
employees, agents, successors and assigns from any and all claims
(including, without limitation, royalty claims and claims for
reimbursement of research and development expenses), Liabilities and
causes of action of any kind under the terms of the Block/Chemex
Agreement, the Aphthasol Agreement and the Mucositis Agreement
for all periods through the Closing Date, irrespective of whether such
claims are known or unknown, matured or contingent.
5.3 Release of Block. Block hereby releases Access, its
Affiliates, and its and their respective officers, directors, employees,
agents, successors and assigns from any and all claims (including,
without limitation, royalty claims and claims for reimbursement of
research and development expenses), Liabilities and causes of action
of any kind under the terms of the Block/Chemex Agreement, the
Aphthasol Agreement and the Mucositis Agreement for all periods
through the Closing Date, irrespective of whether such claims are
known or unknown, matured or contingent.
SECTION 6
---------
REPRESENTATIONS AND WARRANTIES OF BLOCK
---------------------------------------
Block hereby represents and warrants to Access as follows:
6.1 Incorporation, Organization and Qualification of
Block. Block is a corporation duly incorporated, validly existing and
in good standing under the laws of the State of New Jersey, and has
the necessary corporate power to own, lease and operate its property
and to carry on its business as now being conducted by it. Block is
duly qualified and licensed to do business as a foreign corporation and
is in good standing in every jurisdiction where the nature of the
business conducted by it makes such qualification necessary, except
where the failure to so qualify or be in good standing does not have a
Material Adverse Effect.
6.2 Authorization and Validity of Agreement. Block has
the corporate power and legal authority to execute and deliver this
Agreement and the Ancillary Agreements and to carry out its
obligations hereunder and thereunder. The execution and delivery of
this Agreement and the Ancillary Agreements and the performance of
Block's obligations hereunder and thereunder have been duly and
validly authorized by all necessary corporate action by Block, and no
other corporate proceedings on the part of Block are necessary to
authorize such execution, delivery and performance. This Agreement
has been, and the other agreements to be executed by Block in
connection with this Agreement will be, duly and validly executed by
Block and constitute or will constitute, as the case may be, the valid
and binding obligations of Block enforceable against Block in
accordance with its or their terms, subject to bankruptcy, insolvency
or similar laws of general application affecting the enforcement of
rights of creditors, and subject to equitable principles limiting rights
to specific performance or other equitable remedies, and subject to the
effect of federal and state securities laws on the enforceability of
indemnification
15
provisions relating to liabilities arising under such
laws. Execution of this Agreement, the Ancillary Agreements and
any other agreements to be executed by Block in connection with this
Agreement and consummation of the transactions contemplated hereby
and thereby will not (a) result in the violation of or conflict with any
of the terms and provisions of the articles of incorporation or by-laws
of Block, (b) result in a violation or breach of, or constitute (with or
without due notice or lapse of time or both) a default (or give rise to
any right of termination, modification, cancellation or acceleration or
loss of material benefits) under, any of the terms, conditions or
provisions of any note, bond, mortgage, indenture, contract,
agreement, permit, license, lease, purchase order, sales order,
arrangement or other commitment or obligation to which Block is a
party or may be subject or which is included in the Purchased Assets
or (c) violate any order, writ, injunction, decree, statute, treaty, rule
or regulation applicable to Block or the Purchased Assets, except, in
the case of clauses (b) and (c), as would not have a Material Adverse
Effect.
6.3 Title to Purchased Assets. Except as set forth on
Schedule 6.3, Block is the owner of, and/or is the lawful holder of all
rights to, the Purchased Assets with good, valid and marketable title
thereto, free and clear of any mortgage, lien, charge, security interest,
pledge, restriction on transferability, option, adverse claim or other
encumbrance on title whatsoever (collectively, "Encumbrances"),
and at the Closing, Block will transfer to Access good, valid and
marketable title thereto, free and clear of all Encumbrances.
6.4 Compliance With Law. Block has conducted and is
currently conducting the manufacturing, processing, packaging,
labeling, marketing and sale of the Aphthasol Product in the United
States in compliance with all applicable laws, rules, regulations and
court or administrative orders and processes. Except as disclosed on
Schedule 6.4 or as would not have a Material Adverse Effect, Block
has not received any written notice of violation of any applicable law,
regulation or requirement relating to the Aphthasol Product, the
Purchased Assets or the Takeda License Agreement within the past
three (3) years.
6.5 Litigation. Except as set forth in Schedule 6.5, or as
would not have a Material Adverse Effect, (a) there are no actions,
suits, proceedings, investigations, arbitration proceedings or other
proceedings pending or, to the best knowledge of Block, threatened
against or affecting, in whole or in part, the Purchased Assets, the
Takeda License Agreement or the Aphthasol Product by or before any
federal, state, municipal or other governmental department,
commission, board, bureau, agency or instrumentality, domestic or
foreign, or by or before any arbitrator, and (b) there is not currently
outstanding against Block any judgment, decree, injunction, rule,
settlement, order or award of any court, governmental department,
commission, board, bureau, agency, instrumentality, domestic or
foreign, or arbitrator that relate, in whole or in part, to the Purchased
Assets, the Takeda License Agreement or the Aphthasol Product or
would question or challenge the validity of this Agreement.
6.6 Takeda License Agreement; No Default Under The
Takeda License Agreement. The Takeda License Agreement is
valid, binding and enforceable against Block and Takeda, is in full
force and effect and will continue to be legal, valid, binding,
enforceable and in full force and effect following the Closing Date.
Except as set forth in Schedule 6.6, neither Block nor, to the
knowledge of Block, Takeda are in breach or default of any of the
16
terms, conditions or provisions of the Takeda License Agreement and
to the knowledge of Block, there is no event which, with the giving of
notice and the passage of time, could become a default under the
Takeda License Agreement.
6.7 Intellectual Property Rights.
(a) Except as described in Schedule 6.7, (i) Block is
the sole owner, free and clear of any Encumbrance, except as set
forth in Schedule 6.3, of all right, title and interest in the Product
Intellectual Property and (ii) Block has the right to use the Product
Intellectual Property in the manufacture, sale and distribution of
Product. To knowledge of Block, no other Intellectual Property or
license is required in order to sell the Aphthasol Product in the United
States.
(b) Except as described in Schedule 6.7, all of the
Product Patents and Product Trademarks (i) have been duly registered
or filed with the appropriate government authorities or registries, and
(ii) to the best knowledge of Block are currently in force as to all
applicable jurisdictions.
(c) Except as described in Schedule 6.7, to the
knowledge of Block, no third party is infringing or misappropriating
any of the Product Intellectual Property.
(d) Except as set forth on Schedule 6.7, none of the
Product Intellectual Property infringes or conflicts with any
Intellectual Property right of a third party and there are, and have
been, no claims asserted in writing against Block alleging that Block's
development, manufacture and sale of Aphthasol Product infringes or
misappropriates any Intellectual Property of any other person,
corporation, limited liability company, partnership, other business
entity.
(e) Except as described in Schedule 6.7, Block has
not granted any license or sublicense with respect to the Product
Intellectual Property.
(f) Block has delivered to Access correct and
complete copies of all patents, registrations, applications, licenses and
agreements relating to the Product Intellectual Property.
6.8 Inventory. The Inventory has been stored in
compliance with all applicable federal and state laws, has not been
adulterated and has otherwise been maintained according to the
requirements of federal and state law. The Inventory is merchantable
and fit for the purpose for which it was manufactured, is not defective
and shall have a remaining shelf life of at least eighteen (18) months
from the effective date of the earlier of the expiration or termination
of the Transition Period.
6.9 Government Approvals. Except as set forth on
Schedule 6.9, no government authorization, consent, approval,
license, exemption of or filing or registration with any court or
governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, under any applicable laws, rules
or regulations currently in effect, is or will be necessary for, or in
connection with, the offer and sale of the Purchased Assets,
assignment of the Takeda License Agreement, the execution and
delivery by Block of this Agreement, the Ancillary
17
Agreements and any other agreement or instrument executed in connection
herewith, the consummation of the transactions contemplated hereby or
thereby, or the performance by Block of its obligations under this
Agreement, the Ancillary Agreements and any other agreements.
6.10 Purchased Assets. Except for the Excluded Assets and
as otherwise stated herein (including, without limitation, in Schedule
6.11) or in the Aphthasol Supply Agreement or as would not cause a
Material Adverse Effect, the Purchased Assets include all property,
rights, assets, information, files and materials necessary for Access to
develop, manufacture, sell and distribute the Aphthasol Product in a
manner substantially similar to Block's practices as of the Closing
Date.
6.11 Supply of Amlexanox. Except as described in
Schedule 6.11, Block knows of no reason why Takeda, the supplier of
Amlexanox, the active ingredient in the Product, will not supply
Amlexanox for manufacturing the Product in commercially required
amounts after the date of this Agreement or the consummation of the
transactions contemplated hereby. Notwithstanding the foregoing,
except as set forth in Schedule 6.11, there are no contracts associated
with the supply of Amlexanox from Takeda or any other third party.
Further, Block makes no representations, warranties or covenants as
to the supply of Amlexanox, including, without limitation, any
representation, warranty or covenant as to the availability or price of
such Amlexanox as of and after the Closing Date from Takeda or any
other third party.
6.12 Brokers. Block has not employed any investment
banker, broker, finder or intermediary in connection with the
transactions contemplated hereby who might be entitled to a fee or
commission upon the execution of this Agreement or the
consummation of such transactions.
6.13 Disclosure. The representations and warranties
contained in this Section 6 do not contain any untrue statement of fact
or omit to state a fact necessary in order to make the statements and
information contained in this Section 6 not misleading.
6.14 No Implied Representations. WITH REGARD TO
ANY STATEMENT CONTAINED IN THIS SECTION 6 OR ANY OTHER PROVISION
OF THIS AGREEMENT OR ANY ANCILLARY AGREEMENT BLOCK AND ACCESS
ACKNOWLEDGE AND AGREE THAT NEITHER BLOCK NOR ANY OF ITS AFFILIATES,
AGENTS, EMPLOYEES OR REPRESENTATIVES IS MAKING OR IMPLYING, WHETHER
CONTAINED IN OR REFERRED TO IN THE DUE DILIGENCE AND EVALUATION
MATERIALS THAT HAVE BEEN OR SHALL HEREAFTER BE PROVIDED TO ACCESS
OR ANY OF ITS AFFILIATES, AGENTS OR REPRESENTATIVES, ANY
REPRESENTATION OR WARRANTY WHATSOEVER BEYOND THOSE EXPRESSLY GIVEN BY
BLOCK IN THIS AGREEMENT OR ANY ANCILLARY AGREEMENT, INCLUDING BUT NOT
LIMITED TO, ANY IMPLIED WARRANTY OR REPRESENTATION AS TO THE VALUE,
CONDITION, MERCHANTABILITY OR SUITABILITY AS TO ANY OF THE
PURCHASED ASSETS OR INVENTORY.
18
SECTION 7
---------
COVENANTS OF BLOCK
------------------
7.1 Assistance with Access Regulatory Filings. Block
shall use commercially reasonable efforts to assist Access in its
preparation and filing with the FDA or any other Agency of filings
required to be filed by Access for the manufacture, marketing and
distribution of the Aphthasol Product. It is understood and agreed
that Access, as the owner of the Aphthasol Registrations, shall have
the responsibility for all regulatory filings after the Closing Date. All
costs and fees associated with such regulatory filings shall be borne by
Access.
7.2 Transitional Support.
(a) Except as otherwise set forth herein or in the
Aphthasol Supply Agreement, for a period of not more than ninety
(90) calendar days from the Closing Date (the "Transition Period"),
or until the earlier termination of such Transition Period by Access at
any time and for any reason upon providing at least ten (10) days'
prior written notice to Block, Block agrees, without payment of any
additional consideration from Access, to use commercially reasonable
efforts to provide Access with such transitional support as may be
reasonably requested by Access in order to effectuate a smooth
transition from Block to Access with respect to the sale of Purchased
Assets, including, without limitation, distributing the Aphthasol
Product in the U.S. from Block's Inventory during the Transition
Period. Notwithstanding the foregoing, the Parties agree that ten (10)
business days prior to the effective date of the expiration, or earlier
termination by Access (as provided herein), of the Transition Period,
Block shall cease accepting or placing any new orders for the
Aphthasol Product in the U.S. Block shall retain any proceeds
received from its sales of the Aphthasol Product during the Transition
Period. Access agrees that during the Transition Period, Block shall
be permitted to notify existing customers for the Aphthasol Product,
in a form agreed to by Access, of the consummation of the
transactions contemplated by this Agreement.
(b) Effective as of the Closing and continuing until
the effective date of the expiration, or earlier termination by Access
(as provided herein), of the Transition Period, Access hereby grants
to Block (i) the limited right and non-exclusive, nonsublicensable and
nontransferrable royalty free license under the Product Patents to
distribute, market, promote and sell the Aphthasol Product in the
United States as set forth in Section 7.2(a) above, and (ii) the limited
right and non-exclusive, nonsublicensable and nontransferrable royalty
free license to use the Aphthasol Trademarks and Aphthasol Trade
Dress in connection with the distribution, marketing, promotion and
sale of the Aphthasol Product in the United States as set forth in
Section 7.2(a) above. Following the effective date of the expiration,
or earlier termination by Access (as provided herein), of the
Transition Period and except as otherwise provided in the Aphthasol
Supply Agreement or in Section 14.1 herein, Block shall have no
rights under the Product Patents and shall not use, in any manner or
for any purpose, directly or indirectly, the Aphthasol Trademarks or
Aphthasol Trade Dress without Access' prior written approval. Block
hereby acknowledges and agrees that no right, license or any transfer
is granted by Access to Block by implication or otherwise with respect
to the Product Patents, Aphthasol Trademarks or the Aphthasol Trade
Dress except as provided in the Aphthasol Supply Agreement, Section
14.1 and this Section 7.2(b).
19
7.3 Litigation. From the date hereof until the date six (6)
years after the Closing, Block shall notify Access promptly upon
receipt of any communication or legal process which commences or
threatens litigation which might materially and adversely affect the
value of any of the Purchased Assets.
7.4 Access. During the Transition Period, Block shall
provide Access, during such time as shall be mutually agreed to by
the Parties, access to properties, books, records, contracts and
documents relating to the Purchased Assets.
7.5 Notice of Developments. For a period of one (1) year
after the Closing Date, Block will give written notice to Access of all
material developments of which it has actual knowledge affecting the
Purchased Assets.
7.6 Operation of Business. Until the Closing Date, Block
shall operate the business relating to the Purchased Assets and the
Takeda License Agreement in a manner consistent with its past
business practice relating to the Purchased Assets and the Takeda
License Agreement. Until the effective date of the expiration, or
earlier termination by Access (as provided herein) of the Transition
Period, Block shall operate the business relating to the Inventory,
including, without limitation, the sale and distribution of Aphthasol
Product by Block, in a manner consistent with its past business
practice relating to the Inventory.
SECTION 8
---------
REPRESENTATIONS AND WARRANTIES OF ACCESS
----------------------------------------
Access hereby represents and warrants to Block as follows:
8.1 Incorporation, Organization and Qualification of
Access. Access is a corporation duly incorporated, validly existing
and in good standing under the laws of the State of Delaware, and has
the necessary corporate power to own, lease and operate its property
and to carry on its business as now being conducted by it. Access is
duly qualified and licensed to do business as a foreign corporation and
is in good standing in every jurisdiction where the nature of the
business conducted by it makes qualification necessary, except where
the failure to so qualify or be in good standing would not prevent or
materially delay the consummation of the transactions contemplated
hereby.
8.2 Corporate Action. Access has the corporate power
and legal authority to execute and deliver this Agreement and the
Ancillary Agreements and to carry out its obligations hereunder and
thereunder. The execution and delivery of this Agreement and the
Ancillary Agreements and the performance of Access' obligations
hereunder and thereunder have been duly and validly authorized by all
necessary corporate action, and no other corporate proceedings on the
part of Access are necessary to authorize such execution, delivery and
performance. This Agreement has been, and any other agreements to
be executed in connection herewith will be, duly and validly executed
by Access, and constitutes or will constitute, as the case may be, the
valid and binding obligations of Access, enforceable against Access in
accordance with its or their terms, subject to bankruptcy, insolvency
or similar laws of general application affecting the enforcement of
rights of creditors, and subject to equitable principles limiting rights
to specific
20
performance or other equitable remedies, and subject to the
effect of federal and state securities laws on the enforceability of
indemnification provisions relating to liabilities arising under such
laws. Execution of this Agreement, the Ancillary Agreements and
any other agreements to be executed by Access in connection with this
Agreement and consummation of the transactions contemplated hereby
and thereby will not (a) result in the violation of or conflict with any
of the terms and provisions of the articles of incorporation or by-laws
of Access, (b) result in a violation or breach of, or constitute (with or
without due notice or lapse of time or both) a default (or give rise to
any right of termination, modification, cancellation or acceleration or
loss of material benefits) under, any of the terms, conditions or
provisions of any note, bond, mortgage, indenture, contract,
agreement, permit, license, lease, purchase order, sales order,
arrangement or other commitment or obligation to which Access is a
party or may be subject to or (c) violate any order, writ, injunction,
decree, statute, treaty consummation of such transactions, rule or
regulation applicable to Access except, in the case of clauses (b) and
(c), as would not prevent or materially delay the consummation of the
transactions contemplated hereby.
8.3 Governmental Approvals. No government
authorization, consent, approval, license, exemption of or filing or
registration with any court or governmental department, commission,
board, bureau, agency or instrumentality, domestic or foreign, under
any applicable laws, rules or regulations currently in effect, is or will
be necessary for, or in connection with, the purchase of the Purchased
Assets, the assumption of the Takeda License Agreement, the
execution and delivery by Access of this Agreement, the Ancillary
Agreements and any other agreement or instrument executed in
connection herewith, the consummation of the transactions
contemplated hereby or thereby, or for the performance by it of its
obligations under this Agreement, the Ancillary Agreements and any
other agreements.
8.4 Compliance With Law. Access has conducted and is
currently conducting its business, including, without limitation, the
manufacturing, processing, packaging, labeling, promotion,
advertising, marketing and sale of its pharmaceutical products, in
compliance with all applicable laws, rules, regulations and court or
administrative orders and processes. Except as disclosed on Schedule
8.4 or as would not have a Material Adverse Effect, Access has not
received any written notice of violation of any applicable law,
regulation or requirement relating to its business within the past five
(5) years.
8.5 Litigation. Except as set forth in Schedule 8.5 or as
would not have a Material Adverse Effect, there are no actions, suits,
proceedings, investigations, arbitration proceedings or other
proceedings pending or, to the best knowledge of Access, threatened
against or affecting, in whole or in part, Access' business by or
before any federal, state, municipal or other governmental
department, commission, board, bureau, agency or instrumentality,
domestic or foreign, or by or before any arbitrator and, to the best
knowledge of Access, there is not currently outstanding against
Access any judgment, decree, injunction, rule, settlement, order or
award of any court, governmental department, commission, board,
bureau, agency, instrumentality, domestic or foreign, or arbitrator that
would question or challenge the validity of this Agreement.
8.6 Brokers. Access has not employed any investment
banker, broker, finder or intermediary in connection with the
transactions contemplated hereby who might be entitled to a
21
fee or commission upon the execution of this Agreement or the
consummation of such transactions.
8.7 Disclosure. The representations and warranties
contained in this Section 8 do not contain any untrue statement of fact
or omit to state a fact necessary in order to make the statements and
information contained in this Section 8 not misleading.
SECTION 9
---------
MUTUAL COVENANTS
----------------
9.1 Transfer of Aphthasol Registrations, Etc. The
Parties to this Agreement shall cooperate to effectuate the
consummation of the transactions contemplated by this Agreement and
the transfer of the Purchased Assets and Takeda License Agreement in
accordance with Section 2.1 hereof. The Parties agree to use their
commercially reasonable efforts, before and after the Closing, to take
any other actions required by the FDA or any other Agency to effect
the transfer of the Purchased Assets, including notices to the FDA and
other Agencies regarding the transfer from Block to Access of the
Aphthasol Registrations and to obtain any required third party
consents necessary to consummate the transactions contemplated by
this Agreement.
9.2 Transition Team. Block and Access shall establish a
transition team (the "Transition Team"), which shall be formed from
such number of designees as the Parties may agree and which shall
have the responsibilities set forth in this Section 9.2. For a period of
not longer than the Transition Period, or until the earlier termination
thereof by Access (as provided herein), the Transition Team shall (a)
coordinate the joint efforts of Block and Access, consistent with the
terms and conditions of this Agreement; (b) effect the transfer of the
Purchased Assets in accordance with Section 2.1 and Section 11.1(k);
(c) obtain any required consents, licenses, permits, waivers,
approvals, authorizations or orders; (d) make any required filings or
submissions; (e) effect a smooth transition from Block to Access with
respect to the manufacture and sale of the Product in the U.S.; and (f)
take any other commercially reasonable actions necessary for the
consummation of the transactions contemplated by this Agreement.
9.3 Transitional License. Effective as of the Closing,
Block hereby grants to Access and its Affiliates and its and their
Licensees, the limited right and non-exclusive, nonsublicensable and
nontransferrable royalty free license to use the Block Trademarks and
Block Trade Dress which have been used in connection with the
distribution, marketing, promotion and sale of the Aphthasol Product
in the United States, consistent with Block's past practice, in
connection with the distribution, marketing, promotion and sale of the
Aphthasol Product in the United States. The limited right and license
shall include the right to use the Block Trademarks or the Block
Trade Dress on Product Marketing Materials. The limited right and
license shall be effective until the exhaustion of the Inventory by
Access and/or its Affiliates and its or their Licensees; provided that
Access shall use commercially reasonable efforts to cease using the
Block Trademarks or the Block Trade Dress as soon as practicable
after the Closing Date. Following such time period, neither Access
nor its distributors shall use, in any manner or for any purpose,
directly or indirectly, the Block Trademarks or the Block Trade Dress
without Block's prior written approval, which shall not be
unreasonably withheld. All use of Block's Trademarks or the Block
Trade Dress by Access and/or its Affiliates and its and their
22
Licensees, shall inure to the benefit of Block and shall be in
accordance with Block's past practice for quality standards for the
Product and Product Marketing Materials. Access hereby
acknowledges and agrees that no right, license or any transfer is
granted by Block to Access by implication or otherwise with respect
to the Block Trademarks or the Block Trade Dress except as provided
in this Section 9.3.
9.4 Certain Tax Matters. Access and Block, and each
Party's respective Affiliates, shall cooperate, to the extent reasonably
requested by the other Party, in connection with the preparation and
filing of any Tax Return, audit, litigation, information statement,
proceeding or similar items with respect to Taxes and to furnish the
other Party with a copy of such item in draft form within a reasonable
time before its due date, as well as a copy of such item as filed.
9.5 Adverse Experience Reports. On or prior to the
Closing Date, Block shall provide Access with all information relating
to the investigation and reporting of Adverse Experiences regarding
the Aphthasol Product since three (3) years prior to the Closing Date
and all information which is relevant to the safe use of the Aphthasol
Product as of the Closing Date and will confer with Access on
Adverse Experience history related to the Aphthasol Product. After
the Closing Date, Block and its Affiliates shall promptly submit to
Access all Adverse Experience information or customer complaints
brought to the attention of Block or its Affiliates in respect of the
Aphthasol Product, as well as any material events and matters
concerning or affecting the safety or efficacy of the Aphthasol
Product. Such information or customer complaints shall be forwarded
to Access, Attention: Xxxxxxxxxx X. Xxxx, Director of Clinical
Development. Beginning on the Closing Date, Access shall have all
responsibility for required reporting of Adverse Experiences for the
Aphthasol Product, Mucositis Product and other Dermatological
Product.
9.6 Response to Medical Inquiries and Products
Complaints. Until the effective date of the expiration, or earlier
termination by Access (as provided herein), of the Transition Period,
Block shall continue to be responsible for responding to all medical
inquiries and complaints (excluding, however, any Adverse
Experience reports, as set forth in Section 9.5 above) relating to the
Aphthasol Product in the United States. Access shall promptly refer
all such medical inquiries that it receives to Block for response.
Block shall give Access prompt written notice of all such inquiries or
complaints and shall allow Access to participate in any actions relating
thereto. After the effective date of the expiration, or earlier
termination by Access (as provided herein), of the Transition Period,
Access shall assume all responsibility for responding to any medical
inquiries or complaints about the Product and other Dermatological
Product. Block shall promptly refer all such inquiries and complaints
that it receives to Access for response to such inquiries or complaints.
9.7 Supply Agreements. At the Closing, Block and
Access shall enter into the Aphthasol Supply Agreement.
9.8 Customer Receipts. In the event that Block or any of
its Affiliates receive payment after the effective date of the expiration,
or earlier termination by Access (as provided herein), of the
Transition Period on invoices relating to sales of the Aphthasol
Product by Access or any of its Affiliates after the effective date of
the expiration, or earlier termination by Access
23
(as provided herein), of the Transition Period, Block will promptly
notify Access of such receipt and will promptly remit, or will cause such
Affiliate to promptly remit such payment to Access. In the event that
Access or any of its Affiliates receive payment after the Closing Date on
invoices relating to sales of the Aphthasol Product by Block or any of
its Affiliates prior to the effective date of the expiration, or earlier
termination by Access (as provided herein), of the Transition Period,
Access will promptly notify Block of such receipt and will promptly
remit, or will cause such Affiliate to promptly remit such payment to
Block.
9.9 Credit Under Takeda License Agreement. Access
shall be solely responsible for providing a written accounting to
Takeda, in accordance with Article VIII of the Takeda License
Agreement, of any royalties payable to Takeda under the Takeda
License Agreement on Block's Net Sales (as defined in the Takeda
License Agreement) of Aphthasol Product during the Transition
Period. In such written accounting to Takeda, Access agrees that it
shall use the balance of the aggregate license fee payments existing as
of the Closing Date that have been paid to Takeda by Chemex and
Block since November 12, 1987 in accordance with Section 7.1 of the
Takeda License Agreement, to offset any and all royalties payable to
Takeda on Block's Net Sales (as defined in the Takeda License
Agreement) of Aphthasol Product during the Transition Period. The
balance of the aggregate license fee payments existing as of the
Closing Date that have been paid to Takeda by Chemex and Block
since November 12, 1987 in accordance with Section 7.1 of the
Takeda License Agreement shall be as set forth on Exhibit N, which
shall be attached within ninety (90) days after the Closing Date.
Access shall deliver to Block a copy of any statement or royalty
report provided to Takeda as set forth herein, which accounts for
royalties payable to Takeda on Block's Net Sales (as defined in the
Takeda License Agreement) of Aphthasol Product during the
Transition Period.
SECTION 10
----------
INDEMNIFICATION
---------------
10.1 Indemnification by Block. Block shall indemnify and
hold Access, its Affiliates and their respective employees, officers and
directors (collectively, the "Access Indemnified Parties") harmless
from and against any and all losses, damages, liabilities, obligations,
claims, costs and expenses (including reasonable attorneys' fees)
(each, a "Loss" and collectively, the "Losses") sustained, suffered or
incurred by such Access Indemnified Parties and relating to, directly
or indirectly: (a) the breach of any representation or warranty of
Block contained herein (without regard to materiality qualifiers
provided in such representations or warranties other than the
references to Material Adverse Effect); (b) the breach of any covenant
or agreement of Block contained herein; (c) the breach by Block of
the Takeda License Agreement prior to the Closing Date, or (d) any
claim or cause of action arising from the Retained Liabilities.
10.2 Indemnification by Access. Access shall indemnify
and hold Block, its Affiliates and their respective employees, officers
and directors (collectively, the "Block Indemnified Parties")
harmless from and against any and all Losses sustained, suffered or
incurred by such Block Indemnified Parties and relating to, directly or
indirectly: (a) the breach of any representation or warranty of Access
contained herein, (without regard to materiality qualifiers provided in
such representations or warranties); (b) the breach of any covenant or
agreement of Access contained herein; (c) the breach by Access of the
Takeda License
24
Agreement on and after the Closing Date; or (d) any
claim or cause of action arising from the Assumed Liabilities.
10.3 Notification of Claims.
(a) If any Block Indemnified Party or Access
Indemnified Party receives notice of any event, circumstance, demand
or claim that may give rise to a Loss for which such Party is or may
be entitled to indemnification under this Agreement (each such party,
an "Indemnified Party"), such Indemnified Party shall promptly
notify the Party required to provide such indemnification (the
"Indemnifying Party") in writing of the existence of such potential
Loss and of the amount at issue. The failure to provide such notice
will not affect any rights hereunder except to the extent the
Indemnifying Party is materially prejudiced thereby.
(b) If the event or circumstance giving rise to a
Loss involves any third party claim, the Indemnifying Party shall have
the right to direct, through counsel of its own choosing, which
counsel shall be reasonably satisfactory to the Indemnified Party, the
defense or settlement of any claim or proceeding the subject of
indemnification hereunder at its own expense. If the Indemnifying
Party elects to assume the defense of any such claim or proceeding,
the Indemnified Party may participate in such defense, but in such
case the expenses of the Indemnified Party shall be paid by the
Indemnified Party. The Indemnified Party shall provide the
Indemnifying Party with access to its records and personnel relating to
any such claim, assertion, event or proceeding during normal business
hours and shall otherwise cooperate with the Indemnifying Party in
the defense or settlement thereof, and the Indemnifying Party shall
reimburse the Indemnified Party for all its reasonable out-of-pocket
expenses in connection therewith. If the Indemnifying Party elects to
direct the defense of any such claim or proceeding, the Indemnified
Party shall not pay, or permit to be paid, any part of any claim or
demand arising from such asserted loss unless the Indemnifying Party
consents in writing to such payment or unless the Indemnifying Party
withdraws from the defense of such asserted loss or unless a final
judgment from which no appeal may be taken by or on behalf of the
Indemnifying Party is entered against the Indemnified Party for such
loss. No settlement in respect of any third party claim may be
effected by the Indemnifying Party without the Indemnified Party's
prior written consent, unless the settlement involves a full and
unconditional release of the Indemnified Party. If the Indemnifying
Party shall fail to undertake in a timely manner the defense of any
third party claim or it is reasonably determined by outside counsel
mutually selected by the Indemnified Party and the Indemnifying Party
that representation by the Indemnifying Party's counsel of both the
Indemnifying Party and the Indemnified Party may present a conflict
of interest, the Indemnified Party shall have the right to undertake the
defense or settlement thereof at the Indemnifying Party's expense. If
the Indemnified Party assumes the defense of any such claim or
proceeding pursuant to this Section 10.3 and proposes to settle such
claim or proceeding prior to a final judgment thereon or to forgo any
appeal with respect thereto, then the Indemnified Party shall give the
Indemnifying Party timely written notice and the Indemnifying Party
shall have the right to participate in the settlement or assume or
reassume the defense of such claim or proceeding.
25
SECTION 11
----------
CLOSING AND POST-CLOSING DELIVERIES
-----------------------------------
11.1 Documents/Items to Be Delivered by Block at
Closing. At the Closing, Block shall deliver, or cause to be
delivered, to Access the following:
(a) Any instruments of conveyance, assignment and
transfer, in form and substance satisfactory to Access and Block, as
shall be appropriate to convey, transfer and assign to, and vest in
Access, good title to the Purchased Assets free and clear of all
Encumbrances, except as set forth on Schedule 6.3;
(b) executed Product Patents Assignment;
(c) executed Aphthasol Trademarks Assignment;
(d) an executed counterpart of the Xxxx of Sale and
Assignment Agreement;
(e) reports of Adverse Experience, as provided in Section 9.5;
(f) a certificate dated as of the Closing Date and executed by a
principal executive or financial officer of Block certifying the
satisfaction of the conditions specified in Section 12.1;
(g) a certificate dated as of the Closing Date and executed by the
secretary or an assistant secretary of Block, certifying:
(i) attached thereto is a complete and correct
copy of resolutions adopted by the board of directors of Block
authorizing the execution, delivery and performance of this
Agreement and the Ancillary Agreements executed in connection
herewith by Block and the transfer of the Purchased Assets, the
Assumed Liabilities and the Takeda License Agreement to Access
hereunder, and that such resolutions, approvals and consents have not
been amended or modified in any respect and remain in full force and
effect as of the date thereof (or, in the alternative, a statement to the
effect that no such board of directors approval is necessary regarding
the execution, delivery and performance of this Agreement and the
Ancillary Agreements and the transfer of the Purchased Assets, the
Assumed Liabilities and the Takeda License Agreement to Access);
and
(ii) any necessary Block shareholder
approvals have been obtained with regard to the execution, delivery
and performance of this Agreement and the Ancillary Agreements and
the transfer of the Purchased Assets, Assumed Liabilities and the
Takeda Licensed Agreement to Access; and
(iii) that the person named in the foregoing
officer's certificate delivered pursuant to Section 11.1(f) has been duly
elected, qualified and is an acting officer of Block and that set forth
therein is a genuine signature or true facsimile thereof of such officer.
(h) an executed counterpart of the Assignment and Assumption Agreement;
26
(i) an executed counterpart(s), executed by Block
and Takeda, of the Memorandum of Consent;
(j) an executed counterpart of the Aphthasol Supply Agreement;
(k) the Purchased Assets, to the extent deliverable at
Closing, in accordance with the procedures set forth in Section 2.1.
If the Purchased Assets cannot be delivered at Closing, they shall be
delivered by Block as soon as practicable after the Closing, in
accordance with the procedures set forth in Section 2.1 and, with
regard to the Manufacturing Technology, in accordance with Section
6.1 of the Aphthasol Supply Agreement;
(l) an electronic recording of the Inventory existing
as of the Closing Date; and
(m) such other documents, instruments and
certificates as Block and Access may mutually agree upon.
11.2 Documents/Items to Be Delivered by Access at
Closing. At the Closing, Access shall deliver, or cause to be
delivered, to Block the following:
(a) an executed counterpart of the Xxxx of Sale and
Assignment Agreement;
(b) a certificate dated as of the Closing Date and
executed by a principal executive or financial officer of Access
certifying the satisfaction of the conditions specified in Section 13.1;
(c) a certificate dated as of the Closing Date and
executed by the secretary or an assistant secretary of Access,
certifying:
(i) attached thereto is a complete and correct
copy of resolutions adopted by the board of directors of Access
authorizing the execution, delivery and performance of this
Agreement and the Ancillary Agreements executed in connection
herewith by Access and the transfer of the Purchased Assets, the
Assumed Liabilities and the Takeda License Agreement to Access
hereunder, and that such resolutions, approvals and consents have not
been amended or modified in any respect and remain in full force and
effect as of the date thereof (or, in the alternative, a statement to the
effect that no such board of directors approval is necessary regarding
the execution, delivery and performance of this Agreement and the
Ancillary Agreements and the transfer of the Purchased Assets, the
Assumed Liabilities and the Takeda License Agreement to Access);
and
(ii) any necessary Access shareholder
approvals have been obtained with regard to the execution, delivery
and performance of this Agreement and the Ancillary Agreements and
the transfer of the Purchased Assets, the Assumed Liabilities and the
Takeda Licensed Agreement to Access; and
(iii) that the person named in the foregoing
officer's certificate delivered pursuant to Section 11.2(a) has been
duly elected, qualified and is an acting officer of Access and that set
forth therein is a genuine signature or true facsimile thereof of such
officer.
27
(d) an executed counterpart of the Assignment and
Assumption Agreement;
(e) an executed counterpart of the Aphthasol Supply Agreement;
(f) the first installment of the Purchase Price, as set
forth in Section 3.1(a);
(g) an executed counterpart of the Memorandum of Consent; and
(h) such other documents, instruments and certificates as Block
and Access may mutually agree upon.
11.3 Post-Closing Deliveries.
(a) Promptly after the effective date of the
expiration, or earlier termination by Access (as provided herein) of
the Transition Period, Block shall deliver to Access the Inventory
existing as of the expiration or termination of the Transition Period in
a manner agreed to by the Parties, and an executed counterpart of the
Inventory Xxxx of Sale and Assignment Agreement conveying,
transferring and vesting in Access, good title to such Inventory, free
and clear of all Encumbrances except as set forth on Schedule 6.3, in
accordance with the procedures set forth in Section 3.2.
(b) Access shall deliver to Block the aggregate
Inventory Price in accordance with the procedures set forth in Section
3.2 and an executed counterpart of the Inventory Xxxx of Sale and
Assignment Agreement accepting conveyance and transfer of the
Inventory.
SECTION 12
----------
ACCESS' CONDITIONS OF CLOSING
-----------------------------
The sale and purchase of the Purchased Assets in accordance
with the terms of this Agreement are subject to the following terms
and conditions, each of which is included for the exclusive benefit of
Access, to be fulfilled or performed at or prior to the Closing:
12.1 Representations and Warranties at Closing. The
representations and warranties of Block to Access contained in this
Agreement shall be true and correct as of the Closing in all respects
with the same force and effect as though such representations and
warranties had been made at such time (without regard to materiality
qualifiers set forth therein), except where failure to be so true and
correct would not prevent or materially delay the consummation of the
transactions contemplated hereby, and except that those
representations and warranties which address matters only as of a
particular date or period of time shall remain true and correct as of
such date or period of time, except where failure to be so true and
correct would not prevent or materially delay the consummation of the
transactions contemplated hereby. Block shall deliver to Access at the
Closing a certificate by an officer of Block to such effect.
12.2 Compliance with Terms and Conditions. Block shall
have performed, or complied with, in all material respects, all of the
terms, covenants and conditions of this Agreement to be complied
with or performed by Block at or before the Closing.
28
12.3 AncillaryAgreements. Block shall have executed and
delivered the Product Patents Assignment, the Aphthasol Trademarks
Assignment, the Xxxx of Sale and Assignment Agreement,
Memorandum of Consent, Assignment and Assumption Agreement
and Aphthasol Supply Agreement.
SECTION 13
----------
BLOCK'S CONDITIONS OF CLOSING
-----------------------------
The sale and purchase of the Purchased Assets in accordance
with the terms of this Agreement is subject to the following terms and
conditions, each of which is included for the exclusive benefit of
Block, to be fulfilled or performed at or prior to the Closing.
13.1 Representations and Warranties at Closing. The
representations and warranties of Access to Block contained in this
Agreement shall be true and correct as of the Closing in all respects
with the same force and effect as though such representations and
warranties had been made at such time (without regard to materiality
qualifiers set forth therein), except where failure to be so true and
correct would not prevent or materially delay the consummation of the
transactions contemplated hereby, and except that those
representations and warranties which address matters only as of a
particular date or period of time shall remain true and correct as of
such date or period of time, except where failure to be so true and
correct would not prevent or materially delay the consummation of the
transactions contemplated hereby. Access shall deliver to Block at the
Closing a certificate by an officer of Access to such effect.
13.2 Compliance with Terms and Conditions. Access shall
have performed, or complied with, in all material respects, all the
terms, covenants and conditions of this Agreement to be complied
with or performed by Access at or before the Closing.
13.3 Ancillary Agreements. Access shall have executed the
Memorandum of Consent, Assignment and Agreement and Aphthasol
Supply Agreement.
SECTION 14
----------
TERMINATION AND WAIVER
----------------------
14.1 Termination After Closing.
(a) This Agreement may be terminated by Block at
any time during the fourteen (14) month period after the Closing Date
as follows:
(i) upon providing written notice to Access
of Access' default or breach of Section 3.1 of this Agreement. In the
event that such default or breach is irreparable or Access fails to cure
such default or breach within thirty (30) days after receipt of written
notice thereof from Block, this Agreement shall immediately
terminate; or
29
(ii) if Access (A) shall file in any court
pursuant to any statute of any government in any country a petition in
bankruptcy or insolvency or for reorganization or for an arrangement
or for the appointment of a receiver or trustee of Access or its assets;
(B) proposes a written agreement of composition for extension of its
debts; (C) shall be served with an involuntary petition against it, filed
in any insolvency proceeding, and such petition shall not be dismissed
within sixty (60) days after filing thereof; (D) shall be a party to any
dissolution or liquidation; or (E) shall make a general assignment for
the benefit of its creditors.
In the event that this Agreement is terminated pursuant to this Section
14.1(a), Block shall have the right, without notice to or consent by
Access, to implement and record the transfer and assignment of all
rights, title and interest in and to the Purchased Assets back to Block.
Notwithstanding anything in this Agreement to the contrary and
except as set forth in the next sentence, if Block terminates this
Agreement pursuant to this Section 14.1(a), such termination shall
constitute Block's sole remedy upon the occurrence of any event listed
in this Section 14.1(a) upon which such termination is based, as the
case may be, and Block shall not be entitled to receive any additional
damages from Access or make any claim for the payment of any
additional damages. Notwithstanding the foregoing, Block shall also
be entitled to seek reimbursement for any costs and expenses
(including, without limitation, attorneys' fees) incurred in terminating
this Agreement pursuant to this Section 14.1(a). Further, nothing
contained in this Section 14.1(a) shall be construed as limiting or
restricting in any way any remedies which may be available to Block
and/or its Affiliates at law and equity in the event of a breach by
Access of any material term(s) of this Agreement, other than a breach
of Section 3.1.
(b) Upon termination of this Agreement pursuant to
this Section 14.1, Block shall have the right to retain any sums paid
by Access pursuant to this Agreement, and all outstanding obligations
and Liabilities between the Parties arising from this Agreement shall
immediately terminate upon the effective date of such termination;
provided, however, that those obligations and terms set forth in
Sections 5, 10, 14.1, 16.5, and 16.11 and any other obligations or
Liabilities set forth in this Agreement that accrued after Closing and
prior to the effective date of termination shall survive termination of
this Agreement pursuant to this Section 14.1.
(c) Upon termination or expiration of this
Agreement for any reason, the Aphthasol Supply Agreement shall
immediately automatically terminate.
14.2 Waiver. Either Party to this Agreement may, in
writing, (a) extend the time for the performance of any of the
obligations or other acts of the other Party, (b) waive any inaccuracies
in the representations and warranties of the other Party contained
herein or in any document delivered by the other Party pursuant
hereto or (c) waive compliance with any of the agreements or
conditions of the other Party contained herein. Any such extension or
waiver shall be valid only if set forth in an instrument in writing
referencing this Agreement and signed by the Party to be bound
thereby.
30
SECTION 15
----------
CLOSING DATE
------------
15.1 Closing. Upon the terms and subject to the
conditions of this Agreement, the sale and purchase of the Purchased
Assets shall take place at a closing (the "Closing") to be held at
GlaxoSmithKline, Xxx Xxxxxxxx Xxxxx, Xxxxxxxxxxxx, XX, at
10:00 A.M. Eastern Standard Time on July 22, 2002, or at such other
place or at such other time or on such other date as Block and Access
may mutually agree upon in writing (the day on which the Closing
takes place being the "Closing Date").
SECTION 16
----------
MISCELLANEOUS
-------------
16.1 Expenses. Except as otherwise specified in this
Agreement, all costs and expenses, including, without limitation, fees
and disbursements of counsel, financial advisors and accountants,
incurred in connection with this Agreement and the transactions
contemplated hereby shall be paid by the Party incurring such costs
and expenses, whether or not the Closing shall have occurred. Except
as provided in Section 10, in the event of any dispute among the
Parties hereto relating to the subject matter of this Agreement, each
Party shall pay its own out-of-pocket costs and fees and disbursements
of counsel.
16.2 Further Assurances and Actions. Each of the
Parties hereto, upon the request of the other Party hereto, whether
before or after the Closing and without further consideration, shall,
and shall cause their respective Affiliates to, do, execute,
acknowledge and deliver or cause to be done, executed, acknowledged
or delivered all such further acts, deeds, documents, assignments,
transfers, conveyances, powers of attorney and assurances as may be
reasonably necessary to effect complete consummation of the
transactions contemplated by this Agreement.
16.3 Announcements. No Party shall make a public
announcement regarding this Agreement or the transactions
contemplated hereby without the prior written consent of the other
Party; provided that nothing herein shall restrict Block or Access from
making any public announcement of the transactions contemplated by
this Agreement to the extent that such announcement is required by
law; provided that, prior to any such disclosure, the disclosing Party
shall provide the other Party a reasonable time to review and
comment upon such disclosure. Additionally, Access may disclose
this Agreement and the transactions contemplated hereby, to the extent
reasonably necessary, in connection with any registration of one (1) or
more of the Products with any state or Federal agency.
16.4 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 courier service, by telecopy or by
registered or certified mail (postage prepaid, return receipt requested)
to the respective Parties 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 16.4):
31
(a) if to Block, then:
GlaxoSmithKline
Xxx Xxxxxxxx Xxxxx
Xxxxxxxxxxxx, XX 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Attn: Vice President and Director
GlaxoSmithKline Consumer Healthcare
Worldwide Business Development
with a copy to:
GlaxoSmithKline
Corporate Law Department
Xxx Xxxxxxxx Xxxxx
Xxxxxxxxxxxx, XX 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Attn: General Counsel - US
(b) if to Access, then:
Access Pharmaceuticals, Inc.
0000 Xxxxxxxx Xxxxxxx
Xxxxx 000
Xxxxxx, XX 00000
Telephone : (000) 000-0000
Telecopy : (000) 000-0000
Attn: Xxxxx X. Xxxx
President
with a copy to:
Xxxxxxx XxXxxxxxx LLP
000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Attn: Xxxx X. Xxxxxxxxx III, Esq.
16.5 Applicable Law. This Agreement shall be
governed by and construed in accordance with the laws of the State of
New Jersey without giving effect to principles of conflict of laws.
Each Party to this Agreement expressly and irrevocably (a) consents
that legal action or proceeding against it arising out of this Agreement
may be brought in any court of the
32
State of New Jersey located in
Xxxxxx County or in the United States District Court for the District
of New Jersey, (b) consents and submits to the personal jurisdiction of
any of such courts solely for purposes of such action or proceeding,
(c) consents to the service of any complaint, summons, notice or other
process solely for purposes of such action or proceeding by delivery
thereof to him, her or it by hand or by any other manner provided for
in Section 16.4 and (d) waives any claim or defense solely for
purposes of such action or based on any alleged lack of personal
jurisdiction, improper venue or forum non conveniens or any similar
basis. Nothing in this Section shall affect or impair in any manner or
to any extent the right of any Party to commence legal proceedings or
otherwise proceed against any other Party in any jurisdiction or to
serve process in any manner permitted by law.
16.6 Entire Agreement; Amendments. This
Agreement, including the Exhibits and Schedules hereto, constitutes
the entire agreement among the Parties hereto with respect to the
transactions provided for herein and as stated herein and in the
agreements, instruments and documents executed and to be executed
and delivered in connection herewith, contains all of the agreements
between the Parties hereto. There are no verbal agreements or
understandings between the Parties hereto not reflected in this
Agreement. This Agreement may not be amended or modified in any
respect except by written instrument executed by each of the Parties
hereto.
16.7 Counterparts. This Agreement may be executed in
two (2) or more counterparts, each of which shall be deemed to be an
original and all of which together, shall constitute the same
Agreement.
16.8 No Third Party Beneficiaries. This Agreement
shall be binding upon and inure solely to the benefit of the Parties
hereto and their permitted successors and assigns and nothing herein,
express or implied, is intended to or shall confer upon any person or
entity, any legal or equitable rights, benefits or remedies.
16.9 Assignment. Neither Party may assign its rights or
obligations under this Agreement without the prior written consent of
the other Party and any purported assignment in violation hereof shall
be null and void; provided, however, that either Party may assign its
rights and obligations under this Agreement, without the prior written
consent of the other Party, to an Affiliate or to a successor of the
assigning Party's business by reason of merger, sale of all or
substantially all of its assets or any similar transaction, provided that
such successor agrees in writing to be bound by this Agreement.
Such consent shall not be unreasonably withheld or delayed. Any
permitted assignee shall assume all obligations of its assignor under
this Agreement. No assignment shall relieve either Party of its
responsibility for the performance of any obligation that accrued prior
to the effective date of such assignment hereunder.
16.10 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 so long as the
economic or legal substance of the transactions contemplated hereby is
not affected in any manner materially adverse to any Party. Upon
such determination that any term or other provision is invalid, illegal
or incapable of being enforced, the Parties hereto 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.
16.11 WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO IRREVOCABLY
AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR
PROCEEDING RELATING TO THIS AGREEMENT, THE ANCILLARY AGREEMENTS,
INSTRUMENTS AND DOCUMENTS CONTEMPLATED HEREBY OR THE TRANSACTIONS
CONTEMPLATED HEREBY AND FOR ANY COUNTERCLAIM THEREIN.
16.12 No Waiver of Remedies. No delay on the part of
Access or Block in exercising any right, power or privilege hereunder
shall operate as a waiver thereof, nor shall any waiver on the part of
either Access or Block of any right, power or privilege hereunder nor
shall any single or partial exercise of any right, power or privilege
hereunder preclude any other or further exercise thereof or the
exercise of any other right, power or privilege hereunder. The waiver
of any terms or conditions of this Agreement shall not be construed as
a waiver of any subsequent breach or a subsequent waiver of the same
term or condition, or waiver of any other term or condition, of this
Agreement. The failure of any Party to assert any of its rights
hereunder shall not constitute a waiver of any of such rights.
The remainder of this page is intentionally left blank.
34
IN WITNESS WHEREOF, this Agreement has been executed
by the Parties hereto as of the date first above written.
BLOCK DRUG COMPANY, INC.
By /s/ Xxxx X. Xxxxxxx
-----------------------
Name: Xxxx X. Xxxxxxx
Title: President
ACCESS PHARMACEUTICALS, INC.
By /s/ Xxxxx X. Xxxx
-----------------------
Name: Xxxxx X. Xxxx
Title: President
35
