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EXHIBIT 10.4
PURCHASE AGREEMENT
among
XXXXX PHARMACEUTICAL PRODUCTS, INC.,
AVENTIS PHARMACEUTICALS PRODUCTS INC.
and
VIVELLE VENTURES LLC
March 29, 2001
(CombiPatch(TM) Product)
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
TABLE OF CONTENTS
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ARTICLE I. DEFINITIONS............................................................................2
1.1 Definitions............................................................................2
1.2 Rights and Obligations of the Purchaser................................................5
1.3 Product Formulated as of the Date Hereof...............................................6
ARTICLE II. PURCHASE AND SALE OF ASSETS............................................................6
2.1 Purchase and Sale of Assets............................................................6
2.2 The Purchased Assets...................................................................6
2.3 Excluded Assets........................................................................7
2.4 Disclaimer of Other Representations and Warranties.....................................7
2.5 Physical Transfer of Inventory and Certain Other Purchased Assets......................8
2.6 Physical Transfer of Other Purchased Assets............................................8
ARTICLE III. ASSUMPTION OF LIABILITIES..............................................................9
3.1 Assumption of Assumed Liabilities......................................................9
3.2 Excluded Liabilities..................................................................10
3.3 Retention of Rights...................................................................10
ARTICLE IV. PURCHASE PRICE, MANNER OF PAYMENT AND CLOSING.........................................11
4.1 Purchase Price and Service Fee........................................................11
4.2 Manner of Payment of the Purchase Price and Service Fee...............................11
4.3 Time and Place of Closing.............................................................11
4.4 Conditions to Closing.................................................................11
4.5 Closing Deliveries....................................................................11
4.6 Seller's Obligations Pending Closing..................................................12
ARTICLE V. REPRESENTATIONS AND WARRANTIES........................................................12
5.1 Purchaser's Representations and Warranties............................................12
5.2 Seller's and APPI's Representations and Warranties....................................13
5.3 Knowledge.............................................................................18
5.4 Disclosure Schedule...................................................................18
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Securities and Exchange Commission. Asterisks denote omissions.
TABLE OF CONTENTS
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ARTICLE VI. POST-CLOSING AGREEMENTS...............................................................18
6.1 Transition Manager....................................................................18
6.2 Certain Assignments...................................................................18
6.3 Sales and Transfer Taxes and Fees.....................................................19
6.4 Overstickering........................................................................19
6.5 Additional Covenants Regarding Purchased Assets.......................................19
6.6 Further Assurances....................................................................20
6.7 Survival of Provisions................................................................20
6.8 Ongoing Obligations...................................................................20
ARTICLE VII. REGULATORY APPROVAL ISSUES............................................................20
7.1 Transfer of Regulatory Approvals......................................................20
7.2 Right of Reference and Access to Data.................................................21
7.3 Adverse Event Reports and Provision of Safety Information.............................21
ARTICLE VIII. TRADEMARKS............................................................................22
8.1 Trademarks Rights.....................................................................22
8.2 Use of the Trademarks by the Seller and APPI outside the Territory....................22
8.3 Registration of Trademarks............................................................23
ARTICLE IX. INTELLECTUAL PROPERTY CLAIMS..........................................................23
9.1 Infringement or Other Actions Regarding the CombiPatch Know-How.......................23
9.2 Infringement or Other Action Regarding the Trademarks.................................24
9.3 Third Party Claims Regarding the Trademarks...........................................24
9.4 Other Third Party Infringement Claims.................................................24
ARTICLE X. CONFIDENTIALITY AND NONCOMPETITION....................................................24
10.1 Confidentiality; Press Releases.......................................................24
10.2 Noncompetition........................................................................26
10.3 Injunctive Relief.....................................................................27
ARTICLE XI. INDEMNIFICATION.......................................................................27
11.1 General...............................................................................27
11.2 Indemnification Obligations of the Purchaser..........................................27
11.3 Indemnification Obligations of the Seller.............................................28
11.4 Procedure.............................................................................29
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Securities and Exchange Commission. Asterisks denote omissions.
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11.5 Certain Limitations...................................................................29
ARTICLE XII. MISCELLANEOUS.........................................................................30
12.1 Disputes..............................................................................30
12.2 Independent Contractors...............................................................30
12.3 Assignment............................................................................30
12.4 Binding Effect; Benefit...............................................................31
12.5 Amendments............................................................................31
12.6 No Waiver.............................................................................31
12.7 Notices...............................................................................31
12.8 Counterparts..........................................................................32
12.9 Interpretation........................................................................32
12.10 Governing Law.........................................................................33
12.11 Unenforceability......................................................................33
12.12 Entire Agreement......................................................................33
12.13 Expenses..............................................................................33
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
PURCHASE AGREEMENT
THIS PURCHASE AGREEMENT (the "PURCHASE AGREEMENT"), dated as of March
29, 2001, is by and among XXXXX PHARMACEUTICAL PRODUCTS, INC., a Delaware
corporation with its principal office at 0000 Xxxxxxx Xxxx, Xxxxx 000,
Xxxxxxxxxx, Xxxxxxxx, 00000 (the "SELLER") and AVENTIS PHARMACEUTICALS PRODUCTS
INC., a Delaware corporation with its principal office at Xxxxx 000-000,
Xxxxxxxxxxx, Xxx Xxxxxx , 00000 ("APPI"), and VIVELLE VENTURES LLC, a Delaware
limited liability company with an office c/o Noven Pharmaceuticals, Inc., 00000
X.X. 000xx Xxxxxx, Xxxxx, Xxxxxxx, 00000 (the "PURCHASER").
RECITALS
WHEREAS, the Seller, as assignee, and Noven Pharmaceuticals, Inc.
("NOVEN") are parties to an Amended and Restated License Agreement dated as of
September 30, 1999, as amended by Amendment No. 2 thereto effective as of the
date hereof (collectively, the "NOVEN LICENSE AGREEMENT") pursuant to which
Noven granted the Seller certain continuing rights in the Territory (as defined
below) to use, sell or otherwise dispose of the CombiPatch Product (as defined
below), and the Seller and its Affiliates are engaged in the process of
distributing and selling the CombiPatch Product; and
WHEREAS, the Seller, APPI and the Purchaser desire to enter into a
transaction pursuant to which, among other things: (a) all of the Seller's
rights in the Territory to use, sell or otherwise dispose of the CombiPatch
Product will revert to Noven and Noven will assign those rights to the Purchaser
in the Territory; (b) the Seller and APPI will sell to the Purchaser, and the
Purchaser will purchase from the Seller and APPI, certain inventory of and other
assets related to the CombiPatch Product, including, without limitation, the
CombiPatch Know-How (as defined below) and the Trademarks (as defined below);
and (c) the Purchaser will grant to the Seller a license to use the CombiPatch
Know-How; all on the terms and subject to the conditions contained in this
Purchase Agreement and the Related Agreements (as defined below) (collectively,
the "TRANSACTION"); and
WHEREAS, as part of the Transaction, the Seller and APPI desire to sell
to the Purchaser certain inventory of and other assets relating to the
CombiPatch Product, including, without limitation, the CombiPatch Know-How and
the Trademarks, and the Purchaser desires to purchase said inventory and assets,
all on the terms and subject to the conditions contained in this Purchase
Agreement;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto, intending to
be legally bound, agree as follows:
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
ARTICLE I.
DEFINITIONS
1.1 DEFINITIONS. As used herein, the following capitalized terms shall
have the following meanings:
"ACTIVITY DATE" means, in the case of all Rebates paid for the benefit
of a customer (other than a wholesaler) that takes possession of CombiPatch
Product, the date of sale of such CombiPatch Product by a wholesaler to such
customer, and in the case of all Rebates paid for the benefit of a customer that
does not take possession of CombiPatch Product, the date of dispensing of
CombiPatch Product to the patient.
"AFFILIATE" means, when used with respect to a Person, any other Person
directly or indirectly controlling, controlled by, or under common control with
the subject Person. For purposes of this Purchase Agreement, "control" means the
direct or indirect ownership of over 50% of the outstanding voting securities of
a Person, or to control the management decisions of such Person. Notwithstanding
the foregoing, for purposes of this Purchase Agreement, Noven shall be
considered an Affiliate of the Purchaser, and, for the avoidance of doubt,
Novartis Pharmaceuticals Corporation shall also be considered an Affiliate of
the Purchaser.
"AMENDMENT AGREEMENT" means Amendment No. 2 to the Noven License
Agreement between the Seller and Noven executed prior to the Closing Date and
effective as of the Closing Date.
"ASSUMED LIABILITIES" has the meaning set forth in Section 3.1 hereof.
"CLOSING" has the meaning set forth in Section 4.3 hereof.
"CLOSING DATE" means March 30, 2001, or such other date as the parties
may agree for the Closing to take place.
"COMBIPATCH BUSINESS" means the business of developing, marketing,
advertising, promoting, distributing, selling and otherwise disposing of the
CombiPatch Product.
"COMBIPATCH KNOW-HOW" means any and all data, information, technology,
know-how, processes, techniques, methods, skills, proprietary information, trade
secrets, developments, discoveries, and inventions, whether or not patentable or
reduced to practice, owned by the Seller or its Affiliates, solely or jointly
with Noven, or controlled by the Seller or its Affiliates and related to the
CombiPatch Product and existing as of the Closing Date.
"COMBIPATCH PRODUCT" means the transdermal estrogen/progestin product
which has and is being developed by Noven solely or jointly with the Seller
and/or its Affiliates, and is marketed and sold by the Seller and its Affiliates
under the trademark CombiPatch(TM) in the Territory as of the Closing Date.
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
"CONFIDENTIAL INFORMATION" means all proprietary data, know-how and
related information, including all INDs, NDAs, Regulatory Approvals, the content
of any unpublished patent applications, operating methods and procedures,
marketing, distribution and sales methods and systems, sales figures and other
business information and shall include, without limitation, information
disclosed or accessed pursuant to Sections 7.2 (Right of Reference) and 7.3
(Adverse Event Reports and Provision of Safety Information) hereof.
"CONSIDERATION" means twenty-five million United States Dollars
($25,000,000), being the aggregate of the Purchase Price and the Service Fee.
"DAMAGES" means all liabilities, demands, obligations, assessments,
judgments, levies, losses, fines, penalties, damages (including but not limited
to compensatory damages), costs and expenses, including, without limitation,
reasonable attorneys', accountants', investigators', and experts' fees and
expenses, reasonably sustained or incurred in connection with the defense or
investigation of any claims, actions or causes of action (including, without
limitation, any proceedings to establish insurance coverage), suits,
deficiencies, regulatory, legal, administrative, arbitration, legislative or
judicial proceedings or investigations.
"DISCLOSING PARTY" has the meaning set forth in Section 10.1(a) hereof.
"EXCLUDED ASSETS" has the meaning set forth in Section 2.3 hereof.
"FDA" means the United States Food and Drug Administration and any
successor agency thereto.
"FDA ACT" means the United States Federal Food, Drug and Cosmetic Act,
as amended, and the regulations promulgated thereunder, as amended from time to
time.
"IND" means an Investigational New Drug Application as defined in the
FDA Act.
"INDEMNITY CAP AMOUNT" has the meaning set forth in Section 11.2(b)
hereof.
"INDEMNITY DEDUCTIBLE AMOUNT" has the meaning set forth in Section
11.2(b) hereof.
"INVENTORY" has the meaning set forth in Section 2.2(a) hereof.
"NDA" means a New Drug Application as defined in the FDA Act.
"NOVARTIS PHARMA 2001 SUBLICENSE AGREEMENT" means the Sublicense
Agreement among the Seller, Xxxxx-Xxxxxxx Xxxxx Inc., Aventis Pharmaceuticals
Products Inc., Xxxxx-Xxxxxxx Xxxxx International Holdings Inc., Noven
Pharmaceuticals, Inc. and Novartis Pharma AG and executed on the Closing Date.
"NOVARTIS PHARMA SUBLICENSE AGREEMENT" means the Sublicense Agreement
between the Seller and Novartis Pharma AG dated September 30, 1999.
"ONGOING OBLIGATIONS" has the meaning set forth in Section 6.8 hereof.
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
"PERSON" means any corporation, partnership, joint venture, other
entity or natural person.
"PURCHASE PRICE" has the meaning set forth in Section 4.1(a) hereof.
"PURCHASED ASSETS" has the meaning set forth in Section 2.2 hereof.
"PURCHASER'S ANCILLARY DOCUMENTS" has the meaning set forth in Section
5.1(b) hereof.
"PURCHASER INDEMNITEES" has the meaning set forth in Section 11.3
hereof.
"PURCHASER SUBLICENSE LETTER AGREEMENT" means the Letter Agreement
between, inter alia, the Purchaser and Novartis Pharma AG dated March 29, 2001
pursuant to which Novartis Pharma AG shall offer to sublicense to the Purchaser
all of its rights under the Novartis Pharma 2001 Sublicense Agreement in the
Territory on a product-by-product basis.
"REBATES" has the meaning set forth in Section 3.1(d) hereof.
"RECEIVING PARTY" has the meaning set forth in Section 10.1(a) hereof.
"REGULATORY AND CLINICAL MATERIALS" means all documents, supporting
materials and other materials relating to any Regulatory Approval or other
matter required to be submitted to any regulatory authority in relation to the
CombiPatch Product in the Territory, including, without limitation, the IND and
NDA and documents, supporting materials and other materials relating to any drug
master file, investigators' brochures, clinical study (including, without
limitation, any Phase IV clinical study), safety data, adverse event reports,
questionnaires, consultants reports, correspondence (including, without
limitation, correspondence with any regulatory authority), batch reports,
protocols, specifications, quality assurance, quality control, customer queries
and any responses thereto, and any compilation or evaluations thereof, and
question and answer scripts.
"REGULATORY APPROVAL" means filing for and receipt of all governmental
and regulatory registrations and approvals (including, but not limited to,
approvals of all final labeling of the CombiPatch Product) required for the
marketing and sale of the CombiPatch Product in the Territory.
"REGULATORY AUTHORITY" means the U.S. Food and Drug Administration, and
any equivalent regulatory agency in any other country.
"RELATED AGREEMENTS" means the Novartis Pharma 2001 Sublicense
Agreement, the Purchaser Sublicense Letter Agreement, the Amendment Agreement
and the Vivelle License Agreement.
"SAFETY AGREEMENT" has the meaning set forth in Section 7.3(b) hereof.
"SALES AND PROMOTIONAL MATERIALS" means all sales and promotional
materials, advertising literature, physical manifestations of all web site
content and web site artwork associated with the domain name XXXXXXXXXX.XXX,
product support materials, reference materials, programs, trade exhibit
materials, signage, training materials, promotional items and giveaways,
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
including, without limitation, all bluelines, artwork and other materials
related to the development or production thereof, in each case relating
exclusively to the CombiPatch Product or such parts thereof as relate
exclusively to the CombiPatch Product. The parties agree to deal with Sales and
Promotional Materials that bear the corporate name or corporate logo of the
Seller or any of its Affiliates on a case-by-case basis.
"SELLER INDEMNITEES" has the meaning set forth in Section 11.2 hereof.
"SELLER'S ANCILLARY DOCUMENTS" has the meaning set forth in Section
5.2(b) hereof.
"SERVICE FEE" has the meaning set forth in Section 4.1(a) hereof.
"SUBLICENSED NOVEN INTELLECTUAL PROPERTY" means Noven's Patent Rights
and Noven's Technology (as each such term is defined in the Noven License
Agreement) which are licensed to the Seller pursuant to the Noven License
Agreement.
"TERRITORY" means the United States and its territories and
possessions.
"TRADE DRESS" means the total image of the CombiPatch Product and its
packaging, including, without limitation, the color, color combinations,
graphics and overall design of the CombiPatch Product packaging and the color
and shape of the CombiPatch patch. Notwithstanding the foregoing, the Trade
Dress shall not include the name "Aventis" or any corporate logo or corporate
xxxx of the Seller.
"TRADEMARKS" means the CombiPatch(TM), Estalis(R), and Estrelle(TM)
trademarks, in each case including all pending applications and registrations
therefor and all Trade Dress and goodwill associated with any of the foregoing.
***.
"VIVELLE" means Vivelle Ventures LLC, a Delaware limited liability
company and, for the purposes of this Agreement and the rights exercised by,
actions taken by, deliveries made to and obligations performed by the Purchaser
hereunder shall mean any Affiliate of Vivelle acting on behalf of or for the
benefit of Vivelle.
"VIVELLE LICENSE AGREEMENT" means the License and Assignment Agreement
between Noven and the Purchaser dated on the Closing Date.
1.2 RIGHTS AND OBLIGATIONS OF THE PURCHASER. The rights granted to the
Purchaser hereunder and the obligations assumed by the Purchaser hereunder may
be exercised and performed by, and any actions to be taken by or deliveries to
be made to the Purchaser may be taken by or delivered to, the Purchaser or any
other Person acting on behalf of the Purchaser, including, without limitation,
Noven and Novartis Pharmaceuticals Corporation.
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Securities and Exchange Commission. Asterisks denote omissions.
1.3 PRODUCT FORMULATED AS OF THE DATE HEREOF. Wherever, in this
Purchase Agreement, reference is made to the CombiPatch Product "formulated as
of the date hereof", such expression may include different dosage strengths of
the CombiPatch Product. To be considered CombiPatch Product "formulated as of
the date hereof", such formulation must ***.
ARTICLE II.
PURCHASE AND SALE OF ASSETS
2.1 PURCHASE AND SALE OF ASSETS. On the terms and conditions of this
Purchase Agreement, at the Closing the Seller, and APPI, as the case may be,
shall sell, transfer, convey, assign and deliver to the Purchaser, and the
Purchaser shall purchase and accept, all right, title and interest in and to the
Purchased Assets. The Purchased Assets shall be sold to the Purchaser free and
clear of any liens, title claims, encumbrances or security interests.
2.2 THE PURCHASED ASSETS. The "PURCHASED ASSETS" consist of the
following items and no others:
(a) INVENTORY. All complete lots of the Seller's or its
Affiliates' finished, packaged trade lot inventory and samples of the CombiPatch
Product existing as of the date hereof which are labeled for sale, distribution
or use in the Territory, and are in any of the Seller's or any of its
Affiliate's distribution centers, any third party distribution centers or are in
transit from the site of manufacturing to such distribution centers, excluding
any of such CombiPatch Product held in quarantine and also excluding samples in
the possession or control of the Seller's or its Affiliates' sales
representatives (collectively, the "Inventory"), and all warranties regarding
the Inventory provided by Noven pursuant to the Noven License Agreement and the
related Supply Agreement, dated as of June 26, 1992, between an Affiliate of the
Seller and Noven, and all placebos currently held for use by the Seller or its
Affiliates in the Territory. The Inventory as at the Closing Date is listed in
SCHEDULE 2.2(A);
(b) CUSTOMER AND OTHER INFORMATION. Originals or duplicate
copies of all customer lists, customer records and information, and books and
records held by the Seller and its Affiliates on the Closing Date which relate
to the marketing, advertising, promotion, sale and distribution of the
CombiPatch Product in the Territory, in each case relating exclusively to the
CombiPatch Product or such parts thereof as relate exclusively to the CombiPatch
Product, and in each case, whether created before or after launch of the
CombiPatch Product in the Territory;
(c) CONTRACTS. To the extent assignable, all of the contracts
listed in SCHEDULE 2.2(c)
(d) SALES AND PROMOTIONAL MATERIALS. All Sales and Promotional
Materials approved for use in the Territory, whether approved before or after
launch of the CombiPatch Product in the Territory, and, if any, in draft form or
currently subject to approval for use in the Territory, and held by the Seller
or its Affiliates on the Closing Date, excluding Sales and Promotional Materials
in the possession or control of the Seller's or its Affiliates' sales
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Securities and Exchange Commission. Asterisks denote omissions.
representatives on the Closing Date, and all rights to such Sales and
Promotional Materials, including, without limitation, all copyrights therein;
PROVIDED, HOWEVER, that any original materials which are associated with both
XXXXXXXXXX.XXX and XXXXXXXXXXXXXXXX.XXX shall be transferred, assigned and
delivered to Novartis Pharma AG pursuant to the Novartis Pharma 2001 Sublicense
Agreement;
(e) REGULATORY APPROVAL MATERIALS. The INDs, NDAs and other
Regulatory Approvals listed in SCHEDULE 2.2(E) and all ongoing communications
with regulatory agencies related thereto and the Regulatory and Clinical
Materials;
(f) COMBIPATCH KNOW-HOW. All of the Seller's and its
Affiliates' right, title and interest in any CombiPatch Know-How existing as of
the Closing Date, which CombiPatch Know-How is listed in SCHEDULE 2.2(F); and
(g) TRADEMARKS. The Trademarks in the Territory, together with
all goodwill associated with the CombiPatch Business in the Territory,
including, but not limited to: (a) all registrations and pending applications
for the Trademarks in the Territory, as set forth in SCHEDULE 2.2(G); (b)
renewals thereof; (c) all income, royalties, damages and payments hereafter due
and/or payable with respect thereto, including, without limitation, damages and
payment for future infringements thereof; and (d) the right to xxx for past,
present or future infringement thereof. For the avoidance of doubt, the
Purchased Assets do not include any rights to the Trademarks outside the
Territory, including, without limitation: (y) all income, royalties, damages and
payments hereafter due and/or payable with respect thereto outside the
Territory, including, without limitation, damages and payment for future
infringements thereof; and (z) the right to xxx for past, present or future
infringement thereof outside the Territory.
2.3 EXCLUDED ASSETS. Notwithstanding anything to the contrary contained
herein, and subject to the transfer of any of the rights, title and interest in
assets transferred or to be transferred by the Seller and its Affiliates under
any of the Related Agreements, the Purchased Assets shall not include, and the
Seller and its Affiliates shall retain all of its rights, title and interest in
and to, all assets, properties or rights of the Seller and its Affiliates other
than those specifically enumerated as Purchased Assets in Section 2.2 (the
"EXCLUDED ASSETS"). Without limiting the generality of the foregoing, the
Purchased Assets shall not include (a) any accounts receivable or other right to
receive payment arising out of or relating to the CombiPatch Product sold by the
Seller or its Affiliates on or before the Closing Date; or (b) any right, title
or interest in the Seller's or any of its Affiliates' corporate name, corporate
service xxxx or corporate logo or NDC numbers used with respect to the
CombiPatch Product, other than as set forth in Section 6.4.
2.4 DISCLAIMER OF OTHER REPRESENTATIONS AND WARRANTIES. Except as
expressly set forth in this Purchase Agreement, the Seller makes no
representation or warranty, express or implied, at law or in equity, in respect
of any of the Inventory or other Purchased Assets, and any such other
representations or warranties are hereby expressly disclaimed.
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Securities and Exchange Commission. Asterisks denote omissions.
2.5 PHYSICAL TRANSFER OF INVENTORY AND CERTAIN OTHER PURCHASED ASSETS.
On the Closing Date, the Seller and its Affiliates shall transfer to the
Purchaser, or its designee, title to, and physical possession of:
(a) the Inventory; PROVIDED, that the Seller shall provide physical
possession to the Purchaser on the day after Closing of the amount of Inventory
identified by the Purchaser as sufficient to meet its requirements for at least
three (3) business days, with the remainder of the Inventory to be delivered
within two (2) business days of the Closing and PROVIDED, FURTHER, that risk to
the Inventory shall not pass to the Purchaser until delivery, on a lot by lot
basis, to the Purchaser or its designee;
(b) the customer lists, customer records and information identified in
Section 2.2(b);
(c) all INDs, NDAs, Regulatory Approvals and other material identified
in Section 2.2(e); and
(d) documents and other materials containing or evidencing the
CombiPatch Know-How, and the Purchaser shall be responsible for all marketing,
advertising, promotion, sale and distribution of the CombiPatch Product in the
Territory after the Closing Date. From and after the Closing Date the Seller and
its Affiliates shall refer to the Purchaser all orders, requests and inquiries
regarding the CombiPatch Product.
2.6 PHYSICAL TRANSFER OF OTHER PURCHASED ASSETS. As soon as practicable
after the Closing Date, but in no event later than one calendar month after the
Closing Date, the Seller and its Affiliates shall transfer physical possession
of:
(a) the information, books and records described in Section 2.2(b),
other than the information, books and records delivered on the Closing Date
pursuant to Section 2.5 hereof;
(b) the contracts listed in SCHEDULE 2.2(C);
(c) the Sales and Promotional Materials; and
(d) the Regulatory and Clinical Materials, other than as set forth in
Section 2.5(c) hereof, to the Purchaser. Further, as soon practicable after the
Closing Date, but in no event later than two (2) calendar months after the
Closing Date, the Seller shall provide a written declaration to the Purchaser
certifying that all Sales and Promotional Materials in the possession or control
of the Seller's and its Affiliates' sales representatives on the Closing Date
have been destroyed.
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Securities and Exchange Commission. Asterisks denote omissions.
ARTICLE III.
ASSUMPTION OF LIABILITIES
3.1 ASSUMPTION OF ASSUMED LIABILITIES. Subject to the terms and
conditions of this Purchase Agreement, as of the Closing Date, the Purchaser
shall assume, and shall be solely and exclusively liable with respect to, and
shall pay, perform, discharge and satisfy when due, the following liabilities of
the Seller (collectively, the "ASSUMED LIABILITIES"):
(a) all liabilities of the Seller under any portion of any contract
included in the Purchased Assets which according to such contract relate to
periods after the Closing Date and are to be paid, performed, discharged or
satisfied after the Closing Date; PROVIDED, HOWEVER the Seller shall retain the
balance of the liabilities under such contracts including without limitation,
all accounts payable as of the Closing Date;
(b) all liabilities (i) arising out of the use, storage, handling, sale
or other disposal of the CombiPatch Product sold or otherwise disposed of in the
Territory following the Closing Date, including, without limitation, all
liabilities for product liability, returned goods and Rebates; and (ii) arising
from or relating to the storage, handling or use of any Inventory by or on
behalf of the Purchaser or any of its Affiliates at any time after the delivery
of the Inventory to the Purchaser pursuant to Section 2.5; PROVIDED, HOWEVER,
that the Seller and its Affiliates shall retain all liabilities (A) arising out
of the use, sale or other disposal of the CombiPatch Product sold or otherwise
disposed of on or before the Closing Date, including, without limitation, all
liabilities for product liability, returned goods and Rebates; and (B) arising
from or relating to the storage, handling or use of any Inventory by or on
behalf of the Seller or any of its Affiliates at any time prior to the delivery
of the Inventory to the Purchaser pursuant to Section 2.5;
(c) Subject to Section 3.1(b) above, all liabilities in respect of any
CombiPatch Product warranties and any returned CombiPatch Product for any
CombiPatch Product sold or otherwise disposed of after the Closing Date;
PROVIDED, HOWEVER, that in respect of such liabilities attributable to any
CombiPatch Product that is returned without solicitation or inducement by the
Purchaser and in accordance with the Seller's returned goods policy and
practices, and that was sold by the Seller or its Affiliates on or before the
Closing Date, the Seller shall reimburse the Purchaser within thirty (30) days
of being invoiced by the Purchaser for the costs of replacing such CombiPatch
Product or the rebate or credit issued in lieu of such replacement; PROVIDED,
FURTHER, that the cumulative total of such invoices shall not exceed ***, that
the Seller shall not be liable for any CombiPatch Product returned more than ***
after the Closing Date and that, on request by the Seller the Purchaser will
provide the Seller with copies of such backup documentation as is reasonably
necessary to the Seller to support Purchaser's reimbursement claims under this
Section 3.1(c), including without limitation invoices showing the number of
pieces returned and the lot number of each such piece. A copy of the Seller's
returned goods policy is attached hereto as SCHEDULE 3.1(c); and
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(d) all liabilities in respect of all governmental and non-governmental
chargebacks, rebates or discounts with respect to the CombiPatch Product
(collectively, "REBATES"); PROVIDED, HOWEVER, that the Purchaser shall not
assume, and the Seller and its Affiliates shall retain:
(i) in relation to any Rebate for which payment is
referable to an event with an Activity Date, such liabilities with
respect to Rebates with an Activity Date on or prior to the Closing
Date; and
(ii) in relation to all other Rebates, such
liabilities with respect to Rebates which relate to any CombiPatch
Product sold or otherwise disposed of by or on behalf of the Seller or
its Affiliates; PROVIDED, HOWEVER, that, with respect to Rebates
related to Contracts assigned by the Seller to the Purchaser that are
billed on a quarterly basis the Seller shall only retain such
liabilities, and will make all payments to the relevant parties for
Rebates, for *** after the last day of the quarter in which the Closing
Date falls. Notwithstanding the foregoing, the Purchaser shall
reimburse the Seller, within forty-five (45) days of invoice or other
written request for payment, for the amount of any such payments to the
extent that they relate to Rebates which relate to any CombiPatch
Product sold or otherwise disposed of by or on behalf of the Purchaser
after the Closing Date; PROVIDED, HOWEVER, that on request by the
Purchaser, the Seller will provide the Purchaser with copies of such
backup documentation as is reasonably necessary to the Purchaser to
support the Seller's reimbursement claims under this Section 3.1(d).
3.2 EXCLUDED LIABILITIES. Except for the Assumed Liabilities and the
Purchaser's other obligations under this Purchase Agreement and the Related
Agreements, the Seller and its Affiliates shall retain and the Purchaser is not
assuming and will not in any way be liable or responsible for any liabilities,
obligations or indebtedness of the Seller or its Affiliates, whether relating to
the Purchased Assets or otherwise, of any kind or nature whatsoever, whether due
or to become due, absolute or contingent, direct or indirect, asserted or
unasserted, including, without limitation, claims relating to product defects,
warranties and/or destruction of any CombiPatch Product.
3.3 RETENTION OF RIGHTS. Nothing in this Purchase Agreement shall
impair or limit the right and ability of the Seller or any Affiliate or
sublicensee of the Seller to make or have made CombiPatch Product in the
Territory solely for the purpose of selling or transferring such CombiPatch
Product to Affiliate(s), permitted sublicensees and/or unaffiliated third
parties for development, marketing, distribution, sale or use in Japan, or
pursuant to the Novartis Pharma Sublicense Agreement.
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ARTICLE IV.
PURCHASE PRICE, MANNER OF PAYMENT AND CLOSING
4.1 PURCHASE PRICE AND SERVICE FEE. (a) The purchase price (the
"PURCHASE PRICE") of the Purchased Assets shall equal:
(i) *** for the Purchased Assets (other than the Inventory);
plus
(ii) the Seller's standard costs for the Inventory which
allocated value is *** as of the Closing Date.
Further, in consideration of the transition services to be provided pursuant to
Sections 6.1 (Transition Manager) and 7.1 (Transfer of Regulatory Approvals)
hereof, the Purchaser shall pay to the Seller a service fee ("SERVICE FEE") of
***.
(b) ***.
4.2 MANNER OF PAYMENT OF THE PURCHASE PRICE AND SERVICE FEE. On the
Closing Date, the Purchaser shall pay to the Seller the Purchase Price and the
Service Fee by payment of an amount equal to twenty-five million United States
Dollars ($25,000,000) by wire transfer to an account or accounts designated in
writing by the Seller.
4.3 TIME AND PLACE OF CLOSING. The closing of the Transaction
contemplated by this Purchase Agreement shall be consummated (the "CLOSING") at
10:00 a.m. at the offices of White & Case LLP, 1155 Avenue of the Americas, New
York, New York on the Closing Date or at such other place as the parties
determine. The Closing shall be deemed to be effective as of 11:59 p.m. on the
Closing Date.
4.4 CONDITIONS TO CLOSING. Each party's obligation to carry out the
transactions contemplated by this Purchase Agreement shall be subject to: (a)
receipt of all necessary consents from third parties, including governmental
authorities other than the FDA for the transfer of the Regulatory Approvals; (b)
the execution by the relevant parties thereto of each of the Related Agreements;
and (c) the Seller's, APPI's and their respective Affiliates' compliance with
their obligations pursuant to Section 4.6.
4.5 CLOSING DELIVERIES. In addition to the deliveries contemplated
under Section 2.5, at the Closing, the parties shall execute and deliver such
bills of sale, assignments, documents of title, instruments of assumption,
closing certificates and other documents as are reasonably required in order to
effectuate the consummation of the transaction contemplated hereby. All
documents to be delivered by a party shall be in form and substance reasonably
satisfactory to the other party. Without limiting the foregoing, at the Closing
the Seller and/or APPI, as the case may be, shall deliver to the Purchaser:
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(a) a xxxx of sale for the Inventory, in the form attached as EXHIBIT A
hereto, which includes a schedule listing the Inventory as at the Closing Date;
(b) a letter from the Seller to the FDA, in the form attached as
EXHIBIT B hereto, notifying the FDA of the transfer of the Regulatory Approvals
to the Purchaser; and
(c) such duly executed forms and documentation as may be required by
the Purchaser to effect the transfer of the Trademarks to the Purchaser in the
Territory.
4.6 SELLER'S OBLIGATIONS PENDING CLOSING. Except as otherwise agreed in
writing, from the date hereof until the Closing, the Seller, APPI, and their
respective Affiliates shall:
(a) conduct the CombiPatch Business only in accordance with its usual,
regular and ordinary course of business in substantially the same manner as
conducted prior to the date hereof, service all reasonable demand for the
CombiPatch Product in the Territory, and take no actions to affect the price of
the CombiPatch Product in the Territory;
(b) maintain the Purchased Assets in good and workmanlike manner;
(c) do nothing to damage the goodwill associated with the CombiPatch
Business in the Territory or the Trademarks in the Territory;
(d) maintain the Contracts in full force and effect, and comply with
all material obligations under the Contracts;
(e) not sell, transfer, lease, mortgage, encumber or otherwise dispose
of any interest in any of the Purchased Assets other than in the ordinary course
of business; and
(f) allow the Purchaser and its representatives access to the books,
records, and employees of the Seller at all times reasonably requested by the
Purchaser to verify the Seller's and its Affiliates' compliance with the
foregoing obligations.
ARTICLE V.
REPRESENTATIONS AND WARRANTIES
5.1 PURCHASER'S REPRESENTATIONS AND WARRANTIES. The Purchaser
represents and warrants to the Seller as of the date hereof and the Closing Date
that:
(a) ORGANIZATION. The Purchaser is a limited liability company duly
organized, existing and in good standing, under the laws of the State of
Delaware.
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(b) POWER, AUTHORITY AND ENFORCEABILITY. The Purchaser has full power
and authority to enter into and perform this Purchase Agreement, the Related
Agreements to which it is a party and all documents and instruments to be
executed by the Purchaser pursuant to this Purchase Agreement (collectively, the
"PURCHASER'S ANCILLARY DOCUMENTS"). This Purchase Agreement, the Related
Agreements and the Purchaser's Ancillary Documents have been duly executed and
delivered by duly authorized signatories of the Purchaser. This Purchase
Agreement, the Related Agreements and the Purchaser's Ancillary Documents are
valid and binding obligations of the Purchaser, enforceable against the
Purchaser in accordance with their respective terms.
(c) CONSENTS. Except for the consents obtained on or prior to the
Closing Date pursuant to Section 4.4 hereof and the notice to the FDA described
in Section 4.5 hereof, no consent, authorization, order or approval of, or
filing or registration with, any governmental authority or other Person is
required for the execution and delivery by the Purchaser of this Purchase
Agreement, the Related Agreements to which it is a party and the Purchaser's
Ancillary Agreements, and the consummation by the Purchaser of the Transaction
contemplated by this Purchase Agreement, the Related Agreements and the
Purchaser's Ancillary Documents.
(d) NO VIOLATION. Neither the execution and delivery of this Purchase
Agreement, the Related Agreements to which it is a party and the Purchaser's
Ancillary Documents by the Purchaser, as the case may be, nor the consummation
by the Purchaser of the Transaction contemplated hereby and thereby, will
conflict with or result in a breach of any of the terms, conditions or
provisions of the Purchaser's Operating Agreement or other governing or charter
document, or of any statute or administrative regulation, or of any order, writ,
injunction, judgment or decree of any court or governmental authority or of any
arbitration award or any agreement binding upon the Purchaser or its assets.
(e) NO DEFAULT. The Purchaser is not a party to any unexpired,
undischarged or unsatisfied written or oral contract, agreement, indenture,
mortgage, debenture, note or other instrument under the terms of which
performance by the Purchaser according to the terms of this Purchase Agreement
and the Related Agreements will be a default, or whereby timely performance by
the Purchaser according to the terms of this Purchase Agreement and the Related
Agreements may be prohibited, prevented or delayed.
(f) LITIGATION. There is no action or proceeding pending or, to
knowledge of the Purchaser, threatened against the Purchaser or any of its
Affiliates before any court, arbitrator, administrative agency or other tribunal
which could have a material adverse impact upon the Purchaser's right, power and
authority to enter into this Purchase Agreement and the Related Agreements, to
receive the rights granted to the Purchaser hereunder and thereunder, to grant
the rights granted to the Seller hereunder or thereunder or to otherwise carry
out its obligations hereunder or thereunder.
5.2 SELLER'S AND APPI'S REPRESENTATIONS AND WARRANTIES. The Seller and
APPI, as the case may be, each represents and warrants to the Purchaser as of
the date hereof and the Closing Date that:
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(a) ORGANIZATION. Each of the Seller and APPI is a corporation duly
organized, existing and in good standing, under the laws of the State of
Delaware. The Seller and its Affiliates have all necessary corporate power and
authority to market and sell the CombiPatch Product in the Territory as such
activities are now being conducted.
(b) POWER, AUTHORITY AND ENFORCEABILITY. Each of the Seller and APPI
has full corporate power and authority to enter into and perform this Purchase
Agreement, the Related Agreements to which it is a party and all documents and
instruments to be executed by the Seller or APPI, as the case may be, pursuant
to this Purchase Agreement (collectively, the "SELLER'S ANCILLARY DOCUMENTS").
This Purchase Agreement, the Related Agreements to which it is a party and the
Seller's Ancillary Documents have been duly executed and delivered by duly
authorized signatories of the Seller or APPI, as the case may be. This Purchase
Agreement, the Related Agreements to which it is a party and the Seller's
Ancillary Documents are valid and binding obligations of the Seller or APPI, as
the case may be, enforceable against the Seller or APPI, as the case may be, in
accordance with their respective terms.
(c) COMPLIANCE WITH LAW. The Seller, and its operation of the
CombiPatch Business, is and has been in compliance in all respects with any and
all applicable law (statutory, judicial or otherwise), ordinances, regulations,
judgments, orders, directives, injunctions, writs, decrees or awards of any
governmental authority.
(d) CONSENTS. Except for the consents obtained on or prior to the
Closing Date pursuant to Section 4.4 hereof and the notice to the FDA described
in Section 4.5 hereof, no consent, authorization, order or approval of, or
filing or registration with, any governmental authority or other Person is
required for the execution and delivery by the Seller or APPI, as the case may
be, of this Purchase Agreement, the Related Agreements and the Seller's
Ancillary Documents, and the consummation by the Seller and APPI of the
Transaction contemplated by this Purchase Agreement, the Related Agreements and
the Seller's Ancillary Documents.
(e) NO VIOLATION. Neither the execution and delivery of this Purchase
Agreement, the Related Agreements and the Seller's Ancillary Documents, as the
case may be, nor the consummation by the Seller and APPI of the Transaction
contemplated hereby and thereby, will conflict with or result in a breach of any
of the terms, conditions or provisions of the Seller's or APPI's Certificate of
Incorporation or By-laws, or of any statute or administrative regulation, or of
any order, writ, injunction, judgment or decree of any court or governmental
authority or of any arbitration award or any material agreement binding upon the
Seller, APPI or their respective assets.
(f) NO DEFAULT. Neither the Seller nor APPI is a party to any
unexpired, undischarged or unsatisfied written or oral contract, agreement,
indenture, mortgage, debenture, note or other instrument under the terms of
which performance by the Seller or APPI according to the terms of this Purchase
Agreement and the Related Agreements will be a default, or whereby timely
performance by the Seller or APPI according to the terms of this Purchase
Agreement and the Related Agreements may be prohibited, prevented or delayed.
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(g) TITLE TO PURCHASED ASSETS. The Seller has good and marketable title
to or, as the case may be, a valid contract right in, and the corporate power to
sell, the Purchased Assets (except the Trademarks), free and clear of any liens,
title claims, encumbrances and security interests. APPI has good and marketable
title to or, and the corporate power to sell, the Trademarks, free and clear of
any liens, title claims, encumbrances and security interests. No unreleased
mortgage, trust deed, chattel mortgage, security agreement, financing statement
or other instrument encumbering any of the Purchased Assets has been recorded,
filed, executed or delivered.
(h) NO INCONSISTENT RIGHTS. There are no outstanding assignments,
grants, licenses, obligations or agreements, either written, oral or implied,
materially inconsistent with this Purchase Agreement and the Seller and APPI
have the right to assign the Purchased Assets.
(i) CLAIMS. There is no claim, action or proceeding pending, or to the
knowledge of the Seller or APPI, threatened against the Seller, APPI or any of
their respective Affiliates, before any court, arbitrator, administrative agency
or other tribunal which could have a material adverse impact upon the CombiPatch
Business, any of the Purchased Assets, the Seller's and APPI's right, power and
authority to enter into this Purchase Agreement and the Related Agreements, to
receive the rights granted to the Seller hereunder or thereunder, to grant the
rights granted to the Purchaser hereunder and thereunder or to otherwise carry
out its obligations hereunder or thereunder, and to the knowledge of the Seller
and APPI, there are no grounds for any such claim, action or proceeding.
(j) CONTRACTS. The Seller has disclosed to the Purchaser all material
contracts, agreements and arrangements related to the CombiPatch Product to
which the Seller or any of its Affiliates is a party. Without limiting the
foregoing, the Contracts include all contracts, agreements or arrangements of
the Seller or any of its Affiliates with any city, state or federal agency, or
any retail chain or managed care provider which relate to the CombiPatch
Product. Except as specifically disclosed in SCHEDULE 2.2(C), no consent is
required for the transfer or assignment of any of the Contracts from any third
party, including, without limitation, any party to any of the Contracts.
(k) BOOKS AND RECORDS. The books, records and other materials assigned
under Sections 2.2(b), (d) and (e) contain a complete and accurate record of the
Seller's and its Affiliates' operation of the CombiPatch Business, and do not
contain any statement which is false or misleading in any material respect, or
omit to state any material fact required to be stated in order to make the
statements therein not misleading.
(l) REGULATORY APPROVALS. The Regulatory Approvals listed in SCHEDULE
2.2(E) constitute all of the existing INDs and NDAs and other regulatory or
governmental approvals regarding the CombiPatch Product in the Territory.
(m) INVENTORY. The amount of Inventory at Closing (including any
Inventory ordered and paid for by the Seller, which Inventory shall be delivered
directly to the Purchaser) shall be as set forth in Schedule 5.2(m). The
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Inventory as of the Closing Date consists of items of a quality, condition and
quantity consistent with normal inventory levels of the Seller and its
Affiliates and is usable and saleable in the ordinary and usual course of
business for the purposes for which it is intended. ***.
(n) WARRANTIES. Except as set forth in SCHEDULE 5.2(N), neither the
Seller nor any of its Affiliates have made any oral or written warranties with
respect to the quality or absence of defects in any CombiPatch Product sold in
the Territory which warranties are in force as of the date hereof.
(o) INTELLECTUAL PROPERTY.
(i) To the extent indicated in SCHEDULE 2.2(G), each
of the Trademarks has been duly registered in, filed in or issued by
the United States Patent and Trademark Office, and each such
registration, filing and issuance remains in full force and effect. No
Trademark has been cancelled, abandoned or otherwise terminated and all
renewal and maintenance fees in respect thereof have been duly paid.
There are no oppositions or other contested proceedings, either pending
or, to the best knowledge of the Seller or APPI, threatened, in the
United States Patent and Trademark Office relating to any pending
application with respect to any of the Trademarks.
(ii) APPI has the exclusive right to file, prosecute
and maintain all applications and registrations with respect to the
Trademarks.
(iii) Neither the Seller, APPI nor any of their
respective Affiliates is a party to any license or agreement, whether
as licensor, licensee, or otherwise, with respect to any Trademark or
CombiPatch Know-How except for the Related Agreements and the Novartis
Pharma Sublicense Agreement, and, as of the Closing Date, the Novartis
Pharma 2001 Sublicense Agreement.
(iv) All copies of all items of CombiPatch Know-How
which have been reduced to writing or other tangible form will be or
have been delivered by the Seller to the Purchaser at Closing. There
are no issued patents, or any applications therefor, or licenses
relating to any CombiPatch Know-How, except, to the extent applicable,
the Noven License Agreement.
(v) None of the Seller's or APPI's or any of their
respective Affiliates' use of any of the Trademarks or CombiPatch
Know-How (including, without limitation, the development, marketing,
sale or distribution of the CombiPatch Product and the general conduct
and operations of the CombiPatch Business) violates, infringes,
misappropriates or misuses any intellectual property rights of any
third party.
(vi) Except as set forth in SCHEDULE 5.2(O), neither
the Seller, APPI nor any of their respective Affiliates has received
any written notice or claim from any third party challenging the right
of the Seller, APPI or any of their respective Affiliates to use any of
the Trademarks or CombiPatch Know-How. To the best knowledge of the
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Seller and APPI, with respect to the CombiPatch Business there is no
pending or threatened claims by any third party of a violation,
infringement, misuse or misappropriation by the Seller or any of its
Affiliates of any intellectual property owned by any third party, or
for expungement of any of the Trademarks, and to the best knowledge of
the Seller and APPI, there is no valid basis for any such claims.
(vii) The Seller has secured valid written
assignments, from all consultants and employees who contributed to the
creation or development of any CombiPatch Know-How, of the rights to
such contributions that the Seller does not already own by operation of
law.
(viii) The Seller and its Affiliates have disclosed
the CombiPatch Know-How only in the ordinary course of business. The
Seller, its Affiliates and, to the Seller's knowledge, its
sublicensees, have taken all necessary and reasonable steps to protect
and preserve the confidentiality of all CombiPatch Know-How and all
customer lists related to the CombiPatch Business, and all use,
disclosure or appropriation thereof by or to any third party has been
pursuant to the terms of a written agreement between such third party
and the Seller, its Affiliate or sublicensee or used by the Seller, its
Affiliate or sublicensee in the Regulatory Approvals process.
(ix) The Seller has no actual knowledge indicating
that any use, sale or other disposal of the CombiPatch Product in the
Territory by the Purchaser will infringe any issued third-party patent
right or any patent right of the Seller or any Affiliate of the Seller.
Should the CombiPatch Product fall within a valid claim of a patent
right of the Seller or any Affiliate of the Seller, the Seller shall
grant the Purchaser a royalty-free, fully paid-up, non-exclusive
license sufficient to allow the Purchaser, its Affiliates and
sublicensees, to use, sell or otherwise dispose of the CombiPatch
Product in the Territory.
(p) SUFFICIENCY. The Purchased Assets, together with the rights which
revert to Noven pursuant to the Amendment Agreement, comprise all the intangible
rights and tangible assets necessary for the conduct of the CombiPatch Business
in the Territory and include all the intangible rights actually used in the
conduct of the CombiPatch Business in the Territory in the twelve (12) month
period ending on the Closing Date.
(q) DUE DILIGENCE. All documents, materials, representations and other
information provided or made by or on behalf of the Seller, APPI and their
respective Affiliates to the Purchaser in the course of the Purchaser's due
diligence on the CombiPatch Product, the Purchased Assets and the CombiPatch
Business are complete and accurate, and, taken as a whole, do not contain any
statement which is false or misleading in any material respect or omit to state
any material fact required to be stated in order to make the statements therein
not misleading. The Seller, APPI and their respective Affiliates have produced
to the Purchaser, in the course of the Purchaser's due diligence, all documents
in existence which relate to any category of materials requested by the
Purchaser in the course of the Purchaser's due diligence.
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(r) OTHER AGREEMENTS. Neither the Seller nor any of its Affiliates is a
party to any agreement, arrangement or understanding which relates to the
subject matter of the Noven License Agreement, other than: (i) agreements,
arrangements or understandings which relate only to both Japan and Persons which
are not a party to this Agreement or any Related Agreement, and (ii) the Noven
License Agreement, this Agreement and the Related Agreements.
5.3 KNOWLEDGE. Where a representation or warranty contained in this
Article V is stated to be to a party's knowledge, this shall mean to the actual
knowledge of the party's executive officers and executives or those of the
party's employees working specifically on the Transaction.
5.4 DISCLOSURE SCHEDULE. All exceptions noted in the applicable
schedules to this Purchase Agreement shall be numbered to correspond to the
applicable sections of this Purchase Agreement to which such exception refers;
PROVIDED, HOWEVER, that any disclosure set forth on any particular schedule
shall be deemed disclosed in reference to all applicable schedules.
ARTICLE VI.
POST-CLOSING AGREEMENTS
6.1 TRANSITION MANAGER. For a period of six (6) months commencing on
the Closing Date, the Seller shall make available to the Purchaser its Head of
Regulatory Liaison, or that person's designee, each of whom is familiar with the
CombiPatch Product and the CombiPatch Business, to receive questions from the
Purchaser and to coordinate the timely response (which, in any event, shall be
given within seven (7) days) to such inquiries with regard to the CombiPatch
Product, the Purchased Assets or the Seller's operation of the CombiPatch
Business in the Territory and to assist the Purchaser by providing to the
Purchaser such information in the possession of the Seller as may be reasonably
required by the Purchaser to ensure an orderly transition of the operation of
the CombiPatch Business in the Territory to the Purchaser
6.2 CERTAIN ASSIGNMENTS. Any other provision of this Purchase Agreement
to the contrary notwithstanding, this Purchase Agreement shall not constitute an
agreement to transfer or assign, or a transfer or assignment of, any claim,
contract, lease, commitment, sales order or purchase order, or any benefit
arising thereunder or resulting therefrom, if an attempt at transfer or
assignment thereof without the consent required or necessary for such
assignment, would constitute a breach thereof or in any way adversely affect the
rights of the Purchaser or the Seller thereunder. The Seller shall use its best
efforts to obtain all consents required under such contracts leases, commitments
or orders prior to the Closing and for a period of sixty (60) days thereafter,
and shall keep the Purchaser informed in relation to progress with respect
thereto. The Seller's initial request for each consent shall be by way of a
letter to the other party(s) to each such claim, contract, lease, commitment or
order in substantially the form set forth in EXHIBIT E. During such period, the
parties will cooperate in any arrangement mutually agreed in writing to provide
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the Purchaser the benefits under such claim, contract, lease, commitment or
order. If such a consent or agreement to transfer or assign is not obtained for
any reason after such 60-day period, the Seller shall not be required to
transfer or assign such claim, contract, lease, commitment or order.
6.3 SALES AND TRANSFER TAXES AND FEES. The parties shall share equally
all sales, transfer and/or use taxes, recording fees and personal property title
application fees on transfer of the Purchased Assets and the Assumed Liabilities
arising by virtue of the sale of the Purchased Assets to the Purchaser,
regardless of whether the liability for said taxes or fees is imposed by law
upon the Seller or upon the Purchaser. The parties will cooperate to minimize
all such sales, transfer and/or use taxes, recording fees and personal property
title application fees.
6.4 OVERSTICKERING. The Purchaser shall not distribute any Sales and
Promotional Materials or distribute, sell or otherwise dispose of Inventory of
the CombiPatch Product bearing any corporate name, corporate xxxx or NDC number
of the Seller; PROVIDED, HOWEVER, that for a period of six (6) months following
the Closing Date, the Purchaser may distribute Sales and Promotional Materials
and distribute, sell or otherwise dispose of Inventory of the CombiPatch Product
which have been overstickered such that any corporate name and corporate xxxx of
the Seller are not visible, and PROVIDED, FURTHER, that the Purchaser may
distribute, sell and otherwise dispose of CombiPatch Product bearing the NDC
number of the Seller until the later of: (a) depletion of the Inventory and all
packaging for the CombiPatch Product assigned and transferred to the Purchaser
hereunder; and (b) receipt by the Purchaser of a NDC number for the CombiPatch
Product.
6.5 ADDITIONAL COVENANTS REGARDING PURCHASED ASSETS. The parties agree
to handle post-Closing issues related to certain of the Purchased Assets as
follows:
(a) The Purchaser shall obtain a new NDC number for the CombiPatch
Product promptly after the Closing, but in no event later than five (5) days
after the Closing and shall use commercially reasonable efforts to have its
labeling for CombiPatch Product approved by the FDA and to use such new NDC
number on all invoices, orders and other communications with customers and
regulatory authorities and to communicate such new NDC numbers to its customers
by no later than September 1, 2001.
(b) The Seller shall dispose of all CombiPatch Product trade lots
(including, without limitation, any partial lots), samples and sample coupons
not acquired by the Purchaser hereunder as part of the Inventory, including,
without limitation, the collection and disposal of all samples and sample
coupons in the possession of the Seller's and its Affiliates' sales
representatives as of the Closing Date, and shall certify the results of such
collection and disposal to the Purchaser within sixty (60) days of the Closing.
(c) At or within two (2) days of the Closing, the Seller shall provide
the Purchaser with all purchase orders for CombiPatch Product received by the
Seller or any of its Affiliates: (i) prior to or on the Closing Date but not
fulfilled prior to or on the Closing Date; or (ii) after the Closing Date. The
Purchaser shall be entitled, in its sole discretion, to fulfill such orders in
its own name or to contact the customers to cancel and replace such orders.
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(d) The applicable representatives of the parties shall cooperate to
transition the use of the CombiPatch website materials to minimize the
disruption of any access to the website materials by the public. Without
limiting the foregoing, the Seller shall maintain all such websites pending
their transition to the Purchaser.
6.6 FURTHER ASSURANCES. The parties shall execute such further
documents, and perform such further acts, as may be reasonably necessary to
transfer and convey the Purchased Assets to the Purchaser on the terms herein
contained, and to otherwise comply with the terms of this Purchase Agreement and
consummate the transaction contemplated hereby.
6.7 SURVIVAL OF PROVISIONS. The rights of the respective parties to
make a claim for breach of the representations and warranties made in this
Purchase Agreement shall survive the Closing and remain in full force and
effect: (a) for a period of *** thereafter for all representations and
warranties other than those identified below; (b) *** for the representations
and warranties contained in Section 5.2(o) (Intellectual Property); and (c) ***
for the representations and warranties contained in Sections 5.1(a) (Purchaser's
Organization) and 5.2(a) (Seller's Organization). The obligations of the parties
to perform the covenants, duties and obligations contained in this Purchase
Agreement shall survive the Closing and continue until such covenants, duties
and obligations have been fully performed in accordance with their respective
terms. The provisions of Articles IX (Intellectual Property Claims) , XI
(Indemnification) and XII (Miscellaneous) inclusive and Section 10.1
(Confidentiality; Press Releases) shall also survive termination or expiration
of the Ongoing Obligations.
6.8 ONGOING OBLIGATIONS. The rights and obligations set forth in
Sections 7.2 (Right of Reference), 7.3 (Adverse Event Reports and Provision of
Safety Information), 8.2 (Use of the Trademarks by the Seller and APPI outside
the Territory) and 10.2 (Non-Competition) (collectively, the "ONGOING
OBLIGATIONS") shall commence as of the Closing Date and shall survive until
termination pursuant to this Section 6.8. If either party commits a material
breach of any Ongoing Obligation, or materially defaults in the performance or
observance of any Ongoing Obligation, and (i) such party fails, within sixty
(60) days after receipt of notice of the material breach from the other party,
to remedy such breach or default or to have agreed to a plan for remedy of such
breach or default and (ii) the parties shall have exhausted the dispute
resolution procedures provided in Section 12.1 without resolving their dispute
regarding the material breach; PROVIDED that the time periods contemplated by
the foregoing clauses (i) and (ii) may run concurrently and need not be
sequential, the other party may terminate the rights and obligations of the
parties under the Ongoing Obligations.
ARTICLE VII.
REGULATORY APPROVAL ISSUES
7.1 TRANSFER OF REGULATORY APPROVALS. On the Closing Date, the Seller
shall transfer to the Purchaser or its designee the Regulatory Approvals set
forth in SCHEDULE 2.2(E) hereto. Following such transfer, the Purchaser shall be
solely responsible for obtaining all Regulatory Approvals regarding the
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CombiPatch Product in the Territory, as well as all ongoing regulatory
compliance relating to the CombiPatch Product in the Territory. As of the
Closing Date, the Purchaser and its Affiliates shall retain all ownership of
such Regulatory Approvals. For a period of up to six (6) months after the
Closing Date, the Seller agrees that the Seller and/or its Affiliates shall
reasonably assist the Purchaser by providing information regarding the
regulatory compliance activities performed by the Seller and its Affiliates
prior to the Closing Date in order to ensure an orderly transition of regulatory
responsibilities regarding the CombiPatch Product in the Territory; PROVIDED,
HOWEVER, that nothing in this Section 7.1 shall obligate the Seller to perform
any regulatory-related activities with respect to the CombiPatch Product and/or
the Regulatory Approvals following the Closing Date other than to provide the
requested information.
7.2 RIGHT OF REFERENCE AND ACCESS TO DATA.
(a) ***.
(b) ***.
7.3 ADVERSE EVENT REPORTS AND PROVISION OF SAFETY INFORMATION.
(a) Following the Closing Date, the Purchaser shall be solely
responsible for complying with all legal and/or regulatory obligations in the
Territory regarding the reporting of adverse events related to the CombiPatch
Product after the Closing Date.
(b) Each of the Purchaser and the Seller shall report to the other any
potentially serious alleged adverse drug experiences with respect to the
CombiPatch Product of which it becomes aware promptly, and in no event later
than five (5) business days, after initial receipt of information regarding any
such potentially serious alleged adverse drug experience by such party. Each
such report shall identify lot numbers and customers affected, if known. Each of
the Purchaser and the Seller will report to the other party summaries of any
other adverse drug experiences with respect to the CombiPatch Product of which
it becomes aware every twelve (12) months. The foregoing shall apply only until
the parties establish and implement a procedure for the mutual exchange of
adverse event reports and safety information associated with the CombiPatch
Product. The parties agree that they shall promptly after the Closing Date (if
not completed prior thereto) establish and implement a procedure for the mutual
exchange of adverse event reports and safety information associated with the
CombiPatch Product. Details of such procedure shall be the subject of a Safety
Agreement to be attached to this Purchase Agreement as EXHIBIT C, agreed between
the designated pharmacovigilance primary liaisons of the respective parties. The
Safety Agreement shall be implemented at a time sufficient to permit compliance
with applicable regulatory guidelines and regulations. The Safety Agreement may
be updated by the parties from time to time and expanded in a manner sufficient
to permit compliance with applicable regulatory authority guidelines and
regulations.
(c) Each of the Purchaser and the Seller agrees to supply the other
party on an on-going basis with all necessary safety and stability data relating
to the CombiPatch Product and not otherwise provided hereunder, and necessary to
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such party or its Affiliates and sublicensees with respect to obtaining or
maintaining regulatory approval for the marketing, use or sale of CombiPatch
Product, in the Territory for the Purchaser and outside the Territory for the
Seller. For the avoidance of doubt, nothing in this Section 7.3(c) shall
obligate either party or, its respective Affiliates or sublicensees to provide
the other party with data relating to any specific marketing or sales results.
ARTICLE VIII.
TRADEMARKS
8.1 TRADEMARKS RIGHTS.
(a) OWNERSHIP. The Seller and APPI each acknowledge that after the
Closing Date, the Trademarks in the Territory will belong solely to, and all
goodwill shall inure to the benefit of, the Purchaser. Neither the Seller nor
APPI shall challenge the Purchaser's ownership in or rights to the Trademarks in
the Territory.
(b) MAINTENANCE. The Purchaser will be responsible, in its sole
discretion, for maintaining the registrations for the Trademarks in the
Territory after the Closing Date.
(c) RECORDATION. The assignment papers to be delivered to the Purchaser
in accordance with Section 4.5(c) shall be in recordable form sufficient to
allow Purchaser to record and complete the transfer of ownership of the
Trademarks to Purchaser with the appropriate authorities. The Seller and APPI
each further agree to timely execute any additional papers and cooperate with
the Purchaser to enable the Purchaser to record and complete such transfer
without undue delay.
8.2 USE OF THE TRADEMARKS BY THE SELLER AND APPI OUTSIDE THE TERRITORY.
(a) Except as set forth in the Novartis Pharma Sublicense Agreement,
the Seller and APPI each hereby agree that if they use the Trademarks at all,
they shall use the Trademarks only in Japan, only with respect to the CombiPatch
Product as formulated as of the date hereof and solely in a manner that does not
disparage the Trademarks or the goodwill associated with them. All uses of the
Trademarks by the Seller or APPI shall comply with all applicable laws and
regulations.
(b) The Seller and APPI each covenants on behalf of itself and its
Affiliates and permitted sublicensees, that neither it nor any of its Affiliates
or permitted sublicensees shall, other than as set forth in the Novartis Pharma
Sublicense Agreement: (i) use or register the Trademarks outside Japan, (ii)
sell, outside of Japan, any product bearing any Trademark which is a combination
estrogen/progestin in a polymer adapted for transdermal delivery, including,
without limitation, the CombiPatch Product, or (iii) sell any product bearing
any Trademark which is a combination estrogen/progestin in a polymer adapted for
transdermal delivery, including, without limitation, the CombiPatch Product, to
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any Person (other than the Purchaser or its Affiliates) that Seller (or its
applicable Affiliate or sublicensee) knows or has reason to know, or believes,
will sell such combination estrogen/progestin in a polymer adapted for
transdermal delivery outside Japan; PROVIDED, HOWEVER, that such refusal to sell
is not in violation of any applicable valid laws and regulations.
8.3 REGISTRATION OF TRADEMARKS. The Seller and APPI each covenants on
behalf of itself and its Affiliates and permitted sublicensees that neither it
nor any of its Affiliates or sublicensees shall seek to: (i) register the
Estalis Trademark in any country except for Japan and those countries in the
"territory" as defined in the Novartis Pharma Sublicense Agreement; or (ii)
register the CombiPatch or Estrelle Trademarks in any country outside of Japan.
The Purchaser agrees that in the event the Seller or APPI seeks to register any
Trademark in compliance with the foregoing, it shall, if required by the Seller
or APPI, consent to, and shall not oppose, the registration of such Trademark by
the Seller or APPI in any such country, provided that the Seller and APPI are
each otherwise in full compliance with this Purchase Agreement. The Purchaser
covenants on behalf of itself and its Affiliates and permitted sublicensees that
neither it nor any of its Affiliates or sublicensees shall seek to: (i) register
the Estalis Trademark in any country in the "territory" as defined in the
Novartis Pharma Sublicense Agreement or in Japan; or (ii) register the
CombiPatch or Estrelle Trademarks in Japan. The Seller and APPI each agree that
in the event the Purchaser seeks to register any Trademark in compliance with
the foregoing, they shall, if required by the Purchaser, consent to, and shall
not oppose, the registration of such Trademark by the Purchaser in any such
country, provided that the Purchaser is otherwise in full compliance with this
Purchase Agreement.
ARTICLE IX.
INTELLECTUAL PROPERTY CLAIMS
9.1 INFRINGEMENT OR OTHER ACTIONS REGARDING THE COMBIPATCH KNOW-HOW.
(a) If either party shall become aware of any infringement or
threatened infringement of the CombiPatch Know-How or any unfair competition,
disparagement or other tortious act by any third party in relation to the
CombiPatch Know-How, then the party having such knowledge shall give prompt
notice thereof to the other party.
(b) The Purchaser, its Affiliates and sublicensees, shall have the
right to take such action as it deems appropriate to protect and enforce the
CombiPatch Know-How in the Territory, including but not limited to, bringing an
action, suit or other appropriate proceeding to prevent or eliminate the
infringement of such CombiPatch Know-How, or the unfair competition,
disparagement or other tortious act by any third party in relation to the
CombiPatch Know-How in the Territory. The Seller agrees to cooperate with the
Purchaser in any reasonable manner requested by the Purchaser in any such
action, suit or proceeding, at the expense of the Purchaser, its Affiliates or
sublicensees, as appropriate, including, without limitation, joining as a party
to such action, suit or proceeding, if necessary to maintain standing.
(c) The Purchaser, its Affiliates and sublicensees, shall consult with
the Seller with respect to its decision whether to take any action of the nature
specified in Section 9.1(b), giving due consideration to the Seller's views with
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respect to the necessity or desirability of taking such action. All amounts
awarded as damages, profits or otherwise in connection with any action taken by
the Purchaser, its Affiliates and sublicensees, shall be ***. If the Purchaser,
its Affiliates and sublicensees, elect not to take any action of the nature
specified in Section 9.1(b), the Purchaser shall give the Seller notice of such
decision, and the Seller thereafter shall have the right to take any action of
the nature specified in Section 9.1(b) with respect to the use of the CombiPatch
Know-How in the Territory. In such event, all amounts awarded as damages,
profits or otherwise in connection with any action taken by the Seller shall be
***.
9.2 INFRINGEMENT OR OTHER ACTION REGARDING THE TRADEMARKS.
(a) If the Seller or APPI becomes aware of any infringement or
threatened infringement of any of the Trademarks in the Territory, or of any
unfair competition, disparagement or other tortious act by any third party in
relation thereto, then the Seller and APPI shall give prompt notice thereof to
the Purchaser.
(b) The Purchaser shall have the exclusive right to take such action as
it deems appropriate to protect and enforce the Trademarks in the Territory,
including but not limited to, bringing an action, suit or other appropriate
proceeding to prevent or eliminate the infringement or threatened infringement
or the unfair competition, disparagement or other tortious act by any third
party in relation to the Trademarks in the Territory. The Seller and APPI each
agree to cooperate with the Purchaser in any reasonable manner requested by the
Purchaser in any such action, suit or proceeding, at the Purchaser's expense,
including, without limitation, joining as a party to such action, suit or
proceeding, if necessary to maintain standing.
9.3 THIRD PARTY CLAIMS REGARDING THE TRADEMARKS. If the Seller or APPI
becomes aware of any action, suit or proceeding or threat of action, suit or
proceeding, by a third party alleging that the use of the Trademarks infringes
or violates any other intellectual property right of any third party, they shall
promptly notify the Purchaser of the same and fully disclose the basis therefor.
9.4 OTHER THIRD PARTY INFRINGEMENT CLAIMS. If either the Seller or APPI
becomes aware of any action, suit or proceeding or threat of action, suit or
proceeding, by a third party alleging that the manufacture, use, import or sale
of the CombiPatch Product in the Territory infringes or violates any other
intellectual property right of any third party, they shall promptly notify the
Purchaser of the same.
ARTICLE X.
CONFIDENTIALITY AND NONCOMPETITION
10.1 CONFIDENTIALITY; PRESS RELEASES.
(a) Each of the Purchaser and the Seller and/or their respective
Affiliates (in such capacity, the "DISCLOSING PARTY") have disclosed and will be
disclosing to the other party and/or its Affiliates (in such capacity, the
"RECEIVING PARTY") certain Confidential Information of the Disclosing Party. The
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Receiving Party shall make no use of such Confidential Information except as
expressly permitted in this Purchase Agreement, or, in the case of the Purchaser
only, in the conduct of the CombiPatch Business in the Territory. The Receiving
Party shall use the same efforts to keep secret, and prevent the disclosure to
third parties of, Confidential Information of the Disclosing Party as it would
use with respect to its own Confidential Information. Confidential Information
disclosed by the Disclosing Party shall remain the sole and absolute property of
the Disclosing Party, subject to the rights granted in this Purchase Agreement
and the transactions contemplated herein. The above restrictions on the use and
disclosure of Confidential Information shall not apply to any information which:
(i) is already known to the Receiving Party at the time of disclosure by the
Disclosing Party, as demonstrated by competent proof; (ii) is or becomes
generally available to the public other than through any act or omission of the
Receiving Party in breach of this Purchase Agreement; (iii) is acquired by the
Receiving Party from a third party who is not, directly or indirectly, under an
obligation of confidentiality to the Disclosing Party with respect to same; or
(iv) is developed independently by the Receiving Party without use, direct or
indirect, of information that is required to be held confidential hereunder.
In the event the Receiving Party is required: (i) by law, rule or
regulation to disclose Confidential Information of the Disclosing Party to
regulatory authorities to obtain and maintain Regulatory Approval for the
CombiPatch Product; (ii) to disclose Confidential Information of the Disclosing
Party to respond to a regulatory or governmental inquiry concerning the
CombiPatch Product; or (iii) to disclose Confidential Information of the
Disclosing Party in a judicial, administrative or arbitration proceeding to
enforce such party's rights under this Purchase Agreement, it may do so only if
it: (A) provides the Disclosing Party with as much advance written notice as
possible of the required disclosure; (B) cooperates with the Disclosing Party in
any attempt to prevent or limit the disclosure; and (C) limits disclosure, if
any, to the specific purpose at issue.
(b) Notwithstanding the provisions of this Section 10.1, the Purchaser
shall be permitted to disclose to its distributors, wholesalers and other direct
customers such Confidential Information relating to the CombiPatch Product as
the Purchaser shall reasonably determine to be necessary or useful in order to
effectively market and distribute the CombiPatch Product; PROVIDED that such
entities undertake substantially the same confidentiality obligation as the
Purchaser has with respect to the Seller's Confidential Information.
(c) Notwithstanding any other provision of this Purchase Agreement, for
purposes of this Section 10.1, the CombiPatch Know-How shall be treated by the
parties as Confidential Information of the Purchaser; PROVIDED, HOWEVER, that
the Purchaser hereby consents to the use of the CombiPatch Know-How by the
Seller and its distributors and sublicensees in accordance with the Seller's
right to use the Assigned Licensed Product Know-How (as defined in the Novartis
Pharma 2001 Sublicense Agreement) pursuant to the Novartis Pharma 2001
Sublicense Agreement and PROVIDED, FURTHER, that the CombiPatch Know-How is
disclosed only to Persons bound by obligations of confidentiality no less
stringent than those of the Seller under this Section 10.1 with respect to the
CombiPatch Know-How.
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(d) Except as may be required by applicable laws, rules or regulations,
no party will originate any publicity, press or news release, or other public
announcement, written or oral, whether to the public press or otherwise,
relating to this Purchase Agreement or the Related Agreements, the transactions
contemplated hereby or thereby, or to the existence of an arrangement between
the parties, without the prior written approval of the other party; PROVIDED,
HOWEVER, that (i) the Seller hereby approves, for release by the Purchaser and
its Affiliates, on or after the date of this Purchase Agreement, the press
release attached hereto as EXHIBIT D; and (ii) the Seller shall not originate
any such publicity, press or news release, or other public announcement, until
after the release by the Purchaser or any of its Affiliates of the press release
attached hereto as EXHIBIT D. In the event disclosure of this Purchase Agreement
or any of the Related Agreements, any of the terms and conditions of this
Purchase Agreement or such Related Agreements, or any of the transactions
contemplated by this Purchase Agreement or such Related Agreements, is required
by applicable law, rules or regulations, then the party required to so disclose
such information shall, to the extent possible, provide to the other party for
its prior approval (such approval not to be unreasonably withheld or delayed) a
written copy of such public announcement. When practicable, the party required
to disclose such information will provide such copy to the other party at least
five (5) business days prior to disclosure.
(e) Except as otherwise provided herein, neither party (nor their
respective Affiliates) shall use the name of the other, or any of its
Affiliates, for marketing, advertising or promotional claims without the prior
written consent of the other party.
(f) The parties agree that, with effect from the date hereof, the terms
of Sections 10.1 and 10.3 hereof shall supersede the obligations of the parties
under the Confidentiality Agreement between the Seller and the Purchaser dated
as of February 5, 2001.
10.2 NONCOMPETITION.
(a) The Seller covenants on behalf of itself, and its Affiliates and
sublicensees, that, for a period of *** following the Closing Date, it shall not
develop, market, sell or distribute in the Territory (or agree with any third
party to do any of the foregoing) any ***.
(b) Nothing in Section 10.2(a) shall be interpreted to prevent the
Seller or its Affiliates from pursuing its rights and obligations under the
Noven License Agreement with respect to the CombiPatch Product and improvements
thereto in Japan or pursuant to the Novartis Pharma Sublicense Agreement and the
Novartis Pharma 2001 Sublicense Agreement.
(c) The Seller shall not be considered in breach of Section 10.2(a) by
reason of an acquisition of a Person if (i) the activity of such Person which
would cause such breach in the absence of this provision is not the primary
business of such Person; (ii) prior to the closing of such acquisition the
Seller commits in writing to the Purchaser, on terms acceptable to the Purchaser
(not to be unreasonably withheld or delayed), to promptly divest itself of the
offending assets and/or activity and (iii) the Seller diligently and reasonably
pursues such divestiture and, in the event such divestiture is not completed
within six (6) months after the date of such acquisition, such Person thereupon
ceases all such activity.
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(d) The Seller recognizes that the territorial, time and scope
limitations set forth in this Section 10.2 are reasonable and are required for
the protection of the Purchaser and its Affiliates.
10.3 INJUNCTIVE RELIEF. Each party specifically recognizes that any
breach by it of Section 10.1, and the Seller specifically recognizes that any
breach by it of Section 10.2, may cause irreparable injury to the other party
and that actual damages may be difficult to ascertain, and in any event, may be
inadequate. Accordingly (and without limiting the availability of legal or
equitable, including injunctive, remedies under any other provisions of this
Purchase Agreement), each party agrees that in the event of any such breach,
notwithstanding the provisions of Section 12.1, the other party shall be
entitled to seek, by way of private litigation in the first instance, injunctive
relief and such other legal and equitable remedies as may be available.
ARTICLE XI.
INDEMNIFICATION
11.1 GENERAL. In order to distribute among themselves the
responsibility for claims arising out of this Purchase Agreement and the conduct
of the CombiPatch Business in the Territory, and except as otherwise
specifically provided for herein, from and after the Closing Date, the parties
shall indemnify each other as provided in this Article XI.
11.2 INDEMNIFICATION OBLIGATIONS OF THE PURCHASER. The Purchaser shall
defend, indemnify and hold the Seller, APPI, their respective Affiliates, and
each of their respective officers, directors, agents, employees and shareholders
(collectively, "SELLER INDEMNITEES") harmless, from and against, any and all
Damages which the Seller Indemnitees may incur or suffer, or with which any of
them may be faced arising out of:
(a) the storage, handling, use, marketing, advertising, promotion,
distribution or sale of the CombiPatch Product by the Purchaser and/or its
Affiliates, sublicensees, distributors or agents in the Territory, the conduct
of the CombiPatch Business by the Purchaser and/or its Affiliates, sublicensees,
distributors or agents in the Territory, or the Purchaser's ownership or use of
the Purchased Assets, in each case, from and after the Closing Date, except, in
each case, in so far as any such Damages relate to the storage, handling or use
of any Inventory by or on behalf of the Seller or any of its Affiliates at any
time prior to the delivery of the Inventory to the Purchaser pursuant to Section
2.5;
(b) the breach by the Purchaser or any of its Affiliates of this
Purchase Agreement including, without limitation, (i) any material inaccuracy in
or material breach of any representation and warranty made by the Purchaser in
this Purchase Agreement or in any the Purchaser's Ancillary Documents; PROVIDED,
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HOWEVER, that (A) the Purchaser shall not have any liability under Section
11.2(b)(i) unless and until, and then only to the extent, the aggregate,
cumulative amount of such Damages exceeds *** of the aggregate of the Purchase
Price and the Service Fee under this Purchase Agreement (the "INDEMNITY
DEDUCTIBLE AMOUNT") and (B) in no event shall the aggregate, cumulative
liability of the Purchaser for Damages under this Section 11.2(b)(i) exceed ***
of the aggregate of the Purchase Price and the Service Fee under this Purchase
Agreement (the "INDEMNITY CAP AMOUNT"); and (ii) any material breach by the
Purchaser of, or material failure by the Purchaser to comply with, any of its
covenants or obligations pursuant to this Purchase Agreement, including, without
limitation, those covenants and obligations which are a part of its
responsibility for the Assumed Liabilities.
(c) the enforcement by the Seller Indemnitees of their rights under
this Section 11.2;
(d) any gross negligence or willful misconduct by the Purchaser or its
Affiliates in the conduct by the Purchaser or its Affiliates of the CombiPatch
Business; and
(e) the Purchaser's material violation of any applicable law or
regulation related to this Purchase Agreement;
PROVIDED, HOWEVER, that, in each such case, the Purchaser shall not be liable
hereunder to the extent such Damages arise from willful misconduct or gross
negligence of the Seller Indemnitees.
11.3 INDEMNIFICATION OBLIGATIONS OF THE SELLER. The Seller shall
defend, indemnify and hold the Purchaser, its Affiliates, and each of their
respective officers, directors, agents, employees, shareholders or members
(collectively, "PURCHASER INDEMNITEES") harmless, from and against, any and all
Damages, which the Purchaser Indemnitees may incur or suffer, or with which any
of them may be faced arising out of:
(a) the storage, handling, use, marketing, advertising, promotion,
distribution or sale of the CombiPatch Product by the Seller and/or its
Affiliates, permitted sublicensees, distributors or agents in the Territory, the
conduct of the CombiPatch Business by the Seller and/or its Affiliates,
permitted sublicensees, distributors or agents in the Territory, or the Seller's
or APPI's ownership or use of the Purchased Assets, in each case, on or prior to
the Closing Date, excluding all Assumed Liabilities and except, in each case, in
so far as any such Damages relate to the storage, handling or use of any
Inventory by or on behalf of the Purchaser or any of its Affiliates at any time
after the delivery of the Inventory to the Purchaser pursuant to Section 2.5;
(b) the development, storage, handling, use, marketing, advertising,
promotion, distribution, or sale of any combination estrogen/progestin in a
polymer adapted for transdermal delivery by or on behalf of the Seller, its
Affiliates or sublicensees in Japan;
(c) the breach by the Seller, APPI or any of their respective
Affiliates of this Purchase Agreement including, without limitation, (i) any
material inaccuracy in or material breach of any representation and warranty
made by the Seller or APPI in this Purchase Agreement or in any of the Seller's
Ancillary Documents; PROVIDED, HOWEVER, that (A) the Seller shall not have any
liability under this Section 11.3(c)(i) unless and until, and then only to the
extent, the aggregate, cumulative amount of such Damages exceed the Indemnity
Deductible Amount and (B) in no event shall the aggregate, cumulative liability
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of the Seller for Damages under this Section 11.3(c)(i) exceed the Indemnity Cap
Amount; and (ii) any material breach by the Seller or APPI of, or material
failure by the Seller or APPI to comply with, any of its covenants or
obligations pursuant to this Purchase Agreement, including, without limitation,
those covenants and obligations which are a part of its responsibility under
Section 3.2;
(d) the enforcement by the Purchaser Indemnitees of their rights under
this Section 11.3;
(e) any gross negligence or willful misconduct by the Seller or its
Affiliates in the conduct by the Seller and its Affiliates of the CombiPatch
Business; and
(f) the Seller's or APPI's material violation of any applicable law or
regulation related to this Purchase Agreement;
PROVIDED, HOWEVER, that, in each such case, the Seller shall not be liable
hereunder to the extent such Damages arise from willful misconduct or gross
negligence of the Purchaser Indemnitees.
11.4 PROCEDURE. If any action, claim, suit, proceeding or investigation
arises as to which a right of indemnification provided in this Article XI
applies, the Person seeking indemnification (the "INDEMNIFIED party"), shall
promptly notify the party obligated under this Article XI to indemnify the
indemnified party (the "INDEMNIFYING PARTY") thereof in writing, and allow the
indemnifying party and its insurers the opportunity to assume direction and
control of the defense against such action, claim, suit, proceeding or
investigation, at its sole expense, including without limitation, the settlement
thereof at the sole option of the indemnifying party or its insurers; PROVIDED,
HOWEVER, that the indemnifying party may not enter into any compromise or
settlement without the prior written consent of the indemnified party unless
such compromise or settlement includes as an unconditional term thereof the
giving by each plaintiff or claimant to the indemnified party of a release from
all liability in respect of such claim and only if such compromise or settlement
does not include any admission of legal wrongdoing on the part of the
indemnified party. The indemnified party shall fully cooperate with the
indemnifying party and its insurer in the disposition of any such matter and the
indemnified party will have the right and option to participate in (but not
control) the defense of any third-party action, claim, suit, proceeding or
investigation as to which this Article XI applies, with separate counsel at its
election and cost. If the indemnifying party fails or declines to assume the
defense of any such third-party action, claim, suit, proceeding or investigation
within thirty (30) days after notice thereof, the indemnified party may assume
the defense thereof for the account and at the risk of the indemnifying party.
The indemnifying party shall pay promptly to the indemnified party any Damages
to which the indemnity under this Article XI applies, as incurred.
11.5 CERTAIN LIMITATIONS.
(a) After Closing the exclusive remedy of the Seller, APPI and
Purchaser under this Purchase Agreement or otherwise for breaches of
representations and warranties contained herein and/or for any of the other
matters described in Sections 11.2(a), 11.2(b)(ii), 11.3(a) and 11.3(c)(ii)
shall be the indemnification provided for in this Article XI. No party shall be
entitled to recover any incidental or consequential damages whatsoever under
this Article XI.
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Securities and Exchange Commission. Asterisks denote omissions.
(b) Notwithstanding anything to the contrary contained herein, although
a party may be entitled to make a claim for indemnification pursuant to more
than one section of this Article XI, a party shall not be entitled to recover
indemnification for the same claim under more than one section of this Article
XI.
(c) If any event shall occur which would otherwise entitle a party to
assert a claim for indemnification under this Article XI, no Damages shall be
deemed to have been sustained by such indemnified party to the extent of (i) any
tax savings realized by such party as a result thereof or (ii) any net proceeds
received by such indemnified party or its Affiliates from any insurance policy
with respect thereto; provided, however, that nothing in this Section 11.5(c)
shall require an indemnified party to make any claim for tax savings or any
claim against any insurance policy.
ARTICLE XII.
MISCELLANEOUS
12.1 DISPUTES. Except as set forth in Section 10.3, in the event of any
controversy or claim arising out of, relating to or in connection with any
provision of this Purchase Agreement, or the rights or obligations of the
parties hereunder, the parties shall try to settle their differences amicably
between themselves. Either party may initiate such informal dispute resolution
by sending written notice of the dispute to the other party, and within ten (10)
days after such notice appropriate representatives of the parties shall meet for
attempted resolution by good faith negotiations. If such representatives are
unable to resolve promptly such disputed matter, it shall be referred to the
President of the Purchaser and the Chief Executive Officer of Aventis Pharma AG,
or their respective designees, for discussion and resolution. If such personnel
are unable to resolve such dispute within thirty (30) days of initiating such
negotiations, the parties agree first to try in good faith to settle the dispute
by mediation in New York under the Commercial Mediation Rules of the American
Arbitration Association, before resorting to litigation.
12.2 INDEPENDENT CONTRACTORS. In making and performing this Purchase
Agreement, the parties are acting and shall act as independent contractors.
Nothing in this Purchase Agreement shall be deemed to create an agency, joint
venture or partnership relationship between the parties hereto. Neither party
shall have the authority to obligate the other party in any respect, and neither
party shall hold itself out as having any such authority. All personnel of the
Seller and APPI shall be solely employees of the Seller or APPI, as the case may
be, and shall not represent themselves as employees of the Purchaser. All
personnel of the Purchaser shall be solely employees of the Purchaser and shall
not represent themselves as employees of the Seller or APPI.
12.3 ASSIGNMENT. Neither party shall have a right to assign this
Agreement without the prior written consent of the other party (which consent
shall not be unreasonably withheld or delayed); PROVIDED, HOWEVER, that either
party may assign this Purchase Agreement to any of its Affiliates without the
prior written consent of the other party; PROVIDED, FURTHER that no such
assignment of this Purchase Agreement shall relieve the assignor of any of its
obligations or liabilities under this Purchase Agreement. Notwithstanding the
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Securities and Exchange Commission. Asterisks denote omissions.
foregoing, either party may assign this Purchase Agreement without the other
party's prior written consent in connection with the transfer or sale of all or
substantially all of its assets or business or its merger or consolidation with
another Person.
12.4 BINDING EFFECT; BENEFIT. This Purchase Agreement shall inure to
the benefit of and be binding upon the parties hereto, and their successors and
permitted assigns. Nothing in this Purchase Agreement, express or implied, is
intended to confer on any Person other than the parties hereto, and their
respective successors and permitted assigns any rights, remedies, obligations or
liabilities under or by reason of this Purchase Agreement.
12.5 AMENDMENTS. This Purchase Agreement shall not be modified, amended
or supplemented except pursuant to an instrument in writing executed and
delivered on behalf of each of the parties hereto.
12.6 NO WAIVER. The failure in any one or more instances of a party to
insist upon performance of any of the terms, covenants or conditions of this
Purchase Agreement, to exercise any right or privilege conferred in this
Purchase Agreement, or the waiver by said party of any breach of any of the
terms, covenants or conditions of this Purchase Agreement, shall not be
construed as a subsequent waiver of any such terms, covenants, conditions, right
or privileges, but the same shall continue and remain in full force and effect
as if no such forbearance or waiver had occurred. No waiver shall be effective
unless it is in writing and signed by an authorized representative of the
waiving party.
12.7 NOTICES. All notices, claims, certificates, requests, demands and
other communications hereunder shall be in writing and shall be delivered
personally or sent by facsimile transmission, air courier, or registered or
certified mail, return receipt requested, addressed as follows:
If to the Purchaser: If to the Seller:
Vivelle Ventures LLC Xxxxx Pharmaceutical Products, Inc.
c/o Noven Pharmaceuticals, Inc. 0000 Xxxxxxx Xxxx, Xxxxx 000
11960 S.W. 144th Street Greenville, Delaware 19807
Xxxxx, Xxxxxxx 00000 Fax: (000) 000-0000
Fax: (000) 000-0000
Attn: President
Attn: Xxxxxx X. Xxxxxxx, President
With copies to: With a copy to:
Novartis Pharmaceuticals Corporation Xxxxxxx Xxxxx Xxxxxxx & Ingersoll, LLP
00 Xxxxx 00 1735 Market Street, 51st Floor
East Hanover, New Jersey 07936 Xxxxxxxxxxxx, XX 00000
Fax: (000) 000-0000 Fax: (000) 000-0000
Attn: Office of the CEO Attn: Xxxxxx Xxxxxxx, Xx., Esq.
and
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Securities and Exchange Commission. Asterisks denote omissions.
White & Case LLP
1155 Avenue of the Americas If to APPI:
Xxx Xxxx, XX 00000 Aventis Pharmaceuticals Products Inc.
Fax: (000) 000-0000 Xxxxx 000-000, X.X. Xxx 0000
Attn: Xxxxxx X. Xxxxxxxx, Esq. Xxxxxxxxxxx, XX 00000-0000
Fax: (000) 000-0000
and Attn: Head, BD&L
Noven Pharmaceuticals, Inc. With a copy to:
00000 X.X. 000xx Xxxxxx Xxxxxxx Xxxxx Xxxxxxx & Xxxxxxxxx, LLP
Xxxxx, Xxxxxxx 00000 0000 Xxxxxx Xxxxxx, 00xx Xxxxx
Fax: (000) 000-0000 Xxxxxxxxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxxxx, President, Fax: (000) 000-0000
and Xxxxxxx X. Xxxxxxxxx, Attn: Xxxxxx Xxxxxxx, Xx., Esq.
Esq. General Counsel
With a copy to:
Xxxxx & Xxxxxxx
Washington Harbour
0000 X Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000-0000
Fax: (000) 000-0000
Attn: Xxxxxxx X. Xxxxxxx, Esq.
or to such other address as the party to whom notice is to be given may have
furnished to the other party in writing in accordance herewith. Any such
communication shall be deemed to have been delivered (a) when delivered, if
delivered personally, (b) when sent (with written confirmation received), if
sent by facsimile transmission on a business day, (c) on the first business day
after dispatch (with written confirmation received), if sent by facsimile
transmission on a day other than a business day, (d) on the second business day
after dispatch, if sent by air courier, and (e) on the fifth business day after
mailing, if sent by mail.
12.8 COUNTERPARTS. This Purchase Agreement shall become binding when
any one or more counterparts hereof, individually or taken together, shall bear
the signatures of each of the parties hereto. This Purchase Agreement may be
executed in any number of counterparts, each of which shall be deemed an
original as against the party whose signature appears thereon, but all of which
taken together shall constitute but one and the same instrument. Each party may
execute this Purchase Agreement on a facsimile of the Purchase Agreement. In
addition, facsimile signatures of authorized signatories of either party shall
be valid and binding and delivery of a facsimile signature by either party shall
constitute due execution and delivery of this Purchase Agreement.
12.9 INTERPRETATION. The article and section headings contained in this
Purchase Agreement are for convenience of reference only and shall not affect
the meaning or interpretation of this Purchase Agreement. This Purchase
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Securities and Exchange Commission. Asterisks denote omissions.
Agreement is the product of negotiations between the parties. In construing the
terms hereof, no presumption shall operate in either party's favor as a result
of its counsel's role in drafting the terms or provisions hereof.
12.10 GOVERNING LAW. This Purchase Agreement and any claims, disputes
or causes of action relating to or arising out of this Purchase Agreement shall
be construed in accordance with and governed by the substantive laws of the
State of New York, without giving effect to the conflict of laws principles
thereof.
12.11 UNENFORCEABILITY. If any provisions of this Purchase Agreement
are determined to be invalid or unenforceable in any jurisdiction, such
provisions shall be ineffective to the extent of such invalidity or
unenforceability in such jurisdiction, without rendering invalid or
unenforceable the remaining provisions hereof or affecting the validity or
enforceability of any of such provisions of this Purchase Agreement in any other
jurisdiction. The parties will use their best efforts to substitute the invalid
or unenforceable provision with a valid and enforceable one which conforms, as
nearly as possible, with the original intent of the parties.
12.12 ENTIRE AGREEMENT. This Purchase Agreement, including all exhibits
and schedules, and Related Agreements embody the entire agreement and
understanding between the parties hereto with respect to the subject matter
hereof and supersede all prior agreements, commitments, arrangements,
negotiations or understandings, whether oral or written, between, the parties
hereto and their respective Affiliates with respect thereto. There are no
agreements, covenants or undertakings with respect to the subject matter of this
Purchase Agreement and the Related Agreements other than those expressly set
forth or referred to herein or therein and no representations or warranties of
any kind or nature whatsoever, express or implied, are made or shall be deemed
to be made herein by the parties hereto, except those expressly made in this
Purchase Agreement and the Related Agreements.
12.13 EXPENSES. Except as expressly set forth herein, each party hereto
shall bear all fees and expenses incurred by such party in connection with,
relating to or arising out of the execution, delivery and performance of this
Purchase Agreement and the consummation of the transaction contemplated hereby,
including, without limitation, attorneys', accountants' and other professional
fees and expenses.
[SIGNATURES ON THE FOLLOWING PAGE.]
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Securities and Exchange Commission. Asterisks denote omissions.
IN WITNESS WHEREOF, the parties hereto have executed this Purchase
Agreement as of date first above written.
XXXXX PHARMACEUTICAL PRODUCTS, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
-------------------------------------
President
AVENTIS PHARMACEUTICALS PRODUCTS INC.
By: /s/ Xxxxxxx X. Xxxxxx
-------------------------------------
Vice President
By: /s/ Xxxxxx X. Xxxxxxx
-------------------------------------
Xxxxxx X. Xxxxxxx
President
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