EXHIBIT 10.84
ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement ("Agreement") made as of this ____ day of
December, 1997 by and between Xxxxxxx Laboratories Inc., a New Jersey
corporation ("Xxxxxxx") and X. X. Xxxxxx & Co., a Delaware corporation
("Xxxxxx").
Whereas, Xxxxxxx currently markets certain products; and
Whereas, the parties wish to provide for the acquisition by Xxxxxx of the
rights to the Product (as defined below) in the Territory (as defined below);
and
Whereas, the parties wish to provide for the acquisition by Xxxxxxx of
certain distribution rights as provided in the Distribution Agreement (as
defined below) in the territory specified therein.
Now, therefore, the parties agree as follows:
ARTICLE 1 -- DEFINITIONS
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For purposes of this Agreement:
1.1 "Affiliate" means any entity controlled by, able to control or under
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common control with a party to this Agreement. For purposes of this
definition, "control" means possession, direct or indirect, of the power
to direct or cause direction of the management and policies of an entity.
1.2 "Business" means Xxxxxxx' business of manufacturing, packaging,
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promoting, marketing, distributing and selling the Product in the
Territory.
1.3 "Closing Date" means the date set forth in Section 3.1 for the closing of
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the transaction contemplated herein.
1.4 "Distribution Agreement" means the Distribution Agreement to be entered
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into by Xxxxxx and Xxxxxxx, a copy of which is attached hereto as Exhibit
A.
1.5 "FDA" means the United States Food and Drug Administration or any
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successor agency.
1.6 "Fully Absorbed Cost" means:
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(a) Costs of third party manufacturers, utilities, materials, indirect
materials and supplies used in the manufacturing and packaging of
Product;
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(b) wages of those employees directly employed in the manufacturing and
packaging of Product;
(c) wages of employees directly employed in quality control, materials
management or related functions which are applicable to the
manufacturing and packaging of Product, and the salaries of the
supervisors of said functions (or an appropriate portion of such
wages and salaries if such personnel are not employed exclusively in
said manufacture);
(d) that portion of payroll taxes, benefits, social security payments,
vacation and bonus payments and other employee costs allocable to
the wages and salaries included within the provisions of
subparagraphs (b) and (c) above;
(e) that portion of manufacturing overhead and expenses (excluding
general and administrative expenses) apportioned in accordance with
generally accepted accounting principles to the manufacture and
packaging of Product; and
(f) costs of transportation of the Product to Xxxxxxx' warehouse.
1.7 "Knowledge" means actual knowledge of the officers or directors of an
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entity without independent investigation.
1.8 "Net Sales" means the gross invoice value of the Product sold to third
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parties in the Territory by Xxxxxx and its Affiliates and Transferee,
less:
(a) promotional, cash and trade discounts, contract chargebacks and
rebates and government mandated rebates (including Medicaid
rebates);
(b) allowances and adjustments actually credited to customers for
spoiled, damaged, outdated and returned Product; and
(c) transportation and handling charges, excise, value added and other
taxes and insurance premiums and duties which are billed to
customers as separate items on invoices.
1.9 "Ordinary Course of Business" means the ordinary course of business
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consistent with past custom and practice (including with respect to
quantity and frequency).
1.10 "Other Rights" means such of Xxxxxxx' confidential know-how, process
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patents, and other intangible rights, if any, which are not solely
related to the Product but which are necessary to allow Xxxxxx to
manufacture, package, promote, market, distribute and
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sell such Product in the Territory. It is understood and agreed that no
rights to Xxxxxxx' trademark PHARMACOUNSEL(R) or any logo associated
therewith are to be considered as included in "Other Rights" as defined
herein or otherwise.
1.11 "Permitted Exceptions" means all exceptions, charges, restrictions,
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encumbrances and other matters expressly created pursuant to or permitted
by this Agreement or the agreements to be executed at the closing under
this Agreement.
1.12 "Product" means the Xxxxxxx' prescription product Norethin sold in the
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Territory in tablet form.
1.13 "Product Registration" means the approved new drug application governing
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the manufacture, sale and use of the Product as listed on Schedule 1.13.
1.14 "Product Rights" means all of Xxxxxxx' right, title and interest in or to
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intangible rights and other assets (other than accounts receivable)
solely related to the manufacture, promotion, marketing, distribution and
sale of the Product in the Territory, including, but not limited to:
inventions, confidential know-how, trade secrets, Product Registration,
common law rights to the trademark "Norethin" and to the extent
assignable, sales contracts, customer orders, purchase orders and other
agreements for the supply by Xxxxxxx of the Product in the Territory.
Product Rights shall also not include the trademark PHARMACOUNSEL and
associated logo, sales contracts, customer orders, purchase orders and
other agreements as to which consent to assignment is required but has
not been obtained as of the date of the closing.
1.15 "Territory" means the United States of America, including its territories
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and possessions.
1.16 "Transferee" means such third party as Xxxxxx may elect to transfer the
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Product and any or all of the Product Rights and Other Rights by written
notice to Xxxxxxx no later than five (5) days prior to the Closing Date.
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ARTICLE 2 -- SALE OF ASSETS AND CONSIDERATION
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2.1 Grant of Distribution Rights. At the closing referred to in Section 3.1,
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Xxxxxx shall execute and deliver to Xxxxxxx the Distribution Agreement.
2.2 Sale of Assets. Xxxxxxx shall assign to Xxxxxx the Product Rights and
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shall license to Xxxxxx or Transferee the Other Rights on the terms set
forth herein.
2.2 Consideration. As consideration for the transactions herein
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contemplated:
(a) Xxxxxxx shall assume the obligations set forth in the Distribution
Agreement.
(b) Xxxxxx shall assume the obligations set forth herein.
2.3 Assumption of Obligations. Xxxxxx shall assume and shall agree to pay,
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perform and discharge all of Xxxxxxx' liabilities and obligations under
all commitments and other agreements included within Product Rights but
only to the extent that they remain to be performed or fulfilled after
the date of closing, are not overdue or in default as of the closing, and
are set forth and described on Schedule 2.3 attached hereto. Xxxxxx may
elect to assign its assumption of obligations hereunder to Transferee,
upon which Transferee shall be directly responsible with respect thereto.
2.4 Inventories. Xxxxxx shall purchase Xxxxxxx' inventory of finished
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Product on hand as of the Closing Date upon the following terms:
(a) Within fifteen (15) days following the Closing Date, Xxxxxxx shall
provide Xxxxxx with a statement and count of finished goods
inventory of Product, less finished goods inventory required for
customer orders received prior to Closing, which orders shall be
processed for Xxxxxxx' account. Xxxxxx shall purchase such
finished goods inventory, EX WORKS (as defined by INCOTERMS 1990
Edition) such facilities where such inventory is held, at a
purchase price equal to Xxxxxxx' Fully Absorbed Cost. Xxxxxx shall
pay the purchase price within sixty (60) days following receipt of
the statement with respect to said inventory.
(b) Xxxxxx shall, at its own expense, arrange for shipment of the
finished goods inventory of the Product to its designated facility.
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(c) Notwithstanding the foregoing, Xxxxxx shall not be required to
purchase any such inventory of the Product which is damaged,
misbranded, adulterated or otherwise unsalable or which will expire
on a date than twelve (12) months from the Closing Date.
ARTICLE 3 -- CLOSING
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3.1 Date of Closing. The closing under this Agreement shall take place at
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the offices of Xxxxxx, 0000 Xxx Xxxxxxx Xxxx, Xxxxxx, Xxxxxxxx 00000 at
10:30 a.m. local time on December ___, 1997 (or at such other place or
time as the parties may agree upon in writing) (the "Closing Date").
3.2 Outside Date for Closing. If without the fault of such party, the
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closing has not occurred by March 31, 1998, Xxxxxx or Xxxxxxx may
terminate this Agreement by written notice to the other party. Upon such
termination, neither of the parties shall have any liability of any kind
arising out of this Agreement, other than for any liability resulting
from its breach of this Agreement prior to termination.
3.3 Deliveries at the Closing.
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(a) At the closing, Xxxxxxx shall deliver, or cause to be delivered, the
following:
(i) such bills of sale, assignments or other instruments of
transfer and assignment, all in form and substance
reasonably satisfactory to Xxxxxx and its counsel, as shall
be effective to vest in Xxxxxx or Transferee valid title to
the Product Rights, free and clear of any claims, liens or
encumbrances other than Permitted Exceptions;
(ii) a copy of resolutions of the board of directors of Xxxxxxx
authorizing the execution, delivery and performance by
Xxxxxxx of this Agreement, and a certificate of the
secretary or an assistant secretary of Xxxxxxx, dated the
Closing Date, that such resolutions were duly adopted and
are in full force and effect;
(iii) the certificate referred to in Section 6.1(d); and
(iv) copies of all consents and approvals received pursuant to
Section 5.5; and
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(v) a copy of all existing marketing materials (including
marketing plans), advertising copy, key physician records,
and detailing aids solely related to the Product and all
DDD, IMS and prescription data solely related to the
Product, to the extent disclosure and delivery are permitted
under Xxxxxxx' agreements with third parties.
(b) At the closing, Xxxxxx shall deliver, or cause to be delivered, the
following:
(i) instruments, in form and substance reasonably satisfactory
to Xxxxxxx and its counsel, pursuant to which Xxxxxx shall
assume the obligations and liabilities to be assumed
pursuant to Section 2.3;
(iii) a copy of resolutions of the board of directors of Xxxxxx
authorizing the execution, delivery and performance by
Xxxxxx of this Agreement, and a certificate of the secretary
or an assistant secretary of Xxxxxx, dated the Closing Date,
that such resolutions were duly adopted and are in full
force and effect; and
(iv) the certificate referred to in Section 6.2(d).
(c) At the closing, Xxxxxxx and Xxxxxx shall execute and deliver the
Distribution Agreement.
ARTICLE 4 -- REPRESENTATIONS AND WARRANTIES
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4.1 Representations and Warranties of Xxxxxxx. Xxxxxxx represents and
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warrants to Xxxxxx that:
(a) Existence. Xxxxxxx is a corporation validly existing and in good
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standing under the laws of the State of New Jersey and is duly
authorized to carry on its business where and as now conducted and
to own, lease and operate properties as it now does.
(b) Authority. Xxxxxxx has full power and authority to enter into and
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perform this Agreement in accordance with its terms; the execution,
delivery and performance of this Agreement by Xxxxxxx has been duly
authorized by all necessary action of Xxxxxxx; and this Agreement
constitutes a valid and
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binding obligation of Xxxxxxx enforceable in accordance with its
terms, except as may be limited by applicable bankruptcy,
reorganization, insolvency or other similar laws affecting the
enforcement of creditors' rights in general and subject to
general principles of equity (regardless of whether enforceability
is considered in a proceeding in equity or at law).
(c) Consents of Third Parties. Subject to receipt of the consents and
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approvals required under agreements described in Schedule 4.1(c),
the execution, delivery and performance of this Agreement by Xxxxxxx
will not (i) conflict with its organizational documents or conflict
with or result in the breach or termination of or constitute a
default under any agreement, commitment or other instrument, or any
order, judgment or decree, to which it is a party, by which it is
bound or to which any of the Product Rights is subject, except for
any conflicts, breaches, terminations or defaults that are not in
the aggregate material to the Business; (ii) constitute a violation
by it of any law or regulation applicable to it, the enforcement of
which would have a material adverse effect on the Business; or (iii)
result in the creation of any lien, charge or encumbrance upon any
of the Product Rights, other than Permitted Exceptions. No consent,
approval or authorization of, or declaration or filing (other than
filings with the FDA to assign Product Rights) with, any
governmental authority or any third party (other than consents with
respect to agreements referred to in Schedule 4.1(c)) is required on
the part of Xxxxxxx in connection with the execution, delivery and
performance of this Agreement.
(d) Title. Following the closing, Xxxxxx or Transferee will own good
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and marketable title (free and clear of any rights of third parties
other than Permitted Exceptions) to the Product Rights transferred
hereunder and have the right to practice and/or use the Other Rights
licensed herein on its behalf.
(e) Necessary Rights. Following the closing, Xxxxxx or Transferee will
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have received from Xxxxxxx all permits, licenses, registrations and
other approvals which are then necessary for the registration,
marketing, promotion,
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distribution, and sale of the Product in the Territory in the manner
conducted by Xxxxxxx prior to the closing.
(f) Litigation. Except as set forth in Schedule 4.1(f), there are no
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claims, suits, actions or other proceedings which are pending or
threatened against Xxxxxxx and which relate to the Product, the
Product Rights, the Other Rights or the Business in which the
claimant seeks recovery of an amount in excess of $10,000.
(g) Compliance. To Xxxxxxx' Knowledge except as set forth in Schedule
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4.1(g),
(i) the Product Registration is currently maintained, and the
labeling, packaging, marketing, promotion, distribution and
sale of the Product in the Territory are, in compliance in
all material respects with applicable laws and regulations;
and
(ii) there are no ongoing (or completed within the last calendar
year) investigations or inquiries, by any governmental
agency in the Territory, regarding any problem with the
efficacy, safety, labeling, distribution or sale of the
Products by Xxxxxxx which could materially and adversely
affect the marketing, promotion, distribution or sale of the
Product in the Territory by Xxxxxx or Transferee.
(h) Agreements. Schedule 4.1(h) contains a complete list of all
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material agreements and commitments relating to the Business.
Except as set forth in such Schedule, and to the Knowledge of
Xxxxxxx, the other parties to those agreements and commitments have
performed all their respective obligations thereunder required to be
performed by them on or before the date of this Agreement, and there
has occurred no event which with the lapse of time or giving of
notice or both would constitute a default under said agreements,
except to the extent that any such failures to perform or defaults
would not have a material adverse effect on the Business.
(i) Intellectual Property. Xxxxxxx (a) owns all trade secrets, know-
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how, inventions, copyrights, and Product Registrations, necessary
for the conduct of
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the Business as currently conducted ("Intellectual Property")
(subject as indicated on Schedule 4.1(i)) except for the Other
Rights, (b) is, to Xxxxxxx' Knowledge, not infringing any other
party's patents, trade secrets, know-how, inventions, or copyrights,
with respect to the Business and (c) has the full right and power to
convey the Intellectual Property to Xxxxxx or Transferee as provided
herein. To the Knowledge of Xxxxxxx and except as set forth in
Schedule 4.1(i), no other party is infringing in any material
respect any of Robert's trade secrets, or copyrights used in the
Business.
(j) Financial Results. The pro forma financial information in Schedule
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4.1(j) is correct and fairly presents in all material respects the
results of operations of the Business for the periods identified.
(k) Undisclosed Liabilities. There are no liabilities relating to or
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affecting the Product, Product Rights and/or the Business which
Xxxxxx shall be obligated to assume except the obligations expressly
referred to in Section 2.3 or contained elsewhere in this Agreement
(including the Exhibits thereto).
(l) Customer List. Schedule 4.1(l) consists of a true, correct and
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complete listing of all customers of Xxxxxxx who accounted for
Product revenues for the three (3) quarters ending September 30,
1997.
(m) Material Adverse Change. Except as set forth in Schedule 4.1(m)
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attached hereto, since December 31, 1996, Xxxxxxx has conducted the
Business and used the Product Rights only in the Ordinary Course of
Business and there has been no material adverse change in the
Business and/or the Product Rights or any material change in
Xxxxxxx' accounting methods, principles or procedures relating to
the Business and/or the Product Rights.
4.2 Representations and Warranties of Xxxxxx. Xxxxxx represents and warrants
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to Xxxxxxx that:
(a) Existence. Xxxxxx is a corporation validly existing under the laws
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of the State of Delaware, and is duly authorized to carry on its
business where and as now conducted and to own, lease and operate
properties as it now does.
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(b) Authority. Xxxxxx has full power and authority to enter into and
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perform this Agreement in accordance with its terms; the execution,
delivery and performance of this Agreement by Xxxxxx has been duly
authorized by all necessary action of Xxxxxx; and this Agreement
constitutes a valid and binding obligation of Xxxxxx enforceable in
accordance with its terms, except as may be limited by bankruptcy,
reorganization, insolvency or other similar laws affecting the
enforcement of creditors' rights in general and subject to general
principles of equity (regardless of whether enforceability is
considered in a proceeding in equity or at law).
(c) Consents of Third Parties. The execution, delivery and performance
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of this Agreement by Xxxxxx will not (i) conflict with its
organizational documents and will not conflict with or result in the
breach or termination of or constitute a default under any
agreement, commitment or other instrument, or any order, judgment or
decree, to which it is a party or by which it is bound; or (ii)
constitute a violation by it of any law or regulation applicable to
it. No consent, approval or authorization of, or declaration or
filing (other than the filings with the FDA to assign Product
Rights) with, any governmental authority or any third party is
required on the part of Xxxxxx in connection with the execution,
delivery and performance of this Agreement.
ARTICLE 5 -- FURTHER AGREEMENTS OF THE PARTIES
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5.1 Operations of Xxxxxxx. From the date of this Agreement through the
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Closing Date, Xxxxxxx shall:
(a) operate the Business in the Ordinary Course of Business; and
(b) use reasonable efforts, consistent with past practice, to preserve
the goodwill of Xxxxxxx' customers, suppliers and others having
business relations with it with respect to the Business.
5.2 Notice of Events. From the date hereof and until the Closing Date,
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Xxxxxxx shall promptly advise Xxxxxx in writing of, and furnish any
information Xxxxxx may reasonably request with respect to, (a) any claim,
litigation, proceeding or
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governmental investigation of which it has knowledge that is threatened
or asserted by or against Xxxxxxx and directly involves the Business and
(b) any event or condition of which it has Knowledge that would cause any
of the conditions to Xxxxxx'x obligation to consummate the purchase and
sale under this Agreement not to be fulfilled. Xxxxxx shall promptly
advise Xxxxxxx in writing of, and furnish any information Xxxxxxx may
reasonably request with respect to, any event or condition of which
Xxxxxx has Knowledge that would cause any of the conditions to Xxxxxxx'
obligation to consummate the purchase and sale under this Agreement not
to be fulfilled.
5.3 Access to Information. Prior to the closing, Xxxxxxx shall permit Xxxxxx
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and its representatives to make such investigation of the Product Rights
and Business as Xxxxxx may reasonably request and give Xxxxxx and its
counsel, accountants and other representatives full access, upon
reasonable notice, during normal business hours throughout the period
prior to the Closing Date, to information concerning such Product Rights
and the records and files of the Business. Any investigation by Xxxxxx
shall be conducted in such manner as to minimize interruption of Xxxxxxx'
business. If for any reason the purchase and sale under this Agreement
is not consummated, Xxxxxx shall return any documents delivered to it by
Xxxxxxx.
5.4 Confidentiality of Information Prior to Closing. Except as otherwise
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required by law, Xxxxxx shall keep confidential any information obtained
by it and its representatives in connection with the transactions
contemplated by this Agreement, pursuant to the confidentiality agreement
referenced in Section 9.7.
5.5 Consents; Assignment of Agreements. Xxxxxxx shall use reasonable efforts
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(but shall not be required to make any payment) to obtain at the earliest
practicable date but in no event later than the Closing Date, by
instruments in form and substance reasonably satisfactory to Xxxxxx, all
consents and approvals to the assignment of material agreements and
commitments as listed in Schedule 4.1(h). If, with respect to any
commitment or agreement to be assigned to Xxxxxx or Transferee (whether
or not listed on Schedule 4.1(h)), a required consent to the assignment
is not obtained (and, accordingly, pursuant to Section 1.14, it is
excluded from the sale to Xxxxxx), Xxxxxxx shall use reasonable efforts
to keep in effect and give Xxxxxx or Transferee (at Xxxxxx'x
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or Transferee's cost and expense) the benefit of such commitment or
agreement to the same extent as if it had been assigned and to the extent
not prohibited by that commitment or agreement, and Xxxxxx or Transferee
shall perform Xxxxxxx' obligations under the commitment or agreement or
cooperate in Xxxxxxx' performance of such obligations. Nothing in this
Agreement shall be construed as an attempt to assign any commitment or
agreement that is by its terms nonassignable without the consent of the
other party.
5.6 Other Action. Each of the parties to this Agreement shall use all
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reasonable efforts to cause the fulfillment at the earliest possible date
of all the conditions to the obligations of the other party to consummate
the purchase and sale under this Agreement.
5.7 Further Assurances. At any time and from time to time after the Closing
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Date, each of the parties shall, without further consideration, execute
and deliver such additional instruments of transfer and assumption, and
shall take such other action, as the other party may reasonably request
to carry out the transactions contemplated by this Agreement and effect
an orderly transition of the Business.
5.8 License. From and after the Closing Date, but limited to use in the
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Territory with respect to the Product, Xxxxxxx hereby grants Xxxxxx and
Transferee the non-exclusive, perpetual, royalty-free right (which may be
sub-licensed by Xxxxxx or Transferee to third parties for use on behalf
of Xxxxxx or Transferee) to practice and use the Other Rights.
5.9 NDC Numbers. Promptly following the Closing Date, Xxxxxx or Transferee
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shall take any and all action necessary to change the National Drug Code
number for the Product.
5.10 Labels and Package Inserts. Subject to compliance with applicable laws
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and regulations, (i) Xxxxxxx agrees to permit Xxxxxx and Transferee to
continue to use the labeling and packages, and package inserts that are
existing in Xxxxxxx' finished goods inventory on the Closing Date and
(ii) Xxxxxxx agrees to permit Xxxxxx and Transferee to use, without
modification, the Product literature currently in stock, if any, for
distribution and sales efforts. In no event shall Xxxxxx or Transferee
use such existing materials or any other Product labeling, packages or
package inserts (including any
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referencing Xxxxxxx name) for a period longer than one hundred eighty
(180) days from the Closing Date (the "Initial Period"), plus an
additional ninety (90) days after the expiration of the Initial Period
for those materials described in sub-section (i) of this Section 5.10
used in finished goods existing as of the end of the Initial Period.
Notwithstanding the foregoing, Xxxxxx and Transferee shall use their best
efforts to reduce each period of such uses to the minimum time possible.
5.11 Returns of Product
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(a) Returns will be the financial responsibility of the party that
originally sold the returned Product. Returns shall be tracked by
lot number. Returned Product with lot numbers sold exclusively by
Xxxxxxx will be the financial responsibility of Xxxxxxx; returned
Product with lots numbers sold exclusively by Xxxxxx will be the
responsibility of Xxxxxx; financial responsibility for returned
Product from lots where each party sold a portion of the lot will be
prorated based on the portion of the shared lot that each party
sold.
(b) Both parties agree to enforce preauthorized return or scan and
destroy procedures in an attempt to have customer return Product
and obtain credit from the party who originally sold the Product to
them. Both parties agree to accept returns from the prorated lot.
However, either party may accept Product returns for which they are
not financially responsible in order to maintain their reputation
and good will in the marketplace and the financially responsible
party will reimburse the party processing the return. In these
cases, the processing party will verify the price the customer
originally paid (and therefore the credit provided) with the party
who originally sold the Product.
5.12 Chargebacks and Rebates
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(a) Xxxxxxx will be financially responsible for all chargeback claims
related to Product sold by a wholesaler to a chargeback contract
customer on and after the Closing Date and during the first three
(3) months of 1998.
(b) Xxxxxxx will be financially responsible for all managed care rebates
related to Product dispensed by a pharmacist on and after the
Closing Date and during the first six (6) months of 1998.
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(c) In general, Xxxxxx will forward to Xxxxxxx for payment any claims
received related to Sections 5.12(a) and (b) above for which Xxxxxxx
is financially responsible. However, for the purpose of
administrative convenience or at the specific request of a customer,
Xxxxxx may elect to pay the claim for which Xxxxxxx is financially
responsible and Xxxxxxx will reimburse Xxxxxx with respect to such
claim.
(d) Xxxxxxx will be financially responsible for all Medicaid rebates
related to Product dispensed by a pharmacist on and after the
Closing Date and during the first six (6) months of 1998. HCFA will
continue to xxxx Xxxxxxx for Medicaid rebates for up to one year
after the expiration date on the last Norethin product issued with a
Xxxxxxx labeler code. For administrative convenience, Xxxxxxx will
continue to pay all future Medicaid rebates claims it receives.
Xxxxxx will reimburse Xxxxxxx for any rebate claims paid by Xxxxxxx
but which relate to Product dispensed by a pharmacist after the
aforesaid first six months of 1998.
(e) Xxxxxxx shall continue to make any chargeback or rebate payments
with respect to the Product required under agreements, government
mandates or otherwise which relate to supply contracts not assigned
or assignable under Section 5.5 or which are processed by Xxxxxxx
due to direct requests of a customer, provided that Xxxxxx shall
reimburse Xxxxxxx for all such payments pursuant to Section 5.12(d)
above.
5.13 Assignment to Transferee. Xxxxxx may elect to assign its
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responsibilities under Sections 5.11 and 5.12 to Transferee, upon which
Transferee shall be directly responsible with respect thereto.
Notwithstanding the foregoing, Xxxxxx shall remain liable for its
obligations under Sections 5.11 and 5.12 in the event that Transferee
fails to honor such obligations.
5.14 Post-Closing Services. From the Closing Date and until the expiration of
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twelve (12) weeks thereafter, Xxxxxxx shall perform the following
services:
(a) notify all customers and government formularies of the transfer of
the Product to Xxxxxx or Transferee (providing Xxxxxx or Transferee
with a duplicate set of mailing labels for its use);
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(b) print notifications of the sale of the Product on selected invoices;
and
(c) invoice, book sales and ship Product as agent for Xxxxxx or
Transferee and use all reasonable efforts (short of instituting
third party collection or legal proceedings) to collect amounts due
for Product so shipped. For its services, Xxxxxx or Transferee
shall pay Xxxxxxx a fee equal to [DELETION] such fee to be paid in
monthly installments within ten (10) days of Xxxxxxx' invoice
therefor.
ARTICLE 6 -- CONDITIONS TO OBLIGATIONS OF THE PARTIES
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6.1 Conditions Precedent to Obligation of Xxxxxx. The obligation of Xxxxxx
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to consummate the purchase and sale under this Agreement is subject to
the fulfillment, prior to or on the Closing Date, of each of the
following conditions (any or all of which may be waived by Xxxxxx):
(a) there shall be no governmental or judicial action, law or regulation
making the purchase and sale under this Agreement unlawful nor any
threat or notice of such action;
(b) all representations and warranties of Xxxxxxx shall be true in all
material respects at and as of the Closing Date with the same effect
as though made again at and as of that time;
(c) Xxxxxxx shall have performed and complied with all obligations and
agreements required by this Agreement to be performed or complied
with by it prior to or on the Closing Date;
(d) Xxxxxx shall have been furnished with a certificate of an officer of
Xxxxxxx, dated as of the Closing Date, certifying to the fulfillment
of the conditions specified in Sections 6.1(b) and (c);
(e) there shall not have been from the date of execution to the Closing
Date any material adverse change in the condition (financial or
otherwise) of the Business, the Product, or the Product Rights;
(f) execution and delivery to Xxxxxx of the Distribution Agreement in
accordance with the provisions set forth therein; and
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(g) execution and delivery by Xxxxxxx Pharmaceutical Corporation of the
Performance Guarantee attached as Exhibit B hereto.
6.2 Conditions Precedent to Obligation of Xxxxxxx. The obligation of Xxxxxxx
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to consummate the purchase and sale under this Agreement is subject to
the fulfillment, prior to or on the Closing Date, of each of the
following conditions (any or all of which may be waived by Xxxxxxx):
(a) there shall be no governmental or judicial action, law or regulation
making the purchase and sale under this Agreement unlawful nor any
threat or notice of such action;
(b) all representations and warranties of Xxxxxx shall be true in all
material respects at and as of the Closing Date with the same effect
as though made again at and as of that time;
(c) Xxxxxx shall have performed and complied with all obligations and
agreements required by this Agreement to be performed or complied
with by it prior to or on the Closing Date;
(d) Xxxxxxx shall have been furnished with a certificate of an officer
of Xxxxxx, dated as of the Closing Date, certifying to the
fulfillment of the conditions specified in Sections 6.2(b) and (c);
and
(e) execution and delivery to Xxxxxxx of the Distribution Agreement.
ARTICLE 7 -- SURVIVAL OF REPRESENTATIONS AND WARRANTIES, INDEMNIFICATION; AND
-------------------------------------------------------- --------------------
DEFAULT
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7.1 Survival. Subject to Sections 7.4 and 7.5, the representations and
--------
warranties of each of the parties contained in this Agreement shall
survive the closing; provided however, that the representations and
warranties will expire on the first anniversary of the Closing Date.
There are no representations or warranties other than those set forth in
this Agreement. Except as set forth in this Article 7, neither party
shall have any claim against the other for misrepresentation or breach of
warranty, covenant or agreement under this Agreement.
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7.2 Indemnification of Xxxxxx. Subject to the limitations stated in this
-------------------------
Article 7, Xxxxxxx shall indemnify and hold Xxxxxx, Transferee and their
respective Affiliates harmless from and against any loss, liability,
damage or expense (including, but not limited to, reasonable attorneys'
fees) based upon, arising out of or otherwise resulting from any
inaccuracy in any representation or any breach of any warranty, covenant
or agreement of Xxxxxxx contained in this Agreement or in any certificate
or instrument of assignment delivered by it pursuant to this Agreement.
7.3 Indemnification of Xxxxxxx. Subject to the limitations stated in this
--------------------------
Article 7, Xxxxxx shall indemnify and hold Xxxxxxx and its Affiliates
harmless from and against any loss, liability, damage or expense
(including, but not limited to, reasonable attorneys' fees) based upon,
arising out of or otherwise resulting from any inaccuracy in any
representation or any breach of any warranty, covenant or agreement of
Xxxxxx contained in this Agreement or in any certificate delivered by it
pursuant to this Agreement.
7.4 Limitations on Recovery. Neither Xxxxxxx nor Xxxxxx shall be liable to
-----------------------
the other party under Sections 7.2 or 7.3 of this Article 7, as
applicable, except to the extent that the aggregate amount of all claims
for indemnity by the other party exceeds an amount equal to [DELETION].
7.5 Notice of Claims. Indemnification pursuant to Sections 7.2 or 7.3 of
----------------
this Article 7 shall apply only to the extent that notice of a claim
therefor is asserted in writing and delivered to the indemnifying party
prior to the end of the applicable time period set forth below:
(a) if the claim is based upon a third party claim for damages to
property or personal injury resulting from the manufacture and/or
use of the Product, whether based on breach of warranty, negligence,
product liability or strict liability, the notice period shall be
the statute of limitations for such claim;
(b) if the claim is based upon an assessment of taxes due, the notice
period shall be the applicable statute of limitations; and
(c) for all other claims the notice period shall be one (1) year from
the Closing Date.
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Any notice of such a claim shall state with reasonable specificity the
representation, warranty, covenant or agreement with respect to which the
claim is made, the facts giving rise to, and the alleged basis for, the
claim, and, if known, the amount of liability asserted by reason of the
claim.
7.6 Defense of Claims. If any claim is made that would give rise to a right
-----------------
of indemnification under this Agreement, the party against whom the claim
is made ("Claimant") shall afford the other party ("Indemnifying Party")
and its counsel (reasonably satisfactory to Claimant), at the
Indemnifying Party's expense, the opportunity to defend or settle the
claim. If such notice and opportunity are not given to the Indemnifying
Party, no liability for indemnification under this Agreement shall be
imposed upon the Indemnifying Party by reason of such claim. The
Indemnifying Party shall notify Claimant no later than ten (10) days
after the date of the notice described in Section 7.5 of this Article 7
of its intention to assume the defense of any such claims. In the event
the Indemnifying Party fails to give such notice to Claimant within the
said time, the Indemnifying Party shall no longer be entitled to assume
such defense and the Claimant shall have the right to assume the defense
thereof with counsel of its choice at the Indemnifying Party's expense
and defend, settle or otherwise dispose of such claim. With respect to
any such claim which the Indemnifying Party shall fail to defend
promptly, said party shall not thereafter question the liability of the
Indemnifying Party to Claimant for any loss or payment with respect to
such claim (including attorneys' fees and cost of defense).
7.7 Determination of Loss. The parties shall make appropriate adjustments
---------------------
for tax benefits and insurance proceeds (reasonably certain of receipt
and utility in each case) and for the time cost of money (using the
Applicable Rate as the discount rate) in determining the amount of loss
for purposes of this Article 7. For the purpose of this Section 7.7 of
this Article 7, "Applicable Rate" means the base rate published from time
to time by Citibank N.A., New York, New York.
7.8 Consequential Damages. Notwithstanding any provision of this Agreement
---------------------
which might otherwise be to the contrary, neither party shall be liable
to the other for lost profits or other consequential damages.
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ARTICLE 8 -- NON-COMPETITION
----------------------------
8.1 Non-Competition. In consideration of the transactions contemplated
---------------
hereunder and other valuable consideration but subject to Section 5.5 of
this Agreement, Xxxxxxx hereby covenants and agrees with Xxxxxx that
Xxxxxxx and each of its Affiliates will not, between the Closing Date and
the second (2nd) anniversary of the Closing Date, engage in, directly or
indirectly, or carry on any business in the Territory in whatever form
which shall consist of the manufacturing and/or packaging, distribution
or sale of any ethical pharmaceutical product whose active ingredient(s)
consist(s) solely of the same active ingredient(s) as the Product;
provided that, nothing in this Article 8 shall in any way restrict or
preclude Xxxxxxx or any of its Affiliates from acquiring another company,
business or line of products (including by license thereof or through
investment therein), a non-material portion of which includes such
ethical pharmaceutical products. "Non-material" for purposes of this
Article 8 means that ethical pharmaceutical products containing such
active ingredients, account at the time of purchase for less than ten per
cent (10%) of the gross sales in the Territory of all products included
in the acquired company, business or line of products. If Xxxxxxx
acquires any company, line of products or business with products as in
(i) above, Xxxxxxx agrees to negotiate with Xxxxxx or Transferee, as
applicable, toward a possible sale of such products to Xxxxxx or
Transferee in the Territory.
ARTICLE 9 -- MISCELLANEOUS
--------------------------
9.1 Notices. Any notice or other communication under this Agreement shall be
-------
in writing and shall be considered given when delivered personally or
three (3) days after being mailed by registered mail, return receipt
requested, to the applicable party at the address set forth below (or at
such other address as a party may specify by notice given to the other):
If to Xxxxxxx, to: Xxxxxxx Laboratories Inc.
Meridian Center III
0 Xxxxxxxxxx Xxx Xxxx Xxxxxxxx: (000) 000-0000
Xxxxxxxxx, XX 00000 Att'n: Xxxx X. Xxxxxxxxxx
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Att'n: Xxxx X. Xxxxxxxxxx
President
with a copy to: Xxxxxxx Laboratories Inc.
Meridian Center III
0 Xxxxxxxxxx Xxx Xxxx Xxxxxxxx: (000) 000-0000
Xxxxxxxxx, XX 00000 Att'n: Xxxxxxx X. Xxxxxx
Att'n: Xxxxxxx X. Xxxxxx
Vice President and
General Counsel
If to Xxxxxx, to: X. X. Xxxxxx & Co.
0000 Xxx Xxxxxxx Xxxx
Xxxxxx, Xxxxxxxx 00000 Telecopy: (000) 000-0000
Att'n: Controller, Att'n: Controller, US Operations
US Operations
with a copy to: X. X. Xxxxxx & Co.
0000 Xxx Xxxxxxx Xxxx Telecopy: (000) 000-0000
Xxxxxx, Xxxxxxxx 00000 Att'n: Xxxxxx X. Xxxxxxxxx
Att'n: Xxxxxx X. Xxxxxxxxx
Vice President and
General Counsel
9.2 Finders. Each of the parties represents and warrants to the other that
-------
it has not retained or dealt with any broker or finder in connection with
the transactions contemplated by this Agreement.
9.3 Headings. The Section headings of this Agreement are for reference
--------
purposes only and are to be given no effect in the construction or
interpretation of this Agreement.
9.4 Governing Law. This Agreement shall be governed by and construed in
-------------
accordance with the domestic law of the state of Illinois applicable to
agreements made and to be performed in Illinois, without regard to
principles of conflicts of laws thereof.
9.5 Severability. If any provision of this Agreement shall be deemed illegal
------------
or unenforceable, such illegality or unenforceability shall not affect
the validity and enforceability of any other provision of this Agreement,
which shall be construed as if such illegal or unenforceable provision or
provisions had not been inserted herein.
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9.6 Assignment. Neither party may assign any of its rights or delegate any
----------
of its duties under this Agreement without the prior written consent of
the other party. No assignment shall relieve the assigning party of any
of its obligations or liabilities under this Agreement.
9.7 Entire Agreement. This Agreement, including the schedules and exhibits,
----------------
together with the confidentiality agreement dated August 26, 1997 between
Xxxxxx and Xxxxxxx, contains a complete statement of all the arrangements
between the parties with respect to the transaction contemplated herein,
and cannot be changed or terminated orally. This Agreement may not be
amended except by an instrument in writing signed on behalf of each party
hereto by a duly authorized officer of such party.
9.8 Costs. Each party shall bear its own costs and expenses incurred in
-----
negotiating this Agreement.
9.9 Waiver of Default. No waiver of any default hereunder by any party or
-----------------
any failure to enforce any rights hereunder shall be deemed to constitute
a waiver of any subsequent default with respect to the same or any other
provision hereof. No waiver shall be effective unless made in
writing with specific reference to the relevant provisions(s) of this
Agreement and signed by a duly authorized representative of the party
granting the waiver.
9.10 Publicity. Except as required by law, the parties agree to keep this
---------
Agreement confidential until they mutually agree on publicity. All
publicity regarding this Agreement shall be jointly planned and
coordinated between the parties.
9.11 Survival. All indemnification and confidentiality provisions contained
--------
or referenced in this Agreement shall survive the termination of this
Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
X. X. XXXXXX & CO. XXXXXXX LABORATORIES INC.
By: _______________________ By: ___________________________
its_____________________ its__________________________
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Exhibits and Schedules
----------------------
Exhibit
-------
A Distribution Agreement
B Performance Guarantee
Schedule
--------
1.13 Product Registration
2.3 Assumed Obligations
4.1(c) Contracts Requiring Consents
4.1(f) Pending Suits and Claims
4.1(g) Compliance
4.1(h) Material Contracts
4.1(i) Exceptions to Ownership of
Intellectual Property
4.1(j) Financial Information
4.1(l) Customer List
4.1(m) Material Adverse Changes
EXHIBIT A
DISTRIBUTION AGREEMENT
----------------------
EXHIBIT B
PERFORMANCE GUARANTEE
---------------------
In consideration of the execution by X. X. Xxxxxx & Co. of the foregoing
Asset Purchase Agreement, ("Agreement") Xxxxxxx Pharmaceutical Corporation
hereby guarantees to X. X. Xxxxxx & Co. and its Affiliates, as principal
and not as surety, the performance by Xxxxxxx Laboratories Inc. of all of
its obligations under the Agreement (including, without limitation, the
Exhibits thereto).
This Guarantee shall survive the amendment, expiration or other termination
of the Agreement or any assignment by Xxxxxxx Laboratories Inc. of its
rights and obligations under such agreement.
Xxxxxxx Pharmaceutical Corporation
By
Its
Date ________________
