Execution Copy
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ASSET PURCHASE AGREEMENT
among
aaiPHARMA INC., aaiPHARMA LLC, AAI PROPERTIES, INC.
and
MAYNE PHARMA (USA) INC.
dated as of February 27, 2004
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TABLE OF CONTENTS
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ARTICLE I
DEFINITIONS
Section 1.01 Defined Terms................................................. 1
Section 1.02 Construction of Certain Terms and Phrases..................... 12
ARTICLE II
PURCHASE AND SALE OF ASSETS
Section 2.01 Purchase and Sale of Assets................................... 13
Section 2.02 Assignability and Consents.................................... 13
ARTICLE III
ASSUMPTION OF LIABILITIES
Section 3.01 Assumption of Assumed Liabilities............................. 14
ARTICLE IV
PURCHASE PRICE AND PAYMENT
Section 4.01 Purchase Price................................................ 14
ARTICLE V
CLOSING
Section 5.01 Time and Place................................................ 15
Section 5.02 Deliveries at Closing......................................... 15
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF SELLERS
Section 6.01 Organization.................................................. 17
Section 6.02 Authority of Seller........................................... 18
Section 6.03 Consents and Approvals........................................ 18
Section 6.04 Non-Contravention............................................. 19
Section 6.05 Assumed Contracts............................................. 19
Section 6.06 Financial Statements.......................................... 20
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Section 6.07 Intellectual Property Rights.................................. 21
Section 6.08 Absence of Adverse Effects.................................... 23
Section 6.09 Title to Assets............................................... 23
Section 6.10 Litigation.................................................... 23
Section 6.11 Compliance with Law........................................... 24
Section 6.12 Inventory..................................................... 25
Section 6.13 Marketing Materials........................................... 25
Section 6.14 Brokers....................................................... 25
Section 6.15 No Non-Competition Agreements or Preferential Obligations..... 25
Section 6.16 Novation...................................................... 25
Section 6.17 No Other Representations and Warranties....................... 25
ARTICLE VII
REPRESENTATIONS AND WARRANTIES OF BUYER
Section 7.01 Corporate Organization........................................ 26
Section 7.02 Authority of Buyer............................................ 26
Section 7.03 Consents and Approvals........................................ 26
Section 7.04 Non-Contravention............................................. 27
Section 7.05 Litigation.................................................... 27
Section 7.06 Brokers....................................................... 27
Section 7.07 Financial Capability.......................................... 27
ARTICLE VIII
COVENANTS OF THE PARTIES
Section 8.01 Conduct of Business........................................... 28
Section 8.02 Reasonable Best Efforts....................................... 29
Section 8.03 Cooperation................................................... 30
Section 8.04 Access........................................................ 30
Section 8.05 Public Announcements.......................................... 30
Section 8.06 Bulk Sales.................................................... 31
Section 8.07 Tax Matters................................................... 31
Section 8.08 Ancillary Agreements.......................................... 32
Section 8.09 Acquisition Proposals......................................... 32
Section 8.10 Corporate Names............................................... 33
Section 8.11 Assistance in Collecting Certain Amounts...................... 33
Section 8.12 Handling of Inventory......................................... 33
Section 8.13 Differentiation of Products................................... 33
Section 8.14 Regulatory Matters............................................ 34
Section 8.15 Chargebacks, Returns and Rebates.............................. 34
Section 8.16 Further Assurances............................................ 37
Section 8.17 Guaranty...................................................... 37
Section 8.18 Inventory, etc................................................ 37
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Section 8.19 Certain Quality Assurance Matters............................. 38
Section 8.20 Royalty....................................................... 39
Section 8.21 Sales Employees............................................... 39
Section 8.22 Certain Payments.............................................. 41
Section 8.23 Multi-Product Contracts....................................... 41
Section 8.24 Noncompete.................................................... 41
ARTICLE IX
CONDITIONS TO THE OBLIGATIONS OF SELLERS
Section 9.01 Representations, Warranties and Covenants..................... 42
Section 9.02 Covenants..................................................... 42
Section 9.03 Ancillary Agreements.......................................... 42
Section 9.04 Certificate................................................... 42
Section 9.05 No Actions or Proceedings..................................... 42
Section 9.06 Consents...................................................... 42
Section 9.07 Bank of America Consent....................................... 42
Section 9.08 Buyer Deliveries.............................................. 42
Section 9.09 Other Closing Deliveries...................................... 43
ARTICLE X
CONDITIONS TO THE OBLIGATIONS OF BUYER
Section 10.01 Representations, Warranties and Covenants..................... 43
Section 10.02 Covenants..................................................... 43
Section 10.03 Ancillary Agreements.......................................... 43
Section 10.04 Certificate................................................... 43
Section 10.05 No Actions or Proceedings..................................... 43
Section 10.06 Consents...................................................... 43
Section 10.07 Bank of America Consent....................................... 43
Section 10.08 AstraZeneca Investigation..................................... 44
Section 10.09 Seller Deliveries............................................. 44
Section 10.10 Other Closing Deliveries...................................... 44
ARTICLE XI
INDEMNIFICATION
Section 11.01 Survival of Representations, Warranties, Etc.................. 44
Section 11.02 Indemnification............................................... 44
Section 11.03 Limitations................................................... 48
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ARTICLE XII
TERMINATION AND ABANDONMENT
Section 12.01 Methods of Termination........................................ 49
Section 12.02 Procedure Upon Termination.................................... 50
ARTICLE XIII
MISCELLANEOUS
Section 13.01 Confidentiality............................................... 50
Section 13.02 Notices....................................................... 51
Section 13.03 Entire Agreement.............................................. 52
Section 13.04 Waiver........................................................ 52
Section 13.05 Amendment..................................................... 53
Section 13.06 Third Party Beneficiaries..................................... 53
Section 13.07 Assignment; Binding Effect.................................... 53
Section 13.08 Headings...................................................... 53
Section 13.09 Severability.................................................. 53
Section 13.10 Specific Performance.......................................... 53
Section 13.11 Governing Law................................................. 53
Section 13.12 Consent to Jurisdiction and Forum Selection................... 54
Section 13.13 Expenses...................................................... 54
Section 13.14 Counterparts.................................................. 54
Section 13.15 Schedules, Exhibits and Other Agreements...................... 54
Section 13.16 Seller and its Affiliates..................................... 54
EXHIBITS
SELLERS DISCLOSURE SCHEDULE
BUYER DISCLOSURE SCHEDULE
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ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement (this "Agreement") is made and entered
into as of February 27, 2004, among aaiPharma Inc., a Delaware corporation
("AAI"), aaiPharma LLC, a Delaware limited liability company, and AAI
Properties, Inc., a North Carolina corporation ("AAI Properties") (together with
AAI and aaiPharma LLC, the "Sellers") and Mayne Pharma (USA) Inc., a Delaware
corporation ("Buyer").
RECITALS
WHEREAS, Sellers are engaged in the business of having manufactured,
marketing, promoting, selling and distributing the Products (as defined below)
in the United States (as defined below) (the "Business").
WHEREAS, subject to the terms and conditions of this Agreement,
Sellers desires to sell to Buyer, and Buyer desires to purchase from Sellers,
substantially all of the assets, tangible and intangible, associated with the
Business and the Products.
AGREEMENT
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and promises contained herein, and for other good and valuable
consideration, the receipt and sufficiency of which hereby are acknowledged, the
Parties agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01. Defined Terms. As used in this Agreement, the
following defined terms have the meanings described below:
"Accounts Receivable" means all trade accounts and notes receivable
and other miscellaneous receivables of the Business, including those that are
not evidenced by instruments or invoices, existing as of the Closing.
"Action or Proceeding" means any action, suit, proceeding,
arbitration, Order, inquiry, hearing, assessment with respect to fines or
penalties, or litigation (whether civil, criminal, administrative, investigative
or informal) commenced, brought, conducted or heard by or before, or otherwise
involving, any Governmental or Regulatory Authority.
"Adverse Effect" means an effect or condition that, individually or
aggregated with other effects or conditions, is materially adverse to (i) the
Purchased Assets taken as a whole; (ii) the business, results of operations, or
financial condition of the Business taken as a whole; or (iii) any Product taken
individually.
"Affiliate" means, with respect to any Person, another Person that
directly, or indirectly through one or more intermediaries, controls, is
controlled by or is under common control with such Person. "Control" and, with
correlative meanings, the terms "controlled by" and "under common control with"
means the power to direct or cause the direction of the management or policies
of a Person, whether through the ownership of voting securities, by contract,
resolution, regulation or otherwise.
"Agreement" means this Agreement, the Sellers Disclosure Schedule,
the Buyer Disclosure Schedule and the Schedules and Exhibits hereto.
"Ancillary Agreements" means, collectively, the Xxxx of Sale,
Assignment and Assumption Agreement, the Transition Services Agreement, the AZ
Consent Agreements, the Enzon Consent Agreement, the Trademark Assignment
Agreement, the Domain Name Transfer Agreement, the License Agreement and the
Guaranty.
"Applicable Employees" has the meaning set forth in Section 8.21(b).
"Approval Date" means the date on which the waiting period (and any
extension thereof) under the Xxxx-Xxxxx-Xxxxxx Act applicable to the
transactions contemplated hereby expires or is terminated.
"Aquasol A Product" means the vitamin A pharmaceutical product
marketed and sold under the trademark "Aquasol A" parenteral dose pursuant to
FDA approval under NDA 06-823.
"Aquasol E Product" means the vitamin E nutritional product marketed
and sold under the trademark "Aquasol E".
"Assets and Properties" and "Assets or Properties" of any Person
means all assets and properties of any kind, nature, character and description
(whether real, personal or mixed, whether tangible or intangible, whether
absolute, accrued, contingent, fixed or otherwise and wherever situated),
including the goodwill related thereto, operated, owned or leased by such
Person, including cash, cash equivalents, accounts and notes receivable, chattel
paper, documents, instruments, general intangibles, real estate, equipment,
inventory, goods and intellectual property.
"Assumed Contract" means those Contracts identified in Section
1.1(a) of the Sellers Disclosure Schedule.
"Assumed Liabilities" means (i) all Liabilities and obligations that
Buyer has expressly assumed or agreed to assume under this Agreement or any
Ancillary Agreement; (ii) all Liabilities and obligations under or pursuant to
the Assumed Contracts to be performed following the Closing, but specifically
excluding Sellers' payment obligations under Section 4.01 of the AZ APA and
Sellers' payment obligations in respect of the contractual obligations owed to
AstraZeneca LP that are described in Section 8.22 of this Agreement; (iii) all
Liabilities and obligations relating to recalls or
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product liability claims or threatened claims or injuries caused by Products
manufactured and released by or on behalf of Buyer; and (iv) all other
Liabilities and obligations that arise out of or are related to the Purchased
Assets (including the Regulatory Approvals), the Business or the Products,
attributable to occurrences and circumstances arising on or after the Closing.
"AZ APA" means that certain Asset Purchase Agreement between
AstraZeneca AB and aaiPharma LLC (f/k/a Neosan Pharmaceuticals Inc.), dated as
of July 25, 2001, and the amendment thereto effective as of December 31, 2002.
"AZ Consent Agreements" mean consent agreements with respect to the
assignment and assumption of the AZ APA and the Supply Agreement that are
reasonably satisfactory to Buyer and Seller, it being understood that consent
agreements in the forms set forth in Exhibit A-1 and A-2 attached hereto are
satisfactory to Buyer and Sellers.
"Base Purchase Price" has the meaning set forth in Section 4.01(a).
"Benefit Plans" has the meaning set forth in Section 8.21(b).
"Xxxx of Sale, Assignment and Assumption Agreement" means a xxxx of
sale, assignment and assumption agreement substantially in the form attached
hereto as Exhibit B.
"Books and Records" means, to the extent owned by Sellers and their
Affiliates, all paper and electronic versions of files, documents, instruments,
papers, books, ledgers, plans, correspondence, memoranda, maps, diagrams,
photographs and videotapes, to the extent relating to the Purchased Assets,
Products or Business (other than Marketing Materials), including any pricing
lists, customer lists vendor lists, electronic territory management system
reports and data, sales representative call plans, financial data, regulatory
information or files (including adverse event reports and annual regulatory
reports, but not including the Regulatory Approvals), litigation, adverse claims
or demands, investigation information or files, trademark registration
certificates, trademark renewal certificates, documentation or other tangible
property to the extent relating to the Transferred Intellectual Property, the
Products or the Regulatory Approvals, including all documentation relating to
the product processes, analytical methods and tests, development, validation and
manufacturing of the Products not otherwise included in the Regulatory
Approvals, but in each case excluding the Regulatory Approvals themselves and
redacting or excluding matter to the extent that it does not relate to the
Purchased Assets, Products or Business, with Sellers retaining ownership of such
redacted or excluded matter.
"Business" has the meaning set forth in the recitals to this
Agreement.
"Business Day" means a day other than Saturday, Sunday or any day on
which banks located in the County of New York are authorized or obligated to
close.
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"Buyer" has the meaning set forth in the preamble to this Agreement.
"Buyer Disclosure Schedule" has the meaning set forth in the
preamble of Article VII to this Agreement.
"Buyer Governmental Consents" has the meaning set forth in Section
7.03.
"Closing" has the meaning set forth in Section 5.01.
"Closing Date" means the date that the Closing actually occurs as
provided in Section 5.01.
"Contract" means any and all legally binding commitments, contracts,
purchase orders, leases, or other agreements, whether written or oral.
"Copyrights" means all copyrights in and to any of the Purchased
Assets, including the Marketing Materials, the Invention Disclosures and
copyrights associated with the Purchased Trademarks.
"Corporate Names" has the meaning set forth in Section 8.10(a).
"Domain Names" means those domain names listed in Section 1.01(b) of
the Sellers Disclosure Schedule.
"Domain Name Transfer Agreement" means a domain name transfer
agreement substantially in the form attached hereto as Exhibit C attached
hereto.
"Encumbrance" means any mortgage, pledge, assessment, security
interest, deed of trust, lease, lien, adverse claim, levy, charge or other
encumbrance of any kind, or any conditional sale or title retention agreement or
other agreement to give any of the foregoing in the future.
"Environmental Law" means any applicable Law relating to (i) the
protection of human health or the environment (including air, water vapor,
surface water, groundwater, drinking water supply and surface or subsurface
land) or (ii) the exposure to, or the use, storage, recycling, treatment,
generation, transportation, processing, handling, labeling, management,
emission, release or disposal of any Hazardous Substance or waste.
"Enzon Consent Agreement" means a consent agreement with respect to
the assignment and assumption of the Processing and Packaging Agreement dated
April 22, 1998 between Enzon Pharmaceuticals, Inc. (as successor in interest to
The Liposome Company, Inc.) and aaiPharma, LLC (as successor in interest to
Astra USA, Inc.), and the amendment thereto dated as of August 15, 2001,
reasonably satisfactory to Buyer and
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Sellers, it being understood that a consent agreement in either of the forms set
forth in Exhibit A-1 or A-2 is satisfactory to Buyer and Sellers.
"Excluded Assets" means all Assets and Properties of Seller and
their Affiliates except the Purchased Assets.
"Excluded Liabilities" means all Liabilities of Seller and its
Affiliates except the Assumed Liabilities. The term "Excluded Liabilities"
includes, without limitation, the following Liabilities incurred by Sellers and
their Affiliates: (i) any accounts payable or any other payment obligations or
Indebtedness of Seller and their Affiliates; (ii) any Liability arising out of
or relating to the Excluded Assets; (iii) any Liability arising out of or
resulting from Seller's ownership of the Purchased Assets or conduct, prior to
the Closing, of the Business that is not an Assumed Liability, including,
without limitation, (A) any product liability, breach of warranty, contract or
similar causes of action or claims, whether in tort, contract or otherwise,
regardless of when asserted, which resulted from or related to the use or misuse
of any product, other than the Products, designed, tested, marketed, sold or
supplied by or on behalf of Sellers or their Affiliates, (B) subject to Section
8.12, any product liability, breach of warranty, contract or similar causes of
action or claims, whether in tort, contract or otherwise, regardless of when
asserted, which resulted from or related to the use or misuse of any Product
manufactured and released by or on behalf of Sellers or their Affiliates, (C)
any violation or alleged failure to comply by Sellers or any of their Affiliates
of any Law or governmental policy (including, without limitation, the rules,
regulations and policies applicable under the federal Medicare program or any
state Medicaid program), (D) subject to Section 8.15, any Liability relating to
the pricing of the Products by Seller or their Affiliates, rebates, chargebacks
or other forms of discounts granted by Sellers or any of their Affiliates, or
claims for overcharges, or the marketing of the Products by Seller, any of their
Affiliates or any Person acting on behalf of Seller or any of their Affiliates,
and (E) any Liability relating to any Environmental Law or the presence of, or
exposure to, any Hazardous Substance; (iv) any Liability in respect of
Indebtedness or Encumbrances directly related thereto; (v) any Liability,
obligation or commitment of any kind arising out of or relating to employment,
termination, compensation or benefits (including severance) for the past,
present or future employees of Sellers, their Affiliates or any of their
respective contractors, including, without limitation, all Liabilities with
respect to the Sales Employees which arose out of events occurring prior to the
separation of such Sales Employees from Sellers; (vi) any Liability, obligation
or commitment of any kind arising out of or relating to any contract, agreement,
lease, license, commitment, sale and purchase order and other instrument entered
into by Sellers other than those obligations under the Assumed Contracts
expressly assumed by Buyer pursuant to an Ancillary Agreement; (vii) any
Liability in respect of claims made by, or causes of action asserted by, any
securityholder of Sellers or any of their Affiliates in connection with this
Agreement, the transactions contemplated hereby or otherwise; (viii) any
Liability for Transfer Taxes imposed or assessed as a result of the transactions
effected pursuant to this Agreement; (ix) any Liability for indemnification of,
or advancement of expenses or payment of insurance proceeds to, any present or
former director or officer of (or other
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persons serving in a fiduciary capacity at the request of) Seller or any of
their Affiliates based upon an actual or alleged breach of fiduciary duty of
such person; (x) any Liability of Seller or any of their Affiliates for any
professional, financial advisory or consulting fees and expenses incident to, or
arising out of, the negotiation, preparation, approval or authorization of this
Agreement or the transactions contemplated hereby or any other proposed
transaction for the direct or indirect sale of the Business or any portion
thereof or any Purchased Assets, including, without limitation, the fees,
expenses and disbursements of Sellers' counsel, accountants, auditors,
appraisers and financial advisors; (xi) any Liability of Sellers or any of their
Affiliates in respect of automobile or other vehicle leases that Sellers or
their Affiliates have entered into; (xii) any Liability of Sellers or any of
their Affiliates arising out of matters occurring, or obligations incurred,
after the Closing Date (other than Assumed Liabilities and Losses for which
Buyer has an obligation to indemnify Sellers, their Affiliates and their
respective officers, directors, employees and agents); (xiii) any Liabilities
arising out of the agreements and instruments specified in Section 6.05(a) of
the Sellers Disclosure Schedule; and (xiv) subject to Section 8.24, the
Multi-Product Contracts.
"Expiration Date" means the Business Day prior to the eighteenth
(18th) month anniversary of the Closing Date.
"FDA" means the United States Food and Drug Administration.
"GAAP" means United States generally accepted accounting principles,
consistently applied.
"Governmental or Regulatory Authority" means any court, tribunal,
arbitrator, authority, agency, commission, official or other instrumentality of
the United States, or any state, county, city or other political subdivision.
"Government Rebates" means all state and federal Medicaid/Medicare
rebates related to the Products.
"Gross Margin" has the meaning set forth in Section 6.06(d).
"Guaranty" has the meaning set forth in Section 8.17.
"Xxxx-Xxxxx-Xxxxxx Act" means the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976, as amended.
"Hazardous Substance" means any substance that is listed, defined,
regulated, designated or classified as hazardous, toxic or harmful under
applicable Law or is otherwise regulated by a Governmental or Regulatory
Authority, including petroleum compounds, asbestos-containing material, black
mold and polychlorinated biphenlys.
"Indebtedness" means (i) all Liabilities for borrowed money, whether
current or funded, secured or unsecured, all obligations evidenced by bonds,
debentures,
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notes or similar instruments, and all Liabilities in respect of mandatorily
redeemable or purchasable capital stock or securities convertible into capital
stock; (ii) all Liabilities for the deferred purchase price of property; (iii)
all Liabilities in respect of any lease of (or other arrangement conveying the
right to use) real or personal property, or a combination thereof, which
liabilities are required to be classified and accounted for under GAAP as
capital leases; (iv) all Liabilities for the reimbursement of any obligor on any
letter of credit, banker's acceptance or similar credit transaction securing
obligations of a type described in clause (i), (ii) or (iii) above to the extent
of the obligation secured, and all Liabilities as obligor, guarantor, or
otherwise, to the extent of the obligation secured.
"Indemnification Claim Notice" has the meaning set forth in Section
11.02(c).
"Indemnified Party" has the meaning set forth in Section 11.02(c).
"Indemnifying Party" has the meaning set forth in Section 11.02(c).
"Intellectual Property" means all (i) trademarks, service marks,
brand names, certification marks, collective marks, d/b/a's, Internet domain
names, logos, symbols, trade dress, assumed names, fictitious names, trade
names, and other indicia of origin, all applications and registrations for the
foregoing, and all goodwill associated therewith and symbolized thereby,
including all renewals of same; (ii) all patents, registrations, invention
disclosures and applications therefor, including divisions, continuations,
continuations-in-part and renewal applications, and including renewals,
extensions and reissues (collectively, "Patents") and all inventions and
discoveries whether patentable or not; (iii) confidential information, trade
secrets, including processes, schematics, business methods, formulae, drawings,
prototypes, models, designs, customer lists and supplier lists (collectively,
"Trade Secrets"); (iv) know-how, analytical methodology, process, methods,
Product specifications, technical knowledge, expertise, skill, practice,
procedures, preclinical, clinical, stability, laboratory notebooks and other
data and results, market studies and all other experience and know-how
(collectively, "Know-How"); (v) published and unpublished works of authorship,
whether copyrightable or not (including without limitation databases and other
compilations of information), copyrights therein and thereto, and registrations
and applications therefor, and all renewals, extensions, restorations and
reversions thereof; and (vi) all other intellectual property or proprietary
rights.
"Invention Disclosures" means those invention disclosures listed in
Section 1.01(c) of the Sellers Disclosure Schedule.
"Inventory" means all inventory of finished Products owned as of the
Closing by Sellers or any of their Affiliates, whether held at a location or
facility of Sellers (or of any other Person on behalf of Sellers or any of their
Affiliates) or whether in transit to or from Sellers or any of their Affiliates
(or any such other Person).
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"Knowledge" and "Known" with respect to any Party, means the actual
knowledge of the senior executive officers (or persons performing similar
functions) of such Person, after reasonable inquiry.
"Law" means any federal, state or local law, statute or ordinance,
or any rule, regulation, or published guidelines promulgated by any Governmental
or Regulatory Authority.
"Liability" means any liability (whether known or unknown, asserted
or unasserted, absolute or contingent, accrued or unaccrued, liquidated or
unliquidated, and due or to become due), including any liability for Taxes
(whether arising under Treasury Regulation Section 1.1502-6 or otherwise).
"License Agreement" means the License Agreement between Buyer and
Seller attached hereto as Exhibit L.
"Losses" means any damages, losses, charges, Liabilities, claims,
demands, actions, suits, proceedings, payments, judgments, settlements,
assessments, deficiencies, taxes, interest, penalties, and costs and expenses
(including removal costs, remediation costs, closure costs, fines, penalties and
expenses of investigation and ongoing monitoring, reasonable attorneys' fees,
and reasonable out-of-pocket disbursements).
"Marketing Materials" means, to the extent owned by Sellers and
their Affiliates, all paper and electronic versions of (i) all market research,
marketing plans, media plans, advertising, marketing-related clinical study
results, form letters and medical queries, sales training materials, customer
lists, NWDA forms, supplier lists, display materials, trade show booth panels,
banners, stands and the like, and information with respect to sales of Products
(including doctors, GPOs and pharmacists), marketing books and records owned by
Sellers and their Affiliates and used in connection with the marketing and
promotion of the Products; and (ii) those items of advertising and promotional
materials and literature owned by Sellers and their Affiliates as of the Closing
and used in connection with the advertising and promotion of the Products (the
"Promotional Materials"); provided that "Marketing Materials" shall exclude the
labeling of the Products, which shall be deemed part of the Regulatory Approvals
and DDD reports received from IMS.
"Multi-Product Contracts" has the meaning set forth in Section 6.05.
"M.V.I.-12" means the vitamin-related pharmaceutical product
marketed and sold under the trademark "M.V.I.-12" (including M.V.I.-12
single-dose vials, M.V.I.-12 multi-dose vials and M.V.I.-12 unit-dose vials)
pursuant to FDA approval under NDA 08-809.
"M.V.I.-Adult" means the vitamin-related pharmaceutical products
including single-dose and unit-dose vials approved by the FDA under NDA 21-625.
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"M.V.I.-Adult Bulk" means the vitamin-related pharmaceutical product
approved by the FDA under NDA 21-643.
"M.V.I.-No K" means the vitamin-related pharmaceutical product
(current NDC#s 00000-000-00 (single dose), 00000-000-00 (unit vial) and
00000-000-00 (pharmacy bulk pack)) which does not contain vitamin K, for which
Sellers filed supplemental application S-052 to NDA 08-809 in December 2003.
"M.V.I.-No K Sales" means gross sales in the United States of
M.V.I.-No K by Buyer, its Affiliates, any successor or assignee of Buyer or its
Affiliates or any licensee of Buyer, its Affiliates or a successor or assignee
of Buyer or its Affiliates (the "M.V.I. No K Sellers") less rebates, chargebacks
and other forms of discounts granted by or on behalf of and paid by M.V.I. No K
Sellers, and claims for overcharges paid by M.V.I.-No K Sellers. "M.V.I.-No K
Sales" excludes sales of any products other than M.V.I-No K.
"M.V.I.-Pediatric" means the vitamin-related pharmaceutical product
marketed and sold under the unregistered trademark "M.V.I.-Pediatric" pursuant
to FDA approval under NDA 18-920.
"Order" means any writ, judgment, decree, injunction or similar
order of any Governmental or Regulatory Authority (in each such case whether
preliminary or final).
"Ordinary Course of Business" means such action that is taken in the
ordinary course of the Business and is consistent with the recent past practices
of the Business.
"Other Rebates" means all credits, utilization based rebates,
discounts, allowances and similar payments to wholesalers and other
distributors, buying groups, insurers and other institutions related to Products
other than Government Rebates.
"Other Sellers Third Party Consents" has the meaning set forth in
Section 6.03(c).
"Parties" means Buyer and Sellers collectively, and "Party" means
any of them.
"Permitted Encumbrance" means (i) any Encumbrance for Taxes not yet
due or delinquent or for those Taxes being contested in good faith by
appropriate proceedings for which adequate reserves have been established and
(ii) any minor imperfection of title or similar Encumbrance that individually or
in the aggregate would not have an Adverse Effect or affect Buyer's use, or the
marketability, of any Purchased Asset.
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"Person" means any natural person, corporation, general partnership,
limited partnership, limited liability company, proprietorship, other business
organization, trust, union, association or Governmental or Regulatory Authority.
"Pipeline Inventory" has the meaning set forth in Section 8.18(c).
"Product" or "Products" means each or all of the following products:
(i) M.V.I.-Adult; (ii) M.V.I-Adult Bulk; (iii) M.V.I-12; (iv) M.V.I.-No K; (v)
M.V.I.-Pediatric; (vi) Aquasol A; and (vii) Aquasol E.
"Purchase Price" has the meaning set forth in Section 4.01(b).
"Purchased Assets" means, subject to Section 2.02: (i) the
Transferred Intellectual Property; (ii) subject to the AZ Consent Agreements and
the Enzon Consent Agreement, as applicable, the Assumed Contracts; (iii) the
Marketing Materials; (iv) the Books and Records; (v) the Regulatory Approvals;
(vi) all rights, title and interest in the Products; (viii) the Purchased
Equipment; (x) the Inventory; and (xi) all rights, title and interest in and to
prepaid FDA establishment fees and prepaid FDA product fees with respect to the
Products. The Purchased Assets do not include any fixed assets other than the
Purchased Equipment.
"Purchased Trademarks" means those trademarks listed in Section
1.01(e) of the Sellers Disclosure Schedule, including all applications,
renewals, registrations and common law rights and derivatives thereof.
"Registered" means issued by, registered with, or renewed by any
Governmental or Regulatory Authority or Internet domain name registrar.
"Purchased Equipment" means (i) the 12 mobile tanks with skids (the
"Mobile Tanks") purchased by Seller pursuant to the Xxxx of Sale dated August
17, 2001; and (ii) the filling machine described in Section 1.01(d) of the
Sellers Disclosure Schedule, and the related spare parts, and documents (such
filling machine, spare parts and documents owned by Sellers collectively, the
"Filling Machine").
"Registered" means issued by, registered with, or renewed by any
Governmental or Regulatory Authority or Internet domain name registrar.
"Regulatory Approvals" means each New Drug Application, Abbreviated
New Drug Application and Supplement to New Drug Application listed in Section
1.01(g) of the Sellers Disclosure Schedule, and all supplements thereto.
"Remaining Purchase Price" has the meaning set forth in Section
4.01(b).
"Required Sellers Third Party Consents" has the meaning set forth in
Section 6.03(b).
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"Returns" means all units of Products returned by the Trade to
either Party.
"Sales Employees" means the sales and marketing employees of the
Business listed in Section 1.01(h) of the Sellers Disclosure Schedule.
"Sellers" has the meaning set forth in the Preamble to this
Agreement.
"Sellers Disclosure Schedule" has the meaning set forth in the
preamble to Article VI of this Agreement.
"Sellers Governmental Consents" has the meaning set forth in Section
6.03(a).
"Sellers Monthly Volume" has the meaning set forth in Section
6.06(c).
"Supply Agreement" has the meaning set forth in Section 8.22.
"Tax" means (i) all federal, state or local and all foreign taxes,
including any net income, alternative or add-on minimum tax, gross income, gross
receipts, sales, use, ad valorem, transfer, franchise, profits, license, excise,
severance, stamp, occupation, premium, property, environmental or windfall
profit tax, custom, duty or other tax, governmental fee or other like assessment
imposed by a governmental, regulatory or administrative entity or agency
responsible for the imposition of any such tax in the United States; (ii) any
Liability for the payment of any amounts of the type described in (i) above as a
result of being a member of any affiliated, consolidated, combined, unitary or
other group for any Taxable period; and (iii) any Liability for the payment of
any amounts of the type described in (i) or (ii) above as a result of any
express or implied obligation to indemnify any other person.
"Tax Returns" means all reports and returns required to be filed
with respect to Taxes with a Governmental or Regulatory Authority.
"Third Party" means any Person other than (i) Buyer; (ii) Sellers;
(iii) any of Buyer's or Sellers' Affiliates; and (iv) any successors, assigns or
express licensees of Buyer, Sellers or their respective Affiliates.
"Third Party Claim" has the meaning set forth in Section 11.02(d).
"Trade" means all Third Party customers for the Products, including
but not limited to, hospitals, home infusion pharmacies, nursing homes,
alternate site facilities, outpatient clinics, wholesalers, distributors, buying
groups (including, but not limited to, group purchasing organizations), retail
pharmacies and physician group practices and other locations where patients are
treated with the Products.
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"Trademark Assignment Agreement" means a trademark assignment
agreement substantially in the form attached hereto as Exhibit F.
"Transfer Taxes" has the meaning set forth in Section 8.07(d).
"Transferred Intellectual Property" means (i) Know-How and Trade
Secrets owned by Sellers or their Affiliates used primarily in connection with
or pertaining primarily to the Business; (ii) the Invention Disclosures; (iii)
the Purchased Trademarks; (iv) the Domain Names; and (v) the Copyrights.
"Transition Services Agreement" means a transition services
agreement substantially in the form attached hereto as Exhibit T.
"United States" means the United States of America, its territories
and possessions, including Washington, D.C. and Puerto Rico.
"Vendor Chargebacks" has the meaning set forth in Section 8.15(a).
"Welfare Plans" has the meaning set forth in Section 8.21(b).
"Wholesaler Monthly Volume" has the meaning set forth in Section
6.06(d).
Section 1.02 Construction of Certain Terms and Phrases. Unless the
context of this Agreement otherwise requires:
(a) words of any gender include each other gender;
(b) words using the singular or plural number also include the
plural or singular number, respectively;
(c) the terms "hereof," "herein," "hereby" and derivative or
similar words refer to this entire Agreement;
(d) all references to dollar amounts shall be in United States
Dollars;
(e) the terms "Article" or "Section" refer to the specified
Article or Section of this Agreement;
(f) the term "including" or "includes" means "including without
limitation" or "includes without limitation";
(g) no M.V.I. Adult shall be deemed to be "manufactured and
released by or on behalf of Sellers" unless such M.V.I. Adult is included in
Inventory.
Whenever this Agreement refers to a number of days, such number
shall refer to calendar days unless Business Days are specified.
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ARTICLE II
PURCHASE AND SALE OF ASSETS
Section 2.01 Purchase and Sale of Assets. (a) Subject to the terms
and conditions of this Agreement, at the Closing, Sellers shall, or shall cause
their relevant Affiliates to, sell, transfer, convey, assign and deliver to
Buyer, free and clear from all Encumbrances other than Permitted Encumbrances,
and Buyer shall purchase, acquire and accept from Sellers and such Affiliates,
all of Sellers' and each such Affiliate's right, title and interest, as of the
Closing, in and to the Purchased Assets.
(b) Buyer acknowledges and agrees that the rights related to the
Purchased Assets, Products and the Business conveyed by Sellers and its
Affiliates hereunder are restricted solely to the United States and nothing
herein shall authorize Buyer to manufacture, market, sell, distribute or
otherwise exploit the Products outside of the United States; provided, however,
that all rights conveyed by Sellers hereunder to the Reformulation Intellectual
Property (as defined in the AZ APA) are world-wide rights which are not
restricted to the United States.
(c) Notwithstanding anything contained in this Agreement to the
contrary, (i) from and after the Closing, Sellers and their Affiliates shall
retain all of their right, title and interest in and to the Excluded Assets; and
(ii) Sellers may retain an archival copy of all Assumed Contracts, Books and
Records, Marketing Materials and other documents or materials conveyed hereunder
(but Sellers and their Affiliates shall not use any such archival copy for any
other purposes than as an archive).
Section 2.02 Assignability and Consents. Notwithstanding anything to
the contrary contained in this Agreement, if the sale, assignment, transfer,
conveyance or delivery or attempted sale, assignment, transfer, conveyance or
delivery to Buyer of any asset that would be a Purchased Asset is (a) prohibited
by any applicable Law or (b) would require any authorizations, approvals,
consents or waivers from a Third Party or Governmental or Regulatory Authority
and such authorizations, approvals, consents or waivers shall not have been
obtained prior to the Closing, then in either case the Closing shall proceed
without the sale, assignment, transfer, conveyance or delivery of such asset and
this Agreement shall not constitute a sale, assignment, transfer, conveyance or
delivery of such asset; provided that nothing in this Section 2.02 shall be
deemed to waive the rights of Buyer not to consummate the transactions
contemplated by this Agreement if the conditions to its obligations set forth in
Article X have not been satisfied. Subject to Section 8.02, in the event that
the Closing proceeds without the sale, assignment, transfer, conveyance or
delivery of any such asset, then following the Closing, the Parties shall use
their commercially reasonable best efforts, and cooperate with each other, to
obtain promptly such authorizations, approvals, consents or waivers; provided,
however, that Sellers shall not be required to pay any consideration to obtain
any such authorization, approval, consent or waiver. Subject to Section 8.02,
pending such authorization, approval, consent or waiver, the Parties shall
cooperate with each
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other in any mutually agreeable, reasonable and lawful arrangements designed to
provide to Buyer the benefits of use of such asset and to Seller the benefits,
including any indemnities, that, in each case, it would have obtained had the
asset been conveyed to Buyer at the Closing. To the extent that Buyer is
provided the benefits pursuant to this Section 2.02 of any Assumed Contract,
Buyer shall (x) perform for the benefit of the other parties thereto the
obligations of Sellers or any Affiliate of any Seller thereunder, including any
payments to be made thereunder; and (y) shall satisfy any related Liabilities
with respect to such Assumed Contract that, but for the lack of an
authorization, approval, consent or waiver to assign such obligations or
Liabilities to Buyer, would be Assumed Liabilities. If authorization, approval,
consent or waiver for the sale, assignment, transfer, conveyance or delivery of
any such asset not sold, assigned, transferred, conveyed or delivered at the
Closing is obtained, Seller shall assign, transfer, convey and deliver such
asset to Buyer at no additional cost to Buyer.
ARTICLE III
ASSUMPTION OF LIABILITIES
Section 3.01 Assumption of Assumed Liabilities. Subject to the terms
and conditions of this Agreement, as of the Closing Date, Buyer agrees to
assume, satisfy, perform, pay and discharge when due the Assumed Liabilities.
ARTICLE IV
PURCHASE PRICE AND PAYMENT
Section 4.01 Purchase Price. As consideration for the Purchased
Assets, Buyer shall:
(a) pay to AAI at the Closing, the sum of one hundred million
dollars ($100,000,000) (the "Base Purchase Price") in immediately available
funds by wire transfer into an account designated by Sellers two Business Days
before the Closing;
(b) pay to AAI Properties, on the later to occur of (i) the
Closing and (ii) the fifth Business Day following the date on which the FDA
approves supplement S-052 to NDA 8-809, an additional five million dollars
($5,000,000) (the "Remaining Purchase Price" and, collectively with the Base
Purchase Price, the "Purchase Price") in immediately available funds by wire
transfer into an account designated by Seller two Business Days before such
amount is due; and
(c) assume the Assumed Liabilities at the Closing.
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ARTICLE V
CLOSING
Section 5.01 Time and Place. Unless this Agreement is earlier
terminated pursuant to Article XII, the closing of the transactions contemplated
by this Agreement, including the purchase and sale of the Purchased Assets and
the assumption of the Assumed Liabilities (the "Closing"), shall take place on
the later of (i) the first Business Day on which the conditions (other than
those that, by their nature, can only be satisfied at the Closing) set forth in
Articles IX and X are satisfied or waived, and (ii) two (2) Business Days after
the Approval Date, at the offices of Xxxxxxxx & Xxxxxxxx LLP, 000 Xxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000, unless another time or place shall be agreed to by the
Parties.
Section 5.02 Deliveries at Closing.
(a) Closing Deliveries by Sellers. At the Closing, Seller shall
deliver or cause to be delivered to Buyer:
(i) physical possession, provided in such manner, at such
location and pursuant to such reasonable protocols as Buyer and
Sellers shall agree, of all tangible personal property included in
the Purchased Assets, including (A) the Regulatory Approvals; (B)
the Marketing Materials; and (C) the Books and Records (but
excluding the Mobile Tanks which shall remain in the appropriate
Third Party manufacturing facilities, and the Filling Machine which
shall be delivered pursuant to Section 5.02(c)), and appropriate
documents of transfer related thereto in form and substance
reasonably acceptable to Seller and Buyer;
(ii) an original Xxxx of Sale, Assignment and Assumption
Agreement, duly executed by Sellers;
(iii) a Transition Services Agreement, duly executed by
Sellers;
(iv) original Intellectual Property assignments of the
Transferred Intellectual Property in form and substance reasonably
acceptable to Seller and Buyer and, to the extent necessary and
appropriate, consents from third party licensors of any Transferred
Intellectual Property licensed therefrom;
(v) a Trademark Assignment Agreement, duly executed by
Sellers;
(vi) a Domain Name Transfer Agreement, duly executed by
Sellers;
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(vii) copies of all Sellers Governmental Consents and Required
Sellers Third Party Consents and all Other Sellers Third Party
Consents obtained as of Closing;
(viii) the AZ Consent Agreements, duly executed by all parties
thereto other than the Buyer;
(ix) the Enzon Consent Agreement, duly executed by all
parties thereto other than the Buyer;
(x) transfer letter with respect to each Regulatory
Approval, in form and substance reasonably satisfactory to Buyer;
(xi) an original certificate contemplated by Section 10.04,
duly executed by Sellers; and
(xii) all other such bills of sale, certificates of title and
such other documents or instruments of assignment, transfer or
conveyance, as Buyer reasonably may deem necessary to vest in or
confirm to Buyer full and complete title to, and the right to use
and enjoy, the Purchased Assets.
(b) Closing Deliveries by Buyer. At the Closing, Buyer will
deliver or cause to be delivered to Sellers:
(i) the Base Purchase Price and, if the FDA has approved
supplement S-052 to NDA 8-809, five (5) or more Business Days prior
to the Closing Date, the Remaining Purchase Price;
(ii) an original Xxxx of Sale, Assignment and Assumption
Agreement, duly executed by Buyer;
(iii) a Transition Services Agreement, duly executed by Buyer;
(iv) an original Trademark Assignment Agreement, duly
executed by Buyer;
(v) an original Domain Name Transfer Agreement, duly
executed by Buyer;
(vi) such instruments of assumption and other instruments or
documents, in form and substance reasonable acceptable to Seller and
Buyer, as may be necessary to effect Buyer's assumption of the
Assumed Liabilities;
(vii) the AZ Consent Agreements, duly executed by Buyer;
(viii) the Enzon Consent Agreement, duly executed by Buyer;
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(ix) copies of all Buyer Governmental Consents; and
(x) the certificate contemplated by Section 9.04;
(xi) an original Guaranty, duly executed by an authorized
representative of Mayne Group Limited.
(c) Post-Closing Deliveries by Seller:
(i) Within three Business Days following the Closing, Seller
shall cause Cardinal Health 105, Inc. (f/k/a CORD Logistics, Inc.)
to deliver the Inventory, free of all Encumbrances other than the
Permitted Encumbrances, to UPS, as receiving agent on behalf of
Buyer, at UPS' facility in Fort Worth, Texas. Title to the Inventory
shall transfer at the Closing. Risk of loss shall transfer upon
delivery of the Inventory to UPS, and Seller shall pay all fees,
expenses, shipping costs, taxes and insurance charges arising out of
such transfer and delivery.
(ii) Within 30 days following the Closing, Seller shall
deliver or cause to be delivered to a common carrier selected by
Buyer, the Filling Machine, in good working order and free of all
Encumbrances other than the Permitted Encumbrances, to Buyer at
Buyer's facility in Aguadilla, Puerto Rico. Title to the Filling
Machine shall transfer at the Closing. Risk of loss shall transfer
upon Closing, and Buyer shall pay all fees, expenses, shipping
costs, taxes and insurance charges arising out of such transfer and
delivery.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF SELLERS
Sellers represent and warrant to Buyer as of the date hereof and as
of the Closing Date, subject to such exceptions as are specifically disclosed in
the disclosure schedule (referencing the appropriate Sections hereof) supplied
by Sellers to Buyer and dated as of the date hereof (the "Sellers Disclosure
Schedule"), which Sellers Disclosure Schedule shall be deemed to be
representations and warranties of Sellers as if made herein, as follows:
Section 6.01 Organization. AAI and AAI Properties are corporations
and aaiPharma LLC is a limited liability company, duly organized, validly
existing and in good standing in their respective State of organization and each
has all requisite power and authority to own its assets and carry on the
Business as currently conducted by it. Each Seller transferring Purchased Assets
is duly authorized to conduct its business and is in good standing in each
jurisdiction where such qualification is required, except for any jurisdiction
where failure to so qualify could not reasonably be expected to have an Adverse
Effect or materially impair or delay Sellers' ability to perform its obligations
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hereunder. AAI owns 100% of the shares of capital stock or similar equity
interests of AAI Properties and aaiPharma LLC. No Affiliate of Sellers has any
right, title or interest in or to any of the Purchased Assets.
Section 6.02 Authority of Seller. Each Seller has all necessary
power and authority and has taken all actions necessary to enter into this
Agreement and each Ancillary Agreement and to carry out the transactions
contemplated hereby. Each Seller has taken all action required by Law, its
organization documents or otherwise to be taken by it to authorize the execution
and delivery of this Agreement and each Ancillary Agreement by Sellers and the
consummation of the transactions contemplated hereby and thereby. This Agreement
has been duly and validly executed and delivered by each Seller and, when
executed and delivered by Buyer, will constitute a legal, valid and binding
obligation of Sellers enforceable against them in accordance with its terms
except as limited by applicable bankruptcy, insolvency, reorganization,
moratorium and other laws of general application affecting enforcement of
creditors' rights generally. Each Ancillary Agreement, when executed and
delivered by the Sellers and the other parties thereto, will constitute a legal,
valid and binding obligation of Sellers enforceable against it in accordance
with its terms except as limited by applicable bankruptcy, insolvency,
reorganization, moratorium and other laws of general application affecting
enforcement of creditors' rights generally.
Section 6.03 Consents and Approvals. (a) Section 6.03(a) of the
Sellers Disclosure Schedule sets forth a complete and accurate list of all
consents, waivers, approvals, Orders or authorizations of, or registrations,
declarations or filings with, any Governmental or Regulatory Authority that are
required by or with respect to Sellers in connection with the execution and
delivery of this Agreement and each Ancillary Agreement by Sellers or the
performance of its obligations hereunder and thereunder, except for such
consents, waivers, approvals, Orders or authorizations the failure to obtain
which, and such registrations, declarations or filings the failure to make
which, are not reasonably likely to have an Adverse Effect, materially impair or
delay Sellers' ability to perform their obligations hereunder or materially
affect Buyer's use of the Purchased Assets (the "Sellers Governmental
Consents").
(b) Section 6.03(b) of the Sellers Disclosure Schedule sets forth
a complete and accurate list of all consents, waivers, approvals, or
authorizations of, or notices to, any Third Party (other than a Governmental or
Regulatory Authority) that are required by or with respect to Sellers in
connection with the execution and delivery of this Agreement and each Ancillary
Agreement by Sellers or the performance of their obligations hereunder and
thereunder, except for such consents, waivers, approvals, or authorizations the
failure to obtain which, and such notices the failure to give which, are not
reasonably likely to have an Adverse Effect, materially impair or delay Sellers'
ability to perform its obligations hereunder or materially affect Buyer's use of
the Purchased Assets (the "Required Seller Third Party Consents").
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(c) Section 6.03(c) of the Sellers Disclosure Schedule sets forth
a complete and accurate list of other consents, waivers, approvals, or
authorizations of, or notices to, any third party (other than a Governmental or
Regulatory Authority) that are required by or with respect to Sellers or their
Affiliates in connection with the execution and delivery of this Agreement by
Sellers or the performance of their obligations hereunder, which Sellers believe
are not material to conduct of the Business (the "Other Sellers Third Party
Consents").
Section 6.04 Non-Contravention. The execution and delivery by
Sellers of this Agreement does not, and the performance by them of their
obligations under this Agreement and the consummation of the transactions
contemplated hereby will not:
(a) conflict with or result in a violation or breach of any of the
terms, conditions or provisions of the organizational documents of Sellers;
(b) assuming the receipt and/or making, as the case may be, of
Sellers Governmental Consents, conflict with or result in a violation or breach
of any term or provision of any Law applicable to Sellers, the Business, the
Products or the Purchased Assets; or
(c) assuming the receipt and/or making, as the case may be, of the
Required Seller Third Party Consents, conflict with or result in a breach or
default (or an event which, with notice or lapse of time or both, would
constitute a breach or default) under any Assumed Contract.
Section 6.05 Assumed Contracts. (a) Except as set forth in Section
6.05(a) of the Sellers Disclosure Schedule the Assumed Contracts and
Multi-Product Contracts are the only Contracts other than wholesaler Contracts
to which any Seller or any of their respective Affiliates is a party, that (i)
relates directly to the manufacture, marketing, sale, promotion or distribution
of any of the Products; (ii) relates directly to the acquisition, sale,
licensing in or out, or assignment of Transferred Intellectual Property; (iii)
relates directly to the purchase or disposition of assets, or the provision of
services, to or from the Business; or (iv) relates directly to sales of Products
to any Governmental or Regulatory Authority.
(b) Section 6.05(b) of the Sellers Disclosure Schedule sets forth
a complete and correct list of each Contract and other oral or written
arrangement to which Sellers are a party and pursuant to which Sellers sell one
or more Products, together with other pharmaceutical products of Sellers, to a
Third Party (the "Multi-Product Contracts"). Sellers have made available to
Buyer copies or a reasonable summary of terms of all Multi-Product Contracts;
provided that such copies have been redacted to prevent disclosure of
information not related to the Products.
(c) Except as set forth in Section 6.05(b) of the Sellers
Disclosure Schedule, each of the Assumed Contracts and Multi-Product Contracts
is in full force and effect and enforceable against the applicable Seller and,
to the Knowledge of Sellers,
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against the other parties thereto, in each case in accordance with its terms,
except as limited by applicable bankruptcy, insolvency, reorganization,
moratorium and other laws of general application affecting enforcement of
creditors' rights generally. Neither Sellers nor, to their Knowledge, any other
party to any Assumed Contract or Multi-Product Contract is in material breach or
default in complying with any provisions thereof, to Sellers' Knowledge no
Person has made any claim with respect to any such breach or default, and to
Sellers' Knowledge no condition or set of facts exists which, with notice, lapse
of time or both would constitute any such breach or default. Except as
contemplated by this Agreement, Sellers have not assigned any of their interest
in any Assumed Contract or Multi-Product Contract.
(d) Sellers and their Affiliates are not parties to any employment
agreements with the Sales Employees, and all of the Sales Employees are "at
will" employees.
Section 6.06 Financial Statements. (a) The data and information set
forth in Section 6.06(a) of the Sellers Disclosure Schedule is true and accurate
in all material respects as of the dates specified therein, was prepared in
accordance with GAAP and does not contain any untrue statement of a material
fact or omit to state a material fact necessary in order to make the statements
made therein, and data and information presented therein, not misleading.
(b) Sellers do not now have, and have never had, any contract or
arrangement pursuant to which any Person other than a wholesaler of the Products
(including Cardinal Health, Amerisource Bergen, McKesson and Xxxxxx & Xxxxx)
issues or is entitled to issue chargebacks to Seller, and, as of the Closing
Date, Seller will have no Liability for any chargebacks made by Persons other
than wholesalers. Without limitation of the foregoing, no distributor of the
Product makes or is entitled to make any chargeback against amounts otherwise
owed to Seller, except for chargebacks made by such distributor through a
wholesaler which in turn issues the chargeback to Sellers.
(c) Section 6.06(c) of the Sellers Disclosure Schedule sets forth,
with respect to each presentation of each Product, a true and accurate
calculation of Sellers' average monthly unit sales volume for such presentation
during 2003 (such average monthly sales volume for such presentation, the
"Seller Monthly Volume"). For purposes of this Agreement, the Seller Monthly
Volume for each presentation of M.V.I. Adult shall be the same as that for
M.V.I.-12.
(d) Section 6.06(d) of the Sellers Disclosure Schedule sets forth:
(i) with respect to each wholesaler to which Sellers sold any Product in
calendar year 2003 and with respect to each presentation of each Product, a true
and accurate calculation, based on information received from wholesalers, of the
average monthly unit sales volume of sales made by Sellers to such wholesaler
with respect to such presentation during 2003 (such wholesaler's average monthly
sales volume for such presentation, the "Wholesaler Monthly Volume"), and (ii)
Sellers' gross margin per unit
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for each presentation of each Product (such gross margin with respect to such
presentation as calculated and designated in Section 6.06(d) of the Sellers
Disclosure Schedule, (the "Gross Margin").
Section 6.07 Intellectual Property Rights. (a) Section 6.07(a) of
the Sellers Disclosure Schedule sets forth a list of all licenses or similar
agreements or arrangements to which Seller and/or its Affiliates are a party,
either as licensee or licensor, relating to the Transferred Intellectual
Property and which are material to the conduct of the Business as of the Closing
Date. Unless otherwise indicated in Section 6.07(a) of the Sellers Disclosure
Schedule, all Transferred Intellectual Property that is Registered shall remain
in full force and effect immediately following the Closing.
(b) All of the Transferred Intellectual Property that is
Registered is set forth in Section 1.01(f) of the Sellers Disclosure Schedule.
(c) Except as set forth on Section 6.07(c) of the Sellers
Disclosure Schedule: (i) Sellers are the sole owner of all rights, title and
interest in all Transferred Intellectual Property that is Registered; (ii) to
Sellers' Knowledge, Sellers are the sole owner of all rights, title and interest
in the Transferred Intellectual Property that is not registered; (iii) Sellers
have not assigned, transferred, licensed, pledged, or otherwise encumbered any
of the Transferred Intellectual Property or the Reformulation Intellectual
Property; (iv) no Third Party has a superior right to the Sellers to use any of
the Transferred Intellectual Property, excluding the Trade Secrets and Know-How,
and with respect to the Trade Secrets and Know-How, to Sellers' Knowledge, no
Third Party has a superior right to the Sellers to use any of the Transferred
Intellectual Property and, except with respect to the rights reserved pursuant
to the AZ APA, the Reformulation Intellectual Property; (v) to Sellers'
Knowledge the Transferred Intellectual Property and the Reformulation
Intellectual Property are valid, subsisting and enforceable and no Third Party
has questioned or challenged the scope or validity of the Transferred
Intellectual Property nor do Sellers have Knowledge of any valid basis therefor;
(vi) all of the Transferred Intellectual Property that is Registered is valid
and subsisting, all necessary registration, maintenance and renewal fees in
connection with Transferred Intellectual Property that is Registered have been
paid; (vii) to Sellers' Knowledge, no Third Party has infringed or
misappropriated, or is infringing or misappropriating, the Transferred
Intellectual Property or the Reformulation Intellectual Property and Sellers
have not received notice from any Third Party and have no Knowledge that the use
of the Transferred Intellectual Property or the Reformulation Intellectual
Property has infringed or misappropriated, or does or will infringe or
misappropriate, the intellectual property of any Third Party or has constituted
or does or will constitute unfair competition or trade practices under the Laws
of any jurisdiction; (viii) there are no Actions or Proceedings relating to any
Transferred Intellectual Property or the Reformulation Intellectual Property,
nor to the Knowledge of Seller has any such Action or Proceeding been threatened
nor are Sellers aware of any valid basis therefor and no Transferred
Intellectual Property or the Reformulation Intellectual Property is subject to
any outstanding decree, order, judgment, agreement or stipulation restricting in
any manner
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the use, transfer or licensing thereof or that may affect the validity, use or
enforceability of the Transferred Intellectual Property or the Reformulation
Intellectual Property; (ix) no present or former employee or consultant of
Sellers owns or has any proprietary financial or other interest, direct or
indirect, in the Transferred Intellectual Property or the Reformulation
Intellectual Property; (x) except as set forth in Section 2.01(b) of the AZ APA,
none of the Transferred Intellectual Property is subject to any contractual
obligation restricting Sellers use thereof or entitling others to use the same
or in any way obligating Sellers to make payments to others; (xi) the
Transferred Intellectual Property is freely transferable and consummation of the
transactions contemplated by this Agreement will not place Sellers in breach or
default of any Contract relating to the Transferred Intellectual Property or the
Reformulation Intellectual Property, or trigger any modification, termination or
acceleration with respect to the Transferred Intellectual Property or the
Reformulation Intellectual Property, or effect any license under or Encumbrance
(other than Permitted Encumbrances) on Transferred Intellectual Property or the
Reformulation Intellectual Property; (xii) no Transferred Intellectual Property
or the Reformulation Property is sublicensed by any of Sellers to any Third
Party; and (xiii) Sellers are not obligated to make payments by way of
royalties, advances, profit sharing, commissions, fees or otherwise to any
Person in respect of any Transferred Intellectual Property or the Reformulation
Intellectual Property.
(d) The Transferred Intellectual Property, as ameliorated by the
Reformulation Intellectual Property, constitutes all of the Intellectual
Property rights owned or controlled by Seller or any of its Affiliates that are
necessary for the conduct of the Business as conducted as of the Closing Date or
are otherwise necessary for the conduct of the Business as conducted as of the
Closing Date.
(e) Sellers have taken reasonable measures to protect the
confidentiality and value of all Trade Secrets and Know-How that are owned by
Sellers in connection with the Business or included in the Reformulation
Intellectual Property, and to Sellers' Knowledge, such Trade Secrets have not
been used, disclosed to or discovered by any person except pursuant to valid and
appropriate non-disclosure and/or license agreements which have not, to Sellers'
Knowledge, been breached. All of the current and prior employees employed in the
Business have executed valid intellectual property and confidentiality
agreements for the benefit of Sellers. To Seller's Knowledge, the performance by
employees of the Business of their employment activities does not violate any
Third Party's Intellectual Property rights or such employees' contractual
obligations to any third person.
(f) NOTWITHSTANDING ANYTHING IN THIS AGREEMENT SELLERS MAKE NO
REPRESENTATIONS OR WARRANTIES WITH RESPECT TO THE INVENTION DISCLOSURES,
INCLUDING REPRESENTATIONS OR WARRANTIES WITH RESPECT TO WHETHER ANY PATENTS WILL
BE ISSUED WITH RESPECT TO THE INVENTION DISCLOSURES, THE VALIDITY OF ANY CLAIMS
SET FORTH THEREIN OR WHETHER ADDITIONAL ACTIVITIES WILL BE NECESSARY IN ORDER
FOR SUCH PATENTS TO ISSUE.
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Section 6.08 Absence of Adverse Effects. Since December 31, 2002,
Sellers have operated the Business in the Ordinary Course of Business using
commercially reasonable efforts consistent with the efforts used by Sellers in
the conduct of the Business, except as set forth in Section 6.08 of the Sellers
Disclosure Schedule, there has not been any Adverse Effect. Since December 31,
2002, except as set forth in Section 6.08 of the Sellers Disclosure Schedule,
Sellers have not: (a) mortgaged, pledged or subjected to any Encumbrance on
(other than Permitted Encumbrance) any Purchased Asset; (b) transferred or
granted any rights or options in or to any of the Purchased Assets except for
the transfer of finished Product in the Ordinary Course of Business; (c)
transferred to any Third Party any rights under any licenses, sublicenses or
other agreements with respect to the Transferred Intellectual Property; (d)
conducted its marketing and promotional activities with respect to the Product
other than in the Ordinary Course of the Business; (e) instituted any new
methods of purchase, sale or operation or instituted any changes in the Product
pricing or in promotional allowances other than in the Ordinary Course of the
Business; (f) made any changes in selling, pricing or advertising practices with
respect to the Product other than in the Ordinary Course of the Business; (g)
launched any Product packaging changes other than in the Ordinary Course of the
Business consistent with recent past practices; or (h) committed an act of gross
negligence or willful misconduct in connection with the operation of the
Business or with any of the Purchased Assets. Without limiting clause (f) of
this Section, other than as set forth Section 6.08 of the Sellers Disclosure
Schedule, Sellers have not engaged in, any tie-ins of the Products with any of
Sellers' other products.
Section 6.09 Title to Assets. (a) Except as set forth in Section
6.09 of the Sellers Disclosure Schedule, as of the Closing Date, the Purchaser
shall acquire good title to, and all right, title and interest of Sellers and
Sellers' Affiliates in and to the Purchased Assets, free and clear of all
Encumbrances, other than Permitted Encumbrances. The Purchased Assets constitute
all of the assets, rights and properties (other than the Reformulation
Intellectual Property) necessary for the operation of the Business as currently
operated by Sellers and their Affiliates. In addition, the Purchased Assets are
in all material respects adequate for the purposes for which such assets are
currently used or are held for use, and are in reasonably good repair and
operating condition (subject to normal wear and tear where applicable) and, to
Sellers' Knowledge, there are no facts or conditions affecting the Purchased
Assets which could, individually or aggregated with other effects or conditions,
interfere in any material respect with the use or operation thereof as currently
used or operated, or their adequacy for such use. Other than the Purchased
Assets, there are no items of tangible personal property owned by Sellers and
used primarily in connection with the Business.
(b) To Sellers' Knowledge, the Filling Machine meets all of AAI's
and all of the Filling Machine's manufacturer's specifications for use in the
filling stage of the production process of the dual-chambered M.V.I.-12 and
M.V.I.-Adult.
Section 6.10 Litigation. Except as set forth in Section 6.10 of the
Sellers Disclosure Schedule, there are no Actions or Proceedings (including, but
not limited to,
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Actions or Proceedings initiated by the FDA or the Securities and Exchange
Commission) pending or, to the Knowledge of Seller, threatened or reasonably
anticipated against, directly relating to, affecting or arising in connection
with (a) the Purchased Assets or the Business; (b) this Agreement; (c) the
transactions contemplated by this Agreement; or (d) the Products. No Seller and
no Affiliate of any Seller is subject to any Order that could reasonably be
expected to materially impair or delay the ability of Sellers to perform their
obligations hereunder.
Section 6.11 Compliance with Law. (a) Except to the extent that it
is not reasonably likely to have an Adverse Effect, Sellers have at all times
conducted the Business in compliance with all applicable Laws, and, except as
set forth on Section 6.11 of the Sellers Disclosure Schedule, the Regulatory
Approvals were properly submitted and have been approved by, and the Regulatory
Approvals are in good standing with the FDA. Except as set forth in Section 6.11
of the Sellers Disclosure Schedule, since August 17, 2001, Sellers have timely
filed with the FDA all required notices, supplemental applications and annual or
other reports or documents, including adverse experience reports, with respect
to the Regulatory Approvals that are material to the Business. Since August 17,
2001, with respect to each Product for which a Regulatory Approval has been
approved by the FDA, Sellers and their Affiliates have acted, and to Seller's
Knowledge, all other Persons which have performed operations covered by the
application acted, in compliance in all material respects with 21 U.S.C.
Sections 351, 352 and 355; 21 C.F.R. Parts 210, 211, 221 or 314 et seq.,
respectively, and all terms and conditions of such applications. Any and all
development of analytic testing methods by Sellers and their Affiliates has been
conducted in accordance with protocols and standard operating procedures of
Sellers and their Affiliates.
(b) NOTWITHSTANDING ANYTHING IN THIS AGREEMENT TO THE CONTRARY,
(I) SELLERS MAKE NO REPRESENTATIONS OR WARRANTIES WITH RESPECT TO ANY ANALYTICAL
TESTING METHODS NOT DEVELOPED BY SELLERS, AND (II) BUYER ACKNOWLEDGES THAT, AS
OF THE DATE HEREOF, THE REGULATORY APPROVAL WITH RESPECT TO M.V.I. NO K HAS NOT
BEEN APPROVED BY THE FDA, AND SELLERS MAKE NO REPRESENTATION OR WARRANTY
WHATSOEVER WITH RESPECT TO WHETHER SUCH REGULATORY APPROVAL WILL BE APPROVED BY
THE FDA, OR WHETHER THE FDA WILL REQUIRE FURTHER ACTIVITY PRIOR TO THE APPROVAL
OF SUCH REGULATORY APPROVAL.
(c) The Inventory, as of the Closing meets the applicable
specifications for the Inventory set forth in the applicable Regulatory
Approvals.
(d) Sellers have not received any written notice that any
Governmental or Regulatory Authority has commenced, or, to the Knowledge of
Sellers, threatened in writing to initiate any action to withdraw its approval
or request the recall of any Product, or commenced or threatened in writing to
initiate any action to enjoin production of any Product at any facility.
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(e) Sellers have made available to the Buyer, on or prior to the
tenth Business Day following the date of this Agreement, copies of all (A)
Regulatory Approvals; (B) reports of inspection observations in Sellers'
possession; (C) establishment inspection reports in Sellers' possession; (D)
certificates of analysis for each lot of Inventory; and (E) warning letters as
well as any other documents received by Seller from the FDA or any other
Governmental or Regulatory Authority to the extent relating to the Products
and/or arising out of the conduct of the Business that assert ongoing lack of
compliance with any applicable Law or regulatory requirements (including those
of the FDA) by Seller. Seller shall make certificates of analysis for each lot
of Inventory available to Buyer as they become available to Sellers. Nothing in
this subparagraph (e) shall be construed as requiring Sellers to deliver any of
the foregoing to Buyer before the Closing Date.
Section 6.12 Inventory. Buyer will receive at Closing, good and
marketable title to the Inventory free and clear of any Encumbrances other than
Permitted Encumbrances.
Section 6.13 Marketing Materials. Seller or its Affiliates at
Closing will have good and marketable title to the Marketing Materials free and
clear of any Encumbrances other than Permitted Encumbrances.
Section 6.14 Brokers. Sellers have not retained any broker in
connection with the transactions contemplated hereunder. Buyer has no, and will
have no, obligation to pay any brokers, finders, investment bankers, financial
advisors or similar fees in connection with this Agreement or the transactions
contemplated hereby by reason of any action taken by or on behalf of Sellers.
Section 6.15 No Non-Competition Agreements or Preferential
Obligations. The Purchased Assets are not subject to any non-competition
agreements with, or other agreements granting preferential rights to purchase or
license the Purchased Assets to, Third Parties.
Section 6.16 Novation. Since on or about October 1, 2002, Sellers
and Novation, LLC ("Novation") have been operating under an arrangement whereby
both Novation and Sellers notified Novation designated wholesalers of pricing
negotiated between Sellers and Novation. Since October 1, 2002 Sellers have been
paying administration fees of 2% of net sales to Novation consistent with this
arrangement.
Section 6.17 No Other Representations and Warranties. EXCEPT FOR THE
REPRESENTATIONS OR WARRANTIES EXPRESSLY SET FORTH IN THIS AGREEMENT, THE
SCHEDULES HERETO AND THE ANCILLARY AGREEMENTS, SELLERS DISCLAIM ALL OTHER
REPRESENTATIONS OR WARRANTIES, WHETHER EXPRESS OR IMPLIED, ORAL OR WRITTEN,
INCLUDING ANY INFORMATION FURNISHED BY SELLERS WITH REGARD TO THE PRODUCTS, THE
PURCHASED ASSETS AND THE BUSINESS, INCLUDING THE FUTURE PROFITABILITY OF THE
PURCHASED ASSETS, THE PRODUCTS
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OR THE BUSINESS, AND IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A
PARTICULAR PURPOSE, TITLE AND NON-INFRINGEMENT OF INTELLECTUAL PROPERTY RIGHTS.
ARTICLE VII
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Sellers as of the date hereof and
as of the Closing Date, subject to such exceptions as are specifically disclosed
in the disclosure schedule (referencing the appropriate Sections hereof)
supplied by Buyer to Sellers and dated as of the date hereof (the "Buyer
Disclosure Schedule"), which Buyer Disclosure Schedule shall be deemed to be
representations and warranties of Buyer as if made herein, as follows:
Section 7.01 Corporate Organization. Buyer is a corporation duly
organized, validly existing and in good standing under the Delaware General
Corporation Law and has all requisite power and authority to own its assets and
carry on its business as currently conducted by it. Buyer is duly authorized to
conduct its business and is in good standing in each jurisdiction where such
qualification is required, except for any jurisdiction where failure to so
qualify could not reasonably be expected, individually or in the aggregate, to
have a material adverse effect on Buyer or materially impair or delay Buyer's
ability to perform its obligations hereunder. Mayne Group Limited owns
indirectly 100% of the shares of capital stock or similar equity interest of
Buyer.
Section 7.02 Authority of Buyer. Buyer has all necessary power and
authority and has taken all actions necessary to enter into this Agreement and
each Ancillary Agreement and to carry out the transactions contemplated hereby.
The Board of Directors of Buyer has taken all action required by Law, its
Certificate of Incorporation, Bylaws or otherwise to be taken by it to authorize
the execution and delivery of this Agreement and each Ancillary Agreement by
Buyer and the consummation of the transactions contemplated hereby and thereby.
This Agreement has been duly and validly executed and delivered by Buyer and,
when executed and delivered by Sellers, will constitute a legal, valid and
binding obligation of Buyer enforceable against it in accordance with its terms
except as limited by applicable bankruptcy, insolvency, reorganization,
moratorium and other laws of general application affecting enforcement of
creditors' rights generally. Each Ancillary Agreement, when executed and
delivered by Seller and the other parties thereto, will constitute a legal,
valid and binding obligation of Sellers enforceable against it in accordance
with its terms except as limited by applicable bankruptcy, insolvency,
reorganization, moratorium and other laws of general application affecting
enforcement of creditors' rights generally.
Section 7.03 Consents and Approvals. Section 7.03 of the Buyer
Disclosure Schedule sets forth a complete and accurate list of all consents,
waivers, approvals, Orders or authorizations of, or registrations, declarations
or filings with, any
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Governmental or Regulatory Authority that is required by Buyer in connection
with the execution and delivery of this Agreement and each Ancillary Agreement
by Buyer or the performance of its obligations hereunder and thereunder (the
"Buyer Governmental Consents"). No other consents, waivers, approvals,
authorizations, registrations, declarations or filing with or from any Person is
required in order for Buyer to consummate the transactions contemplated hereby.
Section 7.04 Non-Contravention. The execution and delivery by Buyer
of this Agreement does not, and the performance by it of its obligations under
this Agreement and the consummation of the transactions contemplated hereby will
not:
(a) conflict with or result in a violation or breach of any of the
terms, conditions or provisions of the Certificate of Incorporation, Bylaws or
other organizational documents of Buyer;
(b) assuming the receipt and/or making, as the case may be, of the
Buyer Governmental Consents, conflict with or result in a violation or breach of
any term or provision of any Law applicable to Buyer; or
(c) conflict with or result in a breach or default (or an event
which, with notice or lapse of time or both, would constitute a breach or
default) under, or result in the termination or cancellation of, or accelerate
the performance required by, or result in the creation or imposition of any
security interest, lien or any other Encumbrance upon any Contract to which
Buyer is a party or by which Buyer or any of its assets is bound.
Section 7.05 Litigation. There are no Actions or Proceedings
pending, or to the Knowledge of Buyer threatened or anticipated, against,
relating to, affecting or arising in connection with (a) this Agreement or (b)
the transactions contemplated by this Agreement. Buyer is not subject to any
Order that could reasonably be expected to materially impair or delay the
ability of Buyer to perform its obligations hereunder.
Section 7.06 Brokers. Buyer has not retained any broker in
connection with the transactions contemplated hereunder. Sellers have no, and
will have no, obligation to pay any brokers, finders, investment bankers,
financial advisors or similar fees in connection with this Agreement or the
transactions contemplated hereby by reason of any action taken by or on behalf
of Buyer.
Section 7.07 Financial Capability. On the Closing Date, Buyer will
have sufficient funds to effect the Closing and all other transactions
contemplated by this Agreement.
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ARTICLE VIII
COVENANTS OF THE PARTIES
Section 8.01 Conduct of Business. (a) During the period from the
date hereof to the Closing, except as otherwise contemplated by this Agreement
or as Buyer shall otherwise agree in writing in advance, Sellers shall conduct
the Business in the Ordinary Course of Business and use their commercially
reasonable efforts to preserve and maintain the Purchased Assets and the
Business' relationship with its customers, suppliers, creditors and employees
intact.
(b) During the period from the date hereof to the Closing, except
as otherwise contemplated by this Agreement or as Buyer shall otherwise consent,
Sellers shall not, and shall cause each of their Affiliates not to, with respect
to the Business and the Purchased Assets:
(i) incur, create or assume any Encumbrance on any of the
Purchased Assets other than a Permitted Encumbrance;
(ii) sell, lease, license, transfer or dispose of any
Purchased Assets other than finished Product sold in the Ordinary
Course of Business;
(iii) terminate, extend, modify or amend any Multi-Product
Contract other than in the Ordinary Course of Business;
(iv) enter into any contract, arrangement or commitment other
than in the Ordinary Course of Business;
(v) dispose of or permit to lapse any rights in, to or for
the use of any Transferred Intellectual Property that is Registered,
or disclose to any Person that is not an employee of Buyer or
Sellers any Transferred Intellectual Property not heretofore a
matter of public knowledge, except pursuant to judicial or
administrative process or to a Third Party under an obligation of
confidentiality;
(vi) (A) increase the compensation of any of the Sales
Employees out of the Ordinary Course of Business, (B) pay or agree
to pay or increase or agree to increase any pension, retirement
allowance, severance or other employee benefit not already required
or provided for under any existing plan, agreement or arrangement to
any Sales Employee unless such benefit is offered to Sellers'
employees generally;
(vii) assume or enter into any labor or collective bargaining
agreement;
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(viii) settle any claims, actions, arbitrations, disputes or
other proceedings directly related to the Business or the Purchased
Assets;
(ix) accelerate the delivery or sale of Products, or offer
discounts on sale of Products or premiums on purchase of raw
materials, except to the extent in the Ordinary Course of Business;
(x) claim or waive any rights of material value directly
related to the Business or the Purchased Assets without the Business
receiving a realizable benefit of similar or greater value, or
voluntarily suffer any extraordinary casualty loss directly related
to the Business or the Purchased Assets;
(xi) do any other act which would cause any representation or
warranty of Seller in this Agreement to be or become untrue in any
material respect or intentionally omit to take any action necessary
to prevent any such representation or warranty from being untrue in
any material respect; or
(xii) authorize or enter into any agreement or commitment with
respect to any of the foregoing.
Section 8.02 Reasonable Best Efforts. (a) Each of the Parties shall
use its reasonable best efforts to take, or cause to be taken, all action
necessary, proper or advisable under applicable Laws to obtain all consents and
approvals of all Governmental or Regulatory Authorities and remove any
injunctions or similar impairments to the consummation of the transactions
contemplated by this Agreement; provided, however, that nothing in this Section
8.02 shall require, or be construed to require, Buyer to proffer to, or agree
to, sell or hold separate and agree to sell, before or after the Closing, any
assets, businesses, or interest in any assets or businesses of Buyer or any of
its Affiliates (or to consent to any sale, or agreement to sell, by Seller of
any of its assets or businesses, including but not limited to the Business and
the Purchased Assets) or to agree to any material changes or restriction in the
operations of any assets or businesses. Subject to applicable Law relating to
the sharing of information, Seller and Buyer shall have the right to review in
advance, and to the extent practicable each will consult the other on, all the
information relating to Seller or Buyer, as the case may be, and any of their
respective Affiliates, that appear in any filing made with, or written materials
submitted to, any Third Party and/or any Governmental or Regulatory Authority in
connection with the transactions contemplated by this Agreement. In exercising
the foregoing right, each of Seller and Buyer shall act reasonably and as
promptly as practicable. The Parties will file the notification and report forms
required to be filed under the Xxxx Xxxxx Xxxxxx Act within three (3) Business
Days after the execution of this Agreement.
(b) Subject to applicable Law and the instructions of any
Governmental or Regulatory Authority, Seller and Buyer each shall keep the other
apprised of the status of matters relating to completion of the transactions
contemplated
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hereby, including promptly furnishing the other with copies of notices or other
communications received by Seller or Buyer, as the case may be, or any of their
Affiliates, from any Third Party and/or any Governmental or Regulatory Authority
with respect to such transactions.
Section 8.03 Cooperation. Each Party shall cooperate fully with the
other in preparing and filing all notices, applications, submissions, reports
and other instruments and documents that are necessary, proper or advisable
under applicable Laws to consummate and make effective the transactions
contemplated by this Agreement, and each Party shall cooperate in the efforts of
the other Party to obtain any consents and approvals of any Governmental or
Regulatory Authority or Required Sellers Third Party Consents required to
consummate the transactions contemplated by this Agreement. Without limiting the
foregoing, Sellers shall assist Buyer in the change of the entry in the
registers of the Transferred Intellectual Property, with the costs for such
entry in the registers and such assignments being borne by Buyer.
Section 8.04 Access. (a) From the date hereof until the Closing,
Sellers shall permit Buyer and its representatives to have access to Sellers'
premises during regular business hours and upon reasonable advance notice, to
the Purchased Assets, subject to reasonable rules and regulations of Sellers and
any applicable Laws, and shall furnish, or cause to be furnished, to Buyer any
financial and operating data and other information that is available with
respect to the Purchased Assets as Buyer shall from time to time reasonably
requests. Sellers shall instruct their employees, counsel and financial advisors
to cooperate with Buyer in its investigation of the Purchased Assets.
(b) Upon the request of Sellers, Buyer shall at all times
following the Closing, to the extent permitted by Law, grant to Sellers and
their representatives the right, during normal business hours, to inspect and
copy the Books and Records and other documents obtained from Sellers in Buyer's
possession, to the extent pertaining to Actions or Proceedings.
Section 8.05 Public Announcements. Each of Sellers and Buyer agree
that, prior and subsequent to the Closing, it and its representatives shall keep
the facts surrounding the negotiation of this Agreement and the transactions
contemplated hereby, disclosures made herein and hereunder, and the results of
investigations and audits conducted hereunder, confidential and shall not
disclose such information to any other Person through a press release or
otherwise (except as necessary to carry out the terms of this Agreement or to
the extent such information becomes public information or generally available to
the public through no fault of such Party or its Affiliates) without the prior
written consent of the other Party (which shall not be unreasonably withheld,
delayed or conditioned), unless such Party has been advised by (a) counsel that
disclosure is required to be made under applicable Law or the requirements of a
national securities exchange or another similar regulatory body or (b) such
Party's independent accountants that disclosure is required in such Party's
public financial statements or the notes thereto. Notwithstanding the foregoing,
Buyer and Seller agree that each of them may issue the
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joint public statement announcing the Agreement in the form attached hereto as
Exhibit G promptly following the execution of this Agreement.
Section 8.06 Bulk Sales. Buyer and Sellers waive compliance with all
bulk sales Laws applicable to the transactions contemplated by this Agreement.
Section 8.07 Tax Matters.
(a) Sellers Liability for Taxes. Sellers shall be liable for (i)
any Taxes imposed with respect to the Business, the Products or any Purchased
Assets or any income or gain derived with respect thereto for the taxable
periods, or portions thereof, ended before the Closing Date, (ii) Losses
directly or indirectly relating to or arising out of any liability for such
Taxes, and (iii) any Transfer Taxes for which Sellers are liable pursuant to
Section 8.07(d), and Sellers shall duly and timely file all Tax Returns with
respect thereto.
(b) Buyer Liability for Taxes. Buyer shall be liable for (i) any
Taxes imposed with respect to the Business, the Products or any Purchased Assets
or any income or gains derived with respect thereto for any taxable period, or
portion thereof, beginning on or after the Closing Date, and (ii) Losses
directly or indirectly relating to or arising out of any liability for such
Taxes, and Buyer shall duly and timely file all Tax Returns with respect
thereto.
(c) Proration of Taxes. To the extent necessary to determine the
liability for Taxes for a portion of a taxable year or period that begins before
and ends after the Closing Date, the determination of the Taxes for the portion
of the year or period ending before, and the portion of the year or period
beginning on or after, the Closing Date shall be determined by assuming that the
taxable year or period ended as of the close of business on the day prior to the
Closing.
(d) Transfer Taxes. All federal, state, local or foreign or other
excise, sales, use, value added, transfer (including real property transfer or
gains), stamp, documentary, filing, recordation and other similar taxes and fees
that may be imposed or assessed as a result of the transfer of the Purchased
Assets (including VAT, if any), together with any interest, additions or
penalties with respect thereto and any interest in respect of such additions or
penalties ("Transfer Taxes"), shall be paid by Sellers.
(e) Contest Provisions. Each of Buyer and Sellers shall promptly
notify the other in writing upon receipt of notice of any pending or threatened
audits or assessments with respect to Taxes for which such other Party (or such
other party's Affiliates) may be liable hereunder. Sellers shall be entitled to
participate at their expense in the defense of any tax audit or administrative
or court proceeding relating to Taxes for which it may be liable, and to employ
counsel of its choice at its expense. Neither Party may agree to settle any
claim for Taxes for which the other may be liable without the prior written
consent of such other Party, which consent shall not be unreasonably withheld.
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(f) Assistance and Cooperation. After the Closing Date the Parties
shall cooperate fully in preparing for any audits of, or disputes with taxing
authorities regarding, any Tax Returns and payments in respect thereof. Each
Party shall (i) provide timely notice to the other in writing of any pending or
proposed audits or assessments with respect to Taxes for which such other Party
or any of its Affiliates may have a Liability under this Agreement and (ii)
furnish the other with copies of all relevant correspondence received from any
taxing authority in connection with any audit or information request with
respect to any Taxes referred to in clause (i).
(g) Maintenance of Buyer's Books and Records. Until the later of
seven years after the Closing and the expiration of any applicable statute of
limitations (including periods of waiver) for any Tax Returns filed or required
to be filed covering the periods up to and including the Closing Date, Buyer
shall, and shall cause its Affiliates to, retain all Books and Records with
respect to the Business in existence on the Closing Date and after the Closing
Date will provide Sellers access to such Books and Records for inspection and
copying by Sellers, or their agents upon reasonable request and upon reasonable
notice.
Section 8.08 Ancillary Agreements. At or prior to the Closing,
Sellers and Buyer shall execute each of the Ancillary Agreements to which it is
intended to be a party.
Section 8.09 Acquisition Proposals. Until the earlier of the
termination of this Agreement and the Closing, Seller shall not and shall cause
its officers, directors, employees, agents and representatives not to, directly
or indirectly, (i) enter into any understandings, arrangements or agreements,
relating to the direct or indirect disposition, whether by sale, merger or
otherwise, of all or any portion of the Business to any Person other than Buyer
or its Affiliates or (ii) knowingly disclose, directly or indirectly, to any
Person any regulatory information, Intellectual Property or Know-How primarily
related to the Business except as necessary to conduct the Business in the
Ordinary Course. In the event that Sellers receive an offer for such a
transaction, Sellers will provide Buyer with notice thereof as soon as practical
after receipt thereof, which notice may, in Sellers' sole discretion, include
the identity of the prospective buyer or soliciting party. Nothing in this
Section 8.09 shall preclude Sellers from soliciting any inquiries or proposals,
or enter into any discussions, negotiations, understandings, arrangements or
agreements with Third Parties relating to the disposition of one or all of
Sellers by way of merger, consolidation or stock purchase, provided that prior
to or contemporaneously with entering into any such understandings, arrangements
or agreements, Sellers shall procure from such Third Party a written agreement
stating that (i) such Third Party is contractually bound to perform the
obligations of Sellers under this Agreement, including the indemnification
obligations set forth herein, and (ii) Buyer is an intended third party
beneficiary of such written agreement with respect to the obligations of Sellers
set forth in this Agreement or any Ancillary Agreement.
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Section 8.10 Corporate Names. (a) Except as set forth in this
Section 8.10, following the Closing, Buyer shall not have any rights by virtue
of this Agreement or any of the transactions or agreements contemplated hereby
to any names, trademarks, trade names, trade dress or logos relating to Seller
or any of the Affiliates of Seller or any of their products other than those
included in the Transferred Intellectual Property (the "Corporate Names").
(b) Buyer may use in connection with its operation of the Business
(i) for up to 12 months following the Closing (or such shorter period as any
Governmental or Regulatory Authority shall designate), items of Inventory or
other Product that bear any of the Corporate Names, it being understood that
Buyer will use its reasonable best efforts to use or sell such items of Product
containing Corporate Names prior to selling Product not containing Corporate
Names; and (ii) for up to 12 months following the Closing (or such shorter
period as any Governmental or Regulatory Authority shall designate), Promotional
Materials that were transferred to Buyer as Purchased Assets that bear any of
the Corporate Names; provided that Buyer may use such Promotional Materials only
if Buyer completely removes all Corporate Names from, or completely covers all
Corporate Names on, such materials. Buyer acknowledges and agrees that Sellers
shall have no Liability arising out of or in connection with Buyer's or its
Affiliate's use of the Marketing Materials.
Section 8.11 Assistance in Collecting Certain Amounts. From and
after the Closing Date, Buyer shall remit promptly to Sellers any payments or
other sums received by Buyer that relate to any sales, shipments or other
matters occurring before the Closing Date or that otherwise are properly for the
account of Sellers. Sellers will pay Buyer for its reasonable out-of-pocket
expenses incurred for Buyer's efforts hereunder. Sellers shall, and shall cause
its Affiliates to, remit promptly to Buyer any payments or other sums received
by Sellers after the Closing Date that relate to any sales or shipments made by
Buyer after the Closing Date and Sellers shall use reasonable efforts to
transmit to Buyer all written inquiries or orders, and to refer to Buyer all
oral inquiries or orders, relating to the Business (to the extent relating to
operations thereof following the Closing) that are received by Sellers following
the Closing Date; provided that Buyer promptly shall reimburse Sellers for all
reasonable out of pocket expenses incurred by Sellers in complying with Sellers'
obligations under this Section 8.11.
Section 8.12 Handling of Inventory. From and after the Closing,
Buyer shall hold, store, and ship any Inventory in accordance with (a) all
applicable Laws; (b) current Good Manufacturing Practices; (c) the applicable
Regulatory Approval; and (d) applicable analytical methods and procedures,
material specifications, master batch records, and stability protocols.
Section 8.13 Differentiation of Products. From and after the
Closing, and as promptly as commercially practicable (but in any event not later
than six (6) months following the Closing), Buyer shall institute appropriate
procedures to ensure that products and goods of the Business, the Products and
the Purchased Assets manufactured,
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finished or sold by, or on behalf of, Buyer can be distinguished from products
and goods of the Business manufactured, finished or sold by, or on behalf of,
Sellers, including (with respect only to Products manufactured by or on behalf
of Buyer) acquiring an NDC code different than that used by the Sellers.
Section 8.14 Regulatory Matters. (a) Except as otherwise provided in
this Agreement or in any Ancillary Agreement, from and after the transfer by
Sellers to Buyer of each Regulatory Approval pursuant to the terms hereof,
Buyer, at its cost, shall be solely responsible and liable for (i) taking all
actions, paying all fees and conducting all communication with the appropriate
Governmental or Regulatory Authority required by Law in respect of such
Regulatory Approval, including preparing and filing all reports (including
adverse drug experience reports) with the appropriate Governmental or Regulatory
Authority; (ii) taking all actions and conducting all communication with Third
Parties in respect of Products sold pursuant to such Regulatory Approval
(whether sold before or after transfer of such Regulatory Approval), including
responding to all complaints in respect thereof, including complaints related to
tampering or contamination; and (iii) investigating all complaints and adverse
drug experiences in respect of Products sold pursuant to such Regulatory
Approval (whether sold before or after transfer of such Regulatory Approval).
(b) Except as otherwise provided in this Agreement or in any
Ancillary Agreement, (i) from and after the transfer by Sellers to Buyer of each
Regulatory Approval pursuant to the terms hereof, Sellers promptly shall notify
Buyer if Sellers receive a complaint or a report of an adverse drug experience
in respect of a Product sold pursuant to such Regulatory Approval, and (ii)
Sellers shall cooperate with Buyer's reasonable requests and use commercially
reasonable efforts to assist Buyer in connection with the investigation of and
response to any complaint or adverse drug experience related to a Product
manufactured and released by or on behalf of Sellers or their Affiliates.
(c) From and after the transfer by Seller to Buyer of each
Regulatory Approval pursuant to the terms hereof, Buyer shall control all
voluntary and involuntary recalls, Product withdrawals and field alerts of units
of Products sold pursuant to such Regulatory Approval (whether sold before or
after transfer of such Regulatory Approval), including recalls, Product
withdrawals and field alerts required by any Governmental or Regulatory
Authority and recalls of units of Products manufactured or released by or on
behalf of Sellers or their Affiliates deemed necessary by Seller in their
reasonable discretion. Seller promptly shall notify Buyer in the event that a
recall, Product withdrawal or field alert of any units of Product manufactured
and released by or on behalf of Seller or its Affiliates is necessary. Buyer
shall consult with Sellers with respect to the necessity and procedures for any
recall, Product withdrawal or field alert for which Sellers will have financial
responsibility.
Section 8.15 Chargebacks, Returns and Rebates. (a) With respect to
wholesaler chargebacks and any associated administrative or service fees related
to sales
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of Products sold by or on behalf of Sellers and their Affiliates or sold by or
on behalf of Buyer or its Affiliates ("Vendor Chargebacks"), Sellers shall be
financially responsible for (x) all Vendor Chargebacks occurring prior to the
Closing Date and (y) all Vendor Chargebacks relating to Products sold by or on
behalf of Sellers and their Affiliates regardless of whether they occur prior
to, on or following the Closing Date. Buyer shall be financially responsible for
all other Vendor Chargebacks occurring after the Closing Date. A Party shall
invoice the other Party on a monthly basis for any Vendor Chargebacks for which
the other Party bears responsibility and as to which invoicing Party issues a
credit or otherwise makes payment, which invoice shall include detail of such
Vendor Chargebacks on an itemized basis, and the other Party shall pay all such
invoices within thirty (30) days after the other Party's receipt thereof. For
purposes of this Section 8.15(a), Vendor Chargebacks shall be deemed to have
"occurred" on the date that the applicable wholesaler ships the related Product
to its customer. For the purposes of administering this Section 8.15(a), Vendor
Chargebacks shall be apportioned between Buyer and Sellers on a "first in, first
out" basis, with Vendor Chargebacks (and returns that Sellers are responsible
for from the Pipeline Inventory that can be determined to originate from a
wholesaler) applied against or in respect of Pipeline Inventory until Vendor
Chargebacks exceed Pipeline Inventory. Notwithstanding the foregoing, if
chargebacks exceed the sum of Pipeline Inventory and Buyer's sales of Products,
the excess chargebacks shall be attributed to Seller. Any amounts owed by a
Party pursuant to this Section 8.15(a) which are not paid when due shall bear
interest at 1.5% per month.
(b) Buyer will be responsible for all returns of Products sold on
or after the Closing, and Seller will be responsible for returns of Products
sold before the Closing. The responsibility for returns shall include, without
limitation, issuing an appropriate credit or making an appropriate reimbursement
to the returning third party. Notwithstanding the foregoing, in the event Buyer
receives Product from lots that include Product that was sold by Seller or its
Affiliates prior to the Closing (each a "Partial Lot"), Seller shall be
responsible for all returns of Product included in such Partial Lot (regardless
of who sold such Product). Each Party shall destroy Product returned to it in
accordance with Applicable Laws regardless of whether it had the responsibility
for the returned Product pursuant to this Section 8.14(a). A Party may invoice
the other Party for the actual expenses incurred as a result of destroying
Product for which the other Party is responsible, including without limitation,
fees paid to third persons for receiving and processing such returned Product.
Such other Party will pay such invoice within thirty (30) days of the date of
invoice. No Party shall issue a credit to a Third Party or reimburse a third
person attributable to returns for which the other Party is responsible. Party
is responsible, including without limitation, fees paid to third persons for
receiving the processing such returned Product. Such other Party will pay such
invoice within thirty (30) days of the date of invoice. Each Party shall assist
with processing chargebacks and returns where documentation is required to
reconcile and resolve issues with Third Parties.
(c) Seller will process and be responsible for the administration
and payment of all federal, state, local and private managed care programs,
including
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Medicaid/Medicare rebates (collectively, "Rebate Programs"), in each case,
related to Products sold under Seller's NDC code, regardless of whether such
Product was sold by Seller or Buyer; provided, however, that Seller will invoice
Buyer with sufficient detail to adequately support the charges in the invoice
related to payments associated with rebate programs or Products sold by Buyer
after Closing.
(d) Sellers shall process and be responsible for the
administration and payment of the quarterly Premier and CHHPS market share
rebate programs that relate to calendar quarters prior to the Closing, the
calendar quarter in which the Closing occurs, and the first calendar quarter
after the calendar quarter in which the Closing occurs. Buyer shall be
responsible for the administration and payment of all other quarterly rebates
with respect to such programs after the Closing. Sellers will not be responsible
for any increases in such rebate amounts as a result of the changes made by
Buyer to such rebate programs.
(e) Buyer acknowledges that Seller will require certain
information from Buyer in order to calculate the Medicaid rebate for Products
bearing Seller's NDC number. Accordingly, Buyer agrees that, from and after the
Closing Date until the date which is one calendar year after the expiration date
of the last lot of Products produced with Sellers' NDC number, Buyer will
provide to Seller, concurrently with its timely delivery of related information
to the Centers for Medicare and Medicaid Services (or any successor agency), the
following information: (a) the "best price" (as defined under the Social
Security Act, 42 U.S.C. Section 1396r-8(c)(1)(C)) for each Product identified by
NDC number, (b) the "average manufacturer price" (as defined under the Social
Security Act, 42 U.S.C. Sections 1396r-8(k)(1)) for each Product identified by
NDC number, and (c) any additional data or other information related to such
Medicaid issues reasonably requested by Seller.
(f) The Parties acknowledge that the VA National Acquisition
Center must approve the removal of the Products from Seller's Federal Supply
Schedule ("FSS") before the responsibility of processing such chargebacks is
transferred from Seller to Buyer. Accordingly, in the event such approval is not
obtained prior to the Closing Date, Seller shall continue to be responsible for
processing the FSS chargebacks on Buyer's behalf, and Buyer shall reimburse
Sellers for the actual chargebacks paid.
(g) Seller shall be financially responsible for all rebates,
wholesaler administration fees and group purchasing organization management fees
associated with, and all other forms of discounts granted by Seller or any of
its Affiliates with respect to, and any claims for overcharges relating to, any
Products manufactured or released by or on behalf of by Seller and its
Affiliates, including, without limitation, rebates owed to state Medicaid
programs and patient assistance or indigent programs.
(h) In the event that Buyer increases the published Wholesaler
Acquisition Cost ("WAC") of any of the Products, Buyer shall (i) promptly notify
Sellers of such increase and (ii) reimburse Sellers, promptly following Buyers'
receipt of Sellers'
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demand therefor, the increase in amounts associated with returns, rebates or
chargebacks for which Sellers are responsible as a result of such increase in
WAC.
Section 8.16 Further Assurances. (a) On and after the Closing,
Seller shall from time to time, at the request of Buyer, execute and deliver, or
cause to be executed and delivered, such other instruments of conveyance and
transfer and take such other actions as Buyer may reasonably request in order to
more effectively vest in Buyer good and marketable title to the Purchased Assets
(including assistance in the collection or reduction to possession of any of the
Purchased Assets) and more effectively confirm Sellers' retention of the
Excluded Liabilities.
(b) On and after the Closing, Buyer shall from time to time, at
the request of Seller, take such actions as Seller may reasonably request in
order to more effectively confirm Buyer's assumption of the Assumed Liabilities.
Section 8.17 Guaranty. Buyer shall cause Mayne Group Limited to
execute a Guaranty in the form attached hereto and incorporated herein by
reference as Exhibit I (the "Guaranty") prior to the Closing.
Section 8.18 Inventory, etc. (a) Within 30 days following the
Closing, Seller shall pay to Buyer, with respect to each presentation of each
Product other than M.V.I. No-K and M.V.I Adult, an amount of cash equal to the
product of (i) the number of units, if any, by which (A) the number of units of
such presentation delivered to Buyer pursuant to Section 5.02(c)(1) and having a
shelf life extending past nine (9) months from the Closing with respect to all
Inventory in the unit vial presentation and the first anniversary of Closing
with respect to all other presentations of the Inventory is less than (B) the
product of three, multiplied by Seller Monthly Volume for such presentation,
multiplied by (ii) Sellers' cost of goods sold per unit for such presentation as
of the Closing Date.
(b) Within 30 days following May 30, 2004, Seller shall pay to
Buyer, with respect to each presentation of the M.V.I Adult, an amount of cash
equal to the product of (i) the number of units, if any, by which (A) the number
of units of such presentation of M.V.I Adult delivered to Buyer from a Third
Party on or before May 30, 2004 and having a shelf life extending past nine (9)
months as of the date of delivery with respect to all such M.V.I Adult in the
unit vial presentation and the first anniversary of delivery with respect to all
other presentations of the M.V.I Adult is less than (B) the product of three,
multiplied by Seller Monthly Volume for such presentation, multiplied by (ii)
Buyer's cost of goods sold per unit for such presentation.
(c) Within 45 days following the Closing, Sellers shall furnish to
Buyer inventory reports and sales data obtained from each wholesaler specifying,
with respect to each wholesaler to which Sellers have sold any presentation of
any Product, and with respect to each such presentation, the on-hand and
in-transit inventory of such presentation (identifying units by list number)
held by such wholesaler as of the Closing Date (the number of units of such
presentation so held by such wholesaler, the "Pipeline
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Inventory"). Within 60 days following the Closing, Sellers shall pay to Buyer,
with respect to each presentation of any Product held by such wholesaler, an
amount of cash equal to the product of (i) the number of units, if any, by which
(A) such wholesaler's Pipeline Inventory for such presentation exceeds (B) the
product of two, multiplied by such wholesaler's Wholesaler Monthly Volume for
such presentation, multiplied by (ii) the Gross Margin for such presentation.
Section 8.19 Certain Quality Assurance Matters. (a) Sellers shall
conduct or cause to be conducted a reasonable investigation concerning the out
of specification aluminum levels in the unit vial presentation of M.V.I.-12
and/or M.V.I. Adult (to the extent applicable) (the "Aluminum Issue"), and shall
cause Enzon, Inc. and AstraZeneca LP to cooperate and participate in such
investigation pursuant to reasonable protocols. Not later than the tenth
calendar day prior to the Closing, Sellers shall deliver to Buyer a written
report reasonably satisfactory to Buyer describing to Sellers' Knowledge, as of
the date of delivery of such report, the cause, or, if not Known, the potential
causes, of the Aluminum Issue, identifying the Person or Persons involved with
the Aluminum Issue, and specifying in reasonable detail the potential actions
necessary to rectify the Aluminum Issue (the "Aluminum Report").
(b) Sellers shall be financially responsible for, and shall pay to
Buyer promptly following Sellers' receipt of Buyer's request therefor, an amount
of cash equal to the product of (i) the number of units of M.V.I.-12 and
M.V.I.-Adult in the unit vial presentation that is included in the Inventory or
purchased by Buyer or its Affiliates prior to the one year anniversary of the
Closing that is tested by or on behalf of Buyer which Buyer or its agents
(including Seller, acting pursuant to any Ancillary Agreement) and is determined
to be "out of specification" as a result of Aluminum Issue, multiplied by (ii)
Buyer's cost of good sold per unit of such Product; it being understood that
Sellers may not seek payment from Buyer to the extent that Buyer recovers
reimbursements from Third Parties as a result of the circumstances to which such
payments relate, and Buyer shall diligently seek to secure such reimbursements
prior to making any claim pursuant to this Section 8.19(b) if Buyer has
reasonable grounds to believe that any such Third Party is obligated to make
such reimbursements, provided that Sellers shall bear Buyer's reasonable costs
in seeking such reimbursements; and (ii) Buyers shall not be obligated to seek
such reimbursements from Third Parties following the first anniversary of the
Closing. Notwithstanding the foregoing, Sellers shall be financially responsible
for all testing required to assess the Products' compliance with specifications
relating to aluminum in the event Buyer seeks the reimbursement described
herein.
(c) Prior to the Closing, Seller shall cause AstraZeneca LP to
grant to Buyer and its employees, representatives and agents, reasonable access
to AstraZeneca LP's personnel and premises where Product is manufactured for the
purpose of conducting a due diligence evaluation concerning the manufacturing
and quality processes utilized by AstraZeneca LP with respect to the Products
manufactured by AstaZeneca LP (the "AstraZeneca Investigation").
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Section 8.20 Royalty. (a) Within 30 days following the end of each
M.V.I. No K Sales Year, Buyer shall pay to Sellers an amount of cash equal to
the product of (x) 10% of (y) the amount of M.V.I. No K Sales made during each
M.V.I. No K Sales Year that exceeds $6,000,000 (each such payment, a "Royalty
Payment"). For purposes of this Agreement, a M.V.I. No-K Sale will be deemed to
have been made as of the recorded sale date according to GAAP.
(b) For purposes of this Agreement, the first "M.V.I. No K Sales
Year" means the period beginning on the date of the first M.V.I. No K Sale and
ending on the last day of the calendar month that contains the one year
anniversary of the first M.V.I. No K Sale, and each "M.V.I. No K Sales Year"
thereafter means each consecutive twelve calendar month period thereafter.
(c) Buyer will pay the Royalty Payment in immediately available
funds by wire transfer into a bank account or accounts designated by Buyer no
later than two Business Days prior to the due date for such Royalty Payment. Any
late Royalty Payment shall include interest on the unpaid amount at a rate equal
to the lesser of (i) 1.5% per month and (ii) the highest rate allowable under
applicable usury Laws.
(d) Upon prior written notice and at mutually agreeable times,
Sellers shall have the right to inspect Buyer's records related to M.V.I. No K
Sales no more than one (1) time during any M.V.I. No K Sales Year for the
purpose of auditing the Sales Reports with respect to the calculation of the
Royalty Payment. If, upon inspection of the books of account and records of
Buyer, Sellers discover that it did not receive the correct Royalty Payment,
Sellers shall notify Buyer of such discovery. Within thirty (30) days of receipt
of Sellers' notice, Buyer shall pay to Sellers the difference between what was
paid and what should have been paid. If the difference of the underpayment
exceeds five per cent (5%) of the Royalty Payment owed, then Buyer shall bear
Sellers' reasonable costs in connection with such inspection, including all
reasonable legal and auditors fees. If Sellers' inspection of the books of
account and records reveals that Buyer overpaid a Royalty Payment, Sellers shall
pay to Buyer such overpayment within thirty (30) days of the discovery of such
overpayment.
Section 8.21 Sales Employees. (a) Until one month following the
Closing, to the extent permitted by applicable Laws, Sellers shall deliver to
Buyer such reasonable compensation and employment information as Buyer shall
reasonably request, including but not limited to a schedule showing each Sales
Employee's base salary, annual bonus, commissions, perquisites, medical, pension
and savings benefits and severance benefits. From time to time following the
date of this Agreement, Seller shall provide Buyer with reasonable access to
each Sales Employee for purposes of allowing Buyer to extend an offer of
employment to such Sales Employee. Buyer shall not be under any obligation to
offer to employ any Employee or offer any particular salary, bonus, commissions,
perquisites or benefits to any Sales Employee in connection with any such offer
of employment. In the event that Buyer extends an offer of employment to any
Sales Employee, Buyer shall so notify Sellers, and thereafter Sellers shall take
no
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actions which would encourage such Sales Employee to reject Buyer's offer and
shall not make any counteroffer to such Sales Employee. In no event shall
Sellers be obligated to imply such Sales Employees will be terminated for
failure to accept Buyer's offer.
(b) Non-Solicitation. For the period commencing from the date
hereof and expiring on the second anniversary of the Closing Date, Sellers agree
that they and their Affiliates will not directly or indirectly (i) induce,
encourage or solicit any Applicable Employee to reject Buyer's offer of
employment, leave such employment with Buyer or accept any other position or
employment or (ii) assist any other entity in hiring any Applicable Employee;
provided that this sentence shall not prohibit solicitations made in connection
with broad-based recruiting efforts not directed specifically at the Sales
Employees or any particular Sales Employee(s). For the period commencing from
the date hereof and expiring on the second anniversary of the Closing Date,
Buyer agrees that it and its Affiliates will not directly or indirectly induce,
encourage or solicit any Sales Employee who has rejected an offer of employment
from Buyer to leave employment with any Seller or accept any other position or
employment or assist any other entity in hiring any such Sales Employee;
provided that this sentence shall not prohibit solicitations made in connection
with broad-based recruiting efforts not directed specifically at the Sellers'
employees or any particular employee of any of the Sellers.
(c) Sellers shall remain responsible for the payment of all
benefits that accrue as a result of events occurring prior to the date of the
separation from Sellers of the Sales Employees who have elected to accept
employment with Buyer (the "Applicable Employees") under each of such Sellers'
or its Affiliates' compensation plans, "employee benefit plans" (as defined in
Section 3(3) of ERISA) and stock, incentive and bonus plans (collectively,
"Benefit Plans"). Buyer shall not at any time assume any Liability under any of
Sellers' Benefit Plans for the payment of any benefits to any active or any
terminated, vested or retired participants (or any of their beneficiaries) in
any of the Benefit Plans. Buyer assumes no obligation to continue or assume any
Benefit Plans or Liabilities of Seller under any Benefit Plans. With respect to
any Applicable Employee (and any dependent or beneficiary of any such Applicable
Employee), Sellers shall retain all liabilities and obligations accruing to the
date of the Applicable Employee's separation from Sellers arising under any
group life, accident, medical, dental or disability plan or similar arrangement
(whether or not insured) and any other "employee welfare benefit plan" (as
defined in Section 3(1) of ERISA) (collectively, "Welfare Plans") maintained for
the benefit of Sellers' employees and their dependents and other beneficiaries
under each such plan or similar arrangement, and such liabilities and
obligations shall constitute Excluded Liabilities. Buyer shall be responsible
only for liabilities and obligations with respect to claims incurred by any
Applicable Employee (and any independent beneficiary of any such Applicable
Employee) on or after the Closing Date which are covered under any life,
accident, medical or dental plan or similar arrangement (whether or not insured)
established or made available by Buyer for the benefit of Applicable Employees
and their dependents and beneficiaries on or after the Closing Date. Sellers
shall retain any obligation for payment during the period ending on the date of
separation of the Applicable Employee's
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separation from Sellers of long or short-term disability claims arising from
disabilities of Applicable Employees that occurred prior to the Closing Date.
For the purpose of determining claims under any medical, dental, vision or
prescription drug plan, a claim generally will be deemed to be incurred on the
date that the service giving rise to such claim is performed and not when such
claim is made, except that disability claims shall be deemed to have been
incurred on the date the Applicable Employee becomes disabled.
Section 8.22 Certain Payments. Following the Closing: Sellers shall
reimburse Buyer, promptly following Sellers' receipt of Buyer's request
therefor, for any and all payments made or required to be made by Buyer or any
of its Affiliates in connection with the last sentence of Section 3.6 of that
certain Interim Supply Agreement, dated as of August 17, 2001, between
AstraZeneca LP and Seller, as amended by the first amendment thereto dated as of
July 22, 2003 (such Interim Supply Agreement, as so amended, the "Supply
Agreement"), and Section 2.4 of the Supply Agreement with respect to (i) the
conversion from M.V.I.-12 to M.V.I.-Adult and (ii) the initial validation of
M.V.I. No K.
Section 8.23 Multi-Product Contracts. From and after the Closing
Date, Buyer shall honor and perform all obligations and liabilities of Sellers
under and pursuant to each Multi-Product Contract with respect to supplying the
applicable Product to the applicable Third Party after the Closing Date, it
being understood that Buyer shall be entitled to enjoy the benefits, and shall
be required to bear the burdens, of such performance. Sellers shall provide
reasonable assistance to Buyer with respect to Buyer's entering into replacement
contracts on substantially the same terms as the Multi-Product Contracts. Prior
to the earlier of (i) the execution of such a replacement contract with respect
to a Multi-Product Contract, and (ii) the one year anniversary of the Closing
Date, Seller shall not cause any Product to be deleted from such Multi-Product
Contract or terminate any portion of such Multi-Product Contract with respect to
any Product, and Sellers shall maintain such Multi-Product Contract on behalf of
Buyer, Buyer shall be entitled to enjoy the benefits, and Buyer shall be
required to bear the burdens, of such performance.
Section 8.24 Noncompete. Prior to the tenth anniversary of the
Closing Date, Sellers shall not, and shall cause their Affiliates not to, engage
in the marketing, promotion or sale of any parenteral multivitamin products
anywhere in the world; provided that this Section 8.24 shall not restrict
Sellers or any of their Affiliates from marketing, promoting or selling any such
products that are marketed or sold by, or are in development by, any entity with
which any Seller may consummate a business combination as of the date of
consummation of such business combination.
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ARTICLE IX
CONDITIONS TO THE OBLIGATIONS OF SELLERS
The obligation of Sellers to effect the transactions contemplated
hereby is subject to the satisfaction (or waiver by Sellers), at or before the
Closing, of each of the following conditions:
Section 9.01 Representations, Warranties and Covenants. Each of the
representations and warranties of Buyer contained in this Agreement shall be
true and correct in all material respects as of the date hereof and as of the
Closing as if made on and as of the Closing (except for such representations and
warranties that are made as of a specific date which shall speak only as of such
date).
Section 9.02 Covenants. The covenants and agreements of Buyer to be
performed on or prior to the Closing have been duly performed in all material
respects.
Section 9.03 Ancillary Agreements. The Ancillary Agreements shall
have been duly executed and delivered by each party thereto, other than Sellers.
Section 9.04 Certificate. Seller shall have received a certificate,
signed by a duly authorized officer of Buyer and dated the Closing Date, to the
effect that the conditions set forth in Sections 9.01 and 9.02 have been
satisfied.
Section 9.05 No Actions or Proceedings. There shall not be pending
or threatened any suit, action or proceeding challenging or seeking to restrain,
limit or prohibit any transactions contemplated by this Agreement or seeking to
obtain from Buyer or any of its Affiliates in connection with the transactions
contemplated by this Agreement any material damages or material commitments or
seeking to prohibit or limit the ownership, operation or control by Buyer or any
of its Affiliates of any material portion of the business or assets of Buyer
(including the Business) or any of its Affiliates.
Section 9.06 Consents. All Seller Governmental Consents, Required
Seller Third Party Consents and Buyer Governmental Consents shall have been
obtained or made, as the case may be, and the waiting period (and any extension
thereof) under the Xxxx-Xxxxx-Xxxxxx Act applicable to the transactions
contemplated hereby shall have expired or been terminated.
Section 9.07 Bank of America Consent. Seller shall have received
from Bank of America, administrative agent for Sellers' credit facility (and
from all lenders associated therewith), a release of the liens and UCC security
interests associated with such credit facility from the Purchased Assets.
Section 9.08 Buyer Deliveries. Buyer shall have delivered to Sellers
all deliveries required pursuant to Section 5.02(b) hereof.
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Section 9.09 Other Closing Deliveries. Buyer shall have delivered to
Seller such other certificates and documents customary in transactions similar
to those contemplated hereby that are reasonably requested by Seller.
ARTICLE X
CONDITIONS TO THE OBLIGATIONS OF BUYER
The obligation of Buyer to effect the transactions contemplated
hereby is subject to the satisfaction (or waiver by Buyer), at or before the
Closing, of each of the following conditions:
Section 10.01 Representations, Warranties and Covenants. Each of the
representations and warranties of Sellers contained in this Agreement shall be
true and correct in all material respects as of the date hereof and as of the
Closing as if made on and as of the Closing (except for such representations and
warranties that are made as of a specific date which shall speak only as of such
date).
Section 10.02 Covenants. Each of the covenants and agreements of
Seller to be performed on or prior to the Closing shall have been duly performed
in all material respects.
Section 10.03 Ancillary Agreements. The Ancillary Agreements shall
have been duly executed and delivered by each party thereto, other than Buyer.
Section 10.04 Certificate. Buyer shall have received a certificate,
signed by a duly authorized officer of Seller and dated the Closing Date, to the
effect that the conditions set forth in Sections 10.01 and 10.02 have been
satisfied.
Section 10.05 No Actions or Proceedings. There shall not be pending
or threatened any suit, action or proceeding challenging or seeking to restrain,
limit or prohibit any transactions contemplated by this Agreement or seeking to
obtain from Seller or any of its Affiliates in connection with the transactions
contemplated by this Agreement any material damages or material commitments or
seeking to prohibit or limit the ownership, operation or control by Buyer or any
of its Affiliates of any material portion of the business or assets of Buyer
(including the Business) or any of its Affiliates.
Section 10.06 Consents. All Sellers Governmental Consents, Required
Sellers Third Party Consents and Buyer Governmental Consents shall have been
obtained or made, as the case may be, the waiting period (and any extension
thereof) under the Xxxx-Xxxxx-Xxxxxx-Act applicable to the transactions
contemplated hereby shall have expired or been terminated, and Buyer shall have
received documentary evidence confirming that this condition has been satisfied.
Section 10.07 Bank of America Consent. Sellers shall have furnished
to Buyer evidence that Sellers have received from Bank of America,
administrative agent
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for Sellers' credit facility (and from all lenders associated therewith), a
release which is reasonably satisfactory to Buyer of the liens and UCC security
interests associated with such credit facility from the Purchased Assets.
Section 10.08 AstraZeneca Investigation. Buyer shall have completed
the AstraZeneca Investigation and shall be satisfied, in its reasonable
discretion, that (i) the Products are being manufactured in substantial
compliance with FDA regulations (including CGMPs), and (ii) that it is
technically feasible for the Products to be manufactured in Buyer's facility in
Aguadilla, Puerto Rico.
Section 10.09 Seller Deliveries. Seller shall have delivered to
Buyer all deliveries required to be delivered on or prior to the Closing Date
pursuant to Section 5.02(a) hereof.
Section 10.10 Other Closing Deliveries. Seller shall have delivered
to Buyer such other certificates and documents customary in transactions similar
to those contemplated hereby that are reasonably requested by Buyer.
ARTICLE XI
INDEMNIFICATION
Section 11.01 Survival of Representations, Warranties, Etc. The
representations and warranties of Sellers and Buyer contained in this Agreement
shall survive the Closing and remain in full force and effect until the
Expiration Date. All representations and warranties contained in this Agreement
and all claims with respect thereto shall terminate on the Expiration Date;
provided that if notice of any claim for indemnification pursuant to Section
11.02(a)(ii) or 11.02(b)(ii) shall have been given prior to the Expiration Date
and such notice describes with reasonable specificity or description the
circumstances with respect to which such indemnification claim relates, such
indemnification claim shall survive until such time as such claim is finally
resolved.
Section 11.02 Indemnification.
(a) By Sellers. Subject to Section 11.03, from and after the
Closing, Sellers shall jointly and severally indemnify, reimburse, defend and
hold harmless Buyer, its Affiliates, and their respective officers, directors,
employees and agents from and against any and all Losses to the extent incurred
in connection with, arising out of, resulting from or incident to (i) any breach
of any covenant or agreement of Sellers herein or in any Ancillary Agreement;
(ii) the inaccuracy or breach of any representation or warranty made by Sellers
in this Agreement or in any certificate delivered pursuant to this Agreement;
(iii) the Excluded Liabilities; (iv) Government Rebates or Other Rebates arising
out of Sellers' fraudulent or criminal conduct; (v) the conduct of the Business
prior to the Closing; (vi) recalls, withdrawals and field alerts with respect to
Products manufactured and released by or on behalf of Sellers or their
Affiliates and (vii) Losses to
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Buyer arising from the breach by any employee or former employee of any of the
Sellers of any confidentiality, nondisclosure, assignment or similar agreement
with Seller.
(b) By Buyer. Subject to Section 11.03, from and after the
Closing, Buyer shall indemnify, defend and hold harmless Sellers, its Affiliates
and their respective officers, directors, employees and agents from and against
any and all Losses to the extent incurred in connection with, arising out of,
resulting from or incident to (i) any breach of any covenant or agreement of
Buyer herein or in any Ancillary Agreement; (ii) the inaccuracy or breach of any
representation or warranty made by Buyer in this Agreement or in any certificate
delivered pursuant to this Agreement; (iii) the failure of Buyer to assume, pay,
perform and discharge any Assumed Liabilities; (iv) the use by Buyer or its
Affiliates of the Marketing Materials; and (v) the conduct of the Business after
Closing; and (vi) recalls, withdrawals and field alerts with respect to Products
manufactured and released by or on behalf of Buyer or its Affiliates.
(c) Procedures. Any Person entitled to be indemnified, reimbursed,
defended and held harmless pursuant to this Agreement (an "Indemnified Party")
shall give the Party obligated to indemnify, reimburse, defend and hold harmless
such Person (the "Indemnifying Party") written notice (an "Indemnification Claim
Notice") within 30 days (or such other additional reasonable period that the
Indemnified Party can establish is reasonably necessary to permit it to
determine whether to make a request for indemnification) of any Losses or
discovery of fact upon which such Indemnified Party intends to base a request
for indemnification under Section 11.02(a) or Section 11.02(b); provided that
the failure timely to give an Indemnification Claim Notice shall affect the
rights of an Indemnified Party hereunder only to the extent that the
Indemnifying Party can establish that such failure had a prejudicial effect on
the defenses available to the Indemnifying Party with respect to such claim.
Each Indemnification Claim Notice must contain a reasonable description of the
claim and the nature and amount of such Losses (to the extent that the nature
and amount of such Losses are known at such time). The Indemnified Party shall
furnish promptly to the Indemnifying Party copies of all papers and official
documents received from any Third Party in respect of any Losses.
(d) Third Party Claims. With respect to Damages arising from
claims of any Third Party that are subject to indemnification as provided for in
Section 11.02(a) or Section 11.02(b) (a "Third Party Claim"):
(i) The Indemnifying Party shall be entitled, to the extent
permitted by applicable Law, to assume and control the defense of
such Third Party Claim with counsel approved by the Indemnified
Party (which approval may not unreasonably be withheld, delayed or
conditioned). If the Indemnifying Party elects to assume and control
such defense, it shall be conclusively established that the
Indemnifying Party is obligated (subject to the other provisions of
this Article XI) to indemnify and reimburse the Indemnified Party in
respect of the matters described in the Indemnification Claim
Notice. Notwithstanding the foregoing, if (i) the
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Indemnified Party shall have reasonably concluded that there is a
reasonable probability that the Third Party Claim may materially and
adversely affect it or its Affiliates other than as a result of
monetary damages for which the Indemnified Party would be entitled
to indemnification or reimbursement under this Article XI, or (ii)
the actual or potential defendants in, or targets of, such Third
Party Claim include both the Indemnifying Party and the Indemnified
Party, and the Indemnified Party shall have reasonably concluded
that there may be legal defenses available to it which are different
from or additional to those available to the Indemnifying Party,
then, in either such case, the Indemnifying Party shall not have the
right to assume or control such defense.
(ii) After the Indemnifying Party duly assumes the defense of
such Third Party Claim:
(A) The Indemnified Party shall have the right to, but
shall not be obligated to, employ separate counsel and to
participate in the defense of such Third Party Claim. The
Indemnifying Party shall reimburse the Indemnified Party for
the reasonable fees and disbursements of such separate counsel
as incurred, if: (I) the actual or potential defendants in, or
targets of, such Third Party Claim include both the
Indemnifying Party and the Indemnified Party, and the
Indemnified Party shall have reasonably concluded that there
may be legal defenses available to it which are different from
or additional to those available to the Indemnifying Party,
(II) the Indemnifying Party shall not have employed counsel
reasonably satisfactory to the Indemnified Party to represent
the Indemnified Party within a reasonable time after electing
to assume the defense of the Third Party Claim or fails to
diligently pursue the defense of such Third Party Claim, or
(III) the Indemnifying Party shall authorize the Indemnified
Party to employ separate counsel at the Indemnifying Party's
expense.
(B) The Indemnified Party shall cooperate in all
reasonable respects with the Indemnifying Party in connection
with such defense and all costs and expenses incurred by the
Indemnified Party in connection therewith shall be a liability
of, and shall be paid by, the Indemnifying Party as incurred.
(C) The Indemnifying Party shall not settle,
compromise, admit liability or consent to the entry of
judgment in connection with such Third Party Claim, nor shall
it offer to do so, in any such case without the Indemnified
Party's written consent, unless (I) no finding or admission of
any violation of Law or any
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violation of the rights of any Person can be made as the
result of such action and such action will have no effect on
other claims that have been made or are reasonably likely to
be made against the Indemnified Party, and (II) the sole
relief (if any) provided is monetary damages that are
reimbursed in full by the Indemnifying Party.
(D) The Indemnifying Party shall have no liability
with respect to any compromise, settlement or discharge of the
Third Party Claim effected without its written consent (which
consent may not unreasonably be withheld, delayed or
conditioned), unless the Indemnifying Party, after taking
control of the defense, fails to continue to diligently pursue
the defense of such claim.
(iii) If the Indemnifying Party has not provided written
notice to the Indemnified Party of its election to assume and
control the defense of such Third Party Claim within 10 days
following its receipt of the Indemnification Claim Notice, then (A)
the Indemnifying Party shall be bound by any action taken, or any
compromise or settlement effected by the Indemnified Party prior to
the assumption of such defense by the Indemnifying Party, and (B) to
the extent that such Third Party Claim is subject to indemnification
or reimbursement with respect to the Third Party Claim (which it
shall be conclusively subject to reimbursement if the Indemnifying
Party later takes control of the defense), all costs and expenses
incurred by the Indemnified Party in defending the Third Party Claim
(including but not limited to legal, accounting and other
professional fees and disbursements, removal costs, remediation
costs, closure costs and expenses of investigation, preparation,
defense and ongoing monitoring) shall be a liability of, and shall
be paid by, the Indemnifying Party as incurred. If the Indemnifying
Party has not provided such notice within 60 days following its
receipt of the Indemnification Claim Notice, the Indemnifying Party
shall thereafter have no right to assume or control such defense.
(e) The Indemnified Party and the Indemnifying Party shall keep
each other fully informed concerning the status of such Third Party Claim and
any related proceedings at all stages thereof, and shall render to each other
such assistance as they may reasonably require of each other and shall cooperate
with each other in good faith in order to ensure the proper and adequate defense
of such Third Party Claim.
(f) The Indemnified Party and the Indemnifying Party shall use
commercially reasonable best efforts to avoid production of confidential
information (consistent with applicable Law and rules of procedure), and to
cause all communications among employees, counsel and other representatives of
the Indemnified Party and the
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Indemnifying Party to be made so as to preserve any applicable attorney-client
or work-product privileges.
(g) Each Party hereby consents to the non-exclusive jurisdiction
of any court in which a Third Party Claim is brought for purposes of any claim
for indemnification or reimbursement with respect to such Third Party Claim or
the matters alleged therein, and agrees that process may be served on such Party
with respect to any such claim anywhere in the world.
Section 11.03 Limitations. (a) The amount of any Losses under
Section 11.02(a) or Section 11.02(b), as the case may be, shall be reduced by
the net amount of any insurance proceeds actually paid to the Indemnified Party
as a result of the matters underlying such claim, after upward adjustment for
any premium increases attributable to the matters underlying such claim. The
reduction specified in this Section 11.03(a) shall not be applied to the extent
insurance proceeds are paid by the Indemnified Party's self-insurance program.
(b) To the extent permitted by Law, any payment made by an
Indemnifying Party pursuant to this Article XI shall be treated on the Parties'
Tax returns as an adjustment to the Purchase Price for all Tax purposes. The
portion of any such payment that is reasonably attributable to a particular
Purchased Asset shall be deemed to be an adjustment to the consideration
allocated to such Purchased Asset. The portion of any such payment that is not
reasonably attributable to a particular Purchased Asset shall be deemed to be an
adjustment to the consideration allocated to all Purchased Assets, with such
adjustment calculated on a pro rata basis. The rights to indemnification and
reimbursement under this Article XI shall not be subject to set-off for any
claim by any Indemnifying Party against any Indemnified Party, whether or not
arising from the same event giving rise to such Indemnified Party's claim.
(c) In the event a claim for indemnification or reimbursement
under this Article XI shall have been finally determined, the amount of the
related Losses shall be paid by the Indemnifying Party to the Indemnified Party
on or before the thirtieth (30th) day after such final determination, by wire
transfer of immediately available funds. Any claim, the Indemnifying Party's
liability therefor and the amount of the related Losses shall be "finally
determined" when the parties to such claim have so determined by mutual written
agreement or, if disputed, when a final and non-appealable Order of a court of
competent jurisdiction shall have been entered concerning such matters. Such
Losses paid later than thirty (30) days after being finally determined will
accrue interest at a rate equal to the lesser of 1.5% per month and the maximum
interest rate allowed by applicable Laws.
(d) In no event shall Sellers be liable for any Losses pursuant to
Section 11.02(a)(ii) unless and until the aggregate amount of all such Losses
exceeds $1,000,000 (the "Threshold Amount"), in which case Sellers shall,
subject to the next sentence, be liable for all such Losses in excess of the
Threshold Amount. The
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cumulative aggregate amount of Losses for which Sellers shall be liable pursuant
to Section 11.02(a)(ii) shall be one hundred million dollars ($100,000,000) if
the Remaining Purchase Price is not paid and one hundred five million dollars
($105,000,000) if the Remaining Purchase Price is paid.
(e) No Party shall be liable for consequential damages other than
lost profits. Sellers shall not be liable for lost profits other than pursuant
to Section 11.02(a)(ii) and the cumulative aggregate amount of lost profits for
which Sellers shall be liable pursuant to Section 11.02(a)(ii) shall be twenty
five million dollars ($25,000,000). Buyer shall not be liable for lost profits
other than pursuant to Section 11.02(b)(ii) and the cumulative aggregate amount
of lost profits for which Buyer shall be liable pursuant to Section 11.02(b)(ii)
shall be twenty five million dollars ($25,000,000). No Party shall be liable
pursuant to this Article XI for any treble or punitive damages, or for any
speculative damages, except, in any such case, for those awarded by a court of
competent jurisdiction in connection with a Third Party Claim asserted against
an Indemnified Party.
(f) The provisions of this Article XI shall constitute the
Parties' sole remedies for breach of representation, misrepresentation,
negligent representation and all similar causes of action accruing on or after
the Closing, other than actual fraud, arising in connection with this Agreement,
any Ancillary Agreement, or any of the transactions contemplated hereby or
thereby.
ARTICLE XII
TERMINATION AND ABANDONMENT
Section 12.01 Methods of Termination. The transactions contemplated
herein may be terminated and/or abandoned at any time prior to the Closing:
(a) by mutual written agreement of Sellers and Buyer; or
(b) by either Sellers or Buyer if the Closing shall not have
occurred by May 31, 2004; provided that the terminating Party is not in material
breach of its obligations hereunder;
(c) by either Sellers or Buyer if the other Party becomes
insolvent or seeks protection under any bankruptcy, receivership, trust deed,
creditors arrangement, composition or comparable proceeding, or if any such
proceeding is instituted against the other Party which proceeding remains
undismissed for a period of 30 days;
(d) by either Sellers or Buyer if there shall be in effect any Law
that prohibits the Closing or if the Closing would violate any non-appealable
Order; or
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(e) by either Sellers or Buyer if the other Party has breached any
material obligation hereunder that remains uncured for a period of 30 days after
written notice and demand for cure thereof by the non-breaching Party.
Section 12.02 Procedure Upon Termination. In the event of
termination and abandonment under Section 12.01 hereof, written notice thereof
shall forthwith be given to the other Party and the transactions contemplated by
this Agreement shall be terminated and abandoned, without further action by the
Parties hereto, subject, however, to any applicable cure periods. If the
transactions contemplated by this Agreement are terminated and/or abandoned as
provided herein:
(a) Each Party, if requested in writing, will redeliver or destroy
all documents, work papers and other material of the other Party and its
Affiliates relating to the transactions contemplated hereby, whether so obtained
before or after the execution hereof, to the Party furnishing the same;
(b) All confidential information received by any Party hereto with
respect to the business of any other party or its Affiliates shall be treated in
accordance with that certain Confidentiality Agreement, dated as of December 26,
2003, by and between AAI and Mayne Group Limited (the "Confidentiality
Agreement").
(c) No Party hereto and none of their respective directors,
officers, stockholders, Affiliates or controlling Persons shall have any further
liability or obligation to any other Party to this Agreement except as stated in
subparagraphs (a) and (b) of this Section, except that (i) nothing in this
Section 12.02 shall prejudice any rights, claims, or causes of action that may
have accrued hereunder or with respect hereto prior to the date of such
termination including with respect to a Party's breach of this Agreement prior
to the termination or abandonment of this Agreement and (ii) the provisions of
Article XII and Article XIII shall survive any termination of this Agreement.
ARTICLE XIII
MISCELLANEOUS
Section 13.01 Confidentiality. The Confidentiality Agreement is
hereby incorporated herein by reference and shall continue in full force and
effect except that (i) as of the Closing, Buyer is released from its obligations
thereunder (other than the obligations set forth in Sections 8, 9 and 13
thereof) to the extent that they pertain to the Product, the Business and the
Purchased Assets, and (ii) all information pertaining to the Product, the
Business and the Purchased Assets will be deemed to be Confidential Information
of Buyer as of the Closing Date and Sellers shall have the obligations of
confidentiality, non-disclosure and non-use set forth in the Confidentiality
Agreement with respect thereto for the entire duration of the statute of
limitations applicable to this Agreement; provided, however, that (x) the
Purpose defined therein will be deemed to also include the exchange or
observation of Confidential Information related to this
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Agreement and the consummation of the transactions described herein, (y) Buyer
shall have the same rights and obligations under the Confidentiality Agreement
as Mayne Group Limited, and (z) AAI Properties and aaiPharma LLC shall have the
same rights and obligations under the Confidentiality Agreement as AAI. Prior to
the Closing, Sellers and Buyers shall consult with each other and negotiate in
good faith concerning any modifications of or amendments to this Section 13.01
reasonably necessary in view of the purposes of this Section 13.01 and the
purposes of the Confidentiality Agreement.
Section 13.02 Notices. All notices, requests and other
communications hereunder must be in writing and will be deemed to have been duly
given only if delivered personally against written receipt or by facsimile
transmission with answer back confirmation or mailed (postage prepaid by
certified or registered mail, return receipt requested) or by nationally
recognized overnight courier that maintains records of delivery to the Parties
at the following addresses or facsimile numbers:
If to Buyer to:
Mayne Pharma (USA) Inc.
000 Xxxx Xxxx
Xxxx-Xxxx Xxxxxx XX
Xxxxxxx, Xxx Xxxxxx 00000
Attn: President
Telephone: 000 000 0000
Facsimile: 000 000 0000
With copies to:
Mayne Pharma (USA) Inc.
000 Xxxx Xxxx
Xxxx-Xxxx Centre II
Xxxxxxx, Xxx Xxxxxx 00000
Attn: Xxxx Xxxxxxxxx, General Counsel
Telephone: 000 000 0000
Facsimile: 000 000 0000
With copies to:
Xxxxxxxx & Xxxxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx X. Xxxx
Xxxx Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
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If to Seller to:
aaiPharma Inc.
0000 Xxxxxxxxxx Xxxx Xxxxx
Xxxxxxxxxx, XX 00000
Attn: Chief Executive Officer
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
With copies to:
aaiPharma Inc.
0000 Xxxxxxxxxx Xxxx Xxxxx
Xxxxxxxxxx, XX 00000
Attn: General Counsel
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
All such notices, requests and other communications will (a) if
delivered personally to the address as provided in this Section, be deemed given
upon receipt, (b) if delivered by facsimile to the facsimile number as provided
in this Section, be deemed given upon receipt by the sender of the answer back
confirmation and (c) if delivered by mail in the manner described above or by
overnight courier to the address as provided in this Section, be deemed given
upon receipt (in each case regardless of whether such notice, request or other
communication is received by any other Person to whom a copy of such notice,
request or other communication is to be delivered pursuant to this Section). Any
Party from time to time may change its address, facsimile number or other
information for the purpose of notices to that Party by giving notice specifying
such change to the other Parties hereto in accordance with the terms of this
Section.
Section 13.03 Entire Agreement. This Agreement and the Ancillary
Agreements supersede all prior discussions and agreements among the Parties with
respect to the subject matter hereof and contains the sole and entire agreement
among the Parties hereto with respect to the subject matter hereof.
Section 13.04 Waiver. Any term or condition of this Agreement may be
waived at any time by the Party that is entitled to the benefit thereof, but no
such waiver shall be effective unless set forth in a written instrument duly
executed by or on behalf of the Party waiving such term or condition. No waiver
by any Party hereto of any term or condition of this Agreement, in any one or
more instances, shall be deemed to be or construed as a waiver of the same or
any other term or condition of this Agreement on any future occasion. All
remedies, either under this Agreement or by Law or otherwise afforded, will be
cumulative and not alternative.
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Section 13.05 Amendment. This Agreement may be amended, supplemented
or modified only by a written instrument duly executed by each Party hereto.
Section 13.06 Third Party Beneficiaries. The terms and provisions of
this Agreement are intended solely for the benefit of each Party hereto and
their respective successors or permitted assigns and it is not the intention of
the Parties to confer third-party beneficiary rights upon any other Person,
other than the Indemnified Parties, who are intended Third Party beneficiaries
of Article XI of this Agreement.
Section 13.07 Assignment; Binding Effect. Neither this Agreement nor
any right, interest or obligation hereunder may be assigned by any Party hereto
without the prior written consent of the other Party hereto, and any attempt to
do so, other than as permitted above, will be void. This Agreement is binding
upon, inures to the benefit of and is enforceable by the Parties hereto and
their respective successors and permitted assigns.
Section 13.08 Headings. The headings used in this Agreement have
been inserted for convenience of reference only and do not define or limit the
provisions hereof.
Section 13.09 Severability. It is the intention of the Parties that
if any provision of this Agreement is held to be illegal, invalid or
unenforceable under any present or future law, and if the rights or obligations
of any Party hereto under this Agreement will not be materially and adversely
affected thereby, (a) such provision will be fully severable, (b) this Agreement
will be construed and enforced as if such illegal, invalid or unenforceable
provision had never compromised a part hereof, (c) the remaining provisions of
this Agreement will remain in full force and effect and will not be affected by
the illegal, invalid or unenforceable provision or by its severance herefrom,
and (d) in lieu of such illegal, invalid or unenforceable provision, there will
be added automatically as a part of this Agreement a legal, valid and
enforceable provision as similar to terms to such illegal, invalid or
unenforceable provision as may be possible and reasonably acceptable to the
Parties herein.
Section 13.10 Specific Performance. The Parties hereto each
acknowledge that, in view of the uniqueness of the subject matter hereof, the
Parties would not have an adequate remedy at law for money damages if this
Agreement were not performed in accordance with its terms, and therefore agree
that the Parties hereto shall be entitled to specific enforcement of the terms
hereof in addition to any other remedy to which the parties may be entitled at
law or in equity.
Section 13.11 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
CONTRACTS EXECUTED AND PERFORMED IN SUCH STATE, WITHOUT GIVING EFFECT TO
CONFLICTS OF LAWS PRINCIPLES.
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Section 13.12 Consent to Jurisdiction and Forum Selection. THE
PARTIES HERETO AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING IN CONNECTION WITH
THIS AGREEMENT SHALL BE INITIATED AND TRIED EXCLUSIVELY IN THE STATE AND FEDERAL
COURTS LOCATED IN THE STATE OF DELAWARE. THE AFOREMENTIONED CHOICE OF VENUE IS
INTENDED BY THE PARTIES TO BE MANDATORY AND NOT PERMISSIVE IN NATURE, THEREBY
PRECLUDING THE POSSIBILITY OF LITIGATION BETWEEN THE PARTIES WITH RESPECT TO OR
ARISING OUT OF THIS AGREEMENT IN ANY JURISDICTION OTHER THAN THAT SPECIFIED IN
THIS SECTION. EACH PARTY HEREBY WAIVES ANY RIGHT IT MAY HAVE TO ASSERT THE
DOCTRINE OF FORUM NON CONVENIENS OR SIMILAR DOCTRINE OR TO OBJECT TO VENUE WITH
RESPECT TO ANY PROCEEDING BROUGHT IN ACCORDANCE WITH THIS SECTION, AND
STIPULATES THAT THE LOCAL AND FEDERAL COURTS LOCATED IN THE STATE OF DELAWARE
SHALL HAVE PERSONAL JURISDICTION AND VENUE OVER EACH OF THEM FOR PURPOSES OF
LITIGATING ANY DISPUTE, CONTROVERSY OR PROCEEDING ARISING OUT OF OR RELATED TO
THIS AGREEMENT. EACH PARTY HEREBY AUTHORIZES AND AGREES TO ACCEPT SERVICE OF
PROCESS SUFFICIENT FOR PERSONAL JURISDICTION IN ANY ACTION AGAINST IT AS
CONTEMPLATED BY THIS SECTION BY REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT
REQUESTED, POSTAGE PREPAID TO ITS ADDRESS FOR THE GIVING OF NOTICES AS SET FORTH
IN THIS AGREEMENT. ANY FINAL JUDGMENT RECEIVED AGAINST A PARTY IN ANY ACTION OR
PROCEEDING SHALL BE CONCLUSIVE AS TO THE SUBJECT OF SUCH FINAL JUDGMENT AND MAY
BE ENFORCED IN OTHER JURISDICTIONS IN ANY MANNER PROVIDED BY LAW.
Section 13.13 Expenses. Except as otherwise provided in this
Agreement, each Party hereto shall pay its own expenses and costs incidental to
the preparation of this Agreement and to the consummation of the transactions
contemplated hereby.
Section 13.14 Counterparts. This Agreement may be executed in any
number of counterparts and by facsimile, each of which will be deemed an
original, but all of which together will constitute one and the same instrument.
Section 13.15 Schedules, Exhibits and Other Agreements. The
Exhibits, Schedules, other agreements, certificates and notices specifically
referred to herein, and delivered pursuant hereto, are an integral part of this
Agreement.
Section 13.16 Seller and its Affiliates. Seller hereby acknowledges
that any reference to Seller in this Agreement shall be to Seller and those of
its Affiliates that own or possess the Purchased Assets. Seller also agrees that
any reference to action to be taken by Seller under this Agreement shall,
without further expression, include a
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covenant by Seller to cause those of its Affiliates that own or possess the
Purchased Assets to take such action, as the case may be.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, this Agreement has been executed by the Parties
hereto all as of the date first above written.
"SELLERS"
aaiPHARMA INC.
By:/s/ Xxxxxx X. Xxxxxxxx
---------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: President and CEO
aaiPHARMA LLC
By:/s/ Xxxxxx X. Xxxxxxxx
---------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: President and CEO
AAI PROPERTIES, INC.
By:/s/ Xxxxxxx X. Xxxxxxx
---------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Vice President
"BUYER"
MAYNE PHARMA (USA) INC.
By:/s/ Xxxxxx Xxxxxxx
---------------------------
Name: Xxxxxx Xxxxxxx
Title: President
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