ASSIGNMENT AGREEMENT
ASSIGNMENT AGREEMENT (the "Agreement") dated as of September 1, 1998,
between XXX, X.X., a Delaware limited partnership with its principal place of
business at 0000 Xxxx Xxxxxx Xxxxxxxxx Xxxxx, Xxxx, Xxxxxxxxxx ("Xxx") and EM
PHARMA, INC., a Delaware corporation with its principal place of business at
0000 Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx ("EM Pharma") (Xxx and EM Pharma
sometimes collectively being referred to as the "Parties").
W I T N E S S E T H :
WHEREAS, pursuant to that certain letter dated September 1, 1998 from
Xxx to EM Pharma, Xxx has offered to contribute to the capital of EM Pharma,
all the tangible and intangible assets belonging to, and certain liabilities
and other obligations of, Xxx which are used solely in connection with or
directly result from the manufacture and sale of hypothyroid products by Xxx
(the "Hypothyroid Business") as of the close of business on August 31, 1998
without the issuance of additional shares of common stock of EM Pharma; and
WHEREAS, EM Pharma has accepted such offer of the contribution of the
Hypothyroid Business to the capital of EM Pharma on such terms;
NOW, THEREFORE, for and in consideration of the mutual promises
contained herein, the parties hereby agree as follows:
1. Xxx hereby transfers, assigns, conveys and sets over to EM Pharma,
effective September 1, 1998, all right, title and interest of Xxx in and to
the Hypothyroid Business as of the close of business on August 31, 1998,
including the assets set forth in Appendix A attached hereto and hereby made a
part hereof. The estimated value of the assets and certain liabilities of the
Hypothyroid Business are set forth in Appendix B attached hereto and hereby
made a part hereof.
2. EM Pharma hereby assumes and agrees to pay, perform and discharge
when due (subject to the provisions of this Agreement) the obligations and
liabilities of Xxx in respect of the Hypothyroid Business as of the close of
business on August 31, 1998 listed in Appendix C attached hereto and hereby
made a part hereof, which excludes amounts owed to affiliates of Xxx.
3. The Parties agree that certain persons employed by Xxx as of the
close of business on August 31, 1998 who are allocated to the Hypothyroid
Business, including approximately twenty-two (22) persons engaged in the sale
and marketing of Dey's hypothyroid product line, shall be transferred to EM
Pharma.
4. To the best knowledge of the Parties, the transfer, assignment and
conveyance of the Hypothyroid Business to EM Pharma as provided herein will
not (i) result in any breach of, constitute any default under or result in a
termination of or an acceleration under any term or
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provision of any commitment, contract, agreement, license or other instrument
or obligation which is part of the Hypothyroid Business or to which Xxx or EM
Pharma is a party; (ii) result in any violation of any law, or any rule or
regulation of any administrative agency or governmental body or any judgment,
order, injunction or decree of any court, administrative agency or
governmental body; or (iii) cause EM Pharma to lose the benefit of any right
or privilege which Xxx presently enjoys in connection with the Hypothyroid
Business. To the best knowledge of Xxx, no proceedings have been instituted or
are pending or threatened which challenge the rights of Xxx or EM Pharma in or
to the Hypothyroid Business.
5. Xxx makes no other warranties or representations, either express
or implied, with respect to the Hypothyroid Business.
6. This Agreement shall be governed by and interpreted in accordance
with the laws of the State of Delaware. This Agreement contains the entire
agreement and understanding between the parties hereto with respect to the
subject matter hereof, and merges and supersedes all prior discussions and
writings with respect thereto. No modification of this Agreement shall be
effective unless made in writing and signed by both parties hereto.
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IN WITNESS WHEREOF, the Parties have caused this Agreement to be
executed by their duly authorized representatives effective as of the date
first above written.
XXX, X.X.
By XXX, INC., its general partner
By: /s/ Xxxxxxx Xxxx
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Xxxxxxx Xxxx, President and
Chief Executive Officer
EM PHARMA, INC.
By: /s/ Xxxxxx Xxxxx
--------------------------------------
Xxxxxx Xxxxx, Executive Vice President and
Chief Financial Officer
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Appendix A
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Hypothyroid Business Assets
Xxx hereby transfers, assigns, conveys and sets over to EM Pharma all
right, title and interest of Xxx in and to all properties, assets, rights,
interests and goodwill of any kind, whether tangible or intangible, wherever
located to the extent that such assets are used by Xxx solely in connection
with the Hypothyroid Business of Xxx as of the close of business on August 31,
1998, including the following assets:
(i) all right, title and interest of Xxx in, to and under
all contracts, indentures, agreements (including sales and rebate
agreements), commitments, insurance policies, warranties and all
other legally binding arrangements, written or oral, relating to the
Hypothyroid Business, including that certain Agreement for
Manufacturing, Selling and Distribution of Products by and between
MOVA Pharmaceutical Corporation and Xxx dated December 30, 1996;
(ii) all right, title and interest of Xxx in, to and under
all leases, including without limitation all automobile leases and
that certain office lease between Stone Mill Properties, Inc. and Xxx
dated March 11, 1997 concerning office space in Hockessin, Delaware;
(iii) all right, title and interest of Xxx in and to all
ideas, software, drawings, diagrams, designs, specifications, trade
secrets, know-how, formulae, processes, proprietary information or
other rights with respect thereto, trademarks, trademark
registrations, trademark registration applications, service marks,
service xxxx registrations, service xxxx registration applications,
tradenames and all names, logos, emblems, and slogans embodying
business, product or service goodwill relating to the Hypothyroid
Business;
(iv) all books of account, general, financial, accounting,
marketing and personnel records and files, contracts files, invoices,
customers' and suppliers' lists and other records, files,
information, data or knowledge in recorded form relating to the
Hypothyroid Business;
(v) all rights, claims, causes of action and choses in
action (including, but not limited to, rights of collection, set-off
and counterclaims, rights under express and implied warranties and
rights to indemnification) relating to the Hypothyroid Business;
(vi) all computer software (including documentation and
related object and source codes) relating to the Hypothyroid
Business;
(vii) all governmental licenses, permits, orders,
certificates authorizations, consents or approvals of any nature
relating to the Hypothyroid Business;
(viii) all inventory (including raw materials, work in
process and finished goods), equipment, computers, tools, vehicles,
furnishings, supplies, purchase and sale forms and sales literature
relating to the Hypothyroid Business;
(ix) all accounts receivable of Xxx accrued as of the date
hereof relating to the Hypothyroid Business;
(x) all unbilled fees and costs of Xxx relating to the
Hypothyroid Business;
(xi) all cash in transit relating to the Hypothyroid
Business; and
(xii) copies of all material contained in Dey's personnel
records for all employees of the Hypothyroid Business hired by or
transferred to EM Pharma.
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Appendix B
Estimated Assets and Liabilities
of the Hypothyroid Business
as of 8/31/98
Accounts Receivable $16,077
Inventory $719,195
Prepaid Items $3,200
Fixed Assets (NBV) $107,560
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Total Assets $846,032
Accounts Payable and Accrued Expenses $818,427
Net Assets $27,605
Appendix C
Assumed Liabilities
EM Pharma hereby assumes and agrees to pay, perform and discharge
when due the following obligations and liabilities of Xxx in respect of the
Hypothyroid Business as of the close of business on August 31, 1998:
(i) certain liabilities totaling $818,427 set forth on
or reserved against in the balance sheet of Dey's
Hypothyroid Business as of the close of business on
August 31, 1998, detailed as follows:
Trade Payables $ 2,691
Accrued Guaranteed Payment to Mova 666,667
Unvouchered Inventory 14,354
Accrued Medicaid Rebates 17,432
Accrued Administrative Fees 308
Accrued Commissions 54,125
Accrued Vacation 40,183
Accrued Pension 22,667
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Total $ 818,427
(ii) except as otherwise provided in the Agreement, all
contractual obligations arising from legal
commitments to which Xxx is a party in connection
with the Hypothyroid Business made in the ordinary
course of the business prior to the close of
business on August 31, 1998;
(iii) any additional liabilities or obligations
incurred by Xxx in connection with the
Hypothyroid Business not recorded on the
books of Xxx as of the close of business
on August 31, 1998.
