Execution Copy
AMENDMENT NO. 1
TO
ASSET PURCHASE AGREEMENT
AMENDMENT NO. 1, dated as of April 22, 2004 (the "Amendment"), to
the ASSET PURCHASE AGREEMENT, dated as of February 27, 2004 (the "Agreement"),
among aaiPharma Inc., a Delaware corporation ("AAI"), aaiPharma LLC, a Delaware
limited liability company, AAI Properties, Inc., a North Carolina corporation
(together with AAI and aaiPharma LLC, "Sellers"), and Mayne Pharma (USA) Inc., a
Delaware corporation ("Buyer").
WHEREAS, Sellers and Buyer desire to amend the Agreement as set
forth herein.
NOW, THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto, intending to be legally bound, do hereby agree
as follows:
1. Definitions. Terms not otherwise defined herein have the meaning
assigned to them in the Agreement.
2. Amendment of Article IV. Article IV of the Agreement is hereby
amended and restated in its entirety to read as follows:
ARTICLE IV
PURCHASE PRICE AND PAYMENT
Section 4.01 Purchase Price. As consideration for the
Purchased Assets, Buyer shall:
(a) pay to AAI the sum of $89,170,000 (the "Base Purchase
Price") at the Closing, by wire transfer of immediately available funds to
accounts in the name of such Sellers and/or such Persons having a
contractual relationship with any Seller as Sellers shall designate at
least one Business Day prior to the Closing; and
(b) pay to AAI Properties, if and only if the FDA approves
supplement S-052 to NDA 8-809, the sum of $5,000,000, either at the
Closing (if and only if the FDA has granted such approval prior to the
Closing Date) or on the fifth Business Day following the date of such
approval (if the FDA has not granted such approval prior to the Closing
Date), by wire transfer of immediately available funds to an account that
AAI Properties shall designate at least one Business Day prior to the
Closing or such fifth Business Day, as the case may be; and
(c) pay to AAI, not later than the fifth Business Day (the
"Third Payment Date") following June 30, 2004 (the "Third Trigger Date"),
by wire transfer of immediately available funds to an account that Sellers
shall designate not fewer than two Business Days prior to the Third
Payment Date, an amount in cash (the "Third Payment") equal to the greater
of (i) zero and (ii) the sum of (A) $5,830,000 (the "Third Base Amount"),
plus (B) any amounts required to be paid by Buyer on or prior to the Third
Trigger Date pursuant to Sections 8.15, 8.18, 8.19(b) and 8.22 (the
"Payment Provisions") that were not so paid to Sellers (the "Third Buyer
Payables"), minus (C) any amounts required to be paid by Sellers on or
prior to the Third Trigger Date pursuant to the Payment Provisions that
were not so paid to Buyer (the "Third Seller Payables"); and
(d) pay to AAI, not later than the fifth Business Day (the
"Fourth Payment Date") following October 31, 2004 (the "Fourth Trigger
Date"), by wire transfer of immediately available funds to an account that
Sellers shall designate not fewer than two Business Days prior to the
Fourth Payment Date, an amount in cash (the "Fourth Payment") equal to the
greater of (i) zero and (ii) the sum of (A) $5,000,000 (the "Fourth Base
Amount"), plus (B) any amounts required to be paid by Buyer on or prior to
the Fourth Trigger Date pursuant to the Payment Provisions that were not
so paid to Sellers and were not included in the Third Buyer Payables (the
"Fourth Buyer Payables"), minus (C) any amounts required to be paid by
Sellers on or prior to the Fourth Trigger Date pursuant to the Payment
Provisions that were not so paid to Buyer and were not included in the
Third Seller Payables (the "Fourth Seller Payables"), minus (D) the
amount, if any (the "Catchup Amount"), by which the Third Seller Payables
exceeded the sum of the Third Base Amount and the Third Buyer Payables;
and
(e) assume the Assumed Liabilities at the Closing.
Section 4.02 Certain Agreements. No provision of this Article
IV shall be construed to limit the Parties' rights or obligations under
Article VIII or Article XI (including but not limited to the Parties
obligations promptly to pay amounts due under the Agreement, as and when
such amounts are due); provided that:
(a) Following the Fourth Trigger Date, Buyer shall not be
entitled to recover from Seller any amounts included in the Third Seller
Payables or the Fourth Seller Payables unless, and only in an aggregate
amount which does not exceed, the amount by which the sum of the Fourth
Seller Payables and the Catchup Amount exceeded the sum of the Fourth Base
Amount and the Fourth Buyer Payables.
(b) Following the Third Trigger Date, Sellers shall not be
entitled to recover from Buyer any amounts included in the Third Buyer
Payables unless the Third Payment exceeds zero and Buyer fails timely to
make such payment. Following the Fourth Trigger Date, Sellers shall not be
entitled to recover from Buyer any amounts included in the Fourth Buyer
Payables unless the Fourth Payment exceeds zero and Buyer fails timely to
make such payment.
3. Amendment to Section 5.02(c)(i). (a) The first sentence of
Section 5.02(c)(i) of the Agreement is hereby amended and restated in its
entirety to read as follows:
Beginning within three Business Days following the Closing, Sellers 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, and shall comply, and shall cause Sellers'
employees and agents to comply with the provisions and protocols set forth
in that certain document entitled "Inventory Delivery Protocols" delivered
by Buyer to Sellers on or about April 22, 2004.
(b) The Inventory Delivery Protocols referred to in Section
5.02(c)(i), as so amended, are set forth in Exhibit 1 to this Amendment.
4. Amendment to Section 5.02(c)(ii). (a) The first sentence of
Section 5.02(c)(ii) is hereby deleted and replaced by the following sentence:
At the Closing, Sellers shall deliver to Buyer a duly executed copy of
that certain letter from Sellers to Xxxxx-Xxxxxxx Corporation in the form
delivered by Buyer to Sellers on or about April 22, 2004.
(b) The form of letter referred to in Section 5.02(c)(ii), as so
amended, is set forth in Exhibit 2 to this Amendment.
5. Governing Law. THIS AMENDMENT 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.
6. Consent to Jurisdiction and Forum Selection. THE PARTIES HERETO
AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING IN CONNECTION WITH THIS AMENDMENT
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 AMENDMENT
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 AMENDMENT. 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 AMENDMENT. 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.
7. Counterparts. This Amendment may be executed in counterparts of
like form, each of which, when executed, shall be deemed together an original
and all of which taken together shall constitute one and the same instrument.
8. No Other Amendments. Except as expressly amended hereby, the
provisions of the Agreement are and shall remain in full force and effect.
IN WITNESS WHEREOF, this First Amendment has been executed by the Parties
hereto all as of the date first above written.
"SELLERS"
aaiPHARMA INC.
By:/s/ Xxxxxxxxx X. Xxxxxxxx
-------------------------------
Name: Xxxxxxxxx X. Xxxxxxxx
Title: President & CEO
aaiPHARMA LLC
By:/s/ Xxxxxxxxx X. Xxxxxxxx
-------------------------------
Name: Xxxxxxxxx X. Xxxxxxxx
Title: President & 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 - Americas
[Signature Page for First Amendment]
