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Exhibit 10.20
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ASSET PURCHASE AGREEMENT
BY AND AMONG
RIBOGENE, INC.,
HYLINE LABORATORIES, INC.
AND
XXXXXXX XXXXXX
January 5, 1994
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TABLE OF CONTENTS
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1. Sale and Purchase of Purchased Assets.................................. 1
a. Purchase and Sale............................................... 1
b. Assets Excluded................................................. 2
c. Liabilities..................................................... 2
d. Closing and Closing Date........................................ 3
2. Purchase Price; Terms of Payment....................................... 4
a. Purchase Price.................................................. 4
b. Valuation and Allocation of Purchase Price...................... 4
c. Taxes........................................................... 5
3. Representations and Warranties of the Seller and the Shareholder....... 5
a. Organization.................................................... 5
b. Title to Purchased Assets....................................... 5
c. Due Authority; Valid and Binding Agreements..................... 5
d. No Conflicts or Violations...................................... 5
e. Tangible Assets................................................. 6
g. No Undisclosed Liabilities...................................... 6
h. No Violation of Law............................................. 6
i. Litigation...................................................... 6
j. Health, Safety, Employment and Environmental Matters............ 6
k. Regulatory Compliance........................................... 7
l. Intellectual Property........................................... 8
m. Material Contracts.............................................. 9
n. Employee Matters................................................10
o. Brokers.........................................................10
p. Assignability of Contracts; No Default..........................10
q. Taxes...........................................................11
r. Unassumed Liabilities...........................................11
s. Purchase Entirely for Own Account...............................11
t. Disclosure of Information.......................................11
u. Investment Experience...........................................12
v. Restricted Securities...........................................12
w. Further Limitations on Disposition..............................12
x. Legends.........................................................12
y. Material Misstatements and Omissions............................13
4. Representations and Warranties of the Purchaser........................13
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TABLE OF CONTENTS
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a. Organization ............................................ 13
b. Due Authority; Valid and Binding Agreements ............. 13
c. No Conflicts or Violations .............................. 13
d. Financial Statements .................................... 14
e. Capitalization .......................................... 14
f. Valid Issuance .......................................... 15
g. No Undisclosed Liabilities .............................. 15
h. No Violation of Law ..................................... 15
i. Health, Safety, Employment and Environmental Matters .... 15
j. Regulatory Compliance ................................... 16
k. Litigation .............................................. 16
l. Material Contracts....................................... 17
m. Intellectual Property ................................... 17
n. Disclosure .............................................. 18
o. Brokers ................................................. 18
p. Material Misstatements and Omissions .................... 18
5. Interim Agreements .................................................. 18
a. Access; Confidentiality ................................. 18
c. Interim Operations ...................................... 19
d. Occurrence of Conditions ................................ 19
e. Seller's Non-solicitation Agreement ..................... 19
f. Certain Assignments ..................................... 19
g. Purchaser's Non-Solicitation Agreement .................. 19
6. Conditions to Obligations of the Purchaser .......................... 20
a. Representations, Warranties and Performance ............. 20
b. Litigation .............................................. 20
c. Approvals ............................................... 20
d. Certain Assignments ..................................... 20
f. Absence of Material Changes ............................. 20
g. Legal Opinion ........................................... 20
h. Related Agreements ...................................... 20
h. Regulatory Matters ...................................... 21
i. FIRPTA Affidavit ........................................ 21
7. Conditions to Obligations of the Seller ............................. 21
a. Representations, Warranties and Performance ............. 21
b. Litigation .............................................. 21
c. Approvals ............................................... 21
d. Absence of Material Changes ............................. 21
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LIST OF EXHIBITS
Exhibit A Tangible Assets
Exhibit B Intellectual Property Rights
Exhibit C Hyline Products
Exhibit D Assigned Contracts
Exhibit E Form of Non-Competition Agreement
Exhibit F Form of Xxxx of Sale
Exhibit G Form of Security Agreement
Exhibit H Form of Assignment and Assumption Agreement
Exhibit I Form of Promissory Note
Exhibit J Form of Common Stock Purchase Warrant
Exhibit K Agreed Warrant Value
Exhibit L Seller's Disclosure Schedule
Exhibit M Purchaser's Disclosure Schedule
Exhibit N Purchaser's Financial Statements
Exhibit O Purchaser Capitalization Table
Exhibit P Form of Opinion of the Seller's Counsel
Exhibit Q Form of Opinion of Sellers' Special Patent Counsel
Exhibit R Form of Opinion of the Purchaser's Counsel
Exhibit S Form of Sixth Amended and Restated Rights Agreement
Exhibit T Form of Side Letter Agreement
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ASSET PURCHASE AGREEMENT
This Agreement is made as of January 5, 1994, by and among RIBOGENE,
INC., a California corporation (the "PURCHASER"), HYLINE LABORATORIES, INC.
(the "SELLER"), a New York corporation, and XXXXXXX XXXXXX, an individual (the
"SHAREHOLDER").
A. The Seller desires to sell and the Purchaser desires to purchase
certain of the assets relating to the Seller's business, which assets have been
assigned or transferred to the Seller from Xxxxxxx Xxxxxx, who acquired the
same from certain other entities (collectively, the "PREDECESSOR").
B. The Shareholder owns all of the issued and outstanding shares of
capital stock of the Seller.
C. The parties hereto desire to make this Agreement for the purpose of
setting forth certain representations, warranties and covenants made by each to
the other as an inducement to the fulfillment of the conditions precedent to
the consummation of the transactions contemplated hereby.
In consideration of the mutual agreements, representations and
warranties contained in this Agreement, the parties agree as follows:
1. Sales and Purchase of Purchased Assets.
a. Purchase and Sale. Subject to the terms and conditions
contained in this Agreement, at the Closing (as defined below) the Seller shall
sell, assign, transfer and convey to the Purchaser, free and clear of all liens
and encumbrances, and the Purchaser shall purchase from the Seller, the assets
described below (collectively, the "PURCHASED ASSETS"): (i) the tangible
assets, furniture and fixtures listed and described in Exhibit A hereto
(collectively, the "TANGIBLE ASSETS"), (ii) all patents, patent licenses,
licensed patents, trademarks, trade names, business names, service marks, logos
and copyrights, and all applications and registrations for the foregoing, and
all of the Seller's applications, licenses or registrations with or from any
governmental authority for any new drug or investigational new drug (including,
without limitation, any antibiotic or biologic) or controlled substance
(collectively, "PATENT RIGHTS") of the Seller, including (without limitation),
each Patent Right described or listed on Exhibit B hereto, and (iii) all trade
secrets, know-how, inventions or other proprietary information of any kind
(collectively, "TRADE SECRETS") relating to the currently identified products
or product candidates currently under development by the Seller, all of which
products are listed on Exhibit C to this Agreement (such products are referred
to herein as the "HYLINE PRODUCTS" and the Patent Rights and Trade Secrets
referred to in (ii) and (iii) above are collectively referred to herein as the
"INTANGIBLE ASSETS"). Without limiting the foregoing, the Purchased Assets
shall be deemed to include the following:
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(A) All books and records, whether originals or copies,
whether financial, scientific or otherwise, relating to the Purchased Assets,
including (without limitation) all data, reports, analyses, models or studies
relating to the Hyline Products and any tests, clinical trials or other research
(and all related documentation) relating to the same, but excluding financial
books and records, as to which the Purchaser shall be entitled to receive only
photocopies;
(B) All of Seller's rights under the leases, service
contracts and other agreements listed on Exhibit D hereto (collectively, the
"ASSIGNED CONTRACTS"), which include, without limitation, all proprietary
information and assignment of inventions or similar agreements with all persons
that have been employed by or have served as a consultant to or director of, the
Seller;
(C) All rights of the Seller, if any, under manufacturer's
warranties and guarantees relating to the Tangible Assets;
(D) All benefits and proceeds with respect to the Tangible
Assets or any other Purchased Assets as of and after the Closing under any
policy of insurance;
(E) All licenses, permits, certificates, franchises,
accreditations and other indicia of authority relating to the Seller's business,
to the extent legally transferable; and
(F) All inventory relating to the Seller's business,
including (without limitation) all inventories of substances, drugs and
materials used in clinical or preclinical trials.
b. Assets Excluded. Except as enumerated above, the Seller shall
retain and the Purchaser shall not acquire the remaining assets of the Seller.
Without limiting the foregoing, the Purchased Assets shall be deemed not to
include the following:
(i) All cash, cash equivalents, prepaid expenses, deposits,
bank accounts and accounts receivable of the Seller; and
(ii) The Seller's rights under this Agreement.
c. Liabilities. Except as otherwise specifically set forth herein,
the Purchaser shall not assume, or take title to the Purchased Assets subject
to, or in any way be liable or responsible for, any liabilities or obligations
of any kind of the Seller and the Seller shall continue to remain responsible
for the same. Without limiting the generality of the foregoing, the Purchaser
shall not assume or take title to the Purchased Assets subject to any of the
following:
(i) Any accounts payable, debts or other obligations of the
Seller outstanding on the Closing Date or arising after the Closing Date, except
as expressly provided in this Agreement with respect to the Assigned Contracts;
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(ii) Any liability or obligation of the Seller arising from
claims for personal injury (including death) or damage to property in respect
of any of the Seller's activities, except as expressly provided in this
Agreement with respect to the Designated Liability Claims (as defined in Section
9(a)(iv) below);
(iii) Any liability or obligation of the Seller, or any of
its employees, for any federal, state, local or foreign income, sales, use,
transfer, employment and other taxes, including, without limitation, any of
such taxes arising out of or in connection with the purchase of the
Purchased Assets by the Purchaser hereunder or any transactions preceding and in
connection with such purchase;
(iv) Any liability or obligation in respect of any plan,
agreement, arrangement or understanding under which benefits or compensation
are provided by the Seller for its employees, consultants or directors
(including but not limited to, any contract or other obligation for health
insurance, accrued vacation, severance pay or other benefits, or any
commissions or revenue or profit sharing or other compensation) (other than
sums which may arise after the date of this Agreement payable to Rip Xxxxxxxx
& Associates, Inc., pursuant to an agreement between such entity and the Seller
or the Predecessor, which obligation to pay such future amounts is being
assumed by the Purchaser hereunder);
(v) Any liability or obligation of the Seller based upon or
arising under any contract or agreement existing prior to or at the time of
Closing, other than pursuant to an Assigned Contract, from and after the
Closing Date;
(vi) Any lien, encumbrance, security interest or charge of
any nature whatsoever; or
(vii) Any liabilities or obligations arising from litigation
to which the Seller or the Shareholder is or would be a party that is pending or
threatened.
d. Closing and Closing Date. Unless otherwise agreed by the
parties, the consummation of the transactions contemplated by this Agreement
shall take place at a closing (the "CLOSING") to be held at the offices of
Salon, Marrow & Xxxxxxx 000 Xxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000,
at 9:00 a.m. local time, on January 5, 1994, or such earlier time or date as
the Seller and the Purchaser shall mutually agree, such time and date being
referred to herein as the "CLOSING DATE." At the Closing, (i) the Purchaser
and the Shareholder shall enter into the Non-Competition Agreement in the form
attached hereto as Exhibit E (the "NON-COMPETITION AGREEMENT"), (ii) the Seller
shall deliver to the Purchaser a Xxxx of Sale in the form attached hereto as
Exhibit F, evidencing the purchase and sale of the Purchased Assets (the "XXXX
OF SALE"), (iii) the Purchaser shall execute and deliver to the Seller each of
the Notes (as defined below), (iv) the Seller, the Shareholder and the Purchaser
shall enter into the Security Agreement (the "SECURITY AGREEMENT") in the form
attached hereto as Exhibit G, which relates to the Notes and the
Non-Competition Agreement, (v) the Purchaser shall execute and deliver to the
Seller the Warrant (as defined below), (vi) the Seller, the Purchaser and
certain other shareholders of the Purchaser shall enter into the Sixth Amended
and Restated Rights Agreement (as set forth in Section 7(f) below), (vii) the
Seller and the
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Purchaser shall enter into the Assignment and Assumption Agreement (the
"ASSIGNMENT AGREEMENT") in the form attached hereto as Exhibit H, and (viii) the
Purchaser shall make the cash payment to the Seller pursuant to the terms of
Section 2(a)(i) below. The Non-Competition Agreement, the Xxxx of Sale, the
Notes, the Security Agreement, the Warrant, the Sixth Amended and Restated
Rights Agreement and the Assignment Agreement are referred to herein
collectively as the "RELATED AGREEMENTS."
2. Purchase Price; Terms of Payment.
a. Purchase Price. The consideration to be paid to the
Seller at the closing (the "PURCHASE PRICE") shall consist of the following:
(i) The Purchaser shall make a cash payment at the
Closing by cash, bank check for immediately available funds or wire transfer to
the Seller or its designee in the amount of Three Hundred Eighty-Two Thousand
Five Hundred Dollars ($382,500.00).
(ii) Four secured promissory notes of the Purchaser
(the "NOTES") each in the form attached hereto as Exhibit I and duly completed
in accordance with the terms set forth herein. The Notes shall be issued in the
respective principal amounts of (A) One Million One Hundred Twenty-One Thousand
Dollars ($1,121,000.00), due together with all interest accrued thereon on the
first (1st) anniversary of the Closing Date; (B) Nine Hundred Sixteen Thousand
Dollars ($916,000.00), due together with all interest accrued thereon on the
second (2nd) anniversary of the Closing Date; (C) Nine Hundred Ten Thousand
Dollars ($910,000.00), due together with all interest accrued thereon on the
third (3rd) anniversary of the Closing Date; and (D) Nine Hundred Nine Thousand
Dollars ($909,000.00), due together with all interest accrued thereon on the
fourth (4th) anniversary of the Closing Date. Each of the Notes shall bear
simple interest, compounded annually, at the minimum rate of interest necessary
to avoid the imputation of income under the Internal Revenue Code of 1986 (the
"CODE") (in effect on the Closing Date), taking into account for such purpose
whether such Note is short-term or mid-term obligation under the Code; and
(iii) A duly executed Common Stock Purchase Warrant
in the form attached hereto as Exhibits J (the "WARRANT"), which shall be
delivered to the Seller at the Closing.
b. Valuation and Allocation of Purchase Price. For purposes
of complying with the requirements of Section 1060 of the Code, the Purchase
Price shall be allocated in accordance with the agreed upon warrant value set
forth on Exhibit K hereto. Each party hereto agrees to prepare its federal and
state income tax returns for all current and future tax reporting periods and
file Form 8594 (and corresponding state forms) with respect to this transaction
in a manner consistent with such valuation and allocation, and shall take no
position in any tax proceedings inconsistent with such valuation or allocation.
If any state or federal taxing authority challenges such valuation or
allocation, the party receiving notice of such challenge shall give the other
prompt written notice of such challenge, and the parties shall cooperate in good
faith in responding to it in order to preserve the effectiveness of such
valuation and allocation.
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c. Taxes. The Seller shall pay and discharge promptly when
due all sales, use, transfer, excise and other like taxes, if any, arising out
of the transfer of the Purchased Assets, or otherwise as a consequence of the
transactions contemplated by this Agreement.
3. Representations and Warrants of the Seller and the Shareholder.
Each of the Seller and the Shareholder represents and warrants to the Purchaser
that, except as set forth in the Disclosure Schedule attached to this Agreement
as Exhibit L (the "SELLER DISCLOSURE SCHEDULE"):
a. Organization. The Seller is a corporation duly organized,
validly existing and in good standing under the laws of the State of New York
and has all requisite power and authority to own, operate and lease its
properties and carry on its business as now conducted. The Shareholder owns all
of the issued and outstanding capital stock of the Seller, and no other person
has any right to acquire any equity or other interest in the Seller.
b. Title to Purchased Assets. The Seller has and will convey
to the Purchaser on the Closing Date title to the Purchased Assets, free and
clear of all security interests, mortgages, liens (including, but not limited
to, liens with respect to taxes), attachments, orders of court, rights of
redemption, debts, claims, charges, or other encumbrances of any kind
whatsoever and not subject to any continuing royalty, commission, profit or
revenue sharing or other compensation contract or obligation of any kind other
than as set forth in the Assigned Contracts.
c. Due Authority; Valid and Binding Agreements. Each of the
Seller and the Shareholder has the power and authority to enter into and be
bound by the terms and conditions of this Agreement and the Related Agreements
to which it is a party and to carry out its obligations pursuant hereto and
thereto. Each of this Agreement and the Related Agreements is, or upon execution
and delivery thereof will be, a legal, valid and binding obligation of each of
the Seller and the Shareholder which is a party thereto, as the case may be, in
each case enforceable against such party in accordance with its terms. The
execution, delivery and performance by the Seller of this Agreement and the
Related Agreements have been authorized and approved by all necessary corporate
action of the Seller and in compliance with all applicable laws.
d. No Conflicts or Violations. Neither the execution and
delivery of this Agreement and the Related Agreements nor the consummation of
the purchase and sale of the Purchased Assets and the other transactions
contemplated by this Agreement or the Related Agreements will (i) conflict with
or result in any violation of or constitute a default under any provision of
the Seller's Certificate of Incorporation or Bylaws or any agreement, mortgage,
bond, indenture, franchise or other instrument or obligation to which the
Seller or the Shareholder is a party or by which the Seller or the Shareholder
is bound (including, without limitation, any collective bargaining agreements
to which the Seller is a party and any partnership or similar agreement to
which the Shareholder or affiliate of the Shareholder may be bound), (ii) result
in the creation of any lien or other encumbrance upon the Purchased Assets
pursuant to the terms of any such mortgage, bond, indenture, franchise or other
instrument or obligation, (iii) violate any judgment, order, injunction, decree
or award of any court,
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administrative agency or government body against, or binding upon, the Seller
or the Shareholder or upon any of the Purchased Assets, (iv) constitute a
violation by the Seller of any law or regulation of any jurisdiction in which
the Seller conducts its business, or (iv) result in the breach of any of the
terms or conditions of, or constitute a default under, or otherwise cause any
impairment of any permit or license or other governmental authorization held by
the Seller.
e. Tangible Assets. Exhibit A contains a complete and
accurate list of certain tangible assets currently used in the Seller's
business. The Tangible Assets are being sold in their current state and the
Seller makes no representation as to their operating condition or repair. The
Seller does not own any real property.
g. No Undisclosed Liabilities. The Seller has no liabilities
or obligations, accrued, absolute, known or unknown, contingent or otherwise,
except (i) the liabilities and obligations set forth on Exhibit L, (ii)
liabilities and obligations which have been incurred subsequent to the date of
such exhibit in the ordinary course of business and (iii) liabilities and
obligations under the Assigned Contracts. All accrued but unpaid monetary
liabilities under the Assigned Contracts as of the date of this Agreement are
set forth on Exhibit L. There are no claims against, or liabilities or
obligations of, or any reasonable basis known to the Seller or the Shareholder
for any claims which, individually or in the aggregate, might result in or
cause any material adverse change in the Seller's business or prospects or in
the value of the Purchased Assets. To the knowledge of the Seller and the
Shareholder, no Designated Liability Claim (as defined in Section 9(a)(iv)
below) has been made or is pending against the Seller, the Predecessor, the
Shareholder or any of their affiliates, nor, to the knowledge of the Seller and
the Shareholder, does any valid basis for any Designated Liability Claim
currently exist.
h. No Violation of Law. There has been no violation of any
applicable federal, state or other law or regulation, ordinance, order,
injunction or decree, or any other requirements of any governmental body,
agency, authority or court that relate to the Purchased Assets.
i. Litigation. There are no suits, actions or administrative,
arbitration, unfair labor practice, worker's compensation or other proceedings
or governmental investigations, pending or, to the Seller's or the
Shareholder's knowledge, threatened that relate to the Purchased Assets, and
there are no judgments, orders, injunctions, decrees, stipulations or awards
(whether rendered by a court, administrative agency or by arbitration, pursuant
to a grievance or other procedure) that relate to the Purchased Assets.
j. Health, Safety, Employment and Environmental Matters.
(i) To the extent that the failure to do or be so
would have an adverse effect upon the Purchased Assets, the Seller is in
compliance with all federal, state, local and foreign health and occupational
safety laws and all federal, state, local and foreign laws related to
employment and employment practices, compensation and benefits, which are
applicable to the Seller or its business, and the Seller and the Predecessor
have conducted their business in compliance with the foregoing provisions.
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(ii) To the extent that the failure to do or be so
would have an adverse effect upon the Purchased Assets, the Seller is in
compliance with the terms and conditions of all environmental permits,
licenses, and other authorizations required under applicable laws relating in
any way to pollution of the environment and the Seller and the Predecessor have
conducted their business in compliance with the foregoing provisions.
(iii) To the extent that the failure to do or be so
would have an adverse effect upon the Purchased Assets, the Seller is in
compliance with all applicable federal, state, local and foreign laws relating
to emissions, discharges, and releases of hazardous materials into the
environment and the generation, treatment, storage, transportation and disposal
of hazardous wastes, including, without limitation, any applicable provisions
of the Resource Conservation and Recovery Act of 1976 or the Comprehensive
Environmental Response Compensation and Liability Act of 1980, and the Seller
and the Predecessor have conducted their business in compliance with the
foregoing provisions.
(iv) To the extent that such would have an adverse
effect on the Purchased Assets, (A) there are no conditions at, on, under or
related to, any real property of the Seller or the Predecessor or at which they
conduct or have conducted any of their operations or business which presently
or potentially pose a significant hazard to human health or the environment,
whether or not in compliance with law, and there (B) has been no production,
use, treatment, storage, transportation or disposal by the Seller or the
Predecessor of any Hazardous Substance, as hereinafter defined, at or on such
real property nor any release or threatened release by the Seller or the
Predecessor of any Hazardous Substance, pollutant or contaminant into or upon
or over the Real Property or into or upon ground or surface water at or within
2,000 feet of the boundaries of such real property except in compliance with
applicable law. To the knowledge of the Seller and the Shareholder, no
Hazardous Substance relating in any manner to the Purchased Assets is now or
ever has been stored by the Seller or the Predecessor on such real property in
underground tanks, pits or surface impoundments except in compliance with
applicable law.
(v) No action, investigation, proceeding, permit
revocation, permit amendment, writ, injunction or claim is pending, nor has the
Seller or the Predecessor received any notice of any of the foregoing,
concerning or relating to (A) the use, storage, sale or disposal of any
Hazardous Substance related to or affecting the Purchased Assets, (B) the
exposure of any person to any Hazardous Substance as a consequence of any
activity related to or affecting the Purchased Assets or (C) the presence of any
Hazardous Substance in, on or under any of the Seller's or the Predecessor's
facilities or any property owned, leased or occupied by the Seller which is
related to or affecting the Purchased Assets.
(vi) For purposes of this Agreement, "Hazardous
Substance" shall mean any environmentally hazardous or toxic substance, material
or waste which is currently regulated as such by any local governmental
authority, any state or the United States Government.
k. Regulatory Compliance.
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(i) Each of the Seller and the Predecessor has
complied with all requirements imposed on the drug products sold or proposed
for sale or testing by the Seller relating to the premarket development,
production, sale and marketing thereof, pursuant to the Federal Food, Drug and
Cosmetic Act (the "FDC ACT"), the regulations promulgated by the U.S. Food and
Drug Administration (the "FDA") thereunder, and any policies issued by the FDA
concerning the premarket development, production, sale and marketing of such
drug products, including any conditions for approval and/or postmarket
requirements that are specific to such drug products. Without limiting the
foregoing, the Seller specifically represents that all necessary
investigational new drug applications ("INDs") and amendments and/or
supplements thereto, as required by the FDC Act, the regulations of the FDA
adopted thereunder, and any policies issued by the FDA in connection with such
investigational new drug applications and amendments and/or supplements
thereto, have been filed with the FDA for metoclopramide, propranolol or any
other Hyline Product for which such applications or amendments are or have been
required, and all necessary approvals and acknowledgments have been obtained
from the FDA. Furthermore, all regulatory submissions to and filings with the
FDA made by or on behalf of the Seller are complete and correct in all material
respects and have been prepared and filed in compliance with all FDA rules,
regulations and stated policies. Informed consent agreements have been duly and
validly entered into between the Seller (or its predecessor) and each person
participating in any clinical trial or testing conducted by the Seller or the
Predecessor with respect to the Hyline Products and such informed consent
agreements are adequate under applicable law. Neither the enforceability nor
legal sufficiency of such informed consent agreements has been challenged by
any participant in any clinical trial or by any governmental agency (including,
without limitation, the FDA).
(ii) The Seller is not and has never been required to
comply with the requirements of the federal Controlled Substances Act (the
"CSA"), the implementing regulations promulgated by the U.S. Drug Enforcement
Administration (the "DEA") thereunder, or any policies issued by the DEA
concerning the premarket development, production, sale and marketing of such
controlled substances, including any conditions for approval or
acknowledgments, such as issuance of all registration and licensing
applications, and/or any other requirements, such as physical security,
recordkeeping, reporting, registration and filing requirements, that are
specific to such controlled substances. Furthermore, the Seller is not and has
never been required to execute and file applications with any State Board of
Pharmacy and has not in fact ever done so.
I. Intellectual Property.
(i) The Seller owns, and/or (as the case may be),
except with respect to any limitation on use expressly set forth in the
Assigned Contracts, has the exclusive right to use, sell, license, dispose of,
and (subject to compliance with legal formalities) bring actions for
infringement of, (A) all of the Patent Rights described in Exhibit B hereto
and, (B) to the extent permitted by law, the Trade Secrets described in Exhibit
C hereto as expressly noted thereon (collectively, "SELLER'S INTELLECTUAL
PROPERTY RIGHTS").
(ii) The execution, delivery and performance of this
Agreement and the Related Agreements and the consummation of the transactions
contemplated
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hereby and thereby (including the transfer of the Purchased Assets to the
Purchaser and the continued conduct by the Purchaser after the Closing Date of
the business of the Seller) will not breach, violate or conflict with any
instrument or agreement governing any of Seller's Intellectual Property Rights
necessary or required for, or used in, the conduct of the business of the
Seller or the Predecessor (including, without limitation, any of Seller's
Intellectual Property Rights relating to any Hyline Product) and will not cause
the forfeiture or termination or give rise to a right of forfeiture or
termination of any of Seller's Intellectual Property Rights or in any way
impair the right of the Purchaser to use, sell, license or dispose of or to
bring any action for the infringement of any of Seller's Intellectual Property
Rights or portion thereof.
(iii) Neither the development, manufacture, marketing,
license, sale or use of any Hyline Product violates or will violate any license
or agreement with any third party (assuming that the foregoing activities are
taken in compliance with the express terms of the Assigned Contracts), or, to
the knowledge of the Seller or the Shareholder, infringes or will infringe any
valid Patent Right or protectible Trade Secret of any other party; there is no
pending or, to the knowledge of the Seller and the Shareholder, threatened
claim or litigation or basis for contesting the validity, ownership or right to
use, sell, license or dispose of any of Seller's Intellectual Property Rights,
nor has the Seller or the Shareholder received any notice asserting that any of
Seller's Intellectual Property Rights or the proposed use, sale, license or
disposition thereof conflicts or will conflict with the rights of any other
party, nor, to the knowledge of the Seller or the Shareholder, is there any
basis for any such assertion. To the knowledge of the Seller or the
Shareholder, there has not been and is not currently any infringement on the
part of any third party of any of Seller's Intellectual Property Rights.
(iv) The Seller has taken reasonable and practicable
steps (including, without limitation, entering into confidentiality and
non-disclosure agreements and inventions assignment agreements with all
officers and employees of and consultants to the Seller with access to or
knowledge of Seller's Intellectual Property Rights) designed to safeguard and
maintain the secrecy and confidentiality of, and/or its proprietary rights in,
all of the Seller's Intellectual Property Rights.
(v) A complete and accurate list of all applications,
filings and other formal actions made or taken pursuant to federal, state,
local and foreign laws by the Seller or the Predecessor with respect to
Seller's Intellectual Property Rights, including, without limitation, all
patents, patent applications, trademarks, trademark applications, service marks
and copyright registrations, including the identification of the country in
which any of them has been filed, issued or registered, is set forth on Exhibit
B hereto. All such patents, trademarks, service marks and copyright
registrations are in full force and effect. The items set forth on Exhibit B, C
and D hereto represent all of the Seller's Intellectual Property Rights with
respect to the Hyline Products and in such regard the information set forth on
such exhibits is accurate and complete.
m. Contracts. The Seller is not bound by any contract,
agreement or instrument of any kind that affects in any way the Purchased
Assets except as set forth on the Seller Disclosure Schedule or Exhibit D
(collectively, the "SELLER CONTRACTS"). No breach, default or condition
permitting declaration of breach or default exists with respect to the Seller
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or, to the Seller's knowledge, with respect to any other party to any such
Seller Contract as to any of the Seller Contracts.
n. Employee Matters.
(i) The Seller Disclosure Schedule contains a
complete and correct list of the names and addresses of all the Seller's
employees and consultants (collectively, the "EMPLOYEES") who perform services
for or on behalf of the Seller, including, to the extent applicable, their
titles, and of all of the members of the Seller's Board of Directors.
(ii) The listing of the Seller Contracts listed on
the Seller Disclosure Schedule includes all contracts, arrangements and
agreements of the Seller with regard to the Employees and/or consultants. The
employment of all Employees is terminable at will without any penalties or
severance obligations of any kind.
(iii) None of the Employees is represented by any
labor union nor is the Seller a party to any collective bargaining agreement.
There is no pending or threatened labor strike, work stoppage, representation
petition, slow down, labor grievance or other labor trouble or interference
pending against the Seller, affecting the Employees or impairing the Seller's
business (including, without limitation, any organizational drive). All
Employees and consultants are either United States citizens or resident aliens
specifically authorized to engage in employment in the United States in
accordance with all applicable laws and have completed and filed all required
forms contemplated by such laws.
(iv) Each of the employees, consultants and directors
of the Seller or the Predecessor have entered into proprietary information and
invention assignment agreements in a form provided to the Purchaser, and to the
extent such agreements affect or relate to the Purchased Assets, such agreements
are fully enforceable and assignable to the Purchaser in accordance with the
provisions of this Agreement.
(v) No agreement or arrangement regarding
compensation which will be assumed by Purchaser provides for any payments which
could result in a nondeductible expense to the Purchaser pursuant to Section
280G of the Code or an excise tax to the recipient of such payment pursuant to
Section 4999 of the Code.
o. Brokers. Neither the Seller nor the Shareholder is
obligated, either directly or indirectly, to any person for brokerage or
finders' fees or agents' commissions or any similar charges in connection with
this Agreement, and each of the Seller and the Shareholder agrees to indemnify
the Purchaser against any liability incurred by the Purchaser resulting from any
such charges alleged to be payable because of any act, omission or statement of
or by the Seller or the Shareholder.
p. Assignability of Contracts; No Default. To the knowledge
of the Seller and the Shareholder, each of the Assigned Contracts (i) is a
legal, binding and enforceable obligation of the Seller and the other parties
thereto and none of the parties thereto is in material breach or default of any
of its obligations to the other party or parties and (ii) upon execution of
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the Assignment Agreement, will constitute legal, binding and enforceable
obligations of such other parties to the benefit of the Purchaser, enforceable
by the Purchaser in accordance with their terms.
q. Taxes. All sales and use taxes, real and personal
property taxes, gross receipts taxes, documentary transfer taxes, employment
taxes, withholding taxes, unemployment insurance contributions and other taxes
or governmental charges of any kind, however denominated, for which the
Purchaser could become liable as a result of acquiring the Purchased Assets or
which could result in a lien on or charge against the Purchased Assets
(collectively, "Taxes") have been or will be paid for all periods prior to and
including the Closing Date. The Seller or the Predecessor has duly and timely
filed (or will file prior to the Closing Date) all returns and reports of Taxes
required to be filed prior to such date. There are not, and as of the Closing
will not be, any liens for Taxes on any of the Purchased Assets (other than
liens for Taxes not yet due and payable). Each of the Seller and the
Predecessor has complied with all record keeping and tax reporting obligations
relating to income and employment taxes due with respect to compensation paid to
Employees. Seller is not a "foreign person" within the meaning of Section
1445(f)(3) of the Code. There are no pending or threatened proceedings with
respect to Taxes.
r. Unassumed Liabilities. The sale, transfer and
assignment of the Purchased Assets pursuant to this Agreement will not render
the Seller unable to pay its liabilities not assumed by the Purchaser as they
become due and payable.
s. Purchase Entirely for Own Account. This Agreement is
made with the Seller in reliance upon the Seller's representation to the
Purchaser, which by the Seller's execution of this Agreement the Seller hereby
confirms, that the Warrant and the shares of Common Stock issuable upon exercise
of the Warrant (the "WARRANT SHARES" and collectively with the Warrant, the
"SECURITIES") to be acquired by the Seller will be acquired for investment for
the Seller's own account, not as a nominee or agent, and not with a view to the
resale or distribution of any part thereof, and that the Seller has no present
intention of selling, granting any participation in, or otherwise distributing
the same other than to the Shareholder and members of the Shareholder's
immediate family or trusts for their benefit. By executing this Agreement, the
Seller further represents that the Seller does not presently have any contract,
undertaking, agreement or arrangement with any person to sell, transfer or grant
participations to such person or to any third person, with respect to any of the
Securities. The Seller understands that this sale of the Securities has not
been, and will not be, registered under the Securities Act of 1933, as amended
(the "SECURITIES ACT"), by reason of a specific exemption from the registration
provisions thereof which depends upon, among other things, the bona fide nature
of the Seller's investment intent and the accuracy of the Seller's
representations as expressed herein. The Seller represents that it has not been
formed for the specific purpose of acquiring the Securities.
t. Disclosure of Information. The Seller believes it has
received all the information it considers necessary or appropriate for deciding
whether to acquire the Securities. The Seller further represents that it has
had opportunity to ask questions and receive answers from the Purchaser
regarding the terms and conditions of the offering of the
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Securities. The foregoing, however, does not limit or modify the
representations and warranties of the Purchaser in Section 4 of this Agreement
or the right of the Seller to rely thereon.
u. Investment Experience. The Seller is capable of
evaluating the merits and risks of the Seller's acquisition of the Securities.
The Seller, by reason of its business or financial experience or the business
or financial experience of its professional advisors who are unaffiliated with
and who are not compensated by the Purchaser or any affiliate or selling agent
of the Purchaser, directly or indirectly, has the capacity to protect its own
interests in connection with the acquisition of the Securities hereunder.
v. Restricted Securities. The Seller understands that the
Securities are characterized as "restricted securities" under the federal
securities laws inasmuch as they are being acquired from the Purchaser in a
transaction not involving a public offering and that under such laws and
applicable regulations such Securities may be resold without registration under
the Securities Act only in certain limited circumstances. In this respect, the
Seller represents that it is familiar with Rule 144 promulgated under the
Securities Act, as presently in effect, and understands the resale limitations
imposed thereby and otherwise by the Securities Act.
w. Further Limitations on Disposition. Without in any way
limiting the representations set forth above, the Seller further agrees not to
make any disposition of all or any portion of the Securities unless and until:
(i) There is then in effect a Registration
Statement under the Securities Act covering such proposed disposition and such
disposition is made in accordance with such Registration Statement; or
(ii) The Seller shall have (A) notified the
Purchaser of the proposed disposition and shall have furnished the Purchaser
with a detailed statement of the circumstances surrounding the proposed
disposition, and (B) if reasonably requested by the Purchaser, furnished the
Purchaser with an opinion of counsel, reasonably satisfactory to the Purchaser,
that such disposition will not require registration under the Securities Act.
It is agreed that the Purchaser will not require opinions of counsel for
transactions made pursuant to Rule 144 except in unusual circumstances.
(iii) Notwithstanding the provisions of paragraphs (i)
and (ii) above, no such registration statement or opinion of counsel shall be
necessary for a transfer by the Seller to a constituent partner (including any
constituent of a constituent) of the Seller or to a trust for the benefit of a
constituent and or members of his immediate family, if the transferee or
transferees agree in writing to be subject to the terms hereof to the same
extent as if they were the Purchaser hereunder.
x. Legends. It is understood that the Securities, and any
securities issued in respect thereof or exchange therefor, may bear one or all
of the following legends: (i) a legend setting forth the restrictions stated
above with respect to the Securities Act of 1933 and Rule 144 promulgated
thereunder, (ii) any legend required by the laws of the State of California or
New York, including any legend required by the California Department of
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17
Corporations, and/or (iii) any legend required by the Blue Sky laws of any other
state to the extent such laws are applicable to the Securities so legended.
y. Material Misstatements and Omissions. No representation
or warranty by the Seller or the Shareholder in this Agreement, any Related
Agreement or in any certificate furnished or to be furnished by the Seller or
the Shareholder pursuant hereto or thereto or in connection with the
transactions contemplated hereby or thereby contains or will contain any untrue
statement of a material fact or omits or will omit to state a material fact
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading. The Seller and the Shareholder have
delivered or made available true and complete copies of each document which has
been requested by the Purchaser.
4. Representations and Warranties of the Purchaser. The Purchaser
represents and warrants to the Seller and the Shareholder that, except as set
forth in the Disclosure Schedule attached to this Agreement as Exhibit M (the
"PURCHASER DISCLOSURE SCHEDULE"):
a. Organization. The Purchaser is a corporation duly
organized, validly existing and in good standing under the laws of the State of
California and has all requisite power and authority to own, operate and carry
on its business as it is now conducted.
b. Due Authority; Valid and Binding Agreements. The
Purchaser has the power and authority to enter into and be bound by the terms
and conditions of this Agreement and the Related Agreements to which it is a
party and to carry out its obligations pursuant hereto and thereto. Each of this
Agreement and the Related Agreements to which the Purchaser is a party is or,
upon execution and delivery thereof will be, a legal, valid and binding
obligation of the Purchaser, in each case enforceable against the Purchaser in
accordance with its terms. The execution, delivery and performance by the
Purchaser of this Agreement and the Related Agreements has been authorized and
approved by all necessary corporate action and in compliance with all applicable
laws. All corporate action on the part of the Purchaser, its officers, directors
and shareholders necessary for the authorization, issuance and delivery of the
Warrant has been taken or will be taken prior to the Closing, and, with respect
to the Warrant Shares, will be taken prior to the exercise of the Warrant.
c. No Conflicts or Violations. Neither the execution or
delivery of this Agreement and the Related Agreements nor the consummation of
the purchase and sale of the Purchased Assets and the other transactions
contemplated by this Agreement or the Related Agreements will (i) conflict with
or result in any violation of or constitute a default under any provision of the
Purchaser's Articles of Incorporation or Bylaws or any agreement, mortgage,
bond, indenture, franchise or other instrument or obligation to which the
Purchaser is a party or by which it is bound, (ii) violate any judgment, order,
injunction, decree or award of any court, administrative agency or governmental
body against, or binding upon, the Purchaser or upon the property or business
regulation of any jurisdiction as such law or regulation relates to the
Purchaser or the property or business of the Purchaser, (iii) constitute a
violation by the Purchaser of any law or regulation of any jurisdiction, or (iv)
result in the breach of any of the terms or conditions of, or constitute a
default under, or otherwise cause any impairment of, any
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permit, license or other governmental authorization held by the Purchaser or
required of the Purchaser to conduct its business.
d. Financial Statements. The audited financial statements of
the Purchaser for the periods ended December 31, 1992 and March 31, 1992, and
unaudited financial statements for the nine-month period ended September 30,
1993, attached to this Agreement as Exhibit N (collectively, the "PURCHASER
FINANCIAL STATEMENTS"), are complete and correct and have been prepared in
accordance with the Purchaser's books and records and with generally accepted
accounting principles applied on a consistent basis throughout the periods
indicated and with each other (except in the case of interim financial
statements for the lack of footnotes and subject to normal year-end audit
adjustments, which, in neither case, are material), and fairly and accurately
set forth the operating results of the Purchaser as of the dates and for the
periods indicated therein. Since the date of such financial statements, there
has not been any adverse change in the revenues, liabilities, operating results
or prospects of the Purchaser or any change in the Purchaser's business from
that reflected in the Purchaser Financial Statements.
e. Capitalization. As of the date of this Agreement, the
authorized capital of the Purchaser consists of:
(i) Preferred Stock. Five Million Eighteen Thousand
Four Hundred Ninety-One (5,018,491) shares of Preferred Stock, of which (a)
138,269 shares have been designated Series A Preferred Stock, of which 138,268
are issued and outstanding, (b) 800,000 shares have been designated Series B
Preferred Stock, of which 580,061 shares are issued and outstanding, (c)
3,810,000 shares have been designated Series C Preferred Stock, of which
2,805,519 shares are issued and outstanding, and (d) 270,222 shares have been
designated Series D Preferred Stock, all of which are issued and outstanding.
(ii) Common Stock. Eight Million (8,000,000) shares
of Common Stock, of which Three Hundred Ten Thousand Three Hundred Sixty-Three
(310,363) shares are issued and outstanding.
(iii) Reservation of Stock. The Purchaser has reserved
(a) 17,556 shares of Series B Preferred Stock for issuance upon exercise of a
certain outstanding warrant to purchase shares of Series B Preferred Stock (the
"SERIES B WARRANT"), (b) 15,000 shares of Series C Preferred Stock for issuance
upon exercise of a certain outstanding warrant to purchase shares of Series C
Preferred Stock (the "SERIES C WARRANT"), (c) 138,268 shares of Common Stock
for issuance upon conversion of the Series A Preferred Stock, (d) 597,617
shares of Common Stock for issuance upon conversion of the Series B Preferred
Stock, (e) 2,820,519 shares of Common Stock for issuance upon conversion of the
Series C Preferred Stock and (f) 270,222 shares of Common Stock for issuance
upon conversion of the Series D Preferred Stock. The Purchaser has also
reserved an aggregate of up to 1,023,376 shares of Common Stock for issuance,
at the discretion of the Board of Directors, to officers, directors, employees
and consultants pursuant to equity incentive plans adopted by the Purchaser.
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(iv) Capitalization Table. Attached hereto as Exhibit
O is a table representing the foregoing capitalization of the Purchaser and
assuming the issuance of the Warrant. Such table is true and correct except to
the extent of the assumed issuance of the Warrant.
f. Valid Issuance. The outstanding shares of Common Stock and
Series A, Series B, Series C and Series D Preferred Stock and the Series B
Warrant and Series C Warrant are duly and validly issued (including, without
limitation, issued in compliance with applicable federal and state securities
laws) and the outstanding capital stock is fully-paid and nonassessable. The
Warrant, when issued, sold and delivered in accordance with the terms hereof
for the consideration expressed herein, will be duly and validly issued
(including, without limitation, issued in compliance with applicable federal
and state securities laws), and the Warrant Shares, when issued upon proper
exercise of the Warrant, will be fully paid and nonassessable and free of
restrictions on transfer other than restrictions on transfer under this
Agreement, any Related Agreements and applicable state and federal securities
laws.
g. No Undisclosed Liabilities. The Purchaser has no
liabilities or obligations, accrued, absolute, known or unknown, contingent or
otherwise, except (i) the liabilities and obligations set forth in the most
recent balance sheet included in the Purchaser Financial Statements, and (ii)
liabilities and obligations which have been incurred subsequent to the date of
such balance sheet in the ordinary course of business which are not,
individually or in the aggregate, material. There are no claims against, or
liabilities or obligations of, or any reasonable basis known to the Purchaser
for any claims which, individually or in the aggregate, might result in or
cause any material adverse change in the Purchaser's business or prospects.
h. No Violation of Law. The Purchaser has not engaged in any
activity or omitted to take any action as a result of which the Purchaser is or
has been in violation of any applicable federal, state or other law or
regulation, ordinance, order, injunction or decree, or any other requirement of
any governmental body, agency, authority or court.
i. Health, Safety, Employment and Environmental Matters.
(i) The Purchaser is in compliance with all federal,
state, local and foreign health and occupational safety laws and all federal,
state, local and foreign laws related to employment and employment practices,
compensation and benefits, which are applicable to the Purchaser or its
business, and the Purchaser has conducted its business in compliance with the
foregoing provisions.
(ii) The Purchaser is in compliance with the terms and
conditions of all environmental permits, licenses, and other authorizations
required under applicable laws relating in any way to pollution of the
environment, and the Purchaser has conducted its business in compliance with
the foregoing provisions.
(iii) The Purchaser is in compliance with all
applicable federal, state, local and foreign laws relating to emissions,
discharges, and releases of hazardous materials into the environment and the
generation, treatment, storage, transportation and
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disposal of hazardous wastes, including, without limitation, any applicable
provisions of the Resource Conservation and Recovery Act of 1976 or the
Comprehensive Environmental Response. Compensation and Liability Act of 1980,
and the Purchaser has conducted its business in compliance with the foregoing
provisions.
(iv) There are no conditions at, on, under or
related to, any real property of the Purchaser or at which they conduct or have
conducted any of their operations or business which presently or potentially
pose a significant hazard to human health or the environment, whether or not in
compliance with law, and there has been no production, use, treatment, storage,
transportation or disposal by the Purchaser of any Hazardous Substance, as
hereinafter defined, at or on such real property nor any release or threatened
release by the Purchaser of any Hazardous Substance, pollutant or containment
into or upon or over the Real Property or into or upon ground or surface water
at or within 2,000 feet of the boundaries of such real property except in
compliance with applicable law. No Hazardous Substance is now or ever have been
stored by the Purchaser on such real property in underground tanks, pits or
surface impoundments except in compliance with applicable law.
(v) No action, investigation, proceeding, permit
revocation, permit amendment, writ, injunction or claim is pending, nor has the
Purchaser received any notice of any of the foregoing, concerning or relating
to (A) the use, storage, sale or disposal of any Hazardous Substance related to
the Purchaser's business, (B) the exposure of any person to any Hazardous
Substance as a consequence of any activity related to the conduct of the
Purchaser's business or (C) the presence of any Hazardous Substance in, on or
under any of the Purchaser's facilities or any property owned, leased or
occupied by the Purchaser.
(vi) For purposes of this Agreement, "Hazardous
Substance" shall mean any hazardous or toxic substance, material or waste which
is regulated by any local governmental authority, any state or the United
States Government.
j. Regulatory Compliance. The Purchaser has complied with
all requirements imposed on the drug products sold or proposed for sale or
testing by the Purchaser relating to the premarket development, production, sale
and marketing thereof, pursuant to the Federal Food, Drug and Cosmetic Art (the
"FDC Act"), the regulations promulgated by the U.S. Food and Drug Administration
(the "FDA") thereunder, and any policies issued by the FDA concerning the
premarket development, production, sale and marketing of such drug products,
including any conditions for approval and/or postmarket requirements that are
specific to such drug products. Furthermore, the Purchaser is not currently and
has never been required to comply with the requirements of the federal
Controlled Substances Act (the "CSA"), the implementing regulations promulgated
by the U.S. Drug Enforcement Administration (the "DEA") thereunder, or any
policies issued by the DEA concerning the premarket development, production,
sale and marketing of such controlled substances.
k. Litigation. There are no suits, actions or
administrative, arbitration, unfair labor practice, worker's compensation or
other proceedings or governmental investigations, pending or, to the
Purchaser's knowledge, threatened against or relating, directly
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21
or indirectly to the Purchaser and there are no judgments, orders, injunctions,
decrees, stipulations or awards (whether rendered by a court, administrative
agency or by arbitration pursuant to a grievance or other procedure) against or
relating to the Purchaser which could result in a material adverse effect on the
financial condition, business or prospects of the Purchaser, or any lien or
other encumbrance on the assets of the Purchaser.
l. Material Contracts. The Purchaser is not bound
by any contract, agreement or instrument of any kind except as listed in the
Purchaser Disclosure Schedule (the "PURCHASER MATERIAL CONTRACTS"). No default,
breach or condition permitting declaration of breach or default exists with
respect to any of the Purchaser Material Contracts.
m. Intellectual Property.
(i) As of the Closing, the Purchaser has or
will have sufficient title and ownership of all patents, trademarks, service
marks, trade names, copyrights, trade secrets information, proprietary rights
and processes necessary for its business as now conducted and as proposed to be
conducted without any conflict with or infringement of the rights of others.
(ii) The Purchaser is not aware that it has
violated or, by conducting its business as proposed, would violate any of the
Intellectual Property Rights of any other person or entity. The execution,
delivery and performance of this Agreement and the Related Agreements and the
consummation of the transactions contemplated hereby and thereby will not
breach, violate or conflict with any instrument or agreement governing any
intellectual property right necessary or required for, or used in, the conduct
of the business of the Purchaser as presently conducted.
(iii) The Purchaser is not aware that any of
its employees are obligated under any contract (including licenses, covenants
or commitments of any nature) or other agreement or subject to any judgment
decree or order of any court or administrative agency, that would interfere
with the use of his best efforts to promote the interests of the Purchaser or
that would conflict with the Purchaser's business as proposed to be conducted.
Neither the execution nor delivery of this Agreement, nor the carrying on of the
Purchaser's business by the employees of the Purchaser, nor the conduct of the
Purchaser's business as proposed, will, to the Purchaser's knowledge, conflict
with or result in a breach of the terms, conditions or provisions of, or
constitute a default under, any contract, covenant or instrument under which
any of such employees is now obligated.
(iv) The Purchaser has taken reasonable and
practicable steps (including, without limitation, entering into confidentiality
and non-disclosure agreements and inventions assignment agreements with all
officers and employees of and consultants to the Seller with access to or
knowledge of the Seller's Intellectual Property Rights) designed to safeguard
and maintain the secrecy and confidentiality of, and/or its proprietary rights
in, all of the Seller's Intellectual Property Rights.
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n. Disclosure. The Purchaser has provided the
Seller and the Shareholder with the most recent draft of the Purchasers
Business Plan (the "BUSINESS PLAN"). To the extent the Business Plan was
prepared by management of the Purchaser, the Business Plan and the financial
projections contained in the Business Plan were prepared in good faith;
however, the Purchaser does not represent or warrant that it will achieve such
financial projections.
o. Brokers. The Purchaser is not obligated either
directly or indirectly, to any person for brokerage or finders' fees or agents'
commissions or any similar charges in connection with this Agreement, and
agrees to indemnify the Purchaser and the Shareholder against any liability
incurred by the Purchaser or the Shareholder resulting from any such charges
alleged to be payable because of any act, omission or statement of or by the
Purchaser.
p. Material Misstatements and Omissions. No
representation or warranty by the Purchaser in this Agreement or the Related
Agreements or in any certificate furnished or to be furnished by the Purchaser
pursuant hereto or thereto or in connection with the transactions contemplated
hereby or thereby contains or will contain any untrue statement of a material
fact or, omits or will omit to state a material fact necessary to make the
statement therein, in light of the circumstances under which they were made not
misleading.
5. Interim Agreements.
a. Access: Confidentiality. The Seller agrees to
make available all books, records, facilities, employees, non-employee agents
(such as patent and regulatory counsel) and information necessary for the
Purchaser to evaluate the Purchased Assets. The Purchaser agrees to make
available all books, records, facilities, employees non-employee agents (such
as patent and regulatory counsel) and information necessary for the Seller to
evaluate the business financial condition and prospects of the Purchaser. Each
party hereto shall keep confidential and shall not make use of any information
treated by the other party as confidential (including, without limitation, the
existence of this Agreement), obtained from the other party concerning the
assets, properties, business or operations of the other party other than to
legal counsel, consultants, financial advisers, key employees, lenders and
investment bankers where such disclosure is related to the performance of
obligations under this Agreement or the consummation of the transactions
contemplated under this Agreement (all of whom shall be similarly bound by the
provisions of this Section 5(a)), except as may be required to be disclosed by
applicable law. Notwithstanding the foregoing, the foregoing confidentiality
restrictions shall not apply to any information which (i) becomes generally
available to the public through no fault of the receiving party or its
employees, agents or representatives; (ii) is independently developed by the
receiving party without benefit of the above-described information (and such
independent development is substantiated in writing), or rightfully received
from another source on a non-confidential basis; (iii) when such disclosure is
required by a court or governmental authority or is otherwise required by law or
is necessary to establish rights under this Agreement or any Related Agreement
or any Related Agreement (and the disclosing party has taken all reasonable
efforts to limit the scope of such disclosure and to protect the confidential
nature of the information disclosed).
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b. Public Announcements. The Purchaser, the
Seller and the Shareholder agree to cooperate in good faith and mutually consent
to any press release or public statement with respect to the existence of this
Agreement or the transactions contemplated hereby, and further agree not to
issue any such press release or public statement prior to consultation with the
other, except as may be required by law.
c. Interim Operations. The Seller agrees, and the
Shareholder agrees to cause the Seller to ensure that, from the date of this
Agreement to the Closing Date, the Seller shall take no action (i) that could
reasonably be expected to diminish in any material way the value of the
Purchased Assets, or (ii) that would result in any representation or warranty
of the Seller or the Shareholder being untrue in any material respect. Without
limiting the generality of the foregoing, the Seller shall not, without the
prior approval of the Purchaser, enter into any material agreement or
commitment, waive any material right or otherwise materially alter any of its
current activities with respect to the Seller's conduct of research development
or testing of the Hyline Products relating to Metoclopramide.
d. Occurrence of Conditions. Each party hereto
shall use its commercially reasonable efforts, or where appropriate cooperate
in the efforts of the other party, to cause the occurrence of the conditions
specified in Section 6 and Section 7 of this Agreement.
e. Seller's Non-solicitation Agreement. From the
date hereof and until the Closing Date or the termination of this Agreement,
whichever occurs earlier, neither the Seller nor the Shareholder shall, whether
directly or indirectly or through any affiliate, advisor or other consultant,
initiate or participate in any discussion or negotiation relating to, or
provide any information in connection with, any possible sale, directly or
indirectly, of the Seller, any of its corporate interests, assets or business
(including, without limitation, the Purchased Assets), to any party other than
the Purchaser.
f. Certain Assignments. The Seller and the
Shareholder shall use their respective best efforts to obtain assignments to
Purchaser on or prior to the closing of each of the Assigned Contracts on the
same terms or terms more favorable to the Purchaser as currently exist with
respect to the Seller, provided, however, that neither the Seller nor the
Shareholder shall be required to pay or transfer or promise to pay or transfer
any sum or property right in order to obtain any such consent.
g. Purchaser's Non-Solicitation Agreement. The
Purchaser agrees for itself and its affiliates that if the transactions
contemplated by this Agreement do not close for any reason resulting primarily
from the fault or breach of the Purchaser, neither the Purchaser nor its
affiliates will without first obtaining the prior written consent of the Seller,
directly or indirectly enter into negotiations or an agreement with Antisoma
Ltd. or any of its affiliates regarding the bladder carcinoma product or enter
into an agreement with Xxxxx Xxxxx (Pharmacon) or any of its affiliates
regarding the immune suppressor product. The foregoing provisions are not
intended to limit any confidentiality agreement previously entered into by the
Purchaser and the Seller.
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6. Conditions to Obligations of the Purchaser. Absent a waiver in
writing, all obligations of the Purchaser to purchase the Purchased Assets are
subject to the satisfaction of the following conditions, to the Purchaser's
reasonable satisfaction, on or before the completion of the Closing on the
Closing Date:
a. Representations, Warranties and Performance. The
representations and warranties of the Seller and the Shareholder contained
herein shall be deemed to have been made again at and as of the Closing Date
and shall then be true and correct in all material respects with the same force
and effect as if such representations and warranties have been made at and as
of the Closing Date; the Seller and the Shareholder shall have performed and
complied with all agreements, conditions and covenants required by this
Agreement to be performed or complied with by the Seller and the Shareholder
prior to or at the Closing Date; and the Seller shall have furnished to the
Purchaser a certificate of the President of the Seller and the Shareholder
dated the Closing Date, verifying, in such detail as the Purchaser may
reasonably request, to the fulfillment of the foregoing conditions.
b. Litigation. There shall not be pending any litigation
before any court or governmental agency (i) the outcome of which could
reasonably be expected to have a material adverse affect on the Purchased
Assets or their value to the Purchaser, or (ii) to restrain or prohibit or to
obtain damages or other relief in connection with, or which is related to or
arises out of, this Agreement, the Related Agreements or the transactions
contemplated hereby or thereby.
c. Approvals. All corporate action shall have been taken by
the Seller and the Shareholder necessary for the approval of this Agreement,
the Related Agreements and the transactions contemplated hereby and thereby,
and all required consents and approval, as set forth on Exhibit L hereto, or
filings shall have been made or completed to the Purchaser's reasonable
satisfaction under any applicable law, rule or regulation or pursuant to any
contract or agreement to which the Seller or the Shareholder may be a party.
d. Certain Assignments. The assignments of the Assigned
Contracts as described in Section 5(f) hereof shall have been received to the
Purchaser's reasonable satisfaction.
e. Absence of Material Changes. Between the date of this
Agreement, and the Closing Date, there shall not have been any adverse change
in or to the Purchased Assets or the Seller's financial condition, business or
prospects.
f. Legal Opinion. The Purchaser shall have received the legal
opinions of Salon, Marrow & Xxxxxxx, counsel to the Seller and the Shareholder,
and Xxxxxx Xxxxxx, special patent counsel to the Seller, each dated the Closing
Date, in the respective forms attached hereto as Exhibit P and Exhibit O. Such
opinions shall be in form and substance reasonably satisfactory to the
Purchaser and its legal counsel.
g. Related Agreements. The Seller and the Shareholder shall
have executed and delivered each of the Related Agreements to which they are a
party.
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h. Regulatory Matters. The Seller shall have delivered to the
Purchaser (i) letters to be executed by the Seller or the Predecessor notifying
the FDA of the transfer of the purchased drug products, including the transfer
of investigational new drug applications and orphan drug designations, as per
21 C.F.R. Section 316.27, and (ii) the original recorded documentation of FDA
approval of all investigational new drug applications filed with the FDA by the
Seller or the Predecessor with respect to the Purchased Assets.
i. FIRPTA Affidavit. The Seller shall have provided the
Purchaser with an affidavit stating, under penalty of perjury, that the Seller
is not a foreign person and providing the Seller's U.S. taxpayer identification
number.
7. Conditions to Obligations of the Seller. Absent a waiver in
writing, all obligations of the Seller to sell the Purchased Assets, are
subject to the satisfaction of the following conditions, to the Seller's
reasonable satisfaction, on or before the completion of the Closing on the
Closing Date:
a. Representations, Warranties and Performance. The
representations and warranties of the Purchaser shall be deemed to have been
made again at and as of the Closing Date and shall then be true and correct in
all material respects with the same force and effect as if such representations
and warranties had been made at and as of the Closing Date; the Purchaser shall
have performed and complied with all agreements, conditions and covenants
required by this Agreement to be performed or complied with by it prior to or
at the Closing Date; and the Seller shall have been furnished with a
certificate of the President of the Purchaser, dated the Closing Date,
certifying in such detail as the Seller may reasonably request, to the
fulfillment of the foregoing conditions.
b. Litigation. There shall not be pending any litigation
before any court or governmental agency to restrain or prohibit or to obtain
damages or other relief in connection with, or which is related to or arises
out of, this Agreement, the Related Agreements or the transactions contemplated
hereby or thereby.
c. Approvals. All corporate action shall have been taken by
the Purchaser necessary for the approval of this Agreement, the Related
Agreements and the transactions contemplated hereby and thereby, and all
required consents, approvals or filings shall have been made or completed to
the Seller and Shareholder's reasonable satisfaction under any applicable law,
rule or regulation or pursuant to any contract or agreement to which the
Purchaser may be a party.
d. Absence of Material Changes. Between the date of this
Agreement, and the Closing Date, there shall not have been any adverse change
in or to the Purchaser's financial condition.
e. Legal Opinion. The Seller shall have received a legal
opinion of Venture Law Group, counsel to the Purchaser, dated the Closing Date,
in the form attached hereto as Exhibit R. Such opinion shall be in form and
substance reasonably satisfactory to the Seller and its legal counsel.
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f. Related Agreements. The Purchaser shall have executed
and delivered the Related Agreements, and the Sixth Amended and Restated Rights
Agreement between the Purchaser, the Seller and certain shareholders of the
Purchaser in the form attached to this Agreement as Exhibit S (the "RIGHTS
AGREEMENT"), shall have been executed and delivered by each shareholder of the
Purchaser named on the signature page thereto.
g. Regulatory Matters. The Purchaser shall have delivered
to the Seller letters executed by the Purchaser notifying the FDA of the
transfer of the purchased drug products.
h. Side Letter Agreement. The Purchaser shall have
delivered to the Seller a copy of the Side Letter Agreement, the form of which
is attached hereto as Exhibit T, executed by certain of the Purchaser's
shareholders.
i. Valuation Matters. The Seller and the Shareholder shall
have received from EGS Securities Corp. a written opinion regarding the fair
market value of the consideration to be received by the Seller in this
transaction in form and substance reasonably satisfactory to the Seller and the
Shareholder.
8. Termination: Survival and Effect of Termination.
a. Termination. Anything contained herein to the contrary
notwithstanding, this Agreement may be terminated and the transactions
contemplated hereby abandoned at any time prior to the Closing Date:
(i) By mutual consent of the Purchaser and the
Seller;
(ii) By the Purchaser, if any of the conditions set
forth in Section 6 shall have become reasonably incapable of fulfillment prior
to January 15, 1994, through no fault of the Purchaser and such condition shall
not have been waived in writing by the Purchaser;
(iii) By the Seller, if any of the conditions set
forth in Section 7 shall have become reasonably incapable of fulfillment prior
to January 15, 1994, through no fault of the Seller and such condition shall
not have been waived in writing by the Seller;
(iv) By either Purchaser or the Seller if (A) the
other has breached this Agreement in any material respect other than a breach
of any representations and warranties made by the other in Section 3 or Section
4 of this Agreement (as the case may be), or (B) the Closing does not occur on
or before January 15, 1994 (unless such date is extended by mutual agreement),
but only if the failure to consummate such transaction on or before such date
did not result from the failure by the party seeking such termination to
fulfill any condition set forth in Section 5(d), Section 6 or Section 7, as the
case may be, which is a condition precedent to the obligation of the other
under this Agreement to consummate the transactions contemplated hereby;
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(v) By the Purchaser if, since October 1, 1993,
there has been an adverse change in the Seller's business or prospects or in the
Purchased Assets; or
(vi) By the Seller if, since October 1, 1993, there
has been an adverse change in the business or prospects of the Purchaser.
b. Survival. If this Agreement is terminated prior to
Closing and the transactions contemplated hereby are not consummated as
described above, this Agreement shall become void and of no further force and
effect, except for the provisions of Section 5(a) (relating to the obligations
of confidentiality); Section 5(b) (relating to disclosure); Section 8 (relating
to termination); and Section 10 (relating to certain miscellaneous provisions).
9. Covenants Following Closing.
a. Indemnification.
(i) Indemnification by the Seller and the
Shareholder. Each of the Seller and the Shareholder, jointly and severally,
agrees to indemnify, defend and hold the Purchaser, its employees, directors,
agents and representatives, harmless from and against any and all losses,
claims, demands, damages, costs and expenses (including without limitation,
reasonable attorneys' fees and disbursements and expenses incurred in the
investigation, defense or settlement) of every kind, nature and description
(collectively, "CLAIMS") based upon, arising out of or otherwise in respect of
(A) any inaccuracy in or any breach or any representation, warranty, covenant or
agreement of the Seller or the Shareholder contained in this Agreement or in any
certificate, document or instrument delivered pursuant to this Agreement at
Closing; (B) any claim arising out of or made in connection with the Seller's
conduct of its business prior to the Closing other than obligations expressly
assumed by the Purchaser with respect to the Assigned Contracts: (C) any failure
to comply in all respects with the "bulk sales" or "bulk transfer" laws of any
jurisdiction in connection with the transactions contemplated hereby; (D) any
Covered FDA or DEA Action (as defined below), in so far as it relates to the
conduct of the Seller's business prior to the Closing; (E) any infringement or
other violation by the Seller, whether known or unknown, of any third party's
intellectual property, rights as the same relate to the Purchased Assets; (F)
any employment or consulting relationship between Seller, Shareholder or any
affiliates thereof and any person other than obligations expressly assumed by
the Purchaser with respect to the Assigned Contracts; (G) successor liability
imposed upon the Purchaser under any state laws imposing successor liability for
Taxes on purchasers of assets, or (H) any claim related to the Purchased Assets,
as such claim relates to any environmentally hazardous or toxic substance,
material or waste is regulated by any local government authority, any state or
the United States Government. The Seller shall not be obligated to indemnify
and hold harmless the Purchaser from, or defend the Purchaser against, any
Designated Liability Claims, as defined below; provided, however, that this
sentence shall not limit in any respect Seller's obligation to indemnify and
hold harmless the Purchaser from Claims arising from the breach of the Seller's
representations and warranties in Section 3(g) and 3(k)(i) of this Agreement.
Each of the Seller and the Shareholder agrees that any breach of this Agreement
by the Seller shall be deemed to be a breach of this Agreement by the
Shareholder, and that the obligations of the Seller and the Shareholder
hereunder, shall be, in all cases, joint
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and several. Notwithstanding the foregoing, neither the Seller nor the
Shareholder shall be obligated to indemnify the Purchaser with respect to (X)
any Claim (other than any Claim relating to Taxes) as to which notice has not
been provided to the Seller or the Shareholder, as the case may be, on or prior
to the third anniversary of the Closing Date; or (Y) any Claim to the extent the
aggregate amount of all Claims for which indemnification would be required
hereunder by the Seller and the Shareholder exceeds the aggregate amount of
those elements of the Purchase Price described in Section 2(a)(i) and Section
2(a)(ii) hereon provided, however, that the foregoing limitations in (X) and (Y)
shall not apply to any claim made in connection with any liabilities arising
from the conduct of the Seller or the Predecessor prior to the Closing and not
expressly assumed hereunder, or arising out of the Seller's failure to duly
perform its obligations hereunder or under any or all of the Related Agreements.
(ii) Covered FDA or DEA Actions. For the purposes of
paragraph (i) above, a "COVERED FDA OR DEA ACTION" shall mean either (x) an FDA
or DEA Action (as defined below) that is the result of a Covered Enforcement
Proceeding (as defined below) or (y) a Qualified Recall (as defined below). For
the purposes of the foregoing, the following definitions apply:
(A) An "FDA OR DEA ACTION" shall mean (i) any
enforcement letter issued by the FDA or DEA relating to a Hyline Product,
including, without limitation, a warning letter issued by the FDA or DEA in so
far as it relates to the conduct of the business of the Seller prior to the
Closing Date, (ii) any seizure or recall by or at the direction of the FDA or
DEA after the Closing Date of any Hyline Product (made or packaged by or for the
Seller or the Predecessor on or prior to the Closing Date), (iii) an injunction
or the filing of a motion for an injunction, indictment or issuance of a
"Section 305 Hearing Notice" against the business by or on behalf of the FDA or
a withdrawal or suspension by the FDA of an IND or NDA relating to a Hyline
Product, or any DEA adverse action in so far as it relates to the conduct of the
business of the Seller prior to the Closing Date or (iv) any other government
civil and/or criminal enforcement action taken by the FDA or DEA relating to a
Hyline Product in so far as it relates to the conduct of the business of the
Seller prior to the Closing Date.
(B) A "COVERED ENFORCEMENT ACTION" shall mean any
enforcement proceeding initiated and/or prosecuted by the FDA or DEA on its
behalf or through the United States Department of Justice against the Purchaser
to the extent that it relates to the conduct of the Seller's business prior to
the Closing Date.
(C) A "QUALIFIED RECALL" shall mean a recall by the
Purchaser of a Hyline Product based upon the reasonable belief that the product
violates the FDC Act or the rules or regulations promulgated thereunder as a
result of the conduct of the Seller's business prior to the Closing Date, but
only to the extent that it relates to such conduct.
(iii) Maintenance of Records. The Purchaser covenants that,
for so long as the Seller is subject to the indemnification provisions of
paragraph (i) above, it will maintain all production, manufacturing,
distribution, quality assurance and complaint resolution records for all Hyline
Products and will allow the Seller, upon reasonable notice, to
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inspect and copy such records to the extent necessary for the Seller to fulfill
such indemnification obligations or to comply with any regulatory requirement.
(iv) Indemnification by the Purchaser. The
Purchaser agrees to indemnify, defend and hold the Seller, the Shareholder, and
their respective employees, directors, agents and representatives harmless from
and against any and all Claims based upon, arising out of or otherwise in
respect of (A) any inaccuracy in or any breach of any representation, warranty,
covenant or Agreement of the Purchaser contained in this Agreement or in any
certificate, document or instrument delivered pursuant to this Agreement at the
Closing; (B) any claim arising out of or made in connection with the
Purchaser's conduct of its business after the Closing, including, without
limitation, claims arising out of its failure to duly perform its obligations
arising after the Closing under the Assigned Contracts; or (C) any Claim made
by a participant (or a participant's successor-in-interest) in any clinical
trials of any Hyline Product conducted prior to the Closing that use of such
Hyline Product in such clinical trial caused illness, injury or death to such
participant (whether such Claim has been brought directly or indirectly against
the Seller, the Shareholder, or their respective employees, directors, agents
or representatives) (such claims under this subpart (C) being referred to
herein as the "DESIGNATED LIABILITY CLAIMS"). Notwithstanding the foregoing,
the Purchaser shall not be obligated to indemnify the Seller, the Shareholder
or their respective employees, directors, agents and representatives with
respect to (X) any Claim as to which notice has not been provided to the
Purchaser on or prior to the third anniversary of the Closing Date; or (Y) any
Claim to the extent the aggregate amount of all Claims for which
indemnification would be required hereunder by the Purchaser exceeds the
aggregate amount of those elements of the Purchase Price described in Section
2(a)(i) and Section 2(a)(ii) hereof; provided, however, that the foregoing
limitations in (X) and (Y) shall not apply to any claim, other than Designated
Liability Claims, made in connection with Purchaser's conduct of its business
after the Closing, including, without limitation, claims arising out of its
failure to duly perform its obligations assumed under the Assigned Contracts or
with respect to Purchaser's obligations under Section C hereof or under any of
the Related Agreements.
(v) De Minimis Amount. Neither the Seller nor the
Shareholder, on the one hand, nor the Purchaser, on the other hand, shall be
required to pay the first one hundred thousand dollars ($100,000.00) in the
aggregate of indemnification pursuant to this Section 9 for any breach,
inaccuracy or misrepresentation regarding any of the warranties or
representations made by such party hereunder.
(vi) Insurance Coverage. To the extent that any
claim is compensable or protected under an enforceable contract of insurance
("INSURANCE CLAIM and "INSURANCE POLICY"), the Insurance Claim shall be
diligently pursued to the full extent of the Insurance Policy before the
indemnifying party shall be liable hereunder. The Purchaser agrees that in the
event the Purchaser shall obtain any products liability insurance policy which
extends to the Hyline Products (which the Purchaser shall have no obligation to
obtain), the Purchaser will add the Seller and the Shareholder as "Additional
Insureds" on such policy; provided, that the Purchaser shall not be obligated
to do so if so adding Additional Insureds would cause the Purchaser to incur
additional expense or if such action would cause the amount of insurance
coverage available to the Purchaser or its affiliates to be reduced.
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(vii) Notification: Settlement. Any party seeking
indemnification hereunder shall notify the party from whom indemnification may
be sought promptly following the indemnified party's receipt of notice of such
Claim; provided that any failure to notify the indemnifying party shall not
limit the indemnified party's rights to indemnification except and only to the
extent such delay in notifying the indemnified party materially prejudices the
defense of such Claim. Indemnification shall be provided hereunder by the
indemnifying party on an as-incurred basis, provided that the indemnified party
agrees in writing to promptly reimburse the indemnifying party in the event
that the indemnified party ultimately is determined not to be entitled to such
indemnification. No indemnifying party shall have any obligation to provide
indemnification with respect to any Claim as to which the indemnified party
enters into a settlement or consent to judgment without the prior written
consent of the indemnifying party. No indemnifying party shall enter into any
settlement or consent to judgment with respect to any Claim unless such
settlement or consent to judgment provides a full release of each indemnified
party with respect thereto. Each of the parties hereto agrees to use their best
efforts to defend against any Claim, and to cooperate with the other parties in
order to minimize the amount of any Claim. The indemnified parties shall use
their best efforts to make any claim for indemnification hereunder not later
than the ninety (90) days after the date on which they have actual knowledge of
the material facts relating to such claim.
(viii) Set-Off Provisions. If a claim for
indemnification is made by the Purchaser (or the related parties enumerated
above) against the Seller or the Selling Shareholder hereunder, the Purchaser
may, at its option and by notice to the Seller (and without limiting any other
rights it may have at law or equity), withhold and place into an
interest-bearing escrow account with an independent third-party reasonably
acceptable to both parties the amount reasonably estimated by the Purchaser to
be the value of such Claim against any principal or interest due under any of
the Notes or those certain amounts payable by Purchaser pursuant to the
Non-Competition Agreement, pending final adjudication or settlement of such
claim. Upon final adjudication or settlement of such claim, the Purchaser shall
retain the amount to which it is entitled hereunder in full or partial
satisfaction of such claim of indemnification and such retained amount shall
reduce and offset any other payment due to the Seller (with any remaining
amount to be paid to Seller). Any amount not properly retained by the Purchaser
under the terms of the final adjudication or settlement relating to such Claim
shall be paid promptly to the Seller. The Purchaser and the Seller shall be
entitled to receive any interest earned on their respective amounts distributed
from the escrow hereunder.
b. Seller's Employees. The Seller and the Shareholder
agree that the Seller shall bear sole responsibility for all amounts due and
payable or otherwise arising with respect to the Seller's employees at and
prior to the Closing Date, including but not limited to, all salaries, wages,
commissions, profit and revenue sharing, and holiday, vacation and severance
pay, bonuses and past service credits and shall have made and remitted, for all
periods through and including the Closing Date, all payroll deductions,
remittances and contributions, including, but not limited to, employees'
salaries and wages, commissions, bonuses and profit-sharing required under
contract, any collective bargaining agreements or applicable laws and
regulations. Except as expressly provided herein, the Purchaser shall have no
obligation whatsoever to employ any employee of the Seller following the
Closing Date.
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c. Use of Name
(i) Following the Closing Date, neither the Seller nor the
Shareholder (nor any of their respective affiliates) shall use the name "Hyline
Pharmaceuticals, Inc., "Hyline Group" or "Hyline" except in connection with
winding up of the Seller's business. The Seller and the Selling Shareholder
hereby represent and warrant that, to their knowledge, no other party has any
legal right to use the foregoing names in any business related to the business
of the Seller or which relates to the Purchased Assets.
(ii) Following the Closing Date, neither the Purchaser nor its
affiliates shall use the name "Xxxxx" either alone or in conjunction with any
other word or phrase, other than in legal filings or other documents in which
such use is reasonably necessary.
d. Confidentiality. From the date hereof and until the tenth (10th)
anniversary of the Closing Date, the Seller and the Shareholder will hold in
confidence and use all reasonable efforts to cause all of their employees,
agents and representatives to hold in confidence all documents and other written
material containing knowledge or information of a confidential nature which is
solely or primarily related to the Seller's business or the Purchased Assets
(including, but not limited to, all of the Seller's Intellectual Property Rights
constituting part of the Purchased Assets), and not disclose, publish, use or
permit others to use the same. The foregoing restriction shall not apply to any
portion of the foregoing which (i) becomes generally available to the public
through no fault of the Seller, the Shareholder or their employees, agents or
representatives; (ii) is independently developed by the Seller or the
Shareholder without benefit of the above-described information (and such
independent development is substantiated in writing), or rightfully received
from another source on a non-confidential basis; or (iii) when such disclosure
is required by a court or governmental authority or is otherwise required by law
or is necessary to establish rights under this Agreement or any Related
Agreement (and the disclosing party has taken all reasonable efforts to limit
the scope of such disclosure and to protect the confidential nature of the
information disclosed). The Seller and the Shareholder agree further that
neither of them shall retain any existing tangible expressions of any the
Seller's Intellectual Property Rights included in the Purchased Assets which
would constitute confidential information subject to this Section 9(d).
e. Discharge of Liabilities. From and after the Closing Date, the
Seller shall promptly and fully satisfy and discharge all of its debts,
liabilities and obligations as they become due, except for liabilities
expressly assumed by the Purchaser hereunder or as shall be contested by the
Seller in good faith.
f. FDA Records. On the Closing Date, all records required by the
FDA to be kept by the Seller with reference to any Purchased Assets, as well as
other records maintained by the Seller or the Predecessor with respect thereto,
shall be transferred to the Purchaser. Responsibility for the accuracy of such
records prior to the Closing Date shall remain with the Seller, but
responsibility for custody and maintenance of such records subsequent to the
Closing Date shall belong to the Xxxxxxxxx.
x. Xxxxxxxxxxx.
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(x) The Seller and the Purchaser shall provide each
other with such information and access to books and records as may reasonably be
requested by the other in connection with any Claim or the preparation of any
returns of Taxes and audits or other proceedings relating to Taxes, and Seller
shall furnish Purchaser with such information as may be necessary under the
incremental research credit provisions of Section 41(f)(3)(A) of the Code.
(ii) The Seller and the Shareholder each agree to
reasonably cooperate (including, as necessary, through the attendance at
meetings) with the Purchaser and its agents in the Purchaser's negotiations
with the University of Michigan with respect to the acquisition by the
Purchaser of exclusive rights to the gelling delivery system, as it relates to
pharmaceutical applications, developed by such institution.
(iii) Each party hereto shall execute and deliver
such other instruments and do and perform such other acts and things as may be
necessary or reasonably desirable for effecting completely the consummation of
this Agreement, the Related Agreements and the transactions contemplated hereby
and thereby.
h. Non-Competition Covenant of the Seller. In
consideration of the payments set forth in Section 2 above, the Seller shall
not, prior to the fifth (5th) anniversary of the date of this Agreement, do any
of the following without the prior written consent of the Purchaser, directly
or indirectly (whether as a shareholder, partner, principal, agent, director,
affiliate, consultant or otherwise) (i) carry on in any county in the United
States of America or in any other country in the world (the "RESTRICTED
TERRITORY") any business activity relating, directly or indirectly, to the
development, marketing, licensing or use of any of the Hyline Products or
products intended for the same applications and utilizing the same delivery
system as any of the Hyline Products or (ii) solicit or influence or attempt to
influence any person employed by the Purchaser, including any person who may
have been employed by any the Seller or the Predecessor prior to his or her
employment with the Purchaser, to terminate or diminish his or her employment
with the Purchaser or become an employee or consultant of the Seller, the
Shareholder, any affiliate of the Shareholder or the Seller, or any competitor
of the Purchaser. The restrictions in this Section 9(h) shall not be deemed to
apply to any investments the Seller may make in any publicly traded company so
long as such Seller's aggregate holdings do not exceed five percent (5%) of the
outstanding voting securities of such company. The parties intend that the
covenants contained in this Agreement shall be construed as a series of
separate covenants, one for each country, county, city and state (or comparable
political subdivision) in the Restricted Territory. Except for geographic
coverage, each such separate covenant shall be deemed identical in terms to the
covenant contained in the preceding paragraphs. If, in any judicial proceeding,
a court shall refuse to enforce any of the separate covenants (or any part
thereof) deemed included in such paragraphs, then such unenforceable covenant
(or such part) shall be deemed eliminated from this Agreement for the purpose
of those proceedings to the extent necessary to permit the remaining separate
covenants (or portions thereof) to be enforced by such court. It is the intent
of the parties that the covenants set forth in this Section 9(h) be enforced to
the maximum degree permitted by applicable law. In the event that the
provisions of this Agreement should ever be deemed to exceed the scope, time or
geographic limitations of applicable law regarding covenants not to compete,
then such
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provisions shall be reformed to the maximum scope, time or geographic
limitations, as the case may be, permitted by applicable laws. The parties
hereto acknowledge and agree that the extent of damages to the Purchaser in the
event of a breach of the covenants contained in this Agreement by the Seller
would be difficult or impossible to ascertain and that there is and will be
available to the Purchaser no adequate remedy at law in the event of any such
breach. Consequently, the Seller hereby agrees that in the event of such
breach, the Purchaser shall be entitled to enforce any or all of the
covenants contained in this Agreement by injunctive or other equitable relief.
10. Miscellaneous.
a. Survival of Representations and Warrants. Subject to
the limitations set forth in Section 9 above, all representations and
warranties of the Purchaser, the Seller and the Shareholder made in this
Agreement or in any certificate, document or other instrument delivered
pursuant hereto shall survive the execution and deliver hereof and the Closing.
b. Fees and Expenses. Each of the parties hereto shall
bear its own fees and expenses, including fees of counsel and accountants,
incurred in connection with the negotiation of this Agreement and the Related
Agreements and the consummation of the transactions contemplated hereby and
thereby or otherwise arising out of, or by reason of, this Agreement or any
Related Agreement.
c. Entire Agreement; Third Party Beneficiaries. This
Agreement and the Related Agreements (including the exhibits and schedules
hereto and thereto) constitute the entire agreement between the parties hereto
and thereto with respect to the subject matter hereof and thereof and
supersedes all prior and contemporaneous agreements, understandings,
negotiations and discussions, whether oral or written, of the parties with
respect thereto, including (without limitation) that certain Letter of Intent
dated as of October 14, 1993. The parties hereto acknowledge and agree that no
third party (including any employee of the Seller) is intended to be a
third-party beneficiary of this Agreement or any Related Agreement.
d. Amendments. No amendment, modification or rescission of
this Agreement or any Related Agreement shall be effective unless set forth in
writing executed by the party sought to be bound thereby.
e. Notices. Any notice given hereunder or under any
Related Agreement (except as otherwise provided therein) shall be in writing and
shall be deemed effective upon the earlier of personal delivery (including
personal delivery by telex or other means), the day after delivery by commercial
courier to a responsible individual with instructions for next-day delivery or
the fourth day after mailing by certified or registered mail, postage prepaid,
as follows:
(i) If to the Purchaser:
RiboGene, Inc.
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00000 Xxxxx Xxxxxxxxx
Xxxxxxx, XX 00000
Attention: President
With a copy to:
Xxxxxxx X. Xxxx, Esq.
Venture Law Group
0000 Xxxx Xxxx Xxxx
Xxxxx Xxxx, XX 00000
(000) 000-0000
(ii) If to the Seller or the Shareholder:
Xxxxx Group Companies, Inc.
000 Xxxxx Xxxxxx
Xxxxxxxxx Xxxxxx, XX 00000
Attention: President
With a copy to:
Xxxx Salon, Esq.
Salon, Marrow & Xxxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
(000) 000-0000,
or to such other address as any party may have furnished in writing to the
other party in the manner provided above.
f. Assignment. Any party may assign its rights to receive
any monetary payment under this Agreement to a third party without the prior
written consent of any other party, but no party may assign any other rights or
any obligations under this Agreement without the prior written consent of the
other parties. Notwithstanding the foregoing, however, the Purchaser (and its
successors) may assign its rights and obligations hereunder to another entity
without the consent of the Seller or the Shareholder so long as such entity has
at least the same net worth immediately following such assignment as the
Purchaser immediately prior to such assignment and so long as such entity
acknowledges and accepts in writing the obligations assumed pursuant to such
assignment; provided, however, that such assignment without the consent of the
Seller or the Shareholder will not serve to relieve the Purchaser of the
performance of its obligations hereunder if such assignee shall fail to perform
such obligations pursuant to the terms of this Agreement. Any proposed
assignment in violation of this Section 10(f) shall be void. Subject to the
foregoing, this Agreement shall be binding upon and shall inure to the benefit
of the parties hereto and their respective transferees, successors, assigns and
legal representatives.
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g. Incorporation by Reference. All Exhibits referred to in
this Agreement are by this reference incorporated herein as an integral part
hereof.
h. Governing Law. This Agreement and the respective rights
and obligations of the parties hereto shall be construed under and by the laws
of the State of New York as such laws are applied to contracts entered into in
that state between residents thereof.
i. Captions. The title to the Sections and subsections of
this Agreement and the Related Agreements are included herein solely for
convenience, are not a part of this Agreement or any Related Agreement and do
not in any way limit or amplify the terms of this Agreement or any Related
Agreement.
j. Attorney's Fees. If any legal action or proceeding is
brought to enforce or interpret this Agreement or any Related Agreement, or
because of an alleged dispute, breach, default or misrepresentation in
connection with this agreement, the prevailing party shall be entitled to
reasonable attorneys' fees and costs in connection with such action or
proceeding in addition to all other relief to which such party may be entitled.
k. Counterparts. This Agreement and any Related Agreement
may be executed in any number of counterparts, each of which shall be considered
to be an original, but all of which together shall constitute one and the same
instrument.
l. California Commissioner of Corporations. THE SALE OF THE
SECURITIES THAT IS THE SUBJECT OF THIS AGREEMENT HAS NOT BEEN QUALIFIED WITH THE
COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA, THE ISSUANCE OF SUCH
SECURITIES OR THE PAYMENT OR RECEIPT OF ANY PART OF THE CONSIDERATION FOR SUCH
SECURITIES PRIOR TO SUCH QUALIFICATION IS UNLAWFUL, UNLESS THE SALE OF
SECURITIES IS EXEMPT FROM THE QUALIFICATION BY SECTION 25100, 25102 OR 25105 OF
THE CALIFORNIA CORPORATIONS CODE. THE RIGHTS OF ALL PARTIES TO THIS AGREEMENT
ARE EXPRESSLY CONDITIONED UPON SUCH QUALIFICATION BEING OBTAINED UNLESS THE SALE
IS SO EXEMPT.
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IN WITNESS WHEREOF, the parties hereto have duly executed this Asset
Purchase Agreement as of the date first set forth above.
PURCHASER: RIBOGENE, INC.,
a California corporation
By: /s/ XXXXXXX X. CASOMENTO
---------------------------------
Title: President & CEO
------------------------------
SELLER: HYLINE LABORATORIES, INC.,
a New York corporation
By: /s/ XXXXXXX XXXXXX
---------------------------------
Title: President
------------------------------
SHAREHOLDER:
/s/ XXXXXXX XXXXXX
------------------------------------
Xxxxxxx Xxxxxx
