EXHIBIT 2.01
[Execution Version]
CONFIDENTIAL
SUBJECT TO CONFIDENTIALITY AGREEMENT
================================================================================
ASSET PURCHASE AGREEMENT
BY AND AMONG
QUINTILES TRANSNATIONAL CORP.,
QUINTILES BERMUDA LTD.,
QUINTILES IRELAND LIMITED,
BIOGLAN PHARMACEUTICALS COMPANY,
AND
XXXXXXX PHARMACEUTICALS, INC.
JUNE 8, 2004
================================================================================
TABLE OF CONTENTS
1. DEFINITIONS............................................................... 1
2. ASSETS TO BE PURCHASED.................................................... 8
2.1 Purchased Assets................................................ 8
2.2 Excluded Assets................................................. 9
2.3 Purchase Price................................................. 10
2.4 Assumption of Liabilities...................................... 11
2.5 Closing........................................................ 12
2.6 Sales, Use and Other Taxes..................................... 12
2.7 Assignability.................................................. 12
2.8 Purchase Price Adjustments..................................... 13
2.9 Allocation of Purchase Price................................... 13
3. REPRESENTATIONS AND WARRANTIES OF SELLERS................................ 14
3.1 Incorporation and Good Standing................................ 14
3.2 Authority; No Conflict......................................... 14
3.3 Financial Statements........................................... 15
3.4 Corporate Records.............................................. 15
3.5 Title to Properties; Encumbrances; Real Property............... 15
3.6 Inventory...................................................... 16
3.7 No Undisclosed Liabilities..................................... 16
3.8 Taxes.......................................................... 16
3.9 Employee Benefits.............................................. 16
3.10 Compliance With Legal Requirements; Governmental
Authorizations.............................................. 17
3.11 Legal Proceedings; Orders..................................... 17
i
3.12 Absence of Certain Changes and Events......................... 17
3.13 Contracts..................................................... 18
3.14 Insurance..................................................... 19
3.15 Labor Relations............................................... 19
3.16 Intellectual Property......................................... 20
3.17 FDA Matters................................................... 21
3.18 Environmental Matters......................................... 22
3.19 Accounts Receivable........................................... 22
3.20 Customers and Suppliers....................................... 22
3.21 Brokers or Finders............................................ 22
3.22 Disclaimer of Other Representations and Warranties............ 22
4. REPRESENTATIONS AND WARRANTIES OF BUYER.................................. 23
4.1 Incorporation and Good Standing................................ 23
4.2 Authority; No Conflict......................................... 23
4.3 Certain Proceedings............................................ 23
4.4 Brokers or Finders............................................. 23
4.5 No Financing Contingency....................................... 24
4.6 Disclaimer of Other Representations and Warranties............. 24
5. COVENANTS OF THE SELLERS PRIOR TO CLOSING DATE........................... 24
5.1 Operation of Bioglan's Business................................ 24
5.2 Required Approvals............................................. 24
5.3 Efforts to Close............................................... 25
5.4 Exclusivity.................................................... 25
6. COVENANTS OF BUYER PRIOR TO CLOSING DATE................................. 25
6.1 Required Approvals............................................. 25
ii
6.2 Efforts to Close............................................... 25
7. ADDITIONAL AGREEMENTS OF THE PARTIES..................................... 25
7.1 Employee Benefits; Continued Employment........................ 25
7.2 Access......................................................... 27
7.3 Products Responsibility........................................ 28
7.4 Liability for Taxes............................................ 29
7.5 Accounts Receivable............................................ 30
7.6 Quintiles Materials and Systems................................ 31
7.7 Corporate Name Change.......................................... 31
7.8 Non-Solicitation............................................... 31
7.9 Non-Competition................................................ 31
7.10 Transfers of QBermuda Assets and QIreland Assets.............. 33
7.11 Closing Date Financial Statements............................. 33
7.12 Certain Bioglan Obligations Net of Aggregate Reserves......... 34
7.13 SEC No-Action Request......................................... 34
7.14 Safety and Surveillance Call Center Services.................. 35
8. CONDITIONS PRECEDENT TO BUYER'S OBLIGATION TO CLOSE;
CLOSING DELIVERIES..................................................... 35
8.1 Accuracy of Representations.................................... 35
8.2 Sellers' Performance........................................... 35
8.3 Sellers' Closing Deliveries.................................... 35
8.4 Financial Statements........................................... 37
8.5 No Material Adverse Effect..................................... 37
8.6 No Proceedings................................................. 38
8.7 No Injunction.................................................. 38
iii
8.8 HSR Act........................................................ 38
8.9 Consents....................................................... 38
9. CONDITIONS PRECEDENT TO SELLERS' OBLIGATION TO CLOSE; CLOSING
DELIVERIES............................................................ 38
9.1 Accuracy of Representations.................................... 38
9.2 Buyer's Performance............................................ 38
9.3 Buyer's Closing Deliveries..................................... 38
9.4 No Proceedings................................................. 39
9.5 No Injunction.................................................. 39
9.6 HSR Act........................................................ 39
10. TERMINATION............................................................. 39
10.1 Termination Events............................................ 39
10.2 Effect of Termination......................................... 40
11. INDEMNIFICATION; REMEDIES............................................... 40
11.1 Survival...................................................... 40
11.2 Indemnification by Sellers.................................... 41
11.3 Indemnification by Buyer...................................... 41
11.4 Time Limitations.............................................. 41
11.5 Limitations on Amount--Seller Indemnifying Parties............ 42
11.6 Limitations on Amount--Buyer.................................. 42
11.7 Procedure for Indemnification................................. 42
11.8 Satisfaction and Treatment of Indemnity Payments.............. 43
11.9 Certain Other Limitations..................................... 44
11.10 Indemnification Exclusive Remedy............................. 44
iv
12. GENERAL PROVISIONS...................................................... 44
12.1 Expenses...................................................... 44
12.2 Public Announcements.......................................... 44
12.3 Confidentiality............................................... 45
12.4 Notices....................................................... 46
12.5 Further Assurances............................................ 47
12.6 Waiver........................................................ 47
12.7 Entire Agreement and Modification............................. 47
12.8 Disclosure Letter............................................. 47
12.9 Assignments, Successors and No Third-Party Rights............. 48
12.10 Severability................................................. 48
12.11 Section Headings; Construction; Conflicts.................... 48
12.12 Time of Essence.............................................. 48
12.13 Governing Law................................................ 48
12.14 Execution of Agreement; Counterparts......................... 49
12.15 Attorney Fees................................................ 49
Exhibit Description
------- -----------
A Form of No-Action Request
Schedule Description
-------- -----------
8.4 Financial Statements
v
ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement (this "Agreement") is made and dated as of June 8,
2004, by and among Quintiles Bermuda Ltd., a Bermuda-registered company
("QBermuda"), Quintiles Ireland Limited, a company incorporated in the Republic
of Ireland ("QIreland"), Bioglan Pharmaceuticals Company, a North Carolina
corporation ("Bioglan"), and Xxxxxxx Pharmaceuticals, Inc., a Delaware
corporation ("Buyer"). QBermuda, QIreland, and Bioglan are sometimes referred to
herein individually as "Seller" and collectively as "Sellers." Sellers and Buyer
may each be referred to herein individually as a "Party" and collectively as the
"Parties." Quintiles is a party to this Agreement solely for purposes of the
Sections indicated below its name on the signature page hereto and, accordingly,
is deemed a "Party" for purposes of such Sections only.
RECITALS
WHEREAS, Sellers hold assets relating to certain pharmaceutical products; and
WHEREAS, Sellers desire to sell, and Buyer desires to purchase, certain assets
of Sellers on the terms and conditions set forth in this Agreement.
AGREEMENT
For good and valuable consideration, the Parties, intending to be legally bound,
agree as follows:
1. DEFINITIONS
For purposes of this Agreement, the following terms have the meanings specified
or referred to in this Section 1:
"Accounts Receivable"--all trade accounts receivable and other similar
rights to payment from customers of Bioglan, including all trade accounts
receivable representing amounts receivable in respect of Products sold by or on
behalf of Bioglan.
"Affiliate"--any corporation or business entity controlled by,
controlling, or under common control with a Party to this Agreement. For this
purpose, "control" shall mean direct or indirect beneficial ownership of at
least fifty percent (50%) of the voting stock or income interest in such
corporation or other business entity, or such other relationship as, in fact,
constitutes actual control.
"ANDA"--an "abbreviated new drug application", as such term is used
under the FFDCA.
"Assumed Liabilities"--as defined in Section 2.4.
"Audited Stub Period Financial Statements"--as defined in Section
7.11(a).
"Balance Sheet"--as defined in Section 3.3.
"Xxxx of Sale"--the xxxx of sale from Bioglan covering the Bioglan
Assets, in form and substance reasonably satisfactory to Bioglan and Buyer.
"Bioglan"--as defined in the first paragraph of this Agreement.
"Bioglan Assets"--as defined in Section 2.1(a).
"Bioglan Assignment and Assumption Agreement"--the assignment and
assumption agreement between Bioglan and Buyer covering the Bioglan Assets and
the Assumed Liabilities, in form and substance reasonably satisfactory to
Bioglan and Buyer.
"Bioglan Plans"--shall mean all Plans (a) maintained by or contributed
to by Bioglan; (b) maintained by or contributed to by Quintiles for benefit of
any Bioglan employees or former employees; (c) which cover any employees or
former employees of Bioglan; or (d) any other Plan as to which Bioglan has any
liability.
"Business Day"--any day other than a Saturday, Sunday or other day on
which banks in the State of North Carolina or the State of New York are
permitted or required to close by law or regulation.
"Buyer"--as defined in the first paragraph of this Agreement.
"Buyer Indemnified Party"--as defined in Section 11.2.
"Cash Equivalents"--cash and cash equivalents including without
limitation currency and coins, bank deposits and balances, certificates of
deposit, money market funds, negotiable money orders, checks and marketable
securities.
"Chargeback"--a credit, chargeback, reimbursement, purchase discount or
other payment to any pharmaceutical wholesaler or distributor in connection with
the sale of a Product by such wholesaler or distributor to a customer at a
discount price pursuant to a contract between such customer and Bioglan or its
Affiliates and/or Buyer or pursuant to the General Services Administration's
Federal Supply Schedule Program or Section 340B of the Public Health Services
Act.
"Closing"--as defined in Section 2.5.
"Closing Date"--the date on which the Closing actually takes place.
"Closing Date Balance Sheet"--as defined in Section 7.11(a).
"Closing Inventories"--as defined in Section 2.3(b).
2
"Confidentiality Agreement"--the letter agreement dated January 20,
2004 between Quintiles and Buyer.
"Damages"--any loss, liability, claim, damage, or expense (including
reasonable attorneys' fees and expenses), in each case subject to the provisions
of Section 11, including without limitation Section 11.9(a).
"Disclosure Letter"--the disclosure letter delivered by Sellers to
Buyer concurrently with the execution and delivery of this Agreement.
"Drug Authorizations"--as defined in Section 2.1(a)(i).
"Encumbrance"--any charge, claim, lien, option, pledge, security
interest, right of first refusal or similar restriction.
"ERISA"--the Employee Retirement Income Security Act of 1974 or any
successor law, and regulations and rules issued pursuant to that Act or any
successor law.
"Excluded Assets"--as defined in Section 2.2.
"FDA"--the United States Food and Drug Administration.
"FFDCA"-- the United States Federal Food, Drug and Cosmetic Act, as
amended from time to time, including all regulations promulgated thereunder.
"GAAP"--generally accepted United States accounting principles,
consistently applied.
"Governmental Authorization"--any approval, consent, license, permit,
waiver, or other authorization issued, granted, given, or otherwise made
available by or under the authority of any Governmental Body or pursuant to any
Legal Requirement.
"Governmental Body"--any Federal, state, local or foreign government or
any court, administrative or regulatory agency or commission or other
governmental authority or agency.
"HSR Act"--the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976 or
any successor law, and regulations and rules issued pursuant to that Act or any
successor law.
"IND"--Notice of Claimed Investigational Exemption for a New Drug, as
such term is used under the FFDCA.
"Indemnified Persons"--as defined in Section 11.7(a).
"Inventories"--all inventories of Bioglan, including all finished
goods, work in process, raw materials, and all other materials and supplies to
be used or consumed by Bioglan in the production of finished goods.
3
"IRC"--the Internal Revenue Code of 1986 or any successor law, and
regulations issued by the IRS pursuant to the Internal Revenue Code or any
successor law.
"IRS"--the United States Internal Revenue Service or any successor
agency, and, to the extent relevant, the United States Department of the
Treasury.
"Knowledge"--with respect to (i) any of Sellers, means the actual
knowledge of the officers of Sellers following reasonable and customary
investigation by the relevant officers of Sellers with respect to the matter in
question, and (ii) Buyer, means the actual knowledge of the officers of Buyer
following reasonable and customary investigation by the relevant officers of
Buyer with respect to the matter in question.
"Know-How"--all know-how, specifications, processes, procedures,
instructions, methods, formulae, designs, plans, and trade secrets or any
similar items, whether or not in tangible form, relating to the Products.
"Legal Requirement"--any Federal, state, local, or foreign
constitution, law, statute, rule or regulation.
"Material Adverse Effect"--any event, circumstance or effect that,
individually or when taken together with all other events, circumstances or
effects relating to like matter, does or is reasonably expected to have a
material adverse effect on the business, financial condition or results of
operations of Bioglan (including the assets, liabilities and operations of
QBermuda and QIreland related to the Products), taken as a whole, or the
Purchased Assets, taken as a whole; provided, however, that in no event shall
any of the following, individually or collectively, constitute a Material
Adverse Effect: (i) any changes in general economic conditions, the financial
markets or the pharmaceuticals industry generally; or (ii) any change related to
the commencement of war or other hostilities, acts of terrorism, or any national
or international calamity affecting the United States.
"Material Contracts"--as defined in Section 3.13(a).
"NDA"--a "new drug application," as such term is used under the FFDCA.
"NDC"--a "national drug code," as such term is used under the FFDCA.
"No-Action Request"--as defined in Section 7.13.
"Organizational Documents"--(a) the articles or certificate of
incorporation and the bylaws of a corporation; (b) any similar documents adopted
or filed in connection with the creation, formation, or organization of a Person
that is not a corporation; and (c) any amendment to any of the foregoing.
"Party" and "Parties"--as defined in the first paragraph of this
Agreement.
4
"Patent Application Assignment"--the Patent Application Assignment to
be executed and delivered at the Closing by Bioglan and Buyer, in form and
substance reasonably satisfactory to Bioglan and Buyer and in proper form for
recording with applicable Governmental Bodies.
"Permitted Encumbrance"-- Encumbrances (i) resulting from taxes or
other governmental assessments or charges which have not yet become delinquent
or are being contested in good faith, (ii) that are mechanics or similar liens
incurred in the ordinary course of business; or (iii) with respect to any
contract included in the Purchased Assets, any Encumbrances reflected in the
terms and conditions of such contract.
"Person"--any individual, corporation, partnership, limited liability
company, trust, association, organization, or other entity or Governmental Body.
"Plan"--any bonus, deferred compensation, incentive compensation, stock
purchase, restricted stock, stock option, severance, hospitalization or other
medical, life or other insurance, employee welfare, supplemental unemployment
benefit, profit-sharing, pension or retirement plan, program, agreement or
arrangement or any other employee benefit plan, program, agreement or
arrangement, including without limitation any "employee pension benefit plan"
and any "employee welfare benefit plan" as those terms are defined in section 3
of ERISA.
"Proceeding"--any action, arbitration, investigation, litigation, or
suit commenced, brought, conducted, or heard by or before, or otherwise
involving, any Governmental Body or arbitrator.
"Product"--each of the following pharmaceutical products:
(i) Adoxa(R)doxycycline monohydrate antibiotic tablets, in
four strengths--150mg, 100mg, 75 mg and 50mg (150 mg tablet is not currently
marketed);
(ii) Adoxa(R)doxycycline monohydrate antibiotic capsules in
four strengths--150mg, 100mg, 75 mg and 50mg (none of which is currently
marketed);
(iii) Solaraze(R), a dermatological product containing the
nonsteroidal anti-inflammatory diclofenac sodium in a 3% topical formulation;
(iv) Zonalon(TM), a doxepin topical cream;
(v) AFIRM(R), a retinol-based topical cream, available in
three strengths--1X, 2X and 3X;
(vi) B-LIFTx(R), a salicylic acid-based peel, available in
two strengths--20% and 30% peels;
(vii) A-Fil(R), an over the counter sunscreen lotion;
5
(viii) Benzashave(R), a benzoyl peroxide cream, available in
two strengths--5% and 10%;
(ix) Pramegel(R), an over the
counter pramoxine topical anesthetic gel; and
(x) Theramycin Z(R), an erythromycin topical cream (which
is not currently marketed).
"Product Trade Dress"--the current trade dress of any Product as of the
Closing Date.
"Purchase Price"--as defined in Section 2.3(a).
"Purchased Assets"--as defined in Section 2.1(c).
"QBermuda"--as defined in the first paragraph of this Agreement.
"QBermuda Assets"--as defined in Section 2.1(b).
"QBermuda Assignment and Assumption Agreement"--that certain assignment
and assumption agreement between QBermuda and Buyer covering the QBermuda
Assets, in form and substance reasonably satisfactory to QBermuda and Buyer.
"QIreland"--as defined in the first paragraph of this Agreement.
"QIreland Assets"--as defined in Section 2.1(c).
"QIreland Assignment and Assumption Agreement"--that certain assignment
and assumption agreement between QIreland and Buyer covering the QIreland
Assets, in form and substance reasonably satisfactory to QIreland and Buyer.
"Quintiles"--Quintiles Transnational Corp., a North Carolina
corporation and the parent entity of each of QBermuda, QIreland and Bioglan.
"Quintiles Materials"--as defined in Section 2.2(k).
"Quintiles Systems"--as defined in Section 2.2(l).
"Regulatory Files"--the documents referenced in the complete regulatory
chronology for each NDA or ANDA, as the case may be, including the IND, NDA, and
sNDAs, as applicable, for the applicable Product, including all supplements
thereto and required regulatory files and data relating thereto in Sellers'
possession or control.
"Replacement Plan"--as defined in Section 7.1(c).
6
"Sales Employees"--those Bioglan Employees who are principally employed
as sales representatives or sales managers on the date hereof and identified as
such on Section 7.1 of the Disclosure Letter.
"SEC"--the Securities and Exchange Commission.
"Seller" or "Sellers"--as defined in the first paragraph of this
Agreement.
"Seller Indemnifiable Claim"--as defined in Section 11.5.
"Seller Indemnified Parties"--as defined in Section 11.3.
"Seller Indemnifying Parties"--as defined in Section 11.2.
"sNDA"--a Supplemental New Drug Application, as such term is used under
the FFDCA.
"Tangible Personal Property"--equipment, furniture, office equipment,
computer hardware, supplies, materials, and other items of tangible personal
property (other than Inventories).
"Taxes"--all of the following: (a) any net income, withholding,
alternative or add-on minimum tax, gross income, gross receipts, sales, use,
value added, ad valorem, transfer, franchise, profits, license, excise,
severance, stamp, occupation, premium, property, environmental or windfall
profit tax, capital tax, customs duty or other tax, governmental fee or other
like assessment, together with any interest, penalty or additional amount due,
imposed by any Governmental Body responsible for the imposition of any such tax;
(b) any liability for the payment of any amounts of the type described in clause
(a) above as a result of being a member of any affiliated, consolidated,
combined, unitary or other group for any taxable period; and (c) any liability
for the payment of any amounts of the type described in clause (a) or (b) above
as a result of any express or implied obligation to indemnify any other Person.
"Third Party"--a Person who or which is neither a Party nor an
Affiliate of a Party.
"Trademark Assignment"--the Trademark Assignment to be executed and
delivered at the Closing by Bioglan and Buyer, in form and substance reasonably
satisfactory to Bioglan and Buyer and in proper form for recording with
applicable Governmental Bodies.
"Transfer Taxes"--as defined in Section 2.6.
"Transferred Employees"--as defined in Section 7.1(a).
7
2. ASSETS TO BE PURCHASED
2.1 Purchased Assets.
(a) Purchase and Sale of Bioglan Assets. Upon the terms and subject to
the conditions set forth in this Agreement, at the Closing, Bioglan shall sell,
convey, assign, transfer and deliver to Buyer free and clear of all Encumbrances
(other than Encumbrances set forth in Section 3.5 of the Disclosure Letter and
Permitted Encumbrances), and Buyer shall purchase and acquire from Bioglan, all
of Bioglan's right, title and interest in and to all of Bioglan's property and
assets, including the following (but excluding the Excluded Assets):
(i) the NDAs, ANDA, pending sNDAs and INDs for the
applicable Products set forth in Section 2.1(a)(i) of the Disclosure Letter (the
"Drug Authorizations") and the related Regulatory Files;
(ii) the trademarks set forth in Section 2.1(a)(ii) of the
Disclosure Letter;
(iii) the contracts and agreements set forth in Section
2.1(a)(iii) of the Disclosure Letter;
(iv) the employment agreements set forth in Section
2.1(a)(iv) of the Disclosure Letter with respect to the Transferred Employees
and the consulting agreement for the consultant specified therein;
(v) all Know-How;
(vi) all Product Trade Dress;
(vii) all Accounts Receivable;
(viii) all Inventories;
(ix) all sales, marketing, packaging, labeling,
promotional, advertising, training and educational materials relating to the
sale of the Products;
(x) all Tangible Personal Property, including those items
described in Section 2.1(a)(x) of the Disclosure Letter (other than Tangible
Personal Property consumed or disposed of in the ordinary course of business);
(xi) subject to Section 2.2(f), all data and records,
including customer lists and records, production reports and records, financial
and accounting records, personnel records relating to the Transferred Employees
and other similar documents and records;
(xii) all Governmental Authorizations and all pending
applications therefor or renewals thereof, in each case to the extent
transferable to Buyer;
8
(xiii) the domain names set forth in Section 2.1(a)(xiii) of
the Disclosure Letter;
(xiv) all copyrights associated with the Purchased Assets;
and
(xv) all patent applications owned by Sellers and
associated with the Products, being those set forth on Section 2.1(a)(xv) of the
Disclosure Letter.
All of the property and assets to be transferred to Buyer under this Section
2.1(a) are herein referred to collectively as the "Bioglan Assets."
(b) Purchase and Sale of QBermuda Assets Related to the Products. Upon
the terms and subject to the conditions set forth in this Agreement, at the
Closing, QBermuda shall sell, convey, assign, transfer and deliver to Buyer free
and clear of all Encumbrances (other than Permitted Encumbrances), and Buyer
shall purchase and acquire from QBermuda, all of QBermuda's right, title and
interest in and to those certain contracts or agreements of QBermuda set forth
in Section 2.1(b) of the Disclosure Letter. All of the property and assets to be
transferred to Buyer under this Section 2.1(b) are herein referred to
collectively as the "QBermuda Assets."
(c) Purchase and Sale of QIreland Assets Related to the Products. Upon
the terms and subject to the conditions set forth in this Agreement, at the
Closing, QIreland shall sell, convey, assign, transfer and deliver to Buyer free
and clear of all Encumbrances (other than Permitted Encumbrances), and Buyer
shall purchase and acquire from QIreland, all of QIreland's right, title and
interest in and to those certain contracts or agreements of QIreland set forth
in Section 2.1(c) of the Disclosure Letter. All of the property and assets to be
transferred to Buyer under this Section 2.1(c) are herein referred to
collectively as the "QIreland Assets."
The Bioglan Assets, the QBermuda Assets and the QIreland Assets are herein
referred to collectively as the "Purchased Assets."
2.2 Excluded Assets. Notwithstanding anything to the contrary contained
in Section 2.1 or elsewhere in this Agreement, the following assets, contracts,
and other items of Sellers (collectively, the "Excluded Assets") are not part of
the sale and purchase contemplated hereunder, are excluded from the Purchased
Assets, shall be retained by Sellers (including with respect to any obligations
thereunder), and shall remain the property of Sellers after the Closing:
(a) all Cash Equivalents;
(b) all bank accounts;
(c) all intercompany receivables between any Seller and any Affiliate
of such Seller;
(d) all minute books, stock records and corporate seals;
(e) all insurance policies and contracts and rights thereunder;
9
(f) all records that Sellers are required by Legal Requirements to
retain in their possession;
(g) all personnel records (excluding proprietary information and
confidentiality agreements, work product and similar agreements, if any)
relating to Bioglan's employees other than the Transferred Employees;
(h) all claims for refund of Taxes and other governmental charges of
whatever nature;
(i) the Bioglan Plans and all rights in connection with, and assets of,
the Bioglan Plans;
(j) subject to Section 2.4(d), the employment or severance contracts,
agreements or other arrangements set forth in Sections 2.1(a)(iv) or 2.2(j) of
the Disclosure Letter to the extent relating to (i) Bioglan Employees who are
not Transferred Employees, or (ii) retention bonus payments with respect to any
Bioglan Employee;
(k) all corporate and business policies, procedures, practices,
handbooks, manuals, and similar items, which have been produced or disseminated
by or on behalf of Quintiles or its Affiliates and which Bioglan uses or holds
for use in its capacity as, or to which it has access by virtue of its status
as, a subsidiary of Quintiles (collectively, the "Quintiles Materials");
(l) all information technology and computer software systems and
infrastructure and Third Party or Affiliate products and services (including
without limitation those described on Section 2.2(l) of the Disclosure Letter)
that Bioglan uses or holds for use in its capacity as, or to which it has access
by virtue of its status as, a subsidiary of Quintiles, including without
limitation financial, tax, payroll, human resources, medical information,
adverse event and similar reporting or records systems (collectively, the
"Quintiles Systems");
(m) all right, title or interest of QBermuda in any QBermuda assets,
properties or rights not set forth in Section 2.1(b) of the Disclosure Letter;
and
(n) all right, title or interest of QIreland in any QIreland assets,
properties or rights not set forth in Section 2.1(c) of the Disclosure Letter.
2.3 Purchase Price.
(a) Subject to the terms hereof, the consideration for the Purchased
Assets (the "Purchase Price") (other than the Inventories, the consideration for
which is described in Section 2.3(b)) will be (i) One Hundred Eighty-Three
Million Dollars ($183,000,000), which shall be paid at Closing to Bioglan (for
further distribution among Sellers) by wire transfer to an account specified by
Bioglan, in immediately available funds; and (ii) the assumption of the Assumed
Liabilities, which shall be accomplished by the execution and delivery of the
QBermuda Assignment and Assumption Agreement, the QIreland Assignment and
Assumption Agreement and the Bioglan Assignment and Assumption Agreement.
10
(b) At least two (2) Business Days prior to the Closing Date,
representatives of Bioglan and Buyer shall meet to determine mutually in good
faith the number of units of the Products held as Inventories by or on behalf of
Bioglan with expiration dating not less than twelve (12) months after the
Closing Date that are salable (or, in the case of samples, distributable) in the
ordinary course of business (collectively, the "Closing Inventories"). For
purposes of determining the Closing Inventories under this Section 2.3(b), all
units of AFIRM(R), A-Fil(R) or B-LIFTx(R), which Products have no expiration
date, shall be deemed to have expiration dating in excess of twelve (12) months.
The purchase price for the Closing Inventories, which shall be paid at Closing
to Bioglan by wire transfer to an account specified by Bioglan, in immediately
available funds, will be (i) the actual per unit purchase cost to Bioglan for
each Product (i.e., without overhead allocation), multiplied by (ii) the number
of units of each Product comprising the Closing Inventories. To the extent that
there are any material differences in the amount of Closing Inventories as of
the Closing Date from the amount determined prior to the Closing Date, the
Parties agree to make an appropriate adjustment payable promptly following the
Closing Date.
2.4 Assumption of Liabilities. Upon the terms and subject to the conditions
set forth in this Agreement, at the Closing, Buyer agrees to assume and become
responsible for the following liabilities or obligations (the "Assumed
Liabilities"):
(a) all current liabilities (other than accrued income taxes payable
and current portion of indebtedness) reflected on the Balance Sheet, or any
other current liabilities incurred by Bioglan in the ordinary course of business
between the date of the Balance Sheet and the Closing Date that (in either case)
remains unpaid in the ordinary course of business at, and is not delinquent as
of, the Closing;
(b) the obligations to customers or suppliers incurred by Bioglan in
the ordinary course of business for orders outstanding as of the Closing Date
reflected on Bioglan's books (excluding any obligations with respect to customer
deposits that are not reflected as of the Closing Date on Bioglan's books);
(c) the respective obligations of Sellers, arising after the Closing
Date, under the contracts and agreements referred to in Sections 2.1(a)(iii),
2.1(a)(iv) (with respect to Transferred Employees), 2.1(b) and 2.1(c) above
(other than obligations arising out of or relating to a breach that occurred
prior to the Closing Date);
(d) the obligations of Sellers or their Affiliates for severance
arrangements with respect to any Transferred Employee, all to the extent that
Section 7.1(g) provides that Buyer shall be obligated therefor; and
(e) the obligations of Bioglan for recalls, returns, Medicaid and state
rebates, managed care rebates, Chargebacks and other Product responsibilities,
all to the extent that Section 7.3 provides that Buyer shall be obligated
therefor.
Except for the Assumed Liabilities or as otherwise expressly provided in this
Agreement, Buyer shall not assume or otherwise be responsible for any
liabilities or other obligations of any of
11
Sellers (and Sellers agree to timely pay or otherwise be responsible for all
such liabilities and obligations).
2.5 Closing. The purchase and sale (the "Closing") provided for in this
Agreement will take place at the offices of Smith, Anderson, Blount, Dorsett,
Xxxxxxxx & Xxxxxxxx, L.L.P. at 0000 Xxxxxxxx Xxxxxxx Xxxxxx, Xxxxxxx, Xxxxx
Xxxxxxxx 00000, at 10:00 a.m. (Eastern Time) on July 8, 2004, or, if later, two
(2) Business Days following the satisfaction or waiver of all conditions under
Sections 8 and 9 (other than conditions with respect to actions the respective
Parties will take at the Closing itself), or at such other time and place as the
Parties may agree. Subject to the provisions of Section 10, failure to
consummate the purchase and sale provided for in this Agreement on the date and
time and at the place determined pursuant to this Section 2.5 will not result in
the termination of this Agreement and will not relieve any Party of any
obligation under this Agreement.
2.6 Sales, Use and Other Taxes. All transfer,
documentary, sales, use, valued-added, gross receipts, stamp, registration or
other similar transfer taxes (collectively, "Transfer Taxes") incurred in
connection with the transfer and sale of the Purchased Assets as contemplated by
the terms of this Agreement, including all recording or filing fees and other
similar costs of Closing, that may be imposed, payable, collectible or incurred,
shall be borne by Buyer. The Parties hereto agree to reasonably cooperate with
each other to claim any applicable exemption from, or reduction of, any
applicable Transfer Taxes.
2.7 Assignability. To the extent that the assignment
or transfer of all or any portion of any contract or Drug Authorization included
in the Purchased Assets shall require the consent of a Third Party (including a
Governmental Body), this Agreement shall not constitute an agreement to assign
any such contract or Drug Authorization if an attempted assignment without such
consent would constitute a breach or violation of such contract or Drug
Authorization and such Third Party objects thereto. In order, however, to
provide Buyer with the full realization and value of the Purchased Assets, each
of the Sellers agree that on and after the Closing Date it will, at the request
and under the direction of Buyer, in the name of such Seller or otherwise as
Buyer shall specify, take all reasonable actions and do or cause to be done all
such things as shall in the reasonable opinion of Buyer be necessary or proper
(i) to assure that the material rights of such Seller under such contracts and
Drug Authorizations shall be preserved for the benefit of, or transferred or
issued to, Buyer, (ii) to facilitate receipt of the consideration to be received
by such Seller under such contracts, which consideration shall be held for the
benefit of, and promptly delivered to, Buyer, and (iii) to enforce all material
rights of such Seller under the contracts and Drug Authorizations, including
provisions restricting or prohibiting use, transfer or disclosure of
confidential information; provided, however, that Buyer shall agree in writing
to reimburse and indemnify and hold harmless such Seller to the full extent
permitted by law or in equity for, and from any and all liabilities and expenses
arising from or in connection with, such contract or Drug Authorization except
to the extent such liabilities and expenses have resulted from actions taken or
omitted due to such Seller's willful misconduct, gross negligence or knowing
violation of law. Once the applicable third-party consent is obtained, the
Parties shall promptly enter into an assignment and assumption agreement or
other appropriate transfer documentation for such contract or Drug Authorization
at no additional cost to Buyer (other than the expenses described
12
in Section 12.1). Nothing in this Section 2.7 shall in any way limit the
provisions of Sections 2.4, 5.2, 8.9 or 12.5 hereof.
2.8 Purchase Price Adjustments.
(a) To the extent that Closing Date Net Working Capital (as defined
below) exceeds Two Million Five Hundred Thousand Dollars ($2,500,000), Buyer
shall pay Sellers the amount of such excess. To the extent that Closing Date Net
Working Capital is less than One Million Five Hundred Thousand Dollars
($1,500,000), Sellers shall pay Buyer the amount of such deficit. For purposes
of this Section 2.8(a) the following terms have the meanings specified below:
"Closing Date Current Assets"--all current assets reflected on
the Closing Date Balance Sheet constituting Purchased Assets, excluding Closing
Inventories.
"Closing Date Current Liabilities"--all current liabilities
reflected on the Closing Date Balance Sheet constituting Assumed Liabilities.
"Closing Date Net Working Capital"--means Closing Date Current
Assets minus Closing Date Current Liabilities.
(b) To the extent that Sellers' Aggregate Net Sales exceed 111% of the
Aggregate Retail Sales Value (as defined below), Sellers shall pay Buyer an
amount equal to seventy percent (70%) of such excess. For purposes of this
Section 2.8(b) the following terms have the meanings specified below:
"Aggregate Net Sales"--an amount equal to the product of (i)
Net Revenues reflected on the income statement included in the Audited Stub
Period Financial Statements, times (ii)(A) the total number of calendar days in
the Comparison Period, divided by (B) the number of calendar days from January
1, 2004 through and including the Closing Date.
"Aggregate Retail Sales Value"--aggregate sales (in dollars)
of all of the Products during the Comparison Period as, and to the extent,
reported in NDCHealth's Pharmaceutical Audit Suite (PHAST) National Trends
Prescription and Institution Monthly.
Comparison Period"--the period from January 1, 2004 through
the last day of the last full calendar week preceding the Closing.
(c) All payments due under this Section 2.8, shall be paid by Sellers
or Buyer, as applicable, within fifteen (15) days after the Audited Stub Period
Financial Statements are delivered to Buyer under Section 7.11(a).
2.9 Allocation of Purchase Price. Buyer and Sellers shall use diligent
efforts to agree upon a statement (the "Allocation Statement") within ten (10)
Business Days after the date hereof, which statement shall set forth the
allocation, fair market value and useful lives of the Purchased Assets. After
the Closing, the Parties shall make consistent use of the allocation, fair
market
13
value and useful lives specified in the Allocation Statement for all Tax
purposes and in all filings, declarations and reports with the IRS in respect
thereof, including the reports required to be filed under Section 1060 of the
IRC. Buyer shall prepare and deliver IRS Form 8594 to Sellers within forty-five
(45) days after the Closing Date to be filed with the IRS. In any Proceeding
related to the determination of any Tax, neither Buyer nor any Seller shall
contend or represent that such allocation is not a correct allocation.
3. REPRESENTATIONS AND WARRANTIES OF SELLERS
Sellers, jointly and severally, represent and warrant to Buyer with respect to
Sections 3.1 through 3.21, and additionally Quintiles represents and warrants to
Buyer with respect to Section 3.2 only, as follows:
3.1 Incorporation and Good Standing. Each of the Sellers is duly organized,
validly existing, and in good standing under the laws of the jurisdiction in
which such Seller is organized, with full corporate power and authority to
conduct its business as it is now being conducted and to own or use the
properties and assets that it owns or uses. Each of the Sellers is duly
qualified to do business as a foreign corporation and is in good standing under
the laws of each state in which either the ownership or use of the properties
owned or used by it, or the nature of the activities conducted by it, requires
such qualification, except where the absence of qualification would not
constitute a Material Adverse Effect. Section 3.1 of the Disclosure Letter
contains a complete and accurate list of the states in which each of the Sellers
is qualified to do business as a foreign corporation.
3.2 Authority; No Conflict.
(a) This Agreement constitutes the legal, valid, and binding obligation
of Seller Indemnifying Parties, enforceable against Seller Indemnifying Parties
in accordance with its terms. Upon the execution and delivery by QBermuda of the
QBermuda Assignment and Assumption Agreement, such agreement will constitute the
legal, valid, and binding obligation of QBermuda, enforceable against QBermuda
in accordance with its terms. Upon the execution and delivery by QIreland of the
QIreland Assignment and Assumption Agreement, such agreement will constitute the
legal, valid, and binding obligation of QIreland, enforceable against QIreland
in accordance with its terms. Upon the execution and delivery by Bioglan of the
Xxxx of Sale, the Bioglan Assignment and Assumption Agreement, the Patent
Application Assignment and the Trademark Assignment, each of such documents will
constitute the legal, valid, and binding obligations of Bioglan, enforceable
against Bioglan in accordance with the respective terms thereof. Seller
Indemnifying Parties have all requisite power and authority to execute and
deliver this Agreement and to perform their obligations under this Agreement and
the transactions contemplated by this Agreement.
(b) Except as set forth in Section 3.2(b) of the Disclosure Letter,
neither the execution and delivery of this Agreement nor the consummation or
performance of any of the transactions contemplated hereby by Seller
Indemnifying Parties will: (i) violate any provision of the Organizational
Documents of any Seller Indemnifying Party; (ii) violate any Legal Requirement
applicable to any Seller Indemnifying Party or the transactions contemplated
hereby; or (iii)
14
result in the creation of any Encumbrance upon any of the Purchased Assets
pursuant to the terms or provisions of, and neither will (with or without notice
or lapse of time or both) result in the breach or violation of, or constitute a
default under, any Material Contract, except in the case of clauses (ii) and
(iii) for such violation, breach, default or Encumbrance that would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.
(c) Except as set forth in Section 3.2(c) of the Disclosure Letter, and
subject to compliance with the HSR Act, none of Seller Indemnifying Parties is
or will be required to give any notice to or obtain any approval, consent or
other authorization from any Person in connection with the execution and
delivery of this Agreement or the consummation or performance of any of the
transactions contemplated hereby.
3.3 Financial Statements. Bioglan has made available to Buyer: (a) an
unaudited balance sheet of the Bioglan Pharmaceuticals operations of Quintiles
as of each of March 31, 2004 (the "Balance Sheet"), December 31, 2003 and
December 31, 2002, in each case consisting of all assets and liabilities of
Bioglan and, to the extent relating to the Products, the assets and liabilities
of QBermuda and QIreland, and (b) unaudited statements of earnings of the
Bioglan Pharmaceuticals operations of Quintiles for each of the three months
ended March 31, 2004 and March 31, 2003, the year ended December 31, 2003 and
the nine months ended December 31, 2002, in each case consisting of all
operations of Bioglan and, to the extent relating to the Products, the
operations of QBermuda and QIreland. The unaudited financial statements of the
Bioglan Pharmaceuticals operations of Quintiles described in Section 3.3(a) and
(b) above are correct and complete in all material respects as at the dates of
and for the periods referred to in such unaudited financial statements, and have
been prepared in accordance with GAAP, consistently applied, except that they
(i) are not financials statements of a single entity, or consolidated financial
statements for two or more entire entities but instead reflect the (A) operating
results, assets and liabilities of Bioglan as an entity, and (B) operating
results, assets and liabilities of both QBermuda and QIreland, but only to the
extent that the operating results, assets and liabilities of QBermuda and
QIreland relate to Bioglan's business, (ii) do not contain either footnotes,
cash flows or a statement of shareholders' equity, (iii) are subject to normal
year end audit adjustments; and (iv) may have a presentation format that is
different from the presentation format of audited financial statements.
3.4 Corporate Records. The corporate records of Bioglan are correct and
complete in all material respects. Bioglan's minute books contain minutes of all
meetings of directors and shareholders and all actions by written consent
without a meeting by the directors and shareholders since the date of its
incorporation and accurately reflect, in all material respects, all actions by
the directors and shareholders with respect to all transactions referred to in
such minutes. True and correct copies of Bioglan's certificate of incorporation
and bylaws and all minutes of meetings or other actions by the directors,
shareholders or incorporators of Bioglan since its inception have been made
available to Buyer.
3.5 Title to Properties; Encumbrances; Real Property. Except as set forth
in Section 3.5 of the Disclosure Letter, (a) Bioglan has good, sole and
transferable title to the Bioglan Assets, including all material properties and
assets reflected in the Balance Sheet (other than the Know-How), QBermuda has
good, sole and transferable title to the QBermuda Assets, QIreland has
15
good, sole and transferable title to the QIreland Assets and, to Bioglan's
Knowledge, Bioglan has good, sole and transferable title to the Know-How, in
each case free and clear of all Encumbrances other than Permitted Encumbrances;
(b) the material Tangible Personal Properties used or held for use by Bioglan in
connection with its business, taken as a whole, are in good operating condition
and are reasonably fit and usable for the purposes for which they are being
used, ordinary wear and tear excepted; and (c) the Purchased Assets (including,
without limitation, the Know-How included therein) include all of the material
rights and properties used in the operation of Bioglan's business as operated by
Bioglan during the twelve (12) months preceding the date hereof, other than the
Quintiles Materials, the Quintiles Systems and those rights and properties sold
or otherwise disposed of in the ordinary course of business. Bioglan does not
own any real property or patents. Section 3.5 of the Disclosure Letter sets
forth the address of all real property leased by Bioglan, and a list of all real
property leases related thereto. Bioglan has made available to Buyer a true and
correct copy of each such lease. The Parties acknowledge and agree that title to
the contracts and agreements set forth in Sections 2.1(a)(iii), 2.1(a)(iv),
2.1(b) and 2.1(c) are subject to the rights of the Third Parties that are the
other parties to such contracts and agreements (in their capacities as such
other parties to, and solely pursuant to the terms of, such contracts and
agreements).
3.6 Inventory. The Closing Inventories consist of a quality and quantity
usable and salable in the ordinary course of business. All Products in the
Closing Inventories were produced or manufactured in accordance with the
specifications for such Products, including as set forth in the Drug
Authorizations for such Products, as applicable, and in compliance with
applicable Legal Requirements, in each case in all material respects.
3.7 No Undisclosed Liabilities. Bioglan has no liabilities or obligations
except for (a) liabilities or obligations reflected or reserved against in the
Balance Sheet, (b) current liabilities incurred in the ordinary course of
business since the date of the Balance Sheet, and (c) liabilities or obligations
that, individually or in the aggregate, would not reasonably be expected to have
a Material Adverse Effect.
3.8 Taxes. Sellers have timely filed and accurately completed in all
material respects all Tax returns or reports as required by applicable Legal
Requirements. Sellers have paid all Taxes shown to be due under such returns or
reports, except those contested by them in good faith. None of Sellers has had
any Tax deficiency proposed or assessed against it (and, to the Knowledge of
Sellers, no audit of any such return or report is pending) nor has any Seller
executed any waiver of any statute of limitations on the assessment or
collection of any Tax.
3.9 Employee Benefits.
(a) Section 3.9(a) of the Disclosure Letter sets forth all Bioglan
Plans. Copies of all Bioglan Plans have been made available to Buyer. Neither
Bioglan nor any member of its "control group" has ever maintained, sponsored,
contributed to, or participated in any of the following plans or arrangements
with respect to any employees working on behalf of Bioglan: (i) an employee
benefit plan subject to Title IV of ERISA or IRC ss. 412 (e.g., defined benefit
pension plans); (ii) a multiemployer plan as defined under ERISA ss. 3(37) or
ss. 4001(a)(3) or IRC ss. 414(f); (iii) an employee benefit plan that provides
medical or other welfare benefits to retirees
16
except as required by ERISA, the IRC, or other applicable Legal Requirement,
including, but not limited to, the Consolidated Omnibus Budget Reconciliation
Act of 1985, as amended; or (iv) a multiple employer plan within the meaning of
IRC ss. 413(c) or ERISA xx.xx. 4063, 4064, or 4066.
(b) Each of Bioglan Plans has been adopted and operated in substantial
compliance with its terms and all applicable Legal Requirements (including,
where applicable, ERISA and the IRC). To Bioglan's Knowledge, none of Bioglan
Plans or any trusts relating thereto have engaged in any transaction in
connection with which Bioglan or any fiduciaries of any Bioglan Plans or related
trusts is or could be subject either to a civil penalty or other liability under
Sections 502(i), 406 or 409 of ERISA or a tax imposed by Section 4975 of the
IRC, and no event has occurred and no condition exists with respect to Bioglan
Plans that could subject Bioglan to any other tax or penalty under the IRC or
civil penalty or other liability under ERISA or other Legal Requirements that
would reasonably be expected to have a Material Adverse Effect with respect to
Bioglan.
(c) Except as set forth in Section 3.9(c) of the Disclosure Letter, the
consummation of the transactions contemplated by this Agreement will not (i)
entitle any current or former employee, officer, director or independent
contractor of Bioglan to severance pay, unemployment compensation or any other
similar payments under any Bioglan Plans or arrangements; (ii) accelerate the
time of payment or vesting, or increase the amount of payments or compensation
due any such person; or (iii) result in any prohibited transaction described in
ERISA ss. 406 or IRC ss. 4975 for which an exemption is not available.
3.10 Compliance With Legal Requirements; Governmental Authorizations. Except
as set forth on Section 3.10 of the Disclosure Letter, (a) Sellers are in
compliance with all applicable Legal Requirements, except where failure to so
comply would not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect; and (b) Sellers have all Governmental
Authorizations necessary for the conduct of their respective businesses as now
being conducted unless the failure to possess such Governmental Authorizations
would not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect.
3.11 Legal Proceedings; Orders. Except as set forth in Section 3.11 of the
Disclosure Letter and except for any Proceeding arising on or after the date
hereof (and, to Sellers' Knowledge, not threatened prior to the date hereof)
that would not reasonably be expected to have a Material Adverse Effect, there
is no pending Proceeding that has been commenced (a) by or against any Seller,
(b) relating to the Purchased Assets, or (c) that challenges, or that may have
the effect of preventing, delaying, making illegal, or otherwise interfering
with, any of the transactions contemplated hereby, and, to Sellers' Knowledge,
no such Proceeding has been threatened. Except as set forth in Section 3.11 of
the Disclosure Letter, to Sellers' Knowledge, there is no order issued by any
Governmental Body to which any Seller, or any asset owned, used or held for use
by Sellers in connection with their respective businesses, is subject.
3.12 Absence of Certain Changes and Events. Except as set forth in
Section 3.12 of the Disclosure Letter, since December 31, 2003, each Seller has
conducted its business in the ordinary course of business and there has not been
any:
17
(a) material payment or increase by Bioglan or its Affiliates of
any bonuses, salaries, or other compensation to any Bioglan officer or employee
(other than in the ordinary course of business to employees who are not managers
or officers) or entry into any material employment, severance, or similar
agreement with any officer or employee;
(b) adoption of, or material increase in the payments to or benefits
under, any profit sharing, bonus, deferred compensation, savings, insurance,
pension, retirement, or other employee benefit plan for or with any employees of
Bioglan;
(c) damage to or destruction or loss of any material asset or property
of Bioglan, which involves material damage or destruction or which, in the case
of damage or destruction occurring after the date hereof, would reasonably be
expected to have a Material Adverse Effect;
(d) sale, lease, or other disposition of any material asset or property
of Bioglan (other than in the ordinary course of business for fair
consideration) or mortgage, pledge, or imposition of any Encumbrance on any
material asset or property of Bioglan (other than Permitted Encumbrances);
(e) (i) material modification or termination of any Material Contract;
or (ii) receipt of notice of termination of any Material Contract, which notice,
in the case of notice received after the date hereof, would reasonably be
expected to result in an actual termination;
(f) indebtedness incurred for borrowed money by Bioglan;
(g) material change in the accounting methods used by Bioglan;
(h) Material Adverse Effect; or
(i) agreement by any Seller, as applicable, to do any of the foregoing.
3.13 Contracts.
(a) Section 3.13(a) of the Disclosure Letter contains a complete and
accurate list, and Sellers have made available to Buyer true and correct copies,
of:
(i) each agreement that involves expenditures or receipts
of Bioglan, or which relates to any of the Products, in excess of Fifteen
Thousand Dollars ($15,000);
(ii) each agreement that involves performance of services or
delivery of goods or materials for or by Bioglan, or which relates to any of the
Products, in an amount or value in excess of Fifteen Thousand Dollars ($15,000);
(iii) each lease, rental or occupancy agreement, license,
installment and conditional sale agreement, and other agreement affecting the
ownership of, leasing of, title to, use of, or any leasehold or other interest
in, any real or personal property held by Bioglan (except
18
personal property leases and installment and conditional sales agreements, in
each case having a value per item or aggregate payments of less than Fifteen
Thousand Dollars ($15,000));
(iv) each agreement for capital expenditures of Bioglan in
excess of Fifteen Thousand Dollars ($15,000);
(v) any indenture, note, loan or credit agreement or other
agreement relating to the borrowing, guaranty or collateralization of money or
indebtedness by or of Bioglan;
(vi) each agreement related to any employment, consulting or
independent contractor relationship of any individual with Bioglan;
(vii) each agreement included in the Purchased Assets
containing covenants that purport to restrict the business activity of any
Seller or limit the freedom of any such Seller to engage in any line of business
or to compete with any Person; and
(viii) each agreement that is otherwise material to Bioglan or
its business.
The agreements identified or required to be identified in Section 3.13(a) of the
Disclosure Letter are referred to in this Agreement as "Material Contracts."
(b) Except as set forth in Section 3.13(b) of the Disclosure Letter,
each Material Contract is in full force and effect and is valid and enforceable
in accordance with its terms in all material respects.
(c) Except as set forth in Section 3.13(c) of the Disclosure Letter,
(i) Bioglan, QBermuda or QIreland, as applicable, is in compliance with all
material applicable terms and requirements of each Material Contract, and, (ii)
to the Knowledge of Sellers, each other Person that has any obligation under any
Material Contract is in compliance with all material applicable terms and
requirements of such agreement.
3.14 Insurance. Sellers have insurance coverage of the types and in the
amounts that Sellers reasonably believe is adequate for their business against
such risks customarily insured against by companies under comparable
circumstances. Sellers have made available to Buyer a summary of such insurance
coverage, which is maintained on behalf of Sellers by Quintiles. All such
insurance coverage is in full force and effect, except to the extent as would
not reasonably be expected to have a Material Adverse Effect.
3.15 Labor Relations. To Bioglan's Knowledge, as of the date hereof, no
officer or key employee of Bioglan intends to terminate employment nor does
Bioglan have any present intention to terminate the employment of any of the
foregoing. No employees of Bioglan are represented by a union or other labor
organization or covered by any collective bargaining agreement. There is no
unfair labor practice complaint, labor organizational effort, strike, slowdown
or similar labor matter pending or, to the Knowledge of Bioglan, threatened
against or affecting Bioglan.
19
3.16 Intellectual Property.
(a) To the Knowledge of Sellers, none of the offering for sale,
selling, marketing, making or using of the Products by Sellers infringes or
misappropriates, and Sellers have not received any written notice of any
infringement or misappropriation by Sellers or the Products of, any intellectual
property rights of any Third Party.
(b) Set forth on Section 3.16(b) of the Disclosure Letter is a
description of the patents licensed by Sellers, as licensee, with respect to any
of the Products (the "Licensed Patents"), which Section of the Disclosure Letter
shall also identify the agreement pursuant to which the related patent is
licensed by Sellers. To the Knowledge of Sellers, the licensor of each of the
Licensed Patents has sufficient right, title and interest to grant such license
to Sellers. Except as set forth on Section 3.2(c) of the Disclosure Letter,
Sellers have sufficient right, title and interest to transfer such license to
the Buyer hereunder. To the Knowledge of Sellers, the use by Sellers of the
technology disclosed and claimed in the Licensed Patents does not infringe or
misappropriate, and Sellers have not received any written notice of any
infringement or misappropriation by Sellers of, any intellectual property rights
of any Third Party, and the Licensed Patents are not being infringed or
misappropriated by any Third Party. To the Knowledge of Sellers, there are no
facts or circumstances that would reasonably serve as the basis for a claim of
invalidity or unenforceability of the Licensed Patents.
(c) Set forth in Section 3.16(c) of the Disclosure Letter is a
description of each trademark of Bioglan that is registered with the U.S. Patent
and Trademark Office (or other applicable Governmental Body) or for which an
application for registration has been filed. Except as set forth in Section
3.16(c) of the Disclosure Letter, Sellers have no Knowledge of any adverse
claims with respect to such trademarks. Except as set forth in Section 3.16(c)
of the Disclosure Letter, to the Knowledge of Sellers, there are no facts or
circumstances that would reasonably serve as the basis for a claim of invalidity
or unenforceability of such trademarks of Bioglan. To the Knowledge of Sellers,
(i) the use of such trademarks by Bioglan does not infringe or misappropriate,
and Sellers have not received any written notice of any infringement or
misappropriation by Bioglan of, any trademark or other intellectual property
rights of any Third Party, (ii) such trademarks are not being infringed or
misappropriated by any Third Party, and, (iii) except as set forth in Section
3.16(c) of the Disclosure Letter, all necessary registration and maintenance
fees due in connection with such trademarks have been paid and all necessary
documents in connection with such trademarks have been filed with the applicable
Governmental Body.
(d) Bioglan has taken reasonable and customary measures to maintain and
protect its confidential information and intellectual property rights.
(e) Except for patent applications listed on Section 2.1(a)(xv) of the
Disclosure Letter, which will be assigned to Buyer under the Patent Application
Assignment, there are no patents or patent applications, relating to the
Products, owned, licensed or otherwise controlled by Sellers or any of their
current or former employees or independent contractors.
20
3.17 FDA Matters.
(a) All Drug Authorizations are current and in full force and effect,
have been duly and validly issued, contain no material error or omission, and
are owned exclusively by Bioglan. All regulatory approvals or authorizations
owned by Sellers and relating to the Products are set forth on Section 2.1(a)(i)
of the Disclosure Letter. Sellers have complied in all material respects with
their respective obligations to report adverse drug experiences and are in
compliance in all material respects with all other obligations applicable to the
Products pursuant to the FFDCA and other applicable Legal Requirements. There is
no Proceeding pending or, to the Knowledge of Sellers, threatened seeking the
recall of any Products or the revocation or suspension of any Drug
Authorization. Sellers have made available to Buyer true and correct copies of
all Drug Authorizations, and there are no material changes, amendments or other
circumstances in connection with or relating to any of the Products that would
require the filing of any material amendment or supplement to a Drug
Authorization or the filing of any new Drug Authorization.
(b) To Sellers' Knowledge, the ANDA relating to Adoxa(R) is current and
in full force and effect, has been duly and validly issued and contains no
material error or omission. To Sellers' Knowledge, there is no Proceeding
pending or threatened seeking the recall of Adoxa(R) or the revocation or
suspension of the ANDA relating to Adoxa(R). To Sellers' Knowledge, there are no
material changes, amendments or other circumstances in connection with or
relating to Adoxa(R) that would require the filing of any material amendment or
supplement to the ANDA relating to Adoxa(R).
(c) Except as set forth in Section 3.17(c) of the Disclosure Letter,
Sellers have not received or been subject to: (i) any FDA Form 483's concerning
the Products; (ii) any FDA Notices of Adverse Findings concerning the Products;
or (iii) warning letters or other correspondence from the FDA or any other
Governmental Body concerning (1) the Products in which the FDA or other such
Governmental Body asserted that the operations of any Seller or the Products
were not in compliance with applicable Legal Requirements in any material
respect, (2) issues arising from any pricing issues concerning the Products,
including "best pricing" issues and Medicaid rebates, (3) issues concerning the
Products involving financial relationships between any Seller and any health
care provider or pharmacy, including issues of improper payments, kickbacks,
promotional activities, speakers' fees or continuing medical education; or (4)
any other issues in relation to the Product, including but not limited to
marketing and promotional activities and off-label promotion of a Product.
During Sellers' ownership or license of the Products and, to the Sellers'
Knowledge, prior thereto, there have been no recalls involving the Products.
Except as set forth on Section 3.17(c) of the Disclosure Letter, there is no
pending or, to the Knowledge of Sellers, threatened material Proceeding relating
to safety or efficacy of any of the Products.
(d) As to any product in development by Sellers and not the subject of
a Drug Authorization, Sellers are in compliance in all material respects with
all applicable Legal Requirements in connection with the development and
clinical testing of such product in the United States.
(e) Sellers have not marketed, distributed or sold any of the Products
outside the United States.
21
3.18 Environmental Matters. Bioglan and, to its Knowledge, its leased
premises are and have been in compliance with all applicable environmental laws,
except for any non-compliance that would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect. None of Sellers has
any Knowledge of any past or present facts, actions, activities, circumstances,
conditions, or events, including the release or presence of hazardous substances
at or in the vicinity of Bioglan's leased premises, that would reasonably be
expected to result in material liability to Bioglan from environmental claims
involving Bioglan or its leased premises.
3.19 Accounts Receivable. The Accounts Receivable are valid receivables
arising from sales actually made by the Seller in the ordinary course of
business and consistent with GAAP. To Seller's Knowledge, the Accounts
Receivable are not subject to any valid defenses, setoffs or counterclaims.
3.20 Customers and Suppliers. Each of the Sellers has used commercially
reasonable best efforts to maintain, and, as of the date hereof, currently
maintains, good working relationships with all of its customers and suppliers
related to the Products. Since June 1, 2003, none of Sellers has received any
written notice, nor has any Knowledge, that any customer or supplier intends to
terminate or materially alter its business relationship relating to Bioglan or
its business (including as conducted post-Closing by Buyer), except for any such
written notice received, or Knowledge gained, after the date hereof with respect
to a termination or material alteration of a business relationship that would
not reasonably be expected to have a Material Adverse Effect.
3.21 Brokers or Finders. Except as set forth in Section 3.21 of the
Disclosure Letter, Sellers and their respective agents have not incurred any
obligation or liability, contingent or otherwise, for brokerage or finders' fees
or agents' commissions or other similar payment in connection with this
Agreement.
3.22 Disclaimer of Other Representations and Warranties. Except as expressly
set forth in this Section 3, Sellers and Quintiles make no representation or
warranty, express or implied, oral or written, at law or in equity, in respect
of the Purchased Assets or the Products, or the prospects thereof, including
without limitation with respect of any warranty of merchantability or warranty
of fitness for any particular purpose, or any other matter with respect to the
transactions contemplated hereby, and any such other representations or
warranties are hereby expressly disclaimed. Neither Sellers or Quintiles nor
their respective officers, directors, employees, stockholders, Affiliates or
representatives have made or make any representation or warranty to Buyer with
respect to any financial projection or forecast relating to the Products. With
respect to any such projection or forecast delivered by or on behalf of Sellers
or Quintiles to Buyer, Buyer acknowledges and agrees that (i) there are
uncertainties inherent in attempting to make such projections and forecasts;
(ii) it is familiar with such uncertainties; (iii) Buyer is taking full
responsibility for making its own evaluation of all such projections and
forecasts so furnished to it; and (iv) Buyer shall have no claim against Sellers
or Quintiles or their respective officers, directors, employees, stockholders,
Affiliates or representatives with respect to such projections or forecasts.
Notwithstanding anything to the contrary contained in this Agreement, Sellers
and Quintiles make no representation or warranty with respect to Benzashave(R)
or Theramycin Z(R) Products, other than those contained in Section 3.19 with
respect to Benzashave(R), and all Purchased Assets relating to such Products are
otherwise being sold to Buyer "AS IS" (without
22
limiting any rights of Buyer under Section 11.2(b), Section 11.2(c) or the last
sentence of Section 2.4).
4. REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Sellers as follows:
4.1 Incorporation and Good Standing. Buyer is duly incorporated, validly
existing, and in good standing under the laws of the State of Delaware.
4.2 Authority; No Conflict.
(a) This Agreement constitutes the legal, valid, and binding obligation
of Buyer, enforceable against Buyer in accordance with its terms. Upon the
execution and delivery by Buyer of the QBermuda Assignment and Assumption
Agreement, the QIreland Assignment and Assumption Agreement, the Bioglan
Assignment and Assumption Agreement, the Patent Application Assignment and the
Trademark Assignment, each of such documents will constitute the legal, valid,
and binding obligations of Buyer, enforceable against Buyer in accordance with
the respective terms thereof. Buyer has all requisite power and authority to
execute and deliver this Agreement and to perform its obligations under this
Agreement and the transactions contemplated by this Agreement.
(b) Neither the execution and delivery of this Agreement nor the
consummation or performance of any of the transactions contemplated hereby will
(i) violate any provision of Buyer's Organizational Documents; (ii) violate any
Legal Requirement applicable to Buyer or the transactions contemplated hereby;
or (iii) result in the breach or violation of, or constitute a default under,
any material agreement to which Buyer is a party or by which Buyer may be bound,
except in the case of clauses (ii) and (iii) for such violation, breach, or
default which would not, individually or in the aggregate, reasonably be
expected to prevent, delay or otherwise interfere with the consummation or
performance of any of the transactions contemplated hereby.
(c) Subject to compliance with the HSR Act, Buyer is not, and will not
be, required to give any notice to or obtain any approval, consent or other
authorization from any Person in connection with the execution and delivery of
this Agreement or the consummation or performance of any of the transactions
contemplated hereby.
4.3 Certain Proceedings. There is no pending Proceeding that has been
commenced against Buyer and that challenges, or may have the effect of
preventing, delaying, making illegal, or otherwise interfering with, any of the
transactions contemplated hereby. To Buyer's Knowledge, no such Proceeding has
been threatened.
4.4 Brokers or Finders. Buyer and its officers and agents have incurred no
obligation or liability, contingent or otherwise, for brokerage or finders' fees
or agents' commissions or other similar payment in connection with this
Agreement (other than the fees of its investment bankers, Xxxxxxx Xxxxx &
Associates, Inc.).
23
4.5 No Financing Contingency. Buyer has the funds or the financing
available (and at Closing will have the funds or financing available) to
consummate the transactions contemplated by this Agreement.
4.6 Disclaimer of Other Representations and Warranties. Except as expressly
set forth in this Section 4, Buyer makes no representation or warranty, express
or implied, oral or written, at law or in equity, in respect of the subject
matter of this Agreement.
5. COVENANTS OF SELLERS PRIOR TO CLOSING DATE
5.1 Operation of Bioglan's Business. Between the date of this Agreement and
the Closing Date, except required by Legal Requirements, Bioglan will:
(a) conduct the business of Bioglan in the ordinary course of business
(except as contemplated by this Agreement), including with respect to purchases
of Inventories;
(b) not incur or fail to satisfy any liability or obligation that would
otherwise be an Assumed Liability, except as contemplated by Section 2.3(b) or
except in the ordinary course of business;
(c) not terminate or modify, or grant any waiver or consent under, any
Material Contract included in the Purchased Assets or, except in the ordinary
course of business, not sell or otherwise dispose of any other item that would
be included in the Purchased Assets;
(d) use commercially reasonable best efforts to preserve intact the
current business organization, rights and properties of Bioglan (including
making necessary filings or taking other appropriate actions to preserve its
trademarks and trademark applications), keep available the services of the
current officers, employees, and agents of Bioglan, and maintain the relations
and goodwill with customers, landlords, creditors, employees, agents, and others
having business relationships with Bioglan; and
(e) without limiting Buyer's rights under this Agreement, report
periodically to Buyer concerning the status of the business and operations of
Bioglan, as reasonably requested by Buyer, and use commercially reasonable best
efforts to inform Buyer in writing within five (5) Business Days after obtaining
Knowledge of (i) any events or circumstances that, individually or in the
aggregate, would reasonably be expected to have a Material Adverse Effect, or
(ii) any breach in any material respect by any Seller of any representation,
warranty, covenant or agreement hereunder.
5.2 Required Approvals. As promptly as practicable after the date of this
Agreement but in any case not later than June 17, 2004, Bioglan will make or
cause Sellers' applicable Affiliate to make all filings required by applicable
Legal Requirements to be made by it to consummate the transactions contemplated
hereby (including all filings under the HSR Act). Between the date of this
Agreement and the Closing Date, Sellers will cooperate with Buyer in taking all
actions reasonably requested by Buyer to cause early termination of any
applicable waiting period under the HSR Act.
24
5.3 Efforts to Close. Between the date of this Agreement and the Closing
Date, Sellers and Quintiles will use commercially reasonable best efforts to
cause the conditions in Section 8 to be satisfied and to cause the Closing Date
to occur on or before July 8, 2004.
5.4 Exclusivity. Between the date of this Agreement and the earlier of the
Closing Date or the date this Agreement is terminated pursuant to Section 10,
each of the Seller Indemnifying Parties shall not, directly or indirectly,
authorize or permit any of its officers, directors, employees, agents, advisors
or representatives to: (a) initiate, solicit or encourage any proposal, offer or
discussion with any party (other than Buyer) concerning any acquisition of any
portion of Bioglan's business, assets or equity (excluding sales of inventory or
other assets in the ordinary course of business); (b) engage in discussions or
negotiations with any party (other than Buyer) concerning any such acquisition
transaction; (c) enter into any agreement relating to any such acquisition
transaction; or (d) take any other action to cooperate in any way with or
facilitate any inquiries or the making of any proposal that constitutes, or may
reasonably be expected to lead to, any such acquisition transaction.
6. COVENANTS OF BUYER PRIOR TO CLOSING DATE
6.1 Required Approvals. As promptly as practicable after the date of this
Agreement but in any case not later than June 17, 2004, Buyer will make all
filings required by Legal Requirements to be made by it to consummate the
transactions contemplated hereby (including all filings under the HSR Act).
Between the date of this Agreement and the Closing Date, Buyer will (i)
cooperate with Sellers with respect to all filings required under the HSR Act in
connection with the transactions contemplated hereby (including all actions
reasonably requested by Sellers to cause early termination of any applicable
waiting period under the HSR Act), and (ii) cooperate with Sellers, as
reasonably requested, in obtaining all consents identified in Section 3.2(c) of
the Disclosure Letter.
6.2 Efforts to Close. Between the date of this Agreement and the Closing
Date, Buyer will use commercially reasonable best efforts to cause the
conditions in Section 9 to be satisfied and to cause the Closing Date to occur
on or before July 8, 2004.
7. ADDITIONAL AGREEMENTS OF THE PARTIES
7.1 Employee Benefits; Continued Employment.
(a) All employees of Bioglan as of the date hereof are set forth in
Section 7.1(a) of the Disclosure Letter (the "Bioglan Employees"). Within ten
(10) days after the date hereof, Buyer shall offer to employ all of the Bioglan
Employees, effective as of the Closing (the "Offers"). In making such Offers,
Buyer shall comply in all material respects with Legal Requirements prohibiting
discrimination in employment. Subject to Sections 2.1(a)(iv) and 2.4(c), each
Offer shall be on terms and conditions, including employee benefits that, taken
as a whole, are at least comparable to the terms and conditions of employment,
including employee benefits, provided to similarly situated employees of Buyer
as of the date hereof. With respect to all Offers, Buyer shall require all
Bioglan Employees offered employment to respond to Buyer within seven (7) days
after the date of the applicable Offer as to the acceptance of employment
25
with Buyer (seven (7) days after the last of the Offers, the "Response Date").
Within two (2) Business Days after the Response Date, Buyer shall provide
written notice to Quintiles identifying those Bioglan Employees who have,
effective as of the Closing, accepted employment with Buyer as described above.
Each Bioglan Employee who accepts an offer of employment from Buyer effective as
of the Closing shall be referred to herein as a "Transferred Employee."
(b) From and after the Closing, Buyer shall give each Transferred
Employee full credit for all vacation time, if any, accrued (but unused) by such
employee as of the Closing in the ordinary course of business in amounts and on
terms consistent with Bioglan's past practices. If on the Closing Date Buyer has
any bonus or other compensation arrangement based on performance criteria (e.g.,
net sales or sales calls/details) that it provides to its employees in positions
substantially comparable to an employment position offered to a Transferred
Employee, then Buyer shall (i) offer participation in such bonus plan to such
Transferred Employee, effective as of the Closing, on substantially comparable
terms, and (ii) credit such Transferred Employee for service with Bioglan with
respect to such performance criteria as if such service had been rendered to
Buyer.
(c) For purposes of participation and vesting in, and other
differential benefits based on length of service under, any Plan maintained or
otherwise provided by Buyer for Transferred Employees (a "Replacement Plan") and
any vacation, sick leave, paid time-off or similar arrangement generally
provided by Buyer to similarly situated employees, to the extent permissible
under Buyer's plans, Buyer shall credit each of the Transferred Employees for
their period of service with Bioglan and its predecessors as if such service had
been rendered to Buyer to the extent such prior service was recognized by
Bioglan for such purposes; provided, however, that no Buyer Plan that is an
employee pension benefit plan (as such term is defined in Section 3(2) of ERISA)
intended to be qualified under Section 401 of the IRC shall be required to
credit any such prior service for purposes of benefit accrual under such Buyer
Plan. Buyer agrees that it will allow Transferred Employees to roll over to its
401(k) Plan any distributions or participant loans from the 401(k) Plan for
Bioglan that are eligible for such treatment under Buyer's 401(k) Plan and the
401(k) Plan for Bioglan.
(d) With respect to any Replacement Plan that is a group health plan,
such Replacement Plan shall (i) credit such Transferred Employees, for the year
during which participation in the Replacement Plan begins, with any deductibles
already incurred during such year under any terminated or discontinued Bioglan
Plan that was a group health plan, (ii) waive any preexisting condition
limitations applicable to the Transferred Employees (and their eligible
dependents) under the Replacement Plan to the extent that a Transferred
Employee's (or dependent's) condition would not have operated as a preexisting
condition under the terminated or discontinued group health plan, and (iii) in
all material respects provide substantially comparable benefits in terms of
employee participation to those plans which Buyer currently makes available to
its other employees in similar positions. Effective as of the Closing Date,
Buyer shall be responsible for perpetuating the applicable group health plan
continuation coverages pursuant to IRC ss. 4980B and ERISA xx.xx. 601 through
609 with respect to all Transferred Employees and their eligible dependents.
Buyer shall indemnify and hold Sellers harmless in the event Sellers incur any
liability at any time after the Closing Date under IRC ss.
26
4980B or ERISA xx.xx. 601 through 609 with respect to any Transferred Employee
(or a dependent or spouse of any such employee) and who has a "qualifying event"
within the meaning of IRC ss. 4980B(f)(3) after the Closing Date.
(e) Sellers agree that they shall be responsible for payment of
retention bonuses as described in Section 2.2(j)(ii) and any and all accrued
compensation, accrued employee benefits, workers compensation claims, Taxes and
other costs and expenses, including without limitation any and all liability for
Damages, in connection with, arising out of or related to the employment of
Bioglan employees during their period of employment with Bioglan. In the case of
any Bioglan Plan that is a group health plan, employee benefits shall be deemed
"accrued" if such benefits are payable with respect to eligible medical services
provided to a covered Bioglan employee (or a covered dependent or spouse of such
employee) during such employee's period of employment with Bioglan.
(f) Without limiting the generality of the foregoing, Sellers shall be
responsible for the applicable group health plan continuation coverages pursuant
to IRC ss. 4980B and ERISA xx.xx. 601 through 609 applicable to Bioglan
employees who were Bioglan employees on or before the Closing Date, but who are
not Transferred Employees. Sellers shall indemnify and hold Buyer harmless in
the event Buyer incurs any liability at any time after the Closing Date under
IRS ss. 4980B or ERISA xx.xx. 601 through 609 with respect to any Bioglan
employee (or a dependent or spouse of any such employee) who had a "qualifying
event" within the meaning of IRC ss. 4980B(f)(3) on or before the Closing Date.
(g) With respect to any Transferred Employee, Buyer will pay such
Transferred Employee any severance payments (but not retention bonuses or other
non-severance payments) to which such Transferred Employee would be entitled
pursuant to the severance arrangements set forth in Section 2.2(j) of the
Disclosure Letter; provided, however, that Sellers shall be obligated to
reimburse Buyer for any such severance payments made with respect to any
Transferred Employee (i) who is not a Sales Employee, and (ii) whose employment
with Xxxxxxx terminates within four months after the Closing Date. If Buyer
makes a payment described in the proviso of the preceding sentence, Buyer will
render an invoice describing its claim for reimbursement under this Section
7.1(g) in reasonable detail, which shall be due and payable by Sellers within
thirty (30) days of receipt. For the avoidance of doubt, except as noted above,
this Section 7.1(g) shall not affect Buyer's obligation for severance payments
with respect to any severance arrangements contained in any contract described
in Section 2.1(a)(iv).
7.2 Access.
(a) Before the Closing. Buyer acknowledges that it has conducted and
completed all or substantially all of its business, financial, legal and
other due diligence investigations regarding the Purchased Assets. From the date
of this Agreement until the Closing, Sellers shall afford Buyer and its
representatives access, during regular business hours and upon reasonable
advance notice, to Sellers and the Purchased Assets, as Buyer may reasonably
request in order to consummate the transactions contemplated by this Agreement
and to plan for the transition of the Products from Sellers to Buyer.
27
(b) After the Closing. From and after the Closing, each Party agrees to
cooperate with and to grant to each other Party and their respective officers,
employees, attorneys, accountants, representatives and agents, during normal
business hours, reasonable access to the other Party's management personnel and
such other information and records relating to the Products and the Purchased
Assets in their possession after the Closing and to permit copying or, where
reasonably necessary, to furnish original documents relating to the Products and
the Purchased Assets for the purposes of (i) any financial reporting or tax
matters (including without limitation any financial and tax audits, tax
contests, tax examination, preparation for any tax returns or financial
records); (ii) any regulatory reporting matters; (iii) any investigation being
conducted by any Governmental Body involving the Products, the Purchased Assets
or any individuals employed by Bioglan prior to the Closing Date; (iv) any
claims or litigation involving either Party, the Purchased Assets or any
individuals employed by Bioglan prior to the Closing Date; or (v) any similar or
related matter. Each Party shall use commercially reasonable best efforts to
ensure that its access to and requests for records and documents pursuant to
this Section 7.2(b) are conducted so as not to interfere with the normal and
ordinary operation of the other Party's business. Each Party acknowledges that
the records and documents made available to such Party pursuant to this Section
7.2(b) constitute confidential information of the releasing Party that is
subject to the provisions of Section 12.3(a) hereof.
(c) Retention of Copies. Notwithstanding anything to the contrary
contained in this Agreement, Sellers and Quintiles may retain and use archival
copies of all documents or materials conveyed hereunder to the extent (i)
required to remain in the possession of Sellers pursuant to Legal Requirements,
(ii) related to any of the purposes set forth in clauses (i) through (v) of
Section 7.2(b), or (iii) necessary or appropriate for Sellers or Quintiles to
perform and discharge all of their respective liabilities or obligations that do
not constitute Assumed Liabilities; provided, however, that Sellers and
Quintiles shall maintain such items in accordance with the provisions of Section
12.3(a) hereof.
7.3 Products Responsibility.
(a) From and after the Closing, Buyer shall be responsible for (i)
taking all actions, paying all fees and conducting all communication with the
appropriate Governmental Body required by applicable Legal Requirements in
respect of each Product, including preparing and filing all reports (including
adverse drug experience reports) with the appropriate Governmental Body; (ii)
taking all actions and conducting all communication with Third Parties in
respect of Products (whether sold before or after the Closing), including
responding to all complaints in respect thereof, including complaints related to
tampering or contamination; and (iii) investigating all complaints and adverse
drug experiences in respect of Products (whether sold before or after the
Closing).
(b) From and after the Closing, Sellers shall promptly notify Buyer if
any Seller receives a complaint or a report of an adverse drug experience in
respect of any Product. In addition, Sellers shall cooperate with Buyer's
reasonable requests and use commercially reasonable best efforts to assist Buyer
in connection with the investigation of and response to any complaint or adverse
drug experience related to a Product sold by Sellers.
28
(c) From and after the Closing, Buyer shall be responsible for
conducting, handling or processing: (i) all voluntary and involuntary recalls of
units of Products, including recalls required by any Governmental Body; (ii) all
returns and credits with respect to the Products; (iii) all Chargebacks with
respect to the Products; and (iv) all rebates for all Medicaid and state rebate
programs and all managed care rebates with respect to the Products; in each
case, regardless of whether such Products were sold before or after the Closing.
With respect to Products sold before the Closing, subject to Section 7.12,
Bioglan shall reimburse Buyer's reasonable out-of-pocket costs and expenses,
including all fines and penalties attributable to pre-Closing activities,
related to the discharge of Buyer's responsibilities under this Section 7.3(c),
related to returns, credits, Chargebacks, or rebates conducted, handled or
processed, as applicable, by Buyer during the twelve (12) month period
commencing on the Closing Date or related to recalls during the shelf life of
the Products included in the Closing Inventories, except to the extent such
recalls are attributable to improper transportation, handling or storage of the
recalled Products by or on behalf of Buyer after the Closing Date. Buyer will
render monthly invoices describing any claims for reimbursement under this
Section 7.3(c) in reasonable detail, which shall, subject to Section 7.12, be
due and payable by Bioglan within thirty (30) days of receipt.
(d) As soon as practicable following the Closing Date, Buyer shall
institute appropriate procedures (including any appropriate procedures for
tracking of lot number information) to ensure that the Products sold by or on
behalf of Buyer can be distinguished from the Products sold by or on behalf of
Bioglan.
(e) As soon as practicable following the Closing Date, Buyer will
establish new NDC numbers for the Products and thereafter shall cause such NDC
numbers to be used on the labeling and packaging for the Products.
7.4 Liability for Taxes.
(a) Sellers shall be responsible for and pay all Taxes arising or
resulting from the ownership or operation of the Purchased Assets on or prior to
the Closing Date, and Buyer shall be responsible for and pay all Transfer Taxes
as described in Section 2.6 and Taxes arising or resulting from the ownership or
operation of the Purchased Assets after the Closing Date.
(b) Ad valorem real and tangible personal property taxes with respect
to the Purchased Assets for the calendar year in which the Closing occurs shall
be prorated between Seller and Buyer as of the Closing Date on the basis of no
applicable discount. If the amount of such taxes with respect to any of the
Purchased Assets for the calendar year in which the Closing occurs has not been
determined as of the Closing Date, then the taxes with respect to such Purchased
Assets for the preceding calendar year, on the basis of no applicable discount,
shall be used to calculate such prorations, with known changes in valuation or
millage applied. If the actual amount of any such taxes varies by more than
Fifteen Thousand Dollars ($15,000) from estimates used at the Closing to prorate
such taxes, then the parties shall re-prorate such taxes within ten (10) days
following request by either party based on the actual amount of the tax xxxx.
(c) Buyer and Sellers agree to cooperate and share all required
information on a timely basis in order to timely file all reports, returns,
schedules and any other documents
29
required to be filed with respect to Taxes and all claims for refunds of Taxes
and for the preparation of any audit, and for the prosecution or defense of any
claim or Proceeding relating to any proposed adjustment. Buyer and Sellers agree
to retain or cause to be retained all books and records pertinent to the
Purchased Assets until the expiration of the applicable period for assessment
under applicable law (giving effect to any and all extensions or waivers) or, if
later, the latest date specified under all record retention agreements entered
into with any Governmental Body. After the Closing, Buyer and Sellers will give
each other reasonable notice prior to transferring, discarding or destroying any
such books and records relating to Tax matters, and Buyer and Sellers will allow
each other upon request to take possession of such books and records at the
requesting Party's expense. Buyer and Sellers shall cooperate with each other in
the conduct of any audit or other Proceedings involving the Purchased Assets for
any Tax purpose.
(d) Any payment by Buyer or Sellers under this Section 7.4 will be
deemed an adjustment to the Purchase Price.
7.5 Accounts Receivable.
(a) Sellers shall, by letter prepared by Buyer and reasonably
acceptable to Sellers, authorize, instruct and direct that the account parties
of all Accounts Receivable shall make and deliver all payments relating thereto
on or after the Closing to such location, bank and/or account as Buyer shall
designate in such letter. If, notwithstanding such letter, any of such account
parties remit payments on or after the Closing directly or indirectly to Sellers
or their Affiliates instead of Buyer, Sellers shall promptly deliver all such
payments to Buyer (including but not limited to negotiable instruments, which
shall be endorsed by the applicable Seller or Affiliate to the order of Buyer).
From and after the Closing, Buyer agrees to use commercially reasonable efforts
in the ordinary course to collect all Accounts Receivable reflected on the
Closing Date Balance Sheet, and, promptly following the last day of each
calendar month, to provide Bioglan with a status report detailing the Accounts
Receivable collected during the six-month period after the Closing Date.
(b) Within thirty (30) days after written notice thereof from Buyer
(which notice shall include an accounting of Accounts Receivable actually
collected by Buyer during the period ending on the date falling six (6) months
after the Closing Date), to the extent Accounts Receivable reflected on the
Closing Date Balance Sheet have not been collected during the period ending on
the date falling six (6) months after the Closing Date (such Accounts
Receivable, "Stale Pre-Closing Receivables"), subject to Section 7.12, Bioglan
shall pay Buyer an amount equal to (a) the Accounts Receivable reflected on the
Closing Date Balance Sheet, minus (b) the aggregate amount of such Accounts
Receivable actually collected by Buyer during the period ending on the date
falling six (6) months after the Closing Date. Buyer agrees that its sole remedy
with respect to the Stale Pre-Closing Receivables is under this Section 7.5(b)
and does hereby waive any other remedy it may have at law or in equity or under
this Agreement against any of the Sellers.
(c) Following any Bioglan payment with respect to Stale Pre-Closing
Receivables under Section 7.5(b), Buyer thereafter shall promptly remit any
amounts collected with respect to
30
the Stale Pre-Closing Receivables to Bioglan; provided, however, that Buyer
shall have no further obligation under this Section 7.5(c) once the aggregate
dollar amount of all amounts remitted to Bioglan under this Section 7.5(c)
equals the amount paid by Bioglan to Buyer with respect to Stale Pre-Closing
Receivables under Section 7.5(b).
7.6 Quintiles Materials and Systems. As soon as practicable after the
Closing Date, but in any event within fifteen (15) Business Days after the
Closing Date, Buyer will deliver to Bioglan the Excluded Assets described in
Sections 2.2(d), (f), (g), (k) and (l) that have been identified by Bioglan to
Buyer as such prior to the Closing. Notwithstanding the preceding sentence, if
Bioglan has taken action in good faith to identify such Excluded Assets but
Buyer later discovers any Excluded Assets that Bioglan did not so identify,
Buyer shall promptly notify Bioglan of such discovery and deliver such
additional Excluded Assets to Bioglan. Following the Closing Date, Buyer and
Sellers agree to cooperate to terminate as soon as practicable after the Closing
Date the use of the Quintiles Systems by Buyer, but in any event within ninety
(90) days after the Closing Date.
7.7 Corporate Name Change. As soon as practicable following the Closing
Date, Sellers shall take all necessary action to change Bioglan's corporate name
to a name that does not include "Bioglan" or a name confusingly similar to
"Bioglan."
7.8 Non-Solicitation. Each of Quintiles and its Affiliates, on the one
hand, and Buyer, on the other, agree that during the eighteen (18) month period
following the date hereof, it will not, and will not cause any Person to,
solicit, request, induce or attempt to influence, directly or indirectly, any
employee of, or any individual exclusively engaged as an independent contractor
by, the other Party or its Affiliates as of the date hereof, to terminate his or
her employment or independent contractor relationship with such Party or
Affiliate; provided, however, that this Section 7.8 shall not prohibit or
prevent (a) the solicitation or hiring of any Transferred Employees in any
capacity by Buyer or any Buyer Affiliate; (b) general advertisements or
solicitations for employment that are not targeted at employees or independent
contractors of the other Party or its Affiliates; or (c) Buyer's or a Quintiles'
(or any of their respective Affiliates') hiring of an employee or exclusive
independent contractor of the other Party or its Affiliates (i) who is solicited
through general advertisements or solicitations for employment that are not
targeted at employees or independent contractors of the other Party or its
Affiliates, or (ii) who have resigned, quit or been terminated by the other
Party or its Affiliates prior to commencement of communications between such
hiring party and such persons.
7.9 Non-Competition.
(a) For purposes of this Section 7.9, the following terms have the
meanings specified below:
"Competing Product" means any pharmaceutical product intended
for human use that is (i) topically administered and indicated for the treatment
of pruritis associated with atopic dermatitis or lichen simplex chronicus in
adult patients, (ii) an orally administered antibiotic that is indicated and, as
of the date hereof, promoted for the treatment of acne, or (iii) topically
administered and indicated for the treatment of actinic keratosis.
31
"Territory" means (i) in the case of a Competing Product that
is topically administered and indicated for the treatment of actinic keratosis,
the United States, Canada and Mexico, and (ii) in the case of all other
Competing Products, the United States.
(b) Subject to Section 7.9(c) and (d) below, for a period of three (3)
years immediately following the Closing Date, Quintiles and its Affiliates shall
not:
(i) own or in-license a Competing Product in the applicable
Territory;
(ii) manufacture, distribute, promote or sell for themselves
or a Third Party a Competing Product in the applicable Territory or provide
consulting services to, or otherwise assist, a Third Party with respect to any
such activities (except as provided in Sections 7.9(c) and (d) below); or
(iii) make an equity investment in a Third Party that
manufactures, distributes or sells a Competing Product in the applicable
Territory, where following such investment Quintiles and its Affiliates own, in
the aggregate, greater than twenty percent (20%) of the outstanding capital
stock of such Third Party.
(c) Notwithstanding the foregoing, and for the avoidance of doubt,
Section 7.9(b) shall not prohibit or prevent during those three (3) years:
(i) any activities by Quintiles or its Affiliates with
respect to a Competing Product outside of the applicable Territory;
(ii) Quintiles or any of its Affiliates from offering or
providing to a Third Party with respect to a Competing Product in the applicable
Territory early development and laboratory services, pre-clinical services,
clinical development services, clinical trial supply and manufacturing services,
health management services, post-approval clinical trial services, training
services, continuing medical education programs, strategic marketing services,
healthcare policy research and consulting services, regulatory and compliance
consulting services, market research services, or strategic analyses services;
(iii) the ownership of (through license, purchase, or
otherwise) or, for itself or a Third Party, the manufacture, distribution,
promotion or sale of, any Competing Product in the applicable Territory by any
business (or any portion thereof), Person, or group of Persons that acquires
Quintiles or any of its Affiliates (whether through the formation of a new
company or otherwise) in a single transaction or a series of related
transactions (it being acknowledged that this clause (iii) is intended only to
permit such acquiring business, Person or group of Persons to conduct such
activities and not to otherwise permit Quintiles or any other Affiliates to
conduct such activities during the three-year period immediately following the
Closing);
(iv) Quintiles or its Affiliates from providing
manufacturing, distribution, promotion or sales services to a Third Party that
owns (whether through purchase, license, or otherwise) a Competing Product in
the applicable Territory as long as such services are not for the Competing
Product and Quintiles or its Affiliate is not being compensated for such
services based on the sales of the Competing Product in the applicable
Territory; or
32
(v) the promotion of a Competing Product in the applicable
Territory for a Third Party customer by an Innovex Inc. (or its predecessor,
Innovex LP)-provided, fee-for-service sales force where such sales force was
initially retained from Innovex by such customer in good faith to promote
products other than a Competing Product; however, as of the date hereof, Innovex
does not have a fee-for-service sales force promoting a Competing Product in the
applicable Territory for a customer and is not aware of any of its customers
seeking to have their Innovex-provided sales force promote a Competing Product
in the applicable Territory.
(d) In addition, for the avoidance of doubt, the Parties agree that
Section 7.9(b) shall not prohibit or prevent after the second anniversary of the
Closing Date, Quintiles or any of its Affiliates from recruiting, managing, or
providing for a Third Party, on a fee-for-service basis, a sales force that
promotes a Competing Product in the applicable Territory.
(e) If a court determines that this Section 7.9 is too broad or
otherwise unreasonable under applicable law, including with respect to duration
or geographic scope, the court is hereby requested and authorized by the Parties
to revise the foregoing restriction to include the maximum restriction allowable
under applicable law. Each of the Parties acknowledges, however, that this
Section 7.9 has been negotiated by the Parties and that the restriction is
deemed reasonable by the Parties in light of all relevant facts and
circumstances.
7.10 Transfers of QBermuda Assets and QIreland Assets . The Parties
acknowledge that QBermuda may transfer the QBermuda Assets and QIreland may
transfer the QIreland Assets to Quintiles or one of Quintiles' subsidiaries (the
"Acquiring Affiliate") before the Closing. If any such assets are transferred as
described in the preceding sentence, the Parties agree to enter into an
amendment to this Agreement pursuant to which (a) Buyer would acquire the
transferred assets directly from the Acquiring Affiliate at the Closing rather
than from the transferring Seller; (b) the obligations and liabilities of
QBermuda or QIreland hereunder with respect to such transferred assets would be
assumed by the Acquiring Affiliate; and (c) Buyer would release QBermuda or
QIreland, as applicable, if all of the QBermuda Assets or QIreland Assets, as
the case may be, are transferred to the Acquiring Affiliate before the Closing
as described in this Section 7.10.
7.11 Closing Date Financial Statements.
(a) Within forty-five (45) days after the Closing, Bioglan shall
deliver to Buyer a balance sheet of the Bioglan Pharmaceuticals operations of
Quintiles consisting of all assets and liabilities of Bioglan and, to the extent
relating to the Products, the assets and liabilities of QBermuda and QIreland,
as of the Closing Date (the "Closing Date Balance Sheet"), and statements of
earnings, statement of equity and cash flows of the Bioglan Pharmaceuticals
operations of Quintiles consisting of all operations of Bioglan and, to the
extent relating to the Products, the operations of QBermuda and QIreland, for
the period from January 1, 2004 through the Closing Date (the "Audited Stub
Period Financial Statements"), which financial statements shall be prepared in
accordance with GAAP and Regulation S-X and be accompanied by the unqualified
audit report of PricewaterhouseCoopers, who shall have audited such financial
statements in accordance with generally accepted auditing standards.
33
(b) By the later of Closing or August 1, 2004, Bioglan shall deliver to
Buyer an unaudited balance sheet of the Bioglan Pharmaceuticals operations of
Quintiles consisting of all assets and liabilities of Bioglan and, to the extent
relating to the Products, the assets and liabilities of QBermuda and QIreland as
of June 30, 2004 and unaudited statements of earnings, statement of equity and
cash flows of the Bioglan Pharmaceuticals operations of Quintiles consisting of
all operations of Bioglan and, to the extent relating to the Products, the
operations of QBermuda and QIreland, for the six-month period ending June 30,
2004, which financial statements shall be prepared in accordance with GAAP and
Article 10 of Regulation S-X and be accompanied by a customary review report of
PricewaterhouseCoopers, who shall have reviewed such financial statements in
accordance with standards established by the American Institute of Certified
Public Accountants set forth in Section AU722.
(c) Sellers shall cooperate with Buyer, and shall use commercially
reasonable efforts to gain the cooperation of PricewaterhouseCoopers, in the
provision of appropriate consents to the filing with the SEC of the financial
statements contemplated by this Agreement or relating to the transactions
contemplated hereby and any other financial information or documents reasonably
requested by Buyer in connection with its SEC filings or Section 2.8.
7.12 Certain Bioglan Obligations Net of Aggregate Reserves. Notwithstanding
Sections 7.3(c) and 7.5(b), Bioglan's payment obligations under such Sections
shall be limited to an amount equal to the excess of (a) amounts that would
otherwise be payable under Sections 7.3(c) and 7.5(b) in the aggregate, over (b)
the aggregate amount of reserves reflected on the Closing Date Balance Sheet for
recalls, returns, credits, Chargebacks, rebates, and allowances for doubtful
Accounts Receivable or similar items.
7.13 SEC No-Action Request. Within one Business Day after the date hereof,
Buyer shall send a letter to the SEC in the form of Exhibit A (the "No-Action
Request"). From the date hereof until the Closing or earlier termination of this
Agreement, Buyer and Seller Indemnifying Parties agree to use their respective
commercially reasonable best efforts (a) to cooperate with the other Parties and
the SEC to obtain a written communication from the Staff of the SEC as
contemplated by Section 8.4(b), and (b) to promptly respond to any request by
the SEC for information concerning the No-Action Request. Each Party shall (i)
promptly notify the other Parties of any written communication to that Party or
its applicable Affiliate from the SEC concerning the No-Action Request and,
subject to Legal Requirements, permit the other Parties to review in advance any
proposed written communication to the SEC concerning the No-Action Request (and
consider in good faith the views of the other Parties in connection therewith),
(ii) not agree to participate in any substantive meeting or discussion with any
representative of the SEC concerning the No-Action Request (excluding
unscheduled telephone calls received from any SEC representative; provided,
however, unless believed in good faith to be impracticable, a Party shall ask
such SEC representative to permit the other Parties to join in such telephone
call) unless it consults with counsel to the other Parties in advance and, to
the extent permitted by the SEC, gives the other Parties the opportunity to
attend, and (iii) furnish the other Parties with copies of all correspondence,
filings and written communications (or memoranda setting forth the substance of
any oral communications of which a representative of the other Parties is not a
recipient) between it or its representatives on one hand, and the SEC or its
Staff on the other hand, with respect to the No-Action Request.
34
7.14 Safety and Surveillance Call Center Services. Following the date
hereof, Buyer and QIreland agree to negotiate in good faith an independent
contractor arrangement, on QIreland's standard terms and conditions, pursuant to
which QIreland would provide Buyer with safety and surveillance call center
services with respect to the Products for a period of at least six (6) months
following the Closing Date.
8. CONDITIONS PRECEDENT TO BUYER'S OBLIGATION TO CLOSE; CLOSING DELIVERIES
Buyer's obligation to purchase the Purchased Assets and assume the Assumed
Liabilities and to take the other actions required to be taken by Buyer at the
Closing is subject to the satisfaction, at or prior to the Closing, of each of
the following conditions (any of which may be waived by Buyer, in whole or in
part):
8.1 Accuracy of Representations. The representations and warranties of
Sellers contained in this Agreement shall be true and correct in all material
respects on and as of the Closing Date, with the same force and effect as if
made on and as of the Closing Date; except (i) to the extent that such
representations and warranties are qualified by terms such as "material" or
"Material Adverse Effect", in which case such warranties and representations
shall be true and correct in all respects on and as of the Closing Date, with
the same force and effect as if made on and as of the Closing Date; and (ii) for
those representations and warranties which address matters only as of a
particular date (which shall be true and correct as of such date).
8.2 Sellers' Performance. All of the covenants and agreements that Sellers
are required to perform or to comply with pursuant to this Agreement at or prior
to the Closing must have been duly performed and complied with in all material
respects.
8.3 Sellers' Closing Deliveries. Each of the following documents, duly
executed by one or more of Sellers, as appropriate, must have been delivered to
Buyer:
(a) the Xxxx of Sale for Bioglan;
(b) the QBermuda Assignment and Assumption Agreement;
(c) the QIreland Assignment and Assumption Agreement;
(d) the Bioglan Assignment and Assumption Agreement;
(e) the Patent Application Assignment;
(f) letters or other appropriate documentation from Bioglan to the FDA
(in accordance with 21 C.F.R. ss.314.72) or such other appropriate Governmental
Body as may be necessary in connection with the notification of the transfer to
Buyer of all rights of Bioglan in and to the Drug Authorizations;
35
(g) the Trademark Assignment (including, to the extent not covered
therein, an appropriate assignment instrument with respect to the ADOXA
trademark application in Canada);
(h) for each real property lease identified in Section 3.5 of the
Disclosure Letter, an Assignment and Assumption of Lease (with landlord consent
thereto) or such other appropriate document or instrument of transfer, each in
form and substance reasonably satisfactory to Buyer;
(i) appropriate assignment instruments for each of the domain names set
forth in Section 2.1(a)(xii) of the Disclosure Letter;
(j) an Officer's Certificate, dated as of the Closing, signed by a
duly authorized officer of each of the Sellers, certifying that the conditions
specified in Sections 8.1 and 8.2 have been fulfilled;
(k) appropriate documents, in form and substance reasonably
satisfactory to Buyer and in proper form for recording with the applicable
Governmental Bodies, evidencing the release of all liens and encumbrances upon
the Purchased Assets (other than Permitted Encumbrances and Encumbrances set
forth in the Disclosure Letter);
(l) a Secretary's Certificate of Bioglan, dated as of the Closing,
certifying (i) that the attached copies of the requisite resolutions or actions
of Bioglan's board of directors and shareholders approving the execution and
delivery of this Agreement and the consummation of the transactions contemplated
hereby were duly adopted and are in full force and effect; and (ii) as to the
incumbency and signatures of the officers of Bioglan executing this Agreement
and the other agreements, instruments or certificates delivered at the Closing;
(m) a Secretary's Certificate of QBermuda, dated as of the Closing,
certifying (i) that the attached copies of the requisite resolutions or actions
of QBermuda's board of directors approving the execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby were duly
adopted and are in full force and effect; and (ii) as to the incumbency and
signatures of the officers of QBermuda executing this Agreement and the other
agreements, instruments or certificates delivered at the Closing;
(n) a Secretary's Certificate of QIreland, dated as of the Closing,
certifying (i) that the attached copies of the requisite resolutions or actions
of QIreland's board of directors approving the execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby were duly
adopted and are in full force and effect; and (ii) as to the incumbency and
signatures of the officers of QIreland executing this Agreement and the other
agreements, instruments or certificates delivered at the Closing; and
(o) a Secretary's Certificate of Quintiles, dated as of the Closing,
certifying (i) that the attached copies of the requisite resolutions or actions
of Quintiles' board of directors approving the execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby were duly
adopted and are in full force and effect; and (ii) as to
36
the incumbency and signatures of the officers of Quintiles executing this
Agreement and the other agreements, instruments or certificates delivered at the
Closing.
8.4 Financial Statements.
(a) Sellers shall have delivered to Buyer: (i) the audited financial
statements listed on Schedule 8.4 hereto, which shall have been prepared in
accordance with GAAP and Rule 3-05 of Regulation S-X and be accompanied by the
unqualified audit report of PricewaterhouseCoopers, who shall have audited such
financial statements in accordance with generally accepted auditing standards;
and (ii) the unaudited financial statements listed on Schedule 8.4 hereto, which
shall have been prepared in accordance with GAAP and Article 10 of Regulation
S-X and be accompanied by a customary review report of PricewaterhouseCoopers,
who shall have reviewed such financial statements in accordance with standards
established by the American Institute of Certified Public Accountants set forth
in Section AU722. Neither the financial condition nor results of operations
taken as a whole and as presented in such audited financial statements shall
reflect a materially adverse change from the unaudited financial statements
referred to in Section 3.3 with respect to the applicable dates and periods. The
condition in the preceding sentence shall be deemed waived five (5) days after
the delivery of the financial statements under this Section 8.4(a), unless Buyer
notifies Sellers in writing specifying the basis for Buyer's good faith belief
that such condition is not satisfied.
(b) The Buyer shall have received a written communication from the
Staff of the SEC which communication shall (i) provide that the Staff of the SEC
will not recommend action against or with respect to Buyer that is based on the
failure to include audited financial statements with respect to Bioglan Pharma
Inc. (now known as BPI New Corp.) or Bioglan Pharma Plc in its Form 8-K to be
filed with the SEC with respect to the transactions contemplated by this
Agreement, for the period from February 1, 2001 through March 22, 2002
inclusive; or (ii) provide that the Staff of the SEC will not recommend action
against or with respect to Buyer as provided in subsection (i) hereof but which
also requires as a condition of such "no action" that Buyer include certain
additional information in such Form 8-K, unless Buyer shall notify Sellers in
writing that Buyer believes in good faith after consultation with Buyer's
advisors and with Seller and its advisors that the inclusion of such additional
information is materially impracticable for Buyer and Buyer reasonably exhausts
avenues to have such materially impracticable conditions removed or modified; or
(iii) waive the requirement that Buyer include audited financial statements with
respect to Bioglan Pharma Inc. or Bioglan Pharma Plc in its Form 8-K to be filed
with the SEC with respect to the transactions contemplated by this Agreement,
for the period from February 1, 2001 through March 22, 2002 inclusive. The
satisfaction of the condition in this Section 8.4(b) shall not be affected by
any condition or limitation in the SEC Staff's communication with respect to
Buyer's being deemed not to be a timely filer or by Buyer being rendered unable
to file registration statements under the Securities Act of 1933 or use Rules
505 or 506 of Regulation D thereunder.
8.5 No Material Adverse Effect. Since the date of this Agreement, there
shall not have been, or there shall not have been any events or circumstances
that, individually or collectively, would reasonably be expected to have, a
Material Adverse Effect.
37
8.6 No Proceedings. Since the date of this Agreement, there must not have
been commenced or threatened against Buyer any Proceeding (a) involving any
challenge to, or seeking damages or other relief in connection with, any of the
transactions contemplated hereby, or (b) that may have the effect of preventing,
delaying, or making illegal any of the transactions contemplated hereby.
8.7 No Injunction. There must not be in effect any Legal Requirement or any
injunction or other order issued by any Governmental Body that (a) prohibits
consummation of any of the transactions contemplated hereby, and (b) has been
adopted or issued, or has otherwise become effective, since the date of this
Agreement.
8.8 HSR Act. The waiting period applicable to the transactions contemplated
hereby under the HSR Act shall have expired or been terminated.
8.9 Consents. Each of the consents identified in Section 8.9 of the
Disclosure Letter shall have been obtained, shall be in full force and effect
and shall be in reasonable and customary form and substance (it being understood
that Sellers will consider and endeavor to address in good faith the views of
Buyer as to the form and substance and that Buyer will not unreasonably withhold
or delay responding to any form of consent proposed by Sellers).
9. CONDITIONS PRECEDENT TO SELLERS' OBLIGATION TO CLOSE; CLOSING
DELIVERIES
Sellers' obligation to sell the Purchased Assets and to take the other actions
required to be taken by Sellers at the Closing is subject to the satisfaction,
at or prior to the Closing, of each of the following conditions (any of which
may be waived by Sellers, in whole or in part):
9.1 Accuracy of Representations. The representations and warranties of
Buyer contained in this Agreement shall be true and correct in all material
respects on and as of the Closing Date, with the same force and effect as if
made on and as of the Closing Date; except to the extent that such
representations and warranties are qualified by terms such as "material" or
"material adverse effect", in which case such warranties and representations
shall be true and correct in all respects on and as of the Closing Date, with
the same force and effect as if made on and as of the Closing Date.
9.2 Buyer's Performance. All of the covenants and obligations that Buyer is
required to perform or to comply with pursuant to this Agreement at or prior to
the Closing must have been performed and complied with in all material respects.
9.3 Buyer's Closing Deliveries. Buyer must have made the cash payments
required to be made by Buyer pursuant to Section 2.3 and must have delivered the
following documents, each duly executed by Buyer:
(a) the QBermuda Assignment and Assumption Agreement;
(b) the QIreland Assignment and Assumption Agreement;
38
(c) the Bioglan Assignment and Assumption Agreement;
(d) the Patent Application Assignment;
(e) the Trademark Assignment;
(f) letters or other appropriate documentation from Buyer to the
FDA (in accordance with 21 C.F.R. ss.314.72) or such other appropriate
Governmental Body as may be necessary in connection with the notification of the
transfer to Buyer of all rights of Bioglan in and to the Drug Authorizations;
(g) for each real property lease identified in Section 3.5 of the
Disclosure Letter, an Assignment and Assumption of Lease or such other
appropriate document or instrument of transfer, each in form and substance
reasonably satisfactory to Seller;
(h) an Officer's Certificate, dated as of the Closing, signed by a
duly authorized officer of Buyer, certifying that the conditions specified in
Sections 9.1 and 9.2 have been fulfilled; and
(i) a Secretary's Certificate of Buyer, dated as of the Closing,
certifying (i) that the attached copies of the requisite resolutions or actions
of Buyer's board of directors approving the execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby were duly
adopted and are in full force and effect; and (ii) to the incumbency and
signatures of the officers of Buyer executing this Agreement and the other
agreements, instruments or certificates delivered at the Closing.
9.4 No Proceedings. Since the date of this Agreement, there must not have
been commenced or threatened against any Seller any Proceeding (a) involving any
challenge to, or seeking damages or other relief in connection with, any of the
transactions contemplated hereby, or (b) that may have the effect of preventing,
delaying, or making illegal any of the transactions contemplated hereby.
9.5 No Injunction. There must not be in effect any Legal Requirement or any
injunction or other order issued by any Governmental Body that (a) prohibits
consummation of any of the transactions contemplated hereby, and (b) has been
adopted or issued, or has otherwise become effective, since the date of this
Agreement.
9.6 HSR Act. The waiting period applicable to the transactions contemplated
hereby under the HSR Act shall have expired or been terminated.
10. TERMINATION
10.1 Termination Events. This Agreement may, by notice given prior to or at
the Closing, be terminated:
39
(a) by Buyer if (i) it is not in material breach of its obligations
under this Agreement, (ii) there has been a material breach of any
representation, warranty, covenant or agreement contained in this Agreement on
the part of Sellers, and (iii) such breach has not been cured within thirty (30)
days after written notice thereof to Sellers;
(b) by Sellers if (i) Sellers are not in material breach of their
obligations under this Agreement, (ii) there has been a material breach of any
representation, warranty, covenant or agreement contained in this Agreement on
the part of Buyer, and (iii) such breach has not been cured within thirty (30)
days after written notice to Buyer;
(c) (i) by Buyer if (A) any of the conditions in Section 8 is or
becomes impossible to satisfy (other than through the failure of Buyer to comply
with its obligations under this Agreement) and Buyer has not waived such
condition, and (B) all conditions required under Section 9 (other than Section
9.6 and conditions with respect to actions that Buyer would take at the Closing
itself) have been satisfied or waived; or (ii) by Sellers if (A) any of the
conditions in Section 9 is or becomes impossible to satisfy (other than through
the failure of Sellers to comply with their obligations under this Agreement)
and Sellers have not waived such condition, and (B) all conditions required
under Section 8 (other than Section 8.8 and conditions with respect to actions
that Sellers would take at the Closing itself) have been satisfied or waived;
(d) by mutual written consent of Buyer and Sellers;
(e) by Buyer if any Seller, or by Sellers if Buyer, becomes insolvent
or seeks protection under any bankruptcy, receivership, trust deed, creditors
arrangement, composition or comparable proceeding, or if any such proceeding is
instituted against such Party and such proceeding shall continue without
dismissal or stay for a period of thirty (30) consecutive days, or an order
granting the relief requested in such proceeding shall be entered; or
(f) by either Buyer or Sellers if the Closing has not occurred (other
than through the failure of any Party (or its Affiliate) seeking to terminate
this Agreement to comply with its obligations under this Agreement) on or before
September 30, 2004.
10.2 Effect of Termination. Each Party's right of termination under
Section 10.1 is in addition to any other rights it may have under this
Agreement, and the exercise of a right of termination will not be an election of
remedies. If this Agreement is terminated pursuant to Section 10.1, all further
obligations of the Parties under this Agreement will terminate, except that the
obligations in Sections 7.8, 11, 12.1, 12.3, 12.13 and 12.15 will survive.
11. INDEMNIFICATION; REMEDIES
11.1 Survival. The representations, warranties, covenants, and agreements in
this Agreement will survive the Closing, subject to Section 11.4. The right to
indemnification or other remedy based on such representations, warranties,
covenants, and agreements will not be affected by any investigation conducted,
whether before or after the execution and delivery of this Agreement or the
Closing Date, with respect to the accuracy or inaccuracy of or compliance with,
any such representation, warranty, covenant, or agreements; provided, however,
that a Party shall not be
40
entitled to indemnification under Section 11 hereof with respect to, and the
other Parties shall not otherwise be liable for, any breach of any
representation or warranty hereunder by such other Parties of which such first
Party had Knowledge at or prior to the Closing.
11.2 Indemnification by Sellers. Subject to the other provisions of this
Section 11, including without limitation Section 11.9(a), Sellers and Quintiles
(the "Seller Indemnifying Parties"), jointly and severally, will indemnify and
hold harmless Buyer and its Affiliates and their respective officers, directors
and shareholders (collectively, the "Buyer Indemnified Parties") for any
Damages, to the extent caused by or arising from (a) any breach of any
representation, warranty, covenant or agreement of Sellers in this Agreement;
(b) the failure of Sellers to pay, perform and discharge all liabilities and
obligations of Sellers that do not constitute Assumed Liabilities; (c) the
manufacture, packaging, labeling, promotion, distribution, transportation,
storage or sale of the Products by or on behalf of Sellers on or before the
Closing Date or the use by patients of Products sold by or on behalf of Sellers
on or before the Closing Date; or (d) any non-compliance with any "bulk
transfer" or similar Legal Requirements in connection with the transactions
contemplated hereby.
11.3 Indemnification by Buyer. Subject to the other provisions of this
Section 11, including without limitation Section 11.9(a), Buyer will indemnify
and hold harmless Sellers and their Affiliates and their respective officers,
directors and shareholders (collectively, the "Seller Indemnified Parties") for
any Damages, to the extent caused by or arising from (a) any breach of any
representation, warranty, covenant or agreement of Buyer in this Agreement; (b)
the failure of Buyer to assume, pay, perform and discharge any Assumed
Liabilities; or (c) the manufacture, packaging, labeling, promotion,
distribution, transportation, storage or sale of the Products by or on behalf of
Buyer after the Closing Date or the use by patients of Products sold by or on
behalf of Buyer after the Closing Date.
11.4 Time Limitations.
(a) Seller Indemnifying Parties will have no liability (for
indemnification or otherwise) with respect to any matter described in Section
11.2(a) (other than (i) any breach of a representation or warranty under
Sections 3.5 or 3.8, or (ii) any breach of any covenant or agreement in this
Agreement to be performed or complied with after the Closing, as to which a
claim may be asserted at any time prior to the expiration of the applicable
statute of limitations) unless, within eighteen (18) months of the Closing Date,
Buyer notifies Seller Indemnifying Parties in writing of a claim specifying the
factual basis of that claim in reasonable detail to the extent then known by
Buyer.
(b) Buyer will have no liability (for indemnification or otherwise)
with respect to any matters described in Section 11.3(a) (other than any breach
of any covenant or agreement in this Agreement to be performed or complied with
after the Closing, as to which a claim may be asserted at any time prior to the
expiration of the applicable statute of limitations) unless, within eighteen
(18) months of the Closing Date, any Seller notifies Buyer in writing of a claim
specifying the factual basis of that claim in reasonable detail to the extent
then known by such Seller.
41
11.5 Limitations on Amount--Seller Indemnifying Parties.
(a) Seller Indemnifying Parties will have no liability (for
indemnification or otherwise) with respect to the matters described in Section
11.2 unless and until (i) the individual claim giving rise to any Damages
exceeds Fifteen Thousand Dollars ($15,000) (a "Seller Indemnifiable Claim"), and
(ii) the aggregate amount of all Seller Indemnifiable Claims exceeds Seven
Hundred Fifty Thousand Dollars ($750,000) (the "Seller Deductible Amount"), in
which case Seller Indemnifying Parties shall be liable for the aggregate amount
of all Seller Indemnifiable Claims in excess of the Seller Deductible Amount;
provided, however, that Section 11.5(a)(ii) will not apply to any claims in
respect of (A) Section 11.2(a) for breaches of Sections 3.5 or 3.8, (B) Section
11.2(a) for breach of any covenant or agreement in this Agreement to be
performed or complied with after the Closing, (C) Section 11.2(b), or (D)
Section 11.2(c).
(b) Notwithstanding anything to the contrary in this Section 11, except
as set forth in Section 11.5(c), Seller Indemnifying Parties will have no
liability (for indemnification or otherwise) with respect to the matters
described in Section 11.2(a) (other than any Damages in respect of Section
11.2(a) for breach of any covenant or agreement in this Agreement to be
performed or complied with after the Closing) once the aggregate dollar amount
of all Damages indemnified under Section 11.2(a) for such matters equals
nineteen percent (19%) of the Purchase Price.
(c) Notwithstanding Section 11.5(b), Seller Indemnifying Parties will
have no liability (for indemnification or otherwise) with respect to any Damages
in respect of breaches of any representations or warranties in Sections 3.5 and
3.8, once the aggregate dollar amount of all Damages indemnified under Section
11.2(a) equals fifty percent (50%) of the Purchase Price.
11.6 Limitations on Amount--Buyer. Buyer will have no liability for
indemnification with respect to breaches of representations and warranties under
Section 4 hereof or with respect to breach of any covenant or agreement in this
Agreement to be performed or complied with on or prior to the Closing Date
unless and until the individual claim giving rise to any Damages exceeds Fifteen
Thousand Dollars ($15,000), in which case Buyer shall be liable for all Damages
arising from such claim.
11.7 Procedure for Indemnification.
(a) All claims for indemnification by a Buyer Indemnified Party or any
Seller Indemnified Party (collectively, the "Indemnified Persons") pursuant to
this Section 11 shall be made in accordance with the provisions of this
Agreement.
(b) If a Third Party asserts that an Indemnified Person is liable to
such Third Party for a monetary or other obligation which may constitute or
result in Damages for which such Indemnified Person may be entitled to
indemnification pursuant to this Section 11, then such Indemnified Person may
make a claim for indemnification pursuant to this Section 11 and shall be
reimbursed in accordance with the applicable provisions of this Agreement for
any such Damages for which it is entitled to indemnification pursuant to this
Section 11 (subject to the
42
right of the indemnifying Party to dispute the Indemnified Person's entitlement
to indemnification under the applicable terms of this Agreement).
(c) The Indemnified Person shall give prompt written notification to
Seller Indemnifying Parties or Buyer, as the case may be, of the commencement of
any Proceeding relating to a Third Party claim for which indemnification
pursuant to this Section 11 may be sought; provided, however, that no delay on
the part of the Indemnified Person in notifying Seller Indemnifying Parties or
Buyer, as the case may be, shall relieve Seller Indemnifying Parties or Buyer,
as the case may be, of any liability or obligation hereunder except to the
extent of any damage or liability caused by or arising out of such failure.
Within thirty (30) days after delivery of such notification, Seller Indemnifying
Parties or Buyer, as the case may be, may, upon written notice thereof to the
Indemnified Person, assume control of the defense of such Proceeding provided
Seller Indemnifying Parties or Buyer, as the case may be, acknowledges in
writing to the Indemnified Person that any damages, fines, costs or other
liabilities that may be assessed against the Indemnified Person in connection
with such Proceeding constitute Damages for which the Indemnified Person shall
be entitled to indemnification pursuant to this Section 11. If Seller
Indemnifying Parties do not or Buyer does not, as the case may be, so assume
control of such defense, the Indemnified Person shall control such defense. The
Party not controlling such defense may participate therein at its own expense.
The Party controlling such defense shall keep the other Party advised of the
status of such Proceeding and the defense thereof. The Indemnified Person shall
not agree to any settlement of such Proceeding without the prior written consent
of Seller Indemnifying Parties or Buyer, as the case may be, which shall not be
unreasonably withheld. Seller Indemnifying Parties or Buyer, as the case may be,
shall not agree to any settlement of such Proceeding without the prior written
consent of the Indemnified Person, which shall not be unreasonably withheld.
11.8 Satisfaction and Treatment of Indemnity Payments.
(a) In the event that Seller Indemnifying Parties are required to
provide indemnification hereunder to any Buyer Indemnified Parties, such
indemnification obligation shall be paid to Buyer (for further distribution
between Buyer and other Buyer Indemnified Parties as appropriate). Any payment
made to Buyer pursuant to this Section 11 shall be treated as a reduction in the
Purchase Price.
(b) In the event that Buyer is required to provide indemnification
hereunder to Seller Indemnified Parties, such indemnification obligation shall
be paid to Bioglan (for further distribution among Bioglan, QBermuda, QIreland
and other Seller Indemnified Parties as appropriate). Any payment made to
Sellers pursuant to this Section 11 shall be treated as an increase in the
Purchase Price.
43
11.9 Certain Other Limitations.
(a) Damages Net of Insurance. Notwithstanding anything to the contrary
in this Agreement, the amount of any Damages for which indemnification is
provided under this Section 11 shall be net of any actual cash insurance
recoveries. A Party shall have an obligation to use commercially reasonable best
efforts to seek an insurance recovery. If a Party obtains a recovery, the
Party's indemnity claim shall not be offset to the extent of the Party's
expenses in obtaining such recovery.
(b) No Consequential Damages. NOTWITHSTANDING ANYTHING TO THE CONTRARY
HEREIN, IN NO EVENT SHALL ANY PARTY HERETO OR ITS AFFILIATES BE LIABLE TO ANY
OTHER PARTY HERETO FOR INCIDENTAL, SPECIAL, CONSEQUENTIAL OR PUNITIVE DAMAGES,
INCLUDING WITHOUT LIMITATION ANY CLAIMS FOR DAMAGES BASED UPON LOST REVENUES OR
PROFITS, HOWEVER CAUSED OR ON ANY THEORY OF LIABILITY.
11.10 Indemnification Exclusive Remedy. Buyer and Sellers acknowledge and
agree that their sole and exclusive remedy with respect to any and all Damages
relating to the subject matter of this Agreement, or otherwise regarding the
transactions contemplated by this Agreement, shall be pursuant to the
indemnification provisions set forth in this Section 11 (subject to the next
sentence). In furtherance of the foregoing, Buyer hereby waives, to the fullest
extent permitted under applicable law, any and all rights, claims and causes of
action it may have against Seller Indemnifying Parties in law or equity, except
such rights, claims and causes of action based upon Buyer's right to
indemnification under this Agreement, and each Seller hereby waives, to the
fullest extent permitted under applicable law, any and all rights, claims and
causes of action each may have against Buyer in law or equity except such
rights, claims and causes of action based upon each Seller's right to
indemnification under this Agreement; provided, however, that in addition to
such indemnification, the Parties may seek equitable remedies, including
specific performance in accordance with applicable Legal Requirements
(including, without limitation, any breach or threatened breach of Sections 7.8,
7.9 or 12.3 hereof); and provided, further, that this Section 11 shall not be
deemed to limit the right of any Party to pursue indemnification or other
remedies for claims for fraud or intentional misconduct.
12. GENERAL PROVISIONS
12.1 Expenses. Except as otherwise expressly provided in this Agreement,
each Party to this Agreement will bear its respective expenses incurred in
connection with the preparation, execution, and performance of this Agreement
and the transactions contemplated hereby, including all fees and expenses of
agents, representatives, counsel, and accountants. Buyer shall pay the HSR Act
filing fee; provided, however, that Sellers shall reimburse Buyer for fifty
percent (50%) of the HSR Act filing fee at the Closing. In the event of
termination of this Agreement, the obligation of each Party to pay its own
expenses will be subject to any rights of such Party arising from a breach of
this Agreement by another Party.
12.2 Public Announcements. Any public announcement or similar publicity with
respect to this Agreement or the transactions contemplated hereby will be
issued, if at all, at such time and
44
in such manner as Buyer and Sellers jointly shall determine (subject to the next
sentence). Unless consented to in advance by Buyer or Sellers, as the case may
be, or required by Legal Requirements or the listing agreement for its publicly
traded securities, prior to the Closing, Buyer and Sellers shall keep this
Agreement strictly confidential and may not make any disclosure of this
Agreement to any Person. Buyer and Sellers will consult with each other
concerning the means by which Bioglan's employees, customers, and suppliers and
others having dealings with Bioglan will be informed of the transactions.
12.3 Confidentiality.
(a) After the date of this Agreement, Buyer and Sellers will maintain
in confidence, and will cause the directors, officers, employees, agents, and
advisors of Buyer and Sellers to maintain in confidence, and not use to the
detriment of another Party any written, oral, or other information obtained in
confidence from another Party in connection with this Agreement or the
transactions contemplated hereby, unless (a) such information is already known
to such Party or to others not bound by a duty of confidentiality or such
information becomes publicly available through no fault of such Party, (b) the
use of such information is necessary or appropriate in making any filing or
obtaining any consent or approval required for the consummation of the
transactions contemplated hereby, or (c) the furnishing or use of such
information is required by or necessary or appropriate in connection with an
applicable Legal Requirement or any Proceeding. If the transactions contemplated
hereby are not consummated, each Party will return or destroy as much of such
written information as the other Party may reasonably request.
(b) If the transactions contemplated hereby are consummated, (i) all
confidential information relating solely to the Purchased Assets shall be deemed
to be information received in confidence from Buyer, and not to already have
been known by Sellers, for purposes of this Section 12.3 and shall be held in
confidence by Sellers and their Affiliates post-Closing pursuant to the
requirements set forth in the first sentence of Section 12.3(a), and (ii) all
confidential information relating in part to the Purchased Assets shall not be
used by Sellers or their Affiliates to the detriment of Buyer and shall be
maintained in confidence post-Closing by Sellers and their Affiliates in the
same manner as Sellers and their Affiliates treat their other confidential
information.
(c) Notwithstanding the foregoing or any other express or implied
agreement or understanding to the contrary, the Parties hereto and their
respective employees, representatives, and other agents are authorized to
disclose the tax treatment and tax structure of the transactions contemplated by
this agreement (the "Transactions") to any and all Persons, without limitation
of any kind. The Parties may disclose all materials of any kind (including
opinions or other tax analysis) to the extent that they relate to the tax
treatment and tax structure of the Transactions. This authorization is not
intended to permit disclosure of any other information including (i) any portion
of any materials to the extent not related to the tax treatment or tax structure
of the Transactions, (ii) the identities of participants or potential
participants in the Transactions, (iii) the existence or status of any
negotiations, (iv) any pricing information, (v) any financial information or
historic Tax return information not relating to the tax treatment or tax
structure of the Transactions or (vi) any other term or detail not related to
the tax treatment or tax structure of the Transactions.
45
12.4 Notices. All notices and other communications provided for hereunder
shall be in writing, shall specifically refer to this Agreement, shall be
addressed to the receiving Party's address set forth below or to such other
address as a Party may designate by notice hereunder, and shall be deemed to
have been sufficiently given for all purposes (a) three (3) Business Days after
being mailed by first class certified or registered mail, postage prepaid, (b)
the next Business Day after being sent by nationally recognized overnight
courier for next Business Day delivery, (c) personally delivered, or (d) made by
telecopy or facsimile transmission with confirmed receipt.
If to Buyer: Xxxxxxx Pharmaceuticals, Inc.
000 Xxxxx 00 Xxxx
Xxxxxxxxx, Xxx Xxxxxx 00000
Attn: Xxxxxx Xxxxxxxx, Chairman and CEO
Fax: (000) 000-0000
with a copy to (which
shall not constitute notice): Xxxxxxx Xxxxxx & Green, P.C.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxxx X. Xxxxx
Fax: (000) 000-0000
If to Sellers or Quintiles: Bioglan Pharmaceuticals Company
c/o Quintiles Transnational Corp.
Attn: General Counsel
0000 Xxxxxxxxxx Xxxxx, Xxxxx 000
Xxxxxx, Xxxxx Xxxxxxxx, 00000
Fax: (000) 000-0000
Quintiles Bermuda Ltd.
c/o Quintiles Transnational Corp.
Attn: General Counsel
0000 Xxxxxxxxxx Xxxxx, Xxxxx 000
Xxxxxx, Xxxxx Xxxxxxxx, 00000
Fax: (000) 000-0000
Quintiles Ireland Limited
c/o Quintiles Transnational Corp.
Attn: General Counsel
0000 Xxxxxxxxxx Xxxxx, Xxxxx 000
Xxxxxx, Xxxxx Xxxxxxxx, 00000
Fax: (000) 000-0000
46
Quintiles Transnational Corp.
Attn: General Counsel
0000 Xxxxxxxxxx Xxxxx, Xxxxx 000
Xxxxxx, Xxxxx Xxxxxxxx, 00000
Fax: (000) 000-0000
with a copy to (which
shall not constitute notice): Smith, Anderson, Xxxxxx, Xxxxxxx
Xxxxxxxx & Xxxxxxxx, L.L.P.
0000 Xxxxxxxx Xxxxxxx Xxxxxx
Xxxxxxx, XX 00000
Attn: Xxxxxxxxxxx X. Xxxxx
Fax: (000) 000-0000
12.5 Further Assurances. The Parties agree (a) to furnish upon request to
each other such further information, (b) to execute and deliver to each other
such other documents, and (c) to do such other acts and things, all as any other
Party may reasonably request for the purpose of carrying out the intent of this
Agreement and the documents referred to in this Agreement.
12.6 Waiver. The rights and remedies of the Parties to this Agreement are
cumulative and not alternative. Neither the failure nor any delay by any Party
in exercising any right, power, or privilege under this Agreement or the
documents referred to in this Agreement will operate as a waiver of such right,
power, or privilege, and no single or partial exercise of any such right, power,
or privilege will preclude any other or further exercise of such right, power,
or privilege or the exercise of any other right, power, or privilege. To the
maximum extent permitted by applicable law, (a) no claim or right arising out of
this Agreement or the documents referred to in this Agreement can be discharged
by one Party, in whole or in part, by a waiver or renunciation of the claim or
right unless in writing signed by the other Party; (b) no waiver that may be
given by a Party will be applicable except in the specific instance for which it
is given; and (c) no notice to or demand on one Party will be deemed to be a
waiver of any obligation of such Party or of the right of the Party giving such
notice or demand to take further action without notice or demand as provided in
this Agreement or the documents referred to in this Agreement.
12.7 Entire Agreement and Modification. This Agreement supersedes all prior
agreements (including, after the Closing, the Confidentiality Agreement) between
the Parties with respect to its subject matter and constitutes (along with the
documents referred to in this Agreement) a complete and exclusive statement of
the terms of the agreement between the Parties with respect to its subject
matter. This Agreement may not be amended or modified except by a written
agreement duly executed by each of the Parties hereto.
12.8 Disclosure Letter. The information and disclosures in the Disclosure
Letter are intended only to qualify and limit the representations, warranties
and covenants of Sellers contained in this Agreement and shall not be deemed to
expand in any way the scope or effect of any of such representations, warranties
or covenants. The Section numbers in the Disclosure Letter correspond to the
section numbers in this Agreement; provided, however, that any information
disclosed therein under any Section number shall be deemed to be disclosed and
incorporated in
47
any other section of this Agreement where such disclosure would be apparent
under the circumstances. Capitalized terms used but not defined in the
Disclosure Letter shall have the same meanings given them in this Agreement. In
the event of any inconsistency between the statements in the body of this
Agreement and those in the Disclosure Letter (other than an exception expressly
set forth as such in the Disclosure Letter with respect to a specifically
identified representation or warranty), the statements in the body of this
Agreement will control.
12.9 Assignments, Successors and No Third-Party Rights. No Party may assign
this Agreement or any of its rights or obligations under this Agreement without
the prior consent of the other Parties, and any purported assignment without a
consent shall be void; provided, however, that Buyer shall be entitled to assign
its rights hereunder to a wholly-owned subsidiary of Buyer, provided that such
assignment shall not relieve Buyer of any of, and Buyer shall remain responsible
for, its obligations hereunder. Subject to the preceding sentence, this
Agreement will apply to, be binding in all respects upon, and inure to the
benefit of the successors and permitted assigns of the Parties. Nothing
expressed or referred to in this Agreement will be construed to give any Person
other than the Parties to this Agreement any legal or equitable right, remedy,
or claim under or with respect to this Agreement or any provision of this
Agreement. This Agreement and all of its provisions and conditions are for the
sole and exclusive benefit of the Parties to this Agreement and their successors
and permitted assigns.
12.10 Severability. If any provision of this Agreement is held invalid or
unenforceable by any court of competent jurisdiction, the other provisions of
this Agreement will remain in full force and effect. Any provision of this
Agreement held invalid or unenforceable only in part or degree will remain in
full force and effect to the extent not held invalid or unenforceable.
12.11 Section Headings; Construction; Conflicts. The headings of Sections in
this Agreement are provided for convenience only and will not affect its
construction or interpretation. All bare references to "Section" or "Sections"
without the accompanying words "of the Disclosure Letter" refer to the
corresponding Section or Sections of this Agreement. All references to "hereof,"
"hereto" and "hereunder" shall refer to this Agreement. All references to
"Bioglan employees," "employees of Bioglan" or phrases of similar import shall
refer to the employees of Bioglan or Quintiles, as the case may be, that work
for Bioglan's business. All words used in this Agreement will be construed to be
of such gender or number as the circumstances require. Unless otherwise
expressly provided, the word "including" does not limit the preceding words or
terms. In the event of any conflict between the provisions of this Agreement and
the provisions of the Xxxx of Sale, the QBermuda Assignment and Assumption
Agreement, the QIreland Assignment and Assumption Agreement, the Bioglan
Assignment and Assumption Agreement, the Patent Application Assignment and the
Trademark Assignment, the provisions of this Agreement shall prevail.
12.12 Time of Essence. With regard to all dates and time periods set forth or
referred to in this Agreement, time is of the essence.
12.13 Governing Law. This agreement will be governed by the laws of the State
of New York without regard to conflicts of laws principles. Each of Sellers and
Quintiles expressly and
48
irrevocably consents that any legal action or proceeding against it under,
arising out of or in any manner relating to, this Agreement, or any other
document delivered in connection herewith, may be brought in the United States
District Court for the Southern District of New York. Buyer expressly and
irrevocably consents that any legal action or proceeding against it under,
arising out of or in any manner relating to, this Agreement, or any other
document delivered in connection herewith, may be brought in the United States
District Court for the Eastern District of North Carolina. With respect to the
above jurisdictions, each of the Parties expressly and irrevocably (a) consents
and submits to the non-exclusive personal jurisdiction of such court in any such
action or proceeding, (b) waives any claim or defense in any such action or
proceeding based on any alleged lack of personal jurisdiction, improper venue or
forum non conveniens or any similar basis, and (c) waives all rights, if any, to
trial by jury with respect to any such action or proceeding. Nothing in this
Section shall affect or impair in any manner or to any extent the right of any
Party to commence legal proceedings or otherwise proceed against any other Party
in any jurisdiction or to serve process in any manner permitted by law.
12.14 Execution of Agreement; Counterparts. This Agreement and any amendment
hereto may be executed in any number of counterparts, each of which when
executed and delivered shall be deemed to be an original and all of which
counterparts taken together shall constitute but one and the same instrument.
The exchange of copies of this Agreement or amendments thereto and of executed
signature pages by facsimile transmission or by email transmission in portable
digital format, or similar format, shall constitute effective execution and
delivery of such instrument(s) as to the Parties and may be used in lieu of the
original Agreement or amendment for all purposes. Signatures of the Parties
transmitted by facsimile or by email in portable digital format, or similar
format, shall be deemed to be their original signatures for all purposes.
12.15 Attorney Fees. In the event that any dispute among the Parties to this
Agreement should result in a Proceeding, the prevailing Party in such dispute
shall be entitled to recover from the losing Party all fees, costs and expenses
of enforcing any right of such prevailing Party under or with respect to this
Agreement, including without limitation, reasonable attorneys' fees and
expenses.
[signature page follows]
49
[Signature Page to Bioglan Asset Purchase Agreement]
IN WITNESS WHEREOF, the Parties have duly executed and delivered this Agreement
as of the date first written above.
QUINTILES BERMUDA LTD.
By: /s/ Xxxx Xxxxxxx
------------------------------------------
Name: Xxxx Xxxxxxx
Title: Vice President & Director
QUINTILES IRELAND LIMITED
By: /s/ Xxxxxxxx Xxxxxxxxx
------------------------------------------
Name: Xxxxxxxx Xxxxxxxxx
Title: Director
BIOGLAN PHARMACEUTICALS COMPANY
By: /s/ Xxx Xxxxxxx
------------------------------------------
Name: Xxx Xxxxxxx
Title: Vice President & Assistant Secretary
QUINTILES TRANSNATIONAL CORP.
(Solely for purposes of Sections 3.2, 5.3,
5.4, 7.2, 7.8, 7.9, 7.13, 11, and 12)
By: /s/ Xxxx Xxxxxxx
-----------------------------------------
Name: Xxxx Xxxxxxx
Title: Executive Vice President & General Counsel
XXXXXXX PHARMACEUTICALS, INC.
By: /s/ Xxxxxx Xxxxxxxx
------------------------------------------
Name: Xxxxxx Xxxxxxxx
Title: Chairman of the Board, Chief Executive
Officer and President
50
List of Omitted Schedules and Attachments
-----------------------------------------
The following exhibits and attachments have been omitted from this filing:
Exhibit A Form of No-Action Request
Schedule 8.14 Financial Statements
Sellers' Disclosure Letter
Quintiles hereby agrees to furnish supplementally to the Commission a copy of
any omitted exhibit or attachment upon the Commission's request.
51
FIRST AMENDMENT TO ASSET PURCHASE AGREEMENT
This First Amendment (this "Amendment") to the Asset Purchase Agreement
(the "Agreement") dated June 8, 2004, by and among Quintiles Bermuda Ltd., a
Bermuda-registered company ("QBermuda"), Quintiles Ireland Limited, a company
incorporated in the Republic of Ireland ("QIreland"), Bioglan Pharmaceuticals
Company, a North Carolina corporation ("Bioglan"), and Xxxxxxx Pharmaceuticals,
Inc., a Delaware corporation ("Buyer"), is made and dated as of the 10th day of
August, 2004. Capitalized terms used herein that are not otherwise defined
herein shall have the meanings given them in the Agreement.
WHEREAS, the Parties entered into the Agreement pursuant to which
Xxxxxxx is acquiring the Purchased Assets;
WHEREAS, the Parties now desire to amend the Agreement in the manner
set forth below;
WHEREAS, Section 12.7 of the Agreement provides that the Agreement may
be amended by a written agreement executed by each of the Parties;
NOW, THEREFORE, for good and valuable consideration, the Parties,
intending to be legally bound, agree as follows:
1. Section 2.4(a) of the Agreement is hereby deleted and replaced in
its entirety as follows:
(a) all current liabilities reflected on the Balance Sheet, or
any other current liabilities incurred by Bioglan in the ordinary
course of business between the date of the Balance Sheet and the
Closing Date (in each case other than accrued income taxes payable,
current portion of indebtedness, and liabilities with respect to
Bioglan employees as described in Section 7.1(e)) that (in either case)
remain unpaid in the ordinary course of business at, and are not
delinquent as of, the Closing;
2. Section 7.11 of the Agreement is hereby deleted and replaced in its
entirety as follows:
7.11 Closing Date Financial Statements
(a) Within forty-five (45) days after the Closing, Bioglan
shall deliver to Buyer a balance sheet of the Bioglan Pharmaceuticals
operations of Quintiles consisting of all assets and liabilities of
Bioglan and, to the extent relating to the Products, the assets and
liabilities of QBermuda and QIreland, as of the Closing Date (the
"Closing Date Balance Sheet"), and statements of earnings, statement of
equity and cash flows of the Bioglan Pharmaceuticals operations of
Quintiles
consisting of all operations of Bioglan and, to the extent relating to
the Products, the operations of QBermuda and QIreland, for the period
from January 1, 2004 through the Closing Date (the "Audited Stub Period
Financial Statements"), which financial statements shall be prepared in
accordance with GAAP and Regulation S-X and be accompanied by the
unqualified audit report of PricewaterhouseCoopers, who shall have
audited such financial statements in accordance with generally accepted
auditing standards.
(b) [Reserved].
(c) Sellers shall cooperate with Buyer, and shall use
commercially reasonable efforts to gain the cooperation of
PricewaterhouseCoopers, in the provision of appropriate consents to the
filing with the SEC of the financial statements contemplated by this
Agreement or relating to the transactions contemplated hereby and any
other financial information or documents reasonably requested by Buyer
in connection with its SEC filings or Section 2.8.
(d) With respect to 2003 quarterly financial data described in
Section 1(c) of Schedule 8.4 and the financial statements to be
reviewed by PricewaterhouseCoopers as described in Section 8.4(a) and
Schedule 8.4, Quintiles shall, pursuant to an engagement letter, engage
PricewaterhouseCoopers to conduct such review and such engagement
letter shall include undertakings by PricewaterhouseCoopers to the
effect that PricewaterhouseCoopers will communicate to Quintiles (i)
any matters that come to the attention of PricewaterhouseCoopers as a
result of the review that PricewaterhouseCoopers believes may require
material modifications to such financial information to make it conform
with GAAP, and (ii) if, for any reasons caused by or relating to the
affairs or management of Sellers, PricewaterhouseCoopers is unable to
complete its review. Quintiles shall notify Buyer promptly of any
communications received from PricewaterhouseCoopers pursuant to the
preceding sentence, but in any event no later than delivery of the
related financial statements to Buyer. The requirement to deliver such
reviewed financial statements under this Agreement shall not be deemed
satisfied if any matters described in clauses (i) and (ii) of this
Section 7.11(d) are communicated by PricewaterhouseCoopers to
Quintiles.
3. Section 8.4(a) of the Agreement is hereby deleted and replaced in
its entirety as follows:
8.4 Financial Statements.
(a) Sellers shall have delivered to Buyer: (i) the audited financial
statements listed on Schedule 8.4 hereto, which shall have been
prepared in accordance with GAAP and Rule 3-05 of Regulation S-X and be
accompanied by the unqualified audit report of PricewaterhouseCoopers,
who shall have audited such financial statements in accordance with
generally accepted auditing standards; and (ii) the unaudited financial
statements listed on Schedule 8.4 hereto, which shall have
2
been prepared in accordance with GAAP and Article 10 of Regulation S-X
(including appropriate footnote disclosure) and be reviewed by
PricewaterhouseCoopers in accordance with the standards established by
the Public Company Accounting Oversight Board ("PCAOB"). Neither the
financial condition nor results of operations taken as a whole and as
presented in such audited financial statements shall reflect a
materially adverse change from the unaudited financial statements
referred to in Section 3.3 with respect to the applicable dates and
periods. The condition in the preceding sentence shall be deemed waived
five (5) days after the delivery of the financial statements under this
Section 8.4(a), unless Buyer notifies Sellers in writing specifying the
basis for Buyer's good faith belief that such condition is not
satisfied.
4. Section 11.3 to the Agreement is hereby deleted and replaced in its
entirety as follows:
11.3 Indemnification by Buyer. Subject to the other provisions of this
Section 11, including without limitation Section 11.9(a), Buyer will
indemnify and hold harmless Sellers and their Affiliates and their
respective officers, directors and shareholders (collectively, the
"Seller Indemnified Parties") for any Damages, to the extent caused by
or arising from (a) any breach of any representation, warranty,
covenant or agreement of Buyer in this Agreement; (b) the failure of
Buyer to assume, pay, perform and discharge any Assumed Liabilities; or
(c) the manufacture, packaging, labeling, promotion, distribution,
transportation, storage or sale of the Products by or on behalf of
Buyer or any of its Affiliates after the Closing Date or the use by
patients of Products sold by or on behalf of Buyer or any of its
Affiliates after the Closing Date.
5. Schedule 8.4 of the Agreement is hereby deleted and replaced in its
entirety with Attachment A hereto.
6. Except as specifically amended by this Amendment, the terms and
conditions of the Agreement shall remain unimpaired, unaffected, and unchanged
in every particular as set forth in the Agreement.
[signature page follows]
3
[Signature Page to First Amendment to Bioglan Asset Purchase Agreement]
IN WITNESS WHEREOF, the Parties have duly executed and delivered this Agreement
as of the date first written above.
QUINTILES BERMUDA LTD.
/s/ Xxxx X. Xxxxxxx
------------------------------------------
Xxxx X. Xxxxxxx
Vice President & Director
QUINTILES IRELAND LIMITED
/s/ Xxxxxxxx Xxxxxxxxx
------------------------------------------
Xxxxxxxx Xxxxxxxxx
Director
BIOGLAN PHARMACEUTICALS COMPANY
/s/ Xxxxxx X. Xxxxxxx
------------------------------------------
Xxxxxx X. Xxxxxxx
Vice President
QUINTILES TRANSNATIONAL CORP.
/s/ Xxxx X. Xxxxxxx
------------------------------------------
Xxxx X. Xxxxxxx
Executive Vice President & General Counsel
XXXXXXX PHARMACEUTICALS, INC.
/s/ R. Xxxxx Xxxxxxxxx
------------------------------------------
R. Xxxxx Xxxxxxxxx
Chief Executive Officer & Vice President
LIST OF OMITTED SCHEDULES AND ATTACHMENTS
The following attachment has been omitted from this filing:
Attachment A Schedule 8.4
Quintiles hereby agrees to furnish supplementally to the Commission a copy of
any omitted schedule or attachment upon the Commission's request.
