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EXHIBIT 2.1
ASSET PURCHASE AGREEMENT
ASSET PURCHASE AGREEMENT made as of the 27th day of June, 1997 between
SmithKline Xxxxxxx Corporation, a Pennsylvania corporation (the "Vendor") and
Xxxxx Medical Industries, Inc., a Delaware corporation (the "Purchaser").
WHEREAS, Vendor manufactures and/or sells the prescription pharmaceutical
products listed on EXHIBIT A hereto (the "Products");
WHEREAS, Purchaser desires to purchase and Vendor desires to sell the
Products and the Purchased Assets (as defined below) with respect to the United
States, Puerto Rico and Canada;
NOW, THEREFORE, in consideration of the premises and the mutual covenants,
agreements and representations herein contained and intending to be legally
bound, Vendor and Purchaser agree as follows:
SECTION 1
INTERPRETATION
1.1 Definitions. Where used in this Agreement the following words or
phrases shall have the meanings set forth below unless the context otherwise
requires:
(a) "Affiliate" when used to indicate a relationship with any Person
means any other Person directly or indirectly controlling, controlled by or
under common control with such Person. For purposes hereof, the term
"controlled" (including the terms "controlled by" and "under common control
with"), as used with respect to any Person, shall mean the direct or indirect
ability or power to direct or cause the direction of management policies of
such Person or otherwise direct the affairs of such Person, whether through
ownership of voting securities or otherwise.
(b) "Agreement" means this Asset Purchase Agreement and any instrument
amending this Agreement as referred to in Section 17.7; and the expression
"Section" followed by a number means and refers to the specified Section of
this Agreement.
(c) "Assignment and Assumption Agreement" means the agreement among
Purchaser, Supplier and Schering Canada, Inc., substantially in the form of
EXHIBIT B hereto.
(d) "Business Day" means any day excluding Saturday, Sunday and any
other day which in the United States is a legal holiday or any day on which
banking institutions are authorized by law or by local proclamation to close.
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(e) "Effective Date" means the Time of Closing or such other date as
the parties shall agree in writing.
(f) "Finished Goods" means finished, packaged, ready for sale Products.
(g) "HSR Act" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act,
as amended.
(h) "Incremental Net Sales" shall refer to the expected increase in Net
Sales of Triostat in the event that Triostat achieves FDA approval for any
indication not approved as of the Effective Date ("FDA Approval") and for
purposes hereof shall mean the excess of (i) the aggregate Net Sales of
Triostat for the particular quarterly period in question (the "Measurement
Period"), over (ii) the Triostat Base Net Sales for that Measurement Period.
For purposes of this Section 1(h), "Triostat Base Net Sales" for a particular
Measurement Period shall be a projected amount equal to the aggregate Net Sales
of Triostat for the calendar quarter immediately preceding the month in which
FDA Approval occurs ("Base Quarter") increased by the "Specified Percentage" of
the product of (A) 25% of the Average Percentage Increase multiplied by (B) the
number of Measurement Periods occurring after the Base Quarter up to and
including the current Measurement Period. For purposes of this Section 1(h),
the "Average Percentage Increase" shall mean the average annual percentage
increase in Net Sales of Triostat for the three 12-month periods immediately
preceding receipt of FDA Approval, and the "Specified Percentage" shall mean
100% for the first 12 Measurement Periods, 75% for the second 12 Measurement
Periods, and 50% for the final 16 Measurement Periods. For the avoidance of
doubt, SCHEDULE 1.1(h) sets out an example of the operation of the definition
of Incremental Net Sales.
(i) "Intellectual Property" means all trademarks (whether registered or
unregistered), trade names and applications therefor and registrations thereof,
brand names, logotypes and symbols utilized with respect to the Products to the
extent used by Vendor in the Territory in the manufacture or sale of Products,
all renewals, modifications and extensions thereof, all variations thereof,
together with the goodwill associated therewith, including, without limitation,
such of the foregoing as are listed or described in SCHEDULE 1.1(i), all
copyrights (whether registered or unregistered), trade secrets, and patents,
patent applications or inventions for which patent applications have not been
filed, to the extent used by Vendor in the manufacture or sale of the Products
in the Territory, including, without limitation, those that are listed in
SCHEDULE 1.1(i), and all renewals, reissues, modifications or extensions
thereof; provided, however, that "Intellectual Property" does not include the
SmithKline Xxxxxxx or Xxxxxxx names or any variation thereof, the corresponding
logos or current trade dress of the Products.
(j) "Inventories" means all of Vendor's inventories of Finished Goods
in the Territory at the date on which such inventories are measured and any
rights of Vendor to any warranties received from manufacturers and sellers with
respect to such Finished Goods.
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(k) "Manufacturing Agreement" means the agreement between Purchaser and
Supplier, substantially in the form of EXHIBIT C hereto.
(l) "Marketing Materials" shall mean all labeling, marketing and
promotional materials, promotional literature and inserts that are used by
Vendor in connection with the Products, and all customer lists, sales data,
price lists and, subject to confidentiality obligations to third parties, all
other pricing information in the possession or control of Vendor, whether in
written or machine readable form.
(m) "Net Sales" means the gross sales of the subject Product in the
Territory by Purchaser, its Affiliates, and its sublicensees ("the Selling
Party") during each year to third parties less deductions actually allowed or
specifically allocated to the subject Product by the Selling Party using
generally accepted accounting principles for: (i) packing, handling and
transportation charges including insurance for transporting the subject Product
to the extent that they appear on the invoice; (ii) sales, excise and other
taxes and duties paid or allowed by the Selling Party and any other
governmental charges imposed upon the production, importation, use or sale of
the subject Product; (iii) trade, quantity and cash discounts allowed on the
subject Product; (iv) allowances or credits to customers on account of
rejection or return of the subject Product; (v) allowances or credits to
customers on account of retroactive price reductions affecting the subject
Product; and (vi) rebates and charge backs for the subject Product, including
those granted to managed care entities and governmental agencies. Sales
between Purchaser and its Affiliates and its or their subdistributors shall be
excluded from the computation of Net Sales and no payments will be payable on
such sales except where such Affiliates or subdistributors are end users, but
Net Sales shall include the subsequent final sales to third parties by such
Affiliates or subdistributors.
(n) "Person" shall mean a natural person, a corporation, a
partnership, a trust, a joint venture, a limited liability company, any
governmental authority or any other entity or organization.
(o) "Purchased Assets" means the property and assets described in
Section 2.1 and related to the sale of the Products in the Territory.
(p) "Purchase Price" means the aggregate consideration payable to
Vendor by Purchaser for the Purchased Assets as provided in Sections 3.1 and
3.2.
(q) "Supplier" means SB Pharmco Puerto Rico, Inc., a subsidiary of
SmithKline Xxxxxxx plc.
(r) "Technology" shall mean all of Vendor's technology, know-how,
methods of operation, manufacturing systems details, processes, production
details, recipes, formulations, files, records, specifications, data and other
information necessary to, or that (to the extent used with respect to Products
in the Territory) assist in, the manufacture of the Products.
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(s) "Territory" means the United States, Puerto Rico and Canada.
(t) "Time of Closing" means 10:00 o'clock in the forenoon (Eastern
time) on such date as the parties shall mutually agree at which time the
parties are to deliver the closing documents described in Section 10.
(u) "Transferred Contracts" means the contracts set forth in SCHEDULE
2.1(b) hereto.
In this Agreement, words importing the singular number only shall include
the plural and vice versa, words importing a specific gender shall include the
other genders and references to Persons shall include corporations and one or
more persons, their heirs, executors, administrators or assigns as the case may
be.
1.2 Currency. All dollar amounts referred to in this Agreement are in
U.S. Dollars.
1.3 Headings, etc. The division of this Agreement into Sections and the
insertion of headings are for convenience of reference only and shall not
affect the interpretation hereof.
SECTION 2
PURCHASED ASSETS
2.1 Assets to be Sold and Purchased. Subject to the terms and conditions
hereof, Vendor shall sell, assign and transfer to Purchaser (or cause its
Affiliates to sell, assign and transfer to Purchaser) and Purchaser shall
purchase from Vendor (or its respective Affiliates), at the Time of Closing,
all rights, title and interest of Vendor and its Affiliates in and to the
Purchased Assets at the Effective Date. The Purchased Assets shall include:
(a) All Intellectual Property, Technology, the Products' formulations,
the Products' rights set forth in SCHEDULE 2.1(a) relating to those product
registrations, including New Drug Applications 10-379 (Cytomel) and 20-105
(Triostat) issued by the U.S. Food and Drug Administration (the "FDA") and the
related product and establishment license applications on file with the FDA and
copies of all existing information relating to the stability and shelf life of
the Products and all rights under the approved New Drug Application(s) for the
Products filed with the FDA, and all subsequent submissions thereto
(collectively, the "NDAs").
(b) The existing lists of current customers for the Products in the
Territory and written contracts and documentation in Vendor's possession
pertaining to the same as set forth in SCHEDULE 2.1(b) hereto (the "Transferred
Contracts"); provided, however, that Vendor retains its rights to such
information with respect to sales of Vendor's other products;
(c) Vendor's existing files pertaining to the Products (whether in
written or machine readable form) including, without limitation, research and
development files, FDA files
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pertaining to the Products (including applications and registrations, as
applicable), market studies, Marketing Materials, NDA files and records,
vendor/supplier audit reports, copies of consumer complaint files, sales
histories, quality control histories, manufacturing knowhow and all other
information and data pertaining to the Products owned or used by Vendor or its
Affiliates and relating to the Territory, which are in the possession of
Vendor, its Affiliates or their agents, or are accessible to Vendor with
reasonable efforts;
(d) All Inventories of Cytomel and 3,500 1 ml vials - 6 of Triostat
(the "Purchased Triostat") at the Effective Date; and
(e) All unfilled customer orders for the Products as of the
Effective Date (a list of such orders to be provided to Purchaser at the Time
of Closing).
The transfer of title to the Purchased Assets is subject to a license from
Vendor to the Supplier to use such assets (other than Finished Goods) in
connection with the Supplier's performance under the Manufacturing Agreement as
set forth more fully therein.
2.2 Liabilities.
(a) Subject to the provisions of Section 16.1 below and except as
otherwise provided in this Agreement, Purchaser shall be liable for (i) all
liabilities arising from and after the Effective Date related to ownership of
the Purchased Assets (including without limitation the Transferred Contracts),
including any cost, claim, expense, loss or liability arising from any product
liability claim or lawsuit or any FDA or other governmental agency action or
notification first filed after the Effective Date (except where the cost,
claim, expense, loss or liability claimed relates to (A) Product(s)
manufactured prior to the Effective Date where the claim arises from the
manufacture or labeling of the Product provided such claim is not as a result
of any change made or damage caused by Purchaser or any customer who buys from
Purchaser, or (B) Product(s) sold prior to the Effective Date, or (C) acts or
omissions of Vendor) and (ii) those open regulatory matters expressly
identified in SCHEDULE 5.8 hereto (the foregoing liabilities being assumed by
the Purchaser hereinafter referred to as the "Assumed Liabilities"); provided,
however, that in the event the closing does not occur and the Purchaser does
not acquire the Purchased Assets as contemplated by this Agreement, then the
Purchaser shall not assume, and shall not be liable for, the Assumed
Liabilities for any period of time.
(b) Prior to and after the Time of Closing, Vendor shall promptly
pay and discharge all liabilities arising or accruing prior to the Effective
Date in respect of the Purchased Assets as such liabilities come due.
(c) Except for the Assumed Liabilities and subject to the provisions
of Section 16.1 below, Purchaser shall not assume or be liable for any
liabilities whatsoever, including, without limitation, product liability,
liability in tort (including unripened liabilities due to past actions or
sales), indebtedness for money borrowed, tax liabilities, obligations to
employees, and
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liabilities for trade promotions related to the Purchased Assets and to acts or
omissions occurring prior to the Effective Date.
(d) Notwithstanding anything herein to the contrary, Purchaser is not
assuming, and shall not be deemed to assume any of the following, all of which
shall remain and be the sole responsibility of Vendor (collectively the
"Excluded Liabilities"):
(i) Any responsibilities, duties, obligations, claims, damages,
liabilities, burdens and problems (collectively "Obligations") arising out of
any claim of any third party in connection with the manufacturing of Products
by Supplier other than those that result from acts or omissions of Purchaser or
Purchaser's customers; or
(ii) Those Obligations with respect to which Vendor is providing
indemnification pursuant to the provisions of Section 14.1 of this Agreement;
or
(iii) Any Obligations arising out of any claim by the FDA or any
other government entity or regulatory body that Vendor has failed to fulfill
Vendor's regulatory obligations in connection with the NDAs prior to the
transfer of such NDA to Purchaser as herein set forth; or
(iv) Any Obligations arising or accruing with respect to the
manufacture, marketing or sale of Products prior to the Effective Date; or
(v) Any Obligations that Vendor or Supplier covenant and agree to
perform pursuant to the provisions of this Agreement or the Manufacturing
Agreement; or
(vi) Any purchase orders with respect to Products which are not
specifically set forth on SCHEDULE 2.2(d) hereto (the parties expressly agree
that SCHEDULE 2.2(D) shall be updated at Closing to reflect the unfilled
customer orders referred to in Section 2.1(e); or
(vii) Any Obligations of Vendor pursuant to the provisions of
Section 2.2(c) above.
2.3 Grant of License. Vendor hereby grants Purchaser a perpetual right
and license to use, or authorize others to use, all molds, resins, resin
specifications and other materials of Vendor (or any of its Affiliates)
necessary to manufacture or package the Products, and Vendor hereby agrees to
execute such documents and instruments and grant such authorizations to third
parties (or to cause its Affiliates to execute such documents and instruments
and grant such authorizations) as may be reasonably requested by Purchaser in
order to effectuate such right and license.
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SECTION 3
PURCHASE PRICE
3.1 Purchase Price. The Purchase Price payable to Vendor for the
Purchased Assets shall be $22,800,000 plus the value of the Inventory included
in the Purchased Assets (computed in accordance with the pricing set forth on
SCHEDULE 3.1 hereto).
3.2 Contingent Purchase Price. In the event (and only in the event) that
the FDA approves Triostat for any additional indications (including without
limitation cardiac surgery) after the Effective Date, then Purchaser shall pay
Vendor additional consideration (the "Contingent Price") with respect to the
Incremental Net Sales of Triostat in the Territory during the period commencing
on the first day of the calendar quarter within which such FDA approval is
received and ending ten (10) years thereafter (the "Payment Period"). The
Contingent Price shall be equal to ten percent (10%) of the Incremental Net
Sales of Triostat in the Territory during the Payment Period and shall be
payable by Purchaser to Vendor within twenty (20) Business Days after the end
of each calendar quarter during the Payment Period. Payment of the Contingent
Price shall be accompanied by a statement setting forth gross sales, Net Sales
and Incremental Net Sales of Triostat for the calendar quarter in question
signed by the principal financial or accounting officer of Purchaser. Vendor's
independent auditors shall have the right to audit all applicable work papers
of Purchaser to assure that Purchaser has complied with the terms of Section
3.2 of this Agreement.
3.3 Transfer Taxes. Purchaser shall be liable for and shall pay all state
and local sales and use taxes payable in connection with the conveyance and
transfer of the Purchased Assets by Vendor to Purchaser.
SECTION 4
PAYMENT OF PURCHASE PRICE
The Purchase Price specified in Section 3.1 (other than that paid for
Inventory) shall be paid and satisfied at the Time of Closing by a wire
transfer of funds to a bank account(s) to be designated by Vendor. The
Inventory will be paid for when invoiced by Vendor.
SECTION 5
REPRESENTATIONS AND WARRANTIES OF VENDOR
Vendor hereby represents and warrants to the Purchaser as follows and
acknowledges that Purchaser is relying on such representations and warranties
in connection with the transactions contemplated by this Agreement:
5.1 Incorporation, Organization and Qualification of Vendor. Vendor is a
corporation duly incorporated, validly existing and in good standing under the
law of the jurisdiction of its incorporation, and has the corporate power to
own or lease its property and to carry on its
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business as now being conducted by it. Vendor is duly qualified to do business
as a foreign corporation and is in good standing in every jurisdiction where
the nature of the business conducted by it makes such qualification necessary
except in such jurisdictions where the failure to so qualify does not in the
aggregate have a material adverse effect on Vendor's business taken as a whole.
5.2 Authorization and Validity of Agreement. Vendor has the corporate
power to enter into this Agreement and to carry out its obligations hereunder.
The execution and delivery of this Agreement and the performance of Vendor's
obligations hereunder have been duly authorized by all necessary corporate
action by the Board of Directors of Vendor, and no other corporate proceedings
on the part of Vendor are necessary to authorize such execution, delivery and
performance. This Agreement has been duly executed by Vendor and constitutes
the valid and binding obligation of Vendor enforceable against Vendor in
accordance with its terms. Execution of this Agreement and consummation of the
transactions contemplated hereby will not result in the violation of, or
conflict with, any of the terms and provisions of the articles of incorporation
or by-laws of Vendor or of any law or regulation or any applicable order of any
court, arbitrator or governmental authority having jurisdiction over Vendor,
the Products or the Purchased Assets or of any indenture or other agreement,
written or oral, to which Vendor may be a party.
5.3 Title to Purchased Assets. Vendor is the owner of the Purchased
Assets with good title thereto free and clear of any mortgage, lien, charge,
security interest, adverse claim or other encumbrance whatsoever (collectively,
"Encumbrances"), and at the Time of Closing will have the right to transfer to
Purchaser good title thereto, free and clear of all Encumbrances.
5.4 Financial Information. The financial information set forth in
SCHEDULE 5.4 hereto was derived from the books and records of Vendor and was
prepared by Vendor in good faith and fairly presents the sales of each Product
for the periods shown.
5.5 Litigation. Except as set forth in SCHEDULE 5.5, there are no
actions, suits, proceedings, investigations, arbitration proceedings or other
proceedings pending or threatened against or affecting the Purchased Assets at
law or in equity or by or before any federal, state, municipal or other
governmental department, commission, board, bureau, agency or instrumentality,
domestic or foreign, or by or before any arbitrator which actions, suits or
arbitration proceedings or other proceedings relate to the Purchased Assets and
Vendor is not now aware of any existing grounds on which any such action, suit
or proceeding might be commenced and there is not presently outstanding against
the Vendor any judgment, decree, injunction, rule, order or award of any court,
governmental department, commission, board, bureau, agency, instrumentality,
domestic or foreign, or arbitrator and relating to the Purchased Assets.
During the last five years there has not been any occurrence of, nor is there
under consideration or investigation by Vendor of, any product recall, or
post-sale warning conducted by or on behalf of Vendor concerning any Products
or any product recall conducted by or on behalf of any entity as a result of
any alleged defect in any Products. There are no letters of
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adverse finding, Form 483s, or other similar regulatory actions or other
similar regulatory correspondence or communications with the FDA or any other
state or federal government agencies pertaining the Products and received by
Vendor at any time since January 1, 1992, except as set forth on SCHEDULE 5.5
hereto. There have been no product liability claims or personal injury claims
with respect to any of the Products at any time since January 1, 1992, except
as set forth on SCHEDULE 5.5 hereto.
5.6 Inventory. The Inventory included in the Purchased Assets as set
forth on SCHEDULE 5.6 hereto, is of a type and quality useable and saleable
(without discount in excess of discounts customarily provided by Vendor) in the
ordinary course of business related to the Products. None of such Inventory
shall have a shelf life less than eighteen (18) months.
5.7 Product Formulas. SCHEDULE 5.7 is a true and complete copy of the
current formulations and production methodologies of each Product. Such
formulations and methodologies are sufficient to enable Purchaser to
manufacture all of the Products.
5.8 Regulatory Issues. The documents listed on SCHEDULE 5.8, copies of
which have previously been delivered or made available to Purchaser, reflect
all outstanding regulatory issues with respect to the Products in the
Territory.
5.9 Compliance with Law. SCHEDULE 5.9 lists all FDA and other
administrative approvals, registrations and permits relating to the Purchased
Assets in the Territory. Except as described on SCHEDULE 5.9, Vendor has
conducted and is currently conducting the manufacture, promotion, advertising,
marketing and sale of the Finished Goods in material compliance with all
applicable domestic and foreign laws, rules, regulations and court or
administrative orders and processes. The manufacture of the Products by Vendor
is conducted pursuant to licensed processes and conforms in all material
respects to the FDA's current "good manufacturing practices" regulations for
finished pharmaceuticals as applicable as currently interpreted and enforced.
Vendor is the lawful holder of all rights under the NDAs free and clear of the
claims of all Persons. Vendor has complied in all material respects with all
applicable laws and regulations in connection with the preparation and
submission to the FDA of the NDAs. The NDAs have been approved by, and nothing
has come to the attention of Vendor which has, or reasonably should have, led
Vendor to believe that the NDAs are not in good standing with the FDA. Vendor
has the requisite right and authority to transfer the NDAs to Purchaser as set
forth in this Agreement without the consent or approval of any Person. The
NDAs are not subject to any right, license or use in the Territory except as
provided in this Agreement.
5.10 No Default Under Agreements. Vendor is not in default under or in
breach of any of the Transferred Contracts and there exists no state of facts
which, after notice or lapse of time or both, would constitute such a default
or breach. The Transferred Contracts are now in good standing and in full
force and effect and upon transfer of rights and obligations thereunder to the
Purchaser, the Purchaser shall be entitled to all rights and benefits
thereunder. Except as set forth in SCHEDULE 2.1(b) and the contemplated
Manufacturing Agreement and Assignment and
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Assumption Agreement, there are no material contracts which relate to the
Products in the Territory.
5.11 Intellectual Property Rights.
(a) Vendor is the beneficial owner of all right, title and interest
in the Intellectual Property and the registered owner of all right, title and
interest in the items listed on SCHEDULE 1.1(i), and has the right to use,
license, sublicense or assign the Intellectual Property without liability to,
or any requirement to obtain the consent of, any other Person, except as
described in SCHEDULE 1.1(i). Except as set forth in SCHEDULE 1.1(i), Vendor
does not own, or have rights under, any patents or have any pending patent
applications that relate to the manufacture, use or sale of the Products in the
Territory.
(b) To the best of Vendor's knowledge and belief, except as otherwise
set forth therein, all of the Intellectual Property listed in SCHEDULE 1.1(i)
as registered or filed has been duly registered or filed in the appropriate
office in the corresponding jurisdiction and is currently valid.
(c) To the best of Vendor's knowledge and belief, there are no
infringements, threats of infringements or asserted or unasserted claims by
Vendor of infringements or misappropriation of any of the Intellectual Property
in the Territory; and there are no asserted or unasserted claims by Vendor
contesting or challenging the right, title, or interest of any other Person in
any of the Intellectual Property.
(d) The are no outstanding threatened or actual claims asserted
against Vendor alleging the infringement or misappropriation by Vendor of any
intellectual property of any other Person that may affect the Purchased Assets
or the revocation, withdrawal, expiration, abandonment, or breach of any right
to use the Intellectual Property in the Territory. Vendor has not been
notified of any such claim of any Person nor does Vendor know of any basis for
the existence of any such claim in the Territory.
(e) The Intellectual Property is not subject to any license, royalty
arrangement or other contract with respect to the sale of Products in the
Territory.
5.12 Schedules. The information included on any Schedule delivered to
Purchaser by Vendor under the terms of this Agreement shall be deemed to have
been delivered with respect to any other Schedule delivered to Purchaser by
Vendor as though such information were fully set forth in such additional
Schedules. All Schedules are represented as true, correct and complete except
to the extent specifically addressed in individual representations, warranties
and Schedules.
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5.13 Ordinary Course. From January 1, 1996 through the date of this
Agreement, Vendor has conducted the business relating to the Purchased Assets
only in the ordinary course consistent with Vendor's past business practices.
5.14 Governmental Approvals. Except for compliance with the HSR Act or as
disclosed in the Schedules to this Section 5, no authorization, consent,
approval, license, exemption of or filing or registration with any court or
governmental department, commission, board, bureau, agency or instrumentality,
domestic or foreign, under any applicable laws, rules or regulations presently
in effect, is or will be necessary for, or in connection with, the sale of the
Purchased Assets to Purchaser, or the execution, delivery or performance by
Vendor of the Agreement or any other agreement or instrument executed in
connection herewith.
5.15 Contracts. Attached hereto as SCHEDULE 5.15 is a listing of all
written contracts currently in effect, or currently being negotiated, involving
the Purchased Assets in the Territory. Vendor has no written contract
involving the manufacture or sale of Products in the Territory except as set
forth SCHEDULE 5.15. The current term of the Third Party Manufacturing
Agreement with Schering Canada, Inc. for the manufacture and supply of Cytomel
expires in March 2000. For purposes hereof, "contracts" means any and all
contracts, agreements, notes, instruments, purchase orders, leases, licenses,
royalty agreements, territorial and agency agreements, sales representative
agreements, distribution or distributor agreements, manufacturer's rep
agreements, commitments or other arrangements of any kind. Vendor is not in
default of any such contract nor to its knowledge, is any party to any such
contract in default thereunder, nor, to Vendor's knowledge, does any condition
exist that with notice or lapse of time or both, constitute a default
thereunder. There are no material oral contracts involving the Purchased
Assets or the manufacture or sale of Products in the Territory, nor are there
any oral contracts which cannot be terminated on thirty (30) days prior written
notice.
5.16 Suppliers. SCHEDULE 5.16 hereto identifies the supplier(s) of raw
material for Triostat and also sets forth any contracts or agreements with
respect to the supply of raw materials for Triostat. Cytomel is manufactured
for Vendor under contract with Schering Corporation. Vendor knows of no reason
why any supplier of raw material for the Products will not supply raw material
for manufacturing the Products after the date of this Agreement.
5.17 Batch Records. SCHEDULE 5.17 hereto sets forth copies of (i) the
batch records from the three (3) most recent lots of Triostat manufactured for
Vendor, and (ii) the batch records from the two (2) most recent lots for each
strength of Cytomel manufactured for Vendor.
5.18 Product Returns. SCHEDULE 5.18 hereto sets forth a breakdown, on a
monthly basis, of all returns of Triostat for the past two (2) years.
5.19 Subsidiaries. Each of SmithKline Xxxxxxx Inc., a Canadian
corporation, SmithKline Xxxxxxx Animal Health Inc, a Canadian corporation,
SmithKline Xxxxxxx Inter-American Corporation, a Delaware corporation and
SmithKline Xxxxxxx Pharmaceuticals Co., a
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Delaware corporation (hereinafter collectively referred to as the
"Subsidiaries" and individually as a "Subsidiary") (i) is a wholly-owned
subsidiary of either SmithKline Xxxxxxx plc. or Vendor, (ii) is a corporation
duly incorporated, validly existing and in good standing under the law of the
jurisdiction of its incorporation, and has the corporate power to own or lease
its property and to carry on its business as now being conducted by it, and
(iii) has the corporate power and authority to sell, assign, and transfer, and
pursuant to this Agreement does sell, assign and transfer, to Purchaser, those
of the Purchased Assets owned by each such Subsidiary respectively.
5.20 Full Disclosure. All documents and other papers delivered by or on
behalf of Vendor pursuant to this Agreement are true, complete and authentic.
No representation or warranty of Vendor contained in this Agreement contains an
untrue statement of a material fact or omits to state a material fact required
to be stated herein or necessary to make statements made, in the context in
which made, not materially false or misleading. There is no fact of which
Vendor has, or reasonably should have, knowledge that has not been disclosed to
Purchaser in writing that materially adversely affects the ability of Vendor to
perform its obligations under this Agreement.
SECTION 6
COVENANTS OF VENDOR
6.1 Conduct of the Business Until Closing. Except for the steps or
actions taken pursuant to the prior written consent of Purchaser, Vendor, from
the date of this Agreement until the Time of Closing, will conduct its business
with respect to the Purchased Assets in good faith and in accordance with the
same practices previously followed by it except to the extent specifically
contemplated by this Agreement and during that period Vendor shall:
(a) conduct the business relating to the Purchased Assets, including
without limitation marketing of the Products, only in the normal course as
conducted from January 1, 1996;
(b) not transfer any of the Purchased Assets except Inventories in the
normal course;
(c) not enter into any patent, trademark or trade name or know-how
licenses, or any other leases, licenses, contracts or other commitments
relating to the Purchased Assets, unless each such lease, license, contract or
commitment (other than purchase orders for raw materials and Finished Goods
placed in the normal course of business) is first disclosed to and approved in
writing by Purchaser;
(d) continue to meet the contractual obligations of, and to pay
obligations relating to, the Purchased Assets as they mature in the normal
course;
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(e) preserve the good relations of the Products with suppliers,
business customers and others with whom it has business relations relating to
the Products; and
(f) not implement any price increases for any of the Products and any
new trade or consumer promotions, and not change the terms or conditions or any
such promotion in existence on the date hereof.
6.2 Transfer of Inventory. All the Inventories in the Territory shall be
shipped to Purchaser or its designee at Purchaser's expense as Purchaser shall
direct within two (2) Business Days after the Time of Closing.
6.3 Records and Retained Product. Vendor shall continue to the extent of
its current practice to preserve its books and records (including financial
information) relating to the Products and the Purchased Assets and retain
product samples from each batch of the Products produced by or for Vendor, and
during such periods and upon reasonable notice, shall grant Purchaser and its
agents and representatives reasonable access to such records and retained
product samples during normal business hours; provided, however, that in the
event Vendor's current practice of retaining product samples is retention for
less than one year, Vendor shall deliver to Purchaser all such product samples
at the end of the applicable retention periods for each such product sample.
6.4 Post Closing Orders. From and after the Time of Closing, Vendor shall
promptly deliver any and all purchase orders and refer all inquiries it shall
receive with respect to the Products to Purchaser.
6.5 Confidentiality. From and after the date hereof, Vendor shall use the
same efforts to maintain the confidentiality of any proprietary or confidential
information regarding the manufacture or sale of the Products as Vendor used to
maintain the confidentiality of such information prior to the date of this
Agreement; provided, however, that any such confidential or proprietary
information may be used by Supplier in manufacturing the Products under the
terms of the Manufacturing Agreement.
6.6 HSR Act. As soon as practical after the signing of this Agreement,
Vendor will file with the United States Federal Trade Commission and the
Antitrust Division of the Justice Department pursuant to the HSR Act all
requisite documents and notifications in connection with the transactions
contemplated by this Agreement. The parties will coordinate and cooperate with
one another in exchanging information and providing reasonable assistance as
the other may request in connection with the foregoing.
6.7 Responsibility for NDAs. Until the NDAs are transferred to Purchaser,
Vendor shall remain responsible for fulfilling and shall fulfill all regulatory
requirements with respect to the Products that are imposed upon Vendor as the
owner of the NDAs. Vendor shall take responsibility for transferring the NDAs
to Purchaser and shall make sure that all regulatory
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matters are complied with in order to complete said transfer. Vendor shall
perform all acts and deeds as may be reasonably requested by Purchaser in
order to transfer the NDA to Purchaser including the filing of all necessary
forms with the FDA. All documents and records pertaining to the NDAs will be
transferred to Purchaser at the Time of Closing.
6.8 Transitional Support. Vendor agrees, without payment of any
additional consideration from Purchaser, to provide Purchaser with such
transitional support as may be reasonably required in order to effectuate a
smooth transition from Vendor to Purchaser with respect to the manufacture and
sale of Products, including that which is set forth on EXHIBIT D hereto.
6.9 Notification of Customers. Vendor agrees to cooperate with Purchaser
in the notification of customers of the transactions contemplated by this
Agreement pursuant to a notice in such form as may be reasonably requested by
Purchaser.
6.10 Restrictive Covenants. (a) For and during the ten (10) year period
following the date of this Agreement (the "Restricted Period"), neither Vendor
nor any of its Affiliates shall directly or indirectly, within the Territory,
whether as a shareholder, agent, partner, proprietor, joint venturer,
consultant or otherwise, of any business or entity, take part, participate or
become interested in, in any manner whatsoever, a business or organization
which directly or indirectly manufactures, distributes or sells in the
Territory, liothyronine sodium products in competition with the Products;
provided, however, that nothing set forth herein shall prevent Vendor or its
Affiliates from (i) manufacturing Products for sale to Purchaser, or (ii)
manufacturing liothyronine sodium products, or (iv) engaging in any merger,
joint venture, partnership, research and/or development collaboration or
relationship of any nature whatsoever (each, a "Relationship") in which the
other party or parties involved in such Relationships (each, a "Significant
Other") at that time already conducts or engages in, directly or indirectly,
anywhere in the Territory, the manufacturing, marketing, distributing or
selling of liothyronine sodium products ("Liothyronine Sodium Business"),
provided that the Liothyronine Sodium Business
(A) does not constitute a material part of the overall business of the
Significant Other prior to the Relationship, and (B) will not constitute a
material part of the overall business of either such Relationship or Vendor, as
the case may be, following consummation of the Relationship. Notwithstanding
the foregoing, nothing set forth herein shall permit Vendor or its Affiliates
to directly or indirectly manufacture or develop a generic liothyronine sodium
product for sale in the Territory. Neither Vendor nor its Affiliates shall
knowingly sell any Products to anyone outside of the Territory for subsequent
distribution or resale inside of the Territory and Vendor and its Affiliates
shall take all reasonable precautions to prevent such distribution or resale
inside the Territory.
(b) If a party (the "Breaching Party") breaches, or threatens to
commit a breach of, any of the provisions of paragraph (a) above (the
"Restrictive Covenants"), the other party (the "Non-Breaching Party") shall
have the following rights and remedies, each of which shall be independent of
the others and severally enforceable, and each of which is in addition to,
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and not in lieu of, any other rights and remedies available to the
Non-Breaching Party at law or in equity: (i) the right and remedy to have the
Restrictive Covenants specifically enforced by any court of competent
jurisdiction, it being agreed that any breach or threatened breach of the
Restrictive Covenants would cause irreparable injury to the Non-Breaching Party
and that money damages would not provide an adequate remedy to the
Non-Breaching Party; (ii) the right and remedy to require the Breaching Party
to account for and pay over to the Non-Breaching Party, all compensation,
profits, monies, accruals, increments or other benefits derived or received by
the Breaching Party and/or by any other Person as the result of, or in any way
incident to any conduct or transactions constituting a breach of the
Restrictive Covenants; and/or (iii) in the event of an actual breach rather
than a threatened breach, the right to cease paying Royalties or other amounts
due under this Agreement. It is further agreed that the amount of any bond
that the Non-Breaching Party may be required to post incident to any equitable
relief sought hereunder shall not exceed $5,000 and that said amount shall be
deemed reasonable and proper.
(c) Vendor acknowledges and agrees that the Restrictive Covenants are
reasonable in geographical and temporal scope and in other respects. If any
court determines that any of the Restrictive Covenants, or any part thereof, is
invalid or unenforceable, the remainder of the Restrictive Covenants shall not
thereby be affected and shall be given full effect, without regard to the
invalid portions.
(d) If any court determines that any of the Restrictive Covenants, or
any part thereof, is unenforceable because of the duration or geographic scope
of such provision, such court shall have the power to reduce the duration or
scope of such provision, as the case may be, and, in its reduced form, such
provision shall then be enforceable.
(e) The Restrictive Covenants set forth herein shall survive the Time
of Closing through the end of the Restricted Period.
SECTION 7
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
Purchaser hereby represents and warrants to the Vendor as follows and
acknowledges that the Vendor is relying on such representations and warranties
in connection with the transactions contemplated by this Agreement:
7.1 Incorporation, Organization and Qualification of Purchaser. Purchaser
is a corporation duly incorporated, validly existing and in good standing under
the law of the jurisdiction of its incorporation, and has the corporate power
to own or lease its property and to carry on its business as now being
conducted by it. Purchaser is duly qualified to do business as a foreign
corporation and is in good standing in every jurisdiction where the nature of
the business conducted by it makes such qualification necessary except in such
jurisdictions where
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the failure to so qualify does not in the aggregate have a material adverse
effect on Purchaser's business taken as a whole.
7.2 Corporate Action. This Agreement and any other agreements and
instruments executed in connection herewith and therewith are the valid and
binding obligations of Purchaser, enforceable in accordance with their
respective terms, subject to bankruptcy, insolvency or similar laws of general
application affecting the enforcement of rights of creditors, and subject to
equitable principles limiting rights to specific performance or other equitable
remedies, and subject to the effect of federal and state securities laws on the
enforceability of indemnification provisions relating to liabilities arising
under such laws. The execution, delivery and performance of this Agreement and
any other agreement and instruments executed in connection herewith and
therewith have been duly authorized by all necessary corporate action of
Purchaser.
7.3 Governmental Approvals. Except for compliance with the HSR Act, no
authorization, consent, approval, license, exemption of or filing or
registration with any court or governmental department, commission, board,
bureau, agency or instrumentality, domestic or foreign, under any applicable
laws, rules or regulations presently in effect, is or will be necessary for, or
in connection with, the purchase of the Purchased Assets, or the execution,
delivery or performance by Purchaser of the Agreement or any other agreement or
instrument executed in connection herewith, or for the performance by it of its
obligations under this Agreement.
SECTION 8
COVENANTS OF THE PURCHASER
8.1 Bulk Sales Act. The Purchaser hereby waives compliance with any
applicable bulk sales act governing the purchase and sale of the Purchased
Assets.
8.2 Insurance. At all times from the Effective Date through June 30,
2002, Purchaser shall maintain product liability insurance written on a claims
made form in an amount of not less than $10,000,000 per occurrence. Purchaser
shall provide Vendor with a certificate of insurance as evidence of such
insurance within ten (10) business days of the execution of this Agreement and
annually thereafter evidencing the renewal of said insurance. In the event
that any such insurance shall be significantly reduced or restricted,
terminated or shall otherwise not be renewed, Purchaser shall immediately
notify Vendor.
8.3 Use of Name. For a period of 12 months from the Effective Date or
such longer period as shall be necessary to exhaust any Inventories (but in no
event later than 18 months after the Time of Closing), Vendor shall permit
Purchaser to use the terms and logo for "SB SmithKline Xxxxxxx Pharmaceuticals"
on the Products and on their packaging and in connection with the sale and
distribution of the Products to wholesale and retail distributors; provided,
that Purchaser shall not order any new packaging from four months after the
Time of Closing which bears any of such names or logos except as manufacturer;
and provided further, that except as
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hereby provided Purchaser shall have no right to use the terms "SB SmithKline
Xxxxxxx Pharmaceuticals" or "SB Pharma" as a trade name, trademark or service
xxxx, and provided further that the continued existence in the market place of
Finished Goods bearing any of the foregoing terms and logos after the
conclusion of such twelve month or longer period in connection with goods which
were sold by Purchaser during such twelve month or longer period shall be
permitted. Use of the name "SmithKline Xxxxxxx Pharmaceuticals" as
manufacturer on labeling for Triostat shall be authorized for Products
manufactured by Supplier under the Manufacturing Agreement.
8.4 Confidentiality. From and after the Effective Date until the Time of
Closing, Purchaser shall use the same efforts to maintain the confidentiality
of any proprietary or confidential information regarding the Products as
Purchaser uses to maintain the confidentiality of its own proprietary
information. In the event that there is no Time of Closing under this
Agreement, Purchaser shall return all information regarding the Products to
Vendor, retaining no copies, excerpts or other analysis or redactions of such
information and covenants that no such information shall be disclosed to any
third party or utilized in any way by Purchaser in the conduct of its own
business.
8.5 HSR Act. Purchaser will file with the United States Federal Trade
Commission and the Antitrust Division of the Justice Department pursuant to the
HSR Act all requisite documents and notifications in connection with the
transactions contemplated by this Agreement. The parties will coordinate and
cooperate with one another in exchanging information and providing reasonable
assistance as the other may request in connection with the foregoing.
SECTION 9
MUTUAL COVENANTS
9.1 Right to Investigate. After the date hereof, the Vendor shall afford
to representatives of the Purchaser reasonable access to offices, plants,
properties, books and records of the Vendor relating to the Products, during
normal business hours, in order that the Purchaser may have full opportunity to
make such investigations as it desires with respect to the Products. In the
event of termination of this Agreement, the Purchaser shall deliver to the
Vendor all documents, work papers and other material obtained by the Purchaser,
or on its behalf, from the Vendor and all copies thereof, whether so obtained
before or after the execution of this Agreement, and shall not itself use
directly or indirectly or through any subsidiary or affiliate any information
so obtained, or otherwise obtained from the Vendor, hereunder or in connection
herewith (unless such information is generally known in the industry or was
acquired by the Purchaser prior to the receipt thereof from the Vendor or was
acquired after the date hereof from a third party having a bona fide right to
provide the same to the Purchaser), and shall endeavor to have all such
information kept confidential and not used in any manner.
9.2 Assignment and Assumption Agreement. Purchaser and Vendor shall enter
into an Assignment and Assumption Agreement substantially in the form of
EXHIBIT B hereto.
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9.3 Manufacturing Agreement. Purchaser and Supplier shall enter into a
Manufacturing Agreement substantially in the form of EXHIBIT C hereto.
9.4 Governmental Filings. Subject to Vendor's obligations pursuant to
Section 6 of this Agreement, Vendor and Purchaser each agree to prepare and
file whatever filings, requests or applications are required to be filed with
any governmental authority in connection with this Agreement and to cooperate
with one another as reasonably necessary in order to accomplish the foregoing.
The parties agree to seek early termination of the waiting period with respect
to their filings under the HSR Act as soon as practicable after the signing of
this Agreement.
9.5 Trade Returns. For a period of five (5) months following the
Effective Date, Vendor shall bear the cost of all returns, Medicaid and other
contractual reimbursements and chargebacks for Products sold prior to the Time
of Closing, in each case in accordance with Vendor's current practices.
Purchaser will not take any action to encourage any returns of such goods to
Vendor. After such five (5) month period, Purchaser shall be responsible for
all Medicaid and other reimbursements and chargebacks for Products regardless
of the date of sale and shall be responsible for returns of Finished Goods from
the trade in accordance with Purchaser's return policy.
9.6 Brokers. Purchaser represents to the Vendor that Purchaser has not
employed any investment banker, broker, finder or intermediary in connection
with the transactions contemplated hereby who might be entitled to a fee or
commission upon the execution of this Agreement or the consummation of such
transactions. Vendor represents to Purchaser that Vendor has not employed any
investment banker, broker, finder or intermediary in connection with the
transactions contemplated hereby who might be entitled to a fee or commission
upon the execution of this Agreement or the consummation of such transactions.
Each party agrees to indemnify and hold the other party harmless with respect
to any action, claim or demand with respect to any third party claiming any
such fee or commission by reason of its relationship to the indemnifying party.
9.7 Allocation of Purchase Price. Following the Time of Closing, Vendor
and Purchaser agree to negotiate in good faith to determine a mutually
acceptable allocation of the Purchase Price among the Purchased Assets. In the
event the parties determine a mutually acceptable allocation, said allocation
shall be reflected on any returns required to be filed with the Internal
Revenue Service or any other foreign or state tax authority arising from this
transaction.
9.8 Promotion; Adverse Event Reports. Purchaser and Vendor shall, upon
execution of this Agreement, apprise the other party of the standard operating
procedures for the investigation and reporting of adverse experiences regarding
the Products. The parties shall then promptly develop and agree upon
procedures for reporting to each other adverse experiences concerning the
Products. The parties shall immediately implement such agreed procedures and
shall provide each other on a regular basis with any appropriate information
which enables the
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other party to meet its obligations in the territories in which it is
commercializing or developing the Products or which is relevant to the safe use
of the Products. The agreed procedures will be reviewed jointly on a regular
basis or when there is a change in regulations governing adverse experience
reporting. For purposes of this section, "adverse experience(s)" shall mean
any untoward medical occurrence in a patent or clinical investigation subject
administered a pharmaceutical product and which does not necessarily have to
have a causal relationship with this treatment.
9.9 Cooperation. If either party shall become engaged in or participate
in any investigation, claim, litigation or other proceeding with any Person,
including the FDA, relating in any way to the Products, the other party shall,
upon reimbursement of all reasonable out-of-pocket expenses, cooperate in all
reasonable respects with such party in connection therewith, including without
limitation, using its reasonable efforts to make available to the other such
employees who may be helpful with respect to such investigation, claim,
litigation or other proceeding.
9.10 Excess Inventory. Vendor's inventory of Triostat in excess of the
Purchased Triostat (the "Excess Triostat") shall be delivered to Purchaser at
Closing at no additional cost. In the event that Purchaser sells any of said
Excess Triostat, Purchaser shall pay Vendor for said Excess Triostat so sold in
accordance with the pricing set forth on SCHEDULE 3.1 hereto. Any Excess
Triostat not sold by Purchaser shall be destroyed by Purchaser in accordance
with applicable law.
SECTION 10
CLOSING ARRANGEMENTS
10.1 Closing Arrangements. At or before the Time of Closing upon
fulfillment of all the conditions hereof which have not been waived in writing
by the Purchaser or the Vendor respectively:
(a) Vendor's Delivery of Closing Documents. Vendor shall deliver to
Purchaser:
(i) a xxxx of sale substantially in the form of EXHIBIT E;
(ii) an assignment of trademarks substantially in the form of
EXHIBIT F;
(iii) such instruments of conveyance, assignment and transfer, in
form and substance satisfactory to Purchaser, as shall be appropriate to
convey, transfer and assign to, and to vest in Purchaser, good title to the
Purchased Assets, free and clear of all Encumbrances;
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(iv) all technical data, formulations, product literature and
other documentation related to the Purchased Assets;
(v) such certificates of Vendor's officers and such other
documents evidencing satisfaction of the conditions specified in Section 11 as
Purchaser shall reasonably request; and
(vi) such other documents, instruments and certificates as
Purchaser may reasonably request.
(b) Purchaser's Delivery of Closing Documents. Purchaser shall
deliver to Vendor:
(i) such certificates of Purchaser's officers and such other
documents evidencing satisfaction of the conditions specified in Section 12 as
Vendor shall reasonably request; and
(ii) such other documents, instruments and certificates as Vendor
may reasonably request.
(c) Payment of Purchase Price. On the fulfillment of the foregoing
terms of Section 10 and upon the fulfillment of all the conditions of this
Agreement, which have not been specifically waived in writing by Purchaser or
Vendor, as the case may be, Purchaser shall pay and satisfy the Purchase Price
as provided in Section 4 hereof.
(d) Physical Delivery. Pursuant to delivery arrangements specified by
Purchaser to Vendor prior to the Time of Closing, and reasonably acceptable to
Vendor, Vendor shall deliver to Purchaser at Purchaser's premises those
tangible assets (other than Inventory) included in the Purchased Assets at the
Time of Closing or as soon thereafter as reasonably practical. Inventory shall
be delivered by Vendor to Purchaser pursuant to Section 6.2 hereof.
10.2 Transfer Expenses -- Trademarks and Patents. Vendor shall deliver to
Purchaser such trademark and patent assignment documents in recordable form
necessary to effect the transfer of such trademarks and patents to Purchaser.
Purchaser shall be responsible for the recordation of same and Purchaser shall
bear any costs and fees related thereto. Purchaser shall be responsible for
all costs associated with maintenance of trademarks and patents from the Time
of Closing.
SECTION 11
PURCHASER'S CONDITIONS OF CLOSING
The sale and purchase of the Purchased Assets in accordance with the terms
of this Agreement are subject to the following terms and conditions, each of
which is included for the
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exclusive benefit of Purchaser, to be fulfilled and/or performed at or prior to
the Time of Closing:
11.1 Representations and Warranties at Closing. The representations and
warranties of Vendor to Purchaser contained in this Agreement and Schedules
hereto shall be true and correct in all material respects at the Effective Date
with the same force and effect as if such representations and warranties were
made at and as of such time and the Vendor shall deliver to the Purchaser at
the Time of Closing certificates by an officer of Vendor to such effect
provided that the receipt of such evidence and the closing of the transaction
of purchase and sale herein provided for shall not be nor be deemed to be a
waiver of the representations and warranties contained in this Agreement and
Schedules hereto.
11.2 Compliance with Terms and Conditions. All of the terms, covenants
and conditions of this Agreement to be complied with or performed by the Vendor
at or before the Time of Closing shall have been complied with or performed in
all material respects.
11.3 Necessary Consents. There shall have been obtained from all
appropriate federal, state, municipal or other governmental or administrative
bodies such approvals or consents as are required to permit the change of
ownership of the Purchased Assets contemplated hereby.
11.4 No Actions Taken Restricting Sale. All required filings under the
HSR Act shall have been made and any required waiting period under the HSR Act
shall have expired or been earlier terminated. No action or proceeding in the
United States by law or in equity shall be pending or threatened by any person,
firm, corporation, government, governmental authority, regulatory body or
agency to enjoin, restrict or prohibit the purchase and sale of the Purchased
Assets contemplated hereby or the right of the Purchaser to conduct the
business in respect of the Purchased Assets.
11.5 Non-Performance of Conditions for the Benefit of the Purchaser. (a)
Subject to the provisions of paragraph (b) below, in the event that any of the
conditions set forth in this Section 11 shall not be fulfilled and/or performed
at or before the Time of Closing, the Purchaser may (i) rescind this Agreement
by notice in writing to the Vendor, and the Purchaser shall thereupon be
released from all obligations under this Agreement and, unless the condition or
conditions for the nonfulfillment of non-performance of which the Purchaser has
rescinded this Agreement are reasonably capable of being fulfilled and/or
performed or caused to be fulfilled or performed by the Vendor, then the Vendor
shall also be released from all obligations under this Agreement, provided any
of the said conditions may be waived in whole or in part by the Purchaser at
any time without prejudice to its rights of rescission in the event of
non-fulfillment and/or non-performance of any other condition or conditions,
any such waiver to be binding upon the Purchaser only if the same is in
writing, or (ii) postpone the Time for Closing until such conditions are
fulfilled and/or performed by giving written notice thereof to the Vendor.
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(b) In the event that any of the conditions set forth in this Section
11 shall not be fulfilled and/or performed at or before the Time of Closing due
to a failure of Vendor to perform its obligations hereunder, then such shall
be a material breach by Vendor of this Agreement and the Purchaser may (i)
postpone the Time for Closing until such conditions are fulfilled and/or
performed by giving written notice thereof to the Vendor, or (ii) rescind this
Agreement by notice in writing to the Vendor, and the Purchaser shall thereupon
be released from all obligations under this Agreement, or (iii) pursue any
other rights or remedies available at law or equity as a result of such breach.
11.6 Ancillary Documents. Purchaser and Supplier shall have entered into
the Manufacturing Agreement, and Vendor, Purchaser and Schering Canada shall
have entered into the Assignment and Assumption Agreement.
11.7 Opinion of Counsel. Purchaser shall have received an opinion of
Xxxxxx X. Xxxxxx, Esq., counsel for Vendor, dated the Time of Closing, in the
form of EXHIBIT G hereto
SECTION 12
VENDOR'S CONDITIONS OF CLOSING
The sale and purchase of the Purchased Assets in accordance with the terms
of this Agreement is subject to the following terms and conditions, each of
which is included for the exclusive benefit of the Vendor. Each of such
conditions is to be fulfilled and/or performed at or prior to the Time of
Closing.
12.1 Compliance with Terms. All the terms, covenants and conditions of
this Agreement to be complied with or performed by the Purchaser at or before
the Time of Closing shall have been duly complied with or performed in all
material respects.
12.2 No Action Taken Restricting Sale. All required filings under the HSR
Act shall have bee made and any required waiting period under the HSR Act shall
have expired or been earlier terminated. No action or proceeding in the United
States at law or in equity shall be pending or threatened by any person, firm,
corporation, government, governmental authority, regulatory body or agency to
enjoin, restrict or prohibit the purchase and sale of the Purchased Assets
contemplated hereby or the right of the Vendor to sell the Purchased Assets.
12.3 Non-Performance of Conditions for the Benefit of the Vendor. (a)
Subject to the provisions of paragraph (b) below, in the event that any of the
conditions set forth in this Section 12 shall not be fulfilled and/or performed
at or before the Time of Closing, the Vendor may (i) rescind this Agreement by
notice in writing to the Purchaser, and the Vendor shall thereupon be released
from all obligations under this Agreement and, unless the condition or
conditions for the nonfulfillment of non-performance of which the Vendor has
rescinded this Agreement are reasonably capable of being fulfilled and/or
performed or caused to be fulfilled or performed by the Purchaser, then the
Purchaser shall also be released from all obligations under this
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Agreement, provided any of the said conditions may be waived in whole or in
part by the Vendor at any time without prejudice to its rights of rescission in
the event of non-fulfillment and/or non-performance of any other condition or
conditions, any such waiver to be binding upon the Vendor only if the same is
in writing or (ii) postpone the Time for Closing until such conditions are
fulfilled and/or performed by giving written notice thereof to Purchaser.
(b) In the event that any of the conditions set forth in this Section
12 shall not be fulfilled and/or performed at or before the Time of Closing due
to a failure of Purchaser to perform its obligations hereunder, then such shall
be a material breach by Purchaser of this Agreement and the Vendor may (i)
postpone the Time for Closing until such conditions are fulfilled and/or
performed by giving written notice thereof to Purchaser, (ii) rescind this
Agreement by notice in writing to the Purchaser, and the Vendor shall thereupon
be released from all obligations under this Agreement or (iii) pursue any other
rights or remedies available at law or equity as a result of such breach.
12.4 Ancillary Documents. Purchaser and Supplier shall have entered into
the Manufacturing Agreement, Purchaser, and Vendor and Schering Canada shall
have entered into the Assignment and Assumption Agreement.
12.5 Opinion of Counsel. Vendor shall have received an opinion of
Xxxxxxxxxxxx, Xxxxxx & Xxxx, P.C., counsel for Purchaser, dated the Time of
Closing, in the form of EXHIBIT H hereto.
12.6 Insurance Certificate. Purchaser shall have provided Vendor with a
certificate of insurance documenting the coverage described in Section 8.2.
SECTION 13
CONDITIONS TO THE OBLIGATIONS OF ALL PARTIES
The obligations of each of the parties hereto are subject to the condition
that at the Time of Closing, there shall exist no injunction or other order
issued by a court of competent jurisdiction which would make unlawful the
consummation of the transactions contemplated by this Agreement.
SECTION 14
INDEMNIFICATION
14.1 Vendor's Indemnification. Vendor will indemnify and hold harmless
Purchaser and each of its directors, officers, employees, advisors, Affiliates,
agents and shareholders from and against any and all losses, damages,
liabilities, costs, claims and expenses, including but not limited to fees and
expenses of counsel and expert witnesses (collectively, "Damages") , arising
out of, based upon or resulting from:
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(a) any claims against, or liabilities or obligations of, the Vendor
or against the Purchased Assets other than the Assumed Liabilities;
(b) any inaccuracy of any representation or warranty or schedule of
Vendor or any of its Affiliates which is contained in or made pursuant to this
Agreement or in any Ancillary Documents referred to in Section 12.4;
(c) the non-compliance by Vendor with the provisions of any applicable
bulk sales act governing the purchase and sale of the Purchased Assets;
(d) any tax liability of Vendor (other than sales and use taxes
referred to in Section 3.3 of this Agreement) including, without limitation,
any tax liability arising out of the failure of Vendor or Purchaser to comply
with any provisions of the tax laws of the Commonwealth of Pennsylvania
(including, without limitation, provisions requiring notice to state tax
authorities concerning bulk or other sales of property); or
(e) any breach by Vendor or any of its Affiliates of any of their
respective agreements, covenants or obligations contained in or made pursuant
to this Agreement or any Ancillary Documents referred to in Section 12.4;
(f) any Excluded Liabilities; or
(g) any negligent acts or omissions of Supplier in the manufacturing
of Products for Purchaser.
Vendor shall have no obligation to indemnify Purchaser under this Section 14
for any breach of Vendor's representations and warranties made in or pursuant
to Section 14.1 of this Agreement, until such time, if any, as the aggregate
amount of the liabilities, losses, damages, claims costs and expenses arising
out of such breach exceeds $50,000 at which time the entire cumulative
aggregate amount of such Damages shall be covered; provided, however, that
Vendor's obligation to indemnify Purchaser hereunder shall be limited to the
aggregate amount of $22,800,000. Notwithstanding the foregoing, in the event
the closing does not occur and Purchaser does not acquire the Purchased Assets
as contemplated by this Agreement, Vendor shall indemnify and hold harmless
Purchaser and each of its directors, officers, employees, advisors, affiliates,
agents and shareholders from and against any and all Damages, based upon or
resulting from the Assumed Liabilities or the conduct of the business related
to the Products by the Vendor, regardless of the period of time at issue, and
the $50,000 limitation set forth above shall not apply.
14.2 Purchaser's Indemnification. Purchaser will indemnify and hold
harmless Vendor and each of its directors, officers, employees, advisors,
affiliates, agents and shareholders from and against any and all Damages
arising out of, based upon or resulting from:
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(a) any inaccuracy of any representation or warranty of Purchaser
which is contained in or made pursuant to this Agreement or any ancillary
documents referred to in Section 12.4;
(b) any breach by Purchaser of any of its agreements, covenants or
obligations contained in or made pursuant to this Agreement or any ancillary
documents referred to in Section 12.4; or
(c) any of the Assumed Liabilities, excluding damages, liabilities,
costs and claims arising out of or related to returns to the extent that Vendor
has retained liability pursuant to Section 9.5.
14.3 Claims Procedures. Promptly after the receipt by any party hereto of
notice under this Section 14 of (x) any claim or (y) the commencement of any
action or proceeding, such party (the "Aggrieved Party") will, if a claim with
respect thereto is to be made against any party obligated to provide
indemnification (the "Indemnifying Party") pursuant to this Section 14, give
such Indemnifying Party written notice of such claim or the commencement of
such action or proceeding and shall permit the Indemnifying Party to assume the
defense of any such claim or any litigation resulting from such claim. Failure
by the Indemnifying Party to notify the Aggrieved Party of its election to
defend any such action within a reasonable time, but in no event more than
fifteen days after notice thereof shall have been given to the Indemnifying
Party, shall be deemed a waiver by the Indemnifying Party of its right to
defend such action.
(b) If the Indemnifying Party assumes the defense of any such claim or
litigation resulting therefrom, the obligations of the Indemnifying Party as to
such claim shall be limited to taking all steps necessary in the defense or
settlement of such claim or litigation resulting therefrom and to holding the
Aggrieved Party harmless from and against any and all losses, damages and
liabilities caused by or arising out of any settlement approved by the
Indemnifying Party or any judgment in connection with such claim or litigation
resulting therefrom. The Aggrieved Party may participate, at its expense, in
the defense of such claim or litigation provided that the Indemnifying Party
shall direct and control the defense of such claim or litigation. The
Indemnifying Party shall not, in the defense of such claim or any litigation
resulting therefrom, consent to entry of any judgment, except with the written
consent of the Aggrieved Party, or enter into any settlement, except with the
written consent of the Aggrieved Party, which does not include as an
unconditional term thereof the giving by the claimant or the plaintiff to the
Aggrieved Party of a release from all liability in respect of such claim or
litigation.
(c) If the Indemnifying Party shall not assume the defense of any such
claim or litigation resulting therefrom, the Aggrieved Party may defend against
such claim or litigation in such manner as it may deem appropriate and, unless
the Indemnifying Party shall deposit with the Aggrieved Party a sum equivalent
to the total amount demanded in such claim or litigation, or shall deliver to
the Aggrieved Party a surety bond or an irrevocable letter of credit in form
and
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substance reasonably satisfactory to the Aggrieved Party, the Aggrieved Party
may settle such claim or litigation on such terms as it may deem appropriate,
and the Indemnifying Party shall promptly reimburse the Aggrieved Party for the
amount of all reasonable expenses, legal or otherwise, incurred by the
Aggrieved Party in connection with the defense against or settlement of such
claims or litigation. If no settlement of such claim or litigation is made,
the Indemnifying Party shall promptly reimburse the Aggrieved Party for the
amount of any judgment rendered with respect to such claim or in such
litigation and of all expenses, legal or otherwise, incurred by the Aggrieved
Party in the defense against such claim or litigation.
14.4 Nature of Survival of Representations, Etc. All representations and
warranties and agreements made by the parties hereto shall survive the Time of
Closing and any investigation at any time made by or on behalf of either party,
provided, however, that no claim may be made in respect of a representation or
warranty after February 28, 1999. Each Aggrieved Party's rights under Section
14 shall not be deemed to have been waived or otherwise affected by such
Aggrieved Party's waiver of the breach of any representation, warranty or
agreement contained in or made pursuant to this Agreement unless such wavier
expressly waives its rights set forth herein in writing.
SECTION 15
EFFECTIVE DATE
15.1 Effective Date and Transfer of Possession. Subject to compliance
with the terms and conditions hereof, the transfer of title of the Purchased
Assets shall take effect as of the Effective Date.
15.2 Time and Place of Closing. The completion of the transactions
contemplated by this Agreement shall take place at the Time of Closing at the
offices of Vendor located at Xxx Xxxxxxxx Xxxxx, Xxxxxxxxxxxx, Xxxxxxxxxxxx, or
at such other place as may be agreed upon by the parties hereto.
SECTION 16
FAILURE TO CLOSE
16.1 Rights and Liabilities. Subject to the respective rights and
obligations of the parties set forth in Sections 11.5 and 12.3 of this
Agreement, it is expressly understood by the parties that in the event that
there is no closing under this Agreement, Purchaser shall have no rights
whatsoever to the revenues from the Products, and shall have no liability for
the Assumed Liabilities or for any costs or expenses incurred or accrued with
respect to the business related to the Products.
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SECTION 17
MISCELLANEOUS
17.1 Further Assurances. Each of the parties hereto upon the request of
the other party hereto, whether before or after the Time of Closing and without
further consideration, shall do, execute, acknowledge and deliver or cause to
be done, executed, acknowledged or delivered all such further acts, deeds,
documents, assignments, transfers, conveyances powers of attorney and
assurances as may be reasonably necessary or desirable to effect complete
consummation of the transactions contemplated by this Agreement.
17.2 Announcements. The parties hereto agree that no disclosure or public
announcement with respect to this Agreement, its contents or any of the
transactions contemplated by this Agreement shall be made by any party hereto
without the prior written consent of the other parties hereto provided,
however, that nothing herein contained shall restrict Vendor or Purchaser from
making any public announcement of the transactions contemplated by this
Agreement to the extent that it, in its sole discretion reasonably exercised,
is of the view that such announcement is required or deemed advisable in order
to meet its obligations under the securities laws or stock exchange
requirements in the United Kingdom or the United States of America; provided
further that prior to making such announcement, the party making it shall
provide particulars thereof in writing to the other parties. Notwithstanding
the foregoing, Purchaser may disclose this Agreement and the transactions
contemplated hereby, to the extent reasonably necessary, in connection with any
registration of one or more of the Products with any state, Federal or other
governmental agency.
17.3 Notices. Any notice, direction or other instrument required or
permitted to be given to Vendor hereunder shall be in writing and may be given
by personally delivering the same or by sending the same by telecommunication
(and followed immediately by mailing the same by certified or registered first
class mail, return receipt requested, postage prepaid) addressed to the Vendor
as follows:
To: SmithKline Xxxxxxx Pharmaceuticals
One Franklin Plaza (FP1935)
Xxxxxxxxxxxx, XX 00000
Attn: Senior Vice President,
Worldwide Business Development
Fax: 000-000-0000
Copy to: SmithKline Xxxxxxx Corporation
One Franklin Plaza (FP2225)
Xxxxxxxxxxxx, XX 00000
Attn: Corporate Legal
Fax: 000-000-0000
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Any notice, direction or other instrument required or permitted to be given to
Purchaser hereunder shall be in writing and may be given by personally
delivering the same or by sending the same by telecommunication (and followed
immediately by mailing the same by certified or registered first class mail,
return receipt requested, postage prepaid) addressed to the Purchaser as
follows:
To: Xxxxx Medical Industries, Inc.
0000 Xxxxx Xxxx, X.X. Xxx 00000
Xx. Xxxxx, XX 00000
Attn:
Fax: 000-000-0000
Copy to: Xxxxxxxxxxxx, Xxxxxx & Xxxx, P.C.
00 Xxxxx Xxxxxxxx
Xxxxx 0000
Xx. Xxxxx, XX 00000
Attn: Xxxxxx X. Chod
Fax: 000-000-0000
Any such notice, direction or other instrument, if delivered, shall be
deemed to have been given on the date on which it was delivered and if
transmitted by telecommunication shall be deemed to have been given at the
opening of business in the office of the addressee on the Business Day next
following the transmission thereof.
Any party hereto may change its address for service from time to time by
notice given to the other parties hereto in accordance with the foregoing.
17.4 Termination. This Agreement may be terminated at any time prior to
the Time of Closing:
(a) by mutual consent of Vendor and Purchaser; and
(b) by either Vendor or Purchaser if the sale contemplated hereby
shall not have been consummated on or before July 31, 1997.
17.5 Time of the Essence. Time shall be of the essence.
17.6 Applicable Law. This Agreement shall be construed and enforced in
accordance with, and the rights of the parties hereto shall be governed by, the
laws of the Commonwealth of Pennsylvania.
17.7 Entire Agreement. This Agreement, including the Exhibits and
Schedules hereto, constitutes the entire agreement between the parties hereto
with respect to the transactions
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provided for herein and, except as stated herein and in the instruments and
documents to be executed and delivered pursuant hereto, contains all of the
agreements between the parties hereto and there are no verbal agreements or
understandings between the parties hereto not reflected in this Agreement.
This Agreement may not be amended or modified in any respect except by written
instrument executed by each of the parties hereto.
17.8 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original and all of which
together shall constitute one and the same Agreement.
17.9 Parties in Interest. This Agreement shall inure to the benefit of
and be binding upon the parties hereto and their respective successors and
assigns, but shall not be assignable by Purchaser or Vendor prior to the Time
of Closing without the written consent of the other party; provided, however,
that nothing set forth in this Section 17.9 shall prevent or restrict either
Vendor or Purchaser from assigning its rights and obligations under this
Agreement without the consent of the other, (i) to its Affiliates, or (ii)
incident to the sale of all or substantially all of its assets or stock, or
(iii) incident to the merger or reorganization of said party. No assignment of
this Agreement or of any rights hereunder shall relieve the assigning party of
any of its obligations or liability hereunder.
17.10 Waiver; Remedies. No delay on the part of Purchaser or Vendor in
exercising any right, power or privilege hereunder shall operate as a waiver
thereof, nor shall any waiver on the part of either Vendor or Purchaser of any
right, power or privilege hereunder operate as a waiver of any other right,
power or privilege hereunder nor shall any single or partial exercise of any
right, power or privilege hereunder preclude any other or further exercise
thereof or the exercise of any other right, power or privilege hereunder.
17.11 Severability. If any provision of this Agreement is found or
declared to be invalid or unenforceable by any court or other competent
authority having jurisdiction, such finding or declaration shall not invalidate
any other provision hereof, and this Agreement shall thereafter continue in
full force and effect except that such invalid or unenforceable provision, and
(if necessary) other provisions hereof, shall be reformed by a court of
competent jurisdiction so as to effect insofar as is practicable, the intention
of the parties as set forth in this Agreement, provided that if such court is
unable or unwilling to effect such reformation, the invalid or unenforceable
provision shall be deemed deleted to the same extent as if it had never
existed.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK; SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, this Agreement has been executed by the parties hereto
as of the date first above written.
XXXXX MEDICAL INDUSTRIES, INC. SMITHKLINE XXXXXXX CORPORATION
By:_________________________________ By:__________________________________
Name:_______________________________ Name:________________________________
Title:______________________________ Title:_______________________________
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EXHIBITS AND SCHEDULES
EXHIBITS
Exhibit A - Products
Exhibit B - Assignment and Assumption Agreement
Exhibit C - Manufacturing Agreement
Exhibit D - Transitional Support
Exhibit E - Xxxx of Sale
Exhibit F - Assignment of Trademarks
Exhibit G - Vendor's Opinion of Counsel
Exhibit H - Purchaser's Opinion of Counsel
SCHEDULES
Schedule 1.1(h) - Incremental Net Sales Example
Schedule 1.1(i) - Intellectual Property
Schedule 2.1(a) - Products' Rights
Schedule 2.1(b) - Transferred Contracts
Schedule 2.2(d) - Purchase Orders
Schedule 3.1 - Pricing
Schedule 5.4 - Financial Information
Schedule 5.5 - Litigation
Schedule 5.6 - Inventory
Schedule 5.7 - Product Formula
Schedule 5.8 - Regulatory Issues
Schedule 5.9 - Compliance with Law
Schedule 5.15 - Contract
Schedule 5.16 - Suppliers
Schedule 5.17 - Batch Records
Schedule 5.18 - Product Returns
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