Exhibit 2.3
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ASSET PURCHASE AGREEMENT
among
COPHARMA, INC.,
MARATHON BIOPHARMACEUTICALS, INC.,
SERAGEN, INC.
and
LIGAND PHARMACEUTICALS INCORPORATED
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January 7, 2000
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ASSET PURCHASE AGREEMENT
ASSET PURCHASE AGREEMENT dated as of January 7, 2000, among CoPharma, Inc.,
a Delaware corporation (the "Buyer"), Marathon Biopharmaceuticals, Inc., a
Delaware corporation (the "Seller"), Seragen, Inc., a Delaware corporation and
the holder of all of the issued and outstanding capital stock of Seller (the
"Shareholder") and Ligand Pharmaceuticals Incorporated, a Delaware corporation
("Ligand").
WITNESSETH
WHEREAS, the Seller is in the business of biotechnical research,
development and manufacture of pharmaceutical and healthcare related products
(the "BUSINESS").
WHEREAS, the Shareholder is the beneficial and record owner of all of the
issued and outstanding shares of capital stock of the Seller; and
WHEREAS, the Seller wishes to sell to the Buyer, and the Buyer wishes to
purchase, substantially all of the assets of the Seller upon the terms and
conditions of this Agreement;
NOW THEREFORE, in consideration of the foregoing and of the mutual
covenants set forth below, the parties hereby agree as follows:
SECTION 1 - SALE AND PURCHASE OF ASSETS
1.1 SALE OF ASSETS. Subject to the provisions of this Agreement, at the
Closing (as defined in Section 1.8 hereof), the Seller agrees to sell and the
Buyer agrees to purchase, all right, title to and interest in all of the
properties, assets and business of the Seller of every kind and description,
tangible and intangible, real, personal or mixed, and wherever located,
including, without limitation, all accounts receivable, inventory, equipment,
intellectual property rights and all of Seller's good will and the exclusive
right to use the name of Seller as all or part of a trade or corporate name;
PROVIDED, HOWEVER, that there shall be excluded from such purchase and sale the
Excluded Assets (as defined in Section 1.2 hereof). The assets, property and
business of Seller to be sold to and purchased by the Buyer (or its designee)
under this Agreement are hereinafter sometimes referred to as the "PURCHASED
ASSETS."
1.2 EXCLUDED ASSETS. The "EXCLUDED ASSETS" shall comprise (i) Seller's
stock record books, corporate record books containing minutes of meetings of
directors and stockholders and such other records as have to do exclusively with
Seller's organization or stock capitalization, (ii) except as otherwise set
forth in the following sentence, the Seller's cash and cash equivalents (it
being specifically understood that accounts receivable are not cash equivalents
and are part of the Purchased Assets acquired by the Buyer) on the Closing Date
(as defined in Section 1.8 hereof), (iii) the Excluded Inventory (as defined
below) and (iv) accounts receivable from Ligand and Shareholder. The Purchased
Assets include all cash and cash equivalents generated or received by the Seller
or the Business following December 31, 1999, all of which such cash and cash
equivalents shall be acquired by the Buyer. The cash and cash equivalents
generated or received by the Seller or the Business after December 31, 1999, all
of which are part of the
Purchased Assets, include, without limitation, the amount of *** paid to
the Seller by ***. The Seller shall have access to the other books and records
of the Seller at reasonable times for purposes of handling tax matters and
dealing with liabilities and claims.
The "EXCLUDED INVENTORY" consists of: (i) Batches of PDS (as such terms are
defined in the Supply and Development Agreement attached hereto as EXHIBIT A
(the "SUPPLY AGREEMENT")) identified on SCHEDULE 1.2(I) attached hereto, (ii)
batches of ONTAK fermentation pellets identified on SCHEDULE 1.2(II) and (iii)
the reagents and cell lines which are specifically identified on SCHEDULE
1.2(III); provided, however, that the items described in subsections (i) through
(iii) above shall be Excluded Inventory only to the extent (A) they are still
being stored in the Seller's facilities on the Closing Date and (B) they have
been sold to the Shareholder prior to the Closing Date.
The incomplete Batches of PDS (A) which are listed on SCHEDULE 1.2(I), (B)
also appear on Exhibit G to the Supply Agreement and (C) which have not failed
QA release or been rejected for any other reason as of the Effective Date (as
defined in the Supply Agreement), will be completed by the Buyer following the
Closing in accordance with the terms of Section 2.17 of the Supply Agreement.
The Seller will make the ONTAK fermentation pellets listed on SCHEDULE 1.2(II)
available to the Buyer in accordance with Sections 2.08 or 2.16 of the Supply
Agreement for use in connection with the Buyer's manufacture of PRODUCT (as
defined in the Supply Agreement) and performance of the other services called
for from Buyer pursuant to the Supply Agreement. The Seller will also make all
reagents, identified on SCHEDULE 1.2(III) which have application to the
manufacture of PRODUCT or the performance of the other services called for from
Buyer pursuant to the Supply Agreement, available to the Buyer in accordance
with Sections 2.08 or 2.16 of the Supply Agreement for use in connection with
the Buyer's manufacture of PRODUCT and performance of other services called for
from Buyer pursuant to the Supply Agreement.
1.3 LIMITATION OF ASSUMPTION OF LIABILITIES. Upon the sale and purchase of
the Purchased Assets, the Buyer shall assume and agree to pay or discharge when
due (i) the accrued liabilities and obligations of the Seller which are to be
performed after the Closing Date (as defined in Section 1.8 below) and which are
described on SCHEDULE 1.3(I), (ii) the accounts payable of the Seller which are
to be paid after the Closing Date and which are described on SCHEDULE 1.3(II)
and (iii) the deferred revenue liabilities and obligations of Seller which are
to be performed after the Closing Date and which are described on SCHEDULE
1.3(III). The liabilities to be assumed by the Buyer under this Agreement are
hereinafter sometimes referred to as the "ASSUMED LIABILITIES."
Except as otherwise specifically provided in this Section 1.3, (a) Buyer
shall not assume or be liable for any obligation or liability of Seller, of any
kind or nature, known, unknown, contingent or otherwise, including without
limitation: (i) any liability of Seller (excluding expenses assumed by the Buyer
pursuant to Section 9.1 hereof) incurred in connection with this
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Agreement and the transactions provided for herein, including, without
limitation, brokerage, accounting and counsel fees and expenses pertaining to
the performance by Seller of its obligations hereunder, (ii) any product
liabilities for products manufactured by the Seller prior to the Closing, (iii)
any liability or obligation of Seller which is not an Assumed Liability, arising
out of any contract or agreement, including any indebtedness for borrowed money
from third parties or from the shareholders or other affiliates of the Seller,
(iv) any obligations, including continuation of benefits, to Seller's employees
or former employees, including without limitation, any pension, retirement, or
profit-sharing plan or trust, or any obligations under the Consolidated Omnibus
Budget Reconciliation Act of 1985, (v) any litigation, proceeding, claim by any
person or entity or other obligation of Seller (except for such obligations that
are specifically included in the Assumed Liabilities) relating to the Business
or operations of Seller or otherwise relating to the Purchased Assets prior to
the Closing Date, whether or not such litigation, proceeding, claim or
obligation is pending, threatened, or asserted before, on, or after the Closing
Date, (vi) except as otherwise provided in Section 9.1 of this Agreement, Taxes
(as defined in Section 2.8) whether relating to periods before or after the
Closing Date, and (vii) any obligations under any law, including but not limited
to antitrust, civil rights, health, safety, labor, discrimination and
environmental laws; and (b) Seller shall be solely responsible for, and shall
discharge, any and all liabilities and obligations of Seller not included within
the Assumed Liabilities. The assumption of the Assumed Liabilities by the Buyer
hereunder shall be treated as independent of its existing business and shall not
enlarge any rights of third parties under contracts or arrangements with the
Buyer or Seller. Nothing herein shall prevent the Buyer from contesting in good
faith any of the Assumed Liabilities.
1.4 PURCHASE PRICE AND PAYMENT. In consideration of the sale of the
Purchased Assets to Buyer, at the Closing, the Buyer shall deliver to the Seller
the amount of Ten Million Dollars ($10,000,000) in cash by certified or bank
check or by wire transfer of immediately available funds to an account
designated by the Seller, as determined by the Seller in its sole discretion.
1.5 TRANSFER OF PURCHASED ASSETS. At the Closing, Seller shall execute and
deliver or cause to be delivered to the Buyer good and sufficient instruments of
transfer transferring to the Buyer all right, title to and interest in all the
Purchased Assets. Such instruments of transfer (a) shall be in the form and will
contain the warranties, covenants and other provisions (not inconsistent with
the provisions hereof) which are usual and customary for transferring the type
of property involved under the laws of the jurisdictions applicable to such
transfers, (b) shall be in form and substance satisfactory to the Buyer and its
counsel, and (c) shall effectively vest in the Buyer good and marketable title
(except in the case of the leasehold interests of Seller which are set forth on
Schedule 2.18 of the Seller and Shareholder Disclosure Schedule attached hereto,
for which leasehold interests such instruments of transfer will vest valid
leasehold interests in the Buyer) to all the Purchased Assets free and clear of
all liens, restrictions and encumbrances, except Permitted Liens (as defined
below). The Seller shall cooperate in all respects with reasonable requests by
the Buyer in connection with transferring possession and ownership of the
Purchased Assets to the Buyer. The Buyer shall be responsible for all
liabilities arising out of the Buyer's use of the Purchased Assets or operation
of the Business following the Closing Date, except for liabilities arising from
matters which constitute grounds for a Buyer Claim (as defined in Section 7.1).
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For purposes of this Agreement, "Permitted Liens" means such of the
following as to which no enforcement, collection, execution, levy or foreclosure
proceeding shall have commenced: mechanic's, materialman's, supplier's, vendor's
or similar liens (A) arising in the ordinary course of business under the leases
which are listed, by lessor name, on SCHEDULE 1.5, and (B) which secure amounts
which are not yet due and payable under such leases which do not exceed the
amounts listed as Assumed Liabilities under such leases on SCHEDULE 1.3.
1.6 DELIVERY OF RECORDS AND CONTRACTS. At the Closing, Seller shall deliver
or cause to be delivered to the Buyer all written leases, contracts, commitments
and rights evidencing Purchased Assets and Assumed Liabilities, with such
assignments thereof and consents to assignments as are necessary to assure the
Buyer of the full benefit of the same. Seller shall also deliver to the Buyer at
the Closing all of Seller's business records, books and other data relating to
the Purchased Assets and the Business (except corporate records and other
property of Seller excluded under Section 1.2) and Seller shall take all
requisite steps to put the Buyer (or its designee) in actual possession and
operating control of the Purchased Assets.
1.7 BUYER DESIGNEES. The Buyer shall have the right, in its sole
discretion, to designate one or more direct or indirect subsidiaries to purchase
the Purchased Assets subject to this Agreement and fulfill the other obligations
and exercise the other rights of the Buyer hereunder. Notwithstanding the
foregoing, the Buyer shall at all times remain responsible to the Seller to
perform all obligations of the Buyer to Seller hereunder.
1.8 CLOSING. Subject to the satisfaction of the conditions set forth in
Sections 5 and 6, the closing of the sale and purchase contemplated hereby (the
"CLOSING"), shall take place by facsimile exchange of executed documents (with
originals to follow by overnight courier) at 10:00 a.m., Pacific Time, on
January 7, 2000, unless the parties shall have agreed in writing to a
postponement or for the Closing to be conducted in such other manner or such
other time or date as the Buyer and the Seller agree in writing (the date of
such Closing shall hereinafter be referred to as the "CLOSING DATE").
1.9 CLOSING DELIVERIES. The parties shall execute and deliver all documents
as noted in Section 1.5 above at the Closing.
1.10 ALLOCATION OF PURCHASE PRICE. Within 60 days of the Closing, Buyer
shall allocate the purchase price among the Purchased Assets. Such allocation
shall be made in accordance with the provisions of Section 1060 of the Internal
Revenue Code of 1986, as amended (the "CODE"), and in a manner mutually agreed
upon by the Buyer and the Seller and shall be binding upon Buyer and Seller for
all purposes (including financial accounting purposes, financial and regulatory
reporting purposes and tax purposes). Buyer and Seller also each agree to file
tax returns consistently with the foregoing and in accordance with Section 1060
of the Code.
1.11 POST CLOSING ADJUSTMENT TO PURCHASE PRICE. The Purchase Price set
forth in Section 1.4 hereof shall be subject to adjustment after the Closing
Date as follows:
1.11.1 After the Closing Date, the Seller shall determine the value as
of the Closing Date of (i) the Net Trade Accounts Receivable (as defined below),
(ii) the Net Trade Accounts Payable (as defined below) and (iii) the Accrued
Liabilities (as defined below), all in a
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manner consistent with the Seller's practices in preparing its balance
sheet as of September 30, 1999, and the Seller shall give the Buyer notice of
the Seller's determination of these amounts (the "SELLER NOTICE"), not later
than the 10th business day after the Closing Date, which notice shall be
accompanied by a worksheet and other information indicating in reasonable detail
the manner in which the Seller calculated these values. The Buyer will afford to
the Seller reasonable access to the books and records in the Buyer's possession
which are necessary for the Seller to determine the values as of the Closing
Date of the Net Trade Accounts Receivable, Net Trade Accounts Payable and
Accrued Liabilities and to complete its financial statements for the period
ended December 31, 1999.
1.11.2 "Net Trade Accounts Receivable" shall mean the Seller's
accounts receivable which are included in the Purchased Assets, net of
allowances for overdue or uncollectable amounts and net of amounts for product
not accepted by the customer in accordance with the terms of the Seller's
contracts with such customer. "Net Trade Accounts Payable" shall mean the
Seller's accounts payable which are part of the Assumed Liabilities in respect
of purchases incurred in the ordinary course of business determined in
accordance with GAAP. "Accrued Liabilities" shall mean the Seller's accrued
liabilities to the extent such accrued liabilities are Assumed Liabilities,
including deferred revenue liabilities, determined in accordance with GAAP,
provided, however, that Accrued Liabilities shall not include Net Trade Accounts
Payable.
1.11.3 In the event that the Buyer disputes any of the values
contained in the Seller Notice, it shall notify the Seller in writing (the
"DISPUTE NOTICE") of the amount, nature and basis of such dispute, within 10
business days after the delivery by the Seller to the Buyer of the Seller
Notice. In the event of such a dispute the parties will use their best efforts
to resolve such dispute between themselves. If the parties are unable to resolve
the dispute or any part thereof within 10 business days after the date of the
Dispute Notice, the parties shall submit the dispute, or the remaining
unresolved portions thereof, to Xxxxxx Xxxxxxxx LLP (the "Accountants") for
resolution. The Accountants shall be directed by the Buyer and the Seller to
resolve the unresolved dispute(s) within 20 business days after submission. The
determination of the Accountants shall be binding and conclusive upon all of the
parties hereto. All determinations pursuant to this subsection shall be made by
the Accountants in writing and shall be delivered by the Accountants to the
Buyer and the Seller.
1.11.4 The fees and expenses of the Accountants in connection with the
resolution of any dispute pursuant to subsection 1.11.3 shall be shared equally
by the Seller and the Buyer.
1.11.5 Upon the expiration of the 10 business day period for giving
the Dispute Notice, if no Dispute Notice is given, the valuations contained in
the Seller Notice shall be deemed accepted by the Buyer. If a Dispute Notice is
given within such 10 business day period the final valuations shall be the
amounts agreed to by the parties, if such agreement is reached, otherwise the
final valuations shall be the amounts determined by the Accountants.
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1.11.6 Within the later of: (i) 60 business days of the Closing Date,
(ii) the resolution of any dispute in accordance with Section 1.11.3 above, or
(iii) only for the first *** of any amount due from the Buyer to the Seller
pursuant to Section 1.11.6(e) below, January 1, 2001; the following adjustments
will be made:
(a) If the final valuation of the Net Trade Accounts Receivable as of
the Closing Date is greater than ***, the Buyer shall pay to the Seller the
amount of the excess.
(b) If the final valuation of the Net Trade Accounts Receivable as of
the Closing Date is less than ***, the Seller shall pay to the Buyer the amount
of the difference.
(c) If the final valuation of the Net Trade Accounts Payable as of the
Closing Date is greater than ***, the Seller shall pay to the Buyer the amount
of the excess.
(d) If the final valuation of the Net Trade Accounts Payable as of the
Closing Date is less than ***, the Buyer shall pay to the Seller the amount of
the difference.
(e) If the final valuation of the Accrued Liabilities as of the
Closing Date is less than ***, the Buyer shall pay to the Seller the amount of
the difference.
(f) If the final valuation of the Accrued Liabilities as of the
Closing Date is greater than ***, the Seller shall pay to the Buyer the amount
of the excess.
1.11.7 All payments called for by Section 1.11.6 shall be paid by
cashier's or certified check or by wire transfer of immediately available funds
to an account designated by the party entitled to such payment.
SECTION 2 - REPRESENTATIONS AND WARRANTIES OF THE SELLER
AND THE SHAREHOLDER
For purposes of this Agreement, (i) "Knowledge of the Seller and
Shareholder," (ii) "Known to the Seller and Shareholder," (iii) "Seller's and
Shareholder's Knowledge" and (iv) similar terms mean the actual knowledge of the
Seller or the Shareholder after due investigation.
The Seller and the Shareholder, jointly and severally (except as to any
representation and warranty of beneficial ownership and title to shares of
capital stock of the Seller, which shall be several), represent and warrant to
the Buyer that, except as set forth in the disclosure schedule attached hereto
(the "SELLER AND SHAREHOLDER DISCLOSURE SCHEDULE"), which Seller and Shareholder
Disclosure Schedule shall be arranged in paragraphs corresponding to the
numbered and lettered paragraphs in this Section 2:
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Confidential Treatment and filed separately with the Commission
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2.1 ORGANIZATION AND QUALIFICATION. The Seller is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware and has full corporate power and lawful authority to own, lease and
operate its assets, properties and business and to carry on its business as now
being and as heretofore conducted. The Seller is qualified to transact business
as a foreign corporation in the Commonwealth of Massachusetts. Except as
provided above, the Seller is not required to be qualified or otherwise
authorized to transact business as a foreign corporation in any jurisdiction (in
the United States and outside of the United States) in which such qualification
or authorization is required by law and in which the failure to so qualify or be
authorized could have a material adverse effect on the Seller or its assets,
properties, business, operations or condition (financial or otherwise). The
Seller does not file and is not required to file any franchise, income or other
tax returns in any other jurisdiction (in the United States or outside of the
United States), other than its jurisdiction of incorporation and in the
Commonwealth of Massachusetts, based upon the ownership or use of property
therein or the derivation of income therefrom. The Seller does not own or lease
property in any jurisdiction (in the United States or outside the United States)
other than the Commonwealth of Massachusetts.
2.2 CAPITALIZATION AND TITLE TO SHARES.
2.2.1 OUTSTANDING CAPITAL STOCK. The Seller is authorized to issue one
hundred (100) shares of Common Stock, $0.01 par value per share, of which all
one hundred (100) shares are issued and outstanding, none is held in its
treasury and all are owned beneficially and of record by the Shareholder, free
and clear of any claim, lien or other encumbrance. No other class of capital
stock of the Seller is authorized or outstanding. All of the issued and
outstanding shares of the Seller's capital stock are duly authorized and are
validly issued, fully paid, nonassessable and free of pre-emptive rights. None
of the issued and outstanding shares have been issued in violation of any
federal or state law.
2.2.2 OPTIONS OR OTHER RIGHTS. There are no outstanding rights,
subscriptions, warrants, calls, preemptive rights, options or other agreements
of any kind to purchase or otherwise to receive from Seller any of the
outstanding, authorized but unissued, unauthorized or treasury shares of the
capital stock or any other security of Seller, and there is no outstanding
security of any kind convertible into or exchangeable for such capital stock.
There are no shareholder agreements, voting trusts or agreements, proxies or
other agreements, instruments or understandings with respect to the outstanding
shares of capital stock of Seller.
2.3 AUTHORITY TO EXECUTE AND PERFORM AGREEMENTS. Each of the Seller and the
Shareholder has the corporate power and all authority and approvals required to
enter into, execute and deliver this Agreement and the other related agreements
referenced herein and necessary for the consummation of the transactions
contemplated by this Agreement (the "RELATED AGREEMENTS") and to perform fully
its respective obligations hereunder and thereunder, and each of this Agreement
and the Related Agreements has been or will be duly executed and delivered and
is the valid and binding obligations of each of the Seller and the Shareholder
enforceable in accordance with its terms.
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2.4 SUBSIDIARIES AND OTHER AFFILIATES. The Seller does not have any
subsidiary or directly or indirectly own or have any investment in any of the
capital stock of, or any other proprietary interest in, or is a party to a
partnership or joint venture with, any other person.
2.5 CHARTER AND BY-LAWS. The Seller has heretofore delivered to the Buyer
true and complete copies of its Certificate of Incorporation (certified by the
Secretary of State of the State of Delaware) and By-laws as in effect on the
date hereof. The minute books of the Seller contain true and complete records of
all meetings and consents in lieu of meetings of the Board of Directors (and any
committees thereof) and of the shareholders of the Seller since the time of its
incorporation and accurately reflect all transactions referred to in such
minutes and consents in lieu of meetings. The stock books of the Seller are
true, complete and correct.
2.6 FINANCIAL STATEMENTS. The unaudited balance sheet of the Seller as at
September 30, 1999 and November 30, 1999, and the related statement of
operations and retained earnings for the eight and ten months then ended,
previously delivered to the Buyer, fairly present in all material respects the
financial condition and results of operations of the Seller as at September 30,
1999 and November 30, 1999, and for the eight and ten months then ended, in
accordance with GAAP consistently applied throughout the period covered thereby
subject to normal year-end adjustments, none of which will be material. The
foregoing financial statements of the Seller as at September 30, 1999 (the
"INTERIM BALANCE SHEET DATE") and November 30, 1999, and for the eight and ten
months then ended, are sometimes called the "INTERIM FINANCIALS" and the balance
sheets included therein are sometimes herein called the "INTERIM BALANCE
SHEETS."
2.7 NO MATERIAL ADVERSE CHANGE. Since the Interim Balance Sheet Date,
(a) there have been no changes in the assets, properties, Business,
operations or condition (financial or otherwise) of the Seller which either
individually or in the aggregate materially and adversely affect the Seller or
the Purchased Assets, nor to the Knowledge of the Seller and the Shareholder (as
defined below) is there any such change that is threatened, nor has there been
any damage, destruction or loss materially and adversely affecting the assets,
properties, Business, operations or condition (financial or otherwise) of the
Seller, whether or not covered by insurance; and
(b) the Seller has not:
(i) incurred any indebtedness for borrowed money, except for the
intercompany advances (the "INTERCOMPANY ADVANCES") which are listed
on Section 2.7(b)(i) of the Seller and Shareholder Disclosure
Schedule;
(ii) declared or paid any dividend or declared or made any other
distribution of any kind to its shareholders, or made any direct or
indirect redemption, retirement, purchase or other acquisition of any
shares of its capital stock;
(iii) except for the Intercompany Advances, made any loan or
advance to any of its shareholders, officers, directors, employees,
consultants, agents or other representatives (other than travel
advances made in the ordinary course of business), or made any other
loan or advance otherwise than in the ordinary course of business;
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(iv) made any payment or commitment to pay any severance or
termination pay to any of its officers, directors, employees,
consultants, agents or other representatives, other than (A) payments
to, or commitments to pay, persons made in the ordinary course of
business and (B) payments made under the Marathon BioPharmaceuticals,
Inc. Retention Plan which payments are identified on Section
2.7(b)(iv)(B) of the Seller and Shareholder Disclosure Schedule;
(v) except in the ordinary course of business: entered into any
lease (as lessor or lessee); sold, abandoned or made any other
disposition of any of its assets or properties, granted or suffered
any lien or other encumbrance on any of its assets or properties;
entered into or amended any contract or other agreement to which it is
a party, or by or to which it or its assets or properties are bound or
subject, or pursuant to which it agrees to indemnify any party or to
refrain from competing with any party;
(vi) except for inventory or equipment acquired in the ordinary
course of business, made any acquisition of all or any part of the
assets, properties, capital stock or business of any other person;
(vii) except for the Intercompany Advances, incurred any
contingent liability as a guarantor or otherwise with respect to the
obligations of others or cancelled any material debt or claim owing
to, or waived any material right of, the Seller;
(viii) incurred any damage, destruction or loss, whether or not
covered by insurance, materially and adversely affecting the
properties, assets or Business of the Seller; or
(ix) made any change in accounting methods or practices, credit
practices or collection policies used by the Seller; and
(c) the Seller has conducted its business only in the ordinary course
and consistently with its prior practices.
2.8 TAX MATTERS.
(a) The Seller has paid or caused to be paid all federal, state,
county, local, foreign and other taxes, including, without limitation, income
taxes, estimated taxes, alternative minimum taxes, excise taxes, sales taxes,
use taxes, import duties, value-added taxes, gross receipts taxes, franchise
taxes, capital stock taxes, employment and payroll-related taxes, withholding
taxes, stamp taxes, transfer taxes, windfall profit taxes, environmental taxes
and property taxes, whether or not measured in whole or in part by net income
and all deficiencies, or other additions to such taxes and interest, fines and
penalties thereon (hereinafter, "TAXES" or, individually, a "TAX") required to
be paid by the Seller through the date hereof whether disputed or not. All Taxes
required to be collected or withheld by the Seller have been duly collected or
withheld and have been or will be duly remitted or deposited in accordance with
law. The provisions for Taxes reflected in the Interim Financials are adequate
to cover any and all Tax liabilities of the Seller in respect of its assets,
properties, business and operations during the periods covered by said Interim
Financials and all prior periods. To the Knowledge of the Seller and the
Shareholder, there is no Tax deficiency or claim for additional Taxes or
interest thereon
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or penalties in connection therewith, asserted or threatened to be asserted
against the Seller by any taxing authority.
(b) For purposes of this Agreement, all references to Sections of the
Code shall include any predecessor provisions to such Sections and any similar
provisions of federal, state, local or foreign law.
2.9 COMPLIANCE WITH LAWS.
(a) The Seller is not in violation of any order, judgment, injunction,
award or decree binding upon it. The Seller is not in violation of any federal,
state, local or foreign law, ordinance, rule or regulation or any other
requirement of any governmental or regulatory body, court or arbitrator
applicable to its Business or assets, including, without limitation, regulations
and requirements of the Food and Drug Administration ("FDA"), Occupational
Safety and Health Administration ("OSHA"), and laws, ordinances, regulations and
other requirements respecting health, labor, employment and employment
practices, terms and conditions of employment and wages and hours, or relating
to the uses of its assets, zoning, pollution or protection of the environment,
including, without limitation, laws relating to emissions, discharges, releases
or threatened releases of pollutants, contaminants, chemicals, or industrial,
toxic or hazardous substances or wastes into the environment (including, without
limitation, ambient air, surface water, ground water or land), or otherwise
relating to the manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of pollutants, contaminants, chemicals or
industrial, toxic or hazardous substances or wastes, except where the violation
of the foregoing would not have a material adverse effect on any of the
Purchased Assets or the Business. The Seller has never received notice of, and
there has never been, any citation, fine or penalty imposed or asserted against
the Seller for, any such violation or alleged violation.
(b) Set forth on SCHEDULE 2.9 of the Seller and Shareholder Disclosure
Schedule are all of the licenses, permits, franchises, orders or approvals of
any federal, state, local or foreign governmental or regulatory body, including,
but not limited to, licenses issued by, FDA, OSHA or otherwise relating to
health, employment and environmental matters (collectively, "PERMITS") that are
material to the conduct of Seller's Business and the uses of its assets. The
Seller holds all Permits necessary to operate its Business as presently
conducted and as currently contemplated to be conducted. Such Permits are in
full force and effect and, except as set forth on SCHEDULE 2.9 of the Seller and
Shareholder Disclosure Schedule, such Permits will be transferred to the Buyer
as part of the Purchased Assets. No violations are or have been recorded with
any governmental or regulatory body in respect of any Permit; and no proceeding
is pending or, to the Knowledge of the Seller and the Shareholder, threatened to
revoke or limit any Permit.
2.10 CONSENTS; NO BREACH. All consents, permits, authorizations, orders and
approvals from any person, and filings or registrations with any person,
pursuant to applicable law or contracts or other agreements with the Seller,
that are required in connection with the performance of the Seller's and the
Shareholder's obligations under this Agreement, or the assignment of the
Purchased Assets or the assumption of the Assumed Liabilities are set forth on
SCHEDULE 2.10 of the Seller and Shareholder Disclosure Schedule. The execution,
delivery and
10
performance of this Agreement and the Related Agreements and the
consummation of the transactions contemplated hereby and thereby will not (i)
violate any provision of the Certificate of Incorporation or By-laws of the
Seller; (ii) except as set forth on SCHEDULE 2.10 of the Seller and Shareholder
Disclosure Schedule, violate, conflict with or result in the breach of any of
the terms or conditions of, result in modification of the effect of, or
otherwise give any other contracting party the right to terminate, or constitute
(or with notice or lapse of time or both constitute) a default under, any
material instrument, contract or other agreement to which the Seller or the
Shareholder is a party or to which either of them or the Purchased Assets may be
bound or subject; (iii) violate any order, judgment, injunction, award or decree
of any court, arbitrator or governmental or regulatory body against, or binding
upon, the Seller or the Shareholder or upon the Purchased Assets or the
Business; (iv) violate any statute, law or regulation of any jurisdiction as
such statute, law or regulation relates to the Seller or the Shareholder or to
the Purchased Assets or the Business; (v) violate any Permit; (vi) except as set
forth in SCHEDULE 2.10 of the Seller and Shareholder Disclosure Schedule,
require the approval or consent of any foreign, federal, state, local or other
governmental or regulatory body or the approval or consent of any other person;
or (vii) result in the creation of any lien or other encumbrance on the
Purchased Assets; except where the violation of or failure to comply with any of
the foregoing would not have a material adverse effect on any of the Purchased
Assets.
2.11 ACTIONS AND PROCEEDINGS. There are no outstanding orders, judgments,
injunctions, awards or decrees of any court, governmental or regulatory body or
arbitration tribunal against or involving the Seller or the Purchased Assets.
Except as set forth on SCHEDULE 2.11 of the Seller and Shareholder Disclosure
Schedule, there are no actions, suits or claims or legal, administrative or
arbitral proceedings or, to the Knowledge of the Seller and the Shareholder,
investigations (whether or not the defense thereof or liabilities in respect
thereof are covered by insurance) pending or, to the Knowledge of the Seller and
the Shareholder, threatened against or involving the Seller or the Purchased
Assets. To the Knowledge of the Seller and the Shareholder, there is no fact,
event or circumstance that may give rise to any suit, action, claim,
investigation or proceeding that individually or in the aggregate could have a
material adverse effect upon the transactions contemplated hereby or upon the
Purchased Assets or the Business.
2.12 CONTRACTS AND OTHER AGREEMENTS. SCHEDULE 2.12 of the Seller and
Shareholder Disclosure Schedule sets forth all of the following contracts and
other agreements to which the Seller is a party or by or to which it or its
assets or properties are bound or subject:
(i) contracts and other agreements with any current or former
officer, director, shareholder, employee, consultant, agent or other
representative of the Seller and contracts and other agreements for
the payment of fees or other consideration to any entity in which any
officer or director of the Seller has an interest;
(ii) contracts and other agreements with any labor union or
association representing any employee of the Seller or otherwise
providing for any form of collective bargaining;
(iii) contracts and other agreements for the purchase or sale of
materials, supplies, equipment, merchandise or services that contain
an escalation,
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renegotiation or redetermination clause or that obligate the
Seller to purchase all or substantially all of its requirements of a
particular product from a supplier, or for periodic minimum purchases
of a particular product from a supplier;
(iv) contracts and other agreements for the sale of any of the
assets or properties of the Seller other than in the ordinary course
of business or for the grant to any person of any options, rights of
first refusal, or preferential or similar rights to purchase any of
such assets or properties;
(v) partnership or joint venture agreements;
(vi) contracts or other agreements under which the Seller agrees
to indemnify any party or to share the tax liability of any party;
(vii) contracts, options and other agreements for the purchase of
any asset, tangible or intangible calling for an aggregate purchase
price or payments in any one year of more than $10,000 in any one case
(or in the aggregate, in the case of any related series of contracts
and other agreements);
(viii) contracts and other agreements that cannot by their terms
be canceled by the Seller and any successor or assignee of the Seller
without liability, premium or penalty on no less than thirty days
notice;
(ix) contracts and other agreements with customers or suppliers
for the sharing of fees, the rebating of charges or other similar
arrangements;
(x) contracts and other agreements containing obligations or
liabilities of any kind to holders of the securities of the Seller as
such (including, without limitation, an obligation to register any of
such securities under any federal or state securities laws);
(xi) contracts and other agreements containing covenants of the
Seller not to compete in any line of business or with any person or
covenants of any other person not to compete with the Seller in any
line of business;
(xii) contracts and other agreements relating to the acquisition
by the Seller of any operating business or the capital stock of any
other person;
(xiii) contracts and other agreements requiring the payment to
any person of a commission or fee, including contracts or other
agreements with consultants which provide for aggregate payments in
excess of $10,000;
(xiv) contracts, indentures, mortgages, promissory notes, loan
agreements, guaranties, security agreements, pledge agreements, and
other agreements relating to the borrowing of money or securing any
such liability;
(xv) distributorship or licensing agreements;
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(xvi) contracts under which the Seller will acquire or has
acquired ownership of, or license to, intangible property, including
software (other than (A) over-the-counter "shrink wrap" software or
(B) software licensed by the Seller as an end user for less than
$10,000 and not distributed by it);
(xvii) leases, subleases or other agreements under which the
Seller is lessor or lessee of any real property; or
(xviii) any other material contract or other agreement whether or
not made in the ordinary course of business that has or may have a
material adverse effect on the Business or the Purchased Assets.
There have been delivered or made available to the Buyer true and complete
copies of all of the contracts and other agreements (and all amendments, waivers
or other modifications thereto) set forth on SCHEDULE 2.12 of the Seller and
Shareholder Disclosure Schedule. All of such contracts and other agreements are
valid, subsisting, in full force and effect, binding upon the Seller, and to the
Knowledge of the Seller and the Shareholder, binding upon the other parties
thereto in accordance with their terms, and the Seller has paid in full or
accrued all amounts now due thereunder and has satisfied in full or provided for
all of its liabilities and obligations thereunder which are presently required
to be satisfied or provided for, and is not in default under any of them, nor,
to the Knowledge of the Seller and the Shareholder, is any other party to any
such contract or other agreement in default thereunder, nor does any condition
exist that with notice or lapse of time or both would constitute a default
thereunder.
2.13 REAL ESTATE. The Seller does not own any property or any buildings or
other structures and does not have any options or any contractual obligations to
purchase or acquire any interest in real property. The leasehold interests of
the Seller set forth in SCHEDULE 2.13 of the Seller and Shareholder Disclosure
Schedule are subject to no lien or other encumbrance that could have a material
adverse effect on any of the Purchased Assets or the Business.
2.14 ACCOUNTS AND NOTES RECEIVABLE. All accounts and notes receivable
reflected on the Interim Balance Sheets and all accounts and notes receivable
arising subsequent to the Interim Balance Sheet Date, have arisen in the
ordinary course of business of the Seller, represent valid and enforceable
obligations due to the Seller, have been and are subject to no set-off or
counter-claim, and have been collected or are fully collectible in the ordinary
course of business of the Seller in the aggregate recorded amounts thereof in
accordance with their terms. Except as set forth in SCHEDULE 2.14 of the Seller
and Shareholder Disclosure Schedule the Seller has no accounts or notes
receivable from any person, firm or corporation which is affiliated with the
Seller or from any director, officer or employee of the Seller.
2.15 INVENTORY. Except for (i) Batches of PDS which are listed on SCHEDULE
1.2(I) as Excluded Inventory and which have failed QA release or have been
rejected for other reasons, which failed or rejected Batches of PDS will be
removed from the facility at 00 Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxxxxxx and
disposed of by Seller in accordance with all applicable laws and regulations
prior to the Closing Date at the sole cost of the Seller and (ii) for reagents
listed on Schedule 1.2(iii) as Excluded Inventory which are not applicable to
the manufacture of PRODUCT or the Buyer's performance of any other services
contemplated by the Supply
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Agreement; the inventory of the Seller is and will be in good and merchantable
condition and suitable and saleable or usable in the manufacture of saleable
finished goods in the ordinary course of business. Purchase commitments for raw
materials and parts are not in excess of normal requirements and none are at
prices materially in excess of current market prices. Since the Interim Balance
Sheet Date no inventory items have been sold or disposed of except through sales
in the ordinary course of business. The Seller's level of inventory and raw
materials is consistent with the Seller's ordinary practices and course of
business.
2.16 TANGIBLE PROPERTY. The plant, machinery, equipment, furniture,
leasehold improvements, fixtures, vehicles, structures, any related capitalized
items and other tangible property that is included in the Purchased Assets
("TANGIBLE PROPERTY") are in good operating condition and repair, ordinary wear
and tear excepted, are free of defects that would have a material adverse effect
on Buyer's use of the assets after the Closing and the Seller has not received
notice that any of its Tangible Property is in violation of any existing law or
any building, zoning, health, safety or other ordinance, code or regulation.
Prior to the Closing Date, the Seller maintained and kept current all of the
Tangible Property that is part of the Purchased Assets, and all documentation
that may be required by regulatory authorities for the Tangible Property that is
part of the Purchased Assets, including but not limited to equipment history
files, including maintenance logs, use logs and cleaning logs (if any), and
validation files or operating procedures.
2.17 INTANGIBLE PROPERTY.
(a) Except as set forth on SCHEDULE 2.17 of the Seller and Shareholder
Disclosure Schedule, the Seller has exclusive ownership of all patents,
trademarks, service marks, trade names and copyrights; all applications to
register any of the foregoing; all franchises, trade secrets, inventions,
customer lists, manufacturing or other processes, designs, computer software,
data compilations, research results and other confidential information and
legally protected proprietary rights; whether any of the foregoing are owned or
licensed (collectively, "PROPRIETARY RIGHTS") that are material to the Business
of the Seller and that are used in its Business as presently conducted or to be
used in its Business as it is contemplated to be conducted and the Seller has
the right to use, free and clear of claims or rights of others, all such
Proprietary Rights. Buyer will have the same rights under the Seragen License
Agreements listed in SCHEDULE 2.17(A) of the Seller and Shareholder Disclosure
Schedule following the Closing as the Seller had under such agreements prior to
the Closing.
(b) Neither the Seller or the Shareholder has received any notices of
infringement by the Seller of any Proprietary Rights of others, and, to the
Knowledge of the Seller and the Shareholder none of the present activities, or
contemplated activities under planning or development, of the Seller, or the
Seller's products or Purchased Assets infringe on any Proprietary Rights of
others, including unauthorized use of any confidential information or trade
secrets of any person, including without limitation any former employer of any
past or present employees of the Seller. Neither the Seller or the Shareholder
is aware of any infringement or violation by others of the Proprietary Rights of
the Seller, including any violation of Seller's confidential information.
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(c) All patents, patent applications, trademarks, trademark
applications and registrations and registered copyrights (or applications
therefor) which are owned by or licensed to Seller or used or to be used by
Seller in its Business as presently conducted or contemplated are listed in
SCHEDULE 2.17(C) of the Seller and Shareholder Disclosure Schedule ("REGISTERED
RIGHTS"). All of the Registered Rights owned by the Seller have been duly
registered in, filed in or issued by the United States Patent and Trademark
Office, the United States Register of Copyrights, or the corresponding offices
of other jurisdictions as identified on said Schedule, and have been properly
maintained and renewed in accordance with all applicable provisions of law and
administrative regulations in the United States and in each such other
jurisdiction. To the Knowledge of the Seller and the Shareholder all of the
Registered Rights licensed to the Seller have been duly registered in, filed in
or issued by the United States Patent and Trademark Office, the United States
Register of Copyrights, or the corresponding offices of other jurisdictions as
identified on said Schedule, and have been properly maintained and renewed in
accordance with all applicable provisions of law and administrative regulations
in the United States and in each such other jurisdiction.
(d) The Seller's policies and procedures designed to establish and
preserve its ownership of its Proprietary Rights are described in SCHEDULE
2.17(D) of the Seller and Shareholder Disclosure Schedule. In particular,
without limitation of the foregoing, the Seller has (i) disclosed or made
available confidential information and trade secrets of the Seller only to
employees or consultants of the Seller who required such disclosure or access
for the business purposes of the Seller and who have executed written
confidentiality agreements governing their use of such confidential information
and trade secrets; and (ii) required all professional and technical employees to
execute agreements under which such employees are required to convey to Ligand
or Seller ownership of all inventions and developments conceived or created by
them in the course of their employment, ownership of all of which such
inventions and developments which were owned by Ligand have been assigned by
Ligand to Seller prior to the Closing.
(e) To the Knowledge of the Seller and the Shareholder, none of the
activities of the employees of the Seller on behalf of the Seller violates any
agreements or arrangements which any such employees have with former employers
currently in effect.
2.18 TITLE TO ASSETS; LIENS. The Seller owns outright and has good and
marketable title (except in the case of the leasehold interests of Seller which
are set forth on Schedule 2.18 of the Seller and Shareholder Disclosure Schedule
attached hereto, for which the Seller has valid leasehold interests) to all of
Purchased Assets, including, without limitation, all of the Purchased Assets
reflected on the Interim Balance Sheets, free and clear of any claim, lien or
other encumbrance, except for Permitted Liens. The Seller is the true and lawful
owner of the Purchased Assets (except in the case of the leasehold interests of
Seller which are set forth on Schedule 2.18 of the Seller and Shareholder
Disclosure Schedule attached hereto, for which the Seller has valid leasehold
interests) and has the right to sell and transfer to the Buyer good and
marketable title to the Purchased Assets (except in the case of the leasehold
interests of Seller which are set forth on Schedule 2.18 of the Seller and
Shareholder Disclosure Schedule attached hereto, for which the Seller has the
right to sell and transfer to the Buyer all rights under such leasehold
interests ), free and clear of all claims, liens or other encumbrances of any
kind, except for Permitted Liens. Upon delivery of the Purchased Assets and the
instruments of transfer as herein provided and payment therefore, the Buyer will
acquire all right, title to and interest in the
15
Purchased Assets and will have good and marketable title (except in the case of
the leasehold interests of Seller which are set forth on Schedule 2.18 of the
Seller and Shareholder Disclosure Schedule attached hereto, for which the Buyer
will have valid leasehold interests) to the Purchased Assets, free and clear of
any claim, lien or other encumbrance of any kind except for Permitted Liens.
2.19 RETAINED LIABILITIES. After the Closing, the Seller will have
sufficient assets and sufficient insurance coverage to discharge, and will
discharge, all obligations of the Seller including, but not limited to, all
liabilities for the payment of taxes incurred by the Seller.
2.20 ABSENCE OF UNDISCLOSED LIABILITIES. As at the Interim Balance Sheet
Date, the Seller had no liabilities of any nature, whether accrued, absolute,
contingent or otherwise (including, without limitation, liabilities as guarantor
or otherwise with respect to obligations of others or liabilities for Taxes due
or then accrued or to become due), required to be shown on the Interim Balance
Sheets that were not fully and adequately reflected or reserved against on the
Interim Balance Sheets. The Seller has no such liabilities, other than
liabilities (i) fully and adequately reflected or reserved against on the
Interim Balance Sheets, (ii) incurred since the Interim Balance Sheet Date in
the ordinary course of business or (iii) set forth on SCHEDULE 2.20 to the
Seller and Shareholder Disclosure Schedule.
2.21 CUSTOMERS AND DISTRIBUTORS. SCHEDULE 2.21 of the Seller and
Shareholder Disclosure Schedule sets forth any representative or distributor of
Seller's products (whether pursuant to a commission, royalty or other
arrangement) and the five customers who accounted for the largest sales of the
Seller for the ten (10) months ended November 30, 1999 (collectively, the
"CUSTOMERS AND DISTRIBUTORS"). To the Knowledge of the Seller and Shareholder
the relationships of the Seller with its Customers and Distributors are
generally good commercial working relationships.
2.22 EMPLOYEE BENEFIT PLANS.
2.22.1 PLANS. SCHEDULE 2.22 of the Seller and Shareholder Disclosure
Schedule sets forth a list of every Employee Program (as defined below) that has
been maintained (as such term in further defined below) by the Seller at any
time during the ten-month period ending on the Closing.
2.22.2 QUALIFICATION UNDER THE CODE. Each Employee Program which has
ever been maintained by Seller and which has at any time been intended to
qualify under Section 401(a) or 501(c) of the Code has received a favorable
determination or approval letter from the Internal Revenue Service ("IRS")
regarding its qualification under such section and has, in fact, been
continuously qualified under the applicable section of the Code since the
effective date of such Employee Program. No event or omission has occurred which
would cause any such Employee Program to lose its qualification under the
applicable Code section.
2.22.3 COMPLIANCE WITH LAWS. The Seller does not know, and has no
reason to know of any failure of any party to comply with any laws applicable to
the Employee Programs that have been maintained by the Seller. With respect to
any Employee Program ever maintained by the Seller, there has occurred no
"prohibited transaction," as defined in Section 406 of the
16
Employee Retirement Income Security Act of 1974, as amended ("ERISA") or Section
4975 of the Code, or breach of any duty under ERISA or other applicable law
(including, without limitation, any health care continuation requirements or any
other tax law requirements, or conditions to favorable tax treatment, applicable
to such plan) which could result, directly or indirectly, in any taxes,
penalties or other liability to the Buyer. No litigation, arbitration, or
governmental administrative proceeding (or investigation) or other proceeding
(other than those relating to routine claims for benefits) is pending or
threatened with respect to any such Employee Program.
2.22.4 CERTAIN PLANS. Neither the Seller nor any Affiliate (as defined
below) has ever (i) maintained any Employee Program which has been subject to
Title IV of ERISA (including, but not limited to, any Multiemployer Plan (as
defined below)) or (ii) provided health care or any other non-pension benefits
to any employees after their employment is terminated (other than as required by
part 6 of subtitle B of title I or ERISA) or has ever promised to provide such
post-termination benefits.
2.22.5 DOCUMENTS DELIVERED. With respect to each Employee Program
maintained by the Seller within three years preceding the Closing, complete and
correct copies of the following documents (if applicable to such Employee
Program) have previously been delivered to the Buyer: (i) all documents
embodying or governing such Employee Program, and any funding medium for the
Employee Program (including, without limitation , trust agreements) as they may
have been amended to the date hereof; (ii) the summary plan description for such
Employee Program (or other descriptions of such Employee Program provided to
employees) and all modifications thereto; (iii) any insurance policy (including
any fiduciary liability insurance policy) related to such Employee Program; and
(iv) any documents evidencing any loan to an Employee Program that is a
leveraged employee stock ownership plan.
2.22.6 DEFINITIONS. For the purposes of this Section:
(a) "EMPLOYEE PROGRAM" means (i) all employee benefit plans within the
meaning of ERISA Section 3(3), including, but not limited to, multiple employer
welfare arrangements (within the meaning of ERISA Section 3(4)), plans to which
more than one unaffiliated employer contributes and employee benefit plans (such
as foreign or excess benefit plans) which are not subject to ERISA; and (B) all
stock or cash option plans, restricted stock plans, stock purchase plans, bonus
or incentive award plans, severance pay policies or agreements, deferred
compensation agreements, supplemental income arrangements, vacation plans,
health, disability, life insurance and all other employee benefit plans,
agreements, and arrangements not described in (A) above. In the case of an
Employee Program funded through an organization described in Code Section
501(c)(9), each reference to such Employee Program shall include a reference to
such organization.
(b) An entity "MAINTAINS" an Employee Program if such entity sponsors,
contributes to, or provides (or has promised to provide) benefits under such
Employee Program, or has any obligation (by agreement or under applicable law)
to contribute to or provide benefits under such Employee Program, or if such
Employee Program provides benefits to or otherwise covers employees of such
entity (or their spouses, dependents or beneficiaries).
17
(c) An entity is an "AFFILIATE" of the Seller if it would have ever
been considered a single employer with Seller under ERISA Section 4001(b) or
part of the same "controlled group" as Seller for purposes of ERISA Section
302(d)(8)(C).
(d) "MULTIEMPLOYER PLAN" means a (pension or non-pension) employee
benefit plan to which more than one employer contributes and which is maintained
pursuant to one or more collective bargaining agreements.
2.23 EMPLOYER RELATIONS. As of the date of this Agreement the Seller has an
aggregate of approximately 47 employees and generally enjoys a good
employer-employee relationship. The Seller is not delinquent in any material
respects in payments to any of its employees or consultants for any wages,
salaries, commissions, bonuses or other direct compensation for any services
performed by them to the date hereof or amounts required to be reimbursed to
such employees and immediately following the Closing the Seller will pay all
such amounts which are due. Upon termination of the employment of said
employees, neither the Seller nor the Buyer will by reason of anything done
prior to the Closing be liable to any of said employees or consultants for
severance pay or any other payments (other than accrued salary, vacation or sick
pay in accordance with the Seller's normal policies). SCHEDULE 2.23 of the
Seller and Shareholder Disclosure Schedule contains a list of all employees and
consultants of Seller. In each case such Schedule includes the current job title
and aggregate annual compensation of each such individual. Seller does not
currently employ, and will not have employed at any point in the six calendar
months prior to and including the Closing Date, 50 or more full-time employees
in any single facility or town in Massachusetts. Seller does not employ 100 or
more employees (excluding employees who work less than 20 hours per week or who
have worked for Seller less than six of the last twelve months) and will not
have employed 100 or more employees at any point during the 90 days prior to and
including the Closing Date.
2.24 INSURANCE. SCHEDULE 2.24 of the Seller and Shareholder Disclosure
Schedule sets forth a list of all policies or binders of fire, liability,
product liability, workmen's compensation, vehicular, directors and officers and
other insurance held by or on behalf of the Seller. Such policies and binders
are in full force and effect, all premiums with respect thereto are currently
paid, are reasonably believed to be adequate for the businesses engaged in by
the Seller and are in conformity with the requirements of all contracts to which
the Seller is a party and to the Knowledge of the Seller and the Shareholder,
are valid and enforceable in accordance with their terms. The Seller is not in
default with respect to any provision contained in any such policy or binder nor
has the Seller failed to give any notice or present any claim under any such
policy or binder in due and timely fashion. There are no outstanding unpaid
claims under any such policy or binder. The Seller has not received notice of
cancellation or non-renewal of any such policy or binder. Such policies will not
cover the Buyer's use of the Purchased Assets after the Closing Date nor will
such policies be transferred to the Buyer.
2.25 BROKERAGE. No broker, finder, agent or similar intermediary has acted
on behalf of the Seller or the Shareholder in connection with this Agreement or
the transactions contemplated hereby, and there are no brokerage commissions,
finders fees or similar fees or commissions payable in connection therewith
based on any agreement, arrangement or understanding with the Seller or any of
the Shareholders, or any action taken by them.
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2.26 HAZARDOUS MATERIALS. Except as set forth on SCHEDULE 2.26 to the
Seller and Shareholder Disclosure Schedule, the Seller has never generated, used
or handled any Hazardous Materials (as defined below) in violation of applicable
law, nor has the Seller treated, stored or disposed of any Hazardous Materials
at any site owned or leased by the Seller or shipped any Hazardous Materials for
treatment, storage or disposal at any other site or facility in violation of
applicable law. To the Knowledge of the Seller and the Shareholder no other
person has ever generated, used, handled, stored or disposed of any Hazardous
Materials at any of the premises currently owned by or leased to the Seller
during the period of Seller's ownership or lease, nor to the Knowledge of the
Seller or the Shareholder has there been or is there threatened any release of
any Hazardous Materials on or at any such site or premises during such period.
The Seller does not presently own, operate, lease or use, nor has it previously
owned, operated, leased, or used any site on which underground storage tanks are
or were located. No lien has ever been imposed by any governmental agency on any
property, facility, machinery, or equipment owned, operated, leased or used by
Seller in connection with the presence of any Hazardous Materials. For purposes
of this Section 2.26, "HAZARDOUS MATERIALS" shall mean and include any
"hazardous waste" as defined in either the United States Resource Conservation
and Recovery Act or regulations adopted pursuant to said Act, and also any
"hazardous substances" or "hazardous materials" as defined in the United States
Comprehensive Environmental Response, Compensation and Liability Act. The Seller
has provided to Buyer copies of all documents, records and information available
to Seller concerning any environmental or health and safety matter relevant to
Seller, whether generated by Seller or others, including, without limitation,
environmental audits, environmental risk assessments, site assessments,
documentation regarding off-site disposal of Hazardous Materials, spill control
plans, and reports, correspondence, permits, licenses, approvals, consents and
other authorizations related to environmental or health and safety matters
issued by any governmental agency.
2.27 SUFFICIENCY OF PURCHASED ASSETS. The Purchased Assets transferred to
the Buyer, as provided in Section 1 hereof, include all property and rights
necessary for the Buyer to conduct, following the Closing, the Business, and no
property excluded from the Purchased Assets constitutes property or rights
material to the conduct of the Business. The Business is the only business
conducted by the Seller prior to the Closing.
2.28 YEAR 2000 COMPLIANCE. All equipment, assets and systems material to
the operation of the Business, contained in the Purchased Assets, which utilize
date related information in any manner: (1) are capable of recognizing,
processing, managing, representing, interpreting, and manipulating correctly
date-related data for dates from, into and between the twentieth and
twenty-first centuries and the years 1999 and 2000, including calculating,
comparing, sorting, storing, tagging and sequencing, without resulting in or
causing material logical or mathematical errors or inconsistencies in any
user-interface, functionalities or otherwise, including data input and
retrieval, data storage, data fields, calculations, reports, processing or any
other input or output, (2) accurately perform leap year calculations and (3)
will not cause any other technology to fail or generate errors related to such
dates (provided that the information technology used in communicating with the
equipment, assets and systems contained in the Purchased Assets properly
exchange date/time data with the equipment, assets and systems contained in the
Purchased Assets).
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2.29 FULL DISCLOSURE. All documents and other papers delivered by or on
behalf of the Seller or the Shareholder in connection with this Agreement and
the transactions contemplated hereby are true and complete. No representation or
warranty of the Seller or the Shareholder contained in this Agreement, and, to
the Knowledge of the Seller and the Shareholder, no document or other paper
furnished by or on behalf of the Seller or the Shareholder to the Buyer (or any
of its agents) pursuant to this Agreement or in connection with the transactions
contemplated hereby, taken as a whole, contains an untrue statement of a
material fact or omits to state a material fact required to be stated therein or
necessary to make the statements made, in the context in which made, not false
or misleading. There is no fact Known to the Seller or the Shareholder that has
not been disclosed to the Buyer in this Agreement or the Schedules hereto that
materially adversely affects, or (in the reasonable business judgment of the
Seller or the Shareholder based on facts of which they have Knowledge) is likely
to materially adversely affect (A) the Business, (B) any of the Purchased
Assets, (C) the Buyer's operation of the Business, or (D) the Buyer's use of the
Purchased Assets following the Closing in a manner substantially similar to the
Seller's use of the Purchased Assets prior to the Closing.
SECTION 3 - REPRESENTATIONS AND WARRANTIES OF THE BUYER
The Buyer represents and warrants to the Seller and the Shareholder that,
except as set forth in the disclosure schedule attached hereto (the "BUYER
DISCLOSURE SCHEDULE"), which Buyer Disclosure Schedule shall be arranged in
paragraphs corresponding to the numbered and lettered paragraphs contained in
this Section 3:
3.1 ORGANIZATION. The Buyer is duly organized, validly existing and in good
standing under the laws of the State of Delaware, and has the corporate power
and lawful authority to own, lease and operate its assets, properties and
business and to carry on its business as now being and as heretofore conducted.
3.2 AUTHORITY TO EXECUTE AND PERFORM AGREEMENTS. The Buyer has the
corporate power and all corporate authority and approvals required to enter
into, execute and deliver this Agreement and the Related Agreements and to
perform fully its obligations hereunder and thereunder. Each of this Agreement
and the Related Agreements has been or will be duly executed and delivered and
the valid and binding obligation of the Buyer enforceable in accordance with its
terms. 3.3 BROKERAGE. No broker, finder, agent or similar intermediary has acted
on behalf of the Buyer in connection with this Agreement or the transactions
contemplated hereby, and there are no brokerage commissions, finders' fees or
similar fees or commissions payable in connection therewith based on any
agreement, arrangement or understanding with the Buyer or any action taken by
the Buyer.
3.4 ACTIONS AND PROCEEDINGS. There are no actions, suits or claims, legal,
administrative or arbitral proceedings pending or, to the Knowledge of the
Buyer, threatened against or involving the Buyer that individually or in the
aggregate could have a material adverse effect upon the transactions
contemplated hereby. To the Knowledge of the Buyer, there is no fact, event or
circumstance that may give rise to any suit, action, claim, investigation or
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proceeding that individually or in the aggregate could have a material adverse
effect upon the transactions contemplated hereby.
3.5 NO BREACH. The execution, delivery and performance of this Agreement
and the Related Agreements and the consummation of the transactions contemplated
hereby and thereby will not (i) violate any provision of the Certificate of
Incorporation or By-laws of the Buyer; (ii) violate, conflict with or result in
the breach of any of the terms or conditions of, result in modification of the
effect of, or otherwise give any other contracting party the right to terminate,
or constitute (or with notice or lapse of time or both constitute) a default
under, any material instrument, contract or other agreement to which the Buyer
is a party or to which it or any of its assets or properties may be bound or
subject; (iii) violate any order, judgment, injunction, award or decree of any
court, arbitrator or governmental or regulatory body against, or binding upon,
the Buyer or upon the securities, properties, assets or business of the Buyer;
(iv) violate any statute, law or regulation of any jurisdiction as such statute,
law or regulation relates to the Buyer or to the securities, properties, assets
or business of the Buyer; (v) result in the creation of any lien or other
encumbrance on the assets or properties of the Buyer, or (vi) require the
approval or consent of any foreign, federal, state, local or other governmental
or regulatory body; PROVIDED, HOWEVER, that the Buyer makes no representation or
warranty concerning any approvals or consents which may be required for, or in
connection with, the transfer of any Permits required for the Buyer's operation
of the Business or the Buyer's use of the facility at 00 Xxxxx Xxxxxx,
Xxxxxxxxx, Xxxxxxxxxxxxx (the "Facility") or the Purchased Assets following the
Closing or, except as explicitly set forth otherwise in the Supply Agreement,
the performance of any of the Buyer's obligations under the Supply Agreement.
3.6 KNOWLEDGE OF THE BUYER. For purposes of this Agreement, (i) "Knowledge
of the Buyer," (ii) "Known to the Buyer," (iii) "Buyer's Knowledge" and (iv)
similar terms mean the actual knowledge of the Buyer after due investigation.
SECTION 4 - COVENANTS AND AGREEMENTS
The parties covenant and agree as follows:
4.1 ASSISTANCE RELATING TO DRUG MASTER FILE.
(a) The Seller shall be responsible for providing the necessary
regulatory documents to the United States Food and Drug Administration (the
"FDA"), including appropriate forms for the Drug Listing Branch and a letter,
accompanied by a revised organizational chart, informing the FDA of the transfer
of ownership and the absence of impact of the transfer on the manufacturing and
testing processing for PRODUCT (as defined in the Supply Agreement), in
connection with the transactions contemplated by this Agreement. The Seller will
provide guidance and assistance as required during the preparation and review of
these initial documents. The Seller will be responsible for the timely
submission of the documents to FDA and all subsequent updates.
(b) The Buyer agrees to reimburse the Seller for all of the
reasonable, documented and invoiced out-of-pocket costs incurred by the Seller
while providing assistance to the Buyer
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under the provisions of Section 4.1(a). Such costs shall be paid by the Buyer
within thirty (30) days after the date of the Buyer's receipt of the invoice.
4.2 CONDUCT OF BUSINESS. In the event that there is not a simultaneous
signing of this Agreement and Closing, during the period from the date hereof to
the Closing Date, Seller shall observe the following covenants:
4.2.1 AFFIRMATIVE COVENANTS PENDING CLOSING. The Seller will:
(a) PRESERVATION OF PERSONNEL. Use reasonable efforts to preserve
intact and keep available the services of Seller's present employees;
(b) PRESERVATION OF RELATIONSHIPS WITH SUPPLIERS AND CUSTOMERS. Use
reasonable efforts to preserve intact its relationships with its suppliers and
customers;
(c) INSURANCE. Use reasonable efforts to keep in effect casualty,
public liability, worker's compensation and other insurance policies in coverage
amounts not less than those in effect on the date of this Agreement;
(d) PRESERVATION AND ADVANCEMENT OF THE BUSINESS; MAINTENANCE OF
PROPERTIES, CONTRACTS. Use reasonable efforts to preserve and advance its
Business, advertise, promote and market its products in accordance with past
practices over the last ten months, keep its properties intact, preserve its
goodwill and its business, maintain all physical properties in good repair and
operating condition subject only to ordinary wear and tear, in each case in
accordance with past practices, and perform and comply in all material respects
with the terms of the contracts set forth in SCHEDULE 2.12 hereto;
(e) MAINTAIN CURRENT PRODUCTION SCHEDULE FOR ONTAK. Use reasonable
efforts to maintain its current production schedule for ONTAK;
(f) INTELLECTUAL PROPERTY RIGHTS. Use commercially reasonable efforts
to preserve and protect its Proprietary Rights; and
(g) ORDINARY COURSE OF BUSINESS. Operate its business solely in the
ordinary course and in the normal, usual and customary manner, consistent with
its past practices.
4.2.2 NEGATIVE COVENANTS PENDING CLOSING. The Seller will not:
(a) DISPOSITION OF ASSETS. Sell or transfer, or mortgage, pledge or
create or permit to be created any security interest on, any of its assets,
other than sales in the ordinary course of business;
(b) LIABILITIES. Incur any obligation or liability other than in the
ordinary course of Seller's business or incur any indebtedness for borrowed
money, except for the Intercompany Advances;
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(c) COMPENSATION. Increase the rates of direct or bonus compensation
payable or to become payable to any officer, employee, agent or consultant or
prepay any loans to the Seller from any such person;
(d) CAPITAL STOCK. Make any change in the number of shares of its
capital stock authorized, issued or outstanding, or grant (or accelerate the
exercisability of) any option, warrant or other right to purchase, or to convert
any obligation into, shares of its capital stock, or declare or pay any dividend
on, or make any redemption, purchase or other acquisition of, any shares of its
capital stock, or sell or transfer any shares of its capital stock;
(e) CHARTER AND BY-LAWS. Amend the Certificate of Incorporation or
By-Laws of the Seller; or
(f) ACQUISITIONS. Make any acquisition of property other than in the
ordinary course of the Business.
4.3 CONTINUED EFFECTIVENESS OF REPRESENTATIONS AND WARRANTIES. In the event
that there is not a simultaneous signing of this Agreement and Closing, from the
date hereof through the Closing Date, the parties hereto shall use reasonable
efforts to conduct their respective businesses and affairs in such a manner so
that their respective representations and warranties contained in this Agreement
shall continue to be true and correct in all material respects on and as of the
Closing Date as if made on and as of the Closing Date, and each party shall
promptly be given notice of any event, condition or circumstance occurring from
the date hereof through the Closing Date that would constitute a violation or
breach of this Agreement by another party. In the event such violation or breach
of this Agreement shall occur on or prior to the Closing Date, the breaching
party shall promptly use its best efforts to remedy the same.
4.4 TAXES. The Seller shall prepare and timely file, in a manner consistent
with prior years, all Tax reports and returns required to be filed after the
date hereof and on or before the Closing Date, and shall timely pay any Taxes
and estimated Taxes, required to be paid by it (including without limitation
pursuant to Section 6655 of the Code) after the date hereof and on or before the
Closing Date. All transfer and excise Taxes payable by the Seller (or by Buyer
or by Seller and Buyer) to any jurisdiction (in the United States and outside
the United States) by reason of the sale and transfer of the Purchased Assets
pursuant to this Agreement shall be paid or provided for by the Buyer after the
Closing.
4.5 CORPORATE EXAMINATIONS AND INVESTIGATIONS. Prior to the Closing Date,
the Buyer shall be entitled, through its employees and representatives, to have
such access to the assets, properties, business, operations, customers,
suppliers, key employees and accountants of Seller, as is reasonably necessary
or appropriate in connection with the Buyer's investigation of Seller and
provided that the Buyer shall give reasonable prior notice of any such requested
access to the Seller, Ligand and the Shareholder. Any such investigation and
examination shall be conducted at reasonable times and under reasonable
circumstances so as to minimize any disruption to or impairment of the Seller's
business and the Seller shall cooperate fully therein. No investigation by the
Buyer shall diminish or obviate any of the representations, warranties,
covenants or agreements of the Seller or the Shareholders under this Agreement.
In order that the Buyer may have full opportunity to make such review, the
Seller and the Shareholders shall furnish the
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representatives of the Buyer during such period with all such information and
copies of such documents concerning the affairs of the Seller as such
representatives may reasonably request and cause its officers, employees,
consultants, agents, accountants and attorneys to cooperate fully with such
representatives in connection with such review and to make full disclosure to
the Buyer of all material facts affecting the assets, properties, business,
operations and financial condition of the Seller. If this Agreement terminates,
the Buyer and its affiliates shall keep confidential and shall not use in any
manner any information or documents obtained from Seller concerning its assets,
properties, business and operations, unless readily ascertainable from public or
published information, or trade sources, or already known or subsequently
developed by the Buyer independently of any investigation of the Seller, or
received from a third party not under an obligation to the Seller to keep such
information confidential, or otherwise required by law. If this Agreement
terminates, any documents obtained from the Seller will be returned or
destroyed, at the Seller's option.
4.6 PROPRIETARY INFORMATION. The Seller agrees that from and after the
Closing Date it shall hold in confidence, and use its best efforts as to
present, and the efforts a reasonable person would use in protecting their own
proprietary information as to former, to have all of its present and former
officers, directors and personnel hold in confidence, all knowledge and
information of a secret or confidential nature with respect to the Purchased
Assets or the Seller's Business prior to the Closing and shall not disclose,
publish or make use of the same without the prior written consent of the Buyer.
The foregoing undertaking shall not apply to information that (i) shall have
become public knowledge other than by breach by the Seller or the Shareholder of
this Agreement or (ii) is required to be disclosed under court or governmental
order, rule or regulation.
4.7 EXCLUSIVITY. The Seller and the Shareholder shall not, and the Seller
shall use its best efforts to cause its affiliates and each of its officers,
directors, employees, representatives and agents not to, directly or indirectly,
(a) encourage, solicit, initiate, engage or participate in discussions or
negotiations with any person or entity (other than the Buyer) concerning any
merger, consolidation, sale of material assets, tender offer, recapitalization,
proxy solicitation or other business combination ("ALTERNATIVE TRANSACTION")
involving the Seller or the Purchased Assets or (b) provide any non-public
information concerning the Purchased Assets or the Seller's Business,
properties, assets or operations to any person or entity (other than the Buyer
and other than in the ordinary course of business). The Seller shall immediately
notify the Buyer of, and shall disclose to the Buyer all details of, any
inquiries relating to any Alternative Transaction.
4.8 MATTERS RELATED TO EMPLOYEES.
4.8.1 TERMINATION BY SELLER OF EMPLOYEES. Effective on the Closing
Date the Seller shall terminate each of its employees. The Seller agrees that it
shall provide to each such terminated employee all notices required to be
provided under applicable law.
4.8.2 TRANSFER OF WORK FORCE. The Seller hereby consents to the hiring
by the Buyer of such of the Seller's employees as the Buyer chooses and waives,
with respect to the employment of such employees by the Buyer, any claims or
rights that the Seller may have against the Buyer or any such employees under
any noncompetition, confidentiality or other agreement relating to the terms and
conditions of employment.
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4.8.3 TRANSITION TO BUYER BENEFIT PLANS. The Seller agrees to use
commercially reasonable efforts to assist the Buyer in the transition of such of
the Seller's employees as Buyer chooses to hire to coverage under the Buyer's
employee benefit plans.
4.8.4 COOPERATION. Commencing on the date of this Agreement, Seller
agrees to cooperate fully with Buyer with respect to the employment-related
actions which are necessary or reasonably desirable to accomplish the
transactions contemplated by this Agreement, including the provision of records
and information as the Buyer may reasonably request (including job titles, short
and long-term disability coverage, life insurance coverage, operator
certification and workers' compensation records and information; provided,
however, that the Seller shall have no obligation to disclose to the Buyer any
personnel records or information about any of the Seller's employees if the
Seller determines in its reasonable discretion that such disclosure may violate
legally protected privacy rights of its employees) and the making of all
appropriate filings under applicable laws.
4.8.5 WITHHOLDING. With respect to the employees who are hired by the
Buyer and who are required to be furnished a Form W-2 for the calendar year in
which the Closing occurs, the Seller and the Buyer agree to follow the "standard
procedure" set forth in Revenue Procedure 96-60 with respect to discharging
their respective income and employment tax withholding and reporting obligations
with respect to such employees.
4.8.6 PAYMENT OF ACCRUED SALARY, VACATION, ETC. As soon as practicable
after the Closing Date, Seller shall pay to all of its terminated employees (A)
all accrued vacation and (B) all salary, overtime and other remuneration earned,
accrued and payable for all periods up to such termination, in a manner
consistent with Seller's policies for terminated employees and the requirements
of applicable law.
4.9 EXPENSES. Except as otherwise provided in this Agreement, each of
Buyer, on the one hand, and the Seller and the Shareholder, on the other, shall
bear their respective expenses incurred in connection with the preparation,
execution and performance of this Agreement and the transactions contemplated
hereby, including, without limitation, all fees and expenses of agents,
representatives, counsel and accountants and no such expenses shall be included
in any of the Assumed Liabilities.
4.10 AUTHORIZATION FROM OTHERS. Prior to the Closing Date, the Buyer, the
Seller and the Shareholder shall use their best efforts to obtain all
authorizations, consents and permits of others required to permit the
consummation by them of the transactions contemplated by this Agreement,
including but not limited to, all consents set forth on SCHEDULE 2.10 of the
Seller and Shareholder Disclosure Schedule, except to the extent waived by the
Buyer in writing. To the extent that the assignment of any lease, contract,
commitment or right which are among the Purchased Assets shall require the
consent of other parties thereto and the Buyer shall have waived the receipt of
such consent at the Closing, this Agreement shall not constitute an assignment
thereof; however, the Seller and the Shareholder shall use their best efforts
after the Closing, without further consideration, to obtain such consents or
waivers to assure the Buyer of the benefits of such leases, contracts,
commitments or rights. Nothing herein shall be deemed a waiver by the Buyer of
its right to receive at the Closing an effective assignment of each of the
leases, contracts, commitments or rights of the Seller which are among the
Purchased Assets.
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4.11 CONSUMMATION OF AGREEMENT. Each of the Buyer, the Shareholder and the
Seller shall use such party's respective best efforts to perform and fulfill all
conditions and obligations to be performed and fulfilled by them under this
Agreement and further to ensure that to the extent in their collective control
or capable of influence by them, no breach of any of the Buyer's, the Seller's
or the Shareholder's respective representations, warranties and agreements
hereunder or contemplated hereby occurs or exists on or prior to the Closing
Date to the end that the transactions contemplated by this Agreement shall be
fully carried out.
4.12 COLLECTION OF ASSETS. Subsequent to the Closing, the Buyer shall have
the right and authority to collect all receivables and other items transferred
and assigned to it by Seller hereunder and to endorse with the name of Seller
any checks received on account of such receivables or other items, and Seller
agrees that it will promptly transfer or deliver to the Buyer from time to time,
any cash or other property that Seller may receive with respect to any claims,
contracts, licenses, leases, commitments, sales orders, purchase orders,
receivables of any character or any other items which are among the Purchased
Assets.
4.13 USE OF NAME AND DISCHARGE OF SELLER AND SHAREHOLDER LIABILITIES. At
and following the Closing, the Seller and the Shareholder shall cause any and
all persons in which any of them has an interest (including without limitation,
Seller) to cease and desist from using the name "Marathon," "Marathon
Biopharmaceuticals," or "Marathon Biopharmaceuticals, Inc." or any variation
thereof as all or part of a trade or corporate name. Following the Closing, the
Seller and the Shareholder shall discharge all obligations of the Seller which
are not Assumed Liabilities on or before the maturity thereof.
4.14 FURTHER ASSURANCES. Without further consideration, each of the parties
shall execute such documents, further instruments of transfer and assignment and
other papers and take such further actions as may be reasonably required or
desirable to carry out the provisions hereof and the transactions contemplated
hereby.
4.15 TAX CLEARANCE CERTIFICATES. As soon as reasonably practicable and in
any event within 4 months after the Closing Date, the Seller shall provide the
Buyer with (i) a certificate of payment/goodstanding from the Commission of
Revenue as provided in Massachusetts General Laws Chapter 62C, Section 44(a);
and (ii) a copy of a waiver of tax lien issued by the Commissioner of Revenue
pursuant to Massachusetts General Laws Chapter 62C, Sections 51 and 52.
SECTION 5 - CONDITIONS PRECEDENT TO
THE OBLIGATION OF THE BUYER TO CLOSE
The obligation of the Buyer to enter into and complete the Closing is
subject, at the option of the Buyer acting in accordance with the provisions of
this Agreement with respect to termination hereof, to the fulfillment of the
following conditions, any one or more of which may be waived by it:
5.1 REPRESENTATIONS, WARRANTIES AND COVENANTS. The representations and
warranties of the Seller and the Shareholder contained in this Agreement shall
be true on and as of the Closing Date with the same force and effect as though
made on and as of the Closing Date. Each
26
of the Seller and the Shareholder shall have performed and complied with all
covenants and agreements required by this Agreement to be performed or complied
with by such parties on or prior to the Closing Date. Seller and Shareholder
shall have delivered to the Buyer a certificate, dated the Closing Date and
signed by an officer of the Seller and an officer of the Shareholder to the
foregoing effect and stating that all conditions to the Buyer's obligations
hereunder have been satisfied.
5.2 THIRD PARTY CONSENTS. The Buyer shall have received evidence of the
receipt of all authorizations, consents and permits of others required to permit
the consummation by the Buyer and the Seller of the transactions contemplated by
this Agreement, including but not limited to, all consents set forth on SCHEDULE
2.10 of the Seller and Shareholder Disclosure Schedule, except to the extent
waived by the Buyer in writing.
5.3 FINANCING. The Buyer shall have completed a financing raising the funds
necessary for the Buyer to pay the Purchase Price.
5.4 SUPPLY AND DEVELOPMENT AGREEMENT. The Buyer and the Shareholder shall
have executed and delivered the Supply Agreement.
5.5 NONCOMPETITION AGREEMENT. Each of the Seller, Ligand and the
Shareholder shall have executed and delivered the Noncompetition Agreement in
substantially the form attached hereto as EXHIBIT B.
5.6 OPINION OF COUNSEL TO THE SELLER AND THE SHAREHOLDERS. The Buyer shall
have received the opinion of Xxxxxxx Xxxxxxx & Xxxxxxxx LLP, counsel to the
Seller and the Shareholder, dated the Closing Date, addressed to the Buyer, and
substantially in the form of EXHIBIT C hereto.
5.7 LITIGATION. No action, suit or proceeding shall have been instituted
before any court or governmental or regulatory body, or instituted or threatened
by any governmental or regulatory body, to restrain, modify or prevent the
carrying out of the transactions contemplated hereby, or to seek damages or a
discovery order in connection with such transactions, or that has or may have,
in the reasonable opinion of the Buyer, a materially adverse effect on the
Purchased Assets or the Business.
5.8 DELIVERY OF INSTRUMENTS OF TRANSFER. Seller shall have delivered or
caused to be delivered to the Buyer instruments of transfer in conformity with
Section 1.5 above.
5.9 CLOSING CERTIFICATES. Buyer shall receive such closing certificates as
it deems necessary, such certificates to be in form and substance satisfactory
to the Buyer.
5.10 SATISFACTORY COMPLETION OF DUE DILIGENCE. The Buyer shall have
completed its due diligence concerning the Seller, the Purchased Assets and the
transactions contemplated hereby to its satisfaction.
5.11 GOVERNMENTAL APPROVALS. All federal, state and local government
approvals required for the uninterrupted operation of the 00 Xxxxx Xxxxxx,
Xxxxxxxxx, Xxxxxxxxxxxxx plant and the other operations of Seller acquired by
Buyer shall have been obtained.
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5.12 NO MATERIAL CHANGE. There shall have been no material adverse change
in the Seller's financial condition, Business, assets, operations or prospects,
nor shall any event have occurred which so far as can reasonably be foreseen on
the Closing Date appears reasonably likely materially and adversely to affect
the financial condition, business, assets, operations or prospects of the
Seller.
5.13 EMPLOYMENT. Xxxxxxx Xxxxxxx and Xxxx X'Xxxxxxxx shall have accepted
employment with the Buyer and shall have signed such documents and agreements as
Buyer requested in connection with accepting such employment.
5.14 SELLER NAME CHANGE AND DISCHARGE OF LIABILITIES. The Seller shall have
delivered to the Buyer evidence of the Seller's compliance with Section 4.13
above.
5.15 LEASE OR SUBLEASE. The Buyer shall have received a lease or sublease
to the premises at 00 Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxxxxxx in a form deemed
acceptable by the Buyer.
SECTION 6 - CONDITIONS PRECEDENT
TO THE OBLIGATION OF SELLER TO CLOSE
The obligation of the Seller and the Shareholder to enter into and complete
the Closing is subject, at the option of the Seller and the Shareholder acting
in accordance with the provisions of this Agreement with respect to termination
hereof, to the fulfillment of the following conditions, any one or more of which
may be waived:
6.1 REPRESENTATIONS, WARRANTIES AND COVENANTS. The representations and
warranties of the Buyer contained in this Agreement shall be true on and as of
the Closing Date with the same force and effect as though made on and as of the
Closing Date. The Buyer shall have performed and complied with all covenants and
agreements required by this Agreement to be performed or complied with by it on
or prior to the Closing Date. The Buyer shall have delivered to the Seller a
certificate, dated the Closing Date and signed by an officer of the Buyer, to
the foregoing effect and stating that all conditions to the obligations of the
Seller hereunder have been satisfied.
6.2 DELIVERY OF ASSUMPTION AGREEMENT. The Buyer shall have delivered or
caused to be delivered to Seller an agreement for assumption of the Assumed
Liabilities by the Buyer containing provisions (not inconsistent with the
provisions hereof) which are usual and customary for assuming the liabilities
involved.
6.3 SUPPLY AND DEVELOPMENT AGREEMENT. The Buyer and the Shareholder shall
have executed and delivered the Supply Agreement.
6.4 LITIGATION. No action, suit or proceeding shall have been instituted
before any court or governmental or regulatory body, or instituted or threatened
by any governmental or regulatory body, to restrain, modify or prevent the
carrying out of the transactions contemplated hereby, and such action, suit or
proceeding shall not have been stayed.
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6.5 NO MATERIAL CHANGE. There shall have been no material adverse change in
the Buyer's financial condition, business, assets, operations or prospects, nor
shall any event have occurred which so far as can reasonably be foreseen on the
Closing Date appears reasonably likely materially and adversely to affect the
financial condition, business, assets, operations or prospects of the Buyer.
6.6 LEASE OR SUBLEASE. The Buyer shall have received a lease or sublease to
the premises at 00 Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxxxxxx in a form deemed
acceptable by the Seller.
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SECTION 7 - INDEMNIFICATION AND GUARANTY
7.1 SURVIVAL. Notwithstanding any right of any party to fully investigate
the affairs of the other party and notwithstanding any knowledge of facts
determined or determinable by such party pursuant to such investigation or right
of investigation, each party has the right to rely fully upon the
representations, warranties, covenants and agreements of each other party in
this Agreement or in any Schedule, certificate or financial statement delivered
by any party pursuant hereto. All such representations, warranties, covenants
and agreements shall survive the execution and delivery hereof and the Closing
hereunder and be indemnified in accordance with this Section 7, and, except as
otherwise specifically provided in this Agreement, shall thereafter survive for
a period of four (4) consecutive years after the Closing Date (or such longer
period as it takes to resolve matters covered by Claims Notices, as defined in
Section 7.4.1, which have been given prior to the expiration of such period, but
such extension shall apply only to matters related to such Claims Notices).
As used in this Section 7, the following terms have the following meanings:
(i) "TAX CLAIM" means any claim based upon, arising out of or
otherwise in respect of (A) issues raised on audit by Tax authorities with
respect to the Seller's Business on or before the Closing Date or (B) any
other Tax liabilities of the Seller, including any liability of the Seller
for the unpaid Taxes of any person under Treasury Regulation Section
1.1502-6 (or any similar provision of state, local or foreign law), as a
transferee or successor, by contract, or otherwise.
(ii) "SELLER CLAIM" means any claim based upon, arising out of or
otherwise in respect of (A) any inaccuracy in or any breach of any
representation, warranty, covenant or agreement of the Buyer contained in
this Agreement or (B) the Buyer's use of the Purchased Assets or operation
of the Business following the Closing Date, except for liabilities arising
from matters which constitute grounds for a Buyer Claim.
(iii) "BUYER CLAIM" means any (A) Tax Claim, (B) claim based upon,
arising out of or otherwise in respect of any inaccuracy in or any breach
of any representation, warranty, covenant or agreement of the Seller or the
Shareholder contained in this Agreement, (C) claim based upon, arising out
of or otherwise in respect of any and all liabilities and obligations of
any nature whatsoever of or relating to: (I) the Seller or the Shareholder
or their businesses either prior to or after the Closing, excluding any
liabilities and obligations expressly assumed by the Buyer pursuant to
Section 1.3 or (II) the Purchased Assets prior to the Closing, excluding
any liabilities and obligations expressly assumed by the Buyer pursuant to
Section 1.3, (D) claim made by any third party with respect to the
infringement or alleged infringement of any Proprietary Rights belonging or
licensed to such third party which may arise from the use by the Buyer of
the Purchased Assets (provided, however, that in the case of the Buyer's
use of rights under the Seragen License Agreements listed in Schedule
2.17(a) of the Seller and Shareholder Disclosure Schedule, a Buyer Claim
will only include claims with respect to
30
infringement or alleged infringement of Proprietary Rights belonging
to or licensed to third parties to the extent the Buyer's use of such
rights is substantially similar to the Seller's use of such rights prior to
the Closing or is consistent with the Buyer's performance of its
obligations under the Supply Agreement) and (E) claim made by any employee
or former employee of the Seller (including any employees of Seller who are
subsequently hired by the Buyer) arising out of or otherwise in respect of
their employment or termination by the Seller.
7.2 OBLIGATION OF THE SELLER AND THE SHAREHOLDERS TO INDEMNIFY. Subject to
the limitations set forth below and to the termination provisions set forth in
Section 8.1, the Seller and the Shareholder, jointly and severally, agree to
indemnify, defend and hold harmless the Buyer (and its directors, officers,
employees, affiliates and assigns) from and against all losses, liabilities,
damages, deficiencies, costs or expenses (including interest and penalties
imposed or assessed by any judicial or administrative body and reasonable
attorneys fees) ("LOSSES") based upon, arising out of or otherwise in respect of
any Buyer Claim.
7.3 OBLIgATION OF THE BUYER TO INDEMNIFY. Subject to the limitations set
forth below and to the termination provisions set forth in Section 8.1, the
Buyer agrees to indemnify, defend and hold harmless the Seller and the
Shareholder (and their respective directors, officers, employees, affiliates and
assigns) from and against any Losses based upon, arising out of or otherwise in
respect of any Seller Claim.
7.4 NOTICE AND OPPORTUNITY TO DEFEND.
7.4.1 NOTICE OF ASSERTED LIABILITY. Promptly after receipt by any
party hereto (the "INDEMNITEE") of notice of any demand, claim or circumstances
which, with the lapse of time, would give rise to a claim or the commencement
(or threatened commencement) of any action, proceeding or investigation (an
"ASSERTED LIABILITY") that may result in a Loss, the Indemnitee shall give
notice thereof (the "CLAIMS NOTICE") to any other party or parties obligated to
provide indemnification pursuant to Sections 7.2 or 7.3 hereof (the
"INDEMNIFYING PARTY"). The Claims Notice shall describe the Asserted Liability
in reasonable detail, and shall indicate the amount (estimated, if necessary) of
the Loss that has been or may be suffered by the Indemnitee.
7.4.2 OPPORTUNITY TO DEFEND. The Indemnifying Party may elect to
compromise or defend, and control the defense of, at its own expense and by
counsel reasonably satisfactory to the Indemnitee, any Asserted Liability,
provided that the Indemnitee shall have no liability under any compromise or
settlement agreed to by the Indemnifying Party which it has not approved in
writing. If the Indemnifying Party elects to compromise or defend such Asserted
Liability, it shall within 30 days (or sooner, if the nature of the Asserted
Liability so requires) notify the Indemnitee of its intent to do so, and the
Indemnitee shall cooperate upon the request and at the expense of the
Indemnifying Party, in the compromise of, or defense against, such Asserted
Liability. If the Indemnifying Party elects not to compromise or defend the
Asserted Liability, or fails to notify the Indemnitee of its election as herein
provided, the Indemnitee may pay, compromise or defend such Asserted Liability
and receive full indemnification for its Losses as provided in Sections 7.2 and
7.3 hereof. In any event, the Indemnitee and the Indemnifying Party may
participate, at their own expense, in the defense of such Asserted
31
Liability by the Indemnifying Party or the Indemnitee, respectively. If the
Indemnifying Party chooses to defend any claim, the Indemnitee shall make
available to the Indemnifying Party any books, records or other documents within
its control that are reasonably requested for such defense and shall otherwise
cooperate with the Indemnifying Party, in which event the Indemnitee shall be
reimbursed for its out-of-pocket expense.
7.5 OTHER BENEFITS. In determining the amount of any Loss, there shall be
taken into account any tax benefit, insurance proceeds or other similar recovery
or offset realized, directly or indirectly, by the Indemnitee.
7.6 PAYMENT OF INDEMNIFICATION OBLIGATION. The Indemnifying Party agrees to
pay promptly to any Indemnitee the amount of all Losses and other obligations to
which the indemnification obligation set forth in this Section 7 relates. All
indemnification by the Seller, the Shareholder or the Buyer, as the case may be,
hereunder shall be effected by payment of cash or delivery of a cashier's or
certified check in the amount of the indemnification liability.
7.7 INTEREST ON UNPAID INDEMNIFICATION OBLIGATIONS. If all or part or any
indemnification obligation under this Agreement is not paid when due, the
Indemnifying Party shall pay the Indemnitee interest on the unpaid amount of
such obligation for each day from the date that the Indemnitee paid such sum
until payment in full, payable on demand, at the lower of the maximum rate
permitted by law or the "Prime Rate" as announced from time to time in the
Eastern Edition of THE WALL STREET JOURNAL plus two percent (2%) per annum.
7.8 LIMITATION ON INDEMNIFICATION OBLIGATION.
7.8.1 The Seller and the Shareholder shall have no liability to the
Buyer (and its directors, officers, employees, affiliates and assigns) for
amounts payable pursuant to their indemnification obligations in this Section 7
until the total of all such Losses incurred by the Buyer (and it directors,
officers, employees, affiliates and assigns) exceed *** (***) in the aggregate
(the "Threshold Amount"), and then indemnification by the Seller and the
Shareholder shall apply only to all such Losses in excess of the Threshold
Amount.
7.8.2 The Buyer shall have no liability to the Seller or the
Shareholder (and their respective directors, officers, employees, affiliates and
assigns) for amounts payable pursuant to its indemnification obligations in this
Section 7 until the total of all such Losses incurred by the Seller and the
Shareholder (and their respective directors, officers, employees, affiliates and
assigns) exceed *** (***) in the aggregate (the "Buyer Threshold Amount"), and
then indemnification by the Buyer shall apply only to all such Losses in excess
of the Buyer Threshold Amount.
7.8.3 The Seller and the Shareholder shall have no liability to the
Buyer (and its directors, officers, employees, affiliates and assigns) pursuant
to their indemnification
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission
32
obligations in this Section 7 for any further Losses (subject to the threshold
requirements set forth in Section 7.8.1 above) payable by the Seller and/or the
Shareholder pursuant to such indemnification obligations once the Losses paid
for by the Seller and/or the Shareholder pursuant to such indemnification
obligations exceed (i) ***(***) in the aggregate through December 31, 2001 or
(ii) *** (***) in the aggregate through December 31, 2003, provided however,
that if the total of all Losses paid by the Seller and/or the Shareholder
pursuant to such indemnification obligations for matters covered by Claims
Notices given prior to December 31, 2001 exceeds *** (***), there shall be no
obligation on the part of the Buyer (or its directors, officers, employees,
affiliates and assigns) to refund any of such sums.
7.9 GUARANTY OF LIGAND. Ligand unconditionally guarantees the due and
punctual payment and performance of Seller's and Shareholder's obligations set
forth in this Section 7. This guaranty is an irrevocable guaranty of payment
(and not just of collection) and shall continue in effect notwithstanding any
extension or modification of the terms of this Agreement, any assumption of any
such guaranteed obligation by any other party or any other act or event which
might otherwise operate as a legal or equitable discharge of Ligand. Ligand
hereby waives any special suretyship defenses and notice requirements. This
guaranty is in no way conditioned upon any requirement that the Buyer first
attempt to collect or enforce any guaranteed obligation from or against the
Seller or the Shareholder. So long as any obligation of the Seller or the
Shareholder to the Buyer remains unpaid or discharged, Ligand hereby waives all
rights to subrogation arising out of any payment by Ligand pursuant to this
Section 7.9.
SECTION 8 - TERMINATION OF AGREEMENT
8.1 TERMINATION. In the event that this Agreement is executed prior the
Closing Date, this Agreement may be terminated on or prior to the Closing as
follows:
(i) at the election of the Seller upon written notice to the Buyer
from Seller if, on or after January 14, 2000, any one or more of the
conditions to the obligation of the Seller to close has not been fulfilled;
(ii) at the election of the Buyer upon written notice to the Seller
if, on or after January 14, 2000, any one or more of the conditions to its
obligation to close has not been fulfilled;
(iii) at the election of the Seller upon written notice to the Buyer
from Seller, if the Buyer has breached any representation, warranty,
covenant or agreement contained in this Agreement and has not, within
fifteen (15) business days of receipt by the Buyer of written notice from
the Seller of such breach of representation, warranty, covenant or
agreement, cured such breach;
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission
33
(iv) at the election of the Buyer upon written notice to the Seller if
the Seller or any of the Shareholders has breached any representation,
warranty, covenant or agreement contained in this Agreement and has not,
within fifteen (15) business days of receipt by the Seller of written
notice from the Buyer of such breach of representation, warranty, covenant
or agreement, cured such breach; or
(v) by mutual written agreement of the Seller and the Buyer.
8.2 EFFECT OF TERMINATION. If this Agreement is terminated and the
transactions contemplated hereby are not consummated as provided above, each and
every representation and warranty contained in this Agreement or any Schedule
hereto, or any certificate, document or other instrument delivered by the
parties in connection herewith, shall expire and none of the parties hereto
shall be under any liability whatsoever with respect to any such representation
or warranty; provided, however, that notwithstanding the foregoing, each party
shall be and remain liable to the other in the event that the failure so to
close hereunder shall occur as a consequence of the failure of a party to fully
perform its covenants and agreements hereunder or the material breach by a party
of its representations or warranties contained herein. Notwithstanding the
foregoing, Sections 4.5, 4.6 and 4.9 shall survive any termination of this
Agreement and continue in full force and effect.
SECTION 9 - MISCELLANEOUS
9.1 SALES, TRANSFER AND DOCUMENTARY TAXES, ETC. Buyer shall bear and pay
promptly all Massachusetts sales, transfer and documentary taxes, if any, due as
a result of the transfer of the Purchased Assets to the Buyer.
9.2 PUBLICITY. No publicity release or announcement concerning this
Agreement or the transactions contemplated hereby shall be made without advance
approval thereof by the Seller, Ligand and the Buyer.
9.3 NOTICES. Any notice or other communication required or permitted
hereunder shall be in writing and shall be delivered personally, telegraphed,
telexed, sent by facsimile transmission or sent by certified, registered or
express mail, postage prepaid or by overnight mail via a reputable national
overnight courier. Any such notice shall be deemed given when so delivered
personally, telegraphed, telexed or sent by facsimile transmission or, if
mailed, two days after the date of deposit in the United States mails, or if
sent via overnight mail, one day after the date of deposit with a reputable
national overnight courier, as follows:
(i) if to the Buyer, to:
CoPharma, Inc.
00 Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxxxxx 00000
Attn: President
with a copy to:
Xxxxxx & Dodge LLP
00
Xxx Xxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000-0000
Attn: Xxxxxxxx X. Xxxxxx, Esq.
(ii) if to the Seller:
Marathon BioPharmaceuticals, Inc.
c/o Ligand Pharmaceuticals Incorporated
00000 Xxxxxxx Xxxxxx Xxxxx
Xxx Xxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxxx, Esq.
with a copy to:
Xxxxxxx Phleger & Xxxxxxxx LLP
000 Xxxx X Xxxxxx
Xxx Xxxxx, XX 00000-0000
Attn: Xxxx X. Xxxxxxx, Esq.
(iii) if to the Shareholder or Ligand to the address
set forth on the signature page hereto.
Any party may by notice given in accordance with this Section to the other
parties designate another address or person for receipt of notices hereunder.
9.4 ENTIRE AGREEMENT. This Agreement (including the Schedules), the Related
Agreements and all other documents executed in connection with the consummation
of the transactions contemplated herein contain the entire agreement among the
parties with respect to the purchase of the Purchased Assets and related
transactions, and supersedes all prior agreements, written or oral, with respect
thereto.
9.5 WAIVERS AND AMENDMENTS; NON-CONTRACTUAL REMEDIES; PRESERVATION OF
REMEDIES. This Agreement may be amended, superseded, canceled, renewed or
extended, and the terms hereof may be waived, only by a written instrument
signed by the parties or, in the case of a waiver, by the party waiving
compliance. No delay on the part of any party in exercising any right, power or
privilege hereunder shall operate as a waiver thereof nor shall any waiver on
the part of any party of any such right, power or privilege, nor any single or
partial exercise of any such right, power or privilege, preclude any further
exercise thereof or the exercise of any other such right, power or privilege.
The rights and remedies herein provided are cumulative and are not exclusive of
any rights or remedies that any party may otherwise have at law or in equity.
The rights and remedies of any party based upon, arising out of or otherwise in
respect of any inaccuracy in or breach of any representation, warranty, covenant
or agreement contained in this Agreement shall in no way be limited by the fact
that the act, omission, occurrence or other state of facts upon which any claim
of any such inaccuracy or breach is based may also be the subject matter of any
other representation, warranty, covenant or agreement contained in this
Agreement (or in any other agreement between the parties) as to which there is
not inaccuracy or breach.
35
9.6 GOVERNING LAW. This Agreement shall be governed and construed in
accordance with the laws of The Commonwealth of Massachusetts.
9.7 ENFORCEABILITY IN JURISDICTIONS; CONSENT. The parties hereto intend to
and hereby confer jurisdiction to enforce the provisions of this Agreement,
expressly including without limitation, the provisions of Section 7 hereof, upon
the courts of Massachusetts. The parties hereto hereby acknowledge and agree
that any breach of their respective obligations under this Agreement or any
other agreement executed in connection herewith shall be deemed to have occurred
at Boston, Massachusetts and that such party has purposely established minimum
contact in Boston, Massachusetts within the meaning of all applicable law. Each
of the parties hereto consents to the jurisdiction of said court or courts in
Massachusetts and to service of process by certified mail, return receipt
requested, or by any other manner provided by law. In the case of any claim
involving the parties hereto, any legal action, suit or proceeding arising out
of or relating to such claim may be instituted against such persons in any state
or federal court located in Boston, Massachusetts and each such party agrees not
to assert, by way of motion, as a defense, or otherwise, in any such action,
suit or proceeding, any claim that it is not subject personally to the
jurisdiction of such courts, that the action, suit or proceeding is brought in
an inconvenient forum, that the venue of the action, suit or proceeding is
improper or that this Agreement or the subject matter hereof may not be enforced
in or by such court.
9.8 BINDING EFFECT; NO ASSIGNMENT. This Agreement shall be binding upon and
inure to the benefit of the parties and their respective successors and legal
representatives. This Agreement is not assignable except by operation of law or
by the Buyer to any of its affiliates.
9.9 VARIATIONS IN PRONOUNS. All pronouns and any variations thereof refer
to the masculine, feminine or neuter, singular or plural, as the context may
require.
9.10 COUNTERPARTS. This Agreement may be executed by the parties hereto in
separate counterparts, each of which when so executed and delivered shall be an
original, but all such counterparts shall together constitute one and the same
instrument. Each counterpart may consist of a number of copies hereof each
signed by less than all, but together signed by all of the parties hereto.
9.11 EXHIBITS AND SCHEDULES. The Exhibits and Schedules are a part of this
Agreement as if fully set forth herein. All references herein to Sections,
subsections, clauses, Exhibits and Schedules shall be deemed references to such
parts of this Agreement, unless the context shall otherwise require.
9.12 HEADINGS. The headings in this Agreement are for reference only, and
shall not affect the interpretation of this Agreement.
9.13 CONSTRUCTION The parties have participated jointly in the negotiation
and drafting of this Agreement. In the event an ambiguity or question of intent
or interpretation arises, this Agreement shall be construed as if drafted
jointly by the parties and no presumption or burden of proof shall arise
favoring or disfavoring any party by virtue of the authorship of any of the
provisions of this Agreement. Any reference to any federal, state, local, or
foreign statute or law shall be deemed also to refer to all rules and
regulations promulgated thereunder, unless the
36
context requires otherwise. The word "including" shall mean including without
limitation. Nothing in the Schedules attached to this Agreement shall be deemed
adequate to disclose an exception to a representation or warranty made herein
unless the Schedule identifies the exception with reasonable particularity and
describes the relevant facts in reasonable detail. Without limiting the
generality of the foregoing, the mere listing (or inclusion of a copy) of a
document or other item shall not be deemed adequate to disclose an exception to
a representation or warranty made herein (unless the representation or warranty
has to do with the existence of the document or other item itself). The parties
intend that each representation, warranty, and covenant contained herein shall
have independent significance. If any party has breached any representation,
warranty, or covenant contained herein in any respect, the fact that there
exists another representation, warranty, or covenant relating to the same
subject matter (regardless of the relative levels of specificity) which the
party has not breached shall not detract from or mitigate the fact that the
party is in breach of the first representation, warranty, or covenant.
9.14 SPECIFIC PERFORMANCE. Each of the parties acknowledges and agrees that
the other parties would be damaged irreparably in the event any of the
provisions of this Agreement are not performed in accordance with their specific
terms or otherwise are breached. Accordingly, each of the parties agrees that
the other parties shall be entitled to an injunction or injunctions to prevent
breaches of the provisions of this Agreement and to enforce specifically this
Agreement and the terms and provisions hereof in any action instituted in any
court of the United States or any state thereof having jurisdiction over the
parties and the matter, in addition to any other remedy to which it may be
entitled, at law or in equity.
9.15 NO BENEFIT TO OTHERS. The representations, warranties, covenants and
agreements contained in this Agreement are for the sole benefit of the parties
hereto and their heirs, personal representatives, successors and assigns, and
they are not intended as, and shall not be construed as, conferring any rights
on any other persons.
9.16 SEVERABILITY. If any provision of this Agreement or the application
thereof to any person or circumstance is held invalid or unenforceable in any
jurisdiction, the remainder of this Agreement, and the application of such
provision to such person or circumstance in any other jurisdiction or to other
persons or circumstances in any jurisdiction, shall not be affected thereby, and
to this end the provisions of this Agreement shall be severable.
[The remainder of this page intentionally left blank.]
37
IN WITNESS WHEREOF, the parties have executed this Agreement under seal as
of the date first above written.
BUYER
-----
COPHARMA, INC.
By: /S/ XXXXXX X. XXXXXXXX
--------------------------
Name: Xxxxxx X. Xxxxxxxx, M.D.
Title: President
SELLER
------
MARATHON BIOPHARMACEUTICALS, INC.
By: /S/ XXXX XXXXX
Name:
Title: President
Address: 00000 Xxxxxxx Xxxxxx Xxxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
SHAREHOLDER
-----------
SERAGEN, INC.
By: /S/ XXXX X. XXXXX
Name:
Title: CEO
Address: 00000 Xxxxxxx Xxxxxx Xxxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
38
LIGAND PHARMACEUTICALS INCORPORATED
By: /S/ XXXXXXX X. XXXXXXX
Name:
Title:
Address: 00000 Xxxxxxx Xxxxxx Xxxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
39
TABLE OF CONTENTS
Page
SECTION 1 - SALE AND PURCHASE OF ASSETS..............................................................1
1.1 Sale of Assets.................................................................................1
1.2 Excluded Assets................................................................................1
1.3 Limitation of Assumption of Liabilities........................................................2
1.4 Purchase Price and Payment.....................................................................3
1.5 Transfer of Purchased Assets...................................................................3
1.6 Delivery of Records and Contracts..............................................................4
1.7 Buyer Designees................................................................................4
1.8 Closing........................................................................................4
1.9 Closing Deliveries.............................................................................4
1.10 Allocation of Purchase Price...................................................................4
1.11 Post Closing Adjustment to Purchase Price......................................................4
SECTION 2 - REPRESENTATIONS AND WARRANTIES OF THE SELLER AND THE SHAREHOLDER.........................6
2.1 Organization and Qualification.................................................................6
2.2 Capitalization and Title to Shares.............................................................7
2.3 Authority to Execute and Perform Agreements....................................................7
2.4 Subsidiaries and Other Affiliates..............................................................7
2.5 Charter and By-laws............................................................................7
2.6 Financial Statements...........................................................................8
2.7 No Material Adverse Change.....................................................................8
2.8 Tax Matters....................................................................................9
2.9 Compliance with Laws...........................................................................9
2.10 Consents; No Breach...........................................................................10
2.11 Actions and Proceedings.......................................................................11
2.12 Contracts and Other Agreements................................................................11
2.13 Real Estate...................................................................................13
2.14 Accounts and Notes Receivable.................................................................13
2.15 Inventory.....................................................................................13
-i-
Page
2.16 Tangible Property.............................................................................13
2.17 Intangible Property...........................................................................14
2.18 Title to Assets; Liens........................................................................15
2.19 Retained Liabilities..........................................................................15
2.20 Absence of Undisclosed Liabilities............................................................15
2.21 Customers and Distributors....................................................................16
2.22 Employee Benefit Plans........................................................................16
2.23 Employer Relations............................................................................17
2.24 Insurance.....................................................................................18
2.25 Brokerage.....................................................................................18
2.26 Hazardous Materials...........................................................................18
2.27 Sufficiency of Purchased Assets...............................................................19
2.28 Year 2000 Compliance..........................................................................19
2.29 Full Disclosure...............................................................................19
SECTION 3 - REPRESENTATIONS AND WARRANTIES OF THE BUYER.............................................20
3.1 Organization..................................................................................20
3.2 Authority to Execute and Perform Agreements...................................................20
3.3 Brokerage.....................................................................................20
3.4 Actions and Proceedings.......................................................................20
3.5 No Breach.....................................................................................20
3.6 Knowledge of the Buyer........................................................................21
SECTION 4 - COVENANTS AND AGREEMENTS................................................................21
4.1 Assistance Relating to Drug Master File.......................................................21
4.2 Conduct of Business...........................................................................21
4.3 Continued Effectiveness of Representations and Warranties.....................................23
4.4 Taxes.........................................................................................23
4.5 Corporate Examinations and Investigations.....................................................23
4.6 Proprietary Information.......................................................................23
4.7 Exclusivity...................................................................................24
-ii-
Page
4.8 Matters Related to Employees..................................................................24
4.9 Expenses......................................................................................25
4.10 Authorization from Others.....................................................................25
4.11 Consummation of Agreement.....................................................................25
4.12 Collection of Assets..........................................................................25
4.13 Use of Name and Discharge of Seller and Shareholder Liabilities...............................26
4.14 Further Assurances............................................................................26
4.15 Tax Clearance Certificates....................................................................26
SECTION 5 - CONDITIONS PRECEDENT TO THE OBLIGATION OF THE BUYER TO CLOSE............................26
5.1 Representations, Warranties and Covenants.....................................................26
5.2 Third Party Consents..........................................................................26
5.3 Financing.....................................................................................27
5.4 Supply and Development Agreement..............................................................27
5.5 Noncompetition Agreement......................................................................27
5.6 Opinion of Counsel to the Seller and the Shareholders.........................................27
5.7 Litigation....................................................................................27
5.8 Delivery of Instruments of Transfer...........................................................27
5.9 Closing Certificates..........................................................................27
5.10 Satisfactory Completion of Due Diligence......................................................27
5.11 Governmental Approvals........................................................................27
5.12 No Material Change............................................................................27
5.13 Employment....................................................................................27
5.14 Seller Name Change and Discharge of Liabilities...............................................27
5.15 Lease or Sublease.............................................................................28
SECTION 6 - CONDITIONS PRECEDENT TO THE OBLIGATION OF SELLER TO CLOSE...............................28
6.1 Representations, Warranties and Covenants.....................................................28
6.2 Delivery of Assumption Agreement..............................................................28
6.3 Supply and Development Agreement..............................................................28
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Page
6.4 Litigation....................................................................................28
6.5 No Material Change............................................................................28
6.6 Lease or Sublease.............................................................................28
SECTION 7 - INDEMNIFICATION AND GUARANTY............................................................29
7.1 Survival......................................................................................29
7.2 Obligation of the Seller and the Shareholders to Indemnify....................................30
7.3 Obligation of the Buyer to Indemnify..........................................................30
7.4 Notice and Opportunity to Defend..............................................................30
7.5 Other Benefits................................................................................31
7.6 Payment of Indemnification Obligation.........................................................31
7.7 Interest on Unpaid Indemnification Obligations................................................31
7.8 Limitation on Indemnification Obligation......................................................31
7.9 Guaranty of Ligand............................................................................32
SECTION 8 - TERMINATION OF AGREEMENT................................................................32
8.1 Termination...................................................................................32
8.2 Effect of Termination.........................................................................32
SECTION 9 - MISCELLANEOUS...........................................................................33
9.1 Sales, Transfer and Documentary taxes, Etc....................................................33
9.2 Publicity.....................................................................................33
9.3 Notices.......................................................................................33
9.4 Entire Agreement..............................................................................34
9.5 Waivers and Amendments; Non-Contractual Remedies; Preservation of Remedies....................34
9.6 Governing Law.................................................................................34
9.7 Enforceability in Jurisdictions; Consent......................................................34
9.8 Binding Effect; No Assignment.................................................................35
9.9 Variations in Pronouns........................................................................35
9.10 Counterparts..................................................................................35
9.11 Exhibits and Schedules........................................................................35
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Page
9.12 Headings......................................................................................35
9.13 Construction..................................................................................35
9.14 Specific Performance..........................................................................36
9.15 No Benefit to Others..........................................................................36
9.16 Severability..................................................................................36
-v-
EXHIBITS
A - Form of Supply and Development Agreement
B - Form of Noncompetition Agreement
C - Form of Opinion of Seller's Counsel
SCHEDULES
Schedule 1.2 Excluded Inventory
Schedule 1.3 Assumed Liabilities
Seller and Shareholder Disclosure Schedule
Buyer Disclosure Schedule
