EXHIBIT 2.1
EXECUTION COPY
ASSET PURCHASE AND SALE AGREEMENT
BY AND BETWEEN
ACSENTIENT, INC.
AND
ISTA PHARMACEUTICALS, INC.
MAY 3, 2002
TABLE OF CONTENTS
PAGE
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ARTICLE I DEFINITIONS........................................................................ 1
1.01 Definitions................................................................ 1
ARTICLE II CLOSING........................................................................... 6
2.01 Conveyance................................................................. 6
2.02 Purchase Price............................................................. 6
2.03 Time and Place of Closing.................................................. 7
2.04 Closing Transactions....................................................... 7
2.05 Purchase Price Allocation.................................................. 8
ARTICLE III REPRESENTATIONS AND WARRANTIES................................................... 8
3.01 Organization of Seller..................................................... 8
3.02 Seller Capital Structure................................................... 8
3.03 Authority.................................................................. 9
3.04 Consents................................................................... 9
3.05 No Conflict................................................................ 10
3.06 License Agreements......................................................... 10
3.07 Financial Statements....................................................... 11
3.08 No Undisclosed Liabilities................................................. 11
3.09 No Changes................................................................. 11
3.10 No Liquidation, Insolvency, Winding-Up..................................... 12
3.11 Restrictions on Business Activities........................................ 13
3.12 Title to Assets; Absence of Liens.......................................... 13
3.13 Intellectual Property...................................................... 13
3.14 Regulatory Matters......................................................... 16
3.15 Litigation................................................................. 16
3.16 Brokers' or Finders' Fees.................................................. 17
3.17 Tax Matters................................................................ 17
3.18 Power of Attorney.......................................................... 18
3.19 Affiliated Transactions.................................................... 18
3.20 Compliance with Laws....................................................... 19
3.21 Use on Property............................................................ 19
3.22 Complete Copies of Materials............................................... 19
3.23 Bulk Transfer Laws......................................................... 19
3.24 Assets..................................................................... 20
3.25 Securities Law Matters..................................................... 20
3.26 Representations Complete................................................... 21
TABLE OF CONTENTS
(Continued)
PAGE
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ARTICLE IV REPRESENTATIONS AND WARRANTIES OF BUYER........................................... 21
4.01 Organization, Good Standing and Qualification.............................. 21
4.02 Authority.................................................................. 21
4.03 No Conflict................................................................ 21
4.04 Consents and Approvals..................................................... 22
4.05 Brokers' or Finders' Fees.................................................. 22
4.06 Available Funds............................................................ 22
4.07 Transaction Documents...................................................... 22
4.08 Reservation of Shares...................................................... 22
4.09 Representations Complete................................................... 22
ARTICLE V COVENANTS.......................................................................... 23
5.01 Assignment of Certain Rights and Obligations under Agreements.............. 23
5.02 Royalties.................................................................. 23
5.03 Regulatory Affairs......................................................... 24
5.04 Data....................................................................... 25
5.05 Action..................................................................... 25
5.06 Consents................................................................... 25
5.07 Public Announcements....................................................... 25
5.08 Further Assurances......................................................... 25
5.09 Taxes...................................................................... 25
5.10 Seller's Covenant Not to Compete........................................... 25
5.11 Expenses................................................................... 26
5.12 Senju Milestone Payment.................................................... 27
5.13 No Solicitation............................................................ 27
ARTICLE VI CONDITIONS TO CLOSING............................................................. 27
6.01 Conditions to Obligations of Buyer......................................... 27
6.02 Conditions to Obligations of Seller........................................ 28
6.03 Conditions to Obligations of Each Party.................................... 28
ARTICLE VII GENERAL PROVISIONS............................................................... 29
7.01 Representations and Warranties............................................. 29
7.02 Indemnification............................................................ 29
7.03 Indemnification for Brokerage Claims....................................... 32
7.04 Survival of Representations, Warranties, Covenants and Indemnifications.... 32
7.05 Assignability and Amendments............................................... 32
7.06 Notices.................................................................... 32
7.07 Bulk Sales................................................................. 33
7.08 Governing Law.............................................................. 34
7.09 Entire Agreement........................................................... 34
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TABLE OF CONTENTS
(Continued)
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7.10 Confidentiality............................................................ 34
7.11 Third Party Beneficiaries.................................................. 34
7.12 Waivers.................................................................... 34
7.13 Counterparts and Headings.................................................. 34
7.14 Severability............................................................... 34
EXHIBITS
Exhibit A - Xxxx of Sale
Exhibit B - Assignment and Assumption Agreement
Exhibit C - Disclosure Schedule
Exhibit D - Form of Consulting Agreement
Exhibit E - Registration Rights Agreement
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ASSET PURCHASE AND SALE AGREEMENT
THIS ASSET PURCHASE AND SALE AGREEMENT (the "Agreement") is entered
into as of May 3, 2002 (the "Effective Date"), by and between AcSentient, Inc.,
a Delaware corporation having its principal place of business at 000 Xxxxx
Xxxxx, Xxxxxxxxxxx, Xxxxx Xxxxxxxx 00000 ("Seller"), and ISTA Pharmaceuticals,
Inc., a Delaware corporation having its principal place of business at 00000
Xxxxx Xxxxxxx, Xxxxx 000, Xxxxxx, Xxxxxxxxxx 00000 ("Buyer").
WITNESSETH:
WHEREAS, Seller desires to sell to Buyer and Buyer desires to purchase
from Seller the Assets (hereinafter defined) upon the terms and conditions and
for the Purchase Price (hereinafter defined) as set forth in this Agreement;
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual covenants herein contained, Buyer and Seller hereby agree as follows:
ARTICLE I
DEFINITIONS
1.01 Definitions. As used in this Agreement, the following defined
terms shall have the meanings set forth below:
"Affiliate" means any Person that directly, or indirectly through one
or more intermediaries, controls, is controlled by, or is under common control
with the Person specified. As used herein the term "control" means possession of
the power to direct, or cause the direction of, the management and policies of a
corporation or other entity whether through the ownership of voting securities,
by contract or otherwise.
"Ancillary Agreement(s)" means the Xxxx of Sale, the Assignment and
Assumption Agreement and the Registration Rights Agreement, each dated as of the
Closing Date, by and between Buyer and Seller.
"Assets" means all of the Products, Data, INDs (including the Orphan
Drug Designation), Intellectual Property, Know-How, License Agreements, Books
and Records, Contracts to which Seller is a party relating to any of the
foregoing, and all rights or assets owned or controlled by Seller relating to
the Compounds.
"Assumed Liabilities" means the performance and payment obligations
imposed on Seller under the License Agreements, including, but not limited to,
the obligation to make milestone and royalty payments and obligations to conduct
pre-clinical and clinical studies and to seek regulatory approval, all as
related to the Compounds and pursuant to the terms of the License Agreements.
"Books and Records" means all papers and records (in paper or
electronic format) in Seller's care, custody, or control relating to the
Compounds, including, without limitation, all vendor lists, accounting and
financial records, product documentation, and product specifications.
"Bromfenac" means 2-amino-3-(4-bromobenzoyl) benzeneacetic acid and all
pharmaceutically acceptable salts thereof, especially the sodium salt
sesquihydrate.
"Bromfenac License Agreement" means the License Agreement by and
between Senju and Seller dated March 7, 2002.
"Bulk Sales Laws" means any statutes, rules or regulations of any
Governmental or Regulatory Authority relating to or affecting bulk sales or
transfers.
"Caprogel(TM)" means aminocaproic acid used in a topical formulation.
"Closing" shall have the meaning set forth in Section 2.03.
"Closing Date" shall have the meaning set forth in Section 2.03.
"Code" means the Internal Revenue Code of 1986, as amended, and the
rules and regulations promulgated thereunder.
"Compounds" means any or all of the following: (i) Bromfenac, (ii)
Timolol, or (iii) Caprogel(TM).
"Confidential Information" means any proprietary information, data,
materials, trade secrets or know-how of Seller related to the Compounds, the
Products or the Intellectual Property, including, but not limited to, research,
clinical protocols, data and results, lab notebooks, assays, biological or
pharmaceutically active materials, product plans, products, services, customer
lists and customers, markets, developments, inventions, processes, formulas,
technology, designs, drawings, engineering, marketing, finances or other
business information disclosed by Seller either directly or indirectly, in
writing, orally, by drawings, or by observation of parts or equipment, but
excluding any of the foregoing items that are publicly known and made generally
available through no wrongful act.
"Conflict" shall have the meaning set forth in Section 3.05.
"Contract" means any mortgage, indenture, lease, contract, covenant or
other agreement, instrument or commitment, permit, concession, franchise or
license, including any amendments or modifications thereto, to which Seller is a
party, relating to, concerning or associated with the Assets, Intellectual
Property, Compounds, and specifically including the License Agreements.
"Data" means, to the extent in Seller's possession and related to a
Compound, any and all research data, pharmacology data, chemistry, manufacturing
and control data, preclinical data and/or
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other documentation submitted, or required to be submitted, to a Governmental or
Regulatory Authority in association with an IND (or other similar foreign
filing), including without limitation any drug master files, chemistry,
manufacturing and control data, or similar documentation.
"Disclosure Schedule" shall have the meaning set forth in the preamble
to Article III.
"EVMS License Agreement" means the License Agreement by and between
Eastern Virginia Medical School and Seller, dated as of April 24, 2002,
including any amendments thereto, including specifically the Addendum, dated
April 30, 2002, by and between Eastern Virginia Medical School and Seller.
"Exchange Act" means the Securities and Exchange Act of 1934, as
amended.
"Exhibits" means the Exhibits annexed to this Agreement, each of which
is hereby incorporated as a part of this Agreement.
"FDA" means the United States Food and Drug Administration, or any
successor entity.
"FDA Approval" means approval by the FDA, permitting Products to be
marketed in the United States for indications for which approval is sought and
manufactured by Buyer for clinical trial and commercial purposes at one or more
manufacturing facilities designated by Buyer.
"Field" shall mean any and all ophthalmic applications of a Compound.
"FICA" means the Federal Insurance Contribution Act.
"FUTA" means the Federal Unemployment Tax Act.
"GAAP" means generally accepted accounting principles, applied on a
consistent basis.
"Governmental or Regulatory Authority" means any court, tribunal,
arbitrator, agency, commission, official or other instrumentality of any country
in the Territory or state, province, county, city or other political subdivision
thereof. It also means the FDA or any court, tribunal, arbitrator, agency,
commission, official or other instrumentality of any federal, state, county,
city, or other political subdivision, domestic or foreign, that performs a
function for such political subdivisions similar to the function performed by
the FDA for the United States, with regard to the approval, licensing,
registration, or authorization to test, study, manufacture, promote, market,
distribute, use, store, import, transport, or sell Products.
"IND" means an Investigational New Drug application, as defined in 21
CFR Section 312.3, obtained for purposes of conducting clinical trials in
accordance with the requirements of the United States Federal Food, Drug, and
Cosmetic Act and the regulations promulgated thereunder, including all
supplements and amendments thereto, and any other regulatory filings or
approvals relating to the Compounds.
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"Intellectual Property" means all rights in, to, or arising out of: (i)
Patents; (ii) Know-How; (iii) Trademarks, (iv) copyrights and registrations and
applications therefor, and all other rights corresponding thereto relating to a
Compound; and (v) any other proprietary rights relating to a Compound, including
the right to file for, prosecute, register, maintain and defend the foregoing,
and the right to enforce any infringement of the foregoing prior to or after the
Closing.
"Invention" means, with respect to an employee or contractor of Seller,
any invention, original work of authorship, development, concept, improvement or
trade secret, whether or not patentable or registrable under copyright or
similar laws, which such employee or contractor may solely or jointly conceive
or develop or reduce to practice, or cause to be conceived or developed or
reduced to practice, that is related to the Compounds, the Products or the
Intellectual Property, during the period of time such employee or contractor is
providing services to Seller.
"Know-How" means all information, techniques, data, inventions,
practices, methods, knowledge, know-how, skill, experience, patent applications,
invention disclosures, trade secrets, improvements, proprietary information,
technology, test, clinical, or technical data which is owned by or Licensed to
Seller relating to a Compound or is reasonably required or useful for
developing, conducting clinical trials, obtaining regulatory approval,
commercializing, manufacturing, marketing, selling, distributing, using,
licensing, improving or otherwise exploiting a Compound or a Product in the
Field, which includes (but is not limited to) pharmacological, toxicological,
preclinical and clinical test data, drug master files, regulatory information,
filings and approvals, analytical and quality control data, packaging,
marketing, pricing, distribution, sales and manufacturing data or descriptions,
compositions-of-matter of a Compound, and assays, biological materials or other
embodiments of or related to the foregoing, and specifically including the Data.
"License Agreements" means the Senju License Agreements and the EVMS
License Agreement.
"Licensed" means the ownership or possession of a license, sublicense
or other right, title or interest in or to intangible property rights (including
patent rights and Know-How), or a right to obtain access or cross-reference to
regulatory filings, in each case to the extent of Seller's interest therein.
"Liens" means liens, claims, encumbrances, options, pledges,
restrictions on transfer, and security interests.
"Losses" means any and all damages, fines, liabilities, fees,
penalties, deficiencies, losses and expenses (including, without limitation
interest, court costs, fees of attorneys, accountants and other experts and
other expenses of litigation or other proceedings or of any claim, default or
assessment).
"Net Sales" means with respect to a Product, the definition of "Net
Sales" in the License Agreement relating to the Compound contained in such
Product, but only to the extent that a royalty accrues under such License
Agreement with respect to such Net Sales.
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"Patents" means all patents, including without limitation, all
substitutions, reissues, revalidations, renewals, reexaminations, patents of
addition, extensions, registrations, confirmations, supplementary certificate of
protections, and all pending patent applications, including without limitation
provisional applications, continuations, divisionals, and continuations-in-part,
which are owned by or licensed to Seller and relate to a Compound (including
without limitation, manufacturing, formulation or methods of use thereof in the
Field).
"Person" means any natural person, corporation, general partnership,
limited partnership, proprietorship, other business organization, trust, union,
association or Governmental or Regulatory Authority.
"Product(s)" means a pharmaceutical preparation containing a Compound
as an active ingredient.
"PTO" means the U.S. Patent and Trademark Office.
"Purchase Price" shall have the meaning set forth in Section 2.02.
"Registered Intellectual Property" means all United States,
international and foreign: (i) Patents and Patent applications (including
provisional applications); (ii) registered trademarks or service marks,
applications to register trademarks, intent-to-use applications, or other
registrations or applications related to trademarks or service marks; (iii)
registered copyrights and applications for copyright registration; (iv) domain
name registrations; and (v) any other Intellectual Property that are the subject
of an application, certificate, filing, registration or other document issued,
filed with or recorded by any Governmental or Regulatory Authority.
"Returns" means federal, state, local and foreign returns, estimates,
information statements and reports.
"Securities Act" means the Securities Act of 1933, as amended.
"Seller Financial Statements" shall have the meaning set forth in
Section 3.07.
"Seller's knowledge" means, with respect to any fact, circumstance,
event or other matter in question, the actual knowledge of such fact,
circumstance, event or other matter of any officer or director of Seller. Any
such officer or director will be deemed to have actual knowledge of a particular
fact, circumstance, event or other matter which such individual would reasonably
be expected to know in the customary performance of such individual's duties and
responsibilities.
"Senju" means Senju Pharmaceutical Co., Ltd.
"Senju License Agreement(s)" means the Bromfenac License Agreement and
the Agreement by and between Senju and Seller dated April 17, 2002, including in
each case any amendments thereof.
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"Shares" means shares of common stock, par value $.001, of Buyer.
"Tax" or "Taxes" shall have the meaning set forth in Section 3.17(a).
"Territory" means the United States for Products containing either
Bromfenac or Timolol as an active ingredient, and worldwide for Products
containing Caprogel(TM)as an active ingredient.
"Timolol" means timolol maleate ophthalmic solution - long-acting.
"Trademarks" means all trademarks and all applications for trademarks
relating to a Compound.
"United States" means the United States of America, its territories and
possessions, the Commonwealth of Puerto Rico and the District of Columbia.
ARTICLE II
CLOSING
2.01 Conveyance. At the Closing, subject to the terms and conditions
set forth in this Agreement, (i) Seller shall sell, transfer, assign, convey,
and deliver to Buyer good and marketable title to the Assets free and clear of
all Liens and Buyer shall purchase good and marketable title to the Assets from
Seller free and clear of all Liens, and (ii) Buyer shall assume all of Seller's
liabilities and obligations with respect to the Assumed Liabilities. Seller
shall execute and deliver such documents of conveyance and take any other action
as may be necessary to transfer the Assets to Buyer as set forth in the
preceding sentence. Except as expressly set forth in this Agreement, Buyer will
not assume or perform any liabilities not specifically contemplated in this
Agreement.
2.02 Purchase Price.
(a) Subject to Sections 2.02(b) and 2.02(c), Buyer will pay to
Seller, in consideration of the Assets, the following (collectively, the
"Purchase Price"):
(i) at the Closing, $290,000 in cash and 100,000
unregistered restricted Shares;
(ii) within 30 days following the one-year
anniversary of the Closing Date, 100,000 unregistered restricted Shares;
(iii) within 30 days following Buyer's receipt of the
first FDA Approval for the marketing and sale in the United States of a Product
which has been manufactured into a final dosage form, packaged and labeled for
use in the Field, containing Bromfenac as an active ingredient, 50,000
unregistered restricted Shares;
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(iv) within 30 days following Buyer's receipt of the
first FDA Approval for the marketing and sale in the United States of a Product
which has been manufactured into a final dosage form, packaged and labeled for
use in the Field, containing Timolol as an active ingredient, 25,000
unregistered restricted Shares; and
(v) within 30 days following Buyer's receipt of the
first FDA Approval for the marketing and sale in the United States of a Product
which has been manufactured into a final dosage form, packaged and labeled for
use in the Field, containing Caprogel as an active ingredient, 25,000
unregistered restricted Shares.
(b) The cash payments of the Purchase Price shall be made in
United States dollars by bank wire transfer in immediately available funds to
the account designated in writing by Seller.
(c) No portion of the Purchase Price to be paid pursuant to
Section 2.02(a)(ii) and (iii) shall be paid if Senju terminates the Bromfenac
License Agreement pursuant to Section 16.06 thereof. Notwithstanding the
foregoing, if a dispute exists between Buyer and Senju regarding Senju's ability
to terminate the Bromfenac License Agreement pursuant to Section 16.06 thereof,
then Buyer shall not be obligated to pay any portion of the Purchase Price to be
paid pursuant to Section 2.02(a)(ii) and (iii) unless and until such dispute is
resolved in Buyer's favor.
2.03 Time and Place of Closing. The transactions contemplated in
Sections 2.01, 2.02(a)(i) and 2.04 (the "Closing") shall take place at the
offices of Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx, P.C., located at 000 Xxxx Xxxx
Xxxx, Xxxx Xxxx, Xxxxxxxxxx, as soon as practicable following satisfaction or
waiver of all of the conditions set forth in Article VI herein other than those
conditions that may, by their terms, only be satisfied at the Closing, but in
any event not later than 10:00 a.m., local time, on the first business day after
satisfaction or waiver of all such conditions, or at such other place or at such
other time as Seller and Buyer may mutually agree in writing. The date upon
which the Closing shall occur is herein called the "Closing Date."
2.04 Closing Transactions. At the Closing:
(a) Buyer will deliver to Seller a certificate representing
100,000 unregistered restricted Shares duly registered in the name of Seller.
(b) Seller shall prepare, execute and deliver to Buyer all
necessary and applicable notifications of change to the relevant Governmental or
Regulatory Authorities respecting the change in the ownership of the Assets to
Buyer.
(c) Seller shall prepare, execute and deliver to Buyer, and
Buyer shall execute and deliver to Seller, all documents, in a form acceptable
to Buyer and otherwise suitable for filing in all relevant jurisdictions,
necessary to transfer, assign, convey and deliver good and marketable title to
the Assets, including, but not limited to, the Xxxx of Sale in the form attached
hereto as Exhibit A and the Assignment and Assumption Agreement in the form
attached hereto as Exhibit B.
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(d) Seller shall, at Seller's sole cost, in the manner and
form existing as of the Closing, deliver to Buyer at Buyer's address stated in
the Preamble to this Agreement, all of the Assets, including all tangible
embodiments of the Know-How.
2.05 Purchase Price Allocation. The Purchase Price shall be allocated
among the Assets in accordance with their respective fair market values (the
"Allocation"), which Allocation shall be consistent with Section 1060 of the
Code. Within 60 days following the Closing Date, Buyer and Seller shall mutually
agree to the proper Allocation of the Purchase Price among the Assets. Each of
Buyer and Seller agree (i) to execute and deliver all tax returns, and prepare
all financial statements, returns and other instruments in a manner that is
consistent with such Allocation, and (ii) not to take any position before any
tax authority or in any judicial proceeding that is inconsistent with such
Allocation.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Except as specifically disclosed in the disclosure schedule attached
hereto as Exhibit C (the "Disclosure Schedule") (referencing the appropriate
Section and paragraph numbers), Seller hereby represents and warrants to Buyer
as of the Effective Date and the Closing Date as follows:
3.01 Organization of Seller. Seller is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware.
Seller has all requisite corporate power and authority to own and use the
properties owned and used by it and to carry on its business as currently
conducted and as currently contemplated to be conducted. Seller is duly
qualified or licensed to do business and in good standing as a foreign
corporation in each jurisdiction in which it conducts business. Seller has
delivered a true and correct copy of its certificate of incorporation and
bylaws, each as amended to the Closing Date and in full force and effect on the
Closing Date, to Buyer. The operations now being conducted by Seller are not now
and have never been conducted under any other name.
3.02 Seller Capital Structure.
(a) The authorized capital stock of Seller consists of
3,000,000 shares of authorized Common Stock, par value $0.001, of which
1,368,511 shares are issued and outstanding, and 1,000,000 shares of authorized
Preferred Stock, par value $0.001, none of which are issued and outstanding. The
capital stock of Seller is held by the persons, with the domicile addresses and
in the amounts, set forth in Section 3.02(a) of the Disclosure Schedule. All
outstanding shares of capital stock of Seller are duly authorized, validly
issued, fully paid and nonassessable and not subject to preemptive rights
created by statute, the certificate of incorporation or bylaws of Seller or any
agreement to which Seller is a party or by which it is bound and have been
issued in compliance with federal and state securities laws. Seller has no other
capital stock authorized, issued or outstanding.
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(b) Seller has never adopted or maintained any stock option
plan or other plan providing for equity compensation of any person. There are no
options, warrants, calls, rights, commitments or agreements of any character,
written or oral, to which Seller is a party or by which it is bound obligating
Seller to issue, deliver, sell, repurchase or redeem, or cause to be issued,
delivered, sold, repurchased or redeemed, any shares of the capital stock of
Seller or obligating Seller to grant or enter into any such option, warrant,
call, right, commitment or agreement. There are no outstanding or authorized
stock appreciation, phantom stock, profit participation, or other similar rights
with respect to Seller. There are no voting trusts, proxies, or other agreements
or understandings with respect to the voting stock of Seller.
3.03 Authority. Seller has all requisite power and authority to enter
into this Agreement and each Ancillary Agreement and to consummate the
transactions contemplated hereby and thereby. The execution and delivery of this
Agreement and each Ancillary Agreement and the consummation of the transactions
contemplated hereby and thereby have been duly authorized by all necessary
corporate action on the part of Seller, and no further action is required on the
part of Seller or any of its stockholders to authorize the Agreement and the
transactions contemplated hereby and thereby. This Agreement has been
unanimously approved by the Board of Directors and the stockholders of Seller.
This Agreement and each Ancillary Agreement has been duly executed and delivered
by Seller and constitutes the valid and binding obligations of Seller,
enforceable against Seller in accordance with its terms, except as such
enforceability may be subject to the laws of general application relating to
bankruptcy, insolvency, and the relief of debtors and rules of law governing
specific performance, injunctive relief, or other equitable remedies.
3.04 Consents. Section 3.04 of the Disclosure Schedule sets forth all
necessary consents, approvals, orders, or authorizations of, and all necessary
registrations, declarations or filings with, any Governmental or Regulatory
Authority or any third party required by or with respect to Seller in connection
with the execution and delivery of this Agreement by Seller or the consummation
by Seller of the transactions contemplated hereby. No other consents, approvals,
orders, or authorizations of, and no necessary registrations, declarations or
filings with, any Governmental or Regulatory Authority or any third party are
required by or with respect to Seller in connection with the execution and
delivery of this Agreement by Seller or the consummation by Seller of the
transactions contemplated hereby.
3.05 No Conflict. The execution and delivery by Seller of this
Agreement, and the consummation of the transactions contemplated hereby, will
not conflict with or result in any violation of, or default under, or give rise
to a right of termination, cancellation, modification or acceleration of any
obligation or loss of any benefit under (any such event, a "Conflict") (i) any
provision of the certificate of incorporation or bylaws of Seller, (ii) any
Contract to which Seller or any of the Assets (including intangible assets) is
subject, or (iii) any judgment, order, decree, statute, law, ordinance, rule or
regulation applicable to Seller or the Assets (tangible and intangible). Seller
is in compliance with and has not breached, violated or defaulted under, or
received notice that it has breached, violated or defaulted under, any of the
terms or conditions of any Contract, nor is Seller aware of any event that would
constitute such a breach, violation or default (with or without notice or lapse
of time, or both).
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3.06 License Agreements.
(a) To Seller's knowledge, the License Agreements are all of
the Contracts between Seller and any third party related to, or necessary for,
developing, filing for and obtaining regulatory approval, and handling other
regulatory affairs relating to, formulating, manufacturing, using, marketing,
promoting, selling, distributing, commercializing, licensing, improving, or
otherwise exploiting the Compounds, and true and complete copies of all such
Contracts have been delivered to Buyer.
(b) Each License Agreement is in full force and effect and
Seller is not subject to any default thereunder, nor is any party obligated to
Seller pursuant to any such License Agreement subject to any default thereunder.
Seller has neither breached, violated or defaulted under, nor received notice
that Seller has breached, violated or defaulted under, any of the terms and
conditions of any License Agreement. Seller has, or will obtain prior to the
Closing, all necessary consents, waivers and approvals of parties to each
License Agreement as are required thereunder in connection with the Closing, or
for each License Agreement to remain in full force and effect without
limitation, modification or alteration after the Closing. Following the Closing,
Buyer will be permitted to exercise all of the rights Seller had under the
License Agreements without the payment of any additional amounts or
consideration other than ongoing fees, royalties or payments which Seller would
otherwise be required to pay pursuant to the terms of such License Agreements
had the transactions contemplated by this Agreement not occurred.
(c) Seller has performed in good faith and completed all of
its obligations (including diligence obligations) under the License Agreements
required or contemplated by the parties thereto to be completed prior to the
Closing. Seller is not aware of any facts, circumstances or events, nor has
Seller received any notice of such, preventing or making infeasible the
completion, prior to or by the time specified or contemplated therefor in the
License Agreements, using only reasonable commercial efforts after the Closing,
of any obligation under the License Agreements required or contemplated by the
parties thereto to be completed after the Closing.
(d) Schedule 3.06(d) of the Disclosure Schedule identifies all
obligations under the License Agreements required or contemplated by the parties
thereto to be completed within ninety (90) days of Closing Date, and the efforts
and progress Seller has made on such obligations as of the Closing, and the
efforts still required to be performed in order to complete such obligations
prior to or by the time specified or contemplated therefor in the License
Agreements.
3.07 Financial Statements. Section 3.07 of the Disclosure Schedule
contains Seller's unaudited balance sheet as of, and income statement for the
period ending, March 31, 2002. Such financial statements are collectively
referred to hereafter as the "Seller Financial Statements." The Seller Financial
Statements are correct in all material respects and have been prepared in
accordance with GAAP consistently applied on a basis consistent throughout the
periods indicated and consistent with each other (except that the Seller
Financial Statements do not contain footnotes and other presentation items that
may be required by GAAP). The Seller Financial Statements present fairly
Seller's financial condition as of the dates and during the periods indicated
therein.
10
3.08 No Undisclosed Liabilities. Seller does not have any liability,
indebtedness, obligation, expense, claim, deficiency, guaranty or endorsement of
any type, whether accrued, absolute, contingent, matured, unmatured or other
(whether or not required to be reflected in financial statements in accordance
with GAAP), which individually or in the aggregate (i) has not been reflected in
or reserved against in the Seller Financial Statements, or (ii) has not arisen
in the ordinary course of business consistent with past practices since the date
of the Seller Financial Statements.
3.09 No Changes. Since March 31, 2002, Seller has conducted its
operations with respect to the Assets only in the ordinary and usual course and
consistent with past practice and, without limiting the generality of the
foregoing:
(a) There have been no changes in the condition (financial or
otherwise), business, net worth, assets, operations, obligations, or liabilities
of Seller with respect to the Assets which, in the aggregate, have had or may be
reasonably expected to have a materially adverse effect on the condition,
business, net worth, assets or operations of the Company, or the Assets.
(b) Seller has not mortgaged, pledged, or otherwise encumbered
any of the Assets.
(c) Seller has not sold, assigned, licensed, leased,
transferred or conveyed, or committed itself to sell, assign, license, lease,
transfer or convey, any of the Assets.
(d) There has been no destruction of, damage to or loss of any
of the Assets.
(e) There has been no revaluation by Seller of any of the
Assets.
(f) Except for Contracts that are also Assets, there is no
Contract by which the Assets are bound or any termination, extension, amendment
or modification of the terms of any existing Contract by which the Assets are
bound.
(g) There has been no notice of any claim or, to Seller's
knowledge, potential claim of ownership by any Person other than Seller to the
Intellectual Property or of infringement by the Company of any other Person's
rights to the Intellectual Property.
(h) There has been no dispute, proceeding, litigation,
arbitration or mediation pending or, to Seller's knowledge, threatened against
Seller relating to the Assets.
(i) There has been no waiver or release of any right or claim
of Seller relating to the Assets.
(j) There has been no agreement or modification to agreement
pursuant to which any other party was granted marketing, distribution,
development or similar rights of any type or scope with respect to a Compound or
any of the Intellectual Property.
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(k) There has been no negotiation or agreement by Seller or
any director, officer, employee, agent, representative or affiliate of Seller to
do any of the things described in the preceding clauses (a) through (k) (other
than negotiations with Buyer and its representatives regarding the transactions
contemplated by this Agreement).
3.10 No Liquidation, Insolvency, Winding-Up.
(a) No order has been made or petition presented, or
resolution passed for the winding-up or liquidation of Seller and there is not
outstanding:
(i) any petition or order for the winding-up of
Seller;
(ii) any appointment of a receiver over the whole or
part of the undertaking of assets of Seller;
(iii) any petition or order for administration of
Seller;
(iv) any voluntary arrangement between Seller and any
of its creditors;
(v) any distress or execution or other process levied
in respect of Seller which remains undischarged; and
(vi) any unfulfilled or unsatisfied judgment or court
order against Seller.
(b) There are no circumstances which would entitle any Person
to present a petition for the winding-up or administration of Seller or to
appoint a receiver over the whole or any part of the undertaking or assets of
Seller.
(c) Seller is not deemed unable to pay its debts within the
meaning of applicable law.
(d) The operations of Seller have not been terminated.
3.11 Restrictions on Business Activities. There is no agreement (not to
compete or otherwise), commitment, judgment, injunction, order or decree to
which Seller is a party relating to a Compound or otherwise binding upon Seller
or a Compound which has or may have the effect of prohibiting or impairing the
transactions contemplated by this Agreement, any business practice of Seller,
any acquisition of property (tangible or intangible) by Seller or impairing the
Assets. Seller has not entered into any agreement under which its operations
with respect to a Compound are restricted or which places any restrictions upon
Seller with respect to selling, licensing or otherwise distributing any
Compound.
3.12 Title to Assets; Absence of Liens. Seller has good and valid title
to all of the Assets free and clear of any Liens, except for Liens for taxes not
yet due and payable.
3.13 Intellectual Property.
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(a) Section 3.13(a) of the Disclosure Schedule, listing or
describing the Intellectual Property, is complete and accurate.
(b) Section 3.13(b) of the Disclosure Schedule lists all
Intellectual Property that are Registered Intellectual Property. To Seller's
knowledge, each such Registered Intellectual Property is currently in compliance
with formal legal requirements (including payment of filing, examination and
maintenance fees and proofs of use), is valid and enforceable, and is not
subject to any unpaid maintenance fees or taxes or actions falling due within 90
days after the Closing Date. There are no proceedings or actions known to Seller
before any court, tribunal (including the PTO or equivalent authority anywhere
in the world) related to any Registered Intellectual Property. Seller has not
claimed any status in the application for or registration of any Registered
Intellectual Property, including "small business status," that would not be
applicable to Buyer.
(c) Seller (i) owns and has good and exclusive title to each
item of Intellectual Property, free and clear of any Liens, and (ii) has
exclusive rights (and is not contractually obligated to pay any compensation to
any third party in respect thereof under any in-license of rights, covenant not
to xxx, settlement or other agreement) to the use thereof or the material
covered thereby in connection with the Assets or the Intellectual Property, and
(iii) no contracts, licenses or agreements exist to which Seller is a party with
respect to any of the Intellectual Property, and (iv) all Assets will be fully
transferable, alienable or licensable by Buyer without restriction and without
payment of any kind to any third party.
(d) To the extent that any Intellectual Property was
originally owned or created by or for, or Licensed from, any third party,
including any predecessor of Seller: (i) Seller has a written agreement with
such third party or parties with respect thereto, pursuant to which Seller (X)
has obtained complete, unencumbered and unrestricted ownership and is the
exclusive owner of, all such Intellectual Property by valid assignment or
otherwise, or (Y) in the case of the Intellectual Property which is Licensed to
Seller, Seller has the right to transfer to Buyer all of Seller's rights and
interests thereunder (which rights and interests have been exclusively Licensed
to Seller for the entire term of the legal protection of such Intellectual
Property); (ii) the transfers and licenses from Seller to Buyer hereunder do not
violate such agreements; (iii) such third parties have not retained and do not
have any rights or licenses with respect to the Intellectual Property (including
license rights to improvements thereto made by Seller), nor are there any
outstanding rights or licenses previously granted by such third parties with
respect to the Intellectual Property; and (iv) no basis exists for such third
party to challenge or object to this Agreement.
(e) Seller has the full and unencumbered right to assign and
transfer to Buyer all of Seller's rights in and under the Contracts which are
Assets without incurring, or causing Buyer to incur, any obligation to any third
party, including any royalty obligations, other than those obligations that
Seller would have under the License Agreements had had such transfer not taken
place.
(f) Seller has not transferred ownership of, or granted any
license of or right to use, or authorized the retention of any rights to use,
any Intellectual Property to any other Person.
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(g) To Seller's knowledge, the Intellectual Property
constitutes all of the Intellectual Property related to, used in, necessary to,
or that would be infringed by, current or reasonably anticipated future
operations with respect to the Assets and the Intellectual Property, including
without limitation developing, conducting clinical trials, filing for and
obtaining regulatory approval, formulating, commercializing, manufacturing,
marketing, selling, distributing, licensing, improving or otherwise exploiting
the Compounds in the Field. To Seller's knowledge, the Intellectual Property
constitutes all of the Intellectual Property necessary for Buyer to acquire in
order to exclusively market and sell Products in the Territory for the Field. To
Seller's knowledge, there are no third parties with rights to make and/or sell
Compounds or Products in the Territory for the Field.
(h) To Seller's knowledge, no government funding, facilities
of a university, college, other educational institution or research center or
funding from third parties was used in the development of the Intellectual
Property. No current or former employee, consultant or independent contractor of
Seller, who was involved in, or who contributed to, the creation or development
of any Intellectual Property has performed services for the government, a
university, college, or other educational institution, or a research center
during a period of time during which such employee, consultant or independent
contractor was also performing services for Seller.
(i) The Intellectual Property and the Assets, did not, do not,
and will not when used by Buyer for their intended purposes, including without
limitation developing, conducting clinical trials, filing for and obtaining
regulatory approval, formulating, commercializing, manufacturing, marketing,
selling, distributing, licensing, improving or otherwise exploiting the
Compounds in the Field, or in the manner used by Seller: (i) infringe,
misappropriate or violate the rights of any Person (including rights to privacy
or publicity); or (ii) constitute unfair competition or trade practices under
the laws of any jurisdiction, and Seller has not received notice from any Person
claiming that such use of the Intellectual Property or the Assets infringes,
misappropriates or violates the rights of any Person or constitutes unfair
competition or trade practices under the laws of any jurisdiction (nor does
Seller have knowledge of any basis therefor).
(j) No licenses or other consents are required from any third
party to permit Buyer to fully exploit the Assets and exercise the rights
granted to it with respect to the Intellectual Property.
(k) There are no contracts, licenses or agreements between
Seller and any other Person with respect to the Assets, including the
Intellectual Property, under which there is any dispute or, to Seller's
knowledge, any threatened dispute regarding the scope of such agreement or
performance under such agreement.
(l) To the knowledge of Seller, no Person is infringing or
misappropriating the Intellectual Property.
(m) Seller has taken all reasonable steps that are required to
protect Seller's rights in confidential information and trade secrets of Seller,
or provided by any third party to Seller, associated with or related to the
Assets and the Intellectual Property. No current or former employee or
consultant of Seller: (i) has any right in or to any Asset; (ii) has the right
to use for such
14
employee's or consultant's benefit or the benefit of any third party, or to
disclose to any third party, any Confidential Information; or (iii) has any
right in or to any Invention.
(n) No Asset or Intellectual Property is subject to any
proceeding or outstanding decree, order, judgment, agreement or stipulation that
restricts in any manner the use, transfer or licensing thereof or may affect the
validity, use or enforceability of the Assets or Intellectual Property.
(o) Seller is not required to make or accrue any royalty
payment to any third party in connection with any of the Assets or the
Intellectual Property.
(p) Neither this Agreement nor the transactions contemplated
by this Agreement, including the assignment to Buyer, by operation of law or
otherwise, of any Contracts which are also Assets, will result in: (i) Buyer
granting to any third party any right to or with respect to any Intellectual
Property owned by, or licensed to, Buyer; (ii) Buyer being bound by, or subject
to, any non-compete or other restriction on the operation or scope of its
businesses; (iii) Buyer being obligated to pay any royalties or other amounts to
any third party in excess of those payable by Buyer or Seller prior to the
Closing; or (iv) Buyer being obligated to pay any royalties or other amounts, or
being limited, restricted or subject to obligations to third parties, with
respect to any aspect of its business unrelated to the Compounds.
3.14 Regulatory Matters. As of the Closing Date:
(a) neither Seller, nor any officer, employee or agent of
Seller (and to the best of its knowledge, all Persons from whom Seller directly
or indirectly acquired rights to the IND and the Data therein), has made an
untrue statement of a material fact to any Governmental or Regulatory Authority
with respect to a Compound (whether in any submission to such Governmental or
Regulatory Authority or otherwise), or knowingly failed to disclose a material
fact required to be disclosed to any Governmental or Regulatory Authority with
respect to a Compound; and
(b) Seller and its employees, agents, clinical institutions
and clinical investigators (and at to the best of its knowledge, all Persons
from whom Seller directly or indirectly acquired rights to the IND and the Data
therein) have complied with all FDA statutory and regulatory requirements
applicable to Seller under the License Agreements with respect to any actions
taken (or any material omissions that occurred) relating to Compounds prior to
the Closing, including without limitation, the IND, and actions taken thereunder
or intended for use therewith. Seller and its employees, agents and clinical
investigators (and to its knowledge, all Persons from whom Seller directly or
indirectly acquired rights to the IND and the Data therein) have disclosed to
Buyer all material facts in Seller's possession regarding pre-clinical and
clinical study results of the Compounds and all communications to and from the
FDA with respect to the Compounds, including, but not limited to, IND
submissions, other written communications with respect to the Compounds, FDA
requests for data and studies of the Compounds, conduct of pre-clinical and
clinical trials, results of pre-clinical and clinical trials, adverse drug
experiences and other IND safety reports, and communications in meetings and
telephone conferences with FDA reviewers and other FDA officials (including
minutes of any such meetings or conferences).
15
3.15 Litigation. There is no action, suit, claim, proceeding, or
investigation of any nature pending or, to Seller's knowledge, threatened
relating to Seller, the Compounds or the Assets, nor is there any reasonable
basis therefor. There is no investigation or other proceeding pending or, to
Seller's knowledge, threatened relating to Seller, the Compounds or the Assets
by or before any Governmental or Regulatory Authority, nor is there any
reasonable basis therefor. No Governmental or Regulatory Authority has at any
time challenged or questioned the legal rights of Seller with respect to the
Compounds under the License Agreements. There are no judgments, orders, decrees,
citations, fines, or penalties heretofore assessed against Seller affecting the
Assets under any federal, state, local or, to Seller's knowledge, foreign law.
3.16 Brokers' or Finders' Fees. Seller has not incurred, nor will it
incur, directly or indirectly, any liability for brokerage or finders' fees or
agents' commissions or any similar charges in connection with this Agreement or
any transaction contemplated hereby.
3.17 Tax Matters.
(a) Definition of Taxes. For the purposes of this Agreement,
the term "Tax" or, collectively, "Taxes" shall mean: (i) any and all federal,
state, local and foreign taxes, assessments and other governmental charges,
duties, impositions and liabilities, including taxes based upon or measured by
gross receipts, income, profits, sales, use and occupation, and value added, ad
valorem, transfer, franchise, withholding, payroll, recapture, employment,
excise and property taxes as well as public imposts, fees and social security
charges (including but not limited to health, unemployment and pension
insurance), together with all interest, penalties and additions imposed with
respect to such amounts; (ii) any liability for the payment of any amounts of
the type described in clause (i) of this Section 3.17(a) as a result of being a
member of an affiliated, consolidated, combined or unitary group for any period;
and (iii) any liability for the payment of any amounts of the type described in
clauses (i) or (ii) of this Section 3.17(a) as a result of any express or
implied obligation to indemnify any other person or as a result of any
obligation under any agreement or arrangement with any other person with respect
to such amounts and including any liability for taxes of a predecessor entity.
(b) Tax Returns and Audits.
(i) As of the Closing Date, Seller will have prepared
and timely filed all required Returns relating to any and all Taxes concerning
or attributable to Seller's operations and such Returns are or will be true and
correct and have been or will be completed in accordance with applicable law.
(ii) As of the Closing Date, Seller (A) will have
paid all Taxes it is required to pay and (B) will have withheld with respect to
its employees all federal, state and foreign income taxes and social security
charges and similar fees, FICA, FUTA, and other Taxes required to be withheld.
(iii) Seller has not been delinquent in the payment
of any Tax, nor is there any Tax deficiency outstanding, assessed or, to
Seller's knowledge, proposed against Seller, nor has
16
Seller executed any waiver of any statute of limitations on or extending the
period for the assessment or collection of any Tax.
(iv) No audit or other examination of any Return of
Seller is presently in progress, nor has Seller been notified of any request for
such an audit or other examination.
(v) Seller does not have any liabilities for unpaid
federal, state, local, or, to Seller's knowledge, foreign Taxes, which have not
been accrued or reserved in accordance with GAAP in the Seller Financial
Statements, whether asserted or unasserted, contingent or otherwise, and Seller
has not incurred any liability for Taxes since March 31, 2002 other than in the
ordinary course of business.
(vi) Seller has made available to Buyer or its legal
counsel, copies of all foreign, federal, state and local income and all state
and local sales and use Returns filed for all periods.
(vii) There are (and immediately following the
Closing there will be) no Liens on the Assets relating to or attributable to
Taxes.
(viii) Seller is not aware of any basis for the
assertion of any claim relating or attributable to Taxes, which, if adversely
determined, would result in any Lien on the Assets.
(ix) None of the Assets are treated as "tax-exempt
use property," within the meaning of Section 168(h) of the Code.
(x) Seller has not filed any consent agreement with
respect to any of the Assets under Section 341(f) of the Code or agreed to have
Section 341(f)(4) of the Code apply to any disposition of a subsection (f) asset
(as defined in Section 341(f)(4) of the Code) owned by Seller.
(xi) Seller is not a party to any tax sharing,
indemnification or allocation agreement with respect to the Assets nor does
Seller owe any amount under any such agreement.
(xii) Seller's tax basis in the Assets for purposes
of determining its future amortization, depreciation and other federal income
Tax deductions is accurately reflected on the Books and Records.
(xiii) Seller is not, and has not been at any time, a
"United States Real Property Holding Corporation" within the meaning of Section
897(c)(2) of the Code.
(xiv) No adjustment relating to any Return filed by
Seller has been proposed by any tax authority to Seller or any representative
thereof.
(xv) Seller has no liability for corporation tax on
chargeable gains or similar Taxes in connection with the disposition of any
asset disposed of by or to Seller.
17
3.18 Power of Attorney. There are no outstanding powers of attorney
executed on behalf of Seller in respect of the Products or the Assets except as
granted to Buyer hereunder.
3.19 Affiliated Transactions. No affiliates of Seller own any asset,
tangible or intangible, which is an Asset.
3.20 Compliance with Laws. Seller has complied with, is not in
violation of, and has not received any notices of violation with respect to, any
foreign, federal, state or local statute, law or regulation with respect to the
Assets or the Products.
3.21 Use on Property. Seller has not manufactured, stored, conducted
pre-clinical or clinical trials on, disposed of, released, discharged, emitted,
or otherwise physically handled or manipulated any Compound or Product or any
chemicals or other substances related to their manufacture, on property owned,
leased, or used at any time by Seller.
3.22 Complete Copies of Materials.
(a) Seller has delivered or made available true and complete
copies of each existing document (or summaries of the same) in its possession
that has been requested by Buyer or its counsel. Seller has delivered to Buyer
true and complete copies of all material documents and correspondence in its
possession with any Governmental or Regulatory Authority relating to the Assets.
(b) Seller has produced or provided access to Buyer prior to
the Closing all material Know-How and other information in Seller's possession
or of which it is aware, concerning efficacy, side effects, injury toxicity, or
sensitivity, reaction and incidents or severity thereof, associated with any
pre-clinical use, clinical use, studies, investigations, or tests with the
Compounds (humans or animals).
(c) Seller has disclosed in writing to Buyer all information
relating to any problem or issue with respect to any of the Compounds, which, to
Seller's knowledge, does, or may reasonably be expected to, adversely affect the
value, functionality of fitness for the intended purpose of such Compounds.
Seller has not omitted to furnish Buyer with any information in its possession
requested by Buyer, not intentionally concealed from Buyer, any information in
its possession concerning the Assets, or the transactions contemplated by this
Agreement, which would be material to Buyer's decision to enter into this
Agreement and to undertake the commitments and obligations set forth herein.
3.23 Bulk Transfer Laws. Seller represents that there are no current or
past creditors of Seller to whom any law, rule or regulation requires the
delivery of notice or from whom any form of consent is required in conjunction
with undertaking the transactions contemplated by this Agreement.
3.24 Assets. The Assets comprise all of the assets, properties and
rights of every type and description (other than real property) used or
developed by Seller relating to the Compounds.
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3.25 Securities Law Matters.
(a) Seller is aware of Buyer's business affairs and financial
condition and has acquired sufficient information about Buyer to reach an
informed and knowledgeable decision to acquire the Shares.
(b) Seller is acquiring the Shares for investment for its own
account only and not with a view to, or for resale in connection with, any
"distribution" thereof within the meaning of the Securities Act. Seller
understands that the Shares have not been registered under the Securities Act or
other securities laws in reliance on specific exemptions therefrom, which
exemptions depend upon, among other things, the bona fide nature of Seller's
investment intent as expressed herein.
(c) Seller further acknowledges and understands that the
Shares must be held indefinitely unless they are subsequently registered under
the Securities Act or an exemption from such registration is available. Seller
understands that the certificate(s) evidencing the Shares shall be imprinted
with a legend that prohibits the transfer of the Shares unless they are
registered or such registration is not required.
(d) Seller understands that Rule 144 promulgated under the
Securities Act permits limited resale of shares purchased in a private placement
subject to the satisfaction of certain conditions, including, among other
things, the existence of a public market for the Shares, the availability of
certain public information about Buyer, more than two years having elapsed
between the resale and the date the security to be sold was last held by Buyer
or an affiliate of Buyer, the sale being made through a "broker's transaction,"
or in transactions directly with a "market maker," and the number of shares
being sold during any three-month period not exceeding specified limitations.
Seller is further aware that Rule 144(k) permits persons who have not been
affiliates of Buyer for at least three months and whose shares have been
beneficially owned by other than Buyer or its affiliates for at least two years
after full payment for such shares to sell such shares without regard to the
current public information, manner of sale and volume limitations described
above.
(e) Without in any way limiting the representations set forth
above, Seller further agrees that Seller shall in no event make any disposition
of all or any portion of the Shares, unless and until (i) there is then in
effect a registration statement under the Securities Act covering such proposed
disposition and such disposition is made in accordance with said registration
statement, (ii) the resale provisions of Rule 144(k) are available in the
opinion of counsel to Buyer or (iii) (A) Seller shall have notified Buyer of the
proposed disposition and shall have furnished Buyer with a detailed statement of
the circumstances surrounding the proposed disposition, (B) Seller shall have
furnished Buyer with an opinion of Seller's counsel to the effect that such
disposition will not require registration of such stock under the Securities Act
and (C) such opinion of Seller's counsel shall have been concurred with by
counsel for Buyer, which concurrence shall not be unreasonably withheld, and
Seller shall have advised Buyer of such concurrence.
3.26 Representations Complete. None of the representations or
warranties made by Seller (as modified by the Disclosure Schedule), nor any
statement made in any Schedule or certificate furnished by Seller pursuant to
this Agreement contains or will contain at the Closing, any untrue
19
statement of a material fact, or omits or will omit at the Closing to state any
material fact necessary in order to make the statements contained herein or
therein, in light of the circumstances under which made, not misleading.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer hereby represents and warrants to Seller as of the Effective Date
and the Closing Date as follows:
4.01 Organization, Good Standing and Qualification. Buyer is a
corporation duly organized, validly existing, and in good standing under the
laws of Delaware. Buyer is, or will be at Closing, duly qualified to do business
as a foreign corporation and in good standing in all jurisdictions in which the
ownership of the Compounds makes such qualification necessary.
4.02 Authority. Buyer has all requisite corporate power and authority
to enter into this Agreement, each of the Ancillary Agreements and the
Consulting Agreements and to consummate the transactions contemplated hereby and
thereby. The execution and delivery of this Agreement, each of the Ancillary
Agreements and the Consulting Agreements and the consummation of the
transactions contemplated hereby and thereby have been duly authorized by all
necessary corporate action on the part of Buyer. This Agreement has been duly
executed and delivered by Buyer and constitute the valid and binding obligations
of Buyer, enforceable in accordance with their terms, except as such
enforceability may be limited by principles of public policy and subject to the
laws of general application relating to bankruptcy, insolvency and the relief of
debtors and rules of law governing specific performance, injunctive relief or
other equitable remedies.
4.03 No Conflict. Neither the execution and delivery of this Agreement,
nor each of the Ancillary Agreements and Consulting Agreements, nor the
consummation of the transactions contemplated hereby or thereby, will: (i)
violate any provision of the certificate of incorporation or bylaws of Buyer; or
(ii) conflict with, constitute a default under, result in breach or acceleration
of, or require consent of any third party under any Contract to which Buyer or
any of its respective properties or assets are subject and which has been filed
as an exhibit to Buyer's filings under the Securities Act or the Exchange Act.
4.04 Consents and Approvals. No (a) consent, approval, authorization,
registration or filing with any Governmental or Regulatory Authority, except for
filings of notices and documentary materials as may be required by applicable
state and federal securities laws (all of which have been made by Buyer, other
than those which are required to be made after the Closing and which will be
made on a timely basis); or (b) consent, approval, authorization of or notice to
any other third party, is required in connection with the valid execution and
delivery by Buyer of this Agreement and each of the Ancillary Agreements and the
Consulting Agreements, or the consummation by Buyer of the transactions
contemplated herein and therein.
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4.05 Brokers' or Finders' Fees. Buyer has not incurred, nor will it
incur, directly or indirectly, any liability for brokerage or finders' fees or
agents' commissions or any similar charges in connection with this Agreement or
any transaction contemplated hereby.
4.06 Available Funds. Buyer has funds available in amounts sufficient
to pay the Purchase Price and related expenses of the transactions contemplated
hereby, to pay the royalty and milestone payments under the License Agreements
as they become due thereunder, and to meet the other Assumed Liabilities arising
under the License Agreements.
4.07 Transaction Documents. The obligations of Buyer under this
Agreement and Ancillary Agreements and the reservation, issuance, sale, and
delivery of the Shares in accordance with Section 2.02 hereof have been duly
authorized by all requisite corporate action on the part of the Buyer. When
issued, sold and delivered in accordance with this Agreement, such Shares will
be validly issued and outstanding, fully paid and nonassessable with no personal
liability attaching to the ownership thereof, free of any Liens created by Buyer
(other than federal and state securities laws restrictions), and not subject to
preemptive or similar rights of the stockholders of Buyer or others.
4.08 Reservation of Shares. Buyer has reserved a sufficient number of
Shares for issuance to Seller in accordance with Section 2.02 hereof.
4.09 Representations Complete. None of the representations or
warranties made by Buyer, nor any statement made in any Schedule or certificate
furnished by Buyer pursuant to this Agreement contains or will contain at the
Closing, any untrue statement of a material fact, or omits or will omit at the
Closing to state any material fact necessary in order to make the statements
contained herein or therein, in light of the circumstances under which made, not
misleading.
ARTICLE V
COVENANTS
Seller covenants and agrees with Buyer and Buyer covenants and agrees
with Seller as follows:
5.01 Assignment of Certain Rights and Obligations under Agreements. At
the Closing, Seller shall assign to Buyer and Buyer shall assume the rights and
obligations to the License Agreements, subject to the delivery by Seller to
Buyer of a written agreement in a form satisfactory to Buyer, signed by the
Eastern Virginia Medical School, pursuant to which Eastern Virginia Medical
School consents to the transfer and assignment of the EVMS License Agreement to
Buyer. Notwithstanding Buyer's assumption of such rights and obligations, Seller
shall solely maintain responsibility, and Buyer specifically does not assume any
responsibility, for the obligation under Section 2.7 of the EVMS License
Agreement to pay 10% of all income or other compensation
21
received or provided as a result of any transfer or assignment, to the extent
such obligation may be applicable to this Agreement and the transactions
contemplated hereby.
5.02 Royalties.
(a) In addition to the Purchase Price to be paid to Seller
pursuant to Section 2.02(a), with respect to each Compound, Buyer shall pay
Seller a 2-1/2% running royalty on Buyer's Net Sales of each Product containing
such Compound during the 10-year period following the first commercial sale of
any Product containing such Compound in the Territory, in accordance with
Section 5.02(b) below.
(b) Within 90 days from the end of each calendar quarter,
Buyer shall send Seller the reports of such calendar quarter describing the Net
Sales of Products in such calendar quarter along with its calculation of the
royalties due under Section 5.02(a) above. Together with each such report, Buyer
shall pay the amount of the running royalty set forth in Section 5.02(a) for
such calendar quarter. Buyer shall keep accurate records in sufficient detail to
enable the payments under this Section 5.02 to be determined.
(c) The payments under this Section 5.02 shall be made in
United States Dollars. The method of currency conversion from local currency
into United States Dollars shall be made by using the exchange rate for the
purchase of United States Dollars reported by the Wall Street Journal on the
last business day of the calendar quarter to which such payments relate. Any
withholding or other tax that is required by law to be withheld with respect to
payments owed by Buyer pursuant to this Agreement shall be deducted by Buyer
from such payment prior to remittance. Buyer shall promptly furnish Seller
evidence of any such taxes withheld.
(d) If Buyer is required to pay to a third party amounts with
respect to a Product under agreements for patent rights, trade secrets, or other
intellectual property or technology, which Buyer, in its reasonable judgment,
determines are necessary to license or acquire with respect to such Product,
Buyer may deduct such amount owing to such third party (prior to any reductions)
from the amounts owing to Seller under Section 5.02.
(e) In the event that a Product sold hereunder contains, in
addition to a Compound, an active ingredient other than the Compounds, the Net
Sales from such combination sales shall be as reasonably allocated by Buyer
between the Compounds and such other active ingredient based upon their relative
importance and proprietary protection.
(f) In no event shall more than one royalty be due hereunder
with respect to any Product. It is understood that no royalty shall be due with
respect to transfers of Products for use in clinical trials or other product
development activities for Products, which are carried out for Buyer, its
Affiliates or sublicensees.
(g) Seller shall have the right to inspect, at its own
expense, upon reasonable notice to Buyer and during regular business hours, the
records prepared and kept in accordance with Section 5.02(b) above. The
inspection shall be carried out by a certified public accountant
22
reasonably acceptable to Buyer for the sole purpose of verifying the accuracy of
the royalty payments made to Seller.
5.03 Regulatory Affairs. Buyer shall, after the Closing Date, have the
right to prepare and file in the name of Buyer all regulatory documents in the
Territory with respect to the Products, and to conduct any and all pre-clinical,
clinical and other activities relating to the development of the Products and/or
FDA Approvals, including without limitation toxicological, pharmacological or
other studies, as well as the development and documentation of processes for the
preparation, manufacturing and/or use of a Product necessary to obtain
permission of regulatory authorities to begin and continue human testing, and
all applicable stability and release testing and any other actions required by
the IND or other applicable laws and regulations in the Territory in respect of
Products; provided, however, that Buyer's right to take such actions is subject
to any rights retained by Senju in the Senju License Agreements; provided,
further, that it is understood and agreed that this Section 5.03 shall not be
construed to impose any obligations on Buyer with respect to such actions. Any
such rights and obligations of Buyer shall be solely as set forth in the License
Agreements.
5.04 Data. Seller shall provide Buyer with reasonable access (during
business hours) to and the right to use Data, without further charge by Seller,
upon the prior written request of Buyer.
5.05 Action. The parties shall take, or cause to be taken, all action,
and do, or cause to be done, all things necessary, proper or advisable under
applicable laws and regulations to consummate and make effective the
transactions contemplated by this Agreement.
5.06 Consents. Each of the parties hereto shall cooperate with the
other party and shall use reasonable commercial efforts to obtain all material
consents of all Persons necessary to effect the transactions contemplated by
this Agreement.
5.07 Public Announcements. Except as required by law, Seller and Buyer
shall obtain the other party's prior written approval, which shall not be
unreasonably withheld, of any press release to be issued announcing the
consummation of the transactions contemplated by this Agreement.
5.08 Further Assurances. From time to time, without further
consideration, each party, at its own expense, shall execute and deliver such
documents to the other party as such other party may reasonably request in order
to consummate more effectively the transactions contemplated hereby. In
addition, without limiting and subject to the indemnification set forth in
Section 7.02, Seller agrees that it will reasonably cooperate, at Buyer's
request, in the event of any litigation regarding the Assets, provided that
Buyer agrees to pay Seller's out-of-pocket expenses relating thereto.
5.09 Taxes. All sales and transfer taxes, if any, incurred in
connection with this Agreement and the transactions contemplated hereby shall be
borne by Buyer. All foreign, federal, state and local income taxes, if any,
incurred in connection with this Agreement and the transactions contemplated
hereby shall be borne by Seller. Seller shall further file all necessary Returns
and all other documentation with respect to such Taxes. Buyer shall, at its sole
expense, provide all relevant
23
sales tax exemption certificates and, if required by applicable law, Buyer shall
join in the execution of any such certificates, Returns or other documentation,
as may be reasonably required.
5.10 Seller's Covenant Not to Compete.
(a) In furtherance of the transactions contemplated by this
Agreement and in order to secure the interests of the parties hereto, Seller
agrees that it will not, for a period of ten years following the Closing Date,
for any reason whatsoever, directly or indirectly, for itself or on behalf of or
in conjunction with any other Person:
(i) engage in any activities related to developing,
filing for and obtaining regulatory approval, and handling other regulatory
affairs relating to, formulating, manufacturing, using, marketing, promoting,
selling, distributing, commercializing, licensing, improving, or otherwise
exploiting the Compounds or any compounds, preparations, procedures,
methodologies, or products with ophthalmic application; or
(ii) call upon any person who is at that time an
employee of Buyer who is engaged in any aspect of Buyer's Compound-related
business for the purpose or with the intent of enticing such employee away from
or out of the employ of Buyer.
(b) It is expressly understood and agreed that, if any of the
agreements contained in this Section 5.10 are for any reason found to be
unreasonably broad, oppressive or unenforceable in an action, suit or proceeding
before any federal or state court, such court (i) shall narrow the covenant not
to compete or shall otherwise endeavor to reform the scope of such agreements in
order to ensure that the application thereof is not unreasonably broad,
oppressive or unenforceable and (ii) to the fullest extent permitted by law,
shall enforce such agreements as so reformed.
(c) All of the covenants in this Section 5.10 shall be
construed as an agreement independent of any other provision in this Agreement,
and the existence of any claim or cause of action of Seller against Buyer,
whether predicated on this Agreement or otherwise, shall not constitute a
defense to the enforcement by Buyer of such covenants. It is specifically agreed
that the period of ten years stated at the beginning of this Section 5.10,
during which period the agreements and covenants of Seller made in this Section
5.10 shall be effective, shall be computed by excluding from such computation
any time during which Seller is found by a court of competent jurisdiction to
have been in violation of any provision of this Section 5.10. The covenants
contained in Section 0 shall not be affected by any breach of any other
provision hereof by an party hereto and shall have no effect if the transactions
contemplated by this Agreement are not consummated.
(d) Seller and Buyer hereby agree that the covenants set forth
in this Section 5.10 are a material and substantial part of the transactions
contemplated by this Agreement.
(e) Because of the difficulty of measuring economic losses to
Buyer as a result of a breach of the restrictive covenants set forth in this
Section 5.10, and because of the immediate and irreparable damage that would be
caused to Buyer for which monetary damages would not be a sufficient remedy, it
is hereby agreed that in addition to all other remedies that may be available to
24
Buyer at law or in equity, Buyer shall be entitled to specific performance and
any injunctive or other equitable relief as a remedy for any breach or
threatened breach of the aforementioned restrictive covenants.
5.11 Expenses. Buyer shall pay Seller's reasonable attorney fees and
costs, up to $20,000, incurred in connection with the preparation for, and the
consummation of, the sale and purchase of the Assets as contemplated by this
Agreement.
5.12 Senju Milestone Payment. On May 6, 2002, Buyer shall initiate a
wire funds transfer to Senju in the amount of $750,000 on behalf of Seller in
order to cure Seller's failure to meet Seller's milestone payment obligations
under Section 3.01 of the Bromfenac License Agreement.
5.13 No Solicitation. From the Effective Date until the earlier of the
Closing or May 10, 2002 at 5:00 p.m. (PST), Seller shall not, directly or
indirectly, through any officer, director, stockholder, Affiliate, agent or
otherwise, solicit, initiate, engage in discussions or encourage any proposals
or offers from any third party relating to the acquisition or licensing of or
otherwise obtaining rights to the Compounds, nor shall Seller participate in any
negotiations regarding, or furnish to any Person any information with respect
to, or otherwise cooperate with, facilitate or encourage any effort or attempt
by any Person to do or seek such agreement, nor shall Seller offer to, grant or
sell any third party any rights with respect to the Assets.
ARTICLE VI
CONDITIONS TO CLOSING
6.01 Conditions to Obligations of Buyer. The obligations of Buyer under
Sections 2.02(a)(i) and 2.04 of this Agreement are subject to the satisfaction
at or prior to the Closing of the following conditions, provided that compliance
with any such conditions or parts thereof may be waived by Buyer:
(a) Seller shall have obtained all material orders, permits,
authorizations, consents and approvals and shall have made all material filings
and declarations required for the consummation of the transactions contemplated
hereby.
(b) Seller shall have obtained unanimous approval of its
stockholders for this Agreement and the transactions contemplated hereunder.
(c) Seller shall have delivered the EVMS Consent to Buyer.
(d) Seller shall have provided a certificate executed on
behalf of Seller by an officer of Seller to the effect that each of the
conditions specified in Sections 6.03(a) and (b) are satisfied in all respects.
25
(e) Buyer shall have obtained confirmation of receipt by Senju
of the milestone payment made by Buyer on behalf of Seller pursuant to Section
5.12 hereof.
6.02 Conditions to Obligations of Seller. The obligations of Seller
under Sections 2.01 and 2.04 of this Agreement are subject to the satisfaction
at or prior to the Closing of the following conditions, provided that compliance
with any such conditions or parts thereof may be waived by Seller:
(a) Buyer shall have obtained all material orders, permits,
authorizations, consents and approvals and shall have made all material filings
and declarations required for the consummation of the transactions contemplated
hereby.
(b) Buyer and each of Xxxxx Xxxxxx, Xxxx Xxxxxx and Xxxx
Xxxxxxx shall have executed and delivered a consulting agreement in the form
attached hereto as Exhibit D.
(c) Buyer shall have executed and delivered to Seller the
Registration Rights Agreement in the form attached hereto as Exhibit E.
(d) Buyer shall have provided a certificate executed on behalf
of Buyer by an officer of Buyer to the effect that each of the conditions
specified in Sections 6.03(a) and (b) are satisfied in all respects.
6.03 Conditions to Obligations of Each Party. The respective
obligations of each party under this Agreement are subject to the satisfaction
at or prior to the Closing of the following conditions, provided that compliance
with any such conditions or parts thereof may be waived by the applicable party:
(a) The representations and warranties of each party made in
Articles III and IV shall be true as of the Closing Date and each party shall
have performed all obligations and conditions herein required to be performed or
observed by it at or prior to the Closing.
(b) No temporary restraining order, preliminary or permanent
injunction or other order issued by any court of competent jurisdiction or other
legal or regulatory restraint or provision challenging the consummation of the
transactions contemplated by the Agreement shall be in effect, nor shall any
proceeding brought by a Governmental or Regulatory Authority, seeking the
foregoing be pending. There shall be no action, suit, claim or proceeding of any
nature pending or threatened, against Buyer or Seller that could materially and
adversely affect the ability of Buyer to develop, conduct clinical trials,
obtain regulatory approval, commercialize, manufacture, market, sell,
distribute, use, license, improve, or otherwise exploit a Compound.
(c) Seller and Buyer shall have executed and delivered the
Xxxx of Sale in the form attached hereto as Exhibit A.
(d) Seller and Buyer shall have executed and delivered the
Assignment and Assumption Agreement in the form attached hereto as Exhibit B.
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ARTICLE VII
GENERAL PROVISIONS
7.01 Representations and Warranties. Buyer acknowledges that Seller has
not made any representations or warranties of any kind, either express or
implied, except as expressly set forth in this Agreement. BUYER AGREES THAT THE
REPRESENTATIONS AND WARRANTIES GIVEN HEREIN BY SELLER ARE IN LIEU OF, AND BUYER
HEREBY EXPRESSLY WAIVES ALL RIGHTS TO, ANY IMPLIED WARRANTIES WHICH MAY
OTHERWISE BE APPLICABLE BECAUSE OF THE PROVISIONS OF ANY STATUTE, INCLUDING,
WITHOUT LIMITATION, THE WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE.
7.02 Indemnification.
(a) Indemnification by Seller. Seller covenants and agrees to
indemnify, defend, protect and hold harmless, Buyer and its officers, directors,
employees, stockholders, assigns, successors and Affiliates (individually, a
"Buyer Indemnified Party" and collectively, "Buyer Indemnified Parties") from,
against and in respect of:
(i) all Losses suffered, sustained, incurred or
paid by any Buyer Indemnified Party in connection with, resulting from or
arising out of or relating to, directly or indirectly:
(A) any breach of any representation or
warranty of Seller set forth in this Agreement or any certificate, document or
instrument delivered by Seller in connection herewith;
(B) any nonfulfillment of any covenant or
agreement on the part of Seller in this Agreement;
(C) claims or causes of actions relating in
any way to the Assets arising from Seller's ownership or license of the Assets
prior to the Closing;
(D) claims or causes of actions arising
subsequent to the Closing attributable to Seller's failure to comply with any
bulk sales laws of any jurisdiction in connection with the sale of the Assets
under this Agreement;
(E) any negligent or reckless actions by
Seller or its employees in connection with the fulfillment of its obligations
set forth in this Agreement; and
(F) non-compliance with the terms and
conditions of any Bulk Sales Laws with respect to the transactions contemplated
by this Agreement.
27
(ii) any and all Losses arising from the foregoing or
to the enforcement of this Section 7.02(a).
The provisions for indemnification contained in this Section 7.02(a) shall be
effective only after the aggregate amount of all Losses for which Seller is
liable under this Agreement exceeds $50,000, in which case the Seller shall be
obligated to indemnify the Buyer Indemnified Parties for the full amount of such
Losses. In no event shall the maximum amount of all Losses for which Seller is
liable pursuant to this Section 7.02(a) exceed $390,000, except for Losses, for
which the Seller is liable, asserted against, resulting to, imposed upon, or
incurred by Buyer Indemnified Parties by reason of or resulting from Seller's
breach or non-performance of Section 3.17, 3.21, 5.09, or 5.10.
(b) Indemnification by Buyer. Buyer covenants and agrees to
indemnify, defend, protect and hold harmless, Seller and its officers,
directors, employees, stockholders, assigns, successors and Affiliates
(individually, a "Seller Indemnified Party" and collectively, the "Seller
Indemnified Parties") from, against and in respect of:
(i) all Losses suffered, sustained, incurred or paid
by any Seller Indemnified Party in connection with, resulting from or arising
out of or relating to, directly or indirectly:
(A) any breach of any representation or
warranty of Buyer set forth in this Agreement or any certificate or other
writing delivered by Buyer in connection herewith; and
(B) any nonfulfillment of any covenant or
agreement on the part of Buyer set forth in this Agreement.
(ii) any and all Losses arising from the foregoing or
to the enforcement of this Section 7.02(b).
(c) All Claims for indemnification under this Section 7.02
shall be asserted and resolved as follows:
(i) Any party that may be entitled to indemnification
under this Agreement, (an "Indemnified Party") shall send a Claim Notice (as
defined below) to the party obligated to indemnify it (an "Indemnifying Party")
with reasonable promptness upon becoming aware of any claim or other facts upon
which a claim for indemnification might be based. If the Indemnifying Party does
not notify the Indemnified Party within 30 days from the date of receipt of such
Claim Notice that the Indemnifying Party disputes such claim, the amount of such
claim shall be conclusively deemed a liability of the Indemnifying Party
hereunder. In case the Indemnifying Party shall object in writing to any claim
made in accordance with this Section 7.02, the Indemnified Party shall have 15
days to respond in a written statement to the objection of the Indemnifying
Party. If after such 15 day period, there remains a dispute as to any claims,
the parties shall attempt in good faith for 60 days to agree upon the rights of
the respective parties with respect to each of such claims. If the parties
should so agree, a memorandum setting forth such agreement shall be prepared and
signed by both parties.
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(ii) In the event that any claim for which an
Indemnifying Party would be liable to an Indemnified Party hereunder is asserted
against an Indemnified Party by a third party, the Indemnified Party shall with
reasonable promptness notify the Indemnifying Party of such claim, including a
copy of the claim made if the claim was made in writing, specifying the nature
of such claim and the amount or the estimated amount thereof to the extent then
feasible (which estimate shall not be conclusive of the final amount of such
claim) (the "Claim Notice"). The Indemnifying Party shall have 30 days from the
receipt of the Claim Notice (the "Notice Period") to notify the Indemnified
Party (i) whether or not the Indemnifying Party disputes the Indemnifying
Party's liability to the Indemnified Party hereunder with respect to such claim
and (ii) if the Indemnifying Party does not dispute such liability, whether or
not the Indemnifying Party desires, at the sole cost and expense of the
Indemnifying Party, to defend against such claim, provided that the Indemnifying
Party is hereby authorized (but not obligated) prior to and during the Notice
Period to file any motion, answer or other pleading and to take any other action
which the Indemnifying Party shall deem necessary or appropriate to protect the
Indemnifying Party's interests. In the event that the Indemnifying Party
notifies the Indemnified Party within the Notice Period that the Indemnifying
Party does not dispute the Indemnifying Party's obligation to indemnify
hereunder and desires to defend the Indemnified Party against such claim and
except as hereinafter provided, the Indemnifying Party shall have the right to
defend by appropriate proceedings, which proceedings shall be diligently settled
or prosecuted by the Indemnifying Party to a final conclusion; provided that,
unless the Indemnified Party otherwise agrees in writing, the Indemnifying Party
may not settle any matter (in whole or in part) unless such settlement includes
a complete and unconditional release of the Indemnified Party. If the
Indemnified Party desires to participate in, but not control, any such defense
or settlement the Indemnified Party may do so at the Indemnified Party's sole
cost and expense. If the Indemnifying Party elects not to defend the Indemnified
Party against such claim, whether by failure of the Indemnifying Party to give
the Indemnified Party timely notice as provided above or otherwise, then the
Indemnified Party, without waiving any rights against the Indemnifying Party,
may settle or defend against any such claim in the Indemnified Party's sole
discretion and the Indemnified Party shall be entitled to recover from the
Indemnifying Party the amount of any settlement or judgment and, on an ongoing
basis, all indemnifiable costs and expenses of the Indemnified Party with
respect thereto, including interest from the date such costs and expenses were
incurred.
(iii) Nothing herein shall be deemed to prevent an
Indemnified Party from making a claim, and an Indemnified Party may make a claim
hereunder, for potential or contingent claims or demands provided the Claim
Notice sets forth the specific basis for any such potential or contingent claim
or demand to the extent then feasible and an Indemnified Party has reasonable
grounds to believe that such a claim or demand may be made.
(iv) Subject to Section 7.04, the Indemnified Party's
failure to give reasonably prompt notice to the Indemnifying Party of any
actual, threatened or possible claim or demand which may give rise to a right of
indemnification hereunder shall not relieve the Indemnifying Party of any
liability which the Indemnifying Party may have to the Indemnified Party unless
the failure to give such notice materially and adversely prejudiced the
Indemnifying Party.
29
7.03 Indemnification for Brokerage Claims. Seller and Buyer each
represents that no broker or finder has been used in connection with the
transactions contemplated by this Agreement and Seller and Buyer shall mutually
indemnify the other against any claim for brokerage or like commission arising
from each other's conduct or alleged conduct.
7.04 Survival of Representations, Warranties, Covenants and
Indemnifications. All representations, warranties, covenants and
indemnifications contained in this Agreement shall survive for a period of one
year from the Closing Date and thereafter shall be of no force or effect. Any
claim for indemnification with respect thereto must be asserted by written
notice to the Indemnifying Party prior to such date.
7.05 Assignability and Amendments. This Agreement may not be assigned
by either party without the prior written consent of the other party, which
consent shall not be unreasonably withheld, except that, subsequent to the
Closing Date, Buyer may assign this Agreement to any of its Affiliates,
provided, that such Affiliates agree to be bound by the provisions of this
Agreement. No such assignment will relieve the assigning party of any of its
liabilities hereunder. This Agreement cannot be altered or otherwise amended
except pursuant to an instrument in writing signed by each of the parties.
7.06 Notices. All notices or communications to be given hereunder will
be deemed to have been duly given only if delivered personally or by facsimile
transmission or by registered or certified mail (first class or air mail in the
case of international correspondence, postage prepaid) or by an internationally
recognized common carrier's overnight courier to the parties at the following
addresses or facsimile numbers:
If to Seller. addressed to:
AcSentient, Inc.
000 Xxxxx Xxxxx
Xxxxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Xxxx X. Xxxxxx
Chief Executive Officer
Facsimile No.: (000) 000-0000
with a copy to:
Life Sciences Law, PLLC
0000 Xxxxxxx Xxxxxxxxx, Xxxxxx Xxxxx
Xxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxx, Esq.
Facsimile No.: (000) 000-0000
30
If to Buyer, addressed to:
ISTA Pharmaceuticals, Inc.
00000 Xxxxx Xxxxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxxxx 00000
Attention: Chief Executive Officer
Facsimile No.: (000) 000-0000
with a copy to:
Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx, P.C.
000 Xxxx Xxxx Xxxx
Xxxx Xxxx, XX 00000
Attention: Xxxxx X. Xxxxxx, Esq.
Facsimile No.: (000) 000-0000
All such notices, requests and other communications shall (i) if
delivered personally to the address as provided in this section, be deemed given
upon delivery, (ii) if delivered by facsimile transmission to the facsimile
number provided in this section, be deemed given upon receipt, and (iii) if
delivered by registered or certified mail or overnight courier in the manner
described above at the address provided in this section, be deemed given upon
receipt (in each case regardless of whether such notice, request or other
communication is received by any other Person to whom a copy of such notice is
to be delivered pursuant to this section). Either party from time to time may
change its address or facsimile number upon written notice to the other party.
7.07 Bulk Sales. Buyer acknowledges that Seller will not comply with
the provision of any bulk sales laws of any jurisdiction in connection with the
sale of the Assets hereunder.
7.08 Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of California without regard to
conflicts of law.
7.09 Entire Agreement. This Agreement (including the Exhibits) contains
the entire agreement between the parties with respect to the transactions
contemplated hereby and supersedes all previous oral negotiations, commitments,
understandings and agreements executed and delivered prior to the respective
dates thereof.
7.10 Confidentiality. Each party hereby agrees, and shall cause its
Affiliates to agree, that after the Closing Date, such party and its Affiliates
shall hold in confidence and not disclose to any third Person, nor use for its
own benefit any confidential or proprietary information of the other party or
its Affiliates (other the Assets acquired pursuant to this Agreement) that is
disclosed to or discovered by such party or its Affiliates in connection with
the transactions contemplated hereby, unless (i) such information becomes known
to the public generally through no fault of such party or its Affiliates or (ii)
disclosure is required by law or the order of any Governmental and Regulatory
Authority.
31
7.11 Third Party Beneficiaries. None of this Agreement or any document
contemplated hereby is intended to grant any right or benefit to any person or
entity that is not a party to this Agreement.
7.12 Waivers. Any waiver must be explicitly in writing. A waiver of any
breach or failure to enforce any of the terms or conditions of this Agreement
shall not in any way affect, limit, or waive a party's rights at any time to
enforce strict compliance thereafter with every term or condition of this
Agreement.
7.13 Counterparts and Headings. This Agreement may be executed in
counterparts, each of which shall be deemed an original and all of which
together shall constitute one and the same instrument. All headings in this
Agreement are inserted for convenience of reference only and shall not affect
its meaning or interpretation.
7.14 Severability. If any provision of this Agreement is held to be
illegal, invalid or unenforceable under any applicable present or future law,
and if the rights or obligations of any party hereto under this Agreement will
not be materially and adversely affected thereby, (a) such provision will be
fully severable, (b) this Agreement will be construed and enforced as if such
illegal, invalid or unenforceable provision had never comprised a part hereof,
(c) the remaining provisions of this Agreement will remain in full force and
effect and will not be affected by the illegal, invalid or unenforceable
provision or by its severance herefrom and (d) in lieu of such illegal, invalid
or unenforceable provision, there will be added automatically as a part of this
Agreement, a legal, valid and enforceable provision as similar in terms to such
illegal, invalid or unenforceable provision as may be possible.
[signature pages follow]
32
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed by their respective duly authorized officers, all as of the date first
above written.
ACSENTIENT, INC.
/S/ XXXX XXXXXX
Name: Xxxx Xxxxxx
Title: Chief Executive Officer
ISTA PHARMACEUTICALS, INC.
/S/ XXXXXXX XXXXX, XX., PH.D.
Name: Xxxxxxx Xxxxx, Xx., Ph.D.
Title: President and Chief Executive Officer
