EXECUTION COPY
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (this "AGREEMENT") is made and entered into as of
the 24 day of April, 2008 (the "SIGNING DATE") by and among (i) Amneal
Pharmaceuticals of New York, LLC, a Delaware limited liability company
("BUYER"), (ii) Interpharm Holdings, Inc., a Delaware corporation, and
Interpharm, Inc., a New York corporation (collectively, "COMPANY"), and (iii)
the shareholders of Company indicated as "Majority Shareholders" on the
signature pages hereto (the "MAJORITY SHAREHOLDERS"). Capitalized terms used
herein and not otherwise defined shall have the definition ascribed thereto in
ARTICLE I hereof.
W I T N E S S E T H:
WHEREAS, Company and its Subsidiaries (collectively, the "SELLERS") operate a
business of developing, manufacturing and distributing pharmaceutical products
(the "BUSINESS"); and
WHEREAS, Company desires for it and the other Sellers to sell substantially all
of their assets to Buyer, and Buyer desires to acquire such assets and to assume
certain specified liabilities of Sellers.
NOW, THEREFORE, in consideration of the mutual representations, warranties,
covenants and agreements, and upon the terms and conditions hereinafter set
forth, the parties do hereby agree as follows:
ARTICLE I
DEFINITIONS
1.1 DEFINED TERMS. For purposes of this Agreement, the following terms
have the meanings specified or referred to in this Article I:
"ACTION" means any suit, action, judicial or administrative
action or proceeding.
"ACM" means any asbestos or asbestos-containing material.
"ACQUISITION PROPOSAL" means any inquiry, proposal, offer or
expression of interest by any third party relating to a merger,
consolidation or other business combination involving any Seller, or
any purchase of more than 20% of the consolidated assets of Sellers or
more than 20% of the outstanding shares of capital stock or membership
interests any Seller (other than pursuant to the exercise of stock
options or conversion rights under securities outstanding as of the
Signing Date in accordance with their terms) or the issuance of any
securities (or rights to acquire securities) of any Seller, or any
similar transaction, or any agreement, arrangement or understanding
requiring any Seller to abandon, terminate or fail to consummate any
transaction contemplated by this
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Agreement. Any material modification of an Acquisition Proposal
(including any modification of the economic terms) shall constitute a
new Acquisition Proposal.
"AFFILIATE" shall mean (x) any Person directly or indirectly
controlling, controlled by, or under common control with another
Person, (y) any director, officer, manager, partner, Employee,
shareholder or member of a Person, or (z) any father, mother, brother,
sister or descendant of a natural person or any spouse thereof;
PROVIDED, HOWEVER, that none of the parties in clause (z) shall be
deemed Affiliates for purposes of SECTION 9.3(G)(III); and PROVIDED,
FURTHER, that in the case of a Company shareholder or noteholder which
is a private equity firm, a portfolio company of such shareholder or
noteholder which does not have any direct or indirect proprietary,
leasehold or financial interest (other than financial interests
consisting of arm's length transactions) in any of the Acquired Assets
or the Business shall not be deemed an Affiliate of Company or any
other Seller. A Person shall be deemed to control another Person if
such Person possesses, directly or indirectly, the power to direct or
cause the direction of the management and policies of such other
Person, whether through ownership of voting securities, by contract,
or otherwise.
"AMEX" means the American Stock Exchange.
"ANDA" means an Abbreviated New Drug Application filed with
the FDA.
"API" means active pharmaceutical ingredients.
"BUSINESS DAY" shall mean any day other than a Saturday,
Sunday and all legal public holidays specified in 5 U.S.C. ss.
6103(a), as amended from time to time.
"CERCLA" means the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended from time to time
(42 U.S.C. xx.xx. 9601 et seq.).
"CGMP" means current good manufacturing practices for the
methods to be used in, and the facilities and controls to be used for,
the manufacture, storage and handling of each Product, all as set
forth from time-to-time by the FDA pursuant to the FD&C Act and the
rules and regulations promulgated thereunder (including specifically,
Title 21, parts 210 and 211 of the Code of Federal Regulations of the
United States).
"CLAIMS" means all actions, suits, proceedings,
investigations, claims or grievances.
"CODE" means the Internal Revenue Code of 1986, as amended.
"CONTRACTS" means all written and oral contracts, leases,
sales, purchase orders, commitments and other agreements, and any
amendments to any of the foregoing.
"DESIGN DOCUMENTATION" means all documentation,
specifications, manuals, user guides, promotional material, internal
notes and memos, technical
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documentation, drawings, flow charts, diagrams, source language
statements, demo disks, benchmark test results, and other written
materials related to, associated with or used or produced in the
development, maintenance or marketing of Sellers Software Programs.
"DGCL" means the Delaware General Corporation Law, as
amended.
"EMPLOYEE" means any (i) officer or employee of any Seller,
and (ii) any independent contractor or consultant whose engagement by
any Seller accounts for the majority of their working time.
"EMPLOYEE BENEFIT PLANS" means all "employee pension benefit
plans" (as defined in Section 3(2) of ERISA), "welfare benefit plans"
(as defined in Section 3(l) of ERISA), membership interest bonus,
membership interest option, restricted membership interest, membership
interest appreciation right, membership interest purchase, bonus,
incentive, deferred compensation, severance, vacation plans, and any
other employee benefit plan, program, policy or arrangement maintained
or contributed to by Sellers or any of their ERISA Affiliates, or to
which Sellers or any of their ERISA Affiliates contribute or are
obligated to make payments thereunder or otherwise may have any
liability.
"ENVIRONMENTAL REQUIREMENTS" means all Laws, statutes,
rules, regulations, ordinances, guidance documents, judgments,
decrees, orders, agreements and other restrictions and requirements
(whether now or hereafter in effect) of any Governmental Authority
relating to the regulation of, imposing standards of conduct or
liability regarding, or protection of, human health and safety
(including, without limitation, employee health and safety), public
welfare, natural resources, conservation, the environment, or the
storage, treatment, disposal, transportation, handling, or other
management of Materials of Environmental Concern.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended.
"ERISA AFFILIATE" means any person (as defined in Section
3(9) of ERISA) that is or has been a member of any group of persons
described in Section 414(b), (c), (m) or (o) of the Code that includes
Sellers.
"ESCROW AMOUNT" means Three Million Five Hundred Thousand
Dollars ($3,500,000).
"ESCROW PERIOD" means the period commencing on the Closing
Date and expiring three hundred sixty five (365) days later.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.
"EXPENSES" means any and all legal, accounting, financial
advisory, consulting and other similar fees and expenses of third
parties that are incurred or paid by a party in connection with the
preparation and negotiation of this Agreement and the other
Transaction Documents and the consummation of transactions
contemplated hereby
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and thereby.
"FACILITY" means the approximately 38 acres of land located
at 00 Xxxxxxxxxx Xxxx, Xxxxxxx, Xxx Xxxx, together with the
approximately 90,000 sq. ft. building and other Improvements located
thereon.
"FDA" means the U.S. Food and Drug Administration.
"FD&C ACT" means the Federal Food, Drug and Cosmetic Act of
1938, as amended, and the regulations thereunder, including cGMP
regulations, as the same may be amended or revised.
"FINANCIAL STATEMENTS" means, collectively, the consolidated
balance sheets and the related consolidated statements of income and
cash flows (including the related notes thereto) of Sellers included
in the SEC Reports.
"GAAP" means U.S. generally accepted accounting principles.
"GOVERNMENTAL AUTHORITY" shall mean any governmental
regulatory or administrative body, department, commission, board,
bureau, agency or instrumentality, any court or judicial authority or
any public, private or industry regulatory authority, in each case
whether federal, state, local or foreign.
"HIGH VOLUME ACCOUNT" means any retailer, wholesaler or
distributor whose annual and/or projected annual aggregate purchase
amounts (on a company-wide level), in units or in dollars, of a
Product from Sellers was, is, or is projected to be among the top
twenty highest of such purchase amounts by Sellers' customers on any
of the following dates: (i) the end of the last quarter that
immediately preceded the Signing Date; or (ii) the end of the last
quarter that immediately preceded the Closing Date.
"HSR LAWS" means the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act and the regulations promulgated thereunder, each as
amended.
"IMPROVEMENTS" means all improvements of any and every
nature (including without limitation all buildings, structures,
fixtures and building systems) located in or affixed to the Sellers'
Real Property, and all components thereof.
"INDEMNIFIED PARTY" shall mean (i) with respect to Losses
described in SECTION 8.1, Buyer, and (ii) with respect to Losses
described in SECTION 8.3, Company.
"INDEMNIFYING PARTY" shall mean (i) with respect to Losses
described in SECTION 8.1, Company, and (ii) with respect to Losses
described in SECTION 8.3, Buyer.
"INDEBTEDNESS" means, with respect to Sellers, all
indebtedness of any Seller for borrowed money, whether current or
funded, or secured or unsecured, including, without limitation: (a)
all indebtedness of any Seller for the deferred purchase price of
property or services, whether or not represented by a note, (b) all
indebtedness of any Seller created or arising under any conditional
sale or other title retention agreement
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with respect to property acquired by any Seller (even though the
rights and remedies of the seller or lender under such agreement in
the event of default are limited to repossession or sale of such
property), (c) all indebtedness of any Seller secured by a purchase
money mortgage or other Lien to secure all or part of the purchase
price of property subject to such mortgage or Lien, (d) all
obligations under leases which shall have been or must be, in
accordance with generally accepted accounting principles, recorded as
capital leases in respect of which any Seller is liable as lessee, (e)
any liability of any Seller in respect of banker's acceptances or
letters of credit, (f) all interest, fees and other expenses owed with
respect to the indebtedness referred to above, and (g) all
indebtedness referred to above which is directly or indirectly
guaranteed by any Seller or which any Seller have agreed (contingently
or otherwise) to purchase or otherwise acquire or in respect of which
it has otherwise assured a creditor against loss (excluding any
contingent indemnification obligations or similar contingent
obligations assuring against loss).
"INTELLECTUAL PROPERTY" means all worldwide intellectual
property rights and all rights associated therewith, including without
limitation: (i) all issued and existing letters patent U.S. or
foreign, including , extensions (whether arising from patent or
regulatory law), supplemental protection certificates, registrations,
confirmations, reissues, reexaminations or renewals and all foreign
equivalents thereof (all of the foregoing described in this subsection
(i), collectively "ISSUED PATENTS"); (ii) all published or unpublished
non-provisional and provisional patent applications, U.S and foreign,
including any continuation, divisional, continuation in part or
division thereof, or any substitute application therefore or foreign
equivalent thereof (all of the foregoing described in this subsection
(ii), collectively "PATENT APPLICATIONS" and, with the Issued Patents,
the "PATENTS"); (iii) all copyrights and copyrightable works,
including all rights of authorship, use, publication, reproduction,
distribution, performance transformation and rights of ownership of
copyrightable works, and all rights to register and obtain renewals
and extensions of registrations, together with all other interests
accruing by reason of international copyright conventions
(collectively, "COPYRIGHTS"); (iv) trademarks, registered trademarks,
applications for registration of trademarks, service marks, registered
service marks, applications for registration of service marks, trade
names, registered trade names and applications for registrations of
trade names (collectively, "TRADEMARKS"); (v) Product Technology; (vi)
all trade secrets, know-how, techniques, data, inventions, practices,
methods, and other confidential or proprietary technical, business,
marketing, research, development, and other information, and (vii) all
other intangible assets, properties and rights, including know how
(whether or not appropriate steps have been taken to protect, under
applicable law, such other intangible assets, properties or rights).
Intellectual Property includes all of the foregoing created or
obtained through the efforts of third parties for or on behalf of
Seller.
"INTERPHARM REALTY" means Interpharm Realty, LLC, a New York
limited liability company and wholly owned subsidiary of Company.
"KNOWLEDGE" shall mean, with respect to Company or Sellers,
any fact, circumstance, event or other matter that (i) any of the
officers or directors of any Seller actually knows (hereinafter
referred to as "ACTUAL KNOWLEDGE"), or (ii) any of the
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foregoing parties should reasonably know in the normal discharge of
his or her assigned duties and responsibilities.
"LAWS" shall mean any law, statute, ordinance, rule,
regulation, order, decree or mandatory guideline of any Governmental
Authority (including, without limitation, the FD&C Act and FDA
regulations), as the same may be amended or revised from time to time.
"LIENS" means all liens, mortgages, pledges, security
interests, charges, Claims, options, grant-backs, judgments, court
orders or other encumbrances.
"LOSSES" means all damages, losses, obligations,
liabilities, Claims, deficiencies, costs, Taxes, penalties, fines,
interest, monetary sanctions and expenses (including, without
limitation, amounts paid in settlement in accordance with SECTION 8.4)
incurred by an Indemnified Party, including, without limitation,
reasonable attorneys' fees and costs incurred to comply with
injunctions and other court and agency orders, and other costs and
expenses incident to any suit, action, investigation, claim or
proceeding or to establish or enforce an Indemnified Party's right to
indemnification hereunder.
"MATERIAL ADVERSE EFFECT" means any change or effect which,
individually or in the aggregate with all other such changes and
effects, is materially adverse to the Business or to the condition
(financial or otherwise), assets, operations, financial condition,
results of operations or prospects of Sellers, taken as a whole (the
"COMPANY CONDITION"), or that would materially and adversely effect
the ability of any Seller to perform its obligations hereunder or that
would prevent or delay the consummation of the transactions
contemplated hereunder; PROVIDED, HOWEVER, that none of the following
shall be deemed in and of themselves, either alone or in combination,
to constitute, and none of the following shall be taken into account
in determining whether there has been or will be, a Material Adverse
Effect: (i) any loss of or diminution in business from any customer or
vendor primarily attributable to the execution, announcement, pendency
or pursuit of the consummation of this Agreement and the transactions
contemplated by this Agreement; (ii) any change, event, state of facts
or development generally affecting the general political, economic or
business conditions of the United States; (iii) any change, event,
state of facts or development generally affecting the generic
pharmaceutical industry; (iv) any change, event, state of facts or
development arising from or relating to compliance with the terms of
this Agreement, or action taken or failure to act, to which Buyer has
consented in writing (excluding any Seller's actions or omissions in
violation of this Agreement); (v) acts of war (whether or not
declared), the commencement, continuation or escalation of a war, acts
of armed hostility, sabotage or terrorism or other international or
national calamity or any material worsening of such conditions; (vi)
changes in Laws or Generally Accepted Accounting Principles after date
hereof or interpretation thereof; (vii) any action taken at Buyer's
request by Sellers or any of their respective affiliates, other than
in cure of a Seller's violation of this Agreement; (viii) any matter
set forth in the Disclosure Memorandum, as in effect on the initial
date of delivery thereof and without giving affect to any amendments
or supplements thereto, except for any material worsening of such
matter; (ix) any matter set forth in the Company's SEC Reports as of
the Signing Date, except for any material worsening of such matter; or
(x)
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any matter described in SECTION 3.21(A) below, except for any material
worsening of the Business or the Company Condition after the Signing
Date.
"MATERIALS OF ENVIRONMENTAL CONCERN" means (i) any
"hazardous substance" as defined in ss. 101(14) of CERCLA or any
regulations promulgated thereunder; (ii) petroleum and petroleum
by-products; (iii) any ACM; (iv) any chemical, material or substance
defined as, or included in the definition of, "hazardous substances,"
"hazardous wastes," "hazardous materials," "extremely hazardous
wastes," "restricted hazardous waste" or "toxic substances" or words
of similar import under any applicable federal, state or local law or
under the regulations adopted or publications promulgated pursuant
thereto, including, but not limited to, under any Environmental
Requirements; or (v) any other chemical, material or substance,
exposure to which is prohibited, limited or regulated by any
Governmental Authority.
"MOST RECENT AUDIT DATE" means June 30, 2007.
"MULTIEMPLOYER PLAN" means any multiemployer plan defined as
such in Section 3(37) of ERISA to which contributions are or have been
made by any Seller or any of their ERISA Affiliates or as to which any
Seller or any of their ERISA Affiliates may have liability and that is
covered by Title IV of ERISA.
"NDC" means a national drug code as issued by the FDA.
"NDC NUMBERS" means the NDC number for each of the Products,
respectively.
"PERMITS" means any licenses, certificates, approvals,
permits and other authorizations issued or to be issued by any
Governmental Authority.
"PERMITTED LIENS" means (i) Liens set forth on SCHEDULE
2.1(H), (ii) Liens for Taxes that are not due and payable or that may
thereafter be paid without penalty, (iii) Liens securing the Assumed
Liabilities, (iv) easements, covenants, rights-of-way and other
similar restrictions of record, and (v) zoning, building and other
similar restrictions.
"PERSON" means any corporation, partnership, association,
trust, limited liability company, joint venture, Governmental
Authority or natural person.
"PRODUCT MARKETING MATERIALS" means all marketing materials
used specifically in the marketing or sale of any Product as of the
Closing Date, including, without limitation, all advertising
materials, training materials, product data, mailing lists, sales
materials (e.g., detailing reports, vendor lists, sales data),
marketing information (e.g., competitor information, research data,
market intelligence reports, statistical programs (if any) used for
marketing and sales research), customer information (including
customer net purchases information to be provided on the basis of
either dollars and/or units for each month, quarter or year), sales
forecasting models, educational materials, and advertising and display
materials, speaker lists, promotional and marketing materials, website
content and advertising and display materials, artwork for the
production of packaging components, television masters and other
similar
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materials related to the Product(s).
"PRODUCT REPORTS" means the following: (i) summary of
Product complaints from physicians related to the Products; (ii)
summary of Product complaints from customers related to the Products;
and (iii) Product recall reports filed with the FDA related to the
Products.
"PRODUCT SCIENTIFIC AND REGULATORY MATERIAL" means all
technological, scientific, chemical, biological, pharmacological,
toxicological, regulatory and clinical trial materials and information
related to the Products that are owned or licensed by any Seller.
"PRODUCT TECHNOLOGY" means the technology, trade secrets,
know-how, and proprietary information (whether patented, patentable or
otherwise) specifically related to the manufacture, validation,
packaging, release testing, stability and shelf life of the Products,
including all product formulations, in existence and in the possession
of any Seller as of the Closing Date, product specifications,
processes, product designs, plans, trade secrets, ideas, concepts,
manufacturing, engineering and other manuals and drawings, standard
operating procedures, flow diagrams, chemical, pharmacological,
toxicological, pharmaceutical, physical and analytical, safety,
efficacy, bioequivalency, quality assurance, quality control and
clinical data, research records, compositions, annual product reviews,
process validation reports, analytical method validation reports,
specifications for stability trending and process controls, testing
and reference standards for impurities in and degradation of products,
technical data packages, chemical and physical characterizations,
dissolution test methods and results, formulations for administration,
clinical trial reports, regulatory communications and labeling and all
other information related to the manufacturing process, and supplier
lists; in all cases that is used by any Seller in the manufacture of
the Products, in each case including any of the foregoing created or
obtained through the efforts of third parties for or on behalf of
Seller.
"REPRESENTATIVES" of a Person means their directors,
officers, managers, partners, shareholders, members, Employees,
consultants, contractors, representatives, agents, accountants,
bankers, attorneys and other advisors.
"SEC" means the U.S. Securities and Exchange Commission.
"SECURITIES ACT" means the Securities Act of 1933, as
amended.
"SOX" means the Xxxxxxxx-Xxxxx Act of 2002.
"SUBSIDIARY" or "SUBSIDIARIES" of any Person means any other
Person of which a majority of the outstanding voting securities or
other voting equity interests, or a majority of any other interests
having the power to direct or cause the direction of the management
and policies of such other Person, are owned, directly or indirectly,
by such first Person.
"TAX" or "TAXES" means any federal, foreign, state, county,
and local
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income, gross receipts, excise, import, property, franchise, ad
valorem, license, sales or use tax or other withholding, social
security, Medicare, unemployment compensation or other
employment-related tax, or any other tax, together with all
deficiencies, penalties, additions, interest, assessments, and other
governmental charges with respect thereto.
"TRANSACTION DOCUMENTS" means this Agreement (including the
Schedules hereto), the Disclosure Memorandum, the Loan and Security
Agreement, the Xxxx of Sale, the Facility Purchase Agreement, the
Restrictive Covenant Agreements, the Certificate of Indebtedness and
all other documents, instruments and certificates contemplated by
ARTICLE VI.
"WARN ACT" means the Worker Adjustment and Retraining
Notification Act of 1988, as amended, and the rules and regulations
thereunder.
1.2 OTHER DEFINITIONS. The following capitalized terms defined
elsewhere in this Agreement are defined in the sections indicated below.
TERM SECTION
Accounting Firm 2.6(c)
Actual Knowledge 1.1 (within definition of "Knowledge")
Acquired Assets 2.1
Agreement Introduction
APR Interest 2.1(u)
Assumed Contracts 2.1(h)
Assumed Liabilities 2.3
Base Cash Amount 2.5(a)
Basket 8.9
Xxxx of Sale 6.2(e)
Break-up Fee 7.2(b)
Business Recitals
Buyer Introduction
Buyer Advances 2.5(d)
Buyer Designee 3.6(d)
Buyer Disagreement Notice 2.6(c)
Buyer FDC Numbers 9.3(e)
Cash Amount Adjustments 2.6
Certificate of Indebtedness 6.2(m)
Ceiling 8.10(a)
Claim Notice 8.4(a)
Closing Cash Amount 2.5(a)
Closing Date 6.1
COBRA 3.15(g)
Common Stock 3.6(b)
Company Introduction
Company Disagreement Notice 2.6(c)
Company Shareholders Meeting 9.4(a)
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TERM SECTION
DEA License 6.1(c)
Disclosure Memorandum 3
Dispute Notice 8.6
Due Diligence 2.8
Due Diligence Period 2.8
Equipment 2.1(a)
Escrow Agent 2.10
Escrow Fund 2.10
Excluded Assets 2.2
Excluded Receivables 2.9(a)
Facility Purchase Agreement 6.2(f)
FDA Inspection 5.5(b)
Inventory 2.1(b)
Information Statement 5.10
Inventory Shortfall 8.12(a)
IP Contractors 3.14(e)
Leased Real Property 3.8(a)
Licensed Intellectual Property 3.14(c)
Loan and Security Agreement 2.5(d)
Majority Shareholders Introduction
Most Recent Balance Sheet 3.4(e)
Non-Paying Party 6.1(b)
Owned Real Property 3.8(a)
Outside Date 7.1(d)
Preliminary Statement 2.6(c)
Products 2.1(d)
Purchase Price 2.5(a)
Recommendation 5.6(b)
Receivables 2.1(c)
Registrations 9.3(a)
Required Shareholders Approval 3.6(b)
Restrictive Covenant Agreements 6.2(h)
SEC Reports 3.4(a)
Sellers Recitals
Sellers Contracts 3.12
Sellers Intellectual Property 3.14(a)
Sellers Real Property 3.8(a)
Sellers Registered Intellectual Property 3.14(b)
Sellers Software Programs 3.14(f)
Series A-1 Preferred Stock 3.6(b)
Series D-1 Preferred Stock 3.6(b)
Signing Date Introduction
Specified Employee 9.1(a)
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TERM SECTION
Statement 2.6(c)
Third Party 5.7
Third Party Intellectual Property 3.14(d)
Transaction Written Consent 3.6(c)
1.3 CONSTRUCTION. In interpreting this Agreement, the following rules
of construction shall apply:
(a) Where the context requires, the use of the singular form in
this Agreement will include the plural, the use of the plural will include the
singular, and the use of any gender will include any and all genders.
(b) The word "including" (and, with correlative meaning, the word
"include") means that the generality of any description preceding such word is
not limited, and the words "shall" and "will" are used interchangeably and have
the same meaning.
(c) References in this Agreement to "Articles", "Sections", or
"Exhibits" shall be to Articles, Sections or Exhibits of or to this Agreement
unless otherwise specifically provided.
(d) References to any agreement or contract are to such agreement
or contract as amended, modified or supplemented from time to time in accordance
with the terms hereof and thereof.
(e) References to any statute and related regulation shall
include any amendments of the same and any successor statutes and regulations.
(f) References to any Person include the successors and permitted
assigns of such Person.
(g) References "from" or "through" any date mean, unless
otherwise specified, "from and including" or "through and including,"
respectively.
ARTICLE II
PURCHASE AND SALE
2.1 PURCHASE OF ASSETS. Subject to the terms and conditions of this
Agreement, at the Closing (as defined in SECTION 6.1), Sellers shall sell,
transfer, convey, assign and deliver to Buyer, and Buyer shall purchase, acquire
and accept from Sellers, all of the assets of each Seller (other than the
Excluded Assets) (collectively, the "ACQUIRED ASSETS"), free and clear of all
Liens (other than Permitted Liens), expressly including, but not limited to:
(a) All vehicles, machinery, equipment (including HVAC
equipment), furniture, fixtures and other tangible personal property which are
specifically set forth on
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SCHEDULE 2.1(A) or are otherwise acquired by any Seller after the Signing Date
or owned by any Seller at the Closing Date ("EQUIPMENT");
(b) All raw materials (including API), supplies, work in progress
and inventory of finished products, including without limitation (i) those
specifically set forth on SCHEDULE 2.1(B), owned by any Seller and forming part
of the Business (collectively, "INVENTORY") and (ii) those acquired or produced
after the Signing Date and not sold in the ordinary course of business with
Schedule 2.1(b) to be supplemented by Company not later than ten (10) Business
Days prior to the Closing Date to reflect such additional Inventory and the
shelf life for each item listed thereon;
(c) All of the accounts, notes and other receivables of any
Seller and all rights relating thereto existing or accrued as of the Closing
Date ("RECEIVABLES"), including without limitation those specifically set forth
on SCHEDULE 2.1(C), other than the Excluded Receivables (as defined in SECTION
2.9 below);
(d) All products approved, pending approval and in development by
any Seller, whether or not discontinued or previously marketed (the "PRODUCTS"),
including without limitation (i) those specifically set forth on SCHEDULE 2.1(D)
and (ii) those produced after the Signing Date and not sold in the ordinary
course of business;
(e) All Intellectual Property owned by any Seller or licensed by
any Seller under the Assumed Contracts, including without limitation (i) the
rights of each Seller in and to any and all product names and logos, (ii) the
Product Scientific and Regulatory Material, (iii) the Product Intellectual
Property, and (iv) the Product Marketing Materials.
(f) All other owned intangible assets of each Seller, including
but not limited to the customer list and supplier list used in the Business;
(g) All ANDAs relating to Products under development by any
Seller, including without limitation (i) those specifically set forth on
SCHEDULE 2.1(G), (ii) any correspondence with the FDA in any Seller's files with
respect to such ANDAs, (iii) the right of reference to the Drug Master Files
included in such ANDAs, and (iv) annual reports relating to the ANDAs which are
filed with the FDA, and adverse event reports, history and statistics pertaining
to the Products;
(h) All Contracts of any Seller which are specifically set forth
on SCHEDULE 2.1(H) (the "ASSUMED Contracts");
(i) The existing lists of all customers for the Products (both
current customers and all Persons who were customers within the 24 month period
prior to the Signing Date); a list of the annual net sales to such customers; a
list including the name, and business contact information, of the Employee(s)
for each High Volume Account that is or has been responsible for the purchase of
the Products on behalf of the High Volume Account;
(j) All outstanding customer purchase orders for the Products;
(k) A list of all NDC Numbers;
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(l) The Product Reports;
(m) All books, records, and facility and equipment qualification
documents related to the manufacturing, packaging and testing of drug products
at the site including, but not limited to, manufacturing, packaging, and
laboratory facility qualification; HVAC qualification; compressed air
qualification; process equipment qualification; laboratory instrument
qualification; and water system validation;
(n) All books and records related to the Products under
development including, but not limited to laboratory notebooks, technical
reports, batch records, product evaluation reports, call reports and the like in
any way relating to the Business;
(o) All business and accounting records, data, supplier, dealer,
broker, distributor and customer lists, manuals, books, files, procedures,
systems, business records, production records, advertising materials and other
proprietary information relating to the Business, and copies of employee files
and records;
(p) All prepaid expenses in the ordinary course;
(q) All rights in and to any Permits;
(r) All Claims, deposits, refunds, rebates, causes of action,
choses in action, rights of recovery, and other rights of action against third
parties;
(s) All transferable warranties or similar rights in favor of
Sellers;
(t) All telephone and facsimile numbers and all domain names
associated with the Business;
(u) Sellers' entire right and interest in and to ten (10) Class A
limited liability company membership interests in APR, LLC, a Delaware limited
liability company (the "APR INTEREST");
(v) The right to enforce, for Buyer's benefit as a third party
beneficiary, any and all of Sellers' rights which directly or indirectly pertain
to non-disclosure, non-solicitation, non-competition, non-disparagement and
assignment of property covenants made by Sellers' Employees or directors under
any Contract, whether or not an Assumed Contract, and all rights under said
Contract ancillary to the foregoing; and
(w) All other intangible personal property and the goodwill
associated with the Business.
2.2 EXCLUDED ASSETS. Notwithstanding anything contained in SECTION 2.1
to the contrary, no Seller shall sell to Buyer, and Buyer shall not acquire from
any Seller, any of the following assets (collectively, the "EXCLUDED ASSETS"):
(i) any Seller's' corporate minute books, stock ledgers, certificates of
incorporation, bylaws, shareholders agreements, all employee files and records,
and related corporate documents and instruments, (ii) except as set forth in
SECTION 2.1(U) above, all shares of capital stock, limited liability company
interests or other securities
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which any Seller holds in any Subsidiary, (iii) all Contracts of each Seller
other than the Assumed Contracts, (iv) except as set forth in SECTION 9.4 below,
the rights of each Seller in and to the names and logos for "Interpharm",
"Interpharm Holdings", "Micro Computers Store", Innovative Business Micros"
"Logix Solutions and "Saturn Chemical," (v) any Excluded Receivables, and (vi)
the assets listed on SCHEDULE 2.2.
2.3 ASSUMPTION OF LIABILITIES. As of and after the Closing Date, Buyer
shall assume only the following liabilities and responsibilities (collectively,
the "ASSUMED LIABILITIES"), and no others:
(a) the capital leases set forth on SCHEDULE 2.3(A);
(b) the trade payables set forth on SCHEDULE 2.3(B);
(c) the pending litigation against the Acquired Assets or the
Business set forth on SCHEDULE 2.3(C); PROVIDED, HOWEVER, that Buyer shall not
assume any pending litigation matter (and the parties shall cause SCHEDULE
2.3(C) to be amended to remove any pending litigation matter) if and to the
extent that (i) Buyer has elected, by written notice to Company given at any
time prior to the expiration of the Due Diligence Period, to not assume such
pending litigation, or (ii) Buyer and Company are unable to mutually agree upon
a dollar value to assign to the liability of Company associated with such
pending litigation after good faith negotiations during the Due Diligence Period
in accordance with SECTION 2.6(A)(II) below;
(d) the performance obligations of each Seller under all Assumed
Contracts, but solely with respect to performance obligations arising after the
Closing Date; PROVIDED, HOWEVER, that Buyer shall have assumed substantially all
of the outstanding Contracts that are not subject to either (i) any dispute with
or adverse claim by any Seller or the other contracting party, or (ii) any
pending or threatened litigation, and provided, further, however that subject to
the prior proviso, Buyer shall not assume any Contract (and the parties shall
cause SCHEDULE 2.1(H) to be amended to remove any Contract from the list of
Assumed Contracts) if and to the extent that Buyer has elected, by written
notice to Company given not less than five (5) Business Days prior to Closing,
to not assume such Contract; and
(e) all other Contracts entered into by any Seller after the date
of this Agreement but prior to the Closing which were consented to in writing by
Buyer prior to their execution by such Seller.
SCHEDULE 2.1(H) shall be amended prior to the Closing to include all Contracts
described in clause (e) above.
2.4 EXCLUDED LIABILITIES. Except as expressly provided in SECTION 2.3
above, Buyer shall not assume or be liable for any liabilities, obligations or
duties of any Seller, whether known or unknown, absolute, contingent or
otherwise. Without limiting the preceding sentence, except as expressly provided
in SECTION 2.3 above, Buyer will not assume or be responsible for any of the
following:
(a) any liability or obligation of any Seller for any Taxes;
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(b) any liability or obligation, to the extent associated with or
arising out of any Excluded Asset;
(c) any Indebtedness of any Seller;
(d) any liability or obligation of any Seller to indemnify any
Person;
(e) any Claims or pending or threatened litigation against the
Acquired Assets or the Business relating to events occurring prior to the
Closing Date regardless of when such Claims are asserted or such litigation or
proceedings commenced;
(f) any liability or obligation of any Seller relating to
intercompany obligations or other obligations between any Seller and any
shareholder or any other Affiliate of such Seller;
(g) any liability or obligation of any Seller for Expenses
incurred in connection with the transactions contemplated by this Agreement and
the other Transaction Documents;
(h) accrued workers' compensation and medical insurance
liabilities;
(i) any liability or obligation under any Employee Benefit Plan;
(j) any liability or obligation owed to Employees or directors,
including, but limited to any severance, success or other fees contingent upon
consummation of this transaction and any liabilities for accrued but unpaid
vacation, sick leave or other paid time off;
(k) any liability or obligation associated with or arising out of
any Receivables, except for (i) the obligation to honor any sales returns which
are made more than sixty (60) days after the Closing Date and are dated not less
than twelve (12) months prior to its expiration at the time of its return, (ii)
any product recall for product lots whose manufacturing began prior to the
Closing Date and were completed after the Closing Date, and (iii) to the extent
covered by reserves as of the Closing Date, for any returns, credits,
allowances, rebates, prebates or chargebacks;
(l) any liability or obligation of any Seller under any Contract
which is not an Assumed Contract; or
(m) any liability or obligation of any Seller under this
Agreement.
2.5 PURCHASE PRICE.
(a) AMOUNT OF PURCHASE PRICE. In full and complete consideration
for the acquisition of the Acquired Assets, at the Closing Buyer shall (i) pay
to Company the sum of Sixty Five Million Dollars ($65,000,000.00) (the "BASE
CASH AMOUNT"), as adjusted pursuant to SECTION 2.6 below (the Base Cash Amount,
as so adjusted, the "CLOSING CASH AMOUNT"), (ii) deliver to the Escrow Agent the
Escrow Amount, and (iii) assume the Assumed Liabilities as set forth in SECTION
2.3 hereof (clauses (i)-(iii) collectively, the "PURCHASE PRICE").
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(b) PAYMENT OF CLOSING CASH AMOUNT. On the Closing Date, the
Closing Cash Amount shall be payable in such amounts and to such bank accounts
as may be directed in writing by Company at least three (3) Business Days prior
to the Closing in immediately available funds.
(c) CASH TO BE PAID INTO ESCROW. On the Closing Date, Buyer shall
deposit with the Escrow Agent a cash amount equal to the Escrow Amount, to be
held and released by the Escrow Agent in escrow in accordance with SECTION 2.10
below.
(d) ADVANCES AGAINST CLOSING CASH AMOUNT. From the Signing Date
until the earlier to occur of the Closing Date or the termination of this
Agreement in accordance with SECTION 7.1, Buyer or an Affiliate thereof shall
advance, as a credit against the Closing Cash Amount, such amounts (the "BUYER
ADVANCES") required by the Loan and Security Agreement in the form attached as
EXHIBIT A hereto (the "LOAN AND SECURITY AGREEMENT") or made by Buyer pursuant
to SECTION 5.1(B)(XII) below. If this Agreement shall be terminated for any
reason in accordance with SECTION 7.1 below, then all Buyer Advances shall be
subject to the repayment terms set forth in the Loan and Security Agreement.
2.6 ADJUSTMENTS TO BASE CASH AMOUNT.
(a) ADJUSTMENTS TO BASE CASH AMOUNT. At Closing, the Base Cash
Amount shall be adjusted as follows (the "CASH AMOUNT ADJUSTMENTS"):
(i) the Base Cash Amount shall be reduced by an
amount equal to the aggregate Buyer Advances existing at
Closing;
(ii) the Base Cash Amount shall be reduced by an
amount equal to the amount of the Assumed Liabilities
assumed under SECTIONS 2.3(A), 2.3(B) and 2.3(C); PROVIDED,
HOWEVER, that the dollar amount ascribed to the liability of
the pending litigation assumed under SECTION 2.3(C) shall be
as mutually agreed by Buyer and Company after good faith
negotiations during the Due Diligence Period (subject to the
provisos to SECTION 2.3(C)) and, if the parties cannot so
agree on a dollar amount to be ascribed to the liability for
any pending litigation matter, such pending litigation
matter shall not be assumed by Buyer;
(iii) the Base Cash Amount shall be increased by
an amount equal to the amount of the face value of the
Receivables (other than the Excluded Receivables)
outstanding as of the Closing which have not been
outstanding more than ninety (90) days for retail accounts
and one hundred twenty (120) days for wholesale accounts
since invoicing (less reserves for returns, allowances,
credits, rebates, prebates and chargebacks in amounts
satisfactory to Buyer and consistent with Sellers' past
practices);
(iv) the Base Cash Amount shall be reduced by an
amount equal to the amount of the purchase price for the
Facility under the Facility Purchase Agreement; and
(v) the Base Cash Amount shall be reduced by an
amount equal to the
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amount of any reductions in the aggregate dollar value
ascribed to Inventory (net of reserves) between the Signing
Date and the Closing Date, as determined in accordance with
SECTION 2.6(B) below.
(b) DETERMINATION OF INVENTORY. On or prior to the fifth (5th)
Business Day prior to the Closing Date, Company shall deliver to Buyer a written
statement setting forth in reasonable detail a list of Inventory and the
calculation by Company of the dollar values thereof and the computations used in
connection therewith. The dollar values ascribed to Inventory shall be based on
Company's accounting and valuation methods consistent with past practices and
consistently applied, provided that any Inventory with a shelf life of less than
fourteen (14) months (except for Midrin which shall have a minimum shelf life of
twelve (12) months) shall be ascribed no value. During the two (2) Business Day
period following the receipt by Buyer of such statement, Buyer and its
Representatives shall be permitted to: (i) review during normal business hours
and make copies reasonably required of (x) the working papers of Company
relating to the preparation of such statement and (y) any supporting schedules,
supporting analyses and other supporting documentation relating to the
preparation of such statement; and (ii) perform a reasonable spot check
(physical count) of the Inventory. In the event Buyer disagrees with the dollar
values ascribed to Inventory reflected on such statement, Buyer and Company
shall seek in good faith to resolve in writing any differences which they may
have with respect thereto on or prior to Closing Date. At the close of business
on the day before Closing, parties will update (as of such date) the list of
Inventory and the calculation of the dollar values thereof for the changes from
the date the above referenced Inventory statement was first delivered to Buyer.
At Closing, the Base Cash Amount shall be adjusted in accordance with SECTION
2.6(A)(V) above based on the determinations made pursuant to this SECTION
2.6(B). Such determination and adjustment shall be final and binding on all
parties, and no further adjustments based on SECTION 2.6(A)(V) above shall be
made pursuant to SECTION 2.6(C) below.
(c) ADJUSTMENT PROCESS.
(i) Notwithstanding anything herein to the
contrary, for purposes of this SECTION 2.6(C), THE TERMS
"Cash Amount Adjustments" and "Closing Cash Amount" shall be
deemed to exclude the adjustments under SECTION 2.6(A)(V),
which shall instead be determined in accordance with SECTION
2.6(B) above and adjusted at the Closing.
(ii) On or prior to the fifth (5th) Business Day
prior to the Closing Date, Company shall deliver to Buyer a
written statement (the "PRELIMINARY STATEMENT") setting
forth in reasonable detail the calculation by Company of the
Closing Cash Amount, the Cash Amount Adjustments and the
computations used in connection therewith. During the two
(2) Business Day period following the receipt by Buyer of
the Preliminary Statement, Buyer and its representatives
shall be permitted to review during normal business hours
and make copies reasonably required of (x) the working
papers of Company, and, if relevant, its independent
auditors relating to the preparation of the Preliminary
Statement and (y) any supporting schedules, supporting
analyses and other supporting documentation relating to the
preparation of the Preliminary Statement.
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(iii) In the event Buyer disagrees with the
Closing Cash Amount or the Cash Amount Adjustments reflected
on the Preliminary Statement, Buyer shall notify Company of
such disagreement within two (2) Business Days after receipt
thereof (the "BUYER DISAGREEMENT NOTICE"), such Buyer
Disagreement Notice to include the amount Buyer believes to
be the correct Closing Cash Amount and/or Cash Amount
Adjustments, as the case may be. If the Buyer Disagreement
Notice is not received by Company within such two Business
Day period, the Closing Cash Amount and the Cash Amount
Adjustments included in the Preliminary Statement shall be
used in order to determine the Purchase Price paid at
Closing.
(iv) If a Buyer Disagreement Notice which disputes
the Closing Cash Amount or the Cash Amount Adjustments
included in the Preliminary Statement is received by Company
within such two (2) Business Day period, then:
(x) the Closing Cash Amount used in
order to determine the Purchase Price paid
at Closing shall be the lower of: (A) the
Closing Cash Amount included in the
Preliminary Statement; and (B) the Closing
Cash Amount included in the Buyer
Disagreement Notice; and
(y) within thirty (30) days after
the Closing, Buyer shall prepare and deliver
to Company a written statement (the
"STATEMENT") setting forth in reasonable
detail its calculation of Closing Cash
Amount and the Cash Amount Adjustments.
(v) During the ten (10) day period following the
receipt by Company of the Statement, Company and their
Representatives shall be permitted to review during normal
business hours and make copies reasonably required of (x)
the working papers of Buyer, Company and, if relevant, its
independent auditors relating to the preparation of the
Statement and (y) any supporting schedules, supporting
analyses and other supporting documentation relating to the
preparation of the Statement. The Statement shall become
final and binding upon the parties on the tenth (10th) day
following delivery thereof, except to the extent that
Company gives written notice of disagreement with the
Statement (the "COMPANY DISAGREEMENT NOTICE") to Buyer prior
to such date. Any Company Disagreement Notice shall (A)
specify in reasonable detail the nature of any disagreement
so asserted (any such disagreement to be limited to whether
such calculation of Closing Cash Amount and the Cash Amount
Adjustments are mathematically correct and/or have been
prepared in accordance with the definition of the Closing
Cash Amount and the Cash Amount Adjustments, and the
definitions included in such definitions) and (B) if
independent auditors are engaged by Company in connection
with the preparation of the Company Disagreement Notice, be
accompanied by a certificate of the independent auditors of
Company that they concur with each of the positions taken by
Company in the Company Disagreement Notice. If a Company
Disagreement
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Notice complying with the preceding sentence is received by
Buyer in a timely manner, then the Statement (as revised in
accordance with clause (I) or (II) below) shall become final
and binding upon the parties on the earlier of (I) the date
Buyer and Company resolve in writing any differences they
have with respect to the matters specified in the Company
Disagreement Notice or (II) the date any disputed matters
are finally resolved in writing by the Accounting Firm (as
defined below).
(vi) During the fifteen (15) day period following
the delivery of a Company Disagreement Notice that complies
with the preceding paragraph, Buyer and Company shall seek
in good faith to resolve in writing any differences which
they may have with respect to the matters specified in the
Company Disagreement Notice. During such period, Buyer and
its independent auditors shall be permitted to review and
make copies reasonably required of (i) the working papers of
Company and, if relevant, the designated independent
auditors (if any) of Company relating to the preparation of
the Company Disagreement Notice and (ii) any supporting
schedules, supporting analyses and other supporting
documentation relating to the preparation of the Company
Disagreement Notice.
(vii) If, at the end of such fifteen (15) day
period, the differences as specified in the Company
Disagreement Notice are not resolved, Company and Buyer
shall within ten (10) days following the end of such fifteen
(15) day period engage a nationally recognized independent
accounting firm mutually and reasonably acceptable to Buyer
and Company (the "ACCOUNTING FIRM") and submit to the
Accounting Firm for review and resolution of any and all
matters which remain in dispute and which are properly
included in the Company Disagreement Notice. In acting
hereunder, the Accounting Firm shall be acting as accounting
experts and not as arbitrators. In resolving any disputed
item, the Accounting Firm shall: (i) be bound by the
provisions of this SECTION 2.6 and the definitions of
Closing Cash Amount and Cash Amount Adjustments and the
definitions included in such definitions; and (ii) limit its
review to matters still in dispute as specifically set forth
in the Company Disagreement Notice (and only to the extent
such matters are still in dispute following such fifteen
(15) day period). The Accounting Firm's determination of any
item that is a component of Closing Cash Amount or Cash
Amount Adjustments and is the subject of a dispute cannot,
however, be in excess of, or less than, the greatest or
lowest value, respectively, claimed for any particular item
in the Statement or the Company Disagreement Notice (or, if
different, the value claimed by the relevant party at the
end of such fifteen (15) day period). Company and Buyer
shall each use their reasonable efforts to cause the
Accounting Firm to render a decision resolving the matters
in dispute within thirty (30) days following the submission
of such matters to the Accounting Firm. Company and Buyer
agree that judgment may be entered upon the determination of
the Accounting Firm in any court having jurisdiction over
the party against which such determination is to be
enforced.
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(viii) Except as specified in the following
sentence, the fees and expenses of the Accounting Firm in
connection with the Accounting Firm's determination of
Closing Cash Amount or Cash Amount Adjustments pursuant to
this SECTION 2.6 shall be borne, in its entirety, by the
party whose calculation of the Closing Cash Amount as
initially submitted to the Accounting Firm is furthest away
from the Closing Cash Amount as determined by the Accounting
Firm. The fees and expenses of Buyer's independent auditors
(if any) incurred in connection with the issuance of the
Statement and review of the Company Disagreement Notice, if
any, shall be borne by Buyer, and the fees and expenses of
the independent auditors of Company incurred in connection
with their review of the Statement and their preparation of
the Company Disagreement Notice, if any, shall be borne by
Company.
(ix) If the Closing Cash Amount as determined by
the Accounting Firm is greater than the Closing Cash Amount
used in order to determine the Purchase Price paid at
Closing, Buyer shall, within five (5) Business Days after
the final determination of the Closing Cash Amount and Cash
Amount Adjustments, make payment to Company, by wire
transfer of immediately available funds, of the amount of
such excess. If the Closing Cash Amount as determined by the
Accounting Firm is less than the Closing Cash Amount used in
order to determine the Purchase Price paid at Closing,
Company shall, within five (5) Business Days after the final
determination of the Closing Cash Amount and Cash Amount
Adjustments, make payment to Buyer, by wire transfer of
immediately available funds, of the amount of such
shortfall. Buyer and Company agree that the amount of any
payment to be made pursuant to this SECTION 2.6(C)(VIII)
shall bear interest from (and including) the Closing Date to
(but excluding) the date of payment at a rate per annum
equal to the "prime rate" of interest in effect at Xxxxx
Fargo on the Closing Date. Such interest shall be payable at
the same time as the payment to which it relates and shall
be calculated daily, on the basis of a year of 365 days and
the actual number of days elapsed, and compounded annually.
(x) Any payment required to be made under this
SECTION 2.6 shall be deemed an adjustment to the Purchase
Price.
2.7 ALLOCATION OF CONSIDERATION AMONG ACQUIRED ASSETS. Buyer and
Sellers shall file all income tax returns or reports, including without
limitation, IRS Form 8594, for their respective taxable years in which the
Closing occurs to reflect an allocation of the Consideration among the Acquired
Assets in a manner consistent with the allocations set forth on SCHEDULE 2.7 and
Buyer and Sellers shall not take any position inconsistent therewith before any
Governmental Authority charged with the collection of taxes or in any judicial
proceedings relating to such tax reporting.
2.8 DUE DILIGENCE CONTINGENCY. Buyer shall have a period, commencing
on the Signing Date and ending on the earlier of the Closing Date and April 30,
2008 (the "DUE DILIGENCE PERIOD"), to conduct (directly and through its
Representatives) any and all legal, regulatory, financial, business,
environmental and other investigations, evaluations and
20
inspections regarding the assets, liabilities, prospects, vendors, customers,
Employees, operations and affairs of the Business, Sellers and their Products
and the Sellers Real Property (the "DUE DILIGENCE") as desired by Buyer
(including, but not limited, to a review of the ANDAs and the intellectual
property matters applicable to each of such Products). If Buyer is not
satisfied, in its sole discretion, with the results of its Due Diligence, it may
elect to exercise its termination rights pursuant to SECTION 7.1(E), upon the
conditions and subject to the limitations set forth therein.
2.9 EXCLUDED RECEIVABLES.
(a) Buyer shall have the right to elect, by written notice to
Company given at any time within the Due Diligence Period, to not assume such
Receivables as it may choose having an aggregate face amount of not more than
Three Hundred Thousand Dollars ($300,000) (any Receivables which Buyer so elects
not to assume are hereinafter referred to as "EXCLUDED RECEIVABLES"). Buyer
shall, at no cost to Buyer, use commercially reasonable efforts (consistent with
its own receivables collection practices) to assist Company in the collection of
and/or collect the Excluded Receivables on Company's behalf.
(b) From and after the Closing, Company shall have the right and
authority to collect for its own account all Excluded Receivables and to endorse
any checks or drafts received with respect to any Excluded Receivables. Buyer
will promptly deliver to Company any cash or other property received directly or
indirectly by it with respect to the Excluded Receivables, including any amounts
payable as interest.
2.10 ESCROW FUND ARRANGEMENT.
(a) On the Closing Date, Buyer will deliver to Sovereign Bank or
such financial institution as may be proposed by Buyer and reasonably acceptable
to Company (the "ESCROW AGENT") by wire transfer of immediately available funds,
a cash amount equal to the Escrow Amount, which amount shall be held in
accordance with SECTION 2.5(C) above (together with all interest earned thereon,
the "ESCROW FUND") all pursuant to the terms of an agreement among the Escrow
Agent, Buyer and Company in form and substance as may be mutually agreed by the
parties (the "ESCROW AGREEMENT"). Each of Company and Buyer covenants to
endeavor to negotiate in good faith and use its diligent efforts to reach mutual
agreement on the terms of the Escrow Agreement prior to the expiration of the
Due Diligence Period. The Escrow Fund shall be available for any of Buyer's
indemnity claims as set forth in ARTICLE VIII below or any payment required to
be made to Buyer under SECTION 2.6.
(b) The Escrow Fund shall be held as a trust fund, shall be the
property of Buyer pending disbursement to Sellers and shall not be subject to
any Lien, attachment, trustee process or any other judicial process of any
creditor of any party, and shall be held and disbursed solely for the purposes
and in accordance with the respective terms of the Escrow Agreement.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF
COMPANY
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As promptly as practicable after the Signing Date but not later than
April 24, 2008, Company shall deliver to Buyer a Disclosure Memorandum dated as
of the date of this Agreement and signed by an officer of Company duly
authorized by its Board of Directors (the "DISCLOSURE MEMORANDUM") setting forth
certain information regarding Sellers and the Business. The disclosures set
forth in the Disclosure Memorandum qualify only those representations and
warranties specifically referenced and referred to in the Disclosure Memorandum
as relating to such disclosures and a disclosure related to any particular
representation and warranty shall not qualify any other representation unless so
expressly stated. To induce Buyer to enter into and perform this Agreement,
Company hereby represents and warrants that, except as otherwise set forth in
the Disclosure Memorandum, each of the representations, warranties and
statements in the following paragraphs of this ARTICLE III is true and correct
as of the date of this Agreement and as of the Closing Date:
3.1 EXISTENCE AND GOOD STANDING.
(a) Interpharm Holdings, Inc. is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware
and Interpharm, Inc. is a corporation duly organized, validly existing and in
good standing under the laws of the State of New York, and each of them has all
requisite power and authority to own, lease and operate its properties and to
carry on its business as now being conducted and as currently contemplated to be
conducted. Each of the other Sellers is a corporation or limited liability
company duly organized, validly existing and in good standing under the laws of
the jurisdiction of its formation, with all requisite power and authority to
own, lease and operate its properties and to carry on its business as now being
conducted and as currently contemplated to be conducted.
(b) Each Seller is qualified or licensed as a foreign corporation
or limited liability company in each jurisdiction in which the character or
location of the property owned, leased or operated by it or the nature of the
business conducted by it makes such qualification necessary, which jurisdictions
are listed on PART 3.1(B) of the Disclosure Memorandum.
(c) Except as set forth on PART 3.1(C) of the Disclosure
Memorandum, no Seller has any Subsidiaries or otherwise owns any interest in any
other Person.
3.2 CAPITALIZATION. The authorized capital stock and issued and
outstanding capital stock or limited liability company interests, as applicable,
of each Seller, together with the shareholders or members thereof, are as set
forth on PART 3.2 of the Disclosure Memorandum. All of the outstanding capital
stock or limited liability company interests, as applicable, of Sellers has been
duly authorized, validly issued and is fully paid and nonassessable and none of
such capital stock or limited liability company interests, as applicable, was
issued in violation of any preemptive or preferential right. Except as set forth
on PART 3.2 of the Disclosure Memorandum, there are no (i) outstanding
conversion or exchange rights, subscriptions, options, warrants or other
arrangements or commitments obligating any Seller to issue any capital stock,
limited liability company interests or other securities, (ii) outstanding or
authorized stock appreciation, phantom stock or similar rights with respect to
any Seller, or (iii) agreements, written or oral, relating to the acquisition,
disposition, voting or registration under applicable securities laws of any
capital stock, limited liability company interests or other securities of any
Seller. All of the Business is carried out and owned by Sellers.
22
3.3 AUTHORIZATION.
(a) Company (and to the extent a party thereto, each of the other
Sellers) has full power, capacity and authority to execute this Agreement and
all other agreements and documents contemplated hereby to which it is or will be
a party, subject to receipt of the Required Shareholder Approval in accordance
with the DGCL. The execution and delivery of this Agreement and such other
agreements and documents by Company (and to the extent a party thereto, each of
the other Sellers) and the consummation by Company (and to the extent a party
thereto, each of the other Sellers) of the transactions contemplated hereby has
been duly authorized by such Seller and its board of directors, and no other
action on the part of such Seller is necessary to authorize the transactions
contemplated hereby, subject to receipt of the Required Shareholder Approval in
accordance with the DGCL and, if applicable to Company, the applicable rules and
regulations of AMEX (except to the extent that failure to be in compliance with
such rules and regulations would not render this Agreement or the Transaction
Written Consent invalid, void or unenforceable in any material respect). This
Agreement has been duly executed and delivered by Company and constitutes the
valid and binding obligation of Company, enforceable in accordance with its
terms, except that (i) enforcement may be subject to bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' rights
generally, and (ii) the remedies of specific performance and injunctive relief
are subject to certain equitable defenses and to the discretion of the court
before which any proceedings may be brought.
3.4 SEC REPORTS; FINANCIAL STATEMENTS.
(a) SEC REPORTS. Company has filed all forms, reports and
documents required to be filed by it with the SEC since May 30, 2003 (including,
without limitation, Sellers' Annual Report on Form 10-K for the years ended June
30, 2006 and June 30, 2007, Sellers' Quarterly Reports on Form 10-Q for the
quarters ended September 30, 2007 and December 31, 2007, and Company's proxy
statement for its 2006 and 2007 Annual Meetings of Shareholders and all
certifications and statements required by Rule 13a-14 or 15d-14 under the
Exchange Act or 18 U.S.C. ss.1350 (Section 906 of SOX) with respect to any
Annual Reports), pursuant to the federal securities laws and the SEC's rules and
regulations thereunder, and SOX and all rules and regulations thereunder
(collectively, and together with all forms, reports and documents filed by
Company with the SEC after the date of this Agreement, including any amendments
thereto, the "SEC REPORTS"). The SEC Reports were or will, as applicable, be
prepared in accordance with the requirements of the Securities Act and the
Exchange Act, as the case may be, and the rules and regulations thereunder. As
of their respective dates, none of the SEC Reports, including, without
limitation, any financial statements or schedules included therein, contained
any untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. No Seller other than Company is or has been required to file any
form, report, registration statement or other document with the SEC.
(b) DISCLOSURE CONTROLS AND PROCEDURES. Sellers maintain
disclosure controls and procedures required by Rule 13a-15 or 15d-15 under the
Exchange Act. Such controls and procedures are effective to ensure that all
material information concerning Sellers is made known on a timely basis to the
individuals responsible for the preparation of Company's filings with the
23
SEC and other public disclosure documents. As used in this SECTION 3.4, the term
"file" shall be broadly construed to include any manner in which a document or
information is furnished, supplied otherwise made available to the SEC.
(c) FINANCIAL STATEMENTS. The Financial Statements included in
the SEC Reports, as of their respective dates, (i) complied (or, in the case of
the SEC Reports filed after the date hereof, will comply) in all material
respects with applicable accounting requirements and the published rules and
regulations of the SEC with respect thereto, (ii) were prepared (or, in the case
of the SEC Reports filed after the date hereof, will be prepared) in accordance
with GAAP applied on a basis consistent with prior periods (except as otherwise
noted therein), and (iii) present fairly (or, in the case of the SEC Reports
filed after the date hereof, will present fairly) the consolidated financial
position of Sellers as of their respective dates, and the consolidated results
of their operations and their cash flows for the periods presented therein
(subject, in the case of the unaudited interim financial statements, to notes
and normal year-end adjustments that were not, or with respect to any such
financial statements contained in any of the SEC Reports to be filed subsequent
to the Signing Date are not reasonably expected to be, material in amount or
effect).
(d) SOX CERTIFICATIONS. To the extent required by Law, Company
has complied with all certification requirements under Sections 302 and 906 of
SOX. Such certifications contain no qualifications or exceptions to the matters
certified therein and have not been modified or withdrawn. Neither Company nor
any of it officers has received notice from any Governmental Authority
questioning or challenging the accuracy, completeness, form or manner of filing
or submission of such certifications.
(e) UNDISCLOSED LIABILITIES. Except (i) as reflected in Sellers'
unaudited consolidated balance sheet at December 31, 2007, a copy of which is
attached as PART 3.4(E) of the Disclosure Memorandum (the "MOST RECENT BALANCE
SHEET") or liabilities described in any notes thereto (or liabilities for which
neither accrual nor footnote disclosure is required pursuant to GAAP), (ii) for
liabilities incurred in the ordinary course of business since December 31, 2007
consistent with past practice or in connection with this Agreement or the
transactions contemplated hereby, or (iii) performance obligations under
Contracts required in accordance with their terms, or performance obligations,
to the extent required under applicable Laws, in each case to the extent arising
after the date hereof, no Seller has any material liabilities or obligations of
any nature (whether accrued, absolute, contingent or otherwise) required by GAAP
to be set forth on a financial statement or in the notes thereto. Since the date
of the Most Recent Balance Sheet, the Business has been conducted only in the
ordinary course consistent with past practice and there has not been any change
in the accounting methods, principles or practices of any Seller.
(f) OFF-BALANCE SHEET ARRANGEMENTS. Sellers have not effected any
securitization transactions or "off-balance sheet arrangements" (as defined in
Item 303(c) of Regulation S-K of the SEC) since May 30, 2003. Sellers has
delivered or made available to Buyer copies of the documentation creating or
governing all such all securitization transactions and off-balance sheet
arrangements.
(g) AUDITORS. Except for assistance in the preparation of the
Seller's tax
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returns, Xxxxxx & Xxxxxxxx LLP has not performed any non-audit services for any
Seller since the Most Recent Audit Date. There has been no change in Sellers'
accountants since the Most Recent Audit Date. No Seller has been in any material
disputes with Xxxxxx & Kliegman LLP since the Most Recent Audit Date, which, in
any such case, were required to be disclosed in the SEC Reports and were not so
disclosed.
(h) BOOKS AND RECORDS. The books of account of Sellers, including
the Financial Statements and the Most Recent Balance Sheet, are true, complete
and correct and fairly reflect, in accordance with GAAP, (i) all transactions
relating to Sellers and (ii) all items of income and expense, assets and
liabilities and accruals relating to Sellers. No Seller has engaged in any
transaction, maintained any bank account or used any corporate funds except for
transactions, bank accounts and funds that have been and are reflected in the
normally maintained books and records of such Seller.
3.5 NO VIOLATION. Except as set forth on PART 3.5 of the
Disclosure Memorandum, the execution, delivery and performance of this Agreement
and the other agreements and documents contemplated hereby by Company (and to
the extent a party thereto, the other Sellers) and the consummation of the
transactions contemplated hereby will not (i) violate any provision of the
certificates of incorporation, bylaws or other governing documents of any
Seller, (ii) violate any Laws by which any Seller or any of its properties or
assets are bound, or (iii) result in a violation or breach of, or constitute a
default under, or result in the creation of any Lien upon, or create any rights
of termination, cancellation or acceleration in any Person with respect to any
Contract to which any Seller is a party or by which the Acquired Assets are
bound or any Permit of any Seller.
3.6 CONSENTS; SHAREHOLDER APPROVALS.
(a) CONSENTS. Set forth on PART 3.6 of the Disclosure Memorandum
is a complete and accurate list of all material consents, approvals or other
authorizations of any Governmental Authority, or under any material Contract to
which any Seller is a party or by which its assets are bound, which are required
as a result of or in connection with the execution or delivery of this Agreement
and the other agreements, documents and instruments to be executed by any Seller
hereunder or the consummation by any Seller of the transactions contemplated
hereby and thereby.
(b) SHAREHOLDER APPROVALS. The affirmative vote of a majority of
the outstanding shares of Company's common stock, par value $.01 per share (the
"COMMON STOCK"), Company's Series A-1 Preferred Stock, par value $.01 per share
(the "SERIES A-1 PREFERRED STOCK"), Company's Series D-1 Preferred Stock, par
value $.01 per share (the "SERIES D-1 PREFERRED STOCK"), voting together as a
single class, in favor of the adoption of this Agreement at a meeting at which a
quorum is present (such votes are hereinafter collectively referred to as the
"REQUIRED SHAREHOLDER APPROVAL") are the only votes of the holders of any class
or series of any Seller's securities necessary to approve this Agreement and the
transactions contemplated hereby.
(c) OBTAINED APPROVALS. On or before the Signing Date, Company has delivered to
Buyer: (i) a resolution of the Board of Directors of Company approving each of
the
25
Transaction Documents and authorizing its officers to execute, deliver and
consummate each of the transactions under each of the Transaction Documents;
(ii) Xxxxx Fargo Bank, N.A.'s signature to both (A) a binding written approval
of the execution, delivery and consummation of each of the transactions under
this Agreement and the Facility Purchase Agreement and (B) an intercreditor
agreement with Buyer in respect of the Buyer Advances; and (iii) a binding
written consent approving the execution, delivery and consummation of each of
the transactions under each of the Transaction Documents (the "TRANSACTION
WRITTEN CONSENT") signed by the holders of (A) a majority of the outstanding
shares of the Series A-1 Preferred Stock, (B) all of the outstanding shares of
the Series D-1 Preferred Stock, and (C) a majority of the outstanding shares of
the Common Stock. Set forth on PART 3.6 of the Disclosure Memorandum is a
complete and accurate list of each of the Company shareholders who have signed
the Transaction Written Consent and the number of shares of each class and
series of capital stock of the Company owned by each of them.
3.7 TAX MATTERS.
(a) RETURNS AND REPORTS. All Tax returns and reports required to
be filed prior to the date hereof by or on behalf of Sellers are true, correct
and complete in all respects, have been duly and timely filed in accordance with
all applicable Laws and such returns and reports required to be filed on or
before the Closing Date will be, or have been, duly and timely filed or
extensions of time within which to file such returns will have been obtained,
and the income, activities, operations and transactions of Sellers have been or
will be properly included and correctly reflected thereon.
(b) PAYMENT. Each Sellers has paid or, in case of Taxes not yet
due, have made adequate provision on the Most Recent Balance Sheet for the
payment of all Taxes for which it (or any other Seller) is or may become liable
for payment. All Tax deficiencies assessed against any Seller for which it (or
any other Seller) may be directly or indirectly liable as a result of any
examination of Tax returns of it (or any other Seller) has been paid. No Seller
is, as of the date hereof, the subject of any audit or other proceeding in
respect of payment of Taxes for which it (or any other Seller) may be directly
or indirectly liable and no such proceeding has been threatened.
(c) EXTENSIONS. No agreements, waivers, or other arrangements
exist providing for an extension of time or statutory periods of limitations
with respect to payment by, or assessment against, any Seller for any Tax for
which it (or any other Seller) may be directly or indirectly liable and no
written request for any such agreement, waiver or other arrangement has been
made and is currently outstanding.
(d) PROCEEDINGS. No Actions or Claims have been asserted or are
threatened against any Seller in respect of any Tax for which it (or any other
Seller) may be directly or indirectly liable.
(e) TAX LIENS. There are no Tax Liens as of the date hereof upon
any of the assets of any Seller, except for statutory Liens for Taxes not yet
due or delinquent.
(f) WITHHOLDING. The amounts of Taxes withheld by or on behalf of
each
26
Seller with respect to all compensation paid to Employees of such Seller for all
periods ending on or before the date hereof and the Closing Date have been (or
will be, as the case may be) proper and accurate in all respects, and all
deposits required with respect to compensation paid to such Employees have been
(or will be) made in compliance in all respects with the provisions of all
applicable Tax Laws.
3.8 REAL PROPERTY, PERSONAL PROPERTY AND ASSETS.
(a) REAL PROPERTY.
(i) No Seller owns, nor has it previously owned, nor does
any Seller hold any options or contractual obligations to purchase or acquire
any interest in, any real property (an "OWNED REAL PROPERTY") other than the
Facility. Each Seller has good and valid title to all of its respective Owned
Real Property, in each case free and clear of all Liens except Permitted Liens.
(ii) Set forth on Part 3.8(A)(II) of the Disclosure
Memorandum is a list of all leases and subleases of any real property to which
any Seller is a party (each, a "LEASED REAL PROPERTY"). Each Seller has good and
valid title to the leasehold estates in all of its respective Leased Real
Property, in each case free and clear of all Liens except Permitted Liens.
(iii) Each Owned Real Property and Leased Real Property and
each of the Improvements thereon (collectively, the "SELLERS REAL PROPERTY") is
in good operating condition and repair, ordinary wear and tear excepted, and is
suited for the operation of the Business as presently conducted and as presently
proposed to be conducted. There is no condition or defect of the Sellers Real
Property thereon that could materially affect their use or operation in the
Business. Sellers enjoy peaceful and undisturbed possession of all Sellers Real
Property. Sellers have valid easements and rights of way necessary to conduct
the Business as it is currently conducted and proposed to be conducted, and
following the consummation of the Closing, such easements and rights of way will
remain valid and in full force and effect. No options have been granted by any
Seller to others to purchase, lease or otherwise acquire any interest in any
Sellers Real Property or any part thereof. Sellers have the exclusive right of
possession of all Sellers Real Property.
(iv) To the Knowledge of Company, all aspects of the Sellers
Real Property and the present use, occupancy and operation thereof are in
compliance, in all material respects, with all Laws and private restrictive
covenants of record, and there has not been any proposed change thereto that
would affect any of the Sellers Real Property or its use, occupancy or
operation. No Seller has received any written or oral communications alleging
any conflict or dispute relating to any Sellers Real Property or the activities
thereon. To the Knowledge of Company, no portion of the Sellers Real Property is
subject to any classification, designation or preliminary determination of any
Government Authority or pursuant to any Law that would restrict its use,
development, occupancy or operation in connection with the Business. Neither
Sellers nor any other Person have caused any work or Improvements to be
performed upon or made to any of Sellers Real Property for which there remains
outstanding any payment obligation that would or might serve as the basis for
any Lien in favor of the Person who performed the work.
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(v) All requisite certificates of occupancy and other
permits and approvals required to be obtained by any Seller with respect to
Sellers Real Property and the use, occupancy and operation thereof have been
obtained and paid for and are currently in effect and allow Sellers to operate
the Business as presently conducted and as presently proposed to be conducted.
(b) PERSONAL PROPERTY. Each Seller owns all of its respective
Inventory, Equipment and other personal property (both tangible and intangible)
free and clear of any Lien, except for Permitted Liens. Such equipment and other
personal property are usable in the ordinary course of business and conform in
all material respects to all applicable Laws relating to their use and operation
as they are currently used in the conduct of the Business and constitute all of
the assets necessary to the operation of the Business as currently conducted.
Attached hereto as PART 3.8(B) of the Disclosure Memorandum is a complete and
accurate listing of the tangible personal property owned or leased by Sellers.
(c) COMPLIANCE. Except for such violations as could not
reasonably be expected to have a Material Adverse Effect, the continued
operation, use and occupancy of the Sellers Real Property as currently
conducted, used and occupied will not violate any zoning, building, health,
flood control, fire or other law, ordinance, order or regulation or any
restrictive covenant. There are no violations of any Law affecting any portion
of the Sellers Real Property or the activities conducted thereon and no written
notice of any such violation has been issued by any Governmental Authority.
(d) UTILITIES. All utilities (including, without limitation,
water, gas, electricity, trash removal, telephone service, cable service and
high speed internet service) are available to the Sellers Real Property in
sufficient quantities to adequately serve the same. Company has obtained rights
for sewer disposal for the Facility with local municipalities which, when
implemented, will provide adequate sewer disposal for the Facility. Currently,
the Facility uses a hold-and-haul tank that provides sufficient capacity for
current operations.
(e) SUFFICIENCY OF ASSETS. The Acquired Assets constitute all of
the assets, properties, licenses, rights, Permits and Contracts that are being
used in and that are necessary or desirable for the operation of the Business as
presently conducted and as presently proposed to be conducted.
(f) OWNERSHIP OF ASSETS. Notwithstanding anything to the contrary
herein, no Seller other than the Company owns or has any interest in any assets
or properties whatsoever.
(g) APR INTEREST. Except as set forth in PART 3.8(G) of the
Disclosure Memorandum, since Company's acquisition of the APR Interest, Company
has not entered into any Contracts relating to the APR Interest or to the
ownership or economic rights arising from or associated with the APR Interest.
3.9 LICENSES AND PERMITS. Each Seller possesses all necessary Permits
to conduct its business in the manner in which and in the jurisdictions and
places where such business is now conducted. Set forth on PART 3.9 of the
Disclosure Memorandum is a complete and accurate list of all material Permits
held by each Seller and all applications pending before any Governmental
28
Authority for the issuance of any Permits or the renewal thereof. To the
Knowledge of Company, there are no other such Permits which are material to any
Seller or the Business, which any Seller has not obtained or which in good
industry practice any Seller should hold for the conduct of the Business. No
Seller is in default, nor has it received any written notice of, nor is there,
to the Knowledge of Company, any Claim or, to the Actual Knowledge of Company,
threatened Claim of default, with respect to any such Permit. Except as
otherwise governed by applicable Laws, each Permit is renewable by its terms or
in the ordinary course of business without the need to comply with any special
qualification procedures or to pay any amounts other than routine filing fees
and will not be adversely affected by the closing of the transactions
contemplated by this Agreement. No present or former Representative, shareholder
or Affiliate of any Seller, and no other Person, owns or has any proprietary,
financial or other interest (direct or indirect) in any Permit which any Seller
owns, possesses, operates under or pursuant to or uses.
3.10 COMPLIANCE WITH LAWS. Each Seller and its ownership and operation
of the Business is in compliance with all applicable Laws in all material
respects. No Seller has Knowledge of any changes to the Business nor in any
regulations, licensing requirements or orders to which any Seller or any
Seller's Employees (because of their activities on behalf of their employer) is
subject that would have a Material Adverse Effect.
3.11 ENVIRONMENTAL LAWS AND REGULATIONS.
(a) Each Seller is and has been at all times in compliance with
all applicable Environmental Requirements relating to the Business and the
Sellers Real Property and any use, storage, treatment, disposal, including any
arrangement therefor, or transportation of any Materials of Environmental
Concern. To the Actual Knowledge of Company, the ownership and operations by any
third parties of the Sellers Real Property, are and have been at all times in
compliance with all applicable Environmental Requirements.
(b) During the occupancy and operation of the Sellers Real
Property by Sellers, and, to the Actual Knowledge of Company, prior to Sellers'
occupancy or operation, no release, leak, discharge, spill, disposal, or
emission of any Materials of Environmental Concern has occurred in, on or under
the Sellers Real Property in a quantity or manner that violates or requires
further investigation or remediation under Environmental Requirements. Sellers
do not use, treat, store, dispose or transport any Materials of Environmental
Concern. There is no pending or, to the Actual Knowledge of Company, threatened
litigation or administrative proceeding or investigation (whether civil,
criminal or administrative) concerning the Business or the Sellers Real Property
involving any Materials of Environmental Concern or Environmental Requirements.
To the Knowledge of Company, there is no material quantity of friable ACM within
the Sellers Real Property, and there are no above-ground or underground storage
tank systems located at the Sellers Real Property.
(c) The execution and delivery of this Agreement by Company and
the consummation by each Seller of the transactions contemplated hereby will not
affect the validity or require the transfer of any permits under Environmental
Requirements, and will not require notification, registration, reporting,
filing, investigation or remediation under any Environmental Requirement,
including without limitation, any environmental transfer Law.
29
(d) Sellers have provided Buyer with the reports set forth on
PART 3.11 of the Disclosure Memorandum, which set forth all reports in the
possession of or available to Sellers with respect to the compliance status or
liability of Sellers, their operations and the Sellers Real Property under
Environmental Requirements.
3.12 SELLERS CONTRACTS. PART 3.12 of the Disclosure Memorandum sets
forth a complete and accurate list, in each case whether written or unwritten,
of all of each Seller's:
(a) Contracts with customers which either (i) are in writing or
(ii) involve payments of $50,000 or more in any twelve (12) month period;
(b) Contracts for capital expenditures or the acquisition or
construction of fixed assets involving $10,000 or more in any twelve (12) month
period per Contract;
(c) Contracts for the purchase or lease of goods or services
(including without limitation, raw materials, API, excipients, equipment,
materials, software, hardware, supplies, merchandise, parts or other property,
assets or services) involving $10,000 or more in any twelve (12) month period;
(d) Contracts under which the amount payable by any Seller is
dependent on the revenue, income or other similar measure of any Seller or any
other Person and which involve or may be reasonably be expected to involve
$10,000 or more in any twelve (12) month period;
(e) Contracts with respect to any Intellectual Property of any
Seller, including without limitation all licenses and service contracts with
respect to Intellectual Property;
(f) Contracts to which any Seller is a party relating to
Indebtedness;
(g) Contracts between any Seller with any Affiliates of any
Seller;
(h) Contracts which place any material limitation on the method
of conducting, or scope of, the Business or which limit the freedom of any
Seller to engage in any line of business or to compete with any other Person;
(i) employment, collective bargaining, severance, consulting,
deferred compensation, benefit and similar plans or Contracts;
(j) Contracts granting a first refusal, first offer or similar
preferential right to purchase or acquire any Seller's capital stock or assets;
and
(k) other material Contracts, plans or arrangements of any Seller
which are not otherwise described in clauses (a) though (j) above.
All the foregoing, including all amendments or modifications thereto,
are referred to as the "SELLERS CONTRACTS." Sellers have furnished to Buyer
copies of all Sellers Contracts (or written descriptions thereof, in the case of
oral Sellers Contracts). Each Sellers Contract (or description) sets forth the
entire agreement and understanding between the applicable Sellers and
30
the other parties thereto. Each Sellers Contract is valid, binding and in full
force and effect, and there is no event or condition which has occurred or
exists, which constitutes or which, with or without notice, the happening of any
event and/or the passage of time, could constitute a default or breach under any
Contract by any Seller or any other party thereto, or could cause the
acceleration of any obligation of any party thereto or give rise to any right of
termination or cancellation thereof. No Seller has any reason to believe that
the parties to any Sellers Contract will not fulfill their obligations
thereunder in all material respects.
3.13 LITIGATION AND RELATED MATTERS. Set forth on PART 3.13 of the
Disclosure Memorandum is a complete and accurate list of (a) all Claims pending
against any Seller or, to the Actual Knowledge of Company, threatened against
any Seller, the Business, the Acquired Assets, or any property or rights of any
Seller, at law or in equity, before or by any Governmental Authority and (b) all
worker's compensation Claims outstanding against any Seller. None of the Claims
listed on PART 3.13 of the Disclosure Memorandum either (i) could reasonably be
expected to have any Material Adverse Effect or (ii) affects or could reasonably
be expected to affect the right or ability of Buyer to carry on the Business
substantially as now conducted or the ability of any Seller to enter into this
Agreement or any other agreement contemplated hereby or to consummate the
transactions contemplated hereby or thereby. Each of the Claims set forth on
PART 3.13 of the Disclosure Memorandum is fully covered by insurance. No Seller
is subject to any continuing order, writ, injunction or decree of any
Governmental Authority applicable specifically to the Business or its
operations, assets or Employees, nor is any Seller in default with respect to
any order, writ, injunction or decree of any Governmental Authority with respect
to the Business or its assets, operations or Employees.
3.14 INTELLECTUAL PROPERTY.
(a) SELLERS INTELLECTUAL PROPERTY. Each Seller (i) owns and has
independently developed or (ii) has the valid right or license to any and all
Intellectual Property used by such Seller in the Business (the "SELLERS
INTELLECTUAL PROPERTY"). Sellers Intellectual Property is sufficient to use and
exploit in furtherance of the Business as currently proposed. One or more
Sellers own and have good and exclusive right or title to each item of Sellers
Intellectual Property (that is not Licensed Intellectual Property, as defined
below), free and clear of any Liens or other restrictions of any kind (other
than Permitted Liens), and have the sole and exclusive right to bring actions
for infringement or unauthorized use thereof. No Seller has granted any third
party rights to or under any Sellers Intellectual Property nor has any Seller
granted any third party the right to sublicense any Seller Intellectual
Property.
(b) SELLERS REGISTERED INTELLECTUAL PROPERTY. Set forth on PART
3.14(B) of the Disclosure Memorandum is a complete and accurate list of all of
the following (collectively, the "SELLERS REGISTERED INTELLECTUAL Property"):
(i) Issued Patents and Patent Applications, (ii) registered Trademarks and
applications for Trademark registrations in each Sellers' names, and (iii)
registered Copyrights and applications for Copyright registration in each
Sellers' names. Each item of Sellers Registered Intellectual Property is valid,
enforceable, subsisting, and in good standing, with all necessary fees and
filings made.
(c) LICENSED INTELLECTUAL PROPERTY. Set forth on PART 3.14(C) of
the Disclosure Memorandum is a complete and accurate list of each item of
Intellectual Property licensed by
31
any Seller pursuant to a Contract ("LICENSED INTELLECTUAL PROPERTY") and
identifies each such item that is incorporated in or an essential component of
any Product. No Seller is in violation of any Contract to which any Seller is a
party or otherwise bound and which relates to any Licensed Intellectual
Property.
(d) INFRINGEMENT OR MISAPPROPRIATION. To Company's Knowledge,
there is no unauthorized use, disclosure, infringement or misappropriation of
any Sellers Intellectual Property by any third party, including without
limitation any Employee or former Employee of any Seller. No Seller has brought
any Action for infringement or misappropriation of any Sellers Intellectual
Property or breach of any license agreement, services agreement or other
agreement involving any Sellers Intellectual Property against any third party.
No Seller has been sued (or received any notice or any threat of being sued) in
any Action which involves a Claim of infringement or misappropriation of any
Intellectual Property right of any third party ("THIRD PARTY INTELLECTUAL
PROPERTY") or which contests the validity, ownership or right of any Seller to
exercise any Sellers Intellectual Property. To Company's Knowledge, the Sellers
Intellectual Property does not and will not infringe or misappropriate any Third
Party Intellectual Property and there is no substantial basis for a claim that
the design, development, use, marketing, licensing, sale, offer for sale,
provision, manufacturing, reproduction, importation and/or distribution of the
Products or any other Sellers Intellectual Property is infringing or has
infringed on or misappropriated any Third Party Intellectual Property.
(e) DEVELOPMENT OF SELLERS INTELLECTUAL PROPERTY. Set forth on
PART 3.14(E) of the Disclosure Memorandum is a complete and accurate list of all
agents, consultants, contractors and subcontractors involved in the development,
support, customization, maintenance or modification of any Sellers Intellectual
Property (that is not Licensed Intellectual Property) (the "IP CONTRACTORS")
along with a list of his, her or its respective engagement agreements with any
Seller. All Employees and IP Contractors who have contributed to or participated
in the conception and development of Sellers Intellectual Property (that is not
Licensed Intellectual Property) on behalf of Sellers have executed nondisclosure
agreements and either (i) have been a party to an enforceable arrangement or
agreement with Sellers in accordance with applicable law that has accorded
Sellers full, effective, exclusive and original ownership of all tangible
property and Intellectual Property thereby arising, or (ii) have executed
appropriate instruments of assignment in favor of Sellers as assignee that have
conveyed to Sellers effective and exclusive ownership of all tangible property
and Intellectual Property thereby arising. Sellers Intellectual Property (that
is not Licensed Intellectual Property) was developed exclusively by IP
Contractors and by Employees of Sellers within the scope of such Employee's
employment. No current or prior officer, Employee or IP Contractor claims any
ownership interest or similar right in any Sellers Intellectual Property.
(f) SELLERS SOFTWARE PROGRAMS. Set forth on PART 3.14(F) of the
Disclosure Memorandum is a complete and accurate list of all software programs
that are owned or licensed (other than off the shelf software) by any Seller
(the "SELLERS SOFTWARE PROGRAMS"). Each Seller owns full and unencumbered right
and good, valid and marketable title to or license to use its respective Sellers
Software Programs free and clear of all Liens (other than Permitted Liens). To
the Actual Knowledge of Company, there are no material defects, malfunctions or
nonconformities in any Sellers Software Programs (including, without
limitations, any customization and installation thereof), and there are no
material errors in any Design
32
Documentation. The Design Documentation is sufficient and adequate to enable a
person of reasonable skill and experience in the relevant art to operate Sellers
Intellectual Property. To the Actual Knowledge of Company, no software contained
within Sellers Software Programs contains any timer, virus, copy protection
device, disabling code, clock, counter, trap door, back door, time bomb or other
limiting design or routine which causes such software (or any portion thereof)
to become erased, inoperable, impaired, or otherwise incapable of being used in
the full manner for which it was designed.
(g) ROYALTIES. No Seller owes any royalties or other payments to
third parties in respect of any Sellers Intellectual Property.
(h) PROTECTION OF INTELLECTUAL PROPERTY. Sellers have implemented
commercially reasonable steps in the physical and electronic protection of
Sellers Intellectual Property from unauthorized disclosure, use or modification.
3.15 EMPLOYEE BENEFIT PLANS.
(a) Set forth on PART 3.15(A) of the Disclosure Memorandum is a
complete and accurate list of all Employee Benefit Plans.
(b) Neither any Seller nor any of its ERISA Affiliates has any
liability (including any contingent liability under Section 4204 of ERISA) with
respect to any Multiemployer Plan covering Employees (or former Employees)
employed in the United States. Neither any Seller nor any of its ERISA
Affiliates has incurred any liability or taken any action that could reasonably
be expected to cause it to incur any liability (i) on account of a partial or
complete withdrawal (within the meaning of Section 4205 and 4203 of ERISA,
respectively) with respect to any Multiemployer Plan or (ii) on account of
unpaid contributions to any such Multiemployer Plan.
(c) At the Closing, all contributions to, and payments from, the
Employee Benefit Plans which are required to have been made by any Seller, or
any of its ERISA Affiliates, with respect to any period ending on or before the
Closing Date will have been timely made in accordance with the Employee Benefit
Plans.
(d) Neither any Seller nor any of its ERISA Affiliates maintain
or contribute to, nor have they ever maintained or contributed to, any pension
plan subject to Title IV of ERISA or Sections 412 of the Code or 302 of ERISA.
(e) The Employee Benefit Plans intended to qualify under Section
401 of the Code have been determined by the Internal Revenue Service to be so
qualified and, to the Knowledge of Company, no event has occurred and no
condition exists with respect to the form or operation of such Employee Benefit
Plans which would cause the loss of such qualification or exemption or the
imposition of any material liability, penalty or tax under ERISA or the Code.
(f) There are (i) no investigations pending by any governmental
entity involving the Employee Benefit Plans or, to the Knowledge of Company, any
Multiemployer Plan, and (ii) no pending or, to the Knowledge of Company,
threatened Claims, other than routine Claims for benefits), suits or proceedings
against any Employee Benefit Plan, against the
33
assets of any of the trusts under any Employee Benefit Plan or against any
fiduciary of any Employee Benefit Plan with respect to the operation of such
plan or asserting any rights or Claims to benefits under any Employee Benefit
Plan or against the assets of any trust under such plan, nor, to the Knowledge
of Company, are there any facts which would give rise to any liability.
(g) None of the "welfare benefit plans" (as defined in Section
3(l) of ERISA) maintained by any Seller provides for continuing benefits or
coverage for any participant or any beneficiary of a participant following
termination of employment, except as may be required under the Consolidated
Omnibus Budget Reconciliation Act of 1985, as amended ("COBRA"), or except at
the expense of the participant or the participant's beneficiary.
3.16 EMPLOYEES; EMPLOYEE RELATIONS.
(a) Set forth on PART 3.16(A) of the Disclosure Memorandum is a
complete and accurate list of the following information: (i) the name and
current annual salary (or rate of pay) and other compensation (including,
without limitation, normal bonus, profit-sharing and other compensation) now
payable by any Seller to each Employee or director; (ii) any increase to become
effective after the date of this Agreement in the total compensation or rate of
total compensation payable by any Seller to each Employee or director; and (iii)
all presently outstanding loans and advances (other than routine travel advances
to be repaid or formally accounted for within sixty (60) days) made by any
Seller to, or made to any Seller by, each Employee or director. Since the Most
Recent Audit Date, Seller has not increased the compensation of any Employee,
officer or director other than in the ordinary course of business consistent
with past practice and has not granted any unusual or extraordinary bonuses,
benefits or other forms of direct or indirect compensation to any Employee,
officer or director.
(b) No Seller is a party to, nor bound by, the terms of any
collective bargaining agreement, contract, letter of understanding (formal or
informal) with any labor union or organization, and no Seller has ever
experienced any material labor difficulties. There are no material labor
disputes existing, or to the Knowledge of Company, threatened involving, by way
of example, strikes, work stoppages, slowdowns, picketing, or any other
interference with work or production, or any other concerted action by
Employees. No grievance or other legal action arising out of any collective
bargaining agreement or relationship exists, or to the Knowledge of Company, is
threatened. No charges or proceedings before the National Labor Relations Board,
or similar agency, exist, or to the Knowledge of Company, are threatened.
(c) No Actions or Claims exist under any Laws affecting the
employment relationship, and to the Actual Knowledge of Company, no Actions or
Claims are threatened under any such Laws and, to the Knowledge of Company, no
facts or circumstances exist which would give rise to any such Actions or
Claims. No Seller is subject to any settlement or consent decree with any
present or former Employee, employee representative or any Governmental
Authority relating to Claims of discrimination or other Claims in respect to
employment practices and policies. No Governmental Authority has issued a
judgment, order, decree or finding with respect to the labor and employment
practices (including practices relating to discrimination) of any Seller. No
Seller has received written notice of the intent of any Governmental Authority
responsible for the enforcement of labor or employment Laws to
34
conduct an investigation with respect to or relating to any Seller and no such
investigation is in progress. Each Seller has complied with all applicable Laws
relating to the employment or engagement of its Employees, including but not
limited to, those relating to wages, hours, collective bargaining, unemployment
insurance, workers' compensation, discrimination and the withholding of payroll
taxes.
(d) No Seller has incurred any liability or obligation under the
WARN Act or similar state laws.
3.17 INSURANCE. Set forth on PART 3.17 of the Disclosure Memorandum is
a complete and accurate list of the policies and contracts (including insurer,
named insured, type of coverage, limits of insurance, required deductibles or
co-payments, annual premiums and expiration date) for fire, casualty, liability
and other forms of insurance maintained by, or for the benefit of, each Seller.
All such policies are in full force and effect and are adequate for the
Business. No Seller has received any notice of cancellation or non-renewal or of
significant premium increases with respect to any such policy. No pending Claims
made by or on behalf of any Seller under such policies have been denied or are
being defended against third parties under a reservation of rights by an insurer
of any Seller. No gaps in coverage have accrued with respect to the policies
listed on PART 3.17 of the Disclosure Memorandum or any other policies retained
by any Seller. All premiums due prior to the date hereof for periods prior to
the date hereof with respect to such policies have been timely paid, and all
premiums due before the Closing Date for periods between the date hereof and the
Closing Date will be timely paid.
3.18 ACCOUNTS RECEIVABLE. The accounts receivable set forth in the
Most Recent Balance Sheet and those accounts receivable accruing through the
Closing Date represent valid and bona fide sales to third parties incurred in
the ordinary course of business, subject to no known defenses, set-offs or
counterclaims and are collectible and will be collected in accordance with their
terms at their recorded amounts subject to any reserves for doubtful accounts,
returns, allowances, credits, rebates, prebates and chargebacks but not in
excess of the amount of the reserves reflected in the Most Recent Balance Sheet.
The reserve for doubtful accounts, returns, allowances, credits, rebates,
prebates and chargebacks reflected in the Most Recent Balance Sheet is net of
fully accrued amounts for future deductions by customers of the Business
relating to sales booked on or before the date of the Most Recent Balance Sheet,
was established in accordance with GAAP consistently applied and is adequate and
was calculated in accordance with historical practice. Notwithstanding anything
to the contrary herein, Company makes no representations in this SECTION 3.18
regarding, and the representations in this SECTION 3.18 shall not apply with
respect to, any Excluded Receivables.
3.19 INVENTORY; PRODUCT WARRANTIES.
(a) The inventories of the Products (i) were acquired and
maintained in the ordinary course of business, (ii) are of good and merchantable
quality in all material respects, (iii) were manufactured in conformance with
the ANDAs for such Product, in conformance with cGMP and in conformance with all
applicable Laws, (iv) are not adulterated or manufactured, prepared, preserved,
packaged or stored under unsanitary conditions within the meaning of the FD&C
Act and FDA regulations, or in any way contrary to cGMP, (iv) at Closing shall
have a minimum shelf life of fourteen (14) months (except for Midrin which shall
have a minimum
35
shelf life of twelve (12) months), and (v) shall not be a product which would
violate any applicable section of the FD&C Act or any FDA regulation or any
other applicable Law.
(b) Except as set forth on PART 3.19(B) of the Disclosure
Memorandum, (i) to Company's Knowledge, each Seller's manufacturing facilities
conforms in all respects to applicable Laws and approvals governing such
facilities and have been adequate to produce the quantities of the Products
which each Seller's customers have ordered from any Seller since May 30, 2003,
and (ii) Seller has not received any written notices to the contrary. All
laboratory, scientific, technical and/or data supplied by any Seller to the FDA
for submission or communication with FDA relating to the Products have been true
and correct in all material respects.
(c) Set forth on PART 3.19(C) of the Disclosure Memorandum is a
complete and accurate list of all outstanding product liability, product defect,
warranty, breach of contract or other similar Claims (including any pending
Claims) related to the Products made since May 30, 2003, in each case to the
extent Company has received written notice or otherwise has Knowledge of such
Claims.
3.20 CUSTOMERS AND SUPPLIERS.
(a) CUSTOMERS. Set forth on PART 3.20(A) of the Disclosure
Memorandum is a complete and accurate list of all material customers of each
Seller. To the Knowledge of Company, no such customer intends or has threatened
(orally or in writing) to cease to do business with any Seller following the
consummation of the transactions contemplated hereby or intends to modify such
relationship in a manner which is less favorable to Buyer, and Company has no
Knowledge of facts that would be reasonably likely to result in such a
termination or modification.
(b) SUPPLIERS. Set forth on PART 3.20(B) of the Disclosure
Memorandum is a complete and accurate list of all materially significant
suppliers of each Seller. To the Knowledge of Company, no such supplier intends
or has threatened (orally or in writing) to cease to do business with any Seller
following the consummation of the transactions contemplated hereby or intends to
modify such relationship in a manner which is less favorable to Buyer, and
Company has no Knowledge of facts that would be reasonably likely to result in
such a termination or modification. Except as set forth on PART 3.20(B) of the
Disclosure Memorandum, no Seller has experienced any difficulties in obtaining
any inventory items necessary to the operation of the Business which has had an
adverse effect on the Business or the operations or financial condition of any
Seller and, to the Knowledge of Company, no such shortage of supply of inventory
items is threatened or pending. No Seller is required to provide any bonding or
other financial security arrangements in any material amount in connection with
any transactions with any of Sellers' suppliers.
3.21 ABSENCE OF CERTAIN CHANGES OR EVENTS.
(a) Since October 25, 2007, Xxxxx Fargo Bank has limited the
financing available to Sellers under the terms of its Loan Agreement with
Sellers dated February 9, 2006, as amended, as modified by its Forbearance
Agreement with Sellers dated October 25, 2007, as
36
modified by its Forbearance Agreement with Sellers dated February 5, 2008, and
its Amended and Restated Forbearance Agreement with Sellers dated March 25,
2008. As a result of this limited financing, Sellers have experienced certain
difficulties in obtaining raw materials and inventory items necessary to the
operation of the Business, which has had a materially adverse effect on the
operations, inventory, sales, margins and financial condition of the Business,
and have resulted in Sellers' operation of the Business in a manner which is not
consistent with past practice, all as more particularly described on PART
3.21(A) of the Disclosure Memorandum.
(b) Except as described in SECTION 3.21(A) above, and except as
may be permitted under SECTION 5.1(A), during the period from the date of the
Most Recent Balance Sheet to the date hereof: (i) the Business has been operated
in the ordinary course, consistent with past practice; (ii) there has been no
event, change or development which, individually or in the aggregate, has had a
Material Adverse Effect; (iii) there has not been any damage, destruction or
casualty loss to the physical properties of any Seller or any of their
suppliers; and (iv) no Seller has taken any action which, if taken after the
execution and delivery of this Agreement, would constitute a breach or violation
of SECTION 5.1 hereof.
3.22 NO ILLEGAL PAYMENTS, ETC. To the Actual Knowledge of Company, no
Seller nor any of their respective Representatives at any time after May 30,
2003 has (a) directly or indirectly given or agreed to give any illegal gift,
contribution, payment or similar benefit to any supplier, customer, governmental
official or employee or other person who was, is or may be in a position to help
or hinder any Seller (or to assist in connection with any actual or proposed
transaction) or made or agreed to make any illegal contribution, or reimbursed
any illegal political gift or contribution made by any other person, to any
candidate for federal, state, local or foreign public office (i) which might
subject any Seller to any damage or penalty in any civil, criminal or
governmental litigation or proceeding or (ii) the non-continuation of which has
had or might have, individually or in the aggregate, a Material Adverse Effect;
or (b) established or maintained any unrecorded fund or asset or made any false
entries on any books or records for any purpose.
3.23 REGULATORY ISSUES. During the year immediately prior to the
Signing Date, with respect to the Products only, no Seller has received or been
subject to: (i) any FDA Form 483's relating to the Products; (ii) any FDA
Notices of Adverse Findings relating to the Products; or (iii) any warning
letters or other written correspondence from the FDA concerning the Products in
which the FDA asserted that the operations of Seller were not in compliance with
applicable Laws or guidelines of any Governmental Authority with respect to the
Products. During the year immediately prior to the Signing Date, there has not
been any occurrence of any product recall, market withdrawal or replacement, or
post-sale warning conducted by or on behalf of Seller concerning the Products or
any product recall, market withdrawal or replacement conducted by or on behalf
of any entity as a result of any alleged defect in the Products.
3.24 INTERESTS IN OTHER PERSONS. Except as set forth in PART 3.24 of
the Disclosure Memorandum, no Employee of any Seller or Person directly or
indirectly controlling, controlled by, or under common control with any Seller
possesses, directly or indirectly, any material financial interest in, or is an
Employee or Affiliate of, any Person which is a current client, supplier,
franchisee, customer, distributor, broker, lessor, lessee, sublessor, sublessee
or competitor of or otherwise having a contractual relationship with any Seller.
Ownership of
37
securities of an entity (other than Company) whose securities are registered
under the Securities Exchange Act of 1934, as amended, not in excess of five
percent (5%) of any class of such securities shall not be deemed to be a
financial interest for purposes of this SECTION 3.24.
3.25 NO INSOLVENCY OR BANKRUPTCY. No Seller has filed any petition
seeking or acquiescing in any reorganization, arrangement, composition,
readjustment, liquidation, dissolution or similar relief under any law relating
to bankruptcy or insolvency, nor has any such petition been filed against any
Seller. No general assignment of property of any Seller has been made for the
benefit of creditors, and no receiver, master, liquidator or trustee has been
applied for or appointed for any Seller or any of its properties, including the
Acquired Assets.
3.26 BROKER FEES. No agent, advisor, broker or other Person acting on
behalf of any Seller or any of its Affiliates is, or will be, entitled to any
commission or broker's, advisor's or finder's fees from Company or Sellers, or
from any of their respective Affiliates, in connection with any of the
transactions contemplated hereby.
3.27 AVAILABILITY OF DOCUMENTS. Company has made available for
inspection by Buyer and its representatives true, correct, and complete copies
of the certificates of incorporation, bylaws, certificates of formation, limited
liability company operating agreements and other organizational documents of
each Seller, all written agreements, arrangements, commitments, and documents
(including, without limitation, all pending and approved ANDAs and regulatory
files with respect thereto) referred to in the Disclosure Memorandum and all
schedules attached hereto.
3.28 INFORMATION SUPPLIED. None of the information supplied or to be
supplied by any Seller in writing for inclusion or incorporation by reference in
the Information Statement will, at the date the Information Statement is first
mailed to Company's shareholders or, except as set forth in any amendments or
supplements to the Information Statement mailed to Company's shareholders prior
to Closing, contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they are made, not
misleading. If required by Law, the Information Statement will comply as to form
in all material respects with the applicable requirements of the Exchange Act
and the rules and regulations thereunder, except that no representation or
warranty is made by Company with respect to statements made or incorporated by
reference therein based on information supplied by Buyer for inclusion or
incorporation by reference therein.
3.29 DISCLOSURE. To the Knowledge of Company, there is no fact
(excluding facts with respect to general business, economic or political
conditions and facts that are publicly known) which materially and adversely
affects the business, assets, properties, operations, prospects, condition
(financial or otherwise), results of operations or liabilities of Sellers, taken
as a whole, that has not been set forth or disclosed in this Agreement
(including the Schedules), the Disclosure Memorandum or in any other instrument
or certificate delivered by any Seller pursuant to ARTICLE VI hereof.
38
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Company as follows:
4.1 ORGANIZATION. Buyer is a limited liability company duly organized,
validly existing and in good standing under the laws of the State of Delaware.
4.2 AUTHORIZATION.
(a) Buyer has full limited liability company power, capacity and
authority to execute and deliver this Agreement and all other agreements and
documents contemplated hereby. The execution and delivery of this Agreement and
such other agreements and documents by Buyer and the consummation by Buyer of
the transactions contemplated hereby have been duly authorized by Buyer and no
other action on the part of Buyer is necessary to authorize the transactions
contemplated hereby.
(b) This Agreement has been duly executed and delivered by Buyer
and constitutes the valid and binding obligation of Buyer, enforceable in
accordance with its terms except that (i) such enforcement may be subject to
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors' rights generally, and (ii) the remedies of specific performance and
injunctive relief are subject to certain equitable defenses and to the
discretion of the court before which any proceedings may be brought.
4.3 NO VIOLATION. The execution and delivery of this Agreement and the
other agreements and documents contemplated hereby by Buyer and the consummation
of the transactions contemplated hereby will not (i) violate any provision of
the certificate of incorporation or bylaws of Buyer, or (ii) violate any
statute, rule, regulation, order or decree of any public body or authority by
which Buyer or its properties or assets are bound.
4.4 CONSENTS. No consent, approval or other authorization of any
Governmental Authority or third party is required as a result of or in
connection with the execution and delivery of this Agreement and the other
agreements and documents to be executed by Buyer or the consummation by Buyer of
the transactions contemplated hereby.
4.5 BROKER FEES. No agent, advisor, broker, person or firm acting on
behalf of Buyer is, or will be, entitled to any commission or broker's,
advisor's or finder's fees from any of the parties hereto, or from any of their
respective Affiliates in connection with any of the transactions contemplated
hereby.
4.6 HSR THRESHOLDS. Buyer represents that its ultimate parent entity
(as defined in the HSR Laws) is Amneal Pharmaceuticals, LLC and, as of the
Signing Date, Amneal Pharmaceuticals, LLC has less than $126.2 million in annual
net sales (as defined in the HSR Laws) and less than $126.2 million in total
assets (as defined in the HSR Laws).
4.7 SUFFICIENT AND AVAILABLE FUNDS TO CLOSE AND PAY ASSUMED
LIABILITIES. Buyer represents that it has the wherewithal to fully fund and pay
the Purchase Price, including making the Closing Cash Amount payment on the
Closing Date and paying when due all of the Assumed
39
Liabilities.
4.8 APR, LLC. Buyer represents that, to the Knowledge of Buyer, it has
no knowledge of APR, LLC outside of the information in the public domain or as
disclosed to Buyer by Company or Xxxxxxx Xxxx.
ARTICLE V
COVENANTS OF THE PARTIES
5.1 CONDUCT OF THE BUSINESS.
(a) AFFIRMATIVE COVENANTS. At all times prior to the Closing,
Company shall use all commercially reasonable and good faith efforts to preserve
its goodwill, rights, property, assets and business, to keep available to itself
and the Buyer its employees, and to preserve and protect its relationships with
its employees, officers, advertisers, suppliers, customers, creditors and others
having business relationships with it. In addition, from and after the date
hereof to the Closing, Seller shall (except with Buyer's written consent, which
consent shall not be unreasonably withheld or conditioned, and any request for
which shall be timely responded to):
(i) maintain its corporate existence;
(ii) subject to SECTION 3.21(A) above and except as
otherwise expressly provided herein, conduct its business only in
the ordinary course consistent with the manner conducted as of
the Signing Date; and
(iii) operate in such a manner as to assure that the
representations and warranties of Company set forth in this
Agreement will be true and correct as of the Closing Date with
the same force and effect as if such representations and
warranties had been made on and as of the Closing Date.
(b) NEGATIVE COVENANTS. Company will not, and Company will cause
the other Sellers not to, at all times prior to the Closing, without Buyer's
prior written consent (which consent shall not be unreasonably withheld or
conditioned, and the request for which shall be timely responded to):
(i) change its method of management or operations in any
material respect (including, without limitation, accelerating
receivables, delaying payments or liquidating assets, except in
the ordinary course of business consistent with past practices);
(ii) dispose of or acquire any assets or properties or make
any commitment to do so, other than sales of inventory or
acquisitions of raw materials, excipients or API, in each case in
the ordinary course of business consistent with past practices;
(iii) incur any Indebtedness for borrowed money (other than
(A) Buyer
40
Advances, (B) after all of the Buyer Advances have been advanced,
up to $200,000 (on substantially similar terms and the same
interest rate as the Buyer Advances) in additional unsecured
debt, provided that such unsecured debt is necessary for and used
only for Sellers' business operations and (C) additional
Indebtedness to Xxxxx Fargo under Company's existing lines of
credit as in effect on the Signing Date), make any loans or
advances, assume, guarantee or endorse or otherwise become
responsible for the obligation of any other Person, or subject
any of its properties or assets to any Lien;
(iv) at any time after the expiration of the Due Diligence
Period, modify, amend, cancel or terminate any Contract or, at
any time during the Due Diligence Period, fail to give Buyer
prompt written notice of any proposed modification, amendment,
cancellation or termination of any Contract;
(v) make any change in the compensation paid or payable to
any Employee or director as shown on PART 3.16(A) of the
Disclosure Memorandum, except in the ordinary course of business
and consistent with past practice;
(vi) pay or agree to pay any bonus or similar payment (other
than success bonuses payable contingent upon the Closing);
(vii) promote, change the job title of, or otherwise alter
in any material respect the responsibilities or duties of, any of
its Employees, except in the ordinary course of business and
consistent with past practice;
(viii) enter into any new Contract involving payments by or
to any Sellers in excess of $5,000 per Contract (and not more
than $50,000 in the aggregate for all such Contracts) in any
twelve (12) month period, other than Contracts for the sale of
inventory or the acquisition of raw materials, excipients and
API, in each case in the ordinary course of business consistent
with past practices;
(ix) make any change in its accounting practices or
procedures, or make any upward revaluation of any of its assets,
except in the ordinary course of business and as required under
accounting rules and regulations;
(x) change by more than ten percent (10%) its customer
pricing, rebates, prebates, chargebacks, returns or discounts (on
a per customer, per SKU basis) of any Product;
(xi) make any payment or distribution with respect to its
equity securities, whether by way of redemption, dividend,
distribution or otherwise;
(xii) issue any additional equity securities, options,
warrants or other arrangements or commitments obligating any
Seller to issue any membership interests or other securities
(other than (A) the issuance of equity securities upon the
exercise of options or warrants outstanding on the date of this
Agreement, or (B) the issuance of up to $1,000,000 in additional
equity securities, but only if
41
(x) Company has first offered Buyer in writing a right of first
refusal to provide such funds in the form of additional Buyer
Advances and (y) Buyer has not, within three business days of its
receipt of such written offer, agreed to provide such funds at
such times and in such amounts as may be required by Company to
operate the Business prior to the Closing);
(xiii) adopt any amendments to its certificate of
incorporation or bylaws; adopt a plan of complete or partial
liquidation or dissolution; or alter through merger,
consolidation, reorganization, restructuring or in any other
fashion its structure or ownership;
(xiv) make an assignment for the benefit of creditors or
admit in writing its inability to pay its debts as they mature;
or consent to or acquiesce in the appointment of a trustee or
receiver for any Seller or any property thereof; or permit any
bankruptcy reorganization, debt arrangement, or other proceeding
under any bankruptcy or insolvency law to be instituted by or
against any Seller; or consent to any involuntary petition filed
pursuant to or purporting to be pursuant to any bankruptcy,
reorganization or insolvency law of any jurisdiction; or be
adjudicated bankrupt;
(xv) take any other action which would be reasonably
expected to have a Material Adverse Effect on its Business or the
affairs, assets, condition (financial or otherwise) or prospects,
or could adversely affect or detract from the value of its assets
or the Business, except as required by Law; or
(xvi) commit to do any of the foregoing referred to in
clauses (i) - (xv).
5.2 PAYMENT OF OBLIGATIONS, DISTRIBUTIONS TO MAJORITY SHAREHOLDERS.
Company covenants and agrees that, immediately upon receipt of the Closing Cash
Amount at Closing, it will cause each Seller to pay off in full or otherwise
satisfy all outstanding Indebtedness (other than capital leases) of such Seller
and amounts payable thereon and any other liabilities of such Seller that are
not expressly assumed by Buyer. Company further covenants and agrees that, in
the event the Closing shall occur, Company will not make any payment or
distribution with respect to its equity securities, whether by way of
redemption, dividend, distribution or otherwise, to the Majority Shareholders or
any other holders of Company's capital stock until more than ninety (90) days
after the Closing Date.
5.3 REQUIRED APPROVALS; SATISFACTION OF CLOSING CONDITIONS. Between
the date of this Agreement and the Closing Date, Company and Buyer shall each
use their commercially reasonable efforts to (i) obtain promptly all such third
party approvals and consents as are necessary or appropriate to the consummation
of the transactions contemplated hereby, (ii) cause all conditions to the
obligations of Buyer under this Agreement over which it is able to exercise
influence or control to be satisfied prior to the Closing Date, and (iii) obtain
promptly and timely comply with all requisite statutory, regulatory or court
approvals, third party releases and consents, and other requirements necessary
for the valid and legal consummation of the transactions contemplated hereby.
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5.4 INVESTIGATIONS.
(a) Company shall, and shall cause each other Seller to, provide
Buyer and its representatives and agents such access to the books and records of
Sellers and furnish to Buyer and its representatives and agents such financial
and operating data and other information with respect to the Business and the
properties of Sellers as they may reasonably request from time to time. Company
shall, and shall cause each other Seller to, permit Buyer and its
Representatives to make such inspections of the Sellers Real Property and the
personal properties of Sellers and the Business as they may reasonably request
from time to time. Company shall, and shall cause each other Seller to, grant
Buyer reasonable access to manufacturing and packaging equipment for generating
data in support of Buyer's ANDA supplements and new ANDA registration filings to
transfer Buyer's existing Products and Products under development to the Sellers
Real Property.
(b) In the event that any Seller receives notice that the FDA
intends to inspect the Sellers Real Property (a "FDA INSPECTION"), Company shall
immediately notify Buyer and provide Buyer with a copy of such FDA notice and,
at any time after the expiration of the Due Diligence Period, will allow a
representative from Buyer to be present during the FDA Inspection (without
participation). Within two (2) Business Days of receipt, Company will provide to
Buyer a copy of any FDA Form 483 observations pertaining to the Sellers Real
Property or any Seller's equipment.
(c) After the date hereof and until the earlier of the Closing
Date or date of termination of this Agreement, Company shall, and shall cause
each other Seller to, submit to Buyer all adverse drug experience information
and customer complaints brought to the attention of Sellers or its Employees
with respect to the Products, as well as any material events and matters
concerning or affecting the safety or efficacy of the Products.
5.5 RECORDS PERTAINING TO SELLERS.
(a) At the Closing, Company shall deliver or cause to be
delivered to Buyer any and all books and records in the possession of any Seller
applicable to any Seller, the Business or the Acquired Assets (other than any
Seller's corporate and limited liability company minute books, stock/unit
ledgers, certificates of incorporation, bylaws, shareholders agreements,
certificates of formation, operating agreements and related corporate and
limited liability company documents and instruments).
(b) Buyer shall, for a period of five years (except in the case
of any sales invoices, which shall be for three years) after the Closing Date,
neither dispose of nor destroy any of the business records or files of Sellers
or Buyer without first offering to turn over possession of copies thereof to
Company, at Company's expense, by written notice to Company at least thirty (30)
days prior to the proposed date of such disposition or destruction.
(c) Promptly after request, Buyer shall allow Company access to
all business records and files acquired hereunder during normal working hours at
the principal place of business of Buyer, or at any location where such records
are stored, in anticipation of, or preparation for, any existing or future third
party actions, Tax, SEC filings, regulatory matters,
43
contractual obligations or other matters in which any Seller is involved and
which relate to the Business.
5.6 NO SOLICITATION OR NEGOTIATION. Sellers and each Majority
Shareholder, severally and not jointly, agree as follows:
(a) Unless and until such time as this Agreement is otherwise
terminated in accordance with SECTION 7.1, each Seller and each Majority
Shareholder shall, and shall cause its Representatives, to, immediately cease
any activities, discussions or negotiations with any parties that may be ongoing
with respect to an Acquisition Proposal and request the return or destruction of
all confidential information regarding Sellers provided to any such persons on
or prior to the Signing Date pursuant to the terms of any confidentiality
agreements or otherwise. Each Seller and each Majority Shareholder shall not,
and shall cause its respective Representatives, not to, directly or indirectly,
(i) solicit, participate in, initiate or encourage (including by way of
furnishing information), or take any other action designed or reasonably likely
to facilitate or encourage, any inquiries or the making of any proposal that
constitutes, or may reasonably be expected to lead to, any Acquisition Proposal
or (ii) participate in any discussions or negotiations (including by way of
furnishing information) regarding any Acquisition Proposal; PROVIDED, HOWEVER,
that if, at any time before the date on which the definitive Information
Statement is filed with the SEC (or, if earlier, mailed to the Company's
shareholders), Company's Board of Directors determines in good faith, after
consultation with outside counsel and a financial advisor of nationally
recognized reputation, that such action is, or is reasonably likely to be,
necessary in order to comply with its fiduciary duties under Law and that such
Acquisition Proposal is reasonably likely to lead to a superior proposal for the
common shareholders of Company as compared to the transactions contemplated by
this Agreement, and if done for the sole purpose of increasing sums available
for distribution to Common stockholders of Interpharm Holdings, Inc., then, in
such case, Company may, in response to an Acquisition Proposal not solicited
after April 11, 2008 and which is submitted in writing by such Person to the
Board of Directors of Company after April 11, 2008 and subject to compliance
with this SECTION 5.6 (and provided that Company has complied in all respects
with its obligations under this SECTION 5.6) (x) furnish information with
respect to Company and its Subsidiaries (other than the terms of this Agreement,
or that certain letter of intent dated April 11, 2008 between Company and Amneal
Pharmaceuticals, LLC, or any discussions or negotiations regarding any of the
foregoing) to the Person making such Acquisition Proposal (or its designated
representatives) pursuant to a confidentiality and standstill agreement,
provided that any such information has been or contemporaneously is provided to
representatives of Buyer, and (y) participate in discussions or negotiations
regarding such Acquisition Proposal.
(b) Except as set forth in SECTION 5.6(C), the Board of Directors
of Company shall not (i) withdraw or modify, or propose to withdraw or modify,
its approval and recommendation of this Agreement and the transactions
contemplated hereby (the "RECOMMENDATION"), (ii) approve or recommend or take no
position with respect to, or propose to approve or recommend or take no position
with respect to, any Acquisition Proposal or (iii) cause Company to enter into
any agreement related to any Acquisition Proposal (other than a confidentiality
and standstill agreement with respect to an Acquisition Proposal as contemplated
by SECTION 5.6(A)).
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(c) If, before the date on which the definitive Information
Statement is filed with the SEC (or, if earlier, mailed to Company's
shareholders), Company's Board of Directors determines in good faith, after
consultation with outside counsel and a financial advisor of nationally
recognized reputation, that such action is necessary in order to comply with its
fiduciary duties under Law and that such Acquisition Proposal is reasonably
likely to lead to a superior proposal for the common shareholders of Company as
compare to the transactions contemplated by this Agreement, and if done for the
sole purpose of increasing sums available for distribution to common
stockholders of Interpharm Holdings, Inc., and PROVIDED THAT Company has
complied in all respects with its obligations under this SECTION 5.6 and has
negotiated in good faith with Buyer with respect to any amendment or
modification to this Agreement proposed by Buyer, then, in such case Company's
Board of Directors may (i) withdraw or modify its Recommendation or (ii) subject
to the provisions of SECTION 7.2(B)(III) hereof, cause Company to terminate this
Agreement; but in either case (x) only at a time that is after the fifth
business day following the receipt by Buyer of written notice advising Buyer
that Company has received a definitive Acquisition Proposal and containing the
information about such Acquisition Proposal specified by SECTION 5.6(D) and (y)
only if simultaneously with taking such action it also executes a definitive
written agreement to implement such Acquisition Proposal. For purposes of this
SECTION 5.6(C), "50%" shall be substituted for "20%" in the definition of the
term "Acquisition Proposal."
(d) Company shall immediately (but in no event later than one
Business Day after receipt thereof) advise Buyer orally and in writing (by
facsimile and email) of any request for information or of any Acquisition
Proposal, the material terms and conditions of such request or Acquisition
Proposal and the identity of the Person making such request or Acquisition
Proposal. Company will immediately inform Buyer of any material developments in
any discussions or negotiations with respect to, and any material change in the
terms (including amendments or proposed amendments) of, any such request or
Acquisition Proposal, with the intent and desire of enabling Buyer to make a
matching offer so that the transactions contemplated hereby may be effected, and
if such matching offer is so made by Buyer, Company shall accept Buyer's
matching offer and reject such other Acquisition Proposal. Company will promptly
provide Buyer with any agreements entered into by Company with respect to any
such request or Acquisition Proposal.
(e) Nothing contained in this SECTION 5.6 shall prohibit Company
from taking and disclosing to its shareholders a position contemplated by Rule
14e-2 or Rule 14d-9 promulgated under the Exchange Act or from making any
disclosure to Company's shareholders if, in the good faith judgment of its Board
of Directors, after consultation with outside counsel, failure so to disclose
would be inconsistent with Law; PROVIDED, HOWEVER, that neither Company nor its
Board of Directors shall, except as specifically permitted by SECTION 5.6(C),
withdraw or modify, or propose to withdraw or modify, its Recommendation or
approve or recommend, or propose to approve or recommend, an Acquisition
Proposal.
(f) REMEDIES. If any Seller, any Majority Shareholder or their
respective Representatives shall violate this SECTION 5.6 and if, as a result,
the conditions to Closing in SECTION 6.2 will not be satisfied prior to the
Outside Date, Buyer shall have the right to avail itself of any and all legal
and equitable remedies available to Buyer, including, without limitation,
specific performance (without the need to post a bond or other security and
regardless
45
of the absence or availability of remedies at law).
5.7 EMPLOYEE BONUSES. Company hereby covenants and agrees that, except
to the extent disclosed in PART 3.16(A) of the Disclosure Memorandum, it will
not pay or permit to be paid to any Employees or directors of any Seller any
bonuses otherwise payable upon a change of control of any Seller or termination
of employment or engagement.
5.8 PUBLIC ANNOUNCEMENTS AND DISCLOSURE. The Company will notify the
Buyer one Business Day in advance prior to making any required press release or
public announcement with respect to the transactions contemplated by this
Agreement except as may be required by Law or AMEX regulations. Except as and to
the extent required by Law or AMEX regulations, without the prior written
consent of the other party (which consent shall not be unreasonably withheld or
conditioned, and the request for which shall be timely responded to), neither
Buyer, any Seller nor any Majority Shareholders will at any time make, and each
will direct its Representatives not to make, directly or indirectly, any public
comment, statement, or communication with respect to, or otherwise disclose or
permit the disclosure of the existence of discussions regarding, the
transactions contemplated by this Agreement or any of the terms of this
Agreement or any other agreement among the parties (including without limitation
those of the letter of intent). If either Buyer or Company is required by Law or
AMEX regulations to make any such disclosure, it must first provide to the other
party the content of the proposed disclosure (with a reasonable opportunity to
comment thereon), the reasons that such disclosure is required by law and the
time and place that the disclosure will be made.
5.9 MAJORITY SHAREHOLDER WRITTEN CONSENT. During the term of this
Agreement, each Majority Shareholder covenants and agrees that it will not
rescind, withdraw or modify its consent as set forth in the Transaction Written
Consent or take or permit to occur any action that would modify the Required
Shareholder Approval or cause the Required Shareholder Approval not to have been
obtained.
5.10 INFORMATION STATEMENT; PUBLIC ANNOUNCEMENT; SEC FILINGS.
(a) Not more than 14 calendar days after the Signing Date,
Company shall file with the SEC an Information Statement on Schedule 14C (the
"INFORMATION STATEMENT") containing the information required by the Exchange Act
with respect to the Transaction Written Consent and the transactions
contemplated by this Agreement. Company shall cooperate and provide Buyer (and
its counsel) with a reasonable opportunity to review and comment on the
Information Statement prior to filing such with the SEC. Company will respond as
promptly as practicable to any comments from the SEC or its staff with respect
to the preliminary version of the Information Statement. Company will use all
reasonable best efforts to cause the definitive version of the Information
Statement to be mailed to its shareholders in accordance with Law and the
applicable rules and regulations of AMEX as soon as it is legally permitted to
do so but, in any event, not later than 21 calendar days before the Outside
Date.
(b) Company will notify Buyer promptly upon the receipt of any
comments from the SEC or its staff in connection with the filing of, or
amendments or supplements to, the Information Statement. Whenever any event
occurs which is required to be set forth in an amendment or supplement to the
Information Statement, Company or Buyer, as applicable, will
46
promptly inform the other of such occurrence and cooperate in filing with the
SEC or its staff, and/or mailing to shareholders of Company, such amendment or
supplement. Company shall cooperate and provide Buyer (and its counsel) with a
reasonable opportunity to review and comment on any amendment or supplement to
the Information Statement or any response to any comment made by the SEC or its
staff prior to filing such with or communicating such to the SEC or its staff,
and will provide Buyer with a copy of all such filings made with or
communications to the SEC or its staff. Except as may be required by Law, no
amendment or supplement to the Information Statement will be made by Company
without the approval of Buyer, which will not be unreasonably withheld or
delayed.
5.11 BANKRUPTCY FILING. For a period of ninety-one (91) days after the
Closing Date, Sellers shall not file or enter into any bankruptcy proceeding or
liquidation whether compulsorily or voluntarily, convene a meeting of its
creditors, or have a receiver appointed over all or part of its assets, or take
or suffer any similar action in consequence of its debt.
ARTICLE VI
CLOSING
6.1 CLOSING.
(a) Unless this Agreement is first terminated as provided in
SECTION 7.1 hereof, and subject to the satisfaction or waiver of all conditions
to the consummation of the transactions contemplated hereby, the closing of the
transactions contemplated hereby (the "CLOSING") shall take place: (i) at the
offices of Xxxx Xxxxxx, P.C., 000 Xxxx X. Xxxxxxx Xxxxxxx, Xxxxx Xxxxx, Xxx
Xxxxxx 00000 on June 16, 2008, as extended pursuant to paragraph (b) below; or
(ii) at such other place, time and date as Buyer and Company may mutually agree
in writing (the "CLOSING DATE").
(b) During the Due Diligence Period, Buyer and its
Representatives will inspect Company's facility at 00 Xxxxx Xxxxxx, Xxxxxxxxx,
Xxx Xxxx 00000 and give Seller a written list of the deficiencies which Buyer
believes in good faith would be an impediment to the transfer to Buyer of
Company's Drug Enforcement Agency controlled substances Permit. Company will use
its best efforts to, as promptly as practicable after Buyer's delivery of such
deficiencies list, remedy all such deficiencies with the first $120,000 in costs
of such remediation borne 100% by Company and all additional costs of
remediation (whether or the deficiencies list or otherwise imposed by the Drug
Enforcement Agency) shall be split 50% by Buyer and 50% by Company; PROVIDED,
HOWEVER, that if total remediation costs in excess of the first $120,000 exceed
$250,000, then either party can elect, by written notice given to the other
party within five (5) Business Days of the end of the Due Diligence Period, not
to pay for such excess remediation costs (such electing party, a "NON-PAYING
PARTY"). If such written election is made, then the other party may elect, by
written notice given to the Non-Paying Party within five (5) Business Days of
receipt of the Non-Paying Party's written election, to assume all of said
remediation costs and, if such notice to assume remediation costs is not given
within such five (5) Business Day period, this Agreement shall immediately and
automatically terminate at
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the end of such five (5) Business Day period.
(c) In the event that a Drug Enforcement Agency controlled
substances license for the facility at 00 Xxxxx Xxxxxx, Xxxxxxxxx, Xxx Xxxx
00000 (the "DEA LICENSE") has not been issued to Buyer prior to June 16, 2008,
then the Closing Date shall be automatically extended to the earlier of (i) July
16, 2008 and (ii) the third (3rd) Business Day following the date on which the
DEA License has been issued. In the event that the DEA License has not been
issued to Buyer prior to July 16, 2008 then, unless Buyer and Company mutually
agree to extend the Closing Date or Buyer waives the condition that it be issued
the DEA License prior to Closing and elects to close, this Agreement shall
automatically terminate at midnight on July 16, 2008.
(d) In the event that Company shall not have fully complied with
and satisfied all of the Information Statement filing and/or mailing obligations
required under SECTION 5.10 of this Agreement prior to June 16, 2008, then the
Closing Date shall be automatically extended to the third (3rd) Business Day
following the date on which the last of such filing and/or mailing obligations
have been fully complied with and satisfied.
(e) In the event that Sellers shall not have fully complied with
and satisfied all of the conditions set forth in SECTION 6.2 hereof (other than
SECTION 6.2(J) and other than as set forth in paragraphs (b), (c) and (d) above)
prior to June 16, 2008, then the Closing Date shall be automatically extended to
the third (3rd) Business Day following the date on which the last of such
conditions has been fully complied with and satisfied.
6.2 CONDITIONS TO BUYER'S OBLIGATIONS. The obligation of Buyer to
effect the Closing shall be subject to the satisfaction of each of the following
conditions at or prior to the Closing (any of which may be waived by Buyer, in
whole or in part):
(a) DEFINITIVE AGREEMENT. This Agreement (including the
Schedules), the Disclosure Memorandum and other related documents and agreements
consistent with the terms herein shall have been executed by Company (and, if
applicable, the other Sellers) and delivered to Buyer.
(b) REPRESENTATIONS, WARRANTIES AND COMPLIANCE WITH COVENANTS.
Each representation and warranty of Company contained in this Agreement, the
Disclosure Memorandum and in any Schedule shall be true and correct in all
respects (in the case of any representations or warranties containing any
materiality or Material Adverse Effect qualifiers) or in all material respects
(in the case of any representations or warranties without any materiality or
Material Adverse Effect qualifiers) on and as of the date of this Agreement and
on and as of the Closing Date, with the same effect as though such
representation and warranty had been made on and as of the Closing Date, without
giving effect to any supplements or amendments to the Disclosure Memorandum
which, individually or in the aggregate with all other such changes, would or
would be reasonably expected to (i) in any material respect be adverse to any of
the Acquired Assets or Assumed Liabilities, taken as a whole or (ii) materially
detrimentally affect the benefit of the bargain struck by Buyer under this
Agreement. Each of the covenants and agreements herein on the part of Company to
be complied with or performed on or before the Closing Date shall have been
complied with and performed. Buyer shall have received a
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certificate, dated the Closing Date, of Company to the foregoing effect.
(c) ABSENCE OF LITIGATION. No inquiry, action, suit or proceeding
shall have been asserted, threatened or instituted (i) in which it is sought to
restrain or prohibit the carrying out of the transactions contemplated by this
Agreement or to challenge the validity of such transactions or any part thereof,
or (ii) which could reasonably be expected to have, if adversely determined, a
Material Adverse Effect.
(d) CONSENTS AND APPROVALS. Company shall have obtained and
delivered to Buyer evidence of approval by the board of directors and the
shareholders of each Seller of this Agreement and the transactions contemplated
hereby and copies of all consents, approvals or Permits required to be obtained
for the consummation thereof (including, without limitation, all consents and
approvals listed in PART 3.6 of the Disclosure Memorandum), and no such consents
or consents, approvals or Permits shall have been withdrawn or suspended.
(e) XXXX OF SALE AND ASSIGNMENTS. Each Seller shall have executed
and delivered to Buyer: (i) a xxxx of sale, assignment and assumption agreement
in substantially the form and substance of EXHIBIT B attached hereto (the "XXXX
OF SALE"), (ii) transfer letters for the ANDAs for each of the approved Products
and pending Products and for the rights of reference to the Drug Master Files
included in such ANDAs to the extent that Seller has such rights of reference
and to the extent they are assignable, and (iii) such patent assignments,
trademark assignments, copyright assignments, domain name assignments and other
instruments of conveyance with respect to the Acquired Assets as Buyer
reasonably requests.
(f) FACILITY PURCHASE AGREEMENT. Interpharm Realty shall have
executed and delivered to Xxxxxx, LLC a contract of sale with respect to the
Facility in substantially the form and substance of EXHIBIT C attached hereto
(the "FACILITY PURCHASE AGREEMENT"), and the closing of the transactions
contemplated thereby shall have been consummated.
(g) RESTRICTIVE COVENANT AGREEMENTS. Buyer shall have received a
non-disclosure, non-solicitation and non-competition agreement in substantially
the form and substance of EXHIBIT D attached hereto (each, a "RESTRICTIVE
COVENANT AGREEMENTS") executed by each Seller.
(h) CERTIFICATES. Each Seller shall have delivered to Buyer (i) a
certificate of the appropriate state official, dated as of a date not more than
fifteen (15) days prior to the Closing Date, attesting to the existence and good
standing of such Seller in its state of organization and in each jurisdiction
where it is qualified or licensed as a foreign corporation; (ii) a copy,
certified by the appropriate state official of the state of organization as of a
date not more than fifteen (15) days prior to the Closing Date, of its
certificate of incorporation and all amendments thereto of such Seller; (iii) a
copy of the bylaws of Sellers certified, as of the Closing Date, by the
Secretary of such Seller; and (iv) a certificate, dated the Closing Date, of the
Secretary of such Seller, relating to the incumbency and board and shareholder
proceedings in connection with the consummation of the transactions contemplated
hereby.
(i) OPINION OF COUNSEL. Buyer shall have received an opinion of
Guzov Ofsink, LLC, counsel to Company, in form and substance satisfactory to
Buyer.
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(j) NO MATERIAL ADVERSE EFFECT. Since the date of the Most Recent
Balance Sheet , there shall not have been (i) any change resulting in a Material
Adverse Effect, or (ii) any damage, destruction or loss affecting the assets,
properties, business, operations or condition of Company or any other Seller or
the Business, whether or not covered by insurance, which could reasonably be
expected to result in a Material Adverse Effect, or (iii) any FDA Inspection
which discloses items that could reasonably be expected to materially and
adversely effect Buyer's ability to manufacture at the Facility any Products
which have been FDA approved or are pending FDA approval.
(k) RELEASE OF LIENS. Company shall have delivered to Buyer
evidence of the proper filing of all duly executed UCC-3 Termination Statements
or other releases and/or terminations of security interests (other than
Permitted Liens) on all of the Acquired Assets, in each case satisfactory to
Buyer.
(l) CERTIFICATE OF INDEBTEDNESS; LIEN DISCHARGES. Company shall
have prepared and delivered to Buyer a certificate (the "CERTIFICATE OF
INDEBTEDNESS"), signed by Company's Chief Financial Officer, certifying as to
the amount of Indebtedness of each Seller outstanding on the Closing Date and
specifying the amount owed to each creditor listed thereon. Company shall have
caused each Seller's creditors set forth in such Certificate of Indebtedness to
deliver payoff letters and lien discharges, each in form reasonably satisfactory
to Buyer, with respect to any such Indebtedness which does not constitute an
Assumed Liability.
(m) TAX CLEARANCE CERTIFICATES. At the Closing and at Company's
sole expense, each of the Sellers shall have delivered to Buyer Tax Clearance
Certificates from the New York Department of Taxation and Finance.
(n) TAIL INSURANCE POLICY. At the Closing and at Company's sole
expense, Company shall have procured "tail-coverage" on the claims-made products
liability insurance policies covering each Seller on such terms as may be
reasonably satisfactory to Buyer, and Buyer shall be named as additional insured
thereon.
(o) INFORMATION STATEMENT. Company shall have complied with all
Information Statement filing and/or mailing obligations required under SECTION
5.10 of this Agreement.
(p) ESCROW AGREEMENT. Each of Company and Escrow Agent shall have
executed and delivered to Buyer the Escrow Agreement.
(q) EPA NOTICE OF VIOLATION. Company shall have resolved, to
Buyer's reasonable satisfaction, all violations raised by the U.S. Environmental
Protection Agency in its Notice of Violation to Company dated October 4, 2007.
(r) DISCLOSURE MEMORANDUM. After the expiration of Due Diligence
Period, there shall have been no changes set forth in any amendments or
supplements to the Disclosure Memorandum which, individually or in the aggregate
with all other such changes, would or would be reasonably expected to (i) in any
material respect be adverse to any of the Acquired Assets or Assumed
Liabilities, taken as a whole or (ii) materially detrimentally affect the
benefit of the bargain struck by Buyer under this Agreement.
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6.3 CONDITIONS TO OBLIGATIONS OF COMPANY. The obligation of Company to
effect the Closing shall be subject to the satisfaction of each of the following
conditions at or prior to the Closing (any of which may be waived by Company, in
whole or in part):
(a) DEFINITIVE AGREEMENT. This Agreement (including the
Schedules) and other related documents and agreements consistent with the terms
herein shall have been executed by Buyer and delivered to Company.
(b) ACCURACY OF REPRESENTATIONS AND WARRANTIES AND COMPLIANCE
WITH COVENANTS. Each representation and warranty of Buyer contained in this
Agreement and in any Schedule shall be true and correct in all respects (in the
case of any representations or warranties containing any materiality or Material
Adverse Effect qualifiers) or in all material respects (in the case of any
representations or warranties without any materiality or Material Adverse Effect
qualifiers) on and as of the date of this Agreement and on and as of the Closing
Date, with the same effect as though such representation and warranty had been
made on and as of the Closing Date. Each of the covenants and agreements herein
on the part of Buyer to be complied with or performed on or before the Closing
Date shall have been fully complied with and performed. Company shall have
received a certificate, dated the Closing Date, of Buyer to the foregoing
effect.
(c) ABSENCE OF LITIGATION. No inquiry, action, suit or proceeding
shall have been asserted, threatened or instituted in which it is sought to
restrain or prohibit the carrying out of the transactions contemplated by this
Agreement or to challenge the validity of such transactions or any part thereof,
other than those asserted, threatened or instituted by the Sellers or Majority
Shareholders.
(d) CONSENTS AND APPROVALS. All material authorizations,
consents, approvals, waivers and releases, if any, necessary for Buyer to
consummate the transactions contemplated hereby shall have been obtained by
Buyer, including the resolution of all comments of the SEC to the Information
Statement and shall have mailed the Information Statement as required under
SECTION 5.10.
(e) ASSUMPTION DOCUMENTS. Buyer shall have executed and delivered
to Company the Xxxx of Sale and such other documents of assumptions of liability
relating to the Assumed Liabilities as Company reasonably request.
(f) FACILITY PURCHASE AGREEMENT. Xxxxxx, LLC shall have executed
and delivered to Interpharm Realty the Facility Purchase Agreement, and the
closing of the transactions contemplated thereby shall have been consummated.
(g) ESCROW AGREEMENT. Each of Buyer and Escrow Agent shall have
executed and delivered to Company the Escrow Agreement.
6.4 CLOSING PAYMENTS. At the Closing, Buyer shall: (i) deliver the
Closing Cash Amount by wire transfer of immediately available funds in such
amounts and to such bank accounts as may be directed in writing by Company at
least two (2) Business Days prior to the Closing; and (ii) deposit with the
Escrow Agent by wire transfer of immediately available funds an aggregate cash
sum equal to the Escrow Amount, all in accordance with SECTIONS 2.5(B) AND
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2.5(C).
ARTICLE VII
TERMINATION PRIOR TO CLOSING
7.1 RIGHT OF TERMINATION. This Agreement may be terminated and
abandoned at any time prior to the Closing:
(a) by the written mutual consent of Buyer and Company;
(b) by Buyer, upon written notice to Company, if any of the
conditions set forth in SECTION 6.2 shall not have been fulfilled in all
material respects at the time at which the Closing would otherwise occur or if
satisfaction of such a condition is or becomes impossible, PROVIDED that at the
time of such notice Buyer must have complied in all material respects with its
obligations under this Agreement; and PROVIDED, FURTHER, that Company shall have
ten (10) days after the notice sent by Buyer pursuant to this subsection (b) in
which to fulfill such conditions not fulfilled unless satisfaction of such a
condition is or becomes impossible;
(c) by Company, upon written notice to Buyer, if any of the
conditions set forth in SECTION 6.3 shall not have been fulfilled in all
material respects at the time at which the Closing would otherwise occur or if
satisfaction of such a condition is or becomes impossible, PROVIDED that at the
time of such notice Company must have complied in all material respects with
their obligations under this Agreement; and PROVIDED, FURTHER, that Buyer shall
have ten (10) days after the notice sent by Company pursuant to this subsection
(c) in which to fulfill such conditions not fulfilled unless satisfaction of
such a condition is or becomes impossible;
(d) by either Buyer or Company, upon written notice to the other,
if the Closing shall not have occurred on or prior to September 16, 2008 (the
"OUTSIDE DATE"); PROVIDED, HOWEVER, that at the time of such notice the party
exercising such termination right shall have complied in all material respects
with its obligations under this Agreement;
(e) by Buyer, if Buyer is not satisfied in its sole discretion
with the results of its Due Diligence, upon written notice given to Company
prior to expiration of the Due Diligence Period that Buyer has elected to
terminate this Agreement pursuant to this SECTION 7.1(E); PROVIDED, HOWEVER,
that Buyer shall be deemed to have waived its termination right under this
SECTION 7.1(E) if Buyer has not given such written notice to Company prior to
expiration of the Due Diligence Period;
(f) By Company, in connection with Company's entering into a
definitive agreement to effect an Acquisition Proposal in accordance, and
provided that Company has complied, with SECTION 5.6; PROVIDED, HOWEVER, that an
election by Company to terminate this Agreement pursuant to this SECTION 7.1(F)
shall not be effective until Company shall have paid the Break-up Fee plus all
Buyer Advances to the Company as provided in Section 7.2(b)(iii);
(g) By Buyer, if (i) Company enters into a definitive agreement
to effect an Acquisition Proposal, (ii) Company's Board of Directors recommends
that Company's
52
shareholders accept or approve any Acquisition Proposal or (iii) Company's Board
of Directors withdraws or modifies, in a manner material and adverse to Company,
the Recommendation, in any case, regardless of whether Company has complied with
SECTION 5.6;
(h) Automatically, as set forth in SECTION 6.1(B) above; or
(i) Automatically, as set forth in SECTION 6.1(C) above; or
(j) Automatically, in the event of Buyer's termination for any
reason of the Facility Purchase Agreement, as permitted thereunder.
7.2 EFFECT OF TERMINATION.
(a) In the event of a termination of this Agreement, all further
obligations of the parties under this Agreement shall terminate, no party shall
have any right under this Agreement against any other party, except as set forth
in this SECTION 7.2, and each party shall bear its own costs and expenses;
PROVIDED, HOWEVER, that (except as set forth in SECTION 7.2(B)(II) below)
termination under SECTION 7.1 shall not relieve any party of liability for any
failure to perform or comply with this Agreement prior to the date of
termination, or constitute a waiver of any claim with respect thereto.
(b) Notwithstanding anything herein to the contrary:
(i) in the event of any termination of this Agreement by Buyer
pursuant to SECTIONS 7.1(B), (D) OR (E), or by mutual written consent
pursuant to SECTION 7.1(A), or in the event of any termination of this
Agreement pursuant to SECTION 7.1(H) due to Buyer's election to be a
Non-Paying Party or in the event of any termination of this Agreement
pursuant to SECTION 7.1(I) or SECTION 7.1(J), Company shall
immediately reimburse Buyer for all Buyer Advances in accordance with
the terms of the Loan and Security Agreement;
(ii) in the event of any termination of this Agreement by
Company pursuant to SECTION 7.1(C), or in the event of any termination
of this Agreement pursuant to SECTION 7.1(H) due to Seller's election
to be a Non-Paying Party, all Buyer Advances shall be retained by
Company as liquidated damages and Buyer shall have no further
obligations against any of the Sellers or their shareholders of any
nature whatsoever arising out of this Agreement;
(iii) if this Agreement is terminated by Company pursuant to
SECTION 7.1(F) or by Buyer pursuant to SECTION 7.1(G), then Company
shall pay to Buyer, an amount in cash equal to four percent (4%) of
the Purchase Price plus reimbursement of all of its out-of-pocket
costs and expenses (the "BREAK-UP FEE") plus all Buyer Advances; and
(iv) If (A) this Agreement is terminated by Company pursuant
to SECTION 7.1(D) and (B) Company consummates an Acquisition Proposal
or enters into a definitive agreement with respect to an Acquisition
Proposal, in either case, within twelve (12) months of such
termination, then Company shall pay Buyer the Break-up Fee plus
53
all Buyer Advances.
Payment of the Break-up Fee and Buyer Advances, if applicable, required by this
SECTION 7.2(B) shall be payable by wire transfer of immediately available funds
(1) in the case of termination of this Agreement by Company pursuant to SECTION
7.1(F) or by Buyer pursuant to SECTION 7.1(G), concurrently with the effective
date of such termination, or (2) in case of a situation contemplated by SECTION
7.2(B)(IV), concurrently with the consummation of such Acquisition Proposal.
ARTICLE VIII
INDEMNIFICATION
8.1 OBLIGATION OF COMPANY TO INDEMNIFY BUYER. Company hereby agrees to
indemnify and hold harmless Buyer and its Representatives from, against and in
respect of any and all Losses suffered, sustained, incurred or required to be
paid by any of them by reason of:
(i) any representation or warranty made by Company in or
pursuant to this Agreement or any of the other Transaction Documents
being untrue or incorrect in any respect;
(ii) any failure by Company to observe or perform its
covenants and agreements set forth in this Agreement or any other
agreement or document executed by them in connection with the
transactions contemplated hereby;
(iii) any liability of any Seller to the extent it is not an
Assumed Liability, including without limitation any liability of any
Seller (other than the Assumed Liabilities) arising from the operation
of the Business prior to the Closing;
(iv) any Taxes of any Seller or with respect to the Business
for all periods prior to the Closing Date, and any Tax liability of
any Seller or Company's shareholders arising in connection with the
transactions contemplated hereby;
(v) any failure of any Seller to have good, verified
marketable title to the Acquired Assets free and clear of all Liens
(other than Permitted Liens); or
(vi) any challenge to the transaction by any shareholder of
the Company.
8.2 [INTENTIONALLY OMITTED]
8.3 OBLIGATION OF BUYER TO INDEMNIFY COMPANY. Buyer agrees to
indemnify and hold harmless Company and its Representatives from, against, for
and in respect of any all Losses suffered, sustained, incurred or required to be
paid by any of them by reason of:
(i) any representation or warranty made by Buyer in or
pursuant to
54
this Agreement being untrue or incorrect in any respect;
(ii) any failure by Buyer to observe or perform its covenants
and agreements set forth in this Agreement or any other agreement or
document executed by it in connection with the transactions
contemplated hereby;
(iii) Buyer's failure to discharge or satisfy the Assumed
Liabilities; or
(iv) the operation of Buyer or the conduct of Buyer's business
following the Closing, including, without limitation, any loss,
liability, obligation, Lien, damage, cost or expense arising from
products produced or processed by Buyer after the Closing, provided
that the act that gives rise to said Losses does not arise from a
breach by any Seller of any of the Transaction Documents.
8.4 CLAIM NOTICE.
(a) Except to the extent set forth in the next sentence, a party
will not have any liability under the indemnity provisions of this Agreement
with respect to a particular matter unless (i) a written notice (the "CLAIM
NOTICE") setting forth in reasonable detail the specific nature of the Losses
and the estimated amount of such Losses (the "CLAIMED AMOUNT") has been given to
the Indemnifying Party (as defined below) prior to the time that the
representations, warranties, covenants or agreements which are the basis for
such indemnification terminate pursuant to SECTION 8.8(B) and, (ii) in addition,
if such matter arises out of a third party suit, action, investigation,
proceeding or claim, such Claim Notice is given promptly, but in any event
within thirty (30) days after the Indemnified Party (as defined below) is given
notice of the claim or the commencement of the suit, action, investigation or
proceeding. Notwithstanding the preceding sentence, failure of the Indemnified
Party to give a Claim Notice hereunder shall not release the Indemnifying Party
from its obligations under this ARTICLE VIII, except to the extent the
Indemnifying Party is materially prejudiced by such failure to give such Claim
Notice. The Indemnified Party, if Buyer, shall also concurrently deliver a copy
of the Claim Notice to the Escrow Agent to the extent cash remains available in
the Escrow Fund to satisfy the Claimed Amount.
(b) With respect to Losses described in SECTION 8.1, Company
shall be the "Indemnifying Party" and Buyer and its Representatives shall be the
"Indemnified Parties". With respect to Losses described in SECTION 8.3, Buyer
shall be the "Indemnifying Party" and Company and its Representatives shall be
the "Indemnified Party".
8.5 DEFENSE OF THIRD PARTY CLAIMS.
(a) Upon receipt of Claim Notice of any third party suit, action,
investigation, claim or proceeding for which indemnification might be claimed by
an Indemnified Party, the Indemnifying Party shall be entitled to defend,
contest or otherwise protect against any such suit, action, investigation, claim
or proceeding at its own cost and expense, and the Indemnified Party must
reasonably cooperate in any such defense or other action. The Indemnified Party
shall have the right, but not the obligation, to participate at its own expense
in defense thereof by counsel of its own choosing, but the Indemnifying Party
shall be entitled to control the defense unless the
55
Indemnified Party has relieved the Indemnifying Party from liability with
respect to the particular matter or the Indemnifying Party fails to assume
defense of the matter.
(b) In the event the Indemnifying Party shall fail to defend,
contest or otherwise protect in a timely manner against any such suit, action,
investigation, claim or proceeding, the Indemnified Party shall have the right,
but not the obligation, thereafter to defend, contest or otherwise protect
against the same and make any compromise or settlement thereof and recover the
entire cost thereof from the Indemnifying Party including, without limitation,
reasonable attorneys' fees, disbursements and all amounts paid as a result of
such suit, action, investigation, claim or proceeding or the compromise or
settlement thereof; PROVIDED, HOWEVER, that the Indemnified Party must send a
written notice to the Indemnifying Party of any such proposed settlement or
compromise, which settlement or compromise the Indemnifying Party may reject
within thirty (30) days of receipt of such notice. Failure to reject such notice
within such thirty (30) day period shall be deemed an acceptance of such
settlement or compromise. Consent of the Indemnifying Party to such proposed
settlement or compromise may not be unreasonably withheld, delayed or
conditioned. The Indemnified Party shall have the right to effect a settlement
or compromise over the objection of the Indemnifying Party; provided, that if
(i) the Indemnifying Party is contesting such claim in good faith or (ii) the
Indemnifying Party has assumed the defense from the Indemnified Party, the
Indemnified Party waives any right to indemnity therefor unless consent of the
Indemnifying Party to such proposed settlement or compromise was unreasonably
withheld, delayed or conditioned.
(c) If the Indemnifying Party undertakes the defense of such
matters then the Indemnified Party shall not, so long as the Indemnifying Party
does not abandon the defense thereof, be entitled to recover from the
Indemnifying Party any legal or other expenses subsequently incurred by the
Indemnified Party in connection with the defense thereof other than the
reasonable costs of investigation undertaken by the Indemnified Party with the
prior written consent of the Indemnifying Party.
(d) Buyer, Company, the Majority Shareholders and each of their
successors and assigns shall cooperate with each other in the defense of any
suit, action, investigation, proceeding or claim by a third party, shall keep
each other informed of all settlement negotiations with third parties and the
progress of any litigation and, during normal business hours, shall afford each
other access to their books and records and employees relating to such suit,
action, investigation, proceeding or claim and shall furnish each other all such
further information that they have the right and power to furnish as may
reasonably be necessary to defend such suit, action, investigation, proceeding
or claim.
8.6 CLAIMS BETWEEN COMPANY AND BUYER.
(a) COMPANY CLAIMS AGAINST BUYER. In the case of a claim for
indemnification hereunder which is brought by Seller as the Indemnified Party
against Buyer as the Indemnifying Party, this SECTION 8.6(A) shall apply. Upon
the Claim Notice having been given to the Indemnifying Party, the Indemnifying
Party shall have thirty (30) days in which to notify the Indemnified Party in
writing (the "DISPUTE NOTICE") that the claim for indemnification is in dispute,
setting forth in reasonable detail the basis of such dispute. In the event that
a Dispute Notice is not given to the Indemnified Party within the required
thirty (30) days, the
56
Indemnifying Party shall be obligated to pay the Indemnified Party the Claimed
Amount within sixty (60) days after the date that the Claim Notice had been
given to the Indemnifying Party. In the event that a Dispute Notice is timely
given to an Indemnified Party, the parties hereto shall have thirty (30) days to
resolve any such dispute. In the event that such dispute is not resolved by such
parties within such period, the parties shall have the right to pursue all
available remedies to resolve such dispute.
(b) BUYER CLAIMS AGAINST COMPANY. In the case of a claim for
indemnification hereunder which is brought by Buyer as the Indemnified Party
against Seller as the Indemnifying Party, this SECTION 8.6(B) shall apply.
Within thirty (30) days after delivery of a Claim Notice from Indemnified Party,
Indemnifying Party shall deliver to Indemnified Party and the Escrow Agent a
written response (the "COMPANY RESPONSE") in which Indemnifying Party shall
either:
(i) agree that Indemnified Party is entitled to receive all
of the Claimed Amount, in which case Indemnified Party and
Indemnifying Party shall deliver to the Escrow Agent, to the
extent cash remains available in the Escrow Fund to satisfy the
Claimed Amount, within two (2) Business Days following the
delivery of the Company Response, a written notice executed by
such parties instructing the Escrow Agent to disburse the Claimed
Amount to Indemnified Party;
(ii) agree that Indemnified Party is entitled to receive
part, but not all, of the Claimed Amount (the "AGREED AMOUNT") in
which case Indemnified Party and Indemnifying Party shall deliver
to the Escrow Agent, to the extent cash remains available in the
Escrow Fund to satisfy the Agreed Amount, within two (2) Business
Days following the delivery of the Company Response, a written
notice executed by such parties instructing the Escrow Agent to
disburse the Agreed Amount to Indemnified Party; or
(iii) dispute that Indemnified Party is entitled to receive
any of the Claimed Amount, in which case, after a final,
non-appealable judgment has been rendered or a settlement has
been reached in respect of such dispute, Indemnified Party shall,
to the extent Indemnified Party is successful in obtaining any
cash sum in such final resolution or settlement, and to the
extent cash remains available in the Escrow Fund to satisfy such
cash sum, Indemnified Party shall deliver to the Escrow Agent a
copy of the settlement agreement or court order or decree setting
forth the cash sum to which Indemnified Party is thereby entitled
and the Escrow Agent shall act in accordance with the terms of
the Escrow Agreement.
8.7 BUYER'S KNOWLEDGE IS NOT WAIVER. Notwithstanding any right of
Buyer to fully investigate the affairs of Sellers and notwithstanding any
knowledge of facts determined or determinable by Buyer pursuant to such
investigation or right of investigation, Buyer has the right to rely fully upon
the representations, warranties, covenants and agreements of Sellers contained
in this Agreement (including the Schedules), as modified by the Disclosure
Memorandum, or in any document delivered to Buyer by any Seller or its
Representatives in connection with the transactions
57
contemplated by this Agreement, and such knowledge (except to the extent set
forth in the Disclosure Memorandum in a section corresponding to the
representation which it is intended to qualify or in a qualification contained
in a provision of this Agreement or a Schedule hereto) shall not constitute a
waiver of any Claims for indemnified Losses which Buyer may make under this
ARTICLE VIII or estop Buyer from making any such Claims.
8.8 SURVIVAL. Notwithstanding anything to the contrary in this
Agreement, the representations and warranties of each of the parties set forth
in this Agreement shall survive the Closing, and such representations and
warranties shall terminate on the one (1) year anniversary of the Closing;
PROVIDED, HOWEVER, that any representation or warranty that is the subject of a
Claim Notice delivered in good faith in compliance with the requirements of
SECTION 8.4(A) prior to the one (1) year anniversary of the Closing shall
survive with respect only to the specific matters described in such Claim Notice
until the earlier to occur of (y) the date on which a final nonappealable
resolution of the matter described in such Claim Notice has been reached or (z)
the date on which the matter described in such Claim Notice has otherwise
reached final resolution. All covenants and agreements of each of the parties
set forth in this Agreement shall survive the Closing indefinitely.
8.9 INDEMNITY BASKET. Notwithstanding anything to the contrary in this
Agreement, no Indemnifying Party shall have any obligation to indemnify any
Indemnified Party under this ARTICLE VIII until and unless the aggregate amount
of Losses (other than those referred to in the proviso to this sentence)
incurred by all Indemnified Parties exceeds Two Hundred Fifty Thousand Dollars
($250,000.00) in the aggregate (the "BASKET"), after which point the
Indemnifying Parties will be obligated to indemnify the Indemnified Parties from
and against the full amount of such Losses (including the Basket), subject to
the Ceiling; PROVIDED, HOWEVER, that the Basket shall not apply with respect to
any Losses set forth in SECTION 8.10(B) below.
8.10 INDEMNITY CEILING. Notwithstanding anything to the contrary in
this Agreement, the liability of the parties under this ARTICLE VIII shall be
limited as follows:
(a) The maximum amount of Losses incurred by a party for which
any party shall be liable pursuant to this ARTICLE VIII shall not exceed (i)
with respect to all of Company, Three Million Five Hundred Thousand Dollars ($
3,500,000.00), and (ii) with respect to Buyer, Three Million Five Hundred
Thousand Dollars ($ 3,500,000.00) (as applicable, the "CEILING").
(b) Notwithstanding the foregoing, with respect to Losses
relating to or resulting from any fraud or any intentional misconduct, an
Indemnified Party shall be entitled to indemnification with respect to such
Losses as though the Ceiling were equal to the Purchase Price.
8.11 CHARACTERIZATION OF INDEMNITY PAYMENT FOR TAX PURPOSES. All
amounts payable under this ARTICLE VIII shall be treated for all tax purposes as
adjustments to the Purchase Price, except as otherwise required by law.
8.12 EXCLUSIVE REMEDY. Other than in respect of Claims arising out of
fraud, intentional misconduct or criminal conduct (in which case Buyer shall
have all remedies available at law or in equity), the sole and exclusive remedy
for any matter arising out of this
58
Agreement after the Closing is a claim for indemnification under this ARTICLE
VIII (subject to the limitations contained in SECTIONS 8.8, 8.9 and 8.10) and
Buyer's sole recourse in order to satisfy any such claim (other than a claim for
Losses set forth in SECTION 8.10(B) above) shall be limited to the Escrowed
Funds; PROVIDED, HOWEVER, that this paragraph shall not operate as a bar to any
suit for specific performance (which does not seek monetary damages)
contemplated by this Agreement.
8.13 DUTY TO MITIGATE; INSURANCE BENEFITS.
(a) No Indemnified Party shall be entitled to indemnification
under this Article VIII for any Losses with respect to:
(i) any covenant or condition waived in writing by the
other party on or prior to the Closing; or
(ii) any Loss with respect to any matter to the extent that
such matter was incorporated in the calculation of the
adjustment of the Purchase Price pursuant to SECTION
2.6 and not otherwise a breach of a representation or
warranty.
(b) Each Indemnified Party shall be obligated to use its
commercially reasonable efforts to mitigate to the fullest extent practicable
the amount of any Loss for which it is entitled to seek indemnification under
this Article VIII.
(c) The amount of any Losses under ARTICLE VIII sustained by an
Indemnified Party shall be reduced by any amount received by such Indemnified
Party with respect thereto under any insurance coverage or from any other Person
alleged to be responsible therefor. The Indemnified Party shall use commercially
reasonable efforts to collect any amounts available under such insurance
coverage and/or from such other Person alleged to have responsibility with
respect to the Loss, as applicable. If an Indemnified Party receives an amount
under insurance coverage and/or from such other Person, as applicable, with
respect to Losses sustained at any time subsequent to any indemnification
payment pursuant to this ARTICLE VIII, then such Indemnified Party shall
promptly reimburse the applicable Indemnifying Party for any payment made or
expense incurred by such Indemnifying Party in connection with providing such
indemnification up to such amount realized or received by the Indemnified Party.
ARTICLE IX
OTHER COVENANTS
9.1 CERTAIN EMPLOYMENT ARRANGEMENTS.
(a) Not less than fifteen (15) days prior to the Closing, Buyer
will provide to Company a list identifying the number of the Employees that will
be offered employment (each, a "SPECIFIED EMPLOYEE") as Buyer determines satisfy
Buyer's needs and hiring criteria (which shall be not less than seventy percent
(70%) of Sellers' employees). Prior to (but conditioned upon) the Closing, Buyer
shall offer each of the Specified Employees engagement or employment with Buyer.
Other than the Specified Employees, Buyer shall have no obligation to
59
engage or hire any Seller Employees.
(b) Sellers shall be solely responsible for (i) ensuring
compliance with the WARN Act (to the extent applicable), (ii) payment of accrued
vacation or paid time off, (iii) payment of any severance payments that may be
due to any of its Employees, and (iv) all other legal requirements in connection
with any reductions in force or other terminations of Sellers' Employees.
9.2 RIGHTS OF ENDORSEMENT. From and after the Closing, Buyer shall
have the right and authority to collect all receivables and other items
transferred and assigned to it by any Seller hereunder and to endorse with the
name of the applicable Seller any checks received on account of such receivables
or other items, and Company agrees that it will, and shall cause each of the
Sellers to, transfer or deliver promptly to Buyer from time to time, any cash or
other property that any Seller may receive with respect to any of the Acquired
Assets. Company shall, and shall cause each of the Sellers to, cooperate with
Buyer in such transfers, including the execution and delivery of all documents
and instruments in order to effectuate the foregoing.
9.3 ADDITIONAL REGULATORY MATTERS; AGENCY RELATIONSHIP DURING
TRANSITION PERIOD.
(a) REGISTRATIONS. On or promptly after the Closing Date, the
parties will cooperate in transferring to Buyer the new drug applications and
ANDAs required to manufacture, market and sell finished dosage forms of each
Product in the United States, its territories, commonwealths and possessions
filed by or on behalf of any Seller with the FDA and any amendments or
supplements thereto which were filed on behalf of any Seller on or prior to the
Closing Date (the "REGISTRATIONS"). Promptly following the Closing Date, the
parties will agree upon procedures to ensure a smooth transition from each
Seller to Buyer of all of the activities required to be undertaken by the
Registration holder, including adverse experience reporting, quarterly and
annual reports to the FDA, handling and tracking of complaints, sample tracking,
and communication with health care professionals, customers and the FDA. Company
shall, and shall cause each Seller to, cooperate with Buyer, at no charge, to
ensure a smooth transition of the activities contemplated hereby.
(b) INTERIM RESPONSIBILITY FOR REGISTRATIONS. Until the
Registrations have been transferred to Buyer, Buyer shall act as the regulatory
agent for all Registrations pending before the FDA and shall be responsible for
maintaining them at its sole cost and expense. Each party shall cooperate with
the other in making and maintaining all regulatory filings that may be necessary
in connection with the execution, delivery and performance of this Agreement.
After each Registration approval is received from the FDA, Buyer shall transfer
such Registration into Buyer's name.
(c) COMMUNICATION WITH AGENCIES. Until the Registrations are
transferred to Buyer, Buyer, as the Regulatory Agent, shall have responsibility
for all communications with FDA and corresponding foreign bodies relating to the
Products, and Company shall, and shall cause each of the Sellers to, promptly
provide Buyer with copies of all communications to or from the FDA with respect
to each Product and/or the manufacture thereof. After such transfer has been
completed, Buyer shall have responsibility for all such communication and each
party
60
shall promptly provide the other with copies of any communications or contacts
it sends to or receives from any other governmental agency in the Territory
concerning the Products, other than communications by Buyer concerning
promotional materials, with respect to which Buyer shall not be required to
provide copies to Company.
(d) SELLERS' NDC NUMBERS. Until Buyer's establishment of Buyer
NDC Numbers as set forth in Section 9.3(e) below, Company shall, and shall cause
each of the Sellers to, not discontinue the NDC Numbers for the Products
existing as of the date hereof; at which time, Buyer shall discontinue the use
of Sellers' NDC Numbers for the Products other than with respect to returns,
rebates, allowances and adjustments for Products sold prior to the Closing Date;
PROVIDED, HOWEVER, that Buyer will be permitted to continue to sell the Products
with labeling bearing Sellers' NDC Numbers if Buyer does not have sufficient
Product Inventory bearing Buyer NDC Number to meet its firm orders; and
PROVIDED, FURTHER, that Sellers shall not seek from any customer any type of
cross-referencing of Buyer NDC Numbers with any Seller products and PROVIDED,
FURTHER, that Sellers shall provide Buyer with draft notifications to any Seller
customers regarding the use or discontinued use of such numbers by any Seller
prior to such notifications being disseminated to the customers. Buyer shall
have five (5) Business Days in which to approve such notifications, such
approval shall not be unreasonably withheld; otherwise, Buyer's approval shall
be deemed given.
(e) BUYER NDC NUMBERS. Buyer covenants and agrees that, within
five (5) Business Days of the Closing Date, Buyer will apply for and initiate
applicable processes to obtain and establish new NDC Numbers (the "BUYER NDC
NUMBERS") and notify Company thereof. Buyer may be permitted to sell the
inventory of Product with labeling bearing the NDC Numbers as of the date hereof
until the inventory of such Product is exhausted. Buyer will not sell any
inventory bearing Buyer's NDC Numbers prior to selling any products or inventory
bearing Sellers' NDC Numbers.
(f) GOVERNMENTAL INSPECTIONS. Each party shall advise the other
party of any governmental visits to, or written or oral inquiries about, any
facilities (to the extent such visit relates to, or the results thereof could
affect the manufacture or supply of, a Product) or procedures for the
manufacture, storage or handling of a Product, or the marketing, selling,
promotion or distribution of any Product, promptly after any such visit or
inquiry (or in advance, for any scheduled visits). Each party shall promptly
furnish to the other party any report or correspondence issued by or provided to
the governmental authority in connection with such visit or inquiry, purged only
of confidential information of such party wholly unrelated to the other party's
activities under this Agreement and any information that is unrelated to the
Products. Each party shall permit the relevant governmental authorities to
inspect its facilities in connection with the activities contemplated by this
Agreement.
9.4 NAME USE LICENSE. For a period of three (3) years from and after
the Closing, Buyer shall have a royalty free, fully paid, perpetual,
transferable license to use the names "Interpharm" and "Interpharm Holdings" and
the related logos in connection with Buyer's seeking to obtain regulatory
approval to market and sell the Products.
9.5 AMENDMENT TO REAL ESTATE LEASE AGREEMENT. Company shall cause
Xxxxxxx Family Realty, LLC, as landlord under the lease agreement for the Leased
Real Property located
61
at 00 Xxxxx Xxxxxx, Xxxxxxxxx, Xxx Xxxx 00000, to execute and deliver to Buyer,
at least two (2) Business Days prior to the expiration of the Due Diligence
Period, an amendment to said lease agreement in form and substance reasonably
acceptable to Buyer. Failure to meet this requirement shall give Buyer the right
to terminate this Agreement at any time prior to the end of the Due Diligence
Period.
ARTICLE X
MISCELLANEOUS
10.1 NOTICES.
(a) Any notice, consent, request or other communication required
or provided for by this Agreement shall be in writing and shall be deemed to
have been duly and properly given or served for any purpose only if (i)
delivered personally (with written confirmation of receipt), (ii) sent by
telecopier (with written confirmation of receipt), (iii) sent by registered or
certified mail, return receipt requested, or (iv) sent by an internationally
recognized courier service, postage and charges prepaid, in each case to the
appropriate addresses and telecopier numbers set forth below:
If to Buyer: Amneal Pharmaceuticals of New York, LLC
000 XxXxxx Xxxxxxxxx
Xxxxxxxx, Xxx Xxxxxx 00000
Attn: Xxxxxx Xxxxx, President
Facsimile: (000) 000-0000
With a copy to: Xxxx Xxxxxx, P.C.
000 Xxxx X. Xxxxxxx Xxxxxxx
Xxxxx Xxxxx, Xxx Xxxxxx 00000
Attn: Xxxxxx X. Xxxxxxxxxxx, Esq.
Facsimile: (000) 000-0000
And with a copy to: Tarsadia Hotels
000 Xxxxxxx Xxxxxx Xxxxx, Xxxxxxxxxx Xxxxx
Xxxxxxx Xxxxx, XX 00000
Attn: Xxxxxx Xxxx, Executive Vice President
and General Counsel
Facsimile: (000) 000-0000
If to any Seller or
any Majority
Shareholder: c/o Interpharm Holdings, Inc.
00 Xxxxx Xxxxxx
Xxxxxxxxx, Xxx Xxxx 00000
Attn: Xxxxxxx Xxxx
Facsimile: (000) 000-0000
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With a copy to: Guzov Ofsink, LLC
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx X. Xxxxxx, Esq.
Facsimile: (000) 000-0000
And with a copy to: Davidoff Xxxxxx & Hutcher LLP
000 Xxxxxx Xxxx Xxxxx, Xxxxx 000
Xxxxxx Xxxx, Xxx Xxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxx Xxxxxxx, Esq.
And with a copy to: Xxxxxx, Xxxxx & Xxxxxxx, LLP
000 Xxxxx Xxxxxx
Xxxxxxxx, XX 00000
Facsimile: Fax: (000) 000-0000
Attention: Xxxxxx Xxxxxx, Esq.
A party may change his or her address for the purpose of this SECTION 10.1 by
written notice to the other parties in the manner provided for above.
(b) All such notices, requests, consents and other communications
shall be deemed to have been given (i) in the case of personal delivery, on the
date of such delivery, (ii) in the case of mailing by an internationally
recognized express courier service, if sent by next day delivery providing
receipt of delivery, on the second Business Day following the date of such
mailing, (iii) in the case of registered or certified mailing, postage and
charges prepaid, return receipt requested, on the third Business Day following
the date of such mailing and (iv) in the case of telecopy, when received.
10.2 ENTIRE AGREEMENT. This Agreement together with the other
Transaction Documents constitute the entire agreement and supersede all prior
agreements and understandings, both written and oral, between the parties hereto
with respect to the subject matter hereof including, but not limited to, that
certain Letter of Intent dated October 20, 2007, and no party shall be liable or
bound to the other in any manner by any representations or warranties not set
forth herein.
10.3 SUCCESSORS AND ASSIGNS. The terms and conditions of this
Agreement shall inure to the benefit of and be binding upon the parties hereto
and their respective successors and permitted assigns. Neither this Agreement
nor any rights, interests, or obligations hereunder may be assigned by any party
hereto without the prior written consent of all other parties hereto; PROVIDED,
HOWEVER, that Buyer may assign its rights to any Affiliate or to a successor of
the business of Buyer, in each case without the consent of Company.
10.4 HEADINGS. The headings of the articles and sections of this
Agreement are inserted for convenience only and shall not be deemed to
constitute part of this Agreement or to affect the construction hereof.
63
10.5 MODIFICATION AND WAIVER. Any of the terms or conditions of this
Agreement may be waived in writing at any time by the party which is entitled to
the benefits thereof, and this Agreement may be modified or amended by a written
instrument executed by all parties hereto. No supplement, modification, or
amendment of this Agreement shall be binding unless executed in writing by all
of the parties hereto. No waiver of any of the provisions of this Agreement
shall be deemed or shall constitute a waiver of any other provision hereof
(whether or not similar) nor shall such waiver constitute a continuing waiver.
10.6 SCHEDULES, ETC. All Exhibits and Schedules annexed hereto and the
Disclosure Memorandum are expressly made a part of this Agreement as though
fully set forth herein, and all references to this Agreement herein or in any
such Exhibits or Schedules or the Disclosure Memorandum shall refer to and
include all such Exhibits and Schedules and the Disclosure Memorandum.
10.7 GOVERNING LAW. This Agreement shall be construed, enforced, and
governed by the internal laws of the State of Delaware, without regard to its
conflicts of laws principles.
10.8 CONSENT TO JURISDICTION. Each party to this Agreement irrevocably
consents and agrees that any legal action or proceeding with respect to this
Agreement and any action for enforcement of any judgment in respect thereof will
be brought in the federal courts located in the State of Delaware, and, by
execution and delivery of this Agreement, each party to this Agreement hereby
submits to and accepts for itself and in respect of its property, generally and
unconditionally, the non-exclusive jurisdiction of the aforesaid courts and
appellate courts from any appeal thereof. Each party to this Agreement further
irrevocably consents to the service of process out of any of the aforementioned
courts in any such action or proceeding by the mailing of copies thereof in the
manner set forth in SECTION 10.1. Each party to this Agreement hereby
irrevocably waives any objection which it may now or hereafter have to the
laying of venue of any of the aforesaid actions or proceedings arising out of or
in connection with this Agreement brought in the courts referred to above and
hereby further irrevocably waives and agrees not to plead or claim in any such
court that any such action or proceeding brought in any such court has been
brought in an inconvenient forum. Nothing in this SECTION 10.8 shall be deemed
to constitute a submission to jurisdiction, consent or waiver with respect to
any matter not specifically referred to herein.
10.9 INVALID PROVISIONS. If any provision of this Agreement is held to
be illegal, invalid, or unenforceable under present or future laws, such
provision shall be fully severable, this Agreement shall be construed and
enforced as if such illegal, invalid, or unenforceable provision had never
comprised a part of this Agreement, and the remaining provisions of this
Agreement shall remain in full force and effect and shall not be affected by the
illegal, invalid, or unenforceable provision or by its severance from this
Agreement.
10.10 RESPONSIBILITY FOR TAXES. Each party shall be responsible for
any Taxes that such party may incur pursuant to the transactions contemplated
hereby and specifically Sellers shall be responsible for and pay all sales, use
and other transfer Taxes resulting from the transactions contemplated hereunder.
10.11 FEES AND EXPENSES. Each party shall pay all of its own fees and
expenses
64
incurred by it in connection with the transactions contemplated hereby.
10.12 CONFIDENTIALITY AGREEMENT. Between the date of this Agreement
and the Closing Date or termination date, each of the parties hereto shall
continue to be bound by the terms and conditions of that certain Confidentiality
Agreement dated February 15, 2008 between Company and Buyer. The terms and
conditions of such Confidentiality Agreement shall survive any termination of
this Agreement.
10.13 THIRD PARTY BENEFICIARIES. Except as otherwise specifically
provided in ARTICLE VIII, no Person shall be a third-party beneficiary of the
representations, warranties, covenants and agreements made by any party hereto.
10.14 FURTHER ASSURANCES. From time to time after the Closing, at the
request of any other party but at the expense of the requesting party, the
parties hereto shall execute and deliver any such other instruments of
conveyance, assignment and transfer, and take such other action as such
requesting party may reasonably request in order to consummate the transactions
contemplated hereby.
10.15 COUNTERPARTS; FACSIMILE SIGNATURES. This Agreement may be
executed in one or more counterparts, including by means of facsimile,
electronic mail or similar means, each of which shall for all purposes be deemed
to be an original and all of which shall constitute the same instrument.
10.16 WAIVER OF JURY TRIAL. EACH PARTY HEREBY IRREVOCABLY WAIVES ALL
RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED
ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR
THE ACTIONS OF THE PARTIES TO THIS AGREEMENT IN THE NEGOTIATION, ADMINISTRATION,
PERFORMANCE AND ENFORCEMENT HEREOF.
[SIGNATURE PAGE FOLLOWS]
65
IN WITNESS WHEREOF, the parties have executed and delivered this Asset
Purchase Agreement as of the date first above written.
BUYER:
AMNEAL PHARMACEUTICALS OF NEW YORK, LLC
By: /s/ Xxxxxx Xxxxx
----------------------------------
Name: Xxxxxx Xxxxx
Title:President and Managing Member
COMPANY:
INTERPHARM HOLDINGS, INC.
By: /s/ Xxxxx Xxxxxxxxxxx
-----------------------------------
Name: Xxxxx Xxxxxxxxxxx
Title: COO/CFO
MAJORITY SHAREHOLDERS (SOLELY FOR PURPOSES
OF SECTIONS 5.6, 5.8, 5.9 AND 8.5(D)):
XXXXXX-XXXXXXXXX CAPITAL FOCUS III,
L.P.
By: Xxxxxx-Xxxxxxxxx Partners III,
L.L.C., its general partner
By: /s/ Xxxx X. Xxxxxxxxxx
---------------------------------
Name: Xxxx X. Xxxxxxxxxx
Title:
AISLING CAPITAL II, L.P.
By: AISLING CAPITAL PARTNERS, LP, its
General Partner
By: AISLING CAPITAL PARTNERS, LLC, its
General Partner
By: /s/ Xxxxxx Xxxxxxx
---------------------------------
Name: Xxxxxx Xxxxxxx
Title: Sr. Managing Member
[SIGNATURE PAGE TO ASSET PURCHASE AGREEMENT]
MAJORITY SHAREHOLDERS (SOLELY FOR PURPOSES
OF SECTIONS 5.6, 5.8, 5.9 AND 8.5(D))
(CONTINUED):
RAJ HOLDINGS I, LLC
By: /s/ Xxxxxxxx X. Xxxxxxx
---------------------------------
Name: Xxxxx Xxxxxxx
Title: Managing Member
By: Xxxxxxxx X. Xxxxxxx,
attorney-in-fact
RAVI HOLDINGS I, LLC
By: /s/ Xxxx Xxxxxxx
---------------------------------
Name: Xxxx Xxxxxxx
Title: Managing Member
P&K HOLDINGS, LLC
By: /s/ Xxxxxxxx X. Xxxxxxx
---------------------------------
Name: Xxxxx Xxxxxxx
Title: Managing Member
By: Xxxxxxxx X. Xxxxxxx,
attorney-in-fact
/s/ Xxxxxxxx X. Xxxxxxx
---------------------------------------
Xxxxxxxx X. Xxxxxxx
/s/ Xxxxxxxx X. Xxxxxxx
---------------------------------------
Xxxxx Xxxxxxx
By: Xxxxxxxx X. Xxxxxxx,
attorney-in-fact
[SIGNATURE PAGE TO ASSET PURCHASE AGREEMENT]
COMPANY:
INTERPHARM, INC.
By: /s/ Xxxxx Xxxxxxxxxxx
-----------------------------------
Name: Xxxxx Xxxxxxxxxxx
Title: COO/CFO
[SIGNATURE PAGE TO ASSET PURCHASE AGREEMENT]
