Exhibit 10.6
EXECUTION COPY
==============================================================================
ASSET PURCHASE AGREEMENT
BY AND AMONG
K-V PHARMACEUTICAL COMPANY
AND
VIVUS, INC.
DATED AS OF MARCH 30, 2007
==============================================================================
TABLE OF CONTENTS
Page
----
ARTICLE I. DEFINITIONS............................................................................................1
Section 1.1 Defined Terms..........................................................................1
Section 1.2 Construction of Certain Terms and Phrases.............................................14
ARTICLE II. PURCHASE AND SALE OF ASSETS; GRANT OF LICENSES; SUBLICENSE AGREEMENT.................................14
Section 2.1 Purchase and Sale of Assets at the Closing............................................14
Section 2.2 Excluded Assets.......................................................................16
Section 2.3 Retention of Assets...................................................................17
Section 2.4 Assignability and Consents............................................................17
Section 2.5 License to Seller Multi-Application Technology........................................17
Section 2.6 Licenses to Improvements. Effective as of the Closing:...............................18
Section 2.7 Sublicense Agreement..................................................................18
Section 2.8 Clinical Results Option...............................................................18
ARTICLE III. ASSUMPTION OF LIABILITIES...........................................................................19
Section 3.1 Assumption of Liabilities.............................................................19
ARTICLE IV. PURCHASE PRICE AND PAYMENT...........................................................................21
Section 4.1 Purchase Price........................................................................21
Section 4.2 Milestone Payments....................................................................21
Section 4.3 Allocation of Purchase Price..........................................................23
Section 4.4 Sales, Use and Other Taxes............................................................24
Section 4.5 Tax Withholding.......................................................................24
Section 4.6 Risk of Loss..........................................................................24
Section 4.7 Subsidiaries..........................................................................24
ARTICLE V. CLOSING...............................................................................................25
Section 5.1 Time and Place........................................................................25
Section 5.2 Deliveries at Closing.................................................................25
ARTICLE VI. REPRESENTATIONS AND WARRANTIES OF THE SELLER.........................................................26
Section 6.1 Organization, Etc.....................................................................26
Section 6.2 Authority of the Seller...............................................................27
Section 6.3 Consents and Approvals................................................................27
Section 6.4 Non-Contravention.....................................................................28
Section 6.5 Contracts.............................................................................28
Section 6.6 Intellectual Property Rights..........................................................28
i
Section 6.7 Litigation............................................................................30
Section 6.8 Permits; Compliance with Law..........................................................31
Section 6.9 Evamist Inventory.....................................................................33
Section 6.10 Suppliers.............................................................................33
Section 6.11 [Intentionally Deleted.]..............................................................33
Section 6.12 Environmental Matters.................................................................33
Section 6.13 Absence of Certain Changes or Events..................................................34
Section 6.14 Title to Assets; Sufficiency of Assets................................................35
Section 6.15 Disclosure............................................................................36
Section 6.16 Taxes.................................................................................36
Section 6.17 Brokers...............................................................................37
ARTICLE VII. REPRESENTATIONS AND WARRANTIES OF THE ACQUIROR......................................................37
Section 7.1 Corporate Organization................................................................37
Section 7.2 Authority of the Acquiror.............................................................37
Section 7.3 Non-Contravention.....................................................................38
Section 7.4 Litigation............................................................................38
Section 7.5 Brokers...............................................................................38
Section 7.6 Financing.............................................................................39
ARTICLE VIII. COVENANTS OF THE PARTIES...........................................................................39
Section 8.1 Operation of the Evamist Business.....................................................39
Section 8.2 Reasonable Efforts....................................................................41
Section 8.3 Access; Confidentiality...............................................................43
Section 8.4 Public Announcements; Confidentiality.................................................46
Section 8.5 Regulatory Matters....................................................................46
Section 8.6 Bulk Transfer Laws....................................................................48
Section 8.7 Covenant Not to Compete...............................................................49
Section 8.8 Further Assurances....................................................................49
Section 8.9 Cooperation Regarding Financial Statements; Taxes, Etc................................50
Section 8.10 No Solicitation.......................................................................50
Section 8.11 Insurance.............................................................................51
Section 8.12 Tax Matters...........................................................................51
Section 8.13 Financial Resources...................................................................53
ARTICLE IX. CONDITIONS TO THE OBLIGATIONS OF THE SELLER FOR THE CLOSING..........................................53
Section 9.1 Representations, Warranties and Covenants.............................................53
Section 9.2 No Actions or Proceedings.............................................................53
Section 9.3 No Material Adverse Effects...........................................................54
Section 9.4 No Proceedings........................................................................54
Section 9.5 Deliveries............................................................................54
ii
ARTICLE X. CONDITIONS TO THE OBLIGATIONS OF THE ACQUIROR FOR THE CLOSING.........................................54
Section 10.1 Representations, Warranties and Covenants.............................................54
Section 10.2 No Actions or Proceedings.............................................................54
Section 10.3 Consents..............................................................................54
Section 10.4 No Material Adverse Effects...........................................................55
Section 10.5 Deliveries............................................................................55
Section 10.6 Proceedings...........................................................................55
ARTICLE XI. INDEMNIFICATION......................................................................................55
Section 11.1 Survival of Representations, Warranties, Covenants, Etc...............................55
Section 11.2 Indemnification.......................................................................55
Section 11.3 Limitations...........................................................................59
Section 11.4 Exclusive Remedy......................................................................60
ARTICLE XII. TERMINATION.........................................................................................60
Section 12.1 Methods of Termination................................................................60
Section 12.2 Procedure upon Termination............................................................62
ARTICLE XIII. MISCELLANEOUS......................................................................................62
Section 13.1 Notices...............................................................................62
Section 13.2 Entire Agreement......................................................................63
Section 13.3 Waiver................................................................................63
Section 13.4 Amendment.............................................................................64
Section 13.5 Third Party Beneficiaries.............................................................64
Section 13.6 Assignment; Binding Effect............................................................64
Section 13.7 Headings..............................................................................64
Section 13.8 Severability..........................................................................64
Section 13.9 Governing Law.........................................................................64
Section 13.10 Expenses..............................................................................65
Section 13.11 Counterparts..........................................................................65
Exhibit A-Form of Sublicense Agreement
Exhibit B-Form of Transition Services Agreement
iii
ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement (this "AGREEMENT") is made and
entered into as of March 30, 2007, by and among K-V Pharmaceutical Company, a
Delaware corporation (the "ACQUIROR"), and Vivus, Inc., a Delaware corporation
(the "SELLER").
RECITALS
WHEREAS, Seller is engaged in researching, developing,
marketing, and selling certain biopharmaceutical products, including Evamist;
WHEREAS, Seller will, by the terms of this Agreement,
transfer or license to Acquiror Seller's tangible and intangible assets and
rights used by Seller in the conduct of the Evamist Business and necessary for
Acquiror to conduct the Evamist Business following the Closing; and
WHEREAS, Acquiror has agreed to assume the Assumed
Liabilities on the terms and subject to the conditions set forth herein.
AGREEMENT
NOW, THEREFORE, in consideration of the premises, covenants,
representations and warranties contained herein, and other good and valuable
consideration, the adequacy and receipt of which are hereby acknowledged, the
parties hereto, intending to be legally bound, agree as follows:
ARTICLE I.
DEFINITIONS
Section 1.1 Defined Terms. As used in this Agreement, the
-------------
following defined terms shall have the meanings specified below:
"ACCOUNTANTS" means KPMG International; provided, however,
that if KPMG International refuses such retention, Seller and Acquiror shall
jointly select another independent accounting firm of recognized national
standing; provided, further, that in the event that the Acquiror and the
Seller are unable to agree on such an accounting firm within ten (10) Business
Days, then the accounting firm shall be selected by lottery.
"ACQUIROR" has the meaning set forth in the preamble to this
Agreement.
"ACQUIROR MATERIAL ADVERSE EFFECT" means any state of facts,
change, development, event, occurrence, effect or condition that, individually
or in the aggregate, has had or would be reasonably expected to have a
material adverse effect on the business, assets (including intangible assets),
results of operations, liabilities (contingent or otherwise) or conditions
(financial or otherwise) of the Acquiror, except that any such state of facts,
change, development, event, occurrence, effect or condition resulting from or
arising out of or in connection with any of the following, either alone or in
combination, shall not be taken into
consideration for purposes of determining whether an Acquiror Material Adverse
Effect has occurred or arisen: (a) the announcement of this Agreement or the
pendency of the transactions contemplated hereby, (b) the performance by the
Acquiror of its obligations under this Agreement, (c) general economic
conditions in any country where the Acquiror's business is conducted to the
extent that they do not disproportionately affect the Acquiror relative to
other industry participants, (d) general conditions in any industry in which
the Acquiror's business is conducted to the extent that they do not
disproportionately affect the Acquiror relative to other industry
participants, (e) changes or conditions in economic, regulatory, political or
capital markets conditions generally to the extent that they do not
disproportionately affect the Acquiror relative to other industry
participants, (f) any natural disaster or any acts of terrorism, sabotage,
military action or war (whether or not declared) or any escalation or
worsening thereof, (g) the Acquiror's failure to meet any financial
projections in and of itself (it being understood that the facts or
occurrences giving rise or contributing to such failure may be deemed to
constitute, or be taken into account in determining whether there has been or
will be, an Acquiror Material Adverse Effect) or (h) changes in Law or GAAP.
"ACRUX LICENSE" means the Estradiol Development and
Commercialization Agreement, dated February 12, 2004, by and among Fempharm
Pty Ltd., Vivus, Inc. and Acrux DDS Pty Ltd., as amended.
"ACRUX LICENSE ASSIGNMENT CONSENT" means the written consent
of Fempharm Pty Ltd. to the assignment and transfer of the Acrux License to
the Acquiror as an Assumed Contract pursuant to Section 2.1(a).
--------------
"ACTION OR PROCEEDING" means any action, suit, claim,
proceeding, arbitration, dispute, Order, inquiry, hearing, assessment with
respect to fines or penalties or litigation (whether civil, criminal,
administrative or investigative) commenced, brought, conducted or heard by or
before, or otherwise involving, any Governmental or Regulatory Authority.
"ADVERSE DETERMINATION" has the meaning set forth in
Section 12.1(i).
---------------
"AFFILIATE" means, with respect to any Person, any other
Person which Controls, is Controlled by or is under common Control with such
Person.
"AGREEMENT" has the meaning set forth in the preamble
hereto.
"ANDROGEN" has the meaning set forth in Section 2.5.
-----------
"APPLICABLE PERIOD" has the meaning set forth in Section 8.7.
-----------
"ASSUMED CONTRACTS" means the Evamist Contracts set forth on
Schedule 1.1(a)(1). Notwithstanding the foregoing, the Assumed Contracts shall
not include the Acrux License in the event that the Sublicense Agreement is
required to be executed and delivered by the parties at the Closing pursuant
to Section 2.7.
-----------
"ASSUMED LIABILITIES" has the meaning set forth in
Section 3.1(a).
--------------
2
"XXXX OF SALE" means the Xxxx of Sale conveying the
Purchased Assets from the Seller to the Acquiror, in a form to be mutually
agreed upon by the parties prior to the Closing.
"BOOKS AND RECORDS" means all books, records, files,
documents, data, information and correspondence, including, without
limitation, all records with respect to supply sources; all pre-clinical,
clinical and process development data and reports relating to research or
development of products or of any materials used in the research, development,
manufacture, marketing or sale of products, including all raw data relating to
clinical trials of products, all case report forms relating thereto and all
statistical programs developed (or modified in a manner material to the use or
function thereof) to analyze clinical data; all market research data, market
intelligence reports, statistical programs (if any) used for marketing and
sales research; promotional, advertising and marketing materials, sales
forecasting models, medical education materials, sales training materials, web
site content and advertising and display materials; all records, including
vendor and supplier lists, manufacturing records, sampling records, standard
operating procedures and batch records, related to the manufacturing process;
all data contained in laboratory notebooks relating to products or relating to
their biological, physiological, mechanical or formula properties; all adverse
experience reports and files related thereto (including source documentation)
and all periodic adverse experience reports and all data contained in
electronic data bases relating to periodic adverse experience reports; all
analytical and quality control data; and all correspondence, minutes or other
communications with the FDA owned or held by Seller or any of its Subsidiaries
as of the Closing Date.
"BUSINESS DAY" means a day other than Saturday, Sunday or
any day on which commercial banks located in New York are authorized or
obligated by Law to close.
"CHARTER DOCUMENTS" has the meaning set forth in Section 6.1.
-----------
"CLINICAL RESULTS OPTION" has the meaning set forth in
Section 2.8.
-----------
"CLOSING" has the meaning set forth in Section 5.1.
-----------
"CLOSING DATE" has the meaning set forth in Section 5.1.
-----------
"CODE" means the Internal Revenue Code of 1986, as amended,
and the regulations promulgated thereunder.
"COMPETING PRODUCT" has the meaning set forth in Section 8.7.
-----------
"CONFIDENTIALITY AGREEMENT" means the Confidentiality
Agreement, dated as June 2, 2006, by and between Seller and Acquiror.
"CONTRACTS" means any and all written or legally binding
oral commitments, contracts, purchase orders, sales orders, leases, subleases,
licenses, easements, commitments, arrangements, undertakings, evidence of
indebtedness, security or pledge agreements or other agreements.
3
"CONTROL" means:
(a) ownership (directly or indirectly) of at least
fifty percent (50%) of the shares or stock entitled to vote for the election
of directors in the case of a company or corporation; or
(b) the ability otherwise to direct and control
(whether directly or indirectly through one or more intermediaries) the
actions of a Person.
"CORPORATE NAME" means "VIVUS, Inc." and any and all
derivatives thereof.
"DAMAGES" has the meaning set forth in Section 11.2(a).
---------------
"DATA PACKAGE" has the meaning set forth in Section 2.8.
-----------
"DEFAULT" means (i) a breach, default or violation, (ii) the
occurrence of an event that with or without the passage of time or the giving
of notice, or both, would constitute a breach, default or violation or cause
an Encumbrance to arise, or (iii) with respect to any Contract, the occurrence
of an event that with or without the passage of time or the giving of Notice,
or both, would constitute a change of control or give rise to a right of
termination, modification, renegotiation, acceleration, cancellation, or a
right to receive Damages or a payment of penalties.
"DESIGNATED ACQUIROR SUBSIDIARY" shall have the meaning set
forth in Section 4.7.
-----------
"DPT LABORATORIES" means the facilities of DPT Laboratories,
Ltd. located at 000 X. Xxxxxxxxx Xxxxxx, Xxx Xxxxxxx 00000.
"ENCUMBRANCE" means any claim, mortgage, pledge, assessment,
security interest, option, deed of trust, lease, lien, levy, license,
restriction on transferability, defect in title, charge or other encumbrance
of any kind, whether voluntarily incurred or arising by operation of Law or
any conditional sale or title retention agreement or other agreement to give
any of the foregoing in the future.
"ENVIRONMENTAL LAWS" means any federal, state, local or
non-U.S. Law and any judicial or administrative interpretation thereof,
including any judicial or administrative order, consent decree, judgment,
stipulation, injunction, permit, authorization, policy, opinion, or agency
requirement, in each case having the force and effect of Law, relating to the
pollution, protection, investigation or restoration of the environment or
health and safety as affected by the environment or natural resources,
including those relating to the use, handling, presence, transportation,
treatment, storage, disposal, release, threatened release or discharge of
Hazardous Materials or noise, odor, wetlands, pollution or contamination.
"ERISA AFFILIATE" means any entity which is (or at any
relevant time was) a member of a "controlled group of corporations" with,
under "common control" with, or a member of an "affiliated service group"
with, Seller, as defined in Section 414(b), (c), (m) or (o) of the Code, or
under "common control" with Seller, within the meaning of Section 4001(b)(1)
of the Employee Retirement Income Security Act of 1974, as amended.
4
"ESTRADIOL" means the compound with the chemical structure
shown in Schedule 1.1(b).
---------------
"ESTROGEN" means ***.
"EVAMIST" means that pharmaceutical product consisting of an
MDTS containing Estradiol, or any other Estrogen that is added to the Field
(as defined under the Acrux License).
"EVAMIST BOOKS AND RECORDS" means all of the Books and
Records related to the Evamist Business owned by the Seller, but excluding the
Excluded Books and Records, and, in the case of any of the Books and Records
also relating to other businesses or assets of the Seller or its Subsidiaries,
the Seller shall have the right to redact the same with respect to such other
businesses and assets.
"EVAMIST BUSINESS" means the research, development,
regulatory approval, manufacture, distribution, marketing, sale and promotion
of Evamist in the Evamist Territory. For clarity, the Evamist Business shall
exclude research, development or manufacturing (including process development)
activities related generally to platforms (including MDTS) or other
technologies not specific to Evamist.
"EVAMIST CONTRACTS" means all (i) Contracts pursuant to
which Seller or its Subsidiaries purchases any materials from any third party
for use solely in connection with the manufacture of Evamist, all of which
Contracts in effect on the date hereof are set forth on Schedule 1.1(a)(2),
------------------
(ii) Contracts relating solely to any pre-clinical or clinical trial involving
Evamist, all of which Contracts in effect on the date hereof are set forth on
Schedule 1.1(a)(2), (iii) Contracts constituting material transfer agreements
------------------
solely involving the transfer of Evamist, all of which Contracts in effect on
the date hereof are set forth on Schedule 1.1(a)(2), (iv) Contracts relating
------------------
solely to the marketing of Evamist or educational matters relating to the
Evamist Business, all of which Contracts in effect on the date hereof are set
forth on Schedule 1.1(a)(2), (v) Contracts relating solely to the supply or
------------------
manufacture of Evamist, all of which Contracts in effect on the date hereof
are set forth on Schedule 1.1(a)(2), (vi) Contracts constituting
------------------
confidentiality agreements involving solely Evamist or the Evamist Business,
all of which Contracts in effect on the date hereof are set forth on Schedule
--------
1.1(a)(2), (vii) Contracts involving any royalty, licensing, partnering or
---------
similar arrangement solely involving Evamist or the Evamist Business, all of
which Contracts in effect on the date hereof are set forth on Schedule
--------
1.1(a)(2), (viii) Contracts pursuant to which any services are provided to
---------
Seller or its Subsidiaries with respect solely to Evamist or the Evamist
Business, including consultation agreements, all of which Contracts in effect
on the date hereof are set forth on Schedule 1.1(a)(2), (ix) Contracts
------------------
pursuant to which any third party collaborates with Seller or its Subsidiaries
in the performance of research or development solely of Evamist or the Evamist
Business, all of which Contracts in effect on the date hereof are set forth on
Schedule 1.1(a)(2), and (x) Contracts entered into by Seller or its
------------------
Subsidiaries from the date hereof to the Closing Date to the extent relating
solely to Evamist, the Purchased Assets or the Evamist Business.
"EVAMIST COPYRIGHTS" means all copyrights, whether
registered or unregistered, and applications, if any, owned or used under
license by the Seller or any of its Subsidiaries
5
exclusively related, or necessary and primarily related, to the Evamist
Business, including without limitation those copyrights set forth on
Schedule 1.1(c).
---------------
"EVAMIST FDA SUBMISSIONS" means, collectively, the Evamist
IND and Evamist NDA.
"EVAMIST GOVERNMENTAL PERMITS" means all governmental
permits, licenses, registrations, NDAs, approvals and other governmental
authorizations related solely to the operation of the Evamist Business that
are held in the name of Seller or any of its Subsidiaries, and any
applications therefor and all files related thereto.
"EVAMIST IND" means the IND for Evamist set forth on
Schedule 1.1(d) as filed as of the date of this Agreement, and all documents,
---------------
data, analyses, and files related thereto, in each case as may be updated in
accordance with this Agreement.
"EVAMIST INTELLECTUAL PROPERTY" means (i) the Evamist
Copyrights, (ii) the Evamist Patent Rights, (iii) the Evamist Know-How, (iv)
the Seller Multi-Application Technology, (v) the Evamist Trademarks and (vi)
any Software that is embedded in hardware included in the Purchased Assets.
"EVAMIST INVENTORY" means all inventories of Evamist in
existence as of the Closing Date, together with all bulk active pharmaceutical
ingredient, other raw materials, components, parts, work in process and
packaging materials owned by Seller or any of its Subsidiaries as of the
Closing Date for use solely in the operation of the Evamist Business. For
clarity, Evamist Inventory shall exclude raw materials, components, parts,
work in process and packaging materials not specific to Evamist.
"EVAMIST KNOW-HOW" means any and all Evamist Manufacturing
Know-How and other product specifications, processes, product designs, plans,
trade secrets, ideas, concepts, inventions, manufacturing, formulations,
engineering and other manuals and drawings, standard operating procedures,
formulae, flow diagrams, chemical, pharmacological, toxicological,
pharmaceutical, physical, analytical, safety, quality assurance, quality
control and clinical data, technical information, research records, and all
other confidential or proprietary technical and business information that is
currently owned or used under license by the Seller or any of its Subsidiaries
and used exclusively in the Evamist Business as of the Closing Date. For the
sake of clarity, none of the foregoing information shall be included in
Evamist Know-How to the extent that such information is covered by any claim
of any Evamist Patent. Notwithstanding the foregoing, Evamist Know-How shall
exclude the Seller Multi-Application Technology.
"EVAMIST MANUFACTURING KNOW-HOW" means any information
relating to the manufacture of Evamist owned or used under license by the
Seller or its Subsidiaries, including without limitation the identity, amounts
and assurance quality of ingredients, the manufacturing processes and
controls, specifications, technology, inventions, assays, quality control and
testing procedures, know-how and trade secrets used exclusively to
manufacture, formulate, test and package Evamist for use, sale, marketing and
distribution in the Evamist Territory as of the Closing Date. For the sake of
clarity, none of the foregoing information shall be included in
6
Evamist Manufacturing Know-How to the extent that such information is covered
by any claim of any Evamist Patent Rights.
"EVAMIST NDA" means the NDA for Evamist set forth on
Schedule 1.1(d) as filed as of the date of this Agreement, and all documents,
---------------
data, analyses, and files related thereto, in each case as may be updated in
accordance with this Agreement.
"EVAMIST NDA APPROVAL" means approval of the Evamist NDA by
the FDA allowing for the initiation of marketing and sale of Evamist in the
United States for the treatment of vasomotor or any other similar symptoms
associated with menopause.
"EVAMIST NDA APPROVAL DATE" means the date upon which the
FDA issues to Seller written notice of the Evamist NDA Approval.
"EVAMIST PATENT RIGHTS" means, to the extent owned or used
under license by the Seller or any of its Subsidiaries, including those Patent
Rights listed on Schedule 1.1(e), together with all registrations,
---------------
applications and renewals thereof, and any other Patents Rights that are owned
or used under license by the Seller or any of its Subsidiaries and that would
be infringed by the manufacture, sale, offer to sell or importation of Evamist
in the Evamist Territory.
"EVAMIST PRODUCT IMPROVEMENT" means (to the extent
applicable), to the extent owned by Seller or any of its Subsidiaries, any:
(i) line extension of Evamist; (ii) new indication of Evamist; (iii)
composition of matter or article of manufacture consisting essentially of an
Estrogen for dermal delivery, with or without a device suitable for dermal
delivery of Estrogen; (iv) pharmaceutical combination containing an Estrogen
for dermal delivery and another active ingredient; (v) new formulations
comprising an Estrogen for dermal deliver; and/or (vi) compositions of matter
or articles of manufacture constituting any of the foregoing or components
thereof.
"EVAMIST PRODUCT REGISTRATIONS" means (i) the exemptions,
approvals or registrations which have been received by Seller or any of its
Subsidiaries as of the date of this Agreement, or which are received by Seller
or any of its Subsidiaries after the date of this Agreement but before the
Closing Date, for the manufacturing, testing, investigation, sale, use,
distribution and/or marketing of Evamist (including any NDAs or INDs), and
(ii) all dossiers, reports, data and other written materials filed as part of
or referenced in any applications for such approvals or registrations, or
maintained by Seller or any of its Subsidiaries and relating to such approvals
or registrations, in each case related exclusively to Evamist and to the
extent owned by Seller or any of its Subsidiaries as of the Closing Date.
"EVAMIST PURCHASED INTELLECTUAL PROPERTY" means (i) the
Evamist Copyrights, (ii) the Evamist Patent Rights, (iii) the Evamist Know-How
and (iv) the Evamist Trademarks, in each case owned by the Seller or any of
its Subsidiaries.
"EVAMIST TERRITORY" means the United States, and its
territories and protectorates.
"EVAMIST TRADEMARKS" means all trademarks, trade names,
trade dress, service marks, logos and slogans, in each case whether registered
or unregistered, and all internet domain names, owned by the Seller or any of
its Subsidiaries and used exclusively in the conduct
7
of the Evamist Business and in any sales, promotional, marketing or
advertising materials for Evamist in the Evamist Territory, and together
with all registrations, applications and renewals thereof and the goodwill
associated therewith, including without limitation those set forth on
Schedule 1.1(f); provided, however, that Evamist Trademarks shall not include
---------------
the Corporate Name of the Seller or its Subsidiaries.
"EXCLUDED ASSETS" has the meaning set forth in Section 2.2.
-----------
"EXCLUDED BOOKS AND RECORDS" means all Books and Records
related to human resources and any other employee related files and records.
"EXCLUDED LIABILITIES" has the meaning set forth in
Section 3.1(b).
--------------
"EXCLUDED TAX LIABILITY" has the meaning set forth in
Section 3.1(b)(ii).
------------------
"FACILITY INSPECTION DEADLINE" has the meaning set forth in
Section 12.1(i).
---------------
"FDA" means the United States Food and Drug Administration
or any successor thereto.
"FDA ACT" means the U.S. Food, Drug and Cosmetic Act of
1938, as it may be superseded or amended from time to time.
"FDA MILESTONE PAYMENT" has the meaning set forth in
Section 4.2(a).
--------------
"FDA TRANSFER LETTER" has the meaning set forth in
Section 8.2(e)
--------------
"FINANCIAL INFORMATION" has the meaning set forth in
Section 6.11.
------------
"FIRST COMMERCIAL SALE" means the first commercial sale of
Evamist for use in the Evamist Territory (other than for evaluation, research,
testing or clinical trial purposes), which occurs after the Evamist NDA
Approval Date, by the Acquiror or its Affiliates or sublicensees to an
independent non-Affiliate third party in exchange for cash or some equivalent
to which value can be assigned.
"GAAP" means United States generally accepted accounting
principles.
"GOVERNMENTAL OR REGULATORY AUTHORITY" means any court,
tribunal, arbitrator, authority, agency, commission, department, ministry,
official or other instrumentality of the United States or other country, or
any supra-national organization, or any foreign or domestic, state, county,
city or other political subdivision.
"HAZARDOUS MATERIALS" means (A) any petroleum, petroleum
products, byproducts or breakdown products, radioactive materials,
asbestos-containing materials or polychlorinated biphenyls or (B) any
chemical, material or other substance defined or regulated as toxic or
hazardous or as a pollutant or contaminant or waste under any Environmental
Law.
8
"HSR ACT" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements
Act of 1976, as amended, together with any rules or regulations promulgated
thereunder.
"IND" means (i) an Investigational New Drug Application, as
defined in the FDA Act and the regulations promulgated thereunder, which is
required to be filed with the FDA before beginning clinical testing of a
product in human subjects, or any successor application or procedure, (ii) all
supplements and amendments that may be filed with respect to the foregoing and
(iii) all international equivalents of the foregoing.
"INDEMNIFICATION CLAIM NOTICE" has the meaning set forth in
Section 11.2(c).
---------------
"IMPROVEMENT" means (i) any improvement or modification to
the design, materials, manufacturing and/or assembly of the metered dose
transdermal spray application device reduced to practice by or on behalf of
either party during the two (2) year period after the Closing Date and/or (ii)
all ideas, concepts, inventions and the like created by either party pursuant
to the services to be performed pursuant to the Transition Service Agreement.
"INDEMNIFIED PARTY" has the meaning set forth in
Section 11.2(c).
---------------
"INDEMNITEES" has the meaning set forth in Section 11.2(c).
---------------
"KNOW-HOW" means any proprietary or nonproprietary
information directly related to the manufacture, preparation, development
(both research and clinical), or commercialization of a product, including,
without limitation, product specifications, processes, product designs, plans,
trade secrets, ideas, concepts, inventions, formulae, chemical,
pharmacological, toxicological, pharmaceutical, physical, analytical,
stability, safety, quality assurance, quality control and clinical
information, technical information, research information, and all other
confidential or proprietary technical and business information, whether or not
embodied in any documentation or other tangible materials, but in no event
shall the definition of "Know-How" include information properly in the public
domain as of the Closing Date.
"KNOWLEDGE" with respect to (i) the Seller means the
knowledge of officers or directors of the Seller, following reasonable
inquiry, with responsibility for, or supervision of, the relevant matters, and
(ii) the Acquiror means the knowledge of the officers, directors or senior
managers, following reasonable inquiry, of the Acquiror with responsibility
for supervision of the relevant matters.
"LAW" means any federal, state, local or foreign law,
statute, code or ordinance, or any rule or regulation promulgated by any
Governmental or Regulatory Authority.
"LIABILITY" means any direct or indirect liability,
obligation, claim, deficiency, guarantee or commitment of any kind or nature
(whether known or unknown, asserted or unasserted, absolute or contingent,
accrued or unaccrued, liquidated or unliquidated, or due or to become due),
including any liability for Taxes.
"LIABILITY CAP" means $1,250,000 unless and until the Seller
receives payment of the FDA Milestone Payment pursuant to Section 4.2(a), and
--------------
thereafter shall be $18,750,000.
9
"LIABILITY THRESHOLD" has the meaning set forth in
Section 11.3(a).
---------------
"MDTS" means the metered dose transdermal spray system as
described in Schedule 1.1(g), and all improvements, derivatives and
---------------
modifications of such system developed by or under authority of Seller, or
Acrux DDS Pty. Ltd. or its Affiliate.
"NET SALES" shall mean, with respect to a fiscal year, the
total gross invoices for Evamist sold by Acquiror and its Affiliates to
independent, third party customers in the Evamist Territory, less (a)
customary trade, quantity and/or cash discounts taken, (b) accrued rebates,
adjustments and allowances, including those amounts credited by reason of
rejections, return of goods, and any retroactive price reductions relating to
Evamist, (c) amounts accrued resulting from mandated rebate programs of the
government of the Evamist Territory (or any agency thereof), including but not
limited to Medicaid and other federal, state or local rebates, (d) accrued
third party rebates and chargebacks, or similar items, related to the sale of
Evamist, (e) customs duties and sales or similar taxes, if any, directly
related to the sale of Evamist, (f) amounts paid by Acquiror to its customers
for defective Evamist returned to Acquiror from its customers, (g) shipping
and freight costs and (h) any reasonable and customary provision for
uncollectible accounts with respect to sales of Evamist per se, to the extent
such reserve is determined in accordance with GAAP, consistently applied
across all product lines of the Person making the sales, provided in the case
of (e) and (g) such amounts are included within the gross invoiced amounts and
separately itemized.
"NDA" means (i) a New Drug Application for any product, as
appropriate, requesting permission to place a drug on the market in accordance
with 21 C.F.R. Part 314, and all supplements or amendments filed pursuant to
the requirements of the FDA, including all documents, data and other
information concerning a product which are reasonably necessary for FDA
approval to market a product in the United States and (ii) all international
equivalents of the foregoing.
"NON-ASSIGNABLE ASSET" has the meaning set forth in
Section 2.4(a).
--------------
"NO-SHOP PERIOD" has the meaning set forth in Section 8.10(a).
---------------
"NOTICE" with respect to a party means notice actually
received by an officer, director or senior manager of the Seller, in the case
of the Seller, or of the Acquiror, in the case of the Acquiror, in each case
with responsibility in the relevant area, or delivered in accordance with the
terms of the document, Law or Order pursuant to which such notice was given.
"ORDER" means any writ, judgment, decree, injunction or
similar order, including consent orders, of any Governmental or Regulatory
Authority (in each such case whether preliminary or final).
"ORDINARY COURSE OF BUSINESS" means an action or activity
that is consistent in nature, scope and magnitude with the past practices of
the Seller and its Subsidiaries with respect to the Evamist Business.
"OTHER BID" has the meaning set forth in Section 8.10.
------------
10
"PATENT ASSIGNMENT AGREEMENT" means the Patent Assignment
Agreement to be dated as of the Closing Date by and between the Acquiror and
Seller, in a form to be mutually agreed upon by the parties prior to the
Closing.
"PATENT RIGHTS" means any patent application (including any
provisionals, divisionals, continuations, continuations-in-part (to the extent
claiming subject matter invented on or before the Closing Date) and
substitutions thereof), patents issuing from or granted upon such patent
application (including patents of addition (to the extent claiming subject
matter invented on or before the Closing Date) and substitutions thereof),
reissues, extensions, reexaminations, renewal applications, supplemental
patent certificates or any confirmation patent or registration patent) and all
foreign counterparts of any of the foregoing.
"PERSON" means any natural person, corporation, general
partnership, limited partnership, limited liability company, proprietorship,
joint venture, other business organization, trust, entity, union, association
or Governmental or Regulatory Authority.
"POST-CLOSING TAX PERIOD" means any Tax period beginning
after the Closing Date and the portion of any Straddle Period beginning after
the Closing Date.
"PRE-CLOSING TAX PERIOD" means any Tax period ending on or
before the Closing Date and the portion of any Straddle Period ending on the
Closing Date.
"PROPERTIES" has the meaning set forth in Section 6.12.
------------
"PURCHASE PRICE" has the meaning set forth in Section 4.1(a).
--------------
"PURCHASED ASSETS" has the meaning set forth in Section 2.1.
-----------
"REGISTERED EVAMIST INTELLECTUAL PROPERTY" means all Evamist
Intellectual Property that has been registered, filed, certified or otherwise
perfected or recorded with or by any Governmental or Regulatory Authority.
"*** FACILITIES" means the facilities of ***.
"RELATED AGREEMENTS" means the Trademark Assignment
Agreement, Patent Assignment Agreement, Xxxx of Sale, Transition Services
Agreement, Sublicense Agreement (only if the Sublicense Agreement is required
to be executed and delivered pursuant to Section 2.7) and duly executed and
-----------
attested assignments of transfer, or such other instruments of conveyance as
may be required by Law, sufficient to permit the proper recordation of
transfer of title ownership in all Registered Evamist Intellectual Property
owned by the Seller from the Seller or its Subsidiaries to Acquiror in
accordance with this Agreement.
"REQUIRED PERMITS" shall have the meaning set forth in
Section 6.8(a).
--------------
"RESTRICTED ESTROGENS" means any of: Estradiol, 17-beta
estradiol, 17-alpha estradiol, ethinyl estradiol or tibolone.
"SELLER" has the meaning set forth in the preamble to this
Agreement.
11
"SELLER DISCLOSURE SCHEDULE" has the meaning set forth in
the preamble to Article VI.
----------
"SELLER GOVERNMENTAL CONSENTS" has the meaning set forth in
Section 6.3(a).
--------------
"SELLER MATERIAL ADVERSE EFFECT" means any state of facts,
change, development, event, occurrence, effect or condition that, individually
or in the aggregate, (i) is materially adverse to the Purchased Assets or (ii)
materially impairs or delays the ability of Seller to perform its obligation
hereunder, except that any such state of facts, change, development, event,
occurrence, effect or condition resulting from or arising out of or in
connection with any of the following, either alone or in combination, shall
not be taken into consideration for purposes of determining whether a Seller
Material Adverse Effect has occurred or arisen: (a) the announcement of this
Agreement or the pendency of the transactions contemplated hereby, (b) the
performance by the Seller of its obligations under this Agreement, (c) general
economic conditions in any country where the Evamist Business is conducted to
the extent that they do not disproportionately affect the Seller relative to
other industry participants, (d) general conditions in any industry in which
the Evamist Business is conducted to the extent that they do not
disproportionately affect the Seller relative to other industry participants,
(e) changes or conditions in economic, regulatory, political or capital
markets conditions generally to the extent that they do not disproportionately
affect the Seller relative to other industry participants, (f) any natural
disaster or any acts of terrorism, sabotage, military action or war (whether
or not declared) or any escalation or worsening thereof, (g) the Seller's
failure to meet any financial projections in and of itself (it being
understood that the facts or occurrences giving rise or contributing to such
failure may be deemed to constitute, or be taken into account in determining,
whether there has been or will be a Seller Material Adverse Effect) or (h)
changes in Law or GAAP.
"SELLER MULTI-APPLICATION TECHNOLOGY" means ***.
"SELLER THIRD PARTY CONSENTS" has the meaning set forth in
Section 6.3(b).
--------------
"SOFTWARE" means (to the extent applicable) computer
programs, including any and all software implementations of algorithms, models
and methodologies whether in source code or object code form, databases and
compilations, including any and all data and collections of data, and all
documentation, including user manuals and training materials, related to any
of the foregoing; provided, however, that "SOFTWARE" shall not include
software that is readily purchasable or licensable and which has not been
modified in a manner material to the use or function thereof (other than
through user preferences).
"STRADDLE PERIOD" means any Tax period beginning on or
before and ending after the Closing Date.
"SUBLICENSE AGREEMENT" means the Sublicense Agreement,
substantially in the form attached hereto as Exhibit A, to be effective as of
---------
the Closing Date, only if applicable pursuant to Section 2.7, by and between
-----------
Seller and Acquiror, whereby Seller agrees to grant to Acquiror an exclusive
sublicense under the Licensed Intellectual Property (as defined in the Acrux
License) solely to exploit, import, export, make, have made, develop, use,
market, offer
12
for sale and sell Evamist in the Field (as defined in the Acrux License) and
subject to the other terms and conditions set forth therein.
"SUBSIDIARY" of a Person means any entity Controlled by that
Person.
"SUPERIOR BID" means any unsolicited bona fide written offer
made by a third party to consummate a proposal for a sale, spin-off or other
disposition or similar transaction involving the Evamist Business and all or
substantially all of the Purchased Assets on terms that the board of directors
of the Seller determines in good faith, after consultation with its outside
counsel and financial advisor, and after taking into account the purchase
price and other terms and conditions of such proposal, the legal and
regulatory aspects of such proposal and the Person making such proposal, (i)
to be more favorable to the Seller's stockholders than the transactions
contemplated by this Agreement and (ii) is likely to be consummated on its
terms in a timely manner.
"SURVIVAL PERIOD" shall have the meaning set forth in
Section 11.1.
------------
"TAXES" means all of the following in connection with the
operations of the Evamist Business or the transactions contemplated hereby:
(i) any net income, alternative or add-on minimum tax, gross income, gross
receipts, sales, use, value added, ad valorem, transfer, franchise, profits,
license, excise, severance, stamp, occupation, premium, property,
environmental or windfall profit tax, capital tax, customs duty or other tax,
governmental fee or other like assessment imposed by any governmental,
regulatory or administrative entity or agency responsible for the imposition
of any such tax (domestic or foreign) including any interest, penalty or
addition thereon, whether disputed or not; (ii) any Liability for the payment
of any amounts of the type described in (i) as a result of being a member of
any affiliated, consolidated, combined, unitary or other group for any Taxable
period; and (iii) any Liability for the payment of any amounts of the type
described in (i) or (ii) as a result of any express or implied obligation to
indemnify any other Person.
"TAX RETURN" means any return, declaration, report, claim
for refund, or information return or statement relating to Taxes, including
any schedule or attachment thereto, and including any amendment thereof.
"TERMINATION DATE" has the meaning set forth in
Section 12.1(b).
---------------
"THIRD PARTY CLAIM" has the meaning set forth in
Section 11.2(d).
---------------
"TRADEMARK ASSIGNMENT AGREEMENT" means the Trademark
Assignment Agreement to be dated as of the Closing Date by and between the
Acquiror and Seller, in a form to be mutually agreed upon by the parties prior
to the Closing.
"TRANSFER TAXES" has the meaning set forth in Section 4.4.
-----------
"TRANSITION SERVICES AGREEMENT" means the Transition
Services Agreement to be dated as of the Closing Date by and between Seller
and Acquiror, substantially in the form attached hereto as Exhibit B, whereby
---------
Seller agrees to provide assistance to Acquiror in matters related to the
Evamist Product Registrations and Evamist Business, including but not
limited to
13
making specified individuals identified in such agreement available to
Acquiror for purposes of providing such assistance.
"TREASURY REGULATIONS" means the Treasury Regulations
promulgated under the Code.
Section 1.2 Construction of Certain Terms and Phrases.
-----------------------------------------
Unless the context of this Agreement otherwise requires: (i) words of any
gender include each other gender; (ii) words using the singular or plural
number also include the plural or singular number, respectively; (iii) the
terms "hereof," "herein," "hereby" and derivative or similar words refer to
this entire Agreement; (iv) the terms "Article" or "Section" refer to the
specified Article or Section of this Agreement; (v) the term "or" has, except
where otherwise indicated, the inclusive meaning represented by the phrase
"and/or"; and (vi) the term "including" means "including without limitation."
Whenever this Agreement refers to a number of days, such number shall refer to
calendar days unless Business Days are specified.
ARTICLE II.
PURCHASE AND SALE OF ASSETS; GRANT OF LICENSES; SUBLICENSE AGREEMENT
Section 2.1 Purchase and Sale of Assets at the Closing. Upon
------------------------------------------
the terms and subject to the conditions set forth in this Agreement, at the
Closing, Seller shall, on behalf of itself and its Subsidiaries, sell, convey,
assign, transfer and deliver to the Acquiror, and the Acquiror shall purchase
and acquire from Seller, all of Seller's right, title and interest in and to
the following assets, free and clear of all Encumbrances (collectively, the
"PURCHASED ASSETS"):
(a) the Assumed Contracts;
(b) all Evamist Books and Records;
(c) all Evamist Inventory, excluding such Evamist
Inventory Acquiror elects to exclude as designated
in writing by Acquiror prior to the Closing Date;
(d) all Evamist Purchased Intellectual Property;
(e) all Evamist Product Registrations, excluding
the Evamist FDA Submissions (subject to Section 8.5);
-----------
(f) all Evamist Governmental Permits, to the extent
legally transferable (excluding the Evamist FDA Submissions,
subject to Section 8.5);
-----------
(g) the Evamist FDA Submissions upon transfer
pursuant to Section 8.5;
-----------
14
(h) any other assets related primarily to the
research (including all pre-clinical and clinical studies),
development, manufacture, formulation, use, distribution,
marketing, sale and promotion of Evamist, provided, however,
that:
(i) using the ***, the Acquiror, after the
Closing, itself or through a contract manufacturer, shall
use commercially reasonable efforts to, and subject to the
terms of the manufacturing and supply contract to be entered
into by and between the Acquiror and ***, manufacture or
cause to be manufactured, on behalf of and for delivery to
the Seller up to 150,000 transdermal spray housings by
January 1, 2008 and up to 150,000 transdermal spray housings
by April 1, 2008, in each case subject to the Seller
providing Acquiror a written purchase order for such
quantities at least 120 calendar days in advance of the
delivery date therefor and agreement to reimburse Acquiror
for its actual cost therefor; provided, however, the
Acquiror shall not be required to take any action under this
Section 2.1(h)(i) that would interfere with, or be
-----------------
detrimental to, the Evamist Business as conducted by the
Acquiror following the Closing, as determined by the
Acquiror in good faith; and
(ii) with respect to the *** located at
DPT Laboratories, the Acquiror, for a period of 120 calendar
days after the Closing, shall use commercially reasonable
efforts to make such equipment available at its then current
location for reasonable use on behalf of the Seller in
connection with the manufacturing of its testosterone
metered dose transdermal spray product, and the parties
shall cooperate with respect to the scheduling of such use
such that the Seller shall have reasonable access to such
equipment as determined by the parties; provided, however,
the Acquiror shall not be required to take any action under
this Section 2.1(h)(ii) that would interfere with, or be
------------------
detrimental to, the Evamist Business as conducted by the
Acquiror following the Closing, as determined by the
Acquiror in good faith; provided, further, the Seller shall
use commercially reasonable efforts following the Closing to
either purchase a *** or find an alternative arrangement
with a third party for use of such third party's *** ;
provided, further, that the Seller shall reimburse the
Acquiror for any costs incurred by the Acquiror as a result
of this Section 2.1(h)(ii).
------------------
In addition, for clarity, the parties agree and acknowledge
that, with the exception of the foregoing ***, the Purchased
Assets shall exclude any assets used by the Seller solely in
connection with its testosterone metered dose transdermal
spray product; and
(i) all rights, claims and credits, including all
guarantees, warranties, indemnities and similar rights in
favor of Seller or any of its Affiliates or any of their
respective employees to the extent relating to any Purchased
Asset or any Assumed Liability.
15
Section 2.2 Excluded Assets. Notwithstanding anything to
---------------
the contrary set forth in this Agreement, the Seller shall have no obligation
to sell, convey, transfer, assign or otherwise deliver unto the Acquiror
pursuant to this Agreement, and the Acquiror shall have no obligation to
purchase or otherwise accept from the Seller pursuant to this Agreement, any
of the right, title or interest of the Seller in or to any of the assets of
the Seller other than the Purchased Assets (collectively, the "EXCLUDED
ASSETS"). Without limiting the generality of the foregoing, the Excluded
Assets shall expressly include (and, therefore, the Purchased Assets shall
specifically exclude) the following:
(a) the Corporate Name;
(b) all human resource and other employee related
files and records;
(c) all Books and Records, other than the Evamist
Books and Records;
(d) subject to Section 8.11, any insurance policies
------------
of Seller or its Subsidiaries or rights thereunder or
proceeds thereof;
(e) the Evamist FDA Submissions (subject to
Section 8.5);
-----------
(f) the Seller Multi-Application Technology;
(g) the right to a refund requested from the FDA
for any or all of the Evamist NDA filing fee;
(h) all right, title and interest of the Seller in
and to any real property, whether owned or leased by the
Seller;
(i) all cash, cash equivalents, marketable
securities and similar cash items of the Seller, whether or
not arising from the Evamist Business;
(j) all refunds and rights to refunds related to
Taxes; and
(k) all claims, actions, deposits, prepayments,
refunds, causes of action, rights of recovery, rights of set
off and rights of recoupment of any kind or nature
(including any such item relating to Taxes) relating to the
Excluded Assets.
16
Section 2.3 Retention of Assets. Notwithstanding
-------------------
anything to the contrary contained in this Agreement and without limiting
Section 2.8, the Seller may retain, at its expense, one archival copy of all
-----------
Assumed Contracts, Evamist Books and Records and other documents or materials
conveyed hereunder, in each case, which the Seller in good faith determines it
is reasonably likely to need access to in connection with performing its
rights and obligations under this Agreement. Without limiting Section 2.8,
-----------
access to such information shall be restricted to the Seller's legal counsel
and such employees of the Seller who have a "need to know" such information in
connection therewith. Upon the final performance of its rights and obligations
hereunder, Seller shall (i) if such materials relate solely to the Evamist
Business, destroy or deliver to the Acquiror such materials, and (ii) if such
materials relate to both the Evamist Business and any other business of
Seller, redact, to the extent practicable, any portion of such materials that
contain information relating solely to the Evamist Business, provided,
however, if the Clinical Results Option is exercised, the Data Package will be
excluded in the case of (i) and (ii) above.
Section 2.4 Assignability and Consents.
--------------------------
(a) Notwithstanding anything to the contrary
contained in this Agreement, if the sale, conveyance,
assignment, transfer or delivery or attempted sale,
conveyance, assignment, transfer or delivery to the Acquiror
of any Purchased Asset is (i) prohibited by any applicable
Law or (ii) would require any authorizations, approvals,
consents or waivers from a third Person and such
authorizations, approvals, consents or waivers shall not
have been obtained prior to the Closing Date (each, a
"NON-ASSIGNABLE ASSET"), in either case, the Closing shall
proceed (subject to the parties rights under Article IX and X,
---------- -
as applicable), but the Closing shall not constitute the
sale, conveyance, assignment, transfer or delivery of such
Non-Assignable Asset, and this Agreement shall not
constitute a sale, conveyance, assignment, transfer or
delivery of such Non-Assignable Asset unless and until such
authorization, approval, consent or waiver is obtained.
After the Closing, the Seller shall continue to use
commercially reasonable efforts to obtain any Seller Third
Party Consent.
(b) Once authorization, approval or waiver of or
consent for the sale, conveyance, assignment, transfer or
delivery of any such Non-Assignable Asset not sold,
conveyed, assigned, transferred or delivered at the Closing
is obtained, the Seller shall convey, assign, transfer and
deliver such Non-Assignable Asset to the Acquiror at no
additional cost to the Acquiror. Notwithstanding anything to
the contrary contained in this Agreement, the Acquiror shall
not assume any Liabilities with respect to a Non-Assignable
Asset until it has been assigned to the Acquiror.
Section 2.5 License to Seller Multi-Application Technology.
----------------------------------------------
Effective as of the Closing, the Seller hereby grants, on behalf of itself and
its Subsidiaries, to the Acquiror a fully paid, royalty free license in
perpetuity under the Seller Multi-Application Technology solely to exploit,
import, export, make, have made, develop, use, market, offer for sale and sell
products (other than a product for transdermal delivery of any Androgen),
which license shall be
17
exclusive as to Evamist and non-exclusive as to any other product. For
purposes of the foregoing and Section 2.6 below, "ANDROGEN" means any of the
following: testosterone, androstenediol, androstenedione,
dehydroepiandrosterone, dihydrotestosterone, tibolone or any selective
androgen receptor modulator.
Section 2.6 Licenses to Improvements. Effective as
------------------------
of the Closing:
(a) the Seller hereby grants to the Acquiror a
worldwide, fully paid, royalty free, non-exclusive license
in perpetuity under Improvements owned or controlled by the
Seller to exploit, import, export, make, have made, develop,
use, market, offer for sale and sell products other than a
product for transdermal delivery of any Androgen; and
(b) the Acquiror hereby grants to the Seller a
worldwide, fully paid, royalty free, non-exclusive license
in perpetuity under Improvements owned or controlled by the
Acquiror to exploit, import, export, make, have made,
develop, use, market, offer for sale and sell products other
than Competing Products.
Section 2.7 Sublicense Agreement. In the event that the Acrux
--------------------
License Assignment Consent has not been obtained as of the Closing, the Seller
shall grant to the Acquiror an exclusive sublicense under the Licensed
Intellectual Property (as defined in the Acrux License) pursuant to, and upon
the terms and subject to the conditions set forth in, the Sublicense
Agreement, effective as of the Closing.
Section 2.8 Clinical Results Option. Notwithstanding anything
-----------------------
to the contrary set forth in this Agreement, in the event that the Acquiror so
elects by giving written notice thereof to the Seller prior to the Closing
(the "CLINICAL RESULTS OPTION"), the Seller shall have the right to retain a
copy of all pre-clinical and clinical trial data results obtained in the
course of the development of Evamist and all Evamist Product Registrations
(collectively, the "DATA PACKAGE"), which Seller shall have the right to sell
and transfer to a third party for such third party's use, modification,
reference and disclosure solely in connection with such third party seeking
regulatory approval to market and commercialize one or more pharmaceutical
products consisting of MDTS containing Estradiol or any other Estrogen, which
product is controlled or developed by or on behalf of such third party, in the
European Union (the "APPROVED USES"); provided, however, any such sale and
transfer of the Data Package shall (i) be subject to standard and customary
confidentiality obligations that limit the use thereof to the Approved Uses
and to Persons subject to similar confidentiality obligations, except in the
case of disclosure to Governmental or Regulatory Authorities which disclosure
would as a matter of Law be maintained as confidential, and (ii) provide that
the third party purchaser of such Data Package may not license, sell, dispose
or otherwise transfer the Data Package to any other Person without the prior
written consent of Acquiror (such consent not to be unreasonably withheld
conditioned or delayed), except to the extent reasonably necessary to enable
the Approved Uses (provided such usage does not involve a further transfer of
ownership of the Data Package) and in all events subject to the
confidentiality obligations described in clause (i) above. For clarity, Seller
shall have the right to retain any and all consideration obtained from such
sale and transfer of the Data Package.
18
ARTICLE III.
ASSUMPTION OF LIABILITIES
Section 3.1 Assumption of Liabilities.
-------------------------
(a) Upon the terms and subject to the conditions
set forth in this Agreement, as of the Closing Date, the
Acquiror agrees to assume, satisfy, perform, pay and
discharge each of the following Liabilities (the "ASSUMED
LIABILITIES"):
(i) all Liabilities of Seller or any of its
Subsidiaries under the Assumed Contracts (in the case of an
Assumed Contract requiring third party consent to
assignment, where such consent has been obtained), but only
to the extent such Liabilities arise from any event,
circumstance or condition occurring after the Closing;
(ii) all Liabilities with respect to the
Evamist Governmental Permits that are Purchased Assets to
the extent relating to the operation or conduct of the
Evamist Business by or on the behalf of the Acquiror from
and after the Closing, excluding the Evamist NDA;
(iii) all Liabilities for Taxes arising
out of or relating to, directly or indirectly, the Purchased
Assets (including Evamist) or the ownership, sale or lease
of any of the Purchased Assets attributable to the
Post-Closing Tax Period, other than the Excluded Tax
Liabilities;
(iv) ***; and
(v) all Liabilities after the Closing Date
arising out of or related to the Acquiror's ownership of the
Purchased Assets and operation and conduct of the Evamist
Business by or for the benefit of the Acquiror.
(b) Notwithstanding anything contained in this
Agreement to the contrary, from and after the Closing Date,
the Seller shall retain all of the following Liabilities
("EXCLUDED LIABILITIES"):
(i) all accounts payable and other similar
Liabilities of the Seller and its Subsidiaries, excluding
fifty percent (50%) of the payment due to Fempharm Pty Ltd.
pursuant to Section 3.2(b) of the Acrux License;
(ii) any Liability incurred by the Seller
in accordance with Section 8.5 in obtaining Evamist NDA
-----------
Approval;
(iii) any Liability of Seller or any of
its Subsidiaries, or any member of any consolidated,
affiliated, combined or unitary group of corporations of
which Seller or any of its Subsidiaries is or has been a
member,
19
for Taxes and any liabilities for Taxes attributable
to the Purchased Assets for any Pre-Closing Tax Period
("EXCLUDED TAX LIABILITY");
(iv) all Liabilities of the Seller and its
Subsidiaries arising out of any product liability, patent
infringement, breach of warranty or similar claim for injury
to person or property or any other claim related to the
Purchased Assets or the Evamist Business arising prior to
the Closing (including all proceedings relating to any such
Liabilities);
(v) all Liabilities of the Seller and its
Subsidiaries arising out of government seizures, field
corrections, withdrawals or recalls of Evamist manufactured,
transferred or sold prior to the Closing, which are claimed
prior to, on or after the Closing Date;
(vi) all Liabilities of the Seller and its
Subsidiaries with respect to any litigation or other claims
related to the Evamist Business or Purchased Assets to the
extent arising from any event, circumstance or condition
occurring or alleged to have occurred prior to the Closing;
(vii) any Liability of the Seller related
to any product or service of the Seller or any of its
Subsidiaries other than Evamist or the operation or conduct
by the Seller or any of its Subsidiaries of any business
other than the Evamist Business;
(viii) any Liability or obligation of
Seller or any of its Subsidiaries (A) arising out of any
actual or alleged breach by Seller or any of its
Subsidiaries of, or nonperformance by Seller or any of its
Subsidiaries under, any Assumed Contract prior to the
Closing or (B) accruing under any Assumed Contract prior to
the Closing;
(ix) any Liability of the Seller to the
extent arising out of (i) any suit, action or proceeding
pending or, to the Knowledge of the Seller, threatened as of
the Closing, with respect to claims which arise from facts,
events or circumstances occurring prior to the Closing, or
(ii) any actual or alleged violation by the Seller or any of
its Affiliates of any Law applicable to the Seller or any of
its Affiliates;
(x) any Liability of the Seller that
relates to any Excluded Asset;
(xi) any Liability of Seller or any of its
Subsidiaries or ERISA Affiliates under or relating to (A)
any employee benefit plan, or relating to wages, bonuses,
payroll, vacation, sick leave, workers' compensation,
unemployment benefits, pension benefits, employee stock
option or profit-sharing plans, health care plans or
benefits, phantom stock, deferred compensation or other
similar plan or arrangement, or any other employee plans or
benefits of any kind, in each case, which Seller or any
Subsidiary or ERISA Affiliate has entered into, maintains or
administers or has maintained or
20
administered, to which Seller or any Subsidiary or ERISA
Affiliate contributes or has contributed or is or has been
required to contribute, or under or with respect to which
Seller or any ERISA Affiliate has or may have any Liability
and (B) any actual or alleged violation by the Seller or any
of its Affiliates of any equal employment or employment
discrimination laws;
(xii) any Liability under Environmental
Laws arising out of or relating to the operation or conduct
of the Evamist Business or the use or ownership of the
Purchased Assets in the Evamist Territory, in each case,
before the Closing;
(xiii) any Liability of the Seller to any
of its Affiliates; and
(xiv) any other Liability of Seller or any
of its Subsidiaries or Affiliates that is not specifically
listed as an Assumed Liability under Section 3.1(a)
--------------
(including any Liability to the extent resulting from the
ownership, use, operation or maintenance of the Purchased
Assets by or on behalf of Seller prior to the Closing, or
the operation or conduct of the Evamist Business by or on
behalf of the Seller prior to the Closing).
ARTICLE IV.
PURCHASE PRICE AND PAYMENT
Section 4.1 Purchase Price. As consideration for the
--------------
Purchased Assets, the grant of the license under the Seller Multi-Application
Technology pursuant to Section 2.5 and, as applicable, the grant of the
-----------
sublicense pursuant to the Sublicense Agreement, at the Closing, the Acquiror
shall:
(a) assume the Assumed Liabilities; and
(b) pay to Seller an aggregate amount equal to the
sum of $10,000,000 (the "PURCHASE PRICE").
The Purchase Price shall be payable in cash by wire transfer of immediately
available funds to an account designated by Seller to Acquiror in writing at
least two (2) Business Days prior to Closing.
Section 4.2 Milestone Payments.
------------------
(a) Upon such date that the Evamist NDA Approval is
granted by the FDA and the Evamist FDA Submissions and all
rights associated therewith are transferred to Acquiror
pursuant to Section 8.5, Acquiror shall pay to Seller,
-----------
within five (5) Business Days thereafter, $140,000,000 in
cash (the "FDA MILESTONE PAYMENT").
21
(b) In the event that Net Sales of Evamist equal or
exceed $100,000,000 in any fiscal year of the Acquiror,
Acquiror shall pay to Seller, within ten (10) Business Days
after the completion of the audit of the consolidated
financial statements of Acquiror as of and for such fiscal
year, but in no event later than sixty (60) days after the
end of such fiscal year, $10,000,000 in cash. For the
avoidance of doubt, the amount required to be paid pursuant
to this Section 4.2(b) (if required to be paid) shall only
--------------
be paid once and, for clarity, not with respect to every
fiscal year that annual Net Sales of Evamist equal or exceed
$100,000,000.
(c) In the event that Net Sales of Evamist equal or
exceed $200,000,000 in any fiscal year of the Acquiror,
Acquiror shall pay to Seller, within ten (10) Business Days
after the completion of the audit of the consolidated
financial statements of Acquiror as of and for such fiscal
year, but in no event later than sixty (60) days after the
end of such fiscal year, either (i) $20,000,000 in cash or
(ii) if the Acquiror has given written notice to the Seller
prior to the Closing of its election to exercise the
Clinical Results Option, $10,000,000 in cash. For the
avoidance of doubt, the amount required to be paid pursuant
to this Section 4.2(c) (if required to be paid) shall only
--------------
be paid once and, for clarity, not with respect to every
fiscal year that Net Sales of Evamist equal or exceed
$200,000,000. In addition, for the avoidance of doubt, the
amounts required to be paid pursuant to Sections 4.2(b) and
-------------------
(c), respectively, may be paid with respect to the same
---
fiscal year in the event that Net Sales of Evamist equal or
exceed both $100,000,000 and $200,000,000 for the first time
in such fiscal year.
(d) All payments paid to the Seller pursuant to
this Section 4.2, shall be by wire transfer of immediately
-----------
available funds to an account designated by the Seller at
least two (2) Business Days prior to the date on which such
payment is required to be paid.
(e) Within five (5) Business Days after the
completion of the audit of the consolidated financial
statements of Acquiror as of and for such fiscal year, until
such time as the Seller has received the applicable
milestone payment pursuant to Section 4.2(c), the Acquiror
--------------
shall provide the Seller with a report, certified by the
Acquiror's Chief Financial Officer, setting forth the Net
Sales (including an itemized list of the deductions from the
total gross invoices used in calculating such Net Sales) of
Evamist during such fiscal year for each country within the
Evamist Territory and the amount, if any, due pursuant to
Section 4.2(b) and/or 4.2(c) with respect to such fiscal
-------------- ------
year. The Acquiror shall keep complete and accurate records
in sufficient detail to make the reports required hereunder,
to confirm its compliance with the provisions of this
Section 4.2, to properly reflect all Net Sales of Evamist
-----------
and to verify the determination of all amounts payable
hereunder.
(f) Upon the written request of the Seller, the
Acquiror shall permit an independent certified public
accounting firm of recognized national standing in
22
the United States designated by the Seller and reasonably
acceptable to the Acquiror to have access during normal
business hours to such of the records of the Acquiror as may
be reasonably necessary to verify the accuracy of any Net
Sales reported and amounts payable under Section 4.2(b) and
--------------
(c) of this Agreement. Each party shall submit such
---
information in its possession or control to the accounting
firm reasonably necessary for verification of Net Sales. Any
such verification shall be carried out under customary
conditions of confidentiality. If the accounting firm
determines that additional amounts were payable, the
Acquiror shall have ten (10) Business Days from the delivery
of such accounting firm's written report to submit
additional information to the accounting firm, and the
accounting firm will take such additional information under
consideration for a period not to exceed ten (10) Business
Days. Thereafter, if the accounting firm finally determines
that Acquiror owes any additional amounts to Seller, such
amount shall be paid within ten (10) Business Days of such
determination, plus interest on such amount (from the date
such amount was originally due under this Agreement) at the
six month LIBOR rate as reported by the East Coast Edition
of the Wall Street Journal on the date such payment is due.
The fees charged by such accounting firm shall be paid by
the Seller, provided, however, that if the audit discloses
that additional amounts were owed to the Seller, then the
Acquiror shall reimburse the Seller for the fees and
expenses charged by such accounting firm.
Section 4.3 Allocation of Purchase Price. The Purchase Price
----------------------------
shall be allocated among the Purchased Assets, the grant of the license under
the Seller Multi-Application Technology pursuant to Section 2.5 and, as
-----------
applicable, the grant of the sublicense pursuant to the Sublicense Agreement
in accordance with Section 1060 of the Code and the Treasury Regulations
promulgated thereunder, and the Acquiror and the Seller agree to (a) be bound
by the allocation, (b) act in accordance with the allocation in the
preparation of financial statements and filing of all Tax Returns (including,
without limitation, filing Internal Revenue Service Form 8594 with their
United States federal income Tax Return for the taxable year that includes the
date of the Closing) and in the course of any Tax audit, Tax review or Tax
litigation relating thereto, and (c) take no position and cause their
Affiliates to take no position inconsistent with the allocation for income Tax
purposes, including United States federal and state income Tax and foreign
income Tax, unless otherwise required pursuant to a "determination" within the
meaning of Section 1313(a) of the Code. The Acquiror shall initially determine
and send written Notice to the Seller of the allocation of the Purchase Price
within thirty (30) days after the Closing Date. The Seller will be deemed to
have accepted such allocation unless it provides written Notice of
disagreement to the Acquiror within ten (10) days after the receipt of the
Seller's Notice of allocation. If the Seller provides such Notice of
disagreement to the Acquiror, the parties shall proceed in good faith to
determine the allocation in dispute. If, within ten (10) days after the
Acquiror receive the Seller's Notice of disagreement, the parties have not
reached agreement, the Accountants shall be engaged to determine the final
allocation in dispute. The Seller and the Acquiror shall share equally the
fees of such Accountants. Not later than thirty (30) days prior to the filing
of their respective Internal Revenue Service Forms 8594 relating to this
transaction, each party shall deliver to the other party a copy of its
Internal Revenue Service Form 8594.
23
Section 4.4 Sales, Use and Other Taxes. All transfer,
--------------------------
documentary, sales, use, valued-added, gross receipts, stamp, registration or
other similar transfer taxes incurred in connection with the transfer and sale
of the Purchased Assets as contemplated by the terms of this Agreement,
including all recording or filing fees, notarial fees and other similar costs
of Closing, that may be imposed, payable, collectible or incurred ("TRANSFER
TAXES") shall be timely paid by Seller. The parties hereto shall reasonably
cooperate, to the extent reasonably requested and permitted by applicable law,
in minimizing any such Transfer Taxes. The party required by law will file all
necessary Tax Returns and other documentation with respect to any such
Transfer Taxes within the time prescribed by applicable law, and the other
party will join in the execution of any such Tax Returns and other
documentation. All costs incurred in the filing of such Tax Returns will be
paid by Seller. The Seller shall provide Acquiror with evidence satisfactory
to Acquiror that such transfer Taxes have been timely paid by the Seller.
Section 4.5 Tax Withholding. All payments made by Acquiror
---------------
to Seller pursuant to this Agreement shall be made free and clear of any
withholding, deduction or offset.
Section 4.6 Risk of Loss. Until the Closing, the Seller shall
------------
bear the risk of any loss or damage to the Purchased Assets from fire,
casualty or any other occurrence. Following the Closing, Acquiror shall bear
the risk of any loss or damage to the Purchased Assets from fire, casualty or
any other occurrence.
Section 4.7 Subsidiaries. Acquiror shall, upon ten (10)
------------
Business Days prior written notice to Seller, have the right to designate one
or more of its wholly-owned direct or indirect Subsidiaries (each, a
"DESIGNATED ACQUIROR SUBSIDIARY") to purchase all or any of the Purchased
Assets or assume all or any of the Assumed Liabilities so long as Acquiror
shall remain liable for all of its liabilities and obligations hereunder and
under the Related Agreements; provided, however, that Acquiror shall not be
permitted to make such a designation if such designation would, or would
reasonably be expected to, (i) result in any material costs, or any material
liabilities, to the Seller or its Subsidiaries (including but not limited to
any liability for Taxes, regardless of materiality and whether withheld at the
source or otherwise), (ii) materially delay or prevent the consummation of the
transactions contemplated hereby, (iii) materially adversely affect the
obtaining of consents and approvals in connection with the transactions
contemplated hereby (or require that material consents and approvals be
resolicited) or (iv) otherwise cause the conditions to Closing set forth in
Articles IX and X hereof to not be satisfied.
----------- -
24
ARTICLE V.
CLOSING
Section 5.1 Time and Place. Unless this Agreement is earlier
--------------
terminated pursuant to Article XII, the closing of the transactions
-----------
contemplated by this Agreement, including the purchase and sale of the
Purchased Assets and the assumption of the Assumed Liabilities (the
"CLOSING"), shall take place as promptly as practicable, but in no event later
than five (5) Business Days following satisfaction or waiver of the conditions
set forth in Articles IX and X, at 9:00 a.m., Pacific Standard time, at the
----------- -
offices of Xxxxxx & Xxxxxxx LLP, 000 Xxxx Xxxxxx Xxxxx 00xx Xxxxx, Xxxxx Xxxx,
Xxxxxxxxxx 00000, unless another time or place shall be agreed to by the
parties (the "CLOSING DATE").
Section 5.2 Deliveries at Closing.
---------------------
(a) Closing Deliveries by the Seller. At the
--------------------------------
Closing, the Seller shall deliver or cause to be delivered
to the Acquiror:
(i) an original of each of the Trademark
Assignment Agreement, the Patent Assignment Agreement, the
Xxxx of Sale, the Transition Services Agreement and the
Sublicense Agreement (only if the Sublicense Agreement is
required to be executed and delivered pursuant to Section
-------
2.7), executed by the Seller, and copies of all documents
---
required to be delivered by the Seller pursuant to the
Related Agreements;
(ii) an unredacted, fully executed copy
of each of the Assumed Contracts;
(iii) assignment and assumption agreements
and/or subcontracts, as applicable, in form and substance
reasonably acceptable to the Seller and the Acquiror,
assigning to the Acquiror all rights of the Seller in and to
the Assumed Contracts;
(iv) written evidence of the receipt of
all Seller Governmental Consents set forth on Schedule
--------
6.3(a) of the Seller Disclosure Schedule and Seller Third
------
Party Consents set forth on Schedule 6.3(b) of the Seller
---------------
Disclosure Schedule;
(v) written evidence (including duly
executed UCC-3 forms, as applicable) that all liens and
encumbrances related to the Purchased Assets, if any, have
been released;
(vi) all forms, certificates and other
documents referred to in Section 8.12(d); and
---------------
(vii) the certificates and other matters
described in Article X.
---------
25
(b) Closing Deliveries by the Acquiror. At the
----------------------------------
Closing, the Acquiror will deliver or cause to be delivered
to the Seller:
(i) the Purchase Price in immediately
available funds by wire transfer to an account or accounts
that shall have been designated by the Seller not less than
two (2) Business Days prior to the Closing Date;
(ii) an original of each of the Trademark
Assignment Agreement, the Patent Assignment Agreement, the
Xxxx of Sale, the Transition Services Agreement and the
Sublicense Agreement (only if the Sublicense Agreement is
required to be executed and delivered pursuant to Section
-------
2.7), executed by the Acquiror, and copies of all documents
---
required to be delivered by the Acquiror pursuant to the
Related Agreements;
(iii) such instruments of assumption and
other instruments or documents, in form and substance
reasonably acceptable to the Seller and the Acquiror, as may
be necessary to effect the Acquiror's assumption of the
Assumed Liabilities and the Assumed Contracts; and
(iv) the certificates and other matters
described in Article IX.
----------
(c) Further Deliveries of the Seller. At or
--------------------------------
promptly following the Closing, but in no event later than
thirty (30) days thereafter, the Seller shall deliver or
cause to be delivered to Acquiror the following: (i) Evamist
Governmental Consents, (ii) the Evamist Books and Records
and (iii) any other Purchased Asset which was not delivered
to Acquiror on the Closing Date.
ARTICLE VI.
REPRESENTATIONS AND WARRANTIES OF THE SELLER
Except as set forth in the disclosure schedule supplied by
the Seller to the Acquiror and dated as of the date hereof (the "SELLER
DISCLOSURE SCHEDULE"), which Seller Disclosure Schedule identifies the Section
(or, if applicable, subsection) to which such exception relates (provided,
however, that such disclosure shall also apply to particular matters
represented or warranted in other Sections and subsections to the extent that
it is readily apparent from the text of such disclosure), the Seller
represents and warrants to the Acquiror as follows:
Section 6.1 Organization, Etc. The Seller is duly
-----------------
incorporated, validly existing and, where applicable, in good standing under
the laws of Delaware and has all requisite power and authority to own its
assets, including the Purchased Assets, and carry on the Evamist Business as
currently conducted by it. The Seller is duly authorized to conduct its
business and is in good standing in each jurisdiction where such qualification
is required to own the Purchased Assets or conduct the Evamist Business as
they are now being conducted, except where the failure to be so qualified or
in good standing would not be reasonably expected to have a Seller Material
Adverse Effect. The certificate of incorporation, bylaws or other similar
governing instruments and organizational documents (the "CHARTER DOCUMENTS")
of the Seller that have been delivered to the Acquiror on or prior to the date
hereof are effective under applicable Laws
26
and are current, correct and complete. No Affiliates of the Seller are
presently or have in the past been engaged in the development, manufacture,
marketing or sale of Evamist or the operation or conduct of the Evamist
Business.
Section 6.2 Authority of the Seller. The Seller has all
-----------------------
necessary corporate power and authority and has taken all actions necessary to
enter into this Agreement, to execute and deliver the Related Agreements to
which it is or will be a party and carry out the transactions contemplated
hereby and by the Related Agreements to which it is or will be a party. The
board of directors of the Seller has taken all action required by Law and the
Charter Documents of the Seller and otherwise to be taken by it to duly
authorize (i) the execution and delivery of this Agreement and the Related
Agreements to which it is or will be a party and (ii) the consummation of the
transactions contemplated hereby and by the Related Agreements to which it is
or will be a party. No other corporate proceedings on the part of the Seller
are necessary to authorize this Agreement and the Related Agreements and the
transactions contemplated hereby and thereby. This Agreement has been duly and
validly executed and delivered by the Seller and, when executed and delivered
by the Acquiror, will constitute a legal, valid and binding obligation of the
Seller, enforceable against it in accordance with its terms. When executed and
delivered by the Seller, each Related Agreement will constitute a legal, valid
and binding obligation of the Seller enforceable against it in accordance with
its terms. Notwithstanding the matters set forth in this Section 6.2, the
-----------
enforceability of this Agreement and the Related Agreements may be limited by
principles of public policy and the rules of law governing specific
performance, injunctive relief or other equitable remedies.
Section 6.3 Consents and Approvals.
----------------------
(a) Schedule 6.3(a) of the Seller Disclosure
---------------
Schedule sets forth a complete and accurate list (the
"SELLER GOVERNMENTAL CONSENTS") of all consents, waivers,
approvals, Orders, permits or authorizations of, or
registrations, notifications, declarations, payments or
filings with, any Governmental or Regulatory Authority that
are required by or with respect to the Seller in connection
with the execution and delivery of this Agreement and the
Related Agreements by the Seller or the performance of its
obligations hereunder and thereunder.
(b) Schedule 6.3(b) of the Seller Disclosure
---------------
Schedule sets forth a complete and accurate list (the
"SELLER THIRD PARTY CONSENTS") of all material consents,
waivers, approvals, or authorizations of, or notices to, any
third party (other than a Governmental or Regulatory
Authority) that are required by or with respect to the
Seller in connection with the execution and delivery of this
Agreement and the Related Agreements by the Seller or the
performance of its obligations hereunder and thereunder.
27
Section 6.4 Non-Contravention. The execution and delivery by
-----------------
the Seller of this Agreement and the Related Agreements does not, and the
performance by Seller of its respective obligations under this Agreement and
the Related Agreements and the consummation of the transactions contemplated
hereby and thereby will not:
(a) conflict with or result in a violation or
breach of any of the terms, conditions or provisions of the
Charter Documents of the Seller;
(b) assuming the receipt of all consents, waivers,
approvals, Orders, permits or authorizations of Governmental
and Regulatory Authorities, and the termination or
expiration of any waiting periods thereunder (set forth in
Schedule 6.4(b) of the Seller Disclosure Schedule) required
---------------
to be obtained by the Seller and the making of all
registrations, notifications, declarations or filings with
Governmental and Regulatory Authorities, and the termination
or expiration of any waiting periods thereunder (set forth
in Schedule 6.4(b) of the Seller Disclosure Schedule)
---------------
required to be made by or with respect to the Seller,
conflict with or result in a violation or breach of any term
or provision of any Law applicable to the Seller, the
Evamist Business or the Purchased Assets; or
(c) conflict with or result in (i) a Default under,
(ii) the loss of any benefit under or (iii) the creation of
any Encumbrance on any of the Purchased Assets (including
any Assumed Contract).
Section 6.5 Contracts.
---------
(a) All Contracts meeting the definition of
"Evamist Contracts" are listed on Schedule 1.1(a)(2). The
------------------
Assumed Contracts are valid, binding and in full force and
effect. Except as set forth on Schedule 6.5(a) of the Seller
---------------
Disclosure Schedule, the Seller and, to the Knowledge of the
Seller, any other party thereunder, has performed all
obligations required to be performed by such party under the
Assumed Contracts and is not in material breach or default
under any Assumed Contract and, to the Knowledge of the
Seller, no other party to any Assumed Contract is (with or
without the lapse of time or the giving of notice, or both)
in material breach or default thereunder. The Seller has not
received any notice of the intention of any party to
terminate any Assumed Contract. Complete and correct copies
of all Assumed Contracts and amendments thereto have been
made available to Acquiror.
(b) No Contracts other than the Evamist Contracts
and the rights of Seller under the Related Agreements are
necessary for the conduct of the Evamist Business.
Section 6.6 Intellectual Property Rights.
----------------------------
(a) Schedule 6.6(a) of the Seller Disclosure
---------------
Schedule lists all Registered Evamist Intellectual Property
that is owned by or licensed to the Seller.
28
(b) To the Knowledge of the Seller, the operation
of the Evamist Business, as has been and is now being
conducted, does not presently infringe or constitute a
misappropriation of any registered or unregistered patents,
trademarks, copyrights, trade secrets or other proprietary
rights of any Person, and the currently contemplated
operation of the Evamist Business will not infringe or
constitute a misappropriation thereof, and neither the
Seller, nor any Subsidiary thereof, has received any written
notice from any Person, or has Knowledge of, any actual or
threatened claim or assertion to the contrary or of any
facts or alleged facts which are likely to serve as the
basis for any such claim or assertion.
(c) Any registration, maintenance and renewal fees
due in connection with the Registered Evamist Intellectual
Property have been paid in a timely manner and all necessary
documents and certificates in connection with the Registered
Evamist Intellectual Property have, for the purposes of
maintaining such Registered Evamist Intellectual Property,
been filed in a timely manner with the relevant Governmental
or Regulatory Authorities, provided, however, that the
foregoing representation and warranty is made only to the
Knowledge of the Seller with respect to Registered Evamist
Intellectual Property licensed to the Seller.
(d) The Evamist Intellectual Property set forth on
Schedule 6.6(a) of the Seller Disclosure Schedule is free
---------------
and clear of all Encumbrances and no Person other than the
Seller and its Subsidiaries, including any current or former
employee or consultant of the Seller and its Subsidiaries,
has any proprietary, commercial or other interest in any of
the Evamist Intellectual Property, provided, however, that
the foregoing representation and warranty is made only to
the Knowledge of the Seller with respect to Evamist
Intellectual Property licensed to the Seller. There are no
existing agreements, options, commitments, or rights with,
of or to any Person to acquire or obtain any rights to, any
of the Evamist Intellectual Property set forth on Schedule
--------
6.6(a) of the Seller Disclosure Schedule, provided, however,
------
that the foregoing representation and warranty is made only
to the Knowledge of the Seller with respect to Evamist
Intellectual Property licensed to the Seller.
(e) The Seller or its Subsidiaries have the
unrestricted right to assign, transfer and/or grant to the
Acquiror all rights in the Evamist Intellectual Property
that are being assigned, transferred and/or granted to the
Acquiror under this Agreement and the Related Agreements, in
each case free of any rights or claims of any Person and
without payment of any royalties, license fees or other
amounts to any Person.
(f) To the Knowledge of the Seller, there is no
unauthorized use or infringement of any of the Evamist
Patent Rights by any Person.
(g) There are no Actions or Proceedings (including
any inventorship challenges) pending or, to the Knowledge of
the Seller, threatened with respect
29
to any of the Evamist Intellectual Property nor have any
such Actions or Proceedings been brought during the past
three (3) years.
(h) Solely as it relates to Evamist, the Seller has
not entered into any Contract (i) granting any Person the
right to bring infringement actions with respect to, or
otherwise to enforce rights with respect to, any of the
Evamist Intellectual Property, or (ii) expressly agreeing to
indemnify any Person against any charge of infringement of
any of the Evamist Intellectual Property.
(i) The Seller has not entered into any Contract
granting any Person the right to control the prosecution of
any of the Evamist Patent Rights.
(j) None of the Evamist Trademarks are or have been
the subject of any opposition, cancellation, abandonment or
similar proceeding, and neither the Seller, nor any of its
Subsidiaries, has received any written notice from any
Person, or has Knowledge, of any actual or threatened claim
or assertion to the contrary, or of any facts or alleged
facts which are likely to serve as a basis for any such
claim or assertion.
(k) To the Knowledge of the Seller, there are no
trademarks or trademark registrations or applications of any
Person that are interfering or potentially interfering with
the Evamist Trademarks set forth on Schedule 1.1(g) or any
---------------
other material Evamist Trademarks.
(l) To the Knowledge of the Seller, there is no
unauthorized use or infringement of the Evamist Copyrights
set forth on Schedule 1.1(c).
---------------
(m) Except as set forth on Schedule 6.6(m) of the
---------------
Seller Disclosure Schedule, the Seller has not granted any
licenses under or to any of the Evamist Intellectual
Property or entered into any distribution or marketing
arrangements with respect to any Evamist Intellectual
Property or Evamist.
Section 6.7 Litigation. Schedule 6.7 of the Seller Disclosure
---------- ------------
Schedule sets forth a list as of the date hereof of each pending or, to the
Knowledge of the Seller, threatened suit, claim, action, proceeding or
investigation, arising out of the conduct of the Evamist Business or against
or affecting any Purchased Assets. Except as set forth in Schedule 6.7 of the
------------
Seller Disclosure Schedule, none of the suits, claims, actions, proceedings or
investigations listed in Schedule 6.7 of the Seller Disclosure Schedule as to
------------
which there is at least a reasonable possibility of adverse determination
would have, if so determined, individually or in the aggregate, a Seller
Material Adverse Effect. Except as set forth in Schedule 6.7 of the Seller
------------
Disclosure Schedule, to the Knowledge of the Seller, there are no unasserted
claims of the type that would be required to be disclosed in Schedule 6.7 of
------------
the Seller Disclosure Schedule if counsel for the claimant had contacted the
Seller that if asserted would have at least a reasonable possibility of an
adverse determination. To the Knowledge of the Seller, except as set forth in
Schedule 6.7 of the Seller Disclosure Schedule, neither the Seller nor any of
------------
its Affiliates are a party or subject to or in Default under any Order
applicable to the conduct of the Evamist Business or any Purchased Assets or
Assumed Liability, and there are no outstanding Orders of
30
any Governmental or Regulatory Authority that apply to the Purchased Assets
that restricts the ownership, disposition or use of the Purchased Assets by
the Seller or the conduct of the Evamist Business by the Seller, in each case,
in any material respect. Except as set forth in Schedule 6.7 of the Seller
------------
Disclosure Schedule, there is not any suit, claim, action, proceeding or
investigation by the Seller pending, or which the Seller intends to initiate,
against any other Person arising out of the conduct of the Evamist Business.
Except as set forth in Schedule 6.7 of the Seller Disclosure Schedule, to the
------------
Knowledge of the Seller, there is no pending or threatened investigation of,
or affecting the conduct of the Evamist Business or any Purchased Assets or
Assumed Liability.
Section 6.8 Permits; Compliance with Law.
----------------------------
(a) Schedule 6.8 of the Seller Disclosure Schedule
------------
sets forth a true and complete list of all material
authorizations, licenses, permits, certificates, approvals,
exemptions, consents, confirmations, orders, registrations,
product registrations, concessions, franchises, waivers and
clearances of an Governmental or Regulatory Authority
(including all authorizations under the FDA Act, the Public
Health Services Act, the Controlled Substances Act and the
regulations of the FDA and the United States Drug
Enforcement Agency promulgated thereunder) necessary for the
Seller to use, test, manufacture, distribute, own, lease and
operate the Purchased Assets and to carry on the Evamist
Business as it is being conducted as of the date hereof (the
"REQUIRED PERMITS"), and the Seller is in possession of all
Required Permits and all Required Permits are valid and in
full force and effect.
(b) The Evamist Business has been and is conducted
by the Seller and its Subsidiaries in material compliance
with all Required Permits and applicable Law by which any
Purchased Asset is bound.
(c) No Governmental or Regulatory Authority has
notified the Seller or any of its Subsidiaries that the
Evamist Business or the Purchased Assets were or are in
violation of any Law or Required Permit or the subject of
any investigation in any jurisdiction where the Evamist
Business is conducted; and, to the Knowledge of the Seller,
there are no grounds for the same.
(d) No Governmental or Regulatory Authority has
notified the Seller or any of its Subsidiaries of any facts
or circumstances which would lead to any suspension, loss of
or material modification to any Required Permit or refusal
by a Governmental or Regulatory Authority to renew or accept
for filing any Required Permit on terms less advantageous,
individually or in the aggregate, to the Seller and its
Subsidiaries than the terms of those Required Permits
currently in force and, to the Knowledge of the Seller,
there are no facts or circumstances providing grounds for
the same.
(e) (i) All applications, submissions, information,
claims, reports and statistics, and other data and
conclusions derived therefrom, utilized as the basis for or
submitted in connection with any and all requests for a
Required Permit
31
of the FDA or other Governmental or Regulatory Authority
relating to the Purchased Assets, when submitted to the FDA
or other Governmental or Regulatory Authority were true,
complete and correct in all material respects as of the date
of submission and any legally necessary or required updates,
changes, corrections or modifications to such applications,
submissions, information, claims, reports or statistics have
been submitted to FDA and other Governmental or Regulatory
Authority.
(ii) All pre-clinical and clinical trials
conducted by or under the authority of the Seller with
regard to the Purchased Assets were and are being conducted
in material compliance with experimental protocols,
procedures and controls pursuant to accepted professional
scientific standards and all applicable Laws promulgated by
the FDA relating thereto, including without limitation the
FDA Act and its applicable implementing regulations at 21
C.F.R. Parts 50, 54, 56 and 312, as amended.
(iii) There are no investigations, audits,
actions or other proceedings pending with respect to a
violation by the Seller or any of its Subsidiaries of the
FDA Act or other applicable Law that would reasonably be
expected to result in administrative, civil or criminal
liability, and, to the Knowledge of the Seller, there are no
facts or circumstances existing that would reasonably be
expected to serve as a basis for such an investigation,
audit, action or other proceeding, in each case with respect
to the Evamist Business.
(iv) No Governmental or Regulatory Authority
has commenced or threatened to initiate any action to
withdraw the Evamist Product Registrations or request the
recall of Evamist, or commenced or threatened to initiate
any action to enjoin production of Evamist at any facility
in the Evamist Territory, nor have the Seller or any of its
Subsidiaries received any notice to such effect and, to the
Knowledge of the Seller, there are no grounds for such
action.
(v) None of the employees of the Seller,
the Seller or any of its Subsidiaries, or their collective
officers or agents, have been disqualified or debarred by
the FDA for any purpose, or have been charged with or
convicted under United States federal Law for conduct
relating to the development or approval or otherwise
relating to the regulation of any drug product under the
Generic Drug Enforcement Act of 1992, the FDA Act or any
other similar Law or have made an untrue statement of a
material fact to any Governmental or Regulatory Authority
with respect to Evamist (whether in any submission to such
Governmental or Regulatory Authority or otherwise), or
failed to disclose a material fact required to be disclosed
to any Governmental or Regulatory Authority with respect to
Evamist. Neither the Seller or any of its Subsidiaries are
the subject of any pending or, to the Knowledge of the
Seller, threatened investigation in respect of the Seller of
any of its Subsidiaries or its products, by the FDA pursuant
to its "Fraud, Untrue Statements of Material Facts, Bribery,
32
and Illegal Gratuities" Final Policy set forth in 56 Fed.
Reg. 46191 (September 10, 1991) and any amendments thereto.
Section 6.9 Evamist Inventory.
-----------------
(a) All of the Evamist Inventory (i) is free of any
material defect or deficiency and (ii) was produced or
manufactured in accordance with the specifications for
Evamist as set forth in the applicable Evamist Product
Registrations and in compliance with applicable Law. The
Seller at Closing will have good and marketable title to the
Evamist Inventory free and clear of any Encumbrances.
(b) The Initial Evamist Inventory Value represents
the value of the Evamist Inventory as of February 28, 2007
and was calculated from the Seller's financial systems,
based upon the historical costs of materials, determined in
accordance with GAAP consistently applied, and as set forth
in reasonable detail on Schedule 6.9(b) of the Seller
---------------
Disclosure Schedule; provided, that for purposes of
calculating the Initial Evamist Inventory Value, the
inventory of the Evamist Business shall not include any
Evamist Inventory that is damaged, defective, unusable or
which otherwise fails to meet the requirements of Section
-------
6.9(a). For clarity, none of the Evamist Inventory has been
------
cleared for commercial sale and all human uses thereof are
subject to appropriate exemptions.
Section 6.10 Suppliers. The Seller has used reasonable
---------
business efforts to maintain, and, to the Knowledge of the Seller, currently
maintains, good working relationships with all of the suppliers to the Evamist
Business. Schedule 6.10 of the Seller Disclosure Schedule also specifies for
-------------
the year beginning January 1, 2006 to the date of this Agreement the names of
the suppliers to the Evamist Business. None of such suppliers has given the
Seller or any of its Subsidiaries notice terminating, canceling or threatening
to terminate or cancel any Contract or relationship with the Seller or any of
its Subsidiaries relating to the Evamist Business. To the Knowledge of Seller,
such suppliers are manufacturing and otherwise operating in compliance with
applicable FDA requirements with respect to the products and materials
supplied to Seller.
Section 6.11 [Intentionally Deleted.]
---------------------
Section 6.12 Environmental Matters.
---------------------
Except as set forth on Section 6.12 of the Seller Disclosure
------------
Schedule:
(a) the Seller and its Subsidiaries, to the extent
related to any property or facility owned, leased or
operated by Seller in the conduct of the Evamist Business
(the "PROPERTIES"), have obtained those Evamist Governmental
Permits required by Environmental Law and necessary for the
conduct of the Evamist Business, and the Seller and its
Subsidiaries are in material compliance with such Evamist
Governmental Permits and other requirements of Environmental
Law;
33
(b) the Seller and its Subsidiaries, to the extent
related to the Evamist Business or the Properties, have not
received any written notice from any Governmental Entity or
any other Person or entity alleging a violation of, or
liability under, Environmental Laws related to any matter
which has not been fully resolved; and
(c) no notice, registration, reporting or other
filing or investigation, response or corrective action is
required by the Seller or its Subsidiaries under any
Environmental Law in connection with, or as a result of, the
execution and delivery of this Agreement, or the
consummation of the transactions contemplated hereby.
Section 6.13 Absence of Certain Changes or Events.
------------------------------------
(a) Except as set forth on Schedule 6.13(a) of the
----------------
Seller Disclosure Schedule, since December 31, 2006, there
has not been a Seller Material Adverse Effect.
(b) Except as set forth in Schedule 6.13(b) of the
----------------
Seller Disclosure Schedule or as otherwise expressly
contemplated by this Agreement or the Related Agreements,
since December 31, 2006 to the date of this Agreement, the
Seller has conducted the Evamist Business in the Ordinary
Course of Business, and the Seller has not, with respect to
the Evamist Business or any of the Purchased Assets:
(i) subjected any of the Purchased Assets
to any Encumbrances;
(ii) sold, transferred, leased, subleased,
licensed or otherwise disposed of, to any third party, any
Purchased Assets or assets necessary for the conduct of the
Evamist Business;
(iii) sold, licensed or sublicensed or
otherwise transferred any rights to any third party under
any Purchased Assets;
(iv) entered into any Assumed Contract or
accelerated, cancelled, modified or terminated any material
Assumed Contract, other than in the Ordinary Course of
Business;
(v) surrendered, revoked or otherwise
terminated any Evamist Governmental Permits, except in
connection with any renewal or reissuance thereof;
(vi) incurred Assumed Liabilities, other
than in the Ordinary Course of Business;
34
(vii) waived, released or assigned any
rights, which rights, but for such waiver, release or
assignment, would have been classified as Purchased Assets,
other than in the Ordinary Course of Business;
(viii) experienced any damage, destruction
or casualty loss (whether or not covered by insurance) with
respect to any Purchased Asset other than as a result of
ordinary wear and tear, where applicable;
(ix) delayed or postponed the payment of
any Assumed Liability outside the Ordinary Course of
Business;
(x) with respect to the Purchased Assets
or the Evamist Business, made any election or change to any
election in respect to Taxes, adopted or changed any
accounting method in respect to Taxes, entered into any Tax
allocation agreement, Tax sharing agreement, Tax indemnity
agreement or closing agreement, settled or compromised on
any claim, notice, audit report or assessment in respect of
Taxes, consented to any extension or waiver of the
limitation period applicable to any claim or assessment in
respect of Taxes, changed any annual Tax accounting period,
filed any amended Tax Return, or surrendered any right to
claim a Tax refund; or
(xi) agreed, whether in writing or
otherwise, to do any of the foregoing, except as expressly
contemplated by this Agreement.
Section 6.14 Title to Assets; Sufficiency of Assets.
--------------------------------------
(a) The Seller has, and at the Closing the Seller
will deliver to Acquiror, good and valid title to or, in the
case of licensed assets, a valid and binding license to the
Purchased Assets free and clear of all Encumbrances, a valid
and binding license under the Seller Multi-Application
Technology pursuant to Section 2.5 and, as applicable, a
-----------
valid and binding sublicense under the Licensed Intellectual
Property (as defined in the Acrux License) pursuant to the
Sublicense Agreement. Except as set forth on Schedule
--------
6.14(a) of the Seller Disclosure Schedule, no Subsidiary of
-------
the Seller owns, beneficially or of record, or has any
rights, title or interest in, to or under any Purchased
Asset or conducts any part of the Evamist Business, and
there are no employees of any Subsidiary of the Seller
employed in the Evamist Business or who perform tasks that
are necessary for the proper operation of the Evamist
Business.
(b) The Purchased Assets (together with the rights
of the Acquiror and its Affiliates under the Related
Agreements), the rights granted pursuant to Section 2.5 and,
as applicable, pursuant to the Sublicense Agreement
constitute all of the assets, Contracts, Required Permits,
rights and services required for the continued operation of
the Evamist Business by the Acquiror as conducted by the
Seller during the past twelve (12) months.
(c) Each item of equipment which is a Purchased
Asset (other than equipment set forth on Schedule 6.14(c) of
----------------
the Seller Disclosure Schedule) is in
35
good operating condition for the purposes for which it is
currently being used, subject to ordinary wear and tear, is
free from any material defect and has been maintained in all
material respects in accordance with generally accepted
industry practice.
(d) The Seller has not experienced any out-of-stock
or back-order situation with respect to the Evamist Business
(e) The Seller does not own or control any Evamist
Product Improvements, and has not granted to any third party
or enabled any third party to make any Evamist Product
Improvements.
Section 6.15 Disclosure. The Seller has made available to
----------
Acquiror all information to the Knowledge of the Seller concerning the safety,
efficacy, side effects or toxicity of Evamist (in animals or humans),
associated with or derived from any pre-clinical or clinical use, studies,
investigations or tests of Evamist (in animals or humans) in all indications
for Evamist that has been submitted to the FDA or studied by the Seller,
whether or not determined to be attributed to Evamist.
Section 6.16 Taxes.
-----
(a) Filing of Tax Returns. To the extent relating
---------------------
to the Purchased Assets or the Evamist Business, (i) the
Seller has duly and timely filed (or caused to be filed)
with the appropriate taxing authorities all Tax Returns
required to be filed through the date hereof, (ii) all such
Tax Returns filed are complete and accurate in all respects
and (iii) all Taxes owed by the Seller (whether or not shown
on any Tax Return) have been paid. The Seller is not
currently the beneficiary of any extension of time within
which to file any Tax Return with respect to the Purchased
Assets or the Evamist Business.
(b) Liens. There are no liens for Taxes (other than
-----
for current Taxes not yet due and payable) on any of the
Purchased Assets. None of the Purchased Assets are property
that is required to be treated for Tax purposes as being
owned by any other Person.
(c) Audits, Investigations, Disputes or Claims. No
------------------------------------------
deficiencies for Taxes have been claimed, proposed or
assessed by any taxing or other Governmental Authority
against the Seller with respect to the Purchased Assets or
the Evamist Business, and there are no pending or, to the
Knowledge of the Seller, threatened audits, investigations,
disputes or claims or other actions for or relating to any
Liability for Taxes with respect to the Purchased Assets or
the Evamist Business, and there are no matters under
discussion with any Governmental Authorities, or known to
the Seller, with respect to Taxes that are likely to result
in an additional Liability for Taxes with respect to the
Purchased Assets or the Evamist Business. The Seller has
delivered or made available to Acquiror complete and
accurate copies of all examination reports and statements of
deficiencies assessed against or agreed to by the Seller
since
36
December 31, 2004 with respect to the Purchased Assets
or the Evamist Business. With respect to the Purchased
Assets or the Evamist Business, the Seller has not waived
any statute of limitations in respect of Taxes or agreed to
any extension of time with respect to a Tax assessment or
deficiency.
(d) Tax Sharing Agreements. There are no
----------------------
Tax-sharing agreements or similar arrangements (including
indemnity arrangements) with respect to or involving the
Purchased Assets or the Evamist Business, and after the
Closing Date, the Purchased Assets and the Evamist Business
shall not be bound by any such Tax-sharing agreements or
similar arrangements or have any Liability thereunder for
amounts due in respect of periods prior to the Closing Date.
(e) No Withholding. The Seller has withheld and
--------------
paid all Taxes concerning the Evamist Business required to
have been withheld and paid in connection with amounts paid
or owing to any employee, independent contractor, creditor,
stockholder or other third party.
Section 6.17 Brokers. The Acquiror has no, and will have no,
-------
obligation to pay any brokers (including real estate brokers), finders,
investment bankers, financial advisors or similar fees in connection with this
Agreement or the transactions contemplated hereby by reason of any action
taken by or on behalf of the Seller or any of its Subsidiaries.
ARTICLE VII.
REPRESENTATIONS AND WARRANTIES OF THE ACQUIROR
Except as set forth in the disclosure schedule supplied by
the Acquiror to the Seller and dated as of the date hereof (the "ACQUIROR
DISCLOSURE SCHEDULE"), which the Acquiror Disclosure Schedule identifies the
Section (or, if applicable, subsection) to which such exception relates
(provided, however, that such disclosure shall also apply to particular
matters represented or warranted in other Sections and subsections to the
extent that it is readily apparent from the text of such disclosure), the
Acquiror represents and warrants to the Seller as follows:
Section 7.1 Corporate Organization. The Acquiror is duly
----------------------
incorporated, validly existing and, where applicable, in good standing under
the laws of Delaware and has all requisite power and authority to own its
assets and carry the Evamist Business as contemplated by this Agreement and
the Related Agreements and is duly authorized to conduct its business and is
in good standing in each jurisdiction where such qualification is required to
own the Purchase Assets or conduct the Evamist Business as contemplated by
this Agreement and the Related Agreements, except where the failure to be so
qualified or in good standing would not be reasonably expected to have an
Acquiror Material Adverse Effect. The Charter Documents of the Acquiror are
effective under the applicable Laws and are current, correct and complete.
Section 7.2 Authority of the Acquiror. The Acquiror has all
-------------------------
necessary power and authority and has taken all actions necessary to enter
into this Agreement, to carry out the transactions contemplated hereby and to
conduct the Evamist Business as contemplated by this Agreement and the Related
Agreements. The board of directors of the Acquiror has taken all
37
action required by Law, its Charter Documents or otherwise to be taken by it
to authorize the execution and delivery by the Acquiror of this Agreement and
the Related Agreements to which the Acquiror is or will be a party and the
consummation of the transactions contemplated hereby and thereby. This
Agreement has been duly and validly executed and delivered by the Acquiror
and, when executed and delivered by the Seller, will constitute a legal, valid
and binding obligation of the Acquiror enforceable against it in accordance
with its terms. When executed and delivered by the Acquiror, each Related
Agreement to which the Acquiror is or will be a party will constitute a legal,
valid and binding obligation of the Acquiror enforceable against it in
accordance with its terms. Notwithstanding the matters set forth in this
Section 7.2, the enforceability of this Agreement and the Related Agreements
-----------
may be limited by principles of public policy and the rules of law governing
specific performance, injunctive relief or other equitable remedies.
Section 7.3 Non-Contravention. The execution and delivery by
-----------------
the Acquiror of this Agreement and each of the Related Agreements does not,
and the performance by it of its obligations under this Agreement and each of
the Related Agreements and the consummation of the transactions contemplated
hereby and thereby will not:
(a) conflict with or result in a violation or
breach of any of the terms, conditions or provisions of the
Charter Documents of the Acquiror;
(b) assuming the receipt of all consents, waivers,
approvals, Orders or authorizations of Governmental and
Regulatory Authorities required to be obtained by the
Acquiror and the making of all registrations, declarations
or filings with Governmental and Regulatory Authorities
required to be made by the Acquiror, conflict with or result
in a violation or breach of any term or provision of any Law
applicable to the Acquiror; or
(c) conflict with or result in a Default under any
Contract to which the Acquiror is a party or by which the
Acquiror or any of its assets is bound or to conduct the
Evamist Business as contemplated by this Agreement and the
Related Agreements.
Section 7.4 Litigation. There are no Actions or Proceedings
----------
pending, or to the Knowledge of the Acquiror, threatened, against or in
connection with (i) this Agreement or any Related Agreement or (ii) the
transactions contemplated by this Agreement. The Acquiror is not subject to
any Order that could reasonably be expected to materially impair or delay the
ability of the Acquiror to perform its obligations hereunder.
Section 7.5 Brokers. The Acquiror has no, and will have no,
-------
obligation to pay any brokers, finders, investment bankers, financial advisors
or similar fees in connection with this Agreement or the transactions
contemplated hereby by reason of any action taken by or on behalf of the
Acquiror.
38
Section 7.6 Financing. The Acquiror has, or has available to
---------
it, sufficient financial resources so as to enable the Acquiror to satisfy its
financial obligations under this Agreement without recourse to any outside
financing other than such outside financing as the Acquiror has already
secured access to as of the date of this Agreement.
ARTICLE VIII.
COVENANTS OF THE PARTIES
Section 8.1 Operation of the Evamist Business.
---------------------------------
(a) Between the date of this Agreement and the
Closing Date, except as expressly permitted by this
Agreement, the Seller shall conduct the Evamist Business
only in the Ordinary Course of Business in substantially the
same manner as previously conducted (including with respect
to research and development efforts, advertising,
manufacturing, capital expenditures and inventory levels)
and use commercially reasonable efforts to keep intact the
Purchased Assets and the Evamist Business, and preserve the
relationships of the Evamist Business with customers,
suppliers, licensors, licensees, distributors, regulatory
authorities and other Persons, in each case, who are
material to the Evamist Business. Without limiting the
generality of the foregoing, from the date of this Agreement
to the Closing, the Seller shall:
(i) notify the Acquiror prior to
implementing material operational decisions relating to the
Evamist Business;
(ii) keep in full force and effect,
without amendment, all material rights relating to the
Evamist Business;
(iii) comply in all material respects with
all requirements of Law and contractual obligations, in each
case applicable to the operation of the Evamist Business;
(iv) maintain all Evamist Books and
Records;
(v) maintain the Purchased Assets in good
operating order and condition, reasonable wear and tear
excepted; and
(vi) upon any damage, destruction or loss
of any Purchased Asset, apply any and all insurance proceeds
received with respect thereto to the prompt repair,
replacement and restoration thereof to the condition of such
Purchased Asset before such event or, if required, to such
other (better) condition as may be required by applicable
Law.
(b) Without limiting the generality of the lead-in
paragraph of Section 8.1(a), and except as set forth in
--------------
Schedule 8.1(b) or as otherwise expressly permitted by the
---------------
terms of this Agreement, from the date of this
39
Agreement to the Closing, without the prior written consent
of the Acquiror (which shall not be unreasonably withheld),
the Seller shall not:
(i) subject any Purchased Assets to any
Encumbrances;
(ii) sell, transfer, lease, sublease,
license or otherwise dispose of or grant any option or
rights in, to or under any Purchased Assets;
(iii) enter into any Contract that would
have been required to be set forth on Schedule 1.1(a)(2) if
------------------
such Contract had existed as of the date hereof, or
terminate, extend or amend any Assumed Contract set forth in
Schedule 1.1(a)(1);
------------------
(iv) abandon or terminate any clinical
trials relating to Evamist (other than for safety concerns
or in accordance with the terms of existing agreements with
respect to such clinical trials) or terminate the Seller's
support of clinical trials sponsored by clinical
investigators with respect to Evamist;
(v) commence, sponsor or commit to
participate in any clinical trials or investigator sponsored
trials with respect to Evamist or provide any clinical
grants with respect to Evamist;
(vi) abandon any patents or patent filings
or any litigation seeking to enforce the Seller's interest
in any Evamist Intellectual Property used in the conduct of
the Evamist Business;
(vii) take any action that would, or that
could reasonably be expected to, result in any of the
conditions to the purchase and sale of the Purchased Assets
set forth in Article IX not being satisfied;
----------
(viii) to the extent that doing so would
adversely affect the Purchased Assets or the Evamist
Business, make any election or change to any election in
respect to Taxes, adopt or change any accounting method in
respect to Taxes, enter into any Tax allocation agreement,
Tax sharing agreement, Tax indemnity agreement or closing
agreement, settle or compromise on any claim, notice, audit
report or assessment in respect of Taxes, consent to any
extension or waiver of the limitation period applicable to
any claim or assessment in respect of Taxes, change any
annual Tax accounting period, file any amended Tax Return,
or surrender any right to claim a Tax refund; or
(ix) agree, whether in writing or
otherwise, to do any of the foregoing set forth in clauses
(i) through (viii) above.
(c) The Seller shall promptly advise Acquiror in
writing of the occurrence of any matter or event that is
material to the business, assets, condition (financial or
otherwise), prospects or results of the operations of the
Evamist Business.
40
Section 8.2 Reasonable Efforts.
------------------
(a) Subject to Sections 8.2(b), and following the
---------------
date hereof, each of the parties hereto shall use its
commercially reasonable efforts to take, or cause to be
taken, all action, or to do, or cause to be done, all things
necessary, proper or advisable under applicable Laws to
consummate and make effective the transactions contemplated
by this Agreement and the Related Agreements and to cause
the conditions to the obligations of the other party hereto
to consummate the transactions contemplated hereby to be
satisfied at the Closing, including obtaining all consents
and approvals of all Persons and Governmental or Regulatory
Authorities and removing any injunctions or other
Encumbrances on the Purchased Assets, impairments or delays
the obtaining or removal of which are necessary, proper or
advisable to the consummation of the transactions
contemplated by this Agreement and the Related Agreements.
The parties hereto shall cooperate with each other in
connection with the taking of all actions referenced in the
preceding sentence, including providing (i) such reasonable
assistance as the other party may request in connection with
its preparation of any required filings or submissions and
(ii) copies of all such filings and submissions to the
non-filing party and its advisors prior to filing or
submission and, if requested, to accept all reasonable
additions, deletions or changes suggested in connection
therewith. The Seller and the Acquiror shall have the right
to review in advance, and, to the extent practicable, each
shall consult the other on, all the information relating to
the Seller or the Acquiror, as the case may be, that appears
in any filing made with, or written materials submitted to,
any third party and/or any Governmental Entity in connection
with the transactions contemplated by this Agreement
(including any filing contemplated by this Section 8.2(a)).
--------------
The Seller and the Acquiror may, as each deems reasonably
advisable and necessary, designate any competitively
sensitive information provided to the other under this
section as "outside counsel only." Such information shall be
given only to outside counsel of the recipient. In addition,
the Seller and the Acquiror may redact any information from
such documents shared with the other party or its counsel
that is not pertinent to the subject matter of the filing or
submission.
(b) The Acquiror and the Seller shall each: (i)
take all actions necessary to make the filing required of
such party or any of its Affiliates under the HSR Act within
ten (10) Business Days after the date hereof; (ii) comply at
the earliest practicable date with any request for
additional information or documentary material received by
such party or any of its Affiliates from the Federal Trade
Commission or the Antitrust Division of the Department of
Justice pursuant to the HSR Act; and (iii) cooperate with
the other party in connection with any filing under the HSR
Act and in connection with resolving any investigation or
other inquiry concerning the transactions contemplated under
this Agreement commenced by either the Federal Trade
Commission or the Antitrust Division of the Department of
Justice or state attorneys general. Each of the Seller, on
one hand, and the Acquiror, on the other hand, shall be
responsible for its own legal fees for preparing its portion
of the HSR Act
41
filings. For the avoidance of doubt, the Acquiror and Seller
shall share equally any required filing fees under the HSR
Act.
(c) In furtherance and not in limitation of the
other covenants of the parties contained herein, each party
shall use commercially reasonable efforts to resolve such
objections, if any, as may be asserted with respect to the
consummation of the transactions contemplated hereby under
any antitrust Law. If any administrative, judicial or
legislative Action or Proceeding is instituted (or
threatened to be instituted) challenging the sale and
purchase of any of the Purchased Assets or any other
transaction as violative of any antitrust Law, each party
shall cooperate and use commercially reasonable efforts to
vigorously contest and resist any such Action or Proceeding,
and to have vacated, lifted, reversed or overturned any
decree, judgment, injunction or other Order that is in
effect and that restricts, prevents or prohibits
consummation of the sale and purchase of the Purchased
Assets or any other transaction contemplated under this
Agreement; provided, however, that nothing in this Agreement
shall require the Acquiror or its Subsidiaries to commit to
any divestitures, licenses or hold separate or similar
arrangements with respect to its assets or conduct of
business arrangements, whether as a condition to obtaining
any approval from a Governmental and Regulatory Authority or
any other Person for any other reason.
(d) Each party shall promptly inform the other
parties of any material communication received by such party
from the Federal Trade Commission or the Antitrust Division
of the Department of Justice regarding any of the
transactions contemplated under this Agreement. Each party
shall advise the other party promptly of any understandings,
undertakings or agreements that such party proposes to make
or enter into with the Federal Trade Commission or the
Antitrust Division of the Department of Justice in
connection with the transactions contemplated under this
Agreement.
(e) The Seller shall (i) permit the Acquiror and
its Subsidiaries to correspond and meet with the FDA to
discuss the acquisition by the Acquiror of all Evamist
Product Registrations and the transfer of manufacturing and
distribution of Evamist to the Acquiror, (ii) include the
Acquiror in any discussions with the FDA regarding any
Evamist Product Registration, (iii) if reasonably requested
by the Acquiror, upon reasonable notice, attend meetings or
conference calls involving the Acquiror or one of its
Subsidiaries and the FDA related to any of the foregoing and
(iv) cooperate with Acquiror by submitting a transfer letter
to the FDA, in a form to be mutually agreed upon by the
parties prior to the Closing (the "FDA TRANSFER LETTER"), to
have the FDA transfer all Evamist Product Registrations to
one of Acquiror's Subsidiaries or to Acquiror at such time
as requested by the Acquiror in accordance with Section 8.5.
-----------
(f) Notwithstanding anything in this Agreement to
the contrary, the Acquiror shall not be required to expend
money, commence any litigation or
42
offer or grant any accommodation (financial or otherwise) to
any third party in connection with obtaining any consent,
substitution, approval or amendment required to assign or
transfer any Purchased Asset to the Acquiror. In the event
any such consent, substitution, approval or amendment is not
obtained prior to the Closing, the Seller shall continue to
use commercially reasonable efforts to obtain such consent,
waiver or approval after the Closing.
(g) Without limiting any other rights and
obligations under this Section 8.2, following the date
-----------
hereof, each of the parties hereto shall use its
commercially reasonable efforts to obtain the Acrux License
Assignment Consent prior to the Closing. In the event that
the Acrux License Assignment Consent is not obtained prior
to the Closing, each of the parties hereto shall continue to
use commercially reasonable efforts to obtain the Acrux
License Assignment Consent after the Closing. In the event
that the Acrux License Assignment Consent is obtained after
the Closing, the parties hereto agree that the Sublicense
Agreement shall terminate, and is hereby terminated, as of
the effectiveness of the Acrux License Assignment Consent.
Section 8.3 Access; Confidentiality.
-----------------------
(a) From the date hereof until the Closing, the
Seller shall permit the Acquiror and its representatives to
have reasonable access, during regular business hours and
upon reasonable advance notice of no less than one (1)
Business Day , to all the personnel, properties, Contracts,
Tax Returns, the Evamist Books and Records, the Assumed
Liabilities or the Evamist Business, and the Seller shall
furnish promptly to the Acquiror such information in the
Seller's possession concerning the Purchased Assets, the
Assumed Liabilities or the Evamist Business as the Acquiror
may reasonably request; provided, however, that any such
access shall be conducted in a manner as not to unreasonably
interfere with the operation of the Evamist Business and the
Seller shall not be required to provide any financial,
operating or other information that is not currently
available through the Seller's existing business processes
and the creation of which would be unduly burdensome on the
Seller. The Seller may redact such portions of its books and
records that do not relate to the Purchased Assets, the
Assumed Liabilities or the Evamist Business. The Seller
shall instruct its respective employees, counsel and
financial advisors to provide reasonable cooperation to the
Acquiror in its investigation of the Evamist Business.
(b) The Seller shall implement procedures to keep
confidential, and cause its Affiliates and its and their
officers, directors, employees, representatives and advisors
to keep confidential, all information relating to the
Purchased Assets, Assumed Liabilities and Evamist Business,
except as required by Law and except for information which
is or becomes generally available to the public other than
as a result of a disclosure by the Seller or its Affiliates
and its and their officers, directors, employees,
representatives or agents. The Seller shall not disseminate
any such information other than to
43
those employees of the Seller who have a business need to
access such information (i) in connection with the
preparation of the Seller's accounting records, (ii) in
connection with the preparation of any Tax Returns or with
any Tax audits, (iii) in connection with any suit, claim,
action, proceeding or investigation relating to the
Purchased Assets, the Assumed Liabilities or the Evamist
Business or (iv) in connection with the operation of the
Evamist Business in the Ordinary Course of Business prior to
the Closing. Effective upon Closing, upon written request of
the Acquiror, from time to time, the Seller shall (at the
Acquiror's sole cost and expense) use reasonable efforts to
enforce the Seller's rights with respect to the use and
maintenance of confidential information relating to the
Evamist Business under all confidentiality agreements
between the Seller and any other potential acquiror of the
Evamist Business that were entered into in contemplation of
the sale of the Evamist Business. The Seller shall not waive
or release its rights under such confidentiality agreements
with respect to the use and maintenance of such confidential
information with respect to the Evamist Business.
(c) Information within the Purchased Assets
disclosed to the Acquiror pursuant to this Agreement
(including in the Seller Disclosure Schedule and the other
Schedules delivered pursuant to this Agreement) shall be
held as Confidential Information (as defined in the
Confidentiality Agreement) and shall be subject to the
Confidentiality Agreement to the extent such information is
Confidential Information as of the date hereof.
(d) The parties hereto, or any of their respective
Affiliates or any of their respective officers or directors,
shall cooperate as may be reasonably required in connection
with the investigation and defense of any suit, action,
claim, proceeding or investigation, in each case that is
adverse to a third party, relating to the Purchased Assets,
the Assumed Liabilities or the Evamist Business; provided,
however, that the requesting party shall reimburse the
non-requesting party promptly for all reasonable
out-of-pocket costs and expenses incurred in connection with
any such requests, including reasonable legal fees and
costs.
(e) Following the Closing, for so long as such
information is retained by the Seller (which shall be for a
period of at least three (3) years), the Seller shall permit
the Acquiror and its authorized representatives to have
reasonable access and duplicating rights during normal
business hours, upon reasonable prior notice, to the Seller
and its books, records and personnel to the extent relating
to the Purchased Assets, the Assumed Liabilities or the
Evamist Business, to the extent such access may reasonably
be required: (i) in connection with the preparation of the
Acquiror's accounting records or with any audits thereof,
(ii) in connection with any suit, claim, action, proceeding
or investigation relating to the Purchased Assets, the
Assumed Liabilities or the Evamist Business (other than such
a suit, claim, action, proceeding or investigation that is
adverse to the Seller) or (iii) in connection with any
required regulatory filing relating to the Purchased Assets,
the Assumed
44
Liabilities or the Evamist Business; provided that the
Acquiror shall reimburse the Seller promptly for all
reasonable and necessary out-of-pocket costs and expenses
incurred by the Seller in connection with any such request.
Notwithstanding the foregoing, the Seller need not disclose
to the Acquiror any information: (i) relating to pricing or
other matters that are highly sensitive if (I) providing
such portions of documents or information, in the good faith
opinion of the Seller's counsel, would reasonably be
expected to result in antitrust difficulties for the Seller
and (II) the Seller designates such information as "outside
counsel and retained experts only" and discloses such
information to Acquiror's outside counsel and retained
experts; or (ii) which the Seller is prohibited from
disclosing by applicable Law. If any material is withheld by
the Seller pursuant to the immediately preceding sentence,
the Seller shall inform the Acquiror as to the general
nature of what is being withheld. The Seller may redact such
portions of such books and records that do not relate to the
Purchased Assets, the Assumed Liabilities or the Evamist
Business.
(f) Following the Closing, for so long as such
information is retained by Acquiror (which shall be for a
period of at least three (3) years), the Acquiror shall
permit the Seller and its authorized representatives to have
reasonable access and duplicating rights during normal
business hours, upon reasonable prior notice, to the
Acquiror and the Books and Records included in the Purchased
Assets and the employees of the Acquiror or its
Subsidiaries, to the extent that such access may reasonably
be required: (i) in connection with the preparation of the
Seller's accounting records or with any audits thereof, (ii)
in connection with any suit, claim, action, proceeding or
investigation relating to the Purchased Assets, the Assumed
Liabilities or the Evamist Business (other than such a suit,
claim, action, proceeding or investigation that is adverse
to the Acquiror) or (iii) in connection with any required
regulatory filing relating to the Purchased Assets, the
Assumed Liabilities or the Evamist Business; provided that
the Seller shall reimburse the Acquiror promptly for all
reasonable and necessary out-of-pocket costs and expenses
incurred by the Acquiror in connection with any such
request, including reasonable attorney fees and costs.
Notwithstanding the foregoing, the Acquiror need not
disclose to the Seller any information: (A) relating to
pricing or other matters that are highly sensitive if (I)
providing such portions of documents or information, in the
opinion of the Acquiror's counsel, might reasonably result
in antitrust difficulties for the Acquiror and (II) the
Acquiror designates such information as "outside counsel and
retained experts only" and discloses such information to the
Seller's outside counsel and retained experts or (B) which
the Acquiror is prohibited from disclosing by applicable
Law. If any material is withheld by the Acquiror pursuant to
the immediately preceding sentence, the Acquiror shall
inform the Seller as to the general nature of what is being
withheld. The Acquiror may redact such portions of such
Books and Records that do not relate to the Purchased
Assets, the Assumed Liabilities or the Evamist Business.
45
Section 8.4 Public Announcements; Confidentiality. Except as
-------------------------------------
otherwise required by applicable Law or applicable stock exchange
requirements, prior to the Closing, neither the Acquiror nor the Seller shall,
and each of them shall cause their respective Affiliates, representatives and
agents not to, issue or cause the publication of any press release or public
announcement with respect to the transactions contemplated by this Agreement
without the express prior written approval of the other party, which approval
shall not be unreasonably withheld or delayed; provided, that each of the
Seller and the Acquiror may make any public statement in response to questions
by the press, analysts, investors or those attending industry conferences or
financial analyst calls, or issue press releases, so long as any such public
statement or press release is not inconsistent with prior public disclosures,
press releases or public statements approved by the other party pursuant to
this Section 8.4 and which do not reveal non-public information about the
-----------
other party. The parties hereto agree to issue separate individual press
releases, each in a form approved by the other party, to announce the
execution of this Agreement and the payment of the FDA Milestone Payment
pursuant to Section 4.2(a).
--------------
Section 8.5 Regulatory Matters.
------------------
(a) Prosecution of Evamist NDA. Until the Evamist
--------------------------
NDA Approval Date, the Seller shall control the prosecution
of the Evamist NDA before the FDA, subject to the terms and
conditions of this Section 8.5. Unless and until the Evamist
-----------
FDA Submissions are assigned to the Acquiror pursuant to
Section 8.5(b), the Seller shall use efforts (consistent
--------------
with the past practices of the Seller with respect to the
Evamist NDA and other NDAs of the Seller), at its expense,
to obtain Evamist NDA Approval as soon as practicable. In
connection therewith, the Seller shall continue to be the
party of record with respect to the Evamist NDA and,
following the Closing, shall keep the Acquiror fully
informed with respect to the prosecution of the Evamist NDA
and (i) promptly provide to the Acquiror or its designee any
correspondence from the FDA with respect thereto and (ii) no
later than ten (10) Business Days prior to the submission
thereof provide to the Acquiror or its designee any proposed
correspondence to the FDA with respect thereto, including
copies of any and all underlying data to accompany any such
correspondence. Following the Closing, the Seller shall
consider in good faith any comments of the Acquiror or its
designee with respect to such correspondence and include any
reasonable comments proposed by the Acquiror. Following the
Closing, the Seller shall also notify the Acquiror of any
meetings with the FDA with respect to the Evamist NDA, and
the Acquiror or its designee shall have the right to
participate in such meetings and any internal pre-meetings
with respect thereto. The Acquiror agrees and acknowledges
that, following the Closing until the Evamist NDA Approval
Date, the Seller shall have the right to use any and all
Purchased Assets solely and to the extent necessary for
carrying out the Seller's right hereunder to prosecute the
Evamist NDA and obtain the Evamist NDA Approval. Without
limiting any other obligation of the Acquiror under this
Agreement, the Acquiror shall cooperate with the Seller in
the Seller's efforts to obtain Evamist NDA Approval,
including providing to the Seller all relevant data,
information and material reasonably requested by the Seller
which the Seller shall not disclose to any third Person or
use except solely and to the
46
extent necessary for prosecuting the Evamist NDA and
obtaining the Evamist NDA Approval.
(b) Optional Assignment of Evamist FDA Submissions
----------------------------------------------
Prior to Evamist NDA Approval. In the event that the Seller
-----------------------------
fails to use efforts (consistent with the past practices of
the Seller with respect to the Evamist NDA and other NDAs of
the Seller), to obtain Evamist NDA Approval as soon as
practicable, and the Acquiror provides at least ten (10)
Business Days' prior written notice thereof to the Seller,
the Seller shall promptly assign to the Acquiror the Evamist
FDA Submissions and all related files, which assignment
shall be effected by the Seller submitting the FDA Transfer
Letter to the FDA. The Seller shall cooperate with Acquiror
in obtaining the assignment and shall take all actions
reasonably requested by Acquiror necessary, proper or
advisable to effectuate the assignment. Thereafter, the
Acquiror shall (i) be the party of record with respect to
the Evamist NDA and (ii) use efforts (consistent with the
past practices of the Acquiror with respect to other NDAs of
the Acquiror), at its expense, to obtain Evamist NDA
Approval as soon as practicable and (iii) provide to the
Seller or the third party purchaser of the Data Package, as
applicable, such information as is necessary for
implementing Section 2.8. In connection therewith, the
-----------
Seller shall reasonably cooperate with the Acquiror in
accordance with the Transition Services Agreement and the
Acquiror shall keep the Seller reasonably informed with
respect to the prosecution of the Evamist NDA and consider
in good faith the Seller's comments with respect thereto and
include any reasonable comments proposed by the Seller.
Without limiting any other obligation of the Seller under
this Agreement, the Seller shall cooperate with the Acquiror
in the Acquiror's efforts to obtain Evamist NDA Approval,
including providing to the Acquiror all relevant data,
information and material reasonably requested by the
Acquiror which the Acquiror shall not disclose to any third
Person or use except solely and to the extent necessary for
prosecuting the Evamist NDA and obtaining the Evamist NDA
Approval. The Seller agrees and acknowledges that, following
the Closing, the Acquiror shall have reasonable access to
and the right to use any and all materials of Seller,
whether or not such materials are Purchased Assets, solely
and to the extent necessary for carrying out the Acquiror's
right hereunder to prosecute the Evamist NDA and obtain the
Evamist NDA Approval in accordance with this Section 8.5.
-----------
(c) Assignment of Evamist FDA Submissions upon
------------------------------------------
Evamist NDA Approval. Unless previously assigned to the
--------------------
Acquiror pursuant to Section 8.5(b), the Seller shall
--------------
transfer and assign, within five (5) Business Days of the
NDA Approval Date, to the Acquiror (A) the Evamist FDA
Submissions (including all associated rights) together with
(B) all files related thereto. Thereafter, the Acquiror
shall have all rights and responsibilities with respect to
such Evamist FDA Submissions. The foregoing transfer and
assignment shall be effected by the Seller submitting the
FDA Transfer Letter to the FDA.
(d) FDA Contacts. From and after the transfer by
------------
the Seller to the Acquiror of each Evamist Product
Registration held by the Seller or any of its
47
Subsidiaries pursuant to the terms hereof, except as
required by applicable Law, the Acquiror shall be solely
responsible and liable for (i) taking all actions, paying
all fees and conducting all communication with the
appropriate Governmental or Regulatory Authority required by
Law in respect of such Evamist Product Registration,
including preparing and filing all reports (including
adverse drug experience reports) and responding to and
answering all questions and complaints requested by the
appropriate Governmental or Regulatory Authority, (ii)
taking all actions and conducting all communication with
third parties in respect of Evamist manufactured, tested,
used or distributed pursuant to such Evamist Product
Registration (whether manufactured, tested, used or
distributed before or after transfer of such Evamist Product
Registration), including responding to all complaints in
respect thereof, including complaints related to tampering
or contamination, and (iii) investigating all complaints and
adverse drug experiences in respect of Evamist manufactured,
tested, used or distributed pursuant to such Evamist Product
Registration (whether manufactured, tested, used or
distributed before or after transfer of such Evamist Product
Registration, as set forth in Section 8.5(e) below). It is
--------------
understood and agreed that Seller shall be responsible for
all foregoing obligations listed in this Section 8.5(d)
--------------
prior to the transfer of the Evamist Product Registrations
and shall use commercially reasonable efforts to timely and
appropriately fulfill such obligations.
(e) Adverse Experience Reports. From and after the
--------------------------
transfer of the Evamist FDA Submissions, the Acquiror shall
be responsible for the investigation, analysis and reporting
to the FDA of any adverse experience report or complaint in
connection with the Product received by either the Acquiror
or the Seller from and after the Closing from any source
(including any patient, health care professional or other
customer of the Evamist Business), regardless of whether the
Product involved in any such adverse experience report or
complaint was manufactured, tested, used or distributed by
the Seller or Acquiror. Any adverse experience report or
complaint received by the Seller relating to the Product
after the Closing shall be reported by the Seller to
Acquiror, within a sufficient time period to allow the
Acquiror to comply with its obligations to the FDA, after
receipt of such adverse experience report or complaint by
the Seller. The Seller shall cooperate with the Acquiror in
connection with the investigation and analysis of all
adverse experience reports or complaints that relate to the
period before the date of the assignment of the Evamist FDA
Submissions. It is understood and agreed that the Seller
shall be responsible for all foregoing obligations listed in
this Section 8.5(e) prior to the transfer of the Evamist FDA
--------------
Submissions and shall use commercially reasonable efforts to
timely and appropriately fulfill such obligations.
Section 8.6 Bulk Transfer Laws. The Acquiror hereby waives
------------------
compliance by the Seller and its Subsidiaries with the provisions of any
so-called "bulk transfer law" of any jurisdiction in connection with the sale
of the Purchased Assets to the Acquiror.
48
Section 8.7 Covenant Not to Compete.
-----------------------
(a) The Seller understands that Acquiror shall be
entitled to protect and preserve the going concern value of
the Evamist Business following the Closing to the extent
permitted by Law and that the Acquiror would not have
entered into this Agreement absent the provisions of this
Section 8.7 and, therefore, for the period from the date
-----------
hereof until *** following the First Commercial Sale by or
under authority of the Acquiror of Evamist in the Evamist
Territory (the "APPLICABLE PERIOD"), the Seller and its
Subsidiaries shall not, directly or indirectly, market,
promote, sell or import any Competing Products for use in
the Evamist Territory. As used herein, "COMPETING PRODUCT"
means ***. The Seller and its Subsidiaries shall not provide
funding during the Applicable Period to third parties for
the specific purpose of, or grant a license or other
authorization to any third party for, marketing, selling,
promoting or importing any Competing Product for use in the
Evamist Territory.
(b) If a court determines that the foregoing
restrictions are too broad or otherwise unreasonable under
applicable Law, including with respect to time or space, the
court is hereby requested and authorized by the parties to
revise the foregoing restriction to include the maximum
restrictions allowable under applicable Law. Each of the
parties acknowledges, however, that this Section 8.7 has
-----------
been negotiated by the parties and that the Evamist
Territory and the Applicable Period are reasonable in light
of the circumstances pertaining to the parties.
(c) Notwithstanding any other provision of this
Agreement, it is understood and agreed that the remedy of
indemnity payments pursuant to Article XI and other remedies
----------
at law would be inadequate in the case of any breach of the
covenants contained in Section 8.7, and, accordingly, the
-----------
Acquiror shall be entitled to equitable relief, including
the remedy of specific performance, with respect to any
breach or attempted breach of such covenants.
(d) For the avoidance of doubt, if any Person
acquires Control of the Seller, whether by stock purchase,
merger or other transaction, no provision of this Section 8.7
-----------
shall apply to such acquiror or its Affiliates so long as no
assets of the Seller are used to further the marketing, sale
or promotion of a Competing Product by such acquiror, or any
of its Affiliates.
Section 8.8 Further Assurances.
------------------
(a) On and after the Closing Date, the Seller shall
from time to time, at the reasonable request of the
Acquiror, execute, acknowledge and deliver, or cause to be
executed, acknowledged and delivered, such further
conveyances, notices and assumptions and such other
instruments, and take such other actions as the Acquiror may
reasonably request, in order to more effectively consummate
the transactions contemplated hereby and to transfer fully
to the Acquiror good and marketable title to the Purchased
Assets and all of the titles,
49
rights, interests, remedies, powers and privileges intended
to be conveyed under this Agreement and the Related
Agreements (including assistance in the collection or
reduction to possession of any of the Purchased Assets).
(b) On and after the Closing Date, the Acquiror
shall from time to time, at the reasonable request of the
Seller, take such actions as the Seller may reasonably
request, in order to more effectively consummate the
transactions contemplated hereby, including the Acquiror's
assumption of the Assumed Liabilities and to conduct the
Evamist Business as contemplated by this Agreement and the
Related Agreements.
Section 8.9 Cooperation Regarding Financial Statements;
-------------------------------------------
Taxes, Etc. In the event that the Acquiror is required to include any audited
-----------
financial statements with respect to the Evamist Business in any filing to be
made by the Acquiror under the Securities Act of 1933, as amended, or the
Securities Exchange Act of 1934, as amended, with respect to or as a result of
the transactions contemplated by this Agreement, the Seller shall, at the
Acquiror's sole cost and expense, (i) use commercially reasonable efforts to
provide the Acquiror with the financial statements and other information and
documents pertaining to the Evamist Business that the Acquiror will be
required by applicable rules and regulations of the Securities and Exchange
Commission to include in its filings and (ii) use commercially reasonable
efforts to cause the accountants for the Seller to promptly deliver such
information and provide access to files and work papers in connection
therewith as the Acquiror may reasonably request. For the avoidance of doubt,
the Acquiror acknowledges that the Seller has not prepared any separate
financial statements specific to the Evamist Business and is not obligated by
any provision of this Agreement to prepare or deliver any such separate
financial statements specific to the Evamist Business.
Section 8.10 No Solicitation.
---------------
(a) From the date of this Agreement to the earliest
to occur of (i) the Closing, (ii) the termination of this
Agreement or (iii) 11:59 p.m. (EST) on the sixtieth (60th)
day following the date of this Agreement (the "NO-SHOP
PERIOD"), the Seller shall not, and shall cause its
Subsidiaries and its and its Subsidiaries' officers,
directors, advisors and representatives not to, directly or
indirectly, (I) solicit, initiate or encourage any Other Bid
(as defined below), (II) enter into any agreement with
respect to any Other Bid or (III) participate in any
discussions or negotiations regarding, or furnish to any
person any information with respect to, or take any other
action to facilitate any inquiries or the making of any
proposal that constitutes, or may reasonably be expected to
lead to, any Other Bid. In the event that the Seller (or any
of its Subsidiaries) receives any Other Bid, the Seller
shall promptly advise the Acquiror of such proposal. As used
in this Section 8.10, "OTHER BID" means any proposal for a
------------
sale, spin-off or other disposition or similar transaction
involving the Evamist Business or any of the Purchased
Assets, other than the transactions contemplated by this
Agreement.
50
(b) Notwithstanding the foregoing or anything in
this Agreement to the contrary, if the Seller receives an
unsolicited Superior Bid after the expiration of the No Shop
Period under circumstances that do not arise out of a breach
of the terms of Section 8.10(a), and such Superior Bid has
---------------
not been withdrawn, nothing in this Agreement shall prevent
the board of directors of the Seller or any committee
thereof from participating in any discussions or
negotiations regarding or furnishing to any person any
information with respect to such Superior Bid pursuant to a
confidentiality agreement which contains terms that are no
less restrictive than those contained in the Confidentiality
Agreement; provided that all such information had been or is
provided on prior or concurrent basis to Acquiror.
(c) The Seller shall promptly (and in any event
within forty-eight (48) hours) notify Acquiror of any Other
Bid, any material modifications thereto or any request for
non-public information relating to the Evamist Business or
for access to the properties, books or records of the Seller
by any third party that has made an Other Bid. The Seller
shall provide notice orally and in writing and shall
identify the third party making and the material terms and
conditions of, any such Other Bid. The Seller shall keep
Acquiror informed on a reasonably current basis of the
status and details (including any material changes to the
Other Bid) of any such Other Bid or request and shall
provide the Acquiror with the written materials related to
the Other Bid.
Section 8.11 Insurance. In the event that prior to the
---------
Closing Date any Purchased Asset suffers any damage, destruction or other loss
as a result of a casualty event, the Seller shall, after the Closing Date, (i)
promptly pay to the Acquiror all insurance proceeds received by the Seller
with respect to such damage, destruction or other loss, less any proceeds
applied to the physical restoration of such asset, and (ii) assign to the
Acquiror all rights of the Seller against third parties (other than against
its insurance carriers) with respect to any causes of action, whether or not
litigation has commenced as of the Closing Date, in connection with such
damage, destruction or other loss; provided, however, that the proceeds of
such insurance shall be subject to (and recovery thereon shall be reduced by
the amount of) any applicable deductibles and co-payment provisions or any
payment or reimbursement obligations of the Seller in respect thereof;
provided, further, that the Seller shall not be required to pay any insurance
proceeds under any insurance policy which constitutes "self-insurance."
Section 8.12 Tax Matters.
-----------
(a) Books & Records; Cooperation. The Acquiror, on
----------------------------
one hand, and the Seller, on the other hand, agree to
furnish or cause to be furnished to the other, upon request,
as promptly as practicable, such information and assistance
relating to the Purchased Assets, including, without
limitation, access to books and records, as is reasonably
necessary for the filing of all Tax Returns by the Acquiror
or the Seller, the making of any election relating to Taxes,
the preparation for any audit by any taxing authority, and
the prosecution or defense of any claim, suit or proceeding
relating to any Taxes. Each of the Acquiror, on one hand,
and the Seller, on the other hand, shall retain all books
and records
51
with respect to Taxes pertaining to the Purchased Assets,
for a period of at least six (6) years following the Closing
Date. At the end of such period, each party shall provide
the other with at least ten (10) days prior written notice
before transferring, destroying or discarding any such books
and records, during which period the party receiving such
notice can elect to take possession, at its own expense, of
such books and records. The Acquiror, on one hand, and the
Seller, on the other hand, shall cooperate fully with the
other in the conduct of any audit, litigation or other
proceeding relating to Taxes involving the Purchased Assets.
The Acquiror, on one hand, and the Seller, on the other
hand, further agree, upon request, to use their commercially
reasonable efforts to obtain any certificate or other
document from any governmental authority or any other Person
as may be necessary to mitigate, reduce or eliminate any Tax
that could be imposed (including, but not limited to, with
respect to the transactions contemplated hereby).
(b) Allocation of Taxes. Except as otherwise
-------------------
provided in Section 4.4 hereof relating to Transfer Taxes,
-----------
the Seller shall be responsible for and shall promptly pay
when due all Taxes levied with respect to the Purchased
Assets attributable to the Pre-Closing Tax Period. All Taxes
levied with respect to the Purchased Assets for any Straddle
Period shall be apportioned between the Pre-Closing Tax
Period and the Post-Closing Tax Period, as follows:
(i) in the case of any Taxes other than
Taxes based upon or related to income or receipts, the
portion allocable to the Pre-Closing Tax Period shall be
deemed to be the amount of such Tax for the entire Straddle
Period multiplied by a fraction the numerator of which is
the number of days in the Tax period ending on the Closing
Date and the denominator of which is the number of days in
the entire Straddle Period, and
(ii) in the case of any Tax based upon or
related to income or receipts, the portion allocable to the
Pre-Closing Tax Period shall be deemed equal to the amount
which would be payable if the relevant Straddle Period ended
on the Closing Date.
Upon receipt of any xxxx for such Taxes relating to the Purchased Assets, the
Acquiror, on one hand, and the Seller, on the other hand, shall present a
statement to the other setting forth the amount of reimbursement to which each
is entitled under this Section 8.12 together with such supporting evidence as
------------
is reasonably necessary to calculate the proration amount. The proration
amount shall be paid by the party owing it to the other within ten (10) days
after delivery of such statement. In the event that the Acquiror or the Seller
shall make any payment for which it is entitled to reimbursement under this
Section 8.12, the applicable party shall make such reimbursement promptly but
------------
in no event later than ten (10) days after the presentation of a statement
setting forth the amount of reimbursement to which the presenting party is
entitled along with such supporting evidence as is reasonably necessary to
calculate the amount of reimbursement.
52
(c) Notices. The Seller shall promptly notify the
-------
Acquiror in writing upon its receipt of notice of any
pending or threatened federal, state, local or foreign Tax
audits or assessments relating to the income, properties or
operations of Seller that reasonably may be expected to
relate to the Purchased Assets.
(d) Withholding. At the Closing, the Seller shall
-----------
deliver to Acquiror all necessary forms and certificates
complying with applicable law, duly executed and
acknowledged, certifying that the transactions contemplated
hereby are exempt from withholding under Section 1445 of the
Code.
(e) Characterization of Payments. Any payments made
----------------------------
to any Indemnified Party pursuant to this Agreement shall
constitute an adjustment of the consideration paid for the
Purchased Assets for Tax purposes and shall be treated as
such by the Acquiror and the Seller on their Tax Returns to
the extent permitted by Law.
Section 8.13 Financial Resources. The Acquiror shall
-------------------
maintain financial resources consisting of cash, cash equivalents and/or
available credit facilities sufficient to enable the Acquiror to satisfy its
financial obligations under this Agreement as and when such financial
obligations become due and payable pursuant to this Agreement.
ARTICLE IX.
CONDITIONS TO THE OBLIGATIONS OF THE
SELLER FOR THE CLOSING
The obligation of the Seller to effect the Closing is
subject to the satisfaction (or waiver by the Seller), at or before the
Closing, of each of the following conditions:
Section 9.1 Representations, Warranties and Covenants. The
-----------------------------------------
representations and warranties of the Acquiror contained in Article VII of
-----------
this Agreement (other than the representations and warranties of the Acquiror
made with reference to a specified date (such as the date hereof), which shall
be true and correct as of such date) that are qualified by materiality shall
be true and correct in all respects and, to the extent not so qualified, shall
be true and correct in all material respects, at and as of the Closing Date as
if made at and as of such time. The Acquiror shall have performed in all
material respects all agreements and covenants required by this Agreement or
any Related Agreements to be performed by it prior to or on the Closing Date.
The Seller shall have received a certificate as to satisfaction of the
conditions set forth in this Section 9.1 dated as of the Closing Date and
-----------
executed by a duly authorized officer of the Acquiror.
Section 9.2 No Actions or Proceedings. No Orders prohibiting
-------------------------
the transactions contemplated hereby shall have been instituted and not
settled or otherwise terminated. No Law shall have been enacted, entered,
promulgated or enforced by any Governmental or Regulatory Authority that is in
effect and has the effect of making the purchase and sale of the Purchased
Assets illegal or otherwise prohibiting the consummation of such purchase and
sale. The waiting
53
period (including any extensions thereof) applicable to the consummation of
the transactions contemplated by this Agreement required pursuant to the HSR
Act shall have expired or been terminated.
Section 9.3 No Material Adverse Effects. No Acquiror
---------------------------
Material Adverse Effect shall have occurred and the be continuing.
Section 9.4 No Proceedings. There shall not be pending any
--------------
Action or Proceeding seeking (i) to prohibit or restrain the transactions
contemplated by this Agreement or (ii) seeking to impose or confirm
limitations on the Acquiror or any of its Subsidiaries to effectively exercise
full ownership of the Evamist Business or the Purchased Assets after the
Closing and to conduct the Evamist Business as contemplated in the Agreement
and the Related Agreements.
Section 9.5 Deliveries. The Acquiror shall have delivered or
----------
caused to be delivered to the Seller each of the documents, materials or funds
as specified in Section 5.2(b).
--------------
ARTICLE X.
CONDITIONS TO THE OBLIGATIONS OF THE ACQUIROR FOR THE CLOSING
The obligation of the Acquiror to effect the Closing is
subject to the satisfaction (or waiver by the Acquiror), at or before the
Closing, of each of the following conditions:
Section 10.1 Representations, Warranties and Covenants. The
-----------------------------------------
representations and warranties of the Seller contained in Article VI of this
----------
Agreement (other than the representations and warranties of the Seller made
with reference to a specified date (such as the date hereof), which shall be
true and correct as of such date) that are qualified by materiality shall be
true and correct in all respects and, to the extent not so qualified, shall be
true and correct in all material respects, at and as of the Closing Date as if
made at and as of such time. The Seller shall have performed in all material
respects all agreements and covenants required by this Agreement or any
Related Agreement to be performed by it prior to or on the Closing Date. The
Acquiror shall have received a certificate as to satisfaction of the
conditions set forth in this Section 10.1 dated as of the Closing Date and
------------
executed by a duly authorized officer of the Seller.
Section 10.2 No Actions or Proceedings. No Orders
-------------------------
prohibiting the transactions contemplated hereby shall have been instituted
and not settled or otherwise terminated. No Law shall have been enacted,
entered, promulgated or enforced by any Governmental or Regulatory Authority
that is in effect and has the effect of making the purchase and sale of the
Purchased Assets illegal or otherwise prohibiting the consummation of such
purchase and sale. The waiting period (including any extensions thereof)
applicable to the consummation of the transactions contemplated by this
Agreement required pursuant to the HSR Act shall have expired or been
terminated.
Section 10.3 Consents.
--------
(a) All Seller Governmental Consents set forth on
Schedule 6.3(a) of the Seller Disclosure Schedule shall have
---------------
been obtained or made.
54
(b) The Acquiror shall have received all Seller
Third Party Consents and all Required Permits necessary to
effect the transactions contemplated by this Agreement and
the Related Agreements (which shall include the consents and
permits set forth on Schedules 6.3(b) and 6.8 of the Seller
---------------- ---
Disclosure Schedule, excluding the Evamist FDA Submissions).
Section 10.4 No Material Adverse Effects. No Seller Material
---------------------------
Adverse Effect shall have occurred and be continuing.
Section 10.5 Deliveries. The Seller shall have delivered or
----------
caused to be delivered to the Acquiror each of the documents specified in
Section 5.2(a).
--------------
Section 10.6 Proceedings. There shall not be pending any
-----------
action, litigation or proceeding by any Governmental or Regulatory Authority
seeking to (i) prohibit or restrain the transactions contemplated by this
Agreement or (ii) seeking to impose or confirm limitations on the ability of
Acquiror or any of its Subsidiaries to effectively exercise full rights of
ownership of the Evamist Business or the Purchased Assets after the Closing.
ARTICLE XI.
INDEMNIFICATION
Section 11.1 Survival of Representations, Warranties,
----------------------------------------
Covenants, Etc. The representations and warranties of the parties contained in
---------------
Articles VI and VII hereof and in the Related Agreements (if any) shall
----------- ---
survive the Closing until the second anniversary of the Closing Date;
provided, however, that the representations and warranties of the Seller in
Sections 6.2, 6.14(a) and 6.16 hereof shall survive the Closing until sixty
------------ ------- ----
(60) days following the expiration of the applicable statute of limitations
(with extensions, if any) with respect to the matters addressed in such
sections. The period of time a representation or warranty survives the Closing
pursuant to the preceding sentence shall be the "SURVIVAL PERIOD" with respect
to such representation or warranty. The covenants and agreements of the
parties hereto contained herein shall survive in accordance with their
respective terms. So long as an Indemnified Party gives an Indemnification
Claim Notice for such claim on or before the expiration of the applicable
Survival Period, such Indemnified Party shall be entitled to pursue its rights
to indemnification under Sections 11.2(a) or (b) hereof, as applicable. In the
---------------- ---
event notice of any claim for indemnification under Section 11.2(a) or (b)
--------------- ---
hereof shall have been given within the applicable Survival Period and such
claim has not been finally resolved by the expiration of such Survival Period,
the representations and warranties that are the subject of such claim shall
survive the end of the Survival Period of such representations or warranties
until such claim is finally resolved, but such representations and warranties
shall only survive with respect to such asserted claim.
Section 11.2 Indemnification.
---------------
(a) By the Seller. Subject to Sections 11.1 and
------------- -------------
11.3, from and after the Closing, the Seller shall
----
indemnify, reimburse, defend and hold harmless the Acquiror,
its Affiliates and their respective officers, directors,
employees, agents, successors and assigns from and against
any and all costs, losses,
55
Liabilities, damages, including fines, penalties, interest,
judgments, lawsuits, deficiencies, claims, expenses
(including reasonable fees and disbursements of attorneys
and other professionals, including third party consultants)
(collectively, "DAMAGES") incurred in connection with,
arising out of, resulting from or incident to (i) any breach
of, or inaccuracy in, any representation or warranty of the
Seller set forth in this Agreement, any Related Agreement or
any certificate of the Seller delivered to Acquiror at the
Closing, without giving effect to any "materiality" or
"Seller Material Adverse Effect" or Knowledge qualifier
therein, (ii) the failure to perform any covenant or
agreement of the Seller set forth in this Agreement or in
any of the Related Agreements, (iii) any Excluded Asset,
(iv) any Excluded Liability and (v) the Seller's breach of
the terms and conditions of the Acrux License, whether or
not such breach is based on facts or circumstances in
existence as of the date hereof.
(b) By the Acquiror. Subject to Sections 11.1 and
--------------- -------------
11.3, from and after the Closing, the Acquiror shall
----
indemnify, defend and hold harmless the Seller, its
Affiliates and their respective officers, directors,
employees, agents, successors and assigns from and against
any and all Damages incurred in connection with, arising out
of, resulting from or incident to (i) any breach of any
representation or warranty of the Acquiror set forth in this
Agreement, any Related Agreement or any certificate of the
Acquiror delivered to the Seller at Closing, without giving
effect to any "materiality" or "Acquiror Material Adverse
Effect" or Knowledge qualifier therein, (ii) the failure to
perform any covenant or agreement of the Acquiror set forth
in this Agreement or in any of the Related Agreements, or
(iii) any Assumed Liabilities.
(c) Procedure for Claims. The Indemnified Party
--------------------
shall give the indemnifying party prompt written notice (an
"INDEMNIFICATION CLAIM NOTICE") of any Damages or discovery
of fact upon which such Indemnified Party intends to base a
request for indemnification under Section 11.2(a) or Section
--------------- -------
11.2(b). Failure to give any such Indemnification Claim
-------
Notice shall not constitute a waiver of any right to
indemnification or reduce in any way the indemnification
available hereunder, except to the extent the indemnifying
party demonstrates that such failure to notify directly
increases the amount to be indemnified hereunder. Each
Indemnification Claim Notice must contain a description of
the claim and the nature and amount of such Damages (to the
extent that the nature and amount of such Damages are known
at such time). The Indemnified Party shall furnish promptly
to the indemnifying party copies of all papers and official
documents received in respect of any Damages. All
indemnification claims in respect of a party, its Affiliates
or their respective directors, officers, employees and
agents (collectively, the "INDEMNITEES" and each an
"INDEMNITEE") shall be made solely by such party to this
Agreement (the "INDEMNIFIED PARTY").
(d) Third Party Claims. The obligations of an
------------------
indemnifying party under this Section 11.2(d) with respect
---------------
to Damages arising from claims of any third party that are
subject to indemnification as provided for in Section
-------
11.2(a)
------
56
or Section 11.2(b) (a "THIRD PARTY CLAIM") shall be governed
---------------
by and be contingent upon the following additional terms and
conditions:
(i) At its option, the indemnifying party
may assume the defense of any Third Party Claim by giving
written Notice to the Indemnified Party within ten (10) days
after the indemnifying party's receipt of an Indemnification
Claim Notice. The assumption of the defense of a Third Party
Claim by the indemnifying party shall be construed as an
acknowledgment that the indemnifying party is liable to
indemnify any Indemnitee in respect of the Third Party
Claim. Upon assuming the defense of a Third Party Claim, the
indemnifying party may appoint as lead counsel in the
defense of the Third Party Claim any legal counsel selected
by the indemnifying party; provided, however, that such
counsel is reasonably acceptable to the Indemnified Party,
provided, further, that in the event that (i) a conflict of
interest arises between the indemnifying party and the
Indemnified Party such that such legal counsel cannot
represent both the indemnifying party and the Indemnified
Party or (ii) the Indemnitee has been advised in writing by
counsel that there may be one or more legal defenses
available to the Indemnitee Party that are different from or
in addition to that of the indemnifying party, the
Indemnitee may retain its own legal counsel at the expense
of the indemnifying party and the indemnifying party and its
counsel shall cooperate with the Indemnified Party and its
counsel, as may be reasonably requested. Except as set forth
above, should the indemnifying party assume the defense of a
Third Party Claim, the indemnifying party shall not be
liable to the Indemnified Party or any other Indemnitee for
any legal expenses subsequently incurred by such Indemnified
Party or other Indemnitee in connection with the analysis,
defense or settlement of the Third Party Claim.
(ii) Without limiting Section 11.2(d)(i),
------------------
any Indemnitee shall be entitled to participate in, but not
control, the defense of such Third Party Claim and to employ
counsel of its choice for such purpose; provided, however,
that such employment shall be at the Indemnitee's sole cost
and expense, except as described in Section 11.2(d)(i),
------------------
unless (A) the employment thereof has been specifically
authorized by the indemnifying party in writing, or (B) the
indemnifying party has failed to assume the defense and
employ counsel in accordance with Section 11.2(d)(i) (in
------------------
which case the Indemnified Party shall control the defense).
(iii) With respect to any Damages relating
solely to the payment of money damages in connection with a
Third Party Claim and that will not result in the
Indemnitee's or the Indemnified Party's becoming subject to
injunctive or other relief for other than money damages, and
as to which the indemnifying party shall have acknowledged
in writing the obligation to indemnify the Indemnitee
hereunder, the indemnifying party shall have the sole right
to consent to the entry of any judgment, enter into any
settlement or otherwise dispose of such Damages, on such
terms as the indemnifying party, in its sole discretion,
shall deem appropriate, provided that, as a result of or in
57
connection with any such settlement each Indemnitee or
Indemnified Party shall receive a full release with respect
to such claim. The indemnifying party shall not be liable
for any settlement or other disposition of Damages by an
Indemnitee or Indemnified Party that is reached without the
written consent of the indemnifying party, which consent
shall not be unreasonably withheld. If the indemnifying
party chooses to defend or prosecute any Third Party Claim,
no Indemnitee or Indemnified Party shall admit any liability
with respect to, or settle, compromise or discharge, any
Third Party Claim without the prior written consent of the
indemnifying party, which consent shall not be unreasonably
withheld.
(iv) Notwithstanding the foregoing, the
indemnifying party shall not be entitled to assume the
defense of any Third Party Claim (and shall be liable for
the reasonable fees and expenses of counsel incurred by the
Indemnified Party in defending such Third Party Claim) if
the Third Party Claim seeks an order, injunction or other
equitable relief or relief for other than money damages
against the Indemnified Party that the Indemnified Party
reasonably determines cannot be separated from any related
claim for money damages. If such equitable relief or other
relief portion of the Third Party Claim can be so separated
from that for money damages, the indemnifying party shall be
entitled to assume the defense of the portion relating to
money damages.
(v) Regardless of whether the indemnifying
party chooses to defend or prosecute any Third Party Claim,
the Indemnified Party and the indemnifying party shall, and
shall cause each other Indemnitee or Affiliate of the
indemnifying party, as applicable, to, cooperate in the
defense or prosecution thereof and shall furnish such
records, information and testimony, provide such witnesses
and attend such conferences, discovery proceedings,
hearings, trials and appeals as may be reasonably requested
in connection therewith. Such cooperation shall include
access during normal business hours afforded to the
indemnifying party or Indemnified Party, as applicable, to,
and reasonable retention by each such Person of, records and
information that are reasonably relevant to such Third Party
Claim, and making each such Person and other employees and
agents available on a mutually convenient basis to provide
additional information and explanation of any material
provided hereunder, and the indemnifying party shall
reimburse each such Person for all its reasonable
out-of-pocket expenses in connection therewith.
(e) Other Claims. In the event any Indemnified
------------
Party has a claim against any indemnifying party under
Section 11.2(a) or 11.2(b) that does not involve a Third
--------------- -------
Party Claim being asserted against or sought to be collected
from such Indemnified Party, the Indemnified Party shall
deliver an Indemnification Claim Notice regarding such claim
with reasonable promptness to the indemnifying party. The
failure by any Indemnified Party so to notify the
indemnifying party shall not relieve the indemnifying party
from any liability that it may have to such Indemnified
Party under Section 11.2(a) or 11.2(b),
--------------- -------
58
except to the extent that the indemnifying party
demonstrates that such failure to notify directly increased
the amount to be indemnified hereunder. If the indemnifying
party does not notify the Indemnified Party within ten (10)
calendar days following its receipt of such notice that the
indemnifying party disputes its liability to the Indemnified
Party under Section 11.2(a) or 11.2(b), such claim specified
--------------- -------
by the Indemnified Party in such notice shall be
conclusively deemed a Liability of the indemnifying party
under Section 11.2(a) or 11.2(b) and the indemnifying party
--------------- -------
shall pay the amount of such Liability to the Indemnified
Party on demand or, in the case of any notice in which the
amount of the claim (or any portion thereof) is estimated,
on such later date when the amount of such claim (or such
portion thereof) becomes finally determined.
(f) Effect of Investigation or Knowledge. Any claim
------------------------------------
by the Acquiror or its Affiliates or any of their respective
directors, officers, employees or agents for indemnification
shall not be adversely affected by any investigation by or
opportunity to investigate afforded to the Acquiror, nor
shall such a claim be adversely affected by the Acquiror's
Knowledge on or before the Closing Date of any breach of the
type specified in this Section 11.2 or of any state of facts
------------
that may give rise to such a breach. The waiver of any
condition based on the accuracy of any representation or
warranty, or on the performance of or compliance with any
covenant or obligation, will not adversely affect the right
to indemnification, payment of Damages or other remedy based
on such representations, warranties, covenants or
obligations.
Section 11.3 Limitations.
-----------
(a) In no event shall the Seller or the Acquiror be
liable for any Damages pursuant to Section 11.2(a) or
---------------
11.2(b), as applicable, unless and until the aggregate
-------
amount of all such Damages exceeds $100,000 (the "LIABILITY
THRESHOLD"), in which case the Seller or the Acquiror, as
applicable, shall be liable for all such Damages in excess
of the Liability Threshold, and then not for any Damages in
excess of the then applicable Liability Cap for all claims
made under such Section 11.2(a) or 11.2(b), as applicable,
--------------- -------
in the aggregate; provided, however, that: (A) for purposes
of claims made by the Acquiror under Sections 11.2(a)(iii),
---------------------
11.2(a)(iv) or 11.2(a)(v), the Seller shall be liable for
----------- ----------
all Damages suffered by the Acquiror without regard to the
Liability Threshold or Liability Cap; (B) for purposes of
claims made by the Seller under Section 11.2(b)(iii), the
--------------------
Acquiror shall be liable for all Damages suffered by the
Seller without regard to the Liability Threshold or
Liability Cap; and (C) for purposes of claims made by a
party due to the other party's fraud or willful misconduct,
such party shall be liable for all Damages suffered by the
other party without regard to the Liability Threshold or
Liability Cap.
(b) Each party agrees that it shall, and shall
cause the applicable Indemnitees to, use its or their
commercially reasonable efforts to secure payment from
insurance policies available and in existence that provide
59
coverage with respect to any Damages to be indemnified. The
amount of any Damages recoverable by a party under Section
-------
11.2 shall be reduced by the amount of any insurance
----
proceeds actually paid to the Indemnified Party or the
Indemnitee, as applicable, relating to such claim.
(c) THE INDEMNIFICATION OBLIGATIONS OF THE PARTIES
HERETO SHALL NOT EXTEND TO PUNITIVE DAMAGES OR TO ANY
INCIDENTAL, CONSEQUENTIAL, SPECIAL OR INDIRECT DAMAGES,
INCLUDING BUSINESS INTERRUPTION, LOSS OF FUTURE REVENUE,
DIMINUTION IN VALUE, PROFITS OR INCOME, OR LOSS OF BUSINESS
REPUTATION OR OPPORTUNITY.
Section 11.4 Exclusive Remedy. Except in the event of fraud
----------------
or willful misconduct, the sole and exclusive remedy of each party with
respect to any and all claims for any breach of any representation, warranty,
covenant or other claim arising out of or relating to this Agreement, whether
arising in contract, tort or otherwise, shall be the indemnification
provisions of this Article XI, provided, however, that the provisions of this
Article XI shall not restrict the right of any party to seek specific
performance or other equitable remedies in connection with any breach of any
of the covenants contained in this Agreement or any of the Related Agreements.
ARTICLE XII.
TERMINATION
Section 12.1 Methods of Termination. Prior to the Closing,
----------------------
his Agreement may be terminated at any time:
(a) by mutual written agreement of the Seller and
the Acquiror;
(b) by either the Seller or the Acquiror if the
Closing shall not have occurred by June 1, 2007; provided,
however, that the right to terminate the Agreement pursuant
to this Section 12.1(b) shall not be available to a party if
---------------
such party's failure to perform in all material respects any
of their material obligations under this Agreement or any
Related Agreement results in the failure of the Closing to
occur by such time;
(c) by either the Seller or the Acquiror, if there
shall be in effect any Law that prohibits the Closing or if
the Closing would violate any non-appealable Order, issued
by a competent Governmental Entity, that permanently
restrains, enjoins or prohibits the consummation of the
transactions contemplated by this Agreement;
(d) by either the Seller or the Acquiror, if the
other party has breached any material representation,
warranty, covenant or agreement hereunder, such breach has
not been waived by the non-breaching party, and the breach
has not been cured within a period of thirty (30) days
following the terminating party's written notice of such
breach and the breaching party is diligently proceeding to
60
cure such breach, unless such breach is not capable of cure,
in which event the non-breaching party may terminate
immediately;
(e) by the Acquiror, if a Seller Material Adverse
Effect shall have occurred since the date of this Agreement;
(f) by the Seller, if an Acquiror Material Adverse
Effect shall have occurred since the date of this Agreement;
(g) by the Seller, if (i) it is not in material
breach of the terms of Section 8.10(a) or (c), (ii) the
--------------- ---
board of directors of the Seller has authorized the Seller
to enter into a definitive agreement for a transaction that
constitutes a Superior Bid, (iii) the Seller has notified
the Acquiror in writing that the Seller has received a
Superior Bid and intends to enter into a definitive
agreement with respect to such Superior Bid pursuant to
Section 8.10(b), (iv) five (5) Business Days have passed
---------------
since the Acquiror has received such written notice and (v)
the Other Bid remains a Superior Bid after any amendments to
this Agreement; provided, however, that the Seller shall not
have the right to terminate this Agreement pursuant to this
Section 12.1(g) prior to the expiration of the No-Shop
---------------
Period.
(h) by the Acquiror, if prior to the Closing, the
Seller has breached the terms and conditions of the Acrux
License in a manner giving rise to a right of termination
under the Acrux License by Fempharm Pty Ltd. and/or Acrux
DDS Pty Ltd., whether or not such breach is based on facts
or circumstances in existence as of the date hereof; or
(i) by Acquiror, on or before the earlier of (i)
11:59 p.m. (Eastern Daylight Saving Time) fourteen (14)
calendar days following the date hereof or (ii) 11:59 p.m.
(Eastern Daylight Saving Time) on the fifth (5th) Business
Day following the date of Acquiror's inspection of the
facilities of ***, located *** (the "Facility Inspection
-------------------
Deadline"), if Acquiror determines in good faith that *** is
--------
unable to manufacture quantities of the pump component for
Evamist meeting the specifications therefor (as set forth in
the Evamist NDA) to support the launch of Evamist or provide
continuity of commercial supply as contemplated by the
parties as of the date hereof (the "Adverse Determination");
---------------------
provided, however, if Acquiror makes the Adverse
Determination it shall promptly notify Seller thereof, then
upon written request of either party to the other party (i)
the parties shall promptly meet (whether in person or
teleconference) and discuss in good faith possible
resolutions to the Adverse Determination over a period of
seven (7) calendar days and (ii) Acquiror's ability to
terminate this Agreement pursuant to this Section 12.1(i)
shall be extended by a period of seven (7) calendar days
following the Facility Inspection Deadline.
61
Section 12.2 Procedure upon Termination. In the event of
--------------------------
termination of this Agreement under Section 12.1, written Notice thereof shall
------------
forthwith be given to the other party, and the transactions contemplated by
this Agreement shall be terminated and abandoned, without further action by
the parties hereto. If this Agreement is terminated as provided herein:
(a) each party, if requested, will redeliver all
documents, work papers and other material of the other party
and its Affiliates relating to the transactions contemplated
hereby, whether so obtained before or after the execution
hereof, to the party furnishing the same; and
(b) no party hereto and none of their respective
directors, officers, stockholders, Affiliates or Controlling
Persons shall have any further liability or obligation to
any other party to this Agreement, other than Section 12.2
------------
and Article XIII; provided, however, that nothing in this
------------
Section 12.2(b) shall prejudice any rights, claims, or
---------------
causes of action that may have accrued hereunder or with
respect hereto prior to the date of such termination,
including for breach of this Agreement (whether based upon
the termination or otherwise).
ARTICLE XIII.
MISCELLANEOUS
Section 13.1 Notices. All Notices, requests and other
-------
communications hereunder must be in writing and will be deemed to have been
duly given only if delivered personally against written receipt or by
facsimile transmission with answer back confirmation or mailed (postage
prepaid by certified or registered mail, return receipt requested) or by
nationally recognized overnight courier that maintains records of delivery to
the parties at the following addresses or facsimile numbers:
If to the Acquiror to:
K-V Pharmaceutical Company
0000 X. Xxxxxx Xxxx
Xx. Xxxxx, Xxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Vice President, Business Development
General Counsel
With copies to:
Xxxxxx & Xxxxxxx LLP
000 Xxxx Xxxxxx Xxxxx, 00xx Xxxxx
Xxxxx Xxxx, Xxxxxxxxxx 00000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxxx X. Xxxx, Esq.
62
If to the Seller to:
Vivus, Inc.
000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxx Xxxx, Xxxxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxxx X. Xxxxxx
With copies to:
Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx
000 Xxxx Xxxx Xxxx
Xxxx Xxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xxx X. Xxxxxxxx, Esq.
All such Notices, requests and other communications will (i) if delivered
personally to the address as provided in this Section 13.1, be deemed given
------------
upon receipt, (ii) if delivered by facsimile to the facsimile number as
provided in this Section 13.1, be deemed given upon receipt by the sender of
------------
the answer back confirmation and (ii) if delivered by mail in the manner
described above or by overnight courier to the address as provided in this
Section 13.1, be deemed given upon receipt (in each case regardless of whether
------------
such Notice, request or other communication is received by any other Person to
whom a copy of such Notice, request or other communication is to be delivered
pursuant to this Section 13.1). Any party from time to time may change its
------------
address, facsimile number or other information for the purpose of Notices to
that party by giving Notice specifying such change to the other party hereto
in accordance with the terms of this Section 13.1.
------------
Section 13.2 Entire Agreement. This Agreement (and all
----------------
Exhibits and Schedules attached hereto and all other documents delivered in
connection herewith) supersedes all prior discussions and agreements, both
oral and written, among the parties with respect to the subject matter hereof
and contains the sole and entire agreement among the parties hereto with
respect to the subject matter hereof. Further, the parties agree and
acknowledge that the Confidentiality Agreement shall remain in effect until,
but shall terminate effective as of, the Closing.
Section 13.3 Waiver. Any term or condition of this Agreement
------
may be waived at any time by the party that is entitled to the benefit
thereof, but no such waiver shall be effective unless set forth in a written
instrument duly executed by or on behalf of the party waiving such term or
condition. No waiver by any party hereto of any term or condition of this
Agreement, in any one or more instances, shall be deemed to be or construed as
a waiver of the same or any other term or condition of this Agreement on any
future occasion. All remedies, either under this Agreement or by Law or
otherwise afforded, will be cumulative and not in the alternative.
63
Section 13.4 Amendment. This Agreement may be amended,
---------
supplemented or modified only by a written instrument mutually agreed upon and
duly executed by each party hereto.
Section 13.5 Third Party Beneficiaries. The terms and
-------------------------
provisions of this Agreement are intended solely for the benefit of each party
hereto and their respective successors or permitted assigns and it is not the
intention of the parties to confer third party beneficiary rights upon any
other Person, except as achieved through the indemnification clause set forth
in Section 11.2.
------------
Section 13.6 Assignment; Binding Effect. Neither this
--------------------------
Agreement nor any rights, interests or obligations hereunder shall be
transferred, assigned or delegated by any party hereto without the prior
written consent of the other party hereto and any attempt to make any such
transfer assignment or delegation without such consent shall be null and void;
provided, however, that (i) without the consent of the Acquiror, the Seller
may (in whole or in part) transfer, assign and delegate its rights, interests
and obligations to one or more of its Affiliates (ii) without the consent of
the Seller, the Acquiror may (in whole or in part) transfer, assign and
delegate its rights, interests and obligations to any Affiliate of the
Acquiror (including pursuant to Section 4.7 hereof), and (iii) without the
-----------
consent of the Seller, the Acquiror may transfer and assign its rights to
indemnity, in whole or in part, to any purchaser of all or substantially all
of the Evamist Business; provided, further, this Agreement is binding upon,
inures to the benefit of and is enforceable by the parties hereto and their
respective successors and permitted assigns and no transfer, assignment or
delegation shall limit, affect or discharge the assignor's obligations
hereunder. In addition, notwithstanding the foregoing, either party hereto may
assign this Agreement, without the prior written consent of the other party
hereto, to a Person that succeeds to all or substantially all of such party's
business or assets related to this Agreement, whether by sale, merger,
operation of law or otherwise, provided that such assignee or transferee
agrees in writing to be bound by the terms and conditions of this Agreement.
Section 13.7 Headings. The headings used in this Agreement
--------
have been inserted for convenience of reference only and do not define or
limit the provisions hereof.
Section 13.8 Severability. If any provision of this
------------
Agreement is held to be illegal, invalid or unenforceable under any present or
future law, and if the rights or obligations of any party hereto under this
Agreement will not be materially and adversely affected thereby, (i) such
provision will be fully severable, (ii) this Agreement will be construed and
enforced as if such illegal, invalid or unenforceable provision had never
comprised a part hereof, (iii) the remaining provisions of this Agreement will
remain in full force and effect and will not be affected by the illegal,
invalid or unenforceable provision or by its severance herefrom, and (iv) in
lieu of such illegal, invalid or unenforceable provision, there will be added
automatically as a part of this Agreement a legal, valid and enforceable
provision as similar to the terms of such illegal, invalid or unenforceable
provision as may be possible and reasonably acceptable to the parties herein.
Section 13.9 Governing Law. THIS AGREEMENT SHALL BE GOVERNED
-------------
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE
APPLICABLE TO CONTRACTS EXECUTED AND PERFORMED IN SUCH
64
STATE, WITHOUT GIVING EFFECT TO CONFLICTS OF LAWS PRINCIPLES. ALL DISPUTES
UNDER, OR PERTAINING TO, THIS AGREEMENT SHALL BE RESOLVED EXCLUSIVELY IN THE
STATE OR FEDERAL COURTS OF THE STATE OF DELAWARE.
Section 13.10 Expenses. Except as otherwise provided in this
--------
Agreement, each party hereto shall pay its own expenses and costs incidental
to the preparation of this Agreement and to the consummation of the
transactions contemplated hereby.
Section 13.11 Counterparts. This Agreement may be executed
------------
in any number of counterparts and by facsimile, each of which will be deemed
an original, but all of which together will constitute one and the same
instrument. A facsimile copy shall be a sufficient proof of signature, without
it being necessary to produce the original copy.
[SIGNATURES ON FOLLOWING PAGE]
65
IN WITNESS WHEREOF, this Agreement has been executed by the
parties hereto all as of the date first above written.
SELLER:
Vivus, Inc.
a Delaware corporation
By: /s/ Xxxxxx X. Xxxxxx
----------------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: President and Chief Executive Officer
ACQUIROR:
K-V Pharmaceutical Company,
a Delaware corporation
By: /s/ Xxxxxx X. Xxxxxxxx
----------------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Vice President and Chief Financial Officer
66
EXHIBIT A
FORM OF SUBLICENSE AGREEMENT
67
EXHIBIT B
FORM OF TRANSITION SERVICES AGREEMENT
68
