1
EXHIBIT 2.2
EXECUTION COPY
================================================================================
ASSET PURCHASE AGREEMENT
for Florinef(TM), Delestrogen(R) and Corzide(R)
between
▇▇▇▇▇▇▇-▇▇▇▇▇ SQUIBB COMPANY
as Seller,
and
KING PHARMACEUTICALS, INC.
as Purchaser
Dated as of August 8, 2001
================================================================================
2
ASSET PURCHASE AGREEMENT dated as of August 8, 2001, (the "Agreement
Date") between ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb Company, a Delaware corporation ("Seller"),
and King Pharmaceuticals, Inc. a Tennessee corporation ("Purchaser").
Seller has the right, directly or indirectly through its Affiliates, to
manufacture, distribute, market and sell each Product (as defined herein) in the
United States. Seller desires to sell to Purchaser, and Purchaser desires to
purchase from Seller, the Acquired Assets (Section 8.02(b) identifies the
sections of this Agreement in which this term and other capitalized terms used
herein and not defined in Section 8.02(a) are defined). In addition, Purchaser
has agreed to assume from Seller the Assumed Liabilities.
Seller and Purchaser have entered into an Asset Purchase Agreement for
Corgard(R) dated as of the date hereof (the "CORGARD Purchase Agreement").
Accordingly, the parties hereby agree as follows:
ARTICLE I.
SALE AND PURCHASE OF ASSETS
SECTION 1.01 PURCHASE AND SALE.
On the terms and subject to the conditions of this Agreement, at
Closing, Seller shall, and shall cause its Affiliates to, sell, assign,
transfer, convey and deliver to Purchaser, and Purchaser shall purchase from
Seller and its Affiliates, all the right, title and interest of Seller and such
Affiliates in, to and under the Acquired Assets, for (a) the amount set forth on
Schedule 1.01(a) (the "Purchase Price") and (b) the assumption by Purchaser of
the Assumed Liabilities. The purchase and sale of the Acquired Assets and the
assumption of the Assumed Liabilities are referred to in this Agreement
collectively as the "Acquisition".
SECTION 1.02 TRANSFER OF ASSETS.
(a) The term "Acquired Assets" means all of Seller's and its
Affiliates' rights, title and interest in, to and under those certain assets set
forth below:
(i) the Included Intellectual Property, including without
limitation, all U.S. Trademarks for each Product, set
forth on Schedule 1.02(a)(i) hereto;
(ii) all registrations (and all submissions to and
correspondence with regulatory authorities)applications,
approvals, licenses and permits relating to each Business
or the Acquired Assets (including each Product) as of the
Closing Date to, from or with any Governmental Entity
located in the Territory, including the NDAs set forth on
Schedule 1.02(a)(ii) hereto;
(iii) all market materials, research data, customer and sales
information, product literature, promotional materials and
data, advertising and display materials and all training
materials in whatever medium (e.g., audio, visual or
print) exclusively related to each Business or to the
Acquired Assets (including each Product) and exclusively
used in the Territory;
(iv) all records and recorded information, including customer
and supplier lists exclusively related to each Business or
the Acquired Assets (including each Product) and
exclusively used in the Territory; and
1
3
(v) all the rights relating to the Acquired Assets, including
all claims, counterclaims, credits, causes of action,
choses in action, rights of recovery and rights of setoff.
(b) [Intentionally omitted].
(c) Except for the rights granted to Purchaser in Section 1.08 of this
Agreement and Section 2.14 of the Supply Agreement, Purchaser also acknowledges
and agrees that it is not acquiring any rights, title or interest in, to and
under any of the following assets (the "Excluded Assets"):
(i) any real estate owned or leased by Seller or any of its
Affiliates;
(ii) all cash and cash equivalents of Seller or any of its
Affiliates;
(iii) the Names;
(iv) all Accounts Receivable;
(v) any assets, properties or rights of Seller or any of its
Affiliates other than the Acquired Assets;
(vi) except as conveyed pursuant to Section 1.07(c), any
inventories of each Business, including raw materials,
goods in process, finished goods, packaging, supplies and
labels;
(vii) any manufacturing equipment and packaging assets used in
the manufacture of each Product, and any warranty rights
applicable to such manufacturing equipment;
(viii) any refund or credit of Taxes attributable to any Tax
payable by Seller for any Pre-Closing Tax Period;
(ix) all rights, claims and credits of Seller or any of its
Affiliates, relating to any Excluded Asset or any Excluded
Liability, including any such items arising under
insurance policies and all guarantees, warranties,
indemnities and similar rights in favor of Seller or any
of its Affiliates relating to any Excluded Asset or any
Excluded Liability;
(x) except as expressly otherwise set forth in this Agreement
or the Related Instruments, all contract rights of Seller
or any of its Affiliates under this Agreement and the
Related Instruments;
(xi) all Retained Information, Excluded Know-How, all Patents
(other than Included Patents), all Trademarks (other than
Included Trademarks), all Trade Dress (other than Included
Trade Dress), all Copyrights (other than Included
Copyrights), and all Internet Names (other than Included
Internet Names);
(xii) any contracts and any rights arising from any contracts,
entered into by Seller on or prior to the Closing Date
relating to the supply of the Products to Third Parties.
2
4
(d) Purchaser shall acquire the Acquired Assets free and clear of all
liabilities, obligations and commitments of Seller or any of its Affiliates,
other than the Assumed Liabilities, and free and clear of all Liens, other than
Permitted Liens.
SECTION 1.03 ASSUMED LIABILITIES.
(a) Upon the terms and subject to the conditions of this Agreement,
Purchaser shall assume, effective as of the day after the Closing Date, and
Purchaser shall pay, perform and discharge when due, the following liabilities,
obligations and commitments of Seller and its Affiliates (the "Assumed
Liabilities"):
(i) all liabilities arising out of or relating to any product
liability, breach of warranty or similar claim for injury
to person or property which results from the use or misuse
of a Product shipped to a Third Party by or on behalf of
Purchaser after the Closing;
(ii) all other liabilities, obligations and commitments of
whatever kind and nature, primary or secondary, direct or
indirect, absolute or contingent, known or unknown,
whether or not accrued, arising out of or relating to,
directly or indirectly, each Business (subject to the
obligation of the Parties in the Supply Agreement), the
Products, or the Acquired Assets or the ownership, sale or
lease of any of the Acquired Assets but only to the extent
related to any period after the Closing Date; and
(iii) all other liabilities, obligations and commitments assumed
by the Purchaser as set forth in Section 1.07.
(b) [Intentionally Omitted]
(c) Notwithstanding any other provision of this Agreement or any
Related Instrument, Purchaser shall not assume any Excluded Liability, each of
which shall be retained and paid, performed and discharged when due by Seller
and its Affiliates. The term "Excluded Liability" shall mean:
(i) account payables and liabilities, obligations and
commitments of Seller or any of its Affiliates for
materials and services directly connected with respect to
the manufacture of each Product (for sake of clarity these
represent obligations that do not fall within Sections
1.03(a)(ii);
(ii) all liabilities arising out of or relating to any product
liability, breach of warranty or similar claim for injury
to person or property, regardless of when asserted, which
resulted from the use or misuse of the Products
manufactured by or on behalf of Seller or its Affiliates
and shipped to a Third Party prior to or on the Closing
Date (the "Shipped Products") or otherwise related to such
Shipped Products;
(iii) any liability, obligation or commitment of Seller or any
of its Affiliates arising out of or relating to any
Excluded Asset;
(iv) any liability, obligation or commitment of any kind
arising out of or relating to employment, compensation or
benefits (including severance) for the present or future
employees of Seller or any of its Affiliates for all
employment relating to each Business;
3
5
(v) any liability, obligation or commitment of any kind
arising out of or relating to the contracts or agreements
required to be set forth on Schedule 2.08, whether or not
relating to the period prior to or after the Closing Date;
or
(vi) other than the Assumed Liabilities, all other liabilities,
obligations and commitments of whatever kind and nature,
primary or secondary, direct or indirect, absolute or
contingent, known or unknown, whether or not accrued,
arising out of or relating to, directly or indirectly,
each Business (subject to the obligations of the Parties
in the Supply Agreement), the Products, or the Acquired
Assets but only to the extent related to any period prior
to and on the Closing Date.
(d) Each of Purchaser's and Seller's obligations under this Section
1.03 will not be subject to offset or reduction by reason of any actual or
alleged breach of any representation, warranty or covenant contained in this
Agreement or any Related Instrument or any right or alleged right to
indemnification hereunder.
(e) For the avoidance of doubt, if there is any conflict between the
terms of this Section 1.03 and the Supply Agreement with respect to any
liabilities arising out of, or related to, directly or indirectly, each Product
(as such term is defined in the Supply Agreement) sold by Seller or its
Affiliates to Purchaser pursuant to the Supply Agreement, the terms of the
Supply Agreement shall govern.
SECTION 1.04 CLOSING AND DELIVERY OF DOCUMENTS.
(a) The consummation of the transactions contemplated by this Agreement
(the "Closing") will, subject to the satisfaction or waiver of the conditions
set forth in Article V hereof, take place on August 8, 2001, or at such other
time as shall be mutually agreed upon by the parties. The date on which Closing
occurs is referred to herein as the "Closing Date".
(b) At Closing, Seller shall deliver or cause to be delivered to
Purchaser, the following: (i) a duly executed Assignment of Trademarks; (ii) a
duly executed ▇▇▇▇ of Sale; (iii) a duly executed Supply Agreement; (iv) the
Seller's Officer's Certificate; (and (v) a duly executed Assignment of
Copyrights.
(c) At Closing, Purchaser shall deliver to Seller, the following: (i)
cash in the aggregate amount of the Purchase Price by electronic funds transfer
of immediately available United States Dollars in the amounts and to the
accounts of such entities as are designated by Seller on Schedule 1.04(c) (with
such entities to designate to Purchaser in writing not less than two (2)
business days prior to Closing the relevant account numbers of the accounts to
which such transfers should be made); (ii) a duly executed Assignment of
Trademarks; (iii) a duly executed instrument of the Assumed Liabilities
substantially in the form of Exhibit C (the "Assumption Agreement"); (iv) a duly
executed Supply Agreement; (v) the Purchaser's Officer's Certificate; and (vi) a
duly executed Assignment of Copyrights.
(d) As promptly as reasonably practicable after Closing and in any
event within sixty (60) days after Closing, Seller shall provide to Purchaser:
(i) all books, computer data, software, records, notes, notebooks and other data
or information, whether in audio, visual, print, machine-readable or other
forms, current and archived, including but not limited to, lists of customers
and suppliers of the Products in the Territory, business development plans,
advertising matter, catalogs, correspondence, mailing lists, photographs, sales
and distribution data, purchasing data, market data, promotional data, product
literature, training materials and research data, and all other materials and
records which concern or relate to the current conduct of each Business and
4
6
the Acquired Assets; and (ii) complete copies of all registrations,
applications, approvals, licenses and permits relating to the Acquired Assets
(including each Product) from the FDA and any other Governmental Entity,
including the NDAs.
SECTION 1.05 RISK OF LOSS.
Until Closing, any loss of or damage to the Acquired Assets from fire,
casualty or any other occurrence shall be the sole responsibility of Seller or
its Affiliates, as applicable. At Closing, title to the Acquired Assets shall be
transferred to Purchaser and Purchaser shall thereafter bear all risk of loss
associated with the Acquired Assets and be solely responsible for procuring
adequate insurance to protect the Acquired Assets against any such loss.
SECTION 1.06 PURCHASE PRICE ADJUSTMENT.
(a) Promptly after execution of this Agreement, Seller shall determine
the Months of Supply of the Product that was held by Seller's or its Affiliates'
wholesale customers as of [July 31, 2001] (the "Calculation Date") and shall
provide notice to Purchaser thereof. "Months of Supply" shall be calculated
pursuant to the formula set forth on Schedule 1.06(a). If the Months of Supply
of the Product exceeds three (3) months, then Seller shall pay to Purchaser in
cash, within ten (10) business days of such notice to Purchaser the amount as
calculated pursuant to the formula set forth on Schedule 1.06(a). For the
avoidance of doubt, to the extent that any amount payable by Seller pursuant to
this Section 1.06(a) is less than zero, Purchaser shall have no obligation to
pay the absolute value of such amounts to Seller.
(b) Notwithstanding anything to the contrary set forth in this
Agreement, Section 1.06(a) shall be Purchaser's sole and exclusive remedy with
respect to Seller's (and its Affiliates') sales practices related to incentives
or other inducements to purchase each Product offered, or volume of each Product
sold, to Seller's (or such Affiliates') customers, in each case, on or prior to
the Closing Date. Purchaser shall not be entitled to recovery under Article VII
for any Losses arising from any breaches of representations and warranties or
breaches of covenants in this Agreement or in any Related Instrument relating to
such sales practices or volume of sales.
SECTION 1.07 REBATES; RETURNS HANDLING; INVENTORY; TAX.
(a) Seller agrees to be responsible for all chargebacks and rebates
("Rebate Programs") Seller is obligated to pay pursuant to any Rebate Programs
for amounts charged to Seller's NDC codes for each Product and invoiced by such
Rebate Programs within ninety (90) days after the Closing Date. Purchaser shall
be responsible for Rebate Program amounts charged to Purchaser's NDC codes for
each Product and for all Rebate Program amounts charged to Seller's NDC codes
for each Product and invoiced by such Rebate Programs more than ninety (90) days
after the Closing Date. All payments due under this Section 1.07(a) for which
Purchaser is responsible shall be made promptly to Seller upon submission to
Purchaser of invoices that describe the requested payments in reasonable detail.
Purchaser shall obtain new NDC codes for each Product as soon as practicable
after the Closing Date. In the event either party disputes an amount owed under
any Rebate Program, each party shall provide to the other copies of any
documents and records evidencing original rebate claims and any resubmissions of
such claims and data relating to unit rebate calculations in order to enable the
responsible party to resolve such disputed amount.
(b) Following the Closing, the Parties will jointly issue a letter to
customers of each Product, advising such customers of Purchaser's and Seller's
respective responsibilities in connection with returns and credits. Except as
otherwise expressly set forth below and subject to Purchaser's timely compliance
with its obligations set forth in this Section 1.07(b), Seller and Purchaser
agree that during the nine (9) month period immediately following the Closing
Date,
5
7
Seller shall be responsible for handling the returns and credits of all Shipped
Products. Seller shall handle such returns during such period in accordance with
Seller's then applicable returned goods policy. Purchaser agrees to provide
Seller with any information reasonably requested by Seller from time to time
regarding Purchaser's selling prices for the Products in order to assist Seller
in Seller's determination of the reimbursement prices for returned Shipped
Products. Such information shall be provided by Purchaser to Seller promptly,
and in any event within ten (10) business days, after Seller's written request
therefor. In the event that during such nine (9) month period any returns are
delivered to Purchaser, such returns shall be shipped by Purchaser to Seller and
Seller shall reimburse Purchaser for the shipping costs incurred. Any Products
returned after the nine (9) month period shall be the responsibility of the
Purchaser. In the event that following such nine (9) month period any returns
are delivered to Seller, such returns shall be shipped by Seller to Purchaser
and Purchaser shall reimburse Seller for the shipping costs incurred. For the
sake of clarity, during the nine (9) month period following the Closing, this
Section 1.07(b) shall not apply to misshipped Products by Purchaser that are
returned by the customer for non-compliance with the terms of the customer's
orders (such as non-compliance with respect to quantity, delivery, date, pricing
error, or delivery location).
(c) On the Closing Date, Seller shall, and shall cause its Affiliates
to, sell, assign, transfer, convey and deliver to Purchaser, and Purchaser shall
purchase, acquire, pay for and accept from Seller, free and clear of all Liens,
all right, title and interest of Seller and its Affiliates in, to and under the
Inventory. The purchase price for the Inventory shall be determined in
accordance with the price for each SKU# set forth in Schedule 1.07(c) and shall
be paid by Purchaser to Seller within thirty (30) days after the Closing by wire
transfer of immediately available funds to the account specified on Schedule
1.04(c). On the Closing Date and for a reasonable time thereafter, Seller and
its Affiliates will make the Inventory available for pick-up by Purchaser.
Seller shall bear the risk of loss to the Inventory until the Inventory has been
delivered to Purchaser; thereafter Purchaser shall bear the risk of loss to the
Inventory. Seller shall provide to Purchaser (a) upon delivery of the Inventory,
Seller's standard certificate of analysis for each batch of Products and (b)
within ten (10) business days of the initial delivery of each Product, a
complete copy of one representative batch record for each Product.
(d) Seller and Purchaser each agrees to be responsible for their
respective Tax liabilities arising in connection with the purchase and sale of
the Acquired Assets. Any Tax liabilities arising out of or relating to, directly
or indirectly, each Business or the Acquired Assets (including the Products) on
or prior to the Closing Date shall be the responsibility of Seller and any Tax
liabilities arising out of or relating to, directly or indirectly, each Business
or the Acquired Assets (including the Products) after the Closing Date shall be
the responsibility of Purchaser. For the sake of clarity, any income tax or
similar liability incurred by Seller after Closing in connection with the
manufacturing of the Products by Seller shall be the responsibility of Seller.
(e) Purchaser and Seller hereby agree to reimburse one another, U.S.
dollar for dollar, in the event that any of their or their respective
Affiliates' customers offset, against accounts payable by such customer to
Seller or Purchaser or their respective Affiliates, the cost of each Product
returned by such customer, in each case which are the responsibility of the
other party hereto pursuant to Section 1.07(b). Seller and Purchaser agree to,
and to cause their respective Affiliates to, provide notice to one another of
any such offset for which such party or its Affiliate is entitled to be
reimbursed pursuant to Section 1.07(b). Payment shall be made promptly following
receipt of notice of any such offset by a customer (together with supporting
documentation). Seller and Purchaser shall, and Seller shall cause its
Affiliates to, cooperate to ensure that a customer does not offset returns of
each Product against both Seller (or any of its Affiliates) and Purchaser.
6
8
SECTION 1.08 LICENSES.
(a) Seller hereby grants to Purchaser a non-exclusive, perpetual, fully
paid-up and royalty-free, irrevocable, transferable (but solely transferable in
connection with the sale of all the Company's rights, title and interest in and
to the Products) and sublicensable right and license under any and all Product
Registrations, Know-How, Copyrights, Patents, Retained Information, and other
market materials, research data, customer and sales information, product
literature, promotional materials and data, advertising and display materials,
training materials in whatever medium (e.g., audio, visual or print), records,
and recorded information that are used as of the Closing Date in each Business
or in the manufacture, use, marketing or sale of a Product in the Territory and
that are owned or controlled by BMS or its Affiliates as of the Closing Date,
where and to the extent not acquired by Purchaser as part of the Acquired
Assets, to use and practice same in order to make and have made Product anywhere
in the world solely for sale, marketing, use and distribution in the Territory.
The foregoing license grant shall also include any and all information and data
developed subsequent to Closing in connection with changes subsequent to the
Closing and prior to the assumption of manufacturing of the Products by
Purchaser (i) to the Specifications, (ii) the Know-How, (iii) relating the
manufacture of the Product or (iv) the Product Registrations (any and all such
information shall be deemed part of the "Licensed Information"). Purchaser
covenants that it will use the licensed rights solely in accordance with the
terms set forth in this Section 1.08(a). Seller retains all rights in and to the
foregoing not expressly licensed under this Section 1.08(a).
(b) Purchaser hereby grants to Seller a non-exclusive, perpetual, fully
paid-up and royalty-free, irrevocable, transferable, worldwide, and
sublicensable right and license under its rights, title and interests in and to
the Acquired Assets solely for the purposes set forth in Section 1.08(c)(A)-(C).
Seller covenants that it will use the licensed rights solely in accordance with
the preceding sentence. Purchaser retains all rights in and to the Acquired
Assets not expressly licensed under this Section 1.08(b).
(c) Purchaser agrees that Seller and its Affiliates may use the license
granted in Section 1.08(b) (and may cross reference such NDAs) in connection
with (A) the manufacture by or on behalf of Seller and its Affiliates of a
Product for Purchaser, (B) any Products for sale, use or distribution outside
the Territory, and the manufacture of any Products in or outside the Territory
for sale, marketing, use or distribution outside the Territory; and (C) internal
research purposes.
(d) Purchaser and its Affiliates agree that they will use the
information contained in the Product Registrations (and may cross-reference the
NDA) solely in connection with (A) the sale, marketing, use or distribution of
any Product in the Territory and the manufacture of any Product in or outside
the Territory for sale, marketing, use or distribution inside the Territory; (B)
internal research purposes, and (C) the development of new line extensions and
formulations of the Product for sale, marketing, use or distribution inside the
Territory.
SECTION 1.09 SCOPE OF THE PARTIES' RIGHTS.
(a) Purchaser hereby acknowledges and agrees that: (i) neither
Purchaser nor its Affiliates shall interfere with, or have the right to
prohibit, the development, manufacture, sale, or distribution of the Products
outside the Territory or the manufacture of Products within the Territory for
use outside the Territory; and (ii) Purchaser will acquire no right, title, or
interest whatsoever in any property or assets of Seller or any of Seller's
Affiliates except as expressly set forth in this Agreement.
(b) Seller hereby acknowledges and agrees that neither Seller nor its
Affiliates shall interfere with, or have the right to prohibit, the development,
manufacture, sale, or distribution of
7
9
the Products inside the Territory or the manufacture of Products outside the
Territory for use inside the Territory.
(c) Purchaser acknowledges and agrees that Seller and its Affiliates
shall be entitled to use the Acquired Assets after Closing only as provided in
Sections 1.08(b) and 1.08(c) or to the extent necessary to fulfill Seller's
obligations hereunder, under the Supply Agreement (as defined below), or under
applicable laws or regulations.
(d) Nothing in this Section 1.09 shall prohibit the manufacture,
marketing, distribution, sale or use by Seller or any of its Affiliates of any
competing products outside the Territory. For the sake of clarity, in no event
may Seller or its Affiliates use the Acquired Assets except as set forth in
Section 1.09(c).
(e) Seller agrees that for a period of ten (10) years following the
Closing Date, Seller and its Affiliates will not market, distribute or sell in
the Territory any generic versions of the Products, including any products sold
or to be sold under any ANDA or supplement thereto referring to any Product as a
reference drug (collectively, a "Generic Product") and will not manufacture any
Generic Product for marketing, distribution, or sale in the Territory; provided,
that in the event Seller or any of its Affiliates merges with, acquires, or is
acquired by any other business that, prior to such merger or acquisition was
selling any Generic Product(s) in the Territory, then Seller shall be permitted
to continue manufacturing, using, marketing, distributing and selling in the
Territory such Generic Product(s) in unlimited quantities notwithstanding
anything in this Agreement to the contrary as long as neither Seller nor any of
its Affiliates uses any Acquired Assets or Know-How that remains confidential to
Purchaser in connection with the manufacture, use, marketing, distribution or
sale of any such Generic Product. In the event that Seller merges with, acquires
or is acquired by any other business selling any Generic Product(s), Seller
shall promptly notify Purchaser in writing if and when Seller determines to sell
or outlicense any such Generic Product. Purchaser shall have sixty (60) days
from the date such notice is given to make a written proposal to Seller for the
acquisition of rights to such Generic Product(s). If Purchaser provides such
notice to Seller within such sixty (60) days, the parties shall negotiate in
good faith the terms and conditions of an agreement for Purchaser's acquisition
of rights to such Generic Product(s). In the event that (i) Purchaser does not
provide such notice to Seller within sixty (60) days of the giving of Seller's
notice or (ii) Purchaser does provide such notice and after a period of sixty
(60) days from the date of such notice, despite good faith negotiations, the
parties have not entered into a written agreement setting forth the terms and
conditions of such acquisition of rights to such Generic Product(s), Seller
shall have the right to at any time within the following six (6) calendar months
sell or otherwise transfer rights to such Generic Product(s) to any third party
on terms and conditions, taken as a whole, that are not more favorable to the
third party than those last offered to Purchaser by Seller in writing, and after
such six (6) calendar month period at any time on any terms and conditions.
(f) The parties acknowledge that the Inventory purchased under this
Agreement will contain packaging and labeling with the names, logos, and
trademarks of Seller and its Affiliates. The parties acknowledge that the
Products to be supplied under the Supply Agreement may contain packaging and
labeling with the names, logos, and trademarks of Seller and its Affiliates.
Purchaser and its Affiliates may distribute such Inventory and Products with
such packaging and labeling for a period of twelve (12) months or the time it
takes to exhaust the current packaging and labeling inventory, whichever is
longer; however, Purchaser and its Affiliates shall not, and shall have no right
to, use such names, logos, or trademarks for any other purpose and Purchaser and
its Affiliates shall acquire no right, title, or interest in or to such names,
logos, and trademarks.
(g) Seller and its Affiliates shall not market, distribute, or sell any
of the Products within the Territory or knowingly cause or facilitate the
Products to be marketed, distributed, or
8
10
sold within the Territory nor knowingly distribute or sell the Products outside
the Territory to a Third Party who Seller or its Affiliates know intends to
distribute the Products within the Territory; provided, that the foregoing shall
not apply to any importation into the Territory by individual consumers of
Products purchased by them outside the Territory, as permitted by applicable
law. Purchaser and its Affiliates shall not market, distribute, or sell any of
the Products outside the Territory or knowingly cause or facilitate the Products
to be marketed, distributed, or sold outside the Territory nor knowingly
distribute or sell the Products in the Territory to a Third Party who Purchaser
or its Affiliates know intends to distribute the Products outside the Territory;
provided, that the foregoing shall not apply to any importation into countries
outside the Territory by individual consumers of Products purchased by them
within the Territory, as permitted by applicable law. Each party shall use
commercially reasonable efforts to investigate the suspected diversion of the
Products into the other Party's Territory. Each party agrees to meet with the
other at its request to discuss matters relating to the unauthorized importation
and sale into its respective territory of the Products.
ARTICLE II.
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Purchaser, as of the Agreement Date,
as follows:
SECTION 2.01 ORGANIZATION.
Seller is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware. Each of Seller and its
Affiliates has all requisite corporate power and authority to own, lease and
operate the Acquired Assets and to carry on each Business as each is presently
conducted.
SECTION 2.02 AUTHORITY; EXECUTION AND DELIVERY; ENFORCEABILITY.
Seller has the requisite corporate power and authority to execute and
deliver this Agreement and to perform all of its obligations hereunder, and each
of Seller and its Affiliates has the requisite corporate power and authority to
execute and deliver each Related Instrument to which it is a party and to
perform all of its obligations thereunder. The execution and delivery of this
Agreement and the Related Instruments and the performance by Seller and its
Affiliates of their respective obligations hereunder and thereunder have been
authorized by all requisite corporate action on their respective parts. This
Agreement has been validly executed and delivered by Seller and, assuming that
this Agreement has been duly authorized, executed and delivered by Purchaser,
constitutes, and each Related Instrument that is to be executed and delivered by
Seller or an Affiliate of Seller will constitute when executed and delivered by
Seller or such Affiliate, as applicable, assuming that such Related Instrument
has been duly authorized, executed and delivered by Purchaser to the extent
applicable, a valid and binding obligation of such party, enforceable against
such party in accordance with its terms.
SECTION 2.03 CONSENTS AND APPROVALS; NO VIOLATIONS.
(a) Except as set forth on Schedule 2.03(a), neither the execution and
delivery of this Agreement nor any Related Instrument by Seller or any Affiliate
of Seller party thereto, nor the performance by Seller or such Affiliate of its
obligations hereunder or thereunder will (i) violate the certificate of
incorporation, by-laws or other organizational document of Seller or such
Affiliate, (ii) conflict with or result in a violation or breach of, or
constitute a default under, any contract, agreement or instrument to which
Seller or such Affiliate is a party or by which Seller or such Affiliate or the
Acquired Assets are bound, or result in the creation or imposition of any
9
11
Lien upon any of the Acquired Assets or (iii) violate or conflict with any law,
rule, regulation, judgment, order or decree of any court applicable to Seller,
such Affiliate or the Acquired Assets, except in the case of clauses (ii) or
(iii) for violations, breaches or defaults which would not result in a Material
Adverse Effect, have a material adverse effect on Seller's ability to consummate
the transactions contemplated hereby or materially delay the consummation of the
transactions contemplated hereby.
(b) Except for the applicable requirements of the HSR Act and except as
set forth on Schedule 2.03(b), no filing with, and no permit, authorization,
consent or approval of, any Governmental Entity is necessary for the
consummation by Seller of the transactions contemplated by this Agreement,
except for those filings, permits, authorizations, consents or approvals the
failure of which to be made or obtained would not result in a Material Adverse
Effect, materially impair Seller's ability to consummate the transactions
contemplated hereby or materially delay the consummation of the transactions
contemplated hereby.
SECTION 2.04 FINANCIAL STATEMENTS.
Schedule 2.04 sets forth the "Statements of Net Sales and Product
Contribution" for each Product for the years ended December 31, 1998, 1999, 2000
("Annual Financial Statements") and for the six (6) months ended June 30, 2001
("Interim Financial Statements", which, together with the Annual Financial
Statements are referred to as the "Financial Statements"). The Financial
Statements have been prepared in accordance with Seller's accounting policies
applied on a consistent basis, which are in accordance with GAAP and fairly
present, in all material respects, as of the dates thereof and for the periods
then ended the product contribution (as described therein) of each Business.
SECTION 2.05 ABSENCE OF CERTAIN CHANGES.
Except as set forth on Schedule 2.05, since June 30, 2001, and through
the Agreement Date, there has not been any Material Adverse Effect in the
business or results of operations of each Business, taken as a whole. Except as
set forth on Schedule 2.05, since June 30, 2001, Seller has caused each Business
to be conducted in the ordinary course. Except as set forth on Schedule 2.05,
since June 30, 2001, none of Seller or its Affiliates has: (a) mortgaged,
pledged or subjected to any Lien (other than Permitted Liens) any Acquired
Asset, (b) failed to maintain satisfactory relationships with or preserve the
goodwill of suppliers and customers in connection with the conduct of each
Business, (c) transferred or granted any rights or options in or to any of the
Acquired Assets except for the transfer of inventory in the ordinary course of
business, (d) transferred to any Third Party any rights under any licenses,
sublicenses or other agreements with respect to any Intellectual Property other
than in the ordinary course of business, (e) conducted its marketing and
promotional activities with respect to each Product other than in the ordinary
course of each Business consistent with past practices, (f) instituted any new
methods of purchase, sale or operation or instituted any changes in the product
pricing or in promotional allowances other than in the ordinary course of each
Business consistent with past practices, (g) made any material changes in
selling, pricing or advertising practices inconsistent with past practices, (h)
launched each Product packaging changes or Product line extensions. Without
limiting the foregoing in clause (g), Seller has not, and has not caused its
Affiliates to engage in any special promotions of each Product or established
any tie-ins of each Product with any of Sellers or its Affiliates other
products.
SECTION 2.06 TITLE OF ASSETS; SUFFICIENCY OF ASSETS.
Seller or an Affiliate of Seller has, or as of the Closing Date will
have, good and valid title to all the Acquired Assets. Upon consummation of the
Acquisition, Purchaser shall acquire good title to, and all right, title and
interest of Seller and its Affiliates in and to the Acquired
10
12
Assets, free and clear of all Liens, other than Permitted Liens. The Acquired
Assets and the license rights granted to Purchaser pursuant to Section 1.08(a)
constitute all of the assets, rights and properties that are sufficient for the
operation of each Business as currently operated by Seller and its Affiliates,
except for the Excluded Assets (other than those Excluded Assets licensed under
Section 1.08(a)).
SECTION 2.07 INTELLECTUAL PROPERTY.
(a) Schedule 2.07(a) sets forth a list of: (i) all patented or
registered Intellectual Property and pending patent applications, trademark
registrations or applications, or other applications for registration of
Intellectual Property owned or used in each Business; (ii) all common law
trademarks and service marks used in each Business; and (iii) all licenses or
similar agreements or arrangements to which Seller or any of its Affiliates is a
party, either as licensee or licensor, relating to the Intellectual Property
which remain in force and effect as of the Closing Date and which are material
to the conduct of each Business.
(b) Except as set forth on Schedule 2.07(b), (i) Seller or Seller's
Affiliates are the owner of all registered Included Intellectual Property or
applications therefor, (ii) all registered Intellectual Property in the
Territory is valid, enforceable and in full force and effect, (iii) to the
Knowledge of Seller, no Third Party has a superior right to Seller or Seller's
Affiliates to use any of the trademarks set forth on Schedule 2.07(a), (iv) none
of the Intellectual Property is subject to any contractual obligation
restricting Seller's or its Affiliates' use thereof or entitling others to use
the same or in any way obligating Seller or its Affiliates to make payments to
others.
(c) Except as set forth on Schedule 2.07(c):
(i) Seller or one of its Affiliates owns or controls all
right, title and interest in, to and under the
Intellectual Property used in each Business in the United
States free and clear of any Liens or other restrictions;
(ii) there are no claims pending or, to the Knowledge of
Seller, threatened, as of the Agreement Date, against
Seller or any of its Affiliates by any person with respect
to ownership, validity, enforceability or use of any of
the Intellectual Property used in each Business in the
United States, including any demand or request in writing
that Seller license rights from a Third Party;
(iii) neither Seller nor any of its Affiliates has received any
notices of, or is aware of any facts which would indicate
a reasonable likelihood of, any infringement or
misappropriation by any Third Party with respect to the
Intellectual Property used in each Business in the United
States; and
(iv) the conduct of each Business in the United States does not
infringe, or to the Knowledge of the Seller,
misappropriate or otherwise conflict with any issued
patents, registered copyrights or registered trademark
rights of any Third Parties.
(d) Except as set forth on Schedule 2.07(d), Seller has the right to
use and convey all the Included Intellectual Property.
(e) No present or former employee or consultant of Seller and no other
Person owns or has any proprietary, financial or other interest, direct or
indirect, in the Included Intellectual Property.
11
13
SECTION 2.08 CONTRACTS.
Except as set forth on Schedule 2.08, none of Seller or its Affiliates
is a party to or bound by any oral or written contract, lease, license,
indenture, agreement, commitment or any other legally binding arrangement, that
is used, held for use or intended for use, primarily in, or that arises
primarily out of, any of the Acquired Assets, each Product, or the operation or
conduct of each Business ("Contracts"), and that is:
(i) or contains a covenant not to compete or covenants that in
any way purport to restrict the business activity of
Seller and/or its Affiliates or limit the freedom of
Seller and/or its Affiliates to engage in each Business or
to compete with any Person or otherwise restricts the
rights of Seller and/or its Affiliates to use or disclose
any information in its or their possession;
(ii) a Contract involving payment by Seller and/or any of its
Affiliates of more than $50,000 or extending for a term
more than 180 days from the date of this Agreement (unless
terminable without payment or penalty upon no more than 60
days' notice), other than purchase orders entered into in
the ordinary course of any Business consistent with past
practice;
(iii) a Contract involving the obligation of Seller and/or any
of its Affiliates to deliver products or services for
payment of more than $50,000 or extending for a term more
than 180 days from the date of this Agreement (unless
terminable without payment or penalty upon no more than 60
days' notice), other than sales orders entered into in the
ordinary course of any Business consistent with past
practice;
(iv) a Contract for the sale of any Acquired Asset (other than
inventory sales in the ordinary course of business) or the
grant of any preferential rights to purchase any Acquired
Asset or requiring the consent of any party to the
transfer thereof or that creates a relationship with any
distributor, dealer, manufacturer, representative or sales
agency or that provides for payments to or by any Person
based on sales, purchases, or profits, other than direct
payments for goods; or
(v) a lease, installment or conditional sale agreement, or
other Contract affecting the ownership of, leasing of,
title to, use of or any other interest in any Acquired
Assets (except personal property leases and installment or
conditional sales agreements having a value per item or
aggregate payments of less than $50,000 or extending for a
term less than 180 days from the date of this Agreement
(unless terminable without payment or penalty upon no more
than 60 days' notice)).
SECTION 2.09 COMPLIANCE WITH LAW.
(a) Except as set forth on Schedule 2.09(a) or to the extent that it
could not reasonably be expected to have a Material Adverse Effect, (i) each
Business is conducted in the United States in compliance with all permits,
government licenses, registrations, approvals, concessions, franchises,
authorizations, orders, injunctions and decrees and applicable laws,
regulations, guidance, and guidelines, including the United States Food, Drug
and Cosmetic Act, as amended from time to time (the "FDA Act") and the
Prescription Drug Marketing Act, as amended from time to time, (ii) all
governmental licenses, permits, registrations, approvals, concessions,
12
14
franchises and authorizations principally employed in, or necessary to the
ongoing conduct of, each Business in the United States are in full force and
effect, (iii) since January 1, 1996, no Governmental Entity has served notice
that Seller and its Affiliates (with respect to each Business), each Business or
the Acquired Assets were or are in violation of any law, statute, ordinance,
rule, regulation or order in the United States and, to the Knowledge of Seller,
there are no grounds for the same and (iv) since January 1, 1996, none of Seller
or any of its Affiliates has received written notice from any United States
Governmental Entity in connection with each Business that there are any
circumstances currently existing which would lead to any loss or refusal to
renew any governmental licenses, permits, registrations, approvals, concessions,
franchises and authorizations on terms less advantageous to Seller and its
Affiliates than the terms of those licenses, permits, registrations, approvals,
concessions, franchises and authorizations currently in force.
(b) Except as set forth in Schedule 2.09(b):
(i) And to the extent that it could not reasonably be expected
to have a Material Adverse Effect, each Business is
conducted in compliance in all material respects with all
applicable laws and regulations in connection with the
preparation and submission to the FDA of each of the NDAs
relating to each Product, and each of the NDAs has been
approved by, and none of Seller or any of its Affiliates
has received any written notice which has, or reasonably
should have, led Seller to believe that any of the NDAs
are not currently in good standing with the FDA. To its
Knowledge or to the extent that it could not reasonably be
expected to have a Material Adverse Effect, Seller or its
Affiliates have filed with the FDA all required notices,
supplemental applications and annual or other reports or
documents, including adverse experience reports, with
respect to each NDA which is material to the conduct of
each Business as currently conducted by Seller. Except to
the extent that it could not reasonably be expected to
have a Material Adverse Effect, with respect to each
Product for which an NDA has been approved by the FDA, the
applicant and all persons performing operations covered by
the application acted in compliance in all material
respects with 21 U.S.C. ▇▇.▇▇. 355 or 357, 21 C.F.R. Parts
314 or 430 et. seq., respectively, and all terms and
conditions of such application. Seller and its Affiliates
have not prepared or have any rights to any ANDA filings
relating to the Products.
(ii) Neither Seller nor any of its Affiliates has received any
written notice since January 1, 1996 that any United
States governmental or regulatory agency (including the
FDA) has commenced, or, to the Knowledge of Seller,
threatened in writing to initiate any action to withdraw
its approval or request the recall of each Product, or
commenced or threatened in writing to initiate any action
to enjoin production of each Product at any facility.
(iii) All manufacturing, testing, labeling, packaging, storing,
and shipping operations conducted by Seller and its
Affiliates relating to each Product are currently
conducted in compliance in all material respects with
current good manufacturing practices as set forth in 21
C.F.R. Parts 210 and 211.
(iv) Seller and its Affiliates have made available to Purchaser
copies of all material (A) reports of inspection
observations relating to each Product, (B) establishment
inspection reports relating to each Product, and (C)
warning letters as well as any other documents received by
Seller or
13
15
any of its Affiliates from the FDA relating to each
Product and/or arising out of the conduct of each Business
that assert ongoing material lack of compliance with any
applicable laws or regulatory requirements (including
those of the FDA) by Seller or its Affiliates and which,
if not corrected, could reasonably be expected to have a
Material Adverse Effect. Attached or listed on Schedule
2.09(b)(iv) are any such reports, letters, and documents
that remain open or unresolved as of the Closing Date.
(v) To Seller's Knowledge or to the extent that it could not
reasonably be expected to have a Material Adverse Effect,
with respect to each Product in the United States, neither
Seller nor any of its Affiliates is in violation of, and
Seller and its Affiliates are in compliance with, all
applicable registration and listing requirements set forth
in 21 U.S.C. ss. 360 and 21 C.F.R. Part 207.
(vi) To Seller's Knowledge, with respect to each Product in the
United States, none of Seller, any of its Affiliates or
their respective officers, employees, or agents has made
an untrue statement of material fact or fraudulent
statement to FDA or any other Governmental Authority,
failed to disclose a material fact required to be
disclosed to the FDA or any other Governmental Authority,
or committed an act, made a statement, or failed to make a
statement that could reasonably be expected to provide a
basis for the FDA to invoke its policy respecting "Fraud,
Untrue Statements of Material Facts, Bribery, and Illegal
Gratuities", set forth in 56 Fed. Reg. 46191 (September
10, 1991) and any amendments thereto, the effect of which
could reasonably be expected to have a Material Adverse
Effect.
(vii) To Seller's Knowledge or to the extent that it could not
reasonably be expected to have a Material Adverse Effect,
with respect to each Product currently in distribution in
the United States that was manufactured and sold by Seller
or its Affiliates prior to the Closing Date, such Product
was not adulterated or misbranded within the meaning of
the FDA Act, 21 U.S.C. ▇▇.▇▇. 351, 352 et. seq., at the
time of delivery by Seller or any of Seller's Affiliates
to a common carrier, and all labeling, advertising and
promotional materials of Seller or its Affiliates with
respect to each Product conform in all material respects
with applicable FDA regulations.
(viii) To Seller's Knowledge, with respect to each Product in the
United States, no material modifications to the process by
which each Product is currently manufactured, such as
modifications in the design and operating principles of
the equipment, the standard operating procedures and
controls, the formulation, or the manufacturing
procedures, are necessary in order to continue to
manufacture commercial quantities of each Product in a
manner and quantity consistent with the amount and timing
of Product requirements over the previous two years.
(ix) The Inventory was manufactured in accordance with the
applicable specifications for each Product and otherwise
in accordance with current good manufacturing practices in
effect at the time of manufacture. The Inventory, when
delivered to the common carrier for delivery, will not be
(a) adulterated or misbranded within the meaning of the
FDCA or (b) an article that may not be introduced into
interstate commerce under the provisions of Sections 404,
505 or 512 of the FDCA, except where and to
14
16
the extent required by the consummation of the
transactions contemplated by this Agreement.
SECTION 2.10 LITIGATION.
(a) As of the Agreement Date, except as set forth on Schedule 2.10,
there is no claim, action, or proceeding, including product liability claims
(collectively, a "Proceeding"), pending or, to Seller's Knowledge, threatened in
writing against Seller or its Affiliates (in respect of the Acquired Assets),
the Acquired Assets (including each Product), the conduct of each Business or
the transactions contemplated by this Agreement and each Related Instrument
which Purchaser would become liable as a result of the consummation of the
transactions contemplated hereby which is reasonably likely to be adversely
determined, and if adversely determined, is reasonably likely to result in a
Material Adverse Effect.
(b) There are no outstanding orders, injunctions or decrees of any
Governmental Entity that apply to the Acquired Assets (or will apply to
Purchaser after the Closing) that restrict the ownership, disposition or use of
the Acquired Assets or the conduct of each Business, in each case, in any
material respect.
SECTION 2.11 BROKERS OR FINDERS.
Neither Seller nor any of its Affiliates has retained any agent,
broker, investment banker, financial advisor or other firm or Person that is or
will be entitled to any brokers' or finder's fee or any other commission or
similar fee in connection with any of the transactions contemplated by this
Agreement, and there are no claims for any of the foregoing.
SECTION 2.12 WEBSITES AND DOMAIN NAMES.
Neither Seller nor any of its Affiliates has any interest or ownership
rights in any internet domain names or websites relating to each Product.
SECTION 2.13 REGULATORY APPROVALS.
Schedule 2.13 sets forth all regulatory approvals for each Product.
SECTION 2.14 KNOWLEDGE.
Seller represents that the individuals set forth on Schedule 8.02(a)
are Seller's and its Affiliates' representatives with primary responsibility for
each Product in their respective areas of expertise.
SECTION 2.15 NO OTHER REPRESENTATIONS OR WARRANTIES.
Except for the representations and warranties contained in this Article
II (including the Schedules), the Seller's Officer's Certificate and the Related
Instruments, none of Seller, its Affiliates or any other Person makes any other
express or implied representation or warranty on behalf of Seller or any of its
Affiliates.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser represents and warrants to Seller as follows:
15
17
SECTION 3.01 ORGANIZATION.
Purchaser is a corporation duly organized, validly existing and in good
standing under the laws of the State of Tennessee. Purchaser has all requisite
corporate power and authority to own, lease and operate its properties and to
conduct its business as now being conducted.
SECTION 3.02 AUTHORITY; EXECUTION AND DELIVERY; ENFORCEABILITY.
Purchaser has the requisite corporate power and authority to execute
and deliver this Agreement and the Related Instruments and to perform its
obligations hereunder and thereunder. The execution and delivery of this
Agreement and the Related Instruments and the performance by Purchaser of its
obligations hereunder and thereunder have been authorized by all requisite
corporate action on the part of Purchaser. This Agreement has been validly
executed and delivered by Purchaser and, assuming that this Agreement has been
duly authorized, executed and delivered by Seller, constitutes, and each Related
Instrument that is to be executed and delivered by Purchaser will constitute
when executed and delivered by Purchaser (assuming that such Related Instrument
has been duly authorized, executed and delivered by Seller and/or its Affiliates
to the extent applicable), a valid and binding obligation of Purchaser,
enforceable against Purchaser in accordance with its terms.
SECTION 3.03 CONSENTS AND APPROVALS; NO VIOLATIONS.
(a) Neither the execution and delivery of this Agreement nor any
Related Instrument by Purchaser nor the performance by Purchaser of its
obligations hereunder or thereunder will (i) violate the certificate of
incorporation, by-laws or other organizational document of Purchaser, (ii)
conflict with or result in a violation or breach of, or constitute a default
under, any contract, agreement or instrument to which Purchaser is a party or by
which any of its properties or assets are bound or (iii) violate or conflict
with any law, rule, regulation, judgment, order or decree, except in the case of
clauses (ii) or (iii) for violations, breaches or defaults which would not have
a material adverse effect on Purchaser's ability to consummate the transactions
contemplated hereby or materially delay the consummation of the transactions
contemplated by this Agreement.
(b) Except for the applicable requirements of the HSR Act, no filing
with, and no permit, authorization, consent or approval of, any Governmental
Entity is necessary for the consummation by Purchaser of the transactions
contemplated by this Agreement, except for those filings, permits,
authorizations, consents or approvals the failure of which to be made or
obtained would not materially impair Purchaser's ability to consummate the
transactions contemplated hereby or materially delay the consummation of the
transactions contemplated hereby.
SECTION 3.04 BROKERS AND FINDERS.
Neither Purchaser nor its Affiliates has retained any agent, broker,
investment banker, financial advisor or other firm or Person that is or will be
entitled to any brokers' or finder's fee or any other commission or similar fee
in connection with any of the transactions contemplated by this Agreement, and
there are no claims for any of the foregoing.
SECTION 3.05 NO PROCEEDINGS.
There is no Proceeding, pending or, to the Knowledge of Purchaser,
threatened in writing against Purchaser which would affect Purchaser's ability
to consummate the transactions contemplated by this Agreement and each Related
Instrument.
16
18
SECTION 3.06 AVAILABILITY OF FUNDS.
Purchaser currently has and as of the Closing Date will have available
funds necessary to consummate the Acquisition contemplated by this Agreement.
SECTION 3.07 NO ACTIVE SOLICITATION OF RETURNS.
To the extent that any Product does not have any safety or efficacy
issues, Purchaser agrees that it will not actively solicit customers to return
Product with a good shelf life that was sold by Seller.
SECTION 3.08 NO OTHER PURCHASER REPRESENTATIONS OR WARRANTIES.
Except for the representations and warranties contained in this Article
III, the Purchaser's Officer's Certificate and the Related Instruments neither
Purchaser nor any other Person makes any other express or implied representation
or warranty on behalf of Purchaser.
ARTICLE IV.
COVENANTS
SECTION 4.01 TRANSFER OF REGULATORY FILINGS; RESPONSIBILITY FOR
PRODUCTS.
(a) Promptly after Closing and in any event within sixty (60) business
days after Closing, the parties shall file with the FDA the information required
pursuant to 21 C.F.R. Part 314, or any successor regulation thereto, regarding
the transfer of the NDAs from Seller to Purchaser. Seller shall file the
information required of a former owner, and Purchaser shall file the information
required of a new owner. Contemporaneously with such filings, Seller also shall
file with the FDA any required information regarding the transfer of the INDs
from Seller to Purchaser. The parties also agree to use their best efforts to
take any and all other actions required by the FDA, or other necessary
governmental agencies, if any, to effect the transfer of the NDAs and the INDs
from Seller to Purchaser. Seller may retain an archival copy of the NDAs and the
INDs, including supplements and records that are required to be kept under
applicable law, and Seller shall treat such archived copies as Confidential
Information (as defined in the Supply Agreement) of Purchaser and disclosure of
such information shall be governed by the Supply Agreement.
(b)
(i) After the Closing, Purchaser shall assume all regulatory
responsibilities under applicable laws and regulations to
be assumed by Purchaser in connection with the Products in
the Territory and the Product Registrations, the NDAs, and
the INDs including, but not limited to, responsibility for
reporting any adverse drug events in connection with the
Products, and responsibility for compliance with the
Prescription Drug Marketing Act of 1987, as the same may
be amended from time to time.
(ii) The parties will agree upon procedures to ensure an
orderly transition from Seller to Purchaser of the
activities required to be undertaken by the holder of the
Product registrations, including, without limitation,
adverse experience reporting, quarterly and annual FDA
reports, complaint and sample tracking, and communication
with health care professionals and customers. Seller
agrees to cooperate with Purchaser to ensure an orderly
transition of the activities contemplated hereby.
17
19
(iii) In order for the parties to comply with their respective
responsibilities under this subsection (iii) in connection
with the reporting of adverse drug events, to the extent
either party hereto receives any information regarding
adverse drug events related to the use of any one of the
Products, whether such use is within or outside of the
Territory, such party shall promptly provide the other
party with such information in accordance with a mutually
agreed to reporting procedure between Purchaser and
Seller. Purchaser and its Affiliates therefore agree to
promptly submit to Seller all adverse drug experience
information or customer complaints brought to the
attention of Purchaser or its Affiliates in respect of the
Products, as well as any material events and matters
concerning or affecting the safety or efficacy of the
Products. Seller and its Affiliates agree to promptly
submit to Purchaser all adverse drug experience
information or customer complaints brought to the
attention of Seller or its Affiliates in respect of the
Products, as well as any material events and matters
concerning or affecting the safety or efficacy of the
Products.
(iv) After the Closing, Purchaser shall assume all
responsibility for any and all FDA fee obligations for
holders or owners of approved NDAs and approved, marketed
prescription drug products relating to the Products,
including, but not limited to, those defined under the
Prescription Drug User Fee Act of 1992.
(v) Promptly after the Closing, Purchaser and Seller shall
take all actions necessary or required under applicable
laws, rules, and regulations, to reflect that the Acquired
Assets are owned by Purchaser and that Purchaser has
responsibility therefor.
(vi) After the Closing, Seller shall direct all complaints or
inquiries concerning the Products in the Territory to
Purchaser to the attention of Purchaser's Medical Affairs
Department, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, at
facsimile number (▇▇▇) ▇▇▇-▇▇▇▇ or otherwise as required
under the Supply Agreement or pursuant to Sections 1.08(b)
and 1.08(c) hereof.
SECTION 4.02 [INTENTIONALLY OMITTED]
SECTION 4.03 CONFIDENTIALITY.
(a) Purchaser acknowledges that the information being provided to it in
connection with the Acquisition and the consummation of the other transactions
contemplated hereby is subject to the terms of a confidentiality agreement
between Purchaser and Seller dated April 17, 2001 (the "Confidentiality
Agreement"), the terms of which are incorporated herein by reference. Effective
upon, and only upon, the Closing, Purchaser's obligations under the
Confidentiality Agreement shall terminate with respect to information relating
solely to each Business or otherwise included in the Acquired Assets or relating
to each Product; provided, however, that Purchaser acknowledges that any and all
other information provided to it by Seller or Seller's representatives
concerning Seller and its Affiliates shall remain subject to the terms and
conditions of the Confidentiality Agreement after the Closing Date.
Notwithstanding the foregoing, Seller acknowledges and agrees that Purchaser may
(i) publicly disclose the information prepared pursuant to Section 4.12(d) and
(ii) publicly disclose Retained Information relating to each Business (A) if and
to the extent required by applicable law, rule or regulation or (B) with the
consent of Seller (not to be unreasonably withheld).
18
20
(b) Each of Purchaser and Seller agrees that the terms of this
Agreement and the Related Instruments shall not be disclosed or otherwise made
available to the public and that copies of this Agreement and the Related
Instruments shall not be publicly filed or otherwise made available to the
public, except where such disclosure, availability or filing is required by
applicable law and only to the extent required by such law. In the event that
such disclosure, availability or filing is required by applicable law, each of
Purchaser and Seller (as applicable) agrees to use commercially reasonable
efforts to obtain "confidential treatment" of this Agreement and the Related
Instruments with the U.S. Securities and Exchange Commission (or the equivalent
treatment by any other Governmental Entity) and to redact such terms of this
Agreement and the Related Instruments as the other party shall request.
(c) Seller shall use commercially reasonable efforts to keep
confidential, and to cause its Affiliates and its and their officers, directors,
employees and advisors to keep confidential, all information relating
exclusively to each Business and used exclusively in the Territory, except as
required by law or administrative process and except for information that is
available to the public on the Closing Date, or thereafter becomes available to
the public other than as a result of a breach of this Section 4.03(c). The
covenant set forth in this Section 4.03(c) shall survive in perpetuity.
SECTION 4.04 [INTENTIONALLY OMITTED].
SECTION 4.05 REGULATORY APPROVALS.
(a) Each of Purchaser and Seller have filed appropriate forms under the
HSR Act with the United States Federal Trade Commission ("FTC") and the United
States Department of Justice ("DOJ"), and each acknowledges that the waiting
period (including any extensions thereof) applicable to the consummation of the
transactions contemplated by this Agreement pursuant to the HSR Act has expired
or has been terminated.
(b) Each of Seller and Purchaser shall use best efforts to procure all
applicable approvals necessary to consummate the transactions contemplated
hereby, including the transfer from Seller to Purchaser, within ninety (90) days
of the Closing Date, all of Seller's rights, title and interest to approvals
relating to each Product or each Business.
SECTION 4.06 PROPERTY TRANSFER TAXES.
Except as otherwise provided herein, any excise, sales, use, transfer
or similar taxes ("Transfer Taxes") required to be made to any Governmental
Entity in connection with the transfer of Acquired Assets pursuant to the terms
of this Agreement shall be paid fifty percent (50%) by the Purchaser and fifty
percent (50%) by the Seller. The Seller and Purchaser shall cooperate in the
timely making and filing of all filings, Tax Returns, reports and forms as may
be required with respect to any Transfer Taxes payable in connection with the
transfer of the Acquired Assets.
SECTION 4.07 PUBLICITY.
Except as otherwise required by law or applicable stock exchange
requirements, prior to the Closing neither Purchaser nor 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. The content of
the initial press release for each party announcing the execution of this
Agreement is attached hereto as Schedule 4.07.
19
21
SECTION 4.08 FURTHER ASSURANCES.
Each party shall from time to time after the Closing, without
additional consideration, execute and deliver such further instruments and take
such other action as may be reasonably requested by the other party to make
effective the transactions contemplated by this Agreement and each Related
Instrument.
SECTION 4.09 NO USE OF CERTAIN NAMES.
(a) Purchaser shall promptly, and in any event within nine (9) months
after Closing, complete the revision of all product literature relating to each
Product (i) to delete all references to the Names and (ii) to delete all
references to Seller's or its Affiliates' customer service address or phone
number; provided, however, that for a period of nine (9) months from the Closing
Date, and subject to any applicable terms of the Supply Agreement, Purchaser may
continue to distribute product literature that uses any Names, addresses or
phone numbers to the extent that such literature exists on the Closing Date, and
Seller hereby grants to Purchaser rights under any copyrights and other
intellectual property owned by Seller (and covenants to cause each of its
Affiliates to grant Purchaser rights under any copyrights and other intellectual
property owned by such Affiliate) to the extent necessary to allow Purchaser to
so use such product literature during such period; provided, that, Purchaser
shall be solely responsible for ensuring that the content, use and distribution
of such product literature complies and is conducted in accordance with
applicable law.
(b) Seller hereby grants a non-exclusive right and license to Purchaser
under the Names to the extent necessary to allow Purchaser and its Affiliates
and their designees to market, distribute and sell each Product utilizing the
labels and packaging existing on the Closing Date, to the extent permitted under
Section 2.01(d) of the Supply Agreement.
SECTION 4.10 BULK TRANSFER LAWS.
Purchaser hereby waives compliance by Seller and its Affiliates with
the provisions of any so-called "bulk transfer law" of any jurisdiction in
connection with the sale of the Acquired Assets to Purchaser.
SECTION 4.11 CUSTOMER NOTIFICATIONS.
Promptly after the Closing Date, Purchaser and Seller shall notify all
wholesale distributors of the Products (i) of the transfer of the Acquired
Assets to Purchaser, (ii) that all purchase orders for Product received by
Seller or any of its Affiliates prior to the Closing Date but not shipped prior
to 11:59 p.m. (EST) of the Closing Date will be transferred to Purchaser
provided, that, to the extent that any purchase order cannot be so transferred,
Seller and Purchaser shall cooperate with each other to ensure that such
purchase order is filled and that Purchaser receives the same economic benefit
and assumes the same liability associated with filling such purchase order as if
such purchase order had been so transferred, and (iii) that all purchase orders
for Product received after the Closing Date should be sent to Purchaser at King
Pharmaceuticals, Inc., ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention:
▇▇▇ ▇▇▇▇.
SECTION 4.12 POST-CLOSING COOPERATION.
(a) Purchaser and Seller shall cooperate with each other, and shall
cause their officers, employees, agents, auditors, Affiliates and
representatives to cooperate with each other, for a period of 180 days after the
Closing, unless otherwise stated in this Agreement, to ensure the orderly
transition of each Business from Seller to Purchaser and to minimize any
disruption to each Business and the other respective businesses of Seller and
Purchaser that might result
20
22
from the transactions contemplated hereby. For a period of three years after the
Closing, unless a longer period is required by law, Seller shall, and shall
cause its Affiliates to, cooperate with Purchaser and to grant to Purchaser and
its employees, attorneys, accountants, officers, representatives and agents,
during normal business hours and upon reasonable advance written notice,
reasonable access to management personnel of Seller and its Affiliates and to
the books and records relating to the Acquired Assets, to Seller's business as
now conducted for the Products in the Territory and to permit copying at
Purchaser's expense of documents relating to the Acquired Assets for the
purposes of any financial reporting, accounting matters, and tax matters
(including any financial and tax audits, tax contests, tax examination,
preparation of any Purchaser tax returns or financial records) relating to the
Acquired Assets (including the Product) and to Seller's Business as now
conducted for the Product. During such period, Seller shall maintain all such
records and documents in the United States as currently exists on the Closing
Date and shall not destroy or dispose of any such records and documents without
the prior written consent of Purchaser other than in accordance with Seller's
record retention policy.
(b) At any time on or after the Closing, (i) Seller shall cooperate
with Purchaser in making Retained Information available, (ii) Seller shall
furnish copies (the first such copy being at Seller's cost and any additional
copies being at Purchaser's cost) of such Retained Information for review by
Purchaser, to the extent practicable, at the reasonable request of Purchaser,
and (iii) upon written notice from Purchaser of any request for Retained
Information, Seller shall promptly designate appropriate contacts with respect
thereto, and shall make such contacts reasonably available to Purchaser.
(c) After the Closing, upon reasonable written notice, Purchaser and
Seller shall furnish or cause to be furnished to each other, as promptly as
practicable, such information and assistance (to the extent within the control
of such party) relating to the Acquired Assets (including access to books and
records) as is reasonably requested for the filing of all Tax Returns, and
making of any election related to Taxes, the preparation for any audit by any
taxing authority, and the prosecution or defense of any claim, suit or
proceeding related to any Tax return. Seller and Purchaser shall cooperate with
each other in the conduct of any audit or other proceeding relating to Taxes
involving each Business. Purchaser shall retain the books and records of Seller
and its Affiliates included in the Acquired Assets for a period of seven years
after the Closing. After the end of such seven-year period, before disposing of
such books or records, Purchaser shall give notice to such effect to Seller and
shall give Seller, at Seller's cost and expense, an opportunity to remove and
retain all or any part of such books or records as Seller may select.
(d) Each party shall reimburse the other for reasonable out-of-pocket
costs and expenses incurred in assisting the other pursuant to this Section
4.12. Neither party shall be required by this Section 4.12 to take any action
that would unreasonably interfere with the conduct of its business or
unreasonably disrupt its normal operations (or, in the case of Purchaser, each
Business).
(e) Seller shall cause Seller's outside accounting firm,
PricewaterhouseCoopers LLP, to conduct an audit of the Annual Financial
Statements and to produce such other financial statements as Purchaser may
reasonably determine are necessary to satisfy Purchaser's public company
reporting requirements pursuant to the Securities Act of 1933 and the Securities
Exchange Act of 1934 including unaudited interim financial statements for the
period between July 1, 2001 through the Closing Date. Seller shall (i) cause
such accounting firm to complete the audit of the Annual Financial Statements
and deliver an unqualified report (including the notes associated therewith)
with respect to such Audited Financial Statements, to Purchaser as soon as
reasonably practicable, but in no event later than sixty (60) days after the
date hereof and (ii) Seller shall cause the stub period financial statements to
be delivered to Purchaser as soon as reasonably practicable, but in no event
later than sixty (60) days after the date hereof. Purchaser
21
23
shall reimburse to Seller the fees paid to PricewaterhouseCoopers LLP for the
audit of the Annual Financial Statement or any other audited statements
requested in writing by Purchaser. Upon the reasonable request of Purchaser and
at the expense of Purchaser, Seller shall provide assistance and such other
financial and other information as shall be necessary or desirable to permit the
preparation of any additional financial statements or information concerning the
Acquired Assets required to comply with Regulation S-X of the Securities and
Exchange Commission, including providing customary management representation
letters to such auditors.
(f) Nothing in this Section 4.12 or otherwise in this Agreement or any
Related Agreement shall require the disclosure or access by any Party of any
documents or information that would cause such Party to forfeit or waive
attorney-client privilege accorded it under applicable law.
SECTION 4.13 MEDICAL INFORMATION.
Within ninety (90) days after the Agreement Date, Seller shall deliver
to Purchaser copies of (a) all serious adverse event reports and periodic
adverse event reports with respect to each Product that have been filed with the
FDA since January 1, 1996, including any material correspondence or other
material documents relating thereto, (b) a schedule of all payouts made by
Seller since January 1, 1996 to end-users in respect of claims relating to each
Product and (c) a schedule of all actual or, to Seller's Knowledge, threatened
claims made by end-users since January 1, 1996 against Seller or its Affiliates
(the "Medical Information"). To the extent that Seller has not provided copies
of all of the Medical Information to Purchaser prior to the date which is ninety
(90) days after the date hereof, Purchaser shall have the right, at Seller's
sole cost and expense, to have access to such Medical Information and to compile
and copy such Medical Information.
SECTION 4.14 NDC CODES.
Promptly following the Closing, Purchaser shall take any and all action
necessary to change, as expeditiously as possible, the National Drug Code
("NDC") number for each Product and to apply such new NDC number to each
Product.
ARTICLE V.
CONDITIONS
SECTION 5.01 CONDITIONS TO EACH PARTY'S OBLIGATIONS.
The respective obligation of each party to effect the transactions
contemplated by this Agreement shall be subject to the satisfaction or waiver at
or prior to the Closing of the following condition:
There shall not be in effect any statute, regulation, order, decree or
judgment of any Governmental Entity which makes illegal or enjoins or prevents
the consummation of the transactions contemplated by this Agreement.
SECTION 5.02 CONDITIONS TO OBLIGATIONS OF PURCHASER.
The obligation of Purchaser to effect the transactions contemplated by
this Agreement shall be further subject to the satisfaction or waiver by
Purchaser at or prior to the Closing of the following conditions:
22
24
(a) The representations and warranties of Seller made in this Agreement
(including the Schedules) and the Related Instruments that are qualified as to
materiality shall be true and correct, and those not so qualified shall be true
and correct in all material respects as of the Closing Date as though made on
the Closing Date, except to the extent such representations and warranties
expressly relate to an earlier date (in which case such representations and
warranties qualified as to materiality shall be true and correct, and those not
so qualified shall be true and correct in all material respects, on and as of
such earlier date).
(b) Seller shall have performed in all material respects all
obligations and covenants required to be performed or complied with by Seller
under this Agreement by the time of Closing.
(c) Purchaser shall have received from Seller a certificate, dated the
Closing Date, duly executed by an authorized officer of Seller, reasonably
satisfactory in form to Purchaser, to the effect of (a) and (b) above (the
"Seller's Officer's Certificate").
(d) Seller shall have delivered or caused to be delivered to Purchaser
each of the documents specified in Section 1.04(b).
(e) During the period from June 30, 2001 until the Closing, there shall
not have occurred, and there shall not exist on the Closing Date, any condition
or fact which has, or would reasonably be expected to have, a Material Adverse
Effect.
SECTION 5.03 CONDITIONS TO OBLIGATIONS OF SELLER.
The obligation of Seller to effect the transactions contemplated by
this Agreement shall be further subject to the satisfaction or waiver at or
prior to the Closing of the following conditions:
(a) The representations and warranties of Purchaser made in this
Agreement and the Related Instruments that are qualified as to materiality shall
be true and correct, and those not so qualified shall be true and correct in all
material respects as of the Closing Date as though made on the Closing Date,
except to the extent such representations and warranties expressly relate to an
earlier date (in which case such representations and warranties qualified as to
materiality shall be true and correct, and those not so qualified shall be true
and correct in all material respects, on and as of such earlier date).
(b) Purchaser shall have performed in all material respects all
obligations and covenants required to be performed or complied with by Purchaser
under this Agreement by the time of Closing.
(c) Seller shall have received from Purchaser a certificate, dated the
Closing Date, duly executed by an authorized officer of Purchaser, reasonably
satisfactory in form to Seller, to the effect of (a) and (b) above (the
"Purchaser's Officer's Certificate").
(d) Purchaser shall have delivered or caused to be delivered to Seller
each of the documents specified in Section 1.04(c).
SECTION 5.04 FRUSTRATION OF CLOSING CONDITIONS.
Neither Purchaser nor Seller may rely on the failure of any condition
set forth in this Article V to be satisfied if such failure was caused by such
party's failure to act in good faith or to use its best efforts to cause the
Closing to occur.
23
25
ARTICLE VI.
AMENDMENTS AND WAIVERS
This Agreement may not be amended except by an instrument in writing
signed on behalf of each of the parties hereto. By an instrument in writing
Purchaser, on the one hand, or Seller, on the other hand, may waive compliance
by the other party with any term or provision of this Agreement that such other
party was or is obligated to comply with or perform. Except as provided in
Section 7.01, no delay or failure on the part of any party hereto in exercising
any right, power or privilege under this Agreement or under any Related
Instrument shall impair any such right, power or privilege or be construed as a
waiver of any default or any acquiescence therein. No single or partial exercise
of any such right, power or privilege shall preclude the further exercise of
such right, power or privilege, or the exercise of any other right, power or
privilege.
ARTICLE VII.
SURVIVAL; INDEMNIFICATION
SECTION 7.01 SURVIVAL OF REPRESENTATIONS.
The representations and warranties contained in this Agreement
(including the Schedules), in any Related Instrument, the Seller's Officer's
Certificate, the Purchaser's Officer's Certificate and in any other document
delivered in connection herewith or therewith shall survive the Closing solely
for purposes of this Article VII and shall terminate at the close of business on
the two-year anniversary of the Closing Date, except that the representations
and warranties contained in Sections 2.01 (Organization), 2.02 (Authority;
Execution and Delivery; Enforceability), and 2.06 (Title to Assets; Sufficiency
of Assets) of this Agreement shall survive in perpetuity; provided, however,
that, in all cases, any representation or warranty that is the subject of a
claim which occurred prior to the expiration of the applicable survival period
is asserted by the party seeking indemnification hereunder in a reasonably
detailed writing delivered to the other party prior to the expiration of the
applicable survival period shall survive with respect to such claim or dispute
until the final resolution thereof.
SECTION 7.02 INDEMNIFICATION BY SELLER.
(a) Subject to Sections 1.06(b) and 7.08, Seller shall indemnify
Purchaser and its Affiliates and each of their respective officers, directors,
employees, stockholders, agents and representatives against, and hold them
harmless from, any loss, liability, claim, damage or expense (including
reasonable legal fees and expenses) ("Losses"), as incurred (payable promptly
upon written request), to the extent arising from or in connection with or
otherwise with respect to:
(i) any breach of any representation or warranty of Seller
(without regard to any materiality or Material Adverse
Effect qualifiers set forth therein) that survives the
Closing and is contained in this Agreement (including the
Schedules), the Seller's Officer's Certificate or in any
Related Instrument (other than the Supply Agreement);
(ii) any breach of any covenant of Seller or breach of the
license rights granted by Purchaser to Seller contained in
this Agreement or in any Related Instrument (other than
the Supply Agreement);
(iii) any Excluded Liability; and
24
26
(iv) any fees, expenses or other payments incurred or owed by
Seller to any brokers, financial advisors or comparable
other Persons retained or employed by it in connection
with the transactions contemplated by this Agreement or by
any Related Instrument.
(b) Seller shall not be required to indemnify any Person, and shall not
have any liability:
(i) under clause (i) of Section 7.02 (a) unless the aggregate
of all Losses for which Seller would, but for this clause
(i), be liable under this Agreement;
(ii) under clause (i) of Section 7.02(a) for any individual
items (or series of related individual items) where the
Loss relating thereto; and
(iii) under clause (i) of Section 7.02(a).
SECTION 7.03 INDEMNIFICATION BY PURCHASER.
(a) Subject to Section 7.08, Purchaser shall indemnify Seller, its
Affiliates and each of their respective officers, directors, employees,
stockholders, agents and representatives against, and agrees to hold them
harmless from, any Loss, as incurred (payable promptly upon written request), to
the extent arising from or in connection with or otherwise with respect to:
(i) any breach of any representation or warranty of Purchaser
(without regard to any materiality or Material Adverse
Effect qualifiers set forth therein) that survives the
Closing and is contained in this Agreement, the
Purchaser's Officer's Certificate or in any Related
Instrument (other than the Supply Agreements);
(ii) any breach of any covenant of Purchaser or breach of any
license rights granted by Seller to Purchaser contained in
this Agreement or in any Related Instrument (other than
the Supply Agreement);
(iii) any Assumed Liability; and
(iv) any fees, expenses or other payments incurred or owed by
Purchaser to any brokers, financial advisors or other
comparable Persons retained or employed by it in
connection with the transactions contemplated by this
Agreement or by any Related Instrument.
25
27
(b) Purchaser shall not be required to indemnify any Person, and shall
not have any liability:
(i) under clause (i) of Section 7.03 (a) unless the aggregate
of all Losses for which Purchaser would, but for this
clause (i), be liable under this Agreement;
(ii) under clause (i) of Section 7.03(a) for any individual
items (or series of related individual items) where the
Loss relating thereto; and
(iii) under clause (i) of Section 7.03(a).
SECTION 7.04 CALCULATION OF LOSSES.
(a) The amount of any Loss for which indemnification is provided under
clause (i) of Section 7.02(a) or clause (i) of Section 7.03(a) shall be net of
any amounts actually recovered by the Indemnified Party under insurance policies
(after reduction for any costs or expenses incurred in connection therewith,
including, retrospective and prospective premium adjustments, experience-based
premium adjustments) with respect to such Loss. Each of the parties hereto
acknowledges and agrees that neither the Seller nor the Purchaser shall have any
obligation to maintain insurance except as required under the Supply Agreement
or be obligated to have to resort to litigation against insurance carriers in
order to pursue any insurance claims.
(b) The amount of any Loss for which indemnification is provided under
clause (i) of Section 7.02(a) or clause (i) of Section 7.03(a) shall be (a)
increased to take account of any net Tax cost incurred by the indemnified party
arising from the receipt of indemnity payments hereunder (grossed up for such
increase) and (b) reduced to take account of any net Tax benefit immediately
realized by the indemnified party in cash arising from the incurrence or payment
of any such Loss. In computing the amount of any such Tax cost or Tax benefit,
the indemnified party shall be deemed to recognize all other items of income,
gain, loss deduction or credit before recognizing any item arising from the
receipt of any indemnity payment under clause (i) of Section 7.02(a) or clause
(i) of Section 7.03(a) or the incurrence or payment of any indemnified Loss. Any
indemnity payment under clause (i) of Section 7.02(a) or clause (i) of Section
7.03(a) shall be treated as an adjustment to the Purchase Price for Tax
purposes, unless a final determination (which shall include the execution of a
Form 870-AD or successor form) with respect to the indemnified party or any of
its Affiliates causes any such payment not to be treated as an adjustment to
such price for federal income Tax purposes.
SECTION 7.05 TERMINATION OF INDEMNIFICATION.
The obligations to indemnify and hold harmless any party, (a) pursuant
to Section 7.02(a)(i) or 7.03(a)(i), shall terminate on the two-year anniversary
of the Closing Date (except to the extent that pursuant to Section 7.01 any
representation or warranty survives past such anniversary) and (b) pursuant to
the other clauses of Sections 7.02 and 7.03, shall not terminate; provided,
however, that such obligations to indemnify and hold harmless shall not
terminate with respect to any item as to which the Person to be indemnified
shall have, before the
26
28
expiration of the applicable period, previously made a claim by delivering a
notice of such claim (stating in reasonable detail the basis of such claim)
pursuant to Section 7.06 to the party to be providing the indemnification prior
to the expiration of the applicable period.
SECTION 7.06 PROCEDURES.
(a) In order for a party (the "Indemnified Party") to be entitled to
any indemnification provided for under this Agreement in respect of, arising out
of or involving a claim made by any Person against the Indemnified Party (a
"Third Party Claim"), such Indemnified Party must notify the indemnifying party
(the "Indemnifying Party") in writing (and in reasonable detail) of the Third
Party Claim within fifteen (15) business days after receipt by such Indemnified
Party of notice of the Third Party Claim; provided, however, that failure to
give such notification shall not affect the indemnification provided hereunder
except to the extent the Indemnifying Party shall have been actually prejudiced
as a result of such failure (except that the Indemnifying Party shall not be
liable for any expenses incurred during the period in which the Indemnified
Party failed to give such notice). Thereafter, the Indemnified Party shall
deliver to the Indemnifying Party, within five (5) business days' after the
Indemnified Party's receipt thereof, copies of all notices and documents
(including court papers) received by the Indemnified Party relating to the Third
Party Claim.
(b) If a Third Party Claim is made against an Indemnified Party, the
Indemnifying Party shall be entitled to participate in the defense thereof and,
if it so chooses, to assume the defense thereof with counsel selected by the
Indemnifying Party. Should the Indemnifying Party so elect to assume the defense
of a Third Party Claim, the Indemnifying Party shall not be liable to the
Indemnified Party for any legal expenses subsequently incurred by the
Indemnified Party in connection with the defense thereof. If the Indemnifying
Party assumes such defense, the Indemnified Party shall have the right to
participate in the defense thereof and to employ counsel, at its own expense,
separate from the counsel employed by the Indemnifying Party, it being
understood that the Indemnifying Party shall control such defense. The
Indemnifying Party shall be liable for the fees and expenses of counsel employed
by the Indemnified Party for any period during which the Indemnifying Party has
not assumed the defense thereof (other than during any period in which the
Indemnified Party shall have failed to give notice of the Third Party Claim as
provided above). If the Indemnifying Party chooses to defend or prosecute a
Third Party Claim, all the Indemnified Parties shall cooperate in the defense or
prosecution thereof. Such cooperation shall include the retention and (upon the
Indemnifying Party's request) the provision to the Indemnifying Party of records
and information that are reasonably relevant to such Third Party Claim, and
making employees available on a mutually convenient basis to provide additional
information and explanation of any material provided hereunder. Whether or not
the Indemnifying Party assumes the defense of a Third Party Claim, the
Indemnified Party shall not admit any liability with respect to, or settle,
compromise or discharge, such Third Party Claim without the Indemnifying Party's
prior written consent (which consent shall not be unreasonably withheld). If the
Indemnifying Party assumes the defense of a Third Party Claim, the Indemnified
Party shall agree to any settlement, compromise or discharge of a Third Party
Claim that the Indemnifying Party may recommend and that by its terms obligates
the Indemnifying Party to pay the full amount of the liability in connection
with such Third Party Claim, which releases the Indemnified Party completely in
connection with such Third Party Claim and that would not otherwise materially
adversely affect the Indemnified Party.
(c) In the event any Indemnified Party should have a claim against any
Indemnifying Party under Section 7.02 or 7.03 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 notice of such claim with
reasonable promptness to the Indemnifying Party. The failure by any Indemnified
Party to notify the Indemnifying Party shall not relieve the Indemnifying Party
from
27
29
any liability that it may have to such Indemnified Party under Section 7.02 or
7.03, except to the extent that the Indemnifying Party demonstrates that it has
been prejudiced by such failure. If the Indemnifying Party disputes its
liability with respect to such claim, the Indemnifying Party and the Indemnified
Party shall proceed in good faith to negotiate a resolution of such dispute and,
if not resolved through negotiations, such dispute shall be resolved by
litigation in an appropriate court of competent jurisdiction.
SECTION 7.07 SOLE REMEDY; NO ADDITIONAL REPRESENTATIONS.
(a) Except as otherwise specifically provided in Sections 1.06(b), and
4.13 or in any Related Instrument, each of Purchaser and Seller acknowledges and
agrees that, to the extent the Closing occurs, its sole and exclusive remedy
after Closing with respect to any and all claims and causes of action under or
that are reasonably related to this Agreement (including the Schedules), the
Seller's Officer's Certificate, the Purchaser's Officer's Certificate and the
Related Instruments (other than the Supply Agreement), the Acquisition and the
other transactions contemplated hereby and thereby, each Business, the Acquired
Assets and the Assumed Liabilities (other than claims of, or causes of action
arising from, fraud, other tortious acts, or relating to breaches of covenants
requiring performance after the Closing Date) shall be pursuant to the
indemnification provisions set forth in this Article VII and Section 8.08 and
Section 8.14. In furtherance of the foregoing, each of Purchaser and Seller
hereby waives, from and after the Closing, to the fullest extent permitted under
applicable law, any and all rights, claims and causes of action under or that
are reasonably related to this Agreement (including the Schedules), the Seller's
Officer's Certificate, the Purchaser's Officer's Certificate and the Related
Instruments (other than the Supply Agreement), the Acquisition and the other
transactions contemplated hereby and thereby, each Business, the Acquired Assets
and the Assumed Liabilities (other than claims of, or causes of action arising
from, fraud, other tortious acts, or relating to breaches of covenants requiring
performance after the Closing Date) it may have against the other party hereto
arising under or based upon any applicable law or arising under or based upon
common law or otherwise (except pursuant to the indemnification provisions set
forth in Section 7.02 or Section 7.03, as applicable, and Section 8.08 and
Section 8.14).
(b) Purchaser acknowledges that it and its representatives have been
permitted full and complete access to the books and records, facilities,
equipment, tax returns, contracts, insurance policies (or summaries thereof) and
other properties and assets of each Business that it and its representatives
have desired or requested to see or review, and that it and its representatives
have had a opportunity to meet with the officers and employees of Seller and its
Affiliates to discuss each Business. For the avoidance of doubt, Purchaser's
access to such information and its opportunity to meet with such personnel shall
not limit Purchaser's right to make a claim for indemnification under Section
7.02(a).
(c) Purchaser acknowledges that none of Seller, its Affiliates or any
other Person has made any representation or warranty, expressed or implied, as
to the accuracy or completeness of any information regarding each Business
furnished or made available to Purchaser and its representatives, except as
expressly set forth in this Agreement (including the Schedules), the Related
Instruments or the Seller's Officer's Certificate, and none of Seller, its
Affiliates or any other Person shall have or be subject to any liability to
Purchaser or any other Person resulting from the distribution to Purchaser, or
Purchaser's use of, any such information, documents or material made available
to Purchaser in any "data rooms", management presentations or in any other form
in expectation of the transactions contemplated hereby except to the extent such
information, documents or materials is included in the representations or
warranties of the Seller set forth in this Agreement (including the Schedules),
the Related Instruments or the Seller's Officers' Certificates.
28
30
(d) Purchaser also acknowledges that, should the Closing occur, except
as expressly set forth in the representations and warranties set forth in
Article II of this Agreement (including the Schedules), Related Instrument or in
the Seller's Officer's Certificate, there are no representations or warranties
by Seller of any kind, express or implied, with respect to each Business, and
that Purchaser is purchasing the Acquired Assets "as is", "where is" and "with
all faults". Without limiting the generality of the foregoing, except as
expressly set forth in the representations and warranties set forth in Article
II of this Agreement (including the Schedules), the Related Instruments or in
the Seller's Officer's Certificate, THERE ARE NO EXPRESS OR IMPLIED WARRANTIES
OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
(e) The right to indemnification based on the representations,
warranties, covenants and agreements contained in this Agreement (including the
Schedules), in any Related Instrument (other than the Supply Agreement), the
Seller's Officer's Certificate, the Purchaser's Officer's Certificate and in any
other document delivered in connection herewith or therewith shall not be
affected by any investigation conducted with respect to, or any knowledge
acquired (or capable of being acquired) at any time, whether before or after the
Closing Date, with respect to the accuracy or inaccuracy of or compliance with,
any such representation, warranty, covenant or agreement.
SECTION 7.08 LIMITATIONS ON LIABILITY.
(a) Notwithstanding any provision herein, neither Seller nor Purchaser
shall in any event be liable to the other party or its Affiliates, officers,
directors, employees, stockholders, agents or representatives on account of any
indemnity obligation set forth in Section 7.02(a)(i) or 7.03(a), for any
indirect, consequential or punitive damages (including, but not limited to, lost
profits, loss of use, damage to goodwill or loss of business).
(b) Seller and Purchaser shall cooperate with each other in resolving
any claim or liability with respect to which one party is obligated to indemnify
the other under this Agreement, including without limitation, by making
commercially reasonable efforts to mitigate or resolve any such claim or
liability.
SECTION 7.09 INDEMNIFICATION IN CASE OF STRICT LIABILITY OR INDEMNITEE
NEGLIGENCE.
THE INDEMNIFICATION PROVISIONS IN THIS ARTICLE 7 SHALL BE ENFORCEABLE
REGARDLESS OF WHETHER THE LIABILITY IS BASED ON PAST, PRESENT, OR FUTURE ACTS,
CLAIMS OR LEGAL REQUIREMENTS, INCLUDING ANY PAST, PRESENT OR FUTURE BULK SALES
LAW, ENVIRONMENTAL LAW, FRAUDULENT TRANSFER ACT, OCCUPATIONAL SAFETY AND HEALTH
LAW OR PRODUCT LIABILITY, SECURITIES OR OTHER LAWS, AND REGARDLESS OF WHETHER
ANY PERSON (INCLUDING THE PERSON FROM WHOM INDEMNIFICATION IS SOUGHT) ALLEGES OR
PROVES THE SOLE, CONCURRENT, CONTRIBUTORY OR COMPARATIVE NEGLIGENCE OF THE
PERSON SEEKING INDEMNIFICATION, OR THE SOLE OR CONCURRENT STRICT LIABILITY
IMPOSED ON THE PERSON SEEKING INDEMNIFICATION; PROVIDED, THAT THE FOREGOING
SHALL NOT BE CONSTRUED TO RESTRICT OR LIMIT ANY DAMAGES, LOSSES, COSTS,
EXPENSES, COMPENSATION, REIMBURSEMENT OR OTHER AMOUNT THAT THE INDEMNIFYING
PARTY MAY BE ENTITLED TO RECOVER FROM THE INDEMNITEE UNDER THIS AGREEMENT OR
APPLICABLE LAW.
29
31
ARTICLE VIII.
MISCELLANEOUS
SECTION 8.01 NOTICES.
All notices and other communications hereunder shall be in writing and
shall be deemed given upon receipt if delivered personally, or when sent if
mailed by registered or certified mail (return receipt requested) or by
reputable overnight express courier (charges prepaid) or transmitted by
facsimile (with confirmation of transmittal) to the parties at the following
addresses (or at such other address for a party as shall be specified by like
notice):
(a) if to Seller, to:
▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb Company
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇ at ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Counsel -- PRI & WSBD
with a copy to:
▇▇▇▇ ▇▇▇▇▇ LLP
Princeton ▇▇▇▇▇▇▇▇▇ Village
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇, Esq.
(b) if to Purchaser, to:
King Pharmaceuticals, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Legal Affairs
with a copy to:
▇▇▇▇▇ & ▇▇▇▇▇▇▇ L.L.P.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇., Esq.
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
30
32
SECTION 8.02 DEFINITIONS; INTERPRETATION.
(a) For purposes of this Agreement:
"Accounts Receivable" shall mean all accounts receivable, notes
receivable and other indebtedness due and owed by any third party to Seller or
any of its Affiliates arising or held in connection with each Business as of the
close of business on the Closing Date.
"Affiliate" shall mean, with respect to any Person, any Person which,
directly or indirectly, controls, is controlled by, or is under common control
with, the specified Person. For purposes of this definition, the term "control"
as applied to any Person, means the possession, directly or indirectly, of the
power to direct or cause the direction of the management of that Person, whether
through ownership of voting securities or otherwise.
"ANDA" shall mean an abbreviated new drug application which is
submitted to the FDA for approval to manufacture and/or sell a pharmaceutical
product in the United States.
"Assignment of Copyrights" shall mean the Assignment of Copyrights
agreement executed by Seller and Purchaser in substantially the form of Exhibit
E.
"Assignment of Trademarks" shall mean the Assignment of Trademarks
agreement executed by Seller and Purchaser in substantially the form of Exhibit
B.
"▇▇▇▇ of Sale" shall mean the ▇▇▇▇ of Sale in substantially the form of
Exhibit D.
"Business" shall mean each business of manufacturing, testing,
labeling, packaging, storing, marketing, distributing and selling each Product
as currently conducted by Seller and its Affiliates in the Territory.
"Controlled by" shall mean with respect to any Know-How, copyright,
patent or other intellectual property right, data, regulatory filing or
registration, that a party owns, has a license to, or otherwise uses such
Know-How, data, regulatory filing or registration and has the ability to grant
to the other party access, a license or a sublicense (as applicable) to such
Know-How, data, regulatory filing or registration as provided for herein without
violating the terms of any agreement or other arrangement with any Third Party
existing at the time such party would be first required hereunder to grant the
other party such access, license or sublicense.
"Corzide Product" shall mean the products manufactured, used,
distributed, marketed and sold under the trademark Corzide(R) and set forth on
Exhibit A-1.
"Copyrights" means all copyrights, copyright registrations, works and
applications therefor used in the conduct of a Business, including dockets and
renewal dates therefor.
"Delestrogen Product" shall mean the products manufactured, used,
distributed, marketed and sold under the trademark Delestrogen(R) and set forth
on Exhibit A-1.
"Excluded Know-How" means all Know-How owned or Controlled by Seller or
one of its Affiliates other than the Included Know-How, including without
limitation Know-How related to Seller's product(s) other than the Products.
"Florinef Product" shall mean the products manufactured, used,
distributed, marketed and sold under the trademark Florinef(R) and set forth on
Exhibit A-1.
"FDA" means the United States Food and Drug Administration.
31
33
"GAAP" shall mean United States generally accepted accounting
principles as in effect on the date hereof.
"Governmental Entity" shall mean any Federal, state, local or other
government or any court of competent jurisdiction, legislature, governmental
agency, administrative agency or commission or other governmental authority or
instrumentality, having jurisdiction for the United States or any of its states.
"HSR Act" shall mean the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act
of 1976, as amended.
"Included Copyrights" means all copyrights, copyright registrations,
works and applications therefor used exclusively in the conduct of a Business,
and used exclusively in the Territory, including dockets and renewal dates
therefor.
"Included Know-How" means all Know-How owned by Seller and its
Affiliates that exclusively relates to any Product and that is used exclusively
in the Territory.
"Included Intellectual Property" shall mean, collectively, (i) the
Included Know-How, (ii) the Included Trademarks, (iii) the Included Copyrights,
(iv) the Included Patents, (v) the Included Trade Dress, and (vi) the Included
Internet Names.
"Intellectual Property" shall mean, collectively, (i) the Know-How,
(ii) the Trademarks, (iii) the Copyrights, (iv) the Patents, (v) the Trade
Dress, and (vi) the Internet Names.
"Internet Names" means all web addresses and domain names and
applications and registrations therefor, which are used in the conduct of each
Business. "Included Internet Names" means all Internet Names which are used
exclusively in the conduct of each Business.
"Inventory" shall mean the finished goods inventory of each Product in
the possession and control of Seller and its Affiliates as of the Closing Date
and which have an expiration date of not less than twelve (12) months after the
Closing Date.
"Know-How" shall mean any and all Manufacturing Know-How, product
specifications, processes, product designs, plans, trade secrets, ideas,
concepts, inventions, manufacturing, engineering and other manuals and drawings,
SOPs, PLCs, flow diagrams, chemical, pharmacological, toxicological,
pharmaceutical, physical and analytical, safety, quality assurance, quality
control and clinical data, technical information, data, research records, all
promotional literature, customer and supplier lists and similar data and
information, and all other confidential or proprietary technical and business
information relating to and used in the manufacture, use, marketing, or sale of
the Products as of the Closing Date.
"Knowledge" shall mean (i) with respect to Seller, the actual knowledge
of the representatives of Seller set forth on Schedule 8.02(a) after due
inquiry, and (ii) with respect to Purchaser, the actual knowledge of any officer
of Purchaser after due inquiry.
"Lien" shall mean any lien (statutory or otherwise), claim, charge,
option, security interest, pledge, mortgage, restriction, financing statement or
similar encumbrance of any kind or nature whatsoever (including any conditional
sale or other title retention agreement and any lease having substantially the
same effect as any of the foregoing and any assignment or deposit arrangement in
the nature of a security device).
32
34
"Manufacturing Know-How" means the percentages and specifications of
ingredients, the manufacturing processes, specifications, technology,
inventions, assays, quality control and testing procedures, know-how and trade
secrets used as of the Closing Date to manufacture, formulate, test, and package
a Product for sale, marketing, distribution, or use in the Territory.
"Material Adverse Effect" means a material and adverse effect upon the
business, operations, assets, liabilities, financial condition or operating
results of each Business or any of the Acquired Assets (including each Product)
of each Business taken as a whole.
"Names" means "▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb Company", "▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb",
"Seller", "▇▇▇▇▇▇▇-▇▇▇▇▇ Product", "B-MS", "Squibb" and "▇.▇. ▇▇▇▇▇▇ & Sons",
"Apothecon", "Invamed", "Apothecon/Invamed", "▇▇▇▇ ▇▇▇▇▇▇▇", "▇▇▇▇ ▇▇▇▇▇▇▇ &
Company" variations and derivatives thereof and any other logos or trademarks,
trade names or service marks of Seller or its Affiliates not included on
Schedule 2.07(a).
"NDA" shall mean a new drug application for a Product, including any
ANDA or Products License Application for each Product, as appropriate,
requesting permission to place a drug on the market in accordance with 21 C.F.R.
Part 314, and all supplements filed pursuant to the requirements of the FDA,
including all documents, data and other information concerning Products which
are necessary for FDA approval to market a Product in the United States.
"Patents" shall mean all patents and patent applications, and all
additions, divisions, continuations, continuations in-part, provisionals,
continued prosecution applications, substitutions, reissues, extensions,
registrations and renewals of any of the foregoing used in the manufacture, use,
importation or sale of a Product as of the Closing Date. "Included Patents"
means all U.S. Patents that exclusively claim the composition, manufacture, use
or sale of a Product (and no other compounds or products).
"Permitted Liens" shall mean, collectively (a) Liens for taxes or
assessments which are not delinquent or are being contested in good faith by
appropriate proceedings, (b) statutory mechanics, warehousemen's, materialmens,
contractors, workmen's, repairmen's and carriers liens, and other similar Liens
arising in the ordinary course for obligations which are not delinquent, and (c)
the rights, if any, of third parties, appearing in product advertisements for
each Product being transferred as part of the Acquired Assets.
"Person" shall mean any individual, group, corporation, partnership or
other organization or entity (including any Governmental Entity).
"Pre-Closing Tax Period" means all taxable periods ending on or before
the Closing Date and the portion ending on the Closing Date of any taxable
period that includes (but does not end on) the Closing Date.
"Product" shall mean a Corzide Product, Delestrogen Product or Florinef
Product and "Products" shall mean all of them.
"Product Registration" shall mean the approvals, registrations,
applications, licenses and permits (including, but not limited to, the NDA) for
each Product which have been received in order to market or sell same in the
Territory (and related submissions to and correspondence with the regulatory
authority responsible for the Product Registration).
"Related Instruments" shall mean the Assumption Agreement, the Supply
Agreement, the Assignment of Trademarks, and any other agreements entered into
in connection with the transaction contemplated herein.
33
35
"Retained Information" shall mean any and all books and records
prepared and maintained by Seller in connection with each Business, including
laboratory books, batch records and stability studies, the originals or copies
of which are required to be kept by Seller or its Affiliates pursuant to
applicable government regulations, in connection with Seller's or its
Affiliates' conduct of each Business prior to the Closing Date or which are used
in connection with Seller's and its Affiliates' other products or businesses.
"Supply Agreement" shall mean the Supply Agreement for each Product
dated the Agreement Date between Purchaser and Seller or an Affiliate of Seller.
"Taxes", or "Tax" in the singular form, shall mean any and all taxes,
levies or other like assessments, including, but not limited to, income,
transfer, gains, gross receipts, excise, inventory, property (real, personal or
intangible), custom duty, sales, use, license, withholding, payroll, employment,
capital stock and franchise taxes, imposed by the United States, or any state,
local or foreign government or subdivision or agency thereof.
"Tax Return" shall mean any report, return or other information filed
with any taxing authority with respect to Taxes imposed upon or attributable to
the operations of each Business.
"Territory" means the United States. For sake of clarity, it does not
include Puerto Rico or U.S. possessions or territories.
"Third Party" shall mean a Person who or which is neither a party nor
an Affiliate of a party.
"Trademarks" shall mean all trademarks, logos, common law trademarks
and service marks used in the Territory, and all variations or derivatives
thereof, and all common law rights, registrations, applications and renewals for
any of the foregoing, together with the goodwill associated therewith, but
specifically excluding all Names and all variations and derivatives of such
Names. "Included Trademarks" means all Trademarks used exclusively with the
Products or packaging therefor and used exclusively in the Territory (for sake
of clarity, Included Trademarks includes all U.S. Trademarks).
"Trade Dress" means all trade dress used with the Products or packaging
therefor. "Included Trade Dress" means all Trade Dress used exclusively with the
Products or packaging therefor and used exclusively in the Territory. For the
sake of clarity, all Names are specifically excluded.
"United States" shall mean the fifty (50) states of the United States
of America and the District of Columbia.
(b) The following terms have the meanings set forth in the Sections set
forth below:
TERM SECTION
---- -------
Acquired Assets 1.02(a)
Acquisition 1.01
Agreement Date Preamble
Assumed Liabilities 1.03(a)
34
36
TERM SECTION
---- -------
Assumption Agreement 1.04(c)
Closing 1.04(a)
Closing Date 1.04(a)
Confidentiality Agreement 4.03(a)
Contracts 2.08
CORGARD Purchase Agreement Preamble
DOJ 4.05(a)
Excluded Assets 1.02(c)
Excluded Liability 1.03(c)
FDA Act 2.09(a)
Financial Statements 2.04
FTC 4.05(a)
Indemnified Party 7.06(a)
Indemnifying Party 7.06(a)
Losses 7.02(a)
Medical Information 4.13
Months of Supply 1.06(a)
NDC 4.14
Proceeding 2.10(a)
Purchase Price 1.01
Purchaser Preamble
Purchaser's Officer's Certificate 5.03(c)
Seller Preamble
Seller's Officer's Certificate 5.02(c)
Third Party Claim 7.06(a)
Transfer Taxes 4.06
(c) In the event of an ambiguity or a question of intent or
interpretation arises, this Agreement shall be construed as if drafted jointly
by the parties and no presumption or burden of proof shall arise favoring or
disfavoring any party by virtue of the authorship of any provisions of this
Agreement.
35
37
(d) The definitions of the terms herein shall apply equally to the
singular and plural forms of the terms defined. Whenever the context may
require, any pronoun shall include the corresponding masculine, feminine and
neuter forms. The words "include", "includes" and "including" shall be deemed to
be followed by the phrase "without limitation". The word "will" shall be
construed to have the same meaning and effect as the word "shall". Unless the
context requires otherwise (A) any definition of or reference to any agreement,
instrument or other document herein shall be construed as referring to such
agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (B) any reference
herein to any Person shall be construed to include the Person's successors and
assigns, (C) the words "herein", "hereof" and "hereunder", and words of similar
import, shall be construed to refer to this Agreement in its entirety and not to
any particular provision hereof, and (D) all references herein to Articles,
Sections, Exhibits or Schedules shall be construed to refer to Articles,
Sections, Exhibits and Schedules of this Agreement.
SECTION 8.03 DESCRIPTIVE HEADINGS.
The descriptive headings herein are inserted for convenience only and
are not intended to be part of or to affect the meaning or interpretation of
this Agreement.
SECTION 8.04 COUNTERPARTS.
This Agreement may be executed in one or more counterparts, all of
which shall be considered one and the same agreement, and shall become effective
when one or more such counterparts have been signed by each of the parties and
delivered to the other party.
SECTION 8.05 ENTIRE AGREEMENT.
This Agreement (including the Schedules) the Purchaser's Officer's
Certificate, the Seller's Officer's Certificate, the Related Instruments and the
Confidentiality Agreement, along with the Schedules and Exhibits hereto and
thereto and along with the CORGARD Purchase Agreement where herein referenced,
contain the entire agreement and understanding between the parties hereto with
respect to the subject matter hereof and supersede all prior agreements and
understandings relating to such subject matter. Neither party shall be liable or
bound to any other party in any manner by any representations, warranties or
covenants relating to such subject matter except as specifically set forth
herein (including the Schedules) the Purchaser's Officer's Certificate, the
Seller's Officer's Certificate or in the Related Instruments or the
Confidentiality Agreement.
SECTION 8.06 FEES AND EXPENSES.
Regardless of whether or not the transactions contemplated by this
Agreement are consummated, each party shall bear its own fees and expenses
incurred in connection with the transactions contemplated by this Agreement. As
to the Related Instruments, Purchaser shall bear all fees, costs, taxes and
expenses in connection with recording the assignments of Intellectual Property
identified in the Assignment of Trademarks and the Assignment of Patents.
SECTION 8.07 GOVERNING LAW.
This Agreement shall be governed by and construed in accordance with
the internal laws of the State of New York applicable to agreements made and to
be performed entirely within such State, without regard to the conflicts of law
principles of such State.
36
38
SECTION 8.08 SPECIFIC PERFORMANCE.
The parties hereto agree that if any of the provisions of this
Agreement were not performed in accordance with their specific terms or were
otherwise breached, irreparable damage would occur, no adequate remedy at law
would exist and damages would be difficult to determine, and that the parties
shall be entitled to specific performance of the terms hereof, in addition to
any other remedy at law or equity.
SECTION 8.09 ASSIGNMENT.
This Agreement may not be assigned by any party hereto without the
prior written consent of the other party. Any attempted assignment in violation
of this Section 8.09 shall be void.
SECTION 8.10 SUCCESSORS AND ASSIGNS.
This Agreement shall be binding upon and inure solely to the benefit of
the parties hereto, their successors and permitted assigns, and nothing in this
Agreement, express or implied, is intended to or shall confer upon any other
person or persons any right, benefits or remedies of any nature whatsoever under
or by reason of this Agreement.
SECTION 8.11 SEVERABILITY.
In the event that any one or more of the provisions contained herein,
or the application thereof in any circumstances, is held invalid, illegal or
unenforceable in any respect for any reason, the parties shall negotiate in good
faith with a view to the substitution therefor of a suitable and equitable
solution in order to carry out, so far as may be valid and enforceable, the
intent and purpose of such invalid provision; provided, however, that the
validity, legality and enforceability of any such provision in every other
respect and of the remaining provisions contained herein shall not be in any way
impaired thereby, it being intended that all of the rights and privileges of the
parties hereto shall be enforceable to the fullest extent permitted by law.
SECTION 8.12 CONSENT TO JURISDICTION.
Each of Purchaser and Seller irrevocably submits to the exclusive
jurisdiction of (a) the Supreme Court of the State of New York, New York County,
and (b) the United States District Court for the Southern District of New York,
for the purposes of any suit, action or other proceeding arising out of this
Agreement, any Related Instrument or any transaction contemplated hereby or
thereby. Each of Purchaser and Seller agrees to commence any such action, suit
or proceeding either in the United States District Court for the Southern
District of New York or if such suit, action or other proceeding may not be
brought in such court for jurisdictional reasons, in the Supreme Court of the
State of New York, New York County. Each of Purchaser and Seller further agrees
that service of any process, summons, notice or document by U.S. registered mail
to such party's respective address set forth above shall be effective service of
process for any action, suit or proceeding in New York with respect to any
matters to which it has submitted to jurisdiction in this Section 8.12. Each of
Purchaser and Seller irrevocably and unconditionally waives any objection to the
laying of venue of any action, suit or proceeding arising out of this Agreement,
any Related Instrument or the transactions contemplated hereby and thereby in
(i) the Supreme Court of the State of New York, New York County or (ii) the
United States District Court for the Southern District of New York, and hereby
and thereby further irrevocably and unconditionally waives and agrees not to
plead or claim in any such court that any such action, suit or proceeding
brought in any such court has been brought in an inconvenient forum.
37
39
SECTION 8.13 WAIVER OF JURY TRIAL.
Each party hereto hereby waives to the fullest extent permitted by
applicable law, any right it may have to a trial by jury in respect to any
litigation directly or indirectly arising out of, under or in connection with
this Agreement or any Related Instrument. Each party hereto (a) certifies that
no representative, agent or attorney of any other party has represented,
expressly or otherwise, that such other party would not, in the event of
litigation, seek to enforce that foregoing waiver and (b) acknowledges that it
and the other parties hereto have been induced to enter into this Agreement and
the Related Instruments, as applicable, by, among other things, the mutual
waivers and certifications in this Section 8.13.
SECTION 8.14 ATTORNEY FEES.
A party in breach of this Agreement shall, on demand, indemnify and
hold harmless the other party for and against all reasonable out-of-pocket
expenses, including legal fees, incurred by such other party by reason of the
enforcement and protection of its rights under this Agreement. The payment of
such expenses is in addition to any other relief to which such other party may
be entitled.
38
40
IN WITNESS WHEREOF, the parties hereto have executed this Asset
Purchase Agreement as of the date first written above.
▇▇▇▇▇▇▇-▇▇▇▇▇ SQUIBB COMPANY
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Title: Secretary
KING PHARMACEUTICALS, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Chairman of the Board and
Chief Executive Officer