EXHIBIT 2.1
SYNTEX ASSET PURCHASE AGREEMENT
THIS SYNTEX ASSET PURCHASE AGREEMENT (this "Agreement") is made and entered
into on March 27, 1997 (the "Effective Date") by and between Syntex (U.S.A.)
Inc., a Delaware corporation with offices at ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("Seller") and Dura Pharmaceuticals, Inc., a California
corporation with offices at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
("Buyer")
This Agreement sets forth the terms and conditions upon which Buyer is
purchasing from Seller and Seller is selling to Buyer the Assets (as hereinafter
defined).
NOW THEREFORE, in consideration of the representations, warranties,
covenants and agreements set forth herein, the parties hereto agree as follows:
1. DEFINITIONS
1.1 "Active Ingredient" means the pharmaceutical compound known by the
chemical name FLUNISOLIDE HEMIHYDRATE (6-alpha-fluoro-11-beta, 16-alpha, 17,
21- tetrahydroxypregna-1, 4-diene-3, 20-dione, cyclic 16, 17-acetyl with
acetone, hemihydrate).
1.2 "Affiliate" of a party means any corporation or other business entity
controlled by, controlling or under common control with, such party. For this
purpose "control" shall mean direct or indirect beneficial ownership of more
than fifty percent (50%) of the voting securities of or income interest in such
corporation or other business entity; provided, however, that Genentech, Inc.,
with offices located at ▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇, shall not be considered an Affiliate of Seller.
1.3 "Assets" has the meaning ascribed to such term in Article 2.
1.4 "Assigned Agreements" has the meaning ascribed to such term in
Section 2.5.
1.5 "Buyer Indemnifiable Claims" has the meaning ascribed to such term in
Section 12.1.
1.6 "Buyer Labeling" means the printed labels, labeling and packaging
materials, including printed carton, container label and package inserts, used
by Buyer and bearing Buyer's name for each Product.
1.7 "Canadian Facility" means the Patheon manufacturing facility located
in Mississauga, Ontario.
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1.8 "cGMP's" means the then-current Good Manufacturing Practices
applicable to the manufacture of pharmaceutical products for human use in the
United States in accordance with FDA regulations.
1.9 "Closing" has the meaning ascribed to such term in Section 10.1.
1.10 "Closing Date" has the meaning ascribed to such term in Section 10.1.
1.11 "Closing Time" means 12:01 a.m. on the date of Closing.
1.12 "Confidentiality Agreement" has the meaning ascribed to such term in
Section 8.12.
1.13 "Copyrights" has the meaning ascribed to such term in Section 2.1.
1.14 "Damages" has the meaning ascribed to such term in Section 12.1.1.
1.15 "Data Bank Documents" has the meaning ascribed to such term in
Section 2.7.
1.16 "Disclosure Schedule" means the disclosure schedule delivered prior
to the Effective Date to Buyer by Seller or to Seller by Buyer in connection
with this Agreement. The sections of the Disclosure Schedule correspond to the
sections of this Agreement, but information disclosed in any section of the
Disclosure Schedule shall be deemed to be disclosed as to all relevant sections
of this Agreement, except as otherwise specifically provided herein.
1.17 "DOJ" means the United States Department of Justice.
1.18 "Effective Date" means the execution date of this Agreement.
1.19 "FDA" means the United States Food and Drug Administration.
1.20 "FTC" means the United States Federal Trade Commission.
1.21 "HSR Act" means the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of
1976, as amended, and the rules and regulations thereunder.
1.22 "Indemnified Party" has the meaning ascribed to such term in Section
12.3.
1.23 "Indemnifying Party" has the meaning ascribed to such term in Section
12.3.
1.24 "Initial Purchase Price" has the meaning ascribed to such term in
Article 3.
1.25 "Intellectual Property" means the Know-How, the Trademarks, and the
Copyrights.
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1.26 "Inventory" has the meaning ascribed to such term in Section 2.4.
1.27 "Inventory Statement" has the meaning ascribed to such term in
Section 9.3.1.
1.28 "Know-How" has the meaning ascribed to such term in Section 2.4.
1.29 "Law" means any federal, state, foreign, local or other law,
ordinance, rule, regulation, or governmental requirement or restriction of any
kind, and any rules, regulations, and orders promulgated thereunder.
1.30 "Material Adverse Effect" means a material adverse effect on the
Assets, taken as a whole.
1.31 "NDA" means a New Drug Application, as such term is defined by the
FDA.
1.32 "Oread" means Oread, Inc., a Kansas corporation.
1.33 "Patent Rights" means any patents or patent applications and any and
all divisions, continuations, continuations-in-part, reexaminations, reissues,
extensions, pending or granted supplementary protection, certificates,
substitutions, confirmations, registrations, revalidations, revisions, additions
and the like, of or to said patents and patent applications.
1.34 "Patheon Agreement" means the Manufacturing and Supply Agreement
entered into on January 31, 1997 between Patheon and ▇▇▇▇▇▇▇▇-▇▇ ▇▇▇▇▇ Inc.
concerning the Products.
1.35 "Products" means the finished pharmaceutical products set forth in
the Registrations.
1.36 "Registrations" has the meaning ascribed to such term in Section 2.2
1.37 "Schedule" means a schedule included as part of the Disclosure
Schedule.
1.38 "Seller Indemnifiable Claims" has the meaning ascribed to such term
in Section 12.2.
1.39 "Seller Labeling" means the printed labels, labeling and packaging
materials, including printed carton, container label and package inserts,
currently used by Seller or its Affiliates for each Product.
1.40 "SPIL Asset Purchase Agreement" means the agreement between Buyer and
Syntex Pharmaceuticals International Limited, ▇▇▇▇▇▇▇▇, Bermuda ("SPIL") for the
sale of certain assets.
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1.41 "SPIL Supply Agreement" means the agreement between Buyer and Syntex
Pharmaceuticals International Limited, ▇▇▇▇▇▇▇▇, Bermuda, ("SPIL") for supply of
the Active Ingredient.
1.42 "Syntex Process" means, for each Product, the manufacturing process
approved in the NDA for such Product.
1.43 "Syntex Supply Agreement" means the Supply Agreement entered into on
the Effective Date between Syntex and Buyer concerning the supply of Nasalide.
1.44 "Territory" means the United States of America, and its possessions,
including the Commonwealth of Puerto Rico and the United States Virgin Islands.
1.45 "Trademarks" has the meaning ascribed to such term in Section 2.1.
1.46 "Transition Services Agreement" means the agreement referred to in
Section 8.4.
2. ASSETS BEING SOLD
Subject to the terms and conditions of this Agreement, at Closing, Seller
shall sell, transfer, assign, convey and deliver to Buyer, its successors and
assigns forever, all of the right, title, and interest of Seller in and to the
assets listed below in the Territory (collectively, the "Assets") and Buyer
shall assume all of the right, title, and interest of Seller in and to the
Assets and, all of the liabilities, obligations and responsibilities associated
therewith. Except as expressly stated herein, Seller does not intend to convey
and Buyer does not intend to purchase the right, title and interest of Seller in
and to any assets not listed in this Article 2 or which may be outside of the
Territory, or the obligations and responsibilities associated therewith.
2.1 TRADEMARKS. The trademark/service ▇▇▇▇ registrations and
applications that are set forth on Schedule 2.1 and the goodwill symbolized by
such trademarks/service marks (the "Trademarks") , and any copyrights and any
unregistered trade dress that are owned by Seller which are associated solely
with the Products and used by Seller solely on or in association with such
Products (the "Copyrights"). "Trademarks" shall not include any
trademark/service marks outside of the Territory that are the same as or similar
to the Trademarks or the right to register any such trademarks-service marks.
Neither "Trademarks" nor "Copyrights" shall include copyrights, service marks
and trade dress used outside the Territory or that are primarily associated with
the divisions, companies or corporate entities of either Seller or ▇▇▇▇▇▇▇▇-▇▇
▇▇▇▇▇ Inc., or their distributors or Affiliates.
2.2 REGISTRATIONS. The NDAs that are set forth on Schedule 2.2 and the
regulatory files relating thereto (the "Registrations"); provided that Seller
shall retain the right to use information that is contained in the Registration
(a) related to the Active Ingredient, and to transfer such information to buyers
of the Active Ingredient inside and outside the Territory,
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and (b) related to the Products, to use such information solely related to the
Products outside the Territory.
2.3 MANUFACTURING TECHNOLOGY AND KNOW-HOW.
2.3.1. The manufacturing technology and know-how that is exclusively
used in manufacturing the Products, including but not limited to the Syntex
Processes, specifications and test methods for Products, raw material,
packaging, stability and other applicable specifications , manufacturing and
packaging instructions, master formula, validation reports (process, analytical
methods and cleaning) to the extent available, stability data, analytical
methods, records of complaints, annual product reviews to the extent available,
and other master documents necessary for the manufacture, control, and release
of the Products as conducted by, or on behalf of Seller (the "Know-How");
provided that Seller shall retain all rights to such information that is
contained in the Know-How related to the Active Ingredient and to transfer such
information to buyers of the Active Ingredient inside and outside the Territory,
and all rights to such information contained in the Know-How for manufacture,
sale and distribution of the Products outside the Territory, subject to the
terms and conditions of the SPIL Supply Agreement.
2.3.2 A non-exclusive, perpetual, paid-up, irrevocable and royalty-
free license, with the right to sublicense, to use any manufacturing technology
and know-how that are necessary or used in manufacturing any Product (but not
exclusively used therein) with such license being restricted to use for purposes
of manufacturing, using or selling Products only in the Territory. In no event
shall "Know-How" include any manufacturing technology and know-how relating to
the manufacture, use or sale of the Active Ingredient or any manufacturing
technology and know-how owned by Patheon or Oread, nor is the use of any such
manufacturing technology and know-how being licensed to Buyer hereunder.
2.4 INVENTORY.
2.4.1 The inventory consisting of the Products (or Active
Ingredient) that are owned by Seller and that have been approved by the Parties
as meeting specifications and otherwise saleable in the ordinary and normal
course of business as of Closing, the quantity and the location of which shall
be agreed upon by the parties prior to Closing. "Inventory" shall be as
described in Schedule 2.4.1 and shall not include Products that have been
shipped from the plant or a warehouse directly to distributors, wholesalers, or
customers prior to Closing. Subject to Article 3, Inventory shall be shipped
FOB Seller's location to a destination designated by Buyer in writing on or
before Closing, but except for such Inventory included within the Initial
Purchase Price, such shipment shall not occur prior to Seller's receipt of
payment therefor.
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2.5 ASSIGNED AGREEMENTS .
2.5.1 TRADEMARK AGREEMENTS. All of the Seller's rights, and all
liabilities, obligations and responsibilities associated therewith, under those
agreements set forth on Schedule 2.5.1 but only to the extent such agreements
relate to the Trademarks.
2.5.2 PATHEON AGREEMENT. All of the Seller's rights, and all
liabilities, obligations and responsibilities associated therewith under such
agreement, but only to the extent such rights, liabilities, obligations and
responsibilities relate to the Products, as set forth in the Assignment and
Amendment of Manufacturing and Supply Agreement between Buyer, Seller and
Patheon Inc.
2.6 MANUFACTURING INFORMATION. Accurate and complete copies of Seller's
Manufacturing Worksheets and copies of Seller's Manufacturing Quality Assurance
Notebooks to the extent available, as well as relevant packaging information.
2.7 DATA BANK DOCUMENTS. The right to obtain copies of and reference the
animal toxicology, animal mutagenicity, human clinical study and final reports,
and drug monograph/investigator brochures, listed on Schedule 2.7 (the "Data
Bank Documents").
2.8 WORLDWIDE SAFETY REPORTS. A hard copy of Seller's Worldwide Safety
Reports with respect to Products, but Buyer shall have all responsibility and
shall pay all costs associated with converting such Worldwide Safety Reports
into the format from which Buyer can access that information.
2.9 MARKETING INFORMATION. Copies of current and past advertising and
promotional materials, to the extent that they relate exclusively to the
Products, with the understanding that Buyer will reformat same to substitute its
name for that of Roche or Syntex as the case may be.
3. PURCHASE PRICE
3.1 INITIAL PURCHASE PRICE. Subject to the terms and conditions of this
Agreement, in reliance on the representations, warranties, covenants and
agreements of the Seller contained herein, and in consideration of the sale,
conveyance, assignment, transfer and delivery of the Assets provided for in
Article 2 hereof, Buyer will deliver at Closing the Initial Purchase Price,
consisting of fifty million United States dollars (US $50,000,000.00) payable to
Seller by bank wire transfer to Seller at such banking institution designated
not less than five (5) days prior to Closing by Seller. Included in the Initial
Purchase Price is such quantities of Inventory as Buyer and Seller shall agree
in writing no later than Closing to enable Buyer to fill customer orders as of
the Closing Date, and for ninety (90) days thereafter ("Closing Inventory").
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3.2 ADDITIONAL PAYMENTS. Subject to the provisions of Section 3.3, Buyer
shall pay the following amounts to Seller, on the scheduled due dates set forth
below by Federal Reserve electronic wire transfer in immediately available funds
to an account designated by Seller:
Amount Due Date
------ --------
Five Million Dollars ($5,000,000.00) December 31, 1997
Five Million Dollars ($5,000,000.00) June 30, 1998
Five Million Dollars ($5,000,000.00) December 31, 1998
3.3 AVAILABILITY OF COMPETITIVE PRODUCT. Buyer shall not be required to
make any of the scheduled payments to Seller as set forth in Section 3.2 above,
if, at any time preceding the date on which a particular payment becomes due and
payable, a third party has both received approval from the FDA for marketing of
a nasal formulation of flunisolide, and has launched the Product for sale,
meaning that orders are being accepted and shipped.
3.4 ADDITIONAL INVENTORY. Any additional Inventory beyond the Closing
Inventory shall be purchased by Buyer from Seller at Seller's cost.
4. REPRESENTATIONS AND WARRANTIES OF SELLER
Except as set forth on the Disclosure Schedule attached hereto as Schedule
4, Seller hereby represents and warrants to the Buyer as follows:
4.1 ORGANIZATION. Seller is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware, with full
corporate power and authority to consummate the transactions contemplated
hereby.
4.2 AUTHORITY. The execution and delivery of this Agreement, the SPIL
Asset Purchase Agreement, the SPIL Supply Agreement the Syntex Supply Agreement
and the Transition Services Agreement (collectively, the "Transaction
Agreements") by Seller or Seller's Affiliates and the consummation and
performance of the transactions contemplated hereby and thereby, have been duly
and validly authorized by all necessary corporate and other proceedings, and
each of the Transaction Agreements has been duly authorized, executed, and
delivered by Seller or Seller's Affiliates and, assuming the enforceability
against Buyer, constitutes the legal, valid and binding obligation of Seller or
Seller's Affiliates, enforceable in accordance with its terms, except as
enforcement thereof may be limited by general principles of equity and the
effect of applicable bankruptcy, insolvency, moratorium and other similar laws
of general application relating to or affecting creditors' rights generally,
including, without limitation, the effect of statutory or other laws regarding
fraudulent conveyances and preferential transfers.
4.3 TITLE TO ASSETS. Seller has good and marketable title to all the
Assets and will convey good and marketable title at Closing, free and clear of
any and all liens, encumbrances,
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charges, claims, restrictions, pledges, security interests, or impositions of
any kind (including those of secured parties). None of the Assets is leased,
rented, licensed, or otherwise not owned by Seller.
4.4 NO VIOLATION OR CONFLICT. The execution and delivery of the
Transaction Agreements by Seller or Seller's Affiliates and the performance of
the Transaction Agreements (and the transactions contemplated herein) by Seller
or its Affiliates (a) will not conflict with, violate or constitute or result in
a default under any Law, judgment, order, decree, the certificate of
incorporation or bylaws of Seller, or any material contract or agreement to
which Seller is a party or by which Seller is bound, except for any conflicts,
violations or defaults that are not, singly or in the aggregate, material to
Seller's ability to consummate the transactions contemplated hereby, and (b)
will not result in the creation or imposition of any lien, charge, mortgage,
claim, pledge, security interest, restriction or encumbrance of any kind on, or
liability with respect to, the Assets except as otherwise provided herein or
otherwise disclosed on the Disclosure Schedule.
4.5 REGISTRATIONS. The Registrations are the only registrations
currently required by the FDA to sell and market the Products in the Territory.
All registrations listed on Schedule 2.2 are valid and held by Seller.
4.6 INTELLECTUAL PROPERTY . Seller has not granted to a third party any
license, interest or other right in respect of the Intellectual Property which
does or which will, subsequent to the Closing, permit anyone other than Buyer
(or Seller to the extent provided herein) to use any of the Intellectual
Property in the Territory. Seller is unaware of any third party intellectual
property which would be infringed by the sale of the Products manufactured using
the Know-How in the Territory. Seller is unaware of any of the Intellectual
Property which is being presently infringed by a third party in the Territory.
Seller is unaware of any reason to believe that the Intellectual Property is
invalid or unenforceable. In conjunction with U.S. Patents No. 4,782,047 and
No. 4,983,595, being transferred contemporaneously by separate Agreements
between Syntex Pharmaceuticals International Limited and Buyer, the Intellectual
Property contains all the technology, patents, know-how, trade secrets, and
other intellectual property owned by Syntex or its Affiliates necessary to
manufacture Products from the Active Ingredient and sell the Products in the
Territory according to the Registrations.
4.7 INVENTORY. As of Closing, the Inventory shall meet the
specifications therefor as set forth in the manufacturing documentation and
Registrations. The Inventory will be in good condition, properly stored and
usable and salable in the ordinary course of business.
4.8 TAXES. As of Closing, there will be no liens for taxes upon the
Assets except for liens for current taxes not yet due and payable.
4.9 ABSENCE OF CERTAIN CHANGES.
4.9.1 Except as set forth in this Agreement, since the December
1996 Memorandum of Sale, there has not been any (i) material adverse change in
the Assets, (ii)
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damage, destruction or loss with respect to the Assets which has or may have a
Material Adverse Effect, or (iii) material transaction or commitment outside the
ordinary course of business with respect to the Assets.
4.9.2 As of the Closing Date and except as otherwise disclosed on
the Disclosure Schedule or in the December 1996 Memorandum of Sale, Seller is
not aware of any facts, circumstances, or proposed or contemplated events that
would have a Material Adverse Effect after Closing.
4.10 VIOLATIONS OF LAW. The use of the Assets (i) does not violate or
conflict with any Law, any decree, judgment, order, or similar restriction in
the Territory in any material respect, and (ii) to the best of Seller's
knowledge, has not been the subject of an investigation or inquiry by any
governmental agency or authority regarding violations or alleged violations, or
found by any such agency or authority to be in violation, of any Law, other than
investigations, inquiries or findings that have not had, or are not reasonably
likely to have, a Material Adverse Effect.
4.11 RESTRICTIONS. Except as listed or described on Schedule and except
for consents the failure of which to obtain would not have a Material Adverse
Effect, no consent, approval, order or authorization of, or registration,
declaration or filing with, any governmental agency is required to be obtained
or made by or with respect to Seller in connection with the execution and
delivery of this Agreement by Seller or the consummation by it of the
transactions contemplated hereby to be consummated by it, except for the filing
of a pre-merger notification report under the HSR Act.
Nothing in this Agreement is intended to restrict Buyer pursuing at
its own expense the necessary regulatory approvals to market the Products in the
over-the-counter market in the Territory. Seller disclaims any warranty on the
availability or likelihood of achieving such regulatory approvals.
4.12 LITIGATION. The Assets are not the subject of (i) any outstanding
judgment, order, writ, injunction or decree of, or settlement agreement with,
any person, corporation, business entity, court, arbitrator or administrative or
governmental authority or agency, limiting, restricting or affecting the Assets
in a way that would have a Material Adverse Effect, or (ii) to the best of
Seller's knowledge, any pending or threatened claim, suit, proceeding, charge,
inquiry, investigation or action of any kind, and (iii) any court suits filed
with respect to the Products since January 1, 1992. To the best of Seller's
knowledge, there are no claims, actions, suits, proceedings or investigations
pending or threatened by or against Seller with respect to the transactions
contemplated hereby, at law or in equity or before or by any federal, state,
municipal or other governmental department, commission, board, agency,
instrumentality or authority.
4.13 DISCLOSURE. To the best of Seller's knowledge, Seller has made
available to or furnished to Buyer complete and accurate copies or originals of
all information requested in writing by Buyer that Seller has been able to
locate after conducting a diligent search except
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for information that is (i) prohibited to be disclosed by contract or Law, (ii)
not available to Seller, or (iii) of such sensitivity under customary business
practices that Seller has informed Buyer that it will not disclose such
information to Buyer until Closing. No disclosure (including the Schedules
attached hereto) contained in this Asset Purchase Agreement, and no disclosure
furnished or to be furnished by Seller to Buyer pursuant to this Asset Purchase
Agreement contains or will contain at Closing any untrue statement of a material
fact or omits or will omit at Closing to state any item or a material fact
necessary in order to make the statements herein contained not misleading.
4.14 LIMITATION OF WARRANTY AND DISCLAIMERS. Seller will not and does not
warrant that owners of products that are substantially similar to or identical
with the Products will not attempt to register and sell such products in the
Territory. Seller makes no representation or warranty as to the prospects,
financial or otherwise, of marketing the Products in the Territory. EXCEPT AS
OTHERWISE SET FORTH IN THIS AGREEMENT OR ANY OTHER TRANSACTION AGREEMENT: (A)
SELLER MAKES NO WARRANTY OF MERCHANTABILITY OF ANY OF THE ASSETS OR OF THE
FITNESS OF ANY OF THE ASSETS FOR ANY PURPOSE, AND (B) THE ASSETS ARE TO BE SOLD
PURSUANT TO THIS AGREEMENT IN AN "AS IS" CONDITION.
4.15 NO OTHER FORMS OF NASAL FLUNISOLIDE. Neither Seller nor any of
Seller's Affiliates has any rights in the Territory to any form of flunisolide
formulated for nasal administration other than the Products.
5. REPRESENTATIONS AND WARRANTIES OF BUYER
Except as set forth on the Disclosure Schedule attached hereto as Schedule
5, Buyer hereby represents and warrants to Seller as follows:
5.1 ORGANIZATION. Buyer is a corporation duly organized, validly
existing and in good standing under the laws of the State of California, with
full corporate power and authority to consummate the transactions contemplated
hereby.
5.2 AUTHORITY. The execution and delivery of this Agreement by Buyer,
and the consummation and performance of the transactions contemplated hereby,
have been duly and validly authorized by all necessary corporate and other
proceedings, and this Agreement has been duly authorized, executed, and
delivered by Buyer and, assuming the enforceability against Seller, constitutes
the legal, valid and binding obligation of Buyer, enforceable in accordance with
its terms, except as enforcement thereof may be limited by general principles of
equity and the effect of applicable bankruptcy, insolvency, moratorium and other
similar laws of general application relating to or affecting creditors' rights
generally, including, without limitation, the effect of statutory or other laws
regarding fraudulent conveyances and preferential transfers.
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5.3 BINDING EFFECT. Each of the Transaction Agreements will, when
delivered at the Closing, have been duly authorized, executed and delivered by
Buyer and, assuming the enforceability against Seller, constitute the legal,
valid and binding obligation of Buyer, enforceable in accordance with their
respective terms, except as enforcement thereof may be limited by general
principles of equity and the effect of applicable bankruptcy, insolvency,
moratorium and other similar laws of general application relating to or
affecting creditors' rights generally, including, without limitation, the effect
of statutory or other laws regarding fraudulent conveyances and preferential
transfers.
5.4 NO VIOLATION OR CONFLICT. The execution and delivery of the
Transaction Agreements by Buyer and the performance of the Transaction
Agreements (and the transactions contemplated herein) by Buyer do not and will
not conflict with, violate or constitute or result in a default under any Law,
judgment, order, decree, the articles of incorporation or bylaws of Buyer, or
any material contract or agreement to which Buyer is a party or by which Buyer
is bound.
5.5 NO GOVERNMENT RESTRICTIONS. Except for consents the failure of which
to obtain would not have a Material Adverse Effect, no consent, approval, order
or authorization of, or registration, declaration or filing with, any
governmental agency is required to be obtained or made by or with respect to
Buyer in connection with the execution and delivery of this Agreement by Buyer
or the consummation by it of the transactions contemplated hereby to be
consummated by it, except for the filing of a pre-merger notification report
under the HSR Act.
5.6 LITIGATION. There are no claims, actions, suits, proceedings or
investigations pending or threatened by or against Buyer with respect to the
transactions contemplated hereby, at law or in equity or before or by any
federal, state, municipal or other governmental department, commission, board,
agency, instrumentality or authority.
5.7 FINANCING. Buyer will have funds sufficient to pay the Initial
Purchase Price on the Closing Date, and the Additional Payments pursuant to
Subsection 3.2.
6. SELLER'S COVENANTS
6.1 USE OF ASSETS. Seller agrees that from the Effective Date until
the Closing Date that, except as specifically disclosed in Schedule 6.1 as of
the Effective Date or unless otherwise consented to by Buyer in writing, Seller
shall:
6.1.1 maintain the Assets in good status and condition normal wear
and tear excepted and not sell or dispose of any Assets except sales of Products
in the ordinary course of business;
6.1.2 not make or institute any unusual or novel methods of
purchase, sale, management, operation, or other business practice with regard to
the Assets;
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6.1.3 not enter into any material contract or commitment, engage in
any transaction, extend credit or incur any obligation with respect to the
Assets, outside of the ordinary course of business;
6.1.4 not engage in any special pricing, rebate, allowance,
promotional or marketing programs inconsistent with past practices or for the
purpose of maintaining customer inventory levels of Product in excess of those
levels maintained in the past; and
6.1.5 promptly inform Buyer of any change in the Assets that could
have a Material Adverse Effect.
6.1.6 not act or omit to take any act which will cause a material
breach of any agreement impacting the Assets which would have a Material Adverse
Effect.
6.1.7 maintain insurance covering the Assets in such amounts and of
such kinds as are comparable to that in effect on the date of this Agreement, if
any;
6.1.8 shall not incur any indebtedness or liability which will or
likely would create a lien or other encumbrance against any of the Assets;
6.2 COMPLIANCE WITH LAWS. Except as otherwise disclosed on the
Disclosure Schedule, Seller shall comply or begin to remedy such non-compliance
upon notification thereof in all material respects with all Laws and orders of
any court or federal, state, local or other governmental entity applicable to
the Assets except where such non-compliance will not have a Material Adverse
Effect.
6.3 DISCLOSURE SUPPLEMENTS. From time to time prior to the Closing Date,
Seller will promptly inform Buyer, in writing, with respect to any matter that
may arise hereafter and that, if existing or occurring prior to the Closing
Date, would have been required to be set forth or described herein or in the
Disclosure Schedule. Buyer shall have a period of two (2) business days after
receipt of such Disclosure Supplement, as the case may be, to notify Seller of
its intention not to proceed with the proposed transaction. Buyer may only so
notify Seller if, in its reasonable good faith opinion, (i) the impact of the
Disclosure Supplement so materially and adversely affects the financial,
business or economic assumptions underlying the transactions contemplated hereby
that it would be inadvisable to proceed to Closing, and (ii) that the value of
the Assets being transferred had been diminished by fifty (50%) percent or more
between the Effective Date and Closing.
6.4 ACCESS. From and after the date hereof and up to Closing (except as
otherwise provided herein), Buyer and its authorized agents, officers, and
representatives shall have access to the Assets during normal business hours
upon reasonable prior notice and at a time and manner mutually agreed upon
between Buyer and Seller in order to conduct such examination and investigation
of the Assets as is reasonably necessary, provided that such examinations shall
not unreasonably interfere with Seller's operations and activities.
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6.5 FURTHER ASSURANCES. Seller shall use all reasonable efforts to
implement the provisions of this Agreement, and for such purpose Seller, at the
request of Buyer, at or after Closing, will, without further consideration,
execute and deliver, or cause to be executed and delivered, to Buyer such
contract assignments, bills of sale, consents and other instruments in addition
to those required by this Agreement, in form and substance reasonably
satisfactory to Buyer, as Buyer may reasonably deem necessary or desirable to
implement any provision of this Agreement.
6.6 TECHNICAL ASSISTANCE. Following the Closing, and for a period of six
(6) months thereafter and within the constraints discussed in Section 8.1 below,
Seller shall use reasonable efforts as provided in Article 8.1 to provide all
technical assistance to Patheon and Oread necessary to allow Patheon and Oread
to fully perform under the Patheon Agreement and the Syntex Supply Agreement,
respectively. In addition, Seller shall notify the FDA promptly following the
Effective Date of the previous transfer by Seller to Oread and Patheon of
manufacturing responsibilities with respect to the Products, and shall provide
copies of necessary site registrations, update the NDA's and drug listings, and
obtain approvals to such transfer, if required by FDA.
6.7 SAMPLE CONTRIBUTION. In support of Buyer's efforts in commercially
launching the Products, Seller shall contribute, at no cost to Buyer 2.4 million
units of Nasarel samples. The parties will agree in writing before Closing on a
schedule to produce those samples in excess of the number available at Closing,
such that Seller contributes 2.4 million units in total.
7. BUYER'S COVENANTS
7.1 BUYER LABELING. Following Closing, Buyer shall at its own expense
and as expeditiously as possible use all reasonable efforts to notify FDA of the
transfer and to obtain such FDA approvals necessary for Buyer Labeling for each
Product.
7.2 FURTHER ASSURANCES. Buyer shall use all reasonable efforts to
implement the provisions of this Agreement, and for such purpose Buyer, at the
request of Seller, at or after Closing, will, without further consideration,
execute and deliver, or cause to be executed and delivered, to Seller such
consents and other instruments in addition to those required by this Agreement,
in form and substance reasonably satisfactory to Seller, as Seller may
reasonably deem necessary or desirable to implement any provision of this
Agreement.
7.3 TAXES. Buyer covenants and agrees to pay on a timely basis all
federal, state and local sales, transfer and use taxes and customs duties with
respect to the sale and purchase of the Assets, and Buyer covenants to reimburse
Seller for any such taxes and duties for which Seller is liable for payment
within twenty (20) business days of receiving notice from Seller of such
payment.
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7.4 OPERATIONAL CHANGES. Buyer shall not engage in any special pricing,
rebate allowance, promotional or marketing program or activities, special
returns policy or special restocking program that would impact the normal course
or level of expected returns with respect to Products sold prior to Closing.
8. COVENANTS BY BUYER AND SELLER
8.1 TECHNOLOGY TRANSFER. Buyer and Seller shall work together to
commence transfer of the Know-How to Buyer promptly after Closing. Buyer
acknowledges that the site for the manufacture of the Products in Canada has
been sold to Patheon in early 1997. Buyer also acknowledges that the site for
the manufacture of Products in the U.S. has been leased or sold to Oread, and in
both cases, most employees with technical know-how specific to the Product have
been terminated by Seller and/or hired by either Patheon or Oread. Within the
constraints of having limited technical expertise in-house, Seller or its
Affiliates shall use reasonable efforts to assist Patheon and Oread in
resolving problems relating to the manufacture of the Products for a period of
six (6) months following Closing. Seller shall have no obligation to provide
manufacturing support for any Product if Buyer elects to use a process that is
materially different from a Syntex Process.
8.2 MANUFACTURING AGREEMENTS. Buyer shall on or before Closing enter
into the Syntex Supply Agreement and consent to the assignment of the Patheon
Agreement.
8.3 TRANSITION SERVICES. Buyer and Seller, or their respective
Affiliates shall at Closing enter into a Transition Services Agreement, attached
as Exhibit D.
8.4 SUPPLY AGREEMENT. On or before Closing, Buyer, utilizing the good
offices of Seller, shall enter into the SPIL Supply Agreement for the supply of
Active Ingredient with Syntex Pharmaceuticals International Limited ("SPIL") in
the form attached as Exhibit E.
8.5 LABELING. In accordance with Section 7.1, Buyer is responsible for
having Buyer Labeling submitted to the FDA as soon as possible following
Closing. Buyer may use the Seller Labeling on the Inventory until such
Inventory is exhausted. In addition, Buyer may use the Seller Labeling on each
Product manufactured by Seller or its Affiliates for Buyer until the earlier of
the date (i) the FDA approves the Buyer Labeling for use on such Product and
Buyer, using all reasonable efforts, has obtained sufficient supplies of
materials with such Labeling for use on such Product, or (ii) six (6) months
following Closing, provided, however, if at the end of such six (6) month period
the FDA has not yet approved the Buyer Labeling, then such six (6) month period
shall be extended for a period of time to be mutually agreed by the parties
reasonably required to obtain such approval, but in no event greater than an
additional six (6) months.
8.6 USE OF SELLER TRADEMARKS. Other than the use of the Seller Labeling
as set forth in Section 8.5, or with respect to the Trademarks, Buyer shall not
have the right to use any
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trademarks, tradenames, or logos of Seller without Seller's consent, and any
such use must be approved by Seller in advance.
8.7 CUSTOMERS. All contracts governing the Products with customers of
Seller or Seller's Affiliates shall be terminated as to the Products upon
expiration of the applicable notice period, and customers shall be notified of
that termination upon Closing. Seller shall provide updated information to
assist Buyer in quantifying the impact of these terminations, provided, however,
no pricing information will be exchanged. Seller shall provide all necessary
information (except pricing information) regarding customers and contracts to
Buyer to assist in Buyer's determination of whether to enter into new contracts.
8.8 ASSIGNMENT OF TRADEMARKS. At or prior to Closing, Buyer shall prepare
and Seller shall execute such assignment documents as Buyer may reasonably
request in order to record the assignment of the Trademarks. The responsibility
and expense of preparing and filing such documents and any actions required
ancillary thereto, shall be borne solely by Buyer.
8.9 TRANSFER OF REGISTRATIONS. At Closing, Buyer and Seller shall
execute such documents as Buyer may reasonably request in order to transfer the
Registrations. Buyer shall pay any user fees associated with any Product that
accrue after Closing, including user fees that accrue prior to transfer of such
Registrations.
8.10 ACCESS TO INFORMATION. Buyer and Seller will, upon reasonable prior
notice, make available to the other party such information or records relating
to the Assets which is in its possession after Closing, to the extent reasonably
required for the purpose of assisting the other party in the preparation of tax
returns relating to the Assets, and prosecuting or defending or preparing for
the prosecution or defense of any action, suit, claim, complaint, proceeding or
investigation at any time brought by or pending against Seller or Buyer relating
to the Assets , other than in the case of litigation between the parties hereto,
such information or records (or copies thereof) in their possession after
Closing (except if such information or records are protected by the attorney-
client privilege and the provision thereof would destroy such privilege). Buyer
and Seller shall also provide each other with periodic drug safety updates and
other information related to the Products, as more specifically set forth in
Schedule 8.10 for so long as each party continues to manufacture and sell
products containing the Active Ingredient.
8.11 CONFIDENTIALITY AGREEMENT. The parties agree that a certain
agreement dated March 20, 1995 between Seller and Buyer (the "Confidentiality
Agreement"), shall survive either termination of this Agreement or Closing as an
independent agreement; provided, however, that upon Closing, the restrictions on
use and the confidentiality obligations set forth in the Confidentiality
Agreement shall no longer be in effect with respect to the use or disclosure by
Buyer of evaluation materials relating to the Assets unless Seller notifies
Buyer in writing regarding specific materials to be held in confidence.
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8.12 PRESS RELEASES. Neither the Seller nor the Buyer, nor any Affiliate
thereof, will issue or cause publication of any press release or other
announcement or public communication with respect to this Agreement or the
transactions contemplated hereby without the prior written consent of the other
party, which consent will not be unreasonably withheld or delayed.
8.13 GOVERNMENT FILINGS.
8.13.1 Within three (3) business days after the Effective Date,
Buyer will, and Seller will, or will cause the ultimate parent entity of Seller
to, make such filings, together with a request for early termination, as may be
required by the HSR Act with respect to the consummation of the transactions
contemplated by this Agreement. Thereafter, Buyer will, and Seller will, or
will cause the ultimate parent entity of Seller to, each file or cause to be
filed as promptly as practicable with the FTC and the DOJ any supplemental
information that may be requested pursuant to the HSR Act. All such filings
will comply in all material respects with the requirements of the HSR Act.
8.14 REBATES. Seller or its Affiliates shall be responsible for any
rebate payments with respect to the Products, whether by agreements, government
mandate or otherwise, for all Products dispensed prior to the Closing Date and
for a period of thirty (30) days thereafter, and Buyer shall be responsible for
any rebate payments with respect to the Products, whether by agreements,
government mandate or otherwise, for all Products dispensed on or after thirty
(30) days following the Closing Date. With respect to Products dispensed during
the calendar quarter in which Closing occurs, Seller shall be responsible for
making such rebate payments, but the amount of such payments shall be prorated
between Buyer and Seller based on the number of days remaining in said quarter
as of thirty (30) days following the Closing Date, or the end of that calendar
quarter, whichever is earlier. If Seller or an Affiliate makes payment of
rebates in its own name due to governmental requirements pertaining to Products
for which Buyer is responsible, Buyer will reimburse Seller or its Affiliate
such amount within thirty (30) days following the date Seller or its Affiliate
notifies Buyer that Seller or its Affiliate has made such payments. Following
termination of the contracts with respect to the Products, as set forth in
Section 8.7 above, neither party shall be responsible for any rebate payments
for Products dispensed after such termination unless such party has entered into
a written agreement with the customer which is requesting the rebate payment.
With regard to Medicaid rebates, each party shall be responsible to
process and pay rebate payments for any Products sold under its respective NDC
code number. In the event the Closing Date occurs in the middle of a calendar
quarter, the parties agree to cooperate with each other to facilitate the timely
filing of any necessary government filings.
8.15 CONTRACT CHARGEBACKS. As of the Closing Date, Seller or its
Affiliates shall notify all parties with purchase contracts covering the
Products that said contract will terminate as to the Products in accordance with
its terms. Seller shall be responsible for all costs and expenses with respect
to claims under contract chargebacks for the Products for chargeback
- 17 -
requests for Product with an invoice date prior to Closing or during a period of
sixty (60) days following Closing.
8.16 RETURNS. Following the Closing Date, Seller shall be responsible for
the cost and proper handling of all returns in connection with Products sold
under Seller's NDC code, and Buyer shall be responsible for the cost and proper
handling of all returns in connection with Products sold under Buyer's NDC code.
8.17 COOPERATION. Prior to the Closing Date, the parties agree to each
designate a key contact person or persons to work out further details and
procedures as the need may arise for each subsection in Article 8. These
contact persons shall be guided by the principles in Article 8, and the parties
agree to good faith cooperation in order to facilitate the respective Covenants
set forth in Article 8.
9. CONDITIONS PRECEDENT TO CLOSING
9.1 CONDITIONS TO OBLIGATION OF BUYER. Conditions to Obligation of
Buyer. The obligations of Buyer under this Agreement to complete the
transactions contemplated hereby are subject to the satisfaction on or prior to
the Closing Date of the following conditions (all or any of which may be waived
in whole or in part by Buyer):
9.1.1 REPRESENTATIONS AND WARRANTIES. The representations and
warranties made by Seller in this Agreement shall have been true and correct in
all material respects as of the Closing Date, except for representations and
warranties made as of a specified date, which will be true and correct in all
respects as of the specified date.
9.1.2 PERFORMANCE. Seller shall have performed and complied in all
material respects with all agreements, obligations and conditions required by
this Agreement to be so performed or complied with by it prior to or at Closing.
9.1.3 THIRD PARTY APPROVALS. All governmental approvals and any
other consents or approvals of third parties necessary for Seller to execute and
deliver this Agreement and perform its obligations hereunder shall have been
obtained and, in the case of any regulatory approval (including under the HSR
Act), all notice and waiting periods with respect thereto shall have expired or
terminated and all conditions contained in any such approval required to be
satisfied prior to consummation of the transactions contemplated hereby shall
have been satisfied, and Seller shall have delivered to Buyer copies or other
evidence of such approvals.
9.1.4 NO ADVERSE CHANGE. During the period from the Effective Date
to the Closing Date there shall not have occurred or been discovered, and there
shall not exist on the Closing Date except for that which has been otherwise
disclosed elsewhere in this Agreement or in the Disclosure Schedule, or in the
Memorandum of Sale, any condition or fact that would have a Material Adverse
Effect.
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9.1.5 OFFICER'S CERTIFICATE. Seller shall have delivered to Buyer
a certificate, dated the Closing Date and executed by an officer of Seller,
certifying to the fulfillment of all conditions set forth in this Section 9.1.
9.1.6 CERTIFICATE OF GOOD STANDING. Seller shall have delivered to
Buyer a certificate of good standing for Seller issued by the State of Delaware
dated within two (2) business days prior to the Closing Date ("Seller
Certificate of Good Standing").
9.1.7 LITIGATION. No investigation, suit, action, or other
proceeding shall be threatened or pending before any court or governmental
agency that seeks the restraint, prohibition, damages, or other relief in
connection with this Agreement or the consummation of the transactions
contemplated by this Agreement unless such action would not have a Material
Adverse Effect.
9.1.8 DELIVERY OF OTHER DOCUMENTS. Buyer shall have received (a)
if authorization and approval of the Board of Directors of Seller is required, a
certified copy of the resolutions of the Board of Directors of Seller, in effect
as of the Closing Date, authorizing and approving the execution, delivery and
performance by Seller of this Agreement and (b) such additional documents
evidencing or certifying satisfaction of the conditions specified in this
Section 9.1 as reasonably may be requested by Buyer.
9.1.9 PROCEEDINGS AND INSTRUMENTS SATISFACTORY. All proceedings,
corporate or other, to be taken in connection with the transactions contemplated
by this Agreement, and all documents incident thereto, shall be reasonably
satisfactory in form and substance to Buyer and Buyer's counsel, and Seller
shall have made available to Buyer for examination the originals or true and
correct copies of all documents which Buyer may reasonably request in connection
with the transactions contemplated by this Agreement.
9.1.10 MANUFACTURE OF BATCH. Patheon must produce one standard
commercial-size batch (2,000 liters) of Nasarel meeting all required
specifications set forth in the Registrations.
9.1.11 AUDIT OF MANUFACTURING FACILITY. After manufacture of the
batch referred to in Section 9.1.10, Buyer shall have conducted a good
manufacturing practice/quality assurance audit of the Patheon manufacturing
facility and Patheon shall have adhered to all relevant cGMP's as set forth in
the audit schedule attached hereto as Schedule 9.1.11 (the "Audit Schedule") and
shall have provided, if requested by Buyer, acceptable information as set forth
in the Audit Schedule.
9.1.12 DEVELOPMENT OF FDA ACTIVITIES PLAN. Buyer and Seller shall
have developed a workplan, pursuant to which the work required to bring all
specifications and release testing for the Products (including issues related to
degradation products) into compliance with FDA's request that this testing be
brought "in line with the division standards for nasal sprays" (Reference FDA
letters of September 30, 1995 and July 24, 1996 from Dr.
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Poochikian). Such workplan shall be as set forth in attached Schedule 9.1.12,
which schedule shall be finalized and attached to this Agreement after the
Effective Date but prior to Closing.
9.1.13 REGISTRATION OF MANUFACTURING SITES. Seller shall have
notified the FDA of the previous transfer by Seller to Oread and Patheon of
manufacturing responsibilities with respect to the Products, and shall have
provided copies of necessary site registrations, updated the NDA's and drug
listings, and obtained approvals to such transfer, if required by FDA.
9.2 CONDITIONS TO OBLIGATIONS OF SELLER. The obligations of Seller under
this Agreement to complete the transactions contemplated hereby at Closing are
subject to the satisfaction on or prior to the Closing Date of the following
conditions (all or any of which may be waived in whole or in part by Seller):
9.2.1 REPRESENTATIONS AND WARRANTIES. The representations and
warranties made by Buyer in this Agreement shall have been true and correct in
all material respects as of the Closing Date, except for representations and
warranties made as of a specified date, which will be true and correct in all
respects as of the specified date.
9.2.2 PERFORMANCE. Buyer shall have performed and complied in all
material respects with all agreements, obligations and conditions required by
this Agreement to be so performed or complied with by it prior to or at Closing.
9.2.3 THIRD PARTY APPROVALS . All governmental approvals and any
other consents or approvals of third parties necessary for Buyer to execute and
deliver this Agreement and perform its obligations hereunder shall have been
obtained and, in the case of any regulatory approval (including under the HSR
Act), all notice and waiting periods with respect thereto shall have expired or
terminated and all conditions contained in any such approval required to be
satisfied prior to consummation of the transactions contemplated hereby shall
have been satisfied, and Buyer shall have delivered to Seller copies or other
evidence of such approvals.
9.2.4 OFFICER'S CERTIFICATE. Buyer shall have delivered to Seller
a certificate, dated the date of Closing and executed by an officer of Buyer,
certifying to the fulfillment of all conditions specified in this Section 9.2.
9.2.5 CERTIFICATE OF GOOD STANDING. Buyer shall have delivered to
Seller a certificate of good standing for Buyer issued by the State of
California dated within two (2) business days prior to the Closing Date ("Buyer
Certificate of Good Standing").
9.2.6 LITIGATION. No investigation, suit, action, or other
proceeding shall be threatened or pending before any court or governmental
agency that seeks the restraint, prohibition, damages, or other relief in
connection with this Agreement or the consummation of the transactions
contemplated by this Agreement unless such action would not have a Material
Adverse Effect.
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9.2.7 DELIVERY OF OTHER DOCUMENTS. Seller shall have received (a)
a certified copy of the resolutions of the Board of Directors of Buyer, in
effect as of the Closing Date, authorizing and approving the execution, delivery
and performance by Buyer of this Agreement and (b) such additional documents
evidencing or certifying satisfaction of the conditions specified in this
Section 9.2 as reasonably may be requested by Seller.
9.2.8 PROCEEDINGS AND INSTRUMENTS SATISFACTORY. Proceedings and
Instruments Satisfactory. All proceedings, corporate or other, to be taken in
connection with the transactions contemplated by this Agreement, and all
documents incident thereto, shall be reasonably satisfactory in form and
substance to Seller and Seller's counsel, and Buyer shall have made available to
Seller for examination the originals or true and correct copies of all documents
which Seller may reasonably request in connection with the transactions
contemplated by this Agreement.
9.3 OTHER CONDITIONS. In addition to the conditions set forth in
Sections 9.1 and 9.2 above, the obligations of the parties to be performed at
the Closing are subject to the satisfaction on or prior to the Closing Date of
the following conditions:
9.3.1 INVENTORY STATEMENT. Seller and Buyer shall have agreed upon
and delivered the Inventory Statement described in Section 2.4 and Article 3
above, which shall detail the Closing Inventory and any additional Inventory.
9.3.2 MANUFACTURING AGREEMENTS. Seller and Buyer, or their
Affiliates, shall have executed the Syntex Supply Agreement and Buyer shall have
consented to an assignment of contract rights and obligations of the Patheon
Agreement.
9.3.3 ACTIVE INGREDIENT SUPPLY AGREEMENT. Buyer and Syntex
Pharmaceuticals International Limited shall have executed the SPIL Supply
Agreement.
9.3.4 TRANSITION SERVICES AGREEMENT. Seller and Buyer, or their
Affiliates, shall have executed the Transition Services Agreement.
9.3.5 SPIL ASSET PURCHASE AGREEMENT. Buyer and Seller shall have
executed the SPIL Asset Purchase Agreement.
10. THE CLOSING
10.1 THE CLOSING. Subject to the satisfaction of all of the conditions
to each party's obligations set forth in Article 9 hereof (or, with respect to
any condition not satisfied, the waiver in writing thereof by the party or
parties for whose benefit the condition exists), the closing of the transactions
contemplated by this Agreement (the "Closing") shall take place at 9:00 a.m.
(local time) as soon as possible following the expiration or termination of all
required waiting periods under the HSR Act (the "Closing Date") at the offices
of Seller or its
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Affiliate or at such other time, date and place as the parties hereto may agree
in writing. The transfer of the Assets shall be deemed to have occurred as of
the Closing Time.
10.2 DELIVERIES BY SELLER. At Closing, Seller shall deliver to Buyer in
form reasonably satisfactory to Buyer, each properly executed and dated as of
the Closing Date, where appropriate:
10.2.1 A general conveyance of the Assets;
10.2.2 Seller Certificate of Good Standing;
10.2.3 Secretary's Certificate certifying that the Board of
Directors of Seller has authorized this Agreement;
10.2.4 Officer's Certificate described in Section 9.1.5;
10.2.5 the statement of the quantity and location of inventory
described in Section 2.4;
10.2.6 completed disclosure schedules required hereunder;
10.2.7 the SPIL Supply Agreement;
10.2.8 the Syntex Supply Agreement and the consent to the assignment
of the Patheon Agreement;
10.2.9 the Transition Services Agreement;
10.2.10 a receipt for the Initial Purchase Price;
10.2.11 the NDA's including all correspondence with FDA related to
the Products;
10.2.12 transfer of ownership letters to FDA;
10.2.13 access letter to the drug master file for the Active
Ingredient; and
10.2.14 the SPIL Asset Purchase Agreement.
10.3 DELIVERIES BY BUYER. At Closing, Buyer shall deliver or cause to be
delivered to Seller:
10.3.1 The Initial Purchase Price payable in accordance with
Article 3;
10.3.2 Buyer Certificate of Good Standing;
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10.3.3 Secretary's Certificate certifying that the Board of
Directors of Buyer has authorized this Agreement.
10.3.4 Officer's Certificate described in Section 9.2.4;
10.3.5 the SPIL Supply Agreement and SPIL Asset Purchase Agreement;
10.3.6 the Syntex Supply Agreement with Seller and the consent to
the assignment of the Patheon Agreement; and
10.3.7 the Transition Services Agreement;
11. TERMINATION
11.1 TERMINATION. This Agreement and the transactions contemplated hereby
may be terminated at any time prior to the Closing Date:
11.1.1 By the mutual written consent of Seller and Buyer;
11.1.2 By either Seller or Buyer, if Closing shall not have occurred
on or before May 30, 1997, unless such date has been extended by mutual
agreement in writing;
11.1.3 By either Seller or Buyer, if consummation of the
transactions contemplated hereby shall violate any non-appealable final order,
decree or judgment of any court or governmental agency having competent
jurisdiction.
11.1.4 By Buyer at Closing, if there has been a material failure of
satisfaction of a condition to the obligations of Buyer that Buyer has not
waived in writing;
11.1.5 By Seller at Closing, if there has been a material failure of
satisfaction of a condition to the obligations of Seller that Seller has not
waived in writing;
11.1.6 By Buyer pursuant to Section 6.3;
11.1.7 By Seller or Buyer, if the SPIL Asset Purchase Agreement is
terminated pursuant to its terms.
11.2 EFFECT OF TERMINATION. If this Agreement is terminated pursuant to
Section 11.1, all further obligations of Seller and Buyer under this Agreement
shall terminate without further liability of Seller or Buyer except for (a) the
obligations of the parties under the Confidentiality Agreement and (b) the
obligations of Buyer and Seller under Sections 8.13, 14 and 15.2. Termination
shall not constitute a waiver by any party of any claim it may have for damages
caused by reason of a breach by the other party of a representation, warranty,
- 23 -
covenant or agreement hereunder. Notwithstanding any statement to the contrary,
in the event the Agreement is terminated for reasons other than Seller's
material breach or material failure to satisfy a condition to Closing, Buyer
shall promptly reimburse Seller for all costs incurred in the manufacture of
Inventory or Samples specifically for this transaction.
12. SURVIVAL; INDEMNIFICATION
12.1 INDEMNIFICATION BY SELLER. Subject to the limitations set forth in
Section 12.5 below, Seller shall indemnify Buyer and its Affiliates, and their
directors, officers, employees and agents ("Buyer Indemnitees") against, and
agrees to hold each of the Buyer Indemnitees harmless from, any and all damages,
losses, liabilities, third party claims, and expenses (collectively, "Damages")
(including, without limitation, reasonable expenses of investigation and
attorneys' fees incurred or suffered by the Buyer Indemnitees arising out of (a)
any inaccuracy in or breach of any representation or warranty made by Seller
herein or (b) the manufacture, sale or distribution of Products by Seller or its
Affiliates prior to Closing (collectively, "Buyer Indemnifiable Claims").
12.2 INDEMNIFICATION BY BUYER. Subject to the limitations set forth in
Section 12.5 below, Buyer shall indemnify Seller and its Affiliates, and their
directors, officers, employees and agents ("Seller Indemnitees") against, and
agrees to hold each of the Seller Indemnitees harmless from, any and all Damages
(including without limitation, reasonable expenses of investigation and
attorneys' fees incurred or suffered by the Seller Indemnitees arising out of
(a) any inaccuracy in or breach of any representation or warranty made by Buyer
herein or (b) the manufacture, sale or distribution of Products by Buyer or its
Affiliates after Closing (collectively "Seller Indemnifiable Claims").
12.3 NOTICE. A party seeking indemnification pursuant to Section 12.1 or
12.2 above (an "Indemnified Party") shall give prompt notice to the party from
whom such indemnification is sought (the "Indemnifying Party") of the assertion
of any claim, or the commencement of any action, suit or proceeding, in respect
of which indemnity is or may be sought hereunder (whether or not the limits set
forth in Section 12.5 have been exceeded) and will give the Indemnifying Party
such information with respect thereto as the Indemnifying Party may reasonably
request, but no failure to give such notice shall relieve the Indemnifying Party
of any liability hereunder except to the extent the Indemnifying Party has
suffered actual prejudice thereby.
12.4 PARTICIPATION IN DEFENSE. The Indemnifying Party may, at its
expense, participate in or assume the defense of any such action, suit or
proceeding involving a third party. In such case the Indemnified Party shall
have the right (but not the duty) to participate in the defense thereof, and to
retain counsel, at its own expense, separate from counsel retained by the
Indemnifying Party in any such action and to participate in the defense thereof.
The Indemnifying Party shall be liable for the fees and expenses of no more than
one firm retained as counsel by the Indemnified Party if the Indemnifying Party
has not assumed the defense thereof. Whether or not the Indemnifying Party
chooses to defend or prosecute any
- 24 -
third party claim, the parties shall cooperate in the defense or prosecution
thereof and shall furnish such records, information and testimony as may be
reasonably requested in connection therewith. In no event shall any third party
claim be settled by the Indemnified Party without the prior written consent of
the Indemnifying Party.
12.5 LIMITATIONS ON INDEMNITY. Notwithstanding anything to the contrary
set forth elsewhere herein:
12.5.1. Neither the Buyer Indemnitees or the Seller Indemnitees shall
be entitled to indemnification hereunder unless the Indemnified Party transmits
written notice of a claim for indemnification to (a) for claims under Section
12.1(a) or 12.2(a), as the case may be, no later than one (1) year following
Closing and (b) for claims under Section 12.1(b) or 12.2(b), as the case may be,
no later than two (2) years following Closing.
12.5.2 Neither the Buyer Indemnitees nor the Seller Indemnitees
shall be entitled to indemnification hereunder with respect to any Buyer
Indemnifiable Claim or Seller Indemnifiable Claim, as the case may be, unless
and until the aggregate amount of Damages incurred or suffered by such
Indemnitees with respect to all Indemnifiable Claims exceed Five Hundred
Thousand Dollars ($500,000).
12.5.3 In no event shall Seller or Buyer be liable to provide
indemnification under this Article 12 (a) in an aggregate amount in excess of
Four Million Dollars ($4,000,000) for, as the case may be, Buyer Indemnifiable
Claims under Section 12.1(a) above or Seller Indemnifiable Claims under Section
12.2(a) or above or (b) in an aggregate amount in excess of Three Million
Dollars ($3,000,000) for, as the case may be, Buyer Indemnifiable Claims under
Section 12.1(b) above or Seller Indemnifiable Claims under Section 12.2(b)
above.
12.6 NO SPECIAL DAMAGES. IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE
OTHER PARTY FOR ANY LOST PROFITS OR PUNITIVE, SPECIAL, INCIDENTAL, INDIRECT OR
CONSEQUENTIAL DAMAGES, EXCEPT THAT THE FOREGOING LIMITATION SHALL NOT APPLY TO
ANY LOST PROFITS OR PUNITIVE DAMAGES THAT MAY BE AWARDED TO A THIRD PARTY AND
FOR WHICH A PARTY OTHERWISE IS LIABLE TO PROVIDE INDEMNIFICATION UNDER THIS
ARTICLE 12.
12.7 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The representations and
warranties of each of Buyer and Seller under this Agreement shall survive for a
period of one (1) year following Closing, except for Section 5.7, which shall
survive for a period of two (2) years following Closing.
12.8 SOLE AND EXCLUSIVE REMEDY. The right of an Indemnified Party to seek
indemnification under this Article 12 shall be the sole and exclusive remedy of
the Indemnified Party against the Indemnifying Party in the event of any Damages
incurred or suffered by such Indemnified Party arising out of any inaccuracy in
or breach of any representation or warranty
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made by Seller or Buyer, as the case may be, herein or the manufacture, sale or
distribution of Products, as the case may be, prior to or following Closing.
13. NOTICES
Any notice required or permitted to be given hereunder shall be deemed
sufficient if sent by United States mail or overnight courier, or delivered by
hand to Seller or Buyer at the respective addresses set forth below or at such
other address as either party hereto may designate. If delivered by overnight
courier, notice shall be deemed given when it has been signed for. If delivered
by hand, notice shall be deemed given when received. If delivered by U.S. Mail,
notice shall be deemed given five (5) business days following the postmark date.
if to Buyer, to:
Dura Pharmaceuticals, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: President
With a copy to General Counsel
if to Seller, to:
Syntex (U.S.A.) Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇
Attention: President
with a copy to: Syntex Legal Dept.
with a copy to:
▇▇▇▇▇▇▇▇-▇▇ ▇▇▇▇▇, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attn: General Counsel
14. GOVERNING LAW
The performance and the interpretation of this Agreement shall be governed
by the laws of the State of California, without giving effect to its choice or
conflict of law rules or principles. The parties hereby agree that jurisdiction
over any litigation arising out of the within Agreement shall reside exclusively
in the State or Federal Courts of the State of California.
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15. ADDITIONAL TERMS
15.1 BROKERS. Buyer represents to Seller that it has not employed any
investment banker, broker, finder or intermediary in connection with the
transactions contemplated hereby who might be entitled to a fee or any
commission from Seller upon consummation of the transactions contemplated
hereby. Seller represents to Buyer that it has not employed any such Person in
such connection who might be entitled to a fee or any commission from Buyer upon
consummation of the transactions contemplated hereby.
15.2 EXPENSES. Except as otherwise expressly provided in this Agreement,
all legal, accounting and other costs and expenses incurred in connection
herewith and the transactions contemplated hereby shall be paid by the party
incurring such expenses.
15.3 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
shall inure to the benefit of the parties and their respective successors and
assigns; provided that this Agreement may not be assigned by any party without
the prior written consent of the other party other than in connection with the
reincorporation of such party in another jurisdiction.
15.4 EXHIBITS AND SCHEDULES. The Exhibits and Schedules attached to this
Agreement and the principles and conditions incorporated in such Exhibits and
Schedules shall be deemed integral parts of this Agreement and all references in
this Agreement to this Agreement shall encompass such Exhibits and Schedules and
the principles and conditions incorporated in such Exhibits and Schedules.
15.5 ENTIRE AGREEMENT. This Agreement, the exhibits hereto, the
Disclosure Schedule (including Disclosure Supplements, if any) and the
Confidentiality Agreement embody the entire agreement of the parties hereto with
respect to the subject matter hereof and supersede and replace all previous
negotiations, understandings, representations, writings, and contract provisions
and rights relating to the subject matter hereof.
15.6 AMENDMENTS; NO WAIVER. No provision of this Agreement may be
amended, revoked or waived except by a writing signed and delivered by an
authorized officer of each party. No failure or delay on the part of either
party in exercising any right hereunder will operate as a waiver of, or impair,
any such right. No single or partial exercise of any such right will preclude
any other or further exercise thereof or the exercise of any other right. No
waiver of any such right will be deemed a waiver of any other right hereunder.
15.7 COUNTERPARTS. This Agreement may be executed in one or more
counterparts all of which shall together constitute one and the same instrument
and shall become effective when a counterpart has been signed by Buyer and
delivered to Seller and a counterpart has been signed by Seller and delivered to
Buyer.
15.8 SEVERABILITY. The parties agree that (a) the provisions of this
Agreement shall be severable and (b) in the event that any of the provisions
hereof are held by a court of
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competent jurisdiction to be invalid, void or otherwise unenforceable, (i) such
invalid, void or otherwise unenforceable provisions shall be automatically
replaced by other provisions that are as similar as possible in terms to such
invalid, void or otherwise unenforceable provisions but are valid and
enforceable and (ii) the remaining provisions shall remain enforceable to the
fullest extent permitted by law, provided that the rights and interests of the
parties hereto shall not be materially affected.
15.9 CAPTIONS. Captions herein are inserted for convenience of reference
only and shall be ignored in the construction or interpretation of this
Agreement. Unless the context requires otherwise, all references herein to
Articles and Sections are to the articles and sections of this Agreement.
IN WITNESS WHEREOF, this Agreement has been signed by duly authorized
representatives of each of the parties hereto as of the date first above
written.
SYNTEX (U.S.A.) INC. DURA PHARMACEUTICALS, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ By: /s/ Cam ▇. ▇▇▇▇▇▇
Vice President Chairman, President & CEO
Date: 3/27/97 Date: 3/27/97
LIST OF SCHEDULES TO SYNTEX ASSET PURCHASE AGREEMENT
----------------------------------------------------
Number Description
------ -----------
2.1 Trademarks
2.2 Registrations
2.4.1 Inventory Statement
2.5.1 Trademark Agreements
2.7 Data Bank Documents
4 Seller's Disclosure
5 Buyer Disclosure Schedule
6.1 Conduct of Business
6.7 Manufacture of Nasarel Samples
8.10 Medical Safety Cooperation and Reporting Obligations
9.1.11 Audit Schedule
9.1.12 Workplan for Specifications and Methods
