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Exhibit 2.1
CONFIDENTIAL TREATMENT REQUESTED
ASSET PURCHASE AGREEMENT made as of the second day of December, 1996
between SmithKline ▇▇▇▇▇▇▇ Corporation, a Pennsylvania corporation ("SBC"),
SmithKline ▇▇▇▇▇▇▇ Pharma Inc., a Canadian corporation ("SBP"), SmithKline
▇▇▇▇▇▇▇ Properties, Inc., a Delaware corporation ("SB Properties") and
SmithKline ▇▇▇▇▇▇▇ Inter-American Corporation, a Delaware corporation
("IAC")(collectively SBC, SBP, SB Properties and IAC are referred to herein as
the "Vendor") and Connective Therapeutics, Inc., a Delaware corporation (the
"Purchaser").
WHEREAS, Vendor manufactures and sells the prescription pharmaceutical
products listed on EXHIBIT A hereto (the "Products");
WHEREAS, Purchaser desires to purchase and Vendor desires to sell the
Products and the Purchased Assets (as hereinafter defined).
NOW, THEREFORE, in consideration of the premises and the mutual
covenants, agreements and representations herein contained and intending to be
legally bound, Vendor and Purchaser agree as follows:
SECTION 1
INTERPRETATION
1.1 Definitions. Where used in this Agreement the following words or
phrases shall have the meanings set forth below unless the context specifically
indicates:
(a) "Affiliate" of an entity means, for so long as one of the
following relationships is maintained, any corporation or other business entity
controlled by, controlling, or under common control with another entity; with
"control" meaning direct or indirect beneficial ownership of more than fifty
percent (50%) of the voting stock of such corporation, or more than fifty
percent (50%) interest in the decision-making authority of such other
unincorporated business entity;
(b) "Agreement" means this Asset Purchase Agreement and any
instrument amending this Agreement as referred to in Section 17.7; and the
expression "Section" followed by a number means and refers to the specified
Section of this Agreement;
(c) "Business Day" means any day excluding Saturday, Sunday
and any other day which in the United States is a national legal holiday or any
day on which national banking institutions are authorized by law to close;
(d) "Equity Agreement" means the agreement between SB
Properties and Purchaser, substantially in the form of EXHIBIT B hereto.
(e) "Finished Goods" means finished, packaged, ready for sale
Products;
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(f) "Intellectual Property" means all trademarks (whether
registered or unregistered), trade names and applications therefor, brand names,
logotypes and symbols unique to the Products to the extent owned by or licensed
to and used by Vendor in the Territory in the manufacture or sale of Products,
all renewals, modifications and extensions thereof, together with the goodwill
associated therewith, including, without limitation, such of the foregoing as
are listed or described in Schedule 5.11, all copyrights (whether registered or
unregistered), trade secrets, formulations and patents, patent applications or
designs, discoveries, processes, manufacturing techniques, improvements, ideas,
copyrightable works, or other inventions for which patent applications have not
been filed, to the extent used by Vendor uniquely in the manufacture or sale of
the Products in the Territory, including, without limitation, those that are
listed in Schedule 5.11, and all continuations, continuations-in-part, renewals,
reissues, modifications or extensions thereof; provided, however, that
"Intellectual Property" does not include the SmithKline ▇▇▇▇▇▇▇ name or any
variation thereof, the corresponding logos or current trade dress of the
Products (except for the trademarks listed in Schedule 5.11);
(g) "Inventories" means all of Vendor's inventories of
Finished Goods in the Territory at the Time of Closing and any rights of Vendor
to any warranties received from manufacturers and sellers with respect to such
Finished Goods;
(h) "Promissory Note" means the promissory note in the
principal amount of $11,000,000, substantially in the form of EXHIBIT C hereto;
(i) "Purchase Price" means the purchase price payable to
Vendor for the Purchased Assets provided for in Section 3;
(j) "Purchased Assets" means the property and assets described
in Section 2.1 and related to the sale of the Products in the Territory;
(k) "Security Agreement" means the agreement between SBC and
Purchaser substantially in the form of EXHIBIT D hereto;
(l) "Supply Agreement" means the agreement between SBC and
Purchaser, substantially in the form of EXHIBIT E hereto.
(m) "Territory" means the United States, Canada and Puerto
Rico;
(n) "Time of Closing" means 1:00 o'clock in the afternoon
(Eastern time) on January 7, 1997 or such other date as the parties shall
mutually agree at which time the parties are to deliver the closing documents
described in Section 10; and
(o) "Transitional Services Agreement" means the agreement
between Vendor and Purchaser, substantially in the form of EXHIBIT F hereto.
In this Agreement, words importing the singular number only shall
include the plural and vice versa, words importing a specific gender shall
include the other genders and references to persons shall include corporations
and one or more persons, their heirs, executors, administrators or assigns as
the case may be.
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1.2 Currency. All dollar amounts referred to in this Agreement are in
U.S. Dollars.
1.3 Headings, etc. The division of this Agreement into Sections and the
insertion of headings are for convenience of reference only and shall not affect
the interpretation hereof.
SECTION 2
PURCHASED ASSETS
2.1 Assets to be Sold and Purchased. Subject to the terms and
conditions hereof, Vendor and its Affiliates shall sell, assign and transfer to
Purchaser and Purchaser shall purchase from Vendor, at the Time of Closing, all
rights, title and interest of Vendor and its Affiliates in the Purchased Assets
wheresoever situated. The Purchased Assets shall include:
(a) all Intellectual Property, New Drug Application No. 18-689
(Capsules) and all supplements thereto, as amended, IND 13,027 (Capsules IND)
dated November 30, 1976 and IND 17,636 (Special Studies IND) dated May 27, 1980
on file with the U.S. Food and Drug Administration (the "FDA"), IND 39,928
(Topical formulation for psoriasis) dated June 29, 1992 which was withdrawn July
21, 1995, Canadian NDS File ▇▇. ▇▇▇▇-▇▇▇▇▇/▇-▇▇, ▇▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇, and all
existing information relating to the stability and shelf life of the Products;
(b) the existing lists of current, past and prospective
customers for the Products, records of volumes of sales and actual selling price
by customer by month for the ten months ending October 31, 1996 and written
contracts and documentation in Vendor's possession pertaining to the same;
provided, however, that Vendor retains its rights to such information with
respect to sales of Vendor's other products;
(c) Vendor's existing files pertaining to the Products
(whether in written or machine readable form) including, without limitation,
research and development files, FDA files pertaining to the Products (including
applications and registrations, as applicable), market studies, marketing plans,
key physician records, copies of consumer complaint files, sales histories,
quality control histories, manufacturing know-how and all other information and
data pertaining to the Products owned by Vendor, which is in the possession of
Vendor or agents and is accessible by Vendor with reasonable efforts;
(d) all work in progress with respect to the improvement,
planning, promotion, production, development and distribution of the Products,
including, without limitation, all papers and promotional materials on hand, all
original art mechanicals and artwork for the production of packaging components,
television masters, agreements with advertising agencies and other materials
associated with the Products;
(e) all unfilled customer orders for the Products as of the
Time of Closing (a list of such orders to be provided to Purchaser promptly
after the Time of Closing).
2.2 Liabilities.
(a) Subject to the provisions of Section 16.1 below, Purchaser
shall be liable for all liabilities relating to actions taken or omissions to
act from and after the Time of Closing related
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to the Purchased Assets, including any cost, claim, expense, loss or liability
arising from any product liability claim or lawsuit or any FDA or other
governmental agency action or notification relating to actions taken or
omissions to act from and after the Time of Closing (except to the extent that
the cost, claim, expense, loss or liability claimed relates to a Product
supplied to Purchaser by Vendor under the Supply Agreement where the claim
arises from the manufacture of the Product) (the foregoing liabilities being
assumed by the Purchaser hereinafter referred to as the "Assumed Liabilities");
provided, however, that in the event the closing does not occur and the
Purchaser does not acquire the Purchased Assets as contemplated by this
Agreement, then the Purchaser shall not assume, and shall not be liable for, the
Assumed Liabilities for any period of time.
(b) Prior to and after the Time of Closing, Vendor shall
promptly pay and discharge all liabilities arising prior to the Time of Closing
in respect of the Purchased Assets as such liabilities come due.
(c) Except for the Assumed Liabilities and subject to the
provisions of Section 16.1 below, Purchaser shall not assume or be liable for
any liabilities whatsoever, including, without limitation, product liability,
liability in tort (including unripened liabilities due to past actions or
sales), indebtedness for money borrowed, tax liabilities, obligations to
employees, and liabilities for trade promotions related to the Purchased Assets
and to acts or omissions occurring prior to the Time of Closing. Purchaser shall
not assume any contract liabilities of Vendor, except as specifically set forth
in Schedule 2.2(c).
2.3 Use of Intellectual Property outside Territory. For the avoidance
of doubt notwithstanding the conveyance of the Intellectual Property, Vendor
retains the right to utilize the know-how and other intangible property (other
than patents and trademarks specific to the Territory) with respect to the
manufacture, marketing and sale outside the Territory of products in which
auranofin is an active ingredient. Subject to the rights of third parties,
Vendor will share with Purchaser on a timely basis any enhancements or
improvements made through such manufacture and hereby grants Purchaser a
non-exclusive right to use any such enhancements or improvements in the
Territory. Vendor will use its reasonable best efforts to prohibit the resale
(where Vendor or an Affiliate is the original seller) of products in which
auranofin is an active ingredient in the Territory and will not sell such
products to any person(s) if Vendor has actual knowledge that such person(s)
intend to resell such products in the Territory.
SECTION 3
PURCHASE PRICE
3.1 Purchase Price. The Purchase Price payable to Vendor for the
Purchased Assets shall be $29.0 million.
3.2 Transfer Taxes. Purchaser shall be liable for and shall pay all
state and local sales and use taxes payable in connection with the conveyance
and transfer of the Purchased Assets by Vendor to Purchaser.
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SECTION 4
PAYMENT OF PURCHASE PRICE
4.1 Payment of Purchase Price. The Purchase Price specified in Section
3.1 shall be paid and satisfied, at the option of Purchaser, by the delivery by
Purchaser to Vendor at the Time of Closing of (a) a certified check or bank
draft payable to the order of Vendor or by a wire transfer of funds to a bank
account(s) to be designated by Vendor in the amount of $3.0 million, (b) the
Promissory Note in the principal amount of $11.0 million, (c) deferred payments
in the aggregate amount of $6.0 million based on net sales as provided in
Section 4.2 below, and (d) shares of Common Stock as provided in Equity
Agreement. The amounts due under subsections (b) and (c) above shall be secured
under the Security Agreement; provided that amounts under subsection (c) shall
be secured only so long as there are remaining amounts due under the Promissory
Note.
4.2 Deferred Purchase Price. From and after the Time of Closing,
Purchaser shall pay to SB Properties an amount equal to [*]% of net sales (up to
$7.5 million in net sales in any calendar year and [*]% of net sales in excess
of such amount) of the Products (or any other product in which auranofin is an
active ingredient) by Purchaser or its Affiliates or any successor, assignee,
licensee or distributor of Purchaser. For purposes of this Section 4.2, net
sales shall be determined as described in Schedule 4.2. Such deferred payments
shall accrue (without interest) commencing from the Time of Closing through
December 31, 1998. Commencing January 1, 1999 such deferred payments shall be
paid quarterly in arrears not later than 30 days after the end of each calendar
quarter. During 1999 concurrently with each such quarterly payment, Purchaser
shall also pay SB Properties one-fourth of the accrued payment with respect to
the two year period ending December 31, 1998. Purchaser's obligation with
respect to deferred payments (exclusive of any late charge for failure to make
such payments when due and payable) shall be limited to $6 million. Vendor
agrees and acknowledges that the deferred payments under this Section 4.2 are
contingent on net sales. Purchaser makes no representation or warranty regarding
the aggregate amount that may be due as deferred payments.
SECTION 5
REPRESENTATIONS AND WARRANTIES OF VENDOR
Vendor hereby represents and warrants to the Purchaser as follows and
acknowledges that Purchaser is relying on such representations and warranties in
connection with the transactions contemplated by this Agreement:
5.1 Incorporation, Organization and Qualification. Each of SBC, SBP, SB
Properties and IAC is a corporation duly incorporated, validly existing and in
good standing under the law of the jurisdiction of its incorporation, and has
the corporate power to own or lease its property and to carry on its business as
now being conducted by it. Each of SBC, SBP, SB Properties and IAC is duly
qualified to do business as a foreign corporation and is in good standing in
every jurisdiction where the nature of the business conducted by it with respect
to the Purchased Assets
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* Confidential treatment has been requested for the language which has
been omitted. All such omitted material has been filed separately with
the SEC.
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or the Products makes such qualification necessary except in such jurisdictions
where the failure to so qualify does not in the aggregate have a material
adverse effect on Vendor's business taken as a whole.
5.2 Authorization and Validity of Agreement. Each of SBC, SBP, SB
Properties and IAC has the corporate power to enter into this Agreement and to
carry out its obligations hereunder. The execution and delivery of this
Agreement, the Equity Agreement, the Transitional Services Agreement, the Supply
Agreement and any other agreements or instruments executed in connection
herewith and therewith (the "SB Agreements") and the performance of their
respective obligations hereunder and thereunder have been duly authorized by all
necessary corporate action by the Boards of Directors of each of SBC, SBP, SB
Properties and IAC, and no other corporate proceedings on the part of SBC, SBP,
SB Properties or IAC are necessary to authorize such execution, delivery and
performance. The SB Agreements have been duly executed by each of SBC, SBP and
IAC and constitutes the valid and binding obligation of each such party,
enforceable against each such party in accordance with their respective terms.
Execution of the SB Agreements and consummation of the transactions contemplated
thereby will not result in the violation of, or conflict with, any of the terms
and provisions of the articles of incorporation or by-laws of SBC, SBP, SB
Properties or IAC or of any law or regulation or any applicable order of any
court, arbitrator or governmental authority having jurisdiction over Vendor, the
Products or the Purchased Assets or of any indenture or other written agreement
to which Vendor may be a party.
5.3 Title to Purchased Assets. Vendor is the sole owner of all the
Purchased Assets with good title thereto free and clear of any mortgage, lien,
charge, security interest, adverse claim or other encumbrance whatsoever
(collectively, "Encumbrances"), and at the Time of Closing will have the right
to transfer to Purchaser good title thereto, free and clear of all Encumbrances.
5.4 Financial Information. The financial information set forth in
Schedule 5.4 hereto was derived from the books and records of Vendor and was
prepared by Vendor in good faith and fairly presents the sales and contributions
of the Products for the periods shown.
5.5 Litigation. Except as set forth in Schedule 5.5, there are no
actions, suits, proceedings, investigations, arbitration proceedings or other
proceedings pending or threatened against or affecting the Purchased Assets at
law or in equity or by or before any federal, state, municipal or other
governmental department, commission, board, bureau, agency or instrumentality,
domestic or foreign, or by or before any arbitrator which actions, suits or
arbitration proceedings or other proceedings relate to the Purchased Assets and
Vendor is not now aware of any existing grounds on which any such action, suit
or proceeding might be commenced and there is not currently outstanding against
the Vendor any judgment, decree, injunction, rule, order or award of any court,
governmental department, commission, board, bureau, agency, instrumentality,
domestic or foreign, or arbitrator and relating to the Purchased Assets. During
the last ten years there has not been any occurrence of, nor is there under
consideration or investigation by Vendor of, any product recall, or post-sale
warning conducted by or on behalf of Vendor concerning any Product or any
product recall conducted by or on behalf of any entity as a result of any
alleged defect in any Product.
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5.6 Inventory. The Inventory of Finished Goods set forth in Schedule
5.6 as of September 30, 1996, is of a type, quality and quantity useable and
saleable (without discount in excess of discounts customarily provided by
Vendor) in the ordinary course of business related to the Products.
5.7 Product Formulas. Schedule 5.7 is a true and complete copy of the
current formulations and production methodologies of each Product. Such
formulations and methodologies are sufficient to enable Purchaser to manufacture
all of the Products.
5.8 Regulatory Issues. The documents (including adverse events reported
to the FDA) listed on Schedule 5.8, copies of which have previously been
delivered or made available to Purchaser, reflect all material regulatory issues
with respect to the Products. Such copies are true and correct in all material
respects.
5.9 Compliance with Law. Schedule 5.9 lists all FDA and other
administrative approvals, registrations and permits relating to the Purchased
Assets. Except as described on Schedule 5.9, Vendor has conducted and is
currently conducting the manufacture, promotion, advertising, marketing and sale
of the Finished Goods in compliance with all applicable laws, rules, regulations
and court or administrative orders and processes. The manufacture of the
Products by SBC and its contract manufacturers conforms in all material respects
to the FDA's current "good manufacturing practices" regulations for finished
pharmaceuticals as applicable as currently interpreted and enforced.
5.10 No Default Under Agreements. Other than Vendor's general contracts
with wholesalers, Vendor's national accounts agreements and rights of reference
to Drug Master Files under the FDA approvals, registrations and permits, there
are no contracts which relate to the Products in the Territory.
5.11 Intellectual Property Rights.
(a) Vendor is the beneficial owner of all right, title and
interest in the Intellectual Property and the registered owner of all right,
title and interest in the items listed on Schedule 5.11, and has the right to
use, license, sublicense or assign the Intellectual Property without liability
to, or any requirement to obtain the consent of, any other person, except as
described in Schedule 5.11. Except as set forth in Schedule 5.11 there are no
agreements, understandings, instruments, contracts, trade secrets or other
proprietary rights to or from Vendor affecting the Intellectual Property.
(b) Except as otherwise set forth therein, all of the
Intellectual Property listed in Schedule 5.11 as registered or filed has been
duly registered or filed in the U.S. Patent and Trademark Office or the Canadian
Trademark Office and is currently valid.
(c) To the best of Vendor's knowledge, there are no
infringements, threats of infringements or asserted or unasserted claims by
Vendor of infringements or misappropriation of any of the Intellectual Property
in the Territory nor are there any asserted or unasserted claims by
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Vendor contesting or challenging the right, title, or interest of any other
person in any of the Intellectual Property.
(d) Except as set forth on Schedules 5.8 and 5.11, there are
no outstanding threatened or actual claims asserted against Vendor alleging the
infringement or misappropriation by Vendor of any intellectual property of any
other party that may affect the Purchased Assets or the revocation, withdrawal,
expiration, abandonment, or breach of any right to use the Intellectual Property
in the Territory. Vendor has not been notified of any such claim of any person
nor does Vendor know of any basis for the existence of any such claim in the
Territory.
5.12 Schedules. The information included on any Schedule delivered to
Purchaser by Vendor under the terms of this Agreement shall be deemed to have
been delivered with respect to any other Schedule delivered to Purchaser by
Vendor as though such information were fully set forth in such additional
Schedules. All Schedules are represented as true, correct and complete except to
the extent specifically addressed in individual representations, warranties and
Schedules.
5.13 Health, Safety, Employment and Environmental Matters. To the
extent that the failure to do so or be so would have a material adverse effect
upon the Purchased Assets, Vendor is in compliance with all federal, state,
local and foreign laws related to health and occupational safety, environment
and hazardous materials and employment practices, that are applicable to Vendor
or its business related to the Purchased Assets, and Vendor has conducted its
business relating to the Purchased Assets in compliance with the foregoing laws.
5.14 Ordinary Course. From October 1, 1995 through the date of this
Agreement, Vendor has conducted the business relating to the Purchased Assets
only in the ordinary course and there have been no events or circumstances of
any kind that have materially and adversely affected the business related to the
Purchased Assets.
5.15 Governmental Approvals. Except for compliance with
▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976, as amended (the "HSR Act")
and the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or as
disclosed in the Schedules to this Section 5, no governmental authorization,
consent, approval, license, exemption of or filing or registration with any
court or governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, under any applicable laws, rules or
regulations currently in effect, is or will be necessary for, or in connection
with, the execution or delivery by Vendor of the SB Agreements.
SECTION 6
COVENANTS OF VENDOR
6.1 Conduct of the Business Until Closing. Except for the steps or
actions taken pursuant to the prior written consent of Purchaser, Vendor, from
the date of this Agreement until the Time of Closing, will conduct its business
with respect to the Purchased Assets in good faith and in accordance with the
same practices previously followed by it except to the extent specifically
contemplated by this Agreement and during that period Vendor shall:
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(a) conduct the business relating to the Purchased Assets,
including without limitation marketing of the Products, only in the normal
course;
(b) not transfer any of the Purchased Assets except
Inventories in the normal course;
(c) not enter into any patent, trademark or tradename or
know-how licenses, or any other leases, licenses, contracts or other commitments
relating to the Purchased Assets, unless each such lease, license, contract or
commitment (other than purchase orders for raw materials and Finished Goods
placed in the normal course of business) is disclosed to and approved in advance
by Purchaser;
(d) continue to meet the contractual obligations of, and to
pay obligations relating to, the Purchased Assets as they mature in the normal
course;
(e) preserve the good relations with respect to the Products
with suppliers, business customers and others with whom Vendor has business
relations relating to the Products; and
(f) not implement any price increases or decreases for any of
the Products or any new trade or consumer promotions, and not change the terms
or conditions or any such promotion in existence on the date hereof.
6.2 Records and Retained Product. Vendor shall continue to the extent
of its current practice to preserve its books and records (including financial
information) relating to the Products and the Purchased Assets and retain
product samples from each batch of the Products produced by or for Vendor, and
during such periods and upon reasonable notice, shall grant Purchaser and its
agents and representatives reasonable access to such records and retained
product samples during normal business hours.
6.3 Post Closing Orders. From and after the expiration of the term of
the Transitional Services Agreement, Vendor shall promptly (but in no event
later than two Business Days after receipt by Vendor's customer service
department) deliver any purchase orders and refer all inquiries it shall receive
with respect to the Products to Purchaser.
6.4 Confidentiality. From and after the date hereof, Vendor shall use
the same efforts to maintain the confidentiality of any proprietary or
confidential information regarding the manufacture or sale of the Products as
Vendor uses with respect to its own prescription pharmaceutical products;
provided, however, that any such confidential or proprietary information (a) may
be used by SBC in performing its obligations under the Supply Agreement, (b) may
be shared, subject to execution of a confidentiality agreement, with potential
third party manufacturers of the Products and (c) may be disclosed, subject to
execution of a confidentiality agreement, with potential purchasers of rights
outside the Territory to product lines for which auranofin is an active
ingredient; provided that no information specific to Purchaser shall be
disclosed in such context.
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6.5 Financial Information. In the event that Purchaser is required by
the Securities and Exchange Commission to provide audited information with
respect to the business related to the Purchased Assets for periods prior to the
Time of Closing, Vendor shall cooperate with Purchaser in providing financial
information to the extent of existing information is maintained by Vendor or can
be prepared without undue hardship or expense to Vendor.
6.6 HSR Act. Vendor will file with the United States Federal Trade
Commission and the Antitrust Division of the Justice Department pursuant to the
HSR Act all requisite documents and notifications in connection with the
transactions contemplated by this Agreement. The parties will coordinate and
cooperate with one another in exchanging information and providing reasonable
assistance as the other may request in connection with the foregoing.
6.7 Electronic Copies of Documents. At the Time of Closing, Vendor will
deliver to Purchaser electronic copies of this Agreement (and all exhibits and
schedules hereto other than Exhibits B, C, D and I) for the purpose of assisting
Purchaser's compliance with its ▇▇▇▇▇ disclosure requirements under the Exchange
Act.
SECTION 7
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
The Purchaser hereby represents and warrants to the Vendor and
acknowledges that the Vendor is relying on such representations and warranties
in connection with the transactions contemplated by this Agreement that:
7.1 Incorporation, Organization and Qualification of Purchaser.
Purchaser is a corporation duly incorporated, validly existing and in good
standing under the law of the jurisdiction of its incorporation, and has the
corporate power to own or lease its property and to carry on its business as now
being conducted by it. Purchaser is duly qualified to do business as a foreign
corporation and is in good standing in every jurisdiction where the nature of
the business conducted by it makes such qualification necessary except in such
jurisdictions where the failure to so qualify does not in the aggregate have a
material adverse effect on Purchaser's business taken as a whole.
7.2 Corporate Action. This Agreement, the Promissory Note, the Equity
Agreement, the Transitional Services Agreement, the Supply Agreement and any
other agreements and instruments executed in connection herewith and therewith
(the "Connective Agreements") are the valid and binding obligations of
Purchaser, enforceable in accordance with their respective terms, subject to
bankruptcy, insolvency or similar laws of general application affecting the
enforcement of rights of creditors, and subject to equitable principles limiting
rights to specific performance or other equitable remedies, and subject to the
effect of federal and state securities laws on the enforceability of
indemnification provisions relating to liabilities arising under such laws. The
execution, delivery and performance of the Connective Agreements have been duly
authorized by all necessary corporate action of Purchaser except that approval
by Purchaser's stockholders will be required to approve the issuance of shares
under the Equity Agreement if such issuance exceeds 19.9% of Purchaser's
outstanding Common Stock prior to such issuance. The issuance of the Promissory
Note and the shares of Connective Therapeutics common stock issued or to be
issued
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pursuant to the Equity Agreement (the "Connective Shares") will not require any
further corporate action, and will not be subject to preemptive or other
preferential rights or similar statutory or contractual rights either arising
pursuant to any agreement or instrument to which Purchaser is a party or which
is otherwise binding upon Purchaser.
7.3 Governmental Approvals. Except for compliance with the HSR Act, the
Exchange Act, the registration of the Connective Shares under the Securities Act
of 1933, as amended, pursuant to the Equity Agreement and any qualification or
filings required to issue the Connective Shares under Pennsylvania securities
laws, no authorization, consent, approval, license, exemption of or filing or
registration with any court or governmental department, commission, board,
bureau, agency or instrumentality, domestic or foreign, under any applicable
laws, rules or regulations presently in effect, is or will be necessary for, or
in connection with, execution and delivery of the Connective Agreements or the
offer, issuance, sale, execution or delivery by Purchaser of the Promissory
Note, the Equity Agreement or the Connective Shares, or for the performance by
it of its obligations under the Connective Agreements.
SECTION 8
COVENANTS OF THE PURCHASER
8.1 Insurance. At all times from the Time of Closing through December
31, 1999, Purchaser shall maintain product liability insurance written on a
claims made form in an amount of not less than $[*] per occurrence, $[*] annual
aggregate. Purchaser shall provide Vendor with a certificate of insurance as
evidence of such insurance at or before the Time of Closing and annually
thereafter evidencing the renewal of said insurance. In the event that any such
insurance shall be significantly reduced or restricted, terminated or shall
otherwise not be renewed, Purchaser shall immediately notify Vendor.
8.2 Confidentiality. From and after the Effective Date until the Time
of Closing, Purchaser shall use the same efforts to maintain the confidentiality
of any proprietary or confidential information regarding the Products as
Purchaser uses to maintain the confidentiality of its own proprietary
information. In the event that there is no Time of Closing under this Agreement,
Purchaser shall return all information regarding the Products to Vendor,
retaining no copies, excerpts or other analysis or redactions of such
information and covenants that no such information shall be disclosed to any
third party or utilized in any way by Purchaser in the conduct of its own
business.
8.3 HSR Act. Purchaser will file with the United States Federal Trade
Commission and the Antitrust Division of the Justice Department pursuant to the
HSR Act all requisite documents and notifications in connection with the
transactions contemplated by this Agreement. The parties will coordinate and
cooperate with one another in exchanging information and providing reasonable
assistance as the other may request in connection with the foregoing.
8.4 Senior Indebtedness. Purchaser shall use its best efforts to secure
amendment or waiver of any outstanding Senior Indebtedness (as defined in the
Note) as quickly as possible and
--------
* Confidential treatment has been requested for the language which has
been omitted. All such omitted material has been filed separately with
the SEC.
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in any event prior to the Time of Closing with the effect that as of the Time of
Closing there is no such outstanding Senior Indebtedness.
SECTION 9
MUTUAL COVENANTS
9.1 Right to Investigate. After the date hereof, the Vendor shall
afford to representatives of the Purchaser reasonable access to offices, plants,
properties, books and records of the Vendor relating to the Products, during
normal business hours, in order that the Purchaser may have full opportunity to
make such investigations as it desires with respect to the Products. In the
event of termination of this Agreement, the Purchaser shall deliver to the
Vendor all documents, work papers and other material obtained by the Purchaser,
or on its behalf, from the Vendor and all copies thereof, whether so obtained
before or after the execution of this Agreement, and shall not itself use
directly or indirectly or through any subsidiary or affiliate any information so
obtained, or otherwise obtained from the Vendor, hereunder or in connection
herewith (unless such information is generally known in the industry or was
acquired by the Purchaser prior to the receipt thereof from the Vendor or was
acquired after the date hereof from a third party having a bona fide right to
provide the same to the Purchaser), and shall endeavor to have all such
information kept confidential and not used in any manner.
9.2 Equity Agreement. Purchaser and SB Properties shall enter into an
Equity Agreement substantially in the form of EXHIBIT B hereto effective as of
the Time of Closing.
9.3 Supply Agreement. Purchaser and SBC shall enter into a Supply
Agreement substantially in the form of EXHIBIT D hereto effective as of the Time
of Closing.
9.4 Transitional Services Agreement. Purchaser and Vendor shall enter
into a Transitional Services Agreement substantially in the form of EXHIBIT E
hereto effective as of the Time of Closing.
9.5 Trade returns. For the period prior to February 28, 1997 Vendor
shall bear the cost of all returns, Medicaid reimbursements and chargebacks for
Products regardless of the date of sale, in each case in accordance with
Vendor's then-current practices. Purchaser will not take any action to encourage
any returns of such goods to Vendor. From and after March 1, 1997, Purchaser
shall be responsible for all Medicaid reimbursements and chargebacks for
Products regardless of the date of sale and shall be responsible for returns of
Finished Goods from the trade in accordance with Purchaser's return policy. The
parties hereto agree that should Purchaser accept returns or grant credit for or
pay Medicaid reimbursements, chargebacks and rebates during the period prior to
▇▇▇▇▇ ▇, ▇▇▇▇, ▇▇▇▇▇▇ shall reimburse Purchaser upon presentation of proper
evidence by Purchaser of such acceptance or payment.
9.6 Brokers. Purchaser represents to the Vendor that Purchaser 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
commission upon the execution of this Agreement or the consummation of such
transactions other than Mazier Partners. Purchaser shall be solely responsible
for any amounts due to Mazier Partners. Vendor represents to Purchaser that
Vendor
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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 commission upon the execution of this Agreement or the consummation of
such transactions. Each party agrees to indemnify and hold the other party
harmless with respect to any action, claim or demand with respect to any third
party claiming any such fee or commission by reason of its relationship to the
indemnifying party.
9.7 Allocation of Purchase Price. Schedule 9.7 sets forth the parties'
mutually negotiated allocation of the Purchase Price among the Purchased Assets.
The parties agree that said allocation shall be reflected on any returns
required to be filed with the Internal Revenue Service or any other foreign or
state tax authority arising from this transaction.
9.8 Best Efforts. Each party shall use its best efforts to close, to
comply with all covenants herein and to consummate the sale contemplated hereby
as expeditiously as possible.
9.9 Best Efforts to Obtain Satisfaction of Conditions. Vendor and
Purchaser covenant and agree to use their best efforts to obtain the
satisfaction of the conditions specified in this Agreement.
9.10 Adverse Event Reports. Upon the transfer of the FDA product
registrations, Purchaser shall assume responsibility for compliance with FDA
regulations, including without limitation adverse event reporting requirements.
To the extent that Vendor receives any adverse event reports, Vendor shall
promptly (but in no event later than five Business Days after receipt by SBC)
forward copies of such reports to Purchaser at the address set forth in Section
17.3, Attention: Regulatory Affairs. To the extent requested by SB in order to
meet SB's obligations with respect to regulatory requirements in countries
outside the Territory, to the extent that Purchaser receives any adverse event
reports, Purchaser shall promptly (but in no event later than five Business Days
after receipt by Purchaser) forward copies of such reports to SBC at the address
set forth in Section 17.3, Attention: Regulatory Affairs.
9.11 Transfer of Registrations, etc. Upon Purchaser's request, Vendor
will transfer to Purchaser, to the extent legally permissible, any federal
health registrations necessary to enable uninterrupted manufacture, marketing
and sale of the Products. Vendor will cooperate with Purchaser in disclosing and
copying any relevant records and reports which are required to be made,
maintained and reported pursuant to law.
9.12 Use of Name. For a period of 12 months from the Effective Date or
such longer period as shall be necessary to exhaust any Inventories (but in no
event later than 18 months after the Time of Closing), Vendor shall permit
Purchaser to use the term and logo for "SB SmithKline ▇▇▇▇▇▇▇ Pharmaceuticals"
on the Products and on their packaging and in connection with the sale and
distribution in the Territory of the Products (including samples) to wholesale
and retail distributors; provided, that Purchaser shall not order any new
packaging from four months after the Time of Closing which bears any of such
names or logos; and provided further, that except as hereby provided Purchaser
shall have no right to use the term "SB SmithKline ▇▇▇▇▇▇▇ Pharmaceuticals" as a
trade name, trademark or service ▇▇▇▇, and provided further that the continued
existence in the market place of Finished Goods bearing the foregoing terms and
logos
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after the conclusion of such twelve month or longer period in connection
with goods which were sold by Purchaser during such twelve month or longer
period shall be permitted.
9.13 Transfer of Regulatory Responsibility. Vendor and Purchaser shall
each use their best efforts to transfer the FDA and Canadian registrations and
permits and to transfer regulatory responsibilities for the Products from Vendor
to Purchaser as expeditiously as possible following the Time of Closing.
SECTION 10
CLOSING ARRANGEMENTS
10.1 Closing Arrangements. At or before the Time of Closing upon
fulfillment of all the conditions hereof which have not been waived in writing
by the Purchaser or the Vendor respectively:
(a) Vendor's Delivery of Closing Documents. Vendor shall
deliver to Purchaser:
(i) a ▇▇▇▇ of sale substantially in the form of
EXHIBIT G;
(ii) such instruments of conveyance, assignment and
transfer, in form and substance satisfactory to Purchaser, as shall be
appropriate to convey, transfer and assign to, and to vest in Purchaser, good
title to the Purchased Assets, free and clear of all Encumbrances;
(iii) all technical data, formulations, product
literature and other documentation related to the Purchased Assets;
(iv) such certificates of Vendor's officers and such
other documents evidencing satisfaction of the conditions specified in Section
11 as Purchaser shall reasonably request; and
(v) such other documents, instruments and
certificates as Purchaser may reasonably request.
(b) Purchaser's Delivery of Closing Documents. Purchaser shall
deliver to Vendor:
(i) such certificates of Purchaser's officers and
such other documents evidencing satisfaction of the conditions specified in
Section 12 as Vendor shall reasonably request; and
(ii) such other documents, instruments and
certificates as Vendor may reasonably request.
(c) Payment of Purchase Price. On the fulfillment of the
foregoing terms of Section 10 and upon the fulfillment of all the conditions of
this Agreement, which have not been
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specifically waived in writing by Purchaser or Vendor, as the case may be,
Purchaser shall pay and satisfy the Purchase Price as provided in Section 3
hereof.
(d) Physical Delivery. Pursuant to delivery arrangements
specified by Purchaser to Vendor prior to the Time of Closing, and reasonably
acceptable to Vendor, Vendor shall deliver to Purchaser at Purchaser's premises
those tangible assets included in the Purchased Assets at the Time of Closing or
as soon thereafter as reasonably practical but in no event later than ten
Business Days after the Time of Closing.
10.2 Transfer Expenses -- Trademarks and Patents. Vendor shall deliver
to Purchaser such trademark and patent assignment documents in recordable form
necessary to effect the transfer of such trademarks and patents to Purchaser.
Purchaser shall be responsible for the recordation of same and Purchaser shall
bear any costs and fees related thereto. Purchaser shall be responsible for all
costs associated with maintenance of trademarks and patents from the Time of
Closing. At least ten Business Days prior to the Time of Closing Vendor shall
provide Purchaser with a list of any such maintenance costs which to Vendor's
knowledge are due prior to February 28, 1997.
SECTION 11
PURCHASER'S CONDITIONS OF CLOSING
The sale and purchase of the Purchased Assets in accordance with the
terms of this Agreement are subject to the following terms and conditions, each
of which is included for the exclusive benefit of Purchaser, to be fulfilled
and/or performed at or prior to the Time of Closing:
11.1 Representations and Warranties at Closing. The representations and
warranties of Vendor to Purchaser contained in this Agreement and Schedules
hereto shall be true and correct in all material respects at the Effective Date
with the same force and effect as if such representations and warranties were
made at and as of such time and the Vendor shall deliver to the Purchaser at the
Time of Closing certificate(s) by an officer of Vendor to such effect provided
that the receipt of such evidence and the closing of the transaction of purchase
and sale herein provided for shall not be nor be deemed to be a waiver of the
representations and warranties contained in this Agreement and Schedules hereto.
11.2 Compliance with Terms and Conditions. All of the terms, covenants
and conditions of this Agreement to be complied with or performed by the Vendor
at or before the Time of Closing shall have been complied with or performed in
all material respects.
11.3 Necessary Consents. There shall have been obtained from all
appropriate federal, state, municipal or other governmental or administrative
bodies such approvals or consents as are required to permit the change of
ownership of the Purchased Assets contemplated hereby.
11.4 No Actions Taken Restricting Sale. All required filings under the
HSR Act shall have been made and any required waiting period under the HSR Act
shall have expired or been earlier terminated. No action or proceeding in the
Territory by law or in equity shall be pending or threatened by any person,
firm, corporation, government, governmental authority, regulatory body
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or agency to enjoin, restrict or prohibit the purchase and sale of the Purchased
Assets contemplated hereby or the right of the Purchaser to conduct the business
in respect of the Purchased Assets.
11.5 Non-Performance of Conditions for the Benefit of the Purchaser. In
the event that any of the conditions set forth in this Section 11 shall not be
fulfilled and/or performed at or before the Time of Closing, the Purchaser may
rescind this Agreement by notice in writing to the Vendor, and the Purchaser
shall thereupon be released from all obligations under this Agreement unless the
condition or conditions for the non-fulfillment of non-performance of which the
Purchaser has rescinded this Agreement are reasonably capable of being fulfilled
and/or performed or caused to be fulfilled or performed by the Vendor, then the
Vendor shall also be released from all obligations under this Agreement,
provided any of the said conditions may be waived in whole or in part by the
Purchaser at any time without prejudice to its rights of rescission in the event
of non-fulfillment and/or non-performance of any other condition or conditions,
any such waiver to be binding upon the Purchaser only if the same is in writing.
11.6 Ancillary Documents. Vendor and Purchaser shall have entered into
the Supply Agreement, the Equity Agreement and the Transitional Services
Agreement.
11.7 Opinion of Counsel. Purchaser shall have received an opinion of
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq., counsel for Vendor, dated the Time of Closing,
substantially in the form of EXHIBIT H.
SECTION 12
VENDOR'S CONDITIONS OF CLOSING
The sale and purchase of the Purchased Assets in accordance with the
terms of this Agreement is subject to the following terms and conditions, each
of which is included for the exclusive benefit of the Vendor. Each of such
conditions is to be fulfilled and/or performed at or prior to the Time of
Closing.
12.1 Compliance with Terms. All the terms, covenants and conditions of
this Agreement to be complied with or performed by the Purchaser at or before
the Time of Closing shall have been duly complied with or performed in all
material respects.
12.2 No Action Taken Restricting Sale. All required filings under the
HSR Act shall have been made and any required waiting period under the HSR Act
shall have expired or been earlier terminated. No action or proceeding in the
United States at law or in equity shall be pending or threatened by any person,
firm, corporation, government, governmental authority, regulatory body or agency
to enjoin, restrict or prohibit the purchase and sale of the Purchased Assets
contemplated hereby or the right of the Vendor to sell the Purchased Assets.
12.3 Non-Performance of Conditions for the Benefit of the Vendor. In
the event that any of the conditions set forth in this Section 12 shall not be
fulfilled and/or performed at or before the Time of Closing, the Vendor may
rescind this Agreement by notice in writing to the Purchaser and the Vendor
shall thereupon be released from all obligations under this agreement and the
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Purchaser shall also be released from all obligations under this Agreement,
provided any of the said conditions may be waived in whole or in part by the
Vendor at any time without prejudice to its respective rights of rescission in
the event of a non-fulfillment and/or non-performance of any other condition or
conditions, any such waiver to be binding upon the Vendor only if the same is in
writing
12.4 Ancillary Documents. Vendor and Purchaser shall have entered into
the Security Agreement, Supply Agreement, the Equity Agreement and the
Transitional Services Agreement and Purchaser shall have executed and delivered
the Note.
12.5 Opinion of Counsel. Vendor shall have received an opinion of
Venture Law Group, counsel for Purchaser, dated the Time of Closing,
substantially in the form of EXHIBIT I.
12.6 Insurance Certificate. Purchaser shall have provided Vendor with a
certificate of insurance documenting the coverage described in Section 8.2.
12.7 Senior Indebtedness. As of the Time of Closing there shall be no
outstanding Senior Indebtedness (as defined in the Note).
SECTION 13
CONDITIONS TO THE OBLIGATIONS OF ALL PARTIES
The obligations of each of the parties hereto are subject to the
condition that at the Time of Closing, there shall exist no injunction or other
order issued by a court of competent jurisdiction which would make unlawful the
consummation of the transactions contemplated by this Agreement.
SECTION 14
INDEMNIFICATION
14.1 Vendor's Indemnification. Vendor will indemnify and hold harmless
Purchaser and each of its directors, officers, employees, advisors, affiliates,
agents and shareholders from and against any and all losses, damages,
liabilities, costs, claims and expenses, including but not limited to attorney's
fees, arising out of, based upon or resulting from:
(a) any claims against, or liabilities or obligations of, the
Vendor or against the Purchased Assets other than the Assumed Liabilities;
(b) any inaccuracy of any representation or warranty or
schedule of Vendor which is contained in or made pursuant to this Agreement;
(c) the non-compliance by Vendor with the provisions of any
applicable bulk sales act governing the purchase and sale of the Purchased
Assets;
(d) any tax liability of Vendor (other than sales and use
taxes referred to in Section 3.2 of this Agreement) including, without
limitation, any tax liability arising out of the failure of Vendor or Purchaser
to comply with any provisions of the tax laws of the
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Commonwealth of Pennsylvania (including, without limitation, provisions
requiring notice to state tax authorities concerning bulk or other sales of
property); or
(e) any breach by Vendor of any of its agreements, covenants,
warranties or obligations contained in or made pursuant to this Agreement.
Vendor shall have no obligation to indemnify Purchaser under this
Section 14.1 for any breach of Vendor's representations and warranties made in
or pursuant to this Agreement, until such time, if any, as the aggregate amount
of the liabilities, losses, damages, claims costs and expenses arising out of
such breach exceeds $50,000 and then only to the extent of such excess.
14.2 Purchaser's Indemnification. Purchaser will indemnify and hold
harmless Vendor and each of its directors, officers, employees, advisors,
affiliates, agents and shareholders from and against any and all losses,
damages, liabilities, costs, claims and expenses including but not limited to
attorney's fees arising out of, based upon or resulting from:
(a) any inaccuracy of any representation or warranty of
Purchaser which is contained in or made pursuant to this Agreement;
(b) any breach by Purchaser of any of its agreements,
covenants, warranties or obligations contained in or made pursuant to this
Agreement; or
(c) any of the Assumed Liabilities, excluding damages,
liabilities, costs and claims arising out of or related to returns to the extent
that Vendor has retained liability pursuant to Section 9.4.
Purchaser shall have no obligation to indemnify Vendor under this
Section 14.2 for any breach of Purchaser's representations and warranties made
in or pursuant to this Agreement, until such time, if any, as the aggregate
amount of the liabilities, losses, damages, claims costs and expenses arising
out of such breach exceeds $50,000 and then only to the extent of such excess.
For the avoidance of doubt this limitation does not apply to Purchaser's
obligations to pay any element of the Purchase Price.
14.3 Claims Procedures. (a) Promptly after the receipt by any party
hereto of notice or upon any party becoming otherwise aware of (x) any claim or
(y) the commencement of any action or proceeding, such party (the "Aggrieved
Party") will, if a claim with respect thereto is to be made against any party
obligated to provide indemnification (the "Indemnifying Party") pursuant to this
Section 14, give such Indemnifying Party written notice of such claim or the
commencement of such action or proceeding and shall permit the Indemnifying
Party to assume the defense of any such claim or any litigation resulting from
such claim. Failure by the Indemnifying Party to notify the Aggrieved Party of
its election to defend any such action within a reasonable time, but in no event
more than thirty days after notice thereof shall have been given to the
Indemnifying Party, shall be deemed a waiver by the Indemnifying Party of its
right to defend such action.
(b) If the Indemnifying Party assumes the defense of any such
claim or litigation resulting therefrom, the obligations of the Indemnifying
Party as to such claim shall be limited to taking all steps necessary in the
defense or settlement of such claim or litigation resulting therefrom
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and to holding the Aggrieved Party harmless from and against any and all losses,
damages and liabilities caused by or arising out of any settlement approved by
the Indemnifying Party or any judgment in connection with such claim or
litigation resulting therefrom. The Aggrieved Party may participate, at its
expense, in the defense of such claim or litigation provided that the
Indemnifying Party shall direct and control the defense of such claim or
litigation. The Indemnifying Party shall not, in the defense of such claim or
any litigation resulting therefrom, consent to entry of any judgment, except
with the written consent of the Aggrieved Party, or enter into any settlement,
except with the written consent of the Aggrieved Party, which does not include
as an unconditional term thereof the giving by the claimant or the plaintiff to
the Aggrieved Party of a release from all liability in respect of such claim or
litigation.
(c) If the Indemnifying Party shall not assume the defense of
any such claim or litigation resulting therefrom, the Aggrieved Party may defend
against such claim or litigation in such manner as it may deem appropriate and,
unless the Indemnifying Party shall deposit with the Aggrieved Party a sum
equivalent to the total amount demanded in such claim or litigation, or shall
deliver to the Aggrieved Party a surety bond or an irrevocable letter of credit
in form and substance reasonably satisfactory to the Aggrieved Party, the
Aggrieved Party may settle such claim or litigation on such terms as it may deem
appropriate, and the Indemnifying Party shall promptly reimburse the Aggrieved
Party for the amount of all reasonable expenses, including, without limitation,
attorneys' fees, incurred by the Aggrieved Party in connection with the defense
against or settlement of such claims or litigation. If no settlement of such
claim or litigation is made, the Indemnifying Party shall promptly reimburse the
Aggrieved Party for the amount of any judgment rendered with respect to such
claim or in such litigation and of all expenses, including, without limitation,
attorneys' fees, incurred by the Aggrieved Party in the defense against such
claim or litigation.
14.4 Nature of Survival of Representations, Etc. All representations
and warranties and agreements made by the parties hereto shall survive the Time
of Closing and any investigation at any time made by or on behalf of either
party, provided, however, that no suit or action may be commenced in respect of
a representation or warranty after eighteen (18) months from the Time of
Closing.
SECTION 15
EFFECTIVE DATE
The completion of the transactions contemplated by this agreement shall
take place at the Time of Closing at the offices of Vendor located at ▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, or at such other place as may be
agreed upon by the parties hereto.
SECTION 16
CONDUCT OF BUSINESS PRIOR TO THE TIME OF CLOSING
It is expressly understood by the parties that in the event that there
is no closing under this Agreement, Purchaser shall have no rights whatsoever to
the revenues from the Products, and shall have no liability for the Assumed
Liabilities or for any costs or expenses incurred or accrued with respect to the
business related to the Products.
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SECTION 17
MISCELLANEOUS
17.1 Further Assurances. Each of the parties hereto upon the request of
the other party hereto, whether before or after the Time of Closing and without
further consideration, shall do, execute, acknowledge and deliver or cause to be
done, executed acknowledged or delivered all such further acts, deeds,
documents, assignments, transfers, conveyances, powers of attorney and
assurances as may be reasonably necessary or desirable to effect complete
consummation of the transactions contemplated by this Agreement, and Vendor will
provide Purchaser with access to financial information relating to the Purchased
Assets as may be reasonably requested by Purchaser.
17.2 Announcements. The parties hereto agree that no disclosure or
public announcement with respect to this Agreement or any of the transactions
contemplated by this Agreement shall be made by any party hereto without the
prior written consent of Vendor or Purchaser provided, however, that nothing
herein contained shall restrict Vendor or Purchaser from making any public
announcement of the transactions contemplated by this Agreement to the extent
that it, in its sole discretion reasonably exercised, is of the view that such
announcement is required or deemed advisable in order to meet its obligations
under the securities laws or stock exchange requirements in the United Kingdom
or the United States of America; provided further that prior to making such
announcement, the party making it shall provide particulars thereof in writing
to the other party. Notwithstanding the foregoing, Purchaser may disclose this
Agreement and the transactions contemplated hereby, to the extent reasonably
necessary, in connection with (a) a private placement of securities for the
purpose of obtaining the financing necessary to pay the Purchase Price and the
fees and expenses related to this Agreement, the transactions contemplated
hereby and such financing, (b) Purchaser's filing and disclosure obligations
under the Securities Act of 1934, as amended, including the filing of he
Agreement and all exhibits with the Securities and Exchange Commission, and/or
(c) any registration of one or more of the Products with any state or Federal
agency.
17.3 Notices. Any notice, direction or other instrument required or
permitted to be given to Vendor hereunder shall be in writing and may be given
by delivering the same or sending the same by telecommunication addressed to the
Vendor as follows:
To: SmithKline ▇▇▇▇▇▇▇ Pharmaceuticals
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
Copy to: SmithKline ▇▇▇▇▇▇▇ Corporation
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Corporate Legal
Fax: ▇▇▇-▇▇▇-▇▇▇▇
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Any notice, direction or other instrument required or permitted to be
given to Purchaser hereunder shall be in writing and may be given by delivering
the same or sending the same by telecommunication addressed to Purchaser as
follows:
To: Connective Therapeutics, Inc.
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Chief Executive Officer
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Copy to: Venture Law Group
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Any such notice, direction or other instrument, if delivered, shall be
deemed to have been given on the date on which it was delivered and if
transmitted by telecommunication shall be deemed to have been given at the
opening of business in the office of the addressee on the Business Day next
following the transmission thereof.
Any party hereto may change its address for service from time to time
by notice given to the other parties hereto in accordance with the foregoing.
17.4 Termination. This Agreement may be terminated at any time prior to
the Time of Closing:
(a) by mutual consent of Vendor and Purchaser; and
(b) by either Vendor or Purchaser if the sale contemplated
hereby shall not have been consummated on or before January 31, 1997.
17.5 Time of the Essence. Time shall be of the essence.
17.6 Applicable Law. This Agreement shall be construed and enforced in
accordance with, and the rights of the parties hereto shall be governed by, the
laws of the Commonwealth of Pennsylvania except that matters related to grant to
Vendor by Purchaser of a security interest in the Purchased Assets shall be
governed by the laws of the State of California.
17.7 Entire Agreement. This Agreement, including the Exhibits and
Schedules hereto, constitutes the entire agreement between the parties hereto
with respect to the transactions provided for herein and, except as stated
herein and in the instruments and documents to be executed and delivered
pursuant hereto, contains all of the agreements between the parties hereto and
there are no verbal agreements or understandings between the parties hereto not
reflected in this Agreement. This Agreement may not be amended or modified in
any respect except by written instrument executed by each of the parties hereto.
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17.8 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original and all of which
together shall constitute one and the same Agreement.
17.9 Parties in Interest. This Agreement shall inure to the benefit of
and be binding upon the parties hereto and their respective heirs, executors,
successors, administrators, and assigns, but shall not be assignable by Vendor
or Purchaser hereto prior to the Time of Closing without the written consent of
the other party. The assignability of the Supply Agreement and the Transitional
Services Agreement shall be governed by their respective terms.
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IN WITNESS WHEREOF this Agreement has been executed by the parties
hereto as of the date first above written.
SMITHKLINE ▇▇▇▇▇▇▇ CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------------------
Title: Secretary
SMITHKLINE ▇▇▇▇▇▇▇ PROPERTIES, INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------------------
Title: Vice President
SMITHKLINE ▇▇▇▇▇▇▇ PHARMA INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------------------
Title: Attorney
SMITHKLINE ▇▇▇▇▇▇▇ INTER-AMERICAN
CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------------------
Title: Vice President
CONNECTIVE THERAPEUTICS, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Title: President and Chief Executive Officer
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Index to Exhibits and Schedules
Exhibit A Products
Exhibit B Form of Equity Agreement
Exhibit C Form of Promissory Note
Exhibit D Form of Security Agreement
Exhibit E Form of Supply Agreement
Exhibit F Form of Transitional Services Agreement
Exhibit G Form of ▇▇▇▇ of Sale
Exhibit H Form of Legal Opinion of Vendor's Counsel
Exhibit I Form of Legal Opinion of Purchaser's Counsel
Schedule 2.2(c) Contracts with price guarantees on Ridaura
Schedule 4.2 Gross and Net Sales
Schedule 5.4 Financial information
Schedule 5.5 Litigation matters
Schedule 5.6 Inventory
Schedule 5.7 Product formulas
Schedule 5.8 Regulatory issues
Schedule 5.9 Approvals, registrations and permits
Schedule 5.11 Intellectual property
Schedule 9.7 Allocation of purchase price