Exhibit 2.3
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (the “Agreement”) is made and entered into as of this 28th day of March, 2024, by and between Nuance Intermediary, LLC, a Delaware limited liability company (the “Buyer”), on the one hand, and Sientra, Inc., a Delaware corporation, Mist Holdings, Inc., a Delaware corporation, Mist, Inc., a Delaware corporation, and Mist International, Inc., a Delaware corporation. (collectively, the “Sellers” and, together with Buyer, the “Parties”), each of the Sellers being a Debtor and Debtor in Possession under Case No. 24-10245 (JTD) (Jointly Administered) (the “Bankruptcy Case”) in the United States Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”).
RECITALS
A. On February 12, 2024, each of the Sellers filed voluntary bankruptcy petitions in the Bankruptcy Court, initiating the Bankruptcy Case.
B. The Buyer desires to purchase certain assets of the Sellers used exclusively in connection with the operation of the portion of their business related to the sale and distribution of their line of products under the Biocorneum name (such portion of Sellers’ business, the “Business”), which assets are more specifically described on the Schedule(s) attached hereto (such assets, collectively, the “Property”), and to assume certain liabilities of the Sellers relating to or arising in connection with the Business and/or the Property, as more particularly described below in Section 2.2 of this Agreement and the Sellers desire to sell the Property to the Buyer and to assign such liabilities to the Buyer and have the Buyer assume the same, all on the terms and conditions set forth in this Agreement and in accordance with Sections 105, 363 and 365 of Title 11 of the United States Code (as in effect on the date hereof, the “Bankruptcy Code”) and other applicable provisions of the Bankruptcy Code.
D. Capitalized terms used but not otherwise defined herein shall have the respective meanings ascribed to them in Exhibit “E” hereto.
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:
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1.4.1 Notwithstanding anything to the contrary in this Agreement, a Contract shall not be a part of the Property hereunder and shall not be assigned to, or assumed by, Buyer to the extent that such Contract is rejected by a Seller or terminated by a Seller or any other party thereto, or terminates or expires by its terms, on or prior to such time as it is to be assumed by Buyer as hereunder and is not continued or otherwise extended upon assumption.
1.4.2 Notwithstanding anything to the contrary in this Agreement, to the extent any Property requires a consent, permission approval, acknowledgment, authorization of or filing with any third party or any authorization of any Governmental Body (other than, and in addition to and determined after giving effect to any order of the Bankruptcy Court, including the Approval Order) (each, a “Consent or Governmental Authorization”) in order to permit the sale or transfer to Buyer of the applicable Seller’s right, title and interest in and to such asset, and such Consent or Governmental Authorization has not been obtained prior to such time as such right, title and interest is to be transferred to Buyer as
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part of the Property hereunder, such asset shall not be transferred to, or received by, Buyer at the Closing. If any Property is deemed not to be assigned pursuant to this Section 1.4.2, the Closing shall nonetheless take place subject to the terms and conditions set forth herein and, thereafter, through the earlier of such time as such Consent or Governmental Authorization is obtained and three (3) months following the Closing (or the closing of the Bankruptcy Case or dissolution of the applicable Seller(s), if earlier), Sellers and Buyer shall (A) use commercially reasonable efforts to secure such Consent or Governmental Authorization as promptly as practicable after the Closing and (B) cooperate in good faith in any lawful and commercially reasonable arrangement reasonably proposed by Buyer, including subcontracting, licensing, or sublicensing to Buyer any or all of any Seller’s rights and obligations with respect to any such portion or item of the Property, under which (1) Buyer shall obtain (without infringing upon the legal rights of such third party or violating any Law) the economic rights and benefits (net of the amount of any related Tax costs imposed on Sellers or their respective Affiliates or any direct costs associated with the retention and maintenance of such Property incurred by any Seller or its Affiliates) with respect to such Property with respect to which the Consent or Governmental Authorization has not been obtained and (2) Buyer shall assume and timely discharge any related burden and obligation with respect to such Property. Upon satisfying any requisite Consent or Governmental Authorization requirement applicable to such Property after the Closing, the applicable Seller’s right, title and interest in and to such Property shall promptly be transferred and assigned to Buyer in accordance with the terms of this Agreement and the Approval Order and the Bankruptcy Code. Notwithstanding anything herein to the contrary, no Seller will be obligated to pay any consideration therefor to any third party from whom Consent or Governmental Authorization is requested or to initiate any litigation to obtain any such Consent or Governmental Authorization.
2.1.1. The cash consideration to be paid by Buyer to Sellers for the Property (the “Purchase Price”) shall be an amount equal to Eight Million Dollars ($8,000,000.00).
2.1.2 The Purchase Price shall be paid as follows:
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2.3 Purchase Price Allocation. Not later than three (3) days prior to the Closing Date, Buyer shall prepare and deliver to Sellers for their review and consideration a schedule (the “Allocation Schedule”) allocating the Purchase Price among the various assets comprising the Property in accordance with Treasury Regulation 1.1060-1 (or any comparable provisions of state or local tax law) or any successor provision. If Sellers disagree with or raise objections to the Allocation Schedule, Buyer and Sellers will negotiate in good faith to resolve such objections. If the Parties are able to agree upon the allocation of the Purchase Price, Buyer and Sellers shall report and file all tax returns (including any amended tax returns and claims for refund) consistent with such mutually
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agreed Purchase Price allocation, and shall take no position contrary thereto or inconsistent therewith (including in any audits or examinations by any taxing authority or any other proceedings). Buyer and Sellers shall file or cause to be filed any and all forms (including U.S. Internal Revenue Service Form 8594), statements and schedules with respect to such allocation, including any required amendments to such forms. If, on the other hand, the Parties are unable mutually to agree upon the manner in which the Purchase Price should be allocated, Buyer and Sellers shall be free to make their own respective allocations of the Purchase Price for tax purposes. The Parties shall reasonably cooperate with each other following the Closing and use commercially reasonable efforts to provide such reasonably necessary information as the other may request or require for tax or audit purposes.
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3.8.1 Reference is made to that certain Order (A) Approving Bid Procedures for the Sale of Substantially All of the Debtors’ Assets; (B) Approving Procedures for the Assumption and Assignment of Executory Contracts and Unexpired Leases; (C) Approving Certain Bid Protections in Connection With the Debtors’ Entry Into Any Potential Stalking Horse Agreement; (D) Scheduling the Auction and Sale Hearing; (E) Approving the Form and Manner of Notice Thereof; and (F) Granting Related Relief entered in the Bankruptcy Case on March 5, 2024 under Docket Number 123 (the “Bid Procedures Order”). The Sale Transactions shall be subject to and shall be conducted by Sellers in accordance with the terms, conditions, process and requirements set forth and established in the Bid Procedures Order.
3.8.2 Promptly following mutual execution and delivery of this Agreement, Sellers shall file a motion (the “Sale Motion”) seeking entry of an order of the Bankruptcy Court approving the sale of the Assets to the Buyer pursuant to the terms of this Agreement (the “Approval Order”), which Approval Order the Sellers shall use commercially reasonable efforts to obtain. The Approval Order shall be in form and content reasonably satisfactory to Buyer and Seller to be hereafter attached as Exhibit “F” hereto. Buyer shall cooperate in all reasonable respects in Sellers’ efforts to obtain the Approval Order and shall be solely responsible for demonstrating, to the Bankruptcy Court’s satisfaction, adequate assurance of future performance under Section 365 of the Bankruptcy Code with respect to each Lease and Contract, it being expressly understood and agreed that neither the Purchase Price nor any of Buyer’s other obligations hereunder (including, without limitation, Buyer’s obligation to consummate the Sale Transactions) shall be affected in any way by the failure of the Property transferred to Buyer at Closing
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to include any Lease or Contract with respect to which Buyer has failed to so satisfy the Bankruptcy Court of adequate assurance of future performance.
3.8.3 The Parties acknowledge that this Agreement and the sale of the Property are subject to higher and better bids and Bankruptcy Court approval pursuant to the Bid Procedures, as approved by the Bid Procedures Order. The Parties further acknowledge that Sellers must take reasonable steps to demonstrate that they have sought to obtain the highest or otherwise best price for the assets, including giving notice thereof to the creditors of Sellers and other interested parties, providing information about the Sellers to prospective bidders, entertaining higher and better offers from such prospective bidders, and, in the event that additional qualified prospective bidders desire to bid for the Property, conducting an auction process as provided in the Bid Procedures Order.
3.8.4 If an Auction (as defined in the Bid Procedures Order) is conducted, and Buyer is not the prevailing party at the conclusion of such Auction (such prevailing party, the “Successful Bidder”), Buyer shall be required to serve as a Back-Up Bidder (as defined in the Bid Procedures Order) and keep Buyer’s bid to consummate the Sale Transactions on the terms and conditions set forth in this Agreement (as the same may be revised in the Auction) open and irrevocable until this Agreement is otherwise terminated, all as more particularly set forth in the Bid Procedures Order. If the Successful Bidder fails to consummate the applicable transaction contemplated by the Successful Bidder’s bid as a result of a breach or failure to perform on the part of such Successful Bidder, the Seller, after consultation with the Consultation Parties (as defined in the Bid Procedures Order) and with the consent of the Consenting Parties (as defined in the Bid Procedures Order) (such consent not to be unreasonably withheld, delayed or conditioned), shall be authorized, but not required, to deem the applicable Back-Up Bid, as disclosed at the Sale Hearing, as the Successful Bid, and the Sellers, after consultation with the Consultation Parties shall be authorized, but not required, to consummate the sale with the Back-Up Bidder submitting the next highest Bid (as defined in the Bid Procedures Order) for any Property without further order of the Bankruptcy Court.
3.8.5 Notwithstanding any other provision of this Agreement to the contrary, Buyer acknowledges that Sellers and their Affiliates and advisors are and may continue (i) soliciting inquiries, proposals, or offers for the Property in accordance with the Bid Procedures Order, (ii) responding to requests for information or due diligence inquiries, or making management available for such purposes, to Persons in connection with any possible alternative transactions in accordance with the Bid Procedures Order, and (iii) furnishing any information with respect to, or assist or participate in, or facilitate in any other manner, any effort or attempt by any Person to do or seek to do any of the foregoing in accordance with the Bid Procedures Order. Notwithstanding any other provision of this Agreement to the contrary, Buyer acknowledges and agrees that Sellers and their Affiliates may enter into a definitive agreement providing for an alternative transaction to the extent provided in the Bid Procedures Order.
3.8.6 The Sellers shall promptly serve true and correct copies of the motion seeking entry of the Approval Order and all related pleadings in accordance with
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the Bid Procedures Order, the Bankruptcy Code, the applicable bankruptcy rules, and any other applicable Order of the Bankruptcy Court.
3.8.7 In addition to Buyer’s cooperation obligations pursuant to the other provisions of this Agreement, the Buyer shall promptly take all actions as are reasonably requested by the Sellers to assist in obtaining the Bankruptcy Court’s entry of the Approval Order and any other Order reasonably necessary in connection with the Sale Transactions as promptly as practicable, including furnishing affidavits, financial information or other documents or information for filing with the Bankruptcy Court and making such employees and advisors of Buyer and its Affiliates available to testify before the Bankruptcy Court for the purposes of, among other things providing necessary assurances of performance by Buyer under this Agreement and demonstrating that Buyer is a “good faith” purchaser under section 363(m) of the Bankruptcy Code, as well as demonstrating Buyer’s ability to pay and perform or otherwise satisfy any Assumed Liabilities following the Closing.
3.8.8 Sellers’ obligations under this Agreement and in connection with the Sale Transactions are subject to entry of and, to the extent entered, the terms of any Orders of the Bankruptcy Court (including entry of the Approval Order). Nothing in this Agreement shall require Sellers or their respective Affiliates to give testimony to or submit a motion to the Bankruptcy Court that is untruthful or to violate any duty of candor or other fiduciary duty to the Bankruptcy Court or its stakeholders.
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4.1.8 Reserved.
Any waiver of a condition shall be effective only if such waiver is stated in writing and signed by the waiving Party; provided, however, that the consent of a Party to the Closing shall constitute a waiver by such Party of any conditions to Closing not satisfied as of the Closing Date.
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4.3.2. Effect of Termination. In the event of the termination of this Agreement pursuant to Section 2.1.2(a) or Section 4.3.1, this Agreement (other than this Section 4.3.2, Section 4.3.3 and Article X, which shall survive such termination) will forthwith become void, and there will be no Liability on the part of Buyer or Sellers or any of their respective officers, directors, agents or other representatives to the others and all rights and obligations of any party hereto will cease, provided, however, that (i) nothing herein will relieve any party from
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Liability for any breach of any representation, warranty, covenant, agreement or other obligation contained in this Agreement which occurred prior to termination of this Agreement in accordance with its terms, and (ii) the provisions of Sections 2.1.2(a) shall apply to any Buyer Default Termination (as defined in Section 2.1.2(a) above).
4.3.3 Refund of Deposit. In the event this Agreement is terminated other than as a result of a Buyer Default Termination, then the Deposit shall be promptly returned to Buyer free and clear of any Liens.
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| To Sellers: | Sientra, Inc. |
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| 3333 Michelson Drive, Suite 350 |
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| Irvine, CA 92612 |
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| Attn: Oliver Bennett, Esq. |
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| Email: oliver.bennett@sientra.com |
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| With a copy to: | Pachulski Stang Ziehl & Jones LLP |
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| 919 North Market Street, 17th Floor |
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| Wilmington, Delaware 19899 |
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| Attn: Laura Davis Jones, Esq. |
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| and David M. Bertenthal, Esq. |
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| Email: ljones@pszjlaw.com and dbertenthal@pszjlaw.com |
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| and |
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| Kirkland & Ellis LLP |
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| 601 Lexington Avenue |
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| New York, NY 10022 |
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| Attn: Nicole L. Greenblatt, P.C. |
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| Elizabeth H. Jones |
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| Email: nicole.greenblatt@kirkland.com and elizabeth.jones@kirkland.com |
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| To Buyer: | Nuance Intermediary, LLC |
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| 5931 Sea Lion Place, Suite 113 |
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| Carlsbad, CA 92010 |
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| Attn: Daniel Henn |
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| Email: dhenn@mdholdings.com |
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| With a copy to: | Ferguson Braswell Fraser Kubasta PC |
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| 2500 Dallas Parkway, Suite 600 |
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| Plano, TX 75093 |
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| Attn: Rachael L. Smiley |
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| Kenn W. Webb |
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| Email: rsmiley@fbfk.law and |
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| kwebb@fbfk.law |
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10.23 Specific Performance. The Parties agree that irreparable damage, for which monetary relief, even if available, would not be an adequate remedy, would occur in the event that any provision of this Agreement is not performed in accordance with its specific terms or is otherwise breached, including if any of the Parties fails to take any action required of it hereunder to consummate the Sale Transactions. It is accordingly agreed that (a) the Parties will be entitled to an injunction or injunctions, specific performance or other equitable relief to prevent breaches of this Agreement and to enforce specifically the terms and provisions hereof in the courts described in Section 10.24 without proof of damages or otherwise, this being in addition to any other remedy to which they are entitled under this Agreement, and (b) the right of specific performance and other equitable relief is an integral part of the Sale Transactions and without that right, neither Sellers nor Buyer would have entered into this Agreement. The Parties
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acknowledge and agree that any Party pursuing an injunction or injunctions or other Order to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement in accordance with this Section 10.23 will not be required to provide any bond or other security in connection with any such Order. The remedies available to a Party pursuant to this Section 10.23 will be in addition to any other remedy to which it is entitled at law or in equity, and the election to pursue an injunction or specific performance will not restrict, impair or otherwise limit any Party from seeking to collect or collecting damages. If, prior to the Outside Date, any Party brings any action, in each case in accordance with Section 10.24, to enforce specifically the performance of the terms and provisions hereof by any other Party, the Outside Date will automatically be extended (i) for the period during which such action is pending, plus ten business days or (ii) by such other time period established by the court presiding over such action, as the case may be. In no event will this Section 10.23 be used, alone or together with any other provision of this Agreement, to require any Seller to remedy any breach of any representation or warranty made by any Seller herein.
Section 10.24 Jurisdiction; Exclusive Venue and Jury Trial Waiver.
10.24.1 Each of the Parties irrevocably agrees that any claim, cause of action, action or proceeding of any kind whatsoever, including a counterclaim, cross-claim, or defense, regardless of the legal theory under which any Liability or obligation may be sought to be imposed, whether sounding in contract or in tort or under statute, or whether at law or in equity, or otherwise under any legal or equitable theory, that may be based upon, arising out of, or related to this Agreement or the negotiation, execution, or performance of this Agreement or the Sale Transactions and any questions concerning the construction, interpretation, validity and enforceability of this Agreement (each, an “Agreement Dispute”) brought by any other Party or its successors or assigns will be brought and determined only in (a) the Bankruptcy Court and any federal court to which an appeal from the Bankruptcy Court may be validly taken or (b) if the Bankruptcy Court is unwilling or unable to hear such Action, in the Court of Chancery of the State of Delaware (or if such court lacks jurisdiction, any other state or federal courts sitting in the state of Delaware) (the “Chosen Courts”), and each of the Parties hereby irrevocably submits to the exclusive jurisdiction of the Chosen Courts for itself and with respect to its property, generally and unconditionally, with regard to any Agreement Dispute. Each of the Parties agrees not to commence any Agreement Dispute except in the Chosen Courts, other than Actions in any court of competent jurisdiction to enforce any Order, decree or award rendered by any Chosen Courts, and no Party will file a motion to dismiss any Agreement Dispute filed in a Chosen Court on any jurisdictional or venue-related grounds, including the doctrine of forum non conveniens. The Parties irrevocably agree that venue would be proper in any of the Chosen Court, and hereby irrevocably waive any objection that any such court is an improper or inconvenient forum for the resolution of any Agreement Dispute. Each of the Parties further irrevocably and unconditionally consents to service of process in the manner provided for notices in Section 10.3. Nothing in this Agreement will affect the right of any Party to serve process in any other manner permitted by Law.
10.24.2 EACH PARTY HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM
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(WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE SALE TRANSACTIONS OR THE ACTIONS OF SUCH PARTY IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE AND/OR ENFORCEMENT HEREOF.
Section 10.25 No Right of Set-Off. Buyer, on its own behalf and on behalf of its respective successors and permitted assigns, hereby waives any rights of set-off, netting, offset, recoupment or similar rights that Buyer or any of its or respective successors and permitted assigns has or may have with respect to the payment of the Purchase Price or any other payments to be made by Buyer pursuant to this Agreement or any other document or instrument delivered by Buyer in connection herewith.
Section 10.26 Bulk Sale Laws. Buyer hereby waives Sellers’ compliance with the any “bulk sale” or similar Laws of any state or other applicable jurisdiction.
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IN WITNESS WHEREOF, Buyer and Sellers have executed this Asset Purchase Agreement as of the day and year first above written.
BUYER: | ||
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Nuance Intermediary, LLC, a | ||
Delaware limited liability company | ||
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By: |
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Name: |
| Daniel Henn |
Its: |
| Board Member |
SELLERS: | ||
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Sientra, Inc., a | ||
Delaware Corporation | ||
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By: |
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Name: |
| Ron Menezes |
Its: |
| Chief Executive Officer |
Mist Holdings, Inc., a | ||
Delaware Corporation | ||
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By: |
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Name: |
| Ron Menezes |
Its: |
| Chief Executive Officer |
Mist, Inc. a | ||
Delaware Corporation | ||
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By: |
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Name: |
| Ron Menezes |
Its: |
| Chief Executive Officer |
Mist International Inc., a | ||
Delaware Corporation | ||
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By: |
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Name: |
| Ron Menezes |
Its: |
| Chief Executive Officer |