ASSET ACQUISITION AGREEMENT
This Asset Acquisition Agreement (this “Agreement”), dated as of November 25, 2006, is by and among Mayne Pharma plc, a company incorporated and registered in England and Wales and/or its designee(s) (“Buyer”), EuroGen Pharmaceuticals, Ltd., a company incorporated and registered in England and Wales (“EuroGen”), and SuperGen, Inc., a Delaware corporation (“Seller”).
BACKGROUND: Seller and EuroGen are in the business of marketing, promoting, selling and distributing the Product (as defined below) in the Territory (as defined below) (collectively, “Seller Business”). On June 21, 2006, Seller and Mayne Pharma (USA) Inc. entered into a separate Asset Acquisition Agreement, pursuant to which Seller has agreed to sell to Mayne Pharma (USA) Inc., among other things, certain assets used by Seller in marketing, promoting, selling, and distributing the Product in the United States, Canada and Mexico (the “U.S. Agreement”). The parties desire that Seller and EuroGen (to the extent EuroGen holds any right, title or interest therein) sell and Buyer buys substantially all of the assets, tangible and intangible, related to the Seller Business, all on the terms and subject to the conditions set forth in this Agreement.
Intending To Be Legally Bound, in consideration of the foregoing and the mutual agreements contained herein and subject to the satisfaction of the terms and conditions set forth herein, the parties hereto agree as follows:
SECTION 1. DEFINED TERMS
Certain defined terms used in this Agreement and not specifically defined in context are defined in this Section 1 as follows:
1.1 “API” means the active pharmaceutical ingredient of the Product, pentostatin.
1.2 “Asset” means any real, personal, mixed, tangible or intangible property of any nature including prepayments, deposits, escrows, Tangible Property, Contract Rights, Intangibles, Marketing Authorizations, Product Registrations, Regulatory Documentation, goodwill, claims, causes of action and other legal rights and remedies.
1.3 “Books and Records” means copies of all paper and electronic versions of files, documents, instruments, papers, books, ledgers, plans, correspondence, memoranda, maps, diagrams, photographs, and videotapes, in each case (i) created in the three years prior to the Closing Date and (ii) only to the extent exclusively pertaining to the Specified Assets or Product (other than Marketing Materials, Regulatory Documentation and Product Registrations), but in all events excluding invoices as well as any of the foregoing items that refer to financial data.
1.4 “Change of Control” shall mean the direct or indirect acquisition of either (i) the majority of the voting stock of such party, or (ii) all or substantially all of the assets of such party, by another entity in a single transaction or series of related transactions if more than fifty percent (50%) of the combined voting power of the continuing or surviving entity’s securities outstanding immediately after such transaction or series of related transactions is owned by
persons who were not stockholders of such party immediately prior to such transaction or series of related transactions.
1.5 “cGMP” means current good manufacturing practice in accordance with the Guidelines of the International Conference on Harmonisation of Technical Requirements for Registration of Pharmaceuticals for Human Use (ICH), as amended from time to time, as applied by the Relevant Regulatory Authority.
1.6 “Claims Adjustment” has the meaning specified in Section 3.2.2.
1.7 “Clinical Trial Agreement” has the meaning specified in Section 4.8.1.
1.8 “Closing Payment” has the meaning specified in Section 3.1.1.
1.9 “Consent” means any consent, approval, order or authorization of, or any declaration, filing or registration with, or any application, notice or report to, or any waiver by, or any other action (whether similar or dissimilar to any of the foregoing) of, by or with, any Person, which is necessary in order to take a specified action or actions in a specified manner and/or to achieve a specified result.
1.10 “Contract” means any written or oral contract, agreement, instrument, order, arrangement, or commitment including sales orders, purchase orders, leases, subleases, data processing agreements, maintenance agreements, license agreements, sublicense agreements, loan agreements, promissory notes, security agreements, pledge agreements, deeds, mortgages, guaranties, indemnities, warranties, employment agreements, consulting agreements, sales representative agreements, joint venture agreements, buy-sell agreements, options or warrants.
1.11 “Contract Right” means any right, power or remedy of any nature under any Contract including rights to receive property or services or otherwise derive benefits from the payment, satisfaction or performance of another party’s Obligations, rights to demand that another party accept property or services or take any other actions, and rights to pursue or exercise remedies or options.
1.12 “Deferred Payments” has the meaning specified in Section 3.3.1.
1.13 “Deferred Payment Year” has the meaning specified in Section 3.3.1.
1.14 “Development Plan Payments” has the meaning specified in Section 2.1.3(A).
1.15 “EMEA” means the European Medicines Agency.
1.16 “Employment Regulations” means the UK Transfer of Undertakings (Protection of Employment) Regulations 2006 or any other local enactment of the European Community Acquired Rights Directive (77/187/EEC, as amended by Directive 98/50 EC and consolidated in 2001/23/EC).
1.17 “Encumbrance” means any lien, superlien, security interest, pledge, right of first refusal, charge (fixed or floating), trust, right of set off, mortgage, easement, covenant,
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restriction, reservation, prior assignment, or other encumbrance, claim, burden or charge of any nature (whether legal or equitable).
1.18 “Entity” means any corporation (including any non-profit corporation), general partnership, limited partnership, limited liability partnership, joint venture, estate, trust, company (including any company limited by shares, limited liability company or joint stock company), firm, society or other enterprise, association, organization or entity.
1.19 “Environmental Laws” means all applicable Laws (including consent decrees and administrative orders) relating to the public health and safety and protection of the environment including those governing the use, generation, handling, storage and disposal or cleanup of Hazardous Substances, all as amended.
1.20 “GAAP” means generally accepted accounting principles under current United States accounting rules and regulations, consistently applied.
1.21 “Good Distribution Practices” means the current good distribution practices as promulgated under Applicable Law, including any applicable guidance on good distribution practices adopted pursuant to Article 84 of Directive 2001/83/EC, in particular the European Commission’s Guidelines on Good Distribution Practice of Medicinal Products for Human Use.
1.22 “Governmental Body” means any: (a) nation, principality, republic, state, commonwealth, province, territory, county, municipality, district or other jurisdiction of any nature; (b) national, federal, state, local, municipal, foreign or other government; (c) governmental or quasi-governmental authority of any nature (including, without limitation, the EMEA) and any governmental division, subdivision, department, agency, bureau, branch, office, commission, council, court, tribunal (including a judicial tribunal); or (d) multi-national organization or body.
1.23 “HMRC” means HM Revenue and Customs in the United Kingdom.
1.24 “Hazardous Substance” means any substance, waste, contaminant, pollutant or material that has been determined by any Governmental Body to be capable of posing a risk of injury or damage to health, safety, property or the environment including (a) all substances, wastes, contaminants, pollutants and materials defined, designated or regulated as hazardous, dangerous or toxic pursuant to any Law, and (b) asbestos, polychlorinated biphenyls (“PCBs”), petroleum, petroleum products and urea formaldehyde, and toxic mold.
1.25 “Holdback Amount” has the meaning specified in Section 3.2.2.
1.26 “including” means including but not limited to.
1.27 “Indemnification Holdback Amount” has the meaning specified in Section 3.2.2.
1.28 “Indemnification Holdback Period” has the meaning specified in Section 3.2.2.
1.29 “Independent Accountant” means a nationally or internationally recognized accounting firm (other than a firm which has provided services to Buyer, EuroGen or Seller)
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mutually agreed upon by Buyer, EuroGen and Seller; provided, however, that should the parties be unable to agree on such accounting firm within thirty days after the determination of need for such Independent Accountant pursuant to Section 9.9 hereof, such firm shall be determined in Buyer’s reasonable discretion (it being agreed that such firm selected by Buyer shall not have provided services to Buyer, EuroGen or Seller).
1.30 “Insurance Policy” means any product liability insurance policy.
1.31 “Intangible” means any and all of the following and any and all rights and interests in, arising out of, or associated therewith, throughout the world: (a) all domain names, logos, symbols, corporate names, fictitious names, trademarks, trademark applications, service marks, service mark applications, trade names, trade dress, brand names, product names, and slogans, and all goodwill associated therewith and/or symbolized thereby; (b) all inventions (whether patentable or not), formulas, algorithms, methods, processes, discoveries, invention disclosures and trade secrets; (c) all patents and patent applications and all reissues, substitutes, divisions, reexaminations, renewals, extensions, provisionals, continuations and continuations-in-part thereof; (d) copyrights, copyright registrations, renewals, and applications therefor, and all other rights corresponding thereto, including rights in designs (whether or not registered or pending); (e) all websites, and all designs related thereto; (f) all rights in databases and data collections; (g) all moral, integrity, paternity, and economic rights of authors and inventors, however denominated; (h) any similar or equivalent rights to any of the foregoing, whether or not in use, under development or design, or inactive; and (i) the right to sue for past, present, and future infringement of any or all of the foregoing and to retain any damages awarded pursuant to such action.
1.32 “Inventory” means the API applicable to the Product together with all inventory of raw materials (including, without limitation, all crude unpurified pentostatin), packaging materials (including vials and stoppers), all work in progress related to the Product and all finished goods inventory of the Product, whether held at a location or facility of EuroGen or Seller (or of any other Person on behalf of EuroGen or Seller) or in transit to or from EuroGen or Seller (or any such other Person) ), including, without limitation, any inventory or packaging materials repurchased from Wyeth pursuant to the Wyeth Distribution Agreement.
1.33 “Inventory Purchase Price” shall have the meaning set forth in Section 3.4.
1.34 “Judgment” means any order, writ, injunction, citation, award, decree or other judgment of any nature of any Governmental Body.
1.35 “knowledge of Seller” or “Seller’s Knowledge” and similar phrases mean that none of EuroGen, Seller, or the directors or officers of EuroGen or Seller, respectively (including Michael Molkentin and Ed Jacobs) or Mark Lewis has any actual knowledge after due inquiry that the statement made is incorrect.
1.36 “Law” means any provision of any foreign, national, supra-national, federal, state or local law, statute, ordinance, treaty, code, rule, or regulation, including common law.
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1.37 “Local Representative” means a company (other than the Marketing Authorisation holder) registered with a Relevant Regulatory Authority to sell the Product on behalf of the Marketing Authorisation holder in that Market.
1.38 “Market” means each country or jurisdiction in the Territory for which a Marketing Authorization is set forth on Schedule 1.39.
1.39 “Marketing Authorization” means each grant of registration approval or license provided by the Relevant Regulatory Authority with respect to each country or jurisdiction in the Territory for the importation, storage, promotion, sale or distribution of the Product in such country or jurisdiction. Schedule 1.39 sets forth a complete list of all Marketing Authorizations.
1.40 “Marketing Materials” means all paper and electronic versions of all market research, marketing plans, media plans, advertising, marketing related clinical study plans and results, form letters and medical queries, promotion and sales training materials, customer lists, supplier lists, labeling, package inserts and posters and abstract displayed or circulated at medical conferences or meetings, display materials, trade show booth panels, banners, stands and the like, and information with respect to sales of the Product (including, without limitation, to doctors, group purchasing organizations (GPOs) and pharmacists), marketing books and records owned by Seller or EuroGen and only to the extent exclusively pertaining to the marketing and promotion of the Product.
1.41 “Market Transfer Date” means the date upon which the Relevant Regulatory Authority in any Market approves the transfer of the Marketing Authorization in that Market to Buyer.
1.42 “Material Adverse Effect” means any adverse effect on (a) the financial condition, or financial performance directly related to the manufacture, promotion and sale of the Product, or (b) the Specified Assets, or (c) any of the assets of third parties which are used in and are material to the Seller Business and are not readily replaceable; which adverse effect is or will be material, to the Seller Business as a whole, including, without limitation, circumstances that would reasonably be expected to make accomplishment of the Sigma Aldrich Conditions unlikely or impossible.
1.43 “Multi-Product Contracts” has the meaning specified in Section 4.8.3.
1.44 “Net Sales” means the gross amount invoiced on sales of the Product within the Territory, less reasonable and customary deductions for (a) credits for returns, including withdrawals and recalls; (b) sales rebates and chargebacks; (c) sales, value-added and other taxes (but in the case of value added taxes only to the extent such taxes are not reimburseable or refundable); (d) customs duties on sales made by such seller to the customer; (e) wholesaler fee-for-service discounts; and (f) group purchasing organization (GPO) fees; but in the case of (a) and (b) only to the extent accrued under accounting principles generally accepted for deductions to be actually given to and taken by the customer, and in the case of (c) and (d) only to the extent separately itemized or attributable to the product sale and paid by the customer or Buyer to a government agency. If a Product is sold for consideration other than solely cash, the fair market value of such other consideration shall be included in the calculation of Net Sales. For purposes
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of calculating Net Sales, transfers of a Product to an Affiliate for end use by such Affiliate in a country within the Territory shall be treated as a sale at the greater of the actual Net Sales and the average Net Sales price for fully arms-length sales of such Product in such country during the applicable calendar quarter.
1.45 “Obligation” means any debt, liability or obligation of any nature, whether secured, unsecured, recourse, nonrecourse, liquidated, unliquidated, accrued, absolute, fixed, contingent, ascertained, unascertained, known, unknown or otherwise.
1.46 “Permit” means any license, permit, approval, certification, waiver, order, authorization, right or privilege of any nature, granted, issued, approved or allowed by any Governmental Body.
1.47 “Permitted Encumbrances” means (i) any Encumbrance for inchoate mechanics’ and materialmen’s liens for construction in progress and workmen’s, repairmen’s warehousemen’s and carrier’s liens arising in the ordinary course of business, and (ii) any Encumbrance for Taxes not yet due and payable.
1.48 “Person” means any individual, Entity or Governmental Body.
1.49 “Privacy Law” means any Law pertaining to the privacy of any Person, including, without limitation, the European Data Protection Directive (95/46/EC), the implementing laws of each of the member states of the European Union, and any rules or regulations promulgated under any such Law.
1.50 “Proceeding” means any demand, claim, suit, action, litigation, investigation, arbitration or administrative enforcement hearing.
1.51 “Product” means, collectively, each of the following within the Territory: (i) the drug to which each Marketing Authorization set forth on Schedule 1.39 relates (such drug referred to herein as “Nipent®”), in whatever formulation; and (ii) any drugs owned by Seller or EuroGen other than Nipent® for which the active ingredient is pentostatin and the indication for use is to treat an oncological disease or Graft Versus Host Disease (collectively, “Seller Pentostatin-Based Oncology Drugs”), in whatever formulation.
1.52 “Product Registrations” means the approvals, registrations, applications, licenses and Permits (including, but not limited to, each dossier, Marketing Authorization application, Marketing Authorization, variation, pricing or reimbursement approval, and European Drug Master File) for the Product which have been prepared, submitted and/or approved (including in preliminary and/or draft form, if applicable) in order lawfully to manufacture (or have manufactured), market, distribute, or sell the same in the Territory, each of which is set forth on Schedule 1.52 attached hereto.
1.53 “Regulatory Documentation” means all (a) regulatory filings and supporting documents, chemistry, manufacturing and controls data and documentation (including, but not limited to, batch records, master batch production records, standard operating procedures, testing logs, sample logs, laboratory logs, and stability logs) in each case to the extent pertaining to the Product, preclinical or clinical studies or tests for the Product, (b) records maintained under
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record-keeping or reporting requirements of any Governmental Body, including any Relevant Regulatory Authority, with respect to the Product, (c) the complete complaint, adverse event and medical inquiry filings with respect to the Product, (d) all documentation relating to any Relevant Regulatory Authority or any other Governmental Body inspections to the extent pertaining to the Product and any written communication with any Relevant Regulatory Authority or any other Governmental Body to the extent pertaining to the Products, including correspondence and written minutes of telephone calls or meetings, and (e) all documentation related to any Relevant Regulatory Authority or any other Governmental Body inspections of the facilities of ChemWerth USA, King Pharmaceuticals, Sigma Aldrich Corp., American Type Culture Collection, Tetrionics, Hauser, Wyeth or Livingston, or any other Entity conducting material activities relating to the manufacture or sale of the Product, in each of (a) through (e) only to the extent (i) Seller or EuroGen possess and can legally transfer such information, and (ii) such information exclusively pertains to the Product in the Territory, and in all events exclusive of Product Registrations.
1.54 “Relevant Regulatory Authority” in relation to a country or jurisdiction in the Territory, means the Governmental Body, whether national, federal, state or local, including, without limitation, the EMEA and European Commission, regulating the development, importation, manufacture, marketing, sale and/or distribution of therapeutic substances and the grant of Marketing Authorization in such country or jurisdiction.
1.55 “Seller Intangibles” means any and all Intangibles within the Territory that are owned by Seller or EuroGen or licensed to Seller or EuroGen from any Third Party (i) that are set forth on Schedule 1.55 or (ii) that otherwise exclusively pertain to the Product.
1.56 “Sellers’ Monthly Volume” means the average monthly unit sales volume of Seller or EuroGen and their distributors, including, without limitation, Wyeth, for the Product for the twelve months ended on the date hereof.
1.57 “Sigma Aldrich Agreement” has the meaning specified in Section 2.1.3(A).
1.58 “Sigma Aldrich Conditions” has the meaning specified in Section 3.2.1.
1.59 “Specified Assets” has the meaning specified in Section 2.1.2 hereof.
1.60 “Specified Contracts” has the meaning specified in Section 4.8.1.
1.61 “Specified Liabilities” has the meaning specified in Section 2.1.3 hereof.
1.62 “Supply Holdback Amount” has the meaning specified in Section 3.2.1.
1.63 “Tangible Property” means any furniture, fixtures, leasehold improvements, vehicles, office equipment, computer equipment, other equipment, machinery, tools, forms, supplies or other tangible personal property of any nature.
1.64 “Tax” means (a) any foreign, federal, state or local income, earnings, profits, gross receipts, franchise, capital stock, net worth, sales, use, value added, occupancy, general property, personal property, intangible property, transfer, fuel, excise, payroll, withholding,
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workers compensation, unemployment compensation, social security, retirement, escheat, unclaimed property or other tax of any nature; (b) any foreign, federal, state or local organization fee, qualification fee, annual report fee, filing fee, occupation fee, assessment, sewer rent or other fee or charges of any nature; or (c) any deficiency, interest or penalty imposed with respect to any of the foregoing.
1.65 “Tax Return” means any return (including any information return), report, statement, schedule, notice, form, declaration, claim for refund or other document or information filed with or submitted to, or required to be filed with or submitted to, any governmental body in connection with the determination, assessment, collection or payment of any Tax or in connection with the administration, implementation or enforcement of or compliance with any law relating to any Tax, including any amendment thereto.
1.66 “Taxing Authority” shall mean any domestic, foreign, federal, national, state, county or municipal or other local government, any subdivision, agency, commission or authority thereof, or any quasi-governmental body exercising tax regulatory authority.
1.67 “Transition Services Agreement” has the meaning specified in Section 8.1.11(c).
1.68 “Territory” means all countries and jurisdictions worldwide, except for (i) the fifty states of the United States of America, the District of Columbia, and all territories and possessions of the United States of America (including, without limitation, Puerto Rico), (ii) Canada, and (iii) Mexico.
1.69 “Third Party” means any Person other than the Buyer, the Seller, EuroGen, any of their respective affiliates or any successors, assigns or express licensees of Buyer, Seller, EuroGen or their respective affiliates.
1.70 “U.S. Drug Safety Agreement” means that certain Drug Safety Agreement dated August 22, 2006 by and between Seller and Buyer.
1.71 “Validation” means confirmation that from an administrative (and not substantive) perspective, all of the documents required by a Relevant Regulatory Authority for a filing with such Relevant Regulatory Authority have been included in a package to be submitted to that Relevant Regulatory Authority.
1.72 “VAT” means value added tax chargeable in the European Union or under the VATA or under any legislation replacing it or under any legislation which the VATA replaced or equivalent tax levied elsewhere in the world and further means value added tax at a rate in force when the relevant supply is made and any tax of a similar nature which is introduced in substitution for such value added tax.
1.73 “VATA” means the Value Added Tax Act 1994 in the United Kingdom.
1.74 “Wyeth Distribution Agreement” means the Amended and Restated Supply and Distribution Agreement related to the Product by and between Wyeth and Seller effective June 1, 2006, as amended from time to time.
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SECTION 2. THE TRANSACTION
2.1 Sale and Purchase of Specified Assets.
On the Closing Date, effective to the fullest extent possible at 12:01 a.m. Eastern Time on the Closing Date, subject to the other terms and conditions of this Agreement, Seller shall sell, transfer, assign and convey to Buyer, and Buyer shall purchase, all right, title and interest in and to all of the Seller Assets, free and clear of any Encumbrances, other than Permitted Encumbrances. At the Closing, Seller shall (and Seller shall cause EuroGen to) assign to Buyer, and Buyer shall assume, the Specified Liabilities of Seller and EuroGen.
2.1.1. Seller Assets. Subject to Section 2.1.2 hereof, the “Seller Assets” means all Assets (within the Territory) of Seller owned (legally or beneficially) and exclusively pertaining to the Product as of the Closing Date, wherever located within the Territory and whether or not reflected on Seller’s books and records set forth in subsections (A) through (K) below (but excluding (a) the Assets specifically excepted below, (b) those Assets defined as Specified Assets under the U.S. Agreement, and (c) those Assets listed on Schedule 2.1.1, which Schedule 2.1.1 shall set forth those assets owned by Seller that are material to the Seller Business but are not among the assets being sold, transferred, conveyed and assigned to Buyer) (collectively, such items expressly excluded below and contained on Schedule 2.1.1 shall be referred to herein as the “Excluded Assets”):
(A) All rights, title and interest in and to the Product, exclusive of Seller Intangibles.
(B) All Seller Intangibles of Seller.
(C) All Product Registrations, Marketing Authorizations and Regulatory Documentation of Seller, whether or not in the name of or held in trust by EuroGen.
(D) All Marketing Materials and Books and Records of Seller.
(E) All rights, title and interest in and to prepaid establishment fees and prepaid product fees with respect to the Product.
(F) All of Seller’s prepayments exclusively pertaining to the Seller Business (including prepaid purchase orders) but excluding all prepaid premiums and other prepayments and deposits, in each case, with respect to Seller’s Insurance Policies, Seller’s Group Insurance plans and Seller’s Retirement Plans.
(G) All of Seller’s Tangible Property set forth in Schedule 2.1.1(G) used by Seller or EuroGen exclusively in connection with the Seller Business.
(H) All of Seller’s and EuroGen’s Contract Rights under the Specified Contracts exclusive of Multi-Product Contracts and further excluding Contract Rights under (1) this Agreement and any other Contracts entered into by Seller or EuroGen with Buyer in connection with the transactions contemplated by this Agreement; (2) Contracts that constitute or evidence Employee Benefit Plans of Seller or EuroGen, (3) all Contracts relating to the
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acquisition of Seller or any of Seller’s predecessors or affiliates, provided that the Seller Assets shall include the rights of either Seller or EuroGen with respect to all indemnification, noncompetition, nondisclosure and other restrictive covenants made for the benefit of Seller or EuroGen or its or their predecessors in any such Contract; and (4) all Contract Rights under any Specified Contracts requiring a Consent that is not obtained on or before the Closing Date (“Non-Assigned Contracts”); provided that, once such Consent is obtained, the Contract Rights under such Non-Assigned Contract (but excluding Multi-Product Contracts) shall be deemed, automatically and without further action by the parties, to be included in the Seller Assets as of the date such Consent is delivered to Buyer.
(I) All of Seller’s goodwill with respect to the Product.
(J) Content of databases (including with respect to clinical trials and data with respect thereto), applicable drug information and data exclusively pertaining to the Product, in all cases excluding such items included as part of the Regulatory Documentation.
(K) All of Seller’s claims, causes of action and other legal rights and remedies, whether or not known as of the Closing Date, with respect to Seller’s ownership of the Seller Assets or the operation of the Seller Business, but excluding causes of action and other legal rights and remedies of Seller (1) against Buyer with respect to the transactions contemplated by this Agreement; (2) relating to Seller’s Assets not included in the Seller Assets or to Seller’s liabilities not included in the Specified Liabilities; and (3) relating to refunds of Taxes.
2.1.2. EuroGen Assets. On the Closing Date, effective to the fullest extent possible at 12:01 a.m. Eastern Time on the Closing Date, subject to the other terms and conditions of this Agreement, EuroGen shall sell, transfer, assign and convey to Buyer, and Buyer shall purchase all right, title and interest in and to all of Inventory owned by EuroGen, free and clear of any Encumbrances, other than Permitted Encumbrances (the Seller Assets and the Inventory shall be referred to collectively herein as the “Specified Assets”). For purposes of this Agreement, it is acknowledged that all Assets of the Seller Business that are within the categories of Assets that are included within the Seller Assets (other than Inventory) to which EuroGen holds legal title are held in trust for the benefit of Seller and are included within the Seller Assets referenced in Section 2.1.1.
2.1.3. Specified Liabilities of Seller and EuroGen. On the Closing Date for those Contracts assigned on the Closing Date as specified on Schedule 2.1.3 as Contracts to be assigned on the Closing Date, or on the applicable date of assignment for those Contracts assigned on some other date as set forth on Schedule 2.1.3, as the case may be, Seller and EuroGen shall assign to Buyer, and Buyer shall assume, the Specified Liabilities of Seller and EuroGen; provided, however, that the Specified Liabilities shall not include any Specified Liabilities under the U.S. Agreement (as defined pursuant to the U.S. Agreement). The “Specified Liabilities” of Seller and EuroGen means the following specifically described liabilities of Seller or EuroGen as of the Closing Date or the applicable date of assignment:
(A) The liabilities of either Seller or EuroGen under those Specified Contracts as set forth on Schedule 2.1.3 (provided, however, that any such liabilities shall only
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be assumed at such time as such Specified Contract is assigned to Buyer in accordance with Schedule 2.1.3) related to the Product and the Seller Business to which either Seller or EuroGen is a party, provided that the incurrence or existence of any such liability or Contract does not constitute a breach or failure of, or a default under, any representation, warranty, covenant or other provision of this Agreement, but only to the extent that such liabilities arise in the ordinary course of performing such Specified Contracts, in accordance with their respective terms, after the Closing Date or the applicable date of assignment for such Contract, as the case may be, and are not due to any breach or default by either Seller or EuroGen under any such Specified Contract. Notwithstanding the foregoing, the Specified Liabilities of Seller and EuroGen shall not include the liabilities of Seller or EuroGen under (1) this Agreement or any other Contracts entered into by either Seller or EuroGen with Buyer in connection with the transactions contemplated by this Agreement; (2) any Contracts that constitute or evidence Employee Benefit Plans of either Seller or EuroGen, (3) any Contracts relating to the acquisition of Seller or any of Seller’s predecessors or affiliates; (4) any Non-Assigned Contracts unless and until such contracts constitute part of the Specified Assets as contemplated by Section 2.1.1(H); (5) any remaining payments (the “Development Plan Payments”), whether known or unknown, in connection with the Development Plan contemplated by the Drug Substance Validation and Supply Agreement (the “Sigma Aldrich Agreement”) dated October 5, 2004 between Seller and Sigma Aldrich (F/K/A Tetrionics, Inc.), and (6) any spending obligations under any existing Clinical Trial Agreements.
2.2 No Other Liabilities. Notwithstanding any other provisions of this Agreement, Buyer shall not purchase the Specified Assets subject to, and Buyer shall not in any manner assume or be liable or responsible for any Obligations of Seller or EuroGen other than the Specified Liabilities. All Obligations of Seller or EuroGen other than the Specified Liabilities shall remain the sole responsibility of Seller or EuroGen, as the case may be, and Seller or EuroGen shall pay and discharge such Obligations in full as the same become due. Without limiting the generality of the foregoing, and in addition to the liabilities excluded from the Specified Liabilities under Section 2.1.3 hereof, Buyer shall not in any manner assume or be liable or responsible for, or acquire any Assets of Seller or EuroGen subject to, any of the following Obligations of Seller or EuroGen identified in this Section 2.2 and the Obligations set forth on Schedule 2.2 attached hereto:
2.2.1. Affiliates. Any Obligation to a shareholder or any current or former shareholder, member, partner, director or controlling Person of either Seller or EuroGen, or to any other Person affiliated with either Seller or EuroGen, or either of their affiliates and predecessors including Obligations for dividends declared but not paid.
2.2.2. Taxes. Except as otherwise provided in Sections 3.5 and 9.4(a), any Obligation for any Tax of either Seller or EuroGen including, (a) any Tax payable by either Seller or EuroGen with respect to the operation of the Seller Business; (b) any Tax payable by any Seller or EuroGen with respect to the ownership, possession, purchase, lease, sale, disposition or use of any of Seller’s or EuroGen’s Assets at any time on or before the Closing Date; and (c) any Tax of either Seller or EuroGen resulting from the sale of the Specified Assets to Buyer or otherwise resulting from the transactions contemplated by this Agreement.
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