EXHIBIT 2.1
PURCHASE AGREEMENT
by and among
LIGAND PHARMACEUTICALS INCORPORATED
SERAGEN, INC.
EISAI INC.
and
EISAI CO., LTD.
Dated as of September 7, 2006
TABLE OF CONTENTS
ARTICLE I. DEFINITIONS........................................................1
SECTION 1.1 DEFINITIONS........................................1
SECTION 1.2 OTHER DEFINITIONAL PROVISIONS.....................16
ARTICLE II. PURCHASE AND SALE................................................17
SECTION 2.1 TRANSFER OF PURCHASED ASSETS AND INVENTORY........17
SECTION 2.2 EXCLUDED ASSETS...................................19
SECTION 2.3 ASSUMED LIABILITIES...............................19
SECTION 2.4 EXCLUDED LIABILITIES..............................19
SECTION 2.5 PROCEDURES FOR CERTAIN PURCHASED ASSETS NOT FREELY
TRANSFERABLE......................................19
SECTION 2.6 PURCHASE PRICE....................................20
SECTION 2.7 PURCHASE PRICE ALLOCATION.........................21
SECTION 2.8 CLOSING DATE INVENTORY ADJUSTMENTS................21
SECTION 2.9 RISK OF LOSS......................................23
SECTION 2.10 TAX WITHHOLDING...................................23
ARTICLE III. CLOSING.........................................................23
SECTION 3.1 CLOSING...........................................23
SECTION 3.2 TRANSACTIONS AT CLOSING...........................24
SECTION 3.3 PURCHASER'S ACTIONS AND DELIVERIES................25
ARTICLE IV. REPRESENTATIONS AND WARRANTIES OF SELLER AND SELLER SUB..........26
SECTION 4.1 ORGANIZATION......................................26
SECTION 4.2 DUE AUTHORIZATION.................................27
SECTION 4.3 NO CONFLICTS; ENFORCEABILITY......................27
SECTION 4.4 TITLE; ASSETS.....................................27
SECTION 4.5 INVENTORY.........................................28
SECTION 4.6 APPLICABLE PERMITS................................28
SECTION 4.7 INTELLECTUAL PROPERTY.............................29
SECTION 4.8 LITIGATION........................................31
SECTION 4.9 ASSIGNED CONTRACTS................................31
SECTION 4.10 CONSENTS..........................................33
SECTION 4.11 TAXES.............................................33
SECTION 4.12 EMPLOYEE MATTERS..................................33
SECTION 4.13 LABOR MATTERS.....................................34
SECTION 4.14 COMPLIANCE WITH LAW...............................35
SECTION 4.15 REGULATORY MATTERS................................35
SECTION 4.16 GOVERNMENT MULTI-PRODUCT CONTRACTS................37
SECTION 4.17 FINANCIAL STATEMENTS; NO UNDISCLOSED LIABILITIES..37
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SECTION 4.18 ABSENCE OF CHANGES................................37
SECTION 4.19 INSURANCE.........................................38
SECTION 4.20 BROKERS, ETC......................................38
SECTION 4.21 PRODUCT EQUIPMENT.................................38
SECTION 4.22 PROMOTIONAL MATERIALS.............................38
SECTION 4.23 NO OTHER WARRANTIES...............................39
ARTICLE V. REPRESENTATIONS AND WARRANTIES OF EISAI INC. AND EISAI, LTD.......39
SECTION 5.1 ORGANIZATION......................................39
SECTION 5.2 DUE AUTHORIZATION.................................39
SECTION 5.3 NO CONFLICTS; ENFORCEABILITY......................39
SECTION 5.4 LITIGATION........................................40
SECTION 5.5 CONSENTS..........................................40
SECTION 5.6 FINANCING.........................................40
SECTION 5.7 BROKERS, ETC......................................40
SECTION 5.8 INDEPENDENT INVESTIGATION.........................40
SECTION 5.9 NO OTHER WARRANTIES...............................41
ARTICLE VI. COVENANTS PRIOR TO CLOSING.......................................41
SECTION 6.1 ACCESS TO INFORMATION.............................41
SECTION 6.2 CONDUCT OF THE PRODUCT LINE BUSINESS..............41
SECTION 6.3 REQUIRED APPROVALS AND CONSENTS...................43
SECTION 6.4 HSR ACT...........................................43
SECTION 6.5 NO NEGOTIATION....................................44
SECTION 6.6 TRANSITION ACTIVITIES.............................45
SECTION 6.7 NON-SOLICITATION; NON-COMPETITION; NON-
DISPARAGEMENT.....................................46
SECTION 6.8 NOTIFICATIONS.....................................47
SECTION 6.9 DISCLOSURE SUPPLEMENTS............................48
SECTION 6.10 FURTHER ASSURANCES; FURTHER DOCUMENTS.............48
ARTICLE VII. CONDITIONS TO CLOSING...........................................48
SECTION 7.1 CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLER,
SELLER SUB AND PURCHASER..........................48
SECTION 7.2 CONDITIONS PRECEDENT TO PURCHASER'S OBLIGATIONS...49
SECTION 7.3 CONDITIONS PRECEDENT TO SELLER'S AND SELLER
SUB'S OBLIGATIONS.................................50
ARTICLE VIII. ADDITIONAL COVENANTS...........................................51
SECTION 8.1 CONFIDENTIALITY; PUBLICITY........................51
SECTION 8.2 AVAILABILITY OF RECORDS...........................51
SECTION 8.3 USE OF SELLER BRANDS..............................52
SECTION 8.4 NOTIFICATION OF CUSTOMERS.........................52
SECTION 8.5 PRODUCT RETURNS, REBATES AND CHARGEBACKS..........53
SECTION 8.6 ACCOUNTS RECEIVABLE...............................56
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SECTION 8.7 REGULATORY MATTERS................................56
SECTION 8.8 WEBSITE INFORMATION...............................59
SECTION 8.9 TAX MATTERS.......................................59
SECTION 8.10 GOVERNMENT MULTI-PRODUCT CONTRACTS................60
SECTION 8.11 INVENTORY MATTERS.................................61
SECTION 8.12 PROSECUTION OF PRODUCT MARKS......................61
SECTION 8.13 TRADE SECRETS.....................................61
SECTION 8.14 PROFESSIONAL ADVISORY FEES, ETC...................62
SECTION 8.15 NON-ASSERTION COVENANT............................62
ARTICLE IX. EMPLOYEE MATTERS.................................................62
SECTION 9.1 EMPLOYEE TRANSFER.................................62
SECTION 9.2 TRANSITION OF BENEFITS............................63
SECTION 9.3 WARN ACT..........................................65
SECTION 9.4 EMPLOYEE INFORMATION..............................65
ARTICLE X. TERM AND TERMINATION..............................................66
SECTION 10.1 TERMINATION.......................................66
SECTION 10.2 PROCEDURE AND EFFECT OF TERMINATION...............67
ARTICLE XI. INDEMNIFICATION..................................................69
SECTION 11.1 SURVIVAL OF REPRESENTATIONS AND WARRANTIES;
EXPIRATION........................................69
SECTION 11.2 INDEMNIFICATION BY SELLER AND SELLER SUB..........70
SECTION 11.3 INDEMNIFICATION BY PURCHASER......................71
SECTION 11.4 CERTAIN PROCEDURES FOR INDEMNIFICATION............71
SECTION 11.5 LIMITATIONS.......................................73
SECTION 11.6 ESCROW............................................74
SECTION 11.7 SATISFACTION OF CLAIMS............................74
SECTION 11.8 EXCLUSIVE REMEDY..................................75
ARTICLE XII. MISCELLANEOUS...................................................75
SECTION 12.1 ASSIGNMENT; BINDING EFFECT........................75
SECTION 12.2 CUMULATIVE RIGHTS.................................75
SECTION 12.3 EXPENSES..........................................75
SECTION 12.4 NOTICES...........................................75
SECTION 12.5 ENFORCEABILITY; SEVERABILITY......................76
SECTION 12.6 AMENDMENT; ENTIRE AGREEMENT.......................77
SECTION 12.7 NO THIRD PARTY BENEFICIARIES......................77
SECTION 12.8 WAIVER............................................77
SECTION 12.9 GOVERNING LAW; JURISDICTION.......................77
SECTION 12.10 INJUNCTIVE RELIEF.................................78
SECTION 12.11 WAIVER OF JURY TRIAL..............................78
SECTION 12.12 HEADINGS..........................................78
SECTION 12.13 COUNTERPARTS......................................78
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SECTION 12.14 SCHEDULES.........................................78
SECTION 12.15 CONSTRUCTION......................................78
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LIST OF EXHIBITS
Exhibit A-1 - Assignment of U.S. Product Marks
Exhibit A-2 - Assignment of Non-U.S. Product Marks
Exhibit B-1 - Assignment of Product Patent Rights
Exhibit B-2 - Assignment of Non-U.S. Product Patent Rights
Exhibit C-1 - Bill of Sale and Assignment and Assumption
Agreement - U.S.
Exhibit C-2 - Bill of Sale and Assignment and Assumption
Agreement - Non-U.S.
Exhibit D - Escrow Agreement
Exhibit E - ONTAK Manufacture and Supply Agreement Assignment
Exhibit F - ONTAK Product Insert
Exhibit G - Targretin Manufacture and Supply Agreement
Assignment
Exhibit H - Transition Services Agreement
LIST OF SCHEDULES
Schedule 2.3 - Assumed Liabilities
Schedule 2.8 - Inventory Value Calculation
Schedule 6.2 - Conduct of Product Line Business
Schedule 8.5(c) - Best Price and AMP
Schedule 9.1(a)(i) - Product Employees to whom Purchaser will Extend
Employment Offers
Schedule 9.1(a)(ii) - Potential Employees
Schedule 9.2(e) - Qualified Beneficiaries
SELLER DISCLOSURE SCHEDULE
Schedule 1.1(a) - Applicable Permits
Schedule 1.1(b) - Assigned Contracts
Schedule 1.1(c) - Knowledge
Schedule 1.1(d) - ONTAK Patents
Schedule 1.1(e) - Panretin Patents
Schedule 1.1(f) - Permitted Encumbrances
Schedule 1.1(g) - Product Copyrights
Schedule 1.1(h) - Product Equipment
Schedule 1.1(i) - Product Marks
Schedule 1.1(j) - Product Trade Dress
Schedule 1.1(k) - Promotional Materials
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Schedule 1.1(l) - Targretin Patents
Schedule 4.3 - No Conflicts
Schedule 4.4 - Title; Assets
Schedule 4.5(c) - Inventory Sales Not in Ordinary Course of Business
Schedule 4.7(b) - Enforceable and Valid Intellectual Property
Schedule 4.7(c) - Control of Intellectual Property
Schedule 4.7(d) - Royalty Obligations
Schedule 4.7(e) - Licenses or Other Rights Granted under
Intellectual Property
Schedule 4.7(f) - Intellectual Property Infringement
Schedule 4.8 - Litigation
Schedule 4.9 - Assigned Contracts - Third Party Consents
Schedule 4.10 - Consents
Schedule 4.12(a) - Product Employee List
Schedule 4.12(b) - Seller Plans
Schedule 4.12(g) - No Liabilities to Product Employees
Schedule 4.13 - Labor Matters
Schedule 4.14 - Compliance with Law
Schedule 4.15 - Registrations
Schedule 4.18 - Absence of Changes
Schedule 4.19 - Insurance Policies
Schedule 7.2 - Required Consents
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PURCHASE AGREEMENT
THIS PURCHASE AGREEMENT (this "AGREEMENT"), dated as of September 7, 2006
(the "EXECUTION DATE"), is entered into by and among Ligand Pharmaceuticals
Incorporated, a Delaware corporation ("SELLER"), Seragen, Inc.,
a Delaware corporation and wholly-owned subsidiary of Seller ("SELLER SUB"), and
Eisai Inc., a Delaware corporation ("EISAI INC.") and Eisai Co., Ltd., a
Japanese company ("EISAI, LTD.", and together with Eisai Inc.,"PURCHASER"). Each
of Seller, Seller Sub, Eisai Inc. and Eisai, Ltd. is sometimes referred to
herein, individually, as a "PARTY" and, collectively, as the "PARTIES." All
capitalized terms used herein shall have the meanings specified in ARTICLE I
below or elsewhere in this Agreement, as applicable.
INTRODUCTION
WHEREAS, subject to the terms and conditions of this Agreement, Seller
and Seller Sub desire to transfer their respective rights in the Products and
substantially all of their respective rights in the Distribution of the Products
in the Territory (collectively, the "PRODUCT LINE BUSINESS") to Purchaser;
WHEREAS, subject to the terms and conditions of this Agreement, Seller
and Seller Sub wish to sell the Purchased Assets and Inventory and transfer the
Assumed Liabilities to Purchaser, and Purchaser wishes to purchase the Purchased
Assets and Inventory and assume the Assumed Liabilities from Seller and Seller
Sub; and
WHEREAS, the Parties agree that all United States rights, liabilities
and obligations to the Purchased Assets, Inventory and Assumed Liabilities
assigned, transferred and conveyed pursuant to this Agreement shall be assigned,
transferred and conveyed to Eisai Inc., and that all other rights, liabilities
and obligations to the Purchased Assets, Inventory and Assumed Liabilities shall
be assigned, transferred and conveyed to Eisai, Ltd.;
NOW, THEREFORE, in consideration of the foregoing and the
representations, warranties, covenants, agreements and provisions set forth
herein and in the Other Agreements, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, and
intending to be legally bound hereby, the Parties agree as follows:
ARTICLE I.
DEFINITIONS
Section 1.1 DEFINITIONS. In addition to the terms defined above and
other terms defined in other Sections of this Agreement, the following terms
shall have the meanings set forth below for purposes of this Agreement:
"ACCOUNTANTS" means an accounting firm of national reputation
(excluding each of Seller's and Purchaser's respective regular outside
accounting firms) as may be mutually acceptable to Seller and Purchaser;
PROVIDED, HOWEVER, if Seller and Purchaser are unable to agree on such
accounting firm within ten (10) days or any such mutually selected accounting
firm is unwilling or unable to serve, then Seller shall deliver to Purchaser a
list of three (3) other accounting firms of national reputation which have not
performed services for Seller or
Purchaser in the preceding three (3)-year period, and Purchaser shall select
one of such three (3) accounting firms.
"ACCOUNTS RECEIVABLE" means any rights whatsoever to any accounts
receivable (including any payments received with respect thereto on or after the
Closing, unpaid interest accrued on any such accounts receivable and any
security or collateral related thereto) arising from sales of the Products on or
prior to the Closing Date.
"ACQUISITION PROPOSAL" means a proposal from a third party not
solicited by or on behalf of Seller, Seller Sub or any of their respective
Affiliates or any Representatives of the foregoing between the Execution Date
and the Effective Time relating to the acquisition of the Products and the
Product Line Business, or the acquisition of more than fifty percent (50%) of
Seller's Common Stock.
"ACT" means the United States Federal Food, Drug, and Cosmetic Act, as
amended, and the rules, regulations, guidelines, guidances and requirements
promulgated thereunder, as may be in effect from time to time.
"ACTION" means any claim, action, suit, arbitration, inquiry, audit,
proceeding or investigation by or before or otherwise involving, any
Governmental Authority.
"AFFILIATE" means, with respect to any Person, any other Person
directly or indirectly controlling or controlled by, or under direct or indirect
common control with, such Person. For purposes of this definition, a Person
shall be deemed, in any event, to control another Person if it owns or controls,
directly or indirectly, or has the ability to direct or cause the direction or
control of, more than fifty percent (50%) of the voting equity of the other
Person.
"AGREEMENT" has the meaning set forth in the first paragraph of this
Agreement.
"ALTERNATIVE TRANSACTION" has the meaning set forth in SECTION 10.2(F).
"ALTERNATIVE TRANSACTION NOTICE" has the meaning set forth in SECTION
10.2(F).
"AMP" has the meaning set forth in SECTION 8.5(C)(III).
"APPLICABLE PERMITS" means the permits, approvals, licenses, franchises
or authorizations, including the Registrations, from any Governmental Authority
held by Seller, Seller Sub or their respective Affiliates that relate primarily
or exclusively to any Product or the Product Line Business, as set forth on
SCHEDULE 1.1(A) of the Seller Disclosure Schedule, in each case, together with
any renewals, extensions or modifications thereof or any amendments thereto.
"APPORTIONED OBLIGATIONS" has the meaning set forth in SECTION 8.9(B).
"ASSETS" of any Person means all assets and properties of any kind,
nature, character and description (whether real, personal or mixed, whether
tangible or intangible, whether absolute, accrued, contingent, fixed or
otherwise and wherever situated), including the goodwill related thereto,
operated, owned or leased by such Person, including cash, cash equivalents,
accounts
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and notes receivable, chattel paper, documents, instruments, general
intangibles, equipment, inventory, goods and intellectual property.
"ASSIGNED CONTRACT(S)" means those Contracts, regardless of dollar
value, including purchase orders, related primarily or exclusively to any
Product or the Product Line Business, as set forth on SCHEDULE 1.1(B) of the
Seller Disclosure Schedule (such schedule to be updated by Seller immediately
prior to the Closing) together with those Contracts which would have been set
forth on SCHEDULE 1.1(B) of the Seller Disclosure Schedule but for the dollar
thresholds of SECTION 4.9(A)(II). Notwithstanding the foregoing, "ASSIGNED
CONTRACT(S)" shall not include any Seller Plan.
"ASSIGNMENT OF NON-U.S. PRODUCT MARKS" means an Assignment of Non-U.S.
Product Marks, in substantially the form attached hereto as EXHIBIT A-2.
"ASSIGNMENT OF NON-U.S. PRODUCT PATENT RIGHTS" means an Assignment of
Non-U.S. Product Patent Rights, in substantially the form attached hereto as
EXHIBIT B-2.
"ASSIGNMENT OF U.S. PRODUCT MARKS" means an Assignment of Non-U.S.
Product Marks, in substantially the form attached hereto as EXHIBIT A-1.
"ASSIGNMENT OF U.S. PRODUCT PATENT RIGHTS" means an Assignment of
Non-U.S. Product Patent Rights, in substantially the form attached hereto as
EXHIBIT B-1.
"ASSUMED LIABILITIES" has the meaning set forth in SECTION 2.3.
"BAYH-DOLE ACT" means the Patent and Trademark Law Amendments Act, 35
U.S.C. ss.200 ET. SEQ, as may be amended or succeeded from time to time, and the
rules, regulations, guidelines, guidances and requirements promulgated
thereunder, as may be in effect from time to time.
"BEST PRICE" has the meaning set forth in SECTION 8.5(C)(III).
"BILL OF SALE AND ASSIGNMENT AND ASSUMPTION AGREEMENT - NON-U.S." means
a Bill of Sale and Assignment and Assumption Agreement - Non-U.S., in
substantially the form attached hereto as EXHIBIT C-2.
"BILL OF SALE AND ASSIGNMENT AND ASSUMPTION AGREEMENT - U.S." means a
Bill of Sale and Assignment and Assumption Agreement - U.S., in substantially
the form attached hereto as EXHIBIT C-1.
"BLA(S)" means a Biologics License Application, or equivalent FDA
application, for any product, as appropriate, relating to the manufacturing and
marketing of biologically based pharmaceutical products, and all supplements or
amendments filed pursuant to the requirements of the Act, including all
documents, data and other information concerning the product which are
reasonably necessary for the FDA approval in the United States.
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"BUSINESS DAY" means any day other than a Saturday, a Sunday or a day
on which banks in New York, New York, United States of America are authorized or
obligated by Law to be closed.
"CAP" has the meaning set forth in SECTION 11.5(B).
"CHARGEBACK CLAIMS" has the meaning set forth in SECTION 8.5(E)(I).
"SELLER SUB" has the meaning set forth in the first paragraph of this
Agreement.
"CLAIM NOTICE" has the meaning set forth in SECTION 11.1(D).
"CLOSING" means the closing of the purchase and sale of the Purchased
Assets and Inventory, and assignment and assumption of the Assumed Liabilities
contemplated by this Agreement.
"CLOSING DATE" has the meaning set forth in SECTION 3.1.
"CLOSING DATE INVENTORY STATEMENT" has the meaning set forth in SECTION
2.8(A).
"CLOSING DATE INVENTORY VALUE" has the meaning set forth in SECTION
2.8(A).
"CODE" means the United States Internal Revenue Code of 1986, as
amended.
"CONFIDENTIALITY AGREEMENT" means that certain Confidentiality
Agreement, dated as of December 19, 2005, between Eisai Inc. and UBS Securities
LLC, on behalf of Seller.
"CONTRACTS" means any and all legally binding written commitments,
contracts, purchase orders, leases, licenses, easements, permits, instruments,
commitments, arrangements, undertakings, practices or other agreements.
"CONTROL" means, with respect to any Intellectual Property, possession
by a Party of the right, whether directly or indirectly, and whether by
ownership, license or otherwise, to assign, grant the right to use, or grant a
license, sublicense or other right to or under, such Intellectual Property as
provided for herein without violating the terms of any agreement or other
arrangement with any third party.
"COPYRIGHTS" means (a) all copyrights (including copyrights in any
package inserts, marketing or promotional materials, Labeling or other text
provided to prescribers or consumers), whether registered or unregistered
throughout the world; (b) any registrations and applications therefor; (c) all
related rights and priorities afforded under any international treaty,
convention, or the like; (d) all extensions and renewals thereof; and (e) the
right to sue for past, present and future infringements of any of the foregoing,
and all proceeds of the foregoing, including licenses, royalties, income,
payments, claims, damages (including attorneys' fees), and proceeds of suit.
"DATA ROOMS" means, collectively, the electronic datasite operated by
the Merrill Corporation on behalf of Seller in connection with the Transactions,
the data room established in
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San Diego, California and made accessible to Purchaser and the data room
established in New York City, New York and made accessible to Purchaser.
"DEDUCTIBLE" has the meaning set forth in SECTION 11.5(A).
"DISTRIBUTION" means any and all activities related to the
distribution, marketing, promoting, offering for sale and selling of any
Product, including advertising, detailing, educating, planning, promoting,
conducting, reporting, storing, handling, shipping and communicating with
Governmental Authorities and third parties in connection therewith.
"EFFECTIVE TIME" has the meaning set forth in SECTION 3.1.
"EMEA" means the European Agency for the Evaluation of Medicinal
Products, or any successor agency thereto.
"ENCUMBRANCE" means, with respect to the property or right of Seller,
Seller Sub or any of their respective Affiliates, any security interest, pledge,
hypothecation, mortgage, lien (statutory or otherwise), assessment, levy, claim
known to Seller, charge, community property interest, equitable interest, third
party license, conditional sale or title retention agreement, option, right of
first option, right of first refusal or similar restriction, restriction on
transfer, restriction on income, or any material restriction on any attribute of
ownership or use of such property or right as it was owned and/or used by
Seller, Seller Sub or any of their respective Affiliates.
"ERISA" means the United States Employee Retirement Income Security Act
of 1974, as amended, or any successor law, and regulations and rules issued
pursuant to that Act or any successor law.
"ERISA AFFILIATE" of any entity means any other entity (whether or not
incorporated) that, together with such entity, would be treated as a single
employer under Section 414 of the Code or Section 4001 of ERISA.
"ESCROW ACCOUNT" has the meaning set forth in SECTION 2.6.
"ESCROW AGENT" means Wells Fargo Bank, National Association or another
escrow agent to be mutually agreed upon by the Parties.
"ESCROW AGREEMENT" means the Escrow Agreement to be entered into by and
among the Escrow Agent, Seller and Purchaser, in substantially the form attached
hereto as EXHIBIT D.
"ESCROW AMOUNT" has the meaning set forth in SECTION 2.6.
"EXCHANGE" means the NASDAQ Global Market.
"EXCHANGE ACT" means the United States Securities Exchange Act of 1934,
as amended, and the rules, regulations and SEC guidance promulgated thereunder,
as may be in effect from time to time.
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"EXCLUDED ASSETS" has the meaning set forth in SECTION 2.2.
"EXCLUDED INTELLECTUAL PROPERTY" means all right, title and interest of
Seller, Seller Sub or any of their respective Affiliates in and to Intellectual
Property, whether now existing or hereafter developed or acquired (including the
Seller Brands) other than the Product Intellectual Property.
"EXCLUDED LIABILITIES" has the meaning set forth in SECTION 2.4.
"EXCLUSIVITY PERIOD" means, with respect to a Product in a country, the
period commencing on the date of the first commercial sale of such Product in
such country until the later of the date of (a) the expiration of the last
Patent that includes a Valid Claim in such country, if any, and (b) the
expiration of any data exclusivity period in such country that would prevent
third parties from securing a Registration in such country for a product that
contains any of denileukin difitox, bexarotene or alitretinoin, as applicable,
based, in whole or part, on data relating to the corresponding Product.
"EXECUTION DATE" means the date set forth in the preamble of this
Agreement.
"EXPIRATION DATE" has the meaning set forth in SECTION 11.1(D).
"EXW" means "ex works," as defined in Incoterms 2000, published by the
International Chamber of Commerce.
"FDA" means the United States Food and Drug Administration, or any
successor agency thereto.
"FINAL ALLOCATION" has the meaning set forth in SECTION 2.7(A).
"FINANCIAL STATEMENT DATE" has the meaning set forth in SECTION 4.17.
"FINANCIAL STATEMENTS" has the meaning set forth in SECTION 4.17.
"FSS" has the meaning set forth in SECTION 8.5(E)(I).
"GAAP" means United States generally accepted accounting principles,
consistently applied.
"GOOD CLINICAL PRACTICES" means the international ethical, scientific,
and quality standards for designing, conducting, recording, and reporting trials
that involve the participation of human subjects, as set forth by the
International Conference on Harmonization E6: Good Clinical Practices
Consolidated Guideline, or as required by applicable Law.
"GOOD MANUFACTURING PRACTICES" means standards and methods to be used
in, and the facilities or controls to be used for, the manufacture, processing,
packaging, testing or holding of a drug to assure that such drug meets the
requirements of applicable Law and other requirements of any Governmental
Authority as to safety, identity and strength, and meets the quality and purity
characteristics that it purports or is represented to possess.
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"GOVERNMENT MULTI-PRODUCT CONTRACTS" means Contracts by which Seller,
Seller Sub or any of their respective Affiliates dispenses both a Product and
other pharmaceutical products of Seller or Seller Sub through a government
agency.
"GOVERNMENTAL AUTHORITY" means any nation or government, any
provincial, state, regional, local or other political subdivision thereof, any
supranational organization of sovereign states, and any entity, department,
commission, ministry, bureau, agency, authority, board, court, tribunal,
arbitrator, official or officer, domestic or foreign, exercising executive,
judicial, regulatory or administrative functions of or pertaining to government.
"HIRED EMPLOYEE" has the meaning set forth in SECTION 9.1(A).
"HSR ACT" means the United States Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended, and the rules and regulations promulgated
thereunder.
"IND" means (a) an Investigational New Drug Application, as defined in
the Act, which is required to be filed with the FDA before beginning clinical
testing of a product in human subjects, or any successor application or
procedure, and (b) all supplements and amendments that may be filed with respect
to the foregoing.
"INDEMNIFIED PARTY" has the meaning set forth in SECTION 11.4(A).
"INDEMNIFYING PARTY" has the meaning set forth in SECTION 11.4(A).
"INDEMNITY CLAIM" has the meaning set forth in SECTION 11.5(A).
"INDEMNITY DISPUTE NOTICE" has the meaning set forth in SECTION
11.4(B).
"INDENTURE" has the meaning set forth in SECTION 4.3(A).
"INTELLECTUAL PROPERTY" means intellectual property rights, including
Trademarks, Copyrights and Patents, whether registered or unregistered, and all
applications and registrations therefor, Know-How, confidential information,
trade secrets, and similar proprietary rights in confidential inventions,
discoveries, analytic models, improvements, processes, techniques, devices,
methods, patterns, formulations and specifications.
"INVENTORY" means all inventory of finished Product that is formulated,
labeled or otherwise intended for use, sale or offer for sale under a Product
Mark, owned by Seller, Seller Sub or any of their respective Affiliates as of
the Closing Date which has not been shipped to a wholesaler or distributor
together with all Product work-in-progress, packaging and all bulk active
pharmaceutical ingredient related to any Product owned by Seller, Seller Sub or
any of their respective Affiliates as of the Closing Date.
"IRS" means the Internal Revenue Service of the United States.
"KNOW-HOW" means any proprietary or nonproprietary information
necessary or useful to the manufacture, preparation, development (including
research, pre-clinical and clinical), or commercialization of a product,
including data, product specifications, processes, product
7
designs, validation methods and procedures, plans, trade secrets, ideas,
concepts, inventions, formulae, chemical, pharmacological, toxicological,
pharmaceutical, physical, analytical, stability, safety, quality assurance,
quality control and clinical information, technical information, research
information, marketing and sales information, and all other confidential or
proprietary technical and business information, whether or not embodied in any
documentation or other tangible materials, including any trade secret or other
rights therein.
"KNOWLEDGE" means, with respect to Seller, the actual knowledge,
following a reasonable internal investigation, of any of the Persons set forth
on SCHEDULE 1.1(C) of the Seller Disclosure Schedule.
"LABELING" shall be as defined in Section 201(m) of the Act (21 U.S.C.
ss. 321(m)) and other comparable foreign Law relating to the subject matter
thereof, including the applicable Product's label, packaging and package inserts
accompanying such Product, and any other written, printed, or graphic materials
accompanying such Product, including patient instructions or patient indication
guides.
"LAW" means each provision of any federal, provincial, state, local or
foreign law, statute, ordinance, order, code, rule, requirement or regulation
(including any published guidelines, guidance or pronouncements having the
effect of law), promulgated or issued by any Governmental Authority, as well as
any judgments, decrees, injunctions or agreements issued or entered into by any
Governmental Authority specifically with respect to Seller, Seller Sub, any
Product or the Product Line Business.
"LIABILITY" means, collectively, any liability, indebtedness, guaranty,
endorsement, claim, loss, damage, deficiency, interest, penalty, cost, expense,
obligation or responsibility, whether fixed or unfixed, known or unknown, choate
or inchoate, liquidated or unliquidated, secured or unsecured, direct or
indirect, matured or unmatured, or absolute, contingent or otherwise, including
any product liability and liability for Taxes.
"LOSSES" means all losses, expenses, Liabilities or other damages,
including reasonable costs of investigation and attorneys' fees.
"MATERIAL ADVERSE EFFECT" means any event, change, condition or effect
that individually or in the aggregate, (a) has a material adverse effect on the
ONTAK Product or the Targretin Capsules Product or the business, operations,
condition (financial or otherwise), or results of operations of the Product Line
Business taken as a whole, but shall exclude: (i) events, changes, conditions or
effects that generally affect the industries in which Seller and Seller Sub
operate or the manufacture or Distribution of any pharmaceutical product
(including legal and regulatory changes), (ii) general economic or political
events, changes, conditions or effects affecting the securities markets
generally, (iii) events, changes, conditions or effects outside of the control
of Seller, Seller Sub or any of their respective Affiliates arising from the
consummation of the Transactions or the announcement of the execution of this
Agreement, or (iv) events, changes, conditions or effects caused by acts of
terrorism or war (whether or not declared) occurring after the Execution Date
and prior to the Closing Date; PROVIDED, that in the case of clauses (i), (ii)
and (iv) above, the Product Line Business is not disproportionately affected by
such changes, conditions or effects as compared to the pharmaceutical industry
as a whole; (b) materially
8
impacts, materially delays or prevents the consummation of the Transactions;
(c) creates a material limitation on the ability of Purchaser to conduct
the Product Line Business in a manner as has been conducted by Seller and Seller
Sub immediately prior to the Effective Time; or (d) creates a material
limitation on the ability of Purchaser to acquire good and valid title to or
other ownership right or interest in a material portion of the Purchased Assets
and Inventory, taken as a whole, free and clear of all Encumbrances (other than
Permitted Encumbrances).
"MEDICAL PRODUCT REGULATORY AUTHORITY" means any Governmental Authority
that is concerned with the safety, efficacy, reliability, manufacture,
investigation, sale or marketing of pharmaceuticals, medical products, biologics
or biopharmaceuticals, including the FDA and the EMEA.
"MULTIEMPLOYER PLAN" means a Plan that is a "multiemployer plan" within
the meaning of section 3(37) of ERISA.
"NDA" means a New Drug Application for any product requesting
permission to place the product on the market in accordance with the Act,
together with all supplements or amendments filed with respect thereto pursuant
to the requirements of the Act, including all documents, data and other
information concerning the product which are reasonably necessary for the FDA
approval to market the product in the United States.
"NDC" means the "National Drug Code", which is the eleven digit code
registered by a company with the FDA with respect to a pharmaceutical product.
"NON-ASSIGNABLE RIGHT" has the meaning set forth in SECTION 2.5(A).
"NOTICE OF OBJECTION" has the meaning set forth in SECTION 2.8(B).
"NOTICE OF SUPERIOR PROPOSAL" has the meaning set forth in SECTION
6.5(B).
"OMITTED ASSET" has the meaning set forth in SECTION 2.1(C).
"ONTAK MANUFACTURE AND SUPPLY AGREEMENT" means the Manufacture and
Supply Agreement, dated as of January 1, 2004, by and among Seller Sub and
Cambrex Bio Science Hopkinkton, Inc., a Delaware corporation.
"ONTAK MANUFACTURE AND SUPPLY AGREEMENT ASSIGNMENT" means the
Assignment and Assumption of Contract with respect to the ONTAK Manufacture and
Supply Agreement, in substantially the form attached hereto as EXHIBIT E.
"ONTAK PATENTS" means those Patents owned by, licensed to or otherwise
controlled by Seller, Seller Sub or any of their respective Affiliates that
relate primarily or exclusively to the manufacture, use or Distribution of the
ONTAK Product, as set forth on SCHEDULE 1.1(D) of the Seller Disclosure
Schedule.
"ONTAK PRODUCT" means all dosage forms, formulations, strengths,
package sizes and types of pharmaceutical products containing denileukin
difitox, a recombinant DNA-derived
9
cytotoxic protein sold in the United States under the Trademark ONTAK(R) as
escribed in the FDA-approved product insert attached hereto as EXHIBIT F.
"ORANGE BOOK" means the listing of approved drug patents with
therapeutic evaluations published by the FDA and commonly known at the Execution
Date as the "Orange Book," and available electronically at
HTTP://WWW.FDA.GOV/CDER/OB/DEFAULT.HTM.
"ORDER" means any writ, judgment, decree, injunction or similar order,
including consent orders, of any Governmental Authority (in each such case
whether preliminary or final).
"OTHER AGREEMENTS" means, collectively, the Assignment of U.S. Product
Marks, the Assignment of Non-U.S. Product Marks, the Assignment of U.S. Product
Patent Rights, the Assignment of Non-U.S. Product Patent Rights, the Bill of
Sale and Assignment and Assumption Agreements-U.S., the Bill of Sale and
Assignment and Assumption Agreements-Non-U.S., the Escrow Agreement, the ONTAK
Manufacture and Supply Agreement Assignment, Targretin Manufacture and Supply
Agreement Assignment and the Transition Services Agreement.
"OUTSIDE DATE" has the meaning set forth in SECTION 10.1(A)(II).
"PANRETIN PATENTS" means those Patents owned by, licensed to or
otherwise controlled by Seller, Seller Sub or any of their respective Affiliates
that relate primarily or exclusively to the manufacture, use or Distribution of
the Panretin Product, as set forth on SCHEDULE 1.1(E) of the Seller Disclosure
Schedule.
"PANRETIN PRODUCT" means all dosage forms, formulations, strengths,
package sizes and types of pharmaceutical products containing a gel formation of
alitretinoin described in NDA #20-886 and currently commercialized in the
Territory as Panretin(R) Gel.
"PARTY" or "PARTIES" has the meaning set forth in the first paragraph
of this Agreement.
"PATENTS" means: (a) all national, regional and international patents
and patent applications, including provisional patent applications; (b) all
patent applications filed either from such patents, patent applications or
provisional applications or from an application claiming priority from either of
these, including divisionals, continuations, continuations-in-part,
substitutions, provisionals, converted provisionals, and continued prosecution
applications; (c) any and all patents that have issued or in the future will
issue from the foregoing patent applications described in clauses (a) and (b),
including utility models, petty patents and design patents and certificates of
invention; (d) any and all extensions or restorations by existing or future
extension or restoration mechanisms, including revalidations, reissues,
re-examinations and extensions (including any supplementary protection
certificates and the like) of the foregoing patents or patent applications
described in clauses (a), (b) and (c); (e) any and all causes of action, claims,
demands or other rights occasioned from or because of any and all past, present
and future infringement of any of the foregoing, including all rights to recover
damages (including attorneys' fees), profits and injunctive or other relief for
such infringement; and (f) any similar rights, including any importation,
revalidation, confirmation or introduction patent or registration patent or
patent of additions to any such foregoing patent applications and patents.
"PDM ACT" means the Prescription Drug Marketing Act of 1987, as
amended.
10
"PERMITTED ENCUMBRANCES" means: (a) statutory liens for current Taxes
not yet due and payable or Taxes being contested in good faith by appropriate
proceedings for which adequate reserves have been established in accordance with
GAAP; (b) mechanics', carriers', workers', repairers', and other similar liens
arising or incurred in the ordinary course of business relating to obligations
as to which there is no default on the part of Seller, Seller Sub or any of
their respective Affiliates or the validity or amount of which is being
contested in good faith by appropriate proceedings; (c) as to Assets evidenced
by written documents, Encumbrances set forth on the face of such documents; (d)
Encumbrances set forth on SCHEDULE 1.1(F); and (e) such other Encumbrances,
other than liens securing the payment of money, as do not materially detract
from the value of or materially impair the use of the affected Asset as
heretofore owned or used by Seller or Seller Sub.
"PERSON" means any individual, corporation, partnership, joint venture,
limited liability company, trust or unincorporated organization or Governmental
Authority.
"PLAN" means any employment, bonus, deferred compensation, incentive
compensation, stock ownership, stock purchase, stock appreciation, restricted
stock, stock option, "phantom" stock, performance, stock bonus, paid time off,
perquisite, fringe benefit, vacation, retirement, retiree medical or life
insurance, supplemental retirement, severance or other benefit plans, programs
or arrangements, and all employment, termination, severance or other contracts
or agreements, or other program, policy or arrangement.
"POST-CLOSING TAX PERIOD" has the meaning set forth in SECTION 8.9(B).
"POTENTIAL EMPLOYEES" has the meaning set forth in SECTION 9.1(A).
"PRE-CLOSING TAX PERIOD" has the meaning set forth in SECTION 8.9(B).
"PRODUCT" or "PRODUCTS" means the ONTAK Product, the Panretin Product,
the Targretin Capsules Product and the Targretin Gel Product, individually or
collectively, as applicable.
"PRODUCT COPYRIGHTS" means all Copyrights owned by, licensed to or
otherwise controlled by Seller, Seller Sub or any of their respective Affiliates
related primarily or exclusively to the Products or the Product Line Business,
as set forth on SCHEDULE 1.1(G) of the Seller Disclosure Schedule.
"PRODUCT EMPLOYEE" means an employee who is employed by Seller, Seller
Sub or any of their respective Affiliates in connection with the Product Line
Business and whose services are primarily or exclusively related to the Product
Line Business.
"PRODUCT EMPLOYEE LIST" has the meaning set forth in SECTION 4.12(A).
"PRODUCT EQUIPMENT" means the manufacturing tools, storage devices and
test equipment owned by Seller, Seller Sub or any of their respective Affiliates
and used primarily or exclusively to manufacture, store or test Products, as set
forth on SCHEDULE 1.1(H) of the Seller Disclosure Schedule.
11
"PRODUCT INTELLECTUAL PROPERTY" means the Product Patent Rights,
Product Copyrights, Product Know-How, Product Marks, and Product Trade Dress.
"PRODUCT KNOW-HOW" means the Know-How owned by, licensed to or
otherwise controlled by Seller, Seller Sub or any of their respective Affiliates
and exclusively or primarily related to any Product or the Product Line Business
in the Territory.
"PRODUCT LINE BUSINESS" has the meaning set forth in the second
paragraph of this Agreement.
"PRODUCT MARKS" means, individually or collectively, as applicable, the
Trademarks "ONTAK(R)", "Panretin(R)", and "Targretin(R)" or such other
Trademarks set forth on SCHEDULE 1.1(I) of the Seller Disclosure Schedule, and
all common law rights, applications and registrations therefor, and all goodwill
associated therewith.
"PRODUCT PATENT RIGHTS" means, collectively, the ONTAK Patents,
Panretin Patents and Targretin Patents.
"PRODUCT RECORDS" means to the extent permitted under and consistent
with the requirements of applicable Law, all books and records relating
primarily or exclusively to any Product, including copies of all material
customer and supplier lists, account lists, call data, sales history, call
notes, marketing studies, consultant reports, physician databases, and
correspondence (excluding invoices) with respect to any Product or the Product
Line Business to the extent maintained by Seller, Seller Sub or any of their
respective Affiliates, and all complaint files and adverse event files with
respect to any Product; PROVIDED, HOWEVER, that (a) in each case, Seller and
Seller Sub may redact any Excluded Intellectual Property contained therein; (b)
Seller and Seller Sub may retain: (i) a copy of any such books and records to
the extent necessary for Tax, regulatory, accounting or litigation; (ii) a copy
of any such books and records to the extent such books and records relate
primarily but not exclusively to any Product or the Product Line Business,
PROVIDED redactions are made to exclude all information relating exclusively to
any Product or the Product Line Business; (iii) all books, documents, records
and files prepared in connection with or relating to the Transactions, including
bids received from other parties and strategic, financial or Tax analyses
relating to the divestiture of the Purchased Assets, the Assumed Liabilities,
the Products and the Product Line Business; and (iv) any attorney work product,
attorney-client communications and other items protected by legal privilege
shall be excluded; and (c) Seller and Seller Sub shall be entitled to redact
from any such books and records any information that does not relate to any
Product or the Product Line Business.
"PRODUCT TRADE DRESS" means the trade dress, package designs, product
inserts, labels, logos and associated artwork owned by, licensed to or otherwise
controlled by Seller, Seller Sub or any of their respective Affiliates used
primarily or exclusively in connection with any Product or the packaging
therefor in the Territory, as set forth on SCHEDULE 1.1(J) of the Seller
Disclosure Schedule, but with the exception of the Product Marks, specifically
excluding all Seller Brands used thereon.
"PROMOTIONAL MATERIALS" means Labeling, Product informational letters,
and the advertising, promotional and media materials, sales training materials
(including any related
12
outlines and quizzes/answers, if any), trade show materials (including
displays and trade show booths) and videos, including materials containing
post-marketing clinical data, if any, owned by Seller, Seller Sub or any of
their respective Affiliates and used primarily or exclusively for the
commercialization of any Product in the Territory (including Distribution and
sales promotion information, market research studies and toll-free telephone
numbers) as set forth on SCHEDULE 1.1(K) of the Seller Disclosure Schedule.
"PTO" means the United States Patent and Trademark Office.
"PURCHASE PRICE" has the meaning set forth in SECTION 2.6.
"PURCHASE PRICE ALLOCATION" has the meaning set forth in SECTION
2.7(A).
"PURCHASE PRICE BANK ACCOUNT" means a bank account in the United States
to be designated by Seller in a written notice to Purchaser at least three (3)
Business Days before the Closing.
"PURCHASED ASSETS" has the meaning set forth in SECTION 2.1(A).
"PURCHASER" has the meaning set forth in the first paragraph of this
Agreement.
"PURCHASER INDEMNIFIED PARTIES" has the meaning set forth in SECTION
11.2.
"PURCHASER'S 401(K) PLAN" has the meaning set forth in SECTION 9.2(A).
"REBATE TERMINATION DATE" has the meaning set forth in SECTION
8.5(C)(I).
"REGISTRATIONS" means (a) with respect to a country in the Territory,
any and all approvals, licenses, registrations or authorizations of any
Governmental Authority issued to or received by any of Seller, Seller Sub or any
of their respective Affiliates as of the Execution Date, or that are issued to
or received by any of Seller, Seller Sub or any of their respective Affiliates
after the Execution Date but on or prior to the Closing Date, that are necessary
for the manufacture, use or Distribution of the Products in such country
(including any BLAs, NDAs, INDs or foreign equivalents thereof, any pricing or
reimbursement approvals, non-clinical and clinical study authorizations, pre-
and post-approval marketing authorizations and Labeling approvals), and any
registrations or applications for, supplements or amendments to, the foregoing;
(b) all supporting files, writings, data, studies, reports and other written
materials filed as part of, or referenced in, such approvals, registrations,
applications or notifications, or maintained by any of Seller, Seller Sub or any
of their respective Affiliates and relating to such approvals, registrations,
applications or notifications; and (c) all correspondence to or with the FDA,
EMEA or any other Governmental Authority with respect to the Products or the
Product Line Business.
"REIMBURSEMENT ACCOUNTS" has the meaning set forth in SECTION 9.2(F).
"REPRESENTATIVES" means, with respect to any Person, the directors,
officers, managers, employees, advisors, independent contractors, agents or
consultants of such Person.
13
"REQUIRED CLOSING DATE INVENTORY VALUE" means Nine Million Seven
Hundred Fifty Thousand Dollars ($9,750,000).
"RIGHTS AGREEMENT" has the meaning set forth in SECTION 4.3(A).
"SEC" means the United States Securities and Exchange Commission, or
any successor agency thereto.
"SECURITIES ACT" means the United States Securities Act of 1933, as
amended, and the rules, regulations and SEC guidance promulgated thereunder, as
may be in effect from time to time.
"SELLER" has the meaning set forth in the first paragraph of this
Agreement.
"SELLER BRANDS" means the Trademarks owned or used by Seller, Seller
Sub or any of their respective Affiliates, whether or not registered, including
the names "Seller" and "Seller Sub", other than the Product Marks and Product
Trade Dress.
"SELLER DISCLOSURE SCHEDULE" means the disclosure schedules delivered
by Seller and Seller Sub to Purchaser in connection with this Agreement.
"SELLER INDEMNIFIED PARTIES" has the meaning set forth in SECTION 11.3.
"SELLER PLAN" means all Plans in which any Product Employee
participates or participated, or under which any Product Employee has accrued
any benefit or right whatsoever, that is maintained by, contributed to or
required to be contributed to by Seller or any of its ERISA Affiliates or as to
which Seller or any of it ERISA Affiliates has any Liability.
"SELLER'S 125 PLAN" has the meaning set forth in SECTION 9.2(F).
"SELLER'S 401(K) PLAN" has the meaning set forth in SECTION 9.2(A).
"SELLER'S COMMON STOCK" means the common stock, par value $.001 per
share, of Seller.
"SELLER'S SEC FILINGS" means all forms, reports and other documents
required to be filed or furnished by Seller under the Securities Act or Exchange
Act, as the case may be, since and including January 1, 2004.
"SUPERIOR PROPOSAL" means an Acquisition Proposal that in the good
faith judgment of the board of directors of Seller (after considering the advice
of its financial advisors and outside legal counsel) would, if consummated,
result in a transaction that is more favorable, taken as a whole, to Seller's
stockholders than the Transactions, and the board of directors of Seller intends
to terminate this Agreement in connection with such determination.
"TARGRETIN CAPSULES PRODUCT" means all dosage forms, formulations,
strengths, package sizes and types of pharmaceutical products containing a
formation of bexarotene (other than the Targretin Gel Product) described in NDA
#21-055 and currently commercialized in the Territory as Targretin(R) Capsules.
14
"TARGRETIN GEL PRODUCT" means the pharmaceutical product containing the
gel form of bexarotene described in NDA #21-056, in any and all strengths and
package sizes and currently commercialized in the Territory as Targretin(R) Gel.
"TARGRETIN MANUFACTURE AND SUPPLY AGREEMENT" means the Manufacture and
Commercial Supply Agreement, dated as of June 1, 1999, by and between Raylo
Chemicals Inc., an Edmonton, Alberta corporation, and Seller.
"TARGRETIN MANUFACTURE AND SUPPLY AGREEMENT ASSIGNMENT" means the
Assignment and Assumption of Contract with respect to the Targretin Manufacture
and Supply Agreement, in substantially the form attached hereto as EXHIBIT G.
"TARGRETIN PATENTS" means those Patents owned by, licensed to or
otherwise controlled by Seller, Seller Sub or any of their respective Affiliates
that related primarily or exclusively to the manufacture, use or Distribution of
the Targretin Capsules Product or the Targretin Gel Product, as set forth on
SCHEDULE 1.1(L) of the Seller Disclosure Schedule.
"TAX" or "TAXES" means any and all taxes, assessments, levies, tariffs,
duties or other charges or impositions in the nature of a tax (together with any
and all interest, penalties, additions to tax and additional amounts imposed
with respect thereto) imposed by any Governmental Authority, including income,
estimated income, gross receipts, profits, business, license, occupation,
franchise, capital stock, real or personal property, sales, use, transfer, value
added, employment or unemployment, social security, disability, alternative or
add-on minimum, customs, excise, stamp, environmental, commercial rent or
withholding taxes, and shall include any Liability for Taxes of any other Person
under applicable Law, as a transferee or successor, by contract or otherwise.
"TAX RETURN" means any report, return (including any information
return), claim for refund, election, estimated Tax filing or payment, request
for extension, document, declaration or other information or filing required to
be supplied to any Governmental Authority with respect to Taxes, including
attachments thereto and amendments thereof.
"TERMINATION FEE" has the meaning set forth in SECTION 10.2(B).
"TERRITORY" means worldwide.
"TRADEMARK" means: (a) all trademarks, trade names, trade dress,
service marks, logos, trade styles, certification marks, collective marks, other
source of product identifiers, designs and general intangibles of a like nature,
including Internet domain names and e-mail addresses, in each case whether
registered or unregistered; (b) all registrations and applications for any of
the foregoing; (c) all extensions or renewals of any of the foregoing; (d) all
of the goodwill connected with the use of and symbolized by the foregoing; (e)
all rights and priorities afforded under the United States "common law" or under
any international treaty, convention, or the like, related to any of the
foregoing; (f) the right to sue for past, present and future infringement or
dilution of any of the foregoing or for any injury to goodwill; and (g) all
proceeds of the foregoing, including license royalties, income, payments,
claims, damages (including attorneys' fees) and proceeds of suit.
15
"TRANSACTIONS" means the transactions contemplated by this Agreement
and the Other Agreements.
"TRANSFER TAXES" means any and all transfer, documentary, sales, use,
gross receipts, stamp, registration, value added, recording, escrow and other
similar Taxes and fees (including any penalties and interest) incurred in
connection with the Transactions (including recording and escrow fees and any
real property or leasehold interest transfer or gains tax and any similar Tax).
"TRANSITION SERVICES AGREEMENT" means that certain Transition Services
Agreement, between Seller, Seller Sub and Purchaser, in substantially the form
attached hereto as EXHIBIT H.
"UNITS" means the arithmetical equivalent of (a) with respect to the
ONTAK Product, one 2ml vial containing 300 mcg of recombinant denileukin
difitox, (b) with respect to the Targretin Gel Product, one 60g tube containing
1% (w/w) of bexarotene, (c) with respect to the Panretin Product, one 60g tube
containing 0.1% (w/w) of alitretinoin, and (d) with respect to the Targretin
Capsules Product, 100 capsule bottles of 75mg capsules of bexarotene.
"VALID CLAIM" means, with respect to a Product in a country, a claim of
an issued and unexpired Product Patent Right that claims denileukin difitox,
bexarotene or alitretinoin, as applicable, as a composition of matter in such
country or the use of such Product for an indication included in the
Registration for such Product in such country, that has not been held
permanently revoked, unenforceable or invalid by a Governmental Authority of
competent jurisdiction, unappealable or unappealed within the time allowed for
appeal, and that has not been admitted to be invalid or unenforceable through
reissue, disclaimer or otherwise.
Section 1.2 OTHER DEFINITIONAL PROVISIONS.
(a) When a reference is made in this Agreement to an Article,
Section, Exhibit or Schedule, such reference is to an Article or Section of, or
an Exhibit or Schedule to, this Agreement unless otherwise indicated.
(b) The words "hereof," "herein," "hereto" and "hereunder" and
words of similar import, when used in this Agreement, shall refer to this
Agreement as a whole and not to any particular provision of this Agreement.
(c) The terms defined in the singular has a comparable meaning
when used in the plural, and vice versa.
(d) Words of one gender include the other gender.
(e) References to a Person are also to its successors and
permitted assigns.
(f) The term "dollars" and "$" means United States dollars.
(g) The word "including" means "including without limitation" and
the words "include" and "includes" have corresponding meanings.
16
(h) The term "or" has, except where otherwise indicated, the
inclusive meaning represented by the phrase "and/or".
(i) For purposes of this Agreement, the term "commercially
reasonable efforts" will not be deemed to require a Person to undertake
extraordinary or unreasonable measures, including payments of amounts in excess
of normal and usual filing fees and processing fees, if any, or other payments
with respect to any Assigned Contract or Applicable Permit that are significant
in the context of such Assigned Contract or Applicable Permit (or significant on
an aggregate basis as to all Assigned Contracts and Applicable Permits), except
if such payment is otherwise prescribed in such Assigned Contract or Applicable
Permit or under Law relating to such Assigned Contract or Applicable Permit.
(j) For the avoidance of doubt, for purposes of this Agreement,
Product shall be deemed "sold" by: (i) Seller, Seller Sub or any of their
respective Affiliates only if the Product has been shipped to a wholesale
distributor of the Product on or prior to 11:59 p.m. California time on the
Closing Date; and (ii)Purchaser or any of its Affiliates during any period
thereafter.
(k) For purposes of this Agreement, the term "made available" shall
mean, with respect to any information, documentation or other materials, that
such information, documentation or other materials were contained and properly
indexed in a Data Room or otherwise physically delivered to Purchaser or
Purchaser's counsel.
ARTICLE II.
PURCHASE AND SALE
Section 2.1 TRANSFER OF PURCHASED ASSETS AND INVENTORY.
(a) PURCHASE AND SALE OF PURCHASED ASSETS. At the Effective Time,
on the terms and subject to the conditions hereof and in consideration of the
Purchase Price (as allocated pursuant to SECTION 2.7) paid to Seller by
Purchaser, Seller and Seller Sub will (and, as applicable, will cause their
respective Affiliates to) sell, convey, transfer, assign and deliver to
Purchaser, and Purchaser will purchase, take delivery of and acquire from Seller
and Seller Sub (and their respective Affiliates, as applicable), all of Seller's
and Seller Sub's (and, as applicable, their respective Affiliates') right, title
and interest in, to and under all of the following Assets (other than the
Inventory which shall be sold, conveyed, transferred, assigned and delivered to
Purchaser under SECTION 2.1(B)) (collectively, the "PURCHASED ASSETS"):
(i) the Assigned Contracts;
(ii) the Promotional Materials;
(iii) the Applicable Permits to the extent permitted
under and consistent with the requirements of applicable Law;
(iv) the Product Records;
(v) the Product Equipment;
17
(vi) the Product Intellectual Property; and
(vii) all goodwill of or relating to the Products or the
Product Line Business.
(b) PURCHASE AND SALE OF INVENTORY. At the Effective Time, on the
terms and subject to the conditions hereof and in consideration of the Purchase
Price (as allocated pursuant to SECTION 2.7) paid to Seller by Purchaser, Seller
and Seller Sub will (and, as applicable, will cause their respective Affiliates
to) sell, convey, transfer, assign and deliver to Purchaser, and Purchaser will
purchase, acquire and, in accordance with SECTION 3.2(A)(I), take delivery from
Seller and Seller Sub (and, as applicable, their respective Affiliates) of all
of Seller's and Seller Sub's (and, as applicable, their respective Affiliates')
right, title and interest in and to the Inventory.
(c) OMITTED ASSETS. Following the Closing, to the extent not
previously sold, conveyed, transferred, assigned or otherwise delivered to
Purchaser at Closing pursuant to SECTIONS 2.1(A), as applicable, Seller and
Seller Sub shall (and, as applicable, will cause their respective Affiliates to)
convey, transfer, assign and deliver to Purchaser and Purchaser shall take
delivery of and acquire from Seller and Seller Sub (and, as applicable, their
respective Affiliates) all of their right, title and interest in, to and under
any Assets (and, in the case of Assigned Contracts, all Liabilities associated
therewith arising after the date of such transfer (other than such Liabilities
that (A) were otherwise required to have been paid, performed or discharged on
or prior to such date, (B)relate to goods or services received or sold on or
prior to such date, (C) that otherwise result from a breach of or default under
any such Assigned Contract on or prior to such date, or (D) are not related in
any way to the Products or the Product Line Business)) as of the Effective Time
of the following categories (without, in each case, the requirement that Assets
of the category in question be listed in the Seller Disclosure Schedule to which
the related definition refers) (collectively, the "OMITTED ASSETS"):
(i) Assigned Contracts;
(ii) Promotional Materials;
(iii) Applicable Permits, to the extent permitted under and
consistent with the requirements of applicable Law;
(iv) Product Records;
(v) Product Equipment; and
(vi) Product Intellectual Property.
The Parties acknowledge and agree that any Omitted Asset required by this
SECTION 2.1(C) to be transferred by Seller or Seller Sub (or, as applicable,
their respective Affiliates) on the one hand and acquired by Purchaser on the
other hand, shall for all purposes of this Agreement (other than SECTION
11.2(E)) be deemed to have been an "Assigned Contract," "Promotional Material,"
"Applicable Permit," "Product Record," item of "Product Equipment" or "Product
Intellectual Property," as applicable (without regard to the Seller Disclosure
Schedule referred to in such
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definition) and a "Purchased Asset" and shall be deemed to have been included
in the applicable Seller Disclosure Schedule as of the Execution Date.
Section 2.2 EXCLUDED ASSETS. Without prejudice to SECTION 2.1, the Parties
acknowledge and agree that neither Seller nor Seller Sub (nor, their respective
Affiliates) is selling, conveying, transferring, delivering or assigning any
rights whatsoever, and Purchaser is not purchasing, taking delivery of or
acquiring any rights whatsoever, to any other products, product lines,
businesses or corporate Assets of Seller, Seller Sub or any of their respective
Affiliates other than the Purchased Assets and the Inventory (collectively, the
"EXCLUDED Assets").
Section 2.3 ASSUMED LIABILITIES. As of the Effective Time, upon the terms
and subject to the conditions set forth in this Agreement, Purchaser shall
assume and pay, perform or otherwise discharge when due, in accordance with
their respective terms and subject to the respective conditions thereof, only
the following Liabilities (collectively, the "ASSUMED LIABILITIES"), and no
other Liabilities of any kind:
(a) any Liability (including any Liability to third parties for
royalty, license fee and other payment obligations under the Assigned Contracts)
arising after the later of (i) the Closing Date, or (ii) the date on which (A)
the Assigned Contract is assigned by Seller or Seller Sub (or, as applicable,
any of their respective Affiliates) to Purchaser or (B) the practical benefit of
such Assigned Contract is provided to Purchaser pursuant to SECTION 2.5,
including any Liability under any Assigned Contract that was entered into by
Seller or Seller Sub after the Execution Date in accordance with SECTION 6.2
(other than such Liabilities that (A) were otherwise required to have been paid,
performed or discharged on or prior to the later of the dates determined under
clause (ii) above, (B) relate to goods or services received or sold on or prior
to such date, (C) that otherwise result from a breach of or default under any
such Assigned Contract on or prior to such date, or (D) are not related in any
way to the Products or the Product Line Business);
(b) any Liability in respect of Hired Employees, and
beneficiaries of Hired Employees, arising after the Closing Date that Purchaser
agrees to assume pursuant to this Agreement and that are not Excluded
Liabilities or otherwise retained by Seller, Seller Sub or any of their
respective Affiliates under ARTICLE IX; and
(c) any other Liability specifically and to the extent set forth
on SCHEDULE 2.3 hereto.
Section 2.4 EXCLUDED LIABILITIES. Notwithstanding anything to the
contrary contained herein, Seller and Seller Sub shall retain and shall be
responsible for paying, performing and discharging when due, and Purchaser shall
not assume or have any responsibility for any Liabilities of Seller, Seller Sub
or any of their respective Affiliates other than the Assumed Liabilities (the
"EXCLUDED LIABILITIES").
Section 2.5 PROCEDURES FOR CERTAIN PURCHASED ASSETS NOT FREELY
TRANSFERABLE.
(a) If any Asset or right (other than the Applicable Permits)
included in the Purchased Assets is not assignable or transferable to Purchaser
either by virtue of the provisions
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thereof (or by virtue of agreements with respect thereto) or under
applicable Law without the consent of one or more third Persons (each, a
"NON-ASSIGNABLE RIGHT"), this Agreement and the related instruments of transfer
shall not constitute an assignment or transfer of the Non-Assignable Right. If
any such consent cannot be obtained prior to the Closing Date and the Closing
occurs, then, notwithstanding anything to the contrary contained in this
Agreement or any Other Agreement:
(i) until the earliest of (A) the date all such consents are
obtained, (B) the date all such Assigned Contracts expire or are
terminated; and (C) the date which is six (6) months from the
Closing Date, Seller shall use commercially reasonable efforts to
obtain such consent as soon as reasonably possible after the
Closing Date and Purchaser shall cooperate, to the extent
commercially reasonable, with Seller and Seller's efforts to obtain
such consents; and
(ii) at Purchaser's election, (A) the Non-Assignable Right
shall be an Excluded Asset and Purchaser shall have no obligation
pursuant to SECTION 2.1(A) or SECTION 2.3 or otherwise with respect
to any such Non-Assignable Right or any Liability with respect
thereto, or (B) Seller shall use its ommercially reasonable efforts
to obtain for Purchaser substantially all of the practical benefit
and burden of such Non-Assignable Right, including by (1) entering
into appropriate and reasonable alternative arrangements on terms
mutually agreeable to Purchaser and Seller and (2)subject to the
consent and control of Purchaser, enforcement, at the cost and for
the account of Purchaser, of any and all rights of Seller against
the other party thereto arising out of the breach or cancellation
thereof by such other party or otherwise.
(b) If any of the Applicable Permits included in the Purchase
Assets are not assignable or transferable without obtaining a replacement
permit, then, notwithstanding anything to the contrary in this Agreement or any
Other Agreement, this Agreement and the related instruments of transfer shall
not constitute an assignment or transfer of such Applicable Permit, and Seller
and Seller Sub shall (and, as applicable,shall cause their respective Affiliates
to) cooperate to the extent commercially reasonable with Purchaser in its
efforts to obtain a replacement permit issued in Purchaser's name. If any
replacement Applicable Permit cannot be obtained prior to the Closing Date and
the Closing occurs, Seller (or Seller Sub) shall (and, as applicable, shall
cause their respective Affiliates to) allow Purchaser to operate under Seller's,
or Seller Sub's or such Affiliate's Applicable Permit if permitted by applicable
Law or applicable Governmental Authorities for a period of up to six (6) months
from the Closing Date (or such longer period as may be reasonably necessary for
Purchaser, using commercially reasonable efforts, to obtain the replacement
Applicable Permit).
Section 2.6 PURCHASE PRICE. In consideration of the sale, transfer,
assignment,conveyance, license and delivery of the Purchased Assets and
Inventory under ARTICLE II, Purchaser shall, upon the Closing, assume the
Assumed Liabilities and pay to Seller, by direct wire transfer of immediately
available funds, Two Hundred and Five Million Dollars ($205,000,000) (subject to
the adjustments set forth in SECTION 2.8, the "PURCHASE PRICE"), which shall be
paid as follows: (a)One Hundred and Eighty-Five Million Dollars ($185,000,000)
shall be paid at the Closing to Seller, by direct wire transfer of immediately
available funds to the
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Purchase Price Bank Account; and (b) Twenty Million Dollars ($20,000,000)
(the"ESCROW AMOUNT") shall be deposited with the Escrow Agent at Closing, by
direct wire transfer of immediately available funds, to the account designated
by the Escrow Agent (the "ESCROW ACCOUNT"), in accordance \ with SECTION 11.6
and theEscrow Agreement.
Section 2.7 PURCHASE PRICE ALLOCATION.
(a) As soon as practicable after the Closing Date Inventory
Statement becomes final pursuant to SECTION 2.8, Purchaser shall deliver to
Seller a statement (the "PURCHASE PRICE ALLOCATION"), allocating the Purchase
Price (PLUS the Assumed Liabilities, to the extent properly taken into account
under Section 1060 of the Code) among the Purchased Assets, the Inventory and
Seller's and Seller Sub's obligations under SECTION 6.7(B) in accordance with
Section 1060 of the Code and the Treasury Regulations thereunder. If within
fifteen (15) days after the delivery of the Purchase Price Allocation Seller
notifies Purchaser in writing that Seller objects to the allocation set forth in
the Purchase Price Allocation, Purchaser and Seller shall use commercially
reasonable efforts to resolve such dispute within twenty (20) days. In the event
that Purchaser and Seller are unable to resolve such dispute within twenty (20)
days, Purchaser and Seller shall jointly retain the Accountants (which may in
turn select an appraiser if needed) to resolve the disputed items. Upon
resolution of the disputed items, the allocation reflected on the Purchase Price
Allocation shall be adjusted to reflect such resolution (such resulting
allocation, the "FINAL ALLOCATION"). The costs, fees and expenses of the
Accountants shall be borne equally by Purchaser and Seller. Notwithstanding
anything to the contrary in this SECTION 2.7, the Final Allocation shall be
consistent with the values agreed to by the Parties for the purposes of
determining the amount of any Transfer Taxes paid prior to the completion of the
Final Allocation. Following final determination of the Final Allocation as
provided in this SECTION 2.7(A), the Final Allocation shall thereafter not be
adjusted and shall be binding on Seller and Purchaser except to reflect any
adjustments to the Purchase Price pursuant to SECTION 8.5 and ARTICLE XI or as
required pursuant to a "determination" within the meaning of Section 1313(a) of
the Code.
(b) In accordance with Section 1060 of the Code and the Treasury
Regulations thereunder, Purchaser, Seller Sub and Seller agree, unless otherwise
required pursuant to a "determination" within the meaning of Section 1313(a) of
the Code, to be bound by the Final Allocation, to file all Tax Returns
(including IRS Form 8594 and any supplemental or amended IRS Form 8594) in
accordance with the Final Allocation, and not to take any position inconsistent
with the Final Allocation in the course of any audit, examination, other
administrative or judicial proceeding, except as required by applicable Law. In
the event that the Final Allocation is disputed by any Governmental Authority,
the Party receiving notice of the dispute shall promptly notify the other
Parties hereto in writing of receipt of such notice and the subsequent
resolution of such dispute.
Section 2.8 CLOSING DATE INVENTORY ADJUSTMENTS.
(a) At least six (6) Business Days prior to the Closing Date,
Seller shall prepare and provide to Purchaser a statement calculating in
reasonable detail the estimated amount and value of the Inventory as of the
Closing Date in accordance with SCHEDULE 2.8, taking into account applicable
inventory reserves in accordance with GAAP (the "CLOSING DATE
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INVENTORY VALUE"), together with supporting written documentation (the
"CLOSING DATE INVENTORY STATEMENT").
(b) During the thirty (30)-day period following the Closing
Date, Purchaser shall be permitted to review the Product Records (including all
of Seller's records and workpapers relating to Seller's calculation of the
Closing Date Inventory) to the extent reasonably necessary for Purchaser to
evaluate the Closing Date Inventory Statement. The Closing Date Inventory
Statement (and the Closing Date Inventory contained therein) shall become final
and binding upon Purchaser and Seller at the end of such thirty (30)-day period,
unless Purchaser objects that either (i) the Closing Date Inventory is less than
the Required Closing Date Inventory Value or (ii) the calculation of the Closing
Date Inventory Value is not in accord with SCHEDULE 2.8, in either of which
cases it shall send written notice (the "NOTICE OF OBJECTION") to Seller within
such period, setting forth in specific detail the basis for its objection and
Purchaser's proposal for any adjustments to the Closing Date Inventory
Statement. If a timely Notice of Objection is delivered to Seller, then the
Closing Date Inventory Statement (and the Closing Date Inventory contained
therein) shall become final and binding (except as provided below with respect
to resolution of disputes) on Seller and Purchaser on the first to occur of (i)
the date Seller and Purchaser resolve in writing any differences they have with
respect to the matters specified in the Notice of Objection and (ii) the date
all matters in dispute are finally resolved in writing by the Accountants, in
each case as provided below. Seller and Purchaser shall seek in good faith to
reach agreement as to any such proposed adjustment or that no such adjustment is
necessary within thirty (30) days following delivery of the Notice of Objection.
If agreement is reached in writing within such thirty (30)-day period as to all
proposed adjustments, or that no adjustments are necessary, Seller and Purchaser
shall revise the Closing Date Inventory Statement accordingly. If Seller and
Purchaser are unable to reach agreement within thirty (30) days following
delivery of the Notice of Objection, then the Accountants shall be engaged at
that time to review the Closing Date Inventory Statement, and shall make a
determination as to the resolution of any adjustments. The determination of the
Accountants of the Closing Date Inventory Statement (and the Closing Date
Inventory contained therein) shall be delivered as soon as practicable following
engagement of the Accountants, but in no event more than sixty (60) days
thereafter, and shall be final, conclusive and binding upon Seller and Purchaser
and the Parties shall revise the Closing Date Inventory Statement accordingly.
Subject to the exercise by a Party of applicable rights of appeal under
applicable Law, the Parties agree that judgment may be entered on such
determination in any court having jurisdiction. Seller, on the one hand, and
Purchaser, on the other hand, shall each pay one-half of the cost of the
Accountants.
(c) Within fifteen (15) Business Days after the date on which
the Closing Date Inventory Statement (and the Closing Date Inventory contained
therein) becomes final and binding on Seller and Purchaser in accordance with
SECTION 2.8(B), in the event that the value of the Closing Date Inventory
(calculated in accordance with SCHEDULE 2.8) is less than the Required Closing
Date Inventory Value, the Purchase Price shall be adjusted downward by an amount
equal to such difference. Notwithstanding SECTION 11.7(A), Seller promptly shall
pay such difference to Purchaser from Seller's own funds, and not from amounts
held in the Escrow Account, by wire transfer of immediately available funds to
an account designated by Purchaser.
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Section 2.9 RISK OF LOSS. Until the Effective Time, any loss of or
damage to the Purchased Assets and Inventory from fire, flood, casualty or any
other similar occurrence shall be the sole responsibility of Seller and Seller
Sub. As of the Effective Time, title to the Purchased Assets and Inventory
(other than Non-Assignable Rights) shall be transferred to Purchaser. After the
Effective Time, Purchaser shall bear all risk of loss associated with the
Purchased Assets and Inventory (other than Non-Assignable Rights) and shall be
solely responsible for procuring adequate insurance to protect the Purchased
Assets and Inventory (other than Non-Assignable Rights) against any such loss.
Section 2.10 TAX WITHHOLDING. The Parties agree that all payments under
this Agreement will be made without any deduction or withholding for
or on account of any Taxes unless required by applicable Tax Law. In the
event Purchaser determines that it is required under applicable Tax Law to
withhold any amount from any payments made to Seller or Seller Sub, such amount
shall be deducted by Purchaser and paid to the relevant Governmental Authority.
Purchaser shall give Seller reasonable advance notice of any such withholding
and the applicable law under which such withholding is required, and Purchaser
shall promptly furnish to Seller copies of any Tax certificate or other
documentation evidencing payment of any such withheld amount to the relevant
Governmental Authority. Purchaser shall not be required to pay any additional
amounts to Seller or Seller Sub in respect of any amounts withheld and paid to
any Governmental Authority pursuant to this SECTION 2.10. If a Governmental
Authority determines that Purchaser is liable for any amount Purchaser failed to
withhold from a payment made to Seller or Seller Sub, Seller shall promptly, but
in no event later than ten (10) Business Days after the presentation of a
statement evidencing payment of such amount by Purchaser to the Governmental
Authority, reimburse Purchaser for such amount, but only to the extent Seller or
Seller Sub have not previously paid the applicable Tax; PROVIDED, HOWEVER,
Seller and Seller Sub shall have no obligation to reimburse Purchaser for the
amount of any interest, penalties or similar amounts imposed on Purchaser on
account of Purchaser's failure to withhold at the time of payment, unless such
failure is attributable to Purchaser's reliance on incorrect or misleading
written certifications or statements provided to Purchaser by Seller or Seller
Sub in support of a claimed exemption from or reduction in withholding, in which
case Seller will reimburse Purchaser for such amounts of interest, penalties, or
similar amounts. Seller and Seller Sub shall promptly provide to Purchaser
written certifications or statements, reasonably requested by Purchaser, to
assist Purchaser in determining whether an exemption or reduction in withholding
is permitted. The Parties agree to reasonably cooperate with each other to
lawfully minimize any withholding obligations of Purchaser, including by
completing or filing documents required under the provisions of any applicable
income tax treaty or applicable Tax Law, to claim any applicable exemption from,
or reduction of, any applicable withholding Taxes.
ARTICLE III.
CLOSING
Section 3.1 CLOSING. Upon the terms and subject to the conditions of
this Agreement, the Closing shall be held on a date to be specified by the
Parties, such date (the "Closing Date") to be no later than the third Business
Day after satisfaction or waiver of all of the conditions set forth in SECTIONS
7.1, 7.2(D) and 7.2(H), at the offices of Latham & Watkins LLP, 12636 High Bluff
Drive, Suite 400, San Diego, California 92130, unless the Parties otherwise
agree. The Parties will exchange (or cause to be exchanged) at the Closing the
funds, agreements,
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instruments, certificates and other documents, and do, or cause to be done, all
of the things respectively required of each Party as specified in Section 3.2.
The Closing shall be deemed to have occurred at 11:59 p.m. California time on
the Closing Date (the "Effective Time").
Section 3.2 TRANSACTIONS AT CLOSING. At the Closing, subject to the
terms and conditions hereof:
(a) SELLER'S AND SELLER SUB'S ACTIONS AND DELIVERIES. Seller
shall, and shall cause Seller Sub and Seller's and Seller Sub's respective
Affiliates to, where applicable, deliver or cause to be delivered to Purchaser:
(i) the Inventory, which Seller shall deliver to Purchaser,
EXW, which Inventory shall be picked up by or on behalf of Purchaser
at such location as designated by Seller as soon as reasonably
practicable after the Closing Date, but in no event more than five (5)
Business Days thereafter;
(ii) executed counterparts of each of the Other Agreements
to which it is a party;
(iii) a letter from Seller or Seller Sub, as applicable, to
the FDA, duly executed by Seller or Seller Sub, as applicable,
transferring the rights to the Registrations to Purchaser;
(iv) a certificate, dated as of the Closing Date, duly
executed by an authorized officer of each of Seller and Seller Sub,
certifying:
(1) all persons executing this Agreement, each of the
Other Agreements and any other documents delivered pursuant
hereto or thereto on behalf of Seller or Seller Sub, as
applicable, are incumbent authorized officers of Seller or Seller
Sub, as applicable,
(2) as to the matters set forth in SECTION 7.2(A) and
(B), and
(3) that (A) each of Seller's and Seller Sub's
Certificate of Incorporation and Bylaws, attached to the
certificate, are true and complete, (B) such Certificate of
Incorporation and Bylaws have been in full force and effect
in the form attached since the date of the adoption of the
resolutions referred to in clause (C) below and no amendment to
such organizational documents has occurred since the date of the
last amendment annexed thereto, if any, and (C) the resolutions
adopted by the board of directors or other governing body of
Seller and Seller Sub (or a committee thereof duly authorized)
authorizing the execution, delivery and performance of this
Agreement, attached to the certificate, were duly adopted at a
duly convened meeting thereof, at which a quorum was present and
acting throughout or by unanimous written consent, remain in
full force and effect,and have not been amended, rescinded or
modified, except to the xtent attached thereto;
24
(v) a certificate of good standing in respect of Seller and
Seller Sub, certified by the Secretary of State of the State of
Delaware, dated as of a date not more than ten (10) Business Days
prior to the Closing Date;
(vi) subject to SECTION 2.5, assignment and assumption
agreements or subcontracts, solely to the extent applicable, in form
and substance reasonably acceptable to the Parties, as are necessary
to effect the assignment to Purchaser of all rights of Seller, Seller
Sub and their respective Affiliates in and to the Assigned Contracts
and Product Intellectual Property;
(vii) copies of all third party consents (including consents
of Governmental Authorities) set forth on SCHEDULE 7.2 of the Seller
Disclosure Schedule and such other third party consents as have been
obtained;
(viii) a certificate, dated as of the Closing Date, duly
executed by an authorized officer of Seller certifying compliance with
SECTION 8.11(A);
(ix) an unredacted, fully executed copy of each Assigned
Contract (including schedules, exhibits and appendices thereto), and
control over or physical possession of, as applicable, all other
Purchased Assets, together with such conveyance documents that are
necessary to vest in Purchaser good and valid title or ownership
rights to the Purchased Assets and the Inventory and valid contract or
other rights in the Purchased Assets that are contractual rights;
(x) a certificate of each of Seller and Seller Sub, in
compliance with Treasury Regulation Section 1.1445-2(b)(2), listing
each of Seller's and Seller Sub's name, address and U.S. employer
identification number and stating that Seller or Seller Sub, as
applicable, is not a foreign person; and
(xi) such other documents, certificates or instruments as
the Parties may reasonably agree to deliver or cause to be delivered
in connection with the consummation of the Transactions, and all other
related matters, in form and substance reasonably acceptable to the
Parties.
Section 3.3 PURCHASER'S ACTIONS AND DELIVERIES. Purchaser shall deliver
or cause to be delivered to Seller:
(i) the Purchase Price in full by direct wire transfers of
immediately available funds directly to the Purchase Price Bank
Account and to the Escrow Account, as set forth in SECTION 2.6;
(ii) executed counterparts of each of the Other Agreements
to which it is a party;
(iii) a letter from Purchaser to the FDA, duly executed by
Purchaser, agreeing to assume certain obligations with respect to
the Registrations;
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(iv) a certificate, dated as of the Closing Date, duly
executed by an authorized officer of Purchaser, certifying:
(1) all persons executing this Agreement, each of the
Other Agreements and any other documents delivered pursuant
hereto or thereto on behalf of Purchaser are incumbent
authorized officers of Purchaser,
(2) as to the matters set forth in SECTION 7.3(A) and
(B), and
(3) (A) Purchaser's Certificate of Incorporation and
Bylaws, attached to the certificate, are true and complete,
(B) such Certificate of Incorporation and Bylaws have been
in full force and effect in the form attached since the date
of the adoption of the resolutions referred to in clause (C)
below and no amendment to such organizational documents has
occurred since the date of the last amendment annexed
thereto, if any, and (C) the resolutions adopted by the
board of directors of Purchaser (or a committee thereof duly
authorized) authorizing the execution, delivery and
performance of this Agreement, attached to the certificate,
were duly adopted at a duly convened meeting thereof, at
which a quorum was present and acting throughout or by
unanimous written consent, remain in full force and effect,
and have not been amended, rescinded or modified, except to
the extent attached thereto;
(v) a certificate of good standing in respect of Eisai
Inc., certified by the Secretary of State of the State of
Delaware, dated as of a date not more than ten (10) Business Days
prior to the Closing Date;
(vi) such instruments of assumption and other instruments
or documents, in form and substance reasonably acceptable to the
Parties, as may be necessary to effect Purchaser's assumption of
the Assumed Liabilities; and
(vii) such other documents, certificates or instruments as
the Parties may reasonably agree to deliver or cause to be
delivered in connection with the consummation of the
Transactions, and all other related matters, in form and
substance reasonably acceptable to the Parties.
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES OF SELLER AND SELLER SUB
At the Execution Date and the Effective Time (except as to certain
representations and warranties which expressly speak as of a date certain, which
shall speak as of such date), Seller and Seller Sub, jointly and severally,
represent and warrant to Purchaser as follows:
Section 4.1 ORGANIZATION. Each of Seller and Seller Sub is a corporation
duly organized, validly existing and in good standing under the Law of Delaware.
Each of Seller and Seller Sub has all requisite corporate power and authority to
own, lease and operate, as applicable, the Product Line Business, the Purchased
Assets and the Inventory, as applicable.
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Section 4.2 DUE AUTHORIZATION. Each of Seller and Seller Sub has all
requisite corporate power and authority to execute, deliver and perform its
obligations under this Agreement and the Other Agreements, and the execution and
delivery of this Agreement and the Other Agreements and the performance of all
of its obligations hereunder and thereunder have been duly authorized by Seller
and Seller Sub.
Section 4.3 NO CONFLICTS; ENFORCEABILITY.
(a) The execution, delivery and performance of this Agreement and
the Other Agreements by Seller and Seller Sub (i) are not prohibited or limited
by, and will not result in the breach of or a default under, any provision of
the Certificate of Incorporation or Bylaws of Seller or Seller Sub, (ii)
assuming that all of the consents, approvals, authorizations and permits
described in SECTIONS 4.9 and 4.10 have been obtained and all of the filings and
notifications described in SECTIONS 4.9 and 4.10 have been made and any waiting
periods thereunder have terminated or expired, does not conflict with any Law
applicable to Seller or Seller Sub, and (iii) except as set forth on SCHEDULE
4.3 of the Seller Disclosure Schedule, does not conflict with, result in a
breach of, constitute (with or without due notice or lapse of time or both) a
default under, result in the acceleration of obligations under, create in any
party the right to terminate, modify or cancel, or require any notice, consent
or waiver under, any material Contract binding on Seller or Seller Sub or any
applicable Order of any Governmental Authority to which Seller or Seller Sub is
a party or by which Seller or Seller Sub is bound or to which any of their
respective Assets is subject. Neither execution of this Agreement nor
consummation of the Transactions will trigger any rights of noteholders or the
trustee under the Indenture, dated as of November 26, 2002 (the "INDENTURE"), by
and between Seller and J.P. Morgan Trust Company, National Association, or
rights of Seller's shareholders or the rights agent under the Amended and
Restated Preferred Shares Rights Agreement, dated as of September 13, 1996, as
amended through March 22, 2004 (the "RIGHTS AGREEMENT"), by and between Seller
and Mellon Investor Services LLC, or any Contract or other document related to
the Indenture or the Rights Agreement.
(b) This Agreement and the Other Agreements have been duly
executed and delivered by each of Seller and Seller Sub, and constitute the
legal, valid and binding obligations of Seller and Seller Sub, enforceable
against Seller and Seller Sub in accordance with their respective terms, except
as enforceability may be limited or affected by applicable bankruptcy,
insolvency, moratorium, reorganization or other Law of general application
relating to or affecting creditors' rights generally.
Section 4.4 TITLE; ASSETS.
(a) Except as set forth on SCHEDULE 4.4 of the Seller Disclosure
Schedule, Seller and Seller Sub have good and valid title or ownership rights to
the Purchased Assets and Inventory, and valid contract or other rights in
Purchased Assets that are contractual rights, and in any case has the right to
use the Purchased Assets and the Inventory, in each case, free and clear of
Encumbrances other than Permitted Encumbrances. Subject to the receipt of the
consents, authorizations, and approvals described in SECTIONS 4.9 and 4.10, upon
consummation of the Transactions, Purchaser will acquire good and valid title or
ownership rights to the Purchased Assets and Inventory, and valid contract or
other rights in the Purchased Assets that
27
are contractual rights, and in any case the right to use the Purchased Assets
and the Inventory, free and clear of all Encumbrances other than Permitted
Encumbrances.
(b) The Purchased Assets and the Inventory, together with those
Assets used in the ordinary course of the Product Line Business such as working
capital, employees, those rights licensed pursuant to this Agreement, and
matters covered by the Transition Services Agreement, and such other Assets that
are not uniquely related to the Product Line Business and may be otherwise
commercially acquired such as tangible personal property, office space,
furniture, office equipment and IT services, constitute all of the Assets
necessary to operate the Product Line Business in a manner as has been and is
being conducted by Seller and Seller Sub as of the Closing Date.
Section 4.5 INVENTORY.
(a) As of the Closing Date, the Inventory (i) is good, saleable
and merchantable in the ordinary course of business, (ii) was produced or
manufactured in accordance with the specifications for the Products as set forth
in the Registrations and Good Manufacturing Practices and in material compliance
with applicable Law, (iii) is not adulterated or misbranded and is of suitable
quality, and (iv) may be introduced into interstate commerce in the United
States or, as the case may be, placed on the market or supplied in the
Territory.
(b) As of the Closing Date, to the extent the Inventory contains
raw materials and works-in-progress, such raw materials and works-in progress
(i) are of good manufacturing quality, (ii) have not been adulterated or
misbranded, and (iii) have been manufactured, handled, maintained, packaged and
stored at all times in accordance with the specifications set forth in the
relevant Registrations, in compliance with applicable Law and current Good
Manufacturing Practices, and in substantial compliance with all requirements of
relevant Governmental Authorities.
(c) Except as set forth in SCHEDULE 4.5(C) of the Seller
Disclosure Schedule, to Seller's Knowledge, in the past twelve (12) months,
Seller, Seller Sub and their respective Affiliates have sold the Products to
wholesalers or distributors only in the ordinary course of business and in
amounts that are generally consistent with past sales by Seller, Seller Sub and
their respective Affiliates to their wholesale and distributor customers during
comparable periods (which, for the avoidance of doubt, shall take into account
seasonality, cyclicality and other market conditions described in Seller's
audited financial statements filed with the SEC).
The foregoing representations and warranties in SECTIONS 4.5(A) and 4.5(B), to
the extent they pertain to the value of the Inventory, shall be subject to
applicable Inventory reserves accrued in accordance with GAAP as of the date
hereof and the Closing Date. The preceding sentence shall not limit the effect
of such representations and warranties other than with respect to the value of
the Inventory.
Section 4.6 APPLICABLE PERMITS. Schedule 1.1(a) of the Seller Disclosure
Schedule sets forth a true, accurate and complete list of all permits,
approvals, licenses, franchises or authorizations, including the Registrations,
from any Governmental Authority held by Seller, Seller Sub or their respective
Affiliates that relate primarily or exclusively to any Product or the
28
Product Line Business, in each case, together with any renewals, extensions or
modifications thereof or any amendments thereto. Each Applicable Permit is in
full force and effect.
Section 4.7 INTELLECTUAL PROPERTY.
(a) SCHEDULE 1.1 of the Seller Disclosure Schedule sets forth a
true, accurate and complete list of all Intellectual Property (other than trade
secrets, Know-How and goodwill attendant to the Product Intellectual Property
and other Intellectual Property rights not reducible to schedulable form)
primarily or exclusively related to the Products or the Product Line Business,
as follows: (i) SCHEDULE 1.1(D) sets forth a true, accurate and complete list of
those Patents owned by, licensed to or otherwise controlled by Seller, Seller
Sub or any of their respective Affiliates that relate primarily or exclusively
to the manufacture, use or Distribution of the ONTAK Product, (ii) SCHEDULE
1.1(E) sets forth a true, accurate and complete list of those Patents owned by,
licensed to or otherwise controlled by Seller, Seller Sub or any of their
respective Affiliates that relate primarily or exclusively to the manufacture,
use or Distribution of the Panretin Product, (iii) SCHEDULE 1.1(G) sets forth a
true, accurate and complete list of all Copyrights owned by, licensed to or
otherwise controlled by Seller, Seller Sub or any of their respective Affiliates
related primarily or exclusively to the Products or the Product Line Business,
(iv) SCHEDULE 1.1(I) sets forth a true, accurate and complete list of the
Product Marks, (vi) SCHEDULE 1.1(J) sets forth a true, accurate and complete
list of the trade dress, package designs, product inserts, labels, logos and
associated artwork owned by, licensed to or otherwise controlled by Seller,
Seller Sub or any of their respective Affiliates used primarily or exclusively
in connection with any Product or the packaging therefor in the Territory, but
with the exception of the Product Marks, specifically excludes all Seller Brands
used thereon; and (vii) SCHEDULE 1.1(L) sets forth a true, accurate and complete
list of the those Patents owned by, licensed to or otherwise controlled by
Seller, Seller Sub or any of their respective Affiliates that relate primarily
or exclusively to the manufacture, use or Distribution of the Targretin Capsules
Product or the Targretin Gel Product.
(b) Except as set forth on SCHEDULE 4.7(B) of the Seller
Disclosure Schedule, (i) the Product Intellectual Property is, to Seller's
Knowledge, enforceable and valid and (ii) none of the Product Intellectual
Property has been or is the subject of (A) any pending Action (including, with
respect to Patents, inventorship challenges, interferences, reissues,
reexaminations and oppositions, and with respect to Trademarks, invalidation,
opposition, cancellation, abandonment or similar Actions) or any Order or other
agreement restricting (x) the use of such Product Intellectual Property in
connection with any Product within the Territory or (y) assignment or license
thereof by Seller, Seller Sub or any of their respective Affiliates, as
applicable, or (B) to Seller's Knowledge, any threatened Action or claim of
infringement threatened or made in writing or any pending Action to which
Seller, Seller Sub or any of their respective Affiliates is a party. SCHEDULE
4.7(B) of the Seller Disclosure Schedule sets forth any and all settlements or
agreements reached with respect to any such Actions related to the Product
Intellectual Property for the three (3)-year period prior to the Closing Date.
(c) Except as set forth on SCHEDULE 4.7(C) of the Seller
Disclosure Schedule, all Product Intellectual Property within the Territory is
under the Control of Seller or Seller Sub. Seller, Seller Sub or any of their
respective Affiliates, as applicable, has the unrestricted right to assign,
transfer or grant to Purchaser all rights in and to the Product Intellectual
Property that are
29
being assigned, transferred or granted to Purchaser under this Agreement and the
Other Agreements, in each case free of any rights or claims of any Person or any
other Encumbrances (other than Permitted Encumbrances), and without payment by
any party of any royalties, license fees or other amounts to any other Person;
PROVIDED, HOWEVER, that the existing royalty obligations set forth on SCHEDULE
4.7(D) of the Seller Disclosure Schedule shall continue to be applicable to the
applicable Products manufactured under the Assigned Contracts in accordance with
the terms of such SCHEDULE 4.7(D) of the Seller Disclosure Schedule.
(d) SCHEDULE 4.7(D) of the Seller Disclosure Schedule sets forth
a true, accurate and complete list of all royalty, license fee and other payment
obligations applicable as of the Closing Date with respect to the Products.
Other than as set forth on SCHEDULE 4.7(D) of the Seller Disclosure Schedule, no
royalties, license fees or other payment obligations are owed to any Person in
connection with the manufacture, use or Distribution of any Product after the
Closing Date.
(e) Except as set forth on SCHEDULE 4.7(E) of the Seller
Disclosure Schedule, or as otherwise contemplated by this Agreement and the
Other Agreements, (i) none of Seller, Seller Sub or any of their respective
Affiliates has assigned, transferred, conveyed, or granted any licenses to the
Product Intellectual Property to third parties within the Territory, or
otherwise caused or permitted any Encumbrance to attach to any Product
Intellectual Property or the Products; (ii) none of Seller, Seller Sub or any of
their respective Affiliates, nor to Seller's Knowledge, any other Person, is
party to any agreements with third parties that materially limit or restrict use
of the Product Intellectual Property within the Territory or require any
payments for their use; (iii) no other Person has any proprietary, commercial,
joint ownership, royalty or other interest in the Product Intellectual Property
or the goodwill associated therewith within the Territory; and (iv) none of
Seller, Seller Sub or any of their respective Affiliates has entered into any
Contract (A) granting any Person the right to bring infringement actions with
respect to, or otherwise to enforce rights with respect to, any of the Product
Intellectual Property, (B) expressly agreeing to indemnify any Person against
any charge of infringement of any of the Product Intellectual Property, or (C)
granting any Person the right to control the prosecution of any of the Product
Intellectual Property. Except for the Permitted Encumbrances, there are no
existing agreements, options, commitments, or rights with, of or to any third
party to acquire or obtain any rights to any of the Product Intellectual
Property.
(f) To Seller's Knowledge, there is no unauthorized use,
infringement, misappropriation or violation of any of the Product Intellectual
Property by any Person within the Territory. The conduct of the Product Line
Business in the Territory, as it has been and is now being conducted, does not
presently infringe or misappropriate or otherwise violate, as applicable, the
intellectual property rights or other proprietary rights of any Person and,
except as set forth on SCHEDULE 4.7(F) of the Seller Disclosure Schedule,
neither Seller nor Seller Sub has received any written notice from any Person,
or has Knowledge of, any claim or assertion to the contrary.
(g) All issuance, renewal, maintenance and other material payments
that are or have become due with respect to the Product Intellectual Property
have been timely paid by or on behalf of Seller or Seller Sub, as applicable.
All documents, certificates and other material in connection with the Product
Intellectual Property have, for the purposes of maintaining such
30
Product Intellectual Property, been filed in a timely manner with the relevant
Governmental Authorities. Seller and Seller Sub (and their respective
Affiliates, as applicable) have properly filed, prosecuted and maintained all
Patents and Trademarks included in the Product Intellectual Property and have
properly filed and maintained all other Product Intellectual Property.
(h) Seller, Seller Sub and their respective Affiliates have taken
all reasonable measures to maintain in confidence all Product Know-How and to
protect the secrecy, confidentiality and value of all trade secrets included
within the Product Intellectual Property.
(i) To Seller's Knowledge there are no domain names that consist
of or include the Product Marks that are owned or registered by any Person other
than Seller or Seller Sub or their respective Affiliates.
(j) Seller, Seller Sub and their respective Affiliates have
complied with all of their obligations pertaining to listing the relevant
Patents pertaining to the Products in the Orange Book and have complied with any
and all of their obligations pursuant to the Bayh-Dole Act with respect to the
Patents pertaining to the Products.
Section 4.8 LITIGATION. Except as set forth in SCHEDULE 4.8 of the Seller
Disclosure Schedule, there is no Action pending or, to Seller's Knowledge,
threatened, involving Seller, Seller Sub or any of their respective Affiliates
(or to Seller's Knowledge, any third party) related to any Product, the Product
Line Business or the Transactions, except, in each case, as would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect. None of Seller, Seller Sub or any of their respective Affiliates
is subject to any Order of any Governmental Authority that would materially
impair or delay the ability of Seller or Seller Sub to perform its obligations
hereunder or under any Other Agreement.
Section 4.9 ASSIGNED CONTRACTS.
(a) SCHEDULE 1.1(B) of the Seller Disclosure Schedule sets forth a
true, accurate and complete list of each Contract to which Seller, Seller Sub or
any of their respective Affiliates is a party that (i) is material to the
manufacture or Distribution of the Products or the conduct of the Product Line
Business; (ii) provides for aggregate annual payments, or has a value, in excess
of seventy-five thousand dollars ($75,000) and is related to the Products, the
conduct of the Product Line Business, the Purchased Assets or the Inventory; or
(iii) is related to the Products, the conduct of the Product Line Business, the
Purchased Assets or the Inventory and falls within one or more of the following
categories:
(i) Contracts under which Seller, Seller Sub or any of their
respective Affiliates own, have under license, have a right to acquire
(by option or otherwise), have a right to use or exercise (including
any covenant not to sue or other similar right of forbearance), or
otherwise Control, or have any other right or interest in or to any
Product Intellectual Property;
(ii) Contracts with any labor union or similar representative
covering any Product Employee;
31
(iii) Contracts under which the Products are manufactured or
Distributed by Seller, Seller Sub or any of their respective
Affiliates, including any Distribution agreements, wholesalers,
manufacturing and supply agreements and Contracts with managed care
organizations or Governmental Authorities; and
(iv) Contracts limiting or restraining Seller or Seller Sub in
any material respect from engaging or competing in any lines of
business with any Person or from purchasing any products, services or
inventory from any third parties.
(b) Except as indicated in SCHEDULE 1.1(B) of the Seller
Disclosure Schedule, Seller has delivered or made available to Purchaser's
counsel or in the Data Rooms to Purchaser complete and correct copies of all
Assigned Contracts listed on SCHEDULE 1.1(B) of the Seller Disclosure Schedule
(or required to be listed on such schedule), including all schedules, exhibits,
appendices, amendments, modifications and waivers relating thereto.
(c) Each Assigned Contract is in full force and effect in
accordance with the terms thereof and constitutes a legal, valid and binding
agreement of Seller, Seller Sub or any of their respective Affiliates, as
applicable, and is enforceable in accordance with its terms by Seller, Seller
Sub or such Affiliate, as applicable, against each counterparty thereto, except
as such enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar Law relating to or affecting generally the enforcement of
creditors' rights, and the availability of equitable remedies (whether in a
proceeding in equity or at law). Neither Seller nor Seller Sub is in breach,
violation or default (and would not by the lapse of time or the giving of notice
or both, be in default) under any Assigned Contract, except and to the extent to
which such breach, violation or default has not or would not, individually or in
the aggregate, reasonably expected to have a Material Adverse Effect. To
Seller's Knowledge, no other party to any Assigned Contract is in material
breach of or default (and would not by the lapse of time or the giving of notice
or both, be in default) under such Assigned Contract.
(d) Neither Seller nor Seller Sub has any Knowledge that any party
to any Assigned Contract listed on SCHEDULE 1.1(B) of the Seller Disclosure
Schedule (or required to be listed on such schedule) (i) intends to either
terminate or not renew such Assigned Contract, or (ii) has or intends to submit
to Seller, Seller Sub or any of their respective Affiliates any claim of
material breach by any such party with respect to the performance of its
obligations under any such Assigned Contract.
(e) SCHEDULE 4.9 of the Seller Disclosure Schedule sets forth a
true, accurate and complete list of the Assigned Contracts for which third party
consents are required to assign such Assigned Contracts to Purchaser. Subject to
the receipt of the third party consents listed on SCHEDULE 4.9 of the Seller
Disclosure Schedule and Closing, Purchaser will succeed to all rights, title and
interests of Seller, Seller Sub or their respective Affiliates under each
Assigned Contract without the necessity to obtain the consent of any other
Person(s) to the assignment of such Assigned Contract.
32
(f) None of the Assigned Contracts have been entered into by
Seller, Seller Sub or any of their respective Affiliates other than in the
ordinary course of its or their business and other than on an arm's length
basis.
Section 4.10 CONSENTS. Except for the requisite filings under the HSR Act
and the expiration or termination of the waiting period thereunder, and all of
the filings and other actions set forth on SCHEDULE 4.9 of the Seller Disclosure
Schedule, other than as set forth on SCHEDULE 4.10 of the Seller Disclosure
Schedule, and subject to SECTION 2.5(B), no material notice to, filing with,
authorization of, exemption by, or consent of, any Person, including any
Governmental Authority, including any foreign Governmental Authority, is
required for Seller or Seller Sub to transfer the Purchased Assets or the
Inventory to Purchaser and otherwise consummate the Transactions.
Section 4.11 TAXES. All income and other material Tax Returns required to
be filed by or with respect to Seller or Seller Sub have been filed with the
appropriate Governmental Authority, and Seller and Seller Sub have paid all
Taxes due whether or not shown or required to be shown on any Tax Return. The
unpaid Taxes of Seller and Seller Sub have been adequately reserved for, as
determined in accordance with GAAP. There are no liens for Taxes (other than
liens for current Taxes not yet due and payable) on the Purchased Assets or the
Inventory.
Section 4.12 EMPLOYEE MATTERS.
(a) PRODUCT EMPLOYEES. No later than thirty (30) days prior to
the Closing Date, Seller shall deliver a true and complete list (the "PRODUCT
EMPLOYEE LIST"), which shall be appended hereto as SCHEDULE 4.12(A) of the
Seller Disclosure Schedule, of (i) each Product Employee as of the Effective
Time, including position or job title; salary or wage rate; commissions, bonus
compensation and incentive compensation for the past three fiscal years; site of
employment; years (including partial years) of service with Seller, Seller Sub
or any of their respective Affiliates, as applicable; county or city of
residence; accrued leave; severance or stay bonus obligation; whether such
Product Employee is actively at work or on a paid or unpaid leave of absence;
whether such Product Employee is covered by any Seller Plans; and whether such
Product Employee has had his or her work hours reduced in the six (6)-months
prior to the Effective Time; (ii) each person who is not a Product Employee at
the Effective Time but was a Product Employee at any time during the six
(6)-month period preceding the Effective Time, including the date of his or her
employment loss; and (iii) all Contracts (including employment and consulting
agreements) between Seller, Seller Sub or any of their respective Affiliates, as
applicable, and any Product Employee with respect to the Product Line Business
and shall provide Purchaser with copies of such contracts in effect as of the
Effective Time. No Product Employee is a party to, or is otherwise bound by, any
Contract, including any confidentiality, non-competition, retention, proprietary
rights agreement or similar Contract, between such Product Employee and Seller,
Seller Sub or any of their respective Affiliates, as applicable, that would
affect the performance of his or her duties as an employee of Purchaser if
employed by Purchaser pursuant to the provisions of SECTION 9.1(A), or would
require Purchaser to satisfy any financial obligation to such Product Employee
arising out of the termination of such Product Employee's employment with
Seller, Seller Sub or any of their respective Affiliates, as applicable.
33
(b) PLANS AND MATERIAL DOCUMENTS. SCHEDULE 4.12(B) of the Seller
Disclosure Schedule lists all material Seller Plans. Seller has made available
to Purchaser a true and complete copy of each Seller Plan, the summary
description for each Seller Plan and the latest annual report, if any, filed
with the IRS for each Seller Plan.
(c) Neither Seller nor any ERISA Affiliate of Seller has ever
established, maintained or contributed to, or had an obligation to maintain or
contribute to, any Plan that is subject to Title IV of ERISA.
(d) NO MULTIEMPLOYER PLANS. No Seller Plan constitutes a
Multiemployer Plan, and neither Seller nor any of its ERISA Affiliates has ever
contributed to, been required to contribute to, or otherwise had any obligation
or liability in connection with any Multiemployer Plan.
(e) COMPLIANCE. Each Seller Plan has been operated in all
material respects in accordance with its terms and the requirements of all
applicable Law. Each of Seller, Seller Sub and each of their respective
Affiliates has performed all material obligations required to be performed by it
under, is not in any material respect in default under or in material violation
of, and Seller has no Knowledge of any material default or violation by any
party to, any Seller Plan or applicable Law. To Seller's Knowledge, there has
been no prohibited transaction within the meaning of Section 4975 of the Code
and Section 406 of Title I of ERISA with respect to any Seller Plan.
(f) QUALIFICATION OF CERTAIN PLANS. Each Seller Plan that is
intended to be qualified under Section 401(a) of the Code or Section 401(k) of
the Code has timely received a favorable determination or opinion letter from
the IRS covering all of the provisions applicable to the Seller Plan for which
determination or opinion letters are currently available that the Seller Plan is
so qualified and no fact or event has occurred since the date of such
determination or opinion letter or letters from the IRS which could reasonably
be expected to adversely affect the qualified status of any such Seller Plan or
the exempt status of any such trust. Seller has provided Purchaser with a true
and complete copy of each of such determination or opinion letters.
(g) NO LIABILITIES TO PRODUCT EMPLOYEES. Except as set forth on
SCHEDULE 4.12(G), the consummation of the Transactions do not and will not (i)
entitle any Product Employee to severance pay, pension payments or termination
benefits for which Purchaser or any of its Affiliates may become liable; (ii)
accelerate the time of payment or vesting, or increase the amount of
compensation due to any such Product Employee or former employee of Seller,
Seller Sub or any of their respective Affiliates for which Purchaser or any of
its Affiliates may become liable; or (iii) obligate Purchaser or any of its
Affiliates to pay or otherwise be liable for any compensation, vacation days,
pension contribution or other benefits to any Product Employee or former
employee, consultant or agent of Seller, Seller Sub or any of their respective
Affiliates with respect to the Product Line Business for periods prior to the
Closing Date or for personnel whom Purchaser does not actually employ.
Section 4.13 LABOR MATTERS. Except as disclosed in Schedule 4.13, with
respect to the Product Line Business (a) there is, and within the last five (5)
years has been, no representation
34
of the Product Employees, or former employees of Seller, Seller Sub or any of
their respective Affiliates within the Product Line Business, by any labor
organization and, to Seller's Knowledge, there are no union organizing
activities among the Product Employees, and (b) there currently is not, and
within the last five years has not been, any labor strike, dispute, slowdown,
stoppage or lockout pending, affecting, or threatened against Seller, Seller Sub
or any of their respective Affiliates.
Section 4.14 COMPLIANCE WITH LAW. Except for the matters set forth under
SCHEDULE 4.14 of the Seller Disclosure Schedule, SECTION 4.5(A)(II) and
(B)(III), and with respect to certain regulatory matters as addressed in SECTION
4.15, (a) each of Seller and Seller Sub is in material compliance with all
applicable Law relating to any Product, the Purchased Assets and the Inventory;
and (b) Seller and Seller Sub have conducted the Product Line Business in
material compliance with all applicable Laws.
Section 4.15 REGULATORY MATTERS.
(a) SCHEDULE 4.15 of the Seller Disclosure Schedule sets forth a
true, accurate and complete list of (i) all material Registrations held by
Seller, Seller Sub or any of their respective Affiliates or under which Seller,
Seller Sub or any of their respective Affiliates conducts business, or notified
or submitted by or on behalf of Seller, Seller Sub, relating to the conduct of
research in respect of, and the manufacture, use or Distribution of, the
Products on or prior to the Execution Date, and (ii) all applications or
notifications or submissions for Registrations pending as of the Execution Date.
Except as otherwise set forth on SCHEDULE 4.15 of the Seller Disclosure
Schedule, either Seller or Seller Sub is the sole and exclusive owner of the
Registrations. Each such Registration (A) has been validly issued or
acknowledged by the appropriate Governmental Authority and is in full force and
effect, and (B) to the extent permitted by applicable Law, is transferable to
Purchaser.
(b) To Seller's Knowledge, (i) the manufacture, use or
Distribution of any Product by Seller, Seller Sub or any of their respective
Affiliates in the Territory has been conducted in compliance with the
Registrations and all applicable Law, and (ii) no Governmental Authority has
commenced or threatened to initiate any Action alleging, or which has otherwise
alleged, any violations of any federal, state or local or any payor "fraud and
abuse," consumer protection and false claims statutes and regulations, including
the Medicare and State Health Programs Anti-Fraud and Abuse Amendments of the
Social Security Act (42 U.S.C. ss. 1320a-7b(b)), the PDM Act, or any pricing or
rebate reporting requirements or to seek exclusion, whether voluntary or
otherwise, of Seller, Seller Sub or any Product Employee from participation in
any federally or state-funded program except, in each case, as would not,
individually or in the aggregate, reasonably expected to have a Material Adverse
Effect.
(c) No Governmental Authority has notified Seller or Seller Sub
that the conduct of the Product Line Business, the Purchased Assets or the
Inventory are in violation of any Law or the subject of any investigation.
Neither Seller nor Seller Sub has received notice from any Governmental
Authority that there are any circumstances currently existing which would
reasonably be expected to lead to: (i) any loss of or refusal to renew any
Registrations relating to the Product or the Purchased Assets, (ii) renewal on
terms less advantageous to Seller, Seller Sub or any of their respective
Affiliates than the terms of those Registrations currently in
35
force, (iii) recall of any of the Products, or (iv) an action to enjoin
production of any Product at any facility in the Territory.
(d) Seller and Seller Sub have completed and filed all material
annual or other material reports required by the FDA or other Medical Product
Regulatory Authority in order to maintain the Registrations.
(e) Seller has delivered to Purchaser copies of all material (i)
reports of FDA Form 483 inspection observations, or any equivalent report by
inspectors or officials from any other Governmental Authority of any situation
requiring attention or correction or of conditions or circumstances that are
objectionable or otherwise in contrary to applicable Law, (ii) FDA Notices of
Adverse Findings or any equivalent correspondence, notice or communication from
any other Governmental Authority indicating a failure to comply with applicable
Law or other requirements, (iii) establishment inspection reports, (iv) warning
letters and (v) other documents that assert ongoing lack of compliance in any
material respect with any applicable Law or regulatory requirements (including
those of the FDA), in each case received by Seller or Seller Sub from the FDA or
any other Governmental Authority relating to the Products or arising out of the
conduct of Seller and Seller Sub's business.
(f) Seller, Seller Sub and their respective Affiliates have
conducted all clinical trials for the Products in all material respects in
accordance with then-current Good Clinical Practices. Each of Seller, Seller Sub
and each of their respective Affiliates has made all necessary material filings
and received all necessary material approvals and consents for the conduct of
such clinical trials from the necessary Governmental Authorities and neither
Seller nor Seller Sub is aware of any Actions threatened or taken by such
Governmental Authorities to suspend or terminate any ongoing clinical trials for
the Products. Neither Seller nor Seller Sub has received any notice, charge,
subpoena or other request for information, which has not been complied with or
withdrawn, by a Governmental Authority asserting any material breach of the
conditions for approval of any ongoing clinical trials. Seller and Seller Sub
and their respective Affiliates have conducted all clinical trials for the
Products pursuant to valid protocols.
(g) None of Seller or Seller Sub, any of the Product Employees
that has conducted or is conducting clinical trials relating to the Products has
been disqualified, debarred or voluntarily excluded by the FDA or any other
Governmental Authority for any purpose, or has been charged with or convicted
under United States federal Law for conduct relating to the development or
approval, or otherwise relating to the regulation, of any drug product under the
Generic Drug Enforcement Act of 1992, the Act or any other relevant Law. To
Seller's Knowledge neither Seller nor Seller Sub nor any of the Product Employee
has made an untrue statement of a material fact to any Governmental Authority
with respect to the Products (whether in any submission to such Governmental
Authority or otherwise), or failed to disclose a material fact required to be
disclosed to any Governmental Authority with respect to the Products. None of
Seller, Seller Sub or any Product Employee has received any notice to such
effect.
(h) Any and all Products in their finished form sold on or prior
to the Closing Date were manufactured in all material respects in accordance
with then-current Good Manufacturing Practices and in compliance with the
applicable specifications of the Products as defined in the Registrations.
36
(i) Prior to the Effective Time, Seller, Seller Sub and their
respective Affiliates have used all Promotional Materials and conducted all
promotional activities with respect to the Products in material compliance with
all applicable Law.
Section 4.16 GOVERNMENT MULTI-PRODUCT CONTRACTS. Seller has made available
to Purchaser true, complete and correct copies of all Government Multi-Product
Contracts, PROVIDED that such copies may be redacted to prevent disclosure of
information related to a product other than a Product.
Section 4.17 FINANCIAL STATEMENTS; NO UNDISCLOSED LIABILITIES. Each of the
consolidated financial statements (including, in each case, any notes thereto)
contained in Seller's SEC Filings (as amended, supplemented or restated, if
applicable the "FINANCIAL STATEMENTS"), to the extent they disclose financial
information directly or primarily related to the Product Line Business, was
prepared, except as may be indicated in such filings and, in the case of
unaudited quarterly financial statements, as permitted by Form 10-Q under the
Exchange Act, in accordance with GAAP applied on a consistent basis during the
periods indicated, and each, as amended, supplemented or restated, if
applicable, presented fairly, in all material respects, the consolidated
financial position of Seller as of the respective dates thereof and the
consolidated results of operations and cash flows of Seller for the respective
periods indicated therein (subject, in the case of unaudited statements, to
adjustments of a normal and recurring type which, individually or in the
aggregate, are not reasonably expected to have a Material Adverse Effect). There
are no Liabilities of Seller or its consolidated subsidiaries directly or
indirectly related to the Product Line Business or the Purchased Assets and the
Inventory of any kind whatsoever, whether accrued, fixed, absolute, contingent,
known, unknown, determined, determinable or otherwise (and whether due or to
become due), of a nature required by GAAP to be reflected in financial
statements other than (i) liabilities disclosed or provided for in the Financial
Statements and (ii) current liabilities and obligations incurred in the ordinary
course of business and consistent with past practice since December 31, 2005
(the "FINANCIAL STATEMENT DATE") that, individually or in the aggregate, are not
reasonably expected to have a Material Adverse Effect.
Section 4.18 ABSENCE OF CHANGES. Since the Financial Statement Date,
Seller and Seller Sub have operated the Product Line Business in the ordinary
course of business and consistent with past practice, and, except as set forth
in SCHEDULE 4.18 of the Seller Disclosure Schedule:
(a) there has not been any Material Adverse Effect;
(b) none of Seller, Seller Sub or any of their respective
Affiliates has (i) ceased to own any Assets that would, but for such loss of
ownership, have been included in the Purchased Assets (except for sales of
Inventory and disposition of Promotional Materials), (ii) terminated, amended
any material term of or waived any material right under any Assigned Contract or
under any other Contract that would, but for such termination, amendment or
waiver, have been included in Assigned Contracts, (iii) waived, released,
granted, licensed or transferred any right, title or interest in or to any
Purchased Assets or any other Asset that would, but for such waiver, release,
grant, license or transfer, have been included in Purchased Assets, (iv) caused
or assented to the creation or other incurrence of any Encumbrance (other than a
37
Permitted Encumbrance) on any Purchased Asset or item of Inventory; or (v)
agreed to do any of the foregoing;
(c) except in connection with annual job reviews and related
compensation adjustments and bonus allocations (to the extent applicable and
occurring in the ordinary course of business and consistent with past
practices), none of Seller, Seller Sub or any of their respective Affiliates has
made any material change in the terms and conditions of the employment of any
Product Employee;
(d) Seller and Seller Sub have maintained all Applicable Permits
and pricing
information contained in the Product Records in the ordinary course of business;
(e) none of Seller, Seller Sub or any of their respective
Affiliates has instituted, settled or agreed to settle any Action related to the
Products or the Product Line Business;
(f) none of Seller, Seller Sub or any of their respective
Affiliates has taken any write-down of the value of any Purchased Asset or the
Inventory or any portion thereof; and
(g) no permit, approval, license, concession, franchise or
authorization has been cancelled, become delinquent or been lost that otherwise
would have been an Applicable Permit.
Section 4.19 INSURANCE. Schedule 4.19 of the Seller Disclosure Schedule
contains a complete and correct list of all material policies of insurance
maintained by Seller or Seller Sub and related to the Product Line Business.
All such policies are in full force and effect. Neither Seller nor Seller Sub
is in default under any provision contained in any such insurance policy
relating to the Products or the Product Line Business which would have a
material adverse effect upon the ability of the insured to collect insurance
proceeds under such policy. Neither Seller nor Seller Sub has received written
notice of cancellation or non-renewal with respect to any such policy. Except as
set forth on Schedule 4.8 of the Seller Disclosure Schedule, no claim related
to the Products or the Product Line Business exists under any insurance policy
set forth on Schedule 4.19 of the Seller Disclosure Schedule.
Section 4.20 BROKERS, ETC. No broker, investment banker, agent, finder or
other intermediary acting on behalf of Seller or Seller Sub or under the
authority of Seller or Seller Sub, except for UBS Securities LLC, whose fees
shall be paid by Seller and Seller Sub, is or will be entitled to any broker's
or finder's fee or any other commission or similar fee directly or indirectly in
connection with any of the Transactions.
Section 4.21 PRODUCT EQUIPMENT. Schedule 1.1(h) of the Seller Disclosure
Schedule sets forth a true, accurate and complete list of the manufacturing
tools, storage devices and test equipment owned by Seller, Seller Sub or any of
their respective Affiliates and used primarily or exclusively by Seller, Seller
Sub or any of their Affiliates to manufacture, store or test one or more
Products.
Section 4.22 PROMOTIONAL MATERIALS. Schedule 1.1(k) of the Seller
Disclosure Schedule sets forth a true, accurate and complete list of the
Labeling, Product informational letters, and the
38
advertising, promotional and media materials, sales training materials
(including any related outlines and quizzes/answers, if any), trade show
materials (including displays and trade show booths) and videos, including
materials containing post-marketing clinical data, if any, owned by Seller or
Seller Sub and used primarily or exclusively for the commercialization of any
Product in the Territory (including Distribution and sales promotion
information, market research studies and toll-free telephone numbers), and that
Seller, Seller Sub or any of their respective Affiliates has utilized in
connection with, the Product Line Business in the six (6) months prior to the
Execution Date.
Section 4.23 NO OTHER WARRANTIES. EXCEPT FOR THE REPRESENTATIONS AND
WARRANTIES EXPRESSLY SET FORTH IN THIS AGREEMENT, THE OTHER AGREEMENTS AND THE
SELLER DISCLOSURE SCHEDULE, SELLER AND SELLER SUB DISCLAIM ALL OTHER
REPRESENTATIONS AND WARRANTIES, EXPRESS OR IMPLIED, WITH REGARD TO THE SUBJECT
MATTER OF THIS AGREEMENT, INCLUDING WARRANTIES OF MERCHANTABILITY, FITNESS FOR A
PARTICULAR PURPOSE AND NON-INFRINGEMENT OF INTELLECTUAL PROPERTY RIGHTS.
ARTICLE V.
REPRESENTATIONS AND WARRANTIES OF EISAI INC. AND EISAI, LTD.
At the Execution Date and the Effective Time (except as to certain
representations and warranties which expressly speak as of a date certain, which
shall speak as of such date), Eisai Inc. and Eisai, Ltd. represent and warrant
to Seller and Seller Sub as follows:
Section 5.1 ORGANIZATION. Eisai Inc. is a corporation duly organized and
validly existing and in good standing under the Law of the State of Delaware.
Eisai, Ltd. is a corporation duly organized and validly existing and in good
standing under the Laws of Japan. Each of Eisai Inc. and Eisai, Ltd. has all
requisite corporate power and authority to own, lease and operate its properties
and to carry on its business as now being conducted.
Section 5.2 DUE AUTHORIZATION. Each of Eisai Inc. and Eisai, Ltd. has all
requisite corporate power and authority to execute, deliver and perform its
obligations under this Agreement and each of the Other Agreements to which it is
a party, and the execution and delivery of this Agreement and each of the Other
Agreements to which it is a party and the performance of all of its obligations
hereunder and thereunder have been duly authorized by each of Eisai Inc. and
Eisai, Ltd. and, to the extent required by Law, contract or otherwise, its
stockholders.
Section 5.3 NO CONFLICTS; ENFORCEABILITY. The execution, delivery and
performance of this Agreement and each of the Other Agreements to which it is a
party by Eisai Inc. and Eisai, Ltd. (a) are not prohibited or limited by, and
will not result in the breach of or a default under, any provision of the
certificate of incorporation or bylaws of Eisai Inc., or the organizational
documents of Eisai, Ltd., (b) assuming that all of the consents, approvals,
authorizations and permits described in SECTION 5.5 have been obtained and all
of the filings and notifications described in SECTION 5.5 have been made and any
waiting periods thereunder have terminated or expired, does not conflict with
any Law applicable to either Eisai Inc. or Eisai, Ltd., and (c) does not
conflict with, result in a breach of, constitute (with or without due notice or
lapse of time or
39
both) a default under, result in the acceleration of obligations under, create
in any party the right to terminate, modify or cancel, or require any notice,
consent or waiver under, any material Contract binding on either Eisai Inc. or
Eisai, Ltd. or any applicable Order of any Governmental Authority to which
either Eisai Inc. or Eisai, Ltd. is a party or by which either Eisai Inc. or
Eisai, Ltd. is bound or to which any of its Assets is subject, except for such
prohibition, limitation, default, notice, filing, permit, authorization, consent
or approval which would not prevent or delay consummation by either Eisai Inc.
or Eisai, Ltd. of the Transactions. This Agreement and the Other Agreements have
been duly executed and delivered by Eisai Inc. and Eisai, Ltd., and constitute
the legal, valid and binding obligations of Eisai Inc. and Eisai, Ltd.,
enforceable against Eisai Inc. and Eisai, Ltd. in accordance with their
respective terms, except as enforceability may be limited or affected by
applicable bankruptcy, insolvency, moratorium, reorganization or other Law of
general application relating to or affecting creditors' rights generally.
Section 5.4 LITIGATION. There is no Action pending or, to Purchaser's
knowledge, threatened, directly or indirectly involving Purchaser (or to
Purchaser's knowledge, any third party) that would prohibit, hinder, delay or
otherwise impair Purchaser's ability to perform its obligations hereunder or
under the Other Agreements, including the assumption of the Assumed Liabilities,
or would affect the legality, validity or enforceability of this Agreement or
the Other Agreements, or prevent or delay the consummation of the Transactions.
Section 5.5 CONSENTS. Except for the requisite filings under the HSR Act
and the expiration or termination of the waiting period thereunder, FDA and
other applicable foreign and United States regulatory or competition approvals,
and as may be necessary as a result of any facts or circumstances relating
solely to Purchaser, no notice to, filing with, authorization of, exemption by,
or consent of, any Person, including any Governmental Authority, is required for
Purchaser to consummate the Transactions.
Section 5.6 FINANCING. At the Effective Time, Purchaser has sufficient
immediately available funds to pay, in cash, the Purchase Price and
all other amounts payable pursuant to this Agreement and the Other Agreements or
otherwise necessary to consummate all the Transactions. Upon the consummation of
the Transactions, (a) Eisai Inc. and Eisai, Ltd. will not be insolvent, (b)
Eisai Inc. and Eisai, Ltd. will not be left with unreasonably small capital, (c)
Eisai Inc. and Eisai, Ltd. will not have incurred debts beyond its ability to
pay such debts as they mature, and (d) the capital of Eisai Inc. and Eisai, Ltd.
will not be impaired.
Section 5.7 BROKERS, ETC. No broker, investment banker, agent, finder or
other intermediary acting on behalf of Purchaser or under the authority of
Purchaser is or will be entitled to any broker's or finder's fee or any other
commission or similar fee directly or indirectly in connection with any of the
Transactions.
Section 5.8 INDEPENDENT INVESTIGATION. In making the decision to enter
into this Agreement and the Other Agreements and to consummate the Transactions,
other than reliance on the representations, warranties, covenants and
obligations of Seller and Seller Sub set forth in this Agreement, Purchaser has
relied solely on its own independent investigation, review and analysis of the
Purchased Assets, Assumed Liabilities, the Intellectual Property licensed to
Purchaser hereunder, the Products and Product Line Business (including
Purchaser's own
40
estimate and appraisal of the value of the financial condition,
assets, Liabilities, operations and prospects of the Product), which
investigation, review and analysis was done by Purchaser and its Affiliates and
Representatives. Purchaser acknowledges that it and its Representatives have
been provided adequate access to the personnel, properties, premises and records
of the Product Line Business for such purpose.
Section 5.9 NO OTHER WARRANTIES. EXCEPT FOR THE REPRESENTATIONS AND
WARRANTIES EXPRESSLY SET FORTH IN THIS AGREEMENT, PURCHASER DISCLAIMS ALL OTHER
REPRESENTATIONS AND WARRANTIES, EXPRESS OR IMPLIED, WITH REGARD TO THE SUBJECT
MATTER OF THIS AGREEMENT, INCLUDING WARRANTIES OF MERCHANTABILITY, FITNESS FOR A
PARTICULAR PURPOSE AND NON-INFRINGEMENT OF INTELLECTUAL PROPERTY RIGHTS.
ARTICLE VI.
COVENANTS PRIOR TO CLOSING
Section 6.1 ACCESS TO INFORMATION. Between the Execution Date and the
Closing Date, Seller shall and shall cause Seller Sub to (a) afford Purchaser
and its Representatives access, during regular business hours and upon
reasonable agreed-upon times, to the Data Rooms (which, for the avoidance of
doubt, shall contain at least the materials and information included therein on
March 14 and 15, 2006 with respect to the Data Room established in San Diego,
California, and March 31, April 6 and 7 and July 11 and 12, 2006 with respect to
the Data Room established in New York City, New York), and (b) subject to any
applicable Law and the terms of any Contract, afford Purchaser and its
Representatives access, during regular business hours and upon reasonable
agreed-upon times, to Seller's, Seller Sub's and any of their respective
Affiliates' personnel and properties pertaining to any Product or Product Line
Business, Assigned Contracts, Applicable Permits, the Product Records and all
other information and materials pertaining to the Product Line Business,
PROVIDED that such access shall not unreasonably interfere with Seller's or
Seller Sub's business and operations and shall, at all times, be subject to
applicable legal or other limitations. Such access and information shall not in
any way diminish or otherwise affect any of the representations or warranties
hereunder or Purchaser's rights to indemnification in respect of any breach
thereof.
Section 6.2 CONDUCT OF THE PRODUCT LINE BUSINESS.
(a) Between the Execution Date and the Closing Date, except as
otherwise set forth on SCHEDULE 6.2 or as expressly provided for in this
Agreement or consented to in writing by Purchaser, Seller and Seller Sub shall
(and shall cause their respective Affiliates to) use commercially reasonable
efforts to: (i) continue and conduct the Product Line Business in Seller's and
Seller Sub's (and, if applicable, their respective Affiliates') ordinary and
usual course of business and in a manner consistent with past practices (except
where such conduct would conflict with Seller's and Seller Sub's other
obligations under this Agreement or any Other Agreement) and (ii) preserve in
all material respects the Product Line Business, which, for the avoidance of
doubt shall include using commercially reasonable efforts to maintain good
working relationships with all of the prescribers, customers and suppliers of
the Product Line Business.
41
(b) Between the Execution Date and the Closing Date, unless
otherwise agreed by Purchaser, neither Seller nor Seller Sub shall (and Seller
and Seller Sub shall not permit any of their respective Affiliates to):
(i) sell the Products other than in the ordinary course of
business or in amounts that are inconsistent with sales by Seller and
Seller Sub (and as applicable, their respective Affiliates) during
Seller's fiscal quarter ended June 30, 2006;
(ii) grant or announce any increase in the salaries, bonuses
or other benefits payable by Seller or Seller Sub (or their respective
Affiliates) to any of the Product Employees, other than as required by
Law, pursuant to any Seller Plan, programs or agreements existing on
the Execution Date or other ordinary course increases consistent with
the past practices of Seller and Seller Sub (and, as applicable, their
respective Affiliates), respectively;
(iii) terminate or fail to exercise any rights of renewal with
respect to any Assigned Contracts set forth on SCHEDULE 1.1(B) of the
Seller Disclosure Schedule that by its terms would otherwise expire;
(iv) settle or compromise any material claims of Seller,
Seller Sub or their respective Affiliates (to the extent relating to
any Product or Product Line Business); or
(v) enter into any Contract relating in any way to the Product
Line Business, except to the extent that such Contract is (A) entered
into in the ordinary course of business and consistent with past
practice and (B) does not involve Liabilities in excess of fifty
thousand dollars ($50,000) individually or two hundred fifty thousand
dollars ($250,000) in the aggregate;
(vi) make any capital expenditure or commitment or addition to
property, plant or equipment of Seller or Seller Sub in respect of the
Product Line Business or the Purchased Assets, individually or in the
aggregate, in excess of two hundred fifty thousand dollars ($250,000);
(vii) take, or fail to take, any other action that could
reasonably be expected to result in a breach or inaccuracy in any of
the representations or warranties of Seller or Seller Sub contained in
this Agreement;
(viii) (A) incur, create, assume or permit the incurrence,
creation or assumption of any Encumbrance (other than Permitted
Encumbrances) with respect to the Purchased Assets or the Inventory,
(B) dispose of any of the Purchased Assets or Inventory, except for
sales of Inventory and Promotional Materials in the ordinary course of
business, or (C) waive, release, grant, license or transfer any right,
title or interest in or to any Purchased Asset or any item of
Inventory, except in the ordinary course of business;
42
(ix) revise or modify any Promotional Materials (including any
Labeling) except as required by any Governmental Authority or
applicable Law;
(x) except as set forth on SCHEDULE 6.2, terminate any ongoing
clinical trial (including any post approval study) with respect to any
Product, except in the event of a safety concern or as otherwise
necessary to comply with any Governmental Authority or applicable Law;
(xi) except as set forth on SCHEDULE 6.2, abandon, cease
prosecution on, fail to maintain, or fail to pay any fees or expenses
in connection with, any Patent or pending patent application relating
to the Product Intellectual Property;
(xii) add, remove or otherwise alter any references to the
Products in any website Controlled by Seller, Seller Sub or any of
their respective Affiliates or any of the content of such references
in any such website, except in response to a request by a Governmental
Authority or as otherwise required by applicable Law (including in
connection with posting any of Seller's SEC Filings to Seller's
website); or
(xiii) agree to take any of the actions specified in this
SECTION 6.2, except as contemplated by this Agreement and the Other
Agreements.
Section 6.3 REQUIRED APPROVALS AND CONSENTS. As soon as reasonably
practicable, but in any event, no later than ten (10) Business Days after the
Execution Date, the Parties shall make all filings required to be made in order
to consummate the Transactions, including all filings under the HSR Act in
accordance with SECTION 6.4. The Parties shall also cooperate with each other
with respect to all filings that Purchaser elects to make. Seller and Seller Sub
shall use their commercially reasonable efforts to obtain all third party
consents, in accordance with their obligations under SECTION 2.5, subject to
SECTION 2.5(B) and SECTION 8.7, required to effect the assignment of the
Assigned Contracts and Applicable Permits to Purchaser.
Section 6.4 HSR ACT.
(a) If required pursuant to applicable Law, each Party shall file
or cause to be filed as soon as practicable, and in any event no later than ten
(10) Business Days after the Execution Date, any notifications required under
the HSR Act and any comparable filing required by applicable foreign Law. Each
Party shall use commercially reasonable efforts to respond as promptly as
practicable to any inquiries or requests received from any Governmental
Authority in the Territory for additional information or documentation and to
cause the waiting periods under the HSR Act and any applicable foreign Law to
terminate or expire at the earliest possible date after the date of filing. The
Parties shall be responsible for their own legal fees for preparing their
portion of the HSR Act filings, and any filings required by any foreign Law.
Purchaser shall bear the responsibility for any required HSR Act filing fees.
(b) The Parties shall cooperate with each other and (i) promptly
prepare and file all necessary documentation, (ii) effect all necessary
applications, notices, petitions and filings and execute all agreements and
documents, and (iii) use commercially reasonable efforts to obtain all necessary
permits, consents, approvals and authorizations of all Governmental
43
Authorities. Purchaser shall have the right to review and approve in advance all
characterizations of the information relating to Purchaser; Seller shall have
the right to review and approve in advance all characterizations of the
information relating to Seller and its Affiliates; and each Party shall have the
right to review and approve in advance all characterizations of the information
relating to the Transactions, in each case which appear in any material filing
made in connection with the Transactions. The Parties agree that they will
consult with each other with respect to the obtaining of all such necessary
permits, consents, approvals and authorizations of all third parties and
Governmental Authorities. Each Party shall (i) promptly notify the other Party
of any communication to that Party or its Affiliates from any Governmental
Authority and, subject to applicable Law, permit the other Party or the other
Party's counsel to review in advance any proposed written communication to any
of the foregoing; (ii) not participate, or permit its Affiliates to participate,
in any substantive meeting or discussion with any Governmental Authority in
respect of any filings, investigation or inquiry concerning this Agreement
unless it consults with the other Party in advance and, to the extent permitted
by such Governmental Authority in the Territory, gives the other Party the
opportunity to attend and participate thereat; and (iii) with the exception of
business documents deemed confidential by the possessing Party (including
documents submitted as attachments to the Party's Notification and Report Form
under the HSR Act), furnish the other Party with copies of all correspondence,
filings, and communication (and memoranda setting forth the substance thereof)
between the Party (its affiliates, and its respective representatives) on the
one hand, and any Governmental Authority or members of their respective staffs
on the other hand, with respect to this Agreement.
(c) Except as otherwise expressly set forth in this Agreement,
(i) Purchaser shall not be required to divest any of its respective businesses,
product lines or assets, including any part of the Purchased Assets or Product
Line Business acquired pursuant to the terms and conditions of this Agreement
and the Other Agreements; (ii) Purchaser shall not be required to take or agree
to take any other action or agree to any limitation that could reasonably be
expected to have an adverse effect on the business, operations, assets,
liabilities, condition (financial or otherwise), results of operations or
prospects of Purchaser or its Affiliates; and (iii) Purchaser shall not be
required to waive any of the conditions set forth in ARTICLE VII.
Section 6.5 NO NEGOTIATION.
(a) Between the Execution Date and the Closing Date, Seller and
Seller Sub agree that neither they nor any of their respective Affiliates shall,
and each such Party shall use commercially reasonable efforts to cause their
respective Representatives not to, directly or indirectly, take any action to
(x) solicit, initiate or facilitate any Acquisition Proposal, (y) as to any such
Acquisition Proposal, participate in any way in discussions or negotiations
with, or furnish any non-public information to, any Person that has made an
Acquisition Proposal or (z) enter into any agreement with respect to any
Acquisition Proposal; PROVIDED, however, that, at any time prior to the Closing
Date, Seller and Seller Sub shall be permitted to:
(i) participate in any discussions or negotiations with, and
provide any non-public information to, any Person in response to an
Acquisition Proposal by any such Person, if the board of directors of
Seller reasonably determines that
44
there is a substantial likelihood that such Acquisition Proposal
would reasonably be expected to lead to a Superior Proposal;
(ii) if Seller has received an Acquisition Proposal from a
third party and the board of directors of Seller reasonably determines
that such Acquisition Proposal constitutes a Superior Proposal, enter
into an agreement with respect to such Acquisition Proposal; and
(iii) take and disclose to Seller's stockholders a position
with respect to any tender offer or exchange offer by a third party or
amend or withdraw such a position in accordance with Rule 14d-9 and
Rule 14e-2 of the Exchange Act.
(b) In the event Seller makes a determination to take any of the
actions contemplated under SECTION 6.5(A)(II) with respect to an Acquisition
Proposal, Seller shall notify Purchaser of such determination within twenty-four
(24) hours of making such determination (a "NOTICE OF SUPERIOR PROPOSAL"), which
notification shall state that Seller is prepared to enter into a definitive
agreement as to such Superior Proposal and include a summary of the material
terms and conditions of such Superior Proposal. During the five (5) Business Day
period after Purchaser's receipt of the Notice of Superior Proposal, Purchaser
shall have the right, at its sole and absolute discretion, to make an offer that
Purchaser believes to be at least as favorable to Seller's stockholders as such
Superior Proposal; PROVIDED, that during such five (5) Business Day period,
Seller shall negotiate in good faith with Purchaser (to the extent Purchaser
wishes to negotiate) to enable Purchaser to make, modify and complete a more
favorable offer. Upon receipt of such offer, the board of directors of Seller
shall, within two (2) Business Days, determine in good faith, after consultation
with its financial advisor and legal counsel, as to whether the competing offer
continues to constitute a Superior Proposal relative to Purchaser's final offer;
PROVIDED, that Purchaser acknowledges and agrees that in the event Purchaser
terminates this Agreement pursuant to SECTION 10.1(C)(IV) or Seller terminates
this Agreement pursuant to SECTION 10.1(B)(III), that concurrently with such
termination Seller may enter into a definitive agreement providing for
implementation of such Superior Proposal. For the avoidance of doubt, exceeding
the purchase price offered under the Superior Proposal by any dollar amount
shall not be a condition to any offer by Purchaser made in accordance with this
SECTION 6.5(B) being deemed by Seller's board of directors to be a "more
favorable offer."
Section 6.6 TRANSITION ACTIVITIES.
(a) Between the Execution Date and the Effective Time, Seller and
Seller Sub shall promptly furnish Purchaser with such reasonable sample
quantities of any Promotional Materials that Seller or Seller Sub may have
utilized in connection with the Product Line Business during the six (6)
month-period prior to the Execution Date, for use by Purchaser in preparing its
own Promotional Materials. In that regard, each of Seller and Seller Sub shall
and hereby does grant Purchaser a non-exclusive, non-transferable,
non-sublicensable, royalty free, paid-up license in the Territory to use
Seller's and Seller Sub's Promotional Materials in connection with creating
Purchaser's Promotional Materials for a period of six (6) months following the
Closing Date or three (3) months following completion of the transfer of the
Registrations to Purchaser in accordance with SECTION 8.7(A), whichever is
later. All costs and
45
expenses incurred by Purchaser with respect to creating its own Promotional
Materials shall be borne by Purchaser.
(b) Prior to Closing, the Parties shall enter into a Transition
Services Agreement, to be effective immediately after the Effective Time,
providing for the services specified therein pursuant to which Seller and Seller
Sub shall perform certain transitional services for Purchaser in accordance with
the terms thereof.
Section 6.7 NON-SOLICITATION; NON-COMPETITION; NON-DISPARAGEMENT.
(a) LIMITATIONS ON SOLICITATION AND HIRING OF EMPLOYEES.
(i) Neither Seller nor Seller Sub shall (and Seller and Seller
Sub shall not permit any of their respective Affiliates to),
directly or indirectly, solicit or otherwise attempt to induce any
Hired Employee to terminate his or her employment with Purchaser
or its Affiliates for a period of one (1) year following the
Closing Date; PROVIDED, HOWEVER, that this SECTION 6.7(A)(I) shall
not (A) prohibit general solicitations of or advertisement for
employment by Seller if they are not specifically directed at
Hired Employees or (B) prevent Seller from interviewing or hiring
any Hired Employee who responds to such general solicitation of or
advertisement for employment. Subject to the provision in the
preceding sentence, for such one (1)-year period, neither Seller
nor Seller Sub shall (and Seller and Seller Sub shall not permit
any of their respective Affiliates to) directly or indirectly hire
or enter into any arrangement for the services of any employees
employed by Purchaser or its Affiliates with any amount of
responsibility relating to the Products, unless the individual's
employment has been terminated by Purchaser or its Affiliates.
(ii) Purchaser shall not (and shall not permit any of its
Affiliates to), directly or indirectly, solicit or otherwise
attempt to induce any employees of Seller or Seller Sub (other
than the Product Employees, including Potential Employees) to
terminate his or her employment with Seller or Seller Sub or any
of their respective Affiliates for a period of one (1) year
following the Closing Date; PROVIDED, HOWEVER, that this SECTION
6.7(A)(II) shall not (A) prohibit general solicitations of or
advertisement for employment by Purchaser if they are not
specifically directed at Seller's employees, or (B) prevent
Purchaser from interviewing or hiring any employee of Seller who
responds to such general solicitation of or advertisement for
employment. For the avoidance of doubt, notwithstanding the
foregoing, Purchaser may directly or indirectly solicit or
otherwise attempt to induce any Product Employee, including a
Potential Employee, to terminate his or her employment with Seller
or Seller Sub or any of their respective Affiliates, and Purchaser
may interview or hire any Product Employee (including Potential
Employee) of Seller who responds to such solicitation or
inducement.
(b) NON-COMPETITION. Seller and Seller Sub agree that during the
period commencing on the day immediately following the Closing Date and ending,
with respect to
46
each Product in each applicable country, on the last day of the applicable
Exclusivity Period, unless acting pursuant hereto or acting with the prior
written consent of Purchaser (which consent may be withheld in Purchaser's sole
discretion), none of Seller, Seller Sub or any of their respective Affiliates
shall, directly or indirectly, (i) market, Distribute or, except as provided in
the Transition Services Agreement, manufacture or cause to be manufactured, in
the Territory any of denileukin difitox, bexarotene or alitretinoin, or any
derivations thereof, as applicable, or any pharmaceutical product containing any
of the foregoing as an active ingredient, or (ii) license or authorize any other
Person to do the same, PROVIDED, HOWEVER, that such provision shall not survive
a change of control of Seller or an acquisition of a third party pharmaceutical
company by Seller or Seller Sub.
(c) NON-DISPARAGEMENT.
(i) For a period of two (2) years following the Closing Date,
each of Seller and Seller Sub agrees that neither it nor its
Affiliates shall, except as required by Law, engage in any conduct
that involves the making or publishing of written or oral
statements or remarks (including the repetition or distribution of
derogatory rumors, allegations, negative reports or comments)
which are disparaging, deleterious or damaging to the integrity
reputation or goodwill of Purchaser, its Affiliates, the Product
Line Business or the Products.
(ii) For a period of two (2) years following the Closing Date,
Purchaser agrees that neither it nor its Affiliates shall, except
as required by Law, engage in any conduct that involves the making
or publishing of written or oral statements or remarks (including
the repetition or distribution of derogatory rumors, allegations,
negative reports or comments) which are disparaging, deleterious
or damaging to the integrity reputation or goodwill of Seller,
Seller Sub or any of their respective Affiliates.
(d) BLUE PENCIL PROVISIONS. If a court of competent jurisdiction
determines that the foregoing restrictions are too broad or otherwise
unreasonable under applicable Law, including with respect to duration,
geographic scope or space, the court is hereby requested and authorized by the
Parties to revise the foregoing restriction to include the maximum restrictions
allowable under applicable Law. Each of the Parties acknowledges, however, that
this SECTION 6.7 has been negotiated by the Parties and that the geographical
and time limitations on activities, are reasonable in light of the circumstances
pertaining to the Parties.
Section 6.8 NOTIFICATIONS. Between the Execution Date and the Closing Date
(or any earlier termination of this Agreement), Seller and Seller Sub, on the
one hand, and Purchaser, on the other hand, shall promptly notify the other
Party in writing of any fact, change, condition, circumstance, or occurrence or
nonoccurrence of any event of which it is aware that will or is reasonably
likely to (a) cause any representation or warranty made by such Party in this
Agreement or any Other Agreement to be untrue or inaccurate as of the Execution
Date or as of the Effective Time, or (b) cause a failure to comply with or
satisfy any condition, agreement or obligation required to be complied with or
satisfied by such Party under this Agreement or any Other Agreement; PROVIDED,
HOWEVER, that except as set forth in SECTION 6.9, the delivery of any notice
pursuant to this SECTION 6.8 shall not (x) be deemed to cure any breach of
representation,
47
warranty, agreement or obligation or to satisfy any condition for purposes of
determining whether the conditions set forth in ARTICLE VII have been satisfied,
or (y) limit or otherwise affect the remedies or indemnification rights
available hereunder to the Party receiving such notice.
Section 6.9 DISCLOSURE SUPPLEMENTS. Between the Execution Date and the
date that is three (3) Business Days prior to the Closing Date, Seller and
Seller Sub shall supplement or amend the Seller Disclosure Schedule with respect
to any matter which, if existing or occurring prior to the Execution Date, would
have been required to be set forth or described in the Seller Disclosure
Schedule or which is necessary to correct any information in such Seller
Disclosure Schedule which has been rendered inaccurate by an event, condition,
fact or circumstance occurring after the Execution Date. Such delivery shall not
affect any rights of Purchaser under SECTION 10.1 or ARTICLE XI. During the same
period, Seller and Seller Sub also shall promptly notify Purchaser of the
occurrence of any breach of any covenant of Seller or Seller Sub in this ARTICLE
VI or the occurrence of any event that may make the satisfaction of the
conditions in ARTICLE VII impossible or unlikely.
Section 6.10 FURTHER ASSURANCES; FURTHER DOCUMENTS.
(a) As of the Execution Date, each of the Parties shall use its
commercially reasonable efforts, in the most expeditious manner practicable, (i)
to satisfy or cause to be satisfied all the conditions precedent that are set
forth in ARTICLE VII, as applicable to each of them, (ii) to cause the
Transactions to be consummated, and (iii) without limiting the generality of the
foregoing, to obtain all consents and authorizations of third parties and to
make all filings with, and give all notices to, third parties that may be
necessary or reasonably required on its part in order to consummate the
Transactions.
(b) Each Party shall, and shall cause its respective Affiliates
to, at the request of another Party, execute and deliver to such other Party all
such further instruments, assignments, assurances and other documents as such
other Party may reasonably request in connection with the carrying out of this
Agreement and the Transactions.
ARTICLE VII.
CONDITIONS TO CLOSING
Section 7.1 CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLER, SELLER SUB AND
PURCHASER. The respective obligations of Seller, Seller Sub and Purchaser to
consummate the Transactions on the Closing Date are subject to the satisfaction
or waiver (in accordance with SECTION 12.8) at or prior to the Closing Date of
the following conditions:
(a) LITIGATION. No preliminary or permanent injunction or other
Order has been issued or instituted by any Governmental Authority, or other body
or authority, which under applicable Law enjoins, restrains, prohibits or makes
illegal to the Transactions on the Closing Date.
(b) GOVERNMENTAL APPROVALS. Any waiting period (and any extension
thereof) under the HSR Act (or comparable German Law) applicable to the
Transactions has expired or been terminated.
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(c) NO ADVERSE LAW. No Law shall have been enacted, entered,
promulgated or enforced by any Governmental Authority that is in effect and has
the effect of (i) making the purchase and sale of the Purchased Assets or the
Inventory illegal or (ii) prohibiting the consummation of the Transactions.
(d) STOCKHOLDER APPROVAL. If Seller's board of directors
determines in its good faith judgment to seek the approval of Seller's
stockholders to consummate the Transactions, the number of shares of Seller's
Common Stock required to approve the Transactions under Seller's bylaws,
certificate of incorporation or under the Delaware General Corporation Code
shall have been voted in favor of approving the Transactions at a meeting of
Seller's stockholders or by written consent in lieu thereof.
Section 7.2 CONDITIONS PRECEDENT TO PURCHASER'S OBLIGATIONS. Purchaser's
obligations to consummate the Transactions shall be subject to the fulfillment
of each of the following additional conditions, any one or more of which may be
waived, at Purchaser's sole discretion, in writing by Purchaser:
(a) REPRESENTATIONS AND WARRANTIES. Each of the representations
and warranties of Seller and Seller Sub contained in ARTICLE IV that are
qualified by materiality shall be true and correct in all respects, and the
representations and warranties of Seller and Seller Sub contained in ARTICLE IV
that are not so qualified shall be true and correct in all material respects, in
each case as of the Execution Date and as of the Effective Time as though made
on and as of the Execution Date and the Effective Time, as applicable (except
that those representations and warranties which address matters only as of a
particular date need only be true and correct as of such date), in each case
after giving effect to any supplement or amendment to the Seller Disclosure
Schedule made pursuant to SECTION 6.9.
(b) PERFORMANCE. Seller and Seller Sub shall have performed and
complied in all material respects with each of the covenants, agreements and
obligations Seller and Seller Sub are required to perform or comply with under
this Agreement on or before the Closing.
(c) MATERIAL ADVERSE EFFECT. As of the Closing Date, there shall
have been no Material Adverse Effect.
(d) REQUIRED CONSENTS. All consents set forth on SCHEDULE 7.2 of
the Seller Disclosure Schedule shall have been obtained or made, as the case may
be.
(e) NO ADVERSE LAW. No Law shall have been enacted, entered,
promulgated or enforced by any Governmental Authority that is in effect and has
the effect of (i) prohibiting or substantially limiting the ownership,
manufacture, use or Distribution of the Products or the operation by Purchaser
of any material portion of the Product Line Business in a manner as has been
conducted by Seller and Seller Sub immediately prior to the Effective Time or
(ii) compelling or seeking to compel Purchaser to dispose or hold separate any
material portion of Purchaser's business or assets as a result of the
Transactions.
(f) OTHER DOCUMENTS. Purchaser shall have received the items set
forth in SECTION 3.2(A) and such other documents, certificates or instruments as
the Parties may reasonably agree to deliver or cause to be delivered in
connection with the consummation of the
49
Transactions, and all other related matters, in form and substance reasonably
acceptable to the Parties.
(g) OTHER AGREEMENTS. Seller and Seller Sub shall have duly
executed and delivered to Purchaser the Other Agreements.
(h) RELEASE OF ENCUMBRANCES. Purchaser shall have received prior
to the Closing Date, evidence that all Encumbrances (other than Permitted
Encumbrances) on or relating to the Purchased Assets or the Inventory have been
properly terminated or released on or before the Closing, including either (i) a
completed UCC-3 Termination Statement, in a proper form for filing, in respect
of each such Encumbrance or (ii) a payoff letter from the secured party
thereunder, in form and substance reasonably acceptable to Purchaser, certifying
that upon receipt by or on behalf of Seller of the amount specified in such
payoff letter, such Encumbrance shall be released with no further action and
that such secured party will, promptly upon receipt of the specified amount,
deliver to Purchaser a duly executed UCC-3 Termination Statement, in a proper
form for filing, in respect of such Encumbrance.
(i) INSPECTION OF INVENTORY. Seller shall have permitted Purchaser
and its Representatives (at Purchaser's expense), no later than three (3)
Business Days prior to the Closing Date, to inspect the Inventory.
(j) SUPPLIER AND CUSTOMER LISTS. Purchaser shall have received at
Closing, true, complete and accurate lists of all of Seller's and Seller Sub's
suppliers and wholesale and retail customers in connection with the Product Line
Business.
Section 7.3 CONDITIONS PRECEDENT TO SELLER'S AND SELLER SUB'S OBLIGATIONS.
Seller's and Seller Sub's obligation to consummate the Transactions shall be
subject to the fulfillment of each of the following additional conditions, any
one or more of which may be waived, at Seller's sole discretion, in writing by
Seller:
(a) REPRESENTATIONS AND WARRANTIES. Each of the representations
and warranties of Purchaser contained in ARTICLE V that are qualified by
materiality shall be true and correct in all respects, and the representations
and warranties of Purchaser contained in ARTICLE V that are not so qualified
shall be true and correct in all material respects, in each case as of the
Execution Date and as of the Effective Time as though made on and as of the
Execution Date and the Effective Time, as applicable (except that those
representations and warranties which address matters only as of a particular
date need only be true and correct as of such date).
(b) PERFORMANCE. Purchaser shall have performed and complied in
all material respects with each of the covenants, agreements and obligations
Purchaser is required to perform or comply with under this Agreement on or
before the Closing.
(c) OFFICER'S CERTIFICATE. Seller shall have received the items
set forth in SECTION 3.2(B) and such other documents, certificates or
instruments as the Parties may reasonably agree to deliver or cause to be
delivered in connection with the consummation of the Transactions, and all other
related matters, in form and substance reasonably acceptable to the Parties.
50
(d) OTHER AGREEMENTS. Purchaser shall have duly executed and
delivered the Other Agreements to Seller and Seller Sub, as applicable.
ARTICLE VIII.
ADDITIONAL COVENANTS
Section 8.1 CONFIDENTIALITY; PUBLICITY.
(a) The terms of the Confidentiality Agreement shall apply to any
information provided to Seller, Seller Sub or Purchaser pursuant to this
Agreement or any Other Agreement or otherwise in connection with the
Transactions. If this Agreement is terminated, the Parties agree to promptly
return to the disclosing Party or (at the disclosing Party's option) destroy any
information of the other Party in its possession that is subject to the
Confidentiality Agreement.
(b) The Parties shall jointly agree upon the necessity and content
of any press release in connection with the Transactions. Any other publication,
news release or other public announcement by a Party relating to this Agreement
or to the performance hereunder shall first be reviewed and consented to in
writing by the other Parties; PROVIDED, HOWEVER, that notwithstanding any
contrary term contained in the Confidentiality Agreement, (i) any disclosure
that is required by Law as advised by the disclosing Party's counsel may be made
without the prior written consent of the other Parties and (ii) any Party may
issue a press release or public announcement if the contents of such press
release or public announcement have previously been made public other than
through the fault of, or a breach of this Agreement or the Confidentiality
Agreement by, the issuing Party, without the prior written consent of the other
Parties. To the extent practicable, the disclosing Party shall give at least two
(2) Business Days advance notice of any such legally required disclosure to the
other Parties, and such other Parties may provide any comments on the proposed
disclosure during such period and if not practicable, such lesser practicable
period, if any. Notwithstanding any contrary term contained in the
Confidentiality Agreement, to the extent that any Party reasonably determines
that it or any other Party is required to file or register this Agreement, a
summary thereof or a notification thereof to comply with the requirements of an
applicable stock exchange, Exchange regulation, New York Stock Exchange
regulation or any Governmental Authority, including the SEC, such Party shall
give at least two (2) Business Days advance written notice of any such required
disclosure to the other Party. Prior to making any such filing, registration or
notification, the Parties shall consult with respect thereto regarding
confidentiality. The Parties shall cooperate, each at its own expense, in such
filing, registration or notification, including such confidential treatment
request, and shall execute all documents reasonably required in connection
therewith.
Section 8.2 AVAILABILITY OF RECORDS. After the Closing, Seller and Seller
Sub, on the one hand, and Purchaser, on the other hand, shall make available to
each other Party and its Affiliates and Representatives during regular business
hours and upon reasonable agreed-upon times, all Product Records in its
possession and shall preserve all such information, records and documents until
the later of: (i) six (6) years after the Closing; (ii) the expiration of all
statutes of limitations for assessing or collecting Taxes for periods ending on
or prior to the Closing and periods including the Closing Date, including
extensions thereof applicable to Seller, Seller Sub or Purchaser; or (iii) the
required retention period under any applicable Law for all such information,
records or documents (it being understood that the Parties shall not be required
to
51
provide any Tax returns to any Person, other than as required by applicable
Law). Purchaser and Seller shall also make available to each other during
regular business hours and upon reasonable agreed-upon times (PROVIDED, that
such access shall not unreasonably interfere with such Party's business and
operations), personnel responsible for preparing or maintaining information,
records and documents, in connection with Tax matters, governmental contracts,
litigation or potential litigation, each as it relates to the Product, Product
Line Business, Purchased Assets or Assumed Liabilities prior to the Closing Date
(with respect to Seller) or from and after the Closing Date (with respect to
Purchaser), including product liability and general insurance liability. Each
Party shall bear its own expenses and costs incurred in connection with any
exercise of its rights of inspection under this SECTION 8.2.
Section 8.3 USE OF SELLER BRANDS. Other than as expressly provided in this
Agreement and the Other Agreements, Purchaser shall not use or permit any of its
Affiliates to use any of the Seller Brands, except as follows:
(a) To the extent permitted by, and in accordance with applicable
Laws, and subject to the limitations in SECTION 2.5(B) and SECTION 8.7,
Purchaser shall be entitled to continue to use the Seller Brands and the
existing Labeling for the purchased Inventory until the first anniversary of the
Closing Date, it being acknowledged and agreed that Purchaser will use its
commercially reasonable efforts to use or sell such items of Inventory prior to
selling any Product under any Purchaser Trademark. Subject to the terms and
conditions herein, Seller and Seller Sub hereby grant a non-exclusive,
non-transferable right and license to Purchaser to use the Seller Brands on
Labeling and packaging for the Products to the extent specified herein.
(b) Purchaser shall promptly after the Closing Date, and prior to
the first anniversary of the Closing Date, complete the revision of all
Promotional Materials relating to the Products (i) to delete all references to
the Seller Brands and (ii) to delete all references to Seller's or Seller Sub's
customer service address or phone number; PROVIDED, HOWEVER, that for a period
of ninety (90) days following completion of the transfer of the Registrations to
Purchaser, under the license grant set forth in SECTION 6.6(A), Purchaser may
continue to distribute Promotional Materials that use the Seller Brands and such
Seller and Seller Sub addresses or phone numbers to the extent that such
Promotional Materials exist on the Closing Date.
Section 8.4 NOTIFICATION OF CUSTOMERS. Promptly after the Closing,
Purchaser shall notify all wholesale distributors of the Products (a) of the
transfer of the Purchased Assets to Purchaser; (b) that all purchase orders for
any Product received by Seller or Seller Sub or any of their respective
Affiliates on or prior to the Closing Date but not shipped prior to 11:59 p.m.
California time on the Closing Date will be transferred to Purchaser (PROVIDED
that to the extent that any purchase order cannot be so transferred, Seller,
Seller Sub and Purchaser shall cooperate with each other to ensure that such
purchase order is filled and that Purchaser receives the same economic benefit
and assumes the same liability associated with filling such purchase order as if
such purchase order had been so transferred); and (c) that all purchase orders
for the Product received, and all Product returns, after the Closing Date should
be sent to Purchaser at Eisai Inc./Research Triangle Park (RTP), 900 Davis
Drive, P.O. Box 14505, Research Triangle Park, NC 27709. Purchaser and Seller
shall agree upon an appropriate notice to wholesalers and commercial customers
with respect to the transfer of chargeback and rebate submissions to Purchaser
effective thirty (30) days after the Closing Date. Upon Purchaser's request,
Seller and
52
Seller Sub shall use commercially reasonable efforts to cooperate
with Purchaser's provision of notices under this SECTION 8.4.
Section 8.5 PRODUCT RETURNS, REBATES AND CHARGEBACKS.
(a) NDC NUMBERS. Following the Closing Date, Purchaser shall
obtain its own NDC number and shall use commercially reasonable efforts to have
in place, as soon as reasonably practicable, all resources such that sales can
be accomplished under the NDC number of Purchaser. Thereafter, Purchaser shall
use its new NDC number on all invoices, orders and other communications with
customers and Governmental Authorities.
(b) PRODUCT RETURNS. Seller shall be financially responsible for
returned Units of Products sold by Seller, Seller Sub or their respective
Affiliates on or before the Closing Date. Purchaser shall be financially
responsible for all returned Units of Products bearing the NDC numbers of Seller
or Seller Sub sold by Purchaser or its Affiliates after the Closing Date and all
returned Units of the Products bearing the NDC numbers of Purchaser or its
Affiliates. All returned Units of Products received by Purchaser, Seller, Seller
Sub or the Affiliates of any Party after the Closing Date will be processed and
handled by such receiving Party (or its Affiliate, if applicable) at its
respective returns handling facility. If either Party accepts returned Units of
a Product for which the other Party is financially responsible in accordance
with this SECTION 8.5(B), that Party shall invoice the other Party for the
amount of such return in accordance with the current returned goods policy of
the Party receiving the returned Product and the associated reasonable cost of
destruction, including payments to any vendors in connection therewith. Each
such invoice shall set forth the number of Units processed, together with such
other information as shall be reasonably necessary to support the invoice. Each
Party shall, within thirty (30) days of its receipt of invoice, pay the other
Party for the full invoiced amount. The receiving Party shall destroy, or cause
to be destroyed, all such returned Product in a manner consistent with
applicable Laws. Notwithstanding any provision herein to the contrary, Purchaser
and its Affiliates shall not take any actions with the intention of encouraging
or otherwise affirmatively causing Seller's and Seller Sub's customers and
distributors to return Products (except as otherwise required by, or deemed
prudent by Purchaser under, applicable Law).
(c) GOVERNMENT REBATES.
(i) Seller shall be financially responsible for all rebates
pursuant to any government rebate programs for all Products bearing the NDC
numbers of Seller or Seller Sub dispensed on or before the one hundred eightieth
(180th) day after the Closing Date (the "REBATE TERMINATION DATE"). Purchaser
shall be financially responsible for all rebates pursuant to any government
rebate programs for all Products bearing the NDC numbers of Seller or Seller Sub
dispensed after the Rebate Termination Date. The Parties acknowledge and agree
that government rebates are currently invoiced on a calendar quarter basis and,
in the event that the Rebate Termination Date is not the last day of a calendar
quarter, Seller shall be financially responsible for the portion of such
government rebates equal to (A) the aggregate amount of all government rebates
invoiced for such calendar quarter, multiplied by (B) a fraction, the numerator
of which is the number of days from and including the first day of such calendar
quarter through and including the Rebate Termination Date and the denominator of
which is the total number of days in such calendar quarter, and Purchaser shall
be responsible for the portion
53
of such government rebates equal to (1) the aggregate amount of all
government rebates invoiced for such calendar quarter, multiplied by (2) a
fraction, the numerator of which is the number of days from and after the Rebate
Termination Date through and including the last day of such calendar quarter and
the denominator of which is the total number of days in such calendar quarter.
For purposes of this SECTION 8.5(C), the Parties acknowledge and agree that
where detailed dispensing information is not readily available, the Product in
question shall be deemed to have been dispensed in the quarter for which it is
invoiced.
(ii) Seller shall be administratively responsible for
processing all rebates pursuant to any government rebate programs for all
Product bearing the NDC numbers of Seller or Seller Sub or any of their
respective Affiliates. Purchaser acknowledges that Seller will require certain
information from Purchaser in order to calculate the Medicaid rebate for Product
bearing NDC numbers of Seller or Seller Sub or any of their respective
Affiliates sold by Purchaser after the Closing Date. Accordingly, Purchaser
agrees that, from and after the Closing Date until the date which is one (1)
calendar year after the expiration date of the last lot of Product produced with
any NDC number of Seller, Purchaser will provide to Seller, reasonably in
advance of the date Seller is required to file such information with the
appropriate Governmental Authority, the following information: (a) the Best
Price for each Product identified by NDC number, (b) the AMP for each Product
identified by the NDC number, and (c) any additional data or other information
related to such Medicaid issues reasonably requested by Seller, which shall in
each case shall be prepared in accordance with applicable Laws.
(iii) SCHEDULE 8.5(C) sets forth the "BEST PRICE" (as defined
at 42 U.S.C. ss. 1396r-8(c)(1)(C)) and Average Manufacturers Price ("AMP") (as
defined at 42 U.S.C. ss. 1396r-8(k)(1)) reported by Seller for the Product for
the two most recently ended calendar quarters.
(iv) To the extent that Seller or Seller Sub processes
government rebate claims for which Purchaser is financially responsible,
Purchaser shall reimburse Seller within thirty (30) days of receipt of invoices
that describe the requested payments in reasonable detail and include reasonable
supporting documentation.
(d) COMMERCIAL REBATES.
(i) Seller shall be financially responsible for all commercial
rebates with respect to Product bearing the NDC numbers of Seller or Seller Sub
dispensed on or before the Rebate Termination Date. Purchaser shall be
financially responsible for all commercial rebates with respect to Product
bearing the NDC numbers of Seller or Seller Sub dispensed after the Rebate
Termination Date. The Parties acknowledge and agree that to the extent that any
commercial rebates are invoiced on a calendar quarter basis, in the event that
the Rebate Termination Date is not the last day of a calendar quarter, Seller
shall be financially responsible for the portion of such commercial rebates
equal to (A) the aggregate amount of all commercial rebates invoiced for such
calendar quarter, multiplied by (B) a fraction, the numerator of which is the
number of days from and including the first day of such calendar quarter through
and including the Rebate Termination Date and the denominator of which is the
total number of days in such calendar quarter, and Purchaser shall be
responsible for the portion of such commercial rebates equal to (1) the
aggregate amount of all commercial rebates invoiced for such calendar
54
quarter, multiplied by (2) a fraction, the numerator of which is the number
of days from and after the Rebate Termination Date through and including the
last day of such calendar quarter and the denominator of which is the total
number of days in such calendar quarter.
(ii) Notwithstanding the foregoing, the Parties agree that (i)
neither Seller nor Seller Sub shall be responsible for credits or shelf stock
adjustments to the extent resulting from price decreases initiated by Purchaser
on or after the Closing Date and (ii) any such commercial rebate payments by
Seller or Seller Sub shall be made on the terms and conditions equivalent to
Seller's and Seller Sub's rebate obligations as of the Closing with respect to
each commercial customer as set forth in Seller's and Seller Sub's terms of
agreement with such customer.
(iii) To the extent that Seller or Seller Sub processes
commercial rebate claims for which Purchaser is financially responsible,
Purchaser shall reimburse Seller within thirty (30) days of receipt of invoices
that describe the requested payments in reasonable detail and include reasonable
supporting documentation. To the extent that Purchaser processes commercial
rebate claims for which Seller is financially responsible, Seller shall
reimburse Purchaser within thirty (30) days of receipt of invoices that describe
the requested payments in reasonable detail and include reasonable supporting
documentation.
(e) CHARGEBACK CLAIMS.
(i) Seller shall be financially responsible for all chargeback
claims (and associated administrative fees) (the "CHARGEBACK CLAIMS") related to
the Product sold on or prior to the Closing Date. Purchaser shall be financially
responsible for all Chargeback Claims related to the Product sold after the
Closing Date. Notwithstanding the foregoing, the Parties acknowledge that the VA
National Acquisition Center must approve the removal of the Product from
Seller's (and Seller Sub's) Federal Supply Schedule ("FSS") before the
responsibility of processing such rebates is transferred from Seller or Seller
Sub to Purchaser. Until such approval is obtained, Seller (or Seller Sub) shall
continue to be responsible for processing the FSS Chargeback Claims for which
Purchaser is financially responsible on Purchaser's behalf, and Purchaser shall
reimburse Seller for same as set forth below. Purchaser and Seller agree that
(i) Seller's and Seller Sub's financial liability for Chargeback Claims shall be
limited to those commercial customers with which Seller or Seller Sub has
chargeback obligations as of the Closing Date, and (ii) any such Chargeback
Claims issued by Seller or Seller Sub shall be made on terms and conditions
equivalent to Seller's and Seller Sub's obligations as of the Closing with
respect to each customer as set forth in Seller's and Seller Sub's terms of
agreement with such customer as of the Closing Date. Seller shall utilize
records from third party rebate administrators to demonstrate which Chargeback
Claims relate to the Products sold on or prior to the Closing Date for purposes
of determining Seller's obligation.
(ii) To the extent that Seller or Seller Sub processes
Chargeback Claims which are the financial responsibility of Purchaser, Purchaser
shall reimburse Seller within thirty (30) days of receipt of invoices that
describe the requested payments in reasonable detail and include reasonable
supporting documentation. To the extent that Purchaser processes Chargeback
Claims which are the financial responsibility of Seller, Seller shall reimburse
55
Purchaser within thirty (30) days of receipt of invoices that describe the
requested payments in reasonable detail and include reasonable supporting
documentation.
Section 8.6 ACCOUNTS RECEIVABLE. The Parties acknowledge and agree that all
Accounts Receivable shall remain the property of Seller and Seller Sub and their
respective Affiliates and shall be collected by Seller or Seller Sub or their
respective Affiliates subsequent to the Closing. In the event that, subsequent
to the Closing, Purchaser or an Affiliate of Purchaser receives any payments
from any obligor with respect to an Account Receivable outstanding on the
Closing Date, then Purchaser shall, within thirty (30) days of receipt of such
payment, remit the full amount of such payment to Seller. In the case of the
receipt by Purchaser of any payment from any obligor of both Seller or Seller
Sub and Purchaser then, unless otherwise specified by such obligor, such payment
shall be applied first to amounts owed to Purchaser with the excess, if any,
remitted to Seller. In the event that, subsequent to the Closing, Seller or
Seller Sub or any of their respective Affiliates receives any payments from any
obligor with respect to an account receivable of Purchaser for any period after
the Closing Date, then Seller shall, within thirty (30) days of receipt of such
payment, remit the full amount of such payment to Purchaser. In the case of the
receipt by Seller of any payment from any obligor of both Seller or Seller Sub
and Purchaser then, unless otherwise specified by such obligor, such payment
shall be applied first to amounts owed to Seller or Seller Sub with the excess,
if any, remitted to Purchaser.
Section 8.7 REGULATORY MATTERS.
(a) TRANSFER OF REGISTRATIONS.
(i) At the Effective Time, each of Seller and Seller Sub, as
applicable, shall (and, as applicable, Seller and Seller Sub shall
cause their respective Affiliates to) transfer all of the benefit
of the Registrations to Purchaser free of all Encumbrances, other
than Permitted Encumbrances, on the terms and conditions set forth
in this SECTION 8.7, to the extent permitted by, and in accordance
with applicable Law, and subject to SECTION 2.5(B). As soon as
practicable following the Closing Date but in any event no later
than fifteen (15) days after the Closing Date, to the extent
permitted by, and in accordance with applicable Law, and subject
to SECTION 2.5(B), Seller shall, and shall cause Seller Sub and,
as applicable, Seller's and Seller Sub's respective Affiliates to,
transfer the Registrations to Purchaser. As necessary Seller,
Seller Sub, and their respective Affiliates shall make such
amendments to, submit such notifications, reports, correspondence,
documents or other filings to applicable Governmental Authorities
in respect of, fulfill such formalities in respect of, and obtain
any consents and approvals with respect to, such Registrations
necessary to effect the transfer of each of the Registrations to
Purchaser. Following the Closing Date, Seller, Seller Sub and any
of their respective Affiliates, as applicable, shall hold in trust
for the exclusive benefit of Purchaser those Registrations not yet
transferred to, or replaced by, Purchaser, and shall maintain such
Registrations in full force and effect (at the sole cost and
expense of Purchaser), and shall not amend, cancel or surrender
any such Registration (except as may have been initiated prior to
the Execution Date and disclosed to Purchaser in the Seller
Disclosure Schedule), or
56
permit any such Registration to expire or be amended,
cancelled or revoked, unless in each case requested to do so by
Purchaser.
(ii) With respect to all clinical trials (including post
approval studies) for any Product being conducted as of the
Closing Date, Seller shall, as soon as practicable, (or shall
cause Seller Sub to) transfer control to Purchaser or its designee
of such studies and cooperate with Purchaser to ensure a smooth
and orderly transition thereof, in a manner that minimizes the
risk of any disruption of such studies or activities.
(iii) Except as otherwise provided in the Transition Services
Agreement, SECTION 8.5, this SECTION 8.7 and ARTICLE XI, neither
Seller nor Seller Sub shall have any obligations with respect to
the transfer of the Registrations to Purchaser and the maintenance
of the Registrations following the Closing Date.
(iv) Upon receipt of the Registrations transferred to
Purchaser in accordance with this SECTION 8.7, Purchaser promptly
shall notify the applicable Governmental Authorities of its
assumption of the Registrations from Seller, Seller Sub and any of
their respective Affiliates in accordance with applicable Law.
(v) Following the Closing Date, Seller or Seller Sub, as
applicable, shall take or refrain from taking (and each will cause
its Affiliates to take or refrain from taking) such actions with
respect to those Registration not yet transferred to, or replaced
by, Purchaser as are reasonably requested by Purchaser; PROVIDED,
that Purchaser shall indemnify Seller and Seller Sub for any and
all Losses arising in connection with any Action by a third party
arising from, in connection with or otherwise with respect to the
actions taken or failed to be taken by Seller or Seller Sub at
Purchaser's request pursuant to this SECTION 8.7(A).
(b) PURCHASER RESPONSIBILITIES. Except as set forth in the
Transition Services Agreement and subject to the provisions of SECTION 8.5 and
SECTION 8.7(A) above, after the Closing Date, Purchaser (on behalf of Seller or
Seller Sub, to the extent required under applicable Law), at its cost, shall be
solely responsible (subject to Seller's and Seller Sub's obligations set forth
in clauses (c) through (f) below) and liable for (i) taking all actions, paying
all fees and conducting all communication with the appropriate Governmental
Authority required by Law in respect of the Registrations, including preparing
and filing all reports (including adverse drug experience reports) with the
appropriate Governmental Authority (whether the Product is sold before or after
transfer of such Registrations); (ii) taking all actions and conducting all
communication with third parties with respect to Product sold pursuant to such
Registrations (whether sold before or after transfer of such Registrations),
including responding to all complaints in respect thereof, including complaints
related to tampering or contamination; (iii) investigating all complaints and
adverse drug experiences with respect to any Product sold pursuant to such
Registrations (whether sold before or after transfer of such Registrations); and
(iv) fulfilling all other applicable legal and regulatory obligations of a
holder of each Registration.
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(c) COMPLAINTS; ADVERSE DRUG EXPERIENCE REPORTS. After the Closing
Date, Seller shall notify Purchaser within seventy-two (72) hours (or such
shorter period required by Law) if Seller, Seller Sub or any of their respective
Affiliates receives a complaint or a report of an adverse drug experience with
respect to any Product. In addition, Seller and Seller Sub shall (and shall
cause their respective Affiliates to) cooperate with Purchaser's reasonable
requests and use commercially reasonable efforts to assist Purchaser in
connection with the investigation of and response to any complaint or adverse
drug experience report related to the Product sold by Seller, Seller Sub or any
of their respective Affiliates. All notifications pursuant to this Section shall
be by fax or email at such numbers (or email addresses) agreed upon by the
Parties' respective safety divisions.
(d) RECALLS. Except as set forth in the Transition Services
Agreement, after the Closing Date, Purchaser, at its cost (subject to the
proviso below), shall be solely responsible and liable for conducting all
voluntary and involuntary recalls of Units of any Product sold pursuant to such
Registrations (whether sold before or after transfer of such Registrations),
including recalls required by any Governmental Authority and recalls of Units of
any Product sold on or prior to the Closing Date or Product included in
Inventory that was defective when delivered to Purchaser hereunder that are
deemed necessary by Seller in its reasonable discretion; PROVIDED, HOWEVER, that
Seller or Seller Sub shall reimburse Purchaser for the reasonable expenses and
costs of conducting recalls relating to Product sold on or prior to the Closing
Date or Product included in Inventory that was defective when delivered to
Purchaser hereunder, irrespective of whether such recalls were required by
applicable Governmental Authorities or deemed necessary or prudent by Seller,
including the costs of notifying customers, the costs associated with shipment
of such recalled Product, the price paid for such Product, and reasonable
credits extended to customers in connection with the recall. Seller or Seller
Sub promptly shall notify Purchaser in the event that a recall of any Product
sold by Seller, Seller Sub or any of their respective Affiliates on or prior to
the Closing Date or Product included in Inventory that was defective when
delivered to Purchaser hereunder is necessary or otherwise reasonably advisable
and Seller shall, and shall cause Seller Sub to, cooperate with Purchaser's
reasonable requests and use commercially reasonable efforts to assist Purchaser
in implementing and effecting such recall.
(e) RESPONSE TO MEDICAL INQUIRIES. From the Execution Date until
the Closing, Seller and Seller Sub shall continue to be responsible for
responding to all medical inquiries with respect to any Product in the Territory
in accordance with Seller's or Seller Sub's customary internal procedures for
responding to such inquiries. Seller or Seller Sub shall document all responses
made by it hereunder and shall provide reports thereof on a thirty (30)-day
basis to Purchaser. These Product medical inquiries may arise from many sources
such as (but not limited to) direct telephone calls or written correspondence to
either Party. During the period prior to Closing, Purchaser shall promptly refer
all such Product medical inquiries that it receives to Seller for response in
accordance with Seller's or Seller Sub's customary internal procedures. Except
as set forth in the Transition Services Agreement, after Closing, Purchaser
shall assume all responsibility for responding to any medical inquiries with
respect to any Product; PROVIDED, that Seller and Seller Sub shall reasonably
cooperate with Purchaser in connection with the transfer of responsibility for
responding to responses.
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(f) COOPERATION. Seller and Seller Sub shall reasonably cooperate
with Purchaser in supplying information or reasonable assistance in Purchaser's
fulfillment of its obligations under this SECTION 8.7.
Section 8.8 WEBSITE INFORMATION. Within twenty (20) days after the Closing
Date, Seller shall remove all references to the Products from any website
Controlled by Seller, Seller Sub, or any of their respective Affiliates, except
(i) as necessary to describe the Transactions; (ii) any information contained in
Seller's SEC Filings included on Seller's website; or (iii) as contained in
press releases released prior to the Closing Date and references to the Products
in a historical context; PROVIDED, HOWEVER, during such twenty (20) day period
none of Seller, Seller Sub or any of their respective Affiliates shall add or
alter (other than to remove from the website) any references to the Products in
any website Controlled by Seller, Seller Sub or any of their respective
Affiliates or add to or alter (other than to remove from the website) any of the
content of such references in any such website, except in response to a request
by a Governmental Authority or as otherwise required by applicable Law
(including in connection with posting any of Seller's SEC Filings to Seller's
website).
Section 8.9 TAX MATTERS.
(a) All Transfer Taxes shall be borne equally by Seller and
Purchaser; PROVIDED, HOWEVER, that Purchaser and Seller shall reasonably
cooperate with one another to lawfully minimize such Taxes (including, without
limitation, filing claims for refunds of any value added Taxes). Seller and
Purchaser shall also share equally any refunds of Transfer Taxes; PROVIDED,
HOWEVER, that the non-paying party of such Transfer Taxes shall only be entitled
to share equally in such refunds if it has reimbursed the paying party as
provided in this SECTION 8.9. Upon payment of any such Transfer Taxes, the
paying party shall present a statement to the non-paying party setting forth the
amount of the reimbursement to which the paying party is entitled together with
such supporting evidence as is reasonably necessary to calculate the amount to
be reimbursed. The non-paying party shall make such reimbursement promptly but
in no event later than ten (10) Business Days after the presentation of such
statement. Seller, Seller Sub and Purchaser shall cooperate in preparing and
timely filing all Tax Returns and other documentation relating to such Transfer
Taxes (including the determination of the value of the Purchased Assets and
Inventory subject to Transfer Taxes) as may be required by applicable Tax Law.
(b) Any personal property and similar AD VALOREM Taxes levied with
respect to the Purchased Assets and the Inventory for a taxable period which
includes (but does not end on) the Closing Date (collectively, the "APPORTIONED
OBLIGATIONS") shall be apportioned between Seller and Purchaser based on the
number of days of such taxable period up to and including the Closing Date (such
portion of such taxable period, the "PRE-CLOSING TAX PERIOD") and the number of
days of such taxable period after the Closing Date (such portion of such taxable
period, the "POST-CLOSING TAX PERIOD"). Seller shall be liable for the
proportionate amount of such Apportioned Obligations that is attributable to the
Pre-Closing Tax Period, and Purchaser shall be liable for the proportionate
amount of such Apportioned Obligations that is attributable to the Post-Closing
Tax Period.
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(c) Apportioned Obligations and Transfer Taxes shall be timely
paid, and all applicable filings, reports and returns shall be filed, as
provided by applicable Law. The paying party shall be entitled to reimbursement
from the non-paying party in accordance with this SECTION 8.9. Upon payment of
any such Apportioned Obligation or Transfer Tax, the paying party shall present
a statement to the non-paying party setting forth the amount of reimbursement to
which the paying party is entitled under this SECTION 8.9, together with such
supporting evidence as is reasonably necessary to calculate the amount to be
reimbursed. The non-paying party shall make such reimbursement promptly but in
no event later than ten (10) days after the presentation of such statement.
(d) Seller, Seller Sub and Purchaser hereby waive compliance with
any "bulk sales" Laws (including any requirement to withhold any amount from
payment of the Purchase Price) applicable to the sale to Purchaser of the
Purchased Assets and the Inventory by Seller and Seller Sub.
(e) Each of Seller and Purchaser shall (i) provide the other with
such assistance as may reasonably be requested by the other Party in connection
with the preparation of any Tax Return, audit or other examination by a
Governmental Authority or any judicial or administrative proceeding related to
Liability for Taxes in connection with the Purchased Assets or the Inventory;
(ii) retain and provide the other Party with any records or other information
that may be relevant to such Tax Return, audit or examination, proceeding or
determination; and (iii) provide the other Party with any final determination of
any such audit or examination, proceeding or determination that affects any
amount required to be shown on any Tax Return of the other Party for any taxable
period.
Section 8.10 GOVERNMENT MULTI-PRODUCT CONTRACTS. After the Effective Time,
Purchaser shall honor and perform all Liabilities of Seller, Seller Sub and any
of their respective Affiliates arising after the Effective Time under and
pursuant to each Government Multi-Product Contract with respect to supplying any
Products to the applicable party pursuant to such Government Multi-Product
Contract until such time as Seller, Seller Sub or such Affiliate, as applicable,
has terminated each such Government Multi-Product Contract as provided below.
Seller or Seller Sub, as applicable, agree that, except as otherwise required by
applicable Law, after the Effective Time (i) they will not take (or permit any
of their respective Affiliates to take) any action with respect to any
Government Multi-Product Contract that would extend the term of such Government
Multi-Product Contract with respect to the Products, create or agree to any
additional obligations with respect to the Products, or otherwise materially
adversely affect Purchaser or the Product Line Business, without the prior
consent of Purchaser, and (ii) they will take or refrain from taking (and will
cause their respective Affiliates to take or refrain from taking) such actions
with respect to any Government Multi-Product Contract as reasonably requested by
Purchaser; PROVIDED that Purchaser shall indemnify Seller, Seller Sub and their
respective Affiliates for any and all Losses arising in connection with any
Action by a third party arising from, in connection with or otherwise with
respect to the actions taken or failed to be taken by Seller, Seller Sub or any
of their respective Affiliates at Purchaser's request pursuant to this SECTION
8.10. Seller, Seller Sub or any of their respective Affiliates may enter into a
separate agreement with such government party, PROVIDED that such agreements do
not contain any provisions relating to the Products or the Product Line
Business. Seller and Seller Sub, as applicable, shall terminate the rights and
obligations of Seller, Seller Sub or any of their
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respective Affiliates, as applicable, with respect to the Products under
each such Government Multi-Product Contract, to the extent permitted by the
terms thereof and to the extent permitted by, and in accordance with, applicable
Law, as soon as reasonably practicable after the Effective Time.
Section 8.11 INVENTORY MATTERS.
(a) SEGREGATION OF INVENTORY. Prior to the Closing Date, Seller
and Seller Sub shall, and shall cause their respective Affiliates and
subcontractors to, reserve and set aside a single, specific, secure, physical
space for the storage of all the Inventory and shall at all times store and
maintain the Inventory in the designated space and shall not store anything
else, including the products of other third parties, in the designated space,
nor otherwise in any manner co-mingle the Inventory with any property of Seller,
Seller Sub, their respective Affiliates or any other Person other than
Purchaser. The Parties acknowledge and agree that Inventory stored and
maintained in accordance with Good Manufacturing Practices shall meet the
requirements of the first sentence of this SECTION 8.11(A). The records
maintained with respect to such segregated Inventory (which may be computer or
other electronic records) clearly shall indicate that, following the Effective
Time, such Inventory is the property of Purchaser. The Distribution of the
Inventory shall be at Seller's and Seller Sub's expense. After the Closing Date,
Seller and Seller Sub shall hold, Distribute and use the Inventory only in
accordance with the Transition Services Agreement or as otherwise instructed by
Purchaser.
(b) DESTRUCTION OF EXCESS INVENTORY. Within ten (10) days after
the Closing Date, Seller shall destroy any inventory of bulk active
pharmaceutical ingredient, finished pharmaceutical product, samples of finished
pharmaceutical product and works-in-progress of such pharmaceutical product that
is formulated, labeled or otherwise intended for use, sale or offer for sale
under the Seller Brands related to any Product and owned by Seller, Seller Sub
or any of their respective Affiliates that is not part of the Inventory and
shall deliver to Purchaser a certificate, dated no later than ten (10) days
after the Closing Date, duly executed by an authorized officer of Seller
certifying compliance with this SECTION 8.11(B).
Section 8.12 PROSECUTION OF PRODUCT MARKS. Following the Execution Date,
Seller shall undertake all commercially reasonable actions to (a) file, or cause
the filing with, and cause the acceptance by the PTO of, the Combined Section 8
and 15 Declarations for the United States Registration for the Trademark
ONTAK(R); and (b) record, or cause the recordation of, the assignment of the
Mexican Registration for the Trademark ONTAK(R) from Eli Lilly & Company to
Seller with the Mexican Trademark Office. Seller shall provide Purchaser
evidence, acceptable to Purchaser in its sole discretion, of the completion of
each such action promptly upon receipt from the relevant Governmental Authority.
Section 8.13 TRADE SECRETS. Seller shall make available to Purchaser all
trade secrets (if any) included within the Product Intellectual Property
promptly following the Closing and Seller shall, and shall cause Seller Sub and
Seller's and Seller Sub's respective Affiliates to, not use such trade secrets
and maintain the trade secret status of all such trade secrets from and after
the Execution Date unless and until Purchaser ceases to keep such trade secrets
confidential.
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Section 8.14 PROFESSIONAL ADVISORY FEES, ETC. Seller will provide for the
transfer, on the Closing Date, to UBS Securities LLC (who is an intended
third-party beneficiary of this paragraph) a cash amount sufficient to pay in
full all amounts due and payable to UBS Securities LLC in connection with the
Transactions.
Section 8.15 NON-ASSERTION COVENANT. None of Seller, Seller Sub or any of
their respective Affiliates shall assert against Purchaser or any of its
Affiliates, any Intellectual Property rights invented or discovered prior to the
Closing Date and obtained by or Controlled by Seller, Seller Sub or any of their
respective Affiliates prior to or after the Closing Date which would prevent
Purchaser or any of their Affiliates from manufacturing, using or Distributing
the Products. Such covenant not to assert shall be binding on Seller's, Seller
Sub's and their respective Affiliates' successors and assigns and any third
party to whom Seller, Seller Sub, or any of their respective Affiliates licenses
or otherwise transfers rights with respect to any such Intellectual Property
invented or discovered prior to the Closing Date.
ARTICLE IX.
EMPLOYEE MATTERS
Section 9.1 EMPLOYEE TRANSFER.
(a) Subject to Purchaser's standard hiring requirements (including
but not limited to a background check, drug screening and receipt of a motor
vehicle report), Purchaser shall offer to employ on an at-will basis each of the
Product Employees listed on SCHEDULE 9.1(A)(I), whether such Product Employee is
actively at work or on leave of absence as of the Effective Time; PROVIDED,
HOWEVER, that Purchaser shall only be required to offer employment to those
Product Employees listed on SCHEDULE 9.1(A)(I) who are on a leave of absence at
the Effective Time if they are able to return to work within ninety (90) days
after the Effective Time. For a period of one hundred and twenty (120) days
after the Effective Time, Purchaser may, in its sole discretion, offer to employ
on an at-will basis each of the Product Employees who are listed on SCHEDULE
9.1(A)(II) ("POTENTIAL EMPLOYEES"). Notwithstanding the restrictions under
SECTION 6.7(A), Purchaser shall be permitted to solicit and interview Potential
Employees. Purchaser's employment of Product Employees listed on SCHEDULE
9.1(A)(I) who are actively at work at the Effective Time and who accept such
offer of employment shall commence as of the Effective Time. Purchaser's
employment of Product Employees listed on SCHEDULE 9.1(A)(I) who are not
actively at work at the Effective Time and who accept such offer shall commence
when they return to active work, and such Product Employees shall remain
employees of Seller, Seller Sub or any of their respective Affiliates, as
applicable, until they commence employment with Purchaser. Purchaser shall
deliver the offers of employment required under this SECTION 9.1(A), which may
be contingent upon each Product Employee satisfying Purchaser's standard hiring
requirements, to applicable Product Employees at least ten (10) days prior to
the Closing, PROVIDED that all of the information required to be provided by
Seller pursuant to SECTION 4.12(A) has been provided to Purchaser no later than
five (5) days prior to such date. Each Product Employee, including any Potential
Employee, who becomes employed by Purchaser is herein referred to as a "HIRED
EMPLOYEE." Product Employees listed on SCHEDULE 9.1(A)(I) who are actively at
work as of the Effective Time and who accept Purchaser's offer of employment
shall become Hired Employees as of the Effective Time. Product Employees listed
on SCHEDULE 9.1(A)(I) who are not actively at work as of the Effective Time and
who accept Purchaser's offer
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of employment shall become Hired Employees when they return to active
work. Potential Employees who are offered employment by the Purchaser and who
accept Purchaser's offer of employment shall become Hired Employees as of their
date of hire. Product Employees who do not accept Purchaser's offers of
employment shall not become Hired Employees. As of the Effective Time (or on the
date of hire by Purchaser in the case of a Product Employee listed on SCHEDULE
9.1(a)(i) not actively employed at the Effective Time or in the case of a
Potential Employee), Seller or Seller Sub shall (or shall cause their respective
Affiliates to) terminate the employment of each Hired Employee who commences
employment with Purchaser.
(b) As of the Effective Time, all Hired Employees listed on
SCHEDULE 9.1(A)(I) who are actively at work at the Effective Time shall cease
participation in all Seller Plans, subject to the terms of such Plans. Product
Employees listed on SCHEDULE 9.1(A)(I) who are not actively at work as of the
Effective Time shall continue to participate in all applicable Seller Plans,
subject to the terms of such Plans, and shall cease participation in all Seller
Plans when they become Hired Employees, subject to the terms of such Plans.
Potential Employees who become Hired Employees shall cease participation in all
Seller Plans on their date of hire by the Purchaser, subject to the terms of
such Plans.
(c) Commencing at the Effective Time (or on the date of hire by
Purchaser in the case of a Product Employee not actively employed at the
Effective Time or in the case of a Potential Employee) and ending on the earlier
to occur of the (i) the date that is twelve (12) months from the Effective Time
or the date of hire, as applicable, or (ii) the date on which the Hired Employee
terminates employment with Purchaser, Purchaser shall provide each Hired
Employee with pension and welfare benefits (including medical, dental, vision,
accident, life, disability, vacation and leave and other employee welfare
benefits) that are comparable in the aggregate to those provided to similarly
situated employees of Purchaser.
Section 9.2 TRANSITION OF BENEFITS.
(a) Effective as of their date of hire by Purchaser, Hired
Employees who are participants in the Seller Plan that is intended to meet the
requirements of Section 401(k) of the Code (the "SELLER'S 401(K) PLAN") shall
cease to be eligible for any future contributions to Seller's 401(k) Plan except
with respect to compensation from Seller, Seller Sub or any of their respective
Affiliates, as applicable, prior to the Effective Time and as provided under
Seller's 401(k) Plan, and shall be entitled to a distribution of their account
balances under Seller's 401(k) Plan in accordance with such plan and as
permitted by the Code. Hired Employees who receive an eligible rollover
distribution (within the meaning of Section 402(c)(4) of the Code, including a
direct transfer of an eligible rollover distribution within the meaning of
Section 401(a)(31) of the Code) from Seller's 401(k) Plan shall, subject to the
provisions of Section 402 of the Code, be permitted to make a rollover
contribution to a Plan maintained by Purchaser or an Affiliate of Purchaser that
is intended to meet the requirements of Section 401(k) of the Code ("PURCHASER'S
401(K) PLAN"); PROVIDED, HOWEVER, that no outstanding loan amounts or promissory
notes shall be rolled over or transferred to Purchaser's 401(k) Plan.
(b) Seller or Seller Sub, as applicable, shall (or Seller or
Seller Sub shall cause their applicable Affiliate to), on or before the Closing
Date (or on or before the date of hire by Purchaser in the case of a Product
Employee not actively employed at the Closing Date or a
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Potential Employee), pay to all Hired Employees any vacation pay benefits
earned but not yet used as of the date on which they terminate employment with
Seller or Seller Sub (or Seller's or Seller Sub's Affiliate), as applicable.
Purchaser shall not recognize, honor or assume the Liability for any Hired
Employee's accrued but unused personal and sick time with Seller, Seller Sub and
their respective Affiliates, but shall credit Hired Employees with years of
service with Seller, Seller Sub or their respective Affiliates, as applicable,
for purposes of calculating their benefits under Purchaser's paid time off
policy; PROVIDED, that any paid time off under Purchaser's paid time off policy
for the year in which a Product Employee becomes a Hired Employee shall be
prorated to reflect the Hired Employee's date of hire by Purchaser.
(c) As of the Effective Time, Purchaser shall, with respect to (i)
Purchaser's 401(k) Plan, (ii) eligibility, vesting and the contribution
percentage under its money purchase plan, and (iii) other employee benefit
plans, policies, programs or arrangements that contain a service credit
component and that are maintained by Purchaser after the Closing (solely to the
extent applicable to such Hired Employee), credit each Hired Employee with his
or her years of service with Seller, Seller Sub or any of their respective
Affiliates (or any predecessor to any of the foregoing); PROVIDED, that a Hired
Employee's service for Seller, Seller Sub or any of their respective Affiliates
shall not affect the vesting of his benefits, if any, under Purchaser's Long
Term Incentive Plan.
(d) Hired Employees shall be eligible to enroll in a health plan
determined by Purchaser as of their date of hire by Purchaser without (i) any
waiting periods, (ii) any evidence of insurability, or (iii) application of any
pre-existing physical or mental condition restrictions, except to the extent
that such waiting periods, actively at work requirements, evidence of
insurability or pre-existing mental or physical condition restrictions would
apply under Seller's Plans and be permitted by Law. Seller or Seller Sub (or
Seller's or Seller Sub's Affiliate), as applicable, shall retain responsibility
for and continue to pay all medical and dental plan benefits for each Hired
Employee with respect to claims incurred by such Hired Employee or his or her
covered dependents under the Seller Plans prior to his or her date of hire by
Purchaser. Purchaser shall be responsible for all expenses and benefits with
respect to claims incurred by Hired Employees or their covered dependents on or
after the their date of hire by Purchaser, including, but not limited to,
medical, dental, disability, life insurance and workers' compensation benefits.
Purchaser shall recognize, or cause to be recognized, the dollar amount of all
expenses incurred by each Hired Employee (and his or her eligible dependents)
during the calendar year in which the date of hire by Purchaser occurs for
purposes of satisfying such year's deductible and co-payment limitations and
out-of-pocket maximums under the relevant welfare benefit plans in which such
Hired Employee (and his or her eligible dependents) shall be eligible to
participate after his or her date of hire by Purchaser; PROVIDED, that Seller or
each Hired Employee provides Purchaser with all information reasonably necessary
to credit these expenses.
(e) Without limiting the generality of SECTION 2.4, Seller, Seller
Sub and their respective Affiliates shall retain sole responsibility for all
Liabilities in respect of continuation coverage of health insurance under
Section 4980B of the Code or Part 6 of Title I of ERISA or other similar state
or local Law to Product Employees and any other current and former employees of
Seller, Seller Sub and their respective Affiliates and their eligible dependents
with respect to "qualifying events" (as defined in Section 4980B of the Code)
occurring prior to their date of hire by Purchaser. Seller shall include in
SCHEDULE 9.2(E), which shall be delivered at
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Closing, a de-identified list of all qualified beneficiaries within the
meaning of Section 4980B of the Code who are or were Product Employees or are
associated with Product Employees and the beginning and end of the period during
which such qualified beneficiaries are entitled to coverage under Section 4980B
of the Code. Purchaser shall be responsible for satisfying all obligations under
Section 4980B of the Code or Part 6 of Title I of ERISA or other similar state
or local Law with respect to any Hired Employee and his or her eligible
dependents with respect to "qualifying events" occurring on or after the date of
hire by Purchaser. Seller shall continue to maintain a group health plan within
the meaning of Section 4980B of the Code and Part 6 of Title I of ERISA for a
period of at least twelve (12) months after the Closing Date.
(f) With respect to Hired Employees who participate in a Seller
Plan qualified under Section 125 of the Code ("SELLER'S 125 PLAN") that includes
flexible spending accounts for medical care reimbursements and dependent care
reimbursements ("REIMBURSEMENT ACCOUNTS"), Purchaser shall not assume any
obligations or Liabilities regarding the Reimbursement Accounts. No plan
established or maintained by Purchaser or an Affiliate of Purchaser intended to
qualify under Section 125 of the Code will credit Hired Employees' account
balances for Reimbursement Accounts accrued under Seller's 125 Plan or provide
reimbursement for medical care or dependent care expenses incurred by Hired
Employees at any time during Seller's plan year (including any applicable grace
period) prior to their date of hire by Purchaser (including claims incurred
before their date of hire by Purchaser).
(g) EMPLOYEE BENEFIT PLANS. Purchaser shall not become the sponsor
of any of Seller Plans.
Section 9.3 WARN ACT. Purchaser shall be responsible for all Liabilities,
obligations, costs, claims, proceedings and demands, under the WARN Act, or any
state plant closing or notification law, or similar Law in other jurisdictions,
arising out of, or relating to, (i) in respect of Product Employees, the failure
of Purchaser to offer employment to Product Employees listed on SCHEDULE
9.1(A)(I) in accordance with Section 9.1(a), or (ii) in respect of Hired
Employees, any actions taken by Purchaser or their Affiliates on or after the
Closing Date (or date of hire, if later); PROVIDED, HOWEVER, that Purchaser
shall not be responsible for any such Liabilities, obligations, costs, claims,
proceedings and demands to or in respect of any employees of Seller, Seller Sub
or any of their respective Affiliates other than the Product Employees listed on
SCHEDULE 9.1(A)(I). If Seller, Seller Sub or any of their respective Affiliates
does not continue to employ any Product Employees who are not listed on SCHEDULE
9.1(A)(I) and such employment is terminated prior to, at, or within sixty (60)
days following the Effective Time, Seller (or Seller Sub or the applicable
Affiliate) will be responsible for providing any notice to those employees
required by the WARN Act, or any state plant closing or notification Law, or
similar Law in other jurisdictions. Seller and Purchaser will cooperate in good
faith with regard to any notification that may be required by the WARN Act or
any state plant closing or notification law, or similar Law in other
jurisdictions.
Section 9.4 EMPLOYEE INFORMATION. Following the Execution Date, Seller
shall use commercially reasonable efforts to provide Purchaser with all
information and data reasonably requested by Purchaser in connection with
Purchaser's rights and obligations under this ARTICLE IX, including exchanging
information and data relating to employee benefits and employee benefit plan
coverages (except to the extent prohibited by applicable Law).
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ARTICLE X.
TERM AND TERMINATION
Section 10.1 TERMINATION.
(a) This Agreement may be terminated:
(i) at any time before the Closing Date by mutual written
consent of Purchaser and Seller; or
(ii) by either Purchaser or Seller, in writing, if the
Transactions have not been consummated on or before December 31,
2006 (the "OUTSIDE DATE"), PROVIDED that such failure is not due
to (A) the failure of the Party seeking to terminate this
Agreement to perform its obligations under this Agreement or any
Other Agreement or (B) the failure of Seller to obtain the
approval of Seller's stockholders to consummate the Transactions,
in the event Seller's board of directors determines in its good
faith judgment to seek such approval and such vote has not taken
place, in which case Seller shall not have the right to terminate
this Agreement pursuant to this SECTION 10.1(A)(II), and Purchaser
shall have the right to extend the Outside Date to a date that is
no more than ten (10) Business Days after the date on which (I)
Seller's stockholders vote to approve or disapprove Seller's
consummation of the Transactions or (II) Seller ceases to seek
such approval; or
(iii) by either Purchaser or Seller, in writing, if there
shall be in effect any Law that prohibits the Closing or if the
Closing would violate any non-appealable Order.
(b) This Agreement may be terminated by Seller, in writing, if:
(i) (A) any representation or warranty of either Eisai Inc. or
Eisai Ltd. set forth in this Agreement shall have become untrue or
Purchaser has breached any covenant or agreement of Purchaser set
forth in this Agreement, and (B) such breach or misrepresentation
is not capable of being cured prior to the Outside Date; or
(ii) a material breach of any provision of this Agreement has
been committed by Purchaser, such breach has not been waived by
Seller and such breach is not cured by Purchaser within ten (10)
days after written notice thereof; or
(iii) subject to and in accordance with Purchaser's rights
pursuant to SECTION 6.5(B), the board of directors of Seller
reasonably determines that an Acquisition Proposal is a Superior
Proposal (with such termination becoming effective upon Seller
entering into a binding written agreement with respect to such
Superior Proposal).
(c) This Agreement may be terminated by Purchaser, in writing, if:
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(i) (A) any representation or warranty of Seller set forth in
this Agreement shall have become untrue or Seller has breached any
covenant or agreement of Seller set forth in this Agreement, and
(B) such breach or misrepresentation is not capable of being cured
prior to the Outside Date; or
(ii) a material breach of any provision of this Agreement has
been committed by Seller, such breach has not been waived by
Purchaser and such breach is not cured by Seller within ten (10)
days after written notice thereof;
(iii) Seller amends or supplements the Seller Disclosure
Schedule pursuant to SECTION 6.9, PROVIDED that Purchaser provides
Seller notice of termination in accordance with SECTION 10.2(A),
within five (5) calendar days of receipt of Seller's notice
delivered in accordance with SECTION 6.9, and such amendment or
supplement has a Material Adverse Effect;
(iv) the board of directors of Seller approves or recommends
an Acquisition Proposal to the Seller's stockholders or approves
or recommends that its stockholders tender their shares of
Seller's Common Stock in any tender offer or exchange offer that
is an Acquisition Proposal; or
(v) the board of directors of Seller determines in its good
faith judgment to seek the approval of Seller's stockholders to
consummate the Transactions, and Seller fails to obtain such
stockholder approval by January 31, 2007.
Section 10.2 PROCEDURE AND EFFECT OF TERMINATION.
(a) Upon termination of this Agreement by Seller or Purchaser
pursuant to SECTION 10.1, written notice thereof, indicating the termination
provision in this Agreement claimed to provide a basis for such termination,
shall forthwith be given to the other Party and this Agreement shall terminate.
Nothing in this ARTICLE X shall relieve either Party of any liability for a
breach of this Agreement prior to the termination hereof. Except as provided in
the foregoing sentence, termination of this Agreement shall terminate all
outstanding obligations and liabilities between the Parties arising from this
Agreement except those described in: (i) SECTION 8.1, this ARTICLE X, ARTICLE XI
and ARTICLE XII; (ii) the Confidentiality Agreement; and (iii) any other
provisions of this Agreement which by their nature are intended to survive any
such termination.
(b) In the event that this Agreement is terminated (i) by Seller
pursuant to SECTION 10.1(B)(III); or (ii) by Purchaser pursuant to SECTION
10.1(C)(IV) or SECTION 10.1(C)(V), then Seller shall on the date that is two (2)
Business Days after such termination, pay to Purchaser a fee equal to Seven
Million Five Hundred Thousand Dollars ($7,500,000) (the "TERMINATION FEE"), by
wire transfer of immediately available funds to an account designated by
Purchaser in writing. Notwithstanding anything to the contrary in this
Agreement, the Termination Fee (A) shall be the exclusive remedy of Purchaser
under circumstances where the Termination Fee is payable by Seller in respect of
a termination in accordance with SECTION 10.1(C)(IV) and (B) together with the
rights granted to Purchaser under SECTION 10.2(F) shall be
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the exclusive remedy of Purchaser under circumstances where the Termination
Fee is payable by Seller in respect of a termination in accordance with SECTION
10.1(C)(V), and upon payment of the Termination Fee in accordance with this
SECTION 10.2(B), except as otherwise provided in SECTION 10.2(E) and SECTION
10.2(F), Seller shall not have any further liability or obligation relating to
or arising out of this Agreement.
(c) In the event that this Agreement is terminated by Seller
pursuant to SECTION 10.1(B)(I) or SECTION 10.1(B)(II), Purchaser shall pay to
Seller within two (2) Business Days after the receipt of a notice therefor an
amount equal to Seller's reasonable out-of-pocket expenses in connection with
the negotiation, execution and delivery of this Agreement and the actions taken
in furtherance of the consummation of this Agreement, by wire transfer of
immediately available funds to an account designated by Seller in writing.
(d) In the event that this Agreement is terminated by Purchaser
pursuant to SECTION 10.1(C)(I), SECTION 10.1(C)(II) or SECTION 10.1(C)(III),
Seller shall pay to Purchaser within two (2) Business Days after the receipt of
a notice therefor an amount equal to Purchaser's reasonable out-of-pocket
expenses in connection with the negotiation, execution and delivery of this
Agreement and the actions taken in furtherance of the consummation of this
Agreement, by wire transfer of immediately available funds to an account
designated by Purchaser in writing.
(e) As soon as practicable following a termination of this
Agreement, but in no event later than thirty (30) days after such termination,
Purchaser or Seller shall use commercially reasonable efforts, to the extent
practicable, withdraw all filings, applications and other submissions relating
to the Transactions made to any Governmental Authority or other Person.
(f) In the event that Purchaser terminates this Agreement pursuant
to SECTION 10.1(C)(V), and at any time within the twelve (12) month period
following the termination date Seller determines to enter into a transaction, or
a series of transactions, that if consummated would result in the sale of all or
substantially all of the Products or the Product Line Business (an "ALTERNATIVE
TRANSACTION"), Seller shall notify Purchaser of such determination within two
(2) Business Days of making such determination (an "ALTERNATIVE TRANSACTION
NOTICE"), which notification shall state that Seller is prepared to enter into a
definitive agreement as to such Alternative Transaction and include a summary of
the material terms and conditions of such Alternative Transaction. During the
five (5) Business Day period after Purchaser's receipt of the Alternative
Transaction Notice, Purchaser shall have the right, at its sole and absolute
discretion, to make an offer that Purchaser believes to be at least as favorable
to Seller's stockholders as such Alternative Transaction; PROVIDED, that during
such five (5) Business Day period, Seller shall negotiate in good faith with
Purchaser (to the extent Purchaser wishes to negotiate) to enable Purchaser to
make, modify and complete a more favorable offer; PROVIDED, FURTHER, that upon
receipt of such offer, the board of directors of Seller shall, within two (2)
Business Days, determine in good faith, after consultation with its financial
advisor and legal counsel, as to whether such offer is at least as favorable to
Seller's stockholders as such Alternative Transaction. Purchaser acknowledges
and agrees that in the event that the Parties do not agree upon the material
terms of such a more favorable offer after such five (5) Business Day period,
that Seller may enter into a definitive agreement providing for implementation
of such Alternative Transaction. In the event that Purchaser and Seller
consummate a transaction for the
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sale of all or substantially all of the Products or the Product Line
Business, Purchaser shall reimburse Seller for all amounts paid by Seller to
Purchaser pursuant to SECTION 10.2(B) upon consummation of such transaction. For
the avoidance of doubt, exceeding the purchase price offered under the
Alternative Transaction by any dollar amount shall not be a condition to any
offer by Purchaser made in accordance with this SECTION 10.2(F) being deemed by
Seller's board of directors to be a "more favorable offer."
ARTICLE XI.
INDEMNIFICATION
Section 11.1 SURVIVAL OF REPRESENTATIONS AND WARRANTIES; EXPIRATION.
(a) Notwithstanding any investigation made by or on behalf of
Seller and Seller Sub or Purchaser prior to, on or after the Closing Date, the
representations and warranties contained in this Agreement (including the
Schedules hereto and the Seller Disclosure Schedule) and in any Other Agreement
shall survive the Closing and shall terminate on the first anniversary of the
Closing Date, except that the representations and warranties set forth in:
(i) SECTIONS 4.1, 4.2, 4.4(A), 4.20, 5.1, 5.2 and 5.7 shall
survive forever;
(ii) SECTION 4.7 shall survive for eighteen (18) months after
the Closing Date;
(iii) SECTION 4.15(I) shall survive for thirty-six (36) months
after the Closing Date; and
(iv) SECTIONS 4.11 and 4.12 shall survive until the expiration
of the applicable statute of limitations.
(b) The covenants, agreements and obligations of the Parties shall
survive until fully performed and discharged, unless otherwise expressly
provided herein.
(c) Any breach of which would be based upon common law fraud or
intentional misrepresentation with the intent to deceive will survive until the
expiration of the applicable statute of limitations.
(d) Any right of indemnification or reimbursement pursuant to this
ARTICLE XI with respect to a claimed breach, inaccuracy or non-fulfillment of
any representation, warranty, covenant, agreement or obligation shall expire on
the applicable date of termination of the representation, warranty, covenant,
agreement or obligation claimed to be breached as set forth in SECTION 11.1 (the
"EXPIRATION DATE"), unless on or prior to the applicable Expiration Date, the
Indemnifying Party has received written notice from the Indemnified Party of
such breach, inaccuracy or non-fulfillment (a "CLAIM NOTICE"), describing in
reasonable detail the facts giving rise to any claims for indemnification
hereunder or in the case of a third-party claim, the third-party complaint, and
(if then known) the amount or the method of computation of the amount of such
claim, and a reference to the provision in this Agreement upon which such claim
is based; PROVIDED, that the rights of indemnification and reimbursement
provided for under this ARTICLE XI
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shall survive the applicable Expiration Date in the event that the
Indemnified Party's failure or delay to give the Claim Notice is the result of
common law fraud or intentional misrepresentation with the intent to deceive on
the part of the Indemnifying Party, in which case, the Indemnified Party may
continue to pursue its right of indemnification or reimbursement hereunder
beyond the applicable Expiration Date.
Section 11.2 INDEMNIFICATION BY SELLER AND SELLER SUB. Seller and Seller
Sub jointly and severally shall indemnify and hold harmless Purchaser, its
Affiliates, and their respective officers, directors and employees
(collectively, the "PURCHASER INDEMNIFIED PARTIES"), from and against any and
all Losses incurred or suffered, directly or indirectly, by any such Person
arising from, by reason of or in connection with:
(a) any breach or inaccuracy of any representation or warranty of
Seller or Seller Sub contained in this Agreement or any Other Agreement or in
connection with the consummation of the Transactions (without giving effect to
any supplement to the Seller Disclosure Schedule pursuant to SECTION 6.9);
(b) the non-fulfillment or breach by Seller or Seller Sub of any
of its covenants, agreements or obligations under this Agreement or any Other
Agreement;
(c) any Excluded Liability or Excluded Asset;
(d) the failure of Seller or Seller Sub to comply with any Law
(other than to the extent the Law relates to Taxes) relating to bulk sales Law,
fraudulent transfer Law, or similar Law applicable to the transaction;
(e) the failure of Seller, Seller Sub or any of their respective
Affiliates to transfer an Omitted Asset to Purchaser at Closing;
(f) any Transfer Taxes or Apportioned Obligations allocated to
Seller pursuant to SECTION 8.9;
(g) any Plan established or maintained by Seller or Seller Sub;
(h) any Order by a court of competent jurisdiction that finds that
the approval of Seller's stockholders was required in order for Seller to
consummate the Transactions, following a failure by Seller to seek such
stockholder approval;
(i) any failure by Seller to maintain a group health plan within
the meaning of Section 4980B of the Code or Part 6 of Title 1 of ERISA in
accordance with SECTION 9.2(D), including (A) the obligation to provide
continuation coverage of health insurance under Section 4980B of the Code or
Part 6 of Title 1 of ERISA or other similar state of local Law for current and
former employees of Seller, Seller Sub and their respective Affiliates and their
eligible dependents who experienced a "qualifying event" prior to the Effective
Time (or prior to the date of hire by Purchaser in the case of a Product
Employee not actively employed at the Effective Time), and (B) the obligation to
provide health insurance coverage prior to their date of hire (if any) by
Purchaser to Product Employees who are not actively employed at the Effective
Time; and
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(j) any failure of Seller, Seller Sub or any of their respective
Affiliates to terminate prior to the Effective Time the employment of any
Product Employees who will not receive an offer of employment from Purchaser
pursuant to SECTION 9.1(A) or from Seller's, Seller Sub's or any of their
respective Affiliates' failure to provide any notice required by the WARN Act,
or any state plant closing or notification law, or similar Law in other
jurisdictions with regard to Product Employees who are terminated by Seller,
Seller Sub or any of their respective Affiliates prior to, at, or within thirty
(30) days following the Effective Time.
Section 11.3 INDEMNIFICATION BY PURCHASER. Eisai Inc. and Eisai, Ltd.
jointly and severally shall indemnify and hold harmless Seller, Seller Sub,
their respective Affiliates and their respective officers, directors and
employees (collectively, the "SELLER INDEMNIFIED PARTIES"), from and against any
and all Losses incurred or suffered, directly or indirectly, by any such Person
arising from, by reason of or in connection with:
(a) any breach or inaccuracy of any representation or warranty of
Purchaser contained in this Agreement or any Other Agreement or in connection
with the consummation of the Transactions;
(b) the non-fulfillment or breach by Purchaser of any of its
covenants, agreements or obligations under this Agreement or any Other
Agreement;
(c) any Transfer Tax or Apportioned Obligations allocated to
Purchaser pursuant to SECTION 8.9;
(d) any Assumed Liability; and
(e) except with respect to matters for which Seller and Seller Sub
are required to indemnify Purchaser hereunder, Purchaser's ownership of the
Purchased Assets
and Inventory and operation of the Product Line Business following the Closing
Date.
Section 11.4 CERTAIN PROCEDURES FOR INDEMNIFICATION.
(a) If any Person entitled to indemnification under this Agreement
(an "INDEMNIFIED PARTY") asserts a claim for indemnification, or receives notice
of the assertion of any claim or of the commencement of any Action by any Person
not a Party to this Agreement against such Indemnified Party, for which a Party
to this Agreement is required to provide indemnification under this ARTICLE XI
(an "INDEMNIFYING PARTY"), the Indemnified Party promptly deliver to the
Indemnifying Party a Claim Notice; PROVIDED, HOWEVER, that the failure to so
notify the Indemnifying Party shall not relieve the Indemnifying Party from any
liability which it may have to the Indemnified Party, except to the extent that
such failure materially prejudices the Indemnifying Party's ability to defend
such action.
(b) The Indemnifying Party shall have thirty (30) days after
receipt of any such Claim Notice to (i) agree to the basis of the claim and the
amount and method of computation of Losses set forth in the Claim Notice, if
any, or (ii) provide such Indemnified Party with notice that the Indemnifying
Party disagrees with the basis of the claim or the amount or method of
computation set forth in the Claim Notice, if any (the "INDEMNITY DISPUTE
NOTICE"). To the extent the Indemnifying Party has not delivered an Indemnity
Dispute Notice within the
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thirty-day period, the Indemnifying Party shall be deemed to have accepted
the basis of the claim, and the amount and method of computation of Losses, if
any, set forth in the Claim Notice. Within fifteen (15) days after the giving of
the Indemnity Dispute Notice, the Indemnifying Party and the Indemnified Party
shall negotiate in a BONA FIDE attempt to resolve the matter. If the Indemnified
Party and the Indemnifying Party have not resolved such dispute within thirty
(30) days through good faith negotiations, such dispute shall be resolved by
litigation in an appropriate court of competent jurisdiction or other mutually
agreeable non-judicial dispute resolution mechanism.
(c) With respect to third party Actions for which indemnification
is claimed hereunder, the Indemnifying Party shall be entitled to appoint
counsel of the Indemnifying Party's choice at the expense of the Indemnifying
Party to represent the Indemnified Party and direct the defense of any Action at
its sole cost and expense, PROVIDED that (i) the Indemnifying Party provides the
Indemnified Party notice of its election to assume the defense of such Action
within fifteen (15) days of receipt of the applicable Claim Notice, (ii) the
Indemnifying Party has the financial resources to pay such damages and (iii)
such counsel is reasonably satisfactory to the Indemnified Party. If the
Indemnifying Party fails to provide notice of its election to assume the defense
of such Action as provided in the preceding sentence, the Indemnifying Party
shall not be bound by any determination made in such Action or settlement or
compromise of such Action effected by the Indemnified Party without Seller's
prior written consent (which consent shall not be unreasonably withheld or
delayed). After notice from the Indemnifying Party to the Indemnified Party of
its election to assume the defense of such Action, the Indemnifying Party shall
not be liable to the Indemnified Party under this SECTION 11.4 for any legal or
other expenses subsequently incurred by the Indemnified Party in connection with
the defense thereof other than reasonable costs of investigation or of
assistance as contemplated by this SECTION 11.4; PROVIDED, HOWEVER, that if, in
the opinion of counsel (which may be in-house counsel) to the Indemnified Party,
it is advisable for the Indemnified Party to be represented by separate counsel
due to actual or potential conflicts of interest, the Indemnified Party shall
have the right to employ counsel to represent it and in that event the fees and
expenses of such separate counsel shall be paid by the Indemnifying Party. If
the Indemnifying Party assumes the defense of the third party Action: it will be
conclusively established for purposes of this Agreement that the claims made in
that third party Action are within the scope and subject to indemnification
pursuant to this ARTICLE XI, and so long as the Indemnifying Party shall
diligently and vigorously conduct such defense, (i) the Indemnified Party shall
not admit any liability with respect to, or settle, compromise or discharge,
such third party Action without the Indemnifying Party's prior written consent
(which consent shall not be unreasonably withheld or delayed); and (ii) the
Indemnified Party shall agree to any settlement, compromise or discharge of the
third party Action that the Indemnifying Party may recommend that (A) can be
resolved by money damages alone, (B) by its terms obligates the Indemnifying
Party to pay the full amount of the Losses in connection with such third party
Action, and (C) completely and unconditionally releases the Indemnified Party in
connection with such third party Action.
(d) The Indemnified Party and the Indemnifying Party each shall
render to one another such assistance as may reasonably be requested in order to
ensure the proper and adequate defense of any such Action, including furnishing
records, information and testimony, providing witnesses, and attending
conferences, discovery proceedings, hearings, trials and appeals, in each case
as may be reasonably requested in connection therewith. Such cooperation
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shall include affording to the Indemnifying Party or Indemnified Party, as
applicable, access during regular business hours to, and reasonable retention by
each such Person of, records and information that are reasonably relevant to
such Action and making each such Person and such Person's employees and agents
available on an agreed-upon, mutually convenient basis to provide additional
information and explanation of any material provided hereunder. The Indemnifying
Party shall reimburse each such Person for all reasonable out-of-pocket expenses
in connection therewith.
Section 11.5 LIMITATIONS.
(a) In no event shall the respective Indemnifying Parties be
liable for any Losses for claims made pursuant to SECTION 11.2 or 11.3 (each, an
"INDEMNITY CLAIM"), as applicable, unless the aggregate amount of all
indemnified Losses for which Indemnity Claims have been made against the
Indemnifying Party exceeds One Million Five Hundred Thousand Dollars
($1,500,000) (the "DEDUCTIBLE"), in which case the Indemnifying Party shall,
subject to the other limitations contained herein, be liable for such
indemnified Losses in excess of the Deductible. Notwithstanding the foregoing,
indemnification claims made other than pursuant to SECTION 11.2(A) or 11.3(A)
shall not be subject to the Deductible unless an Indemnity Claim for the Loss in
question could have been asserted pursuant to SECTION 11.2(A) or 11.3(A), as the
case may be. For the avoidance of doubt, it is the intention of the Parties that
Losses that arise out of or are the result of breaches of representations and
warranties be subject to the Deductible, even if they are also breaches of other
covenants or agreements that are not subject to the Deductible. Notwithstanding
the foregoing, the limitations set forth in this SECTION 11.5 (A) shall not be
applicable to Losses for which an Indemnity Claim is asserted under SECTION
11.2(D), SECTION 11.2(e), SECTION 11.2(F), SECTION 11.2(G), SECTION 11.2(H),
SECTION 11.2(I), SECTION 11.2(J) or SECTION 11.3(C), for claims for breach under
SECTION 2.1(C), SECTION 2.8, SECTION 8.5, or for claims for breach of any
representation or warranty set forth in SECTION 4.1, SECTION 4.2, SECTION
4.4(A), SECTION 4.11, SECTION 4.12, SECTION 4.15(I), SECTION 4.20, SECTION 5.1,
SECTION 5.2, or SECTION 5.7.
(b) Except as provided under this SECTION 11.5(B), no event shall
Seller and Seller Sub, on the one hand, or Purchaser, on the other hand, be
liable for Losses for claims made pursuant to this ARTICLE XI in an amount in
excess of Twenty Million Dollars ($20,000,000) in the aggregate for any and all
indemnified Losses hereunder (the "CAP"). Notwithstanding the foregoing, (i)
with respect to breaches of the representation and warranty set forth in SECTION
4.15(I), the "Cap" shall be Thirty Million Dollars ($30,000,000); and (ii) the
limitations set forth in this SECTION 11.5(B) shall not be applicable to Losses
for Indemnity Claims (A) pursuant to SECTION 11.2(D), SECTION 11.2(E), SECTION
11.2(F), SECTION 11.2(G), SECTION 11.2(H), SECTION 11.2(I), SECTION 11.2(J) or
SECTION 11.3(C); (B) for breach of SECTION 2.1(C), SECTION 2.8, SECTION 8.5; or
(C) for breach of any representation or warranty set forth in SECTION 4.1,
SECTION 4.2, SECTION 4.4(A), SECTION 4.11, SECTION 4.12, SECTION 4.20, SECTION
5.1, SECTION 5.2, or SECTION 5.7.
(c) The amount of any Losses recoverable by a Party under SECTION
11.2 or SECTION 11.3, as applicable, shall be reduced by the amount of any
insurance proceeds paid to the Indemnified Party relating to such claim.
(d) EXCEPT WITH RESPECT TO LOSSES INCURRED AS THE RESULT OF COMMON
LAW FRAUD, THE INDEMNIFICATION OBLIGATIONS OF THE PARTIES
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HERETO SHALL NOT EXTEND TO SPECIAL, EXEMPLARY OR CONSEQUENTIAL DAMAGES,
INCLUDING BUSINESS INTERRUPTION, LOST PROFITS, PUNITIVE DAMAGES, DIMINUTION OF
VALUE, OR LOSS OF BUSINESS REPUTATION OR OPPORTUNITY.
(e) Each Party shall have a right to indemnification pursuant to
this ARTICLE XI for any Losses incurred as the result of any common law fraud or
intentional misrepresentation with the intent to deceive by any other Party or
any officer or director (or similarly situated person) of such other Party
without regard to the limitations set forth in SECTIONS 11.5(A) and 11.5(B).
(f) Any indemnity or reimbursement payment made pursuant to this
Agreement shall be treated as an adjustment to the Purchase Price for all Tax
purposes, except as otherwise required by applicable Law.
(g) Each Party shall be entitled to set off, offset and deduct
against amounts due from such Party to the other Party for Losses suffered by
such first Party under this Agreement; PROVIDED, HOWEVER, no Party shall offset
any indemnified Losses unless and until the Indemnity Claims giving rise to such
indemnified Losses exceeds One Million Five Hundred Thousand Dollars
($1,500,000), in which case, such offsetting Party may offset any additional
indemnified Losses arising from Indemnity Claims up to and until such
indemnified Losses from Indemnity Claims exceed Twenty Million Dollars
($20,000,000), in which case, such offsetting Party may not offset any
additional indemnified Losses arising from Indemnity Claims.
Section 11.6 ESCROW. On the Closing Date, Purchaser shall deposit the
Escrow Amount with the Escrow Agent at Closing, by direct wire transfer of
immediately available funds into the Escrow Account, in accordance with the
terms of this Agreement and the Escrow Agreement. On the sixth (6) month
anniversary of the Closing Date, the Escrow Agent shall release fifty percent
(50%) of the then existing amount of the Escrow Amount to Seller, LESS the
amount of Indemnity Claims asserted by Purchaser in good faith, which have not
been paid, PLUS any amounts offset by Purchaser pursuant to and in accordance
with SECTION 11.5(G), in respect of Indemnity Claims asserted by Purchaser in
good faith, which have not been paid, and any unreleased amount shall be
retained by the Escrow Agent. On the one year anniversary of the Closing Date,
the Escrow Agent shall release the then existing Escrow Amount to Seller, LESS
the amount of Indemnity Claims asserted by Purchaser in good faith, which have
not been paid, PLUS any amounts offset by Purchaser pursuant to and in
accordance with SECTION 11.5(G), and any unreleased amount shall be retained by
the Escrow Agent. The amount of the Escrow Amount so retained shall be released
by the Escrow Agent (to the extent not utilized to pay Purchaser for any such
claims resolved in favor of Purchaser) in accordance with the resolution of such
claims.
Section 11.7 SATISFACTION OF CLAIMS.
(a) Except as provided in SECTION 2.8(C), claims made by a
Purchaser Indemnified Party for indemnification under SECTION 11.2 shall be
satisfied from (i) first, funds set off, offset or deducted against amounts then
due and payable pursuant to and in accordance with SECTION 11.5(G), (ii) second,
funds held in the Escrow Account; and (iii) third, by payment of cash or other
immediately available funds from Seller.
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(b) Claims made by a Seller Indemnified Party for indemnification
under SECTION 11.3 shall be satisfied by payment of cash or other immediately
available funds from Purchaser.
Section 11.8 EXCLUSIVE REMEDY. Following the Closing, absent claims for
common law fraud, intentional misrepresentation with the intent to deceive, (a)
claims for indemnification pursuant to this ARTICLE XI, and (b) claims for
specific performance or any other equitable remedies of the covenants and
obligations of the other Party under this Agreement and the Other Agreements,
shall, collectively, be the sole and exclusive remedies for claims and damages
available to the Parties and their respective Affiliates for breach of this
Agreement.
ARTICLE XII.
MISCELLANEOUS
Section 12.1 ASSIGNMENT; BINDING EFFECT. This Agreement shall be binding
upon and inure to the benefit of the Parties and their respective successors and
assigns; PROVIDED, HOWEVER, that no Party may sell, transfer, assign, license,
sublicense, delegate, pledge or otherwise dispose of, whether voluntarily,
involuntarily, by operation of Law or otherwise, this Agreement or any of its
rights or obligations under this Agreement, in whole or in part, without the
prior written consent of the other Parties, which consent shall not be
unreasonably delayed, withheld or conditioned; PROVIDED FURTHER, any Party shall
have the right, without the consent of the other Parties, to perform any or all
of its obligations and exercise any or all of its rights under this Agreement
through any of its Affiliates; PROVIDED FURTHER, that any permitted assignment
shall protect the non-assigning Parties' rights under this Agreement; and
PROVIDED FURTHER, that a change of control of Seller, Seller Sub or Purchaser
following the Execution Date shall not require the consent of any other Party.
Any attempted assignment, delegation or other disposition in violation of this
SECTION 12.1 shall be void.
Section 12.2 CUMULATIVE RIGHTS. Except as expressly provided herein, the
various rights under this Agreement shall be construed as cumulative, and no one
of them is exclusive of any other or exclusive of any rights allowed by Law.
Section 12.3 EXPENSES. Except as otherwise specified herein, each Party
shall bear any costs and expenses with respect to the Transactions incurred by
it.
Section 12.4 NOTICES. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be deemed to have been
duly given (a) when received if delivered personally or by reputable courier
maintaining records of receipt, (b) when transmitted if sent by facsimile or
other electronic transmission during normal business hours with confirmation of
transmission by the transmitting equipment, (c) upon receipt, if sent by
registered or certified mail (postage prepaid, return receipt requested) and (d)
the day after it is sent, if sent for next-day delivery to a domestic address by
overnight mail or courier by reputable courier maintaining records of receipt,
to the Parties at the following addresses:
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If to Seller or Seller Sub, to:
Ligand Pharmaceuticals Incorporated
10275 Science Center Drive
San Diego, California 92121
Attention: General Counsel
with a copy sent concurrently to:
Latham & Watkins LLP
12636 High Bluff Drive, Suite 400
San Diego, California 92130
Attn: Scott Wolfe
Attn: Faye Russell
If to Purchaser, to:
Eisai Inc.
Glenpointe Centre West
500 Frank W. Burr Boulevard
Teaneck, NJ 07666
Facsimile: (201) 692-9120
Attention: General Counsel
and to:
Eisai Co., Ltd.
Koishikawa 4-6-10
Bunkyo-Ku, Tokyo 11208088
Japan
Fax: +81-3-3811-5535
Attention: Director, Legal Department
with copies sent concurrently to:
Covington & Burling LLP
1201 Pennsylvania Avenue, NW
Washington, D.C. 20004
Facsimile: (202) 778-5567
Attention: Catherine J. Dargan, Esq.
PROVIDED, HOWEVER, that if any Party shall have designated a different address
by ten (10) days' prior written notice to the other Parties, then to the last
address so designated.
Section 12.5 ENFORCEABILITY; SEVERABILITY. If any term, provision, covenant
or restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void, unenforceable or against its regulatory
policy, in whole or in part, such
76
determination shall not affect or impair the validity or enforceability of
any other provision, covenant, or restriction, each of which is hereby declared
to be separate and distinct, or of the remainder of this Agreement. If any
provision of this Agreement is so broad as to be unenforceable, such provision
shall be interpreted to be only as broad as is enforceable. If any provision of
this Agreement shall be declared invalid or unenforceable for any reason other
than overbreadth, the offending provision shall be modified so as to maintain
the essential benefits of the bargain between the Parties to the maximum extent
possible, consistent with Law and public policy. Each of the Parties
acknowledges, however, that the provisions of this Agreement, including SECTION
10.2(B) regarding the Termination Fee, have been negotiated by the Parties and
that such provisions are reasonable in light of the circumstances pertaining to
the Parties.
Section 12.6 AMENDMENT; ENTIRE AGREEMENT. This Agreement may not be
amended, supplemented or otherwise modified except by an instrument in writing
signed by all of the Parties hereto. This Agreement, the Other Agreements and
the Confidentiality Agreement, together with the Schedules and Exhibits attached
hereto and thereto, contain the entire agreement of the Parties hereto with
respect to the Transactions, superseding all negotiations, prior discussions and
preliminary agreements made prior to the date hereof.
Section 12.7 NO THIRD PARTY BENEFICIARIES. Except as otherwise set forth
under SECTION 8.14, this Agreement is solely for the benefit of the Parties
hereto and their respective Affiliates and no provision of this Agreement shall
be deemed to confer upon any third parties any remedy, claim, liability,
reimbursement, claim of action or other right under this Agreement.
Section 12.8 WAIVER. No waiver of any provision of this Agreement shall be
effective unless it is in writing and signed by the Party against whom
enforcement of any such waiver is sought. Such waiver shall be effective only in
the specific instance and for the purpose for which given. The failure or delay
of any Party to enforce any condition or part of this Agreement at any time
shall not be construed as a waiver of that condition or part, nor shall it
forfeit any rights to future enforcement thereof.
Section 12.9 GOVERNING LAW; JURISDICTION. This Agreement (including any
claim or controversy arising out of or relating to this Agreement) shall be
governed by the Law of the State of New York without regard to conflict of law
principles that would result in the application of any Law other than the Law of
the State of New York. All Actions arising out of or relating to this Agreement,
the Other Agreements and the Transactions or for recognition or enforcement of
any judgment relating thereto, shall be heard and determined exclusively in (a)
the Supreme Court of the State of New York, and the appellate courts thereof or
(b) the United States District Court for the Southern District of New York and
the appellate courts thereof, and each of the Parties hereby irrevocably and
unconditionally (i) agrees not to commence any such Action except in such
courts, (ii) agrees that any claim in respect of any such Action may be heard
and determined in such courts, (iii) waives, to the fullest extent it may
legally and effectively do so, any objection which it may now or hereafter have
to the laying of venue of any Action in such courts, and (iv) waives, to the
fullest extent permitted by Law, the defense of an inconvenient forum to the
maintenance of such Action in such courts. Each of the Parties hereto agrees
that a final judgment in any such Action shall be conclusive and may be enforced
in other jurisdictions by suit on the judgment or in any other manner provided
by Law. Each Party to this Agreement irrevocably consents to service of process
in the manner provided for notices in
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SECTION 12.4. Nothing in this Agreement will affect the right of any Party
to this Agreement to serve process in any other manner permitted by Law.
Section 12.10 INJUNCTIVE RELIEF. Notwithstanding anything to the contrary
in this Agreement, any Party will have the right to seek temporary injunctive
relief in any court of competent jurisdiction as may be available to such Party
under the Law applicable in such jurisdiction with respect to any matters
arising out of any other Party's performance of its obligations under this
Agreement, the Other Agreements or with respect to the Transactions. Each Party
agrees that in the event another Party institutes an appropriate Action seeking
injunctive/equitable relief for specific performance under this Agreement, the
Party seeking such relief shall not be required to provide the other Party with
service of process of a complaint and summons under the procedures set forth in
any Canadian or other non-United States judicial process or system. Under such
circumstances, the Party seeking such relief need only provide the other Party
with two copies of a true, correct and lawfully issued summons and complaint,
via Federal Express (priority delivery).
Section 12.11 WAIVER OF JURY TRIAL. EACH PARTY IRREVOCABLY AND
UNCONDITIONALLY WAIVES ANY RIGHT TO TRIAL BY JURY WITH RESPECT TO ANY ACTION
RELATING TO OR ARISING OUT OF THIS AGREEMENT, THE OTHER AGREEMENTS, OR THE
TRANSACTIONS.
Section 12.12 HEADINGS. The headings of the sections and subsections of
this Agreement are inserted for convenience only and shall not be deemed to
constitute a part hereof.
Section 12.13 COUNTERPARTS. This Agreement may be executed manually or by
facsimile by the Parties, in any number of counterparts, each of which shall be
considered one and the same agreement and shall become effective when a
counterpart hereof shall have been signed by each of the Parties and delivered
to the other Parties. Delivery of an executed counterpart of a signature page of
this Agreement or any amendment hereto by facsimile or other electronic
transmission shall be effective as delivery of a manually executed original
counterpart hereof.
Section 12.14 SCHEDULES. Purchaser agrees that any disclosure by Seller or
Seller Sub in any Schedule attached hereto shall not establish any threshold of
materiality or concede the materiality of any matter or item disclosed.
Section 12.15 CONSTRUCTION. The language in all parts of this Agreement
shall be construed, in all cases, according to its fair meaning. The Parties
acknowledge that each Party and its counsel have reviewed and revised this
Agreement and that any rule of construction to the effect that any ambiguities
are to be resolved against the drafting Party shall not be employed in the
interpretation of this Agreement.
* * * * * * * * * * *
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IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be
executed by their respective duly authorized officers as of the date first above
written.
LIGAND PHARMACEUTICALS INCORPORATED
By: /s/ Henry F. Blissenbach
__________________________________
Name: Henry F. Blissenbach
Title: Chairman & CEO
SERAGEN, INC.
By: /s/ Warner R. Broaddus
__________________________________
Name: Warner R. Broaddus
Title: Secretary
EISAI INC.
By: /s/ Lonnel Coats
__________________________________
Name:
Title:
EISAI CO., LTD.
By: /s/ Hideki Hayashi
__________________________________
Name: Hideki Hayashi
Title: Vice President
Corporate Business Development