CONFIDENTIAL TREATMENT REQUESTED EXHIBIT 10.2
CONFIDENTIAL TREATMENT REQUESTED: INFORMATION FOR WHICH CONFIDENTIAL TREATMENT
HAS BEEN REQUESTED IS OMITTED AND IS NOTED WITH "[CONFIDENTIAL TREATMENT
REQUESTED]." AN UNREDACTED VERSION OF THIS DOCUMENT HAS BEEN FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.
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AMENDED AND RESTATED DIASTAT ASSET PURCHASE AGREEMENT
by and among
ELAN PHARMACEUTICALS, INC., ELAN PHARMA INTERNATIONAL LIMITED
and
XCEL PHARMACEUTICALS, INC.
dated as of March 31, 2001
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CONFIDENTIAL TREATMENT
Table Of Contents
Page
ARTICLE I. Definitions ...................................................... 1
Section 1.01 Defined Terms ............................................. 1
Section 1.02 Construction of Certain Terms and Phrases ................. 9
ARTICLE II. Purchase and Sale of Assets ..................................... 9
Section 2.01 Purchase and Sale of Assets ............................... 9
Section 2.02 Assignability and Consents ............................... 9
ARTICLE III. Assumption of Liabilities ...................................... 10
Section 3.01 Assumption of Assumed Liabilities ......................... 10
ARTICLE IV. Purchase Price and Payment ...................................... 10
Section 4.01 Purchase Price ............................................ 10
Section 4.02 Purchase Price Adjustment ................................. 12
Section 4.03 Purchase of Product Inventory ............................. 13
Section 4.04 Payment of Sales, Use and Other Taxes ..................... 14
Section 4.05 Impact of Failure to Make Payments ........................ 14
ARTICLE V. Closing .......................................................... 14
Section 5.01 Time and Place ............................................ 14
Section 5.02 Deliveries at Closing ..................................... 14
ARTICLE VI. Representations and Warranties of Seller ........................ 15
Section 6.01 Books and Records ......................................... 15
Section 6.02 Corporate Organization .................................... 16
Section 6.03 Authority of Seller ....................................... 16
Section 6.04 Consents and Approvals .................................... 16
Section 6.05 Non-Contravention ......................................... 17
Section 6.06 Assumed Contracts ......................................... 17
Section 6.07 Purchased Assets Generally ................................ 17
Section 6.08 Intellectual Property Rights .............................. 18
Section 6.09 Litigation ................................................ 18
Section 6.10 Compliance with Law ....................................... 18
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Section 6.11 Regulatory Matters ........................................ 19
Section 6.12 Brokers ................................................... 19
Section 6.13 Disclosure ................................................ 19
Section 6.14 No Other Warranties ....................................... 19
ARTICLE VII. Representations and Warranties of Buyer ........................ 19
Section 7.01 Corporate Organization .................................... 20
Section 7.02 Authority of Buyer ........................................ 20
Section 7.03 Consents and Approvals .................................... 20
Section 7.04 Non-Contravention ......................................... 21
Section 7.05 Litigation ................................................ 21
Section 7.06 Brokers ................................................... 21
ARTICLE VIII. Covenants of the Parties ...................................... 21
Section 8.01 Non-Assertion of Intellectual Property Rights ............. 21
Section 8.02 Cooperation ............................................... 22
Section 8.03 Access .................................................... 22
Section 8.04 Public Announcements ...................................... 22
Section 8.05 Non-Solicitation .......................................... 22
Section 8.06 Corporate Names ........................................... 23
Section 8.07 Handling of Product Inventory ............................. 23
Section 8.08 Differentiation of Products ............................... 23
Section 8.09 Regulatory Matters ........................................ 24
Section 8.10 Product Returns, Chargebacks and Rebates .................. 24
Section 8.11 Adverse Experience Reports ................................ 27
Section 8.12 Multi-Product Contracts ................................... 27
Section 8.13 Manner of Business ........................................ 27
Section 8.14 Assumption of Ongoing Clinical Trials ..................... 27
Section 8.15 Compliance Audits ......................................... 28
Section 8.16 Labeling Requirements ..................................... 28
Section 8.17 Further Assurances ........................................ 28
ARTICLE IX. Conditions to the Obligations of Seller ......................... 28
Section 9.01 Representations, Warranties and Covenants ................. 28
Section 9.02 No Actions or Proceedings ................................. 29
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Section 9.03 Consents .................................................. 29
Section 9.04 Other Closing Deliveries .................................. 29
Section 9.05 Product Acquisition Financing Agreement ................... 29
Section 9.06 Completion of Equity Financing ............................ 29
ARTICLE X. Conditions to the Obligations of Buyer ........................... 29
Section 10.01 Representations, Warranties and Covenants ................ 29
Section 10.02 No Actions or Proceedings ................................ 30
Section 10.03 Consents ................................................. 30
Section 10.04 Other Closing Deliveries ................................. 30
Section 10.05 Product Acquisition Financing Agreement .................. 30
ARTICLE XI. Indemnification ................................................. 30
Section 11.01 Survival of Representations, Warranties, Etc. ............ 30
Section 11.02 Indemnification .......................................... 30
Section 11.03 Limitations .............................................. 33
Section 11.04 Limitation of Liability .................................. 34
ARTICLE XII. Miscellaneous .................................................. 34
Section 12.01 Confidentiality .......................................... 34
Section 12.02 Notices .................................................. 35
Section 12.03 Entire Agreement ......................................... 36
Section 12.04 Waiver ................................................... 36
Section 12.05 Amendment ................................................ 36
Section 12.06 Third Party Beneficiaries ................................ 36
Section 12.07 Assignment; Binding Effect ............................... 36
Section 12.08 Headings ................................................. 37
Section 12.09 Severability ............................................. 37
Section 12.10 Governing Law ............................................ 37
Section 12.11 Expenses ................................................. 37
Section 12.12 Counterparts ............................................. 37
Section 12.13 Schedules, Exhibits and Other Agreements ................. 37
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CONFIDENTIAL TREATMENT
AMENDED AND RESTATED DIASTAT ASSET PURCHASE AGREEMENT
This Amended and Restated Diastat Asset Purchase Agreement (this
"Agreement") is made and entered into as of March 31, 2001, by and among Xcel
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Pharmaceuticals, Inc., a Delaware corporation ("Buyer"), Elan Pharmaceuticals,
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Inc., a Delaware corporation ("EPI"), and Elan Pharma International Limited, a
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corporation organized under the laws of the Republic of Ireland ("EPIL") (EPI
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and EPIL are hereinafter sometimes collectively referred to as "Seller").
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RECITALS
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WHEREAS, subject to the terms and conditions of this Agreement, Seller sold
to Buyer, and Buyer purchased from Seller, the Purchased Assets (as defined
below) pursuant to the terms of that certain Diastat Asset Purchase Agreement
(the "Prior Agreement") dated as of March 31, 2001, by and among Buyer, EPI and
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EPIL; and
WHEREAS, the Parties desire to amend and restate the Prior Agreement as set
forth herein effective as of March 31, 2001.
AGREEMENT
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NOW, THEREFORE, in consideration of the premises and the mutual covenants
and promises contained herein, and for other good and valuable consideration,
the receipt and sufficiency of which hereby are acknowledged, the Parties agree
to amend and restate the Prior Agreement as follows:
ARTICLE I. DEFINITIONS
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Section 1.01 Defined Terms.
As used in this Agreement, the following defined terms have the meanings
described below:
(a) "Action or Proceeding" means any action, suit, proceeding, arbitration,
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Order, inquiry, hearing, assessment with respect to fines or penalties or
litigation (whether civil, criminal, administrative, investigative or informal)
commenced, brought, conducted or heard by or before, or otherwise involving, any
Governmental or Regulatory Authority.
(b) "Activity Date" has the meaning set forth in Section 8.10(d).
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(c) "Adverse Effect" means an effect or condition that individually or in
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the aggregate or together with all other events, or changes, or occurrences is,
or reasonably could be expected to be, (i) materially adverse to the Purchased
Assets, the business, results of operations, or financial condition of the
Business, or the Product or (ii) materially adverse to the ability of the Seller
to consummate the transactions contemplated by this Agreement.
(d) "Affiliate" means, with respect to any Person, any other Person which
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controls, is controlled by or is under common control with such person or
entity. A person or entity shall be
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CONFIDENTIAL TREATMENT
regarded as in control of another entity if it owns or controls, directly or
indirectly, (i) in the case of corporate entities at least fifty percent (50%)
(or the maximum ownership interest permitted by law) of the equity securities in
the subject entity entitled to vote in the election of directors and, (ii) in
the case of an entity that is not a corporation, at least fifty percent (50%)
(or the maximum ownership interest permitted by law) of the equity securities or
other ownership interests with the power to direct the management and policies
of such subject entity or entitled to elect the corresponding management
authority, provided, however, that the term "Affiliate" shall not include
subsidiaries or other entities in which a Party or its Affiliates owns a
majority of the ordinary voting power necessary to elect a majority of the board
of directors or other governing board, but is restricted from electing such
majority by contract or otherwise, until such time as such restrictions are no
longer in effect.
(e) "Agreement" has the meaning set forth in the Preamble hereto.
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(f) "Assets and Properties" of any Person means all assets and properties
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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 and notes receivable, chattel paper, documents, instruments, general
intangibles, regulatory approvals, equipment, inventory, goods and intellectual
property.
(g) "Assumed Contract" means any Contract or portion of a Contract to which
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Seller or any of its Affiliates is a party that relates exclusively to the
manufacture, marketing, sale or distribution of the Product, including those
Contracts listed on Section 6.06 of the Seller Disclosure Schedule, but
excluding any Multi-Product Contracts.
(h) "Assumed Liabilities" means (i) all accounts payable incurred by Buyer
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or an Affiliate of Buyer with respect to the Business subsequent to the Closing,
(ii) all Liabilities and obligations that Buyer has expressly assumed or agreed
to assume under this Agreement, (iii) all Liabilities and obligations under or
pursuant to the Assumed Contracts to be performed following the Closing, but
only to the extent that the obligations to pay or perform under such
Liabilities, obligations or Assumed Contracts arise following the Closing and
relate to goods or services or other benefit received by Buyer after the
Closing, (iv) except as otherwise provided herein, all state and federal
Medicaid/Medicare rebates related to Product sold after Closing, (v) except as
otherwise provided herein, all credits, chargeback rebates, utilization based
rebates, reimbursements and similar payments to wholesalers and other
distributors, buying groups, insurers and other institutions related to Product
that is sold after Closing, (vi) all Liabilities and obligations relating to
product liability claims or threatened claims or injuries caused by Product sold
by Buyer after the Closing, and (vii) except as otherwise provided herein, all
other Liabilities and obligations that arise out of or are related to the
ownership of the Purchased Assets (including the Regulatory Approvals) or the
Product Inventory, or operation of the Business from and after the Closing.
(i) "Books and Records" means all files, documents, instruments, papers,
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books and records (scientific or financial), excluding Marketing Materials,
owned by Seller or an Affiliate of Seller relating exclusively to the Business,
including any pricing lists, training materials, customer lists, vendor lists,
financial data and all documentation relating to the Intellectual
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Property or the Registered Intellectual Property, but excluding any such items
to the extent that (i) any applicable Law prohibits their transfer or (ii) any
transfer thereof would subject Seller or any of its Affiliates to any
contractual or other Liability or obligation.
(j) "Business" means the activities of manufacturing, marketing, selling
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and distributing the Product in the Territory.
(k) "Business Day" means a day other than Saturday, Sunday or any day on
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which banks located in New York are authorized or obligated to close.
(l) "Buyer" has the meaning set forth in the Preamble to this Agreement.
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(m) "Buyer Disclosure Schedule" has the meaning set forth in Article VII
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hereof.
(n) "Buyer Governmental Consent" has the meaning set forth in Section
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7.03(a).
(o) "Buyer Indemnified Parties" has the meaning set forth in Section
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11.02(a).
(p) "Buyer Labeling" means the printed labels, labeling and packaging
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materials, including printed carton, container label and package inserts, used
by Buyer and bearing Buyer's name for the Product.
(q) "Buyer Third Party Consent" has the meaning set forth in Section
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7.03(b).
(r) "Closing" has the meaning set forth in Section 5.01.
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(s) "Closing Date" means the date that the Closing actually occurs as
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provided in Section 5.01.
(t) "Closing Payment" has the meaning set forth in Section 4.01(a)(i).
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(u) "Confidential Information" has the meaning set forth in Section 12.01.
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(v) "Contract" means any and all commitments, contracts, purchase orders,
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leases, or other agreements, whether written or oral.
(w) "Corporate Names" has the meaning set forth in Section 8.06(a).
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(x) "Damages" has the meaning set forth in Section 11.02(a).
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(y) "Diastat Credit" has the meaning set forth in Section 4.02(b).
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(z) "Diastat Payment" has the meaning set forth in Section 4.02(c).
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(aa) "Diastat Rx Demand Net Sales" means, for a given period, the total
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number (i.e. from both new and refill prescriptions) of equivalent two (2)
syringe twin pack kits of Product dispensed, determined based on data reported
by Scott Levin SPA (Source Prescription Audit) national level audit increased by
[CONFIDENTIAL TREATMENT REQUESTED] to account for channels of distribution not
fully captured by Scott Levin, multiplied by [CONFIDENTIAL TREATMENT REQUESTED].
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(bb) "Disclosing Party" has the meaning set forth in Section 12.01.
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(cc) "Dollars" and the sign "$" each means lawful money of the United
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States.
(dd) "Encumbrance" means any mortgage, pledge, assessment, security
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interest, deed of trust, lease, lien, adverse claim, levy, charge or other
encumbrance of any kind, or any conditional sale or title retention agreement or
other agreement to give any of the foregoing in the future.
(ee) "Equipment" means the equipment set forth on Schedule A hereto.
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(ff) "Excluded Assets" means all Assets and Properties of Seller and its
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Affiliates except the Purchased Assets and the Product Inventory.
(gg) "Excluded Liabilities" means all Liabilities of Seller and its
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Affiliates except the Assumed Liabilities.
(hh) "Expiration Date" means the date twelve (12) months after the Closing
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Date.
(ii) "Fourth Quarter" has the meaning set forth in Section 4.01.
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(jj) "Governmental or Regulatory Authority" means any court, tribunal,
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arbitrator, authority, agency, commission, official or other instrumentality of
the United States or other country, or any supra-national organization, state,
county, city or other political subdivision thereof.
(kk) "Indemnification Claim Notice" has the meaning set forth in Section
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11.02(c).
(ll) "Indemnified Party" has the meaning set forth in Section 11.02(c).
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(mm) "Indemnifying Party" has the meaning set forth in Section 11.02(c).
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(nn) "Indemnitee" and "Indemnitees" have the respective meanings set forth
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in Section 11.02(c).
(oo) "Intellectual Property" means any and all of the following
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intellectual property rights owned by or licensed to Seller and its Affiliates
and used exclusively in connection with the Business: (i) Patents, (ii)
Know-how; (iii) copyrights, copyright registrations and applications therefor,
and all other rights corresponding thereto; (iv) internet domain names; (v)
brand names, trade names, trade dress, logos, common law trademarks and service
marks, and trademark and service mark registrations, renewals and applications
therefor, including all good will of the Business symbolized thereby or
associated therewith (excluding the Elan tradename and Elan trademark and logo);
(vi) any similar or equivalent rights to any of the foregoing in the Territory;
and (vii) rights to sue and recover damages or obtain injunctive relief for
infringement, dilution or misappropriation of the items set forth in clauses (i)
- - (vi) above.
(pp) "Know-how" means all information and materials owned or licensed by
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Seller and its Affiliates and used exclusively in connection with the Business,
including any Product
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CONFIDENTIAL TREATMENT
specifications, technical knowledge, expertise, skill, practice, inventions,
procedures, formulae, trade secrets, confidential information, analytical
methodology, processes, preclinical, clinical, stability, toxicology and other
data, market studies and all other experience and know-how, in tangible or
intangible form, whether or not patented or patentable; provided, however, that
Know-how shall not include (i) any plant, property, equipment or employees, and
(ii) any items to the extent that any applicable Law prohibits their transfer or
any transfer thereof would subject Seller or any of its Affiliates to any
material Liability or other obligation.
(qq) "Knowledge" with respect to any Party, means the actual knowledge of
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the senior management (or persons performing similar functions) of such Person.
(rr) "Law" means any federal, state or local law, statute or ordinance, or
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any rule, regulation, or published guidelines promulgated by any Governmental or
Regulatory Authority.
(ss) "Liability" means any liability (whether known or unknown, asserted or
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unasserted, absolute or contingent, accrued or unaccrued, liquidated or
unliquidated, and due or to become due), including any liability for Taxes.
(tt) "Marketing Materials" means all market research, marketing plans,
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media plans, advertising, promotional and marketing books and records owned by
Seller and its Affiliates as of the Closing and used exclusively in connection
with the marketing or promotion of the Product, other than any such items to the
extent that (i) any applicable Law prohibits their transfer or (ii) any transfer
thereof would subject Seller or any of its Affiliates to any contractual or
other Liability or obligation.
(uu) "Maximum Returns Credit Amount" has the meaning set forth in Section
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8.10(a).
(vv) "Multi-Product Contracts" has the meaning set forth in Section 8.12.
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(ww) "Net Sales" means the gross amount invoiced for the Product for an
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applicable period by Buyer or its Affiliates to third parties less:
(i) quantity, trade and/or cash discounts allowed or given;
(ii) credits or refunds allowed for the return of rejected, outdated,
damaged or returned Product;
(iii) rebates, chargebacks and price adjustments allowed or given; and
(iv) sales and other excise taxes and duties directly related to the sale,
transportation or delivery, to the extent that such items are included in the
gross invoice price (but not including taxes assessed against the income derived
from such sale).
Each of the items set forth in clauses (i)-(iv) above shall be deducted
from the gross amount invoiced only to the extent charged against Buyer or its
Affiliates and evidenced in Buyer's or its Affiliates' books and records of
account. Deductions shall be determined in accordance with U.S. Generally
Accepted Accounting Principles consistently applied. If a
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CONFIDENTIAL TREATMENT
Product is sold for compensation other than cash, Net Sales shall be calculated
based on the gross list price of the Product on the date of sale.
Sales of Product by and between a Party and its Affiliates are not sales to
a third party and shall be excluded from Net Sales calculations for all
purposes.
(xx) "Non-disclosing Party" has the meaning set forth in Section 12.01.
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(yy) "Non-Soliciting Party" has the meaning set forth in Section 8.05.
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(zz) "Order" means any writ, judgment, decree, injunction or similar order
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of any Governmental or Regulatory Authority (in each such case whether
preliminary or final).
(aaa) "Ordinary Course of Business" means such action that is consistent
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with the past practices of the Business.
(bbb) "Parties" means Buyer and Seller.
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(ccc) "Party" means each of Buyer and Seller.
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(ddd) "Patent" means any patents, provisional patent applications and
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similar instruments (including any divisions, continuations,
continuations-in-part, reissues, renewals, extensions or the like of any such
patent, application or instrument) as well as any foreign equivalents thereof
(including certificates of invention and any applications therefor).
(eee) "Permitted Encumbrance" means (i) any Encumbrance for Taxes not yet
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due or delinquent or for those Taxes being contested in good faith by
appropriate proceedings for which adequate reserves have been established and
(ii) any minor imperfection of title or similar Encumbrance that individually or
in the aggregate would not have an Adverse Effect.
(fff) "Person" means any natural person, corporation, general partnership,
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limited partnership, limited liability company, proprietorship, other business
organization, trust, union, association or Governmental or Regulatory Authority.
(ggg) "Prior Agreement" has the meaning set forth in the Recitals hereto.
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(hhh) "Product" means (x) a viscous, aqueous-based composition of diazepam
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formulated by or on behalf of Seller for rectal administration, including any
formulation covered by a Patent, and (y) any device licensed, sublicensed,
developed or owned by the Seller, as of the Closing, for use in conjunction with
the foregoing, together, as sold by or on behalf of Seller under the registered
trademark "Diastat." Without limiting the foregoing, Product includes each of
the formulations set forth under the term "Diastat" on Exhibit A.
(iii) "Product Acquisition Financing Agreement" means that certain Product
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Acquisition Financing Agreement between EPIL and Buyer in substantially the form
attached hereto at Exhibit B.
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(jjj) "Product Inventory" means all inventory owned as of the Closing by
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Seller or any Affiliate thereof of finished Product or works in progress or
materials used in the manufacture of finished Product, whether held at a
location or facility of Seller or any Affiliate (or of any other Person on
behalf of Seller or any Affiliate) or in transit to or from Seller or any
Affiliate (or any such other Person).
(kkk) "Purchase Price" has the meaning set forth in Section 4.01.
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(lll) "Purchase Price Payment" and "Purchase Price Payments" have the
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respective meanings set forth in Section 4.01.
(mmm) "Purchased Assets" means, subject to Section 2.02 and except as
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otherwise provided on the Seller Disclosure Schedule: (i) the Intellectual
Property; (ii) the Registered Intellectual Property; (iii) the Assumed
Contracts; (iv) the Books and Records; (v) the Regulatory Approvals; (vi) the
Marketing Materials; and (vii) the Equipment.
(nnn) "Q2 Diastat Credit" has the meaning set forth in Section 4.02(a).
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(ooo) "Q3 Diastat Credit" has the meaning set forth in Section 4.02(b).
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(ppp) "Q2 Diastat Payment" has the meaning set forth in Section 4.02(a).
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(qqq) "Q3 Diastat Payment" has the meaning set forth in Section 4.02(b).
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(rrr) "Q4 Diastat Payment" has the meaning set forth in Section 4.02(c).
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(sss) [CONFIDENTIAL TREATMENT REQUESTED] has the meaning set forth in
Section 4.01.
(ttt) [CONFIDENTIAL TREATMENT REQUESTED] has the meaning set forth in
Section 4.01.
(uuu) [CONFIDENTIAL TREATMENT REQUESTED] has the meaning set forth in
Section 4.01.
(vvv) "Quarter" means the Second Quarter, Third Quarter or Fourth Quarter.
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(www) "Registered Intellectual Property" means, as they relate exclusively
--------------------------------
to the Product, all of the following Intellectual Property registered in the
Territory: (i) the Patents identified in Section 6.08(a) of the Seller
Disclosure Schedule; (ii) the registered trademarks and applications to register
trademarks identified in Section 6.08(a) of the Seller Disclosure Schedule; and
(iii) the internet domain names registered with registrars accredited by the
Internet Corporation for Assigned Names and Numbers identified in Section
6.08(a) of the Seller Disclosure Schedule.
(xxx) "Regulatory Approvals" means, as they relate exclusively to the
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Product and to the extent owned or licensed by Seller, the new drug applications
and new drug submissions for the Product identified in Section 6.11 of the
Seller Disclosure Schedule, all supplements thereto and all regulatory files
relating thereto, including any and all (i) regulatory filings and supporting
documents, clinical studies and tests (excluding DEA licenses, and wholesale,
distributor and pharmacy licenses); and (ii) records maintained under Good
Manufacturing Practices ("GMPs")
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or other record keeping or reporting requirements of the FDA, the Environmental
Protection Agency, the Occupational Health and Safety Administration or any
other Governmental or Regulatory Authorities, including all investigational new
drug applications, abbreviated new drug applications, drug master files, FDA
approvals for export, FDA warning letters, FDA Notices of Adverse Finding
Letters, FDA audit reports (including any responses to such reports), all other
correspondence and communications with Governmental or Regulatory Authorities in
connection with the Product, adverse event files, IND safety reports and
complaint files (as well as any foreign equivalents of the foregoing) with
respect to the Product.
(yyy) "Second Quarter" has the meaning set forth in Section 4.01.
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(zzz) "Seller" has the meaning set forth in the Preamble to this Agreement.
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(aaaa) "Seller Disclosure Schedule" has the meaning set forth in the
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preamble to Article VI of this Agreement.
(bbbb) "Seller Governmental Consent" has the meaning set forth in Section
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6.04(a).
(cccc) "Seller Third Party Consent" has the meaning set forth in Section
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6.04(b).
(dddd) "Soliciting Party" has the meaning set forth in Section 8.05.
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(eeee) "Tax" means all of the following tax in connection with the
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operations of the Business or the transactions contemplated hereby: (i) any net
income, alternative or add-on minimum tax, gross income, gross receipts, sales,
use, ad valorem, transfer, franchise, profits, license, excise, severance,
stamp, occupation, premium, property, environmental or windfall profit tax,
custom, duty or other tax, governmental fee or other like assessment imposed by
an governmental, regulatory or administrative entity or agency responsible for
the imposition of any such tax (domestic or foreign); (ii) any Liability for the
payment of any amounts of the type described in (i) as a result of being a
member of any affiliated, consolidated, combined, unitary or other group for any
Taxable period; and (iii) any Liability for the payment of any amounts of the
type described in (i) or (ii) as a result of any express or implied obligation
to indemnify any other person.
(ffff) "Territory" means Territory A and Territory B.
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(gggg) "Territory A" means the United States of America.
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(hhhh) "Territory B" means the entire world other than the United States of
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America.
(iiii) "Third Party Claim" has the meaning set forth in Section 11.02(d).
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(jjjj) "Third Quarter" has the meaning set forth in Section 4.01.
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(kkkk) "Transition Chargebacks" has the meaning set forth in Section
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8.10(d).
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Section 1.02 Construction of Certain Terms and Phrases.
Unless the context of this Agreement otherwise requires: (a) words of any
gender include each other gender; (b) words using the singular or plural number
also include the plural or singular number, respectively; (c) the terms
"hereof," "herein," "hereby" and derivative or similar words refer to this
entire Agreement; (d) the terms "Article," "Section" or "Exhibit" refer to the
specified Article, Section or Exhibit of this Agreement; (e) the term "or" has,
except where otherwise indicated, the inclusive meaning represented by the
phrase, "and/or"; and (f) the term "including" means "including without
limitation." Whenever this Agreement refers to a number of days, such number
shall refer to calendar days unless Business Days are specified. All accounting
terms used but not defined herein shall have the meaning ascribed to such terms
under U.S. Generally Accepted Accounting Principles, consistently applied.
ARTICLE II. PURCHASE AND SALE OF ASSETS
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Section 2.01 Purchase and Sale of Assets.
(a) Subject to the terms and conditions of this Agreement, at the Closing,
EPIL shall, or shall cause its relevant Affiliates to, sell, transfer, convey,
assign and deliver to Buyer, and Buyer shall purchase, acquire and accept from
EPIL and such Affiliates of EPIL (other than EPI), all of EPIL's and each such
Affiliate's right, title and interest, as of the Closing, in and to the
Purchased Assets relating to Territory A.
(b) Subject to the terms and conditions of this Agreement, at the Closing,
EPI shall sell, transfer, convey, assign and deliver to Buyer, and Buyer shall
purchase, acquire and accept from EPI all of EPI's right, title and interest, as
of the Closing, in and to the Purchased Assets relating to Territory B and any
Purchased Assets as may be owned by it relating to Territory A.
(c) Notwithstanding anything contained in this Agreement to the contrary,
(i) from and after the Closing, Seller and its Affiliates shall retain all of
their right, title and interest in and to the Excluded Assets and (ii) Seller
may retain an archival copy of all Assumed Contracts, Books and Records,
Marketing Materials and other documents or materials conveyed hereunder.
Section 2.02 Assignability and Consents.
Notwithstanding anything to the contrary contained in this Agreement, if
the sale, assignment, transfer, conveyance or delivery or attempted sale,
assignment, transfer, conveyance or delivery to Buyer of any asset that would be
a Purchased Asset is (a) prohibited by any applicable Law or (b) would require
any authorizations, approvals, consents or waivers from a third Person or
Governmental or Regulatory Authority and such authorizations, approvals,
consents or waivers shall not have been obtained prior to the Closing, then in
either case the Closing shall proceed without the sale, assignment, transfer,
conveyance or delivery of such asset and this Agreement shall not constitute an
agreement for the sale, assignment, transfer, conveyance or delivery of such
asset; provided that nothing in this Section 2.02 shall be deemed to waive the
rights of Buyer not to consummate the transactions contemplated by this
Agreement if the conditions to its obligations set forth in Article X have not
been satisfied. In the event that the Closing proceeds without the sale,
assignment, transfer, conveyance or delivery of any such asset, then following
the Closing, the Parties shall use their reasonable best efforts, and cooperate
9
CONFIDENTIAL TREATMENT
with each other, to obtain promptly such authorizations, approvals, consents or
waivers; provided, however, that Seller shall not be required to pay any
consideration to obtain any such authorization, approval, consent or waiver.
Pending such authorization, approval, consent or waiver, the Parties shall
cooperate with each other in any mutually agreeable, reasonable and lawful
arrangements designed to provide to Buyer the benefits of use of such asset and
to Seller the benefits, including any indemnities, that, in each case, it would
have obtained had the asset been conveyed to Buyer at the Closing. To the extent
that Buyer is provided the benefits pursuant to this Section 2.02 of any
Contract, Buyer shall (x) perform for the benefit of the other parties thereto
the obligations of Seller or any Affiliate of Seller thereunder and (y) shall
satisfy any related Liabilities with respect to such Contract that, but for the
lack of an authorization, approval, consent or waiver to assign such obligations
or Liabilities to Buyer, would be Assumed Liabilities. Once authorization,
approval, consent or waiver for the sale, assignment, transfer, conveyance or
delivery of any such asset not sold, assigned, transferred, conveyed or
delivered at the Closing is obtained, Seller shall assign, transfer, convey and
deliver such asset to Buyer at no additional cost to Buyer.
ARTICLE III. ASSUMPTION OF LIABILITIES
--------------------------------------
Section 3.01 Assumption of Assumed Liabilities.
(a) Subject to the terms and conditions of this Agreement, as of the
Closing Date, Buyer agrees to assume, satisfy, perform, pay, discharge and
otherwise be responsible for the Assumed Liabilities.
(b) Other than the Assumed Liabilities, Buyer shall not assume or be deemed
to have assumed or guaranteed, or otherwise be responsible for, any other
Liability or obligation of any nature, whether direct or indirect, of Seller or
any of its Affiliates relating to the Purchased Assets or otherwise, without
regard to whether such Liability or obligation is known, knowable, or unknown,
matured or unmatured, liquidated or unliquidated, fixed or contingent, arising
out of acts, omissions or occurrences prior to the Closing Date or any
conditions existing prior to the Closing Date.
ARTICLE IV. PURCHASE PRICE AND PAYMENT
--------------------------------------
Section 4.01 Purchase Price.
(a) Closing Consideration. As consideration for the Purchased Assets, Buyer
---------------------
shall:
(i) pay to Seller the following amounts at Closing (collectively, the
"Closing Payment"):
---------------
(A) [CONFIDENTIAL TREATMENT REQUESTED]; and
(B) [CONFIDENTIAL TREATMENT REQUESTED].
(ii) assume the Assumed Liabilities as of the Closing.
10
CONFIDENTIAL TREATMENT
The Closing Payment shall be paid by Buyer to each of EPIL and EPI in the
amounts set forth above by wire transfer of immediately available funds to the
accounts designated by each of EPIL and EPI prior to the date on which such
payment is due; provided, however, that Buyer shall be entitled to finance up to
[CONFIDENTIAL TREATMENT REQUESTED] of the Closing Payment payable to EPIL,
subject to and in accordance with the terms of the Product Acquisition Financing
Agreement. The Closing Payment is non-refundable and not subject to any future
performance obligations upon EPIL or EPI nor creditable to any future service by
EPIL or EPI.
(b) Additional Consideration. In addition to the Closing Payment, Buyer
------------------------
shall pay to EPIL the following amounts as additional consideration for the
Purchased Assets:
(i) [CONFIDENTIAL TREATMENT REQUESTED].
(ii) [CONFIDENTIAL TREATMENT REQUESTED].
(iii) [CONFIDENTIAL TREATMENT REQUESTED].
(c) Payment. The [CONFIDENTIAL TREATMENT REQUESTED] are each referred to
-------
herein as a "Purchase Price Payment" and are collectively referred to herein as
----------------------
the "Purchase Price Payments". Each Purchase Price Payment shall be paid by
-----------------------
Buyer to EPIL by wire transfer of immediately available funds to an account or
accounts designated by EPIL prior to the date which such payment is due;
provided, however, that Buyer shall be entitled to finance up to sixty percent
(60%) of each Purchase Price Payment subject to and in accordance with the terms
of the Product Acquisition Financing Agreement.
(d) Determination of Diastat Rx Demand Net Sales. Buyer and EPIL recognize
--------------------------------------------
that the amount of Diastat Rx Demand Net Sales for each period may not be known
as of the respective due dates of the [CONFIDENTIAL TREATMENT REQUESTED].
Accordingly, Buyer shall pay to EPIL the maximum amount due for each period as
of the due date. As soon as practical, but under no circumstances more than
sixty (60) days from the due date of the payments, Buyer shall provide EPIL with
a calculation, in reasonable detail, of the Diastat Rx Demand Net Sales for the
applicable period. If the actual amount due EPIL based on the Diastat Rx Demand
Net Sales and the formulas set forth herein is less than the amount paid by
Buyer to EPIL, then EPIL shall refund to Buyer the excess of the amount
originally paid over the actual amount owed. The portion of any refund payment
to be paid in cash by EPIL shall be equal to the percentage of the original
Purchase Price Payment paid in cash by the Buyer. The remaining
11
CONFIDENTIAL TREATMENT
portion of any refund shall be deducted from the amount of the Purchase Price
Payment financed by the Buyer pursuant to the Product Acquisition Financing
Agreement, with such adjustment to be made retroactively to the due date of the
Purchase Price Payment.
Section 4.02 Purchase Price Adjustment.
The Purchase Price shall be subject to adjustment as follows:
(a) Second Quarter Adjustment. In the event that total Net Sales in the
-------------------------
United States are less than [CONFIDENTIAL TREATMENT REQUESTED] during the Second
Quarter, EPIL shall pay to Buyer an amount equal to [CONFIDENTIAL TREATMENT
REQUESTED] of the difference between (y) the lesser of [CONFIDENTIAL TREATMENT
REQUESTED] and the Diastat Rx Demand Net Sales for the Second Quarter and (z)
the total Net Sales in the United States for the Second Quarter (the "Q2 Diastat
----------
Payment"). In the event that the total Net Sales in the United States for the
- -------
Second Quarter are greater than [CONFIDENTIAL TREATMENT REQUESTED], EPIL shall
be entitled to receive a credit from Buyer in an amount equal to [CONFIDENTIAL
TREATMENT REQUESTED] of the difference between (1) [CONFIDENTIAL TREATMENT
REQUESTED] and (2) the total Net Sales in the United States for the Second
Quarter (the "Q2 Diastat Credit").
-----------------
(b) Third Quarter Adjustment. In the event that total Net Sales in the
------------------------
United States are less than [CONFIDENTIAL TREATMENT REQUESTED] during the Third
Quarter, EPIL shall pay to Buyer an amount equal to [CONFIDENTIAL TREATMENT
REQUESTED] of the difference between (y) the lesser of [CONFIDENTIAL TREATMENT
REQUESTED] and the Diastat Rx Demand Net Sales for the Third Quarter and (z) the
total Net Sales in the United States for the Third Quarter (the "Q3 Diastat
----------
Payment"). In the event that the total Net Sales in the United States for the
- -------
Third Quarter are greater than [CONFIDENTIAL TREATMENT REQUESTED], EPIL shall be
entitled to receive a credit from Buyer in an amount equal to [CONFIDENTIAL
TREATMENT REQUESTED] of the difference between (1) [CONFIDENTIAL TREATMENT
REQUESTED] and (2) the total Net Sales in the United States for the Third
Quarter (the "Q3 Diastat Credit"). The Q2 Diastat Credit and the Q3 Diastat
-----------------
Credit are sometimes referred to herein as a "Diastat Credit."
--------------
(c) Fourth Quarter Adjustment. In the event that total Net Sales in the
-------------------------
United States are less than [CONFIDENTIAL TREATMENT REQUESTED] during the Fourth
Quarter, EPIL shall pay to Buyer an amount equal to [CONFIDENTIAL TREATMENT
REQUESTED] of the difference between (y) the lesser of [CONFIDENTIAL TREATMENT
REQUESTED] and the Diastat Rx Demand Net Sales for the Fourth Quarter and (z)
the total Net Sales in the United States for the Fourth Quarter (the "Q4 Diastat
----------
Payment"). The Q2 Diastat Payment, the Q3 Diastat Payment and the Q4 Diastat
- -------
Payment are sometimes referred to herein as a "Diastat Payment."
---------------
(d) Reports; Payments; Application of Credits. In connection with the
-----------------------------------------
adjustments set forth in Sections 4.02(a), (b) and (c) hereof, Buyer shall
provide a report to Seller no later than sixty (60) days after the end of each
Quarter setting forth the calculation of Net Sales in the United States and
Diastat Rx Demand Net Sales for the Product for such Quarter and the amount of
the applicable credit or payment due, each in sufficient detail to permit EPIL
to determine whether the calculation of Net Sales in the United States, Diastat
Rx Demand Net Sales and applicable payment or credit due is accurate. Buyer
shall cause its representatives and
12
CONFIDENTIAL TREATMENT
employees to be available to EPIL to discuss any questions or comments of EPIL
concerning such report. If at the end of the Second Quarter and/or the Third
Quarter a Diastat Payment is due, Seller shall pay to Buyer within thirty (30)
days after receipt of Buyer's report for such Quarter an amount equal to such
Diastat Payment less the amount of any Diastat Credits accrued for the Second
Quarter and/or the Third Quarter. If at the end of the Third Quarter a Diastat
Credit is due, Buyer shall pay to Seller the amount of such Diastat Credit
accrued up to the amount of any Diastat Payments previously made. Any Diastat
Credit outstanding at the end of the Third Quarter that has not been applied
against a Diastat Payment shall be cancelled. If at the end of the Fourth
Quarter a Diastat Payment is due, Seller shall pay to Buyer within thirty (30)
days after receipt of Buyer's report for such Quarter an amount equal to such
Diastat Payment. Each payment to be made pursuant to this Section 4.02 shall be
paid by wire transfer of immediately available funds to an account or accounts
designated by Buyer or EPIL, as the case may be, prior to the date on which such
payment is due.
(e) Records; Access; Audit. Buyer shall keep for a period of four (4) years
----------------------
from the date hereof complete and accurate records of sales and all other
information necessary to accurately calculate Net Sales and Diastat Rx Demand
Net Sales as required pursuant to Sections 4.01 and 4.02(a), (b) and (c) hereof.
EPIL shall have the right through its representatives or an independent,
certified public accountant to audit such records at the place or places of
business where such records are customarily kept in order to verify the accuracy
of the reports of Net Sales and Diastat Rx Demand Net Sales made hereunder. Such
audits may be exercised during normal business hours upon reasonable prior
written notice to Buyer. EPIL shall bear the full cost of such audit unless such
audit discloses a variance of more than five percent (5%) from the amount of any
payment or credit calculated with respect to Net Sales or Diastat Rx Demand Net
Sales under this Agreement, in which case Buyer shall bear the full cost of such
audit. In the event that Buyer disputes the results of EPIL's audit, Buyer and
EPIL shall attempt to resolve such dispute in good faith. Any amounts that are
determined or agreed to be due and owing by Buyer to EPIL or by EPIL to Buyer
following such audit shall be paid within ten (10) days thereafter, together
with any interest due thereon (at a rate equal to seven percent (7%) per annum).
Section 4.03 Purchase of Product Inventory.
At a mutually agreed upon time, but no later than sixty (60) days after the
Closing, Buyer shall purchase from EPI all Product Inventory of EPI with
acceptable dating at a price equal to EPI's cost therefor, which amount shall be
payable to EPI on or before March 29, 2002. All of the finished Product included
in Product Inventory (a) shall be saleable in the Ordinary Course of Business,
except for normal and customary amounts of below-standard quality Product, and
(b) shall have been produced or manufactured in accordance with the
specifications for such Product as set forth in the applicable Regulatory
Approvals and substantially in compliance with applicable Law. All raw materials
and works in progress included in Product Inventory shall be useable in the
Ordinary Course of Business except for normal and customary amounts of
below-standard quality raw materials and works in progress. The payment to be
made pursuant to this Section 4.03 shall be paid by wire transfer of immediately
available funds to an account or accounts designated by EPI prior to the date on
which such payment is due. Until the time that such Product Inventory is
transferred to Buyer, EPI shall hold, store and ship such Product Inventory
substantially in accordance with (i) all applicable Laws, (ii) current GMPs,
(iii) the
13
CONFIDENTIAL TREATMENT
applicable Regulatory Approvals, and (iv) applicable analytical methods and
procedures, material specifications, master batch records and stability
protocols. EPI represents that it has acted in accordance with clauses (i)
through (iv) above with respect to Product Inventory prior to the Closing.
Section 4.04 Payment of Sales, Use and Other Taxes.
Each Party shall be responsible for its own sales, use, transfer and value
added and other related taxes, if any, pursuant to this Agreement. Buyer shall
provide resale certificates and exemption forms as reasonably requested by
Seller.
Section 4.05 Impact of Failure to Make Payments.
The failure by Buyer to make any payments due to EPIL pursuant to Sections
4.01, 4.02 and 4.03 shall constitute an "Event of Default" under the Product
Acquisition Financing Agreement.
ARTICLE V. CLOSING
------------------
Section 5.01 Time and Place.
The closing of the transactions contemplated by this Agreement, including
the purchase and sale of the Purchased Assets and the assumption of the Assumed
Liabilities (the "Closing"), shall take place as promptly as practicable, but no
later than five (5) Business Days, following satisfaction or waiver of the
conditions set forth in Articles IX and X, at the offices of Brobeck, Phleger &
Harrison LLP, 12390 El Camino Real, San Diego, CA 92130, unless another time or
place shall be agreed to by the Parties.
Section 5.02 Deliveries at Closing.
(a) Closing Deliveries by Seller.
----------------------------
At the Closing, Seller shall deliver or cause to be delivered to Buyer:
(i) each of the Patent assignment, trademark assignment and other
intellectual property assignment documents necessary to transfer the
Intellectual Property and the Registered Intellectual Property to Buyer in
form and substance reasonably acceptable to Seller and Buyer;
(ii) assignment and assumption agreements, in form and substance
reasonably acceptable to Seller and Buyer, assigning to Buyer all rights
and obligations of Seller and its Affiliates in and to the Assumed
Contracts;
(iii) copies of all Seller Governmental Consents and Seller Third
Party Consents;
(iv) an executed copy of the Product Acquisition Financing Agreement;
14
CONFIDENTIAL TREATMENT
(v) an opinion of Seller's counsel in form and substance reasonably
satisfactory to Buyer;
(vi) a bill of sale in form and substance reasonably acceptable to
Seller and Buyer to transfer the Books and Records, Equipment and Marketing
Materials to Buyer; and
(vii) the certificates and other documents to be delivered pursuant to
Article X hereof.
(b) Closing Deliveries by Buyer.
---------------------------
At the Closing, Buyer shall deliver or cause to be delivered to Seller:
(i) the Closing Payment in accordance with Section 4.01 hereof;
(ii) assignment and assumption agreements, in form and substance
reasonably acceptable to Seller and Buyer, assigning to Buyer all rights
and obligations of Seller and its Affiliates in and to the Assumed
Contracts;
(iii) such instruments of assumption and other instruments or
documents, in form and substance reasonable acceptable to Seller and Buyer,
as may be necessary to effect Buyer's assumption of the Assumed
Liabilities;
(iv) copies of all Buyer Governmental Consents and Buyer Third Party
Consents;
(v) an opinion of Buyer's counsel in form and substance reasonably
acceptable to Seller;
(vi) an executed copy of the Product Acquisition Financing Agreement;
and
(vii) the certificates and other documents to be delivered pursuant to
Article IX hereof.
ARTICLE VI. REPRESENTATIONS AND WARRANTIES OF SELLER
----------------------------------------------------
Seller represents and warrants to Buyer as of the date hereof, subject to
such exceptions as are specifically disclosed in the disclosure schedule
(referencing the appropriate Sections hereof) supplied by Seller to Buyer and
dated as of the date hereof (the "Seller Disclosure Schedule"), which Seller
--------------------------
Disclosure Schedule shall be deemed to be representations and warranties of
Seller as if made herein, as follows:
Section 6.01 Books and Records.
To Seller's Knowledge, the Books and Records of the Business as made
available by Seller to Buyer are true and correct.
15
CONFIDENTIAL TREATMENT
Section 6.02 Corporate Organization.
EPI is a corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware and has all requisite power and
authority to own its assets and carry on the Business as currently conducted by
it. EPIL is a corporation duly organized and validly existing under the laws of
the Republic of Ireland and has all requisite power and authority to own its
assets and carry on the Business as currently conducted by it. Each Affiliate of
Seller selling, transferring, conveying, assigning or delivering any Purchased
Assets is duly organized, validly existing and in good standing under the laws
of its jurisdiction of organization and has all requisite power and authority to
own its assets and carry on the Business as currently conducted by it. Each of
Seller and each Affiliate selling, transferring, conveying, assigning or
delivering any Purchased Assets is duly authorized to conduct the Business and
is in good standing in each jurisdiction where such qualification is required,
except for any jurisdiction where failure to so qualify could not reasonably be
expected to have an Adverse Effect or materially impair or delay Seller's
ability to perform its obligations hereunder.
Section 6.03 Authority of Seller.
Seller has all necessary power and authority and has taken all actions
necessary to enter into this Agreement and to carry out the transactions
contemplated hereby. The Board of Directors or Executive Committee of the Board
of Directors of Seller has taken all action required by Law, its Certificate of
Incorporation, Bylaws or other organizational documents and agreements, to be
taken by it to authorize the execution and delivery of this Agreement by the
Seller and the consummation of the transactions (including the performance by
the Seller of its obligations) contemplated hereunder. This Agreement has been
duly and validly executed and delivered by Seller and, when executed and
delivered by Buyer, will constitute a legal, valid and binding obligation of
Seller enforceable against it in accordance with its terms except (a) as limited
by applicable bankruptcy, insolvency, reorganization, moratorium and other laws
of general application affecting enforcement of creditors rights generally, and
(b) as limited by laws relating to the availability of specific performance,
injunctive relief or other equitable remedies.
Section 6.04 Consents and Approvals.
(a) All consents, waivers, approvals, Orders, authorizations of,
declarations or filings with any Governmental or Regulatory Authority (each a
"Seller Governmental Consent") that are required by or with respect to Seller or
---------------------------
its Affiliates in connection with the execution and delivery of this Agreement
by the Seller, and its performance of its obligations hereunder are set forth on
Schedule 6.04(a). Each Seller Governmental Consent has been obtained, except to
the extent that the failure to obtain such Seller Governmental Consent would not
have an Adverse Effect.
(b) All consents, waivers, approvals, authorizations of, or notices to, any
third party (other than a Governmental or Regulatory Authority) (each a "Seller
------
Third Party Consent") that are required by or with respect to Seller or its
- -------------------
Affiliates in connection with the execution and delivery of this Agreement by
the Seller, and its performance of its obligations hereunder are set forth on
Schedule 6.04(b). Each Seller Third Party Consent has been obtained, except to
the
16
CONFIDENTIAL TREATMENT
extent that the failure to obtain such Seller Third Party Consent would not have
an Adverse Effect.
Section 6.05 Non-Contravention.
The execution and delivery by Seller of this Agreement does not, and the
performance by it of its obligations under this Agreement and the consummation
of the transactions contemplated hereby will not:
(a) conflict with or result in a violation or breach of any of the terms,
conditions or provisions of the Certificate of Incorporation, Bylaws or other
applicable organizational documents of Seller;
(b) conflict with or result in a violation or breach of any term or
provision of any Law applicable to Seller, the Business or the Purchased Assets,
other than such conflicts, violations or breaches as would not have an Adverse
Effect; or
(c) conflict with or result in a breach or default (or an event which, with
notice or lapse of time or both, would constitute a breach or default) under, or
result in the termination or cancellation of, or accelerate the performance
required by, or result in the creation or imposition of any security interest,
lien or any other Encumbrance (other than a Permitted Encumbrance) upon any
Assumed Contract, other than such conflicts, breaches or defaults as would not
have an Adverse Effect.
Section 6.06 Assumed Contracts.
Section 6.06 of the Seller Disclosure Schedule sets forth a complete and
correct list of each Assumed Contract where the payment obligations after the
Closing exceed Twenty-Five Thousand Dollars ($25,000). Each of the Assumed
Contracts is in effect and constitutes a legal, valid and binding agreement,
enforceable in accordance with its terms, of Seller or an Affiliate of Seller;
and Seller has performed all of its required material obligations under, and is
not in material violation or breach of or default under, any such Assumed
Contract. To the Knowledge of Seller, the other parties to the Assumed Contracts
are not in material violation or breach of or default under any such Assumed
Contract. Seller has made available to Buyer complete and correct copies of all
Assumed Contracts identified in Section 6.06 of the Seller Disclosure Schedule.
Section 6.07 Purchased Assets Generally.
Seller has good and marketable title to the Books and Records, Equipment
and Marketing Materials, free and clear of all Encumbrances (other than
Permitted Encumbrances). The Purchased Assets and the Product Inventory include
all material assets and properties that are owned, licensed or controlled by
Seller with respect to the Product and that are reasonably required for Buyer to
operate the Business after the Closing in substantially the manner and
substantially to the extent operated by Seller prior to the Closing; provided,
however, that Buyer acknowledges and agrees that (a) the Purchased Assets
exclude any items to the extent that (i) any applicable Law prohibits their
transfer or (ii) any transfer thereof would subject Seller or any
17
CONFIDENTIAL TREATMENT
of its Affiliates to any contractual or other Liability or obligation and (b)
certain items have been expressly excluded from the definition of Purchased
Assets and the components thereof.
Section 6.08 Intellectual Property Rights.
(a) Section 6.08(a) of the Seller Disclosure Schedule sets forth a complete
and correct list of all Intellectual Property that is registered in the
Territory, is owned or licensed by Seller and is related exclusively to the
Product. Seller or its Affiliates own all right, title and interest in and to,
or have a license, sublicense or other permission to use, all of the Registered
Intellectual Property, free and clear of all Encumbrances except Permitted
Encumbrances. All necessary registration, maintenance and renewal fees in
connection with such Registered Intellectual Property have been paid and all
necessary documents and certificates in connection with such Registered
Intellectual Property have been filed with the relevant copyright, trademark or
other Governmental or Regulatory Authorities for the purposes of maintaining
such Registered Intellectual Property, except to the extent that failure to take
any such action would not have an Adverse Effect.
(b) Without limiting Section 6.08(a) above, to the Knowledge of Seller,
Seller or its Affiliates own all right, title and interest in and to, or have a
license, sublicense or other permission to use, all of the Intellectual
Property, free and clear of all Encumbrances except Permitted Encumbrances.
(c) Neither Seller nor any of its Affiliates has received any written
notice from any person, or has Knowledge, (i) that the operation of the Business
as currently conducted infringes or misappropriates the intellectual property
rights of any third party, or (ii) that any third party has infringed or
misappropriated or is infringing or misappropriating any of the Intellectual
Property, except where such infringement or misappropriation would not have an
Adverse Effect.
Section 6.09 Litigation.
There are no Actions or Proceedings pending or, to the Knowledge of Seller,
threatened, or reasonably anticipated, against, relating to, affecting or
arising in connection with (a) the Purchased Assets or the Business, (b) this
Agreement, or (c) the transactions contemplated by this Agreement. Seller is not
subject to any Order that could reasonably be expected to materially impair or
delay the ability of Seller to perform its obligations hereunder.
Section 6.10 Compliance with Law.
Since January 1, 2001, Seller and its Affiliates have operated the Business
substantially in compliance with all applicable Laws, except where failure to so
comply could not reasonably be expected to result in an Adverse Effect and
neither Seller nor any of its Affiliates has received any written notice
alleging any violation of such Laws except for violations which could not
reasonably be expected to result in an Adverse Effect.
18
CONFIDENTIAL TREATMENT
Section 6.11 Regulatory Matters.
Section 6.11 of the Seller Disclosure Schedule sets forth a complete and
correct list of all new drug applications and supplements thereto, new drug
submissions and investigational new drug applications for the Product in the
Territory. Seller or its Affiliates own all right, title and interest in and to
each of the new drug applications and supplements thereto, new drug submissions
and investigational new drug applications listed in Section 6.11 of the Seller
Disclosure Schedule. All of the Regulatory Approvals are in full force and
effect and have been duly and validly issued. All required reports have been
made to appropriate Governmental or Regulatory Authorities, all appropriate
actions have been taken and communications with third parties have been made and
all required investigations of adverse drug experiences, contamination,
tampering and/or product defects have been made and appropriate follow-up
actions have been taken, except where the failure to do so would not have an
Adverse Effect. There is no Action or Proceeding by any Governmental or
Regulatory Authority pending or, to the Knowledge of Seller, threatened with
respect to any Product or any Regulatory Approval, which could reasonably be
expected to have an Adverse Effect. Seller has made available to Buyer complete
and correct copies of all Regulatory Approvals.
Section 6.12 Brokers.
Seller has not retained any broker in connection with the transactions
contemplated hereunder. Buyer has no, and will have no, obligation to pay any
brokers, finders, investment bankers, financial advisors or similar fees in
connection with this Agreement or the transactions contemplated hereby by reason
of any action taken by or on behalf of Seller.
Section 6.13 Disclosure.
None of the representations or warranties made by the Seller herein as of
the date of such representations and warranties, and none of the statements
contained in any other written materials with respect to the Purchased Assets
furnished by Seller to Buyer in connection with this Agreement, contains any
untrue statement of a material fact or omits any material fact required to be
stated therein or necessary to make the statements made therein, in light of the
circumstances under which they were made, not misleading.
Section 6.14 No Other Warranties.
EXCEPT AS SET FORTH IN THIS ARTICLE VI, SELLER IS SELLING THE PURCHASED
ASSETS AND PRODUCT INVENTORY HEREUNDER ON AN "AS IS" BASIS WITHOUT
REPRESENTATION OR WARRANTY AS TO THE PRODUCT, THE PRODUCT INVENTORY, THE
PURCHASED ASSETS OR THE BUSINESS WHETHER EXPRESS OR IMPLIED INCLUDING WARRANTIES
OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, OR INFRINGEMENT OF THIRD
PARTY RIGHTS, AND ALL SUCH WARRANTIES ARE EXPRESSLY DISCLAIMED.
ARTICLE VII. REPRESENTATIONS AND WARRANTIES OF BUYER
----------------------------------------------------
Buyer represents and warrants to Seller as of the date hereof, subject to
such exceptions as are specifically disclosed in the disclosure schedule
(referencing the appropriate Sections
19
CONFIDENTIAL TREATMENT
hereof) supplied by Buyer to Seller and dated as of the date hereof (the "Buyer
-----
Disclosure Schedule"), which Buyer Disclosure Schedule shall be deemed to be
- -------------------
representations and warranties of Buyer as if made herein, as follows:
Section 7.01 Corporate Organization.
Buyer is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware and has all requisite power and
authority to own its assets and carry on its business as currently conducted by
it. Buyer is duly authorized to conduct its business and is in good standing in
each jurisdiction where such qualification is required, except for any
jurisdiction where failure to so qualify could not reasonably be expected,
individually or in the aggregate, to have a material adverse effect on Buyer or
materially impair or delay Buyer's ability to perform its obligations hereunder.
Section 7.02 Authority of Buyer.
Buyer has all necessary power and authority and has taken all actions
necessary to enter into this Agreement and to carry out the transactions
contemplated hereby. The Board of Directors of Buyer has taken all action
required by Law, its Certificate of Incorporation, Bylaws or otherwise to be
taken by it to authorize the execution and delivery of this Agreement by Buyer
and the consummation of the transactions contemplated hereby. This Agreement has
been duly and validly executed and delivered by Buyer and, when executed and
delivered by Seller, will constitute a legal, valid and binding obligation of
Buyer enforceable against it in accordance with its terms except (a) as limited
by applicable bankruptcy, insolvency, reorganization, moratorium and other laws
of general application affecting enforcement of creditors rights generally, and
(b) as limited by laws relating to the availability of specific performance,
injunctive relief or other equitable remedies.
Section 7.03 Consents and Approvals.
(a) All consents, waivers, approvals, Orders, authorizations of,
declarations or filings with any Governmental or Regulatory Authority (each a
"Buyer Governmental Consent") that are required by or with respect to Buyer in
--------------------------
connection with the execution and delivery of this Agreement by Buyer, and its
performance of its obligations hereunder are set forth on Schedule 7.03(a). Each
Buyer Governmental Consent has been obtained, except to the extent that the
failure to obtain such Buyer Governmental Consent would not have an Adverse
Effect.
(b) All consents, waivers, approvals, authorizations of, or notices to, any
third party (other than a Governmental or Regulatory Authority) (each a "Buyer
-----
Third Party Consent") that are required by or with respect to Buyer in
- -------------------
connection with the execution and delivery of this Agreement by Buyer, and its
performance of its obligations hereunder are set forth on Schedule 7.03(b). Each
Buyer Third Party Consent has been obtained, except to the extent that the
failure to obtain such Buyer Third Party Consent would not have an Adverse
Effect.
20
CONFIDENTIAL TREATMENT
Section 7.04 Non-Contravention.
The execution and delivery by Buyer of this Agreement does not, and the
performance by it of its obligations under this Agreement and the consummation
of the transactions contemplated hereby will not:
(a) conflict with or result in a violation or breach of any of the terms,
conditions or provisions of the Certificate of Incorporation, Bylaws or other
organizational documents of Buyer;
(b) conflict with or result in a violation or breach of any term or
provision of any Law applicable to Buyer other than such conflicts, violations
or breaches as would not have an Adverse Effect; or
(c) conflict with or result in a breach or default (or an event which, with
notice or lapse of time or both, would constitute a breach or default) under, or
result in the termination or cancellation of, or accelerate the performance
required by, or result in the creation or imposition of any security interest,
lien or any other Encumbrance (other than a Permitted Encumbrance) upon any
Contract to which Buyer is a party or by which Buyer or any of its assets is
bound, other than such conflicts, breaches or defaults as would not have an
Adverse Effect.
Section 7.05 Litigation.
There are no Actions or Proceedings pending, or to the Knowledge of Buyer
threatened or reasonably anticipated, against, relating to, affecting or arising
in connection with (i) this Agreement or (ii) the transactions contemplated by
this Agreement. Buyer is not subject to any Order that could reasonably be
expected to materially impair or delay the ability of Buyer to perform its
obligations hereunder.
Section 7.06 Brokers.
Buyer has not retained any broker in connection with the transactions
contemplated hereunder. Seller has no, and will have no, obligation to pay any
brokers, finders, investment bankers, financial advisors or similar fees in
connection with this Agreement or the transactions contemplated hereby by reason
of any action taken by or on behalf of Buyer.
ARTICLE VIII. COVENANTS OF THE PARTIES
--------------------------------------
Section 8.01 Non-Assertion of Intellectual Property Rights.
(a) Seller agrees that neither it nor any Affiliate will assert against
Buyer, under any patent, trade secret, copyright, trademark or other proprietary
right owned or controlled by Seller and used by Seller in the operation of the
Business as of the Closing, a claim that the Product or the operation of the
Business, infringes such rights owned or controlled by Seller or its Affiliates,
excluding, however, the Elan tradename and the Elan trademark and logo upon the
exhaustion of the Product Inventory.
21
CONFIDENTIAL TREATMENT
(b) Buyer agrees that it will not alter or deface the Elan tradename or the
Elan trademark and logo in operation of the Business while exhausting the
Product Inventory.
(c) Buyer further agrees that it will maintain the same quality of the
Product as used by Seller in the operation of the Business as of the Closing for
any Product sold under the Elan tradename and Elan trademark and logo and will
do nothing to diminish the value of the Elan tradename and Elan trademark and
logo.
Section 8.02 Cooperation.
Each Party shall cooperate fully with the other in preparing and filing all
notices, applications, submissions, reports and other instruments and documents
that are necessary, proper or advisable under applicable Laws to consummate and
make effective the transactions contemplated by this Agreement, including
Seller's cooperation in the efforts of Buyer to obtain any consents and
approvals of any Governmental or Regulatory Authority required for Buyer to be
able to own the Purchased Assets. Each Party shall cooperate fully with the
other in connection with the delivery to Buyer of physical possession of all
tangible personal property included in the Purchased Assets.
Section 8.03 Access.
(a) Upon the request of Seller, Buyer shall at all times following the
Closing, to the extent permitted by Law, grant to Seller and its representatives
the right, during normal business hours, to inspect and copy the Books and
Records and other documents in Buyer's possession to the extent pertaining to
the operation of the Business prior to the Closing Date for Tax purposes and in
connection with Actions or Proceedings.
(b) For a period of five (5) years following the Closing, Buyer agrees to
keep and maintain all Books and Records and other documents in existence on the
Closing Date and make personnel of Buyer or its Affiliates available to Seller
or its representatives to the extent such access is reasonably related to any
Excluded Assets or otherwise necessary for Seller to comply with or enforce the
terms of this Agreement or comply with any applicable Law; it being understood
that Seller shall reimburse Buyer promptly for its reasonable and necessary out
of pocket expenses incurred in complying with any such request by or on behalf
of Seller.
Section 8.04 Public Announcements.
Neither Seller nor Buyer shall issue any press release or make any public
announcement with respect to this Agreement and the transactions contemplated
hereby without obtaining the prior written consent of the other Party, except as
may be required by applicable Law upon the advice of counsel and only if the
disclosing Party provides the non-disclosing Party with an opportunity to first
review the release or other public announcement.
Section 8.05 Non-Solicitation.
Each Party (the "Soliciting Party") agrees that, without the prior written
----------------
consent of the other Party (the "Non-soliciting Party"), for a period commencing
--------------------
on the date hereof and expiring on the second (2nd) anniversary of the Closing
Date, the Soliciting Party will not
22
CONFIDENTIAL TREATMENT
directly or indirectly (a) induce, encourage or solicit any officer or employee
of the Non-soliciting Party or any of its Affiliates to leave such employment or
to accept any other position or employment with the Soliciting Party or (b)
assist any Affiliate or representative of the Soliciting Party in hiring such
employee. However, nothing in this Section 8.05 shall prohibit the Soliciting
Party from indirectly inducing, encouraging or soliciting such officers or
employees to leave the Non-soliciting Party through the use of general
advertisements in trade journals and the like; provided, that in the event that
an officer or employee of the Non-soliciting Party responds to such
advertisement, the Soliciting Party shall not further induce, encourage or
solicit such person to leave such employment or to accept any other position or
employment with the Soliciting Party, without the prior written consent of the
Non-soliciting Party.
Section 8.06 Corporate Names.
(a) Except as set forth in this Section 8.06, following the Closing, Buyer
shall not have any rights by virtue of this Agreement or any of the transactions
or agreements contemplated hereby to any names, trademarks, trade names, trade
dress or logos relating to Seller or any of the Affiliates of Seller or any of
their products other than those included in the Intellectual Property (the
"Corporate Names").
---------------
(b) Buyer may use in connection with its operation of the Business
following the Closing (until such time, if any, as any Governmental or
Regulatory Authority shall otherwise not permit Buyer to do so), items of
Product Inventory that bear any of the Corporate Names, it being understood that
Buyer will use its reasonable best efforts to use or sell such items of Product
Inventory prior to selling any other product under the trademark or trade name
of the Product.
(c) Buyer may use Marketing Materials that were transferred to Buyer as
Purchased Assets that bear any of the Corporate Names in connection with its
operation of the Business following the Closing and for up to thirty (30) days
thereafter; and thereafter Buyer may use such Marketing Materials only if Buyer
completely removes all Corporate Names from, or completely covers all Corporate
Names on, such materials. Buyer acknowledges and agrees that Seller shall have
no Liability or other obligation arising out of or in connection with Buyer's or
it Affiliate's use of the Marketing Materials.
Section 8.07 Handling of Product Inventory.
From and after the Closing, Buyer shall hold, store, and ship any Product
Inventory substantially in accordance with (i) all applicable Laws, (ii) current
GMPs, (iii) the applicable Regulatory Approvals, and (iv) applicable analytical
methods and procedures, material specifications, master batch records, and
stability protocols.
Section 8.08 Differentiation of Products.
From and after the Closing, Buyer shall use commercially reasonable efforts
to promptly institute appropriate procedures to ensure that products and goods
of the Business manufactured, finished or sold by, or on behalf of, Buyer can be
distinguished from products and goods manufactured, finished or sold by, or on
behalf of, Seller and its Affiliates.
23
CONFIDENTIAL TREATMENT
Section 8.09 Regulatory Matters.
(a) From and after the transfer by Seller to Buyer of each Regulatory
Approval pursuant to the terms hereof, Buyer, at its cost, shall be solely
responsible and liable for (i) taking all actions, paying all fees and
conducting all communication with the appropriate Governmental or Regulatory
Authority required by Law in respect of such Regulatory Approval, including
preparing and filing all reports (including adverse drug experience reports)
with the appropriate Governmental or Regulatory Authority, and (ii) taking all
actions and conducting all communication with third parties in respect of
Product sold pursuant to such Regulatory Approval (whether sold before or after
transfer of such Regulatory Approval), including responding to all complaints in
respect thereof, including complaints related to tampering or contamination, and
(iii) investigating all complaints and adverse drug experiences in respect of
Product sold pursuant to such Regulatory Approval (whether sold before or after
transfer of such Regulatory Approval). Seller shall cooperate with Buyer's
reasonable requests and use commercially reasonable efforts to assist Buyer in
connection with any of the foregoing.
(b) From and after the transfer by Seller to Buyer of each Regulatory
Approval pursuant to the terms hereof, Seller promptly (and in any event within
the time periods required by law) shall notify Buyer if Seller receives a
complaint or a report of an adverse drug experience in respect of a Product sold
pursuant to such Regulatory Approval. In addition, Seller shall cooperate with
Buyer's reasonable requests and use commercially reasonable efforts to assist
Buyer in connection with the investigation of and response to any complaint or
adverse drug experience related to a Product sold by Seller or its Affiliates.
(c) From and after the transfer by Seller to Buyer of each Regulatory
Approval pursuant to the terms hereof, Buyer, at its cost, shall be solely
responsible and liable for conducting all voluntary and involuntary recalls of
units of Product sold pursuant to such Regulatory Approval (whether sold before
or after transfer of such Regulatory Approval), including recalls required by
any Governmental or Regulatory Authority and recalls of units of Product sold by
Seller or its Affiliates deemed necessary by Buyer in its reasonable discretion;
provided, however, that in the event that any such recall is attributable to
Product sold by Seller or its Affiliates prior to the Closing, then Seller shall
reimburse Buyer for all reasonable expenses in connection with the recall of
such Product. Each Party promptly (and in any event within the time periods
required by law) shall notify the other Party in the event that a recall of
Product sold by Seller or its Affiliates is necessary.
Section 8.10 Product Returns, Chargebacks and Rebates.
(a) Product Returns. For the period from the Closing through [CONFIDENTIAL
---------------
TREATMENT REQUESTED], Seller will, at its sole cost and expense, process and
issue credits (or render payment in such other form as Seller may determine)
for all returned Product bearing Seller's NDC numbers and evidenced as being
sold by Seller. Such handling of returned Products by Seller, and the issuance
of any credits or other form of reimbursement in connection therewith, shall
be in accordance with Seller's then current returned goods policy. Buyer will
process, and be solely responsible for reimbursements with respect to Product
returns arising with respect to, or resulting from, shipping errors, damage in
transit and shortages relating to Buyer's sales of Products after the Closing
and Product with Buyer's NDC number.
24
CONFIDENTIAL TREATMENT
(i) Buyer agrees and acknowledges that Seller's maximum liability for
credits or other reimbursement for returned Product under this Section
shall be [CONFIDENTIAL TREATMENT REQUESTED] (the "Maximum Returns Credit
----------------------
Amount"), and further agrees that Seller's obligation to issue credits or
------
other reimbursement for returned Products bearing Seller's NDC numbers
shall terminate upon the date on which Seller has issued credits or
otherwise reimbursed the Maximum Returns Credit Amount or [CONFIDENTIAL
TREATMENT REQUESTED], whichever shall be the first to occur. For purposes
of this Section, the dollar value of returned Products processed by Seller,
shall be determined in accordance with Seller's then current returned goods
policy.
(ii) Upon Seller's issuance of credits or other reimbursement for
returned Products bearing Seller's NDC's in an aggregate dollar amount
equal to the Maximum Returns Credit Amount, any such credits or other
reimbursement issued thereafter by Seller shall be the sole and exclusive
liability and obligation of Buyer, for which Buyer will be invoiced by
Seller on a monthly basis. Each such invoice shall set forth the number of
units processed for each Product's NDC, together with such information as
shall be necessary to support the invoice. Buyer shall, within thirty (30)
days of its receipt of invoice, pay to Buyer the full invoiced amount.
(iii) All Products returned to Buyer through [CONFIDENTIAL TREATMENT
REQUESTED], bearing Seller's NDC numbers and evidenced as sold by Seller
shall be the financial responsibility of Seller, subject to the Maximum
Returns Credit Amount set forth in this Section.
(iv) Effective as of [CONFIDENTIAL TREATMENT REQUESTED], Buyer shall
be solely and exclusively responsible for processing any and all returned
Products (including all returned Products bearing Seller's NDC's) and for
the issuance of any and all credits or other reimbursement therefor. Any
and all returned Products received by Seller after [CONFIDENTIAL TREATMENT
REQUESTED] will be destroyed by Seller, and Seller will, after such
destruction, forward to Buyer any necessary accompanying documentation to
determine the appropriate credit. Except as otherwise provided herein,
Buyer and Seller will not bill one another for costs incurred strictly for
the processing of claims for returned Products. Seller and Buyer will use
reasonable efforts in requesting that customers direct all Product returns
after [CONFIDENTIAL TREATMENT REQUESTED] to Buyer.
(v) Buyer and Seller shall be responsible for handling the destruction
of any Product returned to their respective returns handling facility. If
Buyer or Seller destroys Product for which the other was financially
responsible as set forth in this Section, that party shall bill the other
party for the cost of the destruction. Each such invoice shall set forth
the number of units processed, together with such other information as
shall be 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.
(b) Government Rebates. Except as limited in Section 8.10(e) below, Seller
------------------
shall be responsible for all rebates pursuant to any government rebate programs
with respect to government claims for the Products indicating Seller's NDC
numbers and dispensed prior to [CONFIDENTIAL TREATMENT REQUESTED]. Buyer shall
reimburse Seller for all rebates that Seller is obligated to pay
25
CONFIDENTIAL TREATMENT
with respect to government claims for the Product dispensed after [CONFIDENTIAL
TREATMENT REQUESTED] (it being understood and agreed that the dispense date
contained in any report from a state rebate program shall be used for purposes
of determining the date of such claim). All payments due Seller under this
Section shall be made within thirty (30) days of submission to Buyer of invoices
that describe the requested payments in reasonable detail.
(c) Commercial Rebates. Except as limited in Section 8.10(e) below, Seller
------------------
shall be responsible for all commercial rebates with respect to the Product
dispensed prior to [CONFIDENTIAL TREATMENT REQUESTED]. Notwithstanding the
foregoing, Buyer and Seller agree that (a) Seller's financial liability for the
commercial rebates during the period from Closing through [CONFIDENTIAL
TREATMENT REQUESTED] shall be limited to those commercial customers with which
Seller has a rebate obligation as of the Closing and (b) any such payments by
Seller shall be made on the terms and conditions comparable to Seller's rebate
obligations as of the Closing with respect to each commercial customer and shall
be based on Seller's terms of agreement with the respective contract. Any
rebates for Product dispensed subsequent to [CONFIDENTIAL TREATMENT REQUESTED]
will be the liability of Buyer. To the extent that Seller processes such claims,
Buyer shall reimburse Seller within thirty (30) days of receipt of invoices that
describe the requested payments in reasonable detail.
(d) Chargeback Claims. Except as limited in Section 8.10(e) below, Seller
-----------------
shall be financially responsible for all chargeback claims for the Products with
a chargeback invoice dated (i.e. date of sale from the wholesaler to the
wholesaler customer, subsequently referred to as the "Activity Date") prior to
-------------
[CONFIDENTIAL TREATMENT REQUESTED] (the "Transition Chargebacks"). Buyer shall
----------------------
process and be financially liable for all chargeback claims with an Activity
Date subsequent to [CONFIDENTIAL TREATMENT REQUESTED]. Notwithstanding the
foregoing, the parties acknowledge that the VA National Acquisition Center must
approve the removal of the Products from Seller's Federal Supply Schedule
("FSS") before the responsibility of processing such rebates is transferred from
---
Seller to Buyer. Accordingly, in the event such approval is not obtained prior
to [CONFIDENTIAL TREATMENT REQUESTED], Seller shall continue to be responsible
for processing the FSS chargebacks on Buyer's behalf, and Buyer shall reimburse
Seller for same. Buyer and Seller agree that (a) Seller's financial liability
for the Transition Chargebacks shall be limited to those commercial customers
with which Seller has chargeback obligations as of the Closing, and (b) any such
chargebacks issued by Seller shall be made on terms and conditions comparable to
Seller's obligations as of the Closing with respect to each customer and shall
be based on Seller's terms of respective agreements as of the Closing.
(e) Maximum Rebate and Chargeback Amount. Notwithstanding the requirements
------------------------------------
of Sections 8.10(b), (c) and (d), Buyer and Seller agree that Seller's financial
liability for government rebates, commercial rebates and chargeback claims shall
under no circumstances exceed [CONFIDENTIAL TREATMENT REQUESTED] in the
aggregate. Seller shall provide Buyer monthly reports in reasonable detail
setting forth the amount of rebates and chargeback claims for which it was
financially responsible for the current month and on a cumulative basis. Seller
shall cause its representatives and employees to be available to Buyer, during
normal business hours and upon reasonable prior written notice to Seller, to
discuss any questions or comments of Buyer concerning such report.
26
CONFIDENTIAL TREATMENT
Section 8.11 Adverse Experience Reports.
At a mutually agreed upon time after the Closing, Seller shall provide
Buyer with information relating to the investigation and reporting of adverse
experiences regarding the Product since the Product launch and all information
which is materially relevant to the safe use of the Product in Seller's
possession as of the Closing. After the Closing, Seller shall promptly submit to
Buyer all adverse drug experience information or customer complaints brought to
the attention of Seller in respect of the Product, as well as any material
events and matters concerning or affecting the safety or efficacy of the
Product. After the Closing, Buyer shall have all responsibility for required
reporting of adverse experiences for the Product.
Section 8.12 Multi-Product Contracts.
Section 8.12 of the Seller Disclosure Schedule sets forth a complete and
correct list of each Contract to which Seller or any of its Affiliates is a
party and pursuant to which Seller or its Affiliates sells Product, together
with other pharmaceutical products of Seller and its Affiliates, to a third
party (the "Multi-Product Contracts"). Seller has made available to Buyer copies
-----------------------
of all Multi-Product Contracts; provided that such copies have been redacted to
prevent disclosure of information not related to the Product. From and after the
transfer by Seller to Buyer of each Regulatory Approval pursuant to the terms
hereof, Buyer shall honor and perform all obligations and Liabilities of Seller
and its Affiliates under and pursuant to each Multi-Product Contract with
respect to supplying Product to the applicable third party pursuant to such
Regulatory Approval. Seller agrees that after the transfer of such Regulatory
Approval it will not take any action with respect to any Multi-Product Contract
that would extend the term of such Multi-Product Contract with respect to any
Product, create or agree to any additional obligations with respect to the
Product, or otherwise adversely affect Buyer or the Business (other than to
terminate any such Multi-Product Contract), without the prior written consent of
Buyer. Seller further agrees that, at the direction of Buyer (to be given
promptly following the Closing), Seller shall either terminate or assign to
Buyer the rights and obligations with respect to the Product under each such
Multi-Product Contract, to the extent permitted by the terms thereof, as soon as
practicable after obtaining Buyer's direction.
Section 8.13 Manner of Business.
From and after the Closing Date, Buyer shall not, by any action or omission
cause sales of the Product to occur later than they would otherwise have
occurred during the ordinary course of business or cause returns of the Product
to occur earlier than they would otherwise have occurred.
Section 8.14 Assumption of Ongoing Clinical Trials.
From and after the Closing Date, Buyer shall assume control of, and
responsibility for all costs, obligations and Liabilities arising after the
Closing from or related to, the ongoing clinical trials involving the Products
identified on Section 8.14 of the Seller Disclosure Schedule; provided, however,
that Seller shall reimburse Buyer for all such costs, obligations and
Liabilities in connection with Study AN094-502 (DART).
27
CONFIDENTIAL TREATMENT
Section 8.15 Compliance Audits.
From time to time as either Party may elect during the period commencing
with the Closing Date and ending on December 31, 2004, during normal business
hours and upon reasonable prior written notice to the other Party, each Party
shall permit duly authorized representatives of the other Party to review and
inspect the premises, facilities, inventory, records and documentation
maintained by the other Party for the purpose of determining compliance with the
obligations under this Agreement.
Section 8.16 Labeling Requirements.
Following the Closing, Buyer shall at its own expense and as expeditiously
as possible use all reasonable efforts to obtain such FDA approvals necessary
for Buyer Labeling for the Product to be manufactured after the Closing.
Section 8.17 Further Assurances.
(a) On and after the Closing, Seller shall from time to time, at the
request of Buyer, (i) execute and deliver, or cause to be executed and
delivered, such other instruments of conveyance and transfer and take such other
actions as Buyer may reasonably request, in order to more effectively consummate
the transactions contemplated hereby and to vest in Buyer good and marketable
title to the Purchased Assets (including assistance in the collection or
reduction to possession of any of the Purchased Assets) and (ii) use its
commercially reasonable efforts to obtain all consents and waivers and to
resolve all material impracticalities of assignment or transfer necessary to
convey the Purchased Assets to Buyer.
(b) On and after the Closing, Buyer shall from time to time, at the request
of Seller, take such actions as Seller may reasonably request, in order to more
effectively consummate the transactions contemplated hereby, including Buyer's
assumption of the Assumed Liabilities.
ARTICLE IX. CONDITIONS TO THE OBLIGATIONS OF SELLER
---------------------------------------------------
The obligation of Seller to effect the transactions contemplated hereby is
subject to the satisfaction (or waiver by Seller), at or before the Closing, of
each of the following conditions:
Section 9.01 Representations, Warranties and Covenants.
All representations and warranties of Buyer contained in this Agreement
shall be true and correct in all material respects on and as of the Closing
Date, as though given on such date, excluding for such purpose any
representations and warranties that are by their terms given only as of a
specific date, and Buyer shall have performed all agreements and covenants
required by this Agreement to be performed by it prior to or on the Closing
Date, and Seller shall have received a certificate to such effect dated the
Closing Date and executed by a duly authorized officer of Buyer.
28
CONFIDENTIAL TREATMENT
Section 9.02 No Actions or Proceedings.
No Actions or Proceedings that question the validity or legality of the
transactions contemplated hereby shall have been instituted or threatened and
not settled or otherwise terminated.
Section 9.03 Consents.
All Seller Governmental Consents, Seller Third Party Consents, Buyer
Governmental Consents and Buyer Third Party Consents shall have been obtained or
made, as the case may be.
Section 9.04 Other Closing Deliveries.
Buyer shall have delivered to Seller such other certificates and documents
customary in transactions similar to those contemplated hereby that are
reasonably requested by Seller.
Section 9.05 Product Acquisition Financing Agreement.
Buyer shall have executed and delivered to Seller the Product Acquisition
Financing Agreement.
Section 9.06 Completion of Equity Financing.
Buyer shall have completed the sale of shares of its Series A-1 Preferred
Stock with an aggregate purchase price of no less than Sixty-Seven Million Five
Hundred Thousand Dollars ($67,500,000), including the sale to Seller or its
Affiliate of shares of its Series A-1 Preferred Stock with an aggregate purchase
price of no less than Fifteen Million Dollars ($15,000,000), on terms and
conditions satisfactory to Seller.
ARTICLE X. CONDITIONS TO THE OBLIGATIONS OF BUYER
-------------------------------------------------
The obligation of Buyer to effect the transactions contemplated hereby is
subject to the satisfaction (or waiver by Buyer), at or before the Closing, of
each of the following conditions:
Section 10.01 Representations, Warranties and Covenants.
All representations and warranties of Seller contained in this Agreement
shall be true and correct in all material respects on and as of the Closing
Date, as though given on and as of such date, excluding for such purpose any
representations and warranties that are by their terms given only as of a
specific date, and Seller shall have performed all agreements and covenants
required by this Agreement to be performed by it prior to or on the Closing
Date, and Buyer shall have received a certificate to such effect dated the
Closing Date and executed by a duly authorized officer of Seller.
29
CONFIDENTIAL TREATMENT
Section 10.02 No Actions or Proceedings.
No Actions or Proceedings that question the validity or legality of the
transactions contemplated hereby shall have been instituted or threatened and
not settled or otherwise terminated.
Section 10.03 Consents.
All Seller Governmental Consents, Seller Third Party Consents, Buyer
Governmental Consents and Buyer Third Party Consents shall have been obtained or
made, as the case may be.
Section 10.04 Other Closing Deliveries.
Seller shall have delivered to Buyer such other certificates and documents
customary in transactions similar to those contemplated hereby that are
reasonably requested by Buyer.
Section 10.05 Product Acquisition Financing Agreement.
Seller shall have executed and delivered to Buyer the Product Acquisition
Financing Agreement, and Seller shall have made all loans requested by Buyer, in
accordance with and subject to the terms thereof, to be made at the time of
Closing.
ARTICLE XI. INDEMNIFICATION
---------------------------
Section 11.01 Survival of Representations, Warranties, Etc.
The representations, warranties and covenants of Seller and Buyer contained
in this Agreement shall survive the Closing and remain in full force and effect
indefinitely; provided, however, that the representations and warranties of
Seller and Buyer set forth in Article VI and Article VII hereof shall survive
the Closing and remain in full force and effect until the Expiration Date. All
representations and warranties contained in Article VI and Article VII of this
Agreement and all claims with respect thereto shall terminate on the Expiration
Date; provided that if notice of any claim for indemnification pursuant to
Section 11.02(a) or 11.02(b) shall have been given prior to the Expiration Date
and such notice describes with specificity the circumstances with respect to
which such indemnification claim relates, such indemnification claim shall
survive until such time as such claim is finally resolved.
Section 11.02 Indemnification.
(a) By Seller. Subject to Sections 11.03 and 11.04, from and after the
---------
Closing, Seller shall indemnify, reimburse, defend and hold harmless Buyer, its
Affiliates, and their respective officers, directors, employees, agents,
successors and assigns (collectively, the "Buyer Indemnified Parties") from and
-------------------------
against any and all costs, losses, Liabilities, damages, lawsuits, deficiencies,
claims and expenses (including interest, penalties and reasonable fees and
disbursements of attorneys paid in connection with the investigation, defense or
settlement of any of the foregoing) (collectively, the "Damages"), to the extent
-------
incurred in connection with, arising out of, resulting from or incident to (i)
any inaccuracy or breach of any covenant, representation, warranty or other
agreement of Seller herein, (ii) Seller's conduct of the Business
30
CONFIDENTIAL TREATMENT
prior to the Closing, including the development, manufacturing, marketing, sale
or distribution of the Product prior to the Closing; (iii) the failure of Seller
to pay, perform or discharge any Excluded Liabilities; or (iv) the failure of
Seller or the transactions contemplated herein to comply with the Bulk Sales
laws.
(b) By Buyer. Subject to Sections 11.03 and 11.04, from and after the
--------
Closing, Buyer shall indemnify, defend and hold harmless Seller, its Affiliates
and their respective officers, directors, employees, agents, successors and
assigns from and against any and all Damages incurred in connection with,
arising out of, resulting from or incident to (i) any inaccuracy or breach of
any covenant, representation, warranty or other agreement of Buyer herein, (ii)
Buyer's conduct of the Business from and after the Closing, including the
development, manufacturing, marketing, sale or distribution of the Product from
and after the Closing; and (iii) the failure of Buyer to pay, perform or
discharge any Assumed Liabilities.
(c) Procedures. The indemnified Party (the "Indemnified Party") shall give
---------- -----------------
the indemnifying Party (the "Indemnifying Party") prompt written notice (an
------------------
"Indemnification Claim Notice") of any Damages or discovery of fact upon which
----------------------------
such Indemnified Party intends to base a request for indemnification under
Section 11.02(a) or Section 11.02(b), but in no event shall the Indemnifying
Party be liable for any Damages that result from any delay in providing such
notice. Each Indemnification Claim Notice must contain a reasonable description
of the claim and the nature and amount of such Damages (to the extent that the
nature and amount of such Damages are known at such time). The Indemnified Party
shall furnish promptly to the Indemnifying Party copies of all papers and
official documents received in respect of any Damages. All indemnification
claims in respect of a Party, its Affiliates or their respective directors,
officers, employees and agents (collectively, the "Indemnitees" and each an
-----------
"Indemnitee") shall be made solely by such Party to this Agreement.
(d) Third Party Claims. The obligations of an Indemnifying Party under this
------------------
Section 11.02 with respect to Damages arising from claims of any third party
that are subject to indemnification as provided for in Section 11.02(a) or
Section 11.02(b) (a "Third Party Claim") shall be governed by and be contingent
-----------------
upon the following additional terms and conditions:
(i) At its option, the Indemnifying Party may assume the defense of
any Third Party Claim by giving written notice to the Indemnified Party
within thirty (30) days after the Indemnifying Party's receipt of an
Indemnification Claim Notice. The assumption of the defense of a Third
Party Claim by the Indemnifying Party shall not be construed as an
acknowledgment that the Indemnifying Party is liable to indemnify any
Indemnitee in respect of the Third Party Claim, nor shall it constitute a
waiver by the Indemnifying Party of any defenses it may assert against any
Indemnitee's claim for indemnification. Upon assuming the defense of a
Third Party Claim, the Indemnifying Party may appoint as lead counsel in
the defense of the Third Party Claim any legal counsel selected by the
Indemnifying Party that is reasonably acceptable to the Indemnified Party.
In the event the Indemnifying Party assumes the defense of a Third Party
Claim, the Indemnified Party shall promptly deliver to the Indemnifying
Party all original notices and documents (including court papers) received
by any Indemnitee in connection with the Third Party Claim. Should the
Indemnifying Party assume the defense of a Third Party Claim, except as
provided in subsection (ii) below, the Indemnifying Party shall not be
liable to the
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CONFIDENTIAL TREATMENT
Indemnified Party or any other Indemnitee for any legal expenses
subsequently incurred by such Indemnified Party or other Indemnitee in
connection with the analysis, defense or settlement of the Third Party
Claim. In the event that it is ultimately determined that the Indemnifying
Party is not obligated to indemnify, defend or hold harmless an Indemnitee
from and against the Third Party Claim, the Indemnified Party shall
reimburse the Indemnifying Party for any and all costs and expenses
(including attorneys' fees and costs of suit) and any Damages incurred by
the Indemnifying Party in its defense of the Third Party Claim with respect
to such Indemnitee.
(ii) Without limiting Section 11.02(d)(i), any Indemnitee shall be
entitled to participate in, but not control, the defense of such Third
Party Claim and to employ counsel of its choice for such purpose; provided,
however, that such employment shall be at the Indemnitee's own expense
unless (A) the employment thereof has been specifically authorized by the
Indemnifying Party in writing, (B) the Indemnifying Party has failed to
assume the defense and employ counsel in accordance with Section
11.02(d)(i) (in which case the Indemnified Party shall control the defense)
or (C) if the Indemnified Party and the Indemnifying Party are both named
parties to the proceeding and the Indemnified Party has reasonably
concluded that there may be one or more legal defenses that are different
from or in addition to those available to the Indemnifying Party (in which
case the Indemnifying Party shall not have the right to assume the defense
of such action on behalf of the Indemnified Party and the Indemnifying
Party shall be liable for all legal expenses incurred by the Indemnified
Party in furtherance thereof).
(iii) With respect to any Damages relating solely to the payment of
money damages in connection with a Third Party Claim and that will not
result in the Indemnitee's becoming subject to injunctive or other relief
or otherwise adversely affect the business of the Indemnitee in any manner,
and as to which the Indemnifying Party shall have acknowledged in writing
the obligation to indemnify the Indemnitee hereunder, the Indemnifying
Party shall have the sole right to consent to the entry of any judgment,
enter into any settlement or otherwise dispose of such Damages, on such
terms as the Indemnifying Party, in its sole discretion, shall deem
appropriate. With respect to all other Damages in connection with Third
Party Claims, where the Indemnifying Party has assumed the defense of the
Third Party Claim in accordance with Section 11.02(d)(i), the Indemnifying
Party shall have authority to consent to the entry of any judgment, enter
into any settlement or otherwise dispose of such Damages; provided that it
obtains the prior written consent of the Indemnified Party (which consent
shall not be unreasonably withheld or delayed). The Indemnifying Party
shall not be liable for any settlement or other disposition of Damages by
an Indemnitee that is reached without the written consent of the
Indemnifying Party (which consent shall not be unreasonably withheld or
delayed). Regardless of whether the Indemnifying Party chooses to defend or
prosecute any Third Party Claim, no Indemnitee shall admit any liability
with respect to, or settle, compromise or discharge, any Third Party Claim
without the prior written consent of the Indemnifying Party.
(iv) Regardless of whether the Indemnifying Party chooses to defend or
prosecute any Third Party Claim, the Indemnified Party shall, and shall
cause each other Indemnitee to, cooperate in the defense or prosecution
thereof and shall furnish such
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CONFIDENTIAL TREATMENT
records, information and testimony, provide such witnesses and attend such
conferences, discovery proceedings, hearings, trials and appeals as may be
reasonably requested in connection therewith. Such cooperation shall
include access during normal business hours afforded to the Indemnifying
Party to, and reasonable retention by the Indemnified Party of, records and
information that are reasonably relevant to such Third Party Claim, and
making Indemnitees and other employees and agents available on a mutually
convenient basis to provide additional information and explanation of any
material provided hereunder, and the Indemnifying Party shall reimburse the
Indemnified Party for all its reasonable out-of-pocket expenses in
connection therewith.
(e) Expenses. Except as provided above, the costs and expenses, including
--------
fees and disbursements of counsel, incurred by the Indemnified Party in
connection with any claim shall be reimbursed on a quarterly basis by the
Indemnifying Party, without prejudice to the Indemnifying Party's right to
contest the Indemnified Party's right to indemnification and subject to refund
in the event the Indemnifying Party is ultimately held not to be obligated to
indemnity the Indemnified Party.
Section 11.03 Limitations.
(a) In no event shall Seller be liable for any Damages pursuant to Section
11.02(a) unless and until the aggregate amount of all such Damages exceeds
[CONFIDENTIAL TREATMENT REQUESTED], in which case Seller shall be liable for
all such Damages in excess of [CONFIDENTIAL TREATMENT REQUESTED];
provided that Damages shall not be subject to the limitations set forth in this
Section 11.03(a) to the extent that such Damages are payable in connection with
(i) Seller's breach of Section 8.01; (ii) Seller's failure to pay Buyer amounts
due under Sections 4.02, 8.09, 8.10 and 8.14; and (iii) Seller's failure to pay
or otherwise satisfy any Excluded Liabilities.
(b) In no event shall the aggregate liability of Seller for any Damages
pursuant to Section 11.02(a) (other than Damages due to Seller's failure to pay
or otherwise satisfy any Excluded Liabilities) exceed the aggregate amount of
cash consideration received from Buyer pursuant to Section 4.01(a) hereof.
(c) The amount of any Damages under Sections 11.02(a) and 11.02(b) shall be
reduced by the amount of any insurance proceeds paid to the Indemnified Party
relating to such claim.
(d) Except with respect to claims based on fraud, after the Closing, the
right of the Buyer Indemnified Parties to indemnification under this Article XI
shall be the exclusive remedy of the Buyer Indemnified Parties with respect to
claims incurred in connection with, arising out of, resulting from or incident
to (i) any inaccuracy or breach of any covenant, representation, warranty or
other agreement of Seller herein, (ii) Seller's conduct of the Business prior to
the Closing, including Seller's development, manufacturing, marketing, sale or
distribution of the Product prior to the Closing; (iii) the failure of Seller to
pay, perform or discharge any Excluded Liabilities; or (iv) the failure of
Seller or the transactions contemplated herein to comply with the Bulk Sales
laws.
33
CONFIDENTIAL TREATMENT
Section 11.04 Limitation of Liability.
NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THIS AGREEMENT, NEITHER PARTY
NOR ANY OF THEIR RESPECTIVE AFFILIATES SHALL BE LIABLE TO THE OTHER PARTY BY
REASON OF ANY REPRESENTATION OR WARRANTY, CONDITION OR OTHER TERM OR ANY DUTY OF
COMMON LAW, OR UNDER THE EXPRESS TERMS OF THIS AGREEMENT, FOR ANY CONSEQUENTIAL,
SPECIAL OR INCIDENTAL OR PUNITIVE LOSS OR DAMAGE (WHETHER FOR LOSS OF CURRENT OR
FUTURE PROFITS, LOSS OF ENTERPRISE VALUE OR OTHERWISE) AND WHETHER OCCASIONED BY
THE NEGLIGENCE OF SUCH PARTY OR ITS AFFILIATES OR ANY OF THEIR RESPECTIVE
OFFICERS, DIRECTORS, EMPLOYEES, AGENTS OR REPRESENTATIVES.
ARTICLE XII. MISCELLANEOUS
--------------------------
Section 12.01 Confidentiality.
(a) In addition to the restrictions contained in Section 8.04, after the
Closing, no Party (a "Disclosing Party") shall, without the prior written
----------------
consent of the other Party (the "Non-disclosing Party"), disclose to any Person
--------------------
Confidential Information (as defined below) of the Non-disclosing Party, except
to a Disclosing Party's employees or representatives who need to know such
information for any reason contemplated by this Agreement (and then only to the
extent that such persons are under an obligation to maintain the confidentiality
of the Confidential Information), or use any Confidential Information of the
Non-disclosing Party for any reason other than contemplated by this Agreement
unless such Disclosing Party has used its best efforts to (i) consult with the
Non-disclosing Party and obtain the Non-disclosing Party's prior written consent
in a timely manner, and (ii) the Disclosing Party has been advised by counsel
that disclosure is required to be made under applicable Law or the requirements
of a national securities exchange or another similar regulatory body. In the
event that the Disclosing Party is requested or required by documents subpoena,
civil investigative demand, interrogatories, requests for information, or other
similar process to disclose any Confidential Information, the Disclosing Party
shall provide the Non-disclosing Party with prompt written notice of such
request or demands or other similar process so that the Non-disclosing Party may
seek an appropriate protective order or, if such request, demand or other
similar process is mandatory, waive the Disclosing Party's compliance with the
provisions of this Section 12.01(a) as appropriate.
(b) The term "Confidential Information" as used in this Section 12.01 means
(i) as to Buyer, all confidential information relating to Buyer's business, the
Purchased Assets and the Assumed Liabilities, and (ii) as to Seller, all
confidential information relating to the Business (other than the Purchased
Assets) and the business and operations of the Seller and its Affiliates,
including the Excluded Assets and the Excluded Liabilities or other obligations
other than the Assumed Liabilities, in each of (i) and (ii) whether disclosed
prior to or after the date hereof. The term "Confidential Information" does not
include information which becomes generally available to the public other than
as a result of disclosure by the Disclosing Party, or becomes available to the
Disclosing Party on a non-confidential basis from a source other than the Non-
34
CONFIDENTIAL TREATMENT
disclosing Party, provided that such source is not bound by a confidentiality
agreement with the Non-disclosing Party.
(c) This Section 12.01 supercedes and replaces in its entirety that certain
letter agreement relating to confidentiality dated March 28, 2001 between Seller
or its Affiliate and Buyer.
Section 12.02 Notices.
All notices, requests and other communications hereunder must be in writing
and will be deemed to have been duly given only if delivered personally against
written receipt or by facsimile transmission with answer back confirmation or
mailed (postage prepaid by certified or registered mail, return receipt
requested) or by nationally recognized overnight courier that maintains records
of delivery to the Parties at the following addresses or facsimile numbers:
If to Buyer to: Xcel Pharmaceuticals, Inc.
6363 Greenwich Drive, Suite 100
San Diego, CA 92122
Attention: Corporate Secretary
Facsimile: (858) 202-2799
With copies to: Pillsbury Winthrop LLP
101 W. Broadway, Suite 1800
San Diego, CA 92101
Attention: David R. Snyder, Esq.
Facsimile: (619) 236-1995
If to Seller to: Elan Pharmaceuticals, Inc.
800 Gateway Boulevard
South San Francisco, CA 94080
Attention: Vice President and Secretary
Facsimile: (650) 553-7165
and Elan Pharma International Limited
WIL House
Shannon Business Park
Shannon
Co Clare, Ireland
Attention: Company Secretary
Facsimile: +353 61 362 097
With copies to: Brobeck, Phleger & Harrison LLP
12390 El Camino Real
San Diego, CA 92130
Attention: Faye H. Russell, Esq.
Facsimile: (858) 720-2555
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CONFIDENTIAL TREATMENT
All such notices, requests and other communications will (i) if delivered
personally to the address as provided in this Section, be deemed given upon
receipt, (ii) if delivered by facsimile to the facsimile number as provided in
this Section, be deemed given upon receipt by the sender of the answer back
confirmation and (ii) if delivered by mail in the manner described above or by
overnight courier to the address as provided in this Section, be deemed given
upon receipt (in each case regardless of whether such notice, request or other
communication is received by any other Person to whom a copy of such notice,
request or other communication is to be delivered pursuant to this Section). Any
Party from time to time may change its address, facsimile number or other
information for the purpose of notices to that Party by giving notice specifying
such change to the other Parties hereto in accordance with the terms of this
Section.
Section 12.03 Entire Agreement.
This Agreement, together with the Product Acquisition Financing Agreement
(and all Exhibits and Schedules attached hereto and thereto and all other
documents delivered in connection herewith and therewith) supersedes all prior
discussions and agreements among the Parties with respect to the subject matter
hereof and thereof and contains the sole and entire agreement among the Parties
hereto and thereto with respect to the subject matter hereof and thereof.
Section 12.04 Waiver.
Any term or condition of this Agreement may be waived at any time by the
Party that is entitled to the benefit thereof, but no such waiver shall be
effective unless set forth in a written instrument duly executed by or on behalf
of the Party waiving such term or condition. No waiver by any Party hereto of
any term or condition of this Agreement, in any one or more instances, shall be
deemed to be or construed as a waiver of the same or any other term or condition
of this Agreement on any future occasion. All remedies, either under this
Agreement or by law or otherwise afforded, will be cumulative and not
alternative.
Section 12.05 Amendment.
This Agreement may be amended, supplemented or modified only by a written
instrument duly executed by each Party hereto.
Section 12.06 Third Party Beneficiaries.
The terms and provisions of this Agreement are intended solely for the
benefit of each Party hereto (including, in the case of Seller, Seller's
Affiliates) and their respective successors or permitted assigns and it is not
the intention of the Parties to confer third-party beneficiary rights upon any
other Person.
Section 12.07 Assignment; Binding Effect.
Neither this Agreement nor any right, interest or obligation hereunder may
be assigned by any Party hereto without the prior written consent of the other
Party hereto (which consent shall not be unreasonably withheld) and any attempt
to do so will be void. This Agreement is binding
36
CONFIDENTIAL TREATMENT
upon, inures to the benefit of and is enforceable by the Parties hereto and
their respective successors and permitted assigns.
Section 12.08 Headings.
The headings used in this Agreement have been inserted for convenience of
reference only and do not define or limit the provisions hereof
Section 12.09 Severability.
If any provision of this Agreement is held to be illegal, invalid or
unenforceable under any present or future law, and if the rights or obligations
of any Party hereto under this Agreement will not be materially and adversely
affected thereby, (a) such provision will be fully severable, (b) this Agreement
will be construed and enforced as if such illegal, invalid or unenforceable
provision had never compromised a part hereof, (c) the remaining provisions of
this Agreement will remain in full force and effect and will not be affected by
the illegal, invalid or unenforceable provision or by its severance herefrom,
and (d) in lieu of such illegal, invalid or unenforceable provision, there will
be added automatically as a part of this Agreement a legal, valid and
enforceable provision as similar to terms to such illegal, invalid or
unenforceable provision as may be possible and reasonably acceptable to the
Parties herein.
Section 12.10 Governing Law.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF CALIFORNIA APPLICABLE TO CONTRACTS EXECUTED AND PERFORMED
IN SUCH STATE, WITHOUT GIVING EFFECT TO CONFLICTS OF LAWS PRINCIPLES.
Section 12.11 Expenses.
Except as otherwise provided in this Agreement, each Party hereto shall pay
its own expenses and costs incidental to the preparation of this Agreement and
to the consummation of the transactions contemplated hereby.
Section 12.12 Counterparts.
This Agreement may be executed in any number of counterparts and by
facsimile, each of which will be deemed an original, but all of which together
will constitute one and the same instrument.
Section 12.13 Schedules, Exhibits and Other Agreements.
The Exhibits, Schedules, other agreements, certificates and notices
specifically referred to herein, and delivered pursuant hereto, are an integral
part of this Agreement. Any disclosure that is made in any of the Schedules or
certificates delivered pursuant to this Agreement shall be deemed responsive to
any other applicable disclosure obligation hereunder.
[Signature Page Follows]
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CONFIDENTIAL TREATMENT
IN WITNESS WHEREOF, this Agreement has been executed by the Parties hereto
all as of the date first above written.
ELAN PHARMACEUTICALS, INC.
By: /s/ Erle Mast
-------------
Title: V.P. Treasurer
--------------
ELAN PHARMA INTERNATIONAL LIMITED
By: /s/ Kevin Insley
----------------
Title: Authorised Signatory
--------------------
XCEL PHARMACEUTICALS, INC.
By: /s/ Michael Borer
-----------------
Title: President and CEO
-----------------
[Signature Page to Amended and Restated Diastat Asset Purchase Agreement]
CONFIDENTIAL TREATMENT
EXHIBITS AND SCHEDULES
----------------------
Exhibit Document
- ------- --------
Exhibit A Product
Exhibit B Product Acquisition Financing Agreement
Schedule
- --------
Seller Disclosure Schedule
Buyer Disclosure Schedule
Schedule A - Equipment
The exhibits and schedules have been omitted from this Agreement as filed with
the Securities and Exchange Commission (the "SEC"). The omitted information is
filed as a separately numbered exhibit to the Registration Statement or is
considered immaterial from an investor's perspective. The Registrant will
furnish supplementally a copy of any of the documents to the SEC upon request of
the SEC.