Exhibit 10.49
ASSET PURCHASE AGREEMENT
DATED AS OF JUNE 29, 2004
AMONG
COLUMBIA LABORATORIES, INC.
COLUMBIA LABORATORIES (BERMUDA) LTD.
AND
LIL' DRUG STORE PRODUCTS, INC.
TABLE OF CONTENTS
Page
ARTICLE 1 DEFINITIONS...................................................1
ARTICLE 2 PURCHASE AND SALE OF ASSETS; GRANT OF LICENSE OF PATENTS......4
2.1 Assets of Seller to Be Purchased..................................4
2.2 Liabilities Assumed...............................................6
2.3 Grant of License..................................................6
ARTICLE 3 PAYMENTS......................................................8
3.1 Purchase Price....................................................8
3.2 Inventory.........................................................8
3.3 Payment of Purchase Price; Assumption of Liabilities..............8
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF SELLER......................8
4.1 Representations and Warranties....................................9
4.1.1 Organization..............................................9
4.1.2 Corporate Approval; Binding Contract......................9
4.1.3 No Conflicts..............................................9
4.1.4 Title to Purchased Assets.................................9
4.1.5 Contracts.................................................9
4.1.6 Intellectual Property Rights.............................10
4.1.7 Litigation...............................................10
4.1.8 Customers and Suppliers..................................10
4.1.9 Products.................................................10
4.1.10 Compliance with Law.....................................10
4.1.11 Consents and Approvals of Governmental Bodies...........10
4.1.12 Other Consents..........................................10
4.1.13 Broker..................................................11
4.1.14 Inventory...............................................11
4.1.15 Sales and Financial Information.........................11
ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF BUYER......................11
5.1 Representations and Warranties...................................11
5.1.1 Organization.............................................11
5.1.2 Corporate Approval; Binding Contract.....................11
5.1.3 No Conflicts.............................................12
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5.1.4 Broker...................................................12
5.1.5 Available Funds..........................................12
ARTICLE 6 CLOSING DATE; CONDITIONS PRECEDENT; UNWINDING; SALE OF
BUSINESS AND PURCHASED ASSETS................................12
6.1 Closing Date and Place...........................................12
6.2 Conditions Precedent to the Obligation of Buyer to Close.........12
6.2.1 No Injunctive Proceedings................................12
6.2.2 Representations and Warranties...........................12
6.2.3 Performance of Agreements................................13
6.2.4 Litigation...............................................13
6.2.5 Deliveries...............................................13
6.2.6 Compliance Evidence......................................13
6.2.7 Consents, Approvals, Assignments.........................13
6.3 Conditions Precedent to the Obligation of Seller to Close........13
6.3.1 No Injunctive Proceedings................................13
6.3.2 Representations and Warranties...........................13
6.3.3 Performance of Agreements................................13
6.3.4 Payments.................................................13
6.3.5 Litigation...............................................13
6.3.6 Deliveries...............................................14
6.3.7 Compliance Evidence......................................14
6.3.8 Consents, Approvals, Assignments.........................14
6.4 Unwinding........................................................14
6.4.1 Unwinding Trigger Events.................................14
6.4.2 Effect of Unwinding......................................14
6.5 Sale of Business and Purchased Assets............................14
ARTICLE 7 CLOSING DELIVERIES...........................................15
7.1 Deliveries by Seller.............................................15
7.1.1 Corporate Resolutions....................................15
7.1.2 Instrument of Conveyance.................................15
7.1.3 Assignment of Contracts..................................15
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7.1.4 Assignment of Trademark Registrations....................15
7.1.5 Supply Agreement.........................................15
7.1.6 Professional Promotion Agreement.........................15
7.1.7 Transition Services Agreement............................15
7.2 Deliveries by Buyer..............................................15
7.2.1 Corporate Resolutions....................................15
7.2.2 Purchase Price...........................................15
7.2.3 Prepaid Promotional Expenses.............................15
7.2.4 Inventory................................................16
7.2.5 Instrument of Assumption.................................16
7.2.6 Assignment of Contracts..................................16
7.2.7 Assignment of Trademark Registrations....................16
7.2.8 Supply Agreement.........................................16
7.2.9 Professional Promotional Agreement.......................16
7.2.10 Transition Services Agreement...........................16
ARTICLE 8 SURVIVAL OF REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION 16
8.1 Survival.........................................................16
8.2 Indemnification by Seller........................................16
8.3 Indemnification by Buyer.........................................17
8.4 Limitations on Indemnification Obligations.......................17
8.5 Procedure for Indemnification....................................17
8.5.1 Direct Claims............................................17
8.5.2 Third Party Claims.......................................18
8.6 Limitation on Remedies...........................................19
ARTICLE 9 COVENANTS....................................................19
9.1 Reasonable Commercial Efforts and Required Consents..............19
9.2 Books, Records and Information...................................19
9.3 Confidential Information.........................................19
9.4 Publicity........................................................20
9.5 Use of Name......................................................20
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9.6 Accounts Receivable..............................................20
9.7 Bulk Transfer Laws...............................................20
9.8 Non-Solicitation.................................................20
9.9 Product Returns..................................................21
ARTICLE 10 TAX MATTERS..................................................21
10.1 Sales Use and Transfer Taxes....................................21
10.2 Proration of Property Taxes.....................................21
10.3 Purchase Price Allocation.......................................21
10.4 Cooperation and Exchange of Information.........................21
ARTICLE 11 MISCELLANEOUS................................................22
11.1 Expenses........................................................22
11.2 Notices.........................................................22
11.3 Integration.....................................................23
11.4 Captions........................................................23
11.5 Assignment; Amendment; Waiver...................................23
11.6 Applicable Law..................................................24
11.7 Further Assurances..............................................24
11.8 No Third-Party Rights...........................................24
11.9 Incorporation of Exhibits and Schedules.........................24
11.10 Submission to Jurisdiction.....................................24
11.11 Counterparts...................................................24
11.12 Specific Performance...........................................25
11.13 Severability...................................................25
11.14 Schedules......................................................25
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EXECUTION DOCUMENT
Schedules
A Products
2.1(a)(iv) Contracts
2.1(a)(vi) Prepaid Promotional Expenses
2.2 Retained Liabilities
2.3 Product Patents and Product Claims
3.2 Inventory
4.1.3 No Conflicts
4.1.4 Permitted Encumbrances
4.1.5 Contracts
4.1.6 Business Trademarks
4.1.10 Compliance with Law
4.1.12 Other Consents
4.1.15 Sales and Financial Information
6.2.7 Consents, Approvals and Assignments Required as Conditions to
Closing
9.9 Seller's Return Policy
Exhibits
3.3(b) Instrument of Assumption
7.1.2 Instrument of Conveyance
7.1.3 Assignment of Contracts
7.1.4 Assignment of Trademark Registrations
7.1.5 Supply Agreement
7.1.6 Professional Promotion Agreement
7.1.7 Transition Services Agreement
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ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT, dated as of June 29, 2004 (this
"AGREEMENT"), by and among Columbia Laboratories, Inc., a corporation existing
and organized under the laws of the State of Delaware, having its principal
office at 354 Eisenhower Parkway, Plaza 1, Second Floor, Livingston, New Jersey
07039 (hereinafter "COLUMBIA US"), COLUMBIA LABORATORIES (BERMUDA) LTD., a
corporation existing and organized under the laws of Bermuda, having its
registered office at Canon's Court, 22 Victoria Street, Hamilton HM 12, Bermuda
(hereinafter "COLUMBIA BERMUDA"; together with Columbia US, collectively,
"SELLER"), and Lil' Drug Store Products, Inc., a corporation existing and
organized under the laws of the State of Iowa, having a place of business at
1201 Continental Place North East, Cedar Rapids, Iowa 52402 (hereinafter
"BUYER").
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, Seller is currently engaged in, among other things, the business
of marketing, distributing and selling the over-the-counter consumer health
products (the "PRODUCTS") listed on Schedule A hereto (the "BUSINESS").
WHEREAS, Seller desires to sell to Buyer, and Buyer desires to purchase
from Seller, certain of the assets necessary to the Business, subject to the
Assumed Liabilities (as defined below), all upon the terms and subject to the
conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and the mutual promises
made herein, and in consideration of the representations and warranties herein
contained, the parties hereto agree as follows:
ARTICLE 1 DEFINITIONS
As used in this Agreement, the following terms have the meanings specified
or referred to in this Article I:
"AFFILIATE" means, with respect to any Person, any Person which, directly
or indirectly, controls or is controlled by such Person or is under common
control with such Person. For the purposes of this definition, "control"
(including, with correlative meaning, the terms "controlled by" and "under
common control with"), as used with respect to any Person, shall mean the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person whether through the
ownership of voting securities, by contract or otherwise.
"AGENTS" has the meaning set forth in Section 8.2.
"AGREEMENT" means this Asset Purchase Agreement.
"ASSIGNMENT OF CONTRACTS" has the meaning set forth in Section 7.1.3.
"ASSIGNMENT OF TRADEMARK REGISTRATIONS" has the meaning set forth in
Section 7.1.4.
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"ASSUMED LIABILITIES" has the meaning set forth in Section 2.2.
"BUSINESS" has the meaning set forth in the Recitals to this Agreement.
"BUSINESS DAY" means any day that is not a Saturday or Sunday or a day on
which banks located in New York City are authorized or required to be closed.
"BUSINESS TRADEMARKS" has the meaning set forth in Section 4.1.6.
"BUYER PRODUCT RETURN LIABILITY" has the meaning set forth in Section 9.9.
"CASH" means all cash on hand and on deposit in banks, cash equivalents
and investments, and all accounts, notes and royalties receivable, and other
rights accruing before the Closing Date to receive cash including contingent
rights such as tax refunds.
"CLOSING" has the meaning set forth in Section 6.1.
"CLOSING DATE" has the meaning set forth in Section 6.1.
"CLOSING INVENTORY BALANCE" has the meaning set forth in Section 3.2.
"CODE" means the United States Internal Revenue Code of 1986, as amended.
"CONTEMPLATED TRANSACTIONS" means the sale, transfer, assignment and
conveyance of the Purchased Assets by Seller to Buyer, the purchase of the
Purchased Assets by Buyer from Seller, the assumption of the Assumed Liabilities
by Buyer and the other transactions contemplated hereby.
"CONTRACTS" means contracts, agreements, leases, licenses, arrangements,
quotations and understandings.
"DAMAGES" has the meaning set forth in Section 8.2.
"DEFERRED REVENUE" means the aggregate amount, as of the Closing Date,
billed or received by Seller for the sale of the Products, the delivery of which
will occur on or after the Closing Date.
"ENCUMBRANCES" has the meaning set forth in Section 4.1.4.
"EXCLUDED ASSETS" has the meaning set forth in Section 2.1(b).
"EXCLUDED INTELLECTUAL PROPERTY" shall mean (i) Seller Trademarks, (ii)
the Patents associated with each of the Products, and (iii) any intellectual
property, including but not limited to all other Patents owned by Seller, that
does not relate specifically and solely to the manufacturing, marketing, sale or
distribution of one or more of the Products. For clarity, all of Seller's
Patents are Excluded Intellectual Property.
"GAAP" means United States generally accepted accounting principles as in
effect on the date hereof.
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"GOVERNMENTAL BODY" means any national, regional, state or municipal
government, any subdivision, agency, commission, authority or instrumentality
hereof, or any quasi-governmental or other private body exercising any
regulatory or taxing authority thereunder.
"GOVERNMENTAL PERMIT" means permits, authorizations, registrations,
approvals, franchises or licenses of or by any Governmental Body.
"IN-PROCESS INVENTORY" has the meaning set forth in Section 2.1(a)(i).
"INDEMNITEE" has the meaning set forth in Section 8.5.2(a).
"INDEMNITOR" has the meaning set forth in Section 8.5.2(a).
"INSTRUMENT OF ASSUMPTION" has the meaning set forth in Section 3.3(b).
"INTELLECTUAL PROPERTY" has the meaning set forth in Section 4.1.6.
"INVENTORY" has the meaning set forth in Section 2.1(a)(i).
"KNOWLEDGE OF SELLER" or words of similar import, means actual knowledge,
on the date hereof.
"MATERIAL ADVERSE EFFECT" means an effect which is materially adverse to
the Purchased Assets valued at or in excess of [***], but shall not include (i)
any adverse effect due to changes in conditions generally affecting (A) the
healthcare industry or (B) the United States economy as a whole, (ii) any change
or adverse effect caused by, or relating to, the announcement of this Agreement
and the transactions contemplated by this Agreement or (iii) any adverse effect
due to legal or regulatory changes.
"PATENTS" means United States and other patents and patent applications,
reissues and reexaminations thereof, all inventions disclosed therein, all
rights provided by international treaties and conventions, and all rights to
obtain and file for patents and registrations thereto.
"PERMITTED ENCUMBRANCES" has the meaning set forth in Section 4.1.4.
"PERSON" means any individual, corporation, partnership, limited liability
company, joint venture, trust, association, joint stock company, unincorporated
organization, Governmental Body or other entity.
"PREPAID PROMOTIONAL EXPENSES" has the meaning set forth in Section
2.1(a)(vi).
"PRODUCT CLAIMS" has the meaning set forth in Section 2.3.
"PRODUCT PATENTS" has the meaning set forth in Section 2.3.
"PRODUCTS" has the meaning set forth in the Recitals to this Agreement.
"PROFESSIONAL PROMOTION AGREEMENT" has the meaning set forth in Section
7.1.6.
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"PURCHASED ASSETS" has the meaning set forth in Section 2.1(a).
"PURCHASE PRICE" has the meaning set forth in Section 3.1.
"RETAINED LIABILITIES" has the meaning set forth in Section 2.2.
"RETAINED NAMES" has the meaning set forth in Section 9.5.
"RETURN PERIOD" means the period ending [***] days after the Closing Date.
"SALES MATERIALS" has the meaning set forth in Section 9.5.
"SELLER" has the meaning set forth in the first paragraph of this
Agreement.
"SELLER ACCOUNTS" has the meaning set forth in Section 9.6.
"SELLER PRODUCT RETURN LIABILITY" has the meaning set forth in Section
9.9.
"SELLER TRADEMARKS" shall mean (i) the "Columbia Laboratories" name or any
variations thereof (ii) the name "Columbia" and all formatives and derivatives
thereof, all composite marks including such name or any such formatives or
derivatives, and any colorable imitation of any of the foregoing and (iii) all
trademarks, other than the Business Trademarks, currently used by Seller in
connection with the manufacture, marketing, sale and distribution of its
products.
"SUPPLY AGREEMENT" has the meaning set forth in Section 7.1.5.
"SURVIVAL EXPIRATION DATE" has the meaning set forth in Section 8.1.
"TRANSFER DOCUMENTS" has the meaning set forth in Section 4.1.2.
"TRANSITION SERVICES AGREEMENT" has the meaning set forth in Section
7.1.7.
Wherever from the context it appears appropriate, each term stated in
either the singular or plural shall include the singular and the plural, and
pronouns stated in the masculine, feminine or neuter gender shall include the
masculine, the feminine and the neuter. The words "include", "including" and
other words of similar import mean "include, without limitation" or "including,
without limitation," regardless of whether any reference to "without limitation"
or words of similar import is made.
ARTICLE 2 PURCHASE AND SALE OF ASSETS; Grant of License OF PATENTS
2.1 Assets of Seller to Be Purchased.
(a) At the Closing, subject to the terms and conditions of this
Agreement, Buyer shall purchase, assume and acquire from Seller, and Seller
shall sell, transfer, convey, assign and deliver to Buyer all of Seller's right,
title and interest in and to the assets, properties, powers and rights set forth
below, free and clear of all Encumbrances except the Assumed Liabilities and the
Permitted Encumbrances (collectively, the "PURCHASED ASSETS"):
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(i) all finished product inventory of the Business identified on
Schedule 3.2 (the "INVENTORY"), other than (A) finished products not saleable in
the ordinary course of Business, and (B) all packaging materials, finished
products, work-in-process and raw materials on Schedule 3.2 (the "IN-PROCESS
INVENTORY") that are made obsolete after the Closing as a consequence of some
action or inaction of Buyer;
(ii) customer lists and supplier lists, marketing reports and data,
advertising and promotional materials, product literature, sampling lists, art
work, and analyses relating exclusively to the Business; provided, however, that
Seller shall retain all rights of access and ownership of such information with
respect to sales of Seller's other products;
(iii) all Business Trademarks, and other names and marks owned or
used by Seller, relating exclusively to the Business identified on Schedule
4.1.6;
(iv) all rights of Seller under the Contracts identified on Schedule
2.1(a)(iv) relating to the Business, including (A) purchase orders either placed
by or on behalf of the Business or under which Seller is obligated in connection
with the Business, and (B) advertising and promotional commitments incurred by
Seller in connection with the Business, except the (1) Manufacturing Agreement,
dated as of September 25, 2000, by and between Columbia Laboratories (Bermuda)
Ltd. and Mipharm S.p.A. and (2) Investment and Royalty Agreement, dated as of
July 31, 2002, by and between Columbia Laboratories, Inc. and PharmaBio
Development Inc.;
(v) all goodwill associated with the Business; and
(vi) all prepaid expenses ("PREPAID PROMOTIONAL EXPENSES") relating
to advertising and promotional commitments identified on Schedule 2.1(a)(vi).
(b) Anything in this Agreement to the contrary notwithstanding, the
Purchased Assets shall exclude (collectively, the "EXCLUDED ASSETS"):
(i) any and all tax refunds, deposits or credits for any taxes
relating to the Purchased Assets attributable to any period ending on or prior
to the Closing Date;
(ii) any and all tax refunds, deposits or credits for any other
taxes of Seller;
(iii) all Excluded Intellectual Property, any plant, tangible
property, equipment and employees related to the development, manufacture and
commercialization of any Products;
(iv) any Deferred Revenue;
(v) any Cash;
(vi) all insurance policies relating to the Business, including
policies relating to property, liability, business interruption, health and
workers' compensation and officers and directors of Seller;
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(vii) the corporate charter, qualifications to conduct business as a
foreign corporation, arrangements with registered agents relating to foreign
qualifications, taxpayer and other identification numbers, seals, minutes books,
stock transfer books, blank stock certificates, and other documents relating to
the organization, maintenance, and existence of Seller as a corporation; and
(viii)......any of the rights of Seller under this Agreement (or
under any side agreement between Seller on the one hand and Buyer on the other
hand entered into on or after the date of this Agreement).
2.2 Liabilities Assumed. Buyer agrees to assume as of the Closing Date the
following obligations and liabilities relating to the Business and the Purchased
Assets (the "ASSUMED LIABILITIES"):
(a) those liabilities or obligations of Seller which accrue after
the Closing Date under the Contracts described in Section 2.1(a)(iv);
(b) all liabilities relating to the Business accruing after the
Closing;
(c) those liabilities or obligations for Inventory in transit at the
Closing and not included in the Closing Inventory Balance;
(d) liabilities and obligations relating to the return of Products
sold by Seller in connection with the Business to the extent that such returns
(i) are actually received by Buyer or Seller during the Return Period and
constitute Buyer Product Return Liabilities pursuant to Section 9.9 or (ii) are
actually received by Buyer or Seller at any time after the Return Period; and
(e) all costs and expenses (including all attorneys' fees, expenses
and disbursements) associated with the assignment of all Business Trademark
registrations set forth on Schedule 4.1.6 hereto to Buyer pursuant to Section
7.2.7 hereof.
Notwithstanding Section 2.2(a) and Section 2.2(b), Buyer shall not
assume any liabilities, obligations or commitments of Seller relating to or
arising out of the operation of the Business or the ownership of the Purchased
Assets prior to the Closing (as hereinafter defined) other than the Assumed
Liabilities (the "RETAINED LIABILITIES"), including those Retained Liabilities
set forth on Schedule 2.2 hereto.
2.3 Grant of License. Subject to the terms and conditions hereof and the
Supply Agreement (as hereinafter defined), Seller hereby grants to Buyer, so
long as no material default shall exist under and during the term of the Supply
Agreement, a royalty-free (except as provided in Article 5.4 of the Supply
Agreement), exclusive license and right, in and to the Product patents, for the
life of said patents, identified on Schedule 2.3 hereto (the "PRODUCT PATENTS").
This exclusive license grant is exclusive only as to (i) the Products basically
in their current form, and (ii) only with regard to their current approved and
labeled claims as of the effective date of this Agreement (respectively, the
"PRODUCT CLAIMS") identified on Schedule 2.3 hereto. This exclusive license
conveys only the right to manufacture, distribute, sell, offer for sale and
import the Products in the Territory (as defined in the Supply Agreement), for
use within the respective Product Claims. To avoid confusion, this license grant
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does not convey any rights under the Product Patents: (i) regarding any Product
modified in any manner that affects or is intended to affect that Product's use
or usefulness beyond its Product Claims; or (ii) regarding any use of a Product,
whether or not modified, other than for its respective Product Claims. Further,
Seller expressly and exclusively reserves for itself, including the right to
sublicense, all other rights under the Product Patents, including without
limitation (i) all rights regarding any other product the use and marketing for
which falls outside the Product Claims; (ii) all rights regarding any other
product that contains a treating agent (other than nonoxynol-9 used as a vaginal
contraceptive) and that also provides a secondary benefit covered by the Product
Claims, provided that such product is primarily marketed or labeled for a claim
associated with the treating agent and Seller reasonably believes that labeling
statements with respect to a Product Claim are required to comply with legal or
regulatory requirements; and (iii) all rights regarding any other product that
is not sold over-the-counter. Notwithstanding the expiration or termination of
the Supply Agreement (excepting termination of the Supply Agreement for a
material default of Buyer), the exclusive license of the Product Patents to
Buyer shall continue for the life of said Patents, unless sooner terminated by
mutual consent, or in accordance with the provisions of the Supply Agreement.
Notwithstanding anything contained herein to the contrary, Seller and Buyer
agree that the license granted to Buyer herein shall include any relevant
continuation patents of Product Patents filed by Seller but, for the avoidance
of doubt, Seller and Buyer expressly recognize that [***]. In addition, Columbia
agrees to reasonably cooperate with LDS if LDS seeks to file and/or register the
Product Patents in additional countries, subject to the existing rights of any
third parties and at LDS's sole cost. In connection with this license grant:
(a) Buyer acknowledges that all right, title and interest in the
Product Patents shall remain vested solely in Seller. All rights not expressly
granted to Buyer herein are hereby reserved by Seller and such reserved rights
may be exercised by Seller concurrently with the rights licensed by Buyer
hereunder. Specifically and without limitation, Buyer acknowledges that this
Agreement does not include any license to any patent owned by Seller that is not
a Product Patent.
(b) Buyer shall:
(i) comply with all applicable state, federal, local and foreign
laws, statutes and regulations, pertaining to Buyer's use of the Product Patents
within the Territory, and its manufacturing, use, distribution, and sale of
Products, within the Territory.
(ii) be solely responsible for prosecuting, maintaining and
protecting from infringement any of its rights, including the taking of all
appropriate legal action and action with respect to any regulatory authorities
necessary to obtain, improve or perfect such rights in, to or under any of the
Product Patents.
(iii) on behalf of Seller, have responsibility for all labeling,
patent marking or warnings as required by laws for all Products sold by it
within the Territory.
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(c) Upon the written request of Buyer, Seller agrees to take
commercially reasonable steps to assist Buyer in fulfilling its responsibilities
set forth in Section 2.3 hereof, including but not limited to acting on behalf
of Buyer as its agent or under a power of attorney in any legal or
administrative proceedings (with any costs incurred by Seller in connection
therewith to be borne by Buyer).
(d) Seller agrees to promptly notify Buyer of any actions which it
reasonably believes constitute an infringement by a third party of the rights of
Buyer under any of the Product Patents.
ARTICLE 3 PAYMENTS
3.1 Purchase Price. The aggregate consideration for the Purchased Assets
(the "PURCHASE PRICE") shall be the sum of the following:
(i) Three Hundred Thousand Dollars ($300,000), which shall be paid
by Buyer to Seller at the Closing (the "CLOSING PAYMENT"), plus
(ii) reimbursement of Seller for all Prepaid Promotional Expenses
identified on Schedule 2.1(a)(vi), which shall be paid by Buyer to Seller [***]
days after the Closing, plus
(iii) assumption of the Assumed Liabilities; plus
(iv) the payments for Inventory described in Section 3.2 below.
3.2 Inventory. Buyer and Seller have agreed upon the ending Inventory
identified on Schedule 3.2 located in Wixom, Michigan, Inventory in transit, and
Inventory in Jensa, United Kingdom (the "CLOSING INVENTORY BALANCE"). Buyer
shall pay Seller for Inventory included in the Closing Inventory Balance, at the
prices set forth in the Supply Agreement, as follows:
(i) For Advantage-S Inventory, [***];
(ii) For RepHresh Inventory, [***]; and
(iii) Buyer shall not be obligated to pay Seller for the In-Process
Inventory identified on Schedule 3.2, except for In-Process Inventory made
obsolete after the Closing as a consequence of some action or inaction of Buyer.
3.3 Payment of Purchase Price; Assumption of Liabilities.
(a) At the Closing, Buyer shall pay the Closing Payment by wire
transfer in immediately available United States funds to an account or accounts
designated by Seller; and
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(b) Buyer shall execute and deliver to Seller on the Closing Date an
instrument of assumption of liabilities (the "INSTRUMENT OF ASSUMPTION"),
substantially in the form attached hereto as Exhibit 3.3(b), pursuant to which
Buyer shall assume and agree to pay, perform and discharge the Assumed
Liabilities.
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF SELLER
4.1 Representations and Warranties. Seller represents and warrants to
Buyer as of the Closing Date (except to the extent any representation or
warranty relates to a specific date) that:
4.1.1 Organization. Columbia US is a corporation duly organized,
validly existing and in good standing under the laws of the state of Delaware
and has all the requisite power and authority to own its assets and properties
and to carry on the Business as presently conducted. Columbia Bermuda is a
corporation duly organized, validly existing and in good standing under the laws
of Bermuda and has all the requisite power and authority to own its assets and
properties and to carry on the Business as presently conducted.
4.1.2 Corporate Approval; Binding Contract. Seller has full
corporate power and authority, and has taken any and all actions required, to
authorize the execution and delivery of this Agreement and each other agreement,
assignment and transfer document to be entered into pursuant to this Agreement
(collectively, the "Transfer DOCUMENTS") and the consummation of the
transactions contemplated hereby and thereby. This Agreement has been duly
executed and delivered by Seller and constitutes the legal, valid and binding
agreement of Seller, enforceable against Seller in accordance with its terms.
Each of the Transfer Documents to which Seller is a party, when duly executed
and delivered by Seller, will constitute the legal, valid and binding agreement
of Seller, enforceable against it in accordance with its terms.
4.1.3 No Conflicts. The execution and delivery by Seller of this
Agreement and the Transfer Documents to which it is a party and the consummation
of the transactions contemplated hereby or thereby is not prohibited by and will
not violate (i) Seller's certificate of incorporation or bylaws, or (ii) in any
material respect, any statute, ordinance, law, rule, regulation, order, writ,
injunction, judgment or decree applicable to Seller. Except as set forth in
Schedule 4.1.3 hereto, Seller is not a party to and is not otherwise subject to
any agreement, indenture or contract which would prohibit or be violated by the
execution and delivery of this Agreement or any of the Transfer Documents to
which Seller is a party or consummation of the transactions contemplated hereby
or thereby except where such prohibition or violation would not have a Material
Adverse Effect.
4.1.4 Title to Purchased Assets. Seller has good and valid title to
all of the Purchased Assets, free and clear of all liens, mortgages, pledges,
security interests, restrictions, encumbrances and claims ("ENCUMBRANCES") other
than (a) Encumbrances and imperfections of title that, individually or in the
aggregate, would not have a Material Adverse Effect, and (b) as disclosed on
Schedule 4.1.4 (collectively "PERMITTED ENCUMBRANCES").
4.1.5 Contracts. Schedule 2.1(a)(iv) lists and Seller has delivered
to Buyer, complete and correct copies or descriptions of all currently effective
written Contracts relating to the Business to which Seller is a party other than
any such Contracts entered into in the ordinary course of Business which are not
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material to the business, results of operations or financial condition of the
Business. Each of the Contracts listed on Schedule 2.l(a)(iv) is enforceable
against Seller in accordance with its terms and, to the Knowledge of Seller, is
in full force and effect and enforceable against the other party or parties
thereto. Seller is not in default under any such Contract. Except as set forth
on Schedule 4.1.5 hereto, to the Knowledge of Seller, no other party is in
default under any such Contract, nor does there exist any event that with notice
or lapse of time or both would constitute an event of default by Seller or, to
the Knowledge of Seller, any other party thereto.
4.1.6 Intellectual Property Rights. Attached hereto as Schedule
4.1.6 is a list of all trademarks relating exclusively to the Business (the
"BUSINESS TRADEMARKS"; together with the Product Patents licensed pursuant to
Section 2.3 hereof, collectively, the "INTELLECTUAL PROPERTY"). Seller owns or
has the right to use, free and clear of any payment or Encumbrance (other than
Permitted Encumbrances), all of the Intellectual Property. To the Knowledge of
Seller, the use of the Intellectual Property does not infringe the rights of any
third party. None of the Intellectual Property is subject to any outstanding
order, ruling, decree, judgment or stipulation by or with any Governmental Body
or any Contract to which Seller is a party with any Person, and Seller has not
received written notice that the Intellectual Property is being infringed by
others or is being used by others (whether or not such use constitutes
infringement).
4.1.7 Litigation. There are no actions, suits or proceedings pending
or, to the Knowledge of Seller, threatened in writing against Seller with
respect to the Business or the Purchased Assets, at law or in equity before or
by any court or Governmental Body which, if decided adversely to Seller would
have a Materially Adverse Effect.
4.1.8 Customers and Suppliers. Seller has made available to Buyer
the customer lists and supplier lists of the Business. Such lists contain the
names and addresses as carried in the records of Seller of such customers and
suppliers.
4.1.9 Products. Schedule A is a complete and correct list of each of
the products marketed, distributed and sold by Seller in connection with the
Business.
4.1.10 Compliance with Law. Except as set forth in Schedule 4.1.10
hereto, Seller has conducted the Business in material compliance with all
applicable laws, rules and regulations and Governmental Permits of any
Governmental Body having jurisdiction over the Business and Seller has not
received written notice with respect to the Business that it is in breach of any
such laws, rules, regulations, or Governmental Permits.
4.1.11 Consents and Approvals of Governmental Bodies. No consent,
approval or authorization of, or filing or registration with, any Governmental
Body is required on behalf of Seller in connection with the execution, delivery
and performance of this Agreement or the consummation of the Contemplated
Transactions, except for those the failure to obtain which would not,
individually or in the aggregate, have a Material Adverse Effect.
4.1.12 Other Consents. Except as set forth in Schedule 4.1.12, no
consent, approval, authorization of, or filing or registration with any other
Person is required in connection with or necessary to the execution, delivery
and performance of this Agreement or the consummation of the Contemplated
Transactions, except for those, the failure to obtain which would not have a
Material Adverse Effect.
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4.1.13 Broker. No broker, finder, agent or similar intermediary has
acted for or on behalf of Seller or any Affiliate thereof in connection with
this Agreement or the Contemplated Transactions or is entitled to any broker's,
finder's, or similar fee or other commission in connection therewith based on
any agreement, arrangement or understanding with Seller or any Affiliate
thereof.
4.1.14......Inventory. Seller's U.S. Inventory is sufficient to
handle normal and customary U.S. sales of the U.S. Products pursuant to Seller's
forecast in place on the date of Closing.
4.1.15......Sales and Financial Information. The unaudited sales and
financial information in respect of the historical sales, cost of goods sold and
operating expenses provided to Buyer by Seller and set forth on Schedule 4.1.15
hereto (the "SALES AND FINANCIAL INFORMATION") presents fairly the financial
condition of those segments of the Business identified in such Schedule as of
such dates and the results of operations for such periods; provided, however,
that certain portions of the Sales and Financial Information are subject to
normal year-end adjustments (which will not individually or in the aggregate
have a Material Adverse Effect) and lack footnotes and other presentation items.
OTHER THAN AS EXPRESSLY SET FORTH HEREIN, THERE IS NO WARRANTY OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE WITH RESPECT TO ANY OF THE
PURCHASED ASSETS. THE WARRANTIES CONTAINED IN THIS AGREEMENT ARE THE ONLY
WARRANTIES, EXPRESSED OR IMPLIED, GIVEN BY SELLER TO BUYER WITH RESPECT TO THE
BUSINESS OR THE PURCHASED ASSETS.
ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF BUYER
5.1 Representations and Warranties. Buyer represents and warrants to
Seller as of the Closing Date (except to the extent any representation or
warranty relates to a specified date) that:
5.1.1 Organization. Buyer is a corporation duly organized, validly
existing and in good standing under the laws of the state of Iowa and has all
the requisite power and authority to own its assets and properties and to carry
on its business as presently conducted.
5.1.2 Corporate Approval; Binding Contract. Buyer has full power and
authority, and has taken any and all actions required, to authorize the
execution and delivery of this Agreement and each of the Transfer Documents to
which it is a party and the consummation of the transactions contemplated hereby
and thereby. This Agreement has been duly executed and delivered by Buyer and
constitutes the legal, valid and binding agreement of Buyer, enforceable against
Buyer in accordance with its terms. Each of the Transfer Documents to which
Buyer is a party, when duly executed and delivered by Buyer, will constitute the
legal, valid and binding agreement of Buyer, enforceable against it in
accordance with its terms.
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5.1.3 No Conflicts. The execution and delivery by Buyer of this
Agreement and the Transfer Documents and the consummation of the transactions
contemplated hereby or thereby is not prohibited by and will not violate (i)
Buyer's certificate of incorporation or bylaws, or (ii) in any material respect,
any statute, ordinance, law, rule, regulation, order, writ, injunction, judgment
or decree applicable to Buyer. Buyer is not a party to and is not otherwise
subject to any agreement, indenture or contract which would prohibit or would be
violated by the execution and delivery of this Agreement or any of the Transfer
Documents to which Buyer is a party or consummation of the transactions
contemplated hereby or thereby except where such prohibition or violation would
not have a material adverse effect on the business, results of operations or
financial condition of Buyer or its business.
5.1.4 Broker. No broker, finder, agent or similar intermediary has
acted for or on behalf of Buyer or any Affiliate thereof in connection with this
Agreement or the Contemplated Transactions or is entitled to any broker's,
finder's, or similar fee or other commission in connection therewith based on
any agreement, arrangement or understanding with Buyer or any Affiliate thereof.
5.1.5 Available Funds. Buyer has sufficient committed funds
available to it to purchase the Purchased Assets pursuant to this Agreement and
to otherwise satisfy its obligations under this Agreement.
ARTICLE 6 CLOSING DATE; CONDITIONS PRECEDENT; UNWINDING; SALE OF BUSINESS AND
PURCHASED ASSETS
6.1 Closing Date and Place. Subject to Section 6.2 and Section 6.3, the
consummation of the purchase and sale of the Purchased Assets and the assumption
of the Assumed Liabilities (the "CLOSING") shall take place at the offices of
Kelley Drye & Warren LLP at 200 Kimball Drive, Parsippany, New Jersey 07054, at
10:00 A.M. on the date hereof (the "CLOSING DATE").
6.2 Conditions Precedent to the Obligation of Buyer to Close. The
obligations of Buyer to consummate the transactions provided for hereby are
subject to the satisfaction or waiver, on or prior to the Closing Date, of each
of the following conditions; provided that in the event that Buyer waives any
such condition, then notwithstanding anything to the contrary contained in this
Agreement, Buyer shall not be entitled to make a claim for indemnification under
this Agreement with respect to any matter which is the subject of such waiver.
6.2.1 No Injunctive Proceedings. No preliminary or permanent
injunction or other order (including a temporary restraining order) or decree of
any court or Governmental Body which prevents or delays the consummation of the
Contemplated Transactions or prohibits or delays Buyer's ownership of the
Purchased Assets or conduct of the Business shall have been issued and remain in
effect.
6.2.2 Representations and Warranties. All representations and
warranties of Seller contained in this Agreement shall be true and correct in
all material respects as of the Closing Date (except to the extent any
representation or warranty relates to a specific date).
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6.2.3 Performance of Agreements. Seller shall have performed in all
material respects all obligations, agreements, conditions and commitments to be
fulfilled by it pursuant to the terms hereof on or prior to the Closing Date.
6.2.4 Litigation. No action or proceeding shall have been instituted
by any court or Governmental Body to enjoin, restrain, prohibit or assess
substantial damages in respect of, consummation of the Contemplated
Transactions.
6.2.5 Deliveries. Buyer shall have received all of the deliveries
required to be made to it, as set forth in Article 7.
6.2.6 Compliance Evidence. Buyer shall have received a certificate
certifying to the matters set forth in Section 6.2.2 and Section 6.2.3, dated as
of the date hereof, and signed by an appropriate officer of Seller.
6.2.7 Consents, Approvals, Assignments. All consents, approvals,
authorizations and filings set forth on Schedule 4.1.12 shall have been obtained
on terms reasonably satisfactory to Buyer and shall be in full force and effect;
provided, however, that to the extent that any such consent has not been
obtained as of the date hereof, Seller shall use commercially reasonable efforts
to obtain such consent following the Closing or to confer upon Buyer a
comparable economic benefit.
6.3 Conditions Precedent to the Obligation of Seller to Close. The
obligations of Seller to consummate the transactions provided for herein are
subject to the satisfaction or waiver, on or prior to the Closing Date, of each
of the following conditions; provided that in the event that Seller waives any
such condition, then notwithstanding anything to the contrary contained in this
Agreement, Seller shall not be entitled to make a claim for indemnification
under this Agreement with respect to any matter which is the subject of such
waiver.
6.3.1 No Injunctive Proceedings. No preliminary or permanent
injunction or other order (including, without limitation, a temporary
restraining order) of any court or Governmental Body which prevents the
consummation of the Contemplated Transactions or prohibits or delays Buyer's
ownership of the Purchased Assets or conduct of the Business shall have been
issued and remain in effect.
6.3.2 Representations and Warranties. All representations and
warranties of Buyer contained in this Agreement shall be true and correct in all
material respects as of the Closing Date (except to the extent any
representation or warranty relates to a specified date).
6.3.3 Performance of Agreements. Buyer shall have performed in all
material respects all obligations, agreements, conditions and commitments to be
fulfilled by it pursuant to the terms hereof on or prior to the Closing Date.
6.3.4 Payments. Buyer shall have paid to Seller the Closing Payment.
6.3.5 Litigation. No action or proceeding shall have been instituted
by any court or Governmental Body to enjoin, restrain, prohibit or assess
substantial damages in respect of, consummation of the Contemplated
Transactions.
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6.3.6 Deliveries. Seller shall have received all of the deliveries
required to be made to it, as set forth in Article 7.
6.3.7 Compliance Evidence. Seller shall have a certificate
certifying to the matters set forth in Sections 6.3.2 and 6.3.3, dated the
Closing Date, and signed by an appropriate officer of Buyer.
6.3.8 Consents, Approvals, Assignments. All consents, approvals,
authorizations and filings set forth on Schedule 4.1.12 shall have been obtained
on terms reasonably satisfactory to Seller and shall be in full force and
effect; provided, however, that to the extent that any such consent has not been
obtained as of the date hereof, Seller shall use commercially reasonable efforts
to obtain such consent following the Closing or to confer upon Buyer a
comparable economic benefit.
6.4 Unwinding.
6.4.1 Unwinding Trigger Events. Upon termination of (i) the Supply
Agreement by Seller pursuant to Section 11 thereof, or (ii) the Professional
Promotion Agreement by Seller pursuant to Section 11 (excluding any termination
by Seller without cause pursuant to Section 11.1 of such Agreement):
(a) the license granted pursuant to Section 2.3 hereof shall be
terminated and any rights thereunder shall revert to Seller; and
(b) the Purchased Assets (except those Purchased Assets set forth in
Section 2.1(a)(i) and Section 2.1(a)(vi)) assigned by Seller to Buyer hereunder
shall be assigned by Buyer to Seller, with any and all costs of assignment of
the Purchased Assets to Seller (whether incurred by Seller or Buyer) to be borne
entirely by Buyer. Buyer shall have the right to sell any remaining Product
Inventory or Seller may, at its option, repurchase such remaining Product
Inventory from Buyer at Buyer's cost.
6.4.2 Effect of Unwinding. In the event of an unwinding of this
Agreement pursuant to Section 6.4.1, neither party shall have any further
liability or obligation to the other hereunder, except for Sections 6.4.2, 9.3,
9.4 and Article 11 which shall survive termination; provided, however, that an
unwinding under Section 6.4.1 shall not relieve any party of liability for any
failure to perform or comply with any agreement prior to the date of unwinding.
6.5 Sale of Business and Purchased Assets. Subject to Section 11.5 hereof,
in the event that Buyer determines to accept a bona fide offer from a third
party, or a third party accepts a bona fide offer of Buyer, for the Business and
the Purchased Assets, or substantially all of the assets thereof (any such
transaction, the "SALE"), and if the Sale occurs within the two (2) year period
commencing on the Closing Date, Buyer agrees to pay Seller fifty percent (50%)
of the gross proceeds of the Sale, less the Closing Payment made by Buyer as
described in Article 3 hereof and less all amounts paid or to be paid by Buyer
to Seller for Inventory under the Supply Agreement above COGS, as defined in
Exhibit 5.1 of the Supply Agreement.
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ARTICLE 7 CLOSING DELIVERIES
7.1 Deliveries by Seller. At the Closing, Seller shall deliver to Buyer
the following (all documents to be dated as of the Closing Date, except as
otherwise specified):
7.1.1 Corporate Resolutions. Copies of corporate resolutions of
Seller, certified by an appropriate officer of Seller as being in effect on the
Closing Date, authorizing the execution and delivery and performance by Seller
of this Agreement and the performance of the Contemplated Transactions.
7.1.2 Instrument of Conveyance. An instrument of conveyance in favor
of Buyer covering the Purchased Assets in the form attached as Exhibit 7.1.2
hereto (the "INSTRUMENT OF CONVEYANCE"), duly executed by Seller.
7.1.3 Assignment of Contracts. An assignment of contracts in favor
of Buyer covering the Contracts being assigned and which relate to the Purchased
Assets and the Business in the form attached as Exhibit 7.1.3 hereto (the
"ASSIGNMENT OF CONTRACTS"), duly executed by Seller.
7.1.4 Assignment of Trademark Registrations. An assignment of
trademark registrations covering the Business Trademarks in the form attached
hereto as Exhibit 7.1.4 hereto (the "ASSIGNMENT OF TRADEMARK REGISTRATIONS"),
duly executed by Seller.
7.1.5 Supply Agreement. A supply agreement in the form attached as
Exhibit 7.1.5 hereto (the "SUPPLY AGREEMENT"), duly executed by Seller.
7.1.6 Professional Promotion Agreement. A professional sampling and
promotion agreement in the form attached as Exhibit 7.1.6 hereto (the
"PROFESSIONAL PROMOTION AGREEMENT"), duly executed by Seller.
7.1.7 Transition Services Agreement. A transition services agreement
in the form attached as Exhibit 7.1.7 hereto (the "TRANSITION SERVICES
AGREEMENT"), duly executed by Seller.
7.2 Deliveries by Buyer. At the Closing, Buyer shall deliver to Seller the
following (all documents to be dated as of the Closing Date, except as otherwise
specified):
7.2.1 Corporate Resolutions. Copies of corporate resolutions of
Buyer, certified by an appropriate officer of Buyer as being in effect on the
Closing Date, authorizing the execution and delivery and performance by Buyer of
this Agreement and the performance of the Contemplated Transactions.
7.2.2 Purchase Price. The Closing Payment in accordance with Section
3.3(a).
7.2.3 Prepaid Promotional Expenses. Payment for the Prepaid
Promotional Expenses identified on Schedule 2.1(a)(vi), to be paid as described
in Section 3.1(ii).
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7.2.4 Inventory. Payment for Inventory identified on Schedule 3.2,
to be paid as described in Section 3.2.
7.2.5 Instrument of Assumption. The Assumption Agreement, duly
executed by Buyer.
7.2.6 Assignment of Contracts. The Assignment of Contracts, duly
executed by Buyer.
7.2.7 Assignment of Trademark Registrations. The Assignment of
Trademark Registrations, duly executed by Buyer.
7.2.8 Supply Agreement. The Supply Agreement, duly executed by
Buyer.
7.2.9 Professional Promotional Agreement. The Professional Promotion
Agreement, duly executed by Buyer.
7.2.10 Transition Services Agreement. The Transition Services
Agreement, duly executed by Buyer.
ARTICLE 8 SURVIVAL OF REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION
8.1 Survival. All representations and warranties and agreements of Seller
and Buyer contained in this Agreement or any other document delivered pursuant
to this Agreement to be performed at or prior to the Closing shall survive the
Closing until eighteen (18) months after the Closing Date (the "SURVIVAL
EXPIRATION Date"); provided, however, that Seller's representations set forth in
Section 4.1.4 shall survive until the applicable statute of limitations has
expired.
8.2 Indemnification by Seller. Subject to the limitations contained in
this Agreement, after the Closing, Seller shall indemnify and hold harmless
Buyer and its Affiliates and their respective officers, directors and employees
(collectively, "AGENTS") from and against any loss, liability, claim,
obligation, damage or expense (including reasonable legal fees and expenses)
(collectively "DAMAGES") that any such Person may incur or suffer arising out of
or resulting from any of the following:
(a) any breach of any representation or warranty made by Seller in
this Agreement or any document delivered at the Closing pursuant to this
Agreement;
(b) any breach of any covenant or agreement made by Seller in this
Agreement or any document delivered at the Closing pursuant to this Agreement;
(c) any failure to comply with any applicable bulk sales laws in
connection with the Contemplated Transactions;
(d) any and all liabilities and obligations for products liability,
known or unknown, with respect to Products shipped by Seller prior to the
Closing Date; or
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(e) any liabilities, obligations or commitments of Seller relating
to or arising out of the operation of the Business or the ownership of the
Purchased Assets prior to the Closing.
8.3 Indemnification by Buyer. Subject to the limitations contained in this
Agreement, after the Closing, Buyer shall indemnify and hold harmless Seller and
its Affiliates and their respective Agents from and against any Damages that any
such Person may incur or suffer arising out of or resulting from any of the
following:
(a) any breach of any representation or warranty made by Buyer in
this Agreement or any document delivered at the Closing pursuant to this
Agreement;
(b) any breach of any covenant or agreement made by Buyer in this
Agreement or any document delivered at the Closing pursuant to this Agreement;
(c) the Assumed Liabilities;
(d) any and all liabilities and obligations for products liability,
known or unknown, with respect to Products shipped by Buyer following the
Closing Date;
(e) the possession and use of the Purchased Assets subsequent to the
Closing Date (including, without limitation, any claim for any taxes relating to
the Purchased Assets or any other taxes of Buyer);
(f) the use by Buyer of any Retained Name, whether or not in
accordance with Section 10.5 hereof; or
(g) any and all liabilities and obligations for products liability,
known or unknown, with respect to Products shipped by Seller after the Closing
Date.
8.4 Limitations on Indemnification Obligations.
(a) Seller shall not have any liability for Damages under this
Agreement unless the aggregate of all such Damages for which Seller would, but
for this sentence, be liable exceeds $[***] on a cumulative basis, and then
Seller shall be liable only for amounts exceeding such amount. Under no
circumstances shall Seller be liable for Damages under this Agreement
aggregating in excess of the Purchase Price on a cumulative basis for all such
Damages. All indemnity payments made pursuant to this Article 8 shall be reduced
by the amount of any tax benefits to which the indemnified party may be entitled
as a result of the occurrence of the event giving rise to the indemnity
obligation.
(b) No action, claim or set off for Damages shall be brought or made
by Buyer after the Survival Expiration Date.
8.5 Procedure for Indemnification.
8.5.1 Direct Claims. Claims for indemnification under this Article
8, other than those referred to in Section 8.5.2, shall be made by notice in
accordance with Section 11.2 to the party from whom indemnification or other
payment is sought and shall contain a statement to the effect that a claim for
indemnification is being made pursuant to this Article 8.
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8.5.2 Third Party Claims.
(a) Except as provided in Section 8.5.2(b), after receipt by an
indemnitee under Section 8.2 or Section 8.3 (an "INDEMNITEE") of notice of a
claim from any third party, such Indemnitee shall, if a claim in respect thereof
is to be made against an indemnitor under such Section (an "INDEMNITOR"), give
notice to the Indemnitor in accordance with Section 11.2 of the commencement
thereof within a reasonable time after obtaining information concerning the
facts of the claim. The failure so to notify the Indemnitor shall not relieve it
of any liability that it may have to an Indemnitee except to the extent the
Indemnitor demonstrates that the defense of such claim is materially prejudiced
thereby. In case any such claim shall be brought against an Indemnitee and it
shall give notice to an Indemnitor, the Indemnitor, to the extent that it shall
wish, may assume the defense thereof with counsel reasonably satisfactory to the
Indemnitee and, after notice from the Indemnitor to the Indemnitee of its
election so to assume the defense thereof, the Indemnitor shall not be liable to
the Indemnitee for fees of counsel and any other expenses subsequently incurred
by the Indemnitee in connection with the defense thereof, other than reasonable
costs of investigation; provided, an Indemnitee shall nonetheless have the right
to participate in such proceedings and to be represented by counsel of its own
choosing, and the cost and expense attributable to such counsel employed by an
Indemnitee shall be borne solely by the Indemnitee.
(b) If an Indemnitor assumes the defense of an action pursuant to
Section 8.5.2(a), (i) no compromise or settlement thereof may be effected by the
Indemnitor without the Indemnitee's written consent (not to be unreasonably
withheld or delayed) unless there is no finding or admission of any violation of
law or any violation of the rights of any Person and no effect on any other
claims that may be made against the Indemnitee and the sole relief provided is
monetary damages that are paid in full by the Indemnitor, and (ii) the
Indemnitor shall have no liability with respect to any compromise or settlement
thereof effected without its consent (which shall not be unreasonably withheld
or delayed). If an Indemnitee determines in good faith that there is a
reasonable probability that a claim may adversely affect it or its Affiliates
other than as a result of monetary damages, such Indemnitee may, by notice to
the Indemnitor, assume the exclusive right to defend, compromise or settle such
action, but the Indemnitor shall not be bound by any compromise or settlement
thereof effected without its consent (which shall not be unreasonably withheld
or delayed). If notice is given to an Indemnitor by an Indemnitee of the
commencement of any action, and the Indemnitor does not, within fifteen (15)
days after the Indemnitee's notice is given, give notice of its election to
assume the defense thereof, the Indemnitor shall be bound by any determination
made in such action or any compromise or settlement thereof effected by the
Indemnitee, provided that the Indemnitor has consented thereto (such consent not
to be unreasonably withheld or delayed).
(c) In the investigation and defense of any claim for which
indemnification is sought hereunder, the Indemnitor and the Indemnitee shall
cooperate with the other and shall provide reasonable access to all information
in their respective possession which is reasonably necessary in the
investigation and defense of any such claim.
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8.6 Limitation on Remedies. Each of the parties hereto hereby acknowledges
and agrees that its sole and exclusive remedy with respect to any and all claims
under this Article shall be pursuant to the indemnification provisions set forth
in this Article 8, and each party agrees not to seek any remedies other than
those set forth herein. Buyer and Seller hereby further acknowledge and agree
that their liability pursuant to such indemnification provisions shall be
limited to direct damages and losses of the other party and shall not include
special, incidental or consequential damages.
ARTICLE 9 COVENANTS
9.1 Reasonable Commercial Efforts and Required Consents. Seller and Buyer
shall each use reasonable commercial efforts to comply promptly with all
requests or requirements which applicable Governmental Bodies may impose on them
with respect to the Contemplated Transactions, and to consummate such
transactions as promptly as practicable. In addition, Seller shall use
reasonable commercial efforts to assist in the transfer of the Purchased Assets
and the Business to Buyer. Any services provided by Seller to Buyer related to
Buyer's decision to alter, increase, expand or otherwise change the Purchased
Assets or the Business, or to ensure business continuity and/or regulatory
compliance, shall be provided pursuant to the terms of the Transition Services
Agreement.
9.2 Books, Records and Information. Buyer agrees that it shall cause to be
preserved and kept the records of Seller delivered to it hereunder for a period
of seven (7) years after the Closing Date or for any longer period as may be
required by applicable law or in connection with any ongoing litigation that
Seller informs Buyer of in writing prior to the date which is seven (7) years
after the Closing Date, and shall make such records and employees of Buyer
available to Seller or its representatives as may be reasonably required by
Seller in connection with any legal proceedings or governmental investigations
or tax examinations of Seller or any Affiliate thereof. In the event Buyer
wishes to destroy such records before that time, it shall first give prior
written notice to Seller and Seller shall have the right at its option to take
possession of such records.
9.3 Confidential Information. Neither Seller nor any Affiliate shall at
any time, directly or indirectly, publish, utilize, disclose or make available
to any Person other than its Affiliates, whether or not a competitor of Buyer or
its Affiliates, any confidential information concerning the Purchased Assets or
the Business (whether such confidential information was received prior to or
after the Closing), Buyer or its Affiliates, whether or not such confidential
information was obtained prior to the Closing hereof. Neither Buyer nor any
Affiliate shall at any time, directly or indirectly, publish, utilize, disclose
or make available to any Person, whether or not a competitor of Seller or its
Affiliates, any confidential information concerning Seller or its Affiliates
(whether such confidential information was received prior to or after the
Closing). Upon any unwinding of this Agreement, Buyer shall promptly return to
Seller all information of whatever form or type provided by Seller or its
representatives to Buyer in connection with this Agreement or the Contemplated
Transactions (and all information or data of Buyer incorporating or based on
such information provided by Seller), and Buyer and its Affiliates shall keep
confidential and not disclose to any Person or use any such information. This
Section 9.3 shall not be violated by disclosure of information which (a) at the
time of disclosure is publicly available, (b) was in possession of the party
receiving the information prior to the other party's disclosure thereof to such
party, (c) is thereafter disclosed to the party receiving the information by a
third party who did not obtain the information under an obligation of
confidentiality, (d) is disclosed with the written consent of the other party,
or (e) is disclosed pursuant to court order or as otherwise required by law, on
condition that notice of the requirement for such disclosure is given to the
other party prior to making any disclosure and the party subject to such
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requirement cooperates as the other may reasonably request in resisting it.
Seller and Buyer shall each use commercially reasonable efforts to cause their
own and their Affiliates' representatives, attorneys, accountants and advisers
to whom information is disclosed pursuant to this Section 9.3 to comply with the
provisions of this Section 9.3.
9.4 Publicity. Without the approval of the other party hereto, neither
party shall issue or release (or permit any Affiliate to issue or release) any
public announcement or statement with respect to this Agreement or the
Contemplated Transactions, except as required by applicable law or stock
exchange regulations. In the case of any such required disclosure, the
disclosing party shall consult with the other party prior to issuance or release
of such disclosure.
9.5 Use of Name. Anything herein to the contrary notwithstanding, no
interest in or right to use the names "Columbia", "Columbia Laboratories, Inc.",
"Columbia Laboratories (Bermuda) Ltd." or any variation or derivation thereof
(collectively, the "RETAINED NAMES") is being transferred to Buyer pursuant to
the Contemplated Transactions. Subject to Section 8.3(f) and the last sentence
of this Section 9.5, Buyer shall be entitled to use products, signs, purchase
orders, invoices, sales orders, labels, packaging materials, letterheads,
shipping documents and other materials (collectively, "SALES MATERIALS") that
bear any Retained Name or any name, mark or logo similar thereto for such period
after the Closing Date as Buyer reasonably requires in order to (i) sell, in the
ordinary course, the Inventory purchased by Buyer hereunder and (ii) effect an
orderly transition of the Business. Buyer shall use commercially reasonable
efforts to discontinue the use of any and all Retained Names with respect to
Sales Materials of any type no later than the time of printing and production of
any new such Sales Materials. Notwithstanding any other provision of this
Agreement, Buyer shall not use any Sales Materials bearing a Retained Name in
any way (including selling any Products bearing a Retained Name) from and after
the twelve month anniversary of the Closing Date. Such twelve-month period may
be extended with the prior written consent of Seller, which consent shall not be
unreasonably withheld.
9.6 Accounts Receivable. In the event and for so long as Seller shall have
any accounts receivable relating to the Business outstanding after the Closing
Date (the "SELLER ACCOUNTS"), Buyer will use reasonable commercial efforts to
cooperate with Seller in collecting on such Seller Accounts. Without limiting
the generality of the foregoing, Buyer shall promptly transfer to the account of
Seller or deliver to Seller for deposit any payment received by Buyer in respect
of any of Seller Accounts.
9.7 Bulk Transfer Laws. Buyer hereby waives compliance by Seller with the
provisions of any so-called bulk transfer laws of any jurisdiction in connection
with the sale of the Purchased Assets to Buyer hereunder.
9.8 Non-Solicitation. Buyer agrees that it shall not, without the prior
express written consent of Seller, at any time from the date of this Agreement
through the one year anniversary of the Closing Date, solicit, employ, or
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otherwise engage as an employee, independent contractor, or otherwise, any
person who is an employee of Seller or in any manner induce or attempt to induce
any employee of Seller to terminate his employment with Seller or interfere with
Seller's relationship with any person who is an employee.
9.9 Product Returns. With respect to the return of any Product shipment in
excess of $[***] actually received by Buyer or Seller during the Return Period,
Seller shall use commercially reasonable efforts to investigate the
circumstances surrounding any such return. Solely to the extent that Seller's
investigation results in a determination that the returned Products were shipped
by Seller on or prior to the Closing Date and such return is made in accordance
with Seller's Return Policy, as set forth on Schedule 9.9, Seller shall be
solely liable for such returned Products (a "SELLER PRODUCT RETURN LIABILITY")
and such liability shall constitute a Retained Liability. In the event that
Seller's investigation results in a determination that the returned Products
were shipped by Buyer following the Closing Date or that the returned Products
were not returned in accordance with Seller's Return Policy, or Seller's
investigation is inconclusive, Buyer shall be solely liable for such returned
Products ("BUYER PRODUCT RETURN LIABILITY") and such liability shall constitute
an Assumed Liability. Buyer shall be solely liable for return shipments of less
than $[***] during the Return Period, and such returns shall also constitute
Buyer Product Return Liabilities. Buyer shall give prompt written notice to
Seller of any returns of Products for which Seller may be liable under this
Agreement.
ARTICLE 10 TAX MATTERS
10.1 Sales Use and Transfer Taxes. Seller agrees that it shall assume all
liability for any sales and use taxes or any other state or local transfer tax
required to be paid by reason of the sale by Seller to Buyer of the Purchased
Assets or of the Contemplated Transactions pursuant to this Agreement, and
Seller agrees to indemnify and hold harmless Buyer for any sales or use taxes or
other transfer taxes which may be assessed by reason of such sale or
Contemplated Transactions. Seller shall prepare and file all reports relating to
such sales and use and other transfer taxes.
10.2 Proration of Property Taxes. Buyer and Seller shall each pay their
respective portions, prorated as of the Closing Date, of state and local
personal property taxes, if any, relating to the Purchased Assets, such that
Seller shall be responsible for such taxes accruing prior to the Closing and
Buyer shall be responsible for such taxes accruing from and after the Closing.
10.3 Purchase Price Allocation. The Purchase Price shall be allocated
pursuant to Section 1060 of the Code, as set forth on a schedule to be agreed
upon between Buyer and Seller on or promptly following the Closing Date. Unless
otherwise agreed in writing by Buyer and Seller, Buyer and Seller shall file all
tax returns (including Internal Revenue Service Form 8594) in accordance with
and based upon such allocation.
10.4 Cooperation and Exchange of Information. Seller and Buyer shall
provide each other with such cooperation and information as either of them
reasonably may request of the other in filing any tax return with respect to the
Business or the Purchased Assets, amended tax return or claim for refund,
determining a liability for taxes or a right to refund of taxes or in conducting
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any audit or other proceeding in respect of taxes with respect to the Business
or the Purchased Assets. The party requesting assistance hereunder shall
reimburse the other for any reasonable out-of-pocket costs incurred in providing
any return, document or other written information, and shall compensate the
other for any reasonable costs (excluding wages and salaries) of making
employees available, upon receipt of reasonable documentation of such costs. Any
information obtained under this Section 10.3 shall be kept confidential, except
as may be otherwise necessary in connection with the filing of tax returns or
claims for refund or in conducting any audit or other proceeding.
ARTICLE 11 MISCELLANEOUS
11.1 Expenses. Except as specifically set out herein to the contrary, each
party hereto shall bear its own expenses incident to the preparation,
negotiation, execution and delivery of this Agreement and the performance of its
obligations hereunder.
11.2 Notices. All notices or other communications given pursuant hereto by
one party hereto to the other party shall be in writing and deemed given when
(a) delivered by messenger, (b) sent by telecopier (with receipt confirmed),
provided that a copy is mailed by registered or certified mail, postage prepaid,
return receipt requested, or (c) received by the addressee, if sent by express
mail, Federal Express, United Parcel Service or other express delivery service
(receipt requested), in each case to the appropriate addresses and telecopier
numbers set forth below (or to such other addresses and telecopier numbers as a
party may designate as to itself by notice to the other party):
if to Seller or Columbia US, to it at:
Columbia Laboratories, Inc.
354 Eisenhower Parkway, Plaza 1, Second Floor
Livingston, New Jersey 07039
Attention: General Counsel
Facsimile: (973) 994-3001
with a copy to:
Kelley Drye & Warren LLP
200 Kimball Drive
Parsippany, New Jersey 07054
Attention: Christopher G. FitzPatrick, Esq.
Facsimile: (973) 503-5950
if to Columbia Bermuda, to it at:
Columbia Laboratories (Bermuda) Ltd.
Canon's Court
22 Victoria Street
Hamilton HM 12
Bermuda
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Attention: Secretary
Facsimile: (441) 292-6888
with a copy to:
Kelley Drye & Warren LLP
200 Kimball Drive
Parsippany, New Jersey 07054
Attention: Christopher G. FitzPatrick, Esq.
Facsimile: (973) 503-5950
If to Buyer, to it at:
Lil' Drug Store Products, Inc.
1201 Continental Place North East
Cedar Rapids, Iowa 52402
Attention: President
Facsimile: (319) 393-3494
with a copy to:
Bradley & Riley PC
2007 First Avenue SE
P.O. Box 2804
Cedar Rapids, Iowa 52406
Attention: Bradley G. Hart
Facsimile: (319) 363-9824
11.3 Integration. This Agreement and the other agreements being executed
by the parties concurrently herewith and therewith or on the Closing Date are
the entire agreement between the parties hereto with respect to the subject
matter hereof and supersede all prior agreements and understandings.
11.4 Captions. The headings contained in this Agreement and in the table
of contents, exhibits and schedules are for reference purposes only and shall
not affect the meaning or interpretation of this Agreement.
11.5 Assignment; Amendment; Waiver.
(a) All of the terms and provisions of this Agreement shall be
binding upon and inure to the benefit of and be enforceable by the parties
hereto and their respective successors and permitted assigns, which shall
include a third party acquirer of, without limitation, the Business and the
Purchased Assets. Without limitation of the foregoing, the obligations under
Section 5.1 and Section 5.4 under the Supply Agreement, and the rights and
obligations under Section 2 and Section 4 of the Professional Promotion
Agreement, shall be binding upon any transferee of, without limitation, the
Business and the Purchased Assets. This Agreement shall not be assignable or
transferable by either party hereto without the prior written consent of the
other party.
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(b) This Agreement may be amended only by written agreement of the
parties hereto.
(c) The failure of a party to insist upon strict adherence to any
term of this Agreement on any occasion shall not be considered a waiver or
deprive that party of the right thereafter to insist upon strict adherence to
that term or any other term of this Agreement. Any waiver must be in writing.
11.6 Applicable Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of New Jersey, without giving
effect to the principles of conflicts of laws thereof.
11.7 Further Assurances. Each party agrees that it will execute and
deliver, or cause to be executed and delivered, on or after the date of this
Agreement, all such other instruments and will take all reasonable actions as
the other party may reasonably request from time to time in order to effectuate
the provisions and purposes of this Agreement.
11.8 No Third-Party Rights. This Agreement is intended for the exclusive
benefit of the parties hereto and their respective successors and permitted
assigns. Nothing contained in the Agreement shall be construed as granting any
rights or benefits in or to any third party, and no Person shall assert any
rights as third-party beneficiary hereunder.
11.9 Incorporation of Exhibits and Schedules. The Exhibits and Schedules
attached hereto are incorporated into this Agreement and shall be deemed a part
hereof as if set forth herein in full. References herein to "this Agreement" and
the words "herein", "hereof" and words of similar import refer to this Asset
Purchase Agreement, the Exhibits and the Schedules as an entirety. In the event
of any conflict between the provisions of this Agreement and any such Exhibit or
Schedule, the provisions of this Agreement shall control.
11.10 Submission to Jurisdiction.
(a) Any action or proceeding seeking to enforce any provision of, or
based on any right arising out of, this Agreement may be brought against any of
the parties in the courts of the State of New Jersey, City of Newark, or, if it
has or can acquire jurisdiction, in the United States District Court for the
District of New Jersey, and each of the parties hereby consents to the
jurisdiction of such courts (and of the appropriate appellate courts) in any
such action or proceeding and waives any objection to venue laid therein.
(b) Process in any action or proceeding referred to in this Section
11.10 may be served on any party anywhere in the world and may also be served
upon any party in the manner provided for giving of notices to it in Section
11.2.
11.11 Counterparts. This Agreement may be executed in counterparts, each
of which shall be considered an original, but all of which together shall
constitute the same instrument.
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11.12 Specific Performance. The parties agree that irreparable damages
would occur if any of the provisions of this Agreement were not performed in
accordance with their specific terms or were otherwise breached. It is
accordingly agreed that the parties shall be entitled to an injunction or
injunctions without the need to first post any bond or other security to prevent
breaches of this Agreement and to enforce specifically the terms and provisions
hereof, in addition to any other remedy to which they are entitled at law or in
equity.
11.13 Severability. If any provision of this Agreement or the application
of any provision hereof is illegal, invalid or otherwise unenforceable, the
remainder of this Agreement shall not be affected except to the extent necessary
to delete such illegal, invalid or unenforceable provision, unless the provision
held invalid shall substantially impair the benefits of the remaining portions
of this Agreement.
11.14 Schedules. Any disclosure made or information provided on a Schedule
referenced to a section of this Agreement shall be deemed to be made or provided
with respect to any other section or Schedule pursuant to which such disclosure
or information may be required. The appearance of information on a Schedule does
not necessarily mean that it is required to be disclosed on such Schedule under
this Agreement and does not mean that any representation or warranty is being
made with respect to such information if it is not required to be so disclosed.
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IN WITNESS WHEREOF, the parties have executed this Agreement effective as
of the date first above written.
SELLER:
COLUMBIA LABORATORIES, INC.
By: /S/ Fred Wilkinson
------------------------------------------
(signature)
Name: Fred Wilkinson
Title: President, Chief Executive Officer and
Chairman of the Board
COLUMBIA LABORATORIES (BERMUDA) LTD.
By: /S/ Fred Wilkinson
------------------------------------------
(signature)
Name: Fred Wilkinson
Title: President
BUYER:
LIL' DRUG STORE PRODUCTS, INC.
By: /S/ Chris DeWolf
------------------------------------------
(signature)
Name: Christopher DeWolf
Title: President
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