<PAGE>
EXHIBIT 2.1
***TEXT OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
CONFIDENTIAL TREATMENT REQUESTED UNDER
17 C.F.R. SECTIONS 200.80(b)(4)
AND 240.24b-2
================================================================================
EXECUTION COPY
PRODUCT ACQUISITION AGREEMENT
by and between
VALEANT PHARMACEUTICALS NORTH AMERICA
(as buyer)
and
INTERMUNE, INC.
(as seller)
================================================================================
November 28, 2005
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TABLE OF CONTENTS
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Section
Page
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ARTICLE I - DEFINITIONS
1
SECTION
1.1. DEFINED TERMS
1
SECTION
1.2. CONSTRUCTION
12
ARTICLE II - THE TRANSACTION
12
SECTION
2.1. TRANSFER OF
PURCHASED ASSETS AND INVENTORY.
12
SECTION
2.2. EXCLUDED ASSETS.
13
SECTION
2.3. ASSUMED
LIABILITIES
14
SECTION
2.4. EXCLUDED LIABILITIES.
14
SECTION
2.5. PURCHASE PRICE
AND INVENTORY COST
14
SECTION
2.6. RISK OF LOSS
15
ARTICLE III - REPRESENTATIONS AND WARRANTIES OF SELLER
16
SECTION
3.1. ORGANIZATION AND
AUTHORITY
16
SECTION
3.2. TITLE TO
PURCHASED ASSETS AND INVENTORY
16
SECTION
3.3. CONSENTS; NO
VIOLATIONS.
16
SECTION
3.4. REGULATORY
APPROVALS.
17
SECTION
3.5. COMPLIANCE WITH
LAWS AND LITIGATION.
17
SECTION
3.6. NO MATERIAL ADVERSE CHANGE.
18
SECTION
3.7. CONTRACTS.
18
SECTION
3.8. INVENTORY AND
RETURNS.
18
SECTION
3.9. TAX MATTERS
19
SECTION
3.10. INTELLECTUAL PROPERTY.
19
SECTION
3.11. PRODUCT RECORDS
21
SECTION
3.12. BROKERS, FINDERS, ETC
21
SECTION
3.13. FINANCIAL STATEMENTS.
21
SECTION
3.14. INSURANCE.
21
SECTION
3.15. SUFFICIENCY
22
SECTION
3.16. GOVERNMENT
MULTI-PRODUCT CONTRACTS.
22
SECTION
3.17. REGULATORY COMPLIANCE
23
SECTION
3.18. PRODUCT REGISTRATIONS.
24
SECTION
3.19. NO OTHER WARRANTIES
25
SECTION
3.20. ADEQUACY OF DISCLOSURE
25
ARTICLE IV - REPRESENTATIONS AND WARRANTIES OF BUYER
25
SECTION
4.1. ORGANIZATION AND
AUTHORITY
25
SECTION
4.2. CONSENTS; NO
VIOLATIONS.
26
SECTION
4.3. BROKERS,
FINDERS, ETC
26
SECTION
4.4. FINANCING
26
SECTION 4.5. LITIGATION
26
ARTICLE V - COVENANTS OF SELLER PRIOR TO CLOSING
27
SECTION
5.1. ACCESS TO
INFORMATION
27
SECTION
5.2. CONDUCT OF THE
PRODUCT BUSINESS.
27
SECTION
5.3. REQUIRED
APPROVALS AND CONSENTS
27
SECTION
5.4. NOTICE OF
DEFAULT
27
SECTION
5.5. NO NEGOTIATION
28
SECTION
5.6. REASONABLE BEST
EFFORTS
28
SECTION
5.7. TRANSITION
ACTIVITIES.
28
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ARTICLE VI - COVENANTS OF BUYER PRIOR TO CLOSING
28
SECTION
6.1. REQUIRED
APPROVALS AND CONSENTS
28
SECTION
6.2. NOTICE OF
DEFAULT
28
SECTION
6.3. REASONABLE BEST
EFFORTS
29
ARTICLE VII - CLOSING AND TERMINATION
29
SECTION
7.1. CLOSING
29
SECTION
7.2. CONDITIONS
PRECEDENT TO OBLIGATIONS OF
BUYER AND SELLER
29
SECTION
7.3. CONDITIONS
PRECEDENT TO BUYER'S OBLIGATIONS
29
SECTION
7.4. CONDITIONS
PRECEDENT TO SELLER'S OBLIGATIONS
30
SECTION
7.5. CLOSING
DELIVERIES.
31
SECTION
7.6. TERMINATION
32
SECTION
7.7. PROCEDURE AND
EFFECT OF TERMINATION
33
ARTICLE VIII - CERTAIN OTHER COVENANTS
33
SECTION
8.1. HSR FILINGS
33
SECTION
8.2. INVENTORY COST
ADJUSTMENT
34
SECTION
8.3. PRODUCT RETURNS,
REBATES AND CHARGEBACKS
35
SECTION
8.4. TRANSITIONAL
TRADEMARK LICENSE.
38
SECTION
8.5. CUSTOMER BILLING
39
SECTION
8.6. COVENANT NOT TO
COMPETE
39
SECTION
8.7. COOPERATION.
39
SECTION
8.8. CLINICAL TRIALS
40
SECTION
8.9. EMPLOYEES
40
SECTION
8.10. TAX MATTERS.
40
SECTION
8.11. NOTICE TO CUSTOMERS
42
SECTION
8.12. ASSISTANCE IN SUPPLY
OF PRODUCT
42
SECTION
8.13. ADVERSE EXPERIENCE
REPORTS
42
SECTION
8.14. REGULATORY MATTERS.
42
SECTION
8.15. DIFFERENTIATION OF
PRODUCT
43
SECTION
8.16. [***]
43
SECTION
8.17. BOOKS AND RECORDS
44
SECTION
8.18. NON-EXCLUSIVE LICENSE
44
SECTION
8.19. ASSISTANCE REGARDING
REQUIRED SEC
FINANCIAL DISCLOSURES
44
ARTICLE IX - INDEMNIFICATION
45
SECTION
9.1. SURVIVAL OF
REPRESENTATIONS AND
WARRANTIES
45
SECTION
9.2. INDEMNIFICATION.
45
SECTION
9.3. INDEMNIFICATION
PROCEDURES.
47
SECTION
9.4. LIMITATIONS.
49
SECTION
9.5. RIGHT OF SETOFF
49
ARTICLE X - MISCELLANEOUS PROVISIONS
49
SECTION
10.1. CONFIDENTIALITY AND
PUBLICITY.
49
SECTION
10.2. NOTICES
51
SECTION
10.3. MODIFICATION; WAIVER
52
SECTION 10.4. EXPENSES
52
SECTION
10.5. ENTIRE AGREEMENT
52
SECTION
10.6. ASSIGNMENT
53
SECTION
10.7. THIRD PARTIES
53
SECTION
10.8. WAIVER
53
SECTION
10.9. SEVERABILITY
53
SECTION
10.10. GOVERNING LAW
53
SECTION
10.11. HEADINGS
53
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SECTION
10.12. EXECUTION IN COUNTERPARTS
53
SECTION
10.13. FORCE MAJEURE
53
SECTION
10.14. RELATIONSHIP OF THE PARTIES
54
SECTION
10.15. ARBITRATION
54
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<PAGE>
PRODUCT ACQUISITION AGREEMENT
This
PRODUCT ACQUISITION AGREEMENT (as amended from time to time,
the
"Agreement"), dated November 28, 2005 (the "Execution Date"), is
made and
entered into by and between VALEANT PHARMACEUTICALS NORTH AMERICA,
a Delaware
corporation (the "Buyer"), and INTERMUNE, INC., a Delaware
corporation (the
"Seller"). Buyer and Seller are sometimes collectively referred to
herein as the
"Parties" and separately as a "Party."
RECITALS
WHEREAS, Seller is a biopharmaceutical company focused on
developing and
commercializing innovative therapies in hepatology and
pulmonology;
WHEREAS, Buyer is a global, research-based, specialty
pharmaceutical
company that discovers, develops, manufactures and markets
pharmaceutical
products, primarily in the areas of neurology, dermatology and
infectious
disease;
WHEREAS, Seller has determined that the sale of certain products
and
product related rights at this time is consistent with its current
business
strategy;
WHEREAS, Buyer has determined that the acquisition of those
certain
products and product related rights at this time is consistent with
its current
business strategy; and
WHEREAS, Seller desires to sell such products and product related
rights to
Buyer, and Buyer desires to purchase such products and product
related rights
from Seller, on the terms and conditions set forth herein.
NOW,
THEREFORE, in consideration of the promises, representations,
warranties, covenants and agreements contained herein and other
good and
valuable consideration, the receipt and sufficiency of which are
hereby
acknowledged, the Parties hereto, intending to be legally bound
hereby, agree as
follows:
ARTICLE I -- DEFINITIONS
SECTION 1.1. DEFINED TERMS. For the purposes of this Agreement,
the
following words and phrases shall have the following meanings
whether in the
singular or the plural:
"Affiliate" shall mean any Person which controls, is controlled by,
or is
under common control with the applicable Person. For purposes of
this
definition, "control" shall mean: (a) in the case of corporate
entities, direct
or indirect ownership of at least fifty percent (50%) of the stock
or shares (or
such lesser percentage which is the maximum allowed to be owned by
a foreign
corporation in a particular jurisdiction) entitled to vote for the
election of
directors or otherwise having the power to vote on or direct the
affairs of such
Person; and (b) in the case of
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<PAGE>
non-corporate entities, direct or indirect ownership of at least
fifty percent
(50%) of the equity interest or the power to direct the management
and policies
of such non-corporate entities.
"AGHC Trial" shall mean the AGHC-002 (IND #11,599) Phase 2,
randomized,
dose-ranging, open label study of safety and tolerability of
consensus
interferon-alpha (CIFN) plus interferon gamma-1b (IFN-y 1b) with or
without
Ribavirin (RBV) in the treatment of patients with chronic Hepatitis
C who are
nonresponders to pegylated-interferon-a (2a or 2b) plus RBV.
"Agreement" shall have the meaning set forth in the first paragraph
of this
Agreement.
"Amgen" means Amgen Inc.
"Amgen Agreements" means the Amgen License Agreement, Amgen
Assignment,
Assumption and Consent Agreement, and Amgen Quality Agreement.
"Amgen Assignment, Assumption and Consent Agreement" means the
Assignment,
Assumption and Consent Agreement, dated June 15, 2001, by and among
Amgen,
InterMune, and Yamanouchi Europe, B.V.
"Amgen Consent" means
that certain consent, in the form agreed upon by
Buyer and Seller on or prior to the date hereof, to be executed by
Amgen, Buyer
and Seller pursuant to which Amgen consents to Seller assigning to
Buyer the
Amgen Agreements.
"Amgen License Agreement" shall mean that certain License and
Commercialization Agreement, dated June 15, 2001, by and between
Amgen, Inc. and
Seller, as amended from time to time, including but not limited to
that certain
Amendment No. 1, dated April 24, 2002, that certain Amendment
Number 2, dated
December 31, 2004, and that certain Amendment No. Three, dated
January 13, 2005.
"Amgen License Rights" shall mean all of the rights of Seller,
including
but not limited to Seller's rights as licensee and sublicensee,
under the Amgen
License Agreement.
"Amgen Quality Agreement" means the Quality Agreement, dated March
22,
2002, between Amgen and Seller.
"Ancillary Agreements" shall have the meaning set forth in Section
7.3(g).
"Applicable Law" shall mean all applicable provisions of all
statutes,
laws, rules, regulations, administrative codes, ordinances,
decrees, orders,
decisions, guidance documents, injunctions, awards, judgments, and
permits and
licenses of or from Governmental Authorities relating to or
governing the use or
regulation of the subject item, including, where applicable, Tax
Law.
"Asset Acquisition Statement" shall have the meaning set forth in
Section
8.10(a).
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"Assumed Liabilities" shall mean the Liabilities set forth in
Section 2.3.
"Basket" shall have the meaning set forth in Section 9.4(a).
"BI
Austria" means Boehringer Ingelheim Austria GmbH.
"BI
Austria Agreement" means that certain Data Transfer, Clinical Trial
and
Market Supply Agreement, dated November 3, 2005, by and between BI
Austria and
Seller, as amended from time to time
"Bill of Sale" shall have the meaning set forth in Section
7.5(a)(i).
"BLA" means the application for Infergen prepared pursuant to
applicable
FDA Regulations and filed with the FDA for authorization to market
Infergen
within the United States.
"Business Day" means a day, which is not a Saturday, a Sunday, or
a
statutory holiday in the United States.
"Buyer" shall have the meaning set forth in the first paragraph of
this
Agreement.
"Buyer Indemnitee" shall have the meaning set forth in Section
9.2(a).
"Buyer Labeling" means the printed labels, labeling and
packaging
materials, including printed carton, container labels and package
inserts, used
by Buyer and bearing Buyer's name for, or in connection with,
packaging of
Infergen.
"Buyer Losses" shall have the meaning set forth in Section
9.2(a).
"Buyer Proprietary Information" shall have the meaning set forth in
Section
10.1(b).
"Buyer's Closing Certificate" shall have the meaning set forth in
Section
7.4(c).
"Cap" shall have the meaning set forth in Section 9.4(a).
"Cardinal Health Acknowledgement" means that certain written
acknowledgement from Cardinal Health, in form and substance
reasonably
acceptable to Buyer, pursuant to which Cardinal Health shall
acknowledge and
agree to continue to provide to Seller, for the benefit of Buyer,
through ninety
days following the Closing, the same services, including but not
limited to
inventory storage, distribution, accounts payable and accounts
receivable
services, at the same cost as Cardinal Health is currently
providing to Seller
under that certain Distribution Services Agreement, dated January
15, 1999.
"Chargeback Claims" shall have the meaning set forth in Section
8.3(d).
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"Clinical Trials" shall mean, collectively, the IRHC-001 Trial,
the
IRHC-002 Trial, the IRHC-003 Trial, and the IST Trials.
"Clinical Trial Inventory" shall mean the pharmaceutical products
listed on
Schedule 1.1, being the pharmaceutical products held in inventory,
estimated as
of [***], by Seller for use by Seller in the Clinical Trials and
transferred to
Buyer on the Closing Date in accordance with Section 2.1(d);
provided, however,
that Clinical Trial Inventory shall not include such amounts of
pharmaceutical
products as required by Seller to complete the AGHC Trial.
"Closing" shall have
the meaning set forth in Section 7.1.
"Closing Date" shall have the meaning set forth in Section 7.1.
"Closing Payment" shall have the meaning set forth in Section
2.5(a).
"Code" means the United States Internal Revenue Code of 1986, as
amended.
"Confidentiality Agreement" shall have the meaning set forth in
Section
10.1.
"Contract" shall mean any agreement, contract, lease,
consensual
obligation, promise, or undertaking (whether written or oral), to
which Seller
is a party that relates exclusively to the Product, the Product
Business, the
Purchased Assets, or the Assumed Liabilities, or which are
necessary for the
conduct of the Product Business as conducted by the Seller.
"Effective Time" shall have the meaning set forth in Section
7.1.
"Encumbrance" shall mean claims, security interests, liens,
pledges,
charges, escrows, options, proxies, rights of first refusal,
preemptive rights,
mortgages, hypothecations, assessments, prior assignments, title
retention
agreements, conditional sales agreements, indentures, deeds of
trust, leases,
levys or security agreements of any kind whatsoever imposed upon
the subject
property or item.
"Estimated Inventory Cost" shall have the meaning set forth in
Section
8.2(b).
"Estimated Inventory Statement" shall have the meaning set forth in
Section
8.2(a).
"Execution Date" shall mean the date set forth in the first
paragraph of
this Agreement.
"Excluded Assets" shall mean all assets and properties of Seller,
other
than the Purchased Assets, Other Intellectual Property, Inventory
(subject to
the Inventory Cap), and Clinical Trial Inventory.
"Excluded Intellectual Property" shall mean all Intellectual
Property owned
or controlled by Seller other than the Product Intellectual
Property and the
Other Intellectual Property.
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"Excluded Liabilities" shall mean all Liabilities or obligations of
Seller
(other than the Assumed Liabilities), including any obligation or
Liability of
Seller created as a result of this Agreement and those items set
forth on
Schedule 2.4(a).
"FDA" means the United States Food and Drug Administration.
"FSS" shall have the meaning set forth in Section 8.3(d).
"Government Multi-Product Contracts" means all written contracts
or
agreements by which Seller dispenses Infergen through a government
agency,
together with other pharmaceutical products of Seller.
"Governmental Authority" means the government of the applicable
country in
the Territory and any state, province, municipality or other
political
subdivision thereof or therein, or any court, tribunal, agency,
department,
board, instrumentality, authority or commission (including
regulatory and
administrative bodies) of any of the foregoing.
"HSR
Act" shall mean the U.S. Hart-Scott-Rodino Antitrust Improvements
Act
of 1976, as amended, and the rules and regulations promulgated
thereunder.
"Indemnification Claim Notice" shall have the meaning set forth in
Section
8.2(b).
"Indemnified Party" shall have the meaning set forth in Section
8.2(b).
"Indemnifying Party" shall have the meaning set forth in Section
8.2(b).
"Indemnitee(s)" shall mean either a Buyer Indemnitee or Seller
Indemnitee,
as the case may be.
"Infergen" shall mean the finished pharmaceutical product
containing
interferon alfacon-1 in the formulation sold by Seller under the
trademark
Infergen(R) prior to the Closing.
"Instruments of Transfer" shall mean such instruments and documents
in
addition to the Ancillary Agreements that are necessary pursuant to
Applicable
Law to effectuate and consummate the transactions contemplated
hereby,
including, bills of sale, assumption agreements, assignment and
assumption of
contracts and other conveyance documents in the forms agreed-upon
in good faith
by the Parties.
"Intellectual Property" shall mean all domestic and foreign (i)
trademarks,
trademark registrations, trademark applications, service marks,
service mark
registrations, service mark applications, business marks, brand
names, trade
names, trade dress, names, logos and slogans, internet domains and
URLs, and all
goodwill associated therewith; (ii) patents, patent rights,
provisional patent
applications, patent applications, designs, registered designs,
registered
design applications, industrial designs, industrial design
applications and
industrial design registrations,
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including any and all divisions, continuations, continuations in
part,
extensions, substitutions, renewals, registrations,
revalidations,
reexaminations, reissues or additions, including supplementary
certificates of
protection, of or to any of the foregoing items; (iii) copyrights,
copyright
registrations, copyright applications, original works of authorship
fixed in any
tangible medium of expression, including literary works (including
all forms and
types of computer software, including all source code, object code,
firmware,
development tools, files, records and data, and all documentation
related to any
of the foregoing), musical, dramatic, pictorial, graphic and
sculptured works;
(iv) trade secrets, technology, discoveries and improvements, know
how,
proprietary rights, formulae, confidential and proprietary
information,
technical information, techniques, inventions, designs, drawings,
procedures,
processes, models, formulations, manuals and systems, whether or
not patentable
or copyrightable, including all biological, chemical,
biochemical,
toxicological, pharmacological and metabolic material and
information and data
relating thereto and formulation, clinical, analytical and
stability information
and data which have actual or potential commercial value and are
not available
in the public domain; and (v) all other intellectual property or
proprietary
rights, in each case whether or not subject to statutory
registration or
protection.
"Inventory" shall mean the Infergen owned or controlled by Seller
for
Seller's marketing and sale in the Territory, which (i) are in
finished dosage
form, including Seller's trade dress, (ii) are of a quality usable
and salable
in the ordinary course of business, (iii) comprise unsold lots, and
(iv) as of
the Closing Date, have at least two-thirds of their shelf life
remaining. For
the avoidance of doubt, for purposes of this Agreement, unless
otherwise
expressly stated herein, the term "Inventory" shall not include
(and, among
other things, Buyer shall not be required to purchase pursuant
hereto) the
Clinical Trial Inventory or any Infergen which does not satisfy all
of the
foregoing conditions. For the avoidance of doubt, for purposes of
this
Agreement, the term "Inventory" shall include Infergen held in
inventory by
Seller and acquired by Seller from Amgen under Purchase Order No.
6273;
provided, that such Infergen otherwise satisfies all of the
conditions of
subparagraphs (i)-(iv) above and is subject to the Inventory Cap,
all as
otherwise provided in this Agreement.
"Inventory Cap" shall have the meaning set forth in Section
2.1(b).
"Inventory Cost" shall have the meaning set forth in Section
8.2(b).
"Inventory Statement" shall have the meaning set forth in Section
8.2(b).
"IP
Assignment" shall have the meaning set forth in Section
7.5(a)(i).
"IRHC-001 Trial" means the randomized, open-label, phase III
investigational research study (identified as IRHC-001) designed by
and
initiated by Seller as of the date hereof to evaluate the safety
and efficacy of
daily administration of Infergen plus ribavirin versus no treatment
in patients
infected with the hepatitis C virus (HCV) who have not responded to
previous
combination therapy with pegylated interferon alfa plus
ribavirin.
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"IRHC-002 Trial" means the randomized, open-label phase III
investigational
research study (identified as IRHC-002) designed by and initiated
by Seller as
of the date hereof to evaluate the safety and efficacy of two dose
levels of
daily Infergen plus ribavirin in patients infected with the
hepatitis C virus
(HCV) who failed to achieve virologic response after previous
pegylated
interferon alfa plus ribavirin therapy and during at least 24 weeks
of no
treatment in the IRHC-001 Trial.
"IRHC-003 Trial" means the single arm study of daily Infergen
plus
ribavirin in patients infected with the hepatitis C virus (HCV) as
designed and
presented in the briefing package prepared and submitted to FDA on
September 22,
2005 in connection with a meeting with the Division of Antiviral
Drug Products
held on October 24, 2005.
"IRS" means the United States Internal Revenue Service.
"IST
Trials" means all investigator-sponsored trials with respect to
Infergen as set forth on Section 3.17(j) of the Seller Disclosure
Schedule.
"Knowledge of the Buyer" or "to Buyer's Knowledge" or any similar
such
statement shall mean that an executive officer or director of
Buyer, or a key
employee of Buyer directly involved on behalf of Buyer in the
transactions
contemplated herein, either (i) has or had actual knowledge of a
fact or matter,
or (ii) could reasonably be expected to have become aware of the
fact or matter
had he or she conducted a reasonable investigation regarding the
accuracy of the
subject representation or warranty.
"Knowledge of the Seller" or "to Seller's Knowledge" or any similar
such
statement shall mean that an executive officer or director of
Seller, or a key
employee of Seller directly involved in the Product Business,
either (i) has or
had actual knowledge of a fact or matter, or (ii) could reasonably
be expected
to have become aware of the fact or matter had he or she conducted
a reasonable
investigation regarding the accuracy of the subject representation
or warranty.
"Liability" shall mean, collectively, any indebtedness,
guaranty,
endorsement, claim, loss, damage, deficiency, cost, expense,
obligation or
responsibility, fixed or unfixed, known or unknown, choate or
inchoate,
liquidated or unliquidated, secured or unsecured, direct or
indirect, matured or
unmatured, or absolute, contingent or otherwise, including any
product
liability.
"Material Adverse Change" means any change, event or occurrence
that has,
or has had, or is reasonably likely to have, a Material Adverse
Effect;
provided, however, that for purposes hereof, the commencement of,
threatened
commencement of, or announced intention to commence any action or
investigation
of the Product Business prior to the Closing by the U.S. Department
of Justice,
the Office of the Inspector General, or any other Governmental
Authority shall
constitute a Material Adverse Change.
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"Material Adverse Effect" means a material adverse effect upon (i)
the
business, financial condition or results of operations of the
Product Business
or the Purchased Assets, or (ii) the ability of a Party to
consummate the
transactions contemplated by this Agreement, other than (a) any
change, effect,
event or condition that arises from changes in general economic
conditions or
conditions affecting the pharmaceutical industry generally, or (b)
such changes,
events or conditions resulting from the announcement of, or the
consummation of,
the transactions contemplated hereby.
"Material Consents" shall have the meaning set forth in Section
7.3(c).
"Nektar Agreements" means the (i) Development, Licensing and
Manufacturing
Agreement dated as of June 20, 2002 by and between Seller and
Nektar
Therapeutics (successor-in-interest to Shearwater Corporation) and
(ii)
Collaborative Research Agreement dated as of December 19, 2001 by
and between
Seller and Nektar Therapeutics (successor-in-interest to
Shearwater
Corporation).
"[***]" shall have the meaning set forth in Section 8.16(a).
"[***]" shall have the meaning set forth in Section 8.16(a).
"[***]" shall have the meaning set forth in Section 8.16(b).
"Other Intellectual Property" shall mean the Intellectual Property
listed
on Schedule 2.1(c), being that certain Intellectual Property owned
by Seller as
of the Execution Date that is not included within the Purchased
Assets but that
will be conveyed to Buyer as of the Effective Time in accordance
with Section
2.1(c).
"Party" or "Parties" shall have the meaning set forth in the
first
paragraph of this Agreement.
"Permitted Encumbrances" means (i) the Encumbrances and exceptions
set
forth in Section 3.2 of the Seller Disclosure Schedule, and (ii)
liens imposed
by any Governmental Authority for Taxes not yet due and payable, or
for Taxes
that Seller is contesting in good faith.
"Person" shall mean any natural person, corporation,
unincorporated
organization, partnership, association, joint stock company, joint
venture,
limited liability company, trust or government, or any agency or
political
subdivision of any government, or any other entity.
"Prime Rate" shall mean the rate of interest that Citibank N.A.
lists as
its prime lending rate on the last day of the applicable calendar
quarter, or if
such rate is not available, the prime lending rate listed in the
New York City,
USA version of The Wall Street Journal on the last day of the
applicable
calendar quarter.
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***CONFIDENTIAL TREATEMENT REQEUSTED
<PAGE>
"Product" shall mean any finished pharmaceutical product
containing
interferon alphacon-1, including Infergen.
"Product Business" shall mean the manufacturing, using,
developing,
promoting, selling, offering to sell, or importing of Infergen for
sale in the
Territory as currently being conducted by Seller; provided,
however, that
Product Business shall not include the development of Infergen in
combination
with Actimmune.
"Product Copyrights" means, as owned, licensed or controlled by
Seller and
exclusively related to the Product Business, the copyrights
(whether or not
registered) and registrations and applications for registration or
renewals
thereof, including all derivative works, moral rights, renewals,
extensions,
reversions or restorations associated with such copyrights, now or
hereafter
provided by law, regardless of the medium of fixation or means of
expression,
and all goodwill associated therewith listed on Section
3.10(b)(iii) of the
Seller Disclosure Schedule.
"Product Domains" means, as owned, licensed or controlled by Seller
and
exclusively related to the Product Business, the internet domains
and URLs in
the Territory, listed on Section 3.10(b)(iv) of the Seller
Disclosure Schedule.
"Product Intellectual Property" shall mean the Amgen License
Rights,
Product Copyrights, Product Domains, Product Know-How, Product
Patents, Product
Trademarks, and Product Trade Dress, listed on Sections 3.10(b)(i)
to (iv) of
the Seller Disclosure Schedule.
"Product Know How" means, as owned, licensed or controlled by
Seller and
exclusively related to the Product Business, including as developed
in
connection with the Clinical Trials, the research and development
information,
validation methods and procedures, unpatented inventions, know-how,
trade
secrets, technical or other data or information, or other
materials, methods,
procedures, processes, materials, developments or technology,
including all
biological, chemical, clinical, manufacturing and other information
or data,
other than such know-how which is or becomes the subject of a
patent or of a
provisional or filed patent application.
"Product Patents" means, as owned, licensed or controlled by Seller
and
exclusively related to the Product Business, the patents, patent
applications,
provisional patent applications and similar instruments (including
any and all
substitutions, divisions, continuations, continuations-in-part,
reissues,
renewals, extensions, reexaminations, patents of addition,
supplementary
protection certificates, inventors' certificates, pediatric data
package
exclusivity extensions, divisions, re-filings, continuations
and
continuations-in-part thereof, or the like) as well as any foreign
equivalents
thereof (including certificates of invention and any applications
therefor),
listed on Section 3.10(b)(i) of the Seller Disclosure Schedule.
"Product Records" shall mean all files, documents, instruments,
papers,
books and records owned or controlled by Seller, whether in
electronic or
tangible form, to the extent relating to the Product Business,
including any
pricing lists, customer lists, vendor lists, financial
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<PAGE>
data, research and development files, marketing materials (if any),
regulatory
files, adverse event reports and files, clinical studies and all
documentation
relating to the Product Intellectual Property, but excluding any
such items to
the extent that any Applicable Law prohibits their transfer.
Notwithstanding the
foregoing, prior to delivering or making the Product Records
available to Buyer,
Seller shall be entitled to redact from the Product Records any
information that
does not relate exclusively to the Product Business.
"Product Registrations" shall mean all applications (including the
BLA),
new drug applications, abbreviated new drug applications, new drug
submissions,
and any comparable applications and submissions, together with any
and all
supplements or modifications or amendments thereto, whether
existing, pending,
withdrawn or in draft form, together with all correspondence to or
from any
Governmental Authority with respect thereto, prepared and submitted
to any
Governmental Authority in the Territory with respect to
Infergen.
"Product Returns" shall have the meaning set forth in Section
8.3(a).
"Product Trade Dress" means, as owned, licensed or controlled by
Seller,
the trade dress, logos and designs exclusively related to the
Product Business,
listed on Section 3.10(b)(ii) of the Seller Disclosure
Schedule.
"Product Trademarks" means, as owned, licensed or controlled by
Seller and
exclusively related to the Product Business, the trademarks,
service marks,
logos, slogans and trade names (whether or not registered), in the
Territory,
including all variations, derivations, combinations, registrations
and
applications for registration or renewals of the foregoing and all
goodwill
associated therewith, listed on Section 3.10(b)(ii) of the Seller
Disclosure
Schedule.
"Promotional Materials" shall mean, to the extent exclusively
related to
the Product Business, all advertising, promotional, selling and
marketing
materials in written or electronic form existing as of the Closing
and owned or
controlled and in the possession of Seller.
"Purchased Assets" shall mean, collectively, the Contracts,
Regulatory
Approvals, Promotional Materials, Product Records and the Product
Intellectual
Property.
"Purchase Price" shall have the meaning set forth in Section
2.5.
"Regulatory Approvals" shall mean, as exclusively related to
Infergen in
the Territory and/or Seller's operation of the Product Business,
all material
permits, licenses, certificates, approvals, Product Registrations,
filings and
authorizations issued by any Governmental Authority to Seller or
its
representatives.
"Returns" means all returns (including information returns),
declarations,
reports, statements, schedules, notices, forms, declarations and
other documents
or information filed with or submitted to, or required under a Tax
Law to be
filed with or submitted to a Governmental
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<PAGE>
Authority in respect of Taxes or any Tax Law relating to any Tax
(and "Return"
means any one of the foregoing Returns).
"Schedules" shall refer to the schedules to this Agreement which
are hereby
incorporated by reference into this Agreement.
"Seller" shall have the meaning set forth in the first paragraph of
this
Agreement.
"Seller Disclosure Schedule" shall have the meaning set forth in
the first
paragraph of Article III.
"Seller Indemnitee" shall have the meaning set forth in Section
9.2(b).
"Seller Losses" shall have the meaning set forth in Section
9.2(b).
"Seller Marks" shall mean all Trademarks and trade dress owned,
licensed or
controlled by Seller, aside from the Product Trademarks and Product
Trade Dress,
that are used in connection with the Product Business and the
Assumed
Liabilities as of the Execution Date.
"Seller Proprietary Information" shall have the meaning set forth
in
Section 10.1(c).
"Seller's Closing Certificate" shall have the meaning set forth in
Section
7.3(e).
"Statement of Allocation" shall have the meaning set forth in
Section
8.10(a).
"[***]" means, in an [***], the [***] with [***] by both [***] at
[***].
"Taxes" means, with respect to the Territory, all federal, state,
local,
foreign and other income, net income, gross income, gross receipts,
sales, use,
ad valorem, transfer, capital stock, franchise, profits, license,
service, add
on or alternative minimum tax, occupancy, withholding, payroll,
fringe benefits,
employment, employees' income withholding, foreign or domestic
withholding,
unemployment, disability, excise, severance, stamp, value added,
occupation,
premium, property (including, real property and personal property
taxes and any
assessments, special or otherwise), environmental, windfall
profits, customs,
duties or other taxes, fees, assessments, levies, tariffs, or
charges of any
kind that are in the nature of a tax, together with any interest
and any
penalties, additions to tax or additional amounts with respect
thereto (and
"Tax" means any one of the foregoing Taxes).
"Tax
Law" means, with respect to the Territory, a statute, law,
regulation
or administrative rule or judicial opinion enacted, issued or
promulgated for
the determination, imposition, assessment or collection of any
Tax.
"Termination Notice" shall have the meaning set forth in Section
8.16(c).
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***CONFIDENTIAL TREATMENT REQUESTED
<PAGE>
"Territory" means the United States of America, Canada and their
respective
territories and possessions.
"Third Party" shall mean any Person other than Buyer or Seller, or
an
Affiliate of either of them.
"Trademarks" means all trademarks, service marks, logos, slogans
and trade
names (whether or not registered), in the Territory, including all
variations,
derivations, combinations, registrations and applications for
registration or
renewals of the foregoing and all goodwill associated
therewith.
"Transfer Taxes" shall have the meaning set forth in Section
8.10(b).
"Treasury Regulations" shall mean the income tax regulations issued
under
the Code.
"Valid Claim" shall mean shall mean a claim in any (i) unexpired
and issued
patent in the Product Patents rights that has not been (a) held
permanently
revoked, unenforceable or invalid by a final unappealable decision
of a court or
government agency of competent jurisdiction over such claim or (b)
admitted to
be invalid or unenforceable through disclaimers, consent decrees or
otherwise,
or (ii) pending patent application in the Product Patents rights
that has been
on file with the applicable patent office for not more than five
(5) years and
for which there has been reasonably consistent activity to advance
to issuance
of a patent.
SECTION 1.2. CONSTRUCTION. Unless the context of this Agreement
otherwise
requires: (a) words of any gender include each other gender; (b)
"dollars"
refers to U.S. dollars; (c) words using the singular or plural
number also
include the plural or singular number, respectively; (d) the terms
"hereof,"
"herein," "hereby" and derivative or similar words refer to this
entire
Agreement; (e) the terms "Article," "Section" or "Exhibit" refer to
the
specified Article, Section or Exhibit of this Agreement; and (f)
the term
"including" or any variation thereof means "including without
limitation" or any
variation thereof and shall not be construed to limit any general
statement
which it follows to the specific or similar items or matters
immediately
following it, unless otherwise expressly stated.
ARTICLE II -- THE TRANSACTION
SECTION 2.1. TRANSFER OF PURCHASED ASSETS, INVENTORY, OTHER
INTELLECTUAL
PROPERTY AND CLINICAL TRIAL INVENTORY.
(a) Purchase and Sale of Purchased Assets. At the Effective Time,
on
the terms and subject to the conditions hereof and in reliance upon
the
representations, warranties and covenants contained herein and in
consideration
of the Purchase Price paid to Seller by Buyer, Seller will sell,
convey,
transfer, assign and deliver to the Buyer, and the Buyer will
purchase, take
delivery of and acquire from Seller, all of Seller's right, title
and interest
in and to the Purchased Assets.
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<PAGE>
(b) Purchase and Sale of Inventory. At the Effective Time, on
the
terms and subject to the conditions hereof and in reliance upon
the
representations, warranties and covenants contained herein and in
consideration
of the Inventory Cost paid to Seller by Buyer, Seller will sell,
convey,
transfer, assign and deliver to the Buyer, and the Buyer will
purchase and
acquire from Seller, all of Seller's right, title and interest in
and to the
Inventory; provided, however, Buyer shall only be required to
purchase up to
$6.5 million of Inventory hereunder (the "Inventory Cap") and
Seller shall
retain all Inventory (other than the Clinical Trial Inventory) in
excess of the
Inventory Cap.
(c) Transfer of Other Intellectual Property. At the Effective Time,
on
the terms and subject to the conditions hereof, Seller shall
convey, transfer,
assign and deliver to Buyer, at no additional cost to Buyer, and
Buyer shall
acquire from Seller, all of Seller's rights, title, and interest in
and to the
Other Intellectual Property. Notwithstanding the foregoing, Buyer
hereby grants
Seller a non-exclusive, fully paid-up and royalty free license to
the Other
Intellectual Property solely for activities permitted by Section
8.6 of this
Agreement. If Buyer elects to prosecute the Other Intellectual
Property, Buyer
will assume responsibility for such prosecution and will promptly
provide Seller
with copies of official prosecution correspondence and provide
Seller with
reasonable time to consider and comment upon prosecution strategy,
such comments
to be considered by Buyer in good faith. In the event Buyer decides
to abandon
any patent or patent application included in the Other Intellectual
Property,
Buyer will give Seller at least thirty (30) days prior written
notice to decide
whether or not Seller wishes to assume responsibility for such
patent or patent
application, in which case Buyer shall assign and transfer such
patent or patent
application back to Seller.
(d) Transfer of Clinical Trial Inventory. At the Effective Time,
on
the terms and subject to the conditions hereof, Seller shall
convey, transfer,
assign and deliver to Buyer, at no additional cost to Buyer, and
Buyer shall
acquire from Seller, all of Seller's rights, title, and interest in
and to the
Clinical Trial Inventory. On the weekend immediately preceding the
Closing Date,
Seller shall temporarily halt the use of pharmaceutical products to
be used by
Seller in the Clinical Trials, in order to allow Seller to conduct
a review of
those of its locations at which pharmaceutical products used by
Seller in the
Clinical Trials are located in order to determine the exact
quantities of
Clinical Trials Inventory that will be transferred to Buyer
hereunder, and
Seller shall provide Buyer with an itemized list of the Clinical
Trials
Inventory the next Business Day.
SECTION 2.2. EXCLUDED ASSETS.
(a) Excluded Assets. The Parties acknowledge and agree that Seller
is
not selling, conveying, transferring, delivering, assigning any
rights
whatsoever to the Excluded Assets to Buyer, and Buyer is not
purchasing, taking
delivery of or acquiring any rights whatsoever to the Excluded
Assets from
Seller.
(b) Excluded Intellectual Property. Buyer expressly acknowledges it
is
not acquiring any rights whatsoever to the Excluded Intellectual
Property,
including the "InterMune" name or any variations and derivatives
thereof and any
other logos or trademarks of Seller not included in the Product
Intellectual
Property, or the Other Intellectual Property, other than the
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<PAGE>
limited rights to use the Seller Marks for the limited transition
period
pursuant to the provisions of Section 8.4 and other than as
specifically
provided in Section 8.18.
SECTION 2.3. ASSUMED LIABILITIES. As of the Effective Time, Buyer
shall
assume and agree to pay, perform or otherwise discharge, in
accordance with
their respective terms and subject to the respective conditions
thereof, only
the following Liabilities (collectively, the "Assumed
Liabilities"):
(a) Any Liability arising after the Effective Time under any
Contract
listed on Schedule 2.3(a) (other than any Liability arising out of
or relating
to a breach of such Contract which occurred prior to the Effective
Time);
(b) Any Liability arising after the Effective Time under any
Contract
which was entered into by Seller after the Execution Date in
accordance with the
provisions of Section 5.2 (other than any Liability arising out of
or relating
to a breach of such Contract which occurred prior to the Effective
Time); and
(c) Any other Liability specifically set forth on Schedule
2.3(c)
hereto.
For avoidance of doubt, nothing in this Section 2.3 is intended to,
or shall be
interpreted to, limit or otherwise reduce the Liabilities of Buyer
as they may
occur and/or exist after the Effective Time solely by virtue of
Buyer's
ownership of the Purchased Assets or operation of the Product
Business, but
rather, this Section 2.3 is solely intended to identify and provide
for the
assumption by Buyer of those Liabilities of Seller that are
specifically assumed
by Buyer hereunder and which, but for such assumption, would remain
Liabilities
of Seller.
SECTION 2.4. EXCLUDED LIABILITIES.
(a) The Parties hereby acknowledge and agree that, other than
the
Assumed Liabilities, Buyer shall not be responsible for, assume, or
be obligated
to pay, perform or otherwise discharge any Liabilities of Seller,
whether or not
related to the Product Business, including any Excluded Liabilities
as set forth
on Schedule 2.4(a). The Parties acknowledge that in no event shall
the foregoing
sentence be construed to limit Buyer's obligations under Article
IX.
(b) The Parties hereby acknowledge and agree Seller shall not
be
responsible for, assume, or be obligated to pay, perform or
otherwise discharge
any obligations or liabilities of Buyer. The Parties acknowledge
that in no
event shall the foregoing sentence be construed to limit Seller's
obligations
under Article IX.
SECTION 2.5. PURCHASE PRICE AND INVENTORY COST. In addition to
the
assumption by Buyer of the Assumed Liabilities pursuant to Section
2.3, Buyer
will pay to Seller (x) the payments set forth in Section 2.5(a) to
2.5(e) below
for the Purchased Assets (the "Purchase Price"), and (y) the
Inventory Cost for
the Inventory, as follows:
(a) On the Closing Date, Buyer (or its Affiliates) will transfer
to
Seller in accordance with the written instructions provided to
Buyer by Seller,
(i) One Hundred Thirteen
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<PAGE>
Million Five Hundred Thousand Dollars ($113,500,000) (the "Closing
Payment"),
plus (ii) the Estimated Inventory Cost for the Inventory.
Thereafter, the final
Inventory Cost will be determined and a final reconciliation
payment with
respect thereto will be made in accordance with Section 8.2;
(b) Buyer
will transfer to Seller in accordance with the written
instructions provided to Buyer by Seller, a one time cash milestone
payment of
Five Million Dollars ($5,000,000) within five (5) Business Days of
the
completion of the key tables and listings generated from the locked
clinical
database following the last patient visit in the IRHC-001
Trial;
(c) Buyer will transfer to Seller in accordance with the
written
instructions provided to Buyer by Seller, a one time cash milestone
payment of
Ten Million Dollars ($10,000,000) within five (5) Business Days of
[***] of a
[***] to the [***] of [***] in [***] with [***]; provided, however,
that if
[***] has not [***], in lieu of such $10 million milestone payment,
a one-time
cash milestone payment will be paid no later than January 15, 2010
as follows:
(i) if, upon completion of the IRHC-001 Trial, the [***] in [***]
of
the
IRHC-001 Trial is [***] or [***] ([***]%), Buyer will have no
obligation to pay a milestone payment pursuant to this Section
2.5(c);
(ii) if, upon completion of the IRHC-001 Trial, the [***] the [***]
of
[***] of the IRHC-001 Trial is [***] or [***] ([***]%) but [***]
([***]%),
the
cash milestone payment will equal Five Million Dollars
($5,000,000);
(iii) if, upon completion of the IRHC-001 Trial, the [***] the
[***]
of
[***] of the IRHC-001 Trial is [***] or [***] ([***]%) but
[***]
([***]%), the cash milestone payment will equal Ten Million
Dollars
($10,000,000); and
(iv) if, upon completion of the IRHC-001 Trial, [***] the [***]
of
[***] of the IRHC-001 Trial is [***] or [***] ([***]%), the cash
milestone
payment will equal Fifteen Million Dollars ($15,000,000).
(d) Buyer will transfer to Seller in accordance with the
written
instructions provided to Buyer by Seller, a one time cash milestone
payment of
Two Million Euros (E2,000,000) on January 15, 2007 in connection
with the [***]
of the [***].
SECTION 2.6. RISK OF LOSS. Until the Effective Time, any loss of or
damage
to the Purchased Assets, and Inventory from fire, flood, casualty
or any other
similar occurrence shall be the sole responsibility of Seller. As
of the
Effective Time, title to the Purchased Assets, and Inventory shall
be
transferred to Buyer. After the Effective Time, Buyer shall bear
all risk of
loss associated with the Purchased Assets and Inventory and shall
be solely
responsible for
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***CONFIDENITAL TREATMENT REQUESTED
<PAGE>
procuring adequate insurance to protect the Purchased Assets and
Inventory
against any such loss.
ARTICLE III -- REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Buyer that the following
representations
and warranties are true and correct as of the Execution Date and
shall be
reaffirmed at Closing pursuant to Section 7.3(a), subject in each
case to the
attached disclosure schedules supplied by Seller to Buyer and dated
as of the
date hereof (the "Seller Disclosure Schedule ") and provided that
each exception
set forth in such Seller Disclosure Schedule shall be deemed to
qualify only
such representation and warranty that is specifically identified
(by cross
reference or otherwise) in any specific section of the Seller
Disclosure
Schedule.
SECTION 3.1. ORGANIZATION AND AUTHORITY. Seller is a corporation
duly
organized, validly existing and in good standing under the laws of
the State of
Delaware. Seller has full corporate power and corporate authority
to execute and
deliver this Agreement and the Ancillary Agreements, and the
transactions
contemplated hereby and thereby, and effect the transactions
contemplated hereby
and thereby and has duly authorized the execution, delivery and
performance of
this Agreement and the Ancillary Agreements and transactions or
documents
contemplated thereby by all necessary corporate action. Seller has
all corporate
power and corporate authority necessary to own its assets and carry
on the
Product Business as currently being conducted by Seller. This
Agreement and the
Ancillary Agreements are the valid and legally binding obligations
of Seller,
enforceable against it in accordance with their terms, subject to
applicable
bankruptcy moratorium, reorganization, insolvency and similar laws
of general
application relating to or affecting the rights and remedies of
creditors
generally and to general equitable principles (regardless of
whether in equity
or at law).
SECTION 3.2. TITLE TO PURCHASED ASSETS AND INVENTORY. Seller has
good and
marketable title to the Purchased Assets and Inventory free and
clear of any
Encumbrances, except for the Permitted Encumbrances. Seller has not
received any
notice of any adverse claims of ownership to or right to use the
Purchased
Assets or Inventory, and to Seller's Knowledge, no facts or
circumstances exist
which would provide a reasonable basis for any such adverse claim
of ownership
or right to use any of the Purchased Assets or Inventory.
SECTION 3.3. CONSENTS; NO VIOLATIONS.
(a) Except for the requisite filings under the HSR Act and the
expiration or termination of the waiting period thereunder, and
except for all
filings and other actions contemplated by this Agreement and the
Ancillary
Agreements (including the necessary transfer of filings, notices
and approvals
required to transfer the Regulatory Approvals from Seller to Buyer)
(the
"Consents"), the execution, delivery and performance by Seller of
this Agreement
and the Ancillary Agreements and the consummation by Seller of the
transactions
contemplated hereby and thereby will not require any notice to,
filing with, or
the consent, approval or authorization of, any Person or
Governmental Authority.
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<PAGE>
(b)
Neither the execution and delivery of this Agreement or the
Ancillary Agreements nor the consummation of the transactions
contemplated
hereby or thereby will (i) violate or result in a breach or result
in the
acceleration or termination of, or the creation in any Third Party
of the right
to accelerate, terminate, modify or cancel, any Contract listed on
Section 3.7
of the Seller Disclosure Schedule, (ii) conflict with, violate or
result in a
breach of any provision of the certificate of incorporation or
by-laws of
Seller, or (iii) conflict with or violate in any material respect
Applicable
Law.
SECTION 3.4. REGULATORY APPROVALS.
(a) Section 3.4(a) of the Seller Disclosure Schedule sets forth
a
complete and correct list of all applications (including the BLA),
new drug
applications, abbreviated new drug applications, new drug
submissions and any
comparable applications and submissions in the Territory with
respect to the
Product. Seller has provided to Buyer complete and correct copies
of the
Regulatory Approvals or Buyer has had access to such copies of the
Regulatory
Approvals. The Regulatory Approvals are in full force and effect
and have been
duly and validly issued.
(b) Seller has all Regulatory Approvals necessary for or used to
carry
on the Product Business as being conducted by Seller as of the
Execution Date
and which are required by Applicable Law.
(c) Seller is in compliance with all of the Regulatory
Approvals
listed on Section 3.4(a) of the Seller Disclosure Schedule, and,
since the time
Seller acquired its rights in the Product, Seller has not received
any
notification, written or oral, from any Third Party with respect to
any alleged
or possible violation with respect to any such Regulatory
Approvals, and to
Seller's Knowledge, there are no facts or circumstances that would
form a
reasonable basis for any such violation.
SECTION 3.5. COMPLIANCE WITH LAWS AND LITIGATION.
(a) Except with respect to any matter relating to or arising
from
Regulatory Approvals (which is addressed in Section 3.4), with
respect to the
Product Business, the Purchased Assets, the Inventory and the
Assumed
Liabilities, Seller is in compliance with all Applicable Law,
except where such
noncompliance would not reasonably be expected to have a Material
Adverse
Effect.
(b) There are no lawsuits, claims or any civil, administrative
or
criminal actions, suits, or proceedings or governmental
investigations,
including any action or investigation by the U.S. Department of
Justice, Office
of the Inspector General, or any Governmental Authority, existing,
pending, or
to the Knowledge of Seller, threatened, with respect to the Product
Business,
the Purchased Assets or the Assumed Liabilities or with respect to
this
Agreement or the transactions contemplated hereby. Seller is not
subject to any
decree or order of any Governmental Authority that would reasonably
be expected
to impair or delay its ability to perform its obligations under
this Agreement.
SECTION 3.6. NO MATERIAL ADVERSE CHANGE.
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<PAGE>
(a) Since January 1, 2005, there has not been any Material
Adverse
Change and no event has occurred or circumstance exists that would
reasonably be
expected to result in such a Material Adverse Change.
(b) Since January 1, 2005, Seller has, consistent with the conduct
of
the Product Business during the two (2) years prior to the
Execution Date: (i)
continued and conducted the Product Business in Seller's ordinary
and usual
course of business, and (ii) maintained its relationships with
suppliers,
distributors, customers and others having material business
relationships with
Seller related to the Product Business.
SECTION 3.7. CONTRACTS.
(a) Section 3.7 of the Seller Disclosure Schedule sets forth a
complete and correct list of each of the Contracts (i) which
involve payments
totaling $50,000 or more, or (ii) which are otherwise material to
the Product
Business. Such Contracts are all of the Contracts necessary to
conduct the
Product Business. Seller has delivered to or made available to
Buyer true and
complete copies of all such Contracts and any other contracts or
agreements
identified in Section 3.7 of the Seller Disclosure Schedule. All
such Contracts
to which Seller is a party are, as to Seller (and, as to the other
parties
thereto, to the Knowledge of Seller), legal, valid and binding
agreements in
full force and effect and enforceable in accordance with its terms
(subject to
applicable bankruptcy moratorium, reorganization, insolvency and
similar laws of
general application relating to or affecting the rights and
remedies of
creditors generally and to general equitable principles (regardless
of whether
in equity or at law)).
(b) Seller is not in
material breach or default, and no event has
occurred that with notice or lapse of time would constitute a
material breach or
default by Seller permitting termination, modification, or
acceleration, under
any Contract set forth on Section 3.7 of the Seller Disclosure
Schedule. To the
Knowledge of Seller, no other party to any Contract is in material
breach or
default under, or has repudiated any material provision of, any
Contract set
forth on Section 3.7 of the Seller Disclosure Schedule.
(c) The Amgen Agreements are all of the Contracts between Seller
and
Amgen that pertain to the Product.
SECTION 3.8. INVENTORY AND RETURNS.
(a) Section 3.8(a) of the Seller Disclosure Schedule sets forth
a
complete and correct list of Seller's Inventory as of November 4,
2005. The
Inventory consists of finished goods usable and salable by Seller
in the
ordinary course of business. The Inventory has been produced or
manufactured in
accordance with all Applicable Law and Product Registrations.
(b) Since January 1, 2005, other than entering into the Contracts
with
specialty pharmacies for the direct sales by Seller to such
pharmacies of
Infergen and entering into distribution Contracts or amendments to
existing
distribution Contracts with two wholesalers, Seller has not (i)
materially
altered its distribution practices or terms with respect to
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Infergen, or (ii) materially altered its activities and practices
with respect
to inventory levels of Infergen maintained at the wholesale,
chain,
institutional or retail levels in any material respect.
(c) As of the Closing Date, the aggregate dollar value of the
inventory of Infergen (the "Aggregate Inventory Value") maintained
by (a)
Cardinal Health, McKesson, and AmeriSource Bergen (collectively,
"Seller's
Principal Wholesalers"), and (b) the specialty pharmacies with
which Seller has
a contractual relationship, will not exceed the Maximum Inventory
Amount. For
purposes hereof, (i) the "Aggregate Inventory Value" shall be
calculated by
multiplying the number of units of inventory of Infergen maintained
by Seller's
Principal Wholesalers and the specialty pharmacies as of the
Closing Date by the
wholesale acquisition cost ("WAC") for such units as of the Closing
Date, and
(ii) the "Maximum Inventory Amount" shall mean the amount equal to:
(x) the
weekly average of the aggregate number of units of each SKU shipped
by all of
Seller's Principal Wholesalers in the previous [***] ([***])[***],
multiplied by
(y) [***] ([***])[***], multiplied by (z) the WAC for each
unit.
(d) Section 3.8(d) of the Seller Disclosure Schedule sets forth, on
a
[***] basis, the returns of Infergen for [***] ([***])[***].
SECTION 3.9. TAX MATTERS. There are no Encumbrances on any of the
Purchased
Assets or the Inventory that arose in connection with any failure
(or alleged
failure) to pay any Tax, and Seller has no Knowledge of any basis
for assertion
of any claims attributable to Taxes which, if adversely determined,
would
reasonably be expected to result in any such Encumbrance.
SECTION 3.10. INTELLECTUAL PROPERTY.
(a) Seller is the owner, licensee or sub licensee (as
applicable),
free and clear of any Encumbrance, except for the Permitted
Encumbrances, of all
right, title and interest in and to the Product Intellectual
Property.
(b) Sections 3.10(b)(i)-(iv) of the Seller Disclosure Schedule
set
forth a true and complete list of the Intellectual Property owned,
licensed or
controlled by Seller covering the Product Business.
(c) The activities of Seller, if any, relating to the
development,
manufacture, marketing, use, sale, distribution, import, export or
other
commercial exploitation of Infergen by Seller, in each case in
connection with
the operation of the Product Business, do not infringe upon,
misappropriate,
violate, dilute (with respect to any trademarks, trade names, brand
names and
service marks) or otherwise constitute the unauthorized use of, the
Intellectual
Property rights of any third party; (ii) no claim is pending or, to
the
Knowledge of Seller, threatened against Seller alleging any of the
foregoing;
and (iii) to the Knowledge of Seller, no right, license, lease,
consent or other
agreement is required with respect to any Product Intellectual
Property for the
conduct of the Product Business other than those included in the
Purchased
Assets.
(d) To the actual knowledge of an executive officer or director
of
Seller, or a key employee of Seller directly involved on behalf of
Seller in the
transactions contemplated
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herein (the "Actual Knowledge of Seller"), none of the Product
Patents is
involved in any litigation, reissue, interference, reexamination,
or opposition,
and there has been no threat or other indication that any such
proceeding will
hereafter be commenced. To the Actual Knowledge of Seller, the
Product Patents
(excluding patent applications) (i) are in good standing, (ii) are
all without
challenge of any kind, (iii) are valid and enforceable, and (iv)
have not been
adjudged invalid or unenforceable in whole or in part.
(e) To the Actual Knowledge of Seller, none of the Product
Trademarks,
Product Copyrights or Product Domains or registrations or
applications to use or
register such items are involved in any cancellation,
nullification,
interference, conflict, concurrent use or opposition proceeding,
and there has
been no threat or other indication that any such proceeding will
hereafter be
commenced.
(f) No legal proceedings are pending, or to the Actual Knowledge
of
Seller are threatened, against Seller (i) based upon, challenging
or seeking to
deny or restrict the use of any of the Product Intellectual
Property, (ii)
alleging that any services provided by, processes used by, or
products
manufactured or sold or to be manufactured or sold by Seller in
relation to the
Product Business infringe or misappropriate any Intellectual
Property right of
any third party, or (iii) alleging that the Amgen License Rights
conflict with
the terms of any third party license or other agreement.
(g) To the Actual Knowledge of Seller, all maintenance fees,
annuity
fees or renewal fee payment for each jurisdiction in which each
patent, patent
application, trademark, trademark application, trade name, trade
name
registration, brand name, brand name registration, service mark,
service mark
registration, copyright, copyright application, domain name or
domain name
application included within the Product Intellectual Property has
issued or is
pending have been timely paid.
(h) To the Knowledge of Seller, no third party is engaging in
any
activity that infringes or misappropriates the Product Intellectual
Property.
Seller is not a party to any agreement granting rights by Seller to
any third
party with respect to the Product Intellectual Property.
(i) Seller has, with respect to the Product Business, used
commercially reasonable efforts to maintain its trade secrets in
confidence.
(j) To the Knowledge of Seller, there has been no misappropriation
of
any trade secrets or other confidential information of Seller with
respect to
the Product Business.
(k) All employees of, consultants to or vendors of Seller with
access
to confidential information with respect to the Product Business
are parties to
written agreements under which each such employee, consultant or
vendor is
obligated to maintain the confidentiality of confidential
information of Seller.
To the Knowledge of Seller, none of the employees, consultants or
vendors of
Seller or any of its subsidiaries is in violation of such
agreements.
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<PAGE>
(l) The execution, delivery and performance of this Agreement, and
the
consummation of the transactions contemplated hereby, will not
result in or give
rise to any right of termination or other right to impair or limit,
or otherwise
result in a breach of, any of Seller's rights to own or retain a
license to any
of the Product Intellectual Property.
SECTION 3.11. PRODUCT RECORDS. All of the Product Records have been
made
available by Seller to Buyer for examination, are complete and
correct in all
material respects and have been maintained in accordance with sound
business
practices.
SECTION 3.12. BROKERS, FINDERS, ETC. Seller has not employed any
broker,
finder, consultant or other intermediary in connection with the
transactions
contemplated by this Agreement and the Ancillary Agreements who
would have a
valid claim for a fee or commission from Buyer in connection with
such
transactions by reason of any action taken by or on behalf of
Seller.
SECTION 3.13. FINANCIAL STATEMENTS.
(a) Each form, report, schedule and document required to be filed
by
Seller under the Securities Exchange Act of 1934, as amended (the
"Exchange
Act") since January 1, 2003 (collectively, the "Seller SEC Filings"
and
individually, a "Seller SEC Filing"), solely with respect to the
Product
Business, (i) did, as of its date, comply in all material respects
with the
requirements of the Exchange Act and (ii) did not, at the time it
was filed,
contain any untrue statement of a material fact or omit to state a
material fact
required to be stated therein or necessary in order to make the
statements made
therein, in the light of the circumstances under which they were
made, not
misleading.
(b) Each of the consolidated financial statements (including in
each
case, any notes thereto) contained in any Seller SEC Filing, solely
to the
extent each relates to the Product Business, (i) was prepared in
accordance with
GAAP applied (except as may be indicated in the notes thereto and,
in the case
of unaudited quarterly financial statements, as permitted by Form
10-Q under the
Exchange Act) on a consistent basis throughout the periods
indicated, and (ii)
presented fairly the consolidated financial position, results of
operations and
cash flows of Seller as of the respective dates thereof and for the
respective
periods indicated therein (subject, in the case of unaudited
statements, to
normal and recurring year-end adjustments which did not result in a
Material
Adverse Effect).
SECTION 3.14. INSURANCE.
(a) Seller maintains, and shall continue to maintain at its sole
cost
and expense on an uninterrupted basis for a period of at least
[***] following
the Effective Time, product liability and other insurance on a
primary and
non-contributory basis for itself in amounts, respectively, which
are reasonable
and customary in the United States consumer healthcare industry for
companies of
comparable size and activities at the place of business of Seller,
provided that
the product liability insurance amounts are not, and shall not at
any time be
allowed to be, less than [***] ($[***]) per occurrence (or per
claim) and [***]
($[***]) in the aggregate limit of liability per year. Such
insurance
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insures against, and at all times shall insure against, all
liability, including
personal injury, product liability, physical injury, clinical
development
liabilities, and property damage arising out of the development,
manufacture,
sale, distribution, or marketing of the Product.
(b) There are no material claims currently made against any of
the
insurance policies of Seller relating to the Product Business, no
material
impairment of the amounts of coverage required thereunder, and
Seller has no
Knowledge of any reasonable basis for any such claims.
SECTION 3.15. SUFFICIENCY. The Purchased Assets together with the
Assumed
Liabilities, the Inventory, and Buyer's rights under this
Agreement, and the
other Ancillary Agreements, constitute all of the material assets
that are
necessary for Buyer to operate the Product Business as of and after
the Closing
in a substantially similar manner as the Product Business was
operated by Seller
for the two (2) years prior to the Effective Time; provided,
however, for the
avoidance of doubt, such representation and warranty shall exclude
any and all
assets and capabilities that a comparable company in the global
pharmaceutical
business should customarily be capable of providing in connection
with the
operation of a business such as the Product Business, including
internal and
external infrastructure, manufacturing equipment and facilities,
business
permits and licenses, professional services, trade and distribution
networks,
personnel, facilities, factories and other property, promotional
and brand
strategies, and financing.
SECTION 3.16. GOVERNMENT MULTI-PRODUCT CONTRACTS.
(a) Seller is not a party to any managed care contracts or other
sales
contracts pursuant to which Seller is required to provide or honor
discounts,
rebates, charge backs, or similar price breaks in connection with
selling
Infergen.
(b) Seller has made available to Buyer copies of all Government
Multi-Product Contracts; provided that such copies may have been
redacted to
prevent disclosure of information not related to Infergen. After
the Effective
Time, Buyer shall honor and perform all Liabilities of Seller
arising after the
Effective Time under and pursuant to each Government Multi-Product
Contract
(other than any Liability arising out of or relating to a breach of
such
Government Multi-Product Contract which occurred prior to the
Effective Time)
with respect to supplying Infergen to the applicable party pursuant
to such
Government Multi-Product Contract until such time as Seller has
terminated each
such Government Multi-Product Contract as provided below. Seller
agrees that
after the Effective Time it will not take any action with respect
to any
Government Multi-Product Contract that would extend the term of
such Government
Multi-Product contract with respect to Infergen, create or agree to
any
additional obligations with respect to Infergen, or otherwise
adversely affect
Buyer or the Product Business, without the prior written consent of
Buyer,
although Seller may enter into a separate agreement with such
government party,
provided that such agreements do not contain any provisions
relating to Infergen
or the Product Business. Seller further agrees that Seller shall
terminate the
rights and obligations of Seller with respect to the Product under
each such
Government Multi-Product Contract, to the extent permitted by the
terms thereof,
as soon as practicable after the Effective Time.
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<PAGE>
SECTION 3.17. REGULATORY COMPLIANCE. To the extent applicable to
Infergen
in the Territory:
(a) To the Knowledge of Seller, Infergen has been developed,
labeled,
stored, tested and distributed in compliance with all applicable
requirements
under the Federal Food Drug and Cosmetic Act 21 U.S.C. Sections 301
et. seq.,
its implementing regulations, and all similar Applicable Laws,
including those
relating to investig
