<PAGE>
EXHIBIT 10.5
================================================================================
ASSET PURCHASE AGREEMENT
dated as of September 30, 2005
by and between
ABBOTT LABORATORIES
("Seller")
and
IMARX THERAPEUTICS, INC.
("Buyer")
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TABLE OF CONTENTS
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ARTICLE 1
DEFINITIONS...................................................
1
1.1
Definitions...................................................
1
ARTICLE 2 PURCHASE AND
SALE............................................. 5
2.1 Agreements to
Purchase and Sell............................... 5
2.2 Excluded
Assets............................................... 6
2.3 Assumed
Liabilities........................................... 7
2.4 Excluded
Liabilities.......................................... 8
2.5 Procedures for
Purchased Assets not Transferable.............. 9
ARTICLE 3 PURCHASE
PRICE; CONSISTENT TREATMENT.......................... 9
3.1 Purchase
Price................................................ 9
3.2 Payment of
Purchase Price..................................... 9
3.3 Purchase Price
Allocation..................................... 9
3.4
Prorations....................................................
9
ARTICLE 4
CLOSING.......................................................
10
4.1 Closing
Date.................................................. 10
4.2 Transactions at
Closing....................................... 10
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF SELLER......................
10
5.1
Organization..................................................
10
5.2 Due
Authorization.............................................
11
5.3
Title.........................................................
11
5.4 Intellectual
Property......................................... 11
5.5 Compliance with
Laws.......................................... 13
5.6
Equipment.....................................................
13
5.7
Litigation....................................................
13
5.8
Consents......................................................
13
5.9 Brokers,
Etc.................................................. 13
5.10
Financial
Information......................................... 13
5.11
Absence of
Undisclosed Liabilities............................ 13
5.12
Absence of
Unusual Changes and Unusual Transactions........... 13
5.13
Governmental Authorizations...................................
14
5.14
Contracts.....................................................
14
5.15
Tax
Matters...................................................
14
5.16
Full
Disclosure...............................................
15
5.17
Disclaimer....................................................
15
5.18
Independent Investigation.....................................
15
5.19
Investment
by the Seller...................................... 15
5.20
Raw
Material Viability........................................
15
ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF BUYER.......................
15
6.1
Organization..................................................
15
6.2 Due
Authorization.............................................
16
6.3 Capital
Stock................................................. 16
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6.4
Subsidiaries..................................................
16
6.5
Title.........................................................
16
6.6 Buyer's
Intellectual Property................................. 17
6.7
Litigation....................................................
17
6.8
Consents......................................................
17
6.9 Brokers,
Etc.................................................. 17
6.10
Financial
Information......................................... 17
6.11
Absence of
Undisclosed Liabilities............................ 17
6.12
Absence of
Unusual Changes and Unusual Transactions........... 17
6.13
Tax
Matters...................................................
18
6.14
Full
Disclosure...............................................
18
6.15
Transactions with Affiliates..................................
18
6.16
Compliance
with Laws.......................................... 18
6.17
Independent Investigation.....................................
18
ARTICLE 7 PRE-CLOSING
COVENANTS OF SELLER AND BUYER..................... 19
7.1 Corporate and
Other Actions................................... 19
7.2 Consents and
Approvals........................................ 19
7.3 Competition Law
Filings....................................... 19
7.4 Access to
Information......................................... 19
7.5 Ordinary Course
of Business................................... 19
7.6
Exclusivity...................................................
20
ARTICLE 8
CONDITIONS....................................................
20
8.1 Conditions to
Obligations of Seller........................... 20
8.2 Conditions to
Obligations of Buyer............................ 21
ARTICLE 9 POST-CLOSING
COVENANTS; OTHER AGREEMENTS...................... 22
9.1 Availability of
Records....................................... 22
9.2 Use of Trade or
Service Marks................................. 23
9.3 Tax
Matters...................................................
23
9.4 Non-competition
by Seller..................................... 23
9.5 Financial
Statements.......................................... 23
9.6 Compliance with
Laws.......................................... 24
9.7 Post-Closing
Delivery......................................... 24
ARTICLE 10 INDEMNIFICATION AND
SURVIVAL.................................. 24
10.1
Indemnification by Seller.....................................
24
10.2
Indemnification by Buyer......................................
25
10.3
Survival......................................................
26
10.4
Exclusive
Remedy.............................................. 26
10.5
Net Losses
and Subrogation.................................... 27
10.6
Insurance.....................................................
27
ARTICLE 11
TERMINATION...................................................
27
11.1
Termination of Agreement......................................
27
11.2
Automatic
Termination......................................... 27
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ARTICLE 12
MISCELLANEOUS.................................................
28
12.1
Assignment....................................................
28
12.2
No Press
Release Without Consent.............................. 28
12.3
Confidentiality...............................................
28
12.4
Expenses......................................................
29
12.5
Severability..................................................
29
12.6
Entire
Agreement..............................................
29
12.7
No Third
Party Beneficiaries.................................. 29
12.8
Waiver........................................................
29
12.9
Governing
Law................................................. 29
12.10
Headings......................................................
29
12.11
Counterparts..................................................
29
12.12
Further
Documents............................................. 29
12.13
Notices.......................................................
30
12.14
Schedules.....................................................
30
12.15
Construction..................................................
31
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<PAGE>
EXHIBITS AND SCHEDULES
EXHIBITS
Exhibit A - Assignment and Assumption Agreement
Exhibit B - Intellectual Property Transfer Agreement
Exhibit C - Patent License Agreement
Exhibit D - Promissory Note
Exhibit E - Certificate of Designation
Exhibit F - Inventory Testing Procedures
Exhibit G - Security Agreement
Exhibit H - Series E Preferred Stock Purchase Agreement
SCHEDULES
Schedule 1.1 - Knowledge Persons
Schedule 2.1(a)(i) - Inventory
Schedule 2.1(a)(ii) - Equipment
Schedule 2.1(b) - Transferred Intellectual Property
Schedule 2.1(c) - Contracts
Schedule 2.1(d) - Governmental Authorizations
Schedule 2.1(f) - Product Applications
Schedule 2.1(h) - Raw Materials
Schedule 2.3 - Assumed Liabilities
Schedule 5.3 - Title
Schedule 5.4 - Intellectual Property
Schedule 5.7 - Litigation
Schedule 5.8 - Seller Consents
Schedule 5.13 - Governmental Authorization
Schedule 6.4 - Subsidiaries
Schedule 6.5 - Title
Schedule 6.6 - Buyer's Intellectual Property
Schedule 6.8 - Consents
Schedule 6.15 - Transactions with Affiliates
iv
<PAGE>
ASSET PURCHASE AGREEMENT
THIS
AGREEMENT, dated as of September 30, 2005, is entered into by
and
between ABBOTT LABORATORIES, an Illinois corporation ("Seller"),
and ImaRx
Therapeutics, Inc., a Delaware corporation ("Buyer").
WHEREAS, Seller wishes to sell to Buyer the Purchased Assets and
Assumed
Liabilities (each as defined below), and Buyer wishes to purchase
such assets
from Seller and to assume such liabilities.
NOW,
THEREFORE, in consideration of the premises and mutual
covenants,
agreements and provisions herein contained, the parties hereto
agree as follows:
ARTICLE 1
Definitions.
1.1
Definitions. The following terms have the following meanings when
used
herein:
"$"
means United States dollars.
"Affiliate" means, with respect to any Person, any other Person
directly or
indirectly controlling or controlled by, or under direct or
indirect common
control with, such Person. For purposes of this definition, a
Person shall be
deemed to control another Person if it owns or controls more than
fifty percent
(50%) of the voting equity of the other Person (or other comparable
ownership if
the Person is not a corporation).
"Agreement" means this Asset Purchase Agreement, including all
Schedules
and Exhibits hereto, as it may be amended from time to time in
accordance with
its terms.
"Allocation Schedule" has the meaning set forth in Section 3.3.
"Assignment and Assumption Agreement" means the Bill of Sale,
Conveyance
and Assignment in substantially the form attached hereto as Exhibit
A.
"Assumed Liabilities" has the meaning set forth in Section 2.3.
"Certificate of Designation" means the Certificate of Designation
of
Rights, Preferences and Privileges of Series E Preferred Stock, in
substantially
the form attached hereto as Exhibit E.
"Closing" means the closing of the purchase and sale of the
Purchased
Assets and assumption of the Assumed Liabilities contemplated by
this Agreement.
"Closing Date" means September 30, 2005, or such other date as may
be
mutually agreed upon by the Buyer and Seller.
"Code" means the United States Internal Revenue Code of 1986, as
amended.
"Confidentiality Agreement" has the meaning set forth in Section
12.3.
<PAGE>
"Controlled Group" means all members of a controlled group of
corporations
and all trades or businesses (whether or not incorporated) under
common control
which, together with Buyer, are treated as a single employer under
Section 414
of the Code.
"Contracts" has the meaning set forth in Section 2.1(c).
"Encumbrance" means any encumbrance, lien, charge, pledge,
mortgage, title
retention agreement, security interest of any nature, adverse
claim, exception,
reservation, easement, right of occupation, any matter capable of
registration
against title, option, right of pre-emption or privilege or any
agreement or
other commitment, whether written or oral, to create any of the
foregoing.
"Equipment" means that equipment designated as "Equipment" on
Schedule
2.1(a)(ii).
"Excluded Assets" has the meaning set forth in Section 2.2.
"Excluded Liabilities" has the meaning set forth in Section
2.4.
"Field" means the business of manufacturing, marketing and
selling
thrombolytic pharmaceutical therapy products, which shall mean
serine proteases
that converts plasminogen to plasmin to break down the fibrinogen
and fibrin to
dissolve a thrombus in an artery, vein or in-dwelling catheter, or
any proteases
or protease activators which catalyze proteolytic breakdown of
fibrinogen or
fibrin for the same purpose.
"GAAP" means United States generally accepted accounting
principles
consistently applied from period to period and throughout any
period in
accordance with the past practices of Seller or Buyer, as the case
may be.
"Governmental Authorizations" has the meaning set forth in Section
2.1(d).
"HSR
Act" means the Hart-Scott-Rodino Antitrust Improvements Act of
1976,
as amended.
"Indebtedness" shall mean, with respect to any Person, any amount
payable
by such Person pursuant to an agreement or instrument involving,
relating to or
evidencing money borrowed or received, the advance of credit, a
conditional sale
or a transfer with recourse or with an obligation to repurchase, or
pursuant to
a capital lease to which such Person is a party as debtor, borrower
or
guarantor, all obligations of such Person to purchase securities
(or other
property) which arise out of or in connection with the sale of the
same or
substantially similar securities or property, all non-contingent
obligations of
such Person to reimburse any bank or other Person in respect of
amounts paid
under a letter of credit or similar instrument, all obligations to
advance funds
including keep wells, comfort letters and similar arrangements and
all
liabilities under interest rate cap agreements, interest rate swap
agreements,
foreign currency exchange agreements and other hedging agreements
or
arrangements.
"Indemnified Person" has the meaning set forth in Section
10.5(a).
"Indemnifying Person" has the meaning set forth in Section
10.5(a).
2
<PAGE>
"Intellectual Property Rights" means all intellectual property,
industrial
and other proprietary rights, protected or protectable, under the
laws of the
United States or any other country, or any political subdivision
thereof,
including, without limitation, (i) all trade names, trade dress,
trademarks,
service marks, logos, brand names and other identifiers; (ii)
copyrights, moral
rights (including rights of attribution and rights of integrity);
(iii) all
trade secrets, inventions, discoveries, devices, processes,
designs, techniques,
trade secrets, ideas, know-how and other confidential or
proprietary
information, whether or not reduced to practice; (iv) all domestic
and foreign
patents and the registrations, applications, renewals, divisionals,
reissues,
reexaminations, supplemental patent certificates, extensions and
continuations
(in whole or in part) thereof; and (v) all goodwill associated
therewith and all
rights and causes of action for infringement, misappropriation,
misuse, dilution
or unfair trade practices associated with (i) through (iv)
above.
"Intellectual Property Transfer Agreement" means the Intellectual
Property
Transfer Agreement attached hereto as Exhibit B.
"Inventory" means clinical trial finished drug product and bulk
drug
substance and existing intermediates related to the Products as set
forth on
Schedule 2.1(a)(i).
"Inventory Testing Procedures" means the procedures set forth on
Exhibit F
hereto.
"Investment Assets" means all debentures, notes and other evidences
of
indebtedness, stocks, securities (including rights to purchase and
securities
convertible into or exchangeable for other securities), interests
in joint
ventures and general and limited partnerships, mortgage loans and
other
investment or portfolio assets owned of record or beneficially by
the Buyer.
"Investment Documents" means the Promissory Note, the Security
Agreement,
the Series E Preferred Stock Purchase Agreement and the Certificate
of
Designation.
"Knowledge" means, with respect to either Buyer or Seller, the
actual
knowledge of the persons listed on Schedule 1.1 after reasonable
inquiry.
"Losses" has the meaning set forth in Section 10.1(a).
"Multiemployer Plan" means a multiemployer plan as described in
Section
4064(a) of ERISA.
"Option" with respect to any Person means any security, right,
subscription, warrant, option, "phantom" stock right or other
contract or
agreement that gives the right to (i) purchase or otherwise receive
or be issued
any shares of capital stock of such Person or other equity
interests of such
Person or any security of any kind convertible into or exchangeable
or
exercisable for any shares of capital stock or other equity
interests of such
Person or (ii) receive any benefits or rights similar to any rights
enjoyed by
or accruing to the holder of shares of capital stock or other
equity interests
of such Person, including without limitation, any rights to
participate in the
equity, income or election of directors or officers of such
Person.
3
<PAGE>
"Other Agreements" means, collectively, the Assignment and
Assumption
Agreement, the Intellectual Property Transfer Agreement, the Patent
License
Agreement, and the Investment Documents.
"Patent License Agreement" means a Patent License Agreement in
substantially the form attached hereto as Exhibit C.
"Permitted Encumbrances" shall mean Repligen's rights to license US
Patent
No. 5,665,578 and US Patent No. 5,741,682.
"Person" means any individual, corporation, partnership,
limited
partnership, joint venture, limited liability company, trust or
unincorporated
organization or government or any agency or political subdivision
thereof.
"Plan" means any employee pension benefit plan covered by Title IV
of ERISA
or subject to the minimum funding standards under Section 412 of
the Code that
either (a) is maintained by a member of the Controlled Group for
employees or a
member of the Controlled Group or (b) is maintained pursuant to a
collective
bargaining agreement or any other arrangement under which more than
one employer
makes contributions and to which a member of the Controlled Group
is then making
or accruing an obligation to make contributions or has within the
preceding five
plan years made contributions, and includes any Pension Plan.
"Preferred Stock" means 1,000,000 shares of the Series E Preferred
Stock of
the Buyer having the terms set forth in the Certificate of
Designation,
substantially in the form of Exhibit E attached hereto.
"Product" or "Products" means all of Seller's rights in its
proprietary
recombinant urokinase, rUK, as well as its development stage next
generation
lytic, recombinant pro-urokinase, proUK.
"Promissory Note" means the promissory note in the principal amount
of $15
million from Buyer to Seller, substantially in the form attached
hereto as
Exhibit D.
"Purchase Price" has the meaning set forth in Section 3.1.
"Purchased Assets" has the meaning set forth in Section 2.1.
"Raw
Materials" means those raw materials set forth on Schedule
2.1(h).
"Security Agreement" means the Security Agreement relating to
the
Promissory Note, substantially in the form of Exhibit G hereto.
"Series E Preferred Stock Purchase Agreement" means the Series E
Preferred
Stock Purchase Agreement, substantially in the form of Exhibit H
hereto.
"Seller" has the meaning set forth in the recitals hereof.
4
<PAGE>
"Subsidiary" means any Person in which the Buyer, directly or
indirectly,
beneficially owns at least fifty percent (50%) of either the equity
interest in,
or the voting control of, such Person, whether or not existing on
the date
hereof.
"Taxes" shall mean all taxes, charges, fees, duties, levies or
other
assessments, including, without limitation, income, gross receipts,
net
proceeds, ad valorem, turnover, real and personal property
(tangible and
intangible), sales, use, franchise, excise, value added, goods and
services,
license, payroll, unemployment, environmental, customs duties,
capital stock,
disability, stamp, leasing, lease, user, transfer, fuel, excess
profits,
occupational and interest equalization, windfall profits, severance
and
employees' income withholding and social security and similar
employment taxes
imposed by the United States or any foreign country or by any
state,
municipality, subdivision or instrumentality of the United States
or of any
other foreign country or by any other tax authority, including all
applicable
penalties and interest, and such term shall include any interest,
penalties or
additions to tax attributable to such taxes.
"Tax
Indemnification" has the meaning set forth in Section 10.3.
"Thrombolytic Therapy Product" means serine proteases that
converts
plasminogen to plasmin to break down the fibrinogen and fibrin to
dissolve a
thrombus in an artery, vein or in-dwelling catheter, or any
proteases or
protease activators which catalyze proteolytic breakdown of
fibrinogen or fibrin
for the same purpose.
"Transferred Intellectual Property" has the meaning set forth in
Section
2.1(b).
"United States" means the United States of America.
ARTICLE 2
Purchase and Sale.
2.1
Agreements to Purchase and Sell. Subject to the terms and
conditions
contained herein, at the Closing Seller shall sell, transfer,
convey, assign and
deliver to Buyer, and Buyer shall purchase and accept from Seller,
all right,
title, and interest of Seller in and to the following assets of
Seller
(collectively, the "Purchased Assets"):
(a) all of the rights to fixed and other tangible personal
property,
whether owned or leased, to the extent primarily used by Seller to
manufacture
and assemble the Products as set forth on Schedules 2.1(a)(i) and
2.1(a)(ii),
including the Inventory designated on Schedule 2.1(a)(i) and
certain equipment
designated on Schedule 2.1(a)(ii) (the "Equipment");
(b) the following Intellectual Property Rights owned by Seller to
the
extent they primarily relate to the Products: (i) the trademarks,
patents and
patent applications set forth on Schedule 2.1(b), (ii) the package
designs,
labels, logos and associated artwork exclusively related to the
Products, (iii)
master and working cell banks, references and standards,
methodologies,
processes, protocols, specifications, techniques, trade secrets and
know how,
databases and formulas and (iv) studies and other work in
progress,
manufacturing processes and technical information, to the extent
they primarily
relate to the Products (collectively, the
5
<PAGE>
"Transferred Intellectual Property"); provided, however that
Transferred
Intellectual Property does not include any Intellectual Property
Rights licensed
to Seller;
(c) all rights and interest of Seller to active contracts to
the
extent they primarily relate to the Products, including supply,
licenses,
clinical trial, research and development agreements, which are set
forth on
Schedule 2.1(c) (the "Contracts");
(d) all regulatory applications, licenses, approvals,
certificates,
permits, franchises, or other evidence of authority submitted by or
on behalf
of, or issued to, Seller or Seller's Affiliates by a federal,
state, local or
foreign governmental agency or authority, regardless of
jurisdiction, to the
extent they primarily relate to the Products, in each case to the
extent
assignable, including without limitation the matters set forth on
Schedule
2.1(d), (the "Governmental Authorizations");
(e) all records, reports, research materials, Product
information
files (including Product development and regulatory history files),
marketing
information files and inactive contracts of Seller and Seller's
Affiliates, in
each case to the extent they primarily relate to the Products;
(f) all current and pending investigational new drug applications
for
the Products as set forth on Schedule 2.1(f);
(g) all goodwill relating primarily to the trademarks that are part
of
the Transferred Intellectual Property; and
(h) all raw materials listed on Schedule 2.1(h) (the "Raw
Materials").
2.2
Excluded Assets. Notwithstanding anything to the contrary in
this
Agreement, Seller shall not sell, transfer or assign, and Buyer
shall not
purchase or otherwise acquire, the following assets of Seller (such
assets being
collectively referred to hereinafter as the "Excluded Assets"):
(a) all rights of Seller and Seller's Affiliates arising under
this
Agreement, the Other Agreements or from the consummation of the
transactions
contemplated hereby or thereby;
(b) all of Seller's rights in assets to the extent related
primarily
to Seller's tissue culture based urokinase product currently
marketed under the
brand Abbokinase(R);
(c) all accounts receivable, notes receivable, cash, bank
deposits,
marketable securities and intercompany receivable balances owed to
Seller or
Seller's Affiliates with respect to the Products existing at the
Closing Date;
(d) all rights of Seller and Seller's Affiliates arising under
any
active contract or agreement not set forth in Schedule 2.1(c);
(e) all corporate minute books, stock records and Tax returns
(including all workpapers relating to such Tax returns) of Seller
and Seller's
Affiliates and such other similar
6
<PAGE>
corporate and financial books and records of Seller and Seller's
Affiliates as
may exist on the Closing Date;
(f) all real property, buildings, structures and improvements
thereon,
whether owned or leased by Seller or Seller's Affiliates, and all
fixtures and
fittings attached thereto, including those in the buildings
designated by Seller
as the M3, M3B, M6 and M10 buildings in its North Chicago, Illinois
location;
(g) all Intellectual Property of Seller or Seller's Affiliates of
any
kind not listed on Schedule 2.1(b) or referred to in clause (ii) of
Section
2.1(b), specifically including the trademarks or trade names
"Abbott," "Abbott
Laboratories" and any variants thereof, the stylized symbol "A,"
the
ABBOKINASE(R) trademark, and any Intellectual Property to the
extent related
primarily to Seller's tissue culture based urokinase product
currently marketed
under the brand Abbokinase(R); and US Patent No. 5,665,578 and US
Patent No.
5,741,682 (which will be licensed to Buyer pursuant to the Patent
License
Agreement).
(h) all rights to refunds of Taxes paid by or on behalf of Seller
or
Seller's Affiliates;
(i) all insurance policies and claims thereunder existing at
the
Closing Date;
(j) all Seller and Seller Affiliate intercompany payable
balances
owing with respect to the Products;
(k) all equipment related to manufacturing and assembling Products
not
set forth on Schedule 2.1(a)(ii);
(l) all raw materials (including supplies inventory), whether or
not
relating to the Products, not set forth on Schedule 2.1(h);
(m) the services of any employee of Seller or Seller's
Affiliates;
(n) all assets of any employee benefit plan, arrangement, or
program
maintained or contributed to by Seller or any of its
Affiliates;
(o) all assets,
tangible or intangible, wherever situated, not
expressly included in the Purchased Assets;
(p) all computer software and licenses thereto; and
(q) with respect to assets described in Section 2.1(e) above
that
relate both to the Products and to other products or projects of
Seller, all
such assets to the extent they relate to such other products or
projects of
Seller.
2.3
Assumed Liabilities.
(a) On the Closing Date subject to the provisions of Section
2.4,
Buyer shall assume, or shall cause Buyer's Affiliates to assume,
all of the
liabilities of Seller and Seller's
7
<PAGE>
Affiliates relating exclusively to the Purchased Assets existing on
the Closing
Date and listed on Schedule 2.3 except for the Excluded
Liabilities
(collectively, together with all other obligations and liabilities
of Seller and
Seller's Affiliates assumed by Buyer or Buyer's Affiliates pursuant
to this
Agreement and the Schedules hereto, the "Assumed Liabilities").
(b) From and after the Closing Date, Buyer shall assume, or
cause
Buyer's Affiliates to assume, the following post-Closing
liabilities, including
without limitation:
i. all liabilities and obligations arising after Closing under
the Contracts, Transferred Intellectual Property and Governmental
Authorizations
being transferred from Seller to Buyer hereunder;
ii. Taxes that are the responsibility of Buyer pursuant to
Section 3.4, Section 9.3(a) and Section 12.4 of this Agreement and
all Taxes
related to the Products and Purchased Assets attributable to any
period or
partial period ending after the Closing; and
iii. all liabilities related to the research, development,
marketing, manufacture, distribution, testing, sale or trials of
the Products
following Closing.
2.4
Excluded Liabilities. Neither Buyer nor Buyer's Affiliates assume
nor
will they become responsible for any of the following liabilities
and
obligations of Seller or Seller's Affiliates (collectively, the
"Excluded
Liabilities"):
(a) all liabilities related to the research, development,
marketing,
manufacture, distribution, testing or trials of the Products prior
to the
Closing;
(b) all liabilities and obligations of Seller and Seller's
Affiliates
arising under this Agreement, the Other Agreements or from the
consummation of
the transactions contemplated hereby or thereby;
(c) all intercompany payable balances owing by Seller or
Seller's
Affiliates;
(d) all liabilities and obligations of Seller and Seller's
Affiliates
arising under any contract or agreement not set forth on Schedule
2.1(c);
(e) all liabilities and obligations arising under any of the
Contracts
which relate to any act or failure to act of Seller or Seller's
Affiliates prior
to the Closing;
(f) all obligations related to employees of Seller or Seller's
Affiliates;
(g) any and all claims, causes of action or litigation to the
extent
relating to the development, production, distribution, trial,
testing, sale or
use of Products prior to the Closing, including such matters as set
forth on
Schedule 5.7; and
(h) other current liabilities (except Assumed Liabilities) of
Seller
or Seller's Affiliates incurred in the ordinary course of business
and existing
at the Closing Date.
8
<PAGE>
2.5
Procedures for Purchased Assets not Transferable. If any of the
Contracts or any other property or rights included in the Purchased
Assets are
not assignable or transferable either by virtue of the provisions
thereof or
under applicable law without the consent of some party or parties,
Seller shall
use its reasonable best efforts to obtain such consents after the
execution of
this Agreement, but prior to the Closing, and Buyer shall use its
commercially
reasonable efforts to assist in that endeavor. If any such consent
cannot be
obtained prior to the Closing and the Closing occurs, this
Agreement and the
related instruments of transfer shall not constitute an assignment
or transfer
thereof and Buyer shall not assume Seller's obligations with
respect thereto,
but Seller shall use its commercially reasonable efforts to obtain
such consent
as soon as reasonably possible after the Closing or otherwise
obtain for Buyer
the practical benefit of such property or rights and Buyer shall
use its
commercially reasonable efforts to assist in that endeavor. For
purposes of this
Section 2.5, commercially reasonable efforts shall not include any
requirement
of either party to expend money, commence any litigation or offer
or grant any
accommodation (financial or otherwise) to any third party. In the
case of any
Contracts for which a necessary consent has not been obtained,
Buyer shall
provide all goods and services and bear all costs necessary to
complete such
Contracts at no cost to Seller, and Seller shall hold for Buyer's
account and
promptly remit to Buyer all amounts received with respect to such
Contracts.
ARTICLE 3
Purchase Price; Consistent Treatment.
3.1
Purchase Price. The total purchase price for the Purchased Assets
shall
be: (i) $5 million in cash, plus (ii) the Promissory Note, plus
(iii) the
Preferred Stock, plus (iv) the assumption of the Assumed
Liabilities (the
"Purchase Price").
3.2
Payment of Purchase Price. The Purchase Price shall be paid in
accordance with Section 4.2(b).
3.3
Purchase Price Allocation. The Purchase Price shall be allocated
among
the Purchased Assets as set forth in a Schedule (the "Allocation
Schedule") that
Buyer will prepare and deliver to Seller on or before the Closing
Date, which
allocation shall be subject to the reasonable approval of Seller
prior to
Closing. Each of Seller and Buyer shall sign and submit all
necessary forms to
report this transaction for federal, state and foreign income tax
purposes in
accordance with the Allocation Schedule, and shall not take a
position for Tax
purposes inconsistent therewith. Any adjustment to the Purchase
Price shall be
allocated as provided by Treasury Regulation Section 1.1060-1.
3.4
Prorations. Seller and Buyer agree that all of the items listed
below
relating to the Purchased Assets will be prorated as of the Closing
Date, with
Seller liable to the extent such items relate to any time period up
to and
including the Closing Date and Buyer liable to the extent such
items relate to
periods subsequent to the Closing Date: (a) personal property
Taxes, if any,
attributable to the Purchased Assets; (b) Taxes payable by Seller
under any
contract to be assigned to or assumed by Buyer hereunder or for
which Buyer is
entitled to enjoy the practical benefits pursuant to Section 2.5;
(c) the amount
of any license or registration fees with respect to any licenses
or
registrations which are being assigned or transferred hereunder;
and (d) all
other
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items which are normally prorated in connection with similar
transactions.
Seller agrees to furnish Buyer with such documents and other
records as Buyer
reasonably requests in order to confirm all adjustment and
proration
calculations made pursuant to this Section 3.4.
ARTICLE 4
Closing.
4.1
Closing Date. The Closing shall take place at the office of
Kirkland &
Ellis LLP, 200 East Randolph Drive, Chicago, Illinois 60601, at
10:00 a.m.
Chicago time, on the Closing Date subject to the satisfaction or
waiver of each
of the conditions set forth in Article 8 or at such other place,
time or date as
Seller and Buyer may agree.
4.2
Transactions at Closing. At the Closing, subject to the terms
and
conditions hereof:
(a) Transfer of Purchased Assets and Seller Closing Deliveries.
Seller
shall transfer and convey or cause to be transferred and conveyed
to Buyer all
of the Purchased Assets and Seller shall execute and deliver to
Buyer the
Assignment and Assumption Agreement, each of the Other Agreements
and such other
good and sufficient instruments of transfer and conveyance as shall
be necessary
to vest in Buyer title to all of the Purchased Assets. In addition,
Seller shall
deliver to Buyer the certificate required by Section 8.2(b) and all
other
documents required to be delivered by Seller at Closing pursuant
hereto.
(b) Payment of Purchase Price, Assumption of Assumed Liabilities
and
Buyer's Closing Deliveries. In consideration for the transfer of
the Purchased
Assets, Buyer shall: (i) pay to Seller on the Closing Date five
million dollars
($5,000,000) of the Purchase Price in United States dollars by
electronic bank
transfer in immediately available funds directly to Seller's
Account No.
00001329 at Citibank, N.A. of New York, 399 Park Avenue, New York,
NY, ABA
#021000089; (ii) execute and deliver to Seller the Promissory Note;
(iii) issue
and deliver to Seller a stock certificate evidencing the Preferred
Stock
registered in the Seller's name; (iv) execute and deliver to Seller
the
Assignment and Assumption Agreement, whereby Buyer assumes the
Assumed
Liabilities; and (v) execute and deliver to Seller each of the
Other Agreements.
In addition, Buyer shall deliver to Seller the certificate required
by Section
8.1(b) and all other documents required to be delivered by Buyer at
Closing
pursuant hereto.
ARTICLE 5
Representations and Warranties of Seller.
Except as set forth in the Disclosure Schedules, Seller represents
and
warrants to Buyer as of the date of this Agreement as follows:
5.1
Organization. Seller is a corporation duly incorporated and
validly
existing in good standing under the laws of the State of Illinois,
duly
qualified to transact business as a foreign corporation in such
jurisdictions
where the nature of the Purchased Assets makes such qualification
necessary,
except as to jurisdictions where the failure to qualify would not
reasonably be
expected to have a material adverse effect on the Purchased Assets,
and with all
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requisite corporate power and authority to own, lease and operate
its properties
and to carry on its business as now being conducted.
5.2
Due Authorization. Seller has full corporate power and authority
to
execute, deliver and perform its obligations under this Agreement
and the Other
Agreements, and the execution and delivery of this Agreement and
the Other
Agreements and the performance of all of its obligations hereunder
and
thereunder have been duly authorized by Seller. The signing,
delivery and
performance of this Agreement and the Other Agreements by Seller
are not
prohibited or limited by, and will not result in the breach of or a
default
under, or conflict with any obligation of Seller with respect to
the Purchased
Assets under (i) any provision of the Articles of Incorporation or
By-Laws of
Seller, (ii) any material agreement or instrument to which Seller
is a party or
by which it or its properties are bound, (iii) any judgment, order,
award, writ,
injunction or decree of any court, governmental body or
instrumentality, or
arbitrator, (iv) any Governmental Authorizations, or (v) any
applicable law,
statute, ordinance, regulation or rule, and, to Seller's Knowledge,
will not
result in the creation or imposition of any Encumbrance on any of
the Purchased
Assets, except to the extent that any such prohibition, limitation,
breach,
default or conflict would not reasonably be expected to have a
material adverse
effect on Seller. This Agreement has been, and on the Closing Date
the Other
Agreements will have been, duly executed and delivered by Seller
and
constitutes, or, in the case of the Other Agreements, will
constitute, the
legal, valid and binding obligation of Seller, enforceable against
Seller in
accordance with their respective terms, except as enforceability
may be limited
or affected by applicable bankruptcy, insolvency, moratorium,
reorganization or
other laws of general application relating to or affecting
creditors' rights
generally.
5.3
Title. Except as provided on Schedule 5.3, the Purchased Assets
are
owned beneficially by Seller with good and marketable title
thereto, free and
clear of all Encumbrances (except for Permitted Encumbrances). At
the Closing,
Buyer will receive legal and beneficial title to all of the
Purchased Assets
(except for Contracts or any other property or rights included in
the Purchased
Assets for which a necessary consent has not been obtained and for
the
Transferred Intellectual Property, the title of which is addressed
exclusively
in Section 5.4 hereof), free and clear of all Encumbrances (except
for liens for
Taxes not yet due and payable), except the Assumed Liabilities and
except as set
forth on Schedule 5.3 and subject to obtaining any consents of
Persons listed on
Schedule 5.6.
5.4
Intellectual Property
(a) Schedule 5.4 lists all trademarks that directly relate to
the
Products, and all patents and patent applications owned by Seller
to the extent
that they directly relate to the Products or that include any
claims which the
production, manufacture, sale or use of the Products would infringe
as of the
Closing. Seller owns and has good title to the Transferred
Intellectual
Property. Except as set forth on Schedule 5.4, no Person other than
Seller has
any right, claim or interest in or with respect to any Transferred
Intellectual
Property. Except as set forth on Schedule 5.4, there is no
unauthorized use,
unauthorized disclosure, or misappropriation of any Transferred
Intellectual
Property by an employee of Seller, former employee of Seller or by
any other
third party.
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(b) Seller has at all times taken commercially reasonably efforts
to
maintain the trade secrets related primarily to the Products (the
"Trade
Secrets") in confidence and has not disclosed or otherwise dealt
with the Trade
Secrets in such a manner as to cause the loss of such Trade Secrets
by release
into the public domain, including without limitation, the use of
confidentiality
agreements with all of its employees and consultants having access
to the Trade
Secrets and the use of licenses with all individuals or entities
provided access
to the Trade Secrets containing provisions restricting unauthorized
use and
copying and prohibiting decompiling or disassembly of the Trade
Secrets.
(c) Schedule 5.4 contains an accurate list, as of the Closing Date,
of
all licenses, sublicenses and other agreements (to the extent they
relate
directly to the Products or that include any Intellectual Property
Rights which
the production, manufacture, sale or use of the Products would
infringe as of
the Closing) to which Seller is a party and that authorize Seller
to use any
Intellectual Property Rights owned by a third party in connection
with the
Products.
(d) Except as set forth on Schedule 5.4, Seller has not entered
into
any agreement to indemnify any other person or entity against
charges of
infringement of any of the Transferred Intellectual Property. There
are no
royalties, fees or other payments payable by Seller to any Person
by reason of
the ownership, use, sale or disposition of the Transferred
Intellectual
Property, except as set forth on Schedule 5.4. To Seller's
Knowledge, except as
set forth on Schedule 5.4, the Transferred Intellectual Property
does not
materially infringe on any Intellectual Property Rights of any
third party.
(e) Seller is not in material breach of any license, sublicense
or
other agreement relating to the Transferred Intellectual Property.
Except as set
forth on Schedule 5.4, neither the execution, delivery nor
performance of this
Agreement nor the consummation of the Transaction contravenes or
conflicts with
Buyer's right to own or use any Transferred Intellectual
Property.
(f) All patents and registered trademarks owned by Seller and
included
in the Transferred Intellectual Property are valid and subsisting,
except as set
forth on Schedule 5.4. All maintenance and annual fees have been
fully paid and
all fees paid during prosecution and after issuance of any patent
comprising or
relating to such patents have been paid in the correct entity
status amounts. To
Seller's Knowledge, (1) the use of the Products has not
infringed,
misappropriated or made unlawful use of, or (2) the manufacture,
sale, or use of
the Products following Closing, as currently proposed by Buyer and
disclosed to
Seller prior to Closing, will not infringe, misappropriate, or make
unlawful use
of, the Intellectual Property Rights of any third party. Seller has
not brought
a proceeding alleging infringement of the Transferred Intellectual
Property
Rights or breach of any license or agreement involving the
Transferred
Intellectual Property against any third party.
(g) Except as set forth on Schedule 5.4, Seller is not subject to
any
proceeding or outstanding decree, order, judgment, or stipulation
restricting in
any manner the use, transfer, or licensing of the Transferred
Intellectual
Property by Seller, or which may affect the validity, use or
enforceability of
such Transferred Intellectual Property by Buyer. Except as set
forth on Schedule
5.4, Seller is not subject to any agreement that restricts in any
material
respect the use, transfer, or licensing by Seller of the
Transferred
Intellectual Property.
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5.5
Compliance with Laws. Seller is in material compliance with the
requirements of all federal, state and local laws, rules and
regulations
applicable to or pertaining to the Products or the Purchased Assets
(including,
without limitation, the Occupational Safety and Health Act of 1970,
the
Americans with Disabilities Act of 1990, and laws and regulations
establishing
quality criteria standards for air, water, land and toxic or
hazardous wastes
and substances, as well as all laws, rules, and regulations
governing the sale,
manufacture and distribution of pharmaceutical, healthcare or
therapeutic
products, and the conduct of businesses engaged in the sale,
manufacture and
distribution of pharmaceutical, healthcare or therapeutic
products), where any
such non-compliance, individually or in the aggregate, could
reasonably be
expected to have a material adverse effect on the Purchased
Assets.
5.6
Equipment. The equipment included in the Purchased Assets is in
good
condition and has been used, stored and maintained in accordance
with good
industry practices.
5.7
Litigation. Except as set forth on Schedule 5.7, there is no
litigation, proceeding, claim or governmental
