<PAGE>
Exhibit 10.14
EXECUTION VERSION-2
================================================================================
ASSET PURCHASE AGREEMENT
dated as of April 10, 2006
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.............................................. 4
2.1 Agreements to
Purchase and Sell............................... 4
2.2 Excluded
Assets............................................... 5
2.3 Assumed
Liabilities........................................... 7
2.4 Excluded
Liabilities.......................................... 7
2.5 Procedures for
Purchased Assets not Transferable.............. 8
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........................................................
9
4.1 Closing
Date.................................................. 9
4.2 Transactions at
Closing....................................... 9
ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF
SELLER....................... 10
5.1
Organization..................................................
10
5.2 Due
Authorization.............................................
10
5.3 Inventory,
Equipment and Raw Materials........................ 11
5.4
Title.........................................................
11
5.5 Intellectual
Property......................................... 11
5.6
Litigation....................................................
11
5.7
Consents......................................................
12
5.8 Brokers,
Etc.................................................. 12
5.9 Financial
Information......................................... 12
5.10
Absence of
Undisclosed Liabilities............................ 12
5.11
Absence of
Unusual Changes and Unusual Transactions........... 12
5.12
Governmental Authorizations...................................
12
5.13
Contracts.....................................................
12
5.14
Tax
Matters...................................................
13
5.15
Cell
Banks....................................................
13
5.16
Disclaimer....................................................
13
ARTICLE 6 REPRESENTATIONS AND WARRANTIES OF
BUYER........................ 14
6.1
Organization..................................................
14
6.2 Due
Authorization.............................................
14
6.3
Consents......................................................
14
6.4
Litigation....................................................
14
6.5 Breach of
Representations and Warranties...................... 14
6.6 Brokers,
Etc.................................................. 14
6.7 Independent
Investigation..................................... 15
6.8
Indebtedness..................................................
15
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ARTICLE 7 PRE-CLOSING COVENANTS OF SELLER AND
BUYER...................... 15
7.1 Corporate and
Other Actions................................... 15
7.2 Consents and
Approvals........................................ 15
7.3 Competition Law
Filings....................................... 15
7.4 Access to
Information......................................... 16
7.5 Ordinary Course
of Business................................... 16
ARTICLE 8
CONDITIONS.....................................................
16
8.1 Conditions to
Obligations of Seller........................... 16
8.2 Conditions to
Obligations of Buyer............................ 17
ARTICLE 9 POST-CLOSING COVENANTS, OTHER
AGREEMENTS....................... 18
9.1 Assumed
Liabilities........................................... 18
9.2 Availability of
Records....................................... 18
9.3 Use of Trade or
Service Marks................................. 19
9.4 Tax
Matters...................................................
19
9.5
Chargebacks...................................................
20
9.6 Non-competition
by Seller..................................... 20
9.7 Regulatory
Transfer........................................... 20
9.8 Post-Closing
Delivery......................................... 20
9.9 Transition
Services........................................... 20
9.10
No Other
Compensation......................................... 21
ARTICLE 10 INDEMNIFICATION AND
SURVIVAL.................................. 21
10.1
Indemnification by Seller.....................................
21
10.2
Indemnification by Buyer......................................
22
10.3
Survival......................................................
23
10.4
Exclusive
Remedy.............................................. 24
10.5
Net Losses
and Subrogation.................................... 24
10.6
Insurance.....................................................
24
ARTICLE 11
TERMINATION...................................................
25
11.1
Termination of Agreement......................................
25
11.2
Automatic
Termination......................................... 25
11.3
Continuing
Effectiveness...................................... 25
ARTICLE 12
MISCELLANEOUS.................................................
25
12.1
Assignment....................................................
25
12.2
No Press
Release Without Consent.............................. 25
12.3
Confidentiality...............................................
26
12.4
Expenses......................................................
26
12.5
Severability..................................................
26
12.6
Entire
Agreement..............................................
26
12.7
No Third
Party Beneficiaries.................................. 27
12.8
Waiver........................................................
27
12.9
Governing
Law................................................. 27
12.10
Headings......................................................
27
12.11
Counterparts..................................................
27
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12.12
Further
Documents............................................. 27
12.13
Notices.......................................................
27
12.14
Schedules.....................................................
28
12.15
Construction..................................................
29
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EXHIBITS AND SCHEDULES
EXHIBITS
Exhibit A - Assignment and Assumption Agreement
Exhibit B - Intellectual Property Transfer Agreement
Exhibit C - Inventory Trademark License Agreement
Exhibit D - Promissory Note
Exhibit E - Security Agreement
Exhibit F - Escrow Agreement
Exhibit G - Testing Procedures
SCHEDULES
Schedule 1.1 -
Knowledge Persons
Schedule 2.1(b) - Transferred
Intellectual Property
Schedule 2.1(c) - Cell Banks
Schedule 2.1(d)(i) - Contracts
Schedule 2.1(f) - Seller Labeled
Inventory
Schedule 2.1(g) - Sales Materials
Schedule 2.1(h) - Product
Applications
Schedule 2.1(j) - Stock in Trade
Schedule 2.1(k) - Raw Materials
Schedule 2.5 -
Mixed GPO Contracts
Schedule 5.4 -
Title
Schedule 5.5 -
Intellectual Property
Schedule 5.6 -
Litigation
Schedule 5.7 -
Seller Consents
Schedule 5.9 -
Financial Data
Schedule 5.12 -
Governmental Authorizations
Schedule 6.3 -
Buyer Consents
Schedule 6.8 -
Indebtedness
iv
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ASSET PURCHASE AGREEMENT
THIS
AGREEMENT, dated as of April 10, 2006 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). For purposes of clarification,
with respect to
Seller, the term "Affiliate" shall specifically exclude TAP
Holdings Inc., TAP
Finance Inc. and TAP Pharmaceuticals Products Inc.
"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.
"Annual Report" means an annual report filed by Seller with the
FDA
relating to the Product.
"Assignment and Assumption Agreement" means the Assignment and
Assumption
Agreement and Bill of Sale in substantially the form attached
hereto as Exhibit
A.
"Assumed Liabilities" has the meaning set forth in Section 2.3.
"Buyer" has the meaning set forth in the recitals hereof.
"Cell Banks" has the meaning set forth in Section 2.1(c).
"Chargeback" means all credits, chargebacks, rebates,
reimbursements,
administrative fees, and other amounts owed to wholesalers,
distributors, group
purchasing organizations,
<PAGE>
insurers, and other institutions pursuant to any Contract. "Seller
Chargeback"
means Chargebacks arising out of Products sold to customers prior
to the Closing
and "Buyer Chargeback" means Chargebacks arising out of
transactions consummated
on or after the Closing.
"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 April 28, 2006, or such other date as may be
mutually
agreed upon by the Buyer and Seller.
"Confidential Information" has the meaning set forth in Section
12.3.
"Contracts" has the meaning set forth in Section 2.1(d).
"Disclosure Schedules" shall mean those schedules attached
hereto.
"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.
"Escrow Agreement" means the Escrow Agreement in substantially the
form
attached hereto as Exhibit F.
"Excluded Assets" has the meaning set out in Section 2.2.
"Excluded Liabilities" has the meaning set forth in Section
2.4.
"FDA" means the U.S. Food and Drug Administration.
"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(e).
"HSR
Act" means the Hart-Scott-Rodino Antitrust Improvements Act of
1976,
as amended.
"Indemnified Person" has the meaning set forth in Section
10.5(a).
"Indemnifying Person" has the meaning set forth in Section
10.5(a).
"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,
2
<PAGE>
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, extensions,
divisionals
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 in substantially the form attached hereto as
Exhibit B.
"Inventory" has the meaning set forth in Section 2.1(f).
"Inventory Trademark License Agreement" means the Inventory
Trademark
License Agreement in substantially the form attached hereto as
Exhibit C.
"Knowledge" means, with respect to Seller, the actual knowledge
after
reasonable inquiry of the persons listed on Schedule 1.1.
"Losses" has the meaning set forth in Section 10.1(a).
"Master Cell Bank" means Cell Suspension of Urokinase Kidney Cells,
Code
81987, as described on Schedule 2.1(c).
"Mixed GPO Contracts" means those Group Purchasing Organization
contracts
(including related contracts entered into in connection therewith)
relating to
both Purchased Assets and other products of Seller listed on
Schedule
2.1(d)(ii).
"New
GPO Contract" has the meaning set forth in Section 2.5(b).
"NDA
76-1021" means new drug application 76-1021 filed with the FDA,
subsequently assigned the new NDA 21-846.
"Other Agreements" means, collectively, the Assignment and
Assumption
Agreement, the Intellectual Property Transfer Agreement, the
Inventory Trademark
License Agreement, the Promissory Note, the Security Agreement and
the Escrow
Agreement.
"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.
"Product" or "Products" means Seller's urokinase product marketed
under the
brand Abbokinase(R).
"Promissory Note" has the meaning set forth in Section 3.1(b).
"Purchase Price" has the meaning set forth in Section 3.1.
3
<PAGE>
"Purchased Assets" has the meaning set forth in Section 2.1.
"Raw
Materials" means those raw materials set forth on Schedule
2.1(k).
"Security Agreement" means the Security Agreement in substantially
the form
attached hereto as Exhibit E.
"Seller" has the meaning set forth in the recitals hereof.
"SNDAs" means supplemental new drug applications S-076 through
S-095 and
the supplemental application for CBE-30 filed with the FDA.
"Stock in Trade" has the meaning set forth in Section 2.1(j).
"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 other foreign country or by any
state,
municipality, subdivision or instrumentality of the Unites 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.
"Testing Procedures" means the procedures set forth on Exhibit G
hereto.
"Thrombolytic Therapy Product" means serine proteases that
convert
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.
"Working Cell Banks" means Cell Suspension Subcultured from
Urokinase
Kidney Cells, Frozen Sub-2, Code 48647 as Schedule 2.1(c).
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"):
4
<PAGE>
(a) all sales and marketing information, including all customer
lists
of
Seller, relating primarily to the Products;
(b) (i) the trademarks, patents, and patent applications set forth
on
Schedule 2.1(b), (ii)
the package designs, labels, logos and associated
artwork primarily related to the Products and (iii) all
technical
information, references and standards, methodologies, processes,
protocols,
specifications, techniques, trade secrets and know how, databases
and
formulas primarily related to the Products and any supporting
documentation
that
relates primarily to the Products (collectively, the
"Transferred
Intellectual Property");
(c) the Master Cell Bank and Working Cell Banks described on
Schedule
2.1(c) (the "Cell Banks");
(d) all rights and interest of Seller to the contracts relating to
the
Products set forth on Schedule 2.1(d)(i) (the "Contracts");
(e) all licenses, approvals, certificates, permits, franchises,
or
other evidence of authority issued to Seller or Seller's Affiliates
by a
federal, state, local or foreign governmental agency or
authority,
regardless of jurisdiction, relating primarily to the Products, in
each
case
to the extent assignable, including NDA 76-1021 and the SNDAs
(the
"Governmental Authorizations");
(f) 153,000 vials of unlabelled Product that have been approved
by
Seller for distribution, but have not been approved by the FDA
("Inventory");
(g) all records, reports, Product information files (including
Product
development and regulatory history files) and sales, advertising
and
marketing information files of Seller and Seller's Affiliates, in
each case
relating primarily to the Products, including without limitation
the items
identified on Schedule 2.1(g);
(h) all current and pending new drug applications for the Products
as
set
forth on Schedule 2.1(h);
(i) all goodwill relating exclusively to the Products;
(j) any Stock-in-Trade described on Schedule 2.1(j); and
(k) 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;
5
<PAGE>
(b) 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;
(c) all rights of Seller and Seller's Affiliates arising under
any
contract other than the Contracts;
(d) all corporate minute books, stock records and Tax returns
(including all work papers relating to such Tax returns) of Seller
and
Seller's Affiliates and such other similar corporate books and
records of
Seller and Seller's Affiliates as may exist on the Closing
Date;
(e) 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;
(f) all Intellectual Property Rights of Seller or Seller's
Affiliates
of
any kind not listed on Schedule 2.1(b) or referred to in Section
2.1(d),
specifically including the trademarks or trade names "Abbott,"
"Abbott
Laboratories" and any variants thereof, the stylized symbol "A,"
the
Abbokinase OpenCath(R) trademark and the ABBOKINASE(R) trademark,
which is
the
subject of the Inventory Trademark License Agreement;
(g) all rights to refunds of Taxes paid by or on behalf of Seller
or
Seller's Affiliates;
(h) all insurance policies and claims thereunder existing at
the
Closing Date;
(i) all Seller and Seller Affiliate intercompany payable
balances
relating to the Products;
(j) the services of any employee of Seller or Seller's
Affiliates;
(k) all assets of any employee benefit plan, arrangement, or
program
maintained or contributed to by Seller or any of its
Affiliates;
(l) all assets, tangible or intangible, wherever situated, not
expressly included in the Purchased Assets;
(m) all raw materials not listed in Schedule 2.1(k); and
(n) all equipment of Seller or Seller's Affiliates.
6
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2.3
Assumed Liabilities. On the Closing Date, subject to the provisions
of
Section 2.4, Buyer shall assume, or shall cause Buyer's Affiliates
to assume,
the following liabilities of Seller and Seller's Affiliates
relating primarily
to the Purchased Assets existing on the Closing Date as follows
(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"):
(a) all liabilities and all obligations arising after the Closing
Date
under the Contracts, the Transferred Intellectual Property and
the
Governmental Authorizations being transferred from Seller to
Buyer
hereunder;
(b) Taxes that are the responsibility of Buyer pursuant to
Section
3.4,
Section 9.4(a) and Section 12.4 of this Agreement and all Taxes
related to Products and Purchased Assets attributable to any period
or
partial period ending after the Closing;
(c) Except as provided in Section 2.4(f), all liabilities or
other
claims related to the research, development, marketing,
manufacture,
distribution, testing, sale or trials of the Products that arise
after the
Closing Date.
2.4
Excluded Liabilities. Neither Buyer nor Buyer's Affiliates assume
nor
will they become responsible for any of the liabilities and
obligations of
Seller or Seller's Affiliates (collectively, the "Excluded
Liabilities") except
for those set out in Section 2.3. The Excluded Liabilities shall
include,
without limitation:
(a) 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;
(b) all intercompany payable balances owing to Seller or
Seller's
Affiliates;
(c) all liabilities and obligations of Seller and Seller's
Affiliates
arising under any contract or agreement not set forth on Schedule
2.1(c);
(d) all obligations related to employees of Seller or Seller's
Affiliates;
(e) any and all claims, causes of action or litigation to the
extent
relating to Products sold prior to the Closing, including the
matters set
forth on Schedule 5.6;
(f) any and all claims, causes of action or litigation relating
to
Products sold after Closing to the extent related to Seller's
failure to
manufacture the Inventory in compliance with the standards set
forth in the
specifications in the SNDAs; and
(g) 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.
7
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2.5
Procedures for Purchased Assets not Transferable. (a) 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 commercially reasonable 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.
(b) The parties shall use their commercially reasonable efforts
to
cause the purchaser under each of the Mixed GPO Contracts to enter
into a
new
agreement or amendment with Buyer or to assign the Agreement to
Buyer
pursuant to which the provisions of the Mixed GPO Contracts
relating to
future sales of Products shall be terminated and replaced by such
new
agreement, amendment or assignment between the purchaser and Buyer
on
substantially similar terms as the applicable Mixed GPO Contract
("New GPO
Contract").
(c) In the event that Buyer has not, despite its commercially
reasonable efforts, entered into a New GPO Contract with respect to
each of
the
top five (5) Mixed GPO Contracts identified on Schedule 2.5 within
one
hundred twenty (120) days following Closing (the "Final GPO Date"),
Buyer
shall be entitled to a credit against the Promissory Note equal to
one
hundred thousand dollars ($100,000) multiplied by the number of
such top
five
Mixed GPO Contracts for which no New GPO Contract exists as of
such
date.
(d) On the Final GPO Date, the principal balance of the
Promissory
Note
as of the Final GPO Date shall be reduced by an amount equal to
one
hundred thousand dollars multiplied by the number of top five Mixed
GPO
Contracts not replaced with New GPO Contracts prior to the Final
GPO Date.
8
<PAGE>
ARTICLE 3
Purchase Price; Consistent Treatment
3.1
Purchase Price. The purchase price ("Purchase Price") for the
Purchased
Assets shall consist of (a) a payment at Closing in the amount of
Five Million
U.S. dollars ($5.0 million), plus the assumption of the Assumed
Liabilities and
(b) a promissory note in substantially the form attached hereto as
Exhibit D in
the principal amount of Fifteen Million U.S. dollars (the
"Promissory Note").
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.
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) rents, Taxes and other
items payable
by Seller under any lease, 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 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 offices 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. Seller shall transfer and convey
or
cause to be transferred and conveyed to Buyer all of the Purchased
Assets
and
Seller and Buyer shall
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execute and Seller shall 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 ($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. in New York, New
York, ABA
#021000089 (Swift Code: CITIUS33); (ii) deliver to Seller the
Promissory
Note; and (iii) execute and deliver to Seller the Assignment and
Assumption
Agreement, whereby Buyer assumes the Assumed Liabilities, and each
of the
Other Agreements, as well as the certificate required by Section
8.1(b) and
all
other documents required to be delivered by Buyer at Closing
pursuant
hereto.
(c) Regulatory Transfer. At Closing, Seller will provide to
Buyer
copies of all portions of NDA 76-1021 and the SNDAs necessary to
allow
Buyer to comply with its obligations as the application holder.
Seller
further agrees to notify the FDA of the transfer of NDA 76-1021
in
accordance with Section 505(j) of the Federal Food, Drug and
Cosmetic Act
and
21 CFR 314.72. Buyer agrees to notify the FDA of the transfers of
NDA
76-1021 and SNDAs effective immediately upon the Closing and to
submit as
the
new owner an application Form FDA 356h.
ARTICLE 5
Representations and Warranties of Seller
Except as set forth in the Disclosure Schedules, Seller represents
and
warrants to Buyer 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
requisite corporate power and authority to own, lease and operate
the Purchased
Assets and to carry on its business relating to the Purchased
Assets 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 is
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
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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 the Purchased Assets. 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 Inventory,
Equipment and Raw Materials. The Raw Materials, references
and standards, and Stock-in-Trade transferred pursuant to Section
2.1 are in
good condition, except as would not reasonably be expected to have
a material
adverse effect on such Raw Materials, references and standards
or
Stock-in-Trade, respectively. The Inventory is, in all material
respects, in
good and merchantable condition (it being understood that for
purposes of the
foregoing representation, any Loss shall be deemed immaterial,
unless the
aggregate amount arising out of such Loss is greater than $50,000),
has been
manufactured and stored in compliance with all applicable laws and
regulations,
and conforms to all material Governmental Authorizations; provided,
however,
that the foregoing representation shall be subject to the Buyer's
compliance
with any and all applicable laws and regulations relating to
labeling and
packaging of the Inventory.
5.4
Title. The Purchased Assets are owned beneficially by Seller with
good
and marketable title thereto, free and clear of all Encumbrances.
At the
Closing, Buyer will receive legal and beneficial title to all of
the Purchased
Assets (except for (i) Contracts or any other property or rights
included in the
Purchased Assets for which a necessary consent has not been
obtained and (ii)
the Transferred Intellectual Property, the title of which is
addressed
exclusively in Section 5.5 hereof), free and clear of all
Encumbrances (except
for liens for Taxes not yet due and payable or liens contemplated
by the
Security Agreement), except the Assumed Liabilities and except as
set forth on
Schedule 5.4 and subject to obtaining any consents of Persons
listed on Schedule
5.7.
5.5
Intellectual Property. Except as set forth on Schedule 5.5, the
Transferred Intellectual Property is owned free and clear of all
Encumbrances or
has been duly licensed for use by Seller. Except as set forth on
Schedule 5.5,
to Seller's Knowledge, the Transferred Intellectual Property has
not been and is
not the subject of any pending adverse claim or any threatened
litigation or
claim of infringement. To Seller's Knowledge, except as set forth
on Schedule
5.5, the Transferred Intellectual Property does not materially
infringe on any
Intellectual Property Rights of any third party.
5.6
Litigation. Except as set forth on Schedule 5.6, there is no
litigation, proceeding, claim or governmental investigation pending
or, to
Seller's Knowledge, threatened solely or primarily with respect to
the Products.
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5.7
Consents. No notice to, filing with, authorization of, exemption
by, or
consent of any Person is required for Seller to consummate the
transactions
contemplated hereby.
5.8
Brokers, Etc. No broker or investment banker acting on behalf of
Seller
or under the authority of Seller is or will be entitled to any
broker's or
finder's fee or any other commission or similar fee directly or
indirectly from
Seller or Buyer in connection with any of the transactions
contemplated herein,
other than any fee that is the sole responsibility of Seller.
5.9
Financial Information. The unaudited statements of net revenue for
the
Purchased Assets for the years ended December 31, 2003 and December
31, 2004 (i)
were prepared in accordance with GAAP as applied to the Seller's
consolidated
financial statements and (ii) present fairly in all material
respects the net
revenues for the Products. The costed bill of materials for the
Products for
2004 (i) was prepared in a manner consistent with Seller's
financial policies
and (ii) fairly reflects the cost to manufacture the Products in
Seller's
facilities according to the volume and budget in place at the time
the costs
were established. The data on Schedule 5.9 with respect to the
sales of Products
is complete and accurate in all material respects.
5.10
Absence of Undisclosed Liabilities. To Seller's Knowledge, Seller
has
not incurred any material liabilities or obligations with respect
to the
Purchased Assets (whether accrued, absolute, contingent or
otherwise), which
continue to be outstanding, except as incurred in the ordinary
course of
business.
5.11
Absence of Unusual Changes and Unusual Transactions. Since January
31,
2006, except as would not reasonably be expected to have a material
adverse
effect on the Purchased Assets, there has not been any material
change in the
financial conditions, methods of operation, working capital,
assets, employment
policies or practices or prospects of the Purchased Assets other
than changes in
the ordinary course of business.
5.12
Governmental Authorizations. Schedule 5.12 sets forth a complete
list
of the material Governmental Authorizations. The Governmental
Authorizations
listed in Schedule 5.12 are all the authorizations required to be
in material
compliance with all laws applicable to the Purchased Assets. The
Governmental
Authorizations are in full force and effect in accordance with
their terms, and
there have been no material violations of such Governmental
Authorizations, no
proceedings are pending or, to the Knowledge of the Seller,
threatened, which
could result in their revocation or limitation and all steps have
been taken and
filings made on a timely basis with respect to each Governmental
Authorization
and its renewal; in each case, except as would not reasonably be
expected to
have a material adverse effect on the Purchased Assets.
5.13
Contracts. All current and complete copies of all Contracts have
been
delivered to or made available to the Buyer. The Contracts are all
in full force
and effect and, to Seller's Knowledge, there are no outstanding
defaults or
violations under such Contracts on the part of the Seller or, to
the Knowledge
of the Seller, on the part of any other party to such Contracts and
there are no
current or pending negotiations with respect to the renewal,
repudiation or
amendment of any Contract.
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5.14
Tax Matters. In each case except as would not reasonably be
expected
to have a material adverse effect on the Purchased Assets:
(a) To Seller's Knowledge, no failure, if any, of the Seller to
duly
and
timely pay all Taxes, including all installments on account of
Taxes
for
the current year, that are due and payable by it will result in
an
Encumbrance on the Purchased Assets;
(b) To Seller's Knowledge, there are no proceedings,
investigations,
audits or claims now pending or threatened against the Seller in
respect of
any
Taxes, and there are no matters under discussion, audit or appeal
with
any
governmental authority relating to Taxes, which will result in
an
Encumbrance on the Purchased Assets;
(c) To Seller's Knowledge, the Seller has duly and timely withheld
all
Taxes and other amounts required by law to be withheld by it
relating to
the
Purchased Assets (including Taxes and other amounts relating to
the
Purchased Assets required to be withheld by it in respect of any
amount
pai
