Exhibit 10.1
ASSET PURCHASE
AGREEMENT
This Asset Purchase Agreement (this
“ Agreement ”) is made and entered into as of
October 4, 2006, by and among TEAMM Pharmaceuticals, Inc., a
Florida corporation (“ Seller ”), Accentia
BioPharmaceuticals, Inc., a Florida corporation,
(“Parent”) and Tiber, Inc., a Georgia corporation (the
“ Buyer ”).
RECITALS
WHEREAS, subject to the terms and
conditions of this Agreement, Seller desires to sell to Buyer, and
Buyer desires to purchase from Seller, the Purchased Assets (as
defined below).
AGREEMENT
NOW, THEREFORE, in consideration of
the premises and the mutual covenants and promises contained
herein, and for other good and valuable consideration, the receipt
and sufficiency of which hereby are acknowledged, the Parties agree
as follows:
Article I.
Definitions
Construction of Certain Terms and
Phrases.
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1.0
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Unless the
context of this Agreement otherwise requires: (a) words of any
gender include each other gender; (b) words using the singular
or plural number also include the plural or singular number,
respectively; (c) the terms “hereof,”
“herein,” “hereby” and derivative or
similar words refer to this entire Agreement; (d) the terms
“Article,” “Section” or
“Exhibit” refer to the specified Article, Section or
Exhibit of this Agreement; (e) the term “or” has,
except where otherwise indicated, the inclusive meaning represented
by the phrase, “and/or”; and (f) the term
“including” means “including without
limitation.” Whenever this Agreement refers to a number of
days, such number shall refer to calendar days unless Business Days
are specified. All accounting terms used but not otherwise defined
herein shall have the meanings ascribed to such terms under U.S.
Generally Accepted Accounting Principles. The Agreement was
negotiated by the Parties with the benefit of legal representation,
and any rule of construction or interpretation otherwise requiring
this Agreement to be construed against any Party shall not apply to
any construction or interpretation hereof.
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As used in this Agreement, the
following defined terms have the meanings described
below:
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1.1
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“
Action or Proceeding ” means any action, suit,
proceeding, arbitration, Order, inquiry, hearing, assessment with
respect to fines or penalties or litigation (whether civil,
criminal, administrative, investigative or informal) commenced,
brought, conducted or heard by or before, or otherwise involving,
any Governmental or Regulatory Authority.
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1.2
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“
Adverse Effect ” means an effect or condition that
individually or in the aggregate is materially adverse to the
Purchased Assets or the business, results of operations, or
financial condition of the Business.
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1.3
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“
Affiliate ” means, with respect to any Person, any
other Person which controls, is controlled by or is under common
control with such person or entity. A Person shall be regarded as
in control of another Person if it owns or controls, directly or
indirectly, (i) in the case of corporate entities at least
fifty percent (50%) (or the maximum ownership interest
permitted by law) of the equity securities in the subject entity
entitled to vote in the election of directors and, (ii) in the
case of an entity that is not a corporation, at least fifty percent
(50%) (or the maximum ownership interest permitted by law) of
the equity securities or other ownership interests with the power
to direct the management and policies of such subject entity or
entitled to elect the corresponding management
authority.
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1.4
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“
Agreement ” has the meaning set forth in the Preamble
hereto.
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1.5
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“
Assets and Properties ” of any Person means all assets
and properties of any kind, nature, character and description
(whether real, personal or mixed, whether tangible or intangible,
whether absolute, accrued, contingent, fixed or otherwise and
wherever situated), including the goodwill related thereto,
operated, owned or leased by such Person, including cash, cash
equivalents, accounts and notes receivable, chattel paper,
documents, instruments, general intangibles, regulatory approvals,
equipment, inventory, goods, minute books, stock records and
corporate seals, shares of capital stock held in treasury, all
personnel records, all claims for refund of taxes, and all rights
in connection with and assets of any employee benefit
plans.
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1.6
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“
Assumed Contract ” means those Contracts identified in
Article 6.6 of the Seller Disclosure Schedule.
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1.7
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“
Assumed Liabilities ” means (i) all rebates and
chargebacks and obligations under or pursuant to the Assumed
Contracts received after the Closing Date, so long as such rebates
and chargebacks do not exceed a total of $15,000 for all
liabilities for the first quarter beginning October 1, 2006 and
ending Dec 31,2006. For purposes of this agreement, rebates and
chargebacks for the quarter October 1, 2006 through
December 31, 2006 will be assumed to have been from sales
incurred prior to the closing date, any rebates received after
December 31, 2006 will assumed to be entirely from sales
incurred after the Closing Date and will be the sole obligation of
the Buyer. (ii) effective as of the start of the first
calendar quarter beginning October 1, 2006, and continuing
each quarter thereafter, all state and federal Medicaid/Medicare
rebates related to the Products and Product Inventory that are
received after Closing Date, (iii) that portion of returns
associated only with the specific lot numbers and percentages
identified in Schedule A.
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1.8
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“Authority ” means any governmental, regulatory or
administrative body, agency or authority, any court or judicial
authority, any arbitrator or any public, private or industry
regulatory authority, whether foreign, federal, state or
local.
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1.9
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“
Books and Records ” means all files, documents,
instruments, papers, books and records (other than Marketing
Materials) owned by Seller or an Affiliate of Seller relating
exclusively to the Business, including any pricing lists, customer
lists, vendor lists and financial data, but excluding any such
items to the extent that (i) any applicable Law prohibits
their transfer or (ii) any transfer thereof would subject
Seller or any of its Affiliates to any contractual or other
Liability or obligation.
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1.10
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“
Breach ” means any breach of, or any inaccuracy in,
any representation or warranty or any breach of, or failure to
perform or comply with, any covenant or obligation, in or of this
Agreement, or any event which with the passing of time or the
giving of notice, or both, would constitute such a breach,
inaccuracy or failure.
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1.11
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“
Business ” means the activities of manufacturing,
marketing, selling and distributing the Products in the
Territory.
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1.12
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“
Business Day ” means a day other than Saturday, Sunday
or any day on which banks located in New York are authorized or
obligated to close.
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1.13
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“
Buyer ” has the meaning set forth in the Preamble to
this Agreement.
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1.14
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“
Buyer Disclosure Schedule ” has the meaning set forth
in Article VII hereof.
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1.15
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“
Buyer Governmental Consent ” has the meaning set forth
in Article 7.4.
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1.16
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“
Buyer Indemnified Parties ” shall have the meaning set
forth in Article 11.2.
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1.17
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“
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 the Products.
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1.18
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“
Closing ” has the meaning set forth in Article
5.1.
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1.19
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“
Closing Date ” means the date that the Closing
actually occurs as provided in Article 5.1.
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1.20
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“
Closing Payments ” has the meaning set forth in
Article 4.1
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1.21
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“
Confidential Information ” has the meaning set forth
in Article 12.1.
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1.22
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“
Contemplated Transactions ” means all of transactions
contemplated by this Agreement.
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1.23
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“
Contract ” means any and all commitments, contracts,
consensual obligations, purchase orders, leases, promises or
undertaking or other agreements, whether written or oral and
whether express or implied.
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1.24
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“
Corporate Names ” has the meaning set forth in Article
8.6
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1.25
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“Cost of
Goods” means the price charged by the manufacturer to
Seller.
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1.26
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“
Encumbrance ” means any mortgage, pledge, assessment,
security interest, deed of trust, lease, lien, claim, option,
pledge, right of way, easement, encroachment, levy, charge or other
encumbrance of any kind, or any conditional sale or title retention
agreement or other agreement to give any of the foregoing in the
future.
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1.27
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“
Excluded Assets ” means all Assets and Properties of
Seller and its Affiliates except the Purchased Assets.
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1.28
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“
Excluded Liabilities ” means i) any product liability
claims arising out of the ownership or sale of the Products by
Seller prior to the Closing ii) any Liability for Taxes arising out
of the ownership of the Products by Seller prior to the Closing, as
well as taxes for the period pre-Closing on inventory, income of
Seller, sales and use and ad valorem tax and tax on the sale of the
Purchased Assets iii) all accounts payable incurred by Seller or an
Affiliate of Seller with respect to the Business prior to Closing,
(iv) any rebate liability for the quarter ending
September 30, 2006 as long as Buyer does not adversely affect
rebate liability, (v) any return for Products not specified by
lot number in Schedule A and (vi) any other Liability of
Seller or any of its Affiliates not expressly assumed by Buyer
hereunder.
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1.29
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“Food
and Drug Laws” means the Federal Food, Drug, and Cosmetic Act
of 1938, as amended, and all similar state, local, and foreign laws
or ordinances, as well as all other Federal and state laws related
to the development, manufacture, offer for sale, sale, use and
import of the Products, including, without limitation, all safety,
environmental, and fire and health laws.
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1.30
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“
GAAP ” means generally accepted accounting principles
for financial reporting in the United States, applied on a
consistent basis on which financial statements are
prepared.
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1.31
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“
Governmental or Regulatory Authority ” means any
court, tribunal, arbitrator, authority, agency, commission,
official or other instrumentality of the United States or other
country, or any supra-national organization, state, county, city or
other political subdivision thereof.
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1.32
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“
Gross Revenue ” means the invoiced amount for Products
shipped
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1.33
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“
Indemnification Claim Notice ” has the meaning set
forth in Article 11.2(c).
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1.34
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“
Indemnified Party ” has the meaning set forth in
Article 11.2(c).
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1.35
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“
Indemnifying Party ” has the meaning set forth in
Article 11.2(c).
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1.36
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“
Indemnitee ” and “ Indemnitees ”
have the respective meanings set forth in Article
11.2(c).
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1.37
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“
Initial Amount ” has the meaning set forth in Article
4.2(c).
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1.38
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“ Know-how ”
means all information owned or licensed by Seller and its
Affiliates and used exclusively in connection with the Business,
including any Product specifications, technical knowledge,
expertise, skill, practice, procedures, formulae, trade
secrets,
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confidential information,
analytical methodology, processes, preclinical, clinical, stability
and other data, market studies and all other experience and
know-how, in each case in tangible form, whether or not patented or
patentable.
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1.39
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“
Knowledge ” with respect to any Party, means the
actual knowledge of the senior executive officers of such Party
after due inquiry.
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1.40
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“
Law ” means any federal, state or local law, statute
or ordinance, or any rule, regulation, or published guidelines
promulgated by any Governmental or Regulatory Authority.
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1.41
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“
Liability ” means any liability (whether known or
unknown, asserted or unasserted, absolute or contingent, accrued or
unaccrued, liquidated or unliquidated, and due or to become due),
including any liability for Taxes.
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1.42
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“
Marketing Materials ” means all market research,
marketing plans, media plans, advertising, promotional and
marketing books and records owned by Seller and its Affiliates and
used exclusively in connection with the marketing and promotion of
the Products, other than any such items to the extent that
(i) any applicable Law prohibits their transfer or
(ii) any transfer thereof would subject Seller or any of its
Affiliates to any contractual or other Liability or
obligation.
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1.43
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“ Net
Revenue ” means the Gross Revenues of the Products less
credits for rebates, shipping costs, chargebacks, Product returns
and other discounts deducted from the payment made by the
customer.
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1.44
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“
Non-disclosing Party ” has the meaning set forth in
Article 12.1.
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1.45
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“
Order ” means any order, writ, judgment, decree,
ruling, injunction, assessment or arbitration award or similar
order of any Governmental or Regulatory Authority (in each such
case whether preliminary or final) or arbitrator.
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1.46
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“
Ordinary Course of Business ” means such action that
is consistent in nature, scope and magnitude with the past
practices of the Business.
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1.47
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“
Parties ” means Buyer and Seller.
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1.48
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“
Party ” means each of Buyer and Seller.
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1.49
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“Permits” means all qualifications, registrations,
filings, privileges, franchises, immunities, licenses, permits,
authorizations and approvals of Authorities which are used or
required in the development, manufacture, offer for sale, sale, use
and import of the Products, including, without limitation, all
certificates, licenses and permits relating to building, safety,
environmental laws, Food and Drug Laws, fire and health.
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1.50
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“
Permitted Encumbrance ” means any minor imperfection
of title or similar Encumbrance that individually or in the
aggregate would not have an Adverse Effect to Buyer.
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1.51
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“
Person ” means any natural person, corporation,
general partnership, limited partnership, limited liability
company, proprietorship, other business organization, business
trust, trust, union, unincorporated association or Governmental or
Regulatory Authority.
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1.52
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“
Products ” means Histex ™ HC, Histex ™ SR, Histex ™ Liquid, Histex ™ PD, Histex™ CT, Histex
™
and all reformulations or line
extensions under the Histex trade name manufactured to date or
hereafter, excluding Histex™ PD-12 and Histex™ IE, and
includes the Trademarks, Products in the Distribution Channel,
tooling and equipment, licenses and permits, Marketing Materials
and packaging supplies.
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1.53
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“
Products in the Distribution Channel ” means all
products physically held in any entity that distributes or
dispenses such products including, but not limited to, wholesalers,
distributors, chain warehouses, retail drugstores, clinics,
hospitals, buying groups or mail order distributors.
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1.54
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“
Product Inventory ” means all inventory as set forth
on Seller’s Disclosure Schedule Article 6.7 (which shall be
updated as of Closing), including all inventory of finished Product
in all sizes and presentation including all reformulations owned as
of the Closing by Seller or any Affiliate thereof of finished
Product or works in progress or materials used in the manufacture
of finished Product including all reformulations held at a location
or facility of Seller, any Affiliate of Seller or any of
Seller’s contract manufacturers. Article 6.7 of the Seller
Disclosure Schedule lists the Product Inventory of finished
Products acquired by Buyer as of the Closing.
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1.55
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“
Pull-Through ” means for the specific time period, the
sum of (i) the dispensing of the Product Inventory and the
Products in the Distribution Channel for the NDC codes listed on
Exhibit C as evidenced by Wolters Kluwer reporting data
and (ii) the Returns Report minus the Shipment Report. The
amount of Pull-Through shall be subject to audit by Seller in
accordance with the provisions set forth in Article
4.2(ii).
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1.56
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“
Purchase Price ” has the meaning set forth in Article
IV.
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1.57
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“
Purchased Assets ” means (i) the Products;
(ii) the Product Inventory; (iii) Products in the
Distribution Channel, (iv) Sample Inventory (v) the
Assumed Contracts; (vi) the Trademarks; and (vii) the
Marketing Materials.
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1.58
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“
Regulatory Approvals ” means, as they relate
exclusively to the Products and to the extent owned or licensed by
Seller, the new drug applications and new drug submissions for the
Products, all supplements thereto and all regulatory files relating
thereto and all other regulatory approvals and governmental
registrations made by or issued to Seller that relate specifically
to pertaining to the Products, Transferred Patents, or
Permits.
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1.59
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“
Royalty End Date ” means the date three (3) years
following the Closing Date.
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1.60
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“
Returns Report ” means a report totaling all credit
memoranda issued and/or payments made by Buyer to customers with
respect to Products in the Distribution Channel and Product
Inventory that were returned to Buyer. Each Returns Report shall
contain, at a minimum, the specific Product(s) and Product
Inventory and number of bottles of such Product(s) and Product
Inventory returned to Buyer, the customer(s) and the dollar amount
of payments made or credits issued to such customer(s). The first
Returns Report will be for the period from the Closing Date through
the end of the month immediately following Closing. Thereafter the
Returns Report will be for monthly time periods. Returns Reports
will be transmitted no later than ten (10) days following the
close of the month.
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1.61
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“
Sales Discounts and Allowances ” means any sales
discounts and/or other allowances, including but not limited to,
promotions and terms given to such customers in the normal course
of Business.
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1.62
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“
Seller ” has the meaning set forth in the Preamble to
this Agreement.
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1.63
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“
Seller Disclosure Schedule ” has the meaning set forth
in the preamble to Article VI of this Agreement.
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1.64
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“
Shipment Report ” means a report totaling all
shipments of Product Inventory made by Buyer to customers. Each
Shipment Report shall contain, at a minimum, the specific Product
Inventory and number of bottles of the Product Inventory shipped by
Buyer, the customer(s) and the dollar amount of shipments made to
such customer(s). The first Shipment Report will be for the period
from the Closing Date through December 31, 2006 . Thereafter,
the Shipment Report will be for quarterly time periods.
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1.65
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“Specified Know-How”
means all proprietary inventions,
technology, trade secrets, know-how, data, procedures and other
information, in each case that (a) have been reduced to
writing or stored electronically or are in another tangible form,
and (b) relate exclusively to the Products.
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1.66
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“
Tax ” means all of the following tax in connection
with the operations of the Business or the Contemplated
Transactions: (i) any net income, alternative or add-on
minimum tax, gross income, gross receipts, sales, use, ad valorem,
transfer, franchise, profits, license, excise, severance, stamp,
occupation, premium, property, environmental or windfall profit
tax, custom, duty or other tax, governmental fee or other like
assessment imposed by an Governmental or Regulatory Authority
responsible for the imposition of any such tax (domestic or
foreign) or payable under any tax-sharing agreement or any other
contract; (ii) any Liability for the payment of any amounts of
the type described in (i) as a result of being a member of any
affiliated, consolidated, combined, unitary or other group for any
taxable period; and (iii) any Liability for the payment of any
amounts of the type described in (i) or (ii) as a result
of any express or implied obligation to indemnify any other
person.
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1.66
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“
Territory ” means the United States of
America.
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1.67
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“
Trademarks ” means the trade name, trade dress, logos,
common law trademarks or service marks and registered trademarks or
service marks and the associated goodwill with respect to the
Products.
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Article II. Purchase and Sale
of Assets
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2.1
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Subject to the
terms and conditions of this Agreement, at the Closing, Seller
shall sell, transfer, convey, assign and deliver to Buyer, and
Buyer shall purchase, acquire and accept from Seller, all of
Seller’s and each such Affiliate’s right, title and
interest, as of the Closing, in and to the Purchased Assets free
and clear of Encumbrances, with the exception for Permitted
Encumbrances. The Excluded Assets are not part of the sale and
purchase of the Contemplated Transactions, are excluded from the
Purchased Assets and shall remain the property of Seller after
Closing.
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2.2
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Notwithstanding
anything contained in this Agreement to the contrary, Seller may
retain an archival copy of all Assumed Contracts, Books and
Records, Marketing Materials and other documents or materials
conveyed hereunder.
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Article III. Assumption of
Assumed Liabilities
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3.1
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Subject to the
terms and conditions of this Agreement, as of the Closing Date,
Buyer agrees to assume, satisfy, perform, pay, discharge and
otherwise be responsible for the Assumed Liabilities. The Excluded
Liabilities shall remain the sole responsibility of and shall be
retained, paid, performed and discharged solely by
Seller.
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Article IV. Purchase Price and
Payment
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4.1
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Purchase Price.
As consideration for the Purchased Assets, Buyer shall:
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(a) (i) pay a cash purchase
price for the Products and Marketing Materials equal to $150,000
payable at Closing; and (ii) pay a cash purchase price of
$61,143 for the Product Inventory equal to the Cost of Goods as
estimated by Seller for the inventory as listed on Exhibit A
payable at closing. Buyer shall confirm the inventory within four
(4) months of closing, with an adjustment to the Purchase
Price made at the time of the first royalty payment.
-8-
(b) Assume the Assumed
Liabilities.
(c) The Closing payments shall be
paid by Buyer to Seller in cash by wire transfer of immediately
available funds to an account or accounts designated by Seller
prior to the Closing Date.
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4.2
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Additional
Consideration. As additional consideration for the Purchased
Assets:
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(a) Additional Payments .
Buyer shall pay from the Closing Date and for a period of three
(3) years to Seller a quarterly royalty payment equal to eight
percent (8%) of Net Revenue for the commercial sale of each
Product. The minimum royalty due to Seller is $166,667 for each
rolling12 month period quarter paid as provided in paragraph
(b) below. The payment each quarter shall be the higher of the
minimum payment for the quarter, ($41,500) or 8% of Net Revenue,
adjusted as provided herein. However, if the sales in any rolling
12 month period are less than $2,075,000.00, the royalty payment
due for such period will not exceed $166,667.00.
(b) Each payment to be made pursuant
to this Article 4.2 shall be paid to Seller no later than the
forty-fifth (45th) day after the end of each calendar quarter
by check not less than two (2) Business Days prior to the date
on which such payment is due.
(c) In the event the Buyer shall
sublicense or re-license the Products to a third party, Seller
shall continue to receive a quarterly royalty payment equal to
eight percent (8%) on the commercial net sales of each Product
and Product Inventory until the Royalty End Date subject to the
payment provisions described in this Article 4.2 and subject to the
minimum royalty described in this Article 4.2.
(d) In the event of rebates,
returns, Sales Discounts and Allowances or other adjustments to Net
Revenue occurring after the Royalty End Date, Buyer shall bill
Seller for such adjustment with payment due thirty (30) days
thereafter and an eight percent (8%) per annum interest charge
shall be added to all delinquent payments. However for purposes of
this agreement, minimum royalties must be met for the time period
as listed in 4.2(a) and would not be lowered for returns, rebates,
Sales Discounts and Allowances or other adjustments with the sole
exception in response to FDA action listed in 4.2(e).
(e) Anything herein to the contrary
notwithstanding, in the event that the FDA or other Authority takes
action to remove the Products from the market or prevents their
sale, then all royalty payments shall cease immediately. In the
event, however, that products under the Histex trade name return
for commercial sale within the royalty period outlined in this
agreement, then royalty payments would resume for the remaining
period.
(f) Buyer shall be responsible and
shall hold seller harmless for all Assumed Liabilities as listed in
Article 1.7. Seller shall prepare a report for Buyer listing in
detail any payments that may be due to Seller to reimburse Seller
for any Assumed Liabilities. The reports shall be submitted to the
Buyer within ten (10) days of the close of the quarter and the
amount due shall be paid with, and in addition to, the
Buyer’s royalty payment.
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(g) Within thirty days following
proof to Buyer that Seller has paid return liability in excess of
$100,000 over a two (2) year period from the Closing Date on
Histex Products that is not an Assumed Liability, excluding returns
from Histex IE and Histex PD 12, Buyer will reimburse Seller
$25,000.
(i) Reports; Payments . In
connection with each quarterly royalty payment set forth in Article
4.2(a) hereof, Buyer shall provide an estimated report by the tenth
(10 th ) day after each quarterly
period and a final report when the quarterly royalty payment is due
setting forth the calculation of Net Revenue for each Product and
Product Inventory for the applicable period and the amount of the
royalty payment due, each in sufficient detail to permit Seller to
determine whether the calculation of Net Revenue and the
calculation of the royalty payment due is fair estimate. Buyer
shall cause its representatives and employees to be reasonably
available to Seller to discuss any questions or comments of Seller
concerning such report.
(ii) Records; Access; Audit for
Net Revenue . Buyer shall use commercially reasonable efforts
to keep complete and accurate records of sales and all other
information necessary to accurately calculate the Net Revenue for
the periods described above and keep such records through the
Royalty End Date and for an additional twelve (12) months.
Until the Royalty End Date and for a period of twelve
(12) additional months, Seller shall have the right through
its representatives or an independent, certified public accountant
to audit such records at the place or places of business where such
records are customarily kept in order to verify the accuracy of the
reports of Net Revenue made hereunder. Such audits may be exercised
during normal business hours upon ten (10) days prior written
notice to Buyer, provided that notice is given at least sixty
(60) days after the due date of such royalty payment. Seller
shall bear the full cost of such audit unless such audit discloses
a variance of more than ten percent (10%) from the amount of
any payment calculated with respect to Net Revenue under this
Agreement, in which case Buyer shall bear the full cost of such
audit. In the event that Buyer disputes the results of
Seller’s audit, Buyer may through its representative or an
independent certified public accountant, agreeable to the Seller,
audit such records and if Buyer disputes the claimed amount of
shortfall, Buyer shall provide notice of such dispute in writing
with reasonable detail to Seller and Buyer and Seller shall attempt
to resolve such dispute in good faith. If within twenty
(20) days after receipt of the dispute by Seller, the Parties
have been unable to resolve the dispute amicably, the matter will
be resolved by an independent accounting firm of nationally
recognized standing (the “Arbitrator”) that is mutually
agreed upon by both Buyer and seller for final resolution. Should
the Parties be unable to agree on an Arbitrator, one will be
appointed by the American Arbitration Association. Any amounts that
are determined to be due and owing by Buyer to Seller or by Seller
to Buyer following such audit, including the fees and expenses of
the Arbitrator, if necessary, shall be paid within ten
(10) days thereafter, together with any interest due thereon
(at a rate equal to nine percent (9%) per annum) for any
amounts owing by one Party to the other.
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(iii) Records; Access; Audit for
Product Inventory and Products in the Distribution Channel .
For a period of two years following the Closing Date, Buyer shall
keep complete and accurate records of any returns and Sales
Discounts and Allowances. Seller shall have the right through its
representatives or an independent, certified public accountant to
audit such records pertaining to the Purchased Assets, including
the Returns Report and Shipment Report, at the place or places of
business where such records are customarily kept in order to verify
the accuracy of the returns and the Returns Report and Shipment
Reports made hereunder. Such audits may be exercised during normal
business hours upon ten (10) days prior written notice to
Buyer.
(b) Responsibility for Product
Inventory and Products in the Distribution Channel . Seller
shall be responsible for payment of returns on all Product
Inventory and Products in the Distribution Channel; Buyer will then
reimburse Seller for that portion of returns as specified in
Schedule A. Seller shall remain liable for all manufacturing
defects, product liability, and any other liability related to such
Product Inventory and Product placed in the distribution channel
prior to the Closing Date, and the Product Inventory listed on
Exhibit A.
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4.3
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Payment of
Sales, Use and Other Taxes. Seller shall be solely responsible for
all sales, use, transfer and other related Taxes, if any, arising
out of the sale by Seller and its Affiliates of the Purchased
Assets to Buyer pursuant to this Agreement. Buyer and Seller hereby
waive compliance with the bulk transfer provisions of the uniform
commercial code (or any similar law) (“Bulk Sales
Laws”) in connection with this Agreement.
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Article V.
Closing
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5.1
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Time and Place.
The closing of the transactions contemplated by this Agreement,
including without limitation the purchase and sale of the Purchased
Assets and the assumption of the Assumed Liabilities (the “
Closing ”) shall take place as promptly as
practicable, but no later than October 10, 2006 at the offices
of Seller, unless another time or place shall be agreed to by the
Parties.
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5.2
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Deliveries at
Closing.
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(a) Closing Deliveries by
Seller . At the Closing, Seller shall deliver or cause to be
delivered to Buyer:
(i) Trademark assignments necessary
to transfer the Trademarks to Buyer in form and substance
reasonably acceptable to Seller and Buyer;
(ii) A bill of sale in form and
substance reasonably acceptable to Seller and Buyer to transfer the
Products, Product Inventory, Sample Inventory, Books and Records
and Marketing Materials to Buyer;
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(iii) Within five (5) days of
closing, to transfer all warehoused inventory of Products to the
location designated by Buyer by Buyer’s designated transport
carrier and at Buyer’s expense
(b) Closing Deliveries by
Buyer . At the Closing, Buyer shall deliver or cause to be
delivered to Seller:
(i) the Closing payments in cash or
by wire transfer in accordance with Article 4.1 hereof;
(ii) assignment and assumption
agreements, reasonably satisfactory to Seller and Buyer, assigning
to Buyer all rights and obligations of Seller in and to the Assumed
Contracts;
(iii) such instruments of assumption
and other instruments or documents, in form and substance
reasonable acceptable to Seller and Buyer, as may be necessary to
effect Buyer’s assumption of the Assumed
Liabilities;
(iv) the certificates and other
documents to be delivered pursuant to Article X hereof.
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5.3
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At and after
Closing, Seller and Buyer shall cooperate and make commercially
reasonable efforts to arrange the transfer of rights with respect
to all Assumed Contracts with third parties relating to the
Products from Seller to Buyer.
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Article VI. Representations
and Warranties of Seller
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6.1
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Seller and
Parent represent and warrant to Buyer as of the date hereof,
subject to such exceptions as are specifically disclosed in the
disclosure schedule (referencing the appropriate Sections hereof)
supplied by Seller to Buyer and dated as of the date hereof (the
“ Seller Disclosure Schedule ”), which Seller
Disclosure Schedule shall be deemed to be representations and
warranties of Seller as if made herein, as follows:
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6.2
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Seller is a
corporation duly organized, validly existing and in good standing
under the laws of the State of Florida and has all requisite power
and authority to own its assets and carry on the Business as
currently conducted by it.
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6.3
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Seller has all necessary power
and authority and has taken all actions necessary to enter into
this Agreement and to carry out the Contemplated Transactions. The
Board of Directors of Seller has taken all action required by Law
or its organizational documents to be taken by it to authorize the
execution and delivery of this Agreement by the Seller and the
consummation of the Contemplated Transaction. This Agreement has
been duly
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and validly executed and
delivered by Seller and, when executed and delivered by Buyer, will
constitute a legal, valid and binding obligation of Seller
enforceable against it in accordance with its terms except
(a) as limited by applicable bankruptcy, insolvency,
reorganization, moratorium and other laws of general application
affecting enforcement of creditors rights generally, and
(b) as limited by laws relating to the availability of
specific performance, injunctive relief or other equitable
remedies.
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6.4
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Non-Contravention. The execution and delivery by
Seller of this Agreement does not, and the performance by it of its
obligations under this Agreement and the consumma
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