ASSET PURCHASE AGREEMENT

Exhibit 10.35

Execution Copy

ASSET PURCHASE AGREEMENT

between

BRISTOL-MYERS SQUIBB COMPANY

as Seller

and

WARNER CHILCOTT COMPANY, INC.

as Purchaser

Dated as of September 30, 2005

 

TABLE OF CONTENTS

 

 

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ASSET PURCHASE AGREEMENT dated as of September 30, 2005 (the “ Agreement Date ”) between Bristol-Myers Squibb Company, a Delaware corporation (“ Seller ”), and Warner Chilcott Company, Inc., a Puerto Rican corporation (“ Purchaser ”).

Galen (Chemicals) Limited (“ Galen ”) has assigned all of its rights and obligations under the Option Agreement to Purchaser.

Seller desires to sell to Purchaser, and Purchaser desires to purchase from Seller, the Acquired Assets (Section 8.02(b) identifies the sections of this Agreement in which this term and other capitalized terms used herein and not defined in Section 8.02(a) are defined). In addition, Purchaser has agreed to assume from Seller the Assumed Liabilities.

Accordingly, the Parties hereby agree as follows:

ARTICLE I.

SALE AND PURCHASE OF ASSETS

SECTION 1.01. Purchase and Sale . On the terms and subject to the conditions of this Agreement, at the Closing, Seller shall, and shall cause its Affiliates to, sell, assign, transfer, convey and deliver to Purchaser, and Purchaser shall purchase from Seller and its Affiliates, all the right, title and interest of Seller and such Affiliates in, to and under the Acquired Assets, for (a) the amount set forth on Schedule 1.01(a) , payable in immediately available funds at Closing as set forth in Section 1.04, minus the Up-Front Cash Purchase Price adjustment, if any, determined in accordance with Section 1.06(a), as further adjusted pursuant to Section 1.07 (the “ Up-Front Cash Purchase Price ”), (b) the royalties payable by Purchaser to Seller following the Closing under Article 3 of the Option Agreement (the “ Royalties ”) (the Up-Front Purchase Price and the Royalties referred to herein as the “ Purchase Price ”), (c) the payments in respect of Inventory required by Section 1.08, and (d) the assumption by Purchaser of the Assumed Liabilities. The purchase and sale of the Acquired Assets and the assumption of the Assumed Liabilities are referred to in this Agreement collectively as the “ Acquisition ”.

SECTION 1.02. Transfer of Assets . (a) The term “ Acquired Assets ” means all Seller’s and its Affiliates’ rights, title and interest in, to and under those certain assets set forth below:

 

(i)

the Intellectual Property;

 

(ii)

the Inventory;

 

(iii)

Seller’s right, title and interest in and to any and all regulatory files (including correspondence with regulatory authorities), registrations (including any IND and NDA for the Product), applications, approvals, licenses and permits exclusively relating to the Business or the Acquired Assets (including the Products) as of the Closing Date from any applicable regulatory authority in the Territory, in each case to the extent transferable in light of legal, contractual, and regulatory considerations;

(iv)

Seller’s rights and interests in and to the LEO License Agreement and LEO Supply Agreement, where and to the extent arising from and after the Closing;

 

(v)

all marketing materials, research data, customer and sales information, product literature, promotional materials and data, advertising and display materials and all training materials in whatever medium (e.g., audio, visual or print) exclusively related to the Business or to the Acquired Assets (including the Products), in each case to the extent transferable in light of legal, contractual and practical considerations;

 

(vi)

all records, customer contracts, and recorded information, including customer and supplier lists, that are exclusively related to the Business or the Acquired Assets, in each case to the extent transferable in light of legal, contractual and practical considerations, other than records and recorded information relating to the LEO Patents and LEO Technical Information; and

 

(vii)

all the rights relating to the Acquired Assets set forth in clauses (i) and (iii) above, including all claims, counterclaims, credits, causes of action, choses in action , rights of recovery and rights of setoff and Third Party warranties, guaranties and similar contractual rights as to Third Parties held by or in favor of Seller or any of its Affiliates.

(b) [Intentionally omitted]

(c) Purchaser acknowledges and agrees that it is not acquiring from Seller or its Affiliates any rights, title or interest in, to and under any of the following assets (the “ Excluded Assets ”):

 

(i)

any real estate owned or leased by Seller or any of its Affiliates;

 

(ii)

all cash and cash equivalents of Seller or any of its Affiliates;

 

(iii)

any patent rights, including without limitation the LEO Patents;

 

(iv)

any technical information or know-how relating to the manufacture of the Compound or Product, including without limitation the LEO Technical Information;

 

(v)

the Names;

 

(vi)

all Accounts Receivable;

 

(vii)

any assets, properties or rights of Seller or any of its Affiliates other than the Acquired Assets;

 

(viii)

except as conveyed pursuant to Section 1.08, any inventories of the Business, including raw materials, goods in process, finished goods, packaging supplies and labels;

 

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(ix)

any manufacturing equipment and packaging assets used in the manufacture of the Products, and any warranty rights applicable to such manufacturing equipment;

 

(x)

any refund or credit of Taxes attributable to any Excluded Tax Liability;

 

(xi)

all rights, claims and credits of Seller or any of its Affiliates, relating to any Excluded Asset or any Excluded Liability, including any such items arising under insurance policies and all guarantees, warranties, indemnities and similar rights in favor of Seller or any of its Affiliates relating to any Excluded Asset or any Excluded Liability;

 

(xii)

all rights of Seller or any of its Affiliates under this Agreement and the Ancillary Agreements and Related Instruments; and

 

(xiii)

all Retained Information, except as set forth in Section 4.02(b).

(d) Purchaser shall acquire the Acquired Assets free and clear of all liabilities, obligations and commitments of Seller or any of its Affiliates, other than the Assumed Liabilities, and free and clear of all Liens, other than Permitted Liens.

SECTION 1.03. Assumed Liabilities . (a) Upon the terms and subject to the conditions of this Agreement, Purchaser shall assume, effective as of the Closing, and from and after the Closing, Purchaser shall pay, perform and discharge when due, only the following liabilities, obligations and commitments of Seller and its Affiliates (the “ Assumed Liabilities ”).

 

(i)

except to the extent set forth in Section 1.03(c)(ii), all liabilities arising out of or relating to any product liability, breach of warranty or similar claim for injury to person or property, regardless of when asserted, which resulted from the use or misuse of the Products or otherwise related to the Products (including all Proceedings relating to any such liabilities);

 

(ii)

except to the extent set forth in Section 1.03(c)(iii), all liabilities arising out of or relating to the return of any Product on or after the Closing Date, whether or not sold by Seller or its Affiliates prior to, on or after the Closing Date;

 

(iii)

except to the extent set forth in Section 1.03(c)(iii), all liabilities arising out of or relating to any Rebate Program related to any Product;

 

(iv)

all liabilities for Taxes arising out of or relating to, directly or indirectly, the Business or the Acquired Assets (including the Products) or the ownership, sale or lease of any of the Acquired Assets, other than the Excluded Tax Liabilities, in addition to those attributed to Purchaser pursuant to Section 4.06;

 

(v)

except as set forth in Section 1.03(c), Seller’s obligations under the LEO License Agreement and LEO Supply Agreement, in each case to the extent transferable in light of legal, contractual, and regulatory considerations; and

 

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(vi)

all other liabilities, obligations and commitments of whatever kind and nature, primary or secondary, direct or indirect, absolute or contingent, known or unknown, whether or not accrued, arising out of or relating to, directly or indirectly, the Business or the Acquired Assets (including the Products) or the ownership, sale or lease of any of the Acquired Assets but in each case only to the extent related to the conduct of the Business or the use of the Acquired Assets for any period on or after the Closing Date.

(b) Purchaser and Seller hereby agree to reimburse one another, U.S. dollar for dollar, in the event that (i) any of their or their respective Affiliate’s customers offset, against accounts payable by such customer to Seller or Purchaser or their respective Affiliates, the cost of any Product returned by such customer, or (ii) they or any of their respective Affiliates are required to issue a credit for the account of any customer for returns, in each case which are the responsibility of the other Party hereto pursuant to this Section 1.03. Seller and Purchaser agree to, and to cause their respective Affiliates to, provide notice to one another of any such offset or issuance of credit for which such Party or its Affiliate is entitled to be reimbursed pursuant to this Section 1.03(b). Payment shall be made promptly following receipt of notice of any such offset by or issuance of a credit to a customer (together with supporting documentation). Seller and Purchaser shall, and Seller shall cause its Affiliates to, cooperate to ensure that a customer does not offset returns of any Product against both Seller (or any of its Affiliates) and Purchaser.

(c) Notwithstanding any other provision of this Agreement or any Related Instrument, Purchaser shall not assume any Excluded Liability, each of which shall be retained and paid, performed and discharged when due by Seller and its Affiliates. The term “ Excluded Liability ” shall mean:

 

(i)

accounts payable and liabilities, obligations and commitments of Seller or any of its Affiliates for materials and services with respect to the manufacture of any Product (it being understood that these obligations are ones that are not covered by Sections 1.03(a)(i), (ii) or (iii));

 

(ii)

all liabilities arising out of or relating to any product liability, breach of warranty or similar claim for injury to person or property, regardless of when asserted, which resulted from the use or misuse of Products manufactured by or on behalf of Seller and shipped to a Third Party prior to the Closing (the “ Shipped Products ”) or otherwise related to the Shipped Products (including all Proceedings relating to any such liabilities) (it being understood that these obligations are ones that are not covered by Sections 1.03(c)(i) or (c)(iii));

 

(iii)

all liabilities arising out of or relating to any Rebate Programs related to any Shipped Product;

 

(iv)

any Tax payable with respect to any business, asset, property or operation of Seller or any member of any affiliated group of which Seller is a member (including any Taxes relating to or arising out of the operation of the Business) for any Pre-Closing Tax Period, including any Tax for which Seller is responsible pursuant to Section 4.06 (“ Excluded Tax Liability ”);

 

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(v)

any liability, obligation or commitment of Seller or any of its Affiliates arising out of or relating to any Excluded Asset;

 

(vi)

any liability, obligation or commitment of any kind arising out of or relating to employment, compensation or benefits (including severance) for the present or future employees of Seller or any of its Affiliates;

 

(vii)

all liabilities arising out of or relating to (A) any investigation by any Governmental Entity relating to Shipped Products (a “ Government Investigation ”) or (B) any private litigation to the extent that such litigation relates to a Government Investigation;

 

(viii)

Seller’s obligations and liabilities under the LEO License Agreement and LEO Supply Agreement, to the extent related to the period prior to the Closing; and

 

(ix)

except to the extent specifically provided in Section 1.03(a) (i), (ii), (iii) and (iv), all other liabilities, obligations and commitments of whatever kind and nature, primary or secondary, direct or indirect, absolute or contingent, known or unknown, whether or not accrued, arising out of or relating to, directly or indirectly, the Business or the Acquired Assets (including the Products) but only to the extent related to any period prior to the Closing Date.

(d) Each of Purchaser’s and Seller’s obligations under this Section 1.03 will not be subject to offset or reduction by reason of any actual or alleged breach of any representation, warranty or covenant contained in this Agreement or any Related Instrument or any right or alleged right to indemnification hereunder.

SECTION 1.04. Closing.

(a) The consummation of the transactions contemplated by this Agreement (“ Closing ”) will, subject to the satisfaction or waiver of the conditions set forth in Article V hereof, take place at 9:00 a.m. on January 4, 2006 or at such other time as shall be mutually agreed upon by the Parties at the offices of Bristol-Myers Squibb Company, 345 Park Avenue, New York, New York 10145. The date on which Closing occurs is referred to herein as the “ Closing Date .”

(b) At Closing, Seller shall deliver or cause to be delivered to Purchaser, the following: (i) a duly executed Bill of Sale for the Acquired Assets; (ii) the Seller’s Officer’s Certificate; (iii) a duly executed Assignment of Trademarks; and (iv) a duly executed Assignment of Internet Names.

(c) At Closing, Purchaser shall deliver to Seller, the following: (i) cash in the aggregate amount set forth in Schedule 1.01(a) by electronic funds transfer of immediately available United States Dollars in the amounts and to the accounts of such entities as are designated by Seller on Schedule 1.04(c) (with such entities to designate to Purchaser in writing not less than two (2) business days prior to Closing the relevant account numbers of the accounts to which such transfers should be made); (ii) a duly executed Assignment of Trademarks; (iii) a duly executed Assignment of Internet Names; (iv) a duly executed instrument of assumption of the Assumed Liabilities substantially in the form of Exhibit A (the “ Assumption Agreement ”); and (v) the Purchaser’s Officer’s Certificate .

 

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SECTION 1.05. Risk of Loss.

Until Closing, any loss of or damage to the Acquired Assets from fire, casualty or any other occurrence shall be the sole responsibility of Seller or its Affiliates, as applicable. At Closing, title to the Acquired Assets shall be transferred to Purchaser and Purchaser shall thereafter bear all risk of loss associated with the Acquired Assets and be solely responsible for procuring adequate insurance to protect the Acquired Assets against any such loss.

SECTION 1.06. Up-Front Cash Purchase Price Adjustment.

(a) The Up-Front Cash Purchase Price shall be adjusted by an amount (the “ Pipeline Adjustment ”) equal to the difference between (i) Seller’s total dollar volume sales of the Product for the twelve months ended on the Closing Date and (ii) Seller’s calculation of the total dollar volume sales of the Product for the same twelve-month period as determined in the same manner as in the Copromotion Agreement for purposes of calculating Purchaser’s Performance Compensation thereunder.

(b) Within sixty (60) days after the Closing Date, Seller shall send to Purchaser a written calculation of the Pipeline Adjustment. Seller shall give Purchaser access to all books and records and personnel of Seller reasonably necessary to verify such calculation. Within ninety (90) days of Seller sending such calculation to Purchaser, Purchaser may object in writing to the calculation. If Purchaser fails to object within such ninety-day period, the Pipeline Adjustment shall become final and binding. If Purchaser objects within such ninety-day period, the Parties shall use reasonable efforts to agree upon the calculation within thirty (30) days of Purchaser sending its objections to Seller. If the Parties agree within such period, the Pipeline Adjustment as so agreed shall become final and binding. If the Parties are unable to agree within such period, the Parties shall submit the disagreement to arbitration. Such arbitration shall be final and binding upon the Parties. Such arbitration shall be held in New York, New York, or such other location as Seller and Purchaser may mutually agree. There shall be one (1) arbitrator, who shall be suitably experienced in matters relating to valuations within the pharmaceutical industry and who, unless Seller and Purchaser can agree on the selection of the arbitrator within sixty (60) days after receipt of Purchaser’s written objection shall be selected by the Rules of the American Arbitration Association; provided that such arbitrator must be an individual who (i) is not a current employee or director of, or consultant to, either of the Parties or of an entity which currently has a commercial alliance or consulting relationship with either of the Parties, (ii) has disclosed any previous affiliation with one of the Parties of the type described in clause (i), and (iii) is mutually acceptable to the Parties. The arbitrator will render a written decision within one (1) month after the date that the arbitrator is appointed. The decision of the arbitrator will be final and binding on the Parties. Each Party to the arbitration shall bear its own expenses of such arbitration and shall evenly share the costs and fees of the arbitrator.

(c) Seller shall pay to Purchaser an amount equal to the Pipeline Adjustment in immediately available funds within three (3) business days of its final determination.

 

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(d) Notwithstanding anything to the contrary set forth in this Agreement, except as provided in Section 1.07 of this Agreement, the foregoing shall be Purchaser’s sole and exclusive remedy with respect to Seller’s (and its Affiliates’) sales practices related to incentives or other inducements to purchase the Product offered, or volume of the Product sold, to Seller’s (or such Affiliates’) customers, in each case, prior to the Closing Date. Purchaser shall not be entitled to recovery under Article VII for any Losses arising from any breaches of representations and warranties or breaches of covenants in this Agreement or in any Related Instrument relating to such sales practices or volume of sales, except to the extent arising out of a Third Party Claim.

SECTION 1.07. Unanticipated Discounting Purchase Price Adjustment .

(a) In determining the Up-Front Cash Purchase Price, Seller and Purchaser have assumed that Incentive Discounts (as defined in Section 1.07(b)) in the aggregate for all presentations of the Product for any given full calendar quarter from and after the Effective Date (as defined in the Option Agreement) but prior to the Closing Date will not exceed in the aggregate fifteen percent (15%) or more of all Gross Sales of the Product for such calendar quarter (“ Unanticipated Discounting ”) (it being understood that Seller has sole and absolute discretion to establish pricing for the Product and its discounting, which discounting may or may not exceed 15%). However, if Unanticipated Discounting shall have occurred during any given full calendar quarter, from and after the Effective Date (as defined in the Option Agreement) but prior to the Closing Date, then the Up-Front Cash Purchase Price shall be reduced according to the following formula:

D = A ÷ 85 ÷ B x C

 

A =

the Up-Front Cash Purchase Price;

 

B =

the number of calendar quarters between the Effective Date (as defined in the Option Agreement) and the Closing Date;

 

C =

the number of calendar quarters during which Unanticipated Discounting occurred between the Effective Date (as defined in the Option Agreement) and the Closing Date; and

 

D =

the amount of the applicable reduction to the Up-Front Cash Purchase Price.

(b) For purposes of this Section 1.07, “ Incentive Discounts ” shall mean all sales allowances, including trade, quantity and cash discounts and any other rebates, chargeback rebates, fees, reimbursements or similar payments granted or given to wholesalers or other distributors (including retailers), buying groups, health care insurance carriers or other institutions, and any payment in respect of sales to any governmental authority in respect of any Federal or state Medicaid, Medicare or similar program, all as determined in accordance with generally accepted accounting principles on a basis consistent with Seller’s audited financial statements, but excluding such discounts, credits, or rebates that relate to matters such as product returns, rejected or damaged goods, billing errors, and the like.

 

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SECTION 1.08. Inventory.

On the Closing Date, Seller shall, and shall cause its Affiliates to, sell, assign, transfer, convey and deliver to Purchaser, and Purchaser shall purchase, acquire, pay for and accept from Seller, free and clear of all Liens, all right, title and interest of Seller and its Affiliates in, to and under any Product inventory then held by Seller and its Affiliates or that has been firm ordered by Seller and its Affiliates from LEO (the “ Inventory ”). The purchase price for the Inventory shall be the price and other amounts, including royalties, paid or payable to LEO by Seller under the LEO Supply Agreement and LEO License Agreement and shall be paid by Purchaser to Seller within thirty (30) days after the Closing by wire transfer of immediately available funds to the accounts specified on Schedule 1.04(c). On the Closing Date and for a reasonable time thereafter, Seller and its Affiliates will make the Inventory available for pick-up by Purchaser. Seller shall bear the risk of loss to the Inventory until the Inventory has been delivered to Purchaser; thereafter Purchaser shall bear the risk of loss to the Inventory. Seller shall provide to Purchaser upon delivery of the Inventory, the certificate of analysis that Seller received from LEO for each batch of Products comprising the Inventory.

SECTION 1.09. Rebates; Chargebacks; Returns Handling.

Subject to Section 1.09(h), the Parties will administer and pay all rebates, chargebacks and other similar programs as follows:

(a) Sales of Product Under Seller’s NDC Code . Subject to Section 1.09(e), from and after the Closing, Purchaser will process and be responsible for the administration and payment of all Prime Vendor and federal, state and local managed care and other rebate programs, including Medicaid/Medicare rebates, as well as chargebacks for the Product (collectively, “ Rebate Programs ”), in each case, related to Product sold under Seller’s NDC code, regardless of whether such Product was sold by Seller, Purchaser or any of their respective Affiliates; provided , however , that Seller will pay to Purchaser (by Federal Reserve electronic wire transfer in immediately available funds to an account designated by Purchaser):

 

(i)

within sixty (60) days of the Closing Date an amount equal to: (1) the product of: (A) a number equal to (i) the amount of rebates and chargebacks paid by Seller related to the Product pursuant to federal, state and local governmental Rebate Programs (including, without limitation, Medicaid rebates, but excluding Medicare and any Prime Vendor rebates or chargebacks), during the preceding twelve month period divided by (ii) gross sales for the same preceding period, multiplied by (B) Seller’s gross sales of the Product for the six (6) months preceding the Closing, less (2) any rebates and chargebacks paid by Seller after the Closing relating to Products pursuant to federal, state and local governmental Rebate Programs (including, without limitation, Medicaid rebates, but excluding Medicare and any Prime Vendor rebates or chargebacks); and

 

(ii)

within sixty (60) days of the Closing Date an amount equal to: (1) the product of (A) a number equal to (i) the amount of rebates and chargebacks paid by Seller related to the Product to Prime Vendors with respect to sales to governmental and non-governmental Third Parties during the preceding twelve month period

 

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divided by (ii) gross sales for the same preceding period, multiplied by (B) Seller’s gross sales of the Product for the forty-five (45) day period preceding the Closing, less (2) any rebates and chargebacks paid by Seller after the Closing relating to the Products to Prime Vendors with respect to sales to governmental and non-governmental Third Parties.

Seller shall be responsible for all obligations relating to any Other Rebate Programs (as defined below) until the end of the first full calendar quarter after Closing and thereafter Purchaser shall be responsible for such obligations; provided that notwithstanding anything in the foregoing to the contrary, Seller shall remain responsible for all Shipped Products and Purchaser shall remain responsible for all Products other than Shipped Products. “ Other Rebate Program ” shall mean any Rebate Program related to the Product other than the Rebate Programs covered in clauses (i) and (ii) above or in Section 1.09(f).

(b) Sales of Product Under an NDC Code Other Than Seller’s . Purchaser will process and be responsible for the administration and payment of all federal, state and local managed care and other rebate programs, including Medicaid/Medicare rebates, as well as chargebacks for the Product, in each case, related to Product that is sold by Purchaser in the Territory which bears an NDC Code other than Seller’s NDC Code.

(c) Product Returns . Purchaser shall be solely responsible for processing and handling all returns following the Closing. Purchaser will be responsible for the credit liability associated with all returns of Product sold on or after the Closing Date in the Territory, and Seller will be responsible for the credit liability for all returns of Product sold before the Closing Date. Notwithstanding the foregoing, in the event Seller delivers Product to Purchaser from lots that include Product that was sold by Seller prior to the Closing Date (each referred to herein as a “ Partial Lot ”), Purchaser and Seller will each be responsible for one half of the credit liability associated with returns of Product included in such Partial Lot (regardless of who sold such Product). The issuance and determination of all credits and payments for any returns for which Seller may have a credit liability hereunder (including with respect to Partial Lots) shall be made in accordance with Seller’s returns policy applicable to the majority of Seller’s non-oncology products, as provided in writing to Purchaser. Each party will destroy Product returned to it in accordance with applicable Laws regardless of whether or not it had the responsibility for the returned Product pursuant to this paragraph (c). A Party may invoice the other Party for the actual expenses incurred as a result of destroying Product for which the other Party is responsible including without limitation, fees paid to Third Parties for receiving and processing such returned Product in accordance with applicable Laws; provided, that if Purchaser requests Seller to ship returned Product to Purchaser, Seller will do so at Purchaser’s expense. Such other Party will pay such invoice within thirty (30) days of the date of invoice. Neither Party will issue a credit to a Third Party attributable to returns for which the other Party is responsible. The Parties shall reconcile and true up their accounting under this provision at the end of each calendar quarter after the Closing until both Parties agree that such need no longer exists. Notwithstanding the foregoing, Purchaser shall have no responsibility for, and Seller shall be solely responsible for the cost of, misshipped Products by Seller that are returned by the customer for non-compliance with the terms of the customer’s orders (such as non-compliance with respect to quantity, delivery, date, pricing error, or delivery location). Each Party shall have the right during normal business hours and on reasonable notice, to review the other Party’s books and records and consult with the other Party’s responsible employees in respect of performance of this Section 1.09(c).

 

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(d) Medicaid Processing . Purchaser will be responsible for supplying the United States government with mandated pricing information related to Product sold under Seller’s NDC code for purposes of calculating Medicaid rebate per unit for the Product. This responsibility will begin in the quarter of Closing. The Parties agree that Seller will provide to Purchaser transaction level data related to sales made by Seller under Seller’s NDC code in the quarter of Closing in order for Purchaser to submit applicable pricing.

(e) FSS and PHS Processing . The Parties will notify all necessary Third Parties, including the VA National Acquisition Center, as promptly as possible after the Closing (but in no event later than five business days post-Closing), that the Product should be added to Purchaser’s Federal Supply Schedule (FSS) and that Purchaser will assume responsibility for all reporting and other obligations relating to FSS submissions, PHS submissions, and chargeback processing. Until such time as Seller receives written notification from applicable government entities acknowledging the effective date of such assumption and that Seller is no longer obligated to make FSS submissions and process FSS chargebacks, Seller will continue to make FSS submissions and process FSS chargebacks and Purchaser will provide Seller with prompt written notice of (i) changes in its FSS prices, (ii) price changes to those Tracking Customer(s) existing as of the Closing Date (which, as of August 31, 2005, are all hospitals) for the Product, and (iii) price reductions to any commercial customer to a level below the FSS prices in effect at that time. These price notifications will be made to the Seller within three (3) business days after they take effect.

(f) Medicare . In the event that rebates are required to be paid after the Closing with respect to Medicare based on Products sold prior to Closing, Purchaser will process and pay such claims and rebates and Seller will reimburse Purchaser for all amounts paid relating to Shipped Product

(g) Retroactive Impact . In the event that any pricing changes made by Purchaser after the Closing have the effect of increasing any rebate, chargeback or similar liability or payment obligation owed by Seller to any Third Party in the absence of what such liability obligation would have been in the absence of such pricing change, Purchaser shall reimburse Seller for such increase in liability or payment obligation incurred by Seller.

(h) Materially Unfair Outcome . Notwithstanding anything to the contrary in the foregoing provisions of this Section 1.09 and subject to Sections 1.03(a)(iii) and 1.03(c)(iii), the Parties acknowledge and agree that nothing in this Section 1.09 is intended to make money or lose money for either Party in respect of the matters covered in this Section 1.09, and if either Party believes that the above provisions have resulted in a materially unfair outcome to such Party, the Parties will meet and confer in good faith to address the perceived inequity.

 

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ARTICLE II.

REPRESENTATIONS AND WARRANTIES OF SELLER

Seller represents and warrants to Purchaser on the date hereof as follows:

SECTION 2.01. Organization.

Seller is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware. Each of Seller and its Affiliates has all requisite corporate power and authority to own, lease and operate the Acquired Assets and to carry on the Business as they are presently conducted.

SECTION 2.02. Authority; Execution and Delivery; Enforceability.

Seller has the requisite corporate power and authority to execute and deliver this Agreement and to perform all of its obligations hereunder, and each of Seller and its Affiliates has the requisite corporate power and authority to execute and deliver each Related Instrument to which it is a party and to perform all of its obligations thereunder. The execution and delivery of this Agreement and the Related Instruments and the performance by Seller and its Affiliates of their respective obligations hereunder and thereunder have been authorized by all requisite corporate action on their respective parts. This Agreement has been validly executed and delivered by Seller and (assuming that this Agreement has been duly authorized, executed and delivered by Purchaser) constitutes, and each Related Instrument that is to be executed and delivered by Seller or an Affiliate of Seller will constitute when executed and delivered by Seller or such Affiliate, as applicable (assuming that such Related Instrument has been duly authorized, executed and delivered by Purchaser to the extent applicable), a valid and binding obligation of such Party, enforceable against such Party in accordance with its terms.

SECTION 2.03. Consents and Approvals; No Violations.

(a) Except as set forth on Schedule 2.03(a), neither the execution and delivery of this Agreement nor any Related Instrument by Seller or any Affiliate of Seller party thereto, nor the performance by Seller or such Affiliate of its obligations hereunder or thereunder will (i) violate the certificate of incorporation, by-laws or other organizational document of Seller or such Affiliate, (ii) conflict with or result in a violation or breach of, or constitute a default under, any contract, agreement or instrument to which Seller or such Affiliate is a party or by which Seller or such Affiliate or the Acquired Assets are bound, or result in the creation or imposition of any Lien upon any of the Acquired Assets or (iii) violate or conflict with any Law, rule, regulation, judgment, order or decree of any court applicable to Seller, such Affiliate or the Acquired Assets, except in the case of clauses (ii) or (iii) for violations, breaches or defaults which would not result in a Material Adverse Effect, have a material adverse effect on Seller’s ability to consummate the transactions contemplated hereby or materially delay the consummation of the transactions contemplated hereby.

(b) Except for the applicable requirements of the HSR Act and except as set forth on Schedule 2.03(b), no filing with, and no permit, authorization, consent or approval of, any

 

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Governmental Entity is necessary for the consummation by Seller of the transactions contemplated by this Agreement, except for those filings, permits, authorizations, consents or approvals the failure of which to be made or obtained would not result in a Material Adverse Effect, materially impair Seller’s ability to consummate the transactions contemplated hereby or materially delay the consummation of the transactions contemplated hereby.

SECTION 2.04. Financial Statements.

Schedule 2.04 sets forth the “Statements of Net Sales and Products Contribution” for the Products for the years ended December 31, 2002, 2003 and 2004 and for the 6 months ended June 30, 2005 (collectively, the “ Financial Statements ”). The Financial Statements have been prepared in accordance with Seller’s accounting policies applied on a consistent basis and fairly present, in all material respects, as of the dates thereof and for the periods then ended the aggregate Product contribution (as described therein) for the Business, taken as a whole . The Audited Financial Statements, when delivered to Purchaser pursuant to Section 4.19, will be prepared in accordance with GAAP and Seller’s accounting policies applied on a consistent basis and will fairly present, in all material respects, as of the dates thereof the aggregate Product contribution (as described therein) of the Business, taken as a whole. The aggregate Product contribution for the Business, taken as a whole, as presented in the Audited Financial Statements for the years ended December 31, 2002, 2003 and 2004, shall not reflect any material adverse change from the aggregate Product contribution for the Business, taken as a whole, presented in the Financial Statements as of such respective dates.

SECTION 2.05. [Intentionally omitted].

SECTION 2.06. Title of Assets.

Seller or an Affiliate of Seller has, or as of the Closing Date will have, good and valid title to all the Acquired Assets, except, in the case of the Acquired Assets set forth in clauses (ii), (v) and (vi) of Section 1.02(a), those disposed of in the ordinary course of business consistent with past practice and not in violation of this Agreement, in each case free and clear of all Liens, other than Permitted Liens. This Section 2.06 does not relate to Intellectual Property, which is the subject of Section 2.07.

SECTION 2.07. Intellectual Property.

(a) Schedule 2.07(a) sets forth a complete and correct list of (i) all registered trademarks and copyrights used exclusively in the Business; (ii) all common law trademarks and service marks used exclusively in the Business, and (iii) all licenses or agreements to which Seller or any of its Affiliates is a party with respect to the Intellectual Property.

(b) Except as set forth on Schedule 2.07(b):

 

(i)

Seller or one of its Affiliates owns and possesses all right, title and interest in, to and under the Intellectual Property used in the Business free and clear of any liens, encumbrances or other restrictions; and no claim by any Third Party contesting the validity, enforceability, use or ownership of any such Intellectual Property has been made and is currently outstanding, nor to the Knowledge of Seller, is any threatened;

 

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(ii)

none of Seller or any of its Affiliates has received any notices of, nor is aware of any facts which would indicate a reasonable likelihood of, any infringement or misappropriation by, or conflict with, any Third Party with respect to the Intellectual Property used in the Business (including any demand or request that Seller license rights from a Third Party); and

 

(iii)

to the Knowledge of Seller, the conduct of the Business does not infringe, misappropriate or otherwise conflict with any rights of any Third Parties.

(c) No present or former employee or consultant of Seller and no other person owns or has any proprietary, financial or other interest, direct or indirect, in the Intellectual Property used in the Business.

SECTION 2.08. Contracts.

Except as set forth on Schedule 2.08, none of Seller or its Affiliates is a party to or bound by any oral or written contract, lease, license, indenture, agreement, commitment or any other legally binding arrangement, that is used, held for use or intended for use, primarily in, or that arises primarily out of, the operation or conduct of the Business and under which Purchaser will have any liability or other obligation after the Closing (“ Contracts ”) and that is:

 

(i)

or contains a covenant not to compete or covenants that in any way purport to restrict the business activity of Seller and/or its Affiliates or limit the freedom of Seller and/or its Affiliates to engage in the Business or to compete with any Person or otherwise restricts the rights of Seller and/or its Affiliates to use or disclose any information in its or their possession;

 

(ii)

a Contract involving payment by Seller and/or any of its Affiliates of more than $50,000 or extending for a term more than 180 days from the Agreement Date (unless terminable without payment or penalty upon no more than 60 days’ notice), other than purchase orders entered into in the ordinary course of the Business consistent with past practice;

 

(iii)

a Contract involving the obligation of Seller and/or any of its Affiliates to deliver products or services for payment of more than $50,000 or extending for a term more than 180 days from the Agreement Date (unless terminable without payment or penalty upon no more than 60 days’ notice), other than sales orders entered into in the ordinary course of the Business consistent with past practice; or

 

(iv)

a Contract for the sale of any Acquired Asset (other than inventory sales in the ordinary course of business) or the grant of any preferential rights to purchase any Acquired Asset or requiring the consent of any party thereto to the transfer thereof or that creates a relationship with any distributor, dealer, manufacturer’s representative or sales agency or that provides for payments to or by any Person based on sales, purchases, or profits, other than direct payments for goods; or

 

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(v)

a lease, installment or conditional sale agreement, or other Contract affecting the ownership of, leasing of, title to, use of or any other interest in any Acquired Assets (except personal property leases and installment or conditional sales agreements having a value per item or aggregate payments of less than $50,000 or extending for a term less than 180 days from the Agreement Date (unless terminable without payment or penalty upon no more than 60 days’ notice)).

Except as set forth in Schedule 2.08, all Contracts listed in the Schedules are valid, binding and in full force and effect, except for such failures to be valid, binding, and in full force and effect that, individually or in the aggregate, have not had and could not reasonably be expected to have a Material Adverse Effect. Except as set forth in Schedule 2.08, Seller or its Affiliates have performed all obligations required to be performed by them to date under the Contracts, and they are not (with or without the lapse of time or the giving of notice, or both) in breach or default in any respect thereunder and, to the Knowledge of Seller, no other party to any Contract is (with or without the lapse of time or the giving of notice, or both) in breach or default in any respect thereunder, except for such noncompliance, breaches and defaults that, individually or in the aggregate, have not had and could not reasonably be expected to have a Material Adverse Effect. Complete and correct copies of all Contracts listed in the Schedules, together with all modifications and amendments thereto, have been made available to Purchaser.

SECTION 2.09. Compliance with Law.

(a) Except as set forth on Schedule 2.09(a) or to the extent that it could not reasonably be expected to have a Material Adverse Effect, (i) the Business is conducted in compliance with all permits, government licenses, registrations, approvals, concessions, franchises, authorizations, orders, injunctions and decrees and applicable Laws, including the United States Food, Drug and Cosmetics Act of 1938, as amended from time to time (the “ FDA Act ”), (ii) all governmental licenses, permits, registrations, approvals, concessions, franchises and authorizations principally employed in, or necessary to the ongoing conduct of, the Business are in full force and effect, (iii) since January 1, 2000, no Governmental Entity has served notice that Seller and its Affiliates (with respect to the Business), the Business or the Acquired Assets were or are in violation of any Law or order in any jurisdiction and, to the Knowledge of Seller, there are no grounds for the same and (iv) since January 1, 2000, none of Seller or any of its Affiliates has received written notice from any United States Governmental Entity or any other Governmental Entity that there are any circumstances currently existing which would lead to any loss or refusal to renew any governmental licenses, permits, registrations, approvals, concessions, franchises and authorizations on terms less advantageous to Seller and its Affiliates than the terms of those licenses, permits, registrations, approvals, concessions, franchises and authorizations currently in force.

(b)

 

(i)

Except as set forth on Schedule 2.09(b)(i), the Business is conducted in compliance in all material respects with all applicable Laws in connection with the preparation and submission to the FDA of each of the NDAs relating to the Products, and each of the NDAs has been approved by, and none of Seller or any of its Affiliates has received any notice in writing which has, or reasonably should

 

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have, led Seller to believe that any of the NDAs are not currently in good standing with the FDA. To its Knowledge, Seller or its Affiliates have filed with the FDA all required notices, supplemental applications and annual or other reports, including adverse experience reports, with respect to each NDA which is material to the conduct of the Business as currently conducted by Seller. Except as set forth on Schedule 2.09(b)(i), with respect to the Products for which an NDA has been approved by the FDA, the applicant and all persons performing operations covered by the application acted in compliance in all material respects with 21 U.S.C. §§355 or 357, 21 C.F.R. Parts 314 or 430 et. seq., respectively, and all terms and conditions of such application; provided , that the foregoing shall not apply to any portions of the NDA that rely upon information required to be submitted or supplied by LEO. Except as set forth on Schedule 2.09(b)(i), none of Seller or any of its Affiliates or any of their agents have prepared or have any rights to any ANDA filings (or equivalent non-U.S. filings) relating to the Products.

 

(ii)

Except as set forth on Schedule 2.09(b)(ii), since January 1, 2000, neither Seller nor any of its Affiliates has received any written notice that any United States governmental or regulatory agency (including the FDA) has commenced, or, to the Knowledge of Seller, threatened to initiate any action to withdraw its approval or request the recall of any Product, or commenced or threatened to initiate any action to enjoin production of the Products at any facility.

 

(iii)

Seller does not manufacture any of the Products and, except as set forth in Section 2.17, disclaims all representations and warranties as to whether the manufacturing of the Products is being conducted in compliance in all material respects with current good manufacturing practices as set forth in 21 C.F.R. Parts 210 and 211 or the specifications contained in the NDA for the Product.

 

(iv)

Seller and its Affiliates have made available to Purchaser copies of all material (A) reports of inspection observations received by Seller, (B) establishment inspection reports received by Seller, and (C) warning letters as well as any other documents received by Seller or any of its Affiliates from the FDA relating to the Products and/or arising out of the conduct of the Business that assert ongoing material lack of compliance with any material applicable Laws or regulatory requirements (including those of the FDA) by Seller or its Affiliates.

SECTION 2.10. Litigation.

(a) As of the Agreement Date, except as set forth on Schedule 2.10, there is no claim, action, or proceeding, including product liability claims (collectively, a “ Proceeding ”), pending or, to Seller’s Knowledge, threatened against Seller or its Affiliates in respect of the Acquired Assets (including the Products), the conduct of the Business or the transactions contemplated by this Agreement and each Related Instrument, in respect of which Purchaser would become liable as a result of the consummation of the transactions contemplated hereby which is reasonably likely to be adversely determined, and if adversely determined, is reasonably likely to result in a Material Adverse Effect.

 

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(b) There are no outstanding orders, injunctions or decrees of any United States Governmental Entity that apply to the Acquired Assets (or will apply to Purchaser after Closing) that restrict the ownership, disposition or use of the Acquired Assets or the conduct of the Business, in each case, in any material respect.

SECTION 2.11. Brokers or Finders.

Neither Seller nor any of its Affiliates has retained any agent, broker, investment banker, financial advisor or other firm or Person that is or will be entitled to any brokers’ or finder’s fee or any other commission or similar fee in connection with any of the transactions contemplated by this Agreement, and there are no claims for any of the foregoing.

SECTION 2.12. Registrations.

Schedule 2.12 sets forth all regulatory approvals for the Products.

SECTION 2.13. Medical Information.

Seller has made available to Purchaser copies of (a) all adverse event reports with respect to the Products that have been filed with the FDA since January 1, 2000 through May 2, 2005, including any material correspondence or other material documents relating thereto, (b) a schedule of all payouts made by Seller since January 1, 2000 to end-users in respect of claims relating to the Products, (c) a schedule of all actual or threatened claims made by end-users since January 1, 2002 against Seller or its Affiliates relating to the Products, and (d) all unexpected Serious Adverse Drug Experience (as defined in 21 C.F.R. Section 3.14.80(a)) reports with respect to the Products that have been filed with the FDA since May 2, 2005.

SECTION 2.14. Websites and Domain Names.

Other than the domain names set forth on Schedule 2.14, none of Seller or any of its Affiliates has any interest or ownership rights in any domain names or websites exclusively relating to the Products.

SECTION 2.15. Conduct of Business.

Seller conducts the Business in the Territory only.

SECTION 2.16. Knowledge.

The individuals set forth on Schedule 8.02(a) are Seller’s and its Affiliates’ representatives with primary responsibility in their respective areas of expertise.

 

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SECTION 2.17. Inventory.

To the Knowledge of Seller, the Inventory sold to the Purchaser under this Agreement: (a) will not be adulterated or misbranded under applicable Laws at the time the same is tendered to the common carrier for delivery to the Purchaser; (b) will meet the Specifications therefor at the time the same is tendered to the common carrier for delivery to the Purchaser; and (c) shall be manufactured, labeled and packaged in accordance with Good Manufacturing Practices and all other applicable Laws including all applicable U.S. federal, state and local environmental health and safety Laws in effect at the time and place of manufacture of the Products.

SECTION 2.18. Conduct Since Option Acceptance Date.

Neither Seller nor its Affiliates has engaged in any conduct between the Option Acceptance Date and the date hereof which if engaged in after the date hereof would be a breach of Section 4.01.

SECTION 2.19. No Other Representations or Warranties.

Except for the representations and warranties contained in the Option Agreement, this Article II (including the Schedules), the Seller’s Officer’s Certificate and the Related Instruments, none of Seller, its Affiliates or any other Person makes any other express or implied representation or warranty on behalf of Seller or any of its Affiliates.

ARTICLE III.

REPRESENTATIONS AND WARRANTIES OF PURCHASER

Purchaser represents and warrants to Seller on the date hereof as follows:

SECTION 3.01. Organization.

Purchaser is a corporation duly organized, validly existing and in good standing under the laws of Puerto Rico. Purchaser has all requisite corporate power and authority to own, lease and operate its properties and to conduct its business as now being conducted.

SECTION 3.02. Authority; Execution and Delivery; Enforceability.

Purchaser has the requisite corporate power and authority to execute and deliver this Agreement and the Related Instruments and to perform its obligations hereunder and thereunder. The execution and delivery of this Agreement and the Related Instruments and the performance by Purchaser of its obligations hereunder and thereunder have been authorized by all requisite corporate action on the part of Purchaser. This Agreement has been validly executed and delivered by Purchaser and, assuming that this Agreement has been duly authorized, executed and delivered by Seller, constitutes, and each Related Instrument that is to be executed and delivered by Purchaser will constitute when executed and delivered by Purchaser (assuming that such Related Instrument has been duly authorized, executed and delivered by Seller and/or its Affiliates to the extent applicable), a valid and binding obligation of Purchaser, enforceable against Purchaser in accordance with its terms.

 

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SECTION 3.03. Consents and Approvals; No Violations.

(a) Neither the execution and delivery of this Agreement nor any Related Instrument by Purchaser nor the performance by Purchaser of its obligations hereunder or thereunder will (i) violate the certificate of incorporation, by-laws or other organizational document of Purchaser, (ii) conflict with or result in a violation or breach of, or constitute a default under, any contract, agreement or instrument to which Purchaser is a party or by which any of its properties or assets are bound or (iii) violate or conflict with any Law, judgment, order or decree, except in the case of clauses (ii) or (iii) for violations, breaches or defaults which would not have a material adverse effect on Purchaser’s ability to consummate the transaction contemplated hereby or materially delay the consummation of the transactions contemplated by this Agreement.

(b) Except for the applicable requirements of the HSR Act, no filing with, and no permit, authorization, consent or approval of, any Governmental Entity is necessary for the consummation by Purchaser of the transactions contemplated by this Agreement, except for those filings, permits, authorizations, consents or approvals the failure of which to be made or obtained would not materially impair Purchaser’s ability to consummate the transaction contemplated hereby or materially delay the consummation of the transactions contemplated hereby.

SECTION 3.04. Brokers and Finders.

Neither Purchaser nor its Affiliates has retained any agent, broker, investment banker, financial advisor or other firm or Person that is or will be entitled to any brokers’ or finder’s fee or any other commission or similar fee in connection with any of the transactions contemplated by this Agreement, and there are no claims for any of the foregoing.

SECTION 3.05. No Proceedings.

There is no Proceeding, pending or, to the Knowledge of Purchaser, threatened against Purchaser which would affect Purchaser’s ability to consummate the transactions contemplated by this Agreement and each Related Instrument.

SECTION 3.06. Availability of Funds.

Purchaser possesses as of the Agreement Date, and as of the Closing Date will have, available funds sufficiently necessary to consummate the transaction contemplated by this Agreement.

SECTION 3.07. Assignment

Purchaser represents and warrants that it has accepted and assumed, pursuant to assignment from Galen dated July 30, 2004, all of the rights and obligations of Galen under (i) the Option Agreement; (ii) the Copromotion Agreement; and (iii) the Consent Agreement effective as of April 1, 2003 by and among, Seller, Galen and LEO (said Consent Agreement, as it may be amended or supplemented heretofore or may be amended or supplemented in the future, the “ Consent Agreement ”).

 

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SECTION 3.08. No Other Purchaser Representations or Warranties.

Except for the representations and warranties contained in this Article III, the Purchaser’s Officer’s Certificate and the Related Instruments neither Purchaser nor any other Person makes any other express or implied representation or warranty on behalf of Purchaser in connection with this Agreement.

ARTICLE IV.

COVENANTS

SECTION 4.01. Conduct of the Business.

During the period from the Agreement Date until the Closing, Seller shall, except as otherwise contemplated by this Agreement or as set forth on Schedule 4.01 and shall cause its Affiliates to, operate the Business only in the ordinary course of business consistent with past practices and shall, and shall cause its Affiliates to, use its or their reasonable efforts to preserve intact the Acquired Assets and the Business. Without limiting the generality of the foregoing, and except as otherwise contemplated by this Agreement, from the Agreement Date until the Closing Date, without the prior written consent of Purchaser (which consent shall not be unreasonably withheld), Seller: (a) shall not, and shall cause its Affiliates not to, mortgage, pledge or subject to any Lien (other than Permitted Liens) any Acquired Asset; (b) shall, and shall cause its Affiliates to, use its and their reasonable efforts to maintain satisfactory relationships with and preserve the goodwill of suppliers and customers in connection with the conduct of the Business; (c) shall not, and shall cause its Affiliates not to, transfer or grant any rights or options in or to any of the Acquired Assets except for the transfer of inventory in the ordinary course of business; (d) shall not, and shall cause its Affiliates not to, transfer to any Third Party any rights under any licenses, sublicenses or other agreements with respect to any Intellectual Property; (e) shall, and shall cause its Affiliates to, conduct its marketing and promotional activities with respect to the Products in the ordinary course of the Business consistent with past practices; (f) shall not, and shall cause its Affiliates not to, institute any new methods of purchase, sale or operation nor institute any changes in the product pricing or in promotional allowances other than in the ordinary course of the Business consistent with past practices; (g) shall not, and shall cause its Affiliates not to, make any material changes in selling, pricing or advertising practices other than in the ordinary course of the Business consistent with past practices; and (h) shall not launch any Product packaging changes or Product line extensions and (i) not agree to take any of the foregoing actions. Without limiting the foregoing in clause (g), Seller shall not, and shall cause its Affiliates not to, engage in any special promotions of any Product.

SECTION 4.02. Access to Information.

(a) After the Agreement Date and prior to Closing, Seller shall, and shall cause its Affiliates to, permit Purchaser and its representatives and agents to have reasonable access during normal business hours to Seller’s and its Affiliates’ books and records, manufacturing facilities and personnel primarily relating to the Acquired Assets and the Business and Seller shall, and shall cause its Affiliates to, furnish promptly to Purchaser such available information concerning the Acquired Assets and the Business as Purchaser may reasonably request; provided , however , that such access does not unreasonably disrupt the normal operations of Seller, its Affiliates or the Business.

 

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(b) In addition, at any time prior to, on or after the Closing (i) Seller shall cooperate with Purchaser in making Retained Information available, (ii) Seller shall furnish copies (the first such copy being at Seller’s cost and any additional copies being at Purchaser’s cost) of such Retained Information for review by Purchaser, to the extent practicable, at the reasonable request of Purchaser, including but not limited to the provision of a full copy of the NDA (to the extent included in Retained Information) and (iii) upon written notice from Purchaser of any request for Retained Information, Seller shall promptly designate appropriate contacts with respect thereto, and shall make such contacts reasonably available to Purchaser.

SECTION 4.03. Confidentiality.

(a) Purchaser shall use its commercially reasonable efforts to keep confidential, prior to the Closing, the information being provided to it in connection with the Acquisition and the consummation of the other transactions contemplated hereby except Purchaser may disclose such confidential information (i) to its counsel, (ii) to the extent such information is already public at the time it is disclosed, (iii) in connection with pursuing any remedies under this Agreement or as required by applicable Law, (iv) to prospective lenders (to the extent required by such lenders) all information relating to the Business delivered to such persons in connection with the financing of the transactions contemplated by this Agreement and (v) Retained Information relating to the Business may be publicly disclosed (A) if and to the extent required by applicable Law or (B) with the written consent of Seller (not to be unreasonably withheld).

(b) Each of Purchaser and Seller agrees that the terms of this Agreement and the Related Instruments shall not be disclosed or otherwise made available to the public and that copies of this Agreement and the Related Instruments shall not be publicly filed or otherwise made available to the public, except where such disclosure, availability or filing is required by applicable Law and only to the extent required by such Law. In respect of the foregoing, the Parties acknowledge that Purchaser expects to be required by Law to file this Agreement with the U.S. Securities and Exchange Commission. Notwithstanding anything herein to the contrary, any Party to this Agreement (and any employee, representative, or other agent of any Party to this Agreement) may disclose to any and all persons, without limitation of any kind, the tax treatment and tax structure of the transactions contemplated by this Agreement and all materials of any kind (including opinions or other tax analyses) that are provided to it relating to such tax treatment and tax structure. However, any such information relating to the tax treatment or tax structure is required to be kept confidential to the extent necessary to comply with any applicable federal or state securities laws.

(c) Seller shall use commercially reasonable efforts to keep confidential, and to cause its Affiliates and its and their officers, directors, employees and advisors to keep confidential, all information relating to the Business, except (i) as required to be disclosed by Seller or its Affiliates under any of its Ancillary Agreements with LEO or any of its Affiliates, (ii) as used by Seller and its Affiliates in the manufacture, development, use and sale of the products other than a Competitive Business Product, and (iii) in connection with pursuing any remedies under this Agreement or as required by Law or administrative process and except for information that is

 

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available to the public on the Closing Date, or thereafter becomes available to the public other than as a result of a breach of this Section 4.03(c). The covenant set forth in this Section 4.03(c) shall terminate five (5) years after the Closing.

SECTION 4.04. Best Efforts.

(a) On the terms and subject to the conditions of this Agreement and subject to Section 3.06 of this Agreement with respect to Purchaser’s obligation to have sufficient funds, each Party shall use its best efforts to cause the Closing to occur, including taking all reasonable actions necessary to comply promptly with all legal requirements that may be imposed on it or any of its Affiliates with respect to the Closing. Without limiting the foregoing or the provisions set forth in Section 4.05, Purchaser and Seller shall use their respective best efforts to cause the Closing by the applicable date set forth in the Option Agreement.

SECTION 4.05. Regulatory Approvals.

(a) Promptly after the Agreement Date, each Party will use its reasonable best efforts to file appropriate forms under the HSR Act with the United States Federal Trade Commission (“ FTC ”) and the United States Department of Justice (“ DOJ ”) and with the relevant regulatory authority any other filings required under applicable competition, merger control, antitrust or similar law or regulation (“ Competition Laws ”). Each of Seller and Purchaser shall as promptly as practicable, supply the FTC and the DOJ such supplemental information requested, if any, in connection with the transactions contemplated hereby pursuant to the HSR Act or such other Competition Laws. Any supplemental information shall be in substantial compliance with the requirements of the HSR Act or such other Competition Laws. Each of Purchaser and Seller shall furnish to the other such necessary information and reasonable assistance as the other may request in connection with its preparation of any submission that is necessary under the HSR Act or such other Competition Laws. Seller and Purchaser shall keep each other apprised of the status of any communications with, and any inquiries or requests for additional information from, the FTC and the DOJ or such other Governmental Entity and shall comply promptly with any such inquiry or request. Each of Seller and Purchaser shall use its best efforts to obtain any clearance required under the HSR Act or such other Competition Laws for the consummation of the transactions contemplated by this Agreement.

(b) Except as provided in Section 4.05(a), each of Seller and Purchaser shall use commercially reasonable efforts to procure all applicable regulatory approvals necessary to consummate the transactions contemplated hereby, including the transfer from Seller to Purchaser, within 90 days of the Closing Date, of all Seller’s rights, title and interest to regulatory approvals relating to the Products or the Business.

SECTION 4.06. Transfer Taxes; Purchase Price Allocation.

(a) Except as otherwise provided herein, any fees, charges, Taxes or other payments required to be made to any Governmental Entity in connection with the transfer of the Acquired Assets and the assignment and the assumption of the Assumed Liabilities pursuant to the terms of this Agreement shall be paid 50% by Seller and 50% by Purchaser. Seller and Purchaser shall cooperate in timely making and filing all filings, Tax Returns, reports and forms as may be required with respect to any Taxes payable in connection with the transfer of the Acquired Assets.

 

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(b) Purchaser shall prepare an allocation of the Purchase Price (and all other capitalized costs) among the Acquired Assets in accordance with Code Section 1060 and Treasury regulations thereunder (and any similar provision of state or local law, as appropriate), which allocation shall be binding upon all parties for all purposes of this Agreement. Purchaser shall deliver such allocation to Seller within 60 days after the Closing. If Seller disputes such allocation within 30 days after delivery of such allocation to Seller and the Parties are unable to resolve any dispute within 45 days after delivery of such allocation to Seller, the Parties shall submit any remaining disputes to an independent appraisal firm mutually acceptable to the Parties for a final and binding determination. The fees and expenses of such appraisal firm shall be borne equally by Seller and Purchaser. Seller and Purchaser and their Affiliates shall report, act and file Tax Returns in all respects and for all purposes consistent with such allocation as finally agreed or determined. Neither Seller nor Purchaser shall take any position that is inconsistent with such allocation unless required to do so by applicable Law.

SECTION 4.07. Publicity.

Except as otherwise required by law or applicable stock exchange requirements, prior to Closing neither Purchaser nor Seller shall, and each of them shall cause their respective Affiliates, representatives and agents not to, issue or cause the publication of any press release or public announcement with respect to the transactions contemplated by this Agreement without the express prior written approval of the other Party, which approval shall not unreasonably be withheld. The content of the initial press release announcing the execution of this Agreement shall be mutually agreed by Purchaser and Seller.

SECTION 4.08. Supplemental Disclosure.

Seller shall have the right from time to time prior to the second business day preceding Closing to supplement or amend the Schedules with respect to any matter hereafter arising or discovered which if existing or known on the Agreement Date would have been required to be set forth or described in any such Schedule. Any such supplemental or amended disclosure shall not be deemed to have cured any breach of any representation or warranty made in this Agreement for purposes of determining whether or not the conditions set forth in Article V have been satisfied, but will be deemed to have cured any such breach of representation or warranty made in this Agreement and to have been disclosed as of the Agreement Date for purposes of Article VII hereof.

 

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SECTION 4.09. Further Assurances.

Each Party shall from time to time after Closing, without additional consideration, execute and deliver such further instruments and take such other action as may be reasonably requested by the other Party to make effective the transactions contemplated by this Agreement and each Related Instrument. With respect to all documents, information and other materials included in the Acquired Assets, in addition to paper and other tangible copies, Seller shall, upon Purchaser’s request, also provide to Purchaser electronic copies of such documents, information and other materials, provided , that , Seller or its Affiliates or their respective agents have electronic copies thereof. The foregoing requirement shall only apply to such documents, information and other material exclusively related to the Acquired Assets, and Seller shall have no obligation to reformat or otherwise alter or modify any such materials in order to provide them to Purchaser.

SECTION 4.10. No Use of Certain Names.

(a) Purchaser shall promptly, and in any event within six (6) months after Closing, complete the revision of all product literature relating to the Products (i) to delete all references to the Names and (ii) to delete all references to Seller’s or its Affiliates’ customer service address or phone number; provided , however , that for a period of six (6) months from the Closing Date, Purchaser may continue to distribute product literature that uses any Names, addresses or phone numbers to the extent that such literature exists on the Closing Date, and Seller hereby grants to Purchaser rights under any copyrights and other intellectual property owned by Seller (and covenants to cause each of its Affiliates to grant Purchaser rights under any copyrights and other intellectual property owned by such Affiliate) to the extent necessary to allow Purchaser to so use such product literature. In no event shall Purchaser use any Names after the Closing in any manner or for any purpose d